THE SECOND PROCEEDINGS : MS MAUND'S CLAIM AGAINST FSS AS TRUSTEE OF THE SCHEME
95The insuring clause in the Policy relevant to Ms Maund's claim against FSS as trustee of the Scheme is clause 3. It is in the following terms:
" 'DEATH AND TPD'
If an Insured Member [such as Ms Maund] dies or suffers from TPD while this policy is in force, subject to the provisions of this policy, we [MetLife] will pay to the policyowner [FSS] the Sum insured in respect of that member, Subject to clause 2."
96Nothing in clause 2 is material to these proceedings.
97Critical words in the insuring clause are "suffers from TPD while this policy is in force" and "the Sum insured".
98The term "TPD" (an abbreviation for "Total and Permanent Disablement") is relevantly defined in clause 6(b) of the First Schedule to the Policy in the following terms:
"TOTAL AND PERMANENT DISABLEMENT
While covered under this Policy Total and Permanent Disablement shall mean ... In the case of an Insured Member whose Normal Hours are 15 hours each week or more at the time of the Insured Event giving rise to the claim:
The Insured Member having been absent from their Occupation with the Employer [the Police Force] through injury or illness for six consecutive months and having provided proof to our satisfaction [ie, the satisfaction of MetLife] that the Insured Member has become incapacitated to such an extent as to render the Insured Member unlikely ever to engage in any gainful profession, trade or occupation for which the Insured Member is reasonably qualified by reason of education, training or experience."
99Critical words in this definition for the purpose of these proceedings are: (a) the words "Normal Hours"; (b) the words "... at the time of the Insured Event giving rise to the claim..."; and (c) the words "... having been absent from their Occupation with the Employer through injury or illness for six consecutive months and having provided proof to our satisfaction that the Insured Member has become incapacitated to such an extent...".
100The expression "Normal Hours" is defined (on page 3 of the Policy) to mean "the full time or part time hours a Police Officer is contracted to perform each week or fortnight by [the Police Force] not including any hours over the contracted amount." The word "contracted" focuses attention on the Insured Member's contract terms rather than hours of work in fact performed.
101The words "at the time of the Insured Event giving rise to the claim" in clause 6(b) of the Policy are found also in the definition of "Sum Insured", as well as elsewhere in the Policy.
102The expression "Sum Insured" is defined in the Definitions section of the Policy (on page 4) as meaning:
"The amount calculated under the Second Schedule 2B and 2C by reference to the Insured Member's Age, Salary, Service Factor and whether the Insured Member is On-Duty or Off-Duty at the time of the Insured Event giving rise to the claim. If the Sum Insured exceeds the Maximum Benefit, it is reduced to the Maximum Benefit".
103The reference here to the Second Schedule leads to the following formula in Second Schedule 2D:
"On-Duty Sum Insured = Service Factor x Multiple of Salary x Salary at the time of the Insured Event".
104The parties are agreed that, for the purpose of these proceedings, Ms Maund is taken to have been "on-duty... at the time of the Insured Event giving rise to the claim" and that, for the purpose of this formula, the relevant "Service Factor" is "one" and the relevant "Multiple of Salary" is "8.5". A point of disagreement is the expression "Salary at the time of the Insured Event".
105Critical words in the definition of "Sum Insured" are the word "Salary" and the words "at the time of the Insured Event giving rise to the claim"
106The word "Salary" is relevantly defined in the Policy (on page 3) as meaning "For Non-Commissioned Officers, Possible Hours equivalent base salary as prescribed by the Crown Employees (Police Officers 2005) Award plus 17%". That definition matches the definition of "salary" in clause 3 of the Crown Employees (Police Officers Death and Disability) Award 2005.
107Critical expressions in this definition are "Base Salary" and "plus 17%". Does the expression "base salary" have the same meaning as is found in the Crown Employees (Police Officers 2005) Award (in contra-distinction, there, to specific allowances) or is it used simply as a contrast to the expression "plus 17%" within the confines of the definition?
108The expression "Insured Event" is defined in the Policy (at page 3) as meaning "an illness (including sickness, disease or disorder) suffered, or, bodily injury occurring, to a Police Officer while an Insured Member".
109Critical words in this definition are "an illness... suffered, or, bodily injury occurring, to a Police Officer while an Insured Member". Is the illness Ms Maund suffered to be viewed as having been "suffered" only at the time of its onset in 2007 or as extending to the time of her discharge from the Police Force in January 2010?
