Ivan Mabbett v Watson Wyatt Superannuation Pty Limited & Anor

TEXTS CITED : Lord Steyn, "The Intractable Problem of the Interpretation of Legal Texts" (2003) 25 Sydney Law Review 5

Ivan Mabbett (Plaintiff) PARTIES : Watson Superannuation Pty Limited (First Defendant) AMP Life Limited (Second Defendant)

Mr G Beauchamp (Plaintiff) COUNSEL : Mr R Potter (First Defendant) Ms V Heath (Second Defendant)

Firths (Plaintiff) SOLICITORS : DLA Philips Fox (First Defendant) Minter Ellison (Second Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST

50196/07 Ivan Mabbett v Watson Wyatt Superannuation Pty Limited & AMP Life Limited JUDGMENT

The proceedings 1 These are proceedings concerning the claimed rights of the plaintiff, Mr Ivan Mabbett, to receive payment of an insured benefit commonly referred to as Total and Permanent Disablement benefits ["TPD"]. The plaintiff sustained a back injury on 9 July 2001, the very day upon which he had tendered his resignation to P & O Cold Logistics Services Pty Limited, the company by which he was employed. 2 The first defendant, Watson Wyatt Superannuation Pty Limited ('WWS') was initially sued in its capacity as trustee of the P & O Australia Superannuation fund [the fund], but is no longer a party to these proceedings. The second defendant, AMP Life Limited, is sued as Group Life Insurer of the fund. The convenient course is to refer to the first defendant either by its name or as 'the Trustee' and to the second defendant either by its name or as 'the Insurer'. 3 The plaintiff has standing to sue the Insurer even though it is a group policy and the Insurer owes the same obligation of good faith and fair dealing to the plaintiff as it does to WWS as trustee (Hannover Life Re of Australasia v Sayseng [2005] NSWCA 214 per Santow JA at [70] to [72]). This decision, with which Spigelman CJ and Tobias JA concurred, tracked the authorities concerning the nature and content of an insurer's obligations under a policy taken out by a trustee, the commercial purpose of which policy is to provide insurance against risks to third parties in what are sometimes referred to as "trust" and "benefit" cases. The decision upheld the proposition that the duty of good faith applies where the policy is at least for the indirect benefit of the insured. At [55] Santow JA affirmed the applicability of what his Honour referred to as a 'bilateral obligation of utmost good faith' in a situation where the insured is not the employee concerned or other third-party, but as here, the trustee of the fund. At [56] Santow JA observed that the decision in Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107 afforded a principled basis for attributing such a duty of good faith and fair dealing to the insurer in its dealings with the employee. The duties of utmost good faith in respect of a claim are owed by the insurer and the employee to one another. The facts 4 The plaintiff was employed by P & O from 15 January 2001 until 9 July 2001. As an employee, he was also a member of the superannuation fund during this period. 5 On 9 July 2001 the plaintiff tendered his resignation to P & O. His stated intention was to commence work the next day as a demolition supervisor with Associate Building and Construction Service (ABC). The plaintiff's resignation was accepted by P & O, however he was asked to work until the end of the shift, it being a term of the plaintiff's employment contract that he give 8 hours notice of resignation. Hence the resignation became effective at the end of the plaintiff's shift on 9 July 2001 [PX194]. Between the time at which the plaintiff tendered his resignation, and the time at which the resignation took effect, the plaintiff alleges that he sustained a back injury in the course of his employment with P & O. 6 The plaintiff ceased working for P & O at the end of his shift on 9 July 2001. Due to his injury, the plaintiff alleges that he was unable to start work as anticipated with ABC immediately following the end of his employment with P & O. The plaintiff alleges that the Employer declined to rehire him after his resignation [PX194]. 7 Following a period of medical treatment for his back injury, the Plaintiff began working for ABC on or around 15 November 2001. The plaintiff submits that this work was only on a part-time basis, however this evidence is disputed by the Insurer. This work continued until May 2002. 8 In July 2003, the plaintiff obtained part time work as a bus driver for the Beech Boys Bus Company working two hours in the mornings and two hours in the afternoons five days per week. In September 2003, the plaintiff resigned after being made aware that ongoing work could only be provided if the plaintiff could work longer hours and obtain a Commercial Bus Licence. 9 More recently, the plaintiff has also been involved for some years in helping to run a shop selling organic products and remedies, and has been involved in political activities, but on his evidence he has only received the promise of future payment rather than regular remuneration. The plaintiff's approaches to the trustee/administrator about making a claim 10 In about June 2003, the plaintiff contacted the Trustee or its administrator about making a TPD claim. The Trustee or its administrator sent a letter to the plaintiff on 20 June 2003 regarding the claims process and sent claim forms on 25 November 2003. The plaintiff's completed forms were returned to the Trustee on or around 15 March 2004 [PX196]. The Trustee or its administrator sent the claim for TPD benefits to the Insurer on or about 15 April 2004, and it was apparently received on 20 April 2004 [PX236]. During May 2004, the Insurer requested further information from the Trustee, which the Trustee obtained from the plaintiff and his former employer, P & O. The claim was assessed by the Insurer. 11 The substantive documents before the Insurer in the claim were: · the Employee's Statement (completed by the plaintiff) dated 10 March 2004 [PX216]; · the Employer's Statement dated 31 March 2004 [PX230] · Initial Medical Report & Certificate for Superannuation Disablement Claim by Dr Ng dated 1 March 2004 [PX209]. 12 The Trustee was informed that the Insurer proposed to decline the claim by letter dated 3 June 2004 [PX249-250]. The Insurer invited the plaintiff to comment on the basis for the proposed declining of the claim set out in the letter within 21 days (ie by 24 June) and also invited the Trustee's response if it disagreed with the Insurer. 13 No response was received from the plaintiff or the Trustee by 29 June 2004 so the Insurer proceeded to deny the claim as proposed [PX254, 262]. 14 On 6 September 2006, the plaintiff's solicitor requested the Trustee to have the Trustee and Insurer reconsider the claim based on further evidence being: · Report of Dr Guirgis dated 23 August 2006 · Report of Dr Ng dated 29 June 2005 · Statement of the plaintiff dated 10 January 2006. 15 As the date on which the plaintiff alleged he had commenced his employment in the demolition industry after the injury differed from that previously given, the Trustee requested further information, which was received by the Insurer on or about 14 November 2006. 16 On 24 November 2006, subject to the Trustee's concurrence, the Insurer confirmed its decision to deny the claim. The Insurance Contract and Trust Deed 17 Clearly enough, the commercial context of the insurance contract with which these proceedings are concerned is that it provided benefits to a trustee of the superannuation fund to cover the trustee's own liability to pay TPD benefits to members. 18 During the hearing, the Court was taken to, and examined in detail, those clauses of the insurance contract and the trust deed which formed the basis of the relationship between the parties. Ultimately, only those clauses which are relevant to the issues in the dispute will be extracted in the judgment below.

