Preston v AIA Australia Limited - [2013] NSWSC 282

Supreme Court

New South Wales

Medium Neutral Citation: Preston v AIA Australia Limited [2013] NSWSC 282
Hearing dates: 26/09/2012, 19/11/2012
Decision date: 03 April 2013
Jurisdiction: Equity Division
Before: Lindsay J
Decision:
Proceedings dismissed

Catchwords: INSURANCE - Accident and sickness insurance - The contract - construction of policy terms - plaintiff had a pre-existing condition - whether plaintiff was "Totally Disabled" due to "Accidental Injury" as defined by the policy - whether plaintiff was entitled to waiver of premium benefit under the policy.
Legislation Cited: Competition and Consumer Act 2010 (Cth) Trade Practices Act 1974 (Cth)
Insurance Contracts Act 1984 (Cth)
Cases Cited: Giles v National Mutual Life Association of Australasia Limited (1986) 4 ANZ Ins Cas 60-751
American Home Assurance v Saunders (1987) 11 NSWLR 363 at 369-372
Category: Principal judgment
Parties: S Preston (Plaintiff)
AIA Australia (Defendant)
Representation: S Preston (in person)

File Number(s): 2011 / 00027942

Judgment

INTRODUCTION

In these proceedings the plaintiff (a self-represented litigant) claims, in various guises, a money judgment against the defendant arising from denial by the defendant of any liability for payment to the plaintiff of "Disability Income" benefits under a policy of insurance it issued to him on or about 23 April 2008, the date of commencement of the cover provided by the policy.

By his statement of claim and extensive written and oral submissions, the plaintiff makes extravagant claims for relief which, at one end of a spectrum, challenge the formation of the policy and, at the other, assert that the defendant is liable for loss of bargain damages for repudiation of its obligations under the policy. However, the case he pleads, as distinct from the claims for relief he makes, focuses attention on an allegation that the defendant is contractually bound to pay him a "Total Disablement Benefit" under the policy.

There is no evidence before the Court that could, objectively, justify a finding that the contract between the parties was defective in its formation or the subject of repudiation in its performance. Upon an objective assessment, the plaintiff's case is predicated on a cause of action in debt, or for damages for breach of contract, for non-payment by the defendant of the Total Disablement Benefit to which the plaintiff claims an entitlement.

Subject to the plaintiff's claim of entitlement to a "Waiver of Premium Benefit" under the policy, the policy must be taken to have lapsed no later than 29 April 2010 or thereabouts following the plaintiff's non-payment of premiums after December 2009. By a letter dated 29 April 2010 the defendant advised the plaintiff that the policy had lapsed. It invited him to apply for its reinstatement. That invitation was not taken up.

The questions whether the plaintiff has an entitlement to payment of a Total Disablement Benefit and whether he has an entitlement to a Waiver of Premium Benefit both turn on whether he can, correctly, be characterised as having become "totally disabled" within the meaning of the policy.

Central to the plaintiff's claim is a…

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: [2013] NSWSC 282
Decision Date: 03 April 2013

CaseChat Overview and Summary

In the matter of Preston v AIA Australia Limited, the plaintiff, who held an accident and sickness insurance policy with the defendant, sought a declaration that he was entitled to the waiver of premium benefit under the policy. The plaintiff argued that he was "Totally Disabled" due to an "Accidental Injury" as defined by the policy, despite having a pre-existing condition. The court was tasked with interpreting the terms of the insurance policy to determine whether the plaintiff's condition and circumstances qualified him for the waiver of premium benefit.

The primary legal issue before the court was the interpretation of the insurance policy's terms, specifically those relating to the definition of "Totally Disabled" and "Accidental Injury." The court had to determine whether the plaintiff's pre-existing condition and the events that led to his claimed total disability were covered by the policy. The court also needed to examine whether the plaintiff's condition was caused by an "Accidental Injury" as defined in the policy.

The court held that the plaintiff's condition did not qualify as an "Accidental Injury" as defined in the policy, as it was not caused by a sudden and unforeseen event. The court found that the plaintiff's pre-existing condition, combined with the events that led to his claimed total disability, did not meet the criteria for the waiver of premium benefit under the policy. Consequently, the court ruled in favour of the defendant, determining that the plaintiff was not entitled to the waiver of premium benefit. The court's decision was based on a strict interpretation of the policy terms and the evidence presented regarding the plaintiff's condition and the events that led to his claimed total disability.

Orders