Crown in right of the State of New South Wales v Maund Maund v FSS Trustee Corporation

THE FIRST PROCEEDINGS : A CLAIM BY THE CROWN AGAINST MS MAUND ("the Crown Proceedings") 18In the first proceedings (allocated Case No 2011/228253 in the records of this Court) the Crown sues Ms Maund in debt to recover the principal sum of $467,856.60 under an undertaking she gave in the Deed. She has cross claimed against the Crown for relief relating to an alleged shortfall in leave entitlements, two weeks of salary allegedly not paid and tax said to have been wrongly deducted from payments made to her by the Police Force on or about 22 January 2010. 19These proceedings were commenced in the District Court of New South Wales on 14 July 2011 and transferred to this Court, by an order of this Court, on or about 7 June 2012. 20Ms Maund's cross claim initially included a claim for relief against FSS. She amended the cross claim to abandon that claim in these proceedings. That claim has been litigated, instead, in the second proceedings presently before the Court. No objection has been taken to that course by any party. 21On 16 August 2011 Ms Maund filed a Defence in answer to the Crown's Statement of Claim in which she (on page 2) recorded an "agreement" on her part to pay the Crown part of the amount claimed by the Crown when she receives: (a) "the shortfall in my leave and last salary" from the Crown; and (b) the "shortfall in my Total and Permanent Disability payment" claimed from FSS.

THE SECOND PROCEEDINGS : MS MAUND'S CLAIM AGAINST FSS ("the FSS Proceedings") 22In the second proceedings presently before the Court (allocated Case No 2012/126353 in the records of the Court), Ms Maund sues FSS for an alleged shortfall in a payment made to her as a Total and Permanent Disability benefit paid to her under the Scheme on or about 29 July 2010. 23FFS has filed a cross claim against both MetLife and Ms Maund. By that cross claim, it seeks a declaration as to the proper construction of the First State Superannuation Scheme Trust Deed and Rules and the insurance policy issued to FSS by MetLife as cover for the Scheme. It claims, also, a declaration that MetLife is liable to pay any further benefit to which Ms Maund is entitled under the policy. 24Pursuant to directions made by the Court, the parties to the second proceedings agreed upon a statement of issues for the determination of those proceedings. They agreed upon two issues, which can be paraphrased in the form of the following questions: (a) First, should the benefit paid to Ms Maund under the Policy giving effect to the Scheme have been determined by reference to her salary as at 8 May 2007 (as FSS and MetLife contend) or as at 21 January 2010 (as Ms Maund contends)? (b) Secondly, should the benefit paid to Ms Maund have been determined by reference to her "base annual salary" alone (as FSS and MetLife contend) or, also, by reference to "rolled up" specialist detective's allowances payable under the Crown Employees (Police Officers - 2005) Award (as Ms Maund contends)? 25At the hearing of the proceedings, I invited the parties to prepare calculations against the possibility that I might conclude that the first question should be answered "as at 8 November 2007" rather than either of the two dates specified. 268 May 2007 is the last day on which Ms Maund worked as a Police Officer. 21 January 2010 is the day upon which she was medically discharged from the Police Force. 8 November 2007 marks the expiry of "six consecutive months" after Ms Maund's last day at work, a date which may have significance because of the definition of "Total and Permanent Disablement" in clause 6(b) of the First Schedule to the Policy. 27If the first question is answered "as at 21 January 2010" in favour of Ms Maund, the parties agree that she is entitled to payment of a further principal sum of $128,050.00. If it is answered "as at 8 May 2007" in favour of FSS and MetLife, the parties agree that Ms Maund is entitled to no further payment attributable to this issue. If it is answered "as at 8 November 2007", the parties agree that Ms Maund is entitled to payment of a further principal sum of $29,177.00. 28If the second question is found in favour of FSS and MetLife, the parties agree that Ms Maund is entitled to no further payment on this issue. However, if the second question is determined in her favour, the parties agree that she is entitled to a further payment, quantification of which depends on the answer to the first of the two questions. If the answer to question 1 is "as at 8 May 2007", she is entitled to $113,331.00. If the answer to question 1 is "as at 21 January 2010", her entitlement is to $261,472.00. If the answer to question 1 is "as at 8 November 2007", her entitlement is to $146,717.00. 29At the hearing before me, the parties agreed that, subject to questions of costs (particularly as between FSS and MetLife), a determination of the two questions stated for decision would substantially determine the whole of the FSS proceedings. The parties expressly agreed that any and all other issues that might be thought to arise from the course and content of their respective pleadings are to be taken to have been subsumed in the two specified questions or abandoned. 30A determination of the two specified questions will determine the whole of the proceedings finally, subject to a reservation of two questions for further consideration. The first relates to the question of costs. The second relates to whether Ms Maund has any entitlement to an award of interest and, more particularly, the operation of s 57 of the Insurance Contracts Act 1984 (Cth) and regulation 32 of the Insurance Contracts Regulations 1985 (Cth). 31There appears to be no question in dispute between FSS and MetLife other than the question of costs.

