That passage is one described, in Meagher, Gummow and Lehane's Equity Doctrines and Remedies , 4th ed, paragraph 17-050 at 550 as one in which "the current state of authority in Australia as to equitable or promissory estoppel is encapsulated …". I note that the wording of the first element of the estoppel, as reported in (1988) 76 ALR 513 at 542, differs slightly from the wording in the CLR. I have used (and Meagher, Gummow and Lehane have approved) the wording as set out in the CLR version of the decision.
105 The test for the degree of clarity and freedom from ambiguity which a representation should have to give rise to a promissory estoppel has been stated by Tobias JA (with whom Giles and Hodgson JJA agreed on this matter) in Galaxidis v Galaxidis [2004] NSWCA 111 at [93]:
"… even if a representation is insufficiently precise to give rise to a contract (as in the present case), that fact does not necessarily disqualify the representation from founding a promissory estoppel. Much will depend upon the circumstances in which the representation is made and the context against which it is to be considered. In its context, the representation is sufficiently clear and unambiguous if it is reasonable for the representee to have interpreted the representation in a particular way being a meaning which it is clearly capable of bearing and upon which it is reasonable for the representee to rely. In these circumstances, it would be unconscionable for the representor to deny responsibility for the detriment that arises because of that reliance."
106 I accept the plaintiff's evidence that he assumed that any benefits he would receive under the policy would continue until he was aged sixty-five. Thus, the first element of the estoppel is made out.
107 I turn to whether the defendant induced the plaintiff to adopt that assumption or expectation. The Member Cover Details document is a one-page document, which does not purport to be an accurate summary of the entirety of the Policy. Further, the particular words to which the plaintiff points are, in a broad sense, true - most of the benefits are payable to age sixty-five, but there are detailed limitations and qualifications. As well as the limitation relating to mental illness benefits, there are other circumstances like mis-statement and non-disclosure which can result in benefits being refused or lessened. As well, the Policy has limitations on benefits caused wholly or partly, directly or indirectly by intentional self-injury; committing or aiding and abetting an assault or other unlawful act; war, invasion, civil commotion and riot; or normal pregnancy or childbirth. Further, the Policy has provisions for reduction of the monthly benefit by reference to amounts received under other policies of insurance, as damages, workers' compensation or pension. The most that can be said, in my view, is that the wording in the Member Cover Details document to which the plaintiff points confirmed the plaintiff in an assumption which he was already making, that he would have cover until age sixty-five. I have some doubt about whether that that amounts to the defendant "inducing" the plaintiff to adopt that assumption, as he was making that assumption already, before he received the Member Cover Details document. However, I shall assume, without deciding, that the second element of the estoppel is made out.
108 I do not accept that, if the Member Cover Details had not included the words to which the plaintiff points, he would have sent it back, and not continued with the Policy. In May 2001 there was no reason, on the evidence, to conclude that the plaintiff had any concern about himself possibly suffering from a mental illness. He had disclosed, in his personal statement, that in approximately 1976 AMP had offered him non-standard terms, in that he had been offered insurance on the basis that it included a back injury exclusion. He also disclosed that he had a thyroid disorder which caused him tiredness but had resulted in no time off work, and for which he was on medication, and that there was some family history of problems concerning heart, kidney and diabetes. He denied having any brain, neurological, or other nerve pathway disorder. If he had a suspicion that there was a real practical risk that he might be suffering from a mental illness, it would have been his duty to disclose that fact to AMP. When the plaintiff is a man who has worked in the insurance industry for many decades, I am entitled to infer that he knows about the duty of disclosure. His general practitioner, Dr McKay, sent AMP a medical attendant's report, which disclosed nothing in any way related to any mental illness, and showed that the last time the plaintiff had attended his GP was on 29 January 2001. That report is undated, but was not sent to AMP until after 20 March 2001, as on 20 March 2001 Dr McKay was refusing to send it until he was paid for it. I do not accept that, in the plaintiff's mind in mid-May 2001, the lack of a limitation on mental illness claims had any particular importance. In these circumstances, the third element of the estoppel is not made out.
