Long v IS Industry Fund Pty Ltd

Long v IS Industry Fund Pty Ltd - [2020] NSWSC 1151 - NSWSC 2020 case summary — Zoe

[3]

Pleadings

In his amended statement of claim, Mr Long pleaded the relevant terms of the Policy in pars 6 to 8, which were admitted by Hannover.
Mr Long pleaded in par 9 that he was gainfully employed and working 15 or more hours on average each week, and gave particulars of his employment at BWS, and that this employment continued until 14 January 2011. Hannover admitted this allegation.
Hannover denied Mr Long's pleaded claim, in par 10, that he was unable to do any work as a result of Injury or Illness for six consecutive months, and alleged in its defence that his employment ceased because it was terminated for serious breach of company policy and misconduct.
It must be noted, as it will be relevant to an issue of the proper construction of the Policy that will be considered below, that Mr Long simply pleaded that he was unable to do any work as a result of Injury or Illness for six consecutive months. The particulars given expressly stated that Mr Long ceased work on 14 January 2011, which implies that the six consecutive months started on that date. However, Mr Long's particulars added: "and has not engaged in regular employment since".
Hannover also denied Mr Long's allegation, in par 11, that he is unlikely to resume his previous occupation at any time in the future and will be unable at any time in the future to perform any Other Occupation, as defined in the Policy.
In par 11 of his amended statement of claim, Mr Long set out detailed particulars of his education and employment history, which were relevant to his education, training and experience. Hannover did not respond to these particulars in its defence, but alleged in par 11(b): … the available medical evidence most proximate to the end of 6 consecutive months of the plaintiff's alleged inability to do any work, 14 July 2011: i. did not suggest that the plaintiff was unlikely to resume his previous occupation at any time in the future, or that he would be unable at any time in the future to perform any Other Occupation as alleged; ii. was to the effect that the plaintiff may be able to, or can attempt to, or should return to work, or was fit to do his previous jobs on a full or part-time basis;
In par 12A, Mr Long pleaded the alternative claim based upon the cessation of his employment by Lilydale Larder, which occurred on 11 December 2014. It will become relevant that Mr Long expressly alleged in par 12A.2 that his Date of Disablement, which is a term defined in the Policy, was 11 December 2014.
In response to Mr Long's TPD claim based upon the cessation of his employment at Lilydale Larder, Hannover pleaded in its defence, at par 12A(d), that "the plaintiff ceased employment with Lilydale Larder because he resigned without notice, not as a result of Injury or Illness within the meaning of the Policy". It also pleaded, in par 12A(e), that Mr Long had not been gainfully employed and working 15 or more hours each week within the six months prior to 12 December 2014, as required by the Policy. Finally, Hannover pleaded, in par 12A(f), that "the available evidence most proximate to the period 12 December 2014 to 12 March 2015", did not suggest that Mr Long satisfied the TPD definition in the Policy.
In par 21 of its defence, Hannover made the following allegations in answer to the whole of the amended statement of claim: Further and in the alternative to paragraph 1-20 of this defence, in answer to the whole of the amended statement of claim, the defendants: … (c) say that that (sic) the second defendant's obligation to pay the "Agreed Benefit" is subject to compliance by the plaintiff with clauses 7.1 and 7.2 of the Policy, including: i written notice of the claim being given to the second defendant as soon as reasonably possible in the second defendant's prescribed form; ii proof that the relevant event has happened being provided to the second defendant; iii the evidence listed in clause 7.2 of the Policy being provided to the second defendant if required; and iv the plaintiff attending medical examinations and providing any other information and proofs that the second defendant may request or require; … (g) say that the second defendant is not obliged to pay a benefit to the plaintiff because he did not give written notice of the claims to the second defendant as soon as reasonably possible in the second defendant's prescribed form.
Mr Long filed a reply on 5 August 2019. His reply included a specific response to the allegation in par 12A(e) of the defence, saying: …that the (sic) cl 2.2(a) of the Policy (per the policy wording operative as at 12 December 2014) does not require that the plaintiff to have been gainfully employed for 15 hours of every week within the 6 months prior to 12 December 2014. Rather, cl 2.2(a) requires the plaintiff to have been gainfully employed for 15 hours per week for an unspecified period within (but not necessarily for the entirety of) the 6 months prior to 12 December 2014.
Mr Long also alleged, in his reply, that he provided any proof required of him by clause 7.1 of the Policy or otherwise requested by Hannover, and that he provided notice of the alternative Date of Disablement to Hannover as soon as reasonably possible. Mr Long further alleged that Hannover had not suffered any prejudice by reason of any delay in his notification of the alternative claim.
In final oral submissions, the Court directed questions to Hannover's advocate as to what findings could be made on the evidence concerning the period for Mr Long to make his application that would conform to the requirement that it be "as soon as reasonably possible". That question was asked because Hannover did not call any witness or tender any evidence on the subject. As I understand Hannover's response, it was that Hannover did not seek to identify a specific time when the application was required to be brought by Mr Long, and the delay was a matter that the Court should take into account as part of the circumstances relevant to Hannover's behaviour in relation to whether it acted reasonably in determining the various applications made by Mr Long: see T 145.7.
The hearing in this matter took place on 4 and 5 February 2020. In that time, the parties completed the evidence, but there was insufficient time for the parties to deliver oral submissions to augment the detailed written submissions that they had provided to the Court before the hearing. The proceedings were stood over for further directions on 10 February 2020.
On that date, the parties joined in asking the Court to make the following order, which was made by consent: Order pursuant to r 28.2 UCPR that the following question be separately determined: Did some or all of the second defendant's decisions to decline the plaintiff's claim involve breaches of the second defendant's duty and obligations to the plaintiff, such that the plaintiff is entitled to declaratory relief to the effect that the second defendant's decisions are void and without effect?
The parties' written submissions dealt with all issues in the proceedings. The effect of the Court making this order for the determination of the separate question is that, retrospectively, the issues to be determined by the hearing that occurred were narrowed to those raised by the separate question. The result will be that any issue that the parties have dealt with that falls outside the separate question will remain to be determined at a later hearing, if the Court holds that any of Hannover's decisions are void and without effect.
The Court also made orders for the delivery of further submissions by the parties on the separate question. Those submissions have been received. The Court heard oral submissions on 1 May 2020.
At the hearing, Mr Long, his wife, and one of the principals of Lilydale Larder were cross-examined. As I understand the position, the parties agree that the cross-examination has no relevance to the determination of the separate question, as the evidence given in cross-examination was not available to Hannover at the time it rejected Mr Long's various applications for the TPD benefits.
On 2 July 2020, counsel for Mr Long drew to the Court's attention the decision of Rein J in Standley v Onepath Life Pty Ltd [2020] NSWSC 848 (Standley), and made brief additional written submissions concerning the significance of the reasoning in that case for the determination of the present proceedings. Hannover's advocate provided a response on 7 July 2020.

[4]

The Policy

The Policy, as it existed at the time that is relevant to Mr Long's first claim, provides in clause 2.1(b) for the payment of the Agreed Benefit when an Insured Person "suffers Total and Permanent Disablement".
In the Definitions section of the Policy, Total and Permanent Disablement is defined as meaning either of the conditions described in clause 2.2.
The TPD definition relevant to Mr Long's first claim for the TPD benefit is found in clause 2.2(a). For the purpose of these reasons for judgment, it will be convenient to interpolate into the definition the numbers [1] to [4], to indicate the separate components of the definition. The definition is: 2.2 What is Total and Permanent Disablement? [1] Where an Insured Person is gainfully employed and is working fifteen (15) or more hours on average each week within the six (6) months prior to the Date of Disablement they suffer Total and Permanent Disablement if they; (a) [2] are unable to do any work as a result of Injury or Illness for six (6) consecutive months and [3] in our opinion, at the end of that six (6) months they continue to be so disabled that they are in our opinion unlikely to resume their previous occupation at any time in the future and [4] will be unable at any time in the future to perform any Other Occupation…
When I refer to Issues [1] to [4], I will mean the aspects of the TPD definition in clause 2.2 of the Policy that are prefaced by the respective numbers.
Date of Disablement is defined in the Definitions as meaning "the date on which Total and Permanent Disablement is treated as having occurred under clause 2.5".
Clause 2.5 relevantly provides: 2.5 Date of Disablement If clause 2.2 is satisfied, Total and Permanent Disablement is treated as having occurred on the Date of Disablement which is the earlier of; (a) the date on which the six (6) months consecutive absence from work that results in Total and Permanent Disablement began…
The combined effect of the definition of Date of Disablement and clause 2.5(a) of the Policy is the Date of Disablement is the date on which the six months consecutive absence from work began.
However, the effect of clause 2.2(a) is that a determination that an insured satisfies the TPD definition depends upon the formation of the opinion by Hannover that, at the end of the six months consecutive absence from work, the insured continues to be so disabled that they satisfy the definition. In order to distinguish the Date of Disablement from the later date as at which the opinion must be formed as to the satisfaction of the TPD definition, I will call the later date the Relevant Date.
"Injury" is defined in the Definitions as meaning "bodily injury caused by violent, external and visible means".
"Illness" is defined in the Definitions as meaning "a sickness, disease or disorder".
Also in the Definitions, "Other Occupation" is given the following definition: … any occupation the person is qualified to perform by their education, training or experience at the time we assess the claim and includes; (a) part-time occupations; and (b) an occupation which may be perceived by the person to be of lower status than the person's previous occupation or an occupation in which the person does not earn as much income as they did in their previous occupation.
Clause 7 of the Policy deals with "Claims", and relevantly provides: 7.1 Proof of claim Our obligation to pay a benefit is subject to the following evidence being provided at no cost to us; (a) written notice of any claim or potential claim being given to us as soon as reasonably possible. This notice must be in the form of the Hannover Life Re claim forms or any other documentation we prescribe from time to time and include a Doctor's certification if we require one; (b) proof that the relevant event has happened being provided to our satisfaction; (c) if the claim arises from Total and Permanent Disablement, the Insured Person, at our discretion, attending any medical examinations with which we may arrange and/or providing any other information we may require; (d) such other proofs relating to the claim that we may request; (e) the evidence listed in clause 7.2 must be provided to us at no expense, if we require it. 7.2 What Evidence do we pay for? If we require evidence to assess whether we are liable to pay a claim we must pay the costs of obtaining that evidence except for; (a) proof of the date of birth of the Insured Person; and (b) an initial medical report which must be supplied in support of any claim for Total and Permanent Disablement. We may require this report to be given in a form of our choosing; and … (e) evidence the Proposer requests us to obtain; and … which must be provided at no expense to us…
The parties agreed that the policy wording relevant to Mr Long's alternative TPD claim, which was made following the cessation of his employment with Lilydale Larder, had been varied from the terms of the Policy. As I understand it, the parties agreed that the only relevant variation involved the definition of TPD in clause 2.2, which relevantly provides (using the same interposed numbering system as before): [1] Where an Insured Person is gainfully employed and is working fifteen (15) or more hours on average each week within the six (6) months prior to the Date of Disablement they suffer Total and Permanent Disablement if they; (a) [2] are unable to do any work as a result of Injury or Illness for six (6) consecutive months and [3] in our opinion, at the end of that six (6) months they continue to be so disabled that they are in our opinion unlikely to resume their previous occupation at any time in the future and [4] will be unable at any time in the future to perform any Other Occupation…

[5]

Summary of findings

The complexity of the issues that arise out of the five rejections of Mr Long's TPD claims by Hannover, and the complexity and consequent obscurity of the reasons that are necessary to resolve the extensive submissions of the parties in relation to the significance of the evidence that was provided in support of Mr Long's claims on an evolving basis, make it advantageous for the Court to set out at the beginning a summary of the conclusions that the Court has reached. They are: 1. Issue [2], concerning the inability of Mr Long to do any work as a result of Injury or Illness for six consecutive months, on the proper construction of the Policy, only relates to periods of six consecutive months that commence at the end of a six month period that satisfies the work requirements contained in Issue [1]. 2. In practical terms, there was only one six consecutive month period following the termination of Mr Long's employment by BWS, which was the period that commenced on 14 January 2011. Consequently, Issue [2] had to be satisfied during that six month period and Issue [3] had to be satisfied at the end of the period. Those two Issues could not be satisfied for a six month period commencing after 14 January 2011, because Issue [1] could not then be satisfied at the beginning of the period. 3. Hannover rejected Mr Long's four claims for the TPD benefit in relation to the first six month period on the ground that Mr Long's employment contract was terminated by his employer for breach, so he was subsequently unable to continue his employment. Hannover determined that Mr Long was not unable to do any work for that period as a result of Injury or Illness. 4. The manner in which Hannover dealt with Issue [2] does not appear with equal clarity from the four rejection letters. The first two rejection letters are capable of being read as if Hannover treated the immediate cause of the termination of Mr Long's employment contract as being a relevant factor, but formed the opinion that Issue [2] was not satisfied because the Injury or Illness from which Mr Long suffered did not have the effect of making him unable to do any work. That is, the rejection in those two cases was based upon the formation of an opinion concerning the consequences of Mr Long's Injury or Illness. 5. However, Hannover's reasoning in the third and fourth rejection letters was that, as Mr Long's contract of employment was terminated for breach, he could no longer carry out his former work, so that Issue [2] could not be satisfied, because Injury or Illness was not shown to be the cause of Mr Long's loss of employment. Hannover's treatment of the consequences of Mr Long's Injury or Illness, as not being sufficient to make him unable to do any work, was treated in the case of these two rejections as being a separate ground for rejecting the claims. 6. On the proper construction of the Policy wording relevant to Issue [2], Mr Long was required to establish that in fact he was unable to do any work as a result of Injury or Illness for the six consecutive months, in the sense that he was incapable of doing work, and the direct cause of his contract of employment being terminated was immaterial. 7. However, as Mr Long's case was that the circumstances in which his contract of employment was terminated for breach exacerbated pre-existing Injury or Illness that caused him to be unable to do any work, satisfaction of Issue [2] required that Mr Long establish that the consequence was immediate so that his inability to do any work as a result of Injury or Illness had a duration of the full six consecutive months' period. 8. On the proper construction of the Policy wording relevant to Issue [2], the entitlement to the TPD benefit depends upon proof as a fact that Issue [2] was satisfied, and does not depend upon whether or not Hannover formed the opinion that it was satisfied that Issue [2] had been established. That is unlike Issues [3] and [4], where the opinion formed by Hannover is determinative of the entitlement to the TPD benefit, unless Hannover's determination is vitiated by breach of duty owed to Mr Long. 9. Thus, even though it appears that the parties in their submissions may have treated Issue [2] as one that depended upon the formation of a relevant opinion by Hannover, the real question is whether the evidence establishes Issue [2]. That is a question for the Court to decide. 10. Even though Issue [2] depends upon a question of objective fact, it was necessary for Hannover, in determining Mr Long's claims, to form an opinion as to whether Issue [2] was satisfied. Although the opinion formed would not be determinative, if it was formed unreasonably or not in accordance with the Policy, that would be a ground for the Court to declare the determination to be ineffective. 11. The basis upon which Hannover rejected the third and fourth claims by Mr Long was sufficiently clearly infected by an erroneous construction of the Policy, to the effect that Issue [2] could not be satisfied in a case where Mr Long became unable to continue with his prior work because his contract of employment had been terminated for breach. It follows that a finding is justified that Hannover's rejection of the TPD claim in those cases was vitiated by Hannover acting on an incorrect construction of the Policy. 12. The parties tendered some evidence and made submissions on the effect of the termination of Mr Long's employment contract, and the consequences of that event in relation to the exacerbation of Mr Long's pre-existing Injury or Illness, and whether Mr Long was consequently unable to do any work for the six month period. The evidence was inconclusive as to whether the Injury or Illness that incapacitated Mr Long from doing any work was concurrent with the termination and lasted for the full six month period. If the Court were required to decide that issue in this judgment, the result would be a finding that, as a matter of objective fact, the evidence did not satisfy Issue [2]. 13. However, the effect of the order for the determination of the separate question must be taken into account. In effect, the question for determination in this judgment is whether Hannover's decisions to reject Mr Long's TPD claim were vitiated because of breaches of Hannover's duty and obligations to Mr Long. The separate question does not encompass the issue of whether objectively the evidence satisfies Issue [2]. Consequently, the insufficiency of the evidence on the issue that is apparent at this stage of the proceedings is not determinative. The satisfaction of Issue [2] must be determined at the second stage of the proceedings on the evidence that is then before the Court. 14. The satisfaction of Issue [3] is to be determined on the basis of the opinion formed by Hannover, unless the determination is vitiated by some breach of duty owed by Hannover to Mr Long. 15. Although Hannover's reasons for rejecting Mr Long's first two claims were in some marginal respects inadequate and incomplete, and have been expressed in an infelicitous way, having regard to the standard of reasoning and expression that is required of Hannover, those rejections did not involve a breach of Hannover's duties to Mr Long. 16. The same would be true of the reasons given by Hannover for rejecting Mr Long's claims on the third and fourth occasions, but for the fact that Mr Long supported those applications by additional medical evidence that was not conclusive as to the satisfaction of Issue [3], but was material and required a properly balanced consideration in the formation of Hannover's opinion. By the time of the third and fourth rejections, Hannover acted upon the basis that the new medical evidence was insufficiently relevant to require substantive consideration because it was not produced contemporaneously with the date in respect of which Hannover was required to form the opinion that Mr Long's circumstances satisfied Issue [3]. Hannover substantially ignored the new evidence in forming its opinion that Issue [3] was not satisfied. 17. Hannover's duty to Mr Long to adopt a reasonable process in the formation of its opinion concerning the satisfaction of Issue [3] required it to give substantive consideration to the additional medical evidence. Its failure to do so in respect of the third and fourth rejections was a breach of duty that justifies the Court in finding that the third and fourth rejections were not effective. 18. Consequently, by reason of Hannover's determination of Issues [2] and [3], in relation to the causation and contemporaneous evidence issues, Mr Long is entitled to have his entitlement to the TPD benefit in respect of the first six month period determined by the Court. 19. As to Mr Long's alternative claim for the period following the termination of his employment by Lilydale Larder, the entitlement to the TPD benefit depends, as an initial requirement, upon the satisfaction of Issue [1] as an objective fact on the available evidence. 20. On the proper construction of the Policy wording relevant to Issue [1], the entitlement to the benefit required proof that Mr Long worked 15 hours or more on average each week for the full six month period prior to the date of the cessation of his employment. 21. Mr Long was not employed by Lilydale Larder for the full six months, so that the decision by Hannover that Issue [1] was not satisfied was justified. 22. Strictly speaking, as was the case for Issue [2] in respect of Mr Long's first four claims for the TPD benefit, the question whether Issue [1] was in fact established in relation to the alternative claim falls outside of the subject matter of the question for separate determination. However, on the evidence it is so clear that Mr Long did not satisfy Issue [1] in relation to the alternative claim that the Court should find that Mr Long's claim fails.
Issue [4], concerning whether at the Relevant Date Hannover was of the opinion that Mr Long was so disabled that he will be unable at any time in the future to perform any Other Occupation, was not considered at the hearing. As Hannover noted at par 134 of its written submissions, it had rejected Mr Long's claim because it was not of the opinion that Issue [3] was satisfied. Hannover therefore based its rejection on the issue of whether it was of the opinion that Mr Long was unlikely to ever resume his previous occupation, and not whether he was unable at any time in the future to perform any Other Occupation. As Hannover did not form any opinion concerning Issue [4], it will not be able to argue that any opinion held by it on that subject is determinative. At the second stage of these proceedings, if Issue [4] is raised, the question will be a matter for the Court to decide on the basis of the evidence.

