Mehmet v IOOF Investment Management Ltd

The issues

1. There are two issues for determination before me.
2. The first is whether Mr Mehmet has no TPD cover arising from his 12 March 2001 injury because he was not "at work" (as defined in the manner I set out below) on 30 June 2003. I explain the relevance of that date below.
3. The second issue is whether, assuming that Mr Mehmet is entitled to TPD benefits arising out of his 12 March 2001 injury, the Trustee and TAL have acted in breach of their duties to act in the utmost good faith in their consideration of Mr Mehmet's claim (the first stage of the two stage enquiry referred to in such cases as Edwards v The Hunter Valley Co-op Diary Co Ltd (1992) 7 ANZ Ins Cas 61-113 and Hannover Life Re of Australasia Ltd v Sayseng [2005] NSWCA 214; 13 ANZ Ins Cas 90-213; discussed in my decision in Shuetrim v FSS Trustee Corporation [2015] NSWSC 464 at [28] to [35]).
4. As to this second issue, it is common ground that: 1. were I to conclude that the Trustee and TAL have not acted in breach of their duties of good faith, that is an end to the matter; but 2. were I to conclude that the Trustee and TAL have acted in breach of their duties of good faith, I should set aside their determination that Mr Mehmet is not entitled to TPD benefits and remit the matter to the Trustee and TAL to be dealt with according to law.
5. Thus, the parties agreed that I should not proceed to the second stage of the enquiry referred to in the above authorities; that is, I should not decide for myself whether Mr Mehmet is TPD.

