Hammoud Brothers P/L v NRMA Insurance Ltd

Hammoud Brothers Pty Ltd (the appellant) appealed to the New South Wales Court of Appeal against a decision of the primary judge concerning an insurance claim made against NRMA Insurance Ltd (the respondent). The dispute arose from a claim for loss due to theft, which the insurer had declined on the basis that the loss was not covered by the policy due to alleged fraud by the insured.

The central legal issue before the Court of Appeal was whether the primary judge had erred in finding that the appellant had failed to discharge the onus of proof that the loss was caused by theft within the meaning of the insurance policy. Specifically, the court considered whether the evidence presented established that the loss was a result of an unlawful taking of property, as opposed to other causes, and whether the insurer had successfully established fraud on the part of the appellant.

Meagher and Santow JJA allowed the appeal, finding that the primary judge had misapplied the onus of proof in relation to the fraud defence. The Court held that while the onus of proving the loss rests with the insured, the onus of proving fraud, which is an affirmative defence, rests with the insurer. The Court concluded that the insurer had not discharged its onus of proving fraud, and therefore the insured was entitled to succeed on its claim for loss by theft. The appeal was allowed, with costs to be costs in the appeal.