Rego v FAI General Insurance Company Ltd - [2001] WADC 98

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: REGO -v- FAI GENERAL INSURANCE COMPANY LTD [2001] WADC 98

CORAM: MARTINO DCJ

HEARD: 1 & 2 FEBRUARY 2001

DELIVERED : 4 MAY 2001

FILE NO/S: CIV 166 of 2000

BETWEEN: CARLTON ANTHONY REGO
Plaintiff
AND
FAI GENERAL INSURANCE COMPANY LTD (ACN 000 327 855)
Defendant

Catchwords:

Insurance - General - Non-disclosure - Misrepresentation - Fraud - Fraudulent claim

Legislation:

Insurance Contracts Act 1984 (Cth)

Result:

Plaintiff succeeds on claim

Representation:

Counsel:

Plaintiff: In person
Defendant: Mr T Lampropoulos

Solicitors:

Plaintiff: In person
Defendant: Downings Legal

Case(s) referred to in judgment(s):

Jones v Dunkel (1959) 101 CLR 298
Naomi Marble & Granite Pty Ltd v FAI General Insurance Co Ltd [1999] 1 Qd R 507
Twenty‑First Maylux Pty Ltd v Mercantile Mutual Insurance (Australia) Ltd [1990] VR 919

Case(s) also cited:

Nil

MARTINO DCJ: The plaintiff claims that in March 1999 his home was broken into and property was stolen. He made a claim on the defendant under an insurance policy. The defendant rejected the claim and the plaintiff brought this action.
The plaintiff's claim is for $250 for damage to his home and $34,400 as the cost of replacing stolen property. The plaintiff represented himself at the trial.
By its defence the defendant admitted the insurance contract. It did not admit that the plaintiff's home was broken into, that the plaintiff's house was damaged, that property was stolen or the amount of any loss. It also denied liability on the grounds of non‑disclosure and misrepresentation, including fraudulent non‑disclosure and misrepresentation, and that claim was fraudulent.
When the trial commenced it became apparent that the plaintiff did not appreciate that he had to prove the amount of his claim at the trial and he was not in a position to do so. I was satisfied that this arose out of a misunderstanding on his part due to his lack of familiarity with pleadings. I directed that the trial be as to liability only. The matters to be determined at this trial were:
1.Whether the plaintiff's home was broken into;
2.Whether the defendant was entitled to deny liability on the grounds of non‑disclosure and misrepresentation, including fraudulent non‑disclosure and fraudulent misrepresentation;
3.Whether the defendant was entitled to reduce its liability to a nominal amount on the grounds of non‑disclosure and misrepresentation; and
4.Whether the defendant was entitled to refuse the claim on the ground that it was fraudulent.