The "at work" issue

1. Both the Lumley and TAL policies provide for a continuation of the cover offered to Fund members either by way of "Automatic Acceptance" or pursuant to "Takeover Terms".
2. The Trustee and TAL contend that such cover as Mr Mehmet has under the TAL policy for TPD benefits is pursuant to the Takeover Terms, rather than the Automatic Acceptance terms in that policy.
3. In view of the conclusions to which I have come, it is convenient to assume the correctness of that proposition.
4. The Takeover Terms are set out in cll 3.23 and 3.24 of the TAL Policy as follows: "3.23 We agree to provide cover under this policy without requiring evidence of good health for groups of five (5) or more members with existing group life cover on the following conditions: (a) The cover under this policy wholly replaces the previous insurance policy cover; and (b) The takeover is limited to the level of cover and type of benefit provided under the previous policy; and (c) Transfer cover is limited to the Standard Total and Permanent Disablement definition; and (d) We receive written confirmation from the previous insurer of the acceptance terms applicable to the transferring Insured Persons; and (e) The cover is current and in force at the date of transfer to [TAL]. 3.24 The terms for the transfer of such cover shall be in accordance with the industry guidance note current at the time of takeover (currently IFSA Guidance Note No. 11) or such other terms as agreed by [TAL] in writing at the time, but in any event [TAL] will ensure that no member loses the cover that had been applicable at the time of that transfer as a result of the transfer."
5. I am prepared to assume, in the Trustee's and TAL's favour, that each of the conditions precedent referred to in cl 3.23 have been satisfied. In those circumstances, the matter for consideration is the effect of cl 3.24.
6. Clause 3.24 has the effect of incorporating the Investment and Financial Services Association ("IFSA") Guidance Note No 11 into the TAL Policy; but subject to the qualification that "in any event" TAL would ensure that no Fund member lost the cover applicable at the time of the transfer of cover. It is common ground that the relevant "date of transfer" is 1 July 2003 (that is, the date on which cover was transferred from Hannover to Lumley)
7. The Trustee and TAL submitted that the terms of the transfer of Mr Mehmet's TPD cover from Hannover to Lumley, and thus to TAL, were to be determined by reference to IFSA Guidance Note 11 and that, accordingly, Mr Mehmet had no entitlement to TPD cover arising out of his 12 March 2001 injury.
8. TAL submitted that this was so because: 1. the Guidance Note provides that: 1. the incoming insurer would provide TPD cover to insured members who were "at work" on the relevant date (agreed to be the business day before Lumley took over cover; 30 June 2003, as Lumley took over cover on 1 July 2003); 2. insured members who were not "at work" on the relevant date due to sickness or injury would only (my word) be provided "new events cover"; 3. a member is not "at work" if, relevantly, the member was "entitled to claim…workers' compensation benefits" on that date; and 4. "new events cover" excludes cover for any medical condition which caused the member to be "not at work" on the relevant date, and thus for the medical condition which gave rise to the entitlement to workers compensation; 1. on 11 February 2010, the NSW Workers Compensation Commission awarded Mr Mehmet workers' compensation for the entire period from 8 May 2001 to 9 February 2010; 2. Mr Mehmet must therefore have been "entitled to" workers compensation benefits on 30 June 2003; 3. Mr Mehmet was therefore "not at work" for the purposes of the IFSA Guidance Note; and 4. Mr Mehmet was thus only entitled to "new events cover" and not to cover for the medical condition which caused him to be "not at work"; and therefore not to a TPD benefit arising from his 12 March 2001 injury.
9. Assuming the correctness of this analysis as to the effect of the Guidance Note and the 11 February 2010 award, in my opinion the answer to the question of whether Mr Mehmet is entitled to a TBD benefit lies in the wording of cl 3.24 of the TAL policy, and in particular the proviso to that clause which, to repeat it, reads: "…but in any event [TAL] will ensure that no member loses the cover that had been applicable at the time of that transfer as a result of the transfer".
10. I read the words "but in any event" as meaning "no matter what appears in the IFSA Guidance Note". In my opinion, by the proviso, TAL agreed that nothing in the Guidance Note would have the effect of rendering a member disentitled to cover to which, but for the change of insurers, that member would have otherwise been entitled.
11. The obvious purpose of the provision was to ensure that a Fund member, such as Mr Mehmet, who had TPD cover when he became a member of the Fund, would not lose that cover merely because of a change in the identity of the insurer engaged by the Trustee pursuant to its powers under the Trust Deed.
12. As I have said, when Mr Mehmet joined the Fund, Hannover was the insurer. Under that policy, Mr Mehmet had TPD cover which was not subject to any "at work" requirements. In my opinion, the effect of cl 3.24 of the TAL Policy is to "ensure" that Mr Mehmet retained that level of cover notwithstanding the fact that Lumley, and then TAL, became the insurer.
13. If Mr Mehmet's cover under the TAL Policy is by reason of the Automatic Acceptance provisions of the policy, this issue does not arise. That is because although such cover is subject to an "at work" qualification (in the TAL Policy itself), the definition of "at work" for that purpose is a person: "…actively and competently performing all the essential duties of his or her usual occupation without restriction".
14. On the relevant dates, Mr Mehmet was "at work" within the meaning of that definition.

In making their decisions to decline TPD benefits, did the Trustee and TAL comply with their duties to act with utmost good faith?

