· 30 days after you leave the service of the company.
· when you attain age 65
· the date of your death
· the date a total and permanent disablement claim is accepted by the Pratt Industries Employees Superannuation Fund.
18 The SCI policy was terminated on 30 June 2001, when the Visy Group obtained salary continuance insurance elsewhere. In 2001, Metlife's Claims Manager, Andrew McFarlane, who was then its Group Claims Supervisor, ascertained that the First Schedule to the SCI policy omitted any reference to benefits ceasing on payment of the TPD benefit, and purported to amend the First Schedule on 11 September 2001 so as to define the benefit period as "65 years (ceasing on payment of TPD)".
Rectification of Instruments
19 The requirements of a claim for rectification were not significantly in dispute in these proceedings. For present purposes, they can be sufficiently summarised by reference to the judgment of Wilson J in Pukallus v Cameron (1982) 180 CLR 447, 452, where his Honour said that the essential principles were (1) that though there need not be a concluded antecedent contract, there must be an intention common to both parties at the time of the contract to include in their bargain a term which by mutual mistake is omitted from it; (2) that a plaintiff must advance convincing proof that the written contract does not embody the final intention of the parties; and (3) that the omitted ingredient must be compatible of such proof in clear and precise terms, so that the Court must not assume for itself the task of making the contract for the parties.
20 As to the requirement for proof of the omitted ingredient in clear and precise terms, in Bush v National Australia Bank (1992) 35 NSWLR 390 Hodgson J (as his Honour then was) said (at 407):
A further difficulty which may arise when rectification is sought on the basis of a common mistake as to the legal effect of words is that the court cannot draft an agreement for the parties, to give effect to some intention of the parties which they have totally failed to accomplish with the words they have chosen. It is necessary that the common intention be such that the court can conclude, with the appropriate clarity, both the substance and the detail of the precise variation which needs to be made to the wording of the instrument: see Pukallus v Cameron (1982) 180 CLR 447 at 452; GPI Leisure Corporation v Herdsman Investments Pty Limited (No 4), Young J, 17 August 1990, at [9]-[14]).
21 It is instructive that in this passage Hodgson J was concerned with the detail of the precise variation to be made to the wording of the instrument. In Pukallus v Cameron, which his Honour cited, three cases were mentioned as supporting the requirement for proof in precise terms of the omitted ingredient, including Australian Gypsum Limited v Hume Steel Limited (1930) 45 CLR 54, and Maralinga Pty Limited v Major Enterprises (1973) 128 CLR 336, 349. Both those cases in turn referred to the speech of Lord Chelmsford in Fowler v Fowler (1859) 45 ER 97, in which his Lordship said the claimant for rectification must establish clearly "that the alleged intention to which he desires [the instrument] to be made conformable continued concurrently in the minds of all parties down to the time of its execution, and also must be able to show exactly and precisely the form to which the deed ought to be brought".
22 Again, this illustrates that what must be shown with precision is the form which the instrument ought to have taken - that is to say, the words which ought to have been inserted in or omitted from it. Thus precision is required as to the words to be used, rather than the meaning of those words: rectification is concerned with the form of the instrument, as opposed to its meaning. Meaning is a matter of construction, not rectification, and ambiguity in the meaning of agreed words is not a bar to rectification, if they were, in fact, the words that the parties intended to use. Any such ambiguity can be resolved by the process of construction.
Should the SCI policy be rectified?
23 The starting point is the pre-contractual evidence. The context was that there was an existing Group Life policy, covering employees for total and permanent disablement, between Citicorp Life and the third defendant Visy Board Superannuation, under which the first defendant Visy Board was also the employer. There were also in place arrangements for voluntary salary continuance insurance. What was mutually contemplated was the introduction of universal salary continuance insurance - thus the request for and provision of a quote. The request for a quote, as its name suggests, sought the terms - and perhaps more particularly the price - for that insurance. The quote, when provided, was plainly expressed to be offered on the basis of a benefit period "to age 65, ceasing on TPD". The acceptance of that quote was plainly expressed to be in accordance with the plan "as quoted" in the letter of 9 March 1998, including "ceasing on TPD".
24 The scheme questionnaire was submitted in response to the letter of acceptance, and when completed and signed by Visy's General Manager Human Relations, specified a benefit period "to age 65 or earlier TPD". It was dated 25 August 1998, less than a week before the date on which the policy commenced, on 1 September 1998. The policy itself refers to the questionnaire, in item 2 in the First Schedule.
25 The pre-contractual correspondence therefore strongly favours the view that the parties negotiated, quoted and accepted on the basis that the benefit period would be expressed to be to age 65, ceasing on total and permanent disablement.