THE UNDERLYING FACTS 32For the sake of convenience, I set out here a chronology of events that relate to one or both of the two sets of proceedings. Taken together, they provide the context in which the two sets of proceedings have come together.

Ms Maund's work-related injury 33In 2007 Ms Maund suffered a work-related psychological illness during the course of her employment as a member of the Police Force. The medical evidence is that symptoms of that illness first manifested themselves in January 2007. In an application to the Police Force for a medical discharge from the Force (dated 31 December 2007) Ms Maund wrote: "In May 2007 I sustained psychological damage as a result of the NSW Police Force's treatment of me...". 34FSS and MetLife rely on that statement as an admission by Ms Maund that on and from 8 May 2007 (her last day at work) she suffered the illness that was the proximate cause of her claim for a Total and Permanent Disablement Benefit, "the Insured Event giving rise to the claim" within the meaning of the definition of "Sum Insured" in the Policy. 35They contend that, although Ms Maund had manifested symptoms of her illness earlier in 2007, it was only on 8 May 2007 (as now appears with the benefit of hindsight) that she suffered incapacity for work. Despite her best efforts, she did not return to work before her medical discharge on 21 January 2010. 36It may be accepted for the purpose of these proceedings that between 8 May 2007 and 21 January 2010 Ms Maund did in fact endeavour, conscientiously, to re-engage with the workforce. In presentation of her case she was anxious to emphasise that point, and no party took issue with her. FSS and MetLife themselves contend that the effect of the objective evidence is that she became totally and permanently disabled for work on 8 May 2007, that she remained so until such time as she was paid a Total and Permanent Disablement Benefit on 3 August 2010 and that, indeed, her disablement can be accepted as continuing. The facts, so stated, focus attention particularly on those provisions of the Policy that require consideration of "the time of the Insured Event giving rise to the claim". 37Given the interconnection between the two sets of proceedings, the Crown was invited to make submissions touching upon the questions in dispute in the FSS proceedings. It declined to do so, preferring to submit to the Court's determination of the proceedings without its active participation in them.

Ms Maund's Application TO THE POLICE FORCE for a PARTIAL and Permanent Disability Benefit under the Award 38On 4 February 2008 Ms Maund made an application to the Police Force for a Partial and Permanent Disability benefit payable (as provided in clauses 9.1 and 10.4 of the Award) by the Police Force under clause 9 of the Crown Employees (Police Officers Death and Disability) Award 2005. 39In or about December 2009 Ms Maund's application for a Partial and Permanent Disability Benefit was approved (in the sum of $467,856.60) by the Commissioner of Police. The letter written to Ms Maund to confirm that approval is dated 30 December 2009. It postdates Ms Maund's execution of the Deed by 12 days or thereabouts. 40On or about 18 December 2009 Ms Maund entered into the Deed with the Commissioner of Police. 41The Recitals to the Deed explain its provenance as follows: "A. The Recipient [Ms Maund] has become entitled to a benefit under clause 9 [of the Crown Employees (Police Officers Death and Disability) Award 2005] for partial and permanent disability. B. Clause 10.6 of the Award provides that members [of the Scheme] can only receive one benefit; either a 'partial and permanent disability benefit' or 'total and permanent disablement benefit'. Clauses 7 and 8 of the Award provide for entitlements to a lump sum payment for either an 'on duty' or an 'off duty', death or total and permanent disablement, respectively. C. The Parties [namely, Ms Maund as 'the Recipient' and the Commissioner of Police on behalf of the Police Force] have agreed, in accordance with the terms of this Deed, that the Recipient will repay NSW Police Force all moneys paid to [her] by NSW Police Force under the Award [in respect of a Partial and Permanent Disability Benefit] in the event the Recipient becomes entitled to a benefit under clause 7 or clause 8 of the Award [ie, a Total and Permanent Disablement benefit payable by FSS] and receives payment for that benefit". 42Ms Maund was medically discharged from the Police Force on 21 January 2010. 43On or about 22 January 2010 she received from the Police Force the sum of $467,856.60, less tax of $55,620.00, representing a net sum of $412,236.60 in payment of her claim for a Partial and Permanent Disability benefit. The gross amount of this payment ($467,856.60) is the principal sum sought to be recovered by the Crown, under the Deed, in circumstances in which on or about 3 August 2010 Ms Maund received the sum of $613,887.00 as a Total and Permanent Disablement benefit paid under the Scheme.

