High Court rules on meaning of ‘deliberate nondisclosure’

The High Court has interpreted the phrase ‘deliberate non-disclosure’ to require dishonesty on the part of the insured. Mutual Energy Ltd v Starr Underwriting Agents Ltd concerned the interpretation of a non-disclosure clause that limited the insurers' right of remedy to instances of “deliberate or fraudulent non-disclosure or misrepresentation” on the part of the insured. The High Court held that the term ‘deliberate non-disclosure’ implied a dishonest decision by the insured not to disclose material information. The insurers could not avoid the policy where the insured had failed to disclose material information in an honest but mistaken belief that the information need not be disclosed.