Commercial Union Assurance Co of Australia Ltd v Beard

Commercial Union Assurance Co of Australia Ltd (the insurer) appealed against a judgment in favour of Mr Beard (the plaintiff), who had brought proceedings under section 6 of the *Law Reform (Miscellaneous Provisions) Act 1946* (NSW) to recover damages from the insurer following an injury sustained by a third party. The plaintiff sought to enforce an indemnity provided by a public liability insurance policy issued by the insurer to the owner of a building where the injury occurred. The insurer contended that the policy was voidable due to material non-disclosure by the insured.

The primary legal issues before the Court of Appeal were whether the identity of the building owner was a material fact that ought to have been disclosed by the insured, whether the insurer had actual or constructive knowledge of this fact, and whether the insured's broker possessed knowledge of the relevant information. The court also considered the significance of a newspaper extract and a survey undertaken by the insurer in relation to the insurer's knowledge, and crucially, who bore the onus of proof regarding non-disclosure in the context of a section 6 claim. Finally, the court had to determine whether a retrial was warranted given an interlocutory ruling by the trial judge concerning the onus of proof.

The Court of Appeal, comprising Meagher JA, Davies AJA, and Foster AJA, held that the identity of the building owner was not a material fact in the context of the public liability insurance policy. The court found that the insurer had sufficient knowledge of the relevant circumstances, including information gleaned from a newspaper extract and its own survey, to negate any claim of material non-disclosure. The onus of proving non-disclosure rested with the insurer, and this onus had not been discharged. Consequently, the appeal by the insurer was dismissed.

However, the court allowed the cross-appeal, and the appellant (the insurer) was ordered to pay the costs of both the appeal and the cross-appeal.