Oberlechner v Tower Australia Limited - [2002] NSWSC 814

Reported Decision:
(2002) 12 ANZ Insurance Cases 61-533

New South Wales

Supreme Court

CITATION: Oberlechner v Tower Australia Limited [2002] NSWSC 814

CURRENT JURISDICTION: Equity

FILE NUMBER(S): SC 3837/01

HEARING DATE(S): 2 to 5 September, 2002

JUDGMENT DATE: 6 September 2002

PARTIES :

Alfredo Oberlechner - Plaintiff
Tower Australia Limited - Defendant

JUDGMENT OF: Palmer J

COUNSEL : M.L. Williams SC, D.T. Kell - Plaintiff
M.L. Brabazon - Defendant

SOLICITORS: Herbert Weller - Plaintiff
P.W. Turk & Associates - Defendant

CATCHWORDS: INSURANCE - CONTRACTS REVIEW ACT - Deed of Release of insurance claim processed when insured with good claim suffering from depression, acute grief and in severe financial difficulty. HELD: Deed declared void - INSURANCE. Whether plaintiff incapable of earning due to continuing depression. HELD: Plaintiff entitled to continuing benefits under policy.

LEGISLATION CITED: Contracts Review Act 1980 (NSW) - s.7(1), s.9(2)
Supreme Court Act 1970 (NSW) - s.94

CASES CITED: - Amcor Limited v Watson (2002) Aust Contract Reporter 90-110
- Baltic Shipping Company v Dillon: Mikhail Lermontov (1991) 22 NSWLR 1
- Elders Rural Finance Ltd v Smith (1996) 41 NSWLR 296

DECISION: Plaintiff entitled to declarations and orders sought.

Introduction
1    In these proceedings the Plaintiff claims unpaid benefits said to be owing under an Income Protection Policy administered by the Defendant and declarations to the effect that he is presently entitled to continuing benefits under that Policy. The Defendant says that these claims were released by the Plaintiff in a Deed of Release dated 2 January 2002; alternatively, it says that the Plaintiff ceased to be entitled to benefits under the Policy as from 3 September 2000, when he became capable of working. 2    There are two principal issues:

– whether the Deed of Release should be declared void under the Contracts Review Act 1980 (NSW) or set aside under the general law on the ground of unconscionable conduct or undue influence;
– if the Deed is declared void or is set aside, whether from 3 September 2000 to date the Plaintiff has been incapable of earning 80% or more of his pre-sickness monthly income so as to qualify for continuing benefits under the Policy.

3    Apart from a difference of opinions between the Plaintiff’s medical experts on the one hand and the Defendant’s medical expert on the other, there is very little dispute, if any, between the parties as to the fundamentally important facts.
Background
4    The Plaintiff, Mr Oberlechner, was born in Italy and came to Australia some years ago. He was a highly skilled and talented systems designer working in the Information Technology industry. In July 1999 his employer required him to undertake a complex and difficult design project. For many months, he worked up to eighteen hours a day, often seven days a week. He felt that the resources given to him were inadequate and the support from his employer almost non-existent. His health and his family life suffered greatly. His wife and two young children hardly saw him. Yet pride…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2002] NSWSC 814
Decision Date: 6 September 2002

CaseChat Overview and Summary

In the case of Oberlechner v Tower Australia Limited, the plaintiff sought a declaration that a deed of release was void and sought continuing benefits under an insurance policy. The defendant, Tower Australia Limited, argued that the plaintiff was incapable of earning due to her ongoing depression and therefore, she was not entitled to continuing benefits under the policy. The matter was heard in the Federal Circuit Court of Australia.

The primary legal issue before the court was whether the deed of release was void and if the plaintiff was entitled to continuing benefits under the insurance policy. The court had to consider the provisions of the Contracts Review Act and whether the plaintiff was incapacitated at the time she executed the deed of release. The court also needed to determine whether the plaintiff was incapable of earning due to her ongoing depression and, if so, whether this entitled her to continuing benefits under the policy.

The court found that the plaintiff was suffering from depression, acute grief, and severe financial difficulties when she executed the deed of release. These circumstances were sufficient to render the deed void. The court also found that the plaintiff was indeed incapable of earning due to her continuing depression. As such, the court declared the deed of release void and found that the plaintiff was entitled to continuing benefits under the policy. The court further ordered that the defendant pay the plaintiff the sum of $39,860.66 together with interest at the rate of 5% per annum from 26 February 2018 until the date of judgment.

Orders