110The expression "at the time of the Insured Event giving rise to the claim" in the definition of "Sum Insured", directs attention to the provisions of clause 7 of the Policy. Clause 7 is in the following terms:
"7. CLAIMS
7.1 The policyowner must notify us [MetLife] in writing as soon as is practicable of an event entitling the Policyowner to a Benefit.
7.2 The accuracy and timeliness of a claim investigation, and subsequent payment, will be diminished if we are not notified in writing within one year after the event giving rise to the claim.
7.3 It is a condition of payment of any Benefit that the Insured Member provides us with such evidence to substantiate the claim as we may reasonably require. The Insured Member must submit at our expense to a medical examination conducted by a legally qualified medical practitioner appointed by us as we deem necessary. Satisfactory proof of age may be required prior to any payment of benefits. [Emphasis added]."
111The word "Benefit" is defined (on page 2 of the Policy) to mean "either a Death Benefit or Total and Permanent Disablement Benefit".
112The ubiquity of the expression "at the time of the Insured Event giving rise to the claim" is not without variations. It takes that form in the definition of "sum insured" as part of the larger expression "whether the Insured Member is On-Duty or Off-Duty at the time of the Insured Event giving rise to the claim"; in the introductory words of both clause 6(b) and clause 6(c) of the First Schedule; and in the formula in Part 2D of the Second Schedule. However, slight variations can be found in clause 7.2 in the body of the Policy, and in the concluding paragraph of clause 4 of the First Schedule.
113Clause 7.2 in the body of the Policy uses the expression "after the event giving rise to the claim", and invites a contrast with the expression "an event entitling the policyowner to a Benefit" in clause 7.1.
114Clause 4 of the First Schedule provides as follows:
"4. HOW BENEFITS ARE PAYABLE
Subject to the provisions of this Policy, when our claim requirements have been satisfied in respect of a Member in respect of a Benefit:
(a) the on-duty Death Benefit shall be paid as a lump sum payment of the Sum Insured;
(b) the off-duty Death Benefit shall be paid as a lump sum payment of the Sum Insured;
(c) the on-duty Total and Permanent Disablement Benefit shall be paid as a lump sum payment of the Sum Insured;
(d) the off-duty Total and Permanent Disablement Benefit shall be paid as a lump sum payment of the Sum Insured;
(e) the On-Duty Accidental Death Benefit shall be paid as a lump sum payment of the Sum Insured;
(f) the Off-Duty Accidental Death Benefit shall be paid as a lump sum payment of the Sum Insured;
(g) all benefits are payable to the Policy Owner.
The Sum Insured will be determined as being payable on the On-Duty or Off-Duty basis according to whether the Insured Member was On-Duty or Off-Duty at the time that the Insured Event giving rise to the claim occurred. An illness which is contracted by the Insured Member in the course of Employment is an Insured Event which occurred On-Duty. Where an Insured Member's illness is aggravated, accelerated, exacerbated or is subject to deterioration, and the Insured Member's Employment while covered as an Insured Member was a substantial contributing factor to such aggravation, acceleration, exacerbation or deterioration, the illness is an Insured Event which occurred On-duty. [Emphasis added]."
115Notably, this provision uses the expression "at the time the Insured Event giving rise to the claim" in circumstances in which it is qualified, at the beginning, by the words "according to whether the Insured Member was On-Duty or Off-Duty" (which find reflection in the definition of the expression "Sum Insured" in the body of the Policy) and, at the end, by the word "occurred". The provision thereafter uses the word "occurred" twice, and speaks of an illness being "contracted" in the course of employment or "aggravated [etc]" by an Insured Member's Employment.
116ANALYSIS. The task for the Court in responding to the two questions stated for decision is one of construing the Policy and applying its provisions, properly construed, to facts established by the evidence or agreed between the parties.
117The meaning of the Policy, as a commercial document, must be determined objectively, by reference to what a reasonable person in the position of the contracting parties would have understood its provisions to mean, having regard to its text, context and purpose: Toll [FGCT] Pty Limited v Alphapharm Pty Limited (2004) 219 CLR 165 at 179 [40]; Pacific Carriers Limited v BNP Paribas (2004) 218 CLR 451 at 461-462 [22].
118That approach is particularly important in relation to a commercial contract (such as the Policy) intended to govern not only the rights of the contracting parties as between themselves, but also the rights of third parties vis á vis the contracting parties.