109 Nor am I satisfied that AMP knew or intended that the plaintiff would act, or abstain from acting, in reliance on the assumption or expectation that he would have cover until age sixty-five, without there being any limitation on the mental illness claim. So far as AMP knew, the plaintiff was someone who had read CIB Issue 5, and there was no reason for AMP not to expect that he had understood it, including its explanation of the limit on mental illness claims. Further, the Member Cover Details document is one intended to be addressed to people who have already informed the first defendant that they have received and read CIB Issue 5. It is CIB Issue 5 which purports to inform members, or intending members, of the Plan of the substance of the benefits which will be provided under the Policy, and the limitations, including the mental illness limitation. The Member Cover Details document was not the type of document which purported to give a full and accurate statement of the terms of cover, on which a recipient was likely to rely. As AMP would have well known, it failed to mention numerous limitations on when benefits were payable under the Policy - see para [107] above. Thus, I am not satisfied that the fourth element of the estoppel is made out.
110 The plaintiff has not satisfied me that, if he had, on or very soon after 10 May 2001 set about seeking to obtain a disability insurance cover which did not include a mental illness limitation, he would actually have obtained one. In June 2001 he returned to Dr McKay for some treatment, relating to palpitations that he was having at that time. Dr McKay informed him that those palpitations related to stress he was feeling at the time.
111 By then, the plaintiff had occasion to be feeling stress. A short time after he had filled out the application form for the insurance, the NASDAQ share index fell by forty five percent. That was an event which had most deleterious effects on both the plaintiff's own financial position, and the financial position of his clients as well. He had started investing in technology stock in October 2000. By January 2001 he was aware that his personal financial position had deteriorated. As well, he had recommended that various clients invest in technology stock, and had received complaints from clients by January 2001 about the poor performance of that stock. As at January 2001 he was somewhat anxious about the position, but that falls well short of having a psychiatric illness.
112 It was in October 2001 that the plaintiff made a claim under the Policy. The progress of his condition from January 2001 to October 2001 is described in a history which he gave to Dr Leong:
"Mr Green reported the onset of his nervous problems following the share market falls in 2001. He reported that he incurred substantial financial losses for himself and a number of his clients, totalling in excess of $4 million. Mr Green described feeling increasingly stressed, as a majority of his clients were friends and family, including his father and his partner at the time. He also allegedly felt pressure from his clients in relation to the share market losses, as well as from AMP. AMP subsequently terminated his agency, reportedly due to breach of agency agreement, which Mr Green denied.
In October 2001, Mr Green reported that he was informed that his agency licence was suspended by AMP, which occurred on the day after his father died. His father had been ill for nearly two years after a number of strokes and Mr Green stated that it was a relief that his father died at that time.
Mr Green described the onset of chest pain, palpitations and shortness of breath in June 2001. He consulted various medical practitioners and had an electrocardiograph performed, which was apparently reported as normal, and his chest pain was attributed to stress. Mr Green reported that he was faced with huge financial losses. He experienced difficulty sleeping, had diarrhoea and palpitations. He was worrying constantly about his financial situation and that of his clients. He could not concentrate and he could not think. He experienced a loss of energy and he had difficulty making decisions. He consulted his general practitioner, Dr McKay, who treated him with sleeping tablets and the antidepressant medication Cipramil."
113 I am not satisfied that, if the plaintiff had started, on or shortly after 10 May 2001, to seek some alternative disability insurance, it is likely that it would have been granted to him prior to the emergence of the condition which led to his claim being made in October 2001. When AMP had taken roughly four months to decide whether to accept his application, there is no basis for believing any other insurer would have been any faster. If the plaintiff had applied to AMP for a different policy, it is pure speculation whether AMP itself would have taken less than four months, in view of the information already in its files. I say this particularly bearing in mind that AMP accepted the plaintiff as a Member only after referring his application to Swiss Re. The evidence does not disclose whether, for any other policy AMP offers, the underwriting criteria are the same as those used for the Plan, or whether there is any reinsurer involvement in acceptance of risks under any such other policy.
114 There is no evidence, in any greater detail than the evidence to which I have already referred, of the extent of cover and limitations on which alternative disability cover is available, or the amount of income which can be insured under such a policy. There is evidence that there was not much difference in the premiums charged under the Plan and for other disability policies. There is no evidence from the plaintiff that he would have been prepared to insure on those alternative terms.
115 For these reasons, I am not satisfied that the fifth element of the estoppel is made out.
116 As the sixth element of the estoppel is dependent upon being satisfied of the "detriment" element in the fifth, I am likewise not satisfied that the sixth element of the estoppel is made out.
117 Thus, the plaintiff's estoppel allegation fails.
Ineffectiveness of the Memorandum of Agreement?