[7]

Mr Long's contentions concerning satisfaction of Issue [2]

Mr Long made the following submission (at par 48 of his written submissions, in relation to the third rejection): … Whilst it is true that the cessation of work due to illness or injury is a concept present in some TPD policies, that concept is foreign to the term "Total and Permanent Disablement" as defined in the Policy. All that is required to satisfy the first limb of the definition in the Policy is that the plaintiff has ceased work and from the time he ceased work has been disabled for 6 consecutive months as a result of illness or injury. Thus where, as here, the manner in which the plaintiff ceased work (termination) was provocative of the plaintiff's subsequent psychological illness and resulting incapacity for work, the first limb of the TPD definition is satisfied. Consideration of the cause of the plaintiff's cessation of work was irrelevant to the task before the second defendant. By taking into account an irrelevant consideration, the second defendant misdirected itself in law such that its decision flowing from that misdirection cannot stand.
I understand this submission by Mr Long to mean that Issue [2] is satisfied, provided in fact the claimant has ceased work, and from the time of cessation has been disabled for six consecutive months as a result of Illness or Injury. It does not matter that the direct or immediate cause of cessation is some event that is not contemplated by Issue [2], provided that cause is "provocative" of Illness or Injury that does satisfy Issue [2]. In Mr Long's case, the Illness or Injury that was provoked by the termination was a psychological illness that resulted in incapacity for work, when compounded with the consequences of his long-standing back injury.
As it will be important to the conclusion that the Court will reach concerning Issue [2], it should be noted that Mr Long made the most extensive submission in his written submissions on that issue in the context of his submissions concerning why the third rejection made by Hannover should be held to be invalid. That is, the submission was made in the context of what has been called the first stage enquiry as to whether, in determining to reject a claimant's TPD claim, the insurer has breached the duties that it owes to the claimant in respect of the process of determination. This conclusion is patent in the final sentence of the submission extracted above.
There was some evidence that was capable of supporting an argument that Mr Long's physical and psychological Injury or Illness pre-dated the termination of his employment, so that the Illness or Injury may have been a cause, or perhaps the cause, of Mr Long acting in a manner that was out of character, and which constituted the misconduct that led to the termination of his employment. Those circumstances may have supported an argument that, although his misconduct leading to the termination of his employment was the immediate cause of the cessation of work, the real or underlying cause was the pre-existing Injury or Illness.
In final oral submissions, in response to a question from the Court as to whether it was part of Mr Long's case that the real cause of the termination of work was the pre-existing Injury or Illness, counsel for Mr Long explicitly abandoned any reliance upon a case to that effect. The response given on behalf of Mr Long was that he: "must embrace this proposition that where there is a termination of employment and that termination is itself provocative of the further deterioration in the plaintiff's condition that the immediate cause of work is not (inaudible) what follows from that.": see T 126.9.
At T 127.23, counsel for Mr Long stated: "In this case the immediate exacerbation given there is evidence of a pre-existing injury", as Mr Long's explanation of why Issue [2] was satisfied in the present case, notwithstanding that Mr Long had been terminated for misconduct.
I therefore take Mr Long's case to be as follows. He does not argue that his pre-existing Injury and Illness was the cause of his conduct that led to the termination of his employment. However, there was a pre-existing Injury and Illness. The effect of the termination of Mr Long's employment for misconduct was the "immediate exacerbation" of the combined effect of the pre-existing Injury and Illness, which had the consequence that, in fact, Mr Long was unable to do any work as a result of Injury or Illness for six consecutive months.

[8]

Hannover's contentions concerning satisfaction of Issue [2]

As I have noted above at [20], Hannover denied in its defence that Mr Long was unable to do any work as a result of Injury or Illness for six consecutive months, and alleged that his employment ceased because it was terminated for serious breach of company policy and misconduct. That pleading is consistent with my understanding of the position taken by Hannover, which was that Issue [2] could not be satisfied in a case where Mr Long was unable to do any work in his previous occupation because his right to do so had been lost by reason of the termination of his employment contract for breach.
In its written submissions, Hannover dealt with Issue [2] at pars 128 to 137 under the heading "No causative link". The wording of this heading supports the conclusion that Hannover rejected Mr Long's claims because it took the view that his employment was terminated for breach, rather than that he became unable to work because of Illness or Injury. This was an aspect of Hannover's submissions in respect of the first stage of the enquiry, being whether Hannover had complied with its duties to Mr Long, as set out by Hannover at par 98 of its submissions. Hannover also made submissions that included: 128. The Policy only responds if the plaintiff, "as a result of Injury or Illness", was "unable to do any work" from 11 January to 11 July 2011. A causative link is required between the inability to do work and injury or illness. For example: [Hannover then made submissions about a number of authorities, some of which I will address below]. 129. In this case, at all stages Hannover properly took into account the highly relevant fact that, as the plaintiff has acknowledged from the outset, the reason that he ceased work on 14 January 2011 was that his employment was terminated… 130. In this case, there was no contemporaneous evidence of TPD as at 14 January or 14 July 2011…and the plaintiff's actual employment circumstances as at 14 January 2011…were to the contrary of any such inference being drawn: (a) The Plaintiff was at 14 January 2011 only unable to do work immediately because he had engaged in misconduct in breach of company policy and been dismissed…
I consider that, on a fair reading of Hannover's written submissions, it dealt with Issue [2] on the basis that it fell within the separate question, so that the issue was whether, in considering whether Issue [2] was satisfied, Hannover had acted in accordance with its duties to properly determine Mr Long's claim, so that its decision on the issue was binding upon Mr Long.

[9]

Treatment of Issue [2] in Hannover's rejection letters

Hannover made the following statements concerning Issue [2] in its first four rejection letters. The terms of the reasons given by Hannover are extracted below at [181], [242], [275] and [332]. It is more convenient to set out the full reasons below, where I consider the adequacy of the process of reasoning adopted by Hannover. A consequence is that the extracts are out of context. Issue [2] does not arise in relation to Mr Long's fifth and alternative claim. First rejection: "… The member at the time was employed in the capacity of a full time Retail Manager with Woolworths Limited until being terminated from his employment with effect on 14 January 2011 due to reason other than disablement, namely due to a serious breach of company policy. Therefore for all intention and purpose of our assessment, the Date of Disablement as defined is deemed to have occurred on 14 January 2011 when the member is alleged to have commenced the six consecutive months absence from work that results in total and permanent disablement… … It is however reasonably discernible that the event occurring on or about 14 January 2011 did likely cause a temporary demise in the member's psychological state around that time, after which the member did receive appropriate counselling and amendment to his prescribed medications…" Second rejection: "… Therefore for all intention and purpose of our assessment, the Date of Disablement as defined is deemed to have occurred on 14 January 2011… Just to recap this Member's position at the time of disablement. The member in 2011, was employed in the capacity of a full-time Retail Manager with Woolworths Ltd until being terminated from his employment with effect on 14 January 2011, due to reasons other than disablement, namely due to a serious breach of company policy…" Third rejection: "… To satisfy the applicable definition of Total and Permanent Disablement, the member also has to satisfy that his incapacity from work is a result of either illness or injury. It has already been established and confirmed in our letter dated 5 October 2017 that the member was terminated from his employment due to a breach of company policy not as a result of an illness or injury…" Fourth rejection: "The further evidence provided for review confirms that the Member was sacked (for serious breach of company policy) from his job and following this developed symptoms that were diagnosed as Bipolar Disorder. … In any event, had the Member not breached company policy, he would not have lost his job and despite his medical condition he had shown a history of working and had done so for many years whilst on medication and under treatment…"
The following conclusions may fairly be drawn concerning the meaning and effect of these relevant parts of the rejection letters.
First, Hannover proceeded on the basis that there was one relevant six consecutive month period, being the period commencing when Mr Long's employment was terminated on 14 January 2011. Hannover decided Mr Long's claim depending upon whether it was of the opinion that Mr Long had established Issue [2] for the period 14 January 2011 to 14 July 2011. It did not consider the possibility that Mr Long may have suffered from Injury or Illness that satisfied Issue [2] during some six month period that commenced after 14 January 2011.
Secondly, in varying degrees of clarity, Hannover rejected Mr Long's claim for the TPD benefit on the basis that Issue [2] was not satisfied unless the Injury or Illness was the cause of the cessation of work, and that the evidence did not satisfy this condition because the actual cause was the employer's action in terminating the contract of employment for breach.
That conclusion may not appear clearly from the first and second rejections, but the wording of the third rejection "that the member was terminated from his employment due to a breach of company policy not as a result of illness or injury" (emphasis added) does, in my view, show that Hannover rejected Mr Long's application on the understanding that Issue [2] would not be satisfied if Mr Long was unable to do any work under his prior employment contract because the contract had been terminated for breach. The conclusion appears more clearly in the wording of the fourth rejection where Hannover said: "In any event, had the Member not breached company policy, he would not have lost his job".
Thirdly, Hannover did not reject Mr Long's TPD claim outright based solely on the ground that Mr Long had not satisfied Issue [2]. In the case of each rejection, Hannover responded to whether Issue [3] had been satisfied, and concluded that it had not.

[10]

Relevant period for which Mr Long must have been unable to do any work

The first question is whether Issue [2] must be satisfied solely by the circumstances that relate to the initial six consecutive month period commencing on the first inability to do any work, or whether clause 2.2 may be applied to any consecutive six month period while the claimant is covered by the Policy when the claimant is unable to work.
The chapeau to clause 2.2 (being Issue [1], and set out at [38] above) requires that the claimant be gainfully employed in a particular manner "within the six (6) months prior to the Date of Disablement". Clause 2.2(a) requires that the claimant be unable to do any work for six consecutive months, and the opinion required to be formed by the insurer is as to the claimant's employment prognosis "at the end of that six (6) months".
By clause 2.5 of the Policy (set out above at [41]) "Total and Permanent Disablement is treated as having occurred on the Date of Disablement". That is the date "on which the six (6) months consecutive absence from work…began".
As clause 2.2 explicitly requires that the claimant be gainfully employed and working a specified amount of time within the six months prior to the Date of Disablement, and that amount of time involves working an average number of hours "each week within the six (6) months", clause 2.2 will not be satisfied if a significant time after the initial cessation of work, the claimant suffers an Illness or Injury that would, during and at the end of the next consecutive six month period, satisfy the TPD definition. The connection between the requirement for a specified amount of work on average each week in the six months prior to the cessation of work with the inability to work for the next consecutive six month period constrains the date that can satisfy the definition of the Date of Disablement.
It should be acknowledged that, upon the strict wording of clause 2.2 of the Policy, there may be some limited ability for a second possible Date of Disablement and commencement of a relevant consecutive six month period. But that will be limited by the meaning of "fifteen (15) or more hours on average each week" in the chapeau, so that the period in which clause 2.2 can work twice, so to speak, will be limited to less than one week or in all probability not much longer than that period.

[11]

Significance of Standley

If, on the proper construction of the Policy, the definition of TPD could be satisfied if there was any consecutive six month period during the currency of the Policy, as it applied to Mr Long, in which Mr Long was unable to work as a result of Injury or Illness, then it might not matter if there was a delay between the initial termination of employment and the consequential development of the Injury or Illness that had the separate effect of making Mr Long unable to do any work for a consecutive six month period.
The decision in Standley has potential application to the determination of this issue.
The policy wording and the structure of the insurance cover was significantly different in Standley to the effect of the Policy in the present case. Rein J summarised the effect of the relevant part of the policy wording in the following terms: [3] There is no dispute as to the terms of the Onepath policy. It provides that Onepath will pay "the full TPD Cover amount insured by the benefit payment type which applies" if Mr Standley suffers "total and permanent disability while the TPD Cover is in force and satisfies the conditions of the TPD definition which applies" (CB 272). The definition which applies is "Own Occupation" (CB 356) and the Own Occupation TPD definition, relevantly, is as follows (see CB 273): 'Own Occupation' relates to the most recent occupation in which the life insured was engaged prior to the date of disability. Own Occupation TPD means that, as a result of illness or injury, the life insured: 1. a. has been absent from and unable to engage in their 'Own Occupation' for three consecutive months; and b. is disabled at the end of the period of three consecutive months to such an extent that they are unlikely ever again to be able to engage in their 'Own Occupation'…
One difference between the policy in Standley and the present case is that the entitlement to the TPD benefit in that case depended upon whether or not, as a matter of fact, Mr Standley satisfied the TPD definition at the relevant time. The entitlement did not depend, as it does in the present case and many other reported cases, on the insurer forming an opinion that the claimant satisfied the TPD definition. That difference is not material for present purposes.
Relevantly, the TPD definition in Standley required that, the claimant has been absent from and unable to engage in their Own Occupation for three consecutive months as a result of illness or injury; and is disabled at the end of the period of three consecutive months to such an extent that they are unlikely ever again to be able to engage in their Own Occupation. It must be noted that par 1.a. of the definition refers to circumstances that are required to exist "for three consecutive months", and par 1.b. requires that a particular condition be satisfied "at the end of the period of three consecutive months".
Importantly, on the face of the definition, the wording does not specify any particular three-month period, and does not, in terms, require that there be only one three-month period that commences on the date of the initial commencement of the absence from the claimant's Own Occupation. That result gives rise to the possibility that the claimant may be entitled to the TPD benefit because, during the whole of the period for which the claimant was covered by the policy, there was any consecutive three months period during and at the end of which the claimant satisfied the TPD definition, even though the claimant did not satisfy that definition at the end of the initial three months consecutive period after the claimant first became absent from work.
In Standley, the insurer defended the claim by Mr Standley on the basis that the only issue was whether Mr Standley satisfied the TPD definition in the policy during and at the end of the first three months period after he ceased to engage in the relevant Own Occupation.
Rein J found, at [53], that Mr Standley did not satisfy the TPD definition during and at the end of the first consecutive three months period following his initial cessation of employment. His Honour further found, at [57], that, on the proper construction of the relevant TPD definition, the effect of the words "at the end of the period of three consecutive months" was to have the "precise focus" of requiring that the status of being unlikely ever to work again be satisfied at that time.
His Honour then considered an alternative argument put on behalf of Mr Standley, based upon a construction of the TPD definition in the policy that had the effect that the TPD definition could be satisfied in relation to any consecutive three months period for which the policy applied to the claimant: see [58]-[63]. Rein J found that the policy applied to Mr Standley in a three month period ending in September 2017, and that, by reason of additional injury or illness not shown to have been present at the end of the first three consecutive months period, Mr Standley had been absent from and unable to engage in the relevant employment, and, in September 2017, was unlikely ever again to be able to engage in that employment. In fact, the insurer had not comprehensively challenged that finding on the evidence, because of its apparent confidence that the only relevant three consecutive months' period was the initial one after the commencement of the absence from employment.
Finally, Rein J found, at [62]-[63], that the alternative claim was available to Mr Standley, because he had pleaded in his statement of claim that he had been prevented from engaging in his employment "from about February 2016 and continuing" (emphasis added), so that his claim encompassed subsequent three months' consecutive periods.
The conclusion reached by Rein J in Standley depended upon the wording of the TPD definition in the policy in that case, which permitted his Honour to find that the requirement that the claimant be absent from and unable to engage in their Own Occupation for three consecutive months as a result of illness or injury could be satisfied in respect of a three month period that commenced after the initial absence of the claimant from that occupation. For the reasons that I have given above (at [69]-[71]) the wording of clause 2.2(a) of the Policy in the present case - by reason of the relationship between Issues [1] and [2] - requires that the six consecutive months' period start at the end of the prior six months' period satisfying the work requirement.