1. In Hannover Life v Sayseng, Santow JA, with whom Spigelman CJ and Tobias JA agreed, cited with approval the summary of principles adopted by the trial judge (Bryson J) (at [36] and [50]) relevant to consideration of TPD cover such as in this case. Bryson J, in turn, derived these principles from the observations of McLelland J in Edwards v The Hunter Valley Co-op Dairy Co Ltd at 77,536-7 as follows: 1. there is an implied obligation on the insurer to consider and determine whether it should form an opinion on the matter which was a condition of its own liability; 2. that obligation involves consideration and determination of the correct question; 3. the insurer is under a duty of good faith and fair dealing which requires it to have due regard for the interests of both the insured and the trustee; 4. the insurer is also obliged to act reasonably in considering and determining its opinion; 5. if the view taken by the insurer can be shown to have been unreasonable on the material then before it, its decision can be "successfully attacked" (the first stage of the enquiry); 6. if (and I would add, only if) the insurer's decision is "successfully attacked", the matter upon which its opinion was required becomes one for determination by the Court (the second stage of the enquiry).
2. As I have mentioned, the parties agreed that I should not embark on the second stage of the enquiry.
3. As to the first stage of the enquiry, Young AJ put the matter this way in Chapman v United Super Pty Ltd [2013] NSWSC 592 at [53]: "…the onus is on the plaintiff to establish that the Insurer's or Trustee's decision on the material before them to deny the plaintiff indemnity was (a) so unreasonable in all the circumstances that the Court is required to intervene, see Tonkin v Western Mining Corporation Ltd [1998] WASCA 101; or (b) that either the Trustee or the Insurer breached some duty to the plaintiff. It is not sufficient for the Court to say that had it been the initial decision maker, or if it were an appeal court hearing the matter de novo, it would have come to a different decision. The Court must focus on whether the decision of the Insurer or the Trustee or both was so unreasonable that a reasonable person in that situation could not have made it."
4. Ball J summarised the matter in Erzurumlu v Kellogg Superannuation Pty Ltd [2013] NSWSC 1115 at [54] as follows: "Although a member is not a party to the contract with the insurer who provides insurance cover to the trustee of a superannuation fund, the member has standing to enforce the contract as a beneficiary of the trust which holds the insurance policy as one of its assets. The member does not have a personal claim but is entitled to seek an order that the insurer pay to the trustee the amount due to the trustee under the contract: Sayseng v Kellogg Superannuation Pty Ltd [2003] NSWSC 945 at [78]ff. An insurer, when considering a claim, must comply with its obligation of utmost good faith. That obligation requires the Insurer to act reasonably in considering the claim. The obligation to act reasonably includes an obligation to consider and to determine the correct question. It also includes an obligation to give the member an opportunity to answer any material on which the insurer intends to rely: Hannover Life Re of Australasia Ltd v Sayseng [2005] NSWCA 214; (2005) 13 ANZ Ins Cas 90-213 at [35]ff. Although the obligations of the trustee and the insurer are expressed in different terms, from a practical point of view, the grounds on which the decision of each may be challenged are similar: Sayseng (2003) at [77]. The duty of the court is to determine whether the insurer breached its duty of utmost good faith. It is not to substitute its own view for that of the insurer. However, if an insurer refuses a claim in breach of its obligation of good faith, the court itself can determine whether, on the material available to it, the claim fell within the policy: Sayseng (2005) at [36]."
5. So far as concerns the insurer's decision, the relevant principles are summarised by Nicholas J in Weber v Tiss Pty Ltd [2005] NSWSC 67 at [8] as follows: "…the insurer is not required to undertake the detailed consideration required of a court hearing (Chammas v Harwood Nominees (1993) 7 ANZIC 61-175 at p 78,001); and…the insurer's statement of reasons for declining a claim should be understood as a practical document intended to inform the claimant of the basis of the decision rather than detailed reasons with reference to the evidence relied upon comparable to a judgment of a court or tribunal. The reality must be recognised '…that the reasons of an administrative decision-maker are meant to inform and not to be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed'. (Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at p 272)."
6. However, as the authorities I have set out above emphasise, the insurer must, when making its decision, act reasonably and consistently with its duty of good faith and fair dealing to the insured. The insurer must ask itself the correct question, take into account all of the relevant material and not misstate the effect of the material before it.

TAL's decision

1. Although TAL refused Mr Mehmet's claim for TPD benefits on the four occasions I have mentioned, counsels' submissions focussed particularly on TAL's letter of 29 October 2014.
2. Mr Bingham, who appeared for Mr Mehmet, also relied upon TAL's failure to respond to an "Evidentiary Statement" made by Mr Mehmet on 19 February 2015, which was served on TAL on 20 February 2015.
3. TAL's decision, as explained in its letter of 29 October 2014, was based on three matters.
4. The first was the "at work" point that I have dealt with.
5. The other two matters were: 1. whether Mr Mehmet's absence from employment was "due" to the injury of which he complained; and 2. whether Mr Mehmet would "never" be able to perform his own occupation or any other occupation for which he was reasonably suited by education, training or experience.

