Chapman v United Super Pty Ltd

Judgment 1HIS HONOUR: The plaintiff sues on the basis that he is totally and permanently disabled and is entitled to benefits on that basis from the first defendant, the trustee of his Superannuation Fund ("the first defendant" or "the Trustee") who was insured against that risk by the second defendant, Hannover Light Re Office Australasia Ltd ("the Insurer"). 2The plaintiff was born on 24 December 1968. On 18 November 2006, he claims that he suffered back problems as a result of work done at Muswellbrook whilst installing a sprinkler system at a shopping centre. At the time, and indeed at all relevant times, he was employed by Firewise (Aust) Pty Ltd as a sprinkler fitter. He continued working. 3On 6 February 2007, the plaintiff was working at a building site in Canberra. He said he was required to pick up a screwing machine weighing approximately 50 to 60 kilograms from a transportation box onto the corner of the box. Whilst lifting the machine and twisting he suffered significant pain in his lower back. He says he continued going to work but although he went to work he did not do any work and just followed the foreman about and this continued until 13 February 2007 when he had a further exacerbation of back pain. 4The plaintiff suffered a third accident on 2 March 2007 when "cutting drops". He ceased working after this accident. He claims to have been totally and permanently disabled from 4 March 2007. 5It is indeed accepted that the relevant disability date for purposes of this case is 4 March 2007. 6The Trust Deed governing the Superannuation Fund provides in clauses 5.12 and 7.2 as follows: "5.12 Total and Permanent Disablement Subject to this Deed, the Benefit payable to a Member who ceased to be Gainfully Employed prior to attaining age 65 having suffered Total and Permanent Disablement shall be the sum of: ... (b) the amount of any Insured Benefit, if any, provided in respect of the Member. 7.2 Definitions In the Deed, unless the contrary intention appears: ... "Total and Permanent Disablement" means disablement of a Member resulting from an illness, accident or injury to the Member which commenced or occurred whilst a Member and as a result of which: (a) the Member has been precluded for a period of six consecutive months after the date of occurrence of such event from following any occupation for which the Member is reasonably suited by education training or experience; and (b) the Member will, in the opinion of the Trustee after consideration of medical evidence satisfactory to it, continue to be so disabled to such an extent as to render the Member unlikely ever again to resume work in or attend to any such occupation; and "Totally and Permanently Disabled" shall have a corresponding meaning but where at any time, all or part of the Benefit payable in the event of Total and Permanent Disablement is an Insured Benefit, the term "Total and Permanent Disablement" shall bear the meaning ascribed to it in the relevant Policy in lieu of the above definition; 7The relevant insurance policy was taken out by the Trustee. The Policy contains clause 1.3 which, as far as relevant, reads as follows: "1.3 Total and Permanent Disablement in respect of an Insured Person who was gainfully employed within the six months prior to the Date of Disablement is where: 1.3.1 the Insured Person is unable to follow their usual occupation by reason of accident or illness for six consecutive months and in our opinion, after consideration of medical evidence satisfactory to us, is unlikely ever to be able to engage in any Regular Remunerative Work for which the Insured Person is reasonably fitted by education, training or experience;" ... 8On 9 November 2009, the first defendant rejected the plaintiff's claim. It did so after receiving letters from the second defendant on 6 August 2009 rejecting the claim under the policy for total and permanent disablement. 9The plaintiff protested through his lawyers, the matter was reviewed, but the Trustee again rejected the claim on 22 July 2011 following rejection by the Insurer on 6 May 2011 of the Trustee's claim under the policy. The plaintiff thus brings these proceedings challenging the Trustee's decision. 10The oral hearing took place on 4 March 2013, Mr CJS Purdy appearing for the plaintiff and Mr MBJ Lee SC and Mr EB Cowpe appearing for the defendant. 11In this sort of case, if the Court takes a different view of the facts, it does not substitute its view for that of the Trustee: the decision of the Trustee must be examined to see whether it complies with the duties it owed to the plaintiff. I will deal with these problems, which I might loosely call "procedural problems", in due course. Apart from those questions, I need to consider the following questions of fact: 1.Was the plaintiff unable to follow his usual occupation by reason of accident for six consecutive months after 4 March 2007 by reason of disablement? 2.Was the plaintiff precluded for such period from following any occupation for which he was reasonably suited by education, training or experience? 12After dealing with those questions I then need to tackle the procedural matter, viz: 3.Was the conduct of the Trustee such as it would be appropriate for this Court to interfere with its decision? This involves consideration of the available grounds of review, viz: (a) unreasonableness; and (b) breach of duty by: (i) the Trustee; and/or (ii) the Insurer. 13I will deal with these questions seriatim.

