CON-STAN INDUSTRIES OF AUSTRALIA V NORWICH WINTERTHUR (AUST) LIMITED [1986] 64 ALR 481
High Court of Australia – 11 April 1986
FACTS
Con-Stan Industries of Australia Pty Ltd (Con-Stan) engaged an insurance broker to select insurance for various risks.
Norwich was selected by the broker as the appropriate insurer. Norwich agreed to insure Con-Stan.
Con-Stan paid insurance premiums to the broker who did not pay them to Norwich.
The broker then went into liquidation and Norwich sued Con-Stan for the unpaid premiums.
Con-Stan argued that there was an implied term in the insurance contract that it was only required to pay the premiums to the
broker, and that paying the broker discharged the debt for the insurance premiums.
ISSUES
Did the usual business custom for the payment of insurance premiums imply that there would be a contractual term that
brokers were liable for the payment of the premiums to the insurer?
Did business efficacy imply a term in the contract that the payment of premiums was to be made by brokers and not the
insured?
FINDING
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