(b) Absence from work through injury or illness
127The trial judge's finding against the appellant on causation concerned the corresponding part of the CommInsure TPD clause requiring that the member "has been absent from all employment for 6 consecutive months ... ".
128The trial judge said -
"[68] There are two limbs to the issue of causation. The first is that the plaintiff has to establish that the words "full time" ought to be read into the Hannover TPD clause, and the second is that he otherwise would have been able to recover under the CommInsure policy had that policy incorporated the Hannover TPD wording (or, alternatively, the plaintiff must establish that if the Hannover policy had remained on foot, he would have recovered under that). Given that the plaintiff does not criticise the trustee for any reason other than the failure to maintain the Hannover TPD wording, and because he claims that the Hannover policy terms would have to be read down in other respects, the more appropriate test is to consider whether, apart from the inclusion of the words "part time" in the CommInsure TPD clause, the plaintiff has established that he would recover from CommInsure.
[69] We know that CommInsure has declined to indemnify the plaintiff. That refusal is based on these matters:
(1) the failure to satisfy CommInsure that the plaintiff was incapacitated in the long term, and CommInsure's belief that remedial treatment would remove any impediment to a return to work (full time work, it would appear);
(2) the fact that the plaintiff can work on a part time basis; and
(3) the fact that the plaintiff does not meet other criteria specified in the clause.
[70] I shall assume in favour of the plaintiff that he cannot work full time. This was conceded by the defendant: see para 4 of the defendant's submissions of 25 March 2010. I shall assume in favour of the plaintiff, for the purpose of considering this issue, that had the CommInsure policy adopted the Hannover wording, (2) above would not present an obstacle.
[71] This then brings me to the following requirements of the CommInsure policy. Cover under that policy is expressed to end when the plaintiff ceased to be an employee of the Bank, or within 30 days thereafter: see cll 5(e) and 10 of the CommInsure policy.
[72] To qualify for the TPD benefit, the plaintiff has to have been absent from work for six months due to the injury or disablement. The plaintiff was not absent for any consecutive period of six months prior to his departure on 25 August 2003. He had been working full time between 5 October 2000 and November 2002, and part time from November 2002 to 25 August 2003. He accepted redundancy on 25 August 2003. He subsequently sought work in various companies, and says that he did so on the basis that had he been offered a position, he would have accepted it and resumed work.
[73] There may be situations in which an employer, by terminating an injured employee's position, is acting unfairly to that employee, indeed effectively depriving an employee injured at work of a benefit which would have accrued, because had his employment not been terminated, he would have qualified for the benefit at the end of six months. Not only did the bank not dismiss the plaintiff, it had employed him for more than two years since his injury, and he had worked both full time and part time in that period. His applications for work after he accepted redundancy indicate that he saw himself as fit for part time work (at the least). There is, in one sense, an inconsistency between the acceptance of redundancy and the assertion of total and permanent disability. The plaintiff ceased to be a member of the fund on 25 August 2003. He did so because he accepted redundancy, not because he was unable to work.
[74] It follows, in my view, that the plaintiff would not have recovered under the CommInsure policy even had it not contained the words "part time", and that the plaintiff has failed to make out his case against the trustee on this basis as well."
129With these paragraphs should be read the trial judge's summary at [75], relevantly -
"4. The plaintiff was not entitled to recover under the CommInsure policy because he did not have six consecutive months' absence from work as a result of his disability before choosing to end his employment with the Bank, irrespective of whether there was a 'part time' provision or not."
130It may be that it was not entirely appropriate to ask (see [68]) whether, apart from the inclusion of the words "part time" in the CommInsure TPD clause, the appellant would recover from CommInsure. That took the CommInsure TPD clause as the relevant clause, but the appellant's case was, or at least included, that his entitlement should have been under the terms of the Hannover TPD clause.
131The trial judge referred to the ending of cover under the CommInsure policy, as provided in cll 5(e) and 10. Those clauses were -
" 5. End of cover
Cover for a member under this policy will end as soon as one of the following happens:
...
(e) the member is no longer an employee of the employer ;
...
10 Extended cover
If a member who has ceased employment with the employer :
(a) dies; or
(b) becomes totally and permanent[ly] disabled (if that member had total and permanently disablement cover under this policy),
within 30 days of his or her cover ending under this policy but before he or she exercises the continuation option or joins another employer sponsored superannuation fund, we will pay a death or total and permanent disablement benefit, as applicable.
The amount of the benefit is the insured cover for the member that we have accepted under this policy at the date cover ended for the member ." (italics in original)
132With respect, there is some obscurity in the trial judge's reasons.