[12]

Relevant causes for Mr Long being unable to do any work

The second question is whether Issue [2] can only be satisfied if the inability to undertake work is directly caused by a relevant Illness or Injury, so that clause 2.2 cannot be satisfied if the cessation of work is some extraneous cause.
A subsidiary question is whether, if clause 2.2 may be satisfied where the cause of the cessation of work is initially extraneous, it is necessary for the consequential Injury or Illness to be immediate and endure for the whole of the six consecutive months. This is linked to the answer to the first question.
For the reasons that follow, it is my opinion that, on the proper construction of clause 2.2 of the Policy, the direct or immediate cause of the cessation of work is immaterial, provided that, in fact, the claimant is "unable to do any work as a result of Injury or Illness for six (6) consecutive months". That is, provided that the requisite Injury or Illness is present and has the stipulated effect, it will not be material to the application of clause 2.2 that the claimant's employment was terminated at the inception of the six month period for some reason not caused by the Injury or Illness, with the effect that the ability of the claimant to work in the original employment has been negated by the termination of the contract of employment.
Issue [1], in the chapeau to clause 2.2, requires the claimant to have been gainfully employed and working in a specified way within the six months prior to the Date of Disablement. Issue [2], in clause 2.2(a), requires that the claimant be "unable to do any work as a result of Injury or Illness for" the next six consecutive months. The focus of clause 2.2(a) is on the inability to work as a result of Injury or Illness. If that inability exists, it will not matter whether, at the inception of the six months period, or at some time during that period, the claimant's contract of employment is terminated so that, as a separate matter, the claimant becomes unable to do any work in the manner in which the claimant was gainfully employed in the prior six months period.
To the extent that Hannover determined that Issue [2] was not satisfied because Mr Long's contract of employment was terminated for breach, so that he could not continue his previous occupation for the six consecutive months' period because he was no longer employed, it is to be noted that the words "unlikely to resume their previous occupation" appears in the description of Issue [3] and not Issue [2]. The inability to do any work for the purpose of Issue [2] is not related to whether or not the contract of employment that permitted the previous occupation continues.
However, the combined effect of my answer to this second question and the first question is that, if the claimant's contract of employment is terminated by an extraneous cause, such as in the present case, Issue [2] can only be satisfied if the Injury or Illness of which that cause is provocative - to use Mr Long's expression - is an immediate consequence of the direct cause, because otherwise the claimant will not be "unable to do any work as a result of Injury or Illness for six (6) consecutive months" after the Date of Disablement. If the consequential Injury or Illness is not immediate, there will be a gap in time and a part of the six months when the claimant would have been able to do work and the only reason that work was not done was the termination of the contract of employment, not the effect of Injury or Illness.

[13]

Authorities referred to by the parties

It is necessary to consider a number of authorities relied upon by Hannover (as noted above at [60]) in support of its position on the causation issue. Those authorities may, however, be of illustrative value only, as the meaning and effect of each contract of insurance depends upon the proper construction of its own wording.
As I noted in Wheeler v FSS Trustee Corporation as trustee for the First State Superannuation Scheme [2016] NSWSC 534 (Wheeler) at [63], in Shuetrim v FSS Trustee Corporation [2015] NSWSC 464 (Shuetrim first instance), Stevenson J said at [67]: [67] An insured person cannot be TPD within the meaning of the MetLife definition unless he or she is absent from his or her occupation through illness or injury for six consecutive months. It is, in my opinion, implicit in the definition that such incapacity must arise from the injury or illness that caused the six month absence from work. The definition thus requires consideration of whether the incapacity results from that injury or illness…
In that case the relevant parts of the TAL and MetLife policies were respectively, per TAL Life Ltd v Shuetrim (2016) 91 NSWLR 439; [2016] NSWCA 68 (Shuetrim on appeal) at [10] and [11]: … The Injured Person having been absent from their Occupation through Illness or Injury for 3 consecutive months… … The Insured Member having been absent from their Occupation with the Employer through injury or illness for six consecutive months…
Stevenson J said "that such incapacity must arise from the injury or illness that has caused the six month absence from work" (emphasis added). The required subject matter of the absence is absence from their Occupation, and it is that absence that must be "through injury or illness". That requirement appears to connect the absence to the former Occupation, and as that absence must be "through injury or illness", it appears that the absence from the Occupation must be caused by the injury or illness. On the basis of the policy wording in that case, if the Occupation is terminated by some cause other than injury or illness, the condition for the entitlement to the TPD benefit cannot be satisfied.
The difference between the policy wording in the present case and that considered by Stevenson J in Shuetrim at first instance is that clause 2.2(a) is satisfied simply by the fact of the claimant being "unable to do any work as a result of Injury or Illness".
Hannover also relied upon the case of Ivan Mabbett v Watson Wyatt Superannuation Pty Ltd [2008] NSWSC 365, which was decided by Einstein J.
The part of the contract of insurance that raised the question that is Issue [2] in the present case is set out at [27] of the reasons for judgment of Einstein J, and provided: 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…
This wording appears to be closer to the wording in Shuetrim than the wording in the present case, as it focuses on the illness or injury being the cause of the insured being absent from employment with the employer. The entitlement to the TPD benefit does not depend upon an objective inability to do any work but on an absence from employment with the Employer caused by the illness or injury.
The plaintiff was employed by P&O from 15 January 2001 until 9 July 2001. On 9 July 2001, the plaintiff tendered his resignation to P&O for the purpose of commencing work the next day for a different employer. P&O accepted the plaintiff's resignation, but required him to work until the end of the shift, it being a term of the plaintiff's employment contract that he was required to give 8 hours' notice of resignation. Between the time the plaintiff tendered his resignation, and the time at which the resignation took effect, the plaintiff alleged that he sustained a back injury in the course of his employment with P&O.
Relevantly, as his Honour noted at [46], the insurer contended that the plaintiff elected to resign on 9 July 2001, and that meant that it was his resignation, and not the injury, which was the proximate cause of his absence from his employment over the following period.
Einstein J gave the following reasons at [55]-[56]: [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.
His Honour reached the following conclusion at [58]-[59]: [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.
Einstein J therefore rejected the insurer's argument that, once the insured had resigned and therefore terminated his contract of employment, injury or illness that occurred after the resignation could not be a cause of the insured being absent from employment for the requisite period. There may be more than one real and effective causes of the insured's absence. However, his Honour found against the insured claimant on the facts.
I do not consider that this decision is of direct assistance in determining the proper construction of the Policy. It is of some comfort that Einstein J concluded that there may be more than one operative cause to a claimant being absent from employment with the claimant's employer. However, in my view the terms of the policy in that case were materially different to the terms contained in the Policy.
Hannover also relied upon the decision of the Court of Appeal in Manglicmot v Commonwealth Bank Officers Superannuation Corporation Pty Ltd [2011] NSWCA 204; (2011) 282 ALR 167, in which the principal judgment was given by Giles JA, Young and Whealy JJA agreeing.
In that case, the plaintiff appellant was injured and was subsequently only able to work part-time for his employer. In due course, the plaintiff was offered, and accepted, redundancy.
The relevant part of the definition of Total and Permanent Disablement is set out at [28], and stated: Total and Permanent Disablement means… (b) having been absent from work through injury or illness for an initial period of six (6) consecutive months…
This term is arguably similar to clause 2.2 of the Policy, as it refers to "absent from work", while the equivalent wording in the Policy is "unable to do any work". Although the difference is subtle, it is arguable that the expression "from work" ties the absence slightly more to absence from the former employment than is the case for clause 2.2 of the Policy, which in its terms is concerned with inability to do any work.
Giles JA rejected the appellant's appeal for other reasons, but then explained, in obiter, that the evidence did not establish that the appellant's absence from work was through injury or illness.
Mr Long responded to Hannover's submissions on the significance of causation by relying upon the decision of the Court of Appeal of the Supreme Court of Victoria in Hannover Life Re of Australasia Ltd v Colella (2014) 47 VR 1; [2014] VSCA 205 (Colella). Ashley and Beach JJA agreed with the reasons of Garde AJA in that case.
The relevant part of the definition of Total and Permanent Disablement is set out at [14] in the following terms: A Person suffers Total and Permanent Disablement if they, are unable to do any work as a result of injury or illness for 6 consecutive months and…
Mr Long submitted that this aspect of the TPD definition was the same as the relevant part of clause 2.2 (a) of the Policy. I accept that submission.
Mr Long relied upon [33] of the reasons of Garde AJA, where his Honour said (footnote omitted): [33] Consistently with authority, the trial judge was right to take into account the claimant's physical ability, intellectual capacity, education and qualifications in concluding that he was unable to perform any work for six consecutive months as a result of injury. Plainly, a person has no ability to do work for which the person does not have the physical or the intellectual capacity, or is unqualified or unsuited. Mr Christie who appeared for the insurer at the trial properly accepted in submissions at the trial that the phrase 'unable to do any work' must mean work that the insured could undertake. This excluded occupations which were beyond the insured from a physical, educational or intellectual perspective.
I do not think that the decision in Colella was directed at the present issue, as there was no question about the insured in that case being in fact unable to work because of the termination of the insured's employment, for some reason not connected with injury or illness suffered by the insured. Nonetheless, the decision provides some guidance concerning the proper construction of the relevant part of clause 2.2(a) of the Policy.
As Gleeson CJ said in McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579; [2000] HCA 65 (footnotes omitted): [22] A policy of insurance, even one required by statute, is a commercial contract and should be given a businesslike interpretation. 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.
Primacy must be given to the actual words used in a written contract as McColl JA said in Peppers Hotel Management Pty Ltd v Hotel Capital Partners Ltd [2004] NSWCA 114 at [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 the contract for the purpose of avoiding a result which is considered to be inconvenient or unjust…"
As I have stated above, the wording of the relevant part of clause 2.2(a) of the Policy is sufficiently clear and straightforward to require the conclusion that, although the claimant must be gainfully employed and working the requisite number of hours on average each week within the six months prior to the Date of Disablement (as required by Issue [1]), the actual cause of the insured's inability to do any work as a result of Injury or Illness on the Date of Disablement is immaterial. All that is required is that, as from the Date of Disablement, for six consecutive months, the insured is unable to do any work as a result of Injury or Illness. That work is "any work", so that Issue [2] is concerned with absolute incapacity to work. It is not concerned with inability to carry on the previous employment, so it does not matter that the insured could not have continued with that employment anyway, because it has been terminated.
The Injury or Illness that results in the insured being unable to do any work could develop spontaneously through physiological processes, or be the result of an accidental Injury, and could even be the consequence of some wrongful conduct on the part of the insured. The fact that the insured's employment may be terminated for misconduct is irrelevant, provided that, as from the Date of Disablement, there is an Injury or Illness that in fact has the result that the insured is unable to do any work.
That aspect of the proper construction of the relevant part of clause 2.2(a) involves an acceptance of the submissions made by Mr Long.

[14]

Significance of Hannover's opinion as to satisfaction of Issue [2]

The third question is whether the parties were correct in their apparent assumption that Issue [2] was a matter that fell within the power of Hannover under clause 2.2 of the Policy to form an opinion determinative of Mr Long's right to a TPD benefit.
In Shuetrim on appeal at [60], the entitlement of the claimant to a TPD benefit in that case was "expressed to turn upon the state of mind of the insurer" in contradistinction to it being established that the facts of the case objectively established the requirements of the relevant TPD definition. However, the issue upon which the case turned was equivalent to the subject matter of Issues [3] and [4] in the present case. All of these issues depended upon the relevant part of the TPD definition that included words to the effect of "in our opinion" - referring to the formation of an opinion by the insurer that the evidence presented by the claimant satisfies a requirement that is a condition of the entitlement to the TPD benefit.
In my opinion, it is clear from the ordinary wording of clause 2.2(a) of the Policy in this case that the words "in our opinion" form part of Issues [3] and [4] and not part of Issue [2]. That is, satisfaction of Issue [2] within clause 2.2(a) requires proof as an objective fact that the claimant has been "unable to do any work as a result of Injury or Illness for six (6) consecutive months" from the Date of Disablement. The available evidence will either establish that fact or it will not. Issue [2] is not to be determined on the basis of any opinion formed by Hannover, and consequently a determination by Hannover that Issue [2] has not been satisfied will not be binding on Mr Long.
If my understanding is correct that the parties in their submissions have dealt with Issue [2] as if it Hannover's opinion as to whether the Issue was satisfied will be determinative unless it breached a relevant duty that it owed to Mr Long, that approach was not in my view correct on the proper construction of the Policy.
As the question of whether Issue [2] is to be determined as a matter of objective fact, any opinion formed by Hannover will not be determinative, and must be decided by the Court. The Issue falls outside the ambit of the separate question, and so is not a matter that is to be determined by this judgment.
Nonetheless, as Issue [2] was a factor in Mr Long's entitlement to the TPD benefit, Hannover had to form an opinion as to its satisfaction in deciding whether to accept or reject Mr Long's TPD claim.
In respect of Mr Long's applications where Hannover determined that Issue [2] was not satisfied on the basis of an incorrect construction of clause 2.2(a) of the Policy - to the effect that Mr Long had not established that he was unable to do any work as a result of Injury or Illness for the six consecutive months' period, because his contract of employment had been terminated by his employer for breach - Hannover's rejections of the applications were invalid.

[18]

Principles governing the validity of the determination by the insurer

The modern principles governing the circumstances in which the insurer's decision concerning its own liability to pay a TPD benefit may be traced to the decision of McLelland J (as his Honour then was) in Edwards v Hunter Valley Co-op Dairy Co Ltd (1992) 7 ANZ Ins Cas 61-113 (Edwards) at 77,536, where his Honour said (citations omitted): It is next necessary to examine the nature and content of Zurich's relevant obligations under the policy. Those obligations were contractual and not fiduciary. Zurich was an insurer, not a trustee. Since the commercial purpose of the policy was, relevantly, to provide insurance against the risk of total and permanent disablement, and since the policy was expressed in terms requiring the formation by Zurich of a particular opinion as a condition of Zurich's own liability, there was clearly an implied obligation on Zurich to consider and determine whether it should form that opinion. That involved a consideration and determination of the correct question… Furthermore, in the exercise of powers affecting the interests of both of itself and the claimant, Zurich was under a duty of good faith and fair dealing which required it to have due regard to the interests of the claimant… … However in the field of insurance, it is well-established that where under a contract of insurance an element of the insurer's liability is expressed in terms of the satisfaction or opinion of the insurer, the insurer is obliged to act reasonably in considering and determining that matter… To say that an insurer must act reasonably in forming or declining to form an opinion is not to say that a court can substitute its own view for that of the insurer. As North J pointed out in Doyle at 529, "reasonable persons may reasonably take different views". Unless the view taken by the insurer can be shown to have been unreasonable on the material then before the insurer, the decision of the insurer cannot be successfully attacked on this ground.
It should be noted, as it will be relevant to later discussion, that, in the final sentence, McLelland J stated the view that the insurer's decision could be attacked if it was "shown to have been unreasonable on the material then before the insurer" (emphasis added). The determination of whether or not the decision was unreasonable required acceptance of the proposition that "reasonable persons may reasonably take different views" as to the proper opinion to be formed.
McLelland J's statement of the principles that are to be applied has now been accepted in a number of decisions of the Court of Appeal of this State, such as Hannover Life Re of Australasia Ltd v Sayseng [2005] NSWCA 214 (Sayseng) at [36], Birdsall v Motor Trades Association of Australia Superannuation Fund Pty Ltd [2015] NSWCA 104 at [49], [50]; Shuetrim on appeal at [61], [62]; Hannover Life Re of Australasia Ltd v Jones [2017] NSWCA 233 (Jones) at [64]-[69]; MetLife Insurance Ltd v Hellessey [2018] NSWCA 307 (Hellessey) at [7]; and MetLife Insurance Ltd v MX [2019] NSWCA 228 (MX) at [76]. His Honour's judgment has also been followed in numerous decisions at first instance in this State.
One aspect of the decision in Edwards that has now been confirmed as part of the law of this State, after some doubt, is that the formation of the opinion by the insurer that the claimant does not satisfy the TPD definition at the Relevant Time is vitiated if the insurer does not make the decision in conformity with the restrictions imposed by the law on the decision-making process. If the insurer's determination is vitiated in this way, then it falls to the Court to determine the question of whether the claimant satisfied the TPD definition at the Relevant Time, on the basis of the evidence that is tendered by the parties in the proceedings: see Shuetrim on appeal at [157]-[163]. Thus, it continues to be true to say that, where the insurer has rejected a TPD claim on the basis that it has not formed the requisite opinion, the proceedings by the claimant in the Court to overturn that determination involve a two-stage process. The first stage requires the question to be answered as to whether the process of the determination breached the restrictions that confine the entitlement of the insurer to determine its own liability, so that its decision is not determinative and is ineffective against the claimant. If the answer to that question is affirmative, then the second stage involves the Court itself determining whether the claimant is entitled to the TPD benefit.
There are a number of aspects of the restrictions on the process of the determination of the claim by the insurer for it to be valid and determinative.

