Solicitors: Firths (plaintiff)
William Roberts Lawyers (defendants)
File Number(s): 2018 / 374473
[2]
Judgment
Judgment in these proceedings on a separate question was delivered on 27 August 2020: see Long v IS Industry Fund Pty Ltd [2020] NSWSC 1151 (the first judgment). I will assume an understanding of the first judgment for the purpose of these reasons, and will use the same terms and abbreviations.
Relevantly, the proceedings concern an application by Mr Long against Hannover for an order that he be paid a TPD benefit under the Policy. As recorded at [31] of the first judgment, after the hearing, the parties agreed that the Court should only decide, as a separate question pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 28.2, whether some or all of Hannover's decisions to decline Mr Long's claim involved breaches of Hannover's duty to Mr Long, and were accordingly void and without effect.
This question concerned the now-recognised first stage of the two-stage process for determining whether a claimant for a TPD benefit under an insurance policy is entitled to that benefit. This arises where the insurer declines the claim by exercising its right to be satisfied that the entitling criteria for the benefit have been established. If the Court decides that the insurer's rejection of the claim was invalid for breach of duty by the insurer, the second stage involves the Court determining the issue of whether the criteria for entitlement to the TPD benefit have been established on the basis of the evidence put before the Court: see TAL Life Ltd v Shuetrim (2016) 91 NSWLR 439; [2016] NSWCA 68 (Shuetrim).
In the first judgment, I decided at [406] that the separate question should be answered in the affirmative, but only in relation to the third and fourth rejections of Mr Long's TPD claim. Consequently, it will be necessary for a further hearing to take place for the purpose of the Court deciding for itself whether Mr Long is entitled to the TPD benefit.
For the purpose of supporting his TPD claim, Mr Long provided to Hannover reports by Dr Peter Sharman dated 22 February 2018 and 10 September 2018. Dr Sharman is a consultant occupational physician. His reports were prepared in a conventional expert witness format. The reports are discussed in the first judgment at [371] to [379]. In summary, Dr Sharman expressed the opinion that Mr Long had no prospect of a return to the workforce in any capacity. Relevantly, Dr Sharman expressed the following opinion: "… 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…" Significantly, the effect of this evidence was that Mr Long had not been able to perform any remunerative work for the six consecutive months prior to 22 February 2018 and had no prospect of being able to do so in the future.
Under the Policy, the question was whether Mr Long had been unable to do any work as a result of Injury or Illness for six consecutive months after the date Mr Long's absence from work began. Mr Long ceased to work on 14 January 2011, when his employment was terminated by his employer. The six month period ended on 14 July 2011.
Dr Sharman therefore expressed his opinion that Mr Long satisfied what Dr Sharman understood to be the criteria governing his entitlement to the TPD benefit, but did so for a period about six and half years after the relevant period.
The parties have asked the Court to rule upon the admissibility of Dr Sharman's two reports at the final hearing pursuant to s 192A of the Evidence Act 1995 (NSW) (Evidence Act). The Court agreed to do so and made orders on 6 October 2020 for the delivery of submissions by the parties. The Court has now received those submissions.
The defendants renewed their objection to the tender of Dr Sharman's reports by reference to submissions that they had previously made for the purposes of the first hearing and in the transcript of that hearing.
The essence of the defendants' submissions at pars 138 to 146 of their Outline of Submissions filed and served on 31 January 2020 was that they accepted that, at the second stage hearing, the Court could take into account what they described as "post-dated material", but they submitted that subsequent material will only be relevant if there have not been intervening facts or circumstances that deprives the later evidence of probative value as to the likelihood, at the relevant date following the date of disablement, that the claimant would gain employment in the future in the sense required by the TPD definition. The defendants listed 12 separate matters that had occurred after the date of disablement that they submitted were capable of exacerbating the consequence of any Injury or Illness from which Mr Long suffered at the date of cessation of his employment. They then submitted in par 146 "that the plaintiff's 2017-2019 evidence is irrelevant to the proper questions before Hannover as to whether the plaintiff was TPD in 2011 or 2014".
