{"id":26395,"date":"2014-06-03T19:13:09","date_gmt":"2014-06-03T09:13:09","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=26395"},"modified":"2025-09-02T11:34:38","modified_gmt":"2025-09-02T01:34:38","slug":"court-upholds-claim-denied-by-pre-existing-condition","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2014\/06\/03\/court-upholds-claim-denied-by-pre-existing-condition\/","title":{"rendered":"Court Upholds Claim Denied by Pre-Existing Condition"},"content":{"rendered":"

The NSW Court of Appeal has upheld an earlier decision in favour of an insurer who declined a TPD claim on the grounds of a pre-existing condition.<\/span><\/p>\n

In the case of Preston v AIA Australia, the appellant, a carpenter who took out a life insurance policy with AIA Australia, took the insurer to court for refusing to pay his TPD claim. The original judgement found in favour of the insurer, because the insured\u2019s injury did not meet the policy definition of \u2018accidental injury\u2019. This decision has now been upheld by the NSW Court of Appeal.<\/p>\n

The client, Mr Preston, took out a Priority Protection policy with AIA Australia in 2008. The benefits under the policy included term life insurance (for which a separate premium was payable) and an \u2018Accident Only\u2019 Total Disablement benefit.<\/p>\n

In his application for insurance, Mr Preston disclosed that in 1997 he had fractured both his legs when he fell off a ladder. He stated that the treatment had included \u2018surgery, pins and plates inserted\u2019. The policy was issued on standard terms in April 2008.<\/p>\n

In 2009, Mr Preston suffered an injury to his left ankle and, as a result, was unable to continue his work as a carpenter.<\/p>\n

Mr Preston lodged a claim on his insurance but it was denied because the new injury was found to have been caused in part by a pre-existing injury.<\/p>\n

Mr Preston brought court proceedings against AIA Australia, despite the claim process not having been fully resolved. AIA Australia noted that continued requests for further documentation from the client were not heeded.<\/p>\n

Mr Preston argued that he had become totally disabled as a consequence of the injury to his left ankle on 6 May 2009 and that this injury was unconnected with the injuries sustained in 1996, from which he had fully recovered.<\/p>\n

\u2026the wording of the Policy, like many similar policies, is very restrictive<\/p><\/blockquote>\n

The Primary Judge found that there were two causes of the insured’s admitted disablement. The first of these was the 1996 injury, which had occurred well before the commencement of the policy. The second was the 2009 injury. His Honour concluded that the insurer’s reliance on the existence of a pre-existing injury as a ground for denial of liability \u201c\u2026was squarely within the questions for determination, and fairly litigated\u201d.<\/p>\n

The Court of Appeal found that Mr Preston had a pre-existing physical condition that was susceptible to aggravation, and the aggravation contributed to his total disablement, and therefore upheld the Primary Judge\u2019s decision.<\/p>\n

In handing down the Court of Appeal\u2019s decision, Judge Gleeson<\/strong> noted that the policy wording was \u2018very restrictive\u2019:<\/p>\n

\u201c\u2026the wording of the Policy, like many similar policies, is very restrictive. No doubt this came as a surprise to the appellant when the insurer denied cover.\u201d<\/p>\n

Judge Gleeson continued:<\/p>\n

\u201cWhether the appellant was misled when taking out the Policy was not an issue in these proceedings; nor was it argued that the insurer’s conduct in apparently failing to draw to the insured’s attention, in clear and plain language, the restrictive terms of the cover provided under the Policy might have constituted unconscionable conduct. Hence these possible avenues for ameliorating what may seem a harsh result were not open before the Court below or on appeal.\u201d<\/p>\n

The appeal was dismissed and Mr Preston ordered to pay the insurer’s costs.<\/p>\n

For full details of this case, click here<\/a> to visit our Case Studies Library.<\/p>\n

To read the Court of Appeal\u2019s findings, click here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

The NSW Court of Appeal has upheld an earlier decision in favour of an insurer who declined a TPD claim on the grounds of a pre-existing condition.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8294,8],"tags":[],"class_list":{"0":"post-26395","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-claims","7":"category-compliance-regulation","8":"headers-new"},"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/26395","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=26395"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/26395\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=26395"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=26395"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=26395"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}