The plaintiff's case 19 The plaintiff particularly alleges that the Insurer breached its duty to act with utmost good faith owed to the plaintiff for the following reasons:

a) It formed an opinion which was not reasonably open to it on the evidence;

b) In coming to the opinion that the plaintiff was not entitled to TPD and TSC benefits, the second defendant misconstrued the true test that should have been applied;

c) It failed to provide the plaintiff with an opportunity to address the matters upon which it had formed its opinion prior to declining his claim;

d) It failed to have regard or sufficient regard for the plaintiff's education, training and experience at the time of becoming incapacitated;

e) It failed to have regard or sufficient regard to the medical evidence of the treating doctors;

f) It failed to have regard or sufficient regard to the realistic prospects of the plaintiff obtaining full time employment in his locality;

g) If failed to inform the plaintiff of the matters which could lead to a decision to decline the claim in order to enable the Plaintiff to better address those matters;

h) It failed to inform the plaintiff of the basis upon which its opinion had been reached and so afford the plaintiff the opportunity of presenting further evidence;

i) It failed to provide the plaintiff with an opportunity to address the matters upon which it had formed its opinion;

j) It failed to form its opinion fairly, reasonably, and on a balanced consideration of all the relevant material relating to the state of the plaintiff's capacity for full time work and his qualifications;

k) It failed to act towards the plaintiff with utmost good faith;

m) It failed to give proper or full consideration to all the information provided to them;

n) It failed to exercise its decision to decline in utmost good faith;

o) It failed to exercise its decision to decline on real and genuine consideration of the evidence;

p) It wrongly interpreted reference to "his employment" as applying to any employment when in fact the language in the policy and in particular item 4 states the "employer" is "P & O Australia Ltd".

20 Broadly speaking, the issues raised by the plaintiff's allegations include the contentions that the Insurer: i. misconstrued the appropriate test to be applied and thus came to an incorrect conclusion with regards to the plaintiff's entitlement to TPD benefits [the Construction Issue];

ii. failed to have regard to material considerations, being the medical evidence, the evidence of the plaintiff's education, qualifications and experience and the likelihood of the plaintiff obtaining suitable employment;

ii. failed to give the plaintiff a fair hearing; and

iii. formed an opinion which was not reasonably open to it on the evidence. The relief sought 21 If the Court, accepting one or other of plaintiff's contentions, held that the insurer's decision was vitiated, an issue would arise as to whether or not the proper orders should be:

i. to remit the matter to the insurer by reason of the fact that the contract allocate the decision-making fact-finding role to the insurer or;

ii. for the court to itself determine as a matter of fact whether the plaintiff qualified under the TPD definition.

The Insurer's discretion 22 Clause 8 of the Insurance Policy [CB28] establishes the principal requirements for establishing a claim. It gives the Insurer discretionary power to determine whether the claim is payable:

a) we are satisfied of the identity and age of the Insured Person;

b) we are satisfied that the Insured Person is dead, Totally and Permanently Disabled, or Temporarily Totally Disabled; and

c) we are satisfied that any relevant requirements of the Policy have been met. 23 That is, the Insurer's liability to pay a claim depends on it being satisfied that, among other things, the Insured Person is TPD. This means that all of the facts required to be established under the TPD clause must be established to the Insurer's satisfaction: the discretionary element is not limited to that part of the TPD clause calling for the Insurer's opinion. 24 I accept that a decision whether a claimant is TPD under the policy involves a discretionary decision by the Insurer at 2 levels: · under cl 8, a decision that the Insurer "is satisfied" that claimant is TPD and that any relevant requirements of the policy have been met [PX28]; and · within the TPD definition itself [set out below], the Insurer's opinion that the claimant is unlikely to ever work in or attend to any work in any employment, business or occupation for reward of any type for which he is reasonably fitted by education, training or experience. 25 That is, a decision whether the Insurer is satisfied that the claimant meets either limb of the TPD test is a discretionary decision that the contracting parties, the Trustee and the Insurer, have allocated to be made by the Insurer under the contract. 26 I accept as correct the Insurer's proposition that the Court will not disturb the contractual mechanism for fact-finding and decision-making, which by agreement allocates a discretion to the Insurer, unless persuaded that there is a vitiating error in the Insurer's decision. It is not sufficient that a claimant demonstrate that there is another view of the facts available on the evidence before the Insurer. Before a Court will disturb the Insurer's conclusion it must be persuaded that the Insurer:

(1) applied a wrong construction of the contract, which may have materially affected the outcome; or

(2) failed to properly inform itself by giving the claimant an opportunity to address unknown adverse evidence; or

(3) failed to consider a relevant consideration that the Insurer was bound to take into account or relied on an irrelevant matter; or

(4) took a view of the evidence or reached a conclusion that was outside the bounds of reasonable disagreement.

( Sayseng v Kellogg Superannuation & Anor [2003] NSWSC 945 at [81]-[86]) The definition of TPD under the insurance policy 27 The definition of TPD under the insurance policy is set out at [PX40-41] and is relevantly as follows:

An Insured Person is "Totally and Permanently Disabled" if their disability meets the definition of disablement in either Part 1 or Part 2 of this definition and it commences while the Insured Person was insured under this policy and engaged in Regular Remunerative Work with an Employer.

The Insured Person is disabled if they suffer an illness or injury and: · the illness or injury causes the Insured Person to be absent from employment with the Employer for at least 6 months in a row ['the first limb']; and · in our opinion, the illness or injury means that the Insured Person is unlikely ever to work in or attend to …any Regular Remunerative Work for which they are reasonably fitted by education, training or experience ['the second limb'].

[Part 2 of the TPD relates to the loss of two limbs or both eyes, and is acknowledged by both parties not to apply to the plaintiff]. The trust deed definition of TPD 28 The definition of 'Total and Permanent Disablement' under Article 1-Definitions, on page 8 of the trust deed was in the following terms :

'Total and Permanent Disablement in relation to a Member shall be disablement which was not inflicted or aggravated for the purpose of obtaining a benefit and shall have the same meaning as that phrase has for the purposes of any insurance policy effected by the Trustee relating to that Member PROVIDED THAT (1)… (2)… 'Totally and Permanently Disabled' shall have a corresponding meaning and for the purpose of determining whether a Member is Totally and Permanently Disabled, the trustee may rely on the decision of the Insurer, if any, in relation to the Member' (subclauses (1) and (2) above are not set out as they are concerned with the event where there is no insurance policy or an insurance policy with no definition of 'Total and Permanent Disablement'). 29 Two observations may immediately be made:

i. The first observation is that the definition of Total and Permanent Disablement must be identical to that provided for in the AMP insurance policy in force. The trust deed therefore permits a definition which may not be known when the trust is created (or amended) and may well change if the insurance cover adopted by the trustee changes or the policy terms change.

ii. The practical utility of such a clause is obvious. It permits the trustee to effect insurance cover for certain benefits and seeks to avoid a situation where a benefit may be declined by an insurer as outside their definition but still fall within the definition under the deed. This would defeat the purpose of such insurance and it is important therefore once appropriate cover and terms are agreed by the trustee and principal employer with an insurer (Article 4.5 (k)) for the Fund to adopt the insurer's definition. The basis for the Insurer's decisions

