General Accident Insurance Asia Ltd v Sakr

General Accident Insurance Asia Ltd (the insurer) appealed a decision concerning a claim for fire damage made by Sakr (the insured). The dispute arose from the insurer's refusal to pay the full cost of repairing fire damage to the insured's property. The insurer contended that the insured had failed to disclose that the property had been unoccupied for some time, which it argued was a material fact. The appeal was heard by the Court of Appeal of New South Wales, comprising Giles and Hodgson JJA and Sperling J.

The central legal issue before the court was whether the insured had breached their duty of disclosure at the time of the insurance renewal. Specifically, the court had to determine if the insurer, by not making further inquiries about the property's occupancy status after being informed of its unoccupancy at an earlier stage and having agreed to delete certain coverages as a result, had waived its right to further disclosure on that point. A related issue was whether, if the insured was entitled to indemnity, an allowance for betterment should be made in calculating the cost of repair.

The court reasoned that the insurer, having been informed of the property's unoccupancy and having acted upon that information by adjusting the policy, could not later claim a failure to disclose the same fact at renewal as a breach of duty. The insurer's conduct in not making further inquiries was considered a waiver of its right to further compliance with the duty of disclosure regarding the property's occupancy. Consequently, the court found no failure to disclose unoccupancy. Regarding the cost of repair, the court concluded, on the facts presented, that no allowance for betterment was warranted.

The appeal was dismissed, and the insurer was ordered to pay the costs of the appeal.