Dargan v United Super Pty Ltd & Anor

Supreme Court of NSW|2011-10-25|Before: Gzell J

Introduction 1John Anthony Dargan, the plaintiff, claims superannuation entitlements for becoming totally and permanently disabled on 5 July 2007 when he fell and injured his back. United Super Pty Ltd, the first defendant, was the trustee of the superannuation fund, Construction and Building Unions Superannuation Fund (Cbus). Hannover Life Re of Australasia Limited, the second defendant, insured the fund with respect to obligations to pay total and permanent disablement benefits. 2The trust deed provided that where any benefit payable in the event of total and permanent disablement was an insured benefit, the term "totally and permanently disabled" should have the meaning ascribed to it in the relevant policy. 3It was common ground that the definition of "total and permanent disablement" in cl 1.3.1 of the group life policy issued by Hannover Life was the applicable definition. It was in the following terms: "1.3 Total and Permanent Disablement in respect of an Insured Person who was gainfully employed within the six months prior to the Date of Disablement is where: 1.3.1 the Insured Person is unable to follow their usual occupation by reason of accident or illness for six consecutive months and in our opinion, after consideration of medical evidence satisfactory to us, is unlikely ever to be able to engage in any Regular Remuneration Work for which the Insured Person is reasonably fitted by education, training or experience." 4It was common ground that Mr Dargan was an insured person who was gainfully employed within the six month prior to the date of disablement who was unable to follow his usual occupation for six consecutive months. It was not disputed that Mr Dargan suffered a back injury that caused him significant pain and reduced his physical capacities. 5The question is what is meant by the phrase "... Regular Remuneration Work for which the Insured Person is reasonably fitted by education, training or experience", and how is it to be applied to the instant circumstances.

Employment 6Mr Dargan attended high school in Melbourne. He left after year 11. He did not obtain any trade qualifications. He was employed performing unskilled labouring work and assisting the tradesmen. He eventually got a heavy vehicle licence entitling him to drive all sorts of large trucks. He holds a rigger ticket. He has been employed as a truck driver, a rigger and was employed as a removalist when he injured his back. 7There was evidence that Mr Dargan managed a family-run motel of 30 rooms which had a restaurant attached to it and provided room service. He did not mention this in his statement. Mr Dargan said he participated in most aspects of the management of the motel before his accident but after it he could not do many of the tasks such as carrying a tray with breakfast to a room, and he had difficulty with other tasks such as climbing the stairs to the manager's office. 8Mr Dargan is presently a self-employed taxi driver, but he only works 15 to 20 hours per week mainly from the airport so that he has a break of a couple of hours between customers while he waits in line. 9In January 2011 he renewed his driver licence for 5 years. He intends to continue to drive his taxi.

Physical condition 10In May 2008, an occupational therapist completed a driver evaluation report on Mr Dargan, which was forwarded to the Registrar of Motor Vehicles in Hobart where Mr Dargan lives. Her conclusion was: "Mr Dargan completed his drive in a vehicle fitted with automatic transmission and power steering within his local environment. Significantly reduced sitting tolerance was observed and the drive was ceased early due to exacerbated pain levels. In addition to facial grimacing and vocalization physiological changes were observed - skin became pale and clammy. Apart from 1 handed steering Mr Dargan demonstrated adequate defensive driving skills. A comprehensive picture of his driving skills was not observed due to his limited driving tolerance - eg lane changes, highway driving were not observed. Mr Dargan appeared to be able to observe, interpret and respond appropriately to the driving environment. Reaction times did not appear to be compromised and despite pain levels Mr Dargan utilized trunk movements when reversing and completing observations when pulling away from the curb." 11Dr Peter Sharman was a consultant occupational physician who had treated Mr Dargan. His opinion was: "Mr Dargan has significant ongoing incapacity as a result of a chronic back condition. I have suggested that there would be benefit if he returned to the Metropolitan Spinal Clinic in Melbourne for a further assessment of his back condition with a view to further treatment. Mr Dargan has not been able to return to his previous employment as a removalist, even on a restricted basis. Mr Dargan has been able to work as a self-employed taxi driver, working limited hours, but is probably working beyond his sustainable capacity. There is no prospect that Mr Dargan will ever be able to work again as a labourer, trades assistant, truck driver, rigger or removalist. I am doubtful that that he will be able to continue working in a limited role as a taxi driver in the longer term." 12Dr Sharman was of the view that Mr Dargan might manage some of the tasks he had formerly done at the motel, but only for limited short periods.