[19]

Duties owed by the insurer to the insured

First, the insurer is subject to a duty of utmost good faith in exercising its power of determination, which arises out of the nature of the contract as being a contract of insurance, as well as out of s 13 of the Insurance Contracts Act 1984 (Cth): see Shuetrim on appeal at [48], [49]. As Leeming JA said at [49]: [49] The obligation to act in utmost good faith, of course, predates statute. As Emmett J said in AMP Financial Planning Pty Ltd v CGU Insurance Ltd (2005) 146 FCR 447; [2005] FCAFC 185 at [88]-[89], the concept of utmost good faith or uberrima fides has always been present in the law of insurance, and encompasses notions of fairness, reasonableness and community standards of decency and fair dealing, and may be breached by capricious or unreasonable conduct which falls short of dishonesty. That part of his Honour's reasons was agreed with by Moore J and, on appeal, by Gleeson CJ and Kirby and Crennan JJ: CGU Insurance Ltd v AMP Financial Planning Pty Ltd (2007) 235 CLR 1; [2007] HCA 36 at [15] and [128].
Secondly, the exercise by the insurer of the power to determine the entitlement to the TPD benefit by reason of the formation of its own opinion requires that the insurer act in conformity with the proper construction of the contract of insurance; or as it is sometimes said, the insurer must answer the correct question, as held by McLelland J in the extract from Edwards set out above.
Thus, as both the entitlement of the insured to the TPD benefit and the entitlement of the insurer to form the opinion that is a pre-condition of its obligation to pay the benefit derive from the relevant terms of the contract of insurance, if the formation by the insurer of an opinion that the TPD definition was not satisfied at the Relevant Date arises from a materially incorrect construction of the contract of insurance, then the formation of the opinion by the insurer does not bind the insured.
Thirdly, there is a requirement that the insurer comply with "objective standards of reasonableness" and to "act reasonably in considering and determining that matter": see Edwards at 77,536.
It has now been clearly established that the obligation on the insurer to act reasonably has two components, being that the determination itself must be reasonable on the basis of all of the evidence in the possession of the insurer, and also the process of determination employed by the insurer must be reasonable.
This follows from a number of decisions of the Court of Appeal in this State, which also consider the standard of reasonableness of the determination by the insurer.
As Meagher JA said in Hellessey at [8]: [8] Thus, an insurer's decision may be set aside if it is shown to be unreasonable on the material before the insurer. It will not answer that description merely because the Court would or could have reached a different opinion on that material, because "reasonable persons may reasonably take different views": Edwards at 77,536. In addition, however, a decision may be set aside if the process of consideration underlying it was not undertaken reasonably and fairly, even if the outcome itself is not also shown to have been unreasonable on the material before the insurer. Again, more than one reasonable process of consideration may be open in the circumstances, but the process adopted by an insurer would not cease to be unreasonable simply because another, and reasonable, process to the same conclusion happened to exist.
In the same case, White JA put the matter as follows at [80]-[81]: [80] An opinion that would not be open to an insurer acting reasonably and fairly will not be binding on the claimant. It is not a corollary of that principle that the insurer's opinion will be binding on the claimant if it is one that would be open to an insurer acting reasonably and fairly, if the insurer in question did not act reasonably and fairly in reaching its opinion. It is only if the insurer has acted fairly and reasonably in assessing and determining the claim that the insurer's decision that it is not satisfied that the claimant has met the requirements of the TPD definition may be determinative. It would be to distort the contractual language ("to our satisfaction") to postulate the satisfaction of an hypothetical reasonable insurer faced with the same materials which the actual insurer had. [81] There is a distinction between the formation of a reasonable opinion and acting reasonably in the formation of an opinion. Para [121] of the reasons in Hannover Life Re of Australasia v Jones addresses the former. The reasons of the primary judge addressed the latter. The primary judge was not in error in doing so, nor in his evaluation that MetLife did not act reasonably in forming its opinion.
As the contract of insurance requires the insurer to form its own opinion as to whether the TPD definition is satisfied at the Relevant Date, the insured is entitled to have the insurer form that opinion by adopting a reasonable opinion-forming process, and if the insurer does not do that, the insured is deprived of an entitlement under the contract, so the formation of the opinion does not bind the insured, even if in other circumstances a different insurer could have reached the same opinion by adopting a different but reasonable opinion-forming process.
As Meagher JA observed in Jones at [8], and White JA noted in Hellessey at [73], the focus of the parties in Jones was "on the unreasonableness ground for attacking the insurer's opinion, as distinct from whether the insurer acted unreasonably in the opinion-forming process."

[20]

Nature of the requirement that the Insurer's opinion be reasonable

In Jones, Gleeson JA, who delivered the primary judgment, agreed at [98], with the statement of Beach JA in Colella at [6], which Gleeson JA extracted at [97] "… The opinion formed by the appellant was not open to any insurer acting reasonably and fairly in the consideration of the respondent's claim…"
Macfarlan JA agreed with this statement of principle at [1], as did Meagher JA at [9].
As Gleeson JA made clear at [89], [93] and [95], the Court does not undertake what his Honour called a "merits review" of the determination made by the insurer. The Court does not substitute its own view for that formed by the insurer, when determining the first stage of the enquiry as to whether the insured is entitled to the TPD benefit. The Court must not find unreasonableness in the outcome of the insurer's determination on the basis of the Court's view as to what the most reasonable determination should be on the evidence, with any determination deviating from that reached by the Court being considered to be unreasonable.
Gleeson JA concluded at [121]: [121] As I have said, the task for the court in the present case is not to assess what it thinks is reasonable and thereby conclude that any other view displays error. It may also be accepted that there can be a range of opinions available to an insurer acting reasonably and fairly on the material before it. However, the suggested analogy with judicial review is not so close as to require the adoption of the stringent test of unreasonableness in the Wednesbury sense. Rather, the criterion of reasonableness of an insurer's decision is whether the opinion formed by the insurer was not open to an insurer acting reasonably and fairly in the consideration of the claim.
The Court of Appeal thus rejected the test as being that which is generally described as Wednesbury unreasonableness, after the decision in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223. Gleeson JA discussed the concept of Wednesbury unreasonableness at [100]-[105]. As that approach was held not to be applicable in the present context, it is not necessary to examine the test in detail. It is usually expressed, as translated to the present context, as being that the formation of the opinion that the TPD definition was not satisfied by the insured is so unreasonable that no reasonable insurer could have formed that opinion on the evidence before it.
It may be noted that the decision of the Court of Appeal in Jones effectively confirmed the conclusion that I reached in Hellessey v MetLife Insurance Ltd [2017] NSWSC 1284 at [109] that the Wednesbury test was not appropriate to the determination of whether the opinion formed by the insurer was vitiated by unreasonableness. However, at [109], following the reasoning of Leeming JA in Shuetrim on appeal at [61], [62] and [65], I stated the conclusion that the question was simply whether or not the conclusion reached was reasonable. As I have noted above, that is the way the test was stated by McLelland J in Edwards. Leeming JA at [62] endorsed McLelland J's view by extracting it. Beazley P and Emmett AJA agreed with Leeming JA. I understood that settled the matter. It now appears from Jones that that view may not have found favour with the Court of Appeal, which has expressed the question as being: "whether the opinion formed by the insurer was not open to an insurer acting reasonably and fairly in the consideration of the claim".
In Jones at [3], Macfarlan JA expressed the opinion that the application of the test stated by Gleeson JA at [121] would produce different results to the Wednesbury test "in few, if any, cases".
At [9], Meagher JA expressed the view, in respect of the test enunciated by Gleeson JA: "… If there is any difference of substance between that formulation and the Wednesbury standard of unreasonableness, that difference is not material in the present case…"
The question is whether the different verbal formulations of the principle that governs whether the determination made by the insurer is vitiated because the result of the opinion-forming process is unreasonable are intended to have different meanings. I conclude that they are not, for the following reasons.
First, nothing said by any of the appeal judges in Jones suggests that they understood that they were departing from anything said in Edwards or Shuetrim on appeal.
Secondly, although Gleeson JA stated what he called "the criterion of reasonableness" in [98] and [121] in terms of whether the opinion formed by the insurer was not open to an insurer acting reasonably and fairly in the consideration of the claim, and did so explicitly accepting the statement of Beach JA in Colella at [6], Gleeson JA expressed his conclusion in the course of a consideration at [89] to [96] of the authorities that establish that the Court is not to undertake a review of the merits of the insurer's decision. His Honour accepted Edwards at [94], and noted at [95] that the Court of Appeal had approved Edwards in Sayseng.
Thirdly, although Meagher JA, at [4], substantially agreed with the reasons of Gleeson JA, his Honour's summary of the applicable principles, at [7], adopted the formulation of the test expressed by McLelland J in Edwards. Meagher JA said: These principles do not, however, permit the court merely to substitute its own view for that of the insurer. In Edwards, when addressing the content of the insurer's duty to act reasonably and fairly, McLelland J explained that, as a range of reasonable views may be available in particular circumstances, unless "the view taken by the insurer can be shown to have been unreasonable on the material then before the insurer, the decision of the insurer cannot be successfully attacked on this ground"…
Finally, although in Colella Beach JA formulated the principle in the words adopted by Gleeson JA, at [2] Beach JA substantially agreed with the reasons of Garde AJA. Garde AJA explicitly rejected the Wednesbury test at [73], and in stating the proper test at sub-par (e), his Honour, relying upon both Edwards and Sayseng, used the same wording as did McLelland J.
As in Colella, Ashley JA concurred with both Beach JA and Garde AJA, his Honour must not have thought that the two ways the test had been formulated made a difference.
If that is correct, then the principle as stated by Gleeson JA in Jones is merely intended to express in different terms the propositions recognised by McLelland J in Edwards that, although the decision of the insurer had to be reasonable, the Court must give proper weight to the consideration that reasonable minds may differ, and that an insurer's decision may be reasonable even if it differed from the decision that the Court would have made in the circumstances, or even the decision that the Court considers to be most reasonable.
There may be a question about the extent to which these different formulations of the test matter. In a number of cases, the insurer involved has urged on the Court an acceptance of the Wednesbury test as the proper basis for determining whether the opinion formed by the insurer was unreasonable. The Wednesbury test has been rejected. It is generally accepted that, in the administrative law context, the test is stringent and difficult to establish by the party attacking the administrative decision. It requires a relatively extreme degree of unreasonableness.
If the test stated by Gleeson JA is in fact intended to be consistent with the principle expressed by McLelland J, then the introduction of the words "not open to any insurer acting reasonably and fairly" should not have the effect that the test is an approximation of the Wednesbury test. The Court is not required to find the opinion formed by the insurer to have been reasonable just because every step in the actual path of reasoning adopted by the insurer, though leading to an outcome favourable to the insurer, is just within the margin of what reasonably could have been the outcome of that step. The question is whether the final opinion is reasonable, having regard to the opinions that could be formed by all insurers acting reasonably and fairly, and having regard to the proposition that reasonable minds may differ as to the proper opinion to be formed.
The following two legal propositions are of particular significance to the determination of this aspect of the case.

[22]

Chronological relevance of evidence of the claimant's prognosis

The second legal issue relates to how the insurer should treat evidence concerning the claimant's medical condition and employment prospects prepared remotely in time to the Relevant Time. As will become apparent when the terms of the rejection letters are considered in detail, to varying degrees in the separate rejection letters Hannover based its rejections on the fact that evidence relied upon by Mr Long had come into existence years after the Relevant Date, and, generally speaking, Hannover asserted an entitlement to ignore or give such evidence little weight on the basis that it was not reasonably contemporaneous with the Relevant Date.
This issue raises difficult questions the answers to which are likely to be sensitive to the particular facts of each case. I do not offer the following observations as a generalisation. Taking clause 2.2 of the Policy in the present case is an example, it entitles the claimant to the TPD benefit if the insurer forms the opinion that, as at the Relevant Date - which I have defined as the date six months after the Date of Disablement when the claimant's inability to work commenced - the claimant continued to be so disabled that he or she was unlikely to resume their previous occupation at any time in the future. That level of disablement with the stated prospect of resumption of previous occupation refers to a state of affairs existing at the Relevant Date. The clause gives the insurer the entitlement to form an opinion as to the existence of that state of affairs. However, the opinion must concern whether that state of affairs exists in fact. It is not whether the evidence concerning the existence of that state of affairs that is available relatively contemporaneously with the Relevant Date is sufficient to prove the existence of that state of affairs.
The purpose of the insuring clause is not to give the claimant a right to a benefit only if the evidence that exists on or about the Relevant Date is sufficient to justify the insurer forming an opinion that, at that date, the claimant is so disabled as to be unlikely to resume the claimant's previous occupation at any time in the future. The purpose of the insuring clause is to entitle the claimant to the benefit if in fact the claimant as at the Relevant Date is so disabled as to be unlikely to resume the claimant's previous occupation at any time in the future, although the enjoyment of that entitlement is dependent upon the insurer forming the necessary opinion.
Both the claimant's entitlement and the basis upon which the insurer must form the necessary opinion are necessarily dependent upon the nature of the medical and other relevant evidence that is available at and from the Relevant Date. That evidence may be more all less clear and determinative. It is of the nature of human medical conditions and their effect on employment prospects that the true state of affairs may not be reflected in the available evidence as at the Relevant Date. A claimant who appears to be so disabled as to be unlikely ever to resume employment may in fact turn out to be able to do so, and a claimant who appears at the Relevant Date to have prospects of resuming employment may in reality be unlikely ever to be able to do so.
The appearance of the real state of affairs, as at the Relevant Date, and as it appears through the prism of the formation of the opinion required of the insurer, may reasonably change over time as the medical and other relevant evidence evolves.
In principle, the requirement that the state of affairs exists as at the Relevant Date means that any material increase in the level of the claimant's disability will be relevant if, in fact, it was a natural and organic consequence of the claimant's Injury or Illness as it existed at the Relevant Date. Such an increase will not be relevant if it is a result of some extraneous cause occurring after the Relevant Date.
These considerations introduce complex difficulties into the question of how insurers should reasonably treat medical and other relevant evidence that is brought into existence concerning, or relevant to, the state of affairs that existed as at the Relevant Date, as to whether the claimant suffered from Injury or Illness that had the result that the claimant was unlikely ever to return to the claimant's previous employment.
In this respect, in Shuetrim on appeal at [150] and [151] Leeming JA said: [150] There can be no doubt that the medical and psychiatric opinions expressed in 2013 and 2014 were relevant to the consideration by TAL of the probability of Mr Shuetrim being able to return to work after July 2012. In McArthur v Mercantile Mutual Life Insurance at [74], Muir J said: [74] Medical reports coming into existence after the relevant time will be admissible provided that they are pertinent to the determination of the appellant's condition at the relevant time. McMurdo P agreed with Muir J. McPherson JA also agreed with this aspect of Muir J's reasons, adding that it accorded with "the principle that the court does not speculate when it may know": at [23]. The primary judge relied upon that statement of principle. [151] More recently, the High Court's decision in Finch v Telstra Super Pty Ltd (2010) 242 CLR 254; [2010] HCA 36 at [18] is confirmatory of the position. Of a materially identical clause in a trust deed, the High Court said that the member was entitled to submit that: [18] It can now be seen that the reason why I ceased to be a Telstra Employee was a state of affairs making it unlikely that I will ever engage in any gainful Work again. What matters is that that state of affairs arose while I was a Telstra Employee. It does not matter that the symptoms of that state of affairs emerged more clearly after I left Telstra's employment.
The question of how an insurer's duty to act reasonably in the formation of its opinion should be performed will depend in each case on the nature of the claimant's disability, the evidence of events as they have evolved after the Relevant Date, and the precise terms of the medical or other evidence that is provided to the insurer after that date. It is not possible to formulate generally applicable rules. However, it is likely to be unreasonable for an insurer to determine TPD claims on the basis that evidence available contemporaneously with the Relevant Date will always be more reliable than evidence produced at a much later time. The utility of evidence does not necessarily decrease with the passage of time between its availability and the Relevant Date. In the right circumstances, evidence of the claimant's employment prospects derived from medical examinations conducted years after the Relevant Date may be more reliable as to the true employment prospects of the claimant as at that date than more contemporaneous evidence. The later evidence may resolve uncertainty in prediction existing at the Relevant Date. It is likely to be unreasonable for an insurer to reject out of hand later evidence solely on the ground of its remoteness in time from the Relevant Date.

[23]

General Observations concerning the validity of Hannover's rejections

As Hannover rejected five separate applications made by Mr Long, all of which were supported by different evidence, the Court's consideration of whether the determinations made by Hannover were valid and binding on Mr Long, in accordance with the principles considered above, is unavoidably a complex exercise. The complexity is increased by the extent of the arguments put by the parties for and against the claims by Mr Long that the determinations breached, in a number of ways, the duties that Hannover owed to Mr Long in forming its opinion as to whether Mr Long's circumstances satisfied the TPD definition at the Relevant Date.
For the purpose of considering the validity of the various determinations made by Hannover, I will set out and consider the submissions put by the parties, and deal with those submissions as fully as seems reasonable, although that will tend to make the process of reasoning in this judgment opaque.
I note that the reasons for determination are not required to be comprehensive and should not be judged against the standards required for judicial decisions. It follows that it should be acknowledged that it is a difficult exercise for a judge to identify whether the reasons display with sufficient clarity a failure on the part of Hannover to adhere to the terms of the Policy and to adopt a reasonable process of determination that also achieves a reasonable result. I will adopt the approach of being relatively forgiving of arguable deficiencies in reasoning that may be a product of brevity in the course of dealing with a mass of disparate evidence. I will look for the possible presence of relevant deficiencies in Hannover's process of determination that I consider provide a material basis for vitiating the relevant determination.
It is fair to acknowledge the difficulties faced by Hannover's claims managers in responding to a series of repeated applications, supported by evidence in bulk, that is material in one way or another to proof that Mr Long's circumstances satisfied the TPD definition at the Relevant Date, which appear to have been the result of responses to the grounds upon which earlier rejections were made, and which generally did not in direct terms address the question whether Mr Long was TPD at the Relevant Date. It is reasonable to understand that a claimant in Mr Long's position may not have had the funds to obtain a comprehensive set of expert medical opinions. However, the consequence has been that Hannover was provided with a substantial body of incomplete and dissociated medical and other related evidence. The result is that the Court cannot be too exacting in judging the adequacy of the reasoning process displayed by Hannover in its reasons for rejecting Mr Long's claims.

