MLC Nominees Pty Ltd v Daffy

The dispute in MLC Nominees Pty Ltd v Daffy centred around the interpretation of a total and permanent disability insurance policy. The case was heard in the Supreme Court of New South Wales. The respondent, Mr. Daffy, had entered into a disability insurance policy with the appellant, MLC Nominees Pty Ltd, which promised to pay benefits if he became totally and permanently disabled. Following a termination of his employment, Mr. Daffy claimed benefits under the policy, which were denied by MLC on the basis that the benefit had not accrued at the time of the termination of his employment. Mr. Daffy subsequently appealed the decision of the lower court, arguing that the interpretation advanced by MLC was unjust and erroneous.

The legal issues before the court were whether the construction of the insurance policy posited by the insurer was so unjust as to suggest an error, and whether the liability to pay benefits not already accrued ceased upon the termination of the employment. The court was also required to determine the point at which a benefit accrues under the policy. The respondent argued that the benefit had accrued at the time of the termination of his employment, while the insurer maintained that no benefit had accrued at that point.

The court examined the terms of the insurance policy and held that the construction of the policy advanced by the insurer was unjust. The court found that the benefit had accrued at the time of the termination of the respondent's employment, as the policy provided for the payment of benefits upon the occurrence of a total and permanent disability, which had occurred prior to the termination. The court held that the liability to pay benefits not already accrued did not cease upon the termination of employment. As a result, the appeal was allowed, and the matter was remitted to the lower court for further consideration.