Issue 2: At the date of disablement, was the plaintiff unlikely to ever be able to work in any occupation for which he was reasonably fitted by education, training or experience? 23I pass now to the second question of fact, which I consider to be the one of pivotal importance in the case, and which counsel for the defendants called the second limb of the Insurer's contract definition of "total and permanent disablement"; namely that in the opinion of the Insurer the plaintiff is "unlikely ever to be able to engage in any Regular Remuneration Work for which the plaintiff is reasonably fitted by education, training or experience". 24Mr MBJ Lee SC relied on the authority of the Court of Appeal's decision in Manglicmot v Commonwealth Bank Officers Superannuation Corporation Pty Ltd [2011] NSWCA 204 at 33 [88] where it was said: "The Hannover TPD clause defines total and permanent disablement. It is quite emphatic: the member must be unable ever to engage in or work for reward in any occupation or work. As further context, the member must have been absent from work for six months. Introduction of full time employment or part-time employment into the wording, notions which themselves carry uncertainty (what is the standard for full time employment?) is in my view not warranted. The clause requires unfitness to work, without distinction between full time work and part-time work other than by regard to the work which the member is reasonably capable of performing by reason of education, training or experience." 25Those words were from the judgment of Giles JA. Whealy JA and I were the other members of the Court and we agreed with what Giles JA had said. I was informed from the bar table that there was a five member Court of Appeal which was at the time of the hearing reviewing the correctness of that paragraph. No party wished me to hold back in giving judgment in this case because of that fact. 26However, after preparation of what was then considered to be the final draft of these reasons the Court of Appeal delivered its judgment: Hannover Life Re of Australasia v Dargan [2013] NSWCA 57. 27The principal judgment was delivered by Bathurst CJ with whom Macfarlan, Meagher, Hoeben JJA and Tobias AJA agreed. The Court affirmed Manglicmot, with the Chief Justice stating at [54] that the words used in the document supported that view and that "there does not seem to be anything unreasonable in construing the contract as providing that a person who is capable of undertaking regular part-time work is not totally and permanently disabled". 28However, as pointed out by Mr CJS Purdy in his additional submissions, the work must be regular work not casual. 29The Dargan judgment, however, also dealt with other matters that might affect the present case. Thus, I had a message sent to counsel inviting further submissions. 30Both sets of counsel made additional submissions, for which I am grateful. 31The defendants' central submission is that the plaintiff has not demonstrated either to the Insurer, to the Trustee, or to the Court, that he is unable to do part-time work for which he is reasonably fitted by his education, training and experience. 32Putting aside situations of de minimus training one does not require a plaintiff to undergo a course of retraining in order to make him or her employable. Even if an injured ballet dancer has the intellectual capacity to go to university, get a law degree and become a barrister, that would not disqualify him or her from being totally and permanently disabled (assuming that they were not able to take any part-time job that was reasonably fitted to his or her then current education, training or experience). 33This construction was reached by Hungerford J in Fernance v Wreckair Pty Ltd (No 2) (1992) 43 IR 300 at 329 and affirmed by Brereton J in Halloran v Harwood Nominees Pty Ltd [2007] NSWSC 913 at [36]. 34Dargan makes it clear at [37] that it is no bar to the finding that work is within the plaintiff's education, training or experience that a short qualifying course of training or retraining may be required. 35The plaintiff says he is not fit even for part-time work. The defendant says that the plaintiff can do part-time work as a spare parts interpreter, a taxi driver, a checkout operator and similar jobs. 36I have already considered the position of spare parts interpreter and on the facts I discard that as a realistic possibility. 37The plaintiff would need some retraining to be a taxi driver. Although there is no actual evidence on this point, it would seem from general knowledge that the retraining would not be particularly arduous and would come within the principle noted in paragraph 34 above. 38The onus is on the plaintiff to show that he is not able to do any part-time work so that any deficiency in proof here would be to his account. He probably could be a checkout operator without retraining. He would have to stand for some time, but again the evidence does not show that he cannot do that. 39Counsel for the plaintiff submits that the reference to "occupational work" in a totally and permanently disabled policy is taken to mean "a recognised occupation, not a special light duties job for injured workers, and must be work which the plaintiff is likely to obtain having regard for the practical realities of [his] situation". The authority given for that proposition is Sayseng v Kellogg Superannuation Pty Ltd [2007] NSWSC 583 at [64] per Nicholas J. This is consistent with the principle stated in paragraph 34 above. It is put that there was no evidence in the instant case before the Trustee or the Insurer that the sort of work suggested was available to the plaintiff or, perhaps to put it more accurately, available to the plaintiff on 4 March 2007. 