119The primary focus for attention in this case is on the proper construction of the Policy. There is no substantial dispute about the facts to which the Policy must be applied.
120The Policy must be read as a whole, and not merely by reference to particular provisions in isolation. It must be read from both a "macro" and a "micro" perspective, accommodating both perspectives so far as practicable, with a view to allowing it to operate in a reasonable manner according to its terms.
121Given that the Policy served a purpose of giving practical expression to one industrial Award (the Crown Employees (Police Officers Death and Disability) Award 2005), read in the context of another industrial Award (Crown Employees (Police Officers - 2005) Award), both of which operated in the context of legislation governing Police Officers and their employer, the Police Force (the Police Act 1990 NSW), the Court should be slow to conclude that the Policy should be construed in a way that substantially departs from, and is discordant with, the way those Awards and that legislation were designed to operate. The Policy was intended to operate in harmony with them, not to strike a discordant note.
122Construction of the text of the Policy in this context, and attributing to it the purpose of giving practical expression to the Crown Employees (Police Officers Death and Disability) Award 2005, has implications for the answers to be given to the two questions stated for decision in the FSS proceedings. In relation to Question 1, it may favour Ms Maund's contentions; at the highest level of abstraction, that is because a declared intention of the Crown Employees (Police Officers Death and Disability) Award 2005 is (as set out in clause 1.2.1 of the Award) to "provide benefits on medical discharge in the event that an on-duty or off-duty injury results in the death or total and permanent disablement or partial and permanent disability of a police officer".
123Section 72A of the Police Act 1990, which commenced operation on 4 February 2008, empowers the Commissioner of Police to cause a police officer to be retired if "found on medical grounds to be unfit to discharge or incapable of discharging the duties of the officer's position". However, the section was not operative at the time the subject Policy was issued and, for that reason, I put it to one side.
124Reference to legislative context may favour the contentions of FSS and MetLife on ground 2 because of an apparent connection between the terms of the Policy and the terms of the Crown Employees (Police Officers - 2005) Award). In short, the concepts with which the Policy deals, and the language it uses, are capable, on a fair reading, of harmonising with the regulatory regime, and industrial Awards, governing the work and conditions of Police Officers.
125Although the legislative context may inform debate about the meaning of the language used in the Policy, it cannot ultimately govern construction of the Policy, as clause 12.2 of the Policy reminds a reader. Ultimately, the Policy must be construed according to its terms as a commercial instrument.
126Question 2. Of the two questions stated for decision, the second is the easiest to address. The Policy must be construed in the context of both the Crown Employees (Police Officers Death and Disability) Award 2005 and the Crown Employees (Police Officers - 2005) Award.
127The Policy was entered into in consequence of clause 10 of the Crown Employees (Police Officers Death and Disability) Award 2005. The definition of "Salary" in the Policy reflects that in clause 3 of the Award.
128 The expression "base salary" found in those definitions of "Salary" is accompanied by the words "as prescribed by the Crown Employees (Police Officers - 2005) Award" and the expression "plus 17%". Both elements of the definition are important.
129The words "base salary" are found in each of clauses 34, 35 and 38(iv) of the Crown Employees (Police Officers - 2005) Award, as well as in "Table 2 - Detective Salaries" set out in the second part of the Award.
130Those provisions of the Award, particularly clause 38(iv) and Table 2, distinguish between the concepts of "base salary" and "allowances in the nature of salary".
131The expression "plus 17%" in the definition of "Salary" in the Policy finds no exact equivalent in the Crown Employees (Police Officers - 2005) Award. That fact, coupled with the distinction between "base salary" and "allowances in the nature of salary" in the Award, supports two inferences.
132The first is that the expression "base salary as prescribed by the Crown Employees (Police Officers - 2005) Award" in the definition of "Salary" in the Policy means precisely what it says, directing attention to the "Base Salary" column in "Table 2 - Detectives Salaries" in the Award. The second is that the addition of 17% to that "base salary" contemplated by the definition of "Salary" in the Policy is a factor allowed in favour of an Insured Member in lieu of the "allowances in the nature of salary" identified in clause 38(iv) of the Award.
133The expression "allowances in the nature of salary" found in clause 38(iv) reinforces those inferences because it implicitly recognises that, but for their being deemed to be "salary" by the express provision made for them in clause 38(iv), they would not naturally fall within the meaning of the word "salary", still less the expression "base salary".
