Suncorp General Insurance Limited v Cheihk - [1999] NSWCA 238

CITATION: Suncorp General Insurance Limited v Cheihk [1999] NSWCA 238

FILE NUMBER(S): CA 40229/98

HEARING DATE(S): 2 July 1999

JUDGMENT DATE:
16 July 1999

PARTIES :

Suncorp General Insurance Limited v George Anthony Cheihk

JUDGMENT OF: Meagher JA at 1; Stein JA at 2; Giles JA at 20

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S) : DC 2262/97

LOWER COURT JUDICIAL OFFICER: Bowden ADCJ

COUNSEL: A Bridge/M Fordham (Appellant)
C Birch (Respondent)

SOLICITORS: McCabes (Appellant)
Alexanders (Respondent)

CATCHWORDS: District Court - car stolen - insurance policy - refusal of insurer to indemnify the insured - whether insured was fraudulent in failing to disclose his poor driving record - insured's duty of disclosure under s 21 Insurance Contracts Act 1984 (Cth) - insurer's duty under s 22 to clearly inform the insured of the nature and effect of the duty of disclosure - onus of proof that insurer so informed the insured of the duty of disclosure

ACTS CITED: Insurance Contracts Act 1984 (Cth); s 21;s 22(1); s 28

CASES CITED:
Abalos v Australian Postal Commission (1988) 171 CLR 167
Lumley General Insurance Ltd v Delphin (1990) 6 ANZ InsCas 60-986
State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (1999) 160 CLR 588

DECISION: Appeal dismissed with costs

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL
CA 40229/98
DC 2262/97

MEAGHER JA

STEIN JA
GILES JA

Friday, 16 July 1999

SUNCORP GENERAL INSURANCE LIMITED v George Anthony CHEIHK

In January 1996 the respondent insured his motor vehicle with the appellant. The insurance policy was renewed in January 1997 and in February 1997 the respondent’s motor vehicle was stolen. The appellant refused to indemnify the respondent for the theft on the basis that the respondent had fraudulently failed to disclose details of his poor driving record. Alternatively, it was argued that the respondent had breached his duty of disclosure under s 21 of the Insurance Contracts Act 1984 (Cth) in failing to disclose that he had been convicted of driving whilst disqualified and had his license cancelled.
Bowden ADCJ found a verdict for the respondent in the sum of $184,246.36. He found the respondent was not guilty of fraudulent non-disclosure. His Honour also found that the appellant had not clearly informed the respondent of the general nature and effect of the respondent’s duty of disclosure under s 21. In failing to comply with the requirements of s 22(1) the appellant was precluded from exercising a right in respect of a failure in disclosure under s 21 of the Act.

On appeal, it was argued that:

1. His Honour erred in failing to find that the respondent had been guilty of fraudulent non-disclosure with respect to the renewal of the insurance policy; and

2. His Honour erred in failing to find that the appellant did comply with the provisions of s 22(1) of the Insurance Contracts Act 1984 (Cth).

HELD:
His Honour was not in error in concluding that the respondent was not guilty…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1999] NSWCA 238
Decision Date: 16 July 1999

CaseChat Overview and Summary

Suncorp General Insurance Limited appealed to the Court of Appeal of New South Wales against a decision of the District Court which found in favour of the insured, Mr Cheihk. The dispute concerned Suncorp's refusal to indemnify Mr Cheihk under his motor vehicle insurance policy after his car was stolen. Suncorp alleged that Mr Cheihk had acted fraudulently by failing to disclose his poor driving record.

The Court of Appeal was required to determine two primary legal issues. Firstly, whether Mr Cheihk had breached his duty of disclosure under section 21 of the *Insurance Contracts Act 1984* (Cth) by failing to disclose his driving record. Secondly, whether Suncorp had fulfilled its obligation under section 22 of the Act to clearly inform Mr Cheihk of the nature and effect of his duty of disclosure, and if so, whether the onus of proof for this rested on Suncorp.

The Court of Appeal upheld the District Court's decision, finding that Suncorp had failed to discharge its onus of proving that it had clearly informed Mr Cheihk of the nature and effect of his duty of disclosure as required by section 22 of the *Insurance Contracts Act 1984* (Cth). The Court reasoned that without evidence demonstrating that Suncorp had adequately explained this duty, it could not rely on a breach of that duty to avoid its liability to indemnify Mr Cheihk. Consequently, the appeal was dismissed with costs.

Orders

Orders of the court

Appeal dismissed with costs

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Suncorp General Insurance Limited v Cheihk [1999] NSWCA 238
FILE NUMBER(S):	CA 40229/98
HEARING DATE(S):	2 July 1999
JUDGMENT DATE:	16 July 1999
PARTIES :	Suncorp General Insurance Limited v George Anthony Cheihk
JUDGMENT OF:	Meagher JA at 1; Stein JA at 2; Giles JA at 20

LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S) :	DC 2262/97
LOWER COURT JUDICIAL OFFICER:	Bowden ADCJ

COUNSEL:	A Bridge/M Fordham (Appellant) C Birch (Respondent)
SOLICITORS:	McCabes (Appellant) Alexanders (Respondent)
CATCHWORDS:	District Court - car stolen - insurance policy - refusal of insurer to indemnify the insured - whether insured was fraudulent in failing to disclose his poor driving record - insured's duty of disclosure under s 21 Insurance Contracts Act 1984 (Cth) - insurer's duty under s 22 to clearly inform the insured of the nature and effect of the duty of disclosure - onus of proof that insurer so informed the insured of the duty of disclosure
ACTS CITED:	Insurance Contracts Act 1984 (Cth); s 21;s 22(1); s 28
CASES CITED:	Abalos v Australian Postal Commission (1988) 171 CLR 167 Lumley General Insurance Ltd v Delphin (1990) 6 ANZ InsCas 60-986 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (1999) 160 CLR 588
DECISION:	Appeal dismissed with costs