30 The Insurer's original decision that the plaintiff was not entitled to TPB benefits [PX249, 262] was based on 2 grounds:

(1) the plaintiff was not absent from employment for 6 months in a row from his Employer due to the alleged injury - the plaintiff changed employers and commenced working supervising at ABC during the qualification period; and

(2) the plaintiff was not unlikely ever to return to regular remunerative employment: He had been assessed by Dr Ng as fit for 30 hrs work per week subject to some activity restrictions and assessed as fit for work as a supervisor and driver; and had, on two occasions in the claim period, partially exercised the capacity for which he had been assessed. 31 Clearly, the first of these grounds relates to the first limb of the insurance policy definition referred to above, while the second relates to the requirements of the second limb. 32 The Insurer's second decision, made in response to the plaintiff's request for reconsideration, confirmed the first ground of the previous decision that the plaintiff did not meet the 6 month qualification in the first limb of the TPD test. In reconfirming its decision, the Insurer made no reference to the alternative reasons for refusal based on the plaintiff's failure to satisfy the second limb of the definition. The second defendant submits, however, that these reasons, while not expressly raised, were not abandoned. 33 Ultimately, whether or not the Insurer relied upon the other reasons is not of crucial significance. I accept that, even if the Insurer relied upon the wrong ground in dismissing the application, it is not guilty of breach of contract so long as, at the time the decision was made, there were other valid grounds [whether or not relied upon at the time] on which the plaintiff's application would have been validly dismissed: cf Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 370-371, 373 and 378.

The wrong construction issue 34 With regards to the first ground on which the plaintiff's application was refused, the plaintiff contends that the Insurer wrongly interpreted the reference in the TPD definition to "the employer" as applying to any employer, when the policy stated that the employer was P & O Australia. 35 The term "Employer" is specifically defined in the contract (PX 38) in the following terms: Employer means the entity named in Item 4 [P & O Australia Limited]. It also refers to: s each, or any, of its subsidiaries associated corporations or firms which is participating in the Fund; and s any entity that carries on business in succession to or reconstruction of the Employer. 36 It is common ground that ABC did not fall within either of these two categories, and that the plaintiff did not engage in any work for P & O or its relevant related entities during the 6 month period after his injury. Thus, the plaintiff maintains that the Insurer refused the claim based on a misconstruction of its contractual obligations, and that this misconstruction materially affected the decision to refuse the plaintiff's claim. 37 The Insurer argued that a purposive construction of the TPD clause would be that the employment from which absence is required to be demonstrated in the first limb of the TPD test is not confined to employment with P & O, but is the absence from any employment whatsoever.

The principles relevant to the construction of the TPD clause 38 The principles relevant to construction of the insurance contract may be conveniently summarised as stated by Gleeson CJ in McCann v Switzerland Insurance Australia Ltd & Ors (2000) 203 CLR 579 at [22]:

A policy of insurance, even one required by statute, is a commercial contract and should be given a businesslike interpretation ( Hydarnes Steamship Co v Indemnity Mutual Marine Assurance Co [1895] 1 QB 500 at 504, per Lord Esher MR). Interpreting a commercial document requires attention to the language used by the parties, the commercial circumstances which the document addresses, and the objects which it is intended to secure ( Lake v Simmons [1927] AC 487 at 509, per Viscount Sumner). Conclusion on the construction question 39 I reject the Insurer's contentions on the subject. Clearly special care requires to be taken in the construction of written documents. Much has been written on the topic and in recent times the principles have been affirmed by the Court of Appeal more than once. 40 The Insurer's central contention which prays in aid the commercial context is as follows:

"The commercial context explains why this is so: the insurance contract provides benefits to a trustee of a superannuation fund to cover the trustee's own liability to pay TPD benefits to members. The main purpose of a superannuation fund is to provide retirement benefits but it is permitted to provide ancillary death cover, TPD and temporary disablement benefits. The TPD benefit is calculated as a percentage of the member's salary by their remaining years of service to age 65 but for the illness or injury. The percentage applicable to the plaintiff is 9% (equivalent to the amount of statutory superannuation contribution an employer is required to make). It would be a bizarre result if the qualifying clause for TPD was read so as to allow a person to return (or continue unabated) to work with any employer on different duties (perhaps even on an increased salary) and also claim a benefit that was the equivalent of a retirement benefit." 41 The analysis is rejected. The 'bizarre result' suggested by the Insurer, in which a person could qualify for TPD benefits while working for another employer, is tempered by the fact that any potential claimant would still be required to satisfy the second limb of the test, i.e. to satisfy the Insurer that future employment was unlikely. 42 Moreover, what is here being sought by the Insurer amounts to no more and no less than a clear attempt to attribute a meaning to the words here in issue ["the Employer"] which is plainly contrary to the express language. This is said to be permissible as part and parcel of a purposive construction. In my view the proposition is simply unsustainable. 43 It is unnecessary to do more than to repeat the general statement of principles concerning proper construction in Masterton Homes Pty Ltd v Palm Assets & Ors [2008] NSWSC 274 [at 26] with most particular emphasis upon the quotation from the recent judgement of Tobias JA in Ryledar Pty Ltd v Euphoric Pty Ltd (2007) Aust Contract R 90-254; [2007] NSWCA 65, affirming the approach taken by Palmer J at first instance:

"Dealing firstly with conventional approaches to the construction of written documents the following propositions are well established:

i. where the language of an Agreement is ambiguous or susceptible of more than one meaning the factual matrix including the context and surrounding circumstances, its aim, object or commercial purpose may be taken into account in the construction of an agreement: Reardon Smith Line Ltd v Hansen-Tangen [1976] 1 WLR 989 at 997 cited in Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 per Mason J at 350-352.

ii. Clearly primacy must be given to the actual words used in a written contract. McColl JA in Peppers Hotel Management Pty Ltd v Hotel Capital Partners Ltd [2004] NSWCA 114 at [69] enunciated the following principles: "[69] If the words used [in a written contract] are unambiguous the court must give effect to them, notwithstanding that the result may appear capricious or unreasonable, and notwithstanding that it may be guessed or suspected that the parties intended something different. The court has no power to remake or amend a contract for the purpose of avoiding a result which is considered to be inconvenient or unjust. On the other hand, if the language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust, 'even though the construction adopted is not the most obvious, or the most grammatically accurate': A ustralian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 at 109-110 per Gibbs J (as he then was). However, in construing written contracts it should be presumed that the parties did not intend their terms to operate unreasonably. The more unreasonable the result a party's construction would produce, the more unlikely it is that the parties would have intended it. If the parties did intend an unreasonable result, it is essential that that intention be made "abundantly clear": L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235 at 251 per Lord Reid. [70] Dealing with the circumstances where there are internal inconsistencies in a contract, Gibbs J said "it will be permissible to depart from the ordinary meaning of the words of one provision so far as is necessary to avoid an inconsistency between that provision and the rest of the instrument.": Australian Broadcasting Commission at 109. [71] Gibbs J's statement in Australian Broadcasting Commission at 109 that "the court should construe commercial contracts "fairly and broadly, without being too astute or subtle in finding defects", finds reflection in the statement in International Fina Services AG v Katrina Shipping Ltd ("The Fina Samco") [1995] 2 Lloyd's Rep 344 at 350 per Neill LJ (with whom Roch and Auld LL.J agreed) that the primary focus is the agreement itself which "must speak for itself, but … must do so in situ and not be transported to a laboratory for microscopic analysis".