118 The plaintiff submitted that the Memorandum of Agreement was not able to make a retrospective change to the terms of the Policy. That submission is based upon various propositions of law. The defendant disputed it by invoking various propositions of law. In circumstances where I have held that the terms of the Policy were already effectively varied, years before the Memorandum of Agreement was executed, and where it is not necessary to make factual findings to enable the Court of Appeal to deal with this submission, I shall consider it no further.
The Plaintiff's Trade Practices Act Claims
119 The plaintiff also sues AMP for damages for breach of section 52 Trade Practices Act 1974 (Cth). The claim relies upon two pieces of conduct. The first is the same representation, in the 10 May 2001 Member Cover Details document, as was the foundation for the estoppel claim. The second is a failure to advise the plaintiff at any time between 15 January 2001 and 4 May 2001 that AMP intended to amend the Policy terms and conditions to provide that disability payments for mental disorders would cease after two years.
120 AMP does not dispute that it conducts its business "in trade and commerce", within the meaning of section 52.
121 For reasons substantially the same as those why the estoppel claim fails, I do not accept that it was misleading and deceptive conduct for AMP to send to the plaintiff the Member Cover Details. The words of which the plaintiff complains (para [102] above) are ones which, if read literally and with no regard for context, are untrue, because there were exceptions to the proposition that benefits were payable after the waiting period to age sixty-five, which were not stated in the document. That is not enough to make AMP's conduct in sending the document to the plaintiff misleading and deceptive. In deciding whether conduct is misleading and deceptive, for the purpose of a claim for damages under section 82 Trade Practices Act 1974 (Cth), one considers the particular person who complains about the conduct, quite apart from any class into which such a person might fall: Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 79 ALJR 308 at [36] - [37]. In deciding whether supply of a particular document is misleading or deceptive, one can take into account "… the nature of the parties, the character of the transaction contemplated, and the contents of the [document] itself": Butcher, at [40].
122 Here, AMP had every reason to believe that the plaintiff was someone experienced in insurance matters. It had every reason to believe (because the plaintiff had told it so) that the plaintiff had read CIB Issue 5, which expressly identified the mental illness limitation. It had every reason to believe that the plaintiff wished to obtain insurance on terms which included that mental illness limitation, because the plaintiff had filled in the application form at the back of CIB Issue 5, applying for the policy described in that CIB. When AMP sent the Member Cover Details document, it had no reason to believe that it would be read by the recipient as saying anything other than that AMP had agreed to provide the insurance cover which the plaintiff had applied for. The document, being a one-page document, which included a lot of blank paper on even that one page, was not the type of document which a reasonable recipient (particularly a reasonable recipient who was experienced in the insurance industry) would be likely to read as containing a complete statement of all limitations to which the policy was subject. Nor do I accept that the plaintiff has suffered any damage in consequence of the making of the statement to which the plaintiff points in that document.
123 If the plaintiff was in any way misled, about there being no limitation on mental illness claims, he has misled himself, by failing to read CIB Issue 5, which he had in his possession, and which explains those limitations.
124 The plaintiff pleaded that the representation in question was in respect of future matters, and at the time of the making of the representation AMP had no reasonable grounds for making it.
125 Given that section 51A Trade Practices Act 1974 (Cth) casts the onus of proving that there were reasonable grounds for making a representation with respect to a future matter upon the corporation which made it, there was no need for the plaintiff to prove that AMP had no reasonable grounds for making it. However, I record that the particularised basis for making that allegation, namely that AMP intended to amend the Policy terms and conditions to limit payments for mental illness to two years, is not made out, because AMP had no such intention, except in the trivial sense that it intended to bring into existence a document to record the amendment which had already been orally agreed upon. AMP having that intention in that trivial sense has caused the plaintiff no damage.
126 More important is that the representation alleged that "benefit(s) payable pursuant to the Personal Exertion Cover would be payable after the waiting period to the age sixty five except for new advisors who are restricted to a one year benefit". While that representation was made, in the sense that it appeared in the Member Cover Details it is not, in its context, a representation which should be taken as an exhaustive statement of the circumstances in which benefits would be paid. AMP had reasonable grounds for making it, because the representation was not, in its context, one which was intended to provide an exhaustive statement, and because the representation was made to a person who had already been provided with the CIB which described in all relevant respects, the limitations on the cover, and the document purported to be nothing more than a confirmation of the issue of the cover which the recipient had already applied for.