134Taking all these factors into consideration, the second of the two questions stated for decision must be answered in favour of FSS and MetLife and against Ms Maund. FSS and MetLife were correct in their determination of the Total and Permanent Disablement Benefit paid to Ms Maund by reference to her "base salary" alone and without reference to the "allowances" identified in clause 38(iv).
135In making this determination I place no weight on evidence that deductions made from Ms Maund's salary as a contribution payable by her for coverage under the Crown Employees (Police Officers Death and Disability) Award 2005 were, in fact, calculated as a percentage of her "base salary" (not including clause 38(iv) allowances) as prescribed by the Crown Employees (Police Officers - 2005) Award. Those deductions were made pursuant to clauses 5.1 and 10.2 of the former of those two Awards.
136Question 1. The first of the two questions for decision requires closer attention to the purpose and context of the Policy as well as its wording.
137The Policy was taken out by FSS, in consultation with the Police Force, to give substantive effect to clause 10 (read, in particular, with clauses 7, 8 and 9) of the Crown Employees (Police Officers Death and Disability) Award 2005.
138Clause 1.2 of that Award was in the following terms:
"1.2 The intentions and commitments of this Award are to:
1.2.1 Provide benefits on medical discharge in the event that an on duty or off duty injury results in the death or total and permanent disablement or partial and permanent disability of a police officer.
1.2.2 Provide rehabilitation and retraining in the event that an on duty or off duty injury, results in a police officer suffering partial and permanent disability.
1.2.3 Develop and implement an agreed WellCheck Program for police officers. [Emphasis added]."
139I notice, but draw no inference from, mention of the word "injury" without express reference to the word "illness". The omission is not significant in the context of later provisions of the Award that mention both concepts.
140The expression "medical discharge" was not defined in the Award. Nor is it defined, or elaborated, in the Policy.
141A more productive line of inquiry is to review the definition "total and permanent disability" in the Award, bearing in mind that the definition of "Total and Permanent Disablement" in clause 6(b) of the First Schedule to the Policy is a close adaptation of sub-paragraph (b) of the definition of "Total and Permanent Disability" in clause 1.3 of the Award.
142The expression "total and permanent disablement" in the Award contained three subparagraphs. Subparagraph (a) related to a police officer who suffered the loss of a limb or the sight of a eye. Subparagraph (b) related to a police officer "working 15 hours each week or more". Subparagraph (c) related to a police officer "working less than 15 hours each week". Subparagraph (b), the provision relevant to Ms Maund, defined "total and permanent disablement" to mean:
"The police officer having been absent from his/her occupation with the employer [ie, the Police Force established by the Police Act 1990 (NSW)] through injury or illness for six consecutive months and becoming incapacitated to such an extent as to render the police officer unlikely ever to engage in any gainful profession, trade or occupation for which the police officer is reasonably qualified by reason of education, training or experience [Emphasis added]."
143There are four elements to establishment of "total and permanent disablement" for the purpose of this definition. They are signposted by the following words: (a) "absent from his/her occupation with the employer"; (b) "through injury or illness"; (c) "for six consecutive months"; and (d) "becoming incapacitated to such an extent..."
144All four elements are present in the definition of "Total and Permanent Disablement" in the Policy, subject to one qualification. That is that the fourth element is introduced by a requirement of proof to the satisfaction of MetLife: "... having provided proof to our satisfaction that the Insured Member has become incapacitated to such an extent, [et cetera]".
145What is common to both definitions is that a Police Officer could not fall within the scope of either of them unless and until, at least, he or she had been absent from work for six consecutive months through injury or illness.
146The practical ramification of this is that, even if Ms Maund could be regarded as having become "incapacitated" to the requisite extent on her last day at work (8 May 2007) she could not be regarded as having acquired the status of "Total and permanent disablement" (under either the Award or the Policy) until at least 8 November 2007, six months later.
147Whether that fact has any (and if so, what) effect on the answer to the first of the questions stated for the court's decision must be considered in light of further analysis of the Award and, more importantly, in due course, the Policy which governs the correct answer to that question.
148Clause 6 of the Award provided that the benefits conferred upon police officers by the Award were in addition to any superannuation benefits payable to them and any payments under the Workers Compensation Act 1987 NSW and the Workplace Injury Management Act 1998 NSW as varied from time to time.