Rejections of claims 13Hannover Life rejected Mr Dargan's claim on the basis of his experience as a truck driver: "... evidence submitted does not support Mr Dargan's claim for Total and Permanent Disablement, which is evidenced by the member demonstrating the ability to perform regular remunerative work as a Taxi Driver for which he was reasonably fitted according to his previous work experience as a Truck Driver." 14A claims assessor for Cbus reported that the trustee, apparently adopting the same view, had resolved that Mr Dargan did not meet the definition of total and permanent disablement. 15Reviews of the decisions did not produce any change of attitude. Hannover Life added the following: "Mr Dargan has demonstrated a capacity to perform Taxi Driving and we therefore consider he could also perform other driving occupations that don't require the completion of a one week course i.e courier, delivery driver etc." 16This suggestion has an air of unreality about it. In the commercial world a courier or a delivery driver is required to drive continuously to take up or deliver parcels, a function that Mr Dargan is incapable of doing. As Dr Sharman pointed out, Mr Dargan has been able to work part-time as a self-employed taxi driver working only limited hours and he might not be able to sustain that level of employment.

Taxi driving 17In order to drive a taxi in Tasmania, one is required to hold an ancillary certificate. The Vehicle and Traffic Act 1999 (Tas), s 15(1) was in the following terms: "Subject to the regulations, a person must not drive a public passenger vehicle on a public street for the purpose of carrying passengers for reward unless the person - (a) holds an Australian driver licence to drive a motor vehicle of the relevant class; and (b) holds an ancillary certificate authorising the person to drive a public passenger vehicle of the relevant class." 18Mr Dargan obtained an ancillary certificate in June 2008. It was conditional upon his successfully completing a Road Transport Training Course. He acknowledged on the certificate that it was issued subject to him satisfactorily completing the Road Transport Training Course and that non-compliance or failing the course would result in the immediate suspension of the certificate. 19This was in accordance with the Vehicle and Traffic (Driver Licensing and Vehicle Registration) Regulations 2000 (Tas), reg 40(3) which was in the following terms: "Before the Registrar grants an application for an ancillary certificate authorising the holder to drive public passenger vehicles of a particular class, the Registrar may require the applicant to comply with either or both of the following requirements: (a) to undergo a test or assessment, or provide other evidence to the Registrar's satisfaction, showing that the applicant is a suitable person to drive public passenger vehicles of the class or classes for which the certificate is sought; (b) to undergo a specified course of instruction and provide evidence of the successful completion of the course." 20Mr Dargan said he attended a one-week course in a classroom where the participants were taught the theory and application of legislation pertaining to taxi driving and taxi drivers. He paid a fee of approximately $360 to attend and he received a Road Transport Authority course book. It was not in evidence. 21Mr Dargan said he attended lectures between approximately 9 am and 5 pm for a week at the end of which he had to sit for a written test to be licensed. He also had to pass a driving test and then pass a physical examination. The written test and the driving test were in addition to the one-week course. 22Having successfully passed the tests, Mr Dargan was issued with an unconditional ancillary certificate. 23The course was less extensive than Mr Dargan indicated. On the first three days theory was taught and on the fourth day a practical assessment took place. 24Heavy emphasis was placed on knowledge and application of road rules and it was suggested that applicants should refresh their knowledge of the traffic code before the course began. 25Applicants were forewarned that there would be a written test of their knowledge of the traffic code during the course, which would cover most aspects of the code applicable to use of the roads as a taxi driver. 26The practical assessment consisted of driving in and around the city of Hobart or suburbs during which applicants would be assessed on their ability to handle a medium sized sedan configured as a taxi in traffic in as near to real life operational conditions as could be simulated. During the assessment applicants would be asked to find a location in one of the lessor known streets in the city using a map atlas and to drive to that location by the shortest direct route. It was suggested that applicants familiarise themselves with the use of a map atlas and practice its usage before taking the course. 27Applicants were told that knowledge of the major streets in and around Hobart was mandatory and an applicant's ability to navigate, including knowledge of lanes, was a necessary prerequisite to the course. 28Applicants were told that part of the course included an introduction to acquitting daily takings and making minor calculations from a taximeter. They were also told that training in disability awareness, loading, securing and unloading wheelchair dependent passengers was conducted on the third day of the course. 29During the first two days of the course, which commenced at 8.30 am, Mr Dargan answered a general road law assessment of 25 multiple choice answers with only two errors; a diagrammatic road rule test of some 12 scenarios with only one error; a taxi rules and regulations test with 27 questions with only two wrong answers; a financial transactions test of 16 questions with no incorrect answers; and he sat for a 30 minute written examination interpreting road maps and navigating pre-determined routes which he answered with no mistakes. 30On the third day of the course, which began at 9.00 am, Mr Dargan answered two questionnaires on transporting passengers with disabilities. 31On that day Mr Dargan received an assessment summary that stated he was competent in each of the areas upon which he had been instructed and assessed together with a certificate of competence. 32There was criticism of the quality of a course that would issue a certificate of competence before its conclusion. But it was perfectly logical to do so at the conclusion, on day 3, of the theoretical part of the course. 33On the completion of the on-road practical part of the course on day 4, Mr Dargan received a statement of attainment of the issues dealt with on that day.

