Stevens v Colonial Mutual Life Assurance Society Ltd & Commonwealth Financial Planning Ltd [2012] NSWDC 94

Stevens v Colonial Mutual Life Assurance Society Ltd & Commonwealth Financial Planning Ltd [2012] NSWDC 94

The first defendant was entitled to avoid the CML policy because the plaintiff, although honestly and innocently, failed to disclose material health and lifestyle matters that a reasonable person in his position would have been expected to know were relevant to the insurer's decision whether to accept the risk. The plaintiff therefore failed against the first defendant. The second defendant, through Mr Galloway, owed the plaintiff a duty of care, including a fiduciary duty, in circumstances where it gave financial planning advice intended to replace an existing valid Westpac life insurance policy with a CML policy for the financial benefit of the Commonwealth Group. That duty was breached...

Jurisdiction
Australia
Judgment Date
03 July 2012
Procedural Posture
Civil Proceedings Concerning Life Insurance, Negligence, Breach of Duty and Misleading or Deceptive Conduct / Final Hearing; Principal Judgment
Outcome
Judgment for the first defendant on the plaintiff's claim against that defendant; judgment for the plaintiff against the second defendant in the total sum of $311,128.04 including interest.
Legal Topics
['life Insurance' 'material Non Disclosure' 'avoidance of Insurance Policy' 'financial Planner Duty of Care' 'fiduciary Duty' 'misleading or Deceptive Conduct' 'causation of Loss' 'damages' 'costs']
['contract' 'insurance' 'negligence' 'consumer Protection' 'financial Services'] ['life Insurance' 'material Non Disclosure' 'avoidance of Insurance Policy' 'financial Planner Duty of Care' 'fiduciary Duty' 'misleading or Deceptive Conduct' 'causation of Loss' 'damages' 'costs']

Case Brief

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Procedural Posture

Civil Proceedings Concerning Life Insurance, Negligence, Breach of Duty and Misleading or Deceptive Conduct / Final Hearing; Principal Judgment

Legal Issues

  1. 1 ['Whether the defendants, or either of them, and therefore Mr Galloway, owed the plaintiff a relevant duty of care, either under the general law or arising from relevant statutory provisions, and if so, the nature and content of such duties.' 'Whether, in the course of the plaintiff submitting his proposal for life insurance to the first defendant, there were material non-disclosures concerning his health status and lifestyle and whether, as a result, the first defendant was justifiably entitled to avoid the policy issued on 13 October 2010.' 'Whether, as a result of representations made to the plaintiff by Mr Galloway, either defendant breached duties owed to the plaintiff, and whether representations made by Mr Galloway on behalf of the second defendant were misleading and deceptive.' 'The assessment of any entitlement of the plaintiff to damages.']

Ratio Decidendi

The first defendant was entitled to avoid the CML policy because the plaintiff, although honestly and innocently, failed to disclose material health and lifestyle matters that a reasonable person in his position would have been expected to know were relevant to the insurer's decision whether to accept the risk. The plaintiff therefore failed against the first defendant. The second defendant, through Mr Galloway, owed the plaintiff a duty of care, including a fiduciary duty, in circumstances where it gave financial planning advice intended to replace an existing valid Westpac life insurance policy with a CML policy for the financial benefit of the Commonwealth Group. That duty was breached...

Court Disposition

Judgment for the first defendant on the plaintiff's claim against that defendant; judgment for the plaintiff against the second defendant in the total sum of $311,128.04 including interest.

Orders

  • ["Verdict and judgment for the first defendant on the plaintiff's claim against that defendant." "The plaintiff is to pay the first defendant's costs." 'Verdict and judgment for the plaintiff against the second defendant, including interest up to the time of judgment, in the total sum of $311,128.04.' "The second...