Ray is the owner of a retail store in Berwick that sells assorted collectables and memorabilia items.

Ray has owned and operated this business for many years. His business has been successful, including its development of new and increasing online customers from around Australia and overseas. Ray also owns the shop building (i.e. the'freehold') from which this business is conducted.

Both the building and the business are insured with Acme Commercial Insurance Pty Ltd (ACI).

Unfortunately, last month, a fire caused by overheated electrical cabling had caused an overnight fire, resulting in both the shop building and the contents being totally damaged and unsalvageable. Ray makes a claim on his insurance with ACI, which accepts and processes his claim without any issue.

Although the sudden fire and the damage to Ray's shop and business understandably caused Ray to experience stress and considerable inconvenience, he is nonetheless thankful that there was no injury or loss of life. Ray is also appreciative that ACI efficiently administered his claim to his complete satisfaction.

Ray decides to undergo a'sea-change', and purchases a small farm property in Ballarat. This property has a main house, as well as several smaller self-contained dwellings (or'chalets'). The previous owners used this property as both their residence, and as their bed and breakfast business ('B&B'). Ray intends to do the same following the settlement of his purchase. Having been a long time customer of ACI, Ray applies to ACI for both building and business insurance coverage for this Ballarat property and its B&B operations.

One question among many in the ACL application form (i.e. the insurance proposal) is:"Have you (or anyone authorised by you to act on your behalf) made with ACI or with any other insurance company any claim/s on an insurance policy within the last 5 years?"

Ray is of the view that the nature of his previous collectables and memorabilia business is fundamentally different from that of a B&B business, and therefore, he is entitled to answer"No"to this question.

With reference to applicable principles ofinsurance law, advise as to whether or not, and why, Ray is correct with the abovementioned response he has provided? Your discussion must include any relevant rights and obligations on the part of both Ray and ACI.