The evidence

The plaintiff called his brother Colin Rego. Mr Colin Rego's evidence was that on Saturday 20 March 1999 at around midday he went to the plaintiff's house to go training with him. He noticed that one of the gates at the front of the plaintiff's house was opened in the opposite direction to which it was usually opened.
He went up the stairs at the front of the house to the front door. He saw that a window beside the front door was broken. The front door was locked. The plaintiff's brother went down the front stairs to two roller doors leading to a garage. One of the roller doors was unlocked. He opened the door and went inside. The back door in the garage, which leads into the house, was open. He went through the open door and climbed the stairs. When he reached the top of the stairs he saw a lot of property strewn around the house. No one was home.
Mr Colin Rego tried to telephone the plaintiff on the plaintiff's mobile phone but was unable to contact him. He then telephoned the police. He stayed at the house while the local police and the forensic police inspected it. He then secured the house and left.
The plaintiff gave evidence. He said that in January 1998 he intended to travel to Port Hedland to commence work and he made enquiries about insuring his home with the defendant and various other companies. In July 1998 he decided to take out insurance with the defendant. The defendant required that deadlocks be fitted to accessible external doors and windows. The plaintiff installed those deadlocks and obtained cover with the defendant commencing on 22 July 1998. Between 18 and 20 March 1999 his home was broken into and he suffered loss in that his home was damaged and items of property were stolen. He reported the loss to the defendant.
On 23 March 1999 the defendant's assessor Candy Arafoun attended his home and inspected the scene. On 25 March 1999 the defendant's investigator Mr Peter Boladeras inspected the plaintiff's home and provided a claim form to him which he collected three days later.
Mr Boladeras asked a series of questions of the plaintiff, one of which related to making an insurance claim within the previous five years. The plaintiff said he immediately questioned this five year time limit and said he thought it was two years.
The plaintiff said that when Mr Boladeras returned to the plaintiff's house to collect the claim form he once again questioned this five year time limit but Mr Boladeras simply shrugged this off. The plaintiff said that the claim form was fully answered and completed in Mr Boladeras' presence.
The plaintiff said that the only time he has denied making a claim within the previous five years was after the theft when he said this to Mr Boladeras and on the claim form which Mr Boladeras supplied. The main reason for this was that he did not wish to complicate things or delay the processing of his claim. The plaintiff said he also found Mr Boladeras' manner and attitude upsetting.
The plaintiff said that he always believed that the relevant time period was two years because at the time of his initial enquiry in 1998 the defendant's consultant did not mention anything about the claim free period being five years, only two years, and rewarded him with 20 per cent discount for not making a claim within two years. He said that this was also stated on the quotation form which was supplied and the original proposal.
The plaintiff also said that he believed that the defendant already knew, or at the very least, ought to have known of this past claim with the RAC. Before issuing cover the defendant required him to provide authority to obtain from other insurers any information relating to any insurance held by him or any other insurance claim made by him and he signed that authority without hesitation, believing checks would be made before insurance was issued.
The plaintiff said that on 17 August 2000 he telephoned the defendant applying for insurance, using the name of a relative. He informed the defendant of his two convictions for assault and answered "yes" to the question whether during the last five years he had suffered any burglaries to his home. Although he answered "yes" to the question, the answer typed in the policy schedule provided to him showed the answer "no". He telephoned the defendant on 15 September 2000 and requested that the policy schedule be amended in accordance with his answers. The officer of the defendant he spoke to agreed to do this however, before he received the amended proposal, he received a request for payment of the premium. The plaintiff telephoned the defendant on a third occasion and was told that an amendment had been made on the computer and that if he was still concerned he could alter the policy schedule by writing over it. He still requested a new amended policy schedule which the officer of the defendant agreed to send out, but he did not receive it.
The plaintiff's evidence was that it was not until 30 September 1999, several months after the claim was made, that the allegation that he had tampered with the proposal form and claim form to make five years look like two years on each form was put to him by the defendant. The plaintiff denied that he had tampered with either document.
