Two Canberra brothel owners have won an appeal against Calliden after the insurer refused to pay a $500,000 fire damage claim because they did not disclose their links to an outlaw motorcycle gang.

On New Year’s Day in 2012 The Gentleman’s Club in Mitchell caught fire in suspicious circumstances. Its co-owner and then sole director, Baris Tukel, was a Comanchero sergeant-at-arms.

Calliden refused to pay the $500,000 claim to Mr Tukel and his brother Fidel, and in 2015 the NSW Supreme Court found in Calliden’s favour.

The Tukel brothers took the case to the NSW Court of Appeal, which found a reasonable person could not be expected to know the association with the bikie gang created a risk “over and above” the inherent risk of insuring a brothel.

It says a company that insures brothels should know people with criminal connections are likely to be involved in using the premises.

Calliden had accepted that dangers related to running a brothel could include “arson, standover tactics, fights and dissatisfied customers”.

The court notes the insurance proposal made no inquiry into the director’s identity, or that of their associates.

It was not established whether Calliden would have refused to renew the policy had the disclosure been made, the court says.