Michael Robert Till v National Mutual Life

The Court of Appeal of the Australian Capital Territory heard an appeal concerning an income protection insurance policy. The appellant, Michael Robert Till, alleged that the respondent, National Mutual Life Association of Australasia Ltd, had breached their insurance contract by ceasing disability payments. The primary issue was whether the insurer was required to continue disability payments when the insured's employment contract ended, despite the insured still meeting the policy's definition of total or partial disability.

The court was required to determine two main legal issues: first, whether the trial judge erred in finding that the appellant's entitlement to benefits under the income protection policy ceased upon the termination of his contract of employment; and second, whether the respondent's cessation of payments constituted a repudiation of the insurance contract. The appellant argued that the policy's terms entitled him to continued payments as long as he met the disability criteria, irrespective of his employment status, and that the insurer's actions amounted to a repudiation.

The Court of Appeal found that the trial judge had erred in concluding that the appellant's entitlement to benefits ceased with the termination of his employment contract. The court reasoned that the policy's obligation to pay benefits was triggered by the insured's inability to perform income-producing duties due to sickness or injury, not by the existence of a specific employment contract. The court held that the appellant continued to meet the policy's definition of total disability because his asthmatic condition prevented him from performing essential duties of his occupation as an air-conditioning electrician, particularly in dusty environments. While the court agreed with the trial judge that the insurer's conduct did not amount to a repudiation of the contract, as it stemmed from an erroneous interpretation of medical evidence rather than an intention to no longer be bound by the contract, this did not preclude the appellant from succeeding on his alternative claim for breach of contract.

The appeal was upheld, and judgment was entered for the appellant for the sum of $50,529, representing the calculated benefits from the cessation of payments until the date of the trial hearing. The matter was remitted to the trial judge for a further assessment of damages from that date onwards, taking into account any subsequent earnings and ongoing eligibility for benefits. The respondent was ordered to pay the appellant's costs of the appeal and the proceedings at first instance.