The plaintiff said that at a hearing of his complaint against the defendant before the Insurance Enquiries and Complaints Tribunal on 29 November 1999 he had asked Mr Boladeras when the alterations were discovered and Mr Boladeras had said that they were discovered by him back at the office. He asked Mr Boladeras why that fact had not been brought to his attention until several months after the event and Mr Boladeras had said because he wanted to keep it under his hat. He asked Mr Boladeras if he wrote anything down when he discovered the tampering and Mr Boladeras said he jotted it down on a piece of paper. Mr Boladeras looked for the piece of paper but could not find it.
In cross‑examination, the plaintiff said that he was in the police force from 1981 to 1988. He was dismissed from the police force as a result of a conviction for assault. The assault was of a suspect in his custody. The assault involved burning the victim's hand and punches to the victim's body. After a trial before a jury he was convicted of assault occasioning bodily harm. He was sentenced to one year in prison and spent approximately four months in prison. The plaintiff was also convicted for an assault in about 1993 after a trial before a Magistrate. It was also an assault occasioning bodily harm. That assault occurred while he was working as head doorman for a nightclub. He said that there was an allegation of somebody stealing from the club. He asked the person alleged to have stolen to wait. The person struck out at the plaintiff and the plaintiff said he was forced to push or slap the person very hard, resulting in the perforation of his eardrum.
The plaintiff said that he purchased the house the subject of the action in 1996. He took out a loan from BankWest, who required that he obtain insurance and so the plaintiff obtained insurance with RAC. He insured the house for $100,000 and the contents for $50,000. Approximately six months after he purchased the house he had a break‑in. The thieves entered the garage and stole some items from the garage, mainly tools, but did not enter his house. He made a claim on RAC and that claim was met. As a result of that break‑in he put some spikes on the side fence of his property, put an alarm box with a blue light on the outside of his house, reinforced the back roller door to his garage door so it would not be as easy to break into, put up some beware of the dog signs and put a security screen on the back window.
In 1997 there was an attempted break‑in to his house which he reported to police. It appeared to be by children because of the small footprints outside his house. Some screens from the side windows had been removed but no damage was done.
The plaintiff did not renew his cover with RAC. The reason for that was because he was not happy with the delay in processing his claim. He did not take up insurance with another company at that time.
The plaintiff decided to take out insurance in January 1998 because he needed employment and one of his friends working in Port Hedland had told him that there were opportunities for employment there. The plaintiff obtained quotes from five or six insurance companies. Some insurers did not wish to insure the plaintiff because of the location of his house. One of the companies he spoke to was the defendant.
The plaintiff said that when he spoke to an officer of the defendant in January 1998 he was asked if he had made a claim within the previous two years because, if not, he would get a 20 per cent discount. He said that his answer to that question would have been "no", although he could not say certainly because he could not remember. He did remember being asked about previous convictions and he answered that he had no previous convictions because he did not think it was relevant.
When questioned whether he had informed the defendant's officer in that telephone conversation that he had not made a claim in the previous two years, the plaintiff was extremely uncertain. If he had told the defendant in January 1998 that he had not had a claim in the previous two years that would have been false because a claim had been made on RAC Insurance in June 1996.
The plaintiff was asked why he waited until August 1998 which was just after two years after his June 1996 claim to take out insurance with the defendant. He said it was because at that time he wanted to go to Port Hedland. He did not have a job definitely arranged there, but he felt a move was imminent. In fact a job offer did not materialise and he did not go to Port Hedland. The employment position in Port Hedland became uncertain as a result of industrial action. The plaintiff obtained employment in September in Perth.
Around July or August 1998 the plaintiff telephoned the defendant and spoke to an officer named Olive. In cross‑examination, the plaintiff said he had a poor recollection of that telephone conversation but if he had been asked if he had a claim in the previous five years, he would have answered it "yes". He would have answered it truthfully and if the defendant did not want to insure him he had plenty of options with other insurance companies.
The plaintiff was asked about the proposal form that he completed. He said that it was obvious that both the proposal form and the claim form had been tampered with by altering "five years" to look like "two years". The plaintiff did not know whether it had been tampered with before or after he received it. The plaintiff accepted that if the proposal had not been tampered with before he received it then his answer to the question as to whether he had made a claim in the previous five years would have been false. The plaintiff said that the questionnaire form was filled out for him and he had not completed that answer, but he acknowledged that he went through it.
