Dotlic v Hannover Life Re of Australasia Limited

Threshold Question

1. That question is well-known in insurance law. The policy provides that an insured person is totally and permanently disabled where, relevantly, the insurer forms an 'opinion, after consideration of medical evidence satisfactory to us' that the insured person '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'.
2. There was no dispute as to the applicable legal principle. It was best articulated by McLelland J in Edwards v The Hunter Valley Co-Op Dairy Co Ltd (1992) 7 ANZ Ins Cas 61-113 at 77,536 and has been approved many times since, including at great length in TAL Life Ltd v Shuetrim [2016] NSWCA 68 at [61]-]62]. McLelland J said: Where under a contract, rights or liabilities depend upon the subjective state of mind of a party, eg the party's approval, opinion or satisfaction, of or about something, it can be a difficult question whether the party is subject to an implied obligation in reaching that state of mind, or failing to reach it, as the case may be, to be bound by objective standards of reasonableness … However in the field of insurance, it is well established that where under a contract of insurance an element of the insurer's liability is expressed in terms of the satisfaction or opinion of the insurer, the insurer is obliged to act reasonably in considering and determining that matter. He added: To say that an insurer must act reasonably in forming or declining to form an opinion is not to say that a Court can substitute its own view for that of the insurer. As North J pointed out in Doyle at 529, 'reasonable persons may reasonably take different views'. Unless the view taken by the insurer can be shown to have been unreasonable on the material then before the insurer, the decision of the insurer cannot be successfully attacked on this ground.
3. The importance of recognising that 'reasonable persons may reasonably take different views' was emphasised by the High Court of Australia in Minister for Immigration & Citizenship v Li [2013] HCA 18 at [75]-[76]. The context was different but the principle is analogous. Hayne, Kiefel and Bell JJ referred to House v The King (1936) 55 CLR 499 at 504-505 and the principle that 'it is not enough that an appellate court would have taken a different course'. And they added that 'Unreasonableness is a conclusion which may be applied to a decision which lacks an evident and intelligible justification'.
4. Notwithstanding the breadth of the countervailing evidence in this case, and the inherent difficulties in making a challenge to the insurer's opinion, the plaintiff's counsel submitted that 'having regard to all circumstances of the plaintiff's claim, no reasonable Trustee or Insurer could [not] have reached the conclusion that the plaintiff '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'. Despite the syntactical infelicity of the written submission, the plaintiff's contention was clear. He submitted that the insurer's opinion was so unreasonable that a reasonable person in that position would have not arrived at it.
5. Unfortunately the amended statement of claim did not descend to any particularity as to why the insurer's opinion should be characterised with the requisite degree of unreasonableness. There was no inkling of any substantive ground for the complaint until written submissions were circulated just prior to the hearing. When they emerged, it became apparent that the essence was a complaint that the insurer and trustee had not addressed the question 'whether, in the real world, the plaintiff was ever likely to obtain such work especially bearing in mind the restrictions that he had, his limited English skills and his previous education, training and experience'. Allied to this submission was the contention that there was 'no evidence of any actual labour market analysis to assess the likelihood of the plaintiff obtaining any such employment'.