Whether absence from employment was "due" to illness or injury

1. In its 29 October 2014 letter, TAL said: "Mr Mehmet is a 44 year old Laser Operator whom ceased work on 2nd March 2009. The employer indicates that Mr Mehmet was dismissed due to a refusal to complete a drug and alcohol test. Subsequently, Mr Mehmet lodged a Total and Permanent Disablement claim citing that he was unable to return to any form of work as a result of a lower back condition. Accordingly, we have determined that Mr Mehmet does not satisfy the first limb of the standard TPD definition above, that is, he was not absent from employment due to illness or injury for a continuous period of 6 months. In fact, the evidence indicates Mr Mehmet was dismissed as a result of refusing to undergo a drug and alcohol test."
2. Evidently, the basis upon which TAL concluded that Mr Mehmet had been dismissed from his employment on 2 March 2009 "due to a refusal to complete a drug and alcohol test" was a statement to that effect made by Mr Mehmet's then employer, RCR Laser Pty Ltd, in an "Employer's Statement". This document was included by Mr Mehmet in the documents accompanying his claim for a TPD benefit.
3. However, in a "Member's Statement" signed by Mr Mehmet, which also accompanied Mr Mehmet's TPD claim, he stated that the reason he ceased employment was: "Sustain[ed] injury to lower back. Left for personal reasons."
4. TAL made no reference to Mr Mehmet's explanation for leaving employment with RCR Laser. It simply accepted and asserted the correctness of the employer's statement.
5. Further, in his Evidentiary Statement served on 20 February 2015, Mr Mehmet gave this account of what happened: "I worked full time with RCR Laser until February 2009 when my employment was terminated by management, allegedly on the basis that I had refused to undertake a drug and alcohol test. My termination was the culmination of a number of difficulties I had been having with management which led to me being targeted for drug and alcohol tests on a persistent basis. Specifically, some months prior to my termination I had been experiencing deterioration in my health which prevented me from being able to complete the more heavy manual tasks. Management was aware of these restrictions but nevertheless delegated to me heavy manual tasks, requiring that I lift up to 25kg, which further aggravated my condition and caused me to take sick days off to recover. Specifically, I was continuously assigned to perform laser cutting duties in respect to a particular client's needs (Tyree). Those jobs had very tight production deadlines and I was under pressure to turn around their needs quickly. That meant that I was unable to take the breaks that I needed to manage my pain, and I became overwhelmed with my work demands and its toll on my body. In the past I was working as part of a team of three or four cutters on the Tyree jobs, which lightened the workload and enabled me to have some much needed rest time I needed. On numerous occasions I raised my concerns with management and asked to be rotated onto other jobs or get more support to lighten my workload and to reduce aggravation caused by the repetitious and intensive work activities, however management declined my requests."
6. Thus, although Mr Mehmet acknowledged that the reason given by RCR Laser for his termination was his failure to undertake a drug and alcohol test, he gave an explanation for that circumstance and for what he said was his inability to cope with "work demands". At the very least, this raised an issue as to whether his absence from employment was "due" only to his alleged failure to submit to a drug and alcohol test.
7. TAL gave no consideration to this explanation. Indeed, it made no response at all to the Evidentiary Statement, despite Mr Mehmet's solicitor's request that the Statement be taken into consideration and that a "review decision" be given.
8. It appears that the reason for this was that TAL had proposed, and Mr Mehmet's legal advisors had agreed to, an order in these proceedings that any material in support of Mr Mehmet's request for a review of TAL's earlier refusals to grant TPD benefits be served by 12 September 2014.
9. Thus, on 5 November 2014, after Mr Mehmet's solicitors had served material endeavouring to respond to TAL's letter of 29 October 2014, TAL's solicitors wrote: "You have submitted further documentation in support of [Mr Mehmet's] claim. As you are aware, all documentation in support of [Mr Mehmet's] request for a review was to be provided by 12 September 2014. In any event, the [Trustee and TAL] have finalised their review decisions on [Mr Mehmet's] claim."
10. As I have said, prior to its critical letter of 29 October 2014, TAL had on two earlier occasions (1 March 2013 and 2 April 2013) declined Mr Mehmet's claim for TPD.
11. In circumstances where an insured person continually, and over a long period of time, serves material on a trustee or an insurer and requests reconsideration after reconsideration of an earlier decision to decline indemnity, a point may well be reached where a trustee or an insurer can justify refusal to consider further information without thereby acting in breach of its obligation to act with utmost good faith.
12. But here, the Trustee and TAL were served with a statement by Mr Mehmet which contained new information directly relevant to one basis upon which liability had been denied. It was unreasonable, and in my opinion a breach by the Trustee and TAL of their good faith obligations, simply to ignore it.
13. Mr Bingham also drew attention to the fact that TAL stated, in its 29 October 2014 letter, that Mr Mehmet had ceased working as a laser operator on 2 March 2009. In fact, the evidence is that, after leaving RCR Laser, Mr Mehmet worked for a short time (from April to June 2009) as a machine operator for T&M Overexposure (Australia) Pty Ltd.
14. However, I do not find that it was unreasonable for TAL to make that statement. In his Member's Statement accompanying his claim, Mr Mehmet had described his employer as being RCR Laser and specified the date of cessation of his employment as being "Feb 2009".