26 However, there is a contrary indication in the post-contractual evidence. The letter of 4 December 1998, to which I have referred, is some evidence that a person who had been involved in the negotiations for the policy did not notice any deficiency in the schedule, even though she obviously examined it with care for deficiencies.
27 On the other hand, other post-contractual communications - including correspondence between Buck and Citicorp Life in relation to, and pertaining to consideration of, claims by employees - indicate that the idea of salary continuance cover terminating upon an employee being assessed as totally and permanently disabled was then current, but it does not necessarily show that it was current at the time of the negotiations for the contract, although it can be said that there is nothing in that material - aside from the letter of December 1998 - which is inconsistent with the view that salary continuance cover would terminate on total and permanent disablement. As I indicated in a judgment given on the admissibility of evidence, however, although post contractual conduct from which an inference can be drawn that the parties had, at the time of entering into the transaction, a particular intention, is admissible, it is necessary to exercise considerable caution in the use of that evidence, because it may provide no evidence of the intention prior to and at the time of execution, but only of a later intention which may not have been in existence at the time of execution. Some of the post-contractual evidence in this case appears to involve an acceptance by Buck of a post-contractual assertion by the insurer of its position, rather than a common intention of the two. For that reason, I attribute little significance to the post-contractual evidence, other than the letter of December 1998.
28 For the opposing defendants, great reliance has been placed on the absence of oral or affidavit evidence from any person who was involved in the negotiations as to what was their intention at the time. In the context of this case, I do not find that submission compelling. The evidence that such witnesses could give of his or her intention, years after the event, would be of a subjective intention of one party (not of contractual intention, objectively ascertained), and would be coloured by their current interests - or those of their employers - in these proceedings. The contractual intent of the parties is best ascertained, not by what a witness says, years after the event, was then their subjective intention, but objectively from their communications and conduct at the time. The best evidence in this case of the parties' contractual intention is to be found in the communications that passed between them at the time, and not what anyone might say on their behalf was subjectively their intention many years later.
29 As I indicated in dealing with an objection to the admissibility of evidence, the communications which took place at the time of the pre-contractual negotiations are not admitted in exception of the hearsay rule or for a hearsay purpose. They evidence the negotiations which actually took place, which manifest the then common intention of the parties. The quote and the response to it evidence an offer and an acceptance which, even if not intended to be contractually binding, manifest the type of consensus required to found a case for rectification, as described by Street J (as he then was) in Australasian Performing Right Association Limited v Austarama Television Pty Limited [1972] 2 NSWLR 467, 472-473.
30 It was also pressed on behalf of the defendants that in the absence of evidence from the principals - namely, an officer of the Visy Group - a case for rectification could not be proved based on what an agent - namely, Bucks - had done. I am amply satisfied that Bucks were Visy's duly authorised agent for the purposes of negotiating salary continuance insurance with Citicorp Life. The correspondence, though not containing the precise statement, "We act on behalf of the Visy Group", is captioned in such a way as reflects Bucks acting on behalf of the Visy Group. The inferences which I have drawn as to the completion of the scheme questionnaire - including Mr Taylor's handwriting on it, and the subsequent signature of it by Visy's Manager Human Relations - confirms the authority of Bucks as Visy's representative. In any event, the ultimate issue and acceptance of the policy, and Visy's subsequently making claims on it, is ratification of Buck's authority to negotiate that policy on behalf of Visy.
31 Reliance was placed on the judgment in the High Court of Australia in Australian Gypsum Ltd v Australian Plaster Company Ltd (1930) 45 CLR 54 for the proposition that, in the absence of evidence of communications between Bucks and the Visy Group about the benefit period provision, the plaintiff had failed to establish that the schedule was expressed in its existing form by reason of mutual mistake. However, on closer examination, Australian Gypsum is really concerned with quite a different point. In that case, terms had been added to a document by solicitors or their agents, and the document was thereafter executed by the principal without reading or adverting to the added terms. The High Court held that the draftsman - the solicitor who was acting wholly in the interests of his client - must be taken to have appreciated the effect of the terms that he inserted, and that in the absence of evidence from the principals of some communication between solicitor and principals about it, it had not been proved that what the solicitor had inserted was inserted by mistake. The Court said (at 67):
The respondent cannot establish, as it must to succeed, that down to the execution of the instrument, the appellant ... by its officers, solicitors, or agents authorised in that behalf intended that the term of sublease should not include a minimum period of four years. It, therefore, failed to prove that the instrument was expressed in its present form by reason of a mistake which was mutual.