[25]

Hannover's explanation of first rejection

Hannover provided the following explanation for its decision: It is purported by the member that they did become totally and permanently disabled on or about 14 January 2011 as a result of their claimed medical condition of a possible Bipolar Disorder and back condition. The member at the time was employed in the capacity of a full time Retail Manager with Woolworths Limited until being terminated from his employment with effect on 14 January 2011 due to reason other than disablement, namely due to a serious breach of company policy. Therefore for all intention and purpose of our assessment, the Date of Disablement as defined is deemed to have occurred on 14 January 2011 when the member is alleged to have commenced the six consecutive months absence from work that results in total and permanent disablement. A review of the medical evidence presented, would depict of the member over the preceding years having sought consultation and treatment in respect of depressive symptoms and back pain for which appropriate medication and treatment was prescribed. Up until the date of the member's termination of employment, these medical conditions are seem (sic) to be relatively stable and did not cause any significant impediment in the member's ability or performance of his usual occupational duties. It is however reasonably discernible that the event occurring on or about 14 January 2011 did likely cause a temporary demise in the member's psychological state around that time, after which the member did receive appropriate counselling and amendment to his prescribed medications. Notably the member is reported to have not consulted with his usual treating psychiatrist in the past 12 months, nor consulted with his treating psychologist in the last six months. From a psychological perspective, it is the professional opinion of Consultant Psychiatrist Dr Richard Burek that the member is currently fit to return to work as a retail manager on a full or part-time basis, and could do so immediately. With regard to the member's back condition, it is reasonably illustrated within the evidence to hand, and of the member himself reporting that he did manage to continue with all the heavier physical aspects of his role right up until 14 January 2011, despite his underlying and long standing back condition. There is no evidence presented of which would infer that the member's underlying back condition did significantly impede on his ability to perform, or carrying out the inherent duties of his usual occupational role on or about 14 January 2011 or since such date. Accordingly, the evidence does not persuade Hannover Life Re to reach an opinion that the member is totally and permanently disabled in line with the policy definition. The obligation to provide information establishing an entitlement to the TPD rests with the insured…

[27]

Selective reasoning challenge

Mr Long submitted that, even accepting that the description of the information considered by Hannover was a summary rather than a recount of the entirety of the information considered, the content of the summary suggests that the author focused on the information that was less supportive of Mr Long's claim, whilst ignoring or excluding (deliberately or otherwise) information that was supportive of his claim.
Mr Long gave the following examples: 1. First, the summation of the contents of Mr Long's Member Statement omits any reference to Mr Long's statement of the work duties his disability prevents him from performing, and also the attached statement that significantly qualified the extent of Mr Long's daily activities. 2. Secondly, the letter contains a summary of the clinical patient records of Mr Long's then treating general practitioner, Dr Nael Hussain. Mr Long submitted that some of the summaries of the notes of the consultations were incomplete. 3. The summary for 17 February 2011 omitted reference to Mr Long feeling sad, being suicidal, presenting with back pain and being referred to the emergency department. 4. No reference was made to the consultation on 18 March 2011, at which the doctor noted that Mr Long's depression appeared to be getting worse, requiring a mental health plan, urgent treatment by a psychologist and the doubling of Mr Long's daily dose of Pristiq, an antidepressant. 5. The summary of the consultation on 4 May 2011 omitted reference to Mr Long having presented for depression counselling and Dr Hussain's opinion that "some personality issue = THE DEPRESSION". 6. No reference was made to the consultation on 25 May 2011 at which Dr Hussain recorded a diagnosis of Bipolar Affective Disorder 2 and prescribed certain medication. 7. There was no reference to the consultation on 8 June 2011 at which Mr Long complained of ongoing back pain. 8. The summary of the 23 September 2011 consultation was limited to the positive aspects of Dr Hussain's extensive notes of that consultation. No reference was made to Mr Long having moments when he felt down and isolated, not working due to other medical issues, Mr Long being "not good" at dealing with pressure at that moment and "some time no panic attack and not any psychosis". 9. The letter referred to the consultation on 22 March 2012, but not to the substance of that consultation. Dr Hussain noted Mr Long feeling depressed, uninterested, isolated, agitated, unhappy, lacking concentration, unable to sleep, feeling suicidal and having difficulties with his medication. 10. No reference was made to the 17 April 2012 consultation at which Mr Long was again referred to Dr Jesudason. 11. No reference was made to the consultation of 25 May 2012, at which Mr Long was counselled for depression and prescribed an antidepressant. 12. No reference was made to the 11 September 2012 consultation, at which Mr Long presented with depression for which he was counselled, pain and limited movement in his right shoulder, and received a prescription for an antipsychotic. 13. No reference was made to the consultation on 19 September 2012, at which Mr Long was counselled for depression and given a prescription for bipolar disorder medication. 14. While the letter referred to Dr Jesudason's 31 July 2012 report, it made no reference to the 17 June 2013 report, in which Dr Jesudason had opined that Mr Long would require job capacity assessment and retraining before he could attempt a graded return to work.
Mr Long submitted that, taken on their own, each of the omissions set out above could have been a product of oversight, but viewed en masse, and given the tendency to only omit references supportive of Mr Long's claim, the author of the letter took an unbalanced and unfair approach to the evidence presented in support of Mr Long's claim.
Mr Long submitted that, given these criticisms, and the absence of any evidence from the author of the letter, the Court could not be confident that Hannover approached the evidence in a fair, reasonable and balanced manner, or that it considered all of the evidence then available to it in relation to Mr Long's claim.

[30]

Hannover's response concerning first rejection

Hannover's primary response in its opening written submissions was that Mr Long relied upon reports of Dr Hussain and Dr Jesudason, but neither doctor actually expressed an opinion that Mr Long satisfied the TPD definition. It relied upon the fact that both doctors made statements to the effect that Mr Long may be able to return to work "when he improves" or "once he is more stable".
In relation to Dr Jesudason's 17 June 2013 report, which was requested by Hannover for the purpose of considering Mr Long's application, Hannover noted that the report in substance suggested that Mr Long's health had improved, in that, in respect of his bipolar condition she said: "I feel he has responded relatively well to treatment", and in relation to depression: "His response to medications has been positive". Dr Jesudason said: "Mr Long can attempt graded return to work after appropriate assessment, retaining or up skilling".
Hannover submitted that it was irrelevant that it did not specifically refer to this later report by Dr Jesudason in its letter declining cover, as it was clear from the procedural fairness letter that it had listed the report and would take it into account.
Hannover noted that Dr Hussain declined to provide it with a further report, but did provide his practice's progress notes up to 26 April 2013. Those notes, according to Hannover, did not support a diagnosis by Dr Hussain that Mr Long satisfied the TPD definition. Hannover submitted that, as Dr Hussain had declined to provide a further report to it, it could not be criticised for not having summarised all of the potentially relevant parts of the clinical notes.
Hannover submitted accordingly that there was no evidence from Mr Long's treating doctors that he satisfied the TPD definition at 14 January or 14 July 2011, and there was significant evidence from those doctors suggesting improvement and an ability to return to work.
Hannover relied upon the report of Dr Burek as at 26 July 2013, primarily his opinion that Mr Long was "fit to do his previous jobs on a full or part-time basis" and that he "can immediately return to work as a retail manager both now and in the future".
Finally, Hannover noted that it had advised Mr Long in its procedural fairness letter as to the evidence that it would take into account, and Mr Long chose not to provide any further comments or information.

[32]

Sufficiency of Hannover's summary of the evidence

It is true that Hannover's summary of Mr Long's Member Statement omitted to refer to his answer to the question: "Please list all the work duties your disability prevent you from performing. Mr Long had stated: UPPER MANAGEMENT TERRIFIES ME, CUSTOMERS SCARE ME, MEMORY LOSS, ANGER MANAGEMENT ISSUES, CANNOT STAND OR SIT FOR VERY LONG, CANNOT LIFT BECAUSE OF FEAR OF INJURY, UNABLE TO MAKE DECISIONS WITHOUT SUPERVISION, MOOD SWINGS (OFTEN VIOLENT), HAVE DIFFICULTY WITH SIMPLE INSTRUCTIONS, TROUBLE COMMUNICATING VERBALLY.
In the statement of "Current activities" in Hannover's letter, it appears to have summarised Mr Long's response to the request: "Please state your current daily activities", insofar as Mr Long was able to fit his response into the Member Statement, but Mr Long had sought to expand his response with the words "please see attached statement", which included the following information: Owing to the medication I'm required to take for bipolar and depression I sleep a lot. I rarely get out of bed before 9.00 am. Household chores are sometimes started by me but rarely finished owing to either severe back and leg pain or because I cannot stay focused on what I am doing. I generally sleep for a further 2-4 hours during the day. I sometimes let the chooks and ducks out of their pens in the mornings and sometimes remember to go out and lock them up at night. I drive occasionally to visit my GP or have prescriptions filled. I rarely drive out of Nabiac with the exception of driving to Port Macquarie once or twice a year to visit my mother and brother. Driving is a problem physically, it causes back and leg pain. I also have focus issues because of my medications so I tend to be a passenger more often than not. I play computer games occasionally. I do not have any set daily activities, everything depends on how I am when I wake up.
As to the 17 February 2011 consultation, the Hannover letter only noted "feeling down and depressed". The patient record also noted "suicidal councell as well". The letter also omitted reference to Mr Long feeling "sad", although this is hardly an omission since it recorded that he was "depressed".
Hannover's letter did not refer to the 18 March 2011 consultation. The patient record noted: "pt depression getting worse pt for mental health pain needs psychokogist urgent".
It is of some significance to Mr Long's argument that the Hannover letter did record from the 4 March 2011 clinical record: "the member was stable, mood stable; not suicidal", which does describe a medical state more favourable to Hannover's interests than a number of other observations in the clinical notes.
The 4 May 2011 summary in the Hannover letter merely states "referral to Dr Esther Jesudason", while the patient record in fact includes references to depression, including by referring to that mental state in capital letters.
Mr Long is correct that the Hannover letter omits reference to the 25 May 2011 consultation, in which the patient records do record Mr Long as having bipolar disorder 2 but not suicidal.
There is no reference in the Hannover letter to the consultation on 8 June 2011, in respect of which the patient records refer to Mr Long as having back pain.
Dr Hussain's notes of the 23 September 2011 consultation were more extensive than some of the other notes. The Hannover letter only recorded: - reported the member is not sad or upset as before and not suicidal and not aggressive or angry; sleeping better, more energetic and concentration better; relationship with partner and daughter better; no panic attack and no psychosis.
While the letter omits many of the details, most of the omitted information was not, in my view, particularly relevant to Mr Long's application.
The Hannover letter does omit the information referred to in Mr Long's submissions, which includes an omission to mention "some time no panic attack and not any psychosis", which was favourable to Hannover's position.
Mr Long's submission is correct that the only reference to the consultation on 22 March 2012 in Hannover's letter is that the next appointment for a consultation after 29 November 2011 was four months later, on 22 March 2012. Mr Long is correct in his submission that Dr Hussain recorded matters that were favourable to Mr Long's case, including: t fetlin dweprsed isolated lack of interest unhappy aggiyated and lack od concentration and cant sleep at noct pt pt as well felling suicidal and not happu about many thing r/vhis preogss and the medication as well causing some problem fopr him pt felling wered some time isolated and anger burst and not happy vant do many thing confilect with many issyue and sensitive and upaset for small thing sleep a lot lack odf enery and felling hopl;ess and are guilty and balming him self dfor msny being as well fellig buttling the family at stress and dissspoiymnt with him self as will lack pf the inters amnd joy in many things pt pered for cp he is not suicidal but he needs to f/u with the psuchlogist and psychytrist aswell even we cjhangeand incetrd the valpro he develop some side eefct but advised to keep the same dose he had enough support at home
It is true that the Hannover letter does not contain a summary of the patient records for any of the consultations in 2012, being 22 March, 5 April, 17 April, 11 September and 19 September 2012.
The consultations on 5 April and 17 April dealt with ailments other than those that are relevant to Mr Long's application. The 11 September 2012 record does refer to depression and counselling, as does the record for 19 September 2012. The latter records that Mr Long was not suicidal.
It is correct that the Hannover letter summarises Dr Jesudason's 31 July 2012 report but not the 17 June 2013 report. As to the former report, the letter correctly noted that Dr Jesudason: "Opined the member can attempt to return to work once he is more stable". Relevantly, the latter report stated: "I feel he has responded relatively well to treatment" and "His response to medications has been positive". Dr Jesudason also said: 9) I feel he should be assessed by a job capacity assessor as this is beyond the scope of my expertise. 10) I feel Mr Long can attempt graded return to work after appropriate assessment, retraining or upskilling.
Apart from the suggestion that Mr Long should be assessed by a job capacity assessor, the substance of Dr Jesudason's later report was substantially the same as the earlier report summarised in the Hannover letter.
I conclude that it is probably true that, if all of the patient records are analysed objectively as to what was included in the summary in the Hannover letter and what was excluded, Hannover tended on balance to omit information that was not supportive of the decision that it made to reject Mr Long's TPD claim. Nonetheless, the letter did incorporate significant information that would tend to support Mr Long's claim.
However, when this issue is considered in the context of the whole of the information that Hannover had before it when it made its decision, I would not conclude that the slightly selective summary of the information in Hannover's favour was caused by a process of reasoning based upon a selective omission of information unfavourable to Hannover that, if given proper weight, would probably have caused Hannover, acting reasonably, to have accepted the claim.

[33]

Dr Burek's report

There is some force in Mr Long's claim that Dr Burek's report does not contain a sufficient explanation of his reasoning process in forming the opinion that Mr Long could immediately return to work as a retail manager both at the 26 July 2013 date of the report and in the future.
Dr Burek's report was prepared in a conventional manner and contains considerable detail. Dr Burek noted, on page 5 of his report, the history given to him by Mr Long concerning his mental state and the cause of his current condition, which Mr Long attributed to the termination of his employment. Dr Burek noted inconsistencies between that history and what appeared from the notes of his treating psychiatrist, Dr Jesudason.
Dr Burek concluded that Mr Long was an unreliable witness.
Dr Burek concluded that it was "possible" that Mr Long did have Bipolar II Disorder, which was moderately improved with medication.
Dr Burek noted at page 6 that he could not verify that Mr Long had Bipolar II Disorder, and said: "He has not seen his psychiatrist for a year and has not seen a psychologist for six months… However, he is not perturbed by not seeing a psychiatrist for 12 months or psychologist for six months".
Earlier on page 6, Dr Burek's reasoning appears to be: Despite the possibility that he could have Bipolar Disorder, I see no reason why he could not return to part or full-time work in his previous work as a retail manager. This is not to trivialise or minimise his suffering. He has had a deteriorating marriage and finally separation three weeks ago, on top of his mother's death a month ago. I accept that these factors in themselves would cause much distress. However I conclude that these would not prevent him returning to work. Indeed, if he returned to work then it would give him at least some distraction from ruminating over these problems.
Although Dr Burek did not set out his reasoning process extensively, as an experienced psychiatrist, he has plainly made a judgment, after consulting with Mr Long, and considering the medical information that was presented to him, that, on the basis of that information, and Mr Long's presentation during the consultation, his state of health was not such that he would never return to the workforce, but that he could in fact do so immediately. That is a judgment that probably could not be explained more fully by any attempt to elaborate in words the process of reasoning.

[34]

Sufficiency of Hannover's reasoning

In Hannover's Discussion and Summary, it noted that Mr Long's employment had been terminated on 14 January 2011 due to a reason other than disablement, namely, a serious breach of the employer's policy.
Hannover made a judgment, based upon a review of the medical evidence presented, that over the preceding years Mr Long, having sought consultation and treatment in respect of depressive symptoms and back pain, was prescribed appropriate medication and treatment. The result was that, up until the date of termination, the medical conditions seemed to have been relatively stable, and did not cause any significant impediment to Mr Long's ability or performance of his usual occupational duties.
Hannover accepted that it was reasonable to conclude that the circumstances of the termination of Mr Long's employment on 14 January 2011 caused "a temporary demise in the member's psychological state around that time, after which the member did receive appropriate counselling and amendment to his prescribed medications".
Hannover took into account that it had been reported that Mr Long had not consulted with his psychiatrist for 12 months, or his psychologist for six months. That conclusion appears to have been taken from Dr Burek's report.
Hannover then relied upon the professional opinion of Dr Burek that Mr Long was currently fit to return to work as a retail manager on a full or part-time basis, and could do so immediately.
As to Mr Long's back condition, Hannover relied upon the evidence of Mr Long himself reporting that he was able to manage to continue with all the heavier physical aspects of his role right up until 14 January 2011, despite his underlying and long-standing back condition. Thus, Hannover concluded that Mr Long's back injury did not prevent him from carrying on his earlier duties after 14 January 2011.
It is significant that Hannover's conclusion was expressed in terms: "Accordingly, the evidence does not persuade Hannover Life Re to reach an opinion that the member is totally and permanently disabled in line with the policy definition". Hannover correctly noted that the policy wording placed the burden on the member to provide information that established that the TPD test had been satisfied.
In this respect, Hannover's conclusion was that it had not been so satisfied.
As to Mr Long's complaint that Hannover preferred the opinion that Dr Burek to Mr Long's treating practitioners, Dr Hussain and Dr Jesudason, and there was no attempt in the letter to explain the basis of that preference, it must be noted that the letter recorded Dr Hussain's 12 November 2012 opinion that Mr Long was unable to go back to work at that stage "but as he improves he may be able to", as well as Dr Jesudason's conclusion that Mr Long "can attempt to return to work once he is more stable".
Clearly, those opinions are not as definite as the opinion expressed by Dr Burek. However, they were clearly not expressions of opinion that Mr Long was so disabled that he was unlikely to be able to resume his previous occupation or any Other Occupation at any time in the future.
Although there may be imperfections in Hannover's reasoning, and the summary of the evidence that it had before it, I do not consider that it was unreasonable, as at 25 September 2013, for Hannover to have formed the view, by the process of reasoning that it adopted, that Mr Long had not demonstrated that his conditions satisfied the TPD definition in the policy wording.
In this respect, Hannover was entitled to place substantial weight on the strongly expressed view of Dr Burek. Hannover was not reasonably required to seek any further opinions from Dr Hussain and Dr Jesudason, given that the opinions that they did express in response to the questions asked of them by Hannover positively accepted the possibility that Mr Long would be able to find relevant employment in the future.
It must be remembered that, on 2 August 2013, Hannover sent to the Trustee's Group Claims Officer a letter, conventionally described as a procedural fairness letter, which advised of the evidence furnished to Hannover on behalf of Mr Long, and also that Hannover had obtained additional reports from Dr Burek, Dr Jesudason, and Dr Hussain, each of which was attached to the letter.
Hannover invited the Trustee to submit any further evidence it wished, but the Trustee did not do so. It was not unreasonable for Hannover to proceed upon the basis that the Trustee, on behalf of Mr Long, was content for Hannover to make its determination on the basis of the information listed in the procedural fairness letter.

