Swiss Re Life & Health Australia Ltd v Public Trustee of Queensland (No 3)

Swiss Re Life & Health Australia Ltd, the insurer, filed an application against the Public Trustee of Queensland, seeking to enforce a forfeiture clause in an insurance policy, and by extension, an order for the return of policy benefits to the insurer. The case was heard in the Federal Court of Australia. The primary dispute revolves around the enforceability of a forfeiture clause in a life insurance policy, specifically whether the court should apply the equitable doctrine of forfeiture when a policyholder commits suicide.

The court was required to determine whether it should apply the equitable doctrine of forfeiture in the context of life insurance policies, particularly when the insured commits suicide. The central legal issue was whether the court should adhere to the equitable principle that prevents insurers from benefiting from a policyholder's suicide, or if it should enforce the forfeiture clause as per the policy terms. This involved balancing the policyholder's rights with the insurer's contractual rights.

The court's reasoning focused on the equitable principle that prevents insurers from retaining benefits when a policyholder commits suicide. The court held that the forfeiture clause was not enforceable due to this equitable principle. It found that the policy's terms did not override the fundamental equitable doctrine which prevents insurers from profiting from suicide. The court concluded that the equitable principle should prevail, and the policyholder's estate was entitled to the policy benefits. The court also directed that the funds be paid to the Public Trustee of Queensland for distribution in accordance with the court's declaration.