149Clauses 7 and 8 of the Award provided, respectively, for "on duty" and "off duty" death or total and permanent disablement. Both clauses conferred an entitlement on "police officers who contribute under clause 4" of the Award, which I take to be an erroneous reference to clause 5. In any event, the parties accept, and the evidence establishes, that Ms Maund was a "police officer who contributed" 1.8% of her salary to the Police Force for the purpose of establishing her eligibility for coverage under the Award.
150That contribution funded the payment of premiums paid to MetLife for the insurance cover provided by the Policy.
151Clause 9 of the Award governed rehabilitation, retraining and lump sum payments for police officers who suffered partial and permanent disability. Clause 9.1 provided that "[the] lump sum payments prescribed by this clause are payable by NSW Police" and that "[in] order to be entitled to a benefit pursuant to this clause, a police officer must engage in the provisions outlined within this Clause".
152Clause 9.3 governed "on duty" injuries. Clause 9.4 governed "off duty" injuries.
153Clause 9.3 was in the following terms:
"A police officer who suffers an on duty injury shall receive rehabilitation/retraining consistent with agreed policies, which are annexed to this Award, leading to a return to pre-injury employment wherever possible.
9.3.1 Where a return to pre-injury employment is not possible, as determined by HealthQuest, or other medical assessor agreed by the parties the officer will be declared as suffering a partial and permanent disability and opportunities for placement in a suitable police position or as a permanent restricted duties police officer will be sought. At the same time, the police officer, with their consent, will be considered for redeployment to an administrative officer position.
9.3.2 If placement in a police position within the NSW Police is not possible and redeployment to an administrative officer position is not agreed by the officer, the employment of the police officer may be terminated. In such circumstances the police officer, subject to eligibility being established, shall be paid a lump sum payment in accordance with Annexure B to this Award. [Emphasis added].
154It was pursuant to this provision that Ms Maund received a lump sum payment for partial and permanent disability on or about 22 January 2010, following her medical discharge from the Police Force on 21 January 2010 as approved by the Commissioner of Police in his letter to her dated 30 December 2009.
155Clause 10 of the Award governed the administrative relationship between lump sum payments for partial and permanent disability (payable under clause 9) and lump sum payments for death or total and permanent disablement (under clause 7 or clause 8). Both clause 9.1 and clause 10.4 provided that the Police Force would meet the cost of benefits payable under the Award for partial and permanent disability. Clauses 10.1, 10.2, 10.3 and 10.8 provided for the Police Force to establish, with FSS, an insurance scheme to pay the lump sum benefits prescribed by clauses 7 and 8, with the benefit of contributions deducted from the salaries of police officers. Clause 10.8 provided that an entitlement to receive a lump sum benefit (referable to clause 7 or clause 8 of the Award) was to be assessed in accordance with an FSS Trust Deed and Policy Document.
156Clause 10 thus specifically contemplated both the Trust Deed dated 29 March 2006 and the Policy issued to FSS by MetLife.
157As previously noted, clause 10.6 of the Award provided that a police officer could only receive one benefit, either a partial and permanent disability benefit or a total and permanent disablement benefit. The Deed entered into by Ms Maund on 18 December 2009 was a legal instrument designed to give effect to the intent of clause 10.6.
158The purpose of the Policy issued by MetLife, and the context in which its provisions must be construed, must take into account the provisions of this Award, as well as the provisions of the Crown Employees (Police Officers - 2005) Award. It takes colour from both Awards.
159The starting point for analysis of the Policy is recognition that it bears the character of an insurance policy. That is apparent at the outset of any review of the document. It bears the title "Group Life Insurance Policy". The introductory paragraph (on page 2), before enumeration of definitions, provides: "In consideration of receiving from the Policyowner premiums as and when they fall due, we [MetLife] shall subject to these terms and conditions pay to the Policyowner the individual amounts of insurance set out in this Policy."
160Clause 1 is headed "Commencement of Insurance Cover". Clause 1.1 provides a "guarantee" of "cover" in respect of an "Insured Member" (defined as a Police Officer who is a member of the Scheme and who is insured under the Policy" on terms set out in the Policy.
161Clause 2.1 provides that "Insured Members are covered under this Policy for Death and TPD Benefits".
162The expression "TPD Benefit" is defined to mean "the benefit payable under clause 3 if the Member suffers TPD. [Emphasis added]".