Whether Mr Mehmet is never able to perform his own occupation or any occupation for which he is reasonably suited by education, training or experience

1. In its letter of 29 October 2014, TAL analysed this question by reference to the reports of four experts. They were Mr Mehmet's general practitioner, Dr Sanjiv Shah, a medical legal practitioner retained by TAL for the purposes of this claim, Dr Anthony Lowy, a psychologist/rehabilitation consultant. Ms Angela Ong (from Advanced Personnel Management ("APM")), and a physiotherapist/rehabilitation consultant, Ms Charissa Valenton (also from APM).
2. TAL also referred to a report from Dr Mohammed Assem (a rehabilitation specialist retained by Mr Mehmet's solicitors) and a joint report from Ms Carole Young (a physiotherapist) and Mr Ross Girdler (a rehabilitation councillor) (both from Prudence Consulting Pty Ltd, engaged by Mr Mehmet's solicitors). TAL said in the letter that it had "considered" the reports from Dr Assem and Prudence Consulting as part of its "further review". However, those reports were not mentioned in TAL's analysis of the critical question.
3. Further, TAL made no reference at all to a report of an occupational physician, Dr Greg McGroder. Dr McGroder had been retained by Mr Mehmet's workers compensation insurers. The Trustee served Dr McGroder's report on Mr Mehmet's solicitors in September 2012.
4. TAL referred to Dr Shah's reports of 15 September 2011, 18 January 2012 and 14 July 2012.
5. So far as concerns Dr Shah's report of 15 September 2011, TAL stated that it indicated that Mr Mehmet "is capable of light restricted duties, which does not impact on his back".
6. In fact, what Dr Shah said, under the heading "patient's capacity for work", was: "Not working at present - otherwise restricted to light duties… Unable to do any process work as this involved repetitive lifting".
7. Dr Shah also said that Mr Mehmet could do "no lifting over 5kgs or any repetitive work" and was suffering from "chronic back pain".
8. As to Dr Shah's 18 January 2012 report, TAL stated: "In his report dated 18 January 2012, Dr Shah noted that there have been no recent investigations undertaken and there is no treatment being given at present. Dr Shah is of the opinion that Mr Mehmet is capable of working full time but this would have to be in a non-manual capacity."
9. In fact, Dr Shah said: "Presently he is able to work full time but in a non manual capacity if work became available. He can be retrained for clerical, desk work if appropriate. He should be able to return to work in the future if the work is of the appropriate nature. He is in constant pain but manages this without medication where possible."
10. One implication available from Dr Shah's report is that the "non manual" work he had in mind for Mr Mehmet was "clerical" or "desk" work, and only if Mr Mehmet could be retrained.
11. As to Dr Shah's 14 July 2012 report, TAL said: "In his supplementary report dated 14 July 2012, Dr Shah confirmed that Mr Mehmet's present symptoms had settled and believed that a graded return to work with a rehabilitation program will provide a more positive outcome for Mr Mehmet and his employer. Dr Shah noted that barriers to return to work included fear of injury, long term inability to function and taking care of himself and his mother."
12. However, Dr Shah also said in that report: "There is also need to retrain in non manual work. He is able to work in a non labour based work and should benefit from appropriate training".
13. Those observations, not captured in the TAL letter, point to the conclusion that Dr Shah's opinion was that the "graded return to work" to which he referred, and which TAL did repeat in its letter, would depend upon retraining.
14. TAL was thus selective in its references to Dr Shah's reports.
