Swansson v Harrison - [2014] VSC 118

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

MAJOR TORTS LIST

No. 6310 of 2013

RICHARD NEIL SWANSSON	Plaintiff
v
RUSSELL ALAN HARRISON & ORS	Defendants

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JUDGE:	MACAULAY J
WHERE HELD:	Melbourne
DATE OF HEARING:	5, 6 and 7 March 2014
DATE OF JUDGMENT:	26 March 2014
CASE MAY BE CITED AS:	Swansson v Harrison & Ors
MEDIUM NEUTRAL CITATION:	[2014] VSC 118

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TORT - negligence - misleading and deceptive conduct - Corporations Act2001 (Cth) s 1041H and Australian Securities and Investments Commission Act 2001 (Cth) s 12DA - application for life insurance policy to replace an existing policy - insurance adviser's oral advice - whether failure to advise as to ongoing duty of disclosure - whether failure to advise of risk of avoidance of life insurance policy for innocent non-disclosure within 3 years – Insurance Contracts Act 1984 (Cth) s 29(3) - failure to make further inquiries about client's medical condition prior to cancellation of an existing life insurance policy - standard of care of reasonable and prudent insurance adviser – Wrongs Act 1958 (Vic) ss 48, 57.

TORT - contributory negligence – insurance applicant's failure to disclose changes to status of medical condition before policy issued - just and equitable apportionment - causation - reduction in damages – Wrongs Act 1958 (Vic) ss 26, 48, 62 - Podrebersek v Australian Iron & Steel Pty Ltd (1985) 59 ALR 529.

EVIDENCE - credit of witnesses - reliability and fallibility of memory - Watson v Foxman (1995) 49 NSWLR 315

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R Gillies QC with Mr B Jellis	Adviceline Injury Lawyers
For the Defendants	Mr D Masel SC with Mr R Heath	Colin Biggers & Paisley

TABLE OF CONTENTS

Introduction and Summary.............................................................................................................. 1

Background......................................................................................................................................... 2

7 March meeting............................................................................................................................ 3
Events after 7 March..................................................................................................................... 5

How the case was put........................................................................................................................ 8

Factual and legal issues for decision............................................................................................ 11

What advice was given on 7 March 2012?................................................................................... 13

General considerations............................................................................................................... 13
Phone conversation/s before 7 March..................................................................................... 15
7 March meeting.......................................................................................................................... 17
Events after 7 March................................................................................................................... 25
Credit of the two witnesses....................................................................................................... 25

Reliability of recollection.......................................................................................................... 26
Mr Swansson’s motivation...................................................................................................... 26
Mr Swansson’s previous insurance applications.................................................................... 28
Mr Swansson’s understanding of the disclosure duty............................................................ 30
Mr Swansson’s understanding that he had done all he needed to do...................................... 31
Mr Harrison’s version: alleged inconsistencies....................................................................... 34
Mr Harrison: having it both ways?......................................................................................... 38
Mr Harrison’s sloppy business practice?................................................................................ 39
Mr Harrison’s motivation to earn commission?..................................................................... 39

Findings........................................................................................................................................ 40

Was it negligent not to make further enquiry about Mr Swansson’s condition before cancelling the AXA policy?................................................................................................................................ 43

Was Mr Swansson guilty of contributory negligence?............................................................. 46

Just and equitable apportionment................................................................................................ 49

Conclusion and orders.................................................................................................................... 51

HIS HONOUR:

Introduction and Summary

In March 2012 the plaintiff cancelled a policy of life insurance he had held since 2004 and entered a new policy of life insurance with a different insurer. Each policy was designed to respond if the insured died or was…

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: [2014] VSC 118
Decision Date: 26 March 2014

CaseChat Overview and Summary

The case of Swansson v Harrison involved the plaintiff, Swansson, who sought damages for the alleged negligence of the defendant, Harrison, an insurance adviser. The dispute centred on the defendant's advice concerning the application for a life insurance policy. The matter was heard in the Supreme Court of Victoria. Swansson argued that Harrison's advice was misleading and deceptive, and that there was a failure to disclose the ongoing duty of disclosure and the risk of policy avoidance within three years. Swansson further alleged that Harrison did not make further inquiries about Swansson's medical condition prior to the cancellation of an existing life insurance policy.

The court was required to determine whether Harrison breached the standard of care of a reasonable and prudent insurance adviser by failing to provide adequate advice to Swansson. Additionally, the court had to consider whether Swansson was contributorily negligent by not disclosing changes to his medical condition before the policy was issued. The court was tasked with assessing the just and equitable apportionment of liability and causation, and whether Swansson's damages should be reduced.

In its decision, the court held that Harrison did not breach the standard of care owed to Swansson. The court found that Harrison's advice was reasonable and in line with industry standards. The court also held that Swansson was contributorily negligent, as he failed to disclose changes to his medical condition. The court determined that a just and equitable apportionment of liability should be made between the parties, resulting in a reduction of Swansson's damages. The court further found that Swansson's failure to disclose changes to his medical condition was a causative factor in the outcome.

The court ordered that the defendant, Harrison, was to pay Swansson a reduced amount of damages, reflecting the contributory negligence and the apportionment of liability between the parties.

Orders