Interpretation 34In final address, counsel for Mr Dargan reduced his submissions to one issue, the proper interpretation of the phrase in the definition of Total and Permanent Disablement in the policy "...Work for which the Insured Person is reasonably fitted by education, training or experience." If his submission as to its proper construction was correct, Mr Dargan would win because the insurer and the trustee addressed the wrong question and their decisions are void. If his construction was wrong, Mr Dargan would lose. Counsel for United Super and Hannover Life accepted this limitation of issues. 35Counsel said that the words "reasonably fitted" were not used in this area of the law so much as the words "reasonably suited". 36It is true that the phrase "reasonably suited by education, training or experience" appears in policies of insurance covering total and permanent disablement. See, for example, Duncan v Prudential Assurance Co Ltd (1999) 10 ANZ Insurance Cases 61-433, Kylie Rebecca Druery v First State Super Fss Trustee Corporation [2005] NSWIRCComm 255 and the variant "reasonably suited by training, experience or qualification" in McArthur v Mercantile Mutual Life Insurance Company Ltd (2001) 11 ANZ Insurance Cases 61-501. 37But the phrase "reasonably fitted by education, training or experience" appears in policies in addition to the policy in this case. See, for example, Edwards v The Hunter Valley Co-op Dairy Co Ltd & Anor (1992) 7 ANZ Insurance Cases 61-113, De Britt v Frew (1992) 7 ANZ Insurance Cases 61-140 and the variant "is fitted by his knowledge training status and abilities" in Giles & Giles v The National Mutual Life Association of Australasia Limited (1986) 4 ANZ Insurance Cases 60-751. 38And the phrase "reasonably qualified by education, training or experience" also appears. See, for example, Riley v The National Mutual Life Association of Australasia Limited & Anor (1986) 4 ANZ Insurance Cases 60-684, Fernance v Wreckair Pty Ltd & Anor (No 2) (1992) 43 IR 300 and Halloran v Harwood Nominees Pty Ltd & Anor [2007] NSWSC 913. 39It was submitted that "reasonably fitted" meant having a qualification of some kind as a prerequisite to employment or experience that allowed a person to undertake the employment where no qualification was needed. The question was whether one had an entitlement to engage in the employment in question. 40It was submitted in opposition to this interpretation that it was a binary one. If any training was required the person was not fitted for the job. If no training was required the person was fitted for the job. It was submitted that this construction left no work to be done by the word "reasonably". 41The criticism of the approach taken by Mr Dargan is not accurate. His interpretation was not put on the basis that it was a question of qualification or no qualification. It was submitted that a person could be fitted for a job requiring no training by past experience enabling the job to be taken. 42It does not seem to me that there is any difference between "reasonably suited", "reasonably qualified" and "reasonably fitted". Policies of insurance are commercial contracts and should be given a business like interpretation ( McCann v Switzerland Insurance Australia Limited [2000] HCA 65; (2000) 203 CLR 579 at [22]; 589, International Air Transport Association v Ansett Australia Holdings Limited [2008] HCA 3, (2008) 234 CLR 151 at [8]; 160). 