Davis v Westpac Life Insurance Services Ltd

In *Davis v Westpac Life Insurance Services Ltd*, the New South Wales Court of Appeal considered a dispute concerning a life insurance contract. The insured, Mr. Davis, had failed to disclose a medical condition. Westpac Life Insurance Services Ltd sought to avoid the contract on the grounds of this non-disclosure.

The central legal issues before the Court of Appeal were: firstly, whether the insurer would not have been prepared to enter into a contract of life insurance on any terms with the insured had he complied with his duty of disclosure; and secondly, whether the insurer was entitled to avoid the contract pursuant to section 29(3) of the *Insurance Contracts Act 1984* (Cth). Specifically, the court had to determine whether the insurer must prove a hypothetical decision as at the date of the contract that it would not have entered into the contract, or if it could avoid the contract by proving it would have deferred consideration of the proposal and subsequently would not have been prepared to enter into a contract on any terms.

The Court of Appeal affirmed the principles established in *Prudential Assurance Co Ltd v McNeilly*. It held that section 29(3) of the *Insurance Contracts Act 1984* requires the insurer to demonstrate that, at the time the contract was entered into, it would not have entered into the contract on any terms, had the insured complied with their duty of disclosure. The court found that the insurer's argument that it could defer consideration and later refuse cover was not permissible under the Act. The insurer must prove the notional decision as at the date of the contract.

The appeal was dismissed with costs.