127 For these reasons the plaintiff's Trade Practices claim fails.
The Plaintiff's Claim Against the Trustees
128 The plaintiff alleges that the Trustees had the following fiduciary obligations:
"b) the Second, Third and Fourth Defendants/Cross-Claimants had the following fiduciary obligations:
i. an obligation to provide reasonable assistance to Participants in their pursuit of claims made against the First Defendant/Cross-Claimant under the Policy;
ii. an obligation not to engage in any conduct which would obstruct, hinder or prevent Participants in making or pursuing claims under the Policy against the First Defendant/Cross-Claimant;
iii. an obligation to preserve and protect the rights of Participants to make claims under the Policy;
iv. an obligation not to engage in any conduct which would destroy, limit or remove the rights of Participants to make claims under the Policy."
129 Subject to a qualification that their obligations related only to the making of claims in accordance with the terms of the Policy, the Trustees accept that they had such obligations. The Trustees are right in imposing this qualification upon their admission.
130 It is common ground that the Policy was vested in the Trustees on trust for the Participants, including the plaintiff.
131 The conduct relied upon as a breach of these obligations is the failure of the Trustees to even reply to correspondence from the plaintiff's solicitor in February 2004 and April 2004, which sought their assistance in pursuing a claim by the plaintiff against AMP under the Policy. As well, the plaintiff alleges as breaches that the Trustees, in this litigation, have opposed the plaintiff's relief, filed a cross-claim, and generally supported AMP.
132 It is a sufficient reason to reject this claim that, when the plaintiff had no rights under the Policy against AMP, the conduct of the Trustees about which the plaintiff complains has not caused the plaintiff any loss.
Damages - Generally
133 It is appropriate to make some findings relevant to damages in case the Court of Appeal decides I am wrong in holding that the plaintiff fails in his case on liability.
134 Against AMP, the plaintiff claims damages consisting of two components. The first component, relating to past loss, is the monthly amount of Disability Payment to which he was entitled under the Policy, multiplied by the number of months from 11 November 2003 to the date of judgment. If I am wrong in my findings of liability, that amount will be readily calculable by the Court of Appeal, without the need for any findings of a kind which a trial judge is uniquely well placed to make.
135 The second component, relating to the future, is the present value of the Disability Payments payable under the Policy from the date of judgment until the date the plaintiff turns sixty-five, namely 24 March 2013. Interest is also sought.
136 Alternatively, the plaintiff seeks against AMP an order for the payment of damages equal to the first component of damages which I have just mentioned, and an order in the nature of specific performance or a mandatory injunction requiring AMP to pay benefits to the plaintiff in accordance with the Policy terms until such time as the plaintiff ceases to be entitled to benefits under the Policy. If I am wrong in my findings on liability, the Court of Appeal will be fully equipped to grant this alternate remedy if they find it appropriate, without the need for findings by me.
137 I should, however, give some consideration to matters relevant to whether, if the plaintiff had made out his case on liability, he would be entitled to damages like the second component he claims.
Availability of Lump Sum Damages for Future Loss
138 At common law, if a party to a contract repudiates it, the other party can accept the repudiation and terminate future performance of the contract. That party is then entitled to damages. Those damages are assessed on the basis that they are the sum of money which will, so far as money can, put the innocent party in the same position as he would have been in if the contract had been performed (subject to any questions of remoteness of damage). This is assessed as the present value of the net benefits which would have accrued under the contract to that party, if the contract had been performed, and which are not too remote.
139 Damages assessed in this way can sometimes be recovered by an insured from an insurer, if the insurer repudiates the contract of insurance, and the insured accepts that repudiation. The operation of the principles in the context of an insurance policy was explained as follows by Underwood J in Russell Young Abalone Pty Ltd v Traders Prudent Insurance Co Ltd (1993) 7 ANZ Ins Cas 61-182 at 78,039-78,040:
"If one party acts in such a way as to leave the other to reasonably conclude that he/she does not intend to fulfil his/her obligations under the contract, the former is said to repudiate the contract. Such acts alone have no effect. "I have never been able to understand what effect the repudiation of one party has unless the other party accepts the repudiation." Per Scrutton LJ in Golding v London and Edinburgh Insurance Co Ld (1932) 43 Ll L Rep 487, 488, cited by Viscount Simon LC in Heyman v Darwins Ltd [1942] AC 356 at 361. The innocent party may elect to do nothing and the contract remains on foot even though breach of a term might become the subject matter of proceedings for damages or other relief. Alternatively, the innocent party may elect, by clear notice, to accept the repudiation and rescind the contract, thereby immediately giving rise to a right to sue for damages for the repudiation. See Federal Commerce and Navigation Co v Molena Alpha Inc [1979] AC 757; Photo Production Ltd v Securicor Transport Ltd [1980] AC 827.