Ms Maund's Application TO FSS for a TOTAL and Permanent Benefit under the Scheme 44On 9 April 2009 Ms Maund lodged a claim with FSS for a Total and Permanent Disablement benefit contemplated by clause 10 of the Crown Employees (Police Officers Death and Disability) Award 2005, but payable to FSS (as trustee for members of the Scheme such as Ms Maund) by MetLife under the Policy. 45In her claim form, Ms Maund claimed that on 19 July 2004 she had suffered injuries to her right hand and both knees while arresting a violent offender; she had suffered ongoing bullying and harassment causing a psychological illness; and she had last worked on 8 May 2007. 46Attached to Ms Maund's claim form was a statement that set out her claims of bullying and harassment, between August 2004 and May 2007 or thereabouts, that led to her eventual departure from the Police Force (by medical discharge on 21 January 2010) due to a psychological illness. 47On 6 August 2008 Dr Smith (a psychiatrist) reported that Ms Maund suffered from "chronic adjustment disorder with depressed and anxious mood" and that that condition related to the onset of her physical injuries. He concluded that her prognosis for recovery was poor. 48On 3 February 2010 Dr Gliksman (an occupational physician) concluded that, physically, Ms Maund was suitable to perform sedentary tasks only. 49On 26 February 2010 Dr Edwards (a psychiatrist) reported that he agreed with the diagnosis of Dr Smith and that he considered that that diagnosis had not changed since the onset of Ms Maund's mental symptoms in January 2007. 50On 21 January 2010 Ms Maund was medically discharged from the Police Force. She had not returned to work at any time between 9 May 2007 and 21 January 2010 inclusive. 51On or about 12 July 2010 MetLife determined (as agent for FSS) that, based on the medical evidence, Ms Maund suffered from Total and Permanent Disablement within the meaning of the Policy. 52FSS confirmed that determination, and advised Ms Maund accordingly by a letter dated 29 July 2010, with which was enclosed a cheque drawn in her favour. 53Ms Maund received that letter on 3 August 2010, together with a cheque for $613,887.00 as the benefit payable for her Total and Permanent Disablement. 54That benefit payment was calculated by reference to Ms Maund's base salary (excluding specialist detective's allowances) payable under clauses 34, 35 and 38(iv) of the Crown Employees (Police Officers - 2005) Award as at 8 May 2007, the last day upon which she worked. 55Ms Maund was a "Non-Commissioned Officer" within the meaning of s 3 of the Police Act 1990 (NSW) - that is, she was an officer under the rank of Inspector - and, accordingly, within the definition of "Non-Commissioned Officer" within clause 3 of the Crown Employees (Police Officers - 2005) Award. On that basis, Division 4 (clauses 34-59 inclusive) of the Award applied to her. 56She was a "Detective" within the definition of that term in clause 3: more particularly, a Detective Senior Constable sixth year. 57The Award did not include a general definition of the word "salary". It deployed the word "salary" in particular clauses of the text of the Award ("Part A") which, in their turn, tied the concept, and associated "allowances", to dollar amounts listed in "Tables" of "Monetary Rates" set out in "Part B" of the Award. 58Clause 34 of the Award (headed "Salaries") provided as follows: "Subject to the Police Act 1990, and Regulations and any requirements thereunder and to the provisions of clause 55, 'Competency Based Incremental Progression' (Non-Commissioned Officers), of this Award, a Non-Commissioned Officer shall, according to the rank held and the incremental level achieved, be paid a base salary of not less than the amounts prescribed in Table 1 - Non-Commissioned Officers' Salaries of Part B, Monetary Rates. [Emphasis added]". 59Clause 35 (headed "Loading") provided as follows: "A Non-Commissioned Officer shall, in addition to the base salary prescribed in clause 34, Salaries, of this Award be paid an allowance calculated to the nearest dollar, at the rate of 11.5% of such salary. The allowance being a loading for work performed on weekends, shift work, recall to duty and other incidents of employment not covered elsewhere in this Award, and including a Loading formerly paid on Annual Leave. [Emphasis added]". 