Hoare v Mercantile Mutual [2000] NSWSC 1026

Reported Decision : (2002) 12 ANZ Insurance Cases 90-110

New South Wales Supreme Court

CITATION : Hoare v Mercantile Mutual [2000] NSWSC 1026 CURRENT JURISDICTION: Equity Division Commercial List FILE NUMBER(S) : SC 50071/00 HEARING DATE(S) : 31/10/00, 01/11/00 JUDGMENT DATE : 7 November 2000

PARTIES : Michael James Hoare - Plaintiff Mercantile Mutual Life Insurance Company Limited - Defendant JUDGMENT OF : Rolfe J

COUNSEL : Mr R.W. Seton/Mr T.G. Chadwick - Plaintiff Ms J. Oakley - Defendant SOLICITORS : McCabes - Plaintiff Minter Ellison - Defendant CATCHWORDS : Claim for indemnity under an income protection policy of insurance, which policy was held to be a life policy within the meaning of the Life Insurance Act 1995, upheld. LEGISLATION CITED : Insurance Contracts Act 1984 Life Insurance Act 1995 CASES CITED : Nil DECISION : Plaintiff entitled to judgment

I N D E X

PARA

Introduction 1

The Policy Terms 4

The Claim 20

The Basis Of The Defendant's Defence 28

Total Disability 37

An Exclusion For Neck Pain 47

The Nature Of The Policy 76

If The Policy Had Been A Policy Of General Insurance 83

Conclusions 84

THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST

ROLFE J

NOVEMBER 2000

50071/2000 - HOARE v MERCANTILE MUTUAL LIFE INSURANCE COMPANY LIMITED

JUDGMENT

HIS HONOUR:

Introduction 1 The plaintiff, Mr Michael James Hoare, for whom Mr R.W. Seton of Counsel and Mr T.G. Chadwick of Counsel appeared, entered into a contract of income protection insurance with the defendant, Mercantile Mutual Life Insurance Company Limited, for which Ms J. Oakley of Counsel appeared, which policy commenced on 14 January 1998. 2 On 29 October 1997 the plaintiff signed an application form for the policy in which he disclosed, relevantly for present purposes, that he was born on 1 November 1949; that his occupation was that of a licensed builder in which he had been engaged for thirty years and which involved his supervising home renovations and carrying out twenty per cent of manual work; and that, to the best of his knowledge, he had never "had any of the following", namely "any neck, back or shoulder .. problems". 3 He stated that his actual income, net of expenses incurred in earning it, but before tax, for the prior twelve months derived through his personal exertion in his principal occupation was $80,000 and that he was seeking income protection of $5,000 per month. 4 He stated his usual doctor or medical centre was the Waratah Medical Centre; that he had last consulted with any doctor in 1996 for a common cold; and that he had made a claim, presumably for unemployment benefits, in respect of an injury to his Achilles tendon, which had required him to be off work for two months and from which he had made a full recovery. 5 In paragraph 25, which is the first of three paragraphs headed "Declaration" he answered "yes" to the question whether he had provided the Life Insurance Adviser with all the information that he/she requested to form the basis of a complete fact find and needs analysis, and that he had chosen to purchase "this policy which he/she has recommended". 6 There then appears in heavy type:- "I understand that I risk making a financial commitment to a life policy that may not be appropriate to my needs and objectives because:- … … I have elected to receive advice about a limited range of products only."