[37]

Hannover's reasons for second rejection

The reasons given by Hannover were as follows: Firstly, the Member's Representative - Firth's Lawyers, have not enclosed reports from Ms Sandy Kastner psychologist dated 27 June 2017 and Dr Weidman dated 16 June 2016 as stated in in their submission letter dated 19 September 2017. Unfortunately the only information received were reports from Dr Prinsloo dated 8 and 14 August 2017 and a Statement of Client signed 11 July 2017. That said, we also note that Firth's Lawyers are now relying on medical reports and information some six years retrospectively. We have previously assessed this claim under the following definition" "Are unable to do any work as a result of Injury or Illness for six (6) consecutive months and in our opinion, at the end of that six (6) months they continue to be so disabled that they are in our opinion unlikely to resume their previous occupation at any time in the future and will be unable at any time in the future to perform any Other Occupation;" Therefore for all intention and purpose of our assessment, the Date of Disablement as defined is deemed to have occurred on 14 January 2011 when the member is alleged to have commenced the six consecutive month's absence from work that results in total and permanent disablement. Just to recap this Member's position at the time of disablement. The member in 2011, was employed in the capacity of a full-time Retail Manager with Woolworths Ltd until being terminated from his employment with effect on 14 January 2011, due to reasons other than disablement, namely due to a serious breach of company policy. From a medical perspective and at the time the insurer made a decision to decline the claim in 2013, we relied upon medical reports from: 1. Dr Hael Hussain dated 12.11.2012 2. Clinical patient records Dr Hael Hussein 3. Records of Dr Brain Neale dated 23.5.2011 4. Dr Esther Jesudason dated 31.7.2012 5. Dr Richard Burek dated 26.7.2013. The overriding medical evidence at that time was for the Member to resume his normal duties. Psychiatrist - Dr Richard Burek opined that the member was currently fit to return to work as a retail manager on a full or part-time basis, and could do so immediately. Given that we are now 6 years post the date of disablement, and the fact that the Member cannot provide further compelling evidence in the way of specialist opinion closer to the date of disablement, along with any financial evidence that he has not earned any income since 2011. We are of the opinion that the Member is not totally and permanently disabled in line with the policy definition. The obligation to provide information establishing an entitlement to the TPD rests with the insured Member. At this time, we are not satisfied this has been met and are maintaining our previous decision to deny the claim…

[38]

Mr Long's submissions concerning second rejection

Mr Long based his attack on the reasonableness of Hannover's second decision to reject his TPD claim on the fact that it had additional material, being Mr Long's statement dated 11 July 2017, a report of Mr Long's then general practitioner, Dr Prinsloo dated 8 August 2017 and Dr Prinsloo's clinical notes covering the period 28 March 2017 to 7 August 2017.
Mr Long complained that Hannover's 5 October 2017 letter contained summaries of the first two, but no reference was made to the clinical notes.
Mr Long submitted that the summary of Mr Long's statement was "extremely brief and limited to a single issue - the plaintiff's failed attempt to return to work at Lilydale Larder, which occupied 1 of the 25 paragraphs of the statement". Mr Long asked the Court to draw the inference that Hannover failed to have regard to the balance of the statement or the clinical notes.
Mr Long submitted that, in the "Discussion and Summary" portion of the 5 October 2017 letter, no attempt was made to engage with the content of the new material. For example, Hannover did not appear to have turned its mind to the implications of the failure of Mr Lloyd's attempt to return to work at Lilydale Larder.
As a separate submission, Mr Long submitted that the new material seemed to have been dismissed out of hand, because it was said to be "medical reports and information some six years retrospectively". Mr Long submitted: first, that the new material was not expressed retrospectively; and second, it was relevant evidence to his lack of recovery over the four years since his TPD claim was first dismissed on 25 September 2013. Mr Long submitted, in the circumstances, that the Court should conclude that Hannover failed to have any regard to the new material.
Additionally, Mr Long submitted that the 5 October 2017 letter failed to set out the reasoning process behind Hannover's opinion that the claim should be declined. In particular, it did not explain why Hannover disregarded the content of Mr Long's statement and Dr Prinsloo's report and clinical notes.

[40]

Adequacy of Hannover's consideration of the evidence

As I have explained above, evidence of a TPD claimant's physical and mental capacity to work produced long after the Relevant Date may be relevant to the question of whether the claimant satisfied the TPD definition at the relevant date. The prognosis for a particular injury or disability as at the date of its occurrence may be unclear, because the future is not often easily foretold, and there may be uncertainty about the possibility of recovery. However, evidence of an injury or disability coming into existence long after the Relevant Date that supports the conclusion that at that time the claimant satisfies the TPD definition may be of doubtful weight if it does not support the conclusion that the current physical and mental condition of the claimant is a manifestation of the claimant's condition at the Relevant Date. Difficult factual questions may arise in the attempt to determine whether the claimant's condition at the later date has been materially aggravated by circumstances occurring after the Relevant Date, so that the claimant satisfies the TPD definition, whereas the claimant would not have done so as a result of the circumstances as they existed at the Relevant Date.
Mr Long's 17 July 2017 statement included the following information: 6. In the time leading up to my termination in January 2011, I was in quite a lot of mental anguish and was not thinking properly. I was prescribed Cymbalta. I refer to the clinical notes of Dr. Hussain for a full reading of my treatment and medications. 7. Suffice to say, I was not thinking coherently when I gave the charity, Ronald McDonald House a discount off a fund-raising event where they were purchasing some champagne. I used my personal discount card to give them a discount towards their charitable purposes. My employer saw this and terminated my employment. 8. This action by my employer was devastating to me mentally. I believe that it was clearly a vindictive act since it was my right as a manager to apply a discount but what I did wrong was I used my personal discount card as opposed to making the discount under manager's discretion which I had done many times previously with management's knowledge…
By providing this information, Mr Long apparently sought to persuade Hannover that his mental disability predated the termination of his employment and was a cause of that termination. Mr Long said that the termination of his employment was "devastating", and thus aggravated the disability he suffered as a result of his pre-existing psychological condition.
However, as I have recorded above at [84]-[87], in final oral submissions counsel for Mr Long did not embrace a claim that pre-existing Illness or Injury, in the nature of bipolar condition and back pain, were the effective cause of what might have been the out of character conduct of Mr Long in breaching the terms of his employment contract, so that the pre-existing Illness or Injury might have been the real cause of the termination of Mr Long's employment. Counsel bound Mr Long's case to an acknowledgement that the direct and immediate cause of the termination of Mr Long's contract of employment was his wrongful conduct, and that it was the consequences of the termination that exacerbated the pre-existing conditions from which Mr Long suffered, thus causing him to have acquired Illness or Injury that collectively satisfied the TPD definition in the Policy.
Mr Long then said, in par 9, that thereafter he had continued to battle with mental health issues and his ongoing back pain, and that, to the day of his statement, he was still disabled in relation to his depression, bipolar disorder, anxiety and his back injury.
In pars 10 to 21, Mr Long set out a detailed explanation of his mental and physical health since the date of the termination of his employment, and explained the circumstances that led him to say: 20. I cannot foresee myself being able to work in retail like I have done previously because it requires you to be able to engage with the general public and carry on light banter. I do not like to speak to strangers or others and in fact my social life has essentially ceased. I do not mix with anybody and in fact I have no friends in Hobart or anywhere in Tasmania. All my friends who I engaged in previously in the Forster area have long since ceased. I just did not want to engage with them especially after I was terminated. 21. I would not be able to work in any job for which I was previously able to perform for physical reasons as well as mental health reasons. I just would not be able to remember what needed to be done in any occupation. I would not be able to organise my thoughts, multitask or problem solve. I would not be able to lift even the minimal weights because even repetitive lifting of 5 kg causes increased pain if I do it more than a few occasions.
Mr Long then, in pars 22 to 24, dealt with his attempt to return to work at Lilydale Larder in October 2014. Mr Long said: 22. In October 2014 I thought I would be well enough to work and I obtained a position as a hotel manager at Lilydale Larder in Lilydale, Tasmania. I worked full-time for about five weeks before my mental health and physical disabilities caught up with me and caused me to cease. In fact my back went out on me after about two weeks and I struggled to continue. When I got home at night, I was barely able to get in the front door on my own. I therefore decided that it was not worth jeopardising what health I had left and resigned.
Mr Long said in par 23: "… I had difficulty communicating with customer's (sic) at the hotel and as a small town it is an integral part of a hotel manager or wait staff's role. I just could not continue to live the lie being able to work".
There is some force in Mr Long's submission that Hannover excessively discounted the information in his statement on the incorrect ground that evidence of Mr Long's circumstances over six years after the date of the termination of his employment was not material to whether he satisfied the TPD definition as at the Relevant Date. That information may not have been decisive, but insofar as it related the continuity of Mr Long's situation over the period, it was relevant.
However, it is not entirely clear that Hannover ignored the information. It was summarised in two bullet points on the second page of Hannover's rejection letter. The reference to Mr Long's employment at Lilydale Larder focused on Mr Long's cessation of that employment because his "mental health and physical disabilities caught up with [him] and caused [him] to cease". Hannover did provide a brief summary of Mr Long's stated circumstances since early 2011, and his claim that he had been unable to work because "I do not have the physical and mental stamina to perform any role that I have performed previously".
In these circumstances, I am not persuaded that Hannover unreasonably ignored the information given by Mr Long in his statement, although I accept that there is some room for doubt on that subject.
In her 8 August 2017 report to Mr Long's solicitor, Dr Prinsloo offered the following opinion: Mr Long suffers from ongoing chronic neuropathic pain in the lower back and lower lower (sic) limbs. He also suffers from Bipolar disorder - mixed mood diagnosed in 2011
Dr Prinsloo said that most of Mr Long's recent treatment was for the pain that he suffered, and then she set out a list of the nine types of medication that were being administered to Mr Long.
Dr Prinsloo concluded by saying: His prognosis is guarded in that he will continue to have chronic back pain which will need ongoing management. The bipolar disorder is also a chronic condition which needs ongoing management and supportive counselling.
While Dr Prinsloo expressed the opinion that Mr Long's physical and mental injuries were chronic, and would require ongoing management, she did not direct her attention to the question of whether those injuries had the effect of satisfying the TPD definition in the Policy.
From my reading, the information contained in Dr Prinsloo's clinical notes may not have had great significance for the purposes of a lay claims manager considering Mr Long's TPD claim. There are references to chronic pain, depression, "poor sleep still, mood still up and down", and attendance at a pain clinic.
As was the case for Mr Long's statement, it is unclear from Hannover's rejection letter whether it incorrectly discounted the recent medical evidence on the ground that it was not sufficiently contemporaneous with the Relevant Date. Hannover did state that Mr Long's lawyers were "now relying on medical reports and information some six years retrospectively". That statement does not convey, in any clear way, what Hannover's understanding was concerning how the medical evidence could be relevant to its determination. Hannover stated that the "overriding medical evidence at that time was for the Member to resume his normal duties", referring to the opinion expressed by Dr Burek. Hannover's conclusion was expressed in the following paragraph: Given that we are now 6 years post the date of disablement, and the fact that the Member cannot provide further compelling evidence in the way of specialist opinion closer to the date of disablement, along with any financial evidence that he has not earned any income since 2011. We are of the opinion that the Member is not totally and permanently disabled in line with the policy definition.
Hannover also reminded Mr Long that it was his obligation to provide information establishing his entitlement to the TPD payment.
The reasons given by Hannover for its second rejection of Mr Long's claim provide some basis for concluding that Hannover had a false understanding of the potential relevance of medical evidence brought into existence at a time removed by years from the Relevant Date. That is because of the reference by Hannover to the reliance "on medical reports and information some six years retrospectively", and the observation that, six years post the Relevant Date, "the Member cannot provide further compelling evidence in the way of specialist opinion closer to the date of disablement". These observations tend to show that Hannover believed that medical evidence coming into existence years after the Relevant Date could be discounted, irrespective of its significance to Mr Long's employment prognosis as at that date, simply because of the lapse of time. The observations also tend to show that Hannover wrongly acted on the basis that medical evidence concerning Mr Long's employment prognosis closer in time to the Relevant Date was inherently more probative than medical evidence produced years afterwards. To the extent that Hannover proceeded on that basis, it may wrongly have ignored the possibility that medical evidence expressed in appropriate terms concerning Mr Long's employment prognosis years after the Date of Relevant Date may have been probative as to the real prospects of Mr Long being able to resume his previous occupation as at that date, when those prospects may have been uncertain on the basis of the medical evidence that was relatively contemporaneous to the Relevant Date.
However, additionally, Hannover said that Mr Long had not provided "further compelling evidence in the way of specialist opinion". I make that observation because, for the reasons I have explained above, I do not read Dr Prinsloo's report as expressing any positive opinion that Mr Long satisfied the TPD definition at the date of Dr Prinsloo's report. Further, it did not state an opinion that Mr Long's satisfaction of the TPD definition was caused by his physical and mental condition at the Relevant Date, and not by any new cause occurring after that date.
Consequently, I am not satisfied that Mr Long has demonstrated that the process of reasoning in Hannover's second rejection letter, or the conclusion reached, was so unreasonable as to be a breach of Hannover's duty of good faith to Mr Long. As I have acknowledged, I accept that there are infelicities and ambiguities in the way the letter was expressed. But I do not conclude that those matters were material, in the sense that Hannover determined to reject Mr Long's TPD claim in the face of information provided to the date of the rejection that reasonably ought to have caused Hannover to have accepted the claim.
My conclusion would probably have been to the opposite effect, if the additional medical evidence obtained by Mr Long some six years after the Relevant Date had been reasonably compelling in support of a finding that, by reason of Mr Longman's present circumstances and employment prospects, he satisfied the TPD definition as at the Relevant Date.

[42]

Hannover's reasons for third rejection

The reasons given by Hannover were as follows: As stated in our most recent letter dated 5 October 2017, Firth's Lawyers are relying on medical reports and information some six years retrospectively. They have now submitted additional medical opinion which almost exclusively remains six years retrospective and not applicable to the relevant period of assessment. Whilst we are in receipt of the clinical records of Nabiac Village Medical Centre which are relevant to the applicable period of assessment, they do not contain the opinion of a treating physician certifying the member Totally & Permanently Disabled in accordance with the terms and conditions of the policy during the relevant period of assessment. We have previously assessed this claim under the following definition "Are unable to do any work as a result of Injury or illness for six (6) consecutive months and in our opinion, at the end of that six (6) months they continue to be so disabled that they are in our opinion unlikely to resume their previous occupation at any time in the future and will be unable at any time in the future to perform any Other Occupation;" To satisfy the applicable definition of Total and Permanent Disablement, the member also has to satisfy that his incapacity from work is a result of either an illness or injury. It has already been established and confirmed in our letter dated 5 October 2017 that the member was terminated from his employment due to a breach of company policy not as a result of an illness or injury. Our letter dated 5 October 2017 also established the medical opinion HLRA relied upon to decline the claim in 2013. We again list this below; 1. Dr. Hael Hussain dated 12.11.2012 2. Clinical patient records Dr Hael Hussein 3. Records of Dr. Brain Neale dated 23.5.2011 4. Dr Esther Jesudason dated 31.7.2012 5. Dr. Richard Burek dated 26.7.2013. The balance of medical evidence relevant to the applicable period of assessment supports that the member had capacity to work in a role that he was suited by way of Education, Training or Experience. The obligation to provide information establishing an entitlement to a TPD benefit rests with the insured which HLRA believes the member has not satisfied. The evidence in its totality does not persuade Hannover Life Re to reach an opinion that the member is Totally and Permanently Disabled in line with the policy definition as stated above…

[43]

Mr Long's submissions concerning third rejection

The first submission made by Mr Long is based on Hannover's references to Mr Long relying on medical reports and information "some six years retrospectively" and similar expressions. He submitted: "No attempt is made to explain why the fresh evidence is irrelevant to an assessment of the plaintiff's prognosis as at July 2011". The premise of this submission is that the insurer has an obligation to explain why evidence produced many years after the relevant date is irrelevant to the determination.
In this context, Mr Long observed that Hannover had placed substantial weight on Dr Burek's report, which was prepared some two years after the relevant date, without explaining why that report was highly relevant, but comparable evidence produced six years after the Relevant Date was not relevant.
Mr Long submitted that Hannover breached its duty to him by "unreasonably excluding from consideration all of the new evidence proffered by the plaintiff".
Mr Long referred to the statement in Hannover's Discussion and Summary which said: "The member also has to satisfy that his incapacity from work is a result of either an illness or injury". The letter then referred to the fact that it "has already been established and confirmed in our letter dated 5 October 2017 that the member was terminated from his employment due to a breach of company policy not as a result of an illness or injury".
Mr Long submitted: "Whilst it is true that the cessation of work due to illness or injury is a concept present in some TPD policies, that concept is foreign to the term "Total and Permanent Disablement" as defined in the Policy. All that is required to satisfy the first limb of the definition in the Policy is that the plaintiff has ceased work and, from the time he ceased work, has been disabled for 6 consecutive months as a result of illness or injury". Mr Long submitted that, where the manner in which the claimant's work is terminated is "provocative" of the claimant's psychological illness and resulting incapacity for work, the first limb of the TPD definition is satisfied. Mr Long therefore submitted that Hannover had taken into account an irrelevant consideration. I have already dealt with this submission above in the context of my consideration of Issue [2].
Thirdly, Mr Long challenged Hannover's conclusion that: "The balance of medical evidence relevant to the applicable period of assessment supports that the member had capacity to work in a role that he was suited by way of Education, Training or Experience". Mr Long acknowledged the thrust of Dr Burek's report, but referred to the reports of Dr Hussain and Dr Jesudason that stated opinions to the effect that, at the date of the opinions, Mr Long was unable to go back to work, but that he may be able to when he improves. I take Mr Long's point to be that the evidence of subsequent experience was that he had not improved.
Mr Long submitted that it was a "gross simplification" to suggest that the balance of the evidence supported the conclusion that Mr Long had capacity to work.

