Hannover Life Re of Australasia Ltd v Sayseng

Hannover Life Re of Australasia Ltd appealed to the Court of Appeal of New South Wales against a decision of the Supreme Court of New South Wales concerning a group life insurance policy. The dispute arose from a claim made by Mr. Sayseng, an employee of a company that contributed to a retirement fund, for benefits under the policy due to his alleged total and permanent disablement. The policy was held by the trustee of the retirement fund, and Mr. Sayseng was the "insured person" under the policy.

The Court of Appeal was required to determine whether Mr. Sayseng's incapacity met the policy's definition of "total and permanent disablement." Crucially, the court also had to consider whether Hannover Life Re owed a duty of good faith and fair dealing directly to Mr. Sayseng, as the insured person, in addition to its contractual duty to the trustee. If such a duty was owed, the court had to assess whether it had been breached, particularly in relation to the procedural fairness afforded to Mr. Sayseng in the assessment of his claim.

The court reasoned that the principles established in *Trident General Insurance Co Ltd v Leane* could be incrementally extended to impose a duty of good faith on an insurer towards an insured person who, while not a party to the insurance contract, was the direct beneficiary of the insurance proceeds and whose entitlement to those proceeds depended on the insurer's assessment of their claim. The court found that Hannover Life Re had breached this duty of good faith by failing to afford Mr. Sayseng procedural fairness in the assessment of his claim for total and permanent disablement.

The appeal was dismissed, and Hannover Life Re was ordered to pay Mr. Sayseng's costs.