The defendants made a similar objection in pars 11(h) and 12(a)-(b) of their Objections to Evidence dated 31 January 2020, although they may have intended to add an objection that Dr Sharman's reports did not comply with the Expert Witness Code of Conduct and gave inadmissible opinions on the ultimate issues without disclosed bases. If this latter objection is made, it has not been explained in detail.
The defendants supplemented their submissions at the hearing by making the written submissions that became MFI 1. Their first objection was that Dr Sharman had expressed opinions as at the two dates of his reports in 2018, and not as at the date of disablement.
They also objected on the basis that Dr Sharman was asked to express opinions based on an incomplete TPD definition. The defendants noted that Dr Sharman was provided with the relevant part of the Policy that contained the definition of TPD, including the words "unable at any time in the future to perform any Other Occupation", but the meaning of "Other Occupation" was not provided. The defendants noted that "Other Occupation" meant any occupation which the person was qualified to perform by their education, training or experience, and included part-time occupations, occupations that may be perceived to be of lower status, and occupations that do not earn as much income as the claimant's previous occupation. The defendants complained that Mr Long's solicitors instructed Dr Sharman to apply a "real chance" test requiring "a real chance of obtaining regular (not casual) employment", and taking into account "their ability to perform this work day in day out without significant time off work". They submitted that the "real chance" test was the wrong test, and accordingly Dr Sharman had considered and answered the wrong question.
Consequently, the defendants submitted, Dr Sharman's reports were irrelevant, and also they should be rejected by the Court under s 135 of the Evidence Act, which gives the Court a discretion to refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might be unfairly prejudicial to a party, be misleading or confusing, or cause or result in undue waste of time.
That submission is based upon an argument that the assumptions upon which Dr Sharma had acted when he formed his expert opinions were not made out on the evidence, and Dr Sharman had not been provided with relevant evidence. The defendants relied upon the matters in the nine sub-paragraphs of par 3 of MFI 1. By way of example, sub-par (b) submitted that Dr Sharman had prepared his primary report without any reference to any reports or other evidence prior to 16 June 2017, so that he could not have been considering or expressing any view as to the position in 2011. The defendants referred in sub-par (c) to certain evidence more proximate to the date of disablement that was not supplied to Dr Sharman. It is not necessary to set out all of the matters but I have taken those matters into account.
The defendants reminded the Court of their advocate's submissions on admissibility of Mr Long's evidence in the transcript at T 94.20 to T 119.6. Those submissions developed the defendants' objection to Dr Sharman's reports generally in accordance with the arguments that I have described above.
Finally, the defendants relied upon par 10 of their supplementary submissions on the question for separate determination dated 2 April 2020. That paragraph makes detailed submissions generally going to the argument that an expert witness must be provided with all of the information that is required for the expert to provide a probative report. It also argues that while expert medical evidence concerning the claimant's medical condition and prospects of employment at a later time may be relevant, it will not be of significant probative value if there is evidence of changing conditions and events relevant to the capacity of the claimant to undertake employment between the date of disablement and the date of the experts reports, and the expert either has not been instructed concerning the changes or has not adequately taken them into account.
As I understand the principal thrust of the defendants' objections to the admission of Dr Sharman's reports into evidence, it is that the reports were prepared so long after the date of disablement, and the evidence that Dr Sharman has properly taken into account all relevant subsequent events is so insufficient, that the probative value of his reports is so little that their tender should be rejected in limine.
Mr Long responded by noting that the defendants had not sought to explain, by reference to the separate grounds for rejection of evidence in s 135 of the Evidence Act, why the probative value of Dr Sharman's reports is substantially outweighed by the dangers listed in the section.
Mr Long also responded by submitting that the defendants have not attempted to identify any basis upon which Mr Long's capacity for work, as at 2018 and into the future, is irrelevant to the question of whether, as at the relevant date, he was TPD.