15. So far as concerns Dr Lowy, the TAL letter said: "In his report dated 10 April 2012, Dr Lowy…noted that Mr Mehmet worked from 2002 until 2009 when he decided to stop work. Dr Lowey [sic] states that Mr Mehmet's decision when he ceased work and continuing was and remains because of his perception of lumbar vulnerability, his apprehension and fear of injury with intermittent lumbar symptoms. Mr Mehmet also reported to Dr Lowey [sic] that there was no specific 'injury or claim' in 2009 and none today 'unless I do something stupid'. As a result, Mr Mehmet is apprehensive about his back and is overly cautious. Dr Lowy confirmed that Mr Mehmet demonstrated a full and free range of motion in all six planes of his entire spine, comprising forward flexion, extension, lateral flexion and rotation, all of which are full free and without hesitation or compliant of lumbar region pain. With regards to Mr Mehmet's prospects of recovering and returning to work, Dr Lowy believed this is entirely up to his attitude and willingness to undertake any work. Overall, Dr Lowy opined that Mr Mehmet has been and remains fit to return to work as he did from 2002 to 2009, indicating his reason to stop in 2009 was personal and subjective. Dr Lowy also opined that Mr Mehmet is physically fit to undertake any work for which he is suited by virtue of his education, training and experience. He was of the opinion that Mr Mehmet was also fit for manual handling work, such as machine operating and a range of factory work are well within his capacity - on a full time basis, 37.5 hours per week. Overall, Dr Lowy considered Mr Mehmet could be certified for bricklaying and certified him physically fit for bricklaying."
16. Dr Lowy's report was certainly written in robust terms. Mr Bingham did not suggest that TAL's summary of that report was selective or otherwise misleading.
17. So far as concerns the APM report, TAL's letter said: "APM noted that Mr Mehmet also agreed to the following suggestions regarding employment options: light sedentary type work and light process work. In consideration of medical professionals' reports on Mr Mehmet's work capacity, the outcomes of the Functional Assessment, Mr Mehmet's transferrable skills (education, training and experience) and Mr Mehmet's personal interests, APM identified the following vocational options…as being suitable for Mr Mehmet: Sales Assistant (Retail eg: Hardware); Storeman/Labourer; Forklift Operator; Delivery Driver; Machine Operator (eg: Overhaul Crane Operator); Crane Operator; Process Worker (Light duties). APM noted the information provided by Mr Mehmet confirmed he had low motivation to return to work and that his focus is more on the care of his mother who he advised has schizophrenia. APM also noted that he presented with a reasonable set of transferable skills for roles other than that of a Bricklayer. This also had the support from his treating doctor, Dr Shah. The results from the functional assessment confirmed Mr Mehmet was capable of lifting up to 16.1kgs with both hands, thus he would be able to perform the role of a Process Worker (Light Duties)."
18. TAL's summary of the APM report misstated one matter. TAL said that APM had identified that one vocational option suitable for Mr Mehmet was as a "Sales Assistant (Retail...)". In fact, Ms Ong said: "Dependant on the type of goods sold, a Sales Assistant may be a suitable employment match if his condition is managed effectively. However, liaison with Mr Mehmet confirmed he would not enjoy the role as he was of the view that he does not have any social skills."
19. TAL also stated that Dr Shah provided support for the proposition that Mr Mehmet had a reasonable set of transferrable skills for roles other than a bricklayer. I see nothing in Dr Shah's reports to this effect.
20. I have mentioned that TAL referred to Dr Assem's report but did not consider it in its analysis of Mr Mehmet's condition.
21. Dr Assem's report included the following statements: "Mr Mehmet continues to experience chronic lower back pain that is sometimes associated with non-verifiable radicular symptoms in his right leg. He would have difficulty performing any tasks that would involve standing for long periods, sitting for long periods, repetitive bending, prolonged static back flexion or repetitively lifting items weighing more than 5kg. He is clearly unfit for his pre-injury work as a bricklayer and would have difficulty working as a steel cutter or machine operator in regular and reliable manner without sustaining a further aggravation of his condition. On the balance of probabilities, he is unfit to work as a bricklayer or laser operator or any other work given the limits of his education, training and experience since he ceased working in February 2009. … He is clearly unfit to return to work as a bricklayer. It is also unlikely that he would be able to work as a laser cutter in a regular and reliable manner given that he continues to have ongoing symptoms and limitations that interfere with his usual domestic responsibilities."
