Consider a slightly different variation of the first question. Lloyd’s Underwriters might be unlikely in avoiding the hull and machinery insurance contract based on non-disclosure of Mr. James past imprisonment by Benning. The past imprisonment was known by Tom who contacted Stephen Smith to secure the instance for Benning’s. To understand why this is the case, consider the following. Now the case for Benning’s is that it did not intentionally want to defraud the insurance agency. It is understood that Benning’s has indeed answered all the questions required by the insurance agency.
The responsibility for all these data does not only lie with the insurance seeker, it should also lie with the insurer. The insurer responsibility for asking questions is defined in Section 21 A of the Insurance Contracts Act 1984(Cth). According to this, it is important that the insurer ask the right questions. In addition, there might be causes of innocent non-disclosure and not fraudulent non-disclosure. Benning’s has not acted fraudulently by non-disclosure of details. It has innocently failed to disclose because they were not aware of the data at all. On the other hand, Tom has a situation of fraudulent non-disclosure because he knew a material fact that would have an imposition on the case and yet did not disclose. He knew the situation of Mr. James and has not presented this data even though it was on his connections that insurance was sought by Benning’s from Mr. Stephen of Lloyd’s Underwriters. Therefore, it could be said that the claim might have to be honoured.
In the case of a beneficial owner, one has to address the action in rem for meeting the plaintiff claims (Collins, 1985). A challenge lies for the plaintiff here too, as the plaintiff has to prove that the person claimed as defendant is indeed the beneficial owner at this point. An action in rem considered by the procedural theory can hence be considered as an action personam or action in rem by personification theory. It is modified slightly for serving the actual defendant. When an action in procedural principle is made, no further action in the case of personification is necessary.