60Clause 38(iv) of the Award (under the heading "Detectives Salary Structure and Transition") provided as follows: "Detectives shall according to rank held and incremental level achieved be paid a base salary of not less than the amounts prescribed in Table 2 - Detectives' Salaries of Part B Monetary Rates. In addition to their base salary Detectives shall be paid the following allowances in the nature of salary: (a) the Loading prescribed by clause 35 of this Award; (b) an allowance equivalent to a Grade 3 Special Duties Allowance as prescribed in Table 7 - Special Duties Allowances (Non-Commissioned Officers) of Part B Monetary Rates; and (c) the Detective's Special Allowance as prescribed in Table 6 of Part B Monetary Rates. [Emphasis added]". 61Clause 38(iv)(b) was elaborated by clause 39 (headed "Special Duties Allowance"). 62Clause 39(i) was in the following terms: "In addition to the rates prescribed for Non-Commissioned Officers by clause 34 Salaries and clause 35 Loading of this Award a Non-Commissioned Officer who holds a position set out hereunder shall on the determination of the Commissioner be paid the appropriate allowance prescribed in Table 7 - Special Duties Allowances (Non-Commissioned Officers) of PART B Monetary Rates of this Award, provided that, in respect to Grades 1 to 5 where more than one rate applies to a Non-Commissioned Officer they shall only be entitled to one rate namely the higher or highest. [Emphasis added]". 63Clause 39(ii) set out a list of positions under sub headings referable to "Grade 1", "Grade 2", "Grade 3" and "Grade 4". "Grade 3" applied to Ms Maund by virtue of clause 38(iv)(b). It is not necessary to enumerate the "positions" referable to "Grade 3". Clause 39(iii) provided that, from a date in 2006, Detectives were not entitled to a "Special Duties Allowance". Clause 39(iv)(b) provided them with an "equivalent" allowance "in the nature of salary". 64"Table 2 - Detectives Salaries", referred to in clause 38(iv) set out three columns of dollar amounts against entries for different ranks, and incremental levels, of Detectives. The first column was headed, "Base Salary". The second column was headed, "Base Salary for Overtime Purposes (+ Allowance Equivalent to Grade 3 Special Duties Allowance)". The third was headed, "Loaded Salary (+ 11.5%, Allowance Equivalent to Grade 3 Special Duties Allowance and Detectives' Special Allowance)". 65FSS and MetLife contend that the dollar amounts enumerated in Table 2 under the "Base Salary" heading are those relevant to the calculation of a Total and Permanent Disablement Benefit under the Policy. Ms Maund contends that the relevant amounts are those set out in the "Loaded Salary" column, reflecting the terms of clause 38(iv). 66It is not necessary to follow through the details of the Award setting out different rates relating to "base salary" or "allowances". It is enough, in these proceedings, to notice, first, the distinction drawn in the Award between "base salary" and "allowances" and, secondly, the nature of the "allowances" available to Ms Maund in the ordinary course of her employment as at 8 May 2007. Similar distinctions are found in clause 38 of the Crown Employees (Police Officers - 2009) Award, which replaced the 2005 Award of the same name. The parties are agreed on the arithmetic.

Recovery Action by the Police Force 67It took some time for the administrative arm of the Police Force to become aware of the payment to Ms Maund of a Total and Permanent Disablement Benefit. In the fullness of time, however, the Force demanded of Ms Maund that she repay the sum of $467,856.00 paid to her (on or about 22 January 2012) as a Partial and Permanent Disability benefit. A formal letter of demand was sent to her on or about 4 August 2010. 68Ms Maund replied to that letter on or about 10 August 2010. She stated that there would be some delay on her part in returning the moneys claimed. No express reason for delay was offered. A reader of the letter is left to infer that any delay would be attributable to a need for Ms Maund to have time to sort out her taxation affairs. 69Having referred to an impending appointment to see her tax accountant, Ms Maund proceeded in her letter to query whether she had received her correct entitlements upon discharge from the Police Force and whether the correct taxation component had been deducted from moneys paid to her by the Force on discharge. She also complained of not having received the full amount of her Total and Permanent Disablement Benefit from MetLife. 70The Police Force sent a further letter of demand on 22 October 2010, incorporating its explanation, and calculation, of Ms Maund's entitlements. 71The Crown adheres to the explanations given in that letter. 72Further letters of demand were written by the Police Force to Ms Maund on 22 November 2010 and 20 January 2011. 73Those demands having remained unsatisfied, the Crown filed its Statement of Claim in the District Court on 14 July 2011.