[44]

Hannover's response concerning third projection

Hannover's response focused on Dr Prinsloo's certificates dated 14 August 2017 and 29 August 2017, a medical certificate completed by Dr Weidmann on 19 September 2017, and by Ms Kastner on 27 June 2017.
The substance of Hannover's submission, in response to Dr Prinsloo's certificates to the effect that at the dates of the certificates, Mr Long was TPD and "has been so incapacitated since 14/01/2011", was that they were based on consultations with Mr Long and reviewing clinical notes from 3 February 2017 to 22 June 2017.
Hannover submitted, in relation to the first of the certificates, that Mr Long's solicitors did not explain to Dr Prinsloo the need to give an opinion as at the time of disablement. Further no regard was had to medical evidence prior to the time of the consultations.
Hannover submitted, in relation to the second of Dr Prinsloo's certificates, that she did not express any opinion as to the date of initial incapacitation, and also no regard was had to the prior medical evidence.
Hannover asserted that Dr Prinsloo's notes recorded that Mr Long had consulted her on his third visit on 27 April 2017 because he "wants to apply for total / permanent disability".
In response to Dr Weidmann's certificate of permanent incapacity, Hannover again submitted that no date was provided to the doctor concerning the commencement of incapacity, and no opinion was expressed as to the date of the initial incapacitation.
Dr Weidmann's initial consultation with Mr Long was on 16 June 2017.
Hannover submitted that Ms Kastner saw Mr Long once on 22 June 2017, and she did not express a view on incapacity or prognosis, either as at 2017 or as at 2011.
Hannover then made the general submission, in respect of the certificates and letters relied upon by Mr Long from 2017 and 2018, that Mr Long did not ask the correct questions of the doctors concerned, and their responses answered the wrong questions and should not be admitted or should not be given any weight.
Specifically, Hannover submitted that the solicitors' instructing letters did not provide to the doctors the whole of the relevant definition, by omitting the "Other Occupation" definition, and accordingly the doctors' statements expressed irrelevant opinions.
Therefore, Hannover submitted, no weight could reasonably be given to Dr Prinsloo's or Dr Weidmann's certificates in relation to the proper questions concerning Mr Long's alleged TPD in 2011.
Finally, Hannover submitted that Mr Long did not provide any contemporaneous evidence of TPD, as at the asserted Date of Disablement of 14 January 2011, or during the period 14 January to 14 July 2011, or as at 14 July 2011.

[46]

Hannover's response to additional medical evidence

It will be instructive to note aspects of Hannover's summary of the evidence in relation to the two Permanent Incapacity Medical Certificates completed by Dr Prinsloo and the one completed by Dr Weidmann.
Hannover stated that both doctors could only provide a "retrospective opinion", because they first consulted with Mr Long on dates in 2017.
Hannover said specifically of Dr Prinsloo's certificates: "She can only attest to the members (sic) medical status effective from 28 March 2017 onwards".
Hannover then noted that the only doctor that Mr Long had consulted during the "relevant period of assessment" was Dr Hussain. Hannover noted that Dr Hussain's clinical records did not state that Mr Long's condition was permanent, or that his condition would render him unlikely to perform any occupation that he was suited by way of education, training or experience at any time in the future.
Hannover stated that Mr Long's self-completed disability questionnaire dated 25 August 2017 advised of his physical and mental status effective August 2017 "some 6 years after ceasing work. There is no reference to what his physical and mental status was in 2011".
Then, Hannover recorded that the records from Royal Hobart Hospital effective from April 2016: "are not relevant to the applicable period of assessment".
In respect of Ms Kastner's report dated 22 June 2017, the initial consultation date was 22 June 2017, and according to Hannover: "therefore she is unable to comment on the members (sic) mental state over 6 years prior".
It is a fair conclusion that, although Hannover's written submissions put forward arguments about why the certificates and opinions expressed by the doctors in 2017 could reasonably have been discounted by Hannover for objective reasons, the actual reasoning expressed by Hannover, in its third rejection letter, demonstrates that Hannover discounted the opinions because, as a matter of principle, the new evidence dealt with circumstances in 2017, which was irrelevant to the relevant period, which was from 14 January to 14 July 2011.
In its rejection letter, Hannover said that the doctors could only express a "retrospective opinion", and Dr Prinsloo could only attest to Mr Long's medical status effective from 28 March 2017 onwards. The records of the Royal Hobart Hospital from April 2016 were "not relevant to the applicable period of assessment". Mr Long's disability questionnaire was relevant to his physical and mental status in August 2017, but apparently irrelevant because it did not deal with his status in 2011.
It is in this context that Hannover referred back to the medical opinion that it relied upon in 2013 to decline Mr Long's claim. It then said: "The balance of medical evidence relevant to the applicable period of assessment supports that the member had capacity to work…"
It seems clear that Hannover was only giving significant weight to the medical evidence produced in the period 2011 to 2013. Even then, the opinion of Dr Burek, upon which Hannover relied so heavily, was dated 26 July 2013, which was a full year after the next latest medical opinion upon which Hannover acted.
It will be necessary to consider the substance of the new evidence provided by Mr Long in support of his third application. It may be that this evidence did not comprehensively deal with the continuity of Mr Long's mental and physical incapacity since the Relevant Date, and exclude the possibility that subsequent events had been the operative cause of his TPD. However, medical evidence that, at a point some six years after the relevant date, Mr Long satisfied the TPD definition is not in principle irrelevant. It could not reasonably have been effectively discounted completely. Evidence of that nature logically requires consideration of the evidence relevant to the earlier period, for the purpose of making a proper and reasonable judgment as to whether the evidence, taken as a whole, can be linked together to prove that the Mr Long satisfied the TPD definition at the Relevant Date. If Mr Long satisfied the TPD definition some six years after the Relevant Date, and the evidence as at the Relevant Date, or nearly so, is consistent with Mr Long possibly being TPD, then the fact that Mr Long's circumstances satisfied the TPD definition at the Relevant Date may be the correct conclusion to draw, if there is not afterwards some new cause of that outcome.

[47]

Consideration of additional medical evidence

It will now be appropriate to consider, in more detail, the evidence that was additional to the doctors' certificates provided by Mr Long's solicitors in their 17 October 2017 letter, at least insofar as it was dealt with in Hannover's rejection letter, or has been the subject of the parties' submissions. The solicitors provided 20 items of evidence, not all of which contained substantial new information.
The solicitors provided a Permanent Incapacity Medical Certificate of Dr Prinsloo dated 14 August 2017.
This is a one-page certificate apparently prepared by the solicitors containing the instruction: "Read the following information and if you agree sign and date." The certificate then states in type: I confirm that after my consultations with Martin Long and reviewing clinical notes from 3 February 2017 to 22 June 2017, I have observed clinical signs or symptomology that cause me to conclude he has no real chance of being able to engage in his own occupation and any occupation for which he is reasonably suited by education, training or experience, on a regular basis, and has been so incapacitated since 14/01/2011. Clinical signs, symptomology and reasons in support of my opinion: [The form then provides space for a response from the doctor in handwriting. Dr Prinsloo inserted the following.] Chronic pain, inability to drive for long time, do heavy lifting, do repatitive (sic) stacking. Martin's ability to drive, manage customer's (sic) is also impaired by the sedating side-effects of his long-term pain medication. The chronic pain also worsens his mood disorder.
It should be accepted that the process involved in preparing the certificate, and its brevity, might reasonably be taken by Hannover to diminish its weight. It does not follow that it was reasonable for Hannover to entirely discount the certificate.
Mr Long's solicitors provided to Hannover their letter to Dr Prinsloo dated 26 July 2017, in which they requested her to complete the certificate, as item 32 to their later 17 October 2018 letter in support of Mr Long's fourth claim for the TPD benefit. The letter of instructions was not available to Hannover at the time it rejected Mr Long's claim for the third time. Nonetheless, Hannover relied upon the letter of instructions in its written submissions concerning the third claim.
It must be observed that the letter is in a relatively conventional form, of the type written by solicitors to experts to obtain their opinions. The letter of instructions included the following: We advise that in order for Martin Long to be successful in his claim for TPD benefits, we must be able to establish that he meets the definition under the relevant policy of insurance which is: "the insured person is unable to do any work as a result of injury or illness for six consecutive months and in our opinion, at the end of that six months they continue to be so disabled that they are in our opinion unlikely to resume their previous occupation at any time in the future and will be unable at any time in the future to perform any other occupation". We advise that cases have held that it is a person's education, training or experience at the date of incapacity that is relevant and not any future vocational retraining. Therefore, if a person could only find suitable alternative regular employment after vocational retraining, they would generally be successful in their claim. Additionally, other cases have held that a person must have a real chance of obtaining regular (not casual) employment taking into account their education, training, experience, injuries and disabilities and their ability to perform this work day in and day out without significant time off work which would impact on their ability to continue to perform regular employment for the remainder of their working life. If you are of the opinion that Martin Long meets the relevant definition, when completing the Permanent Incapacity Medical Certificate ('PIMC') can you ensure that you provide reasons, where appropriate, for your opinion. We are instructed that Martin Long ceased working on or about 14/01/2011 and we ask you to assume that this is correct when completing the PIMC…
Hannover submitted that the letter of instructions did not explain the need to give an opinion as at the time of disablement. In my view, given that Dr Prinsloo was an apparently experienced doctor, the inclusion of the definition of TPD in the letter of instructions would have led her to understand that the claimant must be "unable to do any work as a result of injury or illness for six consecutive months and … at the end of that six months… be so disabled that they are … unlikely to resume their previous occupation at any time in the future…" That would cause an experienced doctor to focus her attention on the relevant six-month period.
I accept Hannover's submission that there was no evidence that Dr Prinsloo was provided with any medical evidence for the period prior to her first consultation with Mr Long.
Hannover is also correct in pointing out that, although the letter of instructions referred to "any other occupation", it did not explicitly state the definition of that term in the Policy, but that deficiency is irrelevant for the reason that I have given above.
In these circumstances, I do not accept Hannover's submission that it was reasonable for Hannover not to give any weight to Dr Prinsloo's certificate, because it expressed an "irrelevant opinion".
Mr Long's solicitors provided Hannover with a Permanent Incapacity Medical Certificate of Dr Weidmann dated 19 September 2017.
This certificate was in the same form as that which was earlier completed by Dr Prinsloo, and contained the following handwritten reasons: … [?] Bipolar [?] mixed state, insomnia, periods of debilitating depressed mood, irritability, anxiety, signs [?], [?], reactivity of affect. He also [?] chronic pain.
Unlike Dr Prinsloo's first certificate (in which the Relevant Date was typed in), the typed part of the certificate completed by Dr Weidmann contains the words "and has been so incapacitated since" with the date having been omitted. Hannover's third rejection letter stated: "Dr Weidmann's certificate was un-dated". As the certificate in fact bore the hand-written date 19/9/17, Hannover's letter may have been referring to this omission.
If this omission had been thought at the time by Hannover as having been significant, it might have requested that the obviously unintentionally incomplete certificate be corrected.
It may have been reasonable in the circumstances for Hannover only to have treated Dr Weidmann's certificate as having been relevant to the physical and mental capacity of Mr Long as at 19 September 2017 and into the future. For the reasons that I have given above, that does not mean that the medical opinion of Dr Weidmann was irrelevant to the question that Hannover was required to determine.
Next, Mr Long's solicitors submitted a Permanent Incapacity Medical Certificate of Dr Prinsloo dated 29 August 2017.
This second certificate of Dr Prinsloo was in the same terms as the earlier one, and the discussion of that report above applies.
Mr Long's solicitor's letter included a report of Sandy Kastner, clinical psychologist, dated 27 June 2017.
The report stated that, in the week prior to 22 June 2017, Mr Long was assessed as having extremely severe depression, extremely severe anxiety and moderate stress.
It is true that Ms Kastner did not express any direct opinion that Mr Long, at any time, satisfied the TPD definition. However, it does contain evidence concerning Mr Long's physical and mental condition over his life that is consistent with his TPD claim, and of some relevance to it, although not at all determinative.
In my view, by the time Hannover rejected Mr Long's claim for the third time, it had become sufficiently clear, from the reasons for the rejection, that Hannover was acting upon the incorrect principle that it could reject any medical evidence as having material significance, if it was created as late as 2017, whether the medical opinions expressed related to the Relevant Date or not. Hannover did not take the medical evidence that was available, and weigh it against the other evidence. Rather, it simply rejected the evidence. Consequently, Hannover did not properly balance the new evidence against the opinions expressed by Dr Burek on 26 July 2013. Had it attempted to do so, it ought to have taken account of the fact that Dr Burek's opinions were baldly stated, without any real explanation. Also, the evidence of Mr Long's subsequent unemployment, and the later medical opinions, were capable of putting Dr Burek's opinions in a different context than may have appeared to be the case at the time Dr Burek expressed his opinions.
This conclusion flows from the observation by Hannover that Mr Long's lawyers were "relying on medical reports and information some six years retrospectively". Hannover then said explicitly that such retrospective evidence was "not applicable to the relevant period of assessment". Hannover then identified as being "medical evidence relevant to the applicable period of assessment" the evidence that it listed that was brought into existence between 2011 and 2013. It is apparent from the terms of the third rejection letter that Hannover dismissed the significance of the new medical evidence and gave it no real consideration.
Accordingly, I consider that, at the time Hannover rejected Mr Long's claim for the third time, it did so on the basis of a process of reasoning that did not accord with its duty to Mr Long.

[51]

Hannover's response concerning fourth rejection

Hannover submitted that the fourth rejection was reasoned and reasonable, and particularly given the history, Hannover was not required to set out in detail all of the evidence. It submitted that the letter clearly demonstrated that it had reviewed the further material and given sound reasons for maintaining its prior decision, including reasons why the further letter of Dr Prinsloo was not given determinative weight.
Hannover approached the matter by dividing the new evidence into the 5 December 2017 report of Dr Prinsloo, which it characterised as "the only new evidence presented by the plaintiff suggesting that he might have been TPD in mid-2011", with the other new evidence, which it characterised as not containing opinions as to the prognosis or incapacity of Mr Long "to work as at any time or earlier" than the date the evidence was produced (to use as an example, Hannover's response to Dr Weidmann's 16 June 2017 report to Dr Prinsloo).
As to Dr Prinsloo's 5 December 2017 report, Hannover acknowledged that Dr Prinsloo was, for the first time, provided with clinical notes from 2008 to 2012. Hannover observed in its submissions that the clinical notes were unidentified.
Hannover focused on that part of Dr Prinsloo's 5 December 2017 letter where she wrote that Mr Long was stable, had lost some weight and stopped smoking, and said: "The prognosis in terms of full recovery is guarded". It then submitted: "Notwithstanding those matters, she wrote based upon others' unidentified clinical notes, in the form of words requested by Firths, 'had I been his treating dr. 2011, I would have been of the opinion that he was Totally and Permanently disabled'". Hannover submitted that Dr Prinsloo was asked and answered the wrong question, for the same reason as it gave in respect of the doctor's earlier reports.
It will be convenient to deal with Hannover's submissions as to why it was reasonable for it to discount the other new evidence in the context of a consideration of that evidence.