The plaintiff was asked again about his claim with RAC. He said that RAC did not pay less than the claim as such, rather, he was "messed around" in the handling of the claim, for example, by trying to provide him with a cheaper replacement tool than the one that was stolen.
The plaintiff agreed in cross‑examination that a vehicle of some sort would have been required to remove his stolen property from his house.
The defendant called Olive May Hansen. Ms Hansen was employed in the defendant's call centre in 1998. Her responsibilities in the call centre included providing quotations to people who rang up requesting them. If a person rang up making an enquiry about a quotation Ms Hansen would ask them questions that would appear on her computer screen. She would enter the answers on the computer. It was not possible to move from one screen until all the relevant questions on that screen had been answered. Once all the relevant questions were answered a quotation would be provided.
The same procedure was followed when a person wished to take out a policy with the defendant. The information that was required from the caller was a little more in‑depth. A proposal would be forwarded to the customer by the defendant based upon the answers entered on the computer. The proposal would be sent to the client for signing and return. The signed proposal was returned to the defendant's policy processing section.
Ms Hansen did not recall speaking to the plaintiff but from the defendant's records she had identified her reference and so concluded that she was the person to whom the plaintiff spoke when the proposal was completed.
In the course of his cross‑examination of Ms Hansen, the plaintiff asked her about the defendant's underwriting guidelines and a copy of those guidelines were tendered in evidence. Those guidelines provide that any person convicted of a serious criminal offence including fraud, robbery and the like within the last 10 years cannot be insured by the defendant. They also provided that proposals where three or more home insurance claims had been made in the last two years, proposals where four or more home insurance claims had been made within the last five years and proposals where one or more theft, burglary or house break‑in claims have been incurred within the last two years must be referred to an FAI underwriter.
The guidelines were not available to Ms Hansen on the computer but she had received some training in them. If Ms Hansen felt that a proposal did not come within the guidelines Ms Hansen would have referred it to a more senior person in the defendant.
In re‑examination Ms Hansen said that if the details of the plaintiff's assault convictions had been revealed to her and the cover was being sought her immediate reaction would have been to decline cover and she would have asked a senior for confirmation.
The defendant called Kenneth Henry White. Mr White was an underwriter employed by the defendant from May 1996 to August 1999. He was a domestic underwriter dealing with house and motor insurance. It was Mr White who processed the plaintiff's proposal form. Mr White was familiar with the form and would have read only the answers, not the questions, on the form. Question 5 on the form asks about the claims in the previous five years but, at some stage, it had been altered to look like it was asking about claims in the previous two years. Mr White would not have read that question and would not have noticed whether or not the question had been altered at the time that he processed the proposal. Mr White's evidence was that if it had been disclosed that the plaintiff had made a claim on a home and contents insurance policy with RAC in about June 1996 he would have required the plaintiff to improve his security by installing an alarm as a minimum.
In his evidence‑in‑chief Mr White was asked nothing about what he would have done if he had known of the plaintiff's assault convictions. In cross‑examination he said that depending upon the seriousness of the assault he might take it to the State Manager or other superior of his to discuss, but it is not something that he would be seriously concerned about. Mr White said that at the time of his review of the plaintiff's proposal he was familiar with the defendant's underwriting guidelines. In a statement prepared for the defendant on 6 September 1999, Mr White said:
"Had I been aware that the client had suffered a loss in the previous five years at the time I underwrote his proposal, I would have insisted that an intruder alarm be installed prior to commencement of cover. Our guidelines require the security to be upgraded from that which exists at the time of the previous burglary."
The defendant's underwriting guidelines do not contain such a requirement. Mr White said the guidelines to which he was referring were verbal guidelines from the State Underwriting Manager. In the context of this evidence it was clear that Mr White meant that the guidelines were oral, distinguishing them from written guidelines (T171). The defendant did not call its State Underwriting Manager.