[72] Consistently with this approach, it has been held that if detailed semantic and syntactical analysis of a written contract lead to a conclusion that flouts business commonsense the contract must be made to yield to business commonsense: Antaios Compania Naviera SA v Salen Rederierna AB [1985] AC 191 at 201 per Lord Diplock; applied by Gleeson CJ, Gummow and Hayne JJ in Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181, at 198 [43]. In Maggbury , after referring to Lord Diplock's observations, Gleeson CJ, Gummow and Hayne JJ added: "what in respect of a particular contract comprises 'business commonsense', as an apparently objectively ascertained matter, may itself be a topic upon which minds may differ and in respect of which an imputed consensus is impossible."

iii. In Optus Vision Pty Ltd v Australian Rugby Football League Ltd [2004] NSWCA 61 Santow JA [with whom Meagher JA and Stein AJA agreed] at [22] referred with approval to what the trial judge had said concerning the observations of the High Court in Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 186 ALR 289 at 292-3: "In Codelfa , Mason J (with whose judgment Stephen J and Wilson J agreed), had referred to authorities [[i]n particular, speeches of Lord Wilberforce in Prenn v Simmonds [1971] 1 WLR 1381 at 1383-1385 [1971] 3 All ER 237 at 239-241; L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235 at 261; and Reardon Smith Line Ltd v Yngvar Hansen-Tangen [1976] 1 WLR 989 at 995-997 [1976] 3 All ER 570 at 574-576] which indicated that, even in respect of agreements under seal, it is appropriate to have regard to more than internal linguistic considerations and to consider the circumstances with reference to which the words in question were used and, from those circumstances, to discern the objective which the parties had in view. In particular, an appreciation of the commercial purpose of a contract: "presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating" [citing Reardon Smith Line Ltd v Yngvar Hansen-Tangen [1976] 1 WLR 989 at 995-996; [1976] 3 All ER 570 at 574]. [cf Toll (FGCT) Pty Limited v Alphapharm Pty Limited (2004) 219 CLR 165 at 179 [40]].

iv. Such statements exemplify the point made by Brennan J in his Judgment in Codelfa at 401: "The meaning of a written contract may be illuminated by evidence of facts to which the writing refers, for the symbols of language convey meaning according to the circumstances in which they are used."

v. In Optus Vision, Santow JA at [23] continued: "To this I would add the observation of Lord Steyn, writing extra-judicially on " The Intractable Problem of the Interpretation of Legal Texts " (2003) SLR 1 at 7. After pointing to the shift from literal to purposive interpretation, he adds the caveat that it would be an oversimplification to say that there has been a homogenous shift towards a purposive interpretation of all legal texts. Nonetheless he says: "In a network of contracts governing a construction project, parties ought generally to be able to rely on the obvious meaning of the interlocking texts".

vi. More recently these principles have been affirmed by the Court of Appeal in terms of the proposition that even if evidence of surrounding circumstances is admissible it cannot be used to construe a meaning to the document that is contrary to the express language: cf Ryledar Pty Ltd v Euphoric Pty Ltd (2007) Aust Contract R 90-254; [2007] NSWCA 65 where Tobias JA affirmed the approach of Palmer J at first instance, quoting his Honour as follows (at [108]-[109]):

"However, that does not mean that when the Court begins the task of construction it puts the words of the document aside and endeavours first to ascertain the commonly known factual context and purpose of the transaction, often only by resolving a strenuous contest between the parties. The Court does not, once it has found the commonly known factual context and purpose, then look at the words of the contract and, if they do not readily accommodate the context and purpose so found, force them to do so by a process of interpretation.

When the Court is construing a commercial contract, it begins with the words of the document: there it often finds expressed the factual context known to both parties and the common purpose and object of the transaction. But the court is alive to the possibility that what seems clear by reference only to the words on the printed page may not be so clear when one takes into account as well what was known to both parties but does not appear in the document. When that is taken into account, the words in the contract may legitimately have one or more of a number of possible meanings. It is then the Court's task to identify which of the possible meanings represents the parties' contractual intention.

However, when a party to a contract argues that the known context and common purpose of the transaction gives the words of the contract a meaning which, by no stretch of language or syntax they will bear then, in truth, one has a rectification suit, not a construction suit. That is the case here ...

[109] In my opinion his Honour's approach articulated in the foregoing paragraphs of his judgment is unexceptionable." vii. Hence I take it as axiomatic that: · the Court endeavours to give primacy to unambiguous words used in a written contract, this matter generally being approached in the manner outlined by McColl JA in Peppers Hotel Management, supra; · the proper approach seeks "the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably been available to the parties in the situation in which they were at the time of the contract" (Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181 at 188 citing Lord Hoffmann; Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 at 912; [1998] 1 All ER 98 at 114; Peppers Hotel Management Pty Ltd, supra at [66] et seq); · commercial contracts should be construed so as to be given a sensible commercial operation: Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 at 437; Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 at 109; Hide and Skin Trading v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 at 313-4; Vodafone Pacific Ltd v Mobile Innovations Ltd [2004] NSWCA 15 per Giles JA at [64]." Did the misconstruction materially affect the outcome? 44 For these reasons, at least one of the grounds relied upon in the Insurer's initial decision, and, indeed, the only ground expressly cited in the second decision, was based on a misconstruction of the contractual terms. It is still, however, necessary to establish whether this misconstruction had any material effect on the outcome of the Insurer's decision.

The causation element 45 The Insurer maintains that that the error is immaterial, in that a finding should also be made that the plaintiff did not, on the material before the Insurer, demonstrate compliance with the first limb of the TPD definition. Specifically, it asserts that the plaintiff did not demonstrate, as required by the first limb, that the injury caused him to be absent from employment with the Employer for at least 6 months ('the causation element'). 46 Crucially, the Insurer contends that the fact that the plaintiff elected to resign on 9 July 2001 meant that it was his resignation, and not the injury, which was the proximate cause of his absence from the employer over the following period. 47 The plaintiff's contra contention is that such a definition of the causation element is illogical in the context in which the contract was made. Specifically, it would deny TPD benefits to those who were injured with less than 6 months remaining on a fixed term contract, or, indeed, to employees who were dismissed immediately after suffering injury, thus allowing any employer to avoid liability under the policy. The plaintiff contends that the true construction of the word 'causes' is that the injury or illness was sufficient to prevent the plaintiff from carrying out his pre-injury work with the employer. 48 At this stage, it is important to note that the plaintiff's submission is rejected insofar as it asserts that the plaintiff must continue in his pre-injury work in order to be disqualified under the first limb. There is no warrant for restricting the term "employment" in the first limb of the TPD definition to the insured person's usual duties. The word "employment" is not so defined in the definitions section of the policy, or elsewhere, and especially given the detailed definition of occupation, duties and work in the next limb, if the clause had intended to refer to the person's own normal duties, it would be expected that the clause would expressly say so or have used the apposite defined term "At Work" which means "performing their normal work duties during their normal work hours" [PX 38]. For this reason, the proper construction is that the plaintiff's injuries must cause them to be absent from any employment with the employer, and not merely from their usual duties. 49 To resolve the issue of whether the plaintiff satisfies the first limb of the TPD definition, it is necessary to ascertain, as a question of contractual construction, what is meant by the term 'cause' in the passage described above. On one interpretation of the first limb of the test, the term 'cause' may be interpreted as requiring two factors:

i) that the Insured person was absent from employment with the Employer for at least 6 months in a row; and

ii) but for the illness or injury, the Insured Person would not have been absent from employment with the Employer for at least 6 months in a row. 50 On a different interpretation, causation might require only that the illness or injury must be sufficient to cause the Insured Person to be absent from employment with the Employer for at least 6 months in a row. That is, the employer must have been absent from employment for 6 months in a row, and the injury must be sufficient to cause that absence, regardless of whether the employee would also have been absent if that injury had not occurred. 51 The difference between these two tests may be exemplified by the following example: A person is employed as a manual labourer. On a given date, this person is involved in an accident at work which means that he or she is no longer able to work as a manual labourer. One month later, the employer unexpectedly undergoes a major restructuring in which all employees performing manual labour are dismissed with two months notice. Using the first definition of causation, the injury will not have caused the employee to be absent for 6 months, since but for the injury occurring, the employee would only have worked an additional 3 months before being dismissed. On the other hand, the injury would have been, in and of itself, sufficient to prevent the employee from working for at least 6 months. It is therefore a 'cause' of the absence according to the second approach. As a theoretical matter, it does not seem to make any difference to either approach if the decision to restructure the company was made one month before the injury, rather than a month after i.e. if the employee was injured during the period of 2 months notice. 52 Neither of the tests described above are entirely satisfactory. In March v E & M H Stramare Pty Ltd (1991) 171 CLR 506, Mason CJ noted [at 516] that "the application of [the 'but for test'] proves to be either inadequate or troublesome in various situations in which there are multiple acts or events leading to the plaintiff's injury". Mason CJ also rejected the idea of a 'formulaic' approach to the question of causation, stating [at 515]:

"As Dixon CJ, Fullagar and Kitto JJ remarked in Fitzgerald v Penn [(1954) 91 CLR 268] (at 277): "it is all ultimately a matter of common sense" and "[i]n truth the conception in question [ie, causation] is not susceptible of reduction to a satisfactory formula": at 278." 53 The question to be answered in the present case is quite different to the causation question which commonly arises with respect to the causation of damage in contract or tort. In March v E & M H Stramare Pty Ltd, Mason CJ drew a distinction between 'scientific' and 'legal' causation, stating [at 509]: It has often been said that the legal concept of causation differs from philosophical and scientific notions of causation. That is because "questions of cause and consequence are not the same for law as for philosophy and science", as Windeyer J pointed out in National Insurance Co of New Zealand Ltd v Espagne (1961) 105 CLR 569 at 591. In philosophy and science, the concept of causation has been developed in the context of explaining phenomena by reference to the relationship between conditions and occurrences. In law, on the other hand, problems of causation arise in the context of ascertaining or apportioning legal responsibility for a given occurrence. The law does not accept John Stuart Mill's definition of cause as the sum of the conditions which are jointly sufficient to produce it. Thus, at law, a person may be responsible for damage when his or her wrongful conduct is one of a number of conditions sufficient to produce that damage: see McLean v Bell (1932) 147 LT 262, per Lord Wright at 264; Sherman v Nymboida Collieries Pty Ltd (1963) 109 CLR 580, per Windeyer J at 590-1. 54 In this case, the Court is merely asked to construe a contractual term, not to attempt to ascribe responsibility for damages. There is no question of finding the Insurer 'responsible' for the plaintiff's loss, merely establishing whether the loss falls into a particular category which the Insurer has agreed to indemnify. It may therefore be more akin to the notion of 'scientific' rather than 'legal' causation. 55 Ultimately, the issue which must be resolved in this case is whether the plaintiff's injury caused the plaintiff's absence in the sense of being a real and effective, and proximate, cause of that absence: cf Lasermax Engineering Pty Ltd v QBE Insurance (2005) 13 ANZ Ins Cas 61-643; [2005] NSWCA 66. 56 In construing the contractual clause, I note that there is no express requirement that the illness or injury be the sole cause of the plaintiff's absence from employment. There may be circumstances where there is more than one cause of the plaintiff's absence. Thus, in the example given above, both the employee's injury and the employer's decision to restructure are real and effective causes of the employee's absence. Similarly, in the present case, if the plaintiff can establish that his injury prevented him from being employed by the Employer for a minimum of 6 months, then the finding must be that the injury is, in fact, an effective cause of that absence. This is true regardless of whether, in the hypothetical case that the employee was not injured, the plaintiff would also have been absent from employment with the Employer due to his resignation. 57 A number of contextual considerations reinforce this as the intended meaning of the contractual term:

i) As argued by the plaintiff, a strict approach to the question of causation would prevent a wide range of persons from being entitled to TPD benefits, including those on contracts of less than 6 months in duration, or those who are dismissed for reasons unrelated to their injury during the 6 month qualification period [I interpolate to note that if the employee was dismissed because of his injury i.e. by an unscrupulous employer seeking to avoid liability for TPD benefits, then the injury would clearly be the cause of the dismissal, and thus indirectly the cause of the employee's absence].

ii) There is no term in the insurance contract which expressly excludes TPD insurance for employees with less than 6 months remaining on their contract of employment. Such employees continue to pay a premium [as part of their superannuation package] for such insurance.

iii) TPD benefits are, as the Insurer submits, analogous to death benefits in several respects. There is no suggestion that a person who died on their final day of employment would be denied their benefit on the grounds that they had less than 6 months remaining. The same is true where a person qualifies for TPD benefit under Part II of the TPD definition [which applies to a person who has lost the use of 2 limbs or sight in both eyes].

iv) I accept that the first limb of the TPD definition exists, at least in part, in order to provide the employer with the election to provide suitable modified employment and to cooperate with the workers compensation insurer in order to rehabilitate the plaintiff into suitable permanent work with his existing employer, therefore preventing the plaintiff ever qualifying under the definition of TPD.

v) Nonetheless, the above argument does not necessarily mean that it is necessary to adopt a strict interpretation of 'causation' in order to promote this purpose. As noted above, the term 'employment' is not confined to an employee's pre-existing duties. Thus, an employee who is offered this kind of retraining and rehabilitation will not qualify for TPD benefits, as they will not be absent from employment with the employer for more than 6 months.

vi) In the present case, had alternative duties with the Employer been available, the plaintiff would be unable to show that the injury had caused him to be absent from employment. Rather, it would have been the plaintiff's rejection of the proffered altered employment duties with the Employer which was the cause. In fact, in this case, the plaintiff's evidence is that the Employer declined to rehire him after the injury. This is not to suggest that there was any obligation on the Employer to rehire the plaintiff, merely because he suffered an injury, but it was necessary for the Employer to rehire the plaintiff if it wished to take advantage of the election, available to it under the contract, to take the path of retraining and rehabilitating the plaintiff, thus potentially avoiding liability for TPD benefits.

vii) Finally, it is important to note that the first limb must be interpreted in context, namely as the first limb of a two part, cumulative test. Clearly, the second limb of the TPD definition [which requires the Insurer to form an opinion that the illness or injury means that the Insured Person is unlikely ever to work in or attend to …any Regular Remunerative Work for which they are reasonably fitted by education, training or experience] will prevent many employees from being eligible for TPD benefits who qualify under the first limb. Thus, for example, if a person was injured and unable to work for the Employer for a six month period, but was able to find suitable employment in a different field, or for a different Employer, the second limb of the test would disqualify such a people from eligibility for TPD.

