A term requiring insureds to notify A&G of any changes to their home & contents was not unfair under the ASIC Act
1. The proceedings concern home/contents insurance which contained certain notification obligations on the part of the insureds.
2. The PDS contained a number of references that explained certain matters relevant to the notification obligations (see paras 4-11 of the judgment).
3. Relevantly, the PDS contained 11 examples of changes A&G wanted the insured to tell them about
4. The offending clause, which preceded the 11 examples stated, ‘you need to tell us if ๐ฎ๐ป๐๐๐ต๐ถ๐ป๐ด changes about your home & contents.’ This Notification Clause was the focus of ASICโs claim
5. Evidence concerning the processes for applying for cover (p12-22) & claim assessment (p23-30) was led by A&G
6. The Crt considered relevant provisions of Unfair Contract Terms (ASIC Act) & Utmost Good Faith (ICA)
7. The Crt rejected the literal meaning of ๐ฎ๐ป๐๐๐ต๐ถ๐ป๐ด.
8. The Crt accepted that the requirement in the Notification Clause was restricted to notify A&G โif anything changesโ concerned the information already provided by the insured to A&G. (refer 2 & 3 above)
9. The Crt held that the duty of UGF operates to limit what A&G can do under the Notification Clause in response to an insuredโs failure to notify it of the relevant changes.
10. The Crt determined, upon the proper construction of the Notification Clause, the contracts of insurance contained a term that:
(a) the insured must notify A&G if, during the term of the policy, there was any change to the information about the insuredโs home or contents that the insured had disclosed to A&G prior to entry into the contract; &
(b) if the insured failed to notify A&G of such changes, it had the right to refuse to pay a claim, reduce the amount it paid, cancel the contract or not offer to renew the contract if & to the extent that it would be consistent with commercial standards of decency & fairness for A&G to do so
11. The Crt applied the 3 limb test for ‘unfair clauses’ & held
a. s54 (ICA) operates to ensure that A&Gโs powers to refuse or reduce claims would not cause a ๐จ๐๐๐ฃ๐๐๐๐๐๐ฃ๐ฉ ๐๐ข๐๐๐ก๐๐ฃ๐๐ in the rights & obligations of the parties arising under the contract
b. ๐๐ง๐ค๐ฉ๐๐๐ฉ๐๐ฃ๐ ๐ก๐๐๐๐ฉ๐๐ข๐๐ฉ๐ ๐๐ฃ๐ฉ๐๐ง๐๐จ๐ฉ๐จ of A&G – s54 & UGF constrains A&G to the extent that only a failure to notify a change in information that has prejudiced its interests is relevant
c. The Crt accepted ASIC’s submission that the lack of clarity in the Notification Clause ๐๐๐ช๐จ๐๐ ๐๐๐ฉ๐ง๐๐ข๐๐ฃ๐ฉ to the insured
๐พ๐ค๐ฃ๐๐ก๐ช๐จ๐๐ค๐ฃ
The Crt found that as only 1 of the 3 criteria of an unfair term was met, ASIC failed to establish that the Notification Clause is unfair