Mr Long submitted, in par 8 of his written response:
… Evidence, like Dr Sharman's reports, coming into existence after the "Date of Disablement" informs the Court as to the actual course of the plaintiff's condition in the period about which the Court must form a prognostic view. It is thus clearly relevant to, aside from anything else, the prospect as at the "Date of Disablement" of the plaintiff actually, as opposed to speculatively, responding to treatment and potentially returning to the workforce. Excluding Dr Sharman's reports from the second stage enquiry, as the defendants urge the Court to do, amounts to an invitation to the Court to speculate about matters which it may, by reason of Dr Sharman's opinion, know… [Emphasis in original]
Mr Long also submitted that the Court could not properly or safely reject Dr Sharman's reports because they had not adequately taken into account supervening events occurring between the date of disablement and the date Dr Sharman formed his expert opinions. He submitted that this was a question of the weight to be given to Dr Sharman's evidence, and would depend on all of the other evidence that may be tendered at the second stage hearing, so that the significance of the evidence was a matter for final submissions. In that respect, Mr Long submitted that the question of the admissibility of Dr Sharman's reports simply could not be properly decided on the basis of the evidence before the Court at the first stage hearing.
In response to the defendants' submission that Dr Sharman was asked to prepare his reports on the basis of an incomplete or erroneous TPD definition, Mr Long submitted that Dr Sharman's opinion that Mr Long was unable to perform "any remunerative work" was so wide as to encompass any work contemplated by the definition of "Other Occupation", even if Dr Sharman had not been instructed to provide explicit expert opinion on the issue of whether Mr Long was capable of working in some Other Occupation. Further, Mr Long submitted that the opinions that Dr Sharman has formed are relevant to the question that the Court will be required to answer, even if they are ultimately treated as being expressed only in relation to part of the TPD definition. Dr Sharman's opinions will not be irrelevant if they are found to be relevant to part of the TPD definition but not another part. That finding would affect the weight of the evidence, and that is a matter to be considered at the hearing.
Mr Long responded to the defendants' submission that the assumptions upon which Dr Sharman had based his reports were not made out by submitting that the Court could not properly determine, in the context of an objection isolated from all of the evidence that will be before the Court at the second stage hearing, whether the assumptions are made out or not.
The defendants' reply submissions elaborated certain submissions that they had made. In particular, they submitted that Dr Sharman's reports had "no (or minimal) probative value", and the probative value that they had was "substantially outweighed by the danger that the evidence might be unfairly prejudicial to the defendants or be misleading or confusing". This submission was supported by a claim that there was a danger of unfair prejudice and/or confusion from the manner in which Mr Long has chosen to conduct his case "by not pleading, particularising or calling medical opinion evidence, resulting in at best incomplete evidence and an inability to test that evidence".
Dr Sharman's principal report is his first report dated 22 February 2018, which he prepared in response to Mr Long's solicitors' letter of instructions dated 18 December 2017. Dr Sharman prepared his report on the basis of the documentation enclosed with the solicitors' letter and a consultation with Mr Long on 19 December 2017. In my view, on its face, Dr Sharman's report is an adequately reasoned report in which the basis of Dr Sharman's conclusions is adequately explained.
Dr Sharman expressed the following opinion at page 8:
Mr Long has significant ongoing health problems, including chronic low back pain and bipolar disorder as diagnosed by his treating psychiatrists. 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.
In response to a question from the solicitors: "What is his prognosis?" Dr Sharman said at page 9:
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.
… 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…
Dr Sharman's second report, dated 10 September 2018, responded to a letter from Mr Long's solicitors dated 17 July 2018 in which they provided Dr Sharman with four sets of clinical notes in relation to Mr Long for a period spanning December 2008 to August 2017, and asked him whether he would confirm his earlier report on the basis of the additional material. Dr Sharman did so.
My ruling is that I reject the defendants' objection to the admission of Dr Sharman's reports into evidence.
It must be borne clearly in mind that, in the case of expert opinion evidence, that evidence may be relevant within s 55 of the Evidence Act if it "could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding". The evidence will be relevant, even if there is a contest as to whether it should be accepted, as that is the explicit effect of the section.
While the issue of whether Mr Long is entitled to the TPD benefit depends upon a prognostic factual judgment to be made by the Court at the relevant date, which is six months after the date of disablement, as to whether Mr Long was "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", a qualified medical opinion that Mr Long was in fact unable to perform any remunerative work, and had no prospect of returning to the workforce, as at a date 6 ½ years after the relevant date, is relevant evidence. Particularly at the second-stage hearing, when the Court must make the prognostic judgment, evidence that Mr Long in fact satisfied the TPD definition at the later date is relevant to whether he did so at the earlier date.