The impact of this finding in the present case 58 I reject the Insurer's contention that the mere fact that the plaintiff had resigned prior to his injury made it impossible for him to sustain an injury on his final day of work which would cause his absence from employment with the Employer in the subsequent 6 month period. 59 Nonetheless, it is still necessary for the plaintiff to show that his injury was in fact a cause of his absence from employment with the Employer for a minimum of 6 months. Based on the facts which set out below, and which relate to the finding that the plaintiff fails to satisfy the second limb of the TPD definition, the finding is that the plaintiff has failed to discharge this onus.

The second limb of the TPD definition 60 While it has been established that the Insurer's decision to deny TPD benefits to the plaintiff was based, at least in part, upon an incorrect construction of the insurance contract, no award will ultimately be made in the plaintiff's favour unless it can be shown that this misconstruction had a material effect i.e. prevented the plaintiff from receiving benefits to which he was entitled. 61 It is acknowledged by both parties that the plaintiff was required to satisfy both limbs of the TPD test in order to be eligible for benefits. It is therefore useful to proceed to the question of whether the plaintiff did, in fact, satisfy the second limb of the TPD test, in the sense of being unlikely to ever resume regular remunerative employment. This likelihood must be assessed as at the appropriate date [being six months after the date of injury, or approximately 9 or 10 January 2002].

Assessment of the plaintiff's evidence 62 The convenient approach is to now proceed to treat with a number of issues which arose in relation to the plaintiff's credit. 63 I accept that the plaintiff's background and education was such that in many situations he may not have been able to entirely follow what it was that was being put to him. These matters notwithstanding, the evidence given by the plaintiff in these proceedings was unsatisfactory in a number of respects. These included:

i. The plaintiff's evidence, contained within his initial application for TBD benefits, that his employment with ABC was 'part-time'. This conflicted with records obtained from ABC indicating that, over the period the plaintiff was employed by ABC, he worked 38 hours per week except for RDOs and a few days holiday leave [T55.40, 56.22]. It was also contradicted by the plaintiff's own evidence, given to medical practitioners at the time, that he was working 14 hours a day, 6 days a week [DTB395] and was unable to attend to his treatment because he did not have time due to his long hours at work [DTB401].

ii. The plaintiff admitted to having a 'bad memory' such that he was unable to recall dates such as when he commenced employment with ABC [T55.45].

iii. The plaintiff gave conflicting evidence with regards to why he ceased employment with ABC. In his statement to the Court, the plaintiff claimed that his services were terminated because he could not perform the physical duties or clerical aspects of the job and due to a flare up of his back pain [Statement of Ivan Mabbett 10 January 2006 at 14]. However, during oral evidence the plaintiff admitted that the real reason his employment with the company ceased was because the company decided to go back to its primary business of scaffolding and cease trading in demolition work.

iv. The plaintiff asserted in his statement that he left his bus driving job with Beech Boys because his boss wanted him to work full-time hours and he could not physically cope with full time work. On cross-examination, however, the plaintiff stated that the reason he left that employment was because he lost his HC class licence in 2002 [due to an unrelated sleep apnoea condition].

v. The plaintiff categorised his current occupation as giving 'advice about the way the shop should be organised', and did not disclose until cross-examined that his role also involved working as a picker and packer of light goods, among other duties.

vi. The plaintiff gave evidence that the claim the subject of the current proceedings was his only compensation claim of any kind, whether in court or otherwise [T52.35-45, T85.34], and did not disclose that he had in fact made 14 claims for compensation under the New Zealand Accident Compensation Corporation no-fault scheme [DTB442-45]. The plaintiff's evidence on this issue was at the least evasive and unsatisfactory.

vii. The plaintiff also failed to disclose, either on the TPD claim form or to several of his treating doctors, that he had a history of back injuries including an injury in 1999 to his left lower back caused by strenuous movement with lifting.

viii. Finally, the plaintiff's evidence regarding the extent and impact of his injury was called into question by a report by Ms Gale, who performed a functional capacity evaluation of the plaintiff for the Insurer in December 2007. She observed that the plaintiff did not demonstrate objective clinical signs consistent with his complaints of pain and limitation, and was of the opinion that the plaintiff was exaggerating his complaints and not fully cooperating with testing [DTB421, 422]. The 'relative' standard of proof 64 In addition to these areas, in which the plaintiff's evidence was, at least, evasive and unsatisfactory, the plaintiff also persisted on resorting throughout his cross-examination to a 'relative' standard of truth, seeking to avoid or explain having committed to evidence which was at variance with objective facts which he knew or suspected was demonstrable by the subpoenaed records. Thus, for instance, the plaintiff made statements such as:

My understanding of the truth is you have got two people, you have a truth, I have a truth. So I only can comprehend my truth with what knowledge I have to that date. 65 While I was satisfied that the plaintiff understood his obligation to tell the truth to a degree sufficient to render him competent to give evidence, and that he did at times make a genuine attempt to recall the events upon which he had given evidence and upon which he was cross-examined, ultimately his evidence cannot be regarded as reliable unless corroborated by contemporaneous written evidence or by admissible evidence adduced from other persons whose credit was not impugned.

