Royal & Sun Alliance Life Assurance v Schaffer

Royal & Sun Alliance Life Assurance Ltd (RSA) and Mr Schaffer were the parties involved in a dispute before the High Court of Australia concerning the interpretation of a life insurance policy. Mr Schaffer sought to recover under the policy, which provided benefits for permanent total disablement. RSA denied liability, asserting that Mr Schaffer's condition did not meet the policy's definition of permanent total disablement.

The central legal issue before the High Court was whether Mr Schaffer's condition, a severe and chronic depression, constituted "permanent total disablement" as defined by the insurance policy. This required the court to consider the meaning of "permanent" and "total disablement" in the context of the policy's wording and the factual circumstances of Mr Schaffer's inability to engage in any occupation.

The High Court, in its joint judgment delivered by Gummow and Hayne JJ, held that the policy's definition of permanent total disablement required an assessment of whether the insured was unable to engage in *any* occupation for which they were reasonably suited by education, training, or experience. The court found that Mr Schaffer's depression, while severe and preventing him from performing his previous role as a solicitor, did not necessarily preclude him from engaging in *any* occupation. The court emphasised that the focus was on the capacity to earn income from *any* suitable occupation, not merely the insured's pre-disablement occupation. Consequently, the High Court allowed RSA's appeal, finding that Mr Schaffer had not established permanent total disablement under the policy.