THE FIRST PROCEEDINGS : THE CROWN'S CLAIM AGAINST MS MAUND 74Ms Maund does not dispute her entry into the Deed; the terms of the Deed (namely clauses 1(b) and 2) by which she undertook to pay to the Police Force an amount equal to her Partial and Permanent Disability benefit in the event that she were to receive a Total and Permanent Disablement benefit; or the fact that she did receive a Total and Permanent Disablement benefit. 75In substance, she seeks to offset against the Crown's entitlement to enforce her undertaking a claim by her for entitlements she says remain unpaid by the Police Force and her claim against the FSS. 76Procedurally, nothing turns on whether or not the first of those two claims might have been asserted against the Crown as an equitable set off. Both claims have been heard, via a cross claim, in one or the other of the two sets of proceedings that are now the subject of judgment at the same time. 77Vis á vis the Crown, the substantive question is whether Ms Maund is correct in her challenge to the calculations made by the Police Force, at the time of her medical discharge, in relation to leave entitlements, salary and tax. 78With one qualification, I am not satisfied that Ms Maund has made out her challenge to the calculations made by the Police Force. On the contrary, I accept the evidence adduced by the Crown, and its submissions, to the effect that Ms Maund received her correct entitlements, subject to her obligation under the Deed made on 18 December 2009 to repay moneys to the Crown in the event (as happened) that she subsequently received a payment under the Scheme. 79In a letter dated 22 October 2010 addressed to Ms Maund, Rosemary Byatt of the Police Force's Internal Customer Services set out a comprehensive statement of how Ms Maund's entitlements had been calculated. In the course of the present proceedings she swore an affidavit in which those calculations were presented to the Court as correct. She is employed by the Police Force as a Finance Officer. She was not cross examined on her affidavit. 80In answer to an affidavit in which Ms Maund detailed her complaint of underpayment of entitlements, the Crown also adduced evidence from Patricia Parsons, the Police Force's Manager of Payroll Services. Ms Parsons swore that she had checked the records of the Police Force pertaining to Ms Maund, and reviewed the calculations underlying the payment made to Ms Maund upon her discharge from the Force. She swore that Ms Maund had been paid all of her entitlements. She was not cross examined on her affidavit. 81At least part of Ms Maund's complaint is based upon a contention that she was entitled to have the lump sum payment made to her by the Police Force under clause 9.3 of the Crown Employees (Police Officers Death and Disability) Award 2005 calculated by reference, not only to her "base salary" but also to the "allowances" that (under the Crown Employees (Police Officers - 2005 Award) supplemented the base salary. 82I do not accept Ms Maund's contention, for reasons similar to those elaborated in dealing with a similar issue in dealing with "Question 2" stated for my determination in the second of the two proceedings before the Court relating to the proper construction and operation of clause 10 of the Crown Employees (Police Officers Death and Disability) Award 2005. 83The qualification on my rejection of Ms Maund's challenge to the Police Force's calculation of her entitlements relates to the deduction of tax from the payment made to her. 84At the time Ms Maund executed and returned to the Police Force the Deed subsequently dated 18 December 2009 pursuant to which she was paid her entitlements, she also executed and returned to the Police Force a draft deed (not then duly completed or subsequently executed on behalf of the Police Force) entitled "Deed of Release and Indemnity". 85That document, by paragraph B of the preamble, recited that "[Ms Maund] had requested, and the [Police Force had] agreed not to deduct and remit to the Australian Tax Office the Tax" payable on the (gross) sum of $467,856.60 paid out by the Police Force on Ms Maund's account in or about January 2010. 86Ms Maund complains that the Crown seeks to recover from her the gross sum of $467,856.60 despite the fact that, contrary to the terms of recital B to the draft "Deed of Release and Indemnity", the Police Force deducted tax of $55,620.00 and only paid her the net amount of $412,236.60. She contends that she should not be required to repay the Crown any more than $412,236.00. 