The NSW Court of Appeal has recently had occasion to apply the Stealth Enterprises v Calliden decision. 

In 2011 Amashaw took out a combined liability policy with Marketform that included cover for pollution. Six months prior to the inception of the policy, legislative reform caused Amashaw to engage environmental engineers to monitor groundwater contamination. Those reports identified levels of contamination in excess of the regulations.

The reports were not disclosed to Marketform and in 2013 a claim was made on the policy for an explosion and related petroleum hydrocarbon contamination.

The question before the court was whether the hypothetical reasonable person in the position of the insured would consider the risk to be one that required disclosure to the insurer upon inception of the policy. The NSW Court of Appeal determined the risk was not self-evident to a lay person as one which required disclosure.  The insurer was not entitled to deny the claim on the basis of non-disclosure.