Prepaid Services Pty Ltd v Atradius Credit Insurance NV

Prepaid Services Pty Ltd and others (the appellants) appealed to the Court of Appeal of New South Wales against a decision of the primary judge concerning a claim made under a trade credit insurance policy issued by Atradius Credit Insurance NV (the respondent). The dispute arose when the respondent rejected the appellants' claim, which sought indemnity against a customer's insolvency, asserting that the appellants had failed to comply with their duty of disclosure.

The central legal issues before the Court of Appeal were whether the respondent insurer was entitled to reduce its liability to nil due to the appellants' non-compliance with their duty of disclosure, and whether the insurer had discharged its legal onus of proof. This involved determining whether the insurer would have issued the policy had the non-disclosure not occurred, and whether the insurer had met its evidentiary burden by calling the ultimate decision-maker, despite not calling subordinate employees. The court also considered whether the primary judge had acted contrary to the principle in *Jones v Dunkel* by inferring that the evidence of subordinate officers would have assisted the insurer's case.

The Court of Appeal affirmed the primary judge's findings. The court reasoned that the insurer bore the onus of proving that it would not have entered into the contract of insurance, or would have done so on different terms, had the full and true information been provided by the insured. The court found that the insurer had discharged this onus by adducing evidence from the ultimate decision-maker responsible for underwriting the policy, who testified about the insurer's practices and the impact of the undisclosed information. The court held that the principle in *Jones v Dunkel* did not preclude the primary judge from drawing inferences from the absence of evidence from subordinate employees, particularly where the ultimate decision-maker's evidence was sufficient to discharge the insurer's onus.

The appeal was dismissed with costs.