Grounds for Opinion

1. I have reached the conclusion that there was more than enough material available to the insurer from which it was able reasonably to form the opinion that the plaintiff was not 'unlikely ever to be able to engage …' within the meaning of the policy. Indeed the material was copious. Further, there was an evident and intelligible justification for the insurer's opinion based on that material. And there was precious little pointing the other way, other than the pro-forma medical report from the plaintiff's general practitioner, Dr Predrag Tomasevic that accompanied the claim.
2. As one might expect, Dr Tomasevic ticked a box stating that he did not expect that the plaintiff 'will EVER be able to do a job for which he is reasonably fitted by education, training or experience'. The only reason he gave was 'Due to chronic persisting symptoms resulting from injury on 15/9/2009'. I know nothing about Dr Tomasevic, or the circumstances in which the plaintiff came to see him, or any cultural affinity they may possibly have shared. But I have referred elsewhere to the problem that sometimes arises in malingering cases where medical practitioners - especially a claimant's general practitioner - simply accept the patient's account, questioning neither its truthfulness nor its completeness. I added that: … medical practitioners are not as well suited, by nature, training or circumstance, to detect lies, dishonesty, exaggeration or embellishment. The usual, and entirely understandable, starting premise of a medical practitioner is to accept and believe a patient's account. See Zahr v TAL Life Limited [2014] NSWSC 358 at [29]
3. The one line analysis of Dr Tomasevic is both the start point and the end point of any medical evidence favourable to the plaintiff. In contrast, I have been taken to more than a dozen reports, reviews, analyses and assessments painting a different, more optimistic, more realistic, picture. They were all relied upon by the insurer to reject the plaintiff's claim. The professional time and expense that must necessarily have been involved in creating those reports, examining the plaintiff and conducting an assessment for this modest and unworthy claim is troubling, to say the least.
4. The medical practitioners, health professionals and vocational experts who have given their time to the consideration of the plaintiff's claim include Dr Habib, Ms Kondakoff, Dr Stephenson, Ms Leaver, Mr Raue, Dr Gibson, Dr Anderson, Dr Nguyen, Dr Smith, Dr Newlyn, Dr Kafataris and Dr Guirgis. They represent a small part of a huge professional industry that exists to respond to claims such as that of the plaintiff. I have set out in paragraphs [17] - [28] below a brief summary of their conclusions.
5. Having regard to those conclusions, the question that the insurer ultimately answered against the plaintiff was whether he was 'unlikely ever to be able to engage' in regular employment for which he was 'reasonably fitted by education, training or experience'. It is well-settled that although the regular employment must be remunerative, it can be part-time and need not be full-time: Hannover Life Re of Australasia Limited v Dargan [2-13] NSWCA 57 at [46]. And account must be taken of the plaintiff's physical capacity, his psychological makeup, the availability of employment and the likelihood of obtaining it: Dargan at [43]; Jones v United Super Pty Ltd [2016] NSWSC 1551 at [62]. I am satisfied that that has occurred. The vocational assessors in particular were scrupulous in addressing those issues and recommending employment categories having regard to them - subject to what I have said in paragraphs [32] - [34] below.

Dr Habib

1. Dr Habib is an orthopaedic surgeon trained in the assessment of permanent impairment. He stated in 2011 that the plaintiff was 'considered fit for restricted suitable and light duties on a part-time basis' subject to certain restrictions. In 2012, he added that 'efforts should be made for rehabilitation based functional/vocational assessment to return him to suitable duties'.

Ms Kondakoff

1. Ms Irene Kondakoff is an experienced exercise physiologist. By May 2012, she had conducted eleven supervised sessions with the plaintiff and proposed to conduct a further five sessions. That month she held a teleconference with Dr Tomasevic. The goals that they agreed and discussed included 'Return [the plaintiff] to full time work with a new employer with realistic limitations'. Her final case conference summary stated that: - Mr Dotlic has so far demonstrated that he has improved his functional and postural tolerances to be able to meet the physical requirements of his rehabilitation goal; - Mr Dotlic has more functional capacity than currently reflected on his medical certificate; - Mr Dotlic has the capability to work for 5 hours per day 5 days per week; - Dr Tomasevic would re-assess Mr Dotlic at his next review and consider upgrading Mr Dotlic's medical certificate based on Ms Kondakoff's recommendations.

Dr Stephenson

1. Dr Stephenson is an orthopaedic surgeon. He interviewed and examined the plaintiff. In 2011, he wrote that the plaintiff 'is fit for a variety of other jobs now that do not involve heavy manual labouring work'. He observed that liaison is occurring 'in terms of getting him to look for suitable work'. He recommended a lifting restriction of '15kg correctly lifted from floor to bench'.