133The reasons began with reference to cll 5(e) and 10 of the CommInsure policy. His Honour then went to the first limb of the definition of total and permanent disablement in the CommInsure TPD clause, requiring absence from all employment as a result of sickness or injury for six consecutive months from the date of disablement as defined. He appears to have found that this requirement was not satisfied because the appellant had been working full or part time until 23 August 2003, and had not been absent from all employment for six months prior to leaving the Bank's employment.
134The appellant submitted that the trial judge was in error in holding, apparently because the appellant ceased to be a member of the Fund when he left the Bank's employment, that the six months absence from all employment had to be prior to ceasing to be an employee of the Bank. The corresponding requirement in the Hannover TPD clause would have been that the appellant had been "absent from work through injury or illness for an initial period of six (6) consecutive months", and there was a broad equivalent to cll 5(e) and 10 of the CommInsure policy in cl 6(c) of the Hannover policy.
135The respondent did not agree that his Honour had held that the six months absence had to be prior to ceasing to be an employee of the Bank, but if he had did not seek to support that view: Finch v Telstra Super Pty Ltd [2010] HCA 36; 271 ALR 236 at [18]-[26].
136The trial judge then came to the occasion for the appellant ceasing to be an employee of the Bank. Although expressing it as cessation of membership of the Fund, he said at [73] that it was "because he accepted redundancy, not because he was unable to work". The appellant submitted that the trial judge was in error in holding that the requirement of six months absence from all employment as a result of sickness or injury was not fulfilled, apparently because the appellant's absence from all employment from 25 August 2003 was due to him accepting redundancy, not due to his inability to work as a result of sickness or injury .
137It is not clear that his Honour so held. However, there is no need to explore this further, as the parties addressed in their submissions the question of absence from work through injury or illness.
138The respondent sought to support that the appellant ceased work because he accepted redundancy, not because he was unable to work. It submitted that his absence from all employment (the CommInsure TPD clause) or his absence from work (the Hannover TPD clause) was not as a result of sickness or injury (the CommInsure TPD clause) or through injury or illness (the Hannover TPD clause). The appellant submitted that acceptance of redundancy did not preclude that the subsequent absence from all employment or absence from work was as a result of or through sickness, illness or injury, and that it was.
139The period of absence from work was a requirement distinct from the extent of the member's unfitness for work. In Finch v Telstra Super Pty Ltd at [18] it was said that the continuous absence from work for six months was a key guide to whether the member has the requisite disablement; similarly, it is a precondition tending to support the unfitness for work. By the terms of the clauses, the absence from work must be as a result of or through injury, illness or sickness, but the injury, illness or sickness need not be that ultimately bringing the unfitness for work to the requisite extent.
140By a letter dated 21 July 2003 the manager of the Castle Towers branch of the Bank, where the appellant then worked, wrote to him -
"I refer to our recent discussions regarding the structure and staffing of the Castle Towers Branch.
As you would be aware, as a consequence of this review of our structure, we have more staff than available positions. Unfortunately, after careful consideration of the needs of the business and your skills and experience, I am unable to offer you a continuing position within this team. I have also, as yet been unable to find an appropriate redeployment opportunity with RBS.
We do, however, recognise the skills, knowledge and experience you possess and would, accordingly, like to retain your services with the Bank. To this end, we intend to examine all possible redeployment opportunities. We will continue to search for suitable roles for your within RBS and beyond during the following 6 week period.
I would encourage you to take steps to complement the Bank's efforts. This would include applying for suitable positions or, where possible, drawing on your own internal network to identify appropriate opportunities. You can enlist the assistance of HR Services to complement the Bank's and your efforts in looking for suitable roles for you. I note you have completed and I acknowledge receipt of your Redeployment assistance form.
If we remain unable to redeploy you at the end of the stated period above, and all redeployment opportunities have been exhausted, I will further explore with you the available options. One of these after this time is that you could be retrenched. I will provide further details on this should it be necessary.
Please be assured that the Bank is committed to retention of its employees where possible. Once again, I encourage you to participate in the process."
141The appellant completed a "Redeployment Opportunity Form" dated 23 July 2003, expressing a preference for certain types of positions at certain locations.
142On 8 August 2003 the appellant wrote to the branch manager in the short terms that he "hereby accept[ed] the redundancy being offered by the Commonwealth Bank of Australia, effective immediately". Other than the letter of 21 July 2003, there was no evidence of the Bank's offer of redundancy.
143The appellant submitted that the Bank offered redundancy to him because it could not find further work for him in his incapacitated condition, and that he accepted it because of an inability to work through accident or injury. He said that this was not properly reflected in the trial judge's statement at [73] that he ceased to be a member of the Fund "because he accepted redundancy".
