TOWER AUSTRALIA LTD v FARKAS [2005] NSWCA 363

TOWER AUSTRALIA LTD v FARKAS [2005] NSWCA 363

The correct construction of the policy requires assessment of 'terminal illness' prognosis with regard to the anticipated response to diagnosis, including available medical treatment. However, on the evidence, the respondent's illness at the time of diagnosis was highly likely to result in death within 12 months even with treatment. The actual survival beyond 12 months is not relevant to entitlement under the policy, as the contract focuses on prognosis at time of diagnosis. Thus, the appeal is dismissed and the benefits are payable.

Parties
Appellant: Tower Australia Ltd; Respondent: George Farkas
Jurisdiction
Australia
Judgment Date
28 October 2005
Procedural Posture
Civil Appeal / Appeal From Supreme Court Decision
Outcome
Appeal dismissed with costs
Legal Topics
Death Benefit, Critical Illness Benefit, Policy Construction, Prognosis and Statistical Probability, Interpretation of 'highly Likely' in Insurance Policies
Insurance Law Death Benefit Critical Illness Benefit Policy Construction Prognosis and Statistical Probability Interpretation of 'highly Likely' in Insurance Policies

Case Brief

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Parties

Tower Australia Ltd

Appellant

George Farkas

Respondent

Procedural Posture

Civil Appeal / Appeal From Supreme Court Decision

Legal Issues

  1. 1 Whether the policy required assessment of 'terminal illness' prognosis by reference to available treatment
  2. 2 Whether the respondent's illness as diagnosed was 'highly likely to result in death within 12 months' per the policy definition
  3. 3 Whether survival beyond 12 months is relevant to policy entitlement

Ratio Decidendi

The correct construction of the policy requires assessment of 'terminal illness' prognosis with regard to the anticipated response to diagnosis, including available medical treatment. However, on the evidence, the respondent's illness at the time of diagnosis was highly likely to result in death within 12 months even with treatment. The actual survival beyond 12 months is not relevant to entitlement under the policy, as the contract focuses on prognosis at time of diagnosis. Thus, the appeal is dismissed and the benefits are payable.

Court Disposition

Appeal dismissed with costs

Orders

  • Appeal dismissed with costs
  • Correction in the fourth declaration to reference 'Order 7' in place of 'Order 5'