Issues raised by the defendant

In addition to its non‑admission of the break‑in of the plaintiff's house the defendant raised the following issues in its defence of the plaintiff's claim:
"1.The Defendant admits paragraphs 1 and 2 of the Statement of Claim, but says that upon entering into the insurance policy ("Contract of Insurance") the Plaintiff failed to comply with his duty of disclosure, and made misrepresentations to the Defendant before the insurance policy was entered into, or in the alternative, fraudulently failed to comply with his duty of disclosure, or made fraudulent misrepresentations as follows:
(a)The Defendant's pro forma and contents insurance proposal form asked, inter alia, whether the proposer in the last five years had suffered loss or damage, or made an insurance claim for loss or damage, to any home, any contents or any portable effects, and whether the proposer had ever been convicted of a criminal offence;
(a)The proposal signed by the Plaintiff and dated 22 July 1998 ("the proposal") responded in the negative to those questions;
(b)The pro forma proposal also explained that the proposer had a duty to tell the proposed insurer everything which he knew was relevant, or a reasonable person in the circumstances, would know to be relevant to the insurer's decision to insure the proposer and, if so, on what terms;
(c)The proposal signed by the Plaintiff did not disclose any other relevant information;
(d)In fact, in June 1996 the Plaintiff had made a claim upon RAC Insurance Pty Ltd in relation to a burglary at the same premises the subject of the proposal, and the Plaintiff had been convicted of criminal assault offences;
(e)The Plaintiff failed deliberately to disclose those matters, and also failed to disclose that he was intending to work in Port Hedland and to leave the premises unattended;
(f)The Plaintiff tampered with the word "five" in the question in the proposal about former claims to try and make it look like a "two" so that he could attempt to argue, if necessary, that his answer was not false because his previous claim was outside the two year period.
2.If the Plaintiff had disclosed the abovementioned matters in the proposal or had not made the abovementioned misrepresentations, the Defendant would not have entered into the contract of insurance with the Plaintiff for the same premium and on the same terms and conditions.
...
5.(a) The Defendant's pro forma home and contents insurance claim form, inter alia, asked the Plaintiff whether he had had previous losses or made any claims for loss, damage or theft on any insurer in the past five years;
(b)in the claim form signed by the Plaintiff and dated 23 March 1999 he answered the question in the negative;
(c)the claimant had tampered with the pro forma claim form in an attempt to make the word "five" in that document look like "two".
6.The claim was made fraudulently because the Plaintiff deliberately gave a false answer in that he had made the abovementioned claim upon RAC Insurance.
...
8.(a) If the Plaintiff had complied with his duty of disclosure, and had not made any misrepresentations, the Defendant would not have entered into a contract of insurance with the Plaintiff, or in the alternative, if it did, it would have been on condition that the Plaintiff first install an alarm system at the premises;
(b)if the Plaintiff had installed an alarm system at the premises the alleged break in at the premises between 18 and 20 March 1999 would not have occurred and/or the goods allegedly taken would not have been stolen.
...
10.The Defendant says that in the abovementioned circumstances, it was entitled to, and did, avoid the contract/policy of insurance under Section 28(3) of the Insurance Contracts Act 1984 (Cth) ("the Act") because of the Plaintiff's fraudulent non‑disclosure and misrepresentations.
11.Further, and in the alternative to the preceding paragraph, if the non‑disclosure and misrepresentation were not fraudulent, the Defendant is entitled pursuant to Section 28(3) of the Act to reduce its liability to make any payment to only a nominal amount in respect of the claim because that would put the Defendant in the position in which it would have been if a security alarm had been installed and the burglary and/or theft had thereby been prevented which is what would have occurred if the Plaintiff had complied with his duty of disclosure and if no misrepresentation had been made by him.
12.Further, and in the alternative to the preceding two paragraphs the Defendant is, in all the circumstances, entitled to refuse payment of the claim under Section 56 of the Act on the basis that the claim was made fraudulently.
..."

The Insurance Contracts Act 1984

Section 28 of the Insurance Contracts Act 1984 provides:
"28 General insurance
(1)This section applies where the person who became the insured under a contract of general insurance upon the contract being entered into:
(a)failed to comply with the duty of disclosure; or
(b)made a misrepresentation to the insurer before the contract was entered into;
but does not apply where the insurer would have entered into the contract, for the same premium and on the same terms and conditions, even if the insured had not failed to comply with the duty of disclosure or had not made the misrepresentation before the contract was entered into.
(2)If the failure was fraudulent or the misrepresentation was made fraudulently, the insurer may avoid the contract.
(3)If the insurer is not entitled to avoid the contract or, being entitled to avoid the contract (whether under subsection (2) or otherwise) has not done so, the liability of the insurer in respect of a claim is reduced to the amount that would place the insurer in a position in which the insurer would have been if the failure had not occurred or the misrepresentation had not been made."
Section 21 of the Insurance Contracts Act 1984 provides:
"21 The insured's duty of disclosure
(1)Subject to this Act, an insured has a duty to disclose to the insurer, before the relevant contract of insurance is entered into, every matter that is known to the insured, being a matter that:
(a)the insured knows to be a matter relevant to the decision of the insurer whether to accept the risk and, if so, on what terms; or
(b)a reasonable person in the circumstances could be expected to know to be a matter so relevant.
(2)The duty of disclosure does not require the disclosure of a matter:
(a)that diminishes the risk;
(b)that is of common knowledge;
(c)that the insurer knows or in the ordinary course of the insurer's business as an insurer ought to know; or
(d)as to which compliance with the duty of disclosure is waived by the insurer.
(3)Where a person:
(a)failed to answer; or
(b)gave an obviously incomplete or irrelevant answer to;
a question included in a proposal form about a matter, the insurer shall be deemed to have waived compliance with the duty of disclosure in relation to the matter."
Section 56 of the Insurance Contracts Act 1984 provides:
"56 Fraudulent claims
(1)Where a claim under a contract of insurance, or a claim made under this Act against an insurer by a person who is not the insured under a contract of insurance, is made fraudulently, the insurer may not avoid the contract but may refuse payment of the claim.
(2)In any proceedings in relation to such a claim, the court may, if only a minimal or insignificant part of the claim is made fraudulently and non‑payment of the remainder of the claim would be harsh and unfair, order the insurer to pay, in relation to the claim, such amount (if any) as is just and equitable in the circumstances.
(3)In exercising the power conferred by subsection (2), the court shall have regard to the need to deter fraudulent conduct in relation to insurance but may also have regard to any other relevant matter."