22. Dr Assem's opinions thus differ greatly from those of Dr Lowy, in particular his conclusion that Mr Mehmet is "unfit to work as a bricklayer or laser operator or any other work".
23. Finally, as I have said, TAL made no reference at all to Dr McGroder's report.
24. Dr McGroder said that Mr Mehmet had "chronic lower back pain" and that: "He has no transferrable skills. He has only been a process worker or a bricklayer. He will definitely not return to that type of work."
25. Again, that conclusion is quite different to the conclusion reached by Ms Ong in the APM report that Mr Mehmet had a number of "transferable skills".
26. Dr McGroder concluded: "Overall whilst theoretically he could perform some form of physical work, there is little chance of him becoming employed on the open market."
27. Although TAL said that it had taken into account the Prudence Consulting report, it made no reference in its analysis to Ms Young's conclusions in that report as follows: "1. As a result of his injuries, Mr Mehmet has sustained permanent impairment in his functional capacity and his ability to perform the physical demands of the vocational roles for which he holds qualifications, or at which he is experienced on either a full-time or part-time basis. It is unlikely that he will regain fitness for the demands of heavy work given his injury history and medical status. He will therefore remain unfit for the physical demands of the vocational roles for which he holds qualifications. 2. He is fit for work of a light to medium nature with some further modifications to lifting load requirements, and he would be unlikely to sustain medium category work on a full time basis."
28. In my opinion, TAL's analysis of the medical evidence available was flawed. I see considerable force in Mr Bingham's submission that TAL made reference only to evidence that supported its earlier announced decision to decline indemnity, and made reference to little, if any, evidence that was inconsistent with that denial.
29. Although TAL stated in its 29 October 2014 letter that it had considered all the material made available to it, I infer, from the form of the letter, that the only material to which TAL gave any weight was that discussed in the analysis to which I have referred.
30. In that analysis, TAL put a gloss on what Dr Shah said in his two earlier reports, and omitted any reference to his statement in his final report as to the need for Mr Mehmet to engage in retraining before having a "graded return to work".
31. TAL relied heavily upon Dr Lowy's report and the APM report, both of which certainly lend support to TAL's decision to decline indemnity.
32. However, TAL made no reference in its analysis to the conclusions of Dr Assem and Prudence Consulting, and did not refer to Dr McGroder's report at all. Each of Dr Assem, Dr McGroder and Prudence Consulting expressed opinions and made observations which were inconsistent with TAL's earlier decision to decline TPD benefits. The inference that I draw from the form of TAL's letter is that it simply ignored those opinions.
33. I find TAL's (and thus the Trustee's) analysis to be unreasonable and to bespeak a failure on its part to approach the task of considering Mr Mehmet's application in accordance with its good faith obligation.

Conclusion

1. I propose to set aside TAL's (and thus the Trustee's) determination that Mr Mehmet is not entitled to TPD benefits and remit the matter to TAL and the Trustee for reconsideration.
2. I invite the parties to bring in short minutes to give effect to these reasons.
3. I will hear the parties as to costs.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 16 December 2015