AIA Australia Ltd v Sharma [2023] FCAFC 42

AIA Australia Ltd v Sharma [2023] FCAFC 42

The factual findings established that Dr Sharma's fraudulent misrepresentations had a continuing effect such that CommInsure, as a subsequent group insurer, could rely on them under s 29(2) of the Insurance Contracts Act 1984 (Cth) to avoid the contract of insurance pertaining to additional cover. The misrepresentations were not 'spent' by OnePath's acceptance; CommInsure was within the contemplated class of persons to whom the misrepresentation was directed, and would not have granted cover but for the misrepresentations.

Parties
Appellant: AIA Australia Ltd; First Respondent: Pragya Sharma; Second Respondent: H.E.S.T. Australia Ltd; Third Respondent: Australian Financial Complaints Authority Ltd; Deceased Life Insured: Dr Deepak Sharma
Jurisdiction
Australia
Judgment Date
17 March 2023
Procedural Posture
Appeal / Full Court Judgment
Outcome
Appeal allowed. Orders of the primary judge set aside. Proceeding dismissed with costs.
Legal Topics
Fraudulent Misrepresentation, Life Insurance, Statutory Interpretation, Group Policy Transfer, Duty of Disclosure
Insurance Superannuation Contract Law Fraudulent Misrepresentation Life Insurance Statutory Interpretation Group Policy Transfer Duty of Disclosure

Case Brief

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Parties

AIA Australia Ltd

Appellant

Pragya Sharma

First Respondent

H.E.S.T. Australia Ltd

Second Respondent

Australian Financial Complaints Authority Ltd

Third Respondent

Dr Deepak Sharma

Deceased Life Insured

Procedural Posture

Appeal / Full Court Judgment

Legal Issues

  1. 1 Whether continuing misrepresentations were made to the second insurer
  2. 2 Whether misrepresentations were 'spent' when relied on by the first insurer
  3. 3 Whether the second insurer could rely on misrepresentations to avoid the policy under s 29(2) of the Insurance Contracts Act 1984 (Cth)

Ratio Decidendi

The factual findings established that Dr Sharma's fraudulent misrepresentations had a continuing effect such that CommInsure, as a subsequent group insurer, could rely on them under s 29(2) of the Insurance Contracts Act 1984 (Cth) to avoid the contract of insurance pertaining to additional cover. The misrepresentations were not 'spent' by OnePath's acceptance; CommInsure was within the contemplated class of persons to whom the misrepresentation was directed, and would not have granted cover but for the misrepresentations.

Court Disposition

Appeal allowed. Orders of the primary judge set aside. Proceeding dismissed with costs.

Orders

  • The appeal is allowed with costs.
  • The orders of the primary judge on 13 May 2022 and 30 May 2022 are set aside.