The fact that Dr Sharman may have misunderstood the TPD definition and volunteered that Mr Long's medical condition and employment prospects had been the same for the six months prior to the date of his first report is immaterial. That particular aspect of Dr Sharman's evidence has some marginal relevance, but the misunderstanding does not make the reports inadmissible.
There will be legitimate issues for the second-stage hearing as to whether the weight to be given to Dr Sharman's reports should be reduced, or the reports should be discounted, because (a) Dr Sharman was not given assumptions as to, and did not take into account, events in Mr Long's life in the intervening period that may have caused him to satisfy the TPD definition at 22 February 2018 but not at the relevant date; and (b) whether the assumptions and medical information given to Dr Sharman were not representative or sufficiently complete. Those are forensic matters for further evidence, cross-examination, and submissions and, in general, will not undermine the relevance of the expert opinion evidence. While each case must depend upon its own facts, and in theory expert opinion evidence may be so divorced from the issues as to be truly irrelevant, that is not at all the case with Dr Sharman's reports.
Equally, the possibility that the probative weight of expert opinion evidence may be undermined by it being established that crucial assumptions upon which the opinion is founded are unsubstantiated does not have the effect that the evidence is irrelevant. It will be a subject for forensic contest as to whether the assumptions are sufficiently substantiated to make the expert opinion evidence probative of the relevant issue.
Expert opinion evidence is obtained by one party on the basis of that party's expectations as to the assumptions of fact that can be substantiated and the issues that are relevant. There will often be scope for the other party to believe that some assumptions that are given are false, and other assumptions that are material have been ignored. It is proper for those matters to be contested at the trial. The expert witness may be asked in cross-examination whether the expert would change or adhere to the expert's opinion if some assumptions given were excluded, or additional assumptions were made. It would not be conducive to the just, quick and cheap resolution of the real issues in the proceedings if the Court too readily rejected expert opinion evidence in advance of the hearing because of the existence of credible arguments that might ultimately destroy the probative value of the evidence. Even expert opinion evidence that is flawed in some respect may be revived as a result of the forensic contest.
The same is true if there is a genuine contest as to whether the expert witness has addressed precisely the correct question. While the evidence may be irrelevant if the expert has responded to a plainly irrelevant question, that is not so in the case of Dr Sharman's reports. I accept Mr Long's submission that it will be open to the Court at the second-stage hearing to find that an expert medical opinion that Mr Long has "no prospect of a return in any capacity to the workforce" is so broad as to encompass all of the possible permutations of meaning of the actual TPD definition. That will be a matter for argument at the hearing.
I reject the defendants' complaint about Dr Sharman being asked to express an opinion as to whether Mr Long had any "real chance" of returning to the workforce, as a way of forecasting whether he was "unlikely ever" to do so, as the "real chance" test was established by the Court of Appeal in Shuetrim at [88], [89].
In respect of the defendants' reliance on s 135 of the Evidence Act, I do not think that the defendants have identified relevant prejudice. Dr Sharman's evidence may be inadequate and of little probative value for some or all of the reasons proffered by the defendants, and if that is so, his evidence may not avail Mr Long at the second-stage hearing. Defendants are not usually prejudiced by inadequate evidence led by a plaintiff. The fact that the defendants, in their submissions, have readily identified many features of Dr Sharman's evidence, and the circumstances in which he formed his expert opinions, which the defendants say undermine the evidence, tends to contradict their argument that they will be put to significant prejudice. The defendants have not identified any consequences that they will suffer as a result of any deficiencies related to Dr Sharman's evidence that is wholly disproportionate to the probative advantage that Mr Long may gain from the tender of the evidence. Nor have the defendants identified in any specific way how, in all of the circumstances, Dr Sharman's reports are misleading or confusing.
Consequently, Dr Sharman's reports will be admitted into evidence.
[3]
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Decision last updated: 02 November 2020