Westpac Life Insurance Services Ltd v Guirgis [2015] VSCA 239 Duty of Disclosure & Fraudulent Misrepresentation

In Westpac Life Insurance Services Ltd v Guirgis [2015] VSCA 239, Ms Thereze Guirgis had an insurance policy with Westpac Life Insurance Services Ltd (“Westpac Life Insurance”). Under the policy of insurance, in the event Ms Guirgis was to suffer from a partial or total disability within the meaning of the policy, Ms Guirgis would be entitled to receive monthly benefit payments from Westpac Life Insurance.

On or around October 2011, Ms Guirgis made a claim on her insurance policy, noting that she was suffering from fibromyalgia. During the period October 2011 to April 2012, Westpac Life Insurance made a number of monthly benefit payments to Ms Guirgis.

On 20 June 2012, however, Westpac Life Insurance informed Ms Guirgis that they were of the view that she had failed to comply with her duty of disclosure and intended to avoid the insurance policy from inception in accordance with section 21 and section 29(2) of the Insurance Contracts Act 1984 (Cth).

Ms Guirgis subsequently sued Westpac Life Insurance and submitted that it was in breach of the policy of insurance. Ms Guirgis was successful in the County Court of Victoria at first instance. On appeal, the key issues were as follows:

• whether the trial judge erred in finding that there was no fraudulent misrepresentation or non-disclosure in relation to the diagnosis of fibromyalgia; and

• whether the trial judge erred in finding that Westpac Life Insurance would have issued the policy of insurance to Ms Guirgis even if it had known she was suffering from fibromyalgia and, hence, in any event.

Despite the fact that fibromyalgia may have been mentioned to Ms Guirgis by two rheumatologists, the Court of Appeal agreed that it could not be said that Ms Guirgis was actually “aware of the fibromyalgia diagnosis in August 2007.^[1]” The Court noted that Ms Guirgis’ primary medical practitioner (Dr Fouad Dawood) himself did not believe that Ms Guirgis was suffering from fibromyalgia and as a result, did not have any discussion with Ms Guirgis about fibromyalgia prior to August 2007. The Court of Appeal further noted that Ms Guirgis had informed Westpac Life Insurance that she had visited one of the rheumatologists (Dr Andrew Gibson) in July 2007. Had she truly intended to mislead or misrepresent her condition to Westpac Life Insurance, Ms Guirgis would not have disclosed this information in the first place.

The Court of Appeal also agreed with the trial judge that Westpac Life Insurance would have issued the policy of insurance to Ms Guirgis in any event. The underwriter asserted that the policy of insurance would never have been issued had Westpac Life Insurance known that Ms Guirgis was suffering from fibromyalgia and in accordance with particular “guidelines.” However, these particular “guidelines” were never produced. Consequently, the Court found that “this was a gap in the applicant’s proof”^[2] and that Westpac Life Insurance had failed to prove that the insurance policy should never have been issued. Additionally, the Court noted that if fibromyalgia was considered to be such a serious condition that could possibly result in the denial of insurance coverage, insurance and medical questionnaires should explicitly mention fibromyalgia.

Leave to appeal was subsequently refused.