Issues to be determined

The issues to be determined are:
1.Whether the plaintiff's home was broken into.
2.Whether the plaintiff failed to comply with his duty of disclosure in failing to disclose his conviction for assault, or misrepresented that he had no such conviction.
3.Whether the plaintiff failed to comply with his duty of disclosure in failing to disclose his claim on RAC Insurance Pty Ltd in relation to a burglary at his premises in June 1996 or misrepresented that he had made no such claim.
4.Whether the plaintiff failed to comply with the duty of disclosure in failing to disclose that he was intending to work in Port Hedland and to leave the premises unattended.
5.Whether the defendant would have entered into the contract for the same premium and on the same terms and conditions and if the plaintiff had not made any non‑disclosures or misrepresentations.
6.Whether any non‑disclosures or misrepresentations were made fraudulently.
7.If any non‑disclosures or misrepresentations were made, but not fraudulently, whether the defendant is entitled to reduce its liability to a nominal amount.
8.Whether the plaintiff's claim was fraudulent in that he tampered with the form to make the work "five" look like a "two" and failed to disclose his claim made on RAC Insurance in June 1996.
9.If the claim was made fraudulently, what consequence there should be on the plaintiff's claim.

Mr Peter Boladeras

The defendant was unable to call Mr Peter Boladeras because he died on 13 February 2000. The plaintiff made a number of criticisms of Mr Boladeras during his evidence, including that the allegation that he had tampered with the proposal and the claim form was not put to him until several months after his claim had been made.
The substance of the criticism were contained in the detailed statement of claim dated 24 January 2000 and prepared by the plaintiff personally. The plaintiff's criticisms of Mr Boladeras were made before Mr Boladeras had died.

Whether the plaintiff's house was broken into

I accept the evidence of Mr Colin Rego that on the morning of Saturday 20 March 1999 he found the plaintiff's house apparently broken into and with property strewn around. The plaintiff gave evidence that his home had been broken into. The defendant did not lead any evidence to suggest otherwise. I accept that the plaintiff's home was broken into.

Non‑disclosures or misrepresentations of the criminal offences

The defendant's proposal form asked the following question:
"26.Have you or any person who normally lives with you ever been convicted of a criminal offence or do you or any person who normally lives with you currently have any criminal charges pending? Do not include traffic related offences."
The question was answered "No" by a cross appearing in the box beside the word "No". The answer was based upon the answer given in his telephone conversation with Ms Hansen seeking cover. The proposal was signed by the plaintiff.
In fact the plaintiff had two convictions for assault occasioning bodily harm.
I conclude therefore that the plaintiff misrepresented to the defendant that he had no convictions for criminal offences.