43In each case the consideration is whether, by reason of education, training or experience, an insured person is reasonably suited, reasonably qualified, or reasonably fitted, to engage in the work in question. 44The words describe a capacity to undertake a new job based on education, training or experience. They constitute a link between the job and past education, training or experience. 45In my view neither United Super nor Hannover Life addressed the correct question: was Mr Dargan reasonably capable, because of his past education, training or experience, of becoming a taxi driver? 46The question is to be addressed at the end of the six consecutive months mentioned in the policy - 5 January 2008 ( Giles & Giles at 74,529, Fernance at 329, Halloran at [33]-[35]). 47The answer to the question was No. Mr Dargan had not been a taxi driver before his accident. The only way in which he could take work as a self-employed taxi driver was to obtain an ancillary certificate and he could not hold an ancillary certificate unless he successfully completed the Road Transport Training Course. Until he did that he was not reasonably fitted for the work. He did not have education, training or experience that fitted him to be a taxi driver. He did not have the capacity to undertake the work because he lacked the necessary qualification of an ancillary certificate. 48Mr Dargan could only become a part-time taxi driver by completing further education or training. His experience as a truck driver was not sufficient to enable him to take up that work. 49It was submitted that the Road Transport Training Course was de minimis like an induction into a new job. I do not accept that submission. I have set out the content of the course. It appears to be adequate for its purpose. Candidates were not only required to pass theory tests, they were also tested on the road in practice. 50Furthermore, there is a significant difference between an induction and this training course. With an induction the person already has the job. Mr Dargan might have failed the course in which case he would have no job. 51The policy does not call for a qualitative analysis of education, training or experience in the definition of Total and Permanent Disablement beyond that necessary to determine whether the insured has the capacity to take the job. 52Whatever the quality of the education or training in the Road Transport Training Course it was a prerequisite to employment as a taxi driver. And it was given no consideration by United Super or Hannover Life. 53Their decisions are void for failure to address the correct question. The court in those circumstances can make the determinations ( Edwards , Chammas v Harwood Nominees Pty Ltd (1993) 7 ANZ Insurance Cases 61-175, McArthur , Hannover Life Re of Australasia Limited v Sayseng (2005) 13 ANZ Insurance Cases 90-123, Halloran ). 54Since the parties accepted the proposition that the determination of the correct interpretation of clause 1.3.1 of the Group Life Policy would determine the proceedings it follows that Mr Dargan is entitled to relief. 55I will hear the parties on the appropriate terms of declarations and orders and I will hear the parties on costs. I direct the parties to bring in short minutes of order reflecting these reasons.

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: 03 November 2011

Vehicle and Traffic (Driver Licensing and Vehicle Registration) Regulations 2000(Tas)

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