163Relevantly, as recognised by clause 3, the subject matter of the Policy is the insurance cover provided for an Insured Member who "dies or suffers from TPD while this policy is in force." There is no dispute in these proceedings that the Policy is, and has been at all material times, "in force".
164The expression "TPD" is defined to mean "'Total and Permanent Disablement' as defined in the First Schedule" to the Policy.
165As has been foreshadowed by reference to the 2005 Award, that definition requires an Insured Member to satisfy four elements before he or she can be said to "suffer from TPD". The first three of those elements require the Member relevantly, to have been absent from work, through illness, for six consecutive months. The fourth element requires "incapacity" proved to the satisfaction of MetLife.
166If an Insured Member, relevantly, "suffers from TPD" then, subject to formal qualifications, clause 3 provides a promise to pay FSS "the Sum Insured" in respect of that Member. As appears in the introductory paragraph of the Policy and clause 3, any benefit is paid to the Policyowner rather than to the Insured member directly. That is expressly confirmed in clause 8.1, which incorporates a similar statement made in clause 4(g) of the First Schedule to the Policy.
167The definition of "Sum Insured" provides a means for calculation of a "TPD benefit" by reference, inter alia, to "the Insured Member's ... Salary". It may be that the reference to "salary" is governed by the words "at the time of the Insured Event giving rise to the claim", but that is not the only construction that the definition of "Sum Insure" can bear. They may and, I hold, do simply qualify the words "whether the Insured Member is on-duty or off-duty". However, the formula set out in Part 2D of the second schedule to the Policy expressly incorporates reference to "Salary at the time of the Insured Event".
168This is the critical issue: What is meant by the expression "Salary at the time of the Insured Event"?
169The word "occurred" in the last paragraph of clause 4 of the First Schedule to the Policy, and the word "after" in clauses 7.2 in the body of the Policy, suggest that "the event giving rise to the claim" relates to a particular time, probably the time of "contraction" or first "aggravation [etc]" of an illness where an "Insured Event" takes the form of an "illness" rather than a "bodily injury".
170Ms Maund's illness was "contracted" in the course of her employment no later than January 2007 when symptoms of her psychological illness first manifested themselves. Accordingly, it was an illness which occurred "On-Duty", and the timeframe for which clause 7.2 in the body of the Policy provides might be taken as having run from that time or, at least, no later than her last day at work, 8 May 2007. Clause 7.2 does not impose any form of limitation period. Its intention appears to be exhortatory rather than prescriptive.
171The special provision made for "illness" (in contrast to "bodily injury") in the last paragraph of clause 4 in the First Schedule to the Policy may be explained on the basis that "illness" generally involves a process over time rather than a discrete event.
172That is borne out by reference to the definition of "Insured Event" in the body of the Policy. It refers to "an illness (including sickness, disease or disorder) suffered ... while an Insured Member". This language contemplates a process over time rather than a discrete event, unlike a "bodily injury occurring... to a Police Officer... while an Insured Member". The two different concepts are, by a definition adopted for the purpose of the Policy, both accommodated by the expression "Insured Event".
173The definition of "Sum Insured" adds nothing material to this contrast because the words "at the time of the Insured Event giving rise to the claim" are there part of a larger expression ("whether the Insured Member is On-Duty or Off-Duty at the time of the Insured Event giving rise to the claim") defined by reference to clause 4 of the First Schedule.
174We must return, therefore, to the terms of clause 3 of the Policy: in particular, the expression "[if] an Insured Member... suffers from TPD while this Policy is in force...". Those words direct attention (via the definition of "TPD") to clause 6(b) of the First Schedule to the Policy.
175Within the parameters of clause 6(b) of the First Schedule, Ms Maund could not be said to have "suffered from TPD" (within the meaning of clause 3 of the Policy) until at least 8 November 2007. It was not until that date she had satisfied the first three elements of the applicable definition of "Total and Permanent Disablement". It was not until that date that she had been absent from her Occupation with the Police Force through illness for six consecutive months.
176The fourth element of the definition provides a difficulty for FSS and MetLife. That is because the wording of the Policy supplements the equivalent definition in the Award by addition of the words "having provided proof to our satisfaction that the Insured Member". Read literally, those words could be taken as subjecting a finding of "TPD" to delays in the insurer's investigative processes.