40In any event, the plaintiff points to the fact that medical evidence supports his view that he is unable either to sit or stand for long periods of time. This, he submits precludes him from virtually all occupations, including sedentary ones. The main support for this proposition is the medical reports of Dr Deveridge. 41Dr Deveridge's first Report dated 8 April 2009 (Court Book page 291) based on the doctor's examination of the plaintiff on 7 April 2009 was for some unexplained reason never shown to the Trustee or the Insurers before their rejection of the claim in 2009. Dr Deveridge opined that the plaintiff was permanently unfit for his pre-accident employment and for labouring type work generally. "He is going to be permanently unfit for repetitive bending, heavy lifting, carrying, twisting, pushing, and dragging. He is to avoid prolonged periods of sitting or standing. He has limited transferable skills. In his current state, even sedentary duties stay would prove difficult ... With time, pain management, and retraining, he may get back to a part time sedentary position." 42Dr Deveridge reviewed the plaintiff in March 2011. He said: "The degree of disability does seem excessive when taken into account with the medical imaging and operative findings. However his complaints are accepted as reasonable and consistent. ... there was no evidence of any conscious exaggeration. He is permanently unfit for his pre-accident employment installing fire sprinklers, and for labouring work generally... [h]is inability to sit or stand in any posture for other than brief periods would also act against return to spare parts interpretation, or other similar semi-sedentary employment. I consider that both Dr. Harvey Sutton and Dr. Anderson have incorrectly indicated that he is fit for that type of work. I consider that his injury and current condition qualifies him for total and permanent disablement..." (Court Book page 313) 43As Dr Deveridge indicated, the doctors which were asked to examine the plaintiff on behalf of the Insurer took a different view as to the plaintiffs' ability to handle part-time work. 44If I were the person that had to make a decision, on the balance of probabilities, as to the plaintiffs' inability to work any job that his training and experience allowed him to do as at 4 March 2007, I may have come to the conclusion that there was sufficient evidence to satisfy that onus. However that is not what is required of me in this case. Further, the facts do not necessarily lead a reasonable adjudicator to that conclusion. 45Apart from the opinion of Dr Deveridge, there are the opinions of Drs Harvey Sutton and Anderson who are experienced in this field. They consider that the material given by the plaintiff does not demonstrate that as at 4 March 2007 he was completely unable to do any work, whether full-or part-time, for which he was experienced and trained to do. 46Added to this is the problem that the plaintiff has suffered other trauma since March 2007 which may well have contributed to his present condition. There was the unsuccessful operation on his back, a couple of car accidents and severe illness. 47It is notorious that either degenerative or accident-related back trouble can be extremely painful and debilitating. However the definition in the relevant policies is an extremely hard one to satisfy, so much so that one wonders sometimes whether people taking out total and permanent disability insurance realise that it is only a very narrow range of cases where they may recover under the policy. This is despite attempts by courts to read down the most extreme clauses to bring some realism back into play. To succeed, an injured person must satisfy the Insurer (and the Trustee) that they are disabled to such an extent that they are rendered unlikely ever again to resume work in an occupation for which they are reasonably suited by education, training or experience. That must be proved as at the date of the disablement. Very often other circumstances intervene so that it is very difficult indeed to make the assessment as at the date of disablement, yet if it cannot be done then the insured's claim is likely to fail. 48The Court Book contains copies of most, if not all, relevant medical evidence. I have reviewed it, but I do not perceive the necessity to quote extensively from it. There is certainly material there which would enable a Trustee or Insurer to come to the conclusion that the plaintiff satisfied the definition. 49On the other hand, there is substantial medical evidence that the plaintiff's condition is not as severe as he claims and that it is a little surprising that the physical evidence has caused the plaintiff to be so debilitated. Some material suggests that the plaintiff has now convinced himself that he cannot work at all and this view has outweighed other evidence. 50Again, however, it is fair to remark that some of the doctors retained by the Insurer seem to be a bit too optimistic as to the plaintiff's chances of obtaining even part-time employment. Whether this remark is accurate or not, the fact that the Insurer has had such advice from well-qualified medical experts means that it was entitled to act upon such advice. 51In view of all this, it would be quite reasonable for an adjudicator to come to the view that the plaintiff was not totally and permanently disabled.

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