The issue concerning the role which the plaintiff played in his brother's compensation claim

66 During the hearing the plaintiff was closely cross-examined in relation to the role which it was suggested he had played in his brother's compensation claim. I ensured that the relevant provisions of section 128 of the Evidence Act 1995 were made plain to the plaintiff. He elected to give the answers without taking objections. 67 In cross-examination he volunteered that he had assisted his brother with his compensation claim but he denied that he had assisted his brother to complete the claim form. It appears however that he had witnessed the claim form being signed. The area confronted by the Insurer in attempting to examine the matter was particularly difficult. Ultimately the Court refused leave to issue subpoenas towards the very end of the hearing. The most that can be said in relation to the whole of this area is that the allegations sought to be made good by the Insurer [linking the plaintiff with assisting his brother with his compensation claim, the proposition being that an issue in the other proceedings was why the brother gave one version of the accident in a claim form and had asserted another in the proceedings] was not substantiated. 68 There is of course a plethora of authority in support of the proposition that the Court is bound to see that a case of fraud is clearly proved. An allegation of fraudulent intent is one of the most serious allegations capable of being made. Actual dishonesty is said to be "the hallmark of fraud". 69 The gravity of the allegation has been said to be such that whereas section 140(1) of the Evidence Act 1995 (NSW) stipulates a single standard of proof for all civil cases, namely the balance of probabilities, Section 140(2) preserves the doctrine in Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-362; Pedler v Richardson (Supreme Court of NSW, Young J, 16 October 1997, unreported) at 10-11. See also McLelland CJ in Eq in Watson v Foxman (2000) 49 NSWLR 315, 319. More recently in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 the High Court has put the matter in the following terms:

"The ordinary standard of proof required of a party who bears the onus in civil litigation in this country is proof on the balance of probabilities. That remains so even where the matter to be proved involves criminal conduct or fraud. On the other hand, the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. Thus, authoritative statements have often been made to the effect that clear or cogent or strict proof is necessary "where so serious a matter as fraud is to be found". Statements to that effect should not, however, be understood as directed to the standard of proof. Rather, they should be understood as merely reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct and a judicial approach that a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct." Did the plaintiff satisfy the second limb of the TPD test? 70 For the reasons set out below, the finding is that the Insurer was justified in forming the opinion that the plaintiff was not [as of January 2002] unlikely to ever attend to any Regular Remunerative Work for which he was reasonably fitted by education, training or experience. Thus, the Insurer was entitled to reject the plaintiff's claim on the basis of failure to comply with this second limb of the definition. Similarly, had the Court been required to make its own assessment, it would have reached the conclusion that the plaintiff was not entitled to TPD benefits. 71 There was considerable evidence that the plaintiff was, as at the date of assessment, likely to return to regular remunerative work. Such evidence includes:

i. While the plaintiff's doctor, Dr Ng, made varying assessments of the plaintiff's capacity, her opinion as at 24 November 2001 and 4 January 2002 [notably near to the relevant date of assessment] was that the plaintiff was then capable of lifting weights up to 10kgs and was fit for usual hours of work without additional rest breaks.

ii. Dr Ng was the plaintiff's own treating general practitioner, had seen the plaintiff regularly since the date of injury, and was the doctor who had a frequent opportunity to observe and examine the plaintiff and to have the best up-to-date knowledge of the plaintiff's medical condition and physical capacity.

iii. Later evidence shows that the plaintiff's lifting capacity improved further with a conditioning programme. In 2003, his lumbar mobility was assessed at close to normal range and he was assessed as lifting 15kg and push/pulling 50kg repetitively and walking for prolonged periods. This improvement was achieved even when the assessor considered that the plaintiff's attendance to unsupervised exercise sessions had been 'inconsistent', and his compliance with the programme had 'reduced'.

iv. The most recent workplace assessments have also found that the plaintiff is capable of performing regular remunerative work. Ms Gale performed a functional capacity evaluation of the plaintiff for the workers compensation insurer on 6 December 2007 by assessing his completion of nominated physical tasks and exercises [DTB418-425]. She assessed him as physically suitable for: · all sedentary office work · light sales work · light packing work predominantly at bench height where free to change posture (ie present employment as herb/light goods picker and packer) · light assembly work at bench height · light process work not requiring reaching to low levels/ lift below thigh · button control machine operation.

v. Ms Monika Johnson, Psychologist & Senior Rehabilitation Consultant assessed the plaintiff's vocational capacity on 17 December 2007. She took into account the history given by the plaintiff in interview including of his qualifications and experience, Ms Gale's functional assessment and his medical status including from Dr Ng [DTB426].

vi. In preparing her report, Ms Johnson consulted Dr Ng and obtained her opinion as to work within the plaintiff's medical capacity. Dr Ng gave her report on the form provided by Ms Johnson on 30 November 2007 [DTB463] and certified that the following occupations or jobs are within the plaintiff's physical capacity: · Car driver for a car wash · Car delivery driver for food deliveries · Car/small van delivery driver for Florist, Pathology, Pharmacy or similar · Console operator at a service station. vii. Ms Johnson considered these roles suitable for the plaintiff given his previous experience and noted that there are no training requirements for any of these jobs. She examined the availability of such work in the plaintiff's local area (even though the plaintiff is clearly willing and able to undertake significant commuting to attend activities he is motivated to perform e.g. he presently travels from Doonside to Bondi Junction/Bondi 5 days a week). She found available work within 45 mins of the plaintiff's home for all of these job descriptions. The plaintiff accepts that he can do this work [T73.25-55, 74.41].

viii. Furthermore, aside from this medical evidence, the Court takes into account the fact that the plaintiff did obtain full time work with ABC during the period of 15 November 2001 to 29 May 2002. The plaintiff was paid to attend ABC for 38 hours per week plus some overtime, and he in fact attended at work for long hours (up to 14 hours per day, 6 days per week, as reported to Dr Ng). The plaintiff was working at least full-time hours at ABC, even if he did have work restrictions and rest periods during the workday, or days when he wasn't busy because the business was carrying out scaffolding work instead of demolition. He was also capable of travelling for the extended periods [between 2-4 hours return], which were necessary to get to this place of employment.

ix. More recently, the plaintiff has been receiving worker's compensation payments, which has allowed him to pursue his interest in the Global-Sov organisation. This is a business and political/community enterprise whose activities range from selling herbal preparations and whole foods, to disseminating information for indigenous "sovereign groups" internationally and holding meetings and seminars. The plaintiff has had "a hand in moulding or forming the group" with a Mr Peter Melov and works in parts of it. The business operation of the organisation has been operating for 4 or 5 years, and the plaintiff has always helped Mr Melov in that. The plaintiff works at the picking and packing duties 4 hours per day 5 days per week.

x. Even though the plaintiff is said to be working on a contingency basis and has not yet received payment for that work, such an arrangement is within the policy definition of work "for reward of any type".

xi. The plaintiff asserted that his commitment to attendance at this work at Global-Sov was a reason why he could not attend for interview regarding his ongoing assessment for workers compensation during business hours [DTB426], [T68.24-69.55, 70.1-2] and raised it as an objection to accepting other suitable work with more usual payment terms [T571.6-14]: an objection that was later retracted [T71.28, 72.36-46].

xii. For the purposes of assessing the likelihood of the plaintiff's return to suitable work and on a normally-paid basis, the Court is entitled to assume that the plaintiff is highly motivated to obtain suitable paying work. The plaintiff cannot be permitted to bring about (cause or contribute to) the contractual unlikelihood of his returning to work by his own 'wrong' (in the sense of failure to make a genuine effort or by putting it out of his power to perform his conditions under the definition in the insurance contract or by a breach of the Sayseng duty of good faith owed to the Insurer): whether by a preference to continue on workers compensation to stay working at a job promoting matters he is interested in such as community/political awareness or by relinquishing his driver's licence for non-payment of the licence fee or by being suspended from holding a drivers licence for a period due to driving while unlicensed and failing to pay the fine. 72 In contrast, the medical evidence put forward to suggest the plaintiff's incapacity contained a number of flaws. Significantly:

i. Dr Guirgis, who had only seen the plaintiff on a more limited basis that Dr Ng, only expressed an opinion as to incapacity for work that is based on all of the plaintiff's medical conditions that had been diagnosed by the time of his August 2006 report.

