Tower Australia Ltd v Farkas

Tower Australia Ltd appealed a decision of the Supreme Court of New South Wales concerning a claim made under a life insurance policy by Mr. Farkas. The dispute centred on whether Mr. Farkas's diagnosis of malignant non-Hodgkin's lymphoma triggered a critical illness benefit under the policy, which required the illness or condition to be "highly likely to result in death within twelve months."

The Court of Appeal was required to determine the proper construction of the critical illness benefit clause, specifically whether the likelihood of death within twelve months should be assessed with regard to available medical treatment, or solely based on the inherent nature of the diagnosed condition. Further, the court had to consider the meaning of "highly likely" in this context and whether the fact that the insured survived beyond the twelve-month period was relevant to the determination of the claim.

The Court of Appeal held that the policy's wording did not necessitate consideration of available treatment when assessing the likelihood of death. Instead, the focus was on the inherent prognosis of the diagnosed condition. The court found that "highly likely" referred to a probability that was more than a mere possibility but less than certainty, and that the assessment should be made at the time of diagnosis. The fact that Mr. Farkas ultimately survived beyond twelve months was not determinative of whether the condition was highly likely to result in death at the time of diagnosis.

The appeal was dismissed, and Tower Australia Ltd was ordered to pay Mr. Farkas's costs.