The test of relevance under s 21(1)(a) of the Insurance Contracts Act 1984 (Cth) is directed to the particular insurer's decision, not the hypothetical prudent insurer, and extends to commercial considerations relevant to the insurer's decision to accept the risk even if they do not relate to the risk as such. A broker's belief held with sufficient assurance to act upon in practical affairs constitutes knowledge for the purposes of the duty of disclosure. Where a broker is authorised to commit the insured to a transaction, the broker's knowledge however acquired is the insured's knowledge. A representor who becomes aware that his representation has been understood in a false sense by the representee and fails to correct the misunderstanding is guilty of fraud.
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