MBF Life Limited v Rowena Marchant

MBF Life Limited (the insurer) appealed a decision of the Supreme Court of New South Wales concerning a claim made by Rowena Marchant under an accidental death insurance policy following the death of her husband, Mr. Marchant. Mr. Marchant died while undergoing chemotherapy treatment for cancer. The insurer denied liability under the policy, asserting that his death was not caused by an "accident" as defined by the policy.

The central legal issues before the Court of Appeal were whether Mr. Marchant's death, occurring during chemotherapy, constituted an "accident" within the meaning of the policy. This required the court to consider whether the chemotherapy treatment itself was an "event" and whether Mr. Marchant suffered physical injuries caused solely by "violent, visible and external means," as stipulated in the policy's definition of accidental death. The court also had to determine the proper construction of the insurance policy as a commercial contract, interpreting its terms in light of the language used, the commercial circumstances, and the objects of the policy, including the principle of proximate cause.

The Court of Appeal affirmed the principles of contractual interpretation applicable to insurance policies, emphasizing that they should be construed according to their plain language, taking into account commercial realities and the policy's purpose. The court found that the chemotherapy treatment, while intended to be therapeutic, was an external intervention that led to Mr. Marchant's death. It was not an inevitable or predictable consequence of the treatment itself, but rather an unforeseen and unintended outcome that satisfied the criteria of being an "event" and, in its fatal consequence, an "accident" for the purposes of the policy. The court concluded that the proximate cause of death was the adverse reaction to the chemotherapy, which was an external event, rather than the underlying cancer itself.

The appeal was dismissed, and MBF Life Limited was ordered to pay the costs of the appeal.