MetLife Insurance Ltd v Hellessey

MetLife Insurance Ltd appealed to the New South Wales Court of Appeal against a decision of the primary judge concerning a claim under a life insurance policy. The dispute centred on MetLife's refusal to pay a benefit to the insured member, Mr. Hellessey, who claimed to be totally and permanently disabled. MetLife had rejected the claim, asserting it was not satisfied that Mr. Hellessey met the policy's definition of total and permanent disablement.

The Court of Appeal was required to determine whether MetLife had breached its obligations under the policy to act reasonably and fairly in considering Mr. Hellessey's claim and in forming its satisfaction regarding his disablement. Specifically, the court examined whether MetLife's rejection of lay witness material, which was significant to its reasons for discounting medical expert evidence supporting the claim, constituted a failure to engage with the material in a rational or persuasive manner, thereby breaching its duty of good faith and fair dealing.

The Court of Appeal upheld the primary judge's finding that MetLife had failed to act reasonably and fairly. The court reasoned that MetLife's outright rejection of lay witness evidence, without providing rational or persuasive reasons for doing so, demonstrated a failure to properly engage with material relevant to its decision. This failure meant that MetLife had not satisfied its contractual obligations to consider the claim in good faith and to act reasonably and fairly in determining whether it was satisfied as to the insured member's total and permanent disablement.

The appeal was dismissed with costs.