Folan v United Super - [2014] NSWSC 635

Supreme Court

New South Wales

Medium Neutral Citation: Folan v United Super [2014] NSWSC 635
Hearing dates: 19/05/2014
Decision date: 19 May 2014
Jurisdiction: Equity Division
Before: McDougall J
Decision:
Interest pursuant to s 57 Insurance Contracts Act to run from 10 October 2010 to date of payment of insured benefit.

Catchwords: INTEREST - what is a reasonable period of time for insurer to investigate claim - date from which it was unreasonable for insurer to have withheld payment on claim - application of s 57 Insurance Contracts Act 1984 (Cth)
Legislation Cited: Insurance Contracts Act 1984 (Cth)
Cases Cited: Bankstown Football Club v CIC Insurance Ltd (unreported, NSWSC 17 December 1993)
Folan v United Super Pty Ltd [2014] NSWSC 343
HIH Casualty and General Insurance Ltd (in liq) v Insurance Australia Ltd (No 2) (2006) 14 ANZ Ins Cas 61-685
Sayseng v Kellogg Superannuation Pty Ltd (2007) 213 FLR 174
Category: Procedural and other rulings
Parties: Barry Folan (Plaintiff)
United Super Pty Ltd (First Defendant)
Hannover Life Re of Australasia Ltd (Second Defendant)
Representation: Counsel:
D W Rayment / J Walker (Plaintiff)
J Duncan (Defendants)
Solicitors:
Firths (Plaintiff)
TurksLegal (Defendants)

File Number(s): 2013/94119

Judgment (EX TEMPORE - REVISED 19 May 2014)

HIS HONOUR: In reasons for judgment given on 27 March 2014 ([2014] NSWSC 343), Nicholas AJ held that the plaintiff, Mr Folan, was entitled to be paid benefits for total and permanent disablement (TPD). Those benefits were payable under a policy issued by the second defendant (the Insurer) in favour of the first defendant (the Trustee). The Trustee was the trustee of a superannuation fund of which, Nicholas AJ concluded, Mr Folan was a member at the relevant time.

On 28 March 2014, Nicholas AJ made orders which, the parties agreed, were appropriate to reflect the reasons for judgment given the day before. Those declarations and orders dealt with all matters in issue save the question of interest.

The parties have been unable to agree on the question of interest. Accordingly, the matter has been listed before me for that question to be argued and resolved.

The background is not, for present purposes, contentious. Mr Folan had worked for some years, principally as a labourer, in the construction industry until, on 6 March 2009, he was injured in a motor vehicle accident. He has not worked since. Nicholas AJ concluded, in substance, that Mr Folan's injuries and disabilities consequent thereon were such that he met the TPD definition in the policy of insurance issued by the Insurer in favour of the Trustee.

The claim for interest is made under s 57 of the Insurance Contracts Act 1984 (Cth). It is common ground that the Court's approach to s 57 is as stated by Nicholas J in Sayseng v Kellogg Superannuation Pty Ltd (2007) 213 FLR 174 at [4]-[8].

In those paragraphs, Nicholas J reviewed relevant authorities, starting with the decision of Cole J in Bankstown Football Club v CIC Insurance Ltd (unreported, NSWSC, 17 December 1993).…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Folan v United Super

Details

AGLC: Folan v United Super [2014] NSWSC 635
Case: [2014] NSWSC 635
Decision Date: 19 May 2014

CaseChat Overview and Summary

In the case of Folan v United Super, the dispute arose between the plaintiff, Folan, and the defendant, United Super, regarding the insurer's investigation of a claim. The matter was heard in the Federal Court of Australia. The plaintiff sought clarification on the duration that an insurer could reasonably take to investigate a claim and to determine the date from which it was unreasonable for the insurer to withhold payment on the claim. The case hinged on the interpretation and application of section 57 of the Insurance Contracts Act 1984 (Cth).

The primary legal issue before the court was to ascertain the period within which an insurer could reasonably investigate a claim and the date from which withholding payment became unreasonable. This involved interpreting section 57 of the Insurance Contracts Act 1984 (Cth) and determining the practical implications for both the insurer and the insured. The court needed to balance the insurer's need to properly investigate claims against the insured's right to timely payment of benefits.

The court examined the relevant statutory provisions and case law to determine the reasonable period for investigation. It held that the timeframe was not fixed and depended on the specific circumstances of each case. The court found that the insurer's delay in responding to the claim was unreasonable, entitling the plaintiff to interest under section 57 of the Act. The court concluded that the insurer should have responded within a reasonable period, which in this case was not met. Consequently, the court awarded interest to the plaintiff from the date the insurer should have responded to the claim.

Orders