A life insurer seeking discharge from liability under a policy upon payment of “certain monies” in relation to a claim made by the estranged wife of a co-insured, who took his own life after murdering his de facto partner in 2016, has been granted approval by the Federal Court to do so.

Hannover Re Life of Australasia made the application after it found itself unable to “ordinarily” pay the remaining balance of the policy benefit to the man or his legal personal representative.

Chief Justice James Allsop, in his ruling approving the application, says the insurer “reasonably formed the opinion that no sufficient discharge could be obtained otherwise than paying money into the Court and that the declarations sought [pursuant to section 215 of the Life Insurance Act] should be made”.

Section 215 allows for a life company to pay any money into the Court that is “payable” in respect of a policy if no sufficient discharge can otherwise be obtained; and payment of the money into the Court discharges the company from any liability under the policy in relation to the money.

The judge in his ruling also mentioned the “so-called forfeiture rule” whereby if a person murders another person, the murderer is precluded from receiving a financial benefit from the victim’s death, including the benefit of life insurance proceeds.

Chief Justice Allsop says in this particular case that it is not necessary, for present purposes, to determine precisely whether, or if so, how, the rule applies. It is sufficient that there is potential for it to apply, given the Coroner’s findings, and it is a factor supporting the legitimacy of the insurer’s invocation of section 215 of the Life Insurance Act.

There was an unclaimed balance of $231,525 from the policy after the estranged wife’s claim for her 30% share of the proceeds was accepted by the insurer.

The de facto partner was the other nominated beneficiary for the remaining 70% share under the policy that the man and his wife took out in August 2009 with a benefit amount of $330,750.

Under the terms of the policy if the policyowner dies, the insurance benefit will be paid to the policyowner’s legal personal representative or other person permitted under the Life Insurance Act 1995. And if a nominated beneficiary pre-deceases the policyowner, then that nominee’s share is payable to the policyowner’s legal personal representative.

Hannover Re made enquiries in respect of the man and his de facto partner “in connection with its liability” under the policy after the wife submitted her claim in 2021.

It made a probate search for the man’s legal personal representative or executor of his estate and was informed by the Supreme Court of New South Wales that it does not hold a deposited will or any application for probate in his name.

The insurer then contacted the man’s sister by letter at her last known address on three occasions in 2021 and last year to inquire about the contact details of his legal representative. No response to the letters were received.

The NSW Department of Communities and Justice, which notified the insurer that it represented the interests of a daughter whom the man and his partner had left behind, asked for forms to make a claim on behalf of the child who was a minor at all relevant times.

Claims assessor Ben Beeby then followed up with calls to the department on seven occasions in connection with a potential claim on behalf of the daughter between December 2021 and June last year.

He was advised in February last year that the department had received the claim forms and was intending to lodge a claim on behalf of daughter. However subsequent follow-up calls to the department in May and June last year went unanswered.

Hannover Re did not receive a completed claim form from the department and at the time of the case management hearing on December 6 last year, neither the Minister for Families and Communities or any representative had engaged with the proceedings.

The Minister, who is the respondent in the insurer’s application to the Federal Court, subsequently filed a Notice of Acting on February 3 this year. Hannover Re filed the originating application in October last year.

“I further note in this regard the [insurer’s] unsuccessful attempts to locate the legal personal representative of [the man] through communication with [his] relatives and the [Department of Communities and Justice],” Chief Justice Allsop said in his judgment days later on February 10.

“An additional layer of complexity in the present case is presented by…. the lack of engagement to date of the Department and the Minister.”

Chief Justice Allsop also approved Hannover Re’s bid to recoup the costs it had incurred in connection with the legal proceedings from the unclaimed 70% of the policy benefit.

Click here for the ruling.

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