Tortious duty of good faith: does it apply to insurers in Australia?

The Vytautas case: the facts

In Vytautas Lomsargis v National Mutual Life Association of Australasia Ltd [2005] QSC 199 the Supreme Court of Queensland considered whether there was a tortious duty of good faith imposed upon insurers in Australia. In August 2001 the plaintiff made a claim under a policy, which upon total disability provided weekly income benefit payments until 2021. After concluding that the plaintiff’s claim was fraudulent, the insurer refused payment in December 2001. In August 2004 the plaintiff commenced proceedings against the insurer claiming payment of the agreed weekly sum, damages for breach of an implied duty of good faith in the insurance policy and damages based upon an alleged breach of a tortious duty of good faith.