87The Crown does not dispute that the Police Force did invite Ms Maund to execute and return the draft deed together with the Deed that became operative on or about 18 December 2009. It says, however, that it was obliged (by the Taxation Administration Act 1953 (Cth)) to withhold the tax and to pay it to the ATO on Ms Maund's account, which, it says, it did. 88Ms Maund's submissions appear, at times, to be grounded upon an assumption that the liability for the tax paid to the ATO was, ultimately, a liability of the Police Force, not a liability of hers which the Police Force was obliged, vis á vis the ATO, to recognise. In this, she is mistaken. 89The problem at hand appears to be not so much a legal question in issue between the Crown and Ms Maund but, rather, a practical question of how Ms Maund might obtain a refund from the ATO upon lodgement of an amended tax return referable to the year of income in which she received from the Police Force the money she has to repay following her receipt of the Total and Permanent Disability Benefit paid to her under the Scheme. 90This problem is not to be addressed by declining to enter judgment against Ms Maund for the full amount she has agreed to repay to the Crown (namely, $467,856.00) plus interest. 91The Crown has expressed a willingness (but not an obligation) to assist Ms Maund, after entry of judgment in its favour, by communicating to the ATO the correct state of affairs. I do not propose, by this judgment, to do anything to formalise the Crown's offer of assistance. 92In my assessment, the Crown is entitled to a judgment in the full amount it seeks to recover from Ms Maund; namely, the sum of $467,856.00 plus interest. 93If Ms Maund were to pay the balance of her indebtedness to the Crown without further delay the Court might, conceivably, entertain an application to stay enforcement of the judgment debt to the extent of $55,620.00, for a short time, to facilitate recovery of that amount (for the commercial benefit of the Crown) from the ATO. However, as matters presently stand, there is no application for such a stay and, in any event, there is no assurance that Ms Maund has in hand arrangements to ensure prompt payment to the Crown of the moneys she owes. Apart from mentioning it as a procedural possibility, I hold out to Ms Maund no prospect of any form of stay being granted to her. 94Ms Maund's delay in making any repayments at all to the Crown, under a pretext of having been short-changed in the payment of her entitlements by the Police Force and while she has pursued the FSS Trustee Corporation, may tell against any grant of a stay to assist her now.

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.

CONCLUSION 189In the first proceedings (Case No 2011/228253): (a) I invite the Crown to bring in Short Minutes of Order providing for judgment in favour of the Crown in the sum of $467,856.00 (plus interest calculated at the rate which s 100 of the Civil Procedure Act 2005 NSW provides) and dismissal of Ms Maund's cross claim. (b) I will, on the Short Minutes being brought in, hear any application for costs that may be made. Prima facie, Ms Maund should pay the Crown's costs, on the ordinary basis, as costs generally follow the event. 190In the second proceedings (Case No 2012/126353): (a) I note that, subject to resolution of questions about interest and costs, on the findings in these reasons for judgment Ms Maund is entitled to a judgment against FSS in the sum of $29,177.00. (b) It may be that there should be a declaration (on FSS's cross claim) that MetLife is bound to indemnify FSS in respect of the judgment in Ms Maund's favour; but I will entertain submissions as to the necessity for any declaration in circumstances in which, I anticipate, there is no real dispute between FSS and MetLife as to MetLife's liability to indemnify FSS. (c) Had she been legally represented, Ms Maund may have been entitled to an order for costs against FSS. Whether she has such an entitlement to costs, even though successful against FSS, is open to question. So too is the quantum of any costs that might be allowed to her, having regard to the modesty of the award made in her favour. (d) There may be a live question about costs between FSS and MetLife if, as I apprehend, MetLife has never disputed its obligation to indemnify FSS against any liability to Ms Maund. 191Upon publication of these reasons for judgment I will entertain submissions as to what time is required in preparation for final orders to be made in the two sets of proceedings before the Court. If there is likely to be substantial delay in addressing the question of interest in the FSS proceedings, I may enter judgment in favour of Ms Maund for the principal sum found to be her due and reserve the question of interest for further consideration. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 14 March 2013