Non‑disclosure or misrepresentation of June 1996 RAC claim

It is common ground that question 23 in the proposal was tampered with. The question originally read:
"23.In the last five years, have you or any person who ordinarily lives with you:
·   suffered loss or damage to any home, any contents or any portable personal effects,
·   made an insurance claim for loss or damage to any home, any contents or any portable effects, or
·   had a claim for compensation made against you or any person who normally lives with you?"
At some time the number "five" was tampered with to make it look like the number "two". There is no evidence as to when that occurred, but I conclude that it would not have been done before the proposal was received by the plaintiff. There would be no reason for the tampering to have been done by any officer or agent of the defendant before the plaintiff had received the proposal.
As the plaintiff had made a claim with RAC Insurance in June 1996, less than five years before the proposal dated 22 July 1998 was signed by the plaintiff I conclude that the plaintiff misrepresented to the defendant that he had not suffered a loss or made a claim within the previous five years.

Non‑disclosure of intention to work in Port Hedland and leave the premises unattended

The plaintiff gave evidence in chief that he intended to work in Port Hedland and leave the premises unattended. There was no evidence that he knew that this was a matter relevant to the defendant's decision as to whether to accept the risk and, if so, on what terms.
Nor was there any evidence on which I could conclude that a reasonable person in the circumstances would be expected to know it was so relevant.
I find that there has been no breach of the duty of disclosure in failing to inform the defendant that the plaintiff intended to work in Port Hedland and leave the premises unattended.

Whether the defendant would have entered into the contract for the same premium and on the same terms and conditions even if the misrepresentations had not been made.

Ms Hansen said that if she had been informed of the details of the plaintiff's assault convictions, her immediate reaction would have been to decline cover and she would have asked a senior for confirmation. The only senior called was Mr White.
Mr White said that depending upon the seriousness of the assault, he might take the proposal to the State Underwriting Manager or other superior to decide, but an assault was not something that he would be seriously concerned about.
Neither the State Underwriting Manager nor any other superior of Mr White was called.
No one gave evidence that if the assault convictions had been disclosed the defendant would have refused cover or would have charged a different premium or imposed different terms or conditions. I conclude that even if the plaintiff had disclosed his assault convictions the defendant would have agreed to enter into the contract for the same premium and on the same terms and conditions.
This conclusion is further supported by the fact that the plaintiff telephoned the defendant in August 2000 and disclosed a conviction for assault the defendant agreed to insure him.
Ms Hansen's evidence was that if the previous claim had been notified by the plaintiff she would have entered it on the proposal. She would not have obtained details but would have left it to the plaintiff to complete the details when he received the paperwork. Mr White said that if the claim had been disclosed he would have required an alarm be installed as a minimum. Mr White was asked why he would do that when the defendant's underwriting guidelines did not require any further investigations if there had been only one claim in the last five years. Mr White's response was to minimise the importance of the guidelines. Mr White had referred to the guidelines in his statement dated 6 September 1999. In evidence he said that the guidelines he was then referring to were oral guidelines from the State Underwriting Manager that he could recall.
I find this evidence implausible. The State Underwriting Manager was not called and I conclude that his evidence would not have assisted the defendant's case: Jones v Dunkel (1959) 101 CLR 298.
I do not accept the evidence of Mr White on this point. As I have said I found the evidence implausible.
The defendant had written underwriting guidelines. If Mr White had meant to refer to something other than those guidelines in the statement of 6 September 1999 he would have said so. I conclude he was referring to the underwriting guidelines. He was wrong when he said in his statement that the guidelines required the security to be upgraded after one claim. I conclude that as a result of that error Mr White has attempted to reconstruct what he would have done if the RAC claim had been disclosed in a manner that achieves the same result. I do not accept the evidence of Mr White on this issue.
There was no other evidence that the defendant would have refused cover or charged a different premium or required different terms or conditions.
I conclude that it would not have done so.
Again there is confirmation of this conclusion from the plaintiff's discussion with the defendant in August 2000.