[52]

Adequacy of Hannover's consideration of the evidence

I will deal first with Dr Prinsloo's 5 December 2017 report.
As noted above, Mr Long's solicitors provided Dr Prinsloo with Mr Long's former doctor's clinical notes from 29 December 2008 to 12 November 2012. Those clinical notes do not appear to be included in the evidence.
By par 8 of their letter of instructions, the solicitors noted that Dr Prinsloo had signed the Permanent Incapacity Medical Certificate confirming that Mr Long met the definition of TPD. They asked: "… Could you kindly confirm after reviewing the clinical notes that, had you been his treating doctor as at mid-2011, you would have been of the opinion that he was Totally and Permanently Disabled as defined and expressed by you at that date". As noted above, in an earlier letter of instructions, the solicitors had given Dr Prinsloo the TPD definition, albeit not with the extended definition of Other Occupation.
In its fourth rejection letter, Hannover referred to Dr Prinsloo's opinion, stated in her 5 December 2017 report that, had she been his doctor in 2011, she would have considered him to be TPD.
In her report, Dr Prinsloo commented on a number of Mr Long's disabilities. She observed: "3) Martin was stable during the last 5 visits, mood seems well controlled on current regime and pain adequately managed, provided he adhered to the current medication regime and did not over exert himself physically…"
Dr Prinsloo then noted that Mr Long's main ongoing diagnoses were bipolar disorder and neuropathic pain, with a new diagnosis of glucose intolerance. Mr Long's bipolar disorder was stable on the current regime. His peripheral neuropathy and chronic pain was relatively stable on an ongoing regime of combined pain clinic input and general practitioners support and counselling.
Dr Prinsloo then said: 6) The prognosis in terms of full recovery is guarded I do not think he will make significant progress towards being cured - his conditions are lifelong - at best we can try to control the complications and slow down the progress of deterioration 7) his complaints and disabilities listed in the statement of 11/7/2017 are consistent with his treatment and prognosis 8) After reviewing the clinical notes, had I been his treating dr 2011, I would have been of the opinion that he was Totally and Permanently disabled.
Dr Prinsloo then listed Mr Long's medical disabilities, some without date and others dated from 2011.
The reasoning in Dr Prinsloo's report is relatively brief, although it is in broad terms as elaborate as that contained in Dr Burek's report.
Hannover did not, in its rejection letter, rely upon the argument that it put in its written submissions, to the effect that Dr Prinsloo was asked and answered the wrong question. The reasoning behind that argument was that Mr Long's solicitors had only asked whether Mr Long satisfied the TPD definition as at the date of the report and not as at the Relevant Date.
That argument cannot be accepted, in the case of the fourth rejection, in relation to this report by Dr Prinsloo, as she was specifically asked to state the opinion she would have given, if she was Mr Long's treating doctor in mid-2011, and that is the opinion that she gave.
There is a legitimate issue concerning the weight that ought to have been given to Dr Prinsloo's opinion in the circumstances, but it could not reasonably have been ignored on the basis that it addressed the wrong question.
I will now turn to a consideration of the other new information provided in support of Mr Long's fourth TPD claim.
In its rejection letter, in addition to the 5 December 2017 report of Dr Prinsloo, Hannover listed reports of Dr Jesudason dated 11 August 2011 and 19 May 2011. Earlier, Mr Long had only provided a report by this doctor dated 31 July 2012.
In its Discussion and Summary, Hannover did not make specific reference to the contents of these new reports by Dr Jesudason.
Neither of Dr Jesudason's reports contained any opinion as to whether Mr Long satisfied the TPD definition. They were not prepared for that purpose. Dr Jesudason is a psychiatrist and the reports were to Dr Hussain, Mr Long's treating general practitioner.
The earlier of the reports observed that, in January 2011, Mr Long was sacked from his job for giving an unauthorised discount to a customer. Dr Jesudason said: "In this context he had lost his self esteem, confidence, felt targeted (sic) and contemplated suicide…"
Part of the history taken by Dr Jesudason was: … He has had circumscribed episodes of being elated, unusually cheery and talkative to the point of being silly, hyperactive, easily angered, indulging in excessive drinking. He also would indulge in risky behaviours. His wife cited his recent offence as one such. He violated managerial ethics and did what he knew was a sackable offence. He also indulges in excessive giving, downloads movies despite repeated warnings and he feels these are out of character with him. Martin's depressive episodes were described as profound and prolonged when he would stop talking to the point of being stuporose, refusing to get out of bed. His sleep has always been poor - 3 - 4 hours, unrelated to his mood state. Of note is his long history of depression and anxiety, close to 18 years, and several antidepressant trials. He was unsure of past mood stabilisers…
It is to be noted that this report was prepared on 19 May 2011, shortly before the Relevant Date. The history given and apparently accepted by Dr Jesudason reached back well before the date when Mr Long's employment was terminated. It recorded that Mr Long's psychological state was exacerbated by the termination but, on a proper reading, it describes a psychological disability that pre-existed the termination. The report provides some evidence that the termination of Mr Long's employment may have resulted from his conduct that was itself influenced by Mr Long's psychological disorder.
Hannover's fourth rejection letter does not make clear what, if any, significance Hannover attributed to Dr Jesudason's 19 May 2011 report.
In its fourth rejection letter, Hannover noted, in respect of the report of Dr Neale, psychiatrist, dated 23 February 2011, that it stated that Mr Long had been using antidepressants over the past 15 years, and that he was in relapse following the loss of his job.
In its fourth rejection letter, Hannover followed its summary of Dr Neale's report by saying: In any event, had the Member not breached company policy, he would not have lost his job and despite his medical condition he had shown a history of working and had done so for many years whilst on medication and under treatment.
That statement is objectively true, so far as it goes. Dr Neale's report was to Dr Hussain, and it is only purpose was to briefly advise Dr Hussain as to Dr Neale's opinion concerning appropriate changes to Mr Long's medication to manage his depression.
In its fourth rejection letter, Hannover noted that it had received reports by Dr Weidmann dated 2 May 2018 and 4 July 2018. It did not refer specifically to those reports in its Discussion and Summary in the letter. In fact, as appears from Mr Long's solicitors' 17 October 2018 letter, in which the fourth TPD claim was made, the solicitors enclosed three reports from Dr Weidmann. In its rejection letter, Hannover referred to two of those reports, but omitted the report dated 16 June 2017.
Nonetheless, in its written submissions, Hannover sought to explain why it was reasonable that Hannover did not act on the three reports, being the report dated 16 June 2017 (see par 87(a)), the report of 2 May 2018 (see par 87(e)), and the report of 4 July 2018 (see par 87(f) and (g)).
Dr Weidmann is a consultant psychiatrist and his 16 June 2017 letter was a report to Dr Prinsloo. Dr Weidmann stated that, on examination, Mr Long was depressed and a little irritable. He gave the opinion that Mr Long was a man with mixed mood as part of bipolar disorder, but no opinion was expressed as to his prognosis or his incapacity to work as at that time or earlier. He made a recommendation about Mr Long's future medication.
On 6 October 2017, Mr Long's solicitors wrote to Dr Weidmann to ask him whether, had Mr Long been Dr Weidmann's patient in mid-2011, Dr Weidmann would have been of the opinion that Mr Long met the definition of TPD in mid-2011. The letter enclosed the Permanent Incapacity Medical Certificate dated 19 September 2017 signed by Dr Weidmann, Mr Long's statement dated 11 July 2017, and Dr Hussain's clinical notes from 29 December 2008 until at least 12 November 2012. In the earlier Permanent Incapacity Medical Certificate, Dr Weidmann had confirmed his opinion that Mr Long's clinical signs and symptomatology did not cause him to conclude that he had any real chance of being able to engage in his own occupation and any occupation for which he was reasonably suited by education, training or experience, on a regular basis. Accordingly, Dr Weidmann had in substance been informed of the terms of the TPD definition.
It is true that Dr Weidmann did not directly respond to the question that he was asked. He confirmed that Mr Long had bipolar disorder, and observed: "7. I suspect the prognosis is a course of fluctuating symptomatology".
On 6 June 2018, Mr Long's solicitors pressed Dr Weidmann to respond to the question asked. Dr Weidmann declined to provide the opinion, saying "I cannot say".
In its fourth rejection letter, Hannover noted that it had been provided with two reports of Dr Peter Sharman, occupational physician, dated 22 February 2018 and 10 September 2018. Hannover's only reference to these reports was in the following statement: Other reports have been retrospective and noted that Dr Sharman has based his opinions on review of clinical notes from three practices.
Hannover's written submission was that Dr Sharman only provided an opinion as to the incapacity of Mr Long as at 22 February 2018, rather than as at 2011. In his second report, Dr Sharman only confirmed his prior opinion as at 22 February 2018.
Dr Sharman's 22 February 2018 report was, in substance, a nine page report that contained considered reasons in standard medico-legal expert format. Dr Sharman noted that he had received reports and other medical information dated at various dates in 2017. However, it appears that he obtained a comprehensive history from Mr Long, and, at page 6 of 10, the doctor noted that Mr Long had confirmed "the devastating effects to him mentally from the actions of his employer in relation to the use of a discount card".
Dr Sharman expressed the following opinion: Mr Long has significant ongoing health problems, including chronic low back pain and bipolar disorder as diagnosed by his treating psychiatrist. I can see no prospect of a return in any capacity to the workforce, particularly given the unsuccessful trial in 2014 of apparently suitable work.
Finally, Dr Sharman stated that Mr Long's prognosis was as follows: The prognosis is for a continuation of his current medical and psychiatric status and associated working capacity. Although his symptoms may vary from time to time, I do not see any realistic prospect of a sustained improvement in the foreseeable future. Following review of the documentation and my assessment of Mr Long, I have reached the view that, on the balance of probabilities, Mr Long's complaints and disabilities as contained in his statement are consistent with my clinical findings. I would accept that Mr Long is not able to perform any remunerative work, and has been so for six consecutive months with no prospect that he will be able to return to the workforce in the future and will not be fit for alternative employment. On that basis, I do not believe Mr Long has any "real chance" of returning to regular and permanent employment, as a result of his chronic back condition causing limited movement and confirmed by the medical imaging, as well as his depressed and anxious mental state associated with his bipolar disorder which is as well controlled as is possible.
In his 10 September 2018 report, Dr Sharman was responding to a request from Mr Long's solicitors that he confirm the opinion that he gave on 22 February 2018, on the basis of clinical file notes that were provided to him, that covered the period December 2008 to August 2017. On that basis, Dr Sharman confirmed his earlier opinion.
While it is true that Dr Sharman only expressed the opinion that Mr Long had satisfied the TPD definition for six consecutive months before 22 February 2018, Dr Sharman's report was persuasive evidence as at that time.
It was not reasonable for Hannover to deal with Dr Sharman's reports by merely noting that he had based his opinions on the review of clinical notes from three practices. That entirely understates the exercise conducted by Dr Sharman, who, within the natural limitations of the information that he could be provided, appears to have undertaken a thoroughly professional examination of the evidence for the purpose of expressing his opinion.
Mr Long's solicitors also provided a report of Dr Sofia Ahmed dated 12 April 2018 in support of Mr Long's fourth TPD claim. That report was not listed in Hannover's fourth rejection letter. Although the report confirms that Mr Long suffered significant back pain in a period starting from 30 October 2015, it is otherwise not of substantial direct significance to whether Mr Long satisfied the TPD definition at the Relevant Date.
In its fourth rejection letter, Hannover dealt with all of the additional medical evidence by saying: However, the weight of the evidence does support that the Member had many years of psychiatric illness and had continued to work with appropriate treatment and that he did cease working in January 2011 for reasons other than 'injury or illness'.
The premise upon which this statement was based is true to an extent. However, it does not rationally respond to all of the additional evidence that was offered, particularly that contained in Dr Sharman's reports. It is true that Mr Long was able to continue with his employment up until January 2011, notwithstanding his physical and psychological injuries, and that he had been able to manage the effect of those injuries with medication. However, it does not logically follow from that fact that the successful management of the injuries would necessarily continue indefinitely. Many injuries become progressively more difficult to manage with the increasing age of the sufferer.
Hannover seems to have proceeded upon the basis that Mr Long was able to manage his injuries up to the time when his employment was terminated, notwithstanding the evidence of the existence of both physical and psychological injury. Hannover appears to have treated the termination as being the single cause of the exacerbation of Mr Long's psychological condition that, at later times, caused Dr Prinsloo, Dr Weidmann and Dr Sharman to conclude that, at least as of dates in 2017 and 2018, Mr Long satisfied the TPD definition. Of the three doctors, Dr Prinsloo certified that she regarded Mr Long as having satisfied the TPD definition as at the Relevant Date. The consequence of the process of reasoning adopted by Hannover was that it effectively gave no weight to much of the evidence provided by Mr Long in support of his application. It relied upon the opinion of Dr Burek that was favourable to its position, without analysing all of the evidence, and judging the weight that should properly be given to each piece of that evidence.
I therefore consider that the process of reasoning adopted by Hannover in rejecting Mr Long's TPD claim for the fourth time was not reasonable, and was a breach of the duty that Hannover owed to Mr Long.

[54]

Hannover's reasons for rejection of alternative claim

Hannover gave the following reasons for its decision: We acknowledge that the Member returned to work at Lilydale Larder and was able to work as a full time supervisor for the period from 27/10/2014 - the week ending 17/12/2014. During the employment, the employer has confirmed that the Member was able to walk freely throughout the venue each shift, spending 80% of his time walking or standing, frequently lifting and carrying up to 19kg, and supervising approximately 8 staff members. The clinical records supplied previously suggest that the member consulted with his GP, Dr Adam Renwick on 15/12/2014, and reported to Dr Renwick that he trialled a return to work "managing a hotel was too much physically and mentally". Since the period of the employment at Lilydale Larder was less than 6 months, and the member has not suggested or provided any evidence that he was otherwise gainfully employed during that period, he does not meet the TPD definition refer to 2.2a of the Policy. In order to assess the claim under 2.2b of the policy we refer to the initial claim form completed by the Member dated 27/11/2012 which confirms the Member was able to sleep, shower (sometimes with assistance), occasionally prepare meals, mow the lawn on ride-on, sometimes vacuum home and do washings and his statement of 11 July 2017 and affidavit of 6 March 2019 which do not suggest any inability to perform any of the Activities of Daily Living. The Independent Medical Examination report from Dr Sharman dated 22/02/2018, indicates that the Member was able to drive up to 45 minutes, sit for 10-15 minutes and walk for about 15 minutes. Moreover, the Employer has confirmed that during the employment the Member was able to move freely throughout the venue each shift. The evidence suggests that the Member has capability of participating in Activities of Daily Living without need for assistance, and there is no evidence to suggest any loss of use of limb or eye or Cognitive loss. Therefore it is our opinion that the Member does not satisfy Part 3, Part 4 or Part 5 of the Policy for any disablement occurring on or around 12/12/2014. The obligation to provide information establishing an entitlement to the TPD rests with the insured. The evidence does not persuade Hannover Life Re to reach an opinion that the member is totally and permanently disabled in line with the policy definition…
Hannover, in the first part of the letter, considered Mr Long's TPD claim as if it were made under clause 2.2(a) of the Policy. That term provided: Total and Permanent Disablement in respect of an Insured Person who is: (a) Aged less than 65 and is gainfully employed and working 15 or more hours each week within the 6 months prior to the Date of Disablement, is determined under either Part 1, Part 2, Part 3…
Insured Persons who do not satisfy the requirements of Issue [1] in clause 2.2(a) are limited, by operation of clause 2.2(b), to pursuing a claim for TPD under Part 3, 4 and 5 of the definition of Total and Permanent Disablement.
In its letter, Hannover considered whether Mr Long satisfied any of the alternative requirements covered by clause 2.2(b), and determined that he did not. Mr Long has not challenged this aspect of the determination.

[57]

Validity of Hannover's construction of the Policy

As appears from Hannover's letter, the direct basis of Hannover's rejection of the claim was that Mr Long's period of employment before the relevant Date of Disablement was less than six months. It was not, in terms, that Mr Long had not worked for at least 15 hours in each of the weeks over a six-month period.
Mr Long's argument was, as it appears to me, that all that clause 2.2(a) required was that, for each week that the claimant worked within the six months period before the Date of Disablement, the claimant must have worked at least 15 hours for each of those weeks. Mr Long argued that the provision of the Policy should be given a liberal construction, to the extent of any ambiguity, and should be construed contra proferentem against Hannover.
Mr Long sought to rely upon the fact that the Policy was obtained by the Trustee as trustee of the Fund, which described itself as "specifically catering for the hospitality, clubs, tourism and retail sectors" and claimed to have "designed our products and services to suit those sectors". In effect, Mr Long submitted that the Fund identified itself as targeted at and catering to industries well known for their high rates of casual employment.
The thrust of this submission was that, if clause 2.2(a) were construed as requiring 15 hours of work every week for a full six-month period before the Date of Disablement, it would exclude a great many of the employees that the Fund was created to protect.
The second argument put by Mr Long in support of his construction of the term was that the construction contended for by Hannover "has the capacity to lead to seemingly ludicrous outcomes".
The first such outcome was that, even a full-time employee who had taken a week's leave, and thus worked no hours within a particular week, within the six month period, would be excluded.
The second argument was that a worker who had worked for only, say, one shift of eight hours for the first two months, but then increased the worker's shifts to two shifts of eight hours per week for the final four months of the six months period would be excluded.
I reject Mr Long's claim concerning the proper construction of clause 2.2(a) of the Policy for the following reasons.
First, I do not consider that the use of the word "each" in the provision introduces the ambiguity for which Mr Long contends. I consider that, in the context in which "each" was used, it had the same meaning as if the word "every" was used. The provision does require that the claimant was employed for the period of six months before the Date of Disablement, which was the real reason upon which Hannover acted.
Whatever the full meaning of clause 2.2(a) may be, it does not cover a claimant, in the position of Mr Long, who, having been employed from 27 October 2014 to 17 December 2014, was employed for a period of less than two months in total.
As I have observed above, Issue [1], as it applies to the alternative claim, is a question that must be determined on the objective facts. It is not a question that is to be resolved on the basis of the opinion formed by Hannover concerning whether the Issue is satisfied. Consequently, the determination of this question is not a matter that falls within the question for separate determination. However, as I have recorded at [390], Mr Long accepted that his alternative claim would fail if the Court found that the construction of the Policy that was implemented by Hannover was correct. As I have found that it was correct, it is clear that Mr Long's alternative claim must fail.

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