Ms Leaver

1. Ms Leaver is a physiotherapist employed by the Vocational Capacity Centre. It is a leading provider of comprehensive vocational, functional, medical, clinical, psychological and neuropsychological assessments. She performed vocational capacity testing on the plaintiff. Ms Leaver concluded that the plaintiff 'is capable of performing tasks in the light manual and sedentary range. He can work adeptly with his hands …' She determined that he was 'capable of full-time employment' and 'is suitable for a range of other occupations'. She nominated a number of vocational possibilities for the plaintiff based on his 'transferable skills and abilities'.

Mr Raue

1. Mr Raue is a psychologist who conducted a vocational assessment of the plaintiff having regard to 'relevant aspects of [his] personal, educational and employment backgrounds and the psychometric evaluation of intellectual skills and personal preferences'. In Zahr v TAL Life at [30] I referred to the advantages of psychometric evaluation. Mr Raue concluded that the plaintiff was 'an intelligent man who is likely to have a lot to offer employers over and above simple labouring or hands-on work'. He identified a number of specific employment categories for which the plaintiff was suited.
2. In a separate 'Job Match Report', which Mr Raue prepared jointly with Ms Leaver, they comprehensively summarised a number of employment categories suitable for the plaintiff, adding a description of tasks required to be performed for each job as well as the estimated starting salary for each job. The considered opinion of Mr Raue and Ms Leaver was that the plaintiff was 'capable of returning to the workforce' in each of the categories that they nominated.

Dr Gibson

1. Dr Margaret Gibson is an occupational physician. She was requested to comment on a number of earlier reports. She concluded her analysis by stating: I endorse the recommendations made by the functional assessor that [the plaintiff] is fit for a range of occupations, including Product examiner, Product assembler (light duties), Road maintenance traffic controller, Sales assistant (general), Service station console operator and/or Gatekeeper - industrial sites.

Dr Anderson

1. Dr Tim Anderson is an occupational and environmental medicine physician. He examined the plaintiff and emphasised that 'He is certainly not totally and permanently disabled'. He added that 'there would be many less physically arduous tasks which he should be able to manage' and that 'with even quite minimal further training, this list of occupations could be further expanded'.
2. Dr Anderson provided a detailed opinion about the plaintiff's ability to perform the various employment possibilities that were identified in the vocational assessments, adding qualifications where appropriate. He said that the plaintiff 'could do most of these [jobs] for most of the time'; that there were 'variants of these jobs that he would be able to do; and that 'with relatively limited additional training, there are certainly other jobs that he could do as well'.

Dr Kafataris

1. Dr Kafataris is an injury management consultant with WorkCover and a certified independent medical examiner. He examined the plaintiff early in 2010 and formed a favourable view of his prospects: I remain of the opinion the worker should be able to increase to 20 hours/week fairly quickly e.g. to 4 days/4 hours then 5 days/4 hours two weeks after this. He should then upgrade by an hour per shift every 1 to 2 weeks until he returns to a full shift of suitable duties. … If he is able to return to a full shift of suitable duties within the next 6 - 8 weeks as suggested and he makes improvements in strength and functional capacity via the exercise program, then a trial of pre injury duties could be contemplated.

Dr Guirgis

1. Dr Guirgis is a consultant orthopaedic surgeon. In 2010 he examined the plaintiff. His report stated that the plaintiff should avoid activities that require heavy lifting, repeated lifting and repetitive handling, among others. He assessed the plaintiff as suffering from '5% whole-person impairment' in some areas and '0% whole-person impairment' in another.

Drs Nguyen, Smith and Newlyn

1. Drs Nguyen and Smith are consultant psychiatrists. Each of them concluded that the plaintiff was not incapacitated for employment from a psychiatric point of view. Dr Newlyn is a medical assessor with the Medical Assessment Service of the Motor Accidents Authority. He concluded that the plaintiff's anxiety symptoms 'would allow him to work in a different environment that needed comparable skills'. He assessed his whole of person impairment at no more than 6%, to which he added 2% for the effects of treatment.

