CGU v Porthouse [2008] HCA 30
This matter involved an exclusion clause in a professional
indemnity insurance policy for a Barrister in New South Wales.
The insurer refused to provide cover to the Barrister on the
basis that the Barrister knew of the possibility that a claim would
be made against him.
The insurer relied upon the exclusion clause in the policy that
made it encumbant on the Barrister that he declare any claims
arising from a 'known circumstance'.
A 'known circumstance' included a situation that a
reasonable person in the insured's position would reasonably
believe could give rise to a claim (the second limb).
The High Court found that the second limb was a purely objective
test. This test was to be applied independently of any
consideration of the insured's state of mind.