144The respondent pointed out that one of the matters relied on by CommInsure in declining to pay TPD benefits was that the appellant did not cease work due to injury or illness, but rather because he was made redundant: see the second, third and fourth dot points in the report of 18 September 2006. It submitted that this was correct, and in particular that if the appellant was made redundant "due to a review of the structure" as stated in the report and as indicated in the second paragraph of the letter of 21 July 2003, sickness, illness or injury played no part in his becoming unemployed. Hence, it submitted, the appellant's absence from all employment or from work after 23 August 2003 was not a result of or through sickness, illness or injury.
145The question under the clauses is not whether the appellant ceased his employment with the Bank because of sickness, illness or injury on the one hand or because of unrelated redundancy on the other hand. The answer to that question could shed light on whether his subsequent six months absence from all employment or from work was as a result of sickness or injury or through injury or illness, but the correct question under the clauses is whether the appellant's absence from all employment or from work after 23 August 2003 was because of sickness, illness or injury.
146As to cessation of employment with the Bank, the appellant gave no evidence to the effect that he was offered redundancy, or that he accepted redundancy, because he was unable to work through accident or injury. There was no other evidence to establish that position. The appellant had been working part time since November 2002. There was no evidence that he could not continue to work as he had if a position was available, or that the unavailability of a position was due to restrictions in what he could do.
147On the contrary, the appellant gave the evidence -
"Q. ... Do you see, on the left-hand side of the page, there is a letter to you from the bank dated 21 July 2003; can you see that?
A. Yes, sir.
Q. And that is a letter that you received from the bank at about that time?
A. Yes, sir.
Q. And you understood when you read that letter, that the bank was inviting you to seek out redeployment opportunities with the bank?
A. Yes, sir.
Q. And at page 483, on the right-hand side of that page, is a redeployment opportunity form that you signed, correct?
A. Yes, sir.
Q. And you were telling the bank that you wanted to be considered for other positions in telling or discharges in the Bankstown or Parramatta areas, correct?
A. Yes, sir.
Q. Because you wanted to obtain alternative employment with the bank at that time, correct?
A. Yes, sir.
Q. And if you had been offered alternative employment with the bank, you would have taken it, wouldn't you?
A. Yes, sir."
148In my opinion, the conclusion on the evidence is that the cessation of employment with the Bank by the offer and acceptance of redundancy was not because of sickness, illness or injury.
149Turning to the correct question, the appellant applied for a number of positions. He gave the evidence -
"Q. In the period after August 2003 you applied for a range of positions with other prospective employers, correct?
A. Yes, sir.
Q. (Volume 1A shown) I have it open at page 37, that is a copy of a letter that you received from Integral Energy, correct?
A. Yes, sir.
Q. In February 2004 you applied for a position as a billings officer with Integral Energy, correct?
A. Yes.
Q, You were being truthful in your application, weren't you?
A. Yes, sir.
Q. You applied for that position because you honestly wished to be considered for that position, didn't you?
A. Yes, sir.
Q. And if you had been offered the position at Integral Energy you would have taken it, wouldn't you?
A. Yes, sir.
Q. There are a number of other jobs you applied for at about this time, weren't there?
A. Yes, sir.
Q. If you had been offered those other jobs you would have taken them, wouldn't you?
A. Yes, sir."
150The applications were not in evidence. Letters rejecting the applications for positions were in evidence. None referred to restrictions on what the appellant could do.
151In my opinion, the appellant's absence from all employment or from work from 23 August 2003 was not shown to have been as a result of sickness or injury or through illness or injury.
152The appellant relied on Hay v Total Risk Management Pty Ltd . Under the rules benefits were payable to a member "whose services are terminated by reason of Disablement". The member took voluntary redundancy, on his case because of his inability to continue to work as a locomotive driver. The trustee submitted that his services were not terminated within the meaning of the rule, because there had to be termination by his employer. Burchett AJ considered that the termination could be by either the member or the employer. His reasons included (at [7]) that "[a] worker who resigns because some condition from which he suffers incapacitates him can be said to have terminated the contract by reason of that condition, just as much as an employer might be said to have done so if her terminated the contract for the same reason".
153The proposition last stated may be accepted. However, in the appellant's case it was not established that he resigned because of his incapacity; and as earlier indicated, the question is not why he resigned, but why he was thereafter without work.
154The precondition in either of the TPD clauses was not satisfied. The appellant would not have been entitled to TPD benefits even if the definition of total and permanent disablement had been in the terms of the Hannover TPD clause. He fails on causation independently of failure on breach.