Philips v Tower Australia Limited - [2007] NSWSC 946

CITATION: Philips v Tower Australia Limited [2007] NSWSC 946

HEARING DATE(S): 9 and 10 August 2007

JUDGMENT DATE :
10 August 2007

JURISDICTION: Equity Division
Commercial List

JUDGMENT OF: McDougall J at 1

DECISION: See paragraph [73] of judgment

CATCHWORDS: INSURANCE – Disability income benefit policy – Plaintiff sought suspension of premium payments – Defendant cancelled policy – Reinstatement sought – Whether representations alleged by plaintiff were made by employees of defendant – Dispute decided by Financial Industry Complaints Service in favour of plaintiff – Whether determination enforceable between plaintiff and defendant as contract. - ESTOPPEL – Whether defendant estopped from asserting policy lapsed. - COSTS – Proceedings transferred from District Court – Plaintiff succeeds on new cause of action – Whether defendant should have costs of District Court proceedings.

LEGISLATION CITED: Briginshaw v Briginshaw (1938) 60 CLR 336
Giumelli v Giumelli (1999) 196 CLR 101
Helton v Allen (1940) 63 CLR 691, 712
Watson v Foxman (1995) 49 NSWLR 315

CASES CITED: Insurance Contracts Act 1984

PARTIES: Carolyn Philips (Nee Durrand) (Plaintiff)
Tower Australia Limited (Defendant)

FILE NUMBER(S): SC 50135/06

COUNSEL: B W Rayment QC / M J Gollan (Plaintiff)
N Perram SC / I Griscti (Defendant)

SOLICITORS: Firths Lawyers (Plaintiff)
Ebsworth & Ebsworth Lawyers (Defendant)

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IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

McDOUGALL J

10 August 2007 (ex tempore – revised 14 August 2007)

50135/06 CAROLYN PHILIPS (NEE DURRAND) v TOWER AUSTRALIA LIMITED

JUDGMENT

1 HIS HONOUR: On 12 February 1997, FAI Life Insurance Society Limited (FAI Life) issued a disability income benefit policy of insurance (the policy) to the plaintiff (Ms Philips). Ms Philips stopped paying monthly premiums on the policy in February 1998. She says that she did so because of representations made to her by an employee of FAI Life to the effect that Ms Philips could suspend payments whilst she was on maternity leave, and reinstate the policy within 13 months.

2 The defendant (Tower) is the successor to FAI Life. Tower says that the policy lapsed for non-payment of premium, and that it could only have been reinstated (more than one and one half months after non-payment) if a fresh underwriting assessment had been made.

3 The dispute between Ms Philips and Tower was referred to the Financial Industry Complaints Service Limited (FICS), pursuant to a scheme of dispute resolution. In November 2000, FICS decided the dispute in favour of Ms Philips.

4 Ms Philips put her case in two ways:

5 The parties agreed that the following issues arose:

1. Estoppel

i. What representations did the defendant make to the plaintiff?
ii. Were the representations sufficiently clear to found an estoppel?
iii. Was the plaintiff reasonably induced by the representations to act in a particular way?
iv. Was there reliance on the representations?
v. If…

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.

Continue reading Philips v Tower Australia Limited

Details

AGLC: Philips v Tower Australia Limited [2007] NSWSC 946
Case: [2007] NSWSC 946
Decision Date: 10 August 2007

CaseChat Overview and Summary

In the case of Philips v Tower Australia Limited, the plaintiff sought to suspend premium payments under a disability income benefit policy. The defendant, Tower Australia Limited, cancelled the policy, and the plaintiff sought reinstatement. The dispute centred on whether representations allegedly made by employees of the defendant warranted the policy's reinstatement, and whether the Financial Industry Complaints Service's determination in favour of the plaintiff could be enforced as a contract between the parties. Additionally, the court needed to determine if the defendant was estopped from asserting that the policy had lapsed and whether the defendant should bear the costs of the District Court proceedings.

The court held that the Financial Industry Complaints Service's determination was enforceable as a contract between the parties, as it was a binding arbitration agreement. The court further found that the defendant was estopped from asserting the policy's lapse due to the representations made by its employees. As for the costs, the court ruled that the defendant should bear the costs of the District Court proceedings since the plaintiff had succeeded on a new cause of action.

The final orders of the court required Tower Australia Limited to reinstate the policy and pay the costs of the District Court proceedings.

Orders