Whether either misrepresentation was made fraudulently

In view of my conclusion that the defendant would have entered into the contract for the same premium and on the same terms and conditions even if the misrepresentation had not been made it is not necessary for me to consider whether the plaintiff's misrepresentations were made fraudulently. I do so in case I am wrong in my earlier conclusions.
"The meaning of 'fraudulent' in s 28(2) is not clear. Since at common law innocent non‑disclosure gives rise to the right of avoidance, the duty of disclosure of material facts being absolute, there is not to hand any ready definition of what constitutes fraud for this purpose." Twenty‑First Maylux Pty Ltd v Mercantile Mutual Insurance (Australia) Ltd [1990] VR 919 at 925 per Brooking J.
Fraud is generally subjective and requires an intention to defraud as well as an intention to withhold information or mislead. It is my view that if relevant facts are withheld or misrepresented without that fraudulent intent eg. on the grounds that the insured does not believe that the information would be relevant to the insured's decision, then fraud is not established: see Insurance Law in Australia, Sutton, 3rd edition, par 3.138 and fn 617.
The plaintiff said that he misrepresented the absence of the assault convictions because he found the convictions embarrassing and personal and did not think that they had any relevance to his insurance claim. I accept that evidence. I conclude therefore that the misrepresentation of the plaintiff's assault convictions was not fraudulent.
In considering whether the plaintiff's misrepresentation in failing to disclose the RAC claim was fraudulent, it is necessary to consider whether the plaintiff tampered with the proposal to make "five" look like a "two". The plaintiff denied that he had done so. There is no evidence as to when it occurred. It seems unlikely that the plaintiff would have done so when he was not aware that any dispute was likely to arise. I am not satisfied that the plaintiff tampered with the proposal form.
The plaintiff's evidence was that he thought that the enquiry made by the defendant was whether he had many any claim within two years and that he was told that the no claim bonus applied if there was no claim within the previous two years. Although Ms Hansen said that she did not tell the plaintiff this was so she has since confirmed that a no claim bonus was allowed (T121).
I accept the plaintiff's evidence on this issue. I find that the plaintiff was mistaken when he completed the proposal and that he thought his answer addressed a two year period. I conclude therefore that his misrepresentation in failing to disclose the RAC claim was not fraudulent.

Whether the plaintiff's claim was fraudulent

There are two limbs to the defendant's allegations that the claim was fraudulent: That the claim had been tampered with so that "five" looked like a "two" and that the plaintiff failed to disclose the RAC claim.
The claim form contained the following question:
"Have you had previous loses or made any claims for loss, damage or theft on any insurance in the past five years?"
At some time, the claim form was tampered with so that the number "five" looked like a "two".
The plaintiff denied that he had made this alteration. He considered that the question had originally been addressed to the five year period and he had answered it accordingly because he believed that the relevant period was two years and he did not want to hold up the processing of his claim.
There was no evidence as to when the claim form was tampered with. The plaintiff was not informed of the allegation that the claim form had been tampered with until November 1999. By then, he had written to the defendant on 21 April 1999 and the Insurance Enquiries and Complaints Ltd on 23 July 1999 acknowledging that he had failed to disclose the RAC claim in his claim form. That conduct is inconsistent with the plaintiff having tampered with the claim form to make the "five" appear as "two". I am not satisfied that the plaintiff tampered with the claim form.
However it is clear that in failing to disclose that claim on the claim form the plaintiff made a false statement to the defendant. The reason he did not do so was that he did not want to delay the handling of his claim.
A false statement made in a claim is fraudulent if it was made to influence the insurer's decision to accept, reject or compromise the claim: Naomi Marble & Granite Pty Ltd v FAI General Insurance Co Ltd [1999] 1 Qd R 507.
Because the misrepresentation was made to affect the way in which the defendant handled the claim I conclude that the misrepresentation was made fraudulently.

The consequence of the claim being fraudulent

The only part of the claim which was fraudulent was whether an earlier claim had been made on another insurer. It did not affect the cover of the claim or the amount of the claim.
Even if the correct answer had been given the defendant would not have been entitled to reject the claim. I conclude therefore that only a minimal part of the claim was fraudulent.
In my opinion in these circumstances it would be harsh and unjust if the defendant was permitted to refuse this claim on this ground. For these reasons I order the defendant to pay the whole of the claim that is proved.