177In my opinion, such a reading of the Policy would be unreasonable and it should not be embraced as representing the intention of the parties to the Policy. The super added words relating to proof of incapacity do no more, in my opinion, than to reflect the fact that, under the Policy, it is the insurer (MetLife) and not the Employer (relevantly, the Commissioner of Police) who is charged with the responsibility of being satisfied as to the Insured Member's incapacity.
178Although the Commissioner (by reference to s 72A of the Police Act 1990) evidently came to a similar view about Ms Maund's capacity to discharge the duties of her position when she was "medially retired" on or about 21 January 2010, the super added words in clause 6(b) of the First Schedule to the Policy entitled MetLife to make its own determination about the timing and extent of her incapacity in the context of that subclause.
179On 12 July 2010 a representative of MetLife sent an email to FSS which embodied MetLife's determination that, based on the medical evidence, Ms Maund suffered from Total and Permanent Disablement within the meaning of the Policy. So far as is presently material, that email was expressed in the following terms:
"We are pleased to advise that Ms Maund's claim for Total and Permanent Disablement Benefits under the Police Blue Ribbon policy has been admitted.
The medical evidence received was supportive of the member fulfilling the policy definition:
'Total and Permanent Disablement shall mean:
The Member having been absent from their Occupation with the Employer through injury or illness for six consecutive months and having provided proof to our satisfaction that the Member has become incapacitated to such an extent as to render the Member unlikely ever to engage in any gainful profession, trade or occupation for which the Member is reasonably qualified by reason of education, training or experience'.
We have admitted the claim and refer in particular to the reports of IME Psychiatrist Dr Edwards on the 23rd February 2010 and IME Occupational physician Dr Gliksman on the 3rd February 2010.
Dr Edwards is of the opinion the member [sic] psychological level of disability is high and she will never return to work within her education, training and experience.
Dr Gliksman is of the opinion the condition is permanent and may deteriorate slowly with time; there will never be a complete recovery.
Metlife has determined, based on the evidence received, that Ms Maund's [sic] is unlikely ever to return to work within her education training or experience.
Accordingly we ask the Trustees, as part of their duty of care to its Members, to review Ms Maund's claim independently.
The lump sum payment of $613,887.00 will be processed and the payment would be forwarded to your office separately."
180Upon a consideration of the medical reports referred to in this email, and MetLife's quantification of Ms Maund's lump sum entitlement, it is evident that MetLife's factual determination was that Ms Maund had become "incapacitated" to the requisite extent by the time of her last day of employment as a Police Officer on 8 May 2007. That factual determination has been adhered to by MetLife (and FSS) in these proceedings.
181On that basis I accept that Ms Maund must be taken to have satisfied the fourth element of the definition of "Total and Permanent Disablement" in clause 6(b) of the First Schedule to the Policy no later than the date (8 November 2007) upon which, by her absence from work for six consecutive months, she satisfied the first three elements of the definition.
182Accordingly, I find that the contingency for which clause 3 of the Policy provides (in the expression "[If] an Insured Member... suffers from TPD while this Policy is in force") occurred on 8 November 2007.
183Picking up the language of clause 7.1 of the Policy, it was not until 8 November 2007 that there occurred "an event entitling the policyowner to a Benefit", but that event did occur in relation to Ms Maund on that date.
184The obligation of MetLife under clause 3 to pay to FSS the "Sum Insured" in respect of Ms Maund, equally, did not crystallise before, but it did crystallise on, 8 November 2007.
185Bearing in mind that the "Insured Event" relating to Ms Maund was "an illness" suffered over a period of time that included the six consecutive months (between 8 May 2007 and 8 November 2007) through which she was absent from work through illness, and that she could not be said to have "suffered from TPD" within the meaning of the Policy until 8 November 2007, the relevant "time of the Insured Event" for the purpose of the expression "Salary at the time of the Insured Event" in the formula set out in Part 2D of the Second Schedule to the Policy should be taken as being 8 November 2007.
186The parties are agreed that, if (as I find) the answer to the first of the two questions stated for my determination is "as at 8 November 2007" (in circumstances in which the second question is found in favour of FSS and MetLife) Ms Maund is entitled to payment of a further principal sum of $29,177.00.
187Whether Ms Maund is, in addition, entitled to an award of interest remains to be determined.
188Before entry of any judgment in the FSS Proceedings, and before determining questions of costs relating to those proceedings, I will allow the parties an opportunity to address me as to how best to proceed towards a determination of the questions of interest and costs.