OnePath has won a court case over a $2.63 million claim on a life insurance policy bought by man who lied about his drug use and later jumped to his death from a car park after becoming embroiled in fraud allegations.

The case was dismissed in the Supreme Court of NSW and the man’s wife ordered to pay OnePath’s legal costs.

Sydney man Peter Larcombe took out the life insurance policy with OnePath in November 2014. He committed suicide in August 2016 while on holiday in Los Angeles.

Mr Larcombe was accused of being the mastermind behind one of the biggest corporate tax frauds in Australian history, the $130 million Plutus scheme which involved payroll firms diverting millions of dollars owed in taxes into other companies.

A claim by his wife Catriona Smith was declined by OnePath on the basis that Mr Larcombe fraudulently failed to comply with his duty of disclosure when he falsely said he had not smoked tobacco in the past 12 months or taken drugs on a regular basis or ever received treatment for drug dependence.

“It is inconceivable that he did not know and understand that…he was being asked, in plain English, whether he was taking or had previously taken or used or injected illicit drugs,” the court judgement says.

“It is inconceivable that he did not know that he was, and for a long time had been, a non-trivial drug user [and] did not know and understand that his illicit drug use was relevant to OnePath’s decision whether to accept the risk and, if so, on what terms.”

“I find that he did know and understand this.”

Ms Smith had argued that Mr Larcombe used cocaine in the same way as others drink alcohol, and that it was a normal activity within his social circle. This was rejected by the judge, who said her evidence was “deftly crafted to place the best and most benign complexion on Mr Larcombe’s drug use”.

The medical records reveal that "three years before 2015 he took drugs every day for 18 months and…that when he started he just could not stop, and sometimes had hallucinations”.

“OnePath would not have issued the policy had it known of his drug use,” the judgement says.

The full judgement can be read here.