The Plaintiff's Circumstances

1. In addition to those conclusions from an overabundance of medical and vocational professionals, the insurer and trustee were probably also entitled to take into account the information contained in the reports about the plaintiff's personal circumstances. He was educated in Belgrade but did not complete his final year at secondary school. The year 1999 was a time of tumult in the Balkans. Belgrade was heavily bombed and the plaintiff's family left in 2000. In Australia however, apart from not currently being in gainful employment, the plaintiff appears to lead a relatively normal, even indulgent, lifestyle. Ms Leaver and Mr Raue referred to his 'strong general intelligence' and his 'reasonably strong general English literary skills'. Dr Anderson commented that in early 2014, the plaintiff returned 'from a 6-7 month trip away to Serbia' where 'he had massage and attended a sanatorium'. He added however that he 'leads an appalling lifestyle with his heavy smoking' and 'seems to have very little idea of the need to be physically and progressively more active'. He also said that he was a 'friendly, cooperative and quite pleasant young man' who talked 'rather vaguely about the possibility of running his own business'.
2. I should add that the 2009 motor vehicle accident was not a major accident. It occurred at a roundabout when another vehicle collided with the driver's door of the plaintiff's vehicle. The plaintiff broke no bones; suffered no lacerations. There was no major traumatic injury although he hurt his head, his right shoulder and his back. He was taken by ambulance to Fairfield Hospital but was released later that day. His then general practitioner referred him for physiotherapy and massage. In 2014, Dr Anderson observed that 'there is no particular current treatment other than some very gentle physical activity of his own and also the occasional use of analgesics and anti-inflammatories'.
3. Information such as this, when taken together with the medical diagnoses and prognoses, and the vocational assessments that were obtained, would not have encouraged a reasonable insurer to conclude that the plaintiff was 'unlikely ever' to be able to engage in regular employment (part-time or full-time) for which he was reasonably fitted by education, training or experience.

Vocational Assessments

1. In the circumstances of this case, I do not accept that there has been any failure by the insurer and the trustee to have regard to 'the real world' in considering whether the plaintiff was 'unlikely ever' to be able to engage in suitable employment. Nor do I accept that in the circumstances that pertained to the plaintiff, it was necessary to undertake the sort of detailed labour market analysis for which the plaintiff's counsel appeared to contend.
2. In forming the requisite opinion, the insurer had no responsibility to act as an employment agency. It had no duty to find a particular job with a particular employer willing to take on the plaintiff. The insurer's responsibility was to form an opinion about the probabilities, having regard to the terms of the policy. In doing so, it was reasonable and appropriate to base its opinion on the considered professional advice of experienced vocational assessors. It appears to have been careful in doing so - referring in its letter of declinature dated 1 July 2014 to its review of 'all available evidence' and the 'weight of evidence' on multiple occasions. And it summarised the information on which it based its opinion and the terms of the policy that it was addressing. My impression is that the conduct of the insurer was cautious and comprehensive. It was certainly fair.
3. Nor could there be any suggestion that the Vocational Capacity Centre was not a leading provider of services in the field, including in 'Transferable Skills Analysis'. The Job Match Report, jointly authored by Ms Leaver and Mr Raue, appears on its face to be thorough, even assiduous. Having identified appropriate vocational opportunities for the plaintiff, and taking into account the physical restrictions to which he was subject, there was no need to go further. And no need for the insurer to question the conclusions. The authors were experts in their field. And the suggested employment categories were not rare or unusual. They were mundane and quotidian. They represent the type of jobs that are frequently available in countless workplaces across a range of industries in the prosperous society which the plaintiff now calls home.
4. On the basis of that information, and in the circumstances of this case, I have concluded that the insurer acted reasonably in forming its opinion.

Orders

1. For those reasons, I make the following orders: 1. I answer the separate question in favour of the defendants. 2. I dismiss the proceedings. 3. I order the plaintiff to pay the defendants' costs. 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: 27 July 2017