ii. The plaintiff has developed a number of serious medical conditions since leaving P & O that are not related to his back injury including left shoulder injury, diabetes, high blood pressure, high cholesterol, sleep apnoea and gout diagnosed after the date of injury [T76.1-12 & Dr Cowdery DTB396]. These conditions are not insured under the Insurer's cover. Therefore, those conditions which post-date the plaintiff's injury must be excluded from consideration when determining the plaintiff's future capacity for work as at 10 January 2002.

iii. Dr Guirgis' opinion is therefore not probative on the material question of whether the plaintiff's back injury, as opposed to his other subsequent conditions, would have probably permanently prevented the plaintiff from performing suitable work as at January 2002.

iv. Dr Ng's report of 29 June 2005, as submitted on the reconsideration of the claim, contains an error in that she states that the plaintiff has never been certified for full-time work: her certificates dated 24 November 2001 and 4 January 2002 are to the contrary and are to be preferred as objective evidence [DTB393 & 394]. The questions asked by the solicitor to which the doctor is responding are not supplied. The doctor accepts the history given by the plaintiff regarding the reason he ceased work at ABC - the true explanation emerged in cross-examination and was not available to Dr Ng to be considered. Again, although this was a report obtained specifically, it appears, for the purposes of submission on the TPD claim Dr Ng does not give an opinion that the plaintiff is TPD. The report is superseded by her opinion of 30 November 2007 in respect of employment that is currently suitable to the plaintiff.

v. While the vocational assessment report dated 23.10.06 tendered by the plaintiff shows the plaintiff in an apparent slump in his condition or capacity, the poorer outcome of testing at that time may be due to the plaintiff's uninsured medical conditions referred to above or simply to a reduced level of physical fitness (poor cardiovascular fitness was observed on the testing) or it may have been due to inadequate effort by the plaintiff. In any event the plaintiff's condition reported at that time has not proved permanent - his capacity has substantially improved.

vi. Given the plaintiff's previous improvements in condition there is no basis for concluding that the plaintiff's limitations as that time could be considered likely to be permanent and that has not proved to be the case. It appears from the history given in the report that the plaintiff did not report to the assessor that he had been working 'for years' in the Global-Sov business. It does not appear that the assessor had the benefit of the 2003 report for comparison. This report is really not probative of anything relevant to the assessment of the plaintiff's capacity at the material date. 73 In summary, the plaintiff was fit for full-time work with medium-weight lifting at the material date for assessment of TPD, at times since that date his condition has further improved such that his lifting capacity has increased, his condition has never settled to a permanent level of incapacity, he is currently performing picking and packing and other duties and Dr Ng, with Ms Johnson, gave an opinion that he is able to work in a variety of suitable available jobs as recently as November/December 2007. Hence the plaintiff does not meet the definition of TPD. Miscellaneous matters 74 During the exchanges by the parties of effectively their responses to one another's final submissions a number of particular matters arose, some of which call for mention in these reasons. I proceed accordingly.

Rulings reserved 75 The first matter concerns a number of documents sought to be tendered by the second defendant [to be found in AMP Life Ltd's Tender Bundle ('DTB')] to which the plaintiff objected. The rulings are as follows:

i. I reject the documents to be found at pages 405-417;

ii. I allow into evidence the documents to be found at pages 418,426, 442 and 445. 76 The plaintiff's complaint in respect of the insurer's seeking to rely on various medical reports which have been in existence for between six and seven years is rejected. There was no explanation of the alleged forensic disadvantage, particularly when the plaintiff had apparently been in possession of the GIO medicals up to about March 2006, since that time. Notably, no objection was made to the issuing of the subpoena and the plaintiff did not seek an adjournment before or at the commencement of trial, two reports having then been served. Matters raised by the plaintiff's counsel in his submissions of 11 April 2008 77 In the submissions advanced on behalf of the plaintiff on 11 April 2000, the plaintiff contended that hand written statements of Mr Mabbett and Dr Ng revealed the following information upon which it was suggested that the Insurer failed to act:

i. Treating doctors were Dr J Ackerman (Sports Physician), Dr Guirgis (Orthopaedic Surgeon) and Dr Peter Conrad. Their respective addresses were supplied. [PX 221 and 210]. No attempt was made to obtain a report from any of these doctors.

ii. Rehabilitation providers were Work Directions Australia and Kairroz Pty Ltd. There addresses were supplied [PX 211]. No attempt was made to obtain a report from either provider.

iii. Dr Ng's statement is headed (Initial) Medical Report yet no attempt to clarify her report was made. 78 This was a new issue which ought to have been raised in chief. As the insurer has contended, any complaint as to failure to obtain further evidence from Dr Ackerman and Dr Conrad is not made out when the plaintiff has not tendered any such evidence. Reports from each of Work Directions and Kairroz Pty Ltd have now been tendered by each of the parties and give conflicting opinions which support the Insurer's view that the plaintiff has never had a permanent incapacity for suitable work: his capacity varies depending on physical fitness and other issues. The plaintiff and his advisers must have known, at least at the time of the reconsideration, that the plaintiff had been certified fit for full time employment without breaks and with minimal restrictions as at the date relevant to TPD assessment in January 2002 but this was never disclosed to the Insurer as a matter of good faith and fair dealing. 79 Further, in its submissions in reply the plaintiff, in relation to reconsideration, sought to contend that the insurer had not shown good faith and fairness in dealing with that matter. The contention was that:

i. In reality, the claims are completed by people such as the current plaintiff with no legal or other assistance.

ii. Persons such as this plaintiff with virtually no education performing labour-intensive duties have no idea of what it is a Trustee or Insurer seeks.

iii. All the more reason for an Insurer to seek clarification of claims rather than espouse their own virtue for reconsidering matters. 80 This is another new issue which should have been raised in chief. As the Insurer has contended, the appropriate inference to be drawn is that if the Insurer had made further enquiries it would have discovered the earlier reports of Dr Ng which certified the plaintiff fit to return to full time work at the relevant TPD date (as referred to above) and the 2003 functional capacity assessment. I accept that these would not have assisted the plaintiff and the Insurer would have been entitled to decline the claim on the basis of all the evidence or to defer assessment, which would have resulted in further evidence of the plaintiff's capacity to return to work becoming available (eg in similar terms to 2007 reports).

81 Finally, and as the insurer has contended, the plaintiff did not appear to answer the submission that Dr Ng certified the plaintiff fit for full time employment without breaks and with modest restrictions as at the date relevant to TPD (January 2002) [a fact which the plaintiff did not, as a matter of good faith and fair dealing, ever disclose]. 82 In the result, the plaintiff has not established the alleged breaches by the Insurer of its duty to act with utmost good faith with respect to the plaintiff's claim. Conclusion 83 In consequence, the plaintiff's claim fails. The parties are to bring in short minutes of order, at which time costs may be argued.

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.