Nafar v BT Funds Management Limited [2026] FCA 479

1. On 13 December 2017, Mr Nafar injured his back in an accident while working as a labourer. He claims to have since developed mental sequelae, which are referred to in his pleading as "psychological stress".
2. As a result of those injuries, he ceased work on 14 December 2017 and says that he has been unable to return to employment since that time.
3. He claims that, from 14 December 2017 onwards and as a result of his injuries, he has been unable to perform numerous activities of daily living without assistance. They include the basic functions essential to independent living, such as mobility and cleaning.
4. As a result, Mr Nafar claims to be totally and permanently disabled and, on that basis, entitled to TPD benefits under the insurance policy entitled, "Group Life (Death & TPD) Insurance Policy No. MP 8118" (the "Policy"). The Policy was issued by the second respondent, AIA Australia Limited (the "Insurer"), to the first respondent, BT Funds Management Limited (the "Trustee") as trustee for the BT Lifetime Super Employment Plan (the "Plan"), of which Mr Nafar was a member between 8 December 2017 and 30 June 2019.
5. Mr Nafar submitted a claim for TPD benefits under the Policy on 11 February 2019. The Insurer denied the claim on 7 October 2020, which denial was upheld by the Trustee on 26 March 2021. Mr Nafar thereafter provided further information in support of his claim; however, both the Insurer and the Trustee maintained their decisions to decline it.

1. The principles relevant to the Court's discretion to grant summary judgment are well established.
2. The power of the Court sought to be invoked by the present application derives from s 31A(2) of the Federal Court of Australia Act 1976 (Cth), which permits the Court to grant summary judgment if, relevantly, the applicant has no reasonable prospect of successfully prosecuting the proceeding or part thereof (see also r 26.01 of the Federal Court Rules 2011 (Cth)).
3. In general terms, the Court should not exercise its discretion under r 26.01 lightly. As French CJ and Gummow J observed in Spencer v Commonwealth (2010) HCA 28; (2010) 241 CLR 118 at 131 - 132 [24]:

The exercise of powers to summarily terminate proceedings must always be attended with caution. That is so whether such disposition is sought on the basis that the pleadings fail to disclose a reasonable cause of action or on the basis that the action is frivolous or vexatious or an abuse of process. The same applies where such a disposition is sought in a summary judgment application supported by evidence. As to the latter, this Court in Fancourt v Mercantile Credits Ltd [(1983) 154 CLR 87, 99] said:

"The power to order summary or final judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried."

More recently, in Batistatos v Roads and Traffic Authority (NSW) [(2006) [2006] HCA 27; 226 CLR 256, 275 [46]] Gleeson CJ, Gummow, Hayne and Crennan JJ repeated a statement by Gaudron, McHugh, Gummow and Hayne JJ in Agar v Hyde [(2000) [2000] HCA 41; 201 CLR 552, 575 - 576 [57]] which included the following:

"Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way."

1. However, though the power ought not be exercised lightly, the Court should be prepared to grant summary judgment where it is warranted. In ThoughtWare Australia Pty Limited v IonMy Pty Ltd [2023] FCA 906, the Court observed at [53]:

... courts should not shy away from granting summary judgment when, after a consideration of the facts and law, the outcome of the disputation is clear. If it is apparent that the result will not be altered by the holding of a trial, it is antithetical to the proper administration of justice to require the parties to be put to the effort and expense of conducting a full hearing.

1. The terms of the Policy are annexed to and set out in the affidavit of Mr Matthew Hardy, who is employed by the Insurer.
2. There is no question about the authenticity of the Policy.
3. In general terms, it relevantly provides that a benefit is payable to members of the Plan who become totally and permanently disabled. It contains several alternative definitions of TPD which apply to each insured member depending on their individual characteristics. The definition of TPD applicable to Mr Nafar, which he in these proceedings claims has been satisfied, provides as follows:

The Insured Member is continuously and totally unable to perform at least two (2) of the following activities of daily living as certified by a qualified Medical Practitioner, appointed by the Company:

Bathing:

The ability to wash oneself either in the bath or shower or by sponge bath without the assistance of another person.

Dressing:

The ability to put on and take off all garments and medically necessary braces or artificial limbs usually worn, and to fasten and unfasten them, without the assistance of another person.

Eating:

The ability to feed oneself once food has been prepared and made available, without the assistance of another person.

Toileting:

The ability to get to and from and on and off the toilet, without the assistance of another person and the ability to manage bowel and bladder functions through the use of protective undergarments or surgical appliances, if appropriate.

Transferring:

The ability to move in and out of a chair without the assistance of another person;

and

in the opinion of the Company, after consideration of medical and other evidence satisfactory to it, the Insured Member is unlikely ever to be able to follow their usual occupation and any other occupation for which they are reasonably suited by education, training or experience.

1. This definition imposes two requirements. The first is an objective one, being that a qualified medical practitioner, appointed by the Company (defined as the Insurer), certify that the person is continuously and totally unable to perform at least two of the identified activities of daily living. The second requirement is that the Insurer form a subjective view, after consideration of the medical and other evidence, that the person is unlikely ever to be able to follow their usual occupation and any other occupation for which they are reasonably suited.
2. As the respondents have identified, the difficulty for Mr Nafar in this case is that the first of those requirements has not been met. Though his Statement of Claim refers to numerous reports from several medical practitioners, none was appointed by the Insurer. It follows that the Statement of Claim does not sufficiently address how the requirements of the Policy have been complied with in order to establish an entitlement to a benefit.
3. The law on this point is relatively clear. Counsel for the respondents, Mr May, referred in his thoughtful and careful submissions to two cases of note. In Gomes v Austchem Nominees Pty Ltd (1993) 47 IR 471, the definition of TPD in the relevant insurance policy required the insured to obtain a certification from a "duly qualified medical practitioner acceptable to the Company" that the insured was unlikely ever to be able to attend to any gainful profession or occupation. The Company appointed a medical practitioner who did not give such a certification. Undeterred, the insured relied on other medical evidence as establishing that his condition met the identified level of disability. Sheller J (with whom Kirby P and Mahoney JA agreed) considered the absence of certification by the appointed practitioner to be an insurmountable hurdle (at 477):

The appellant has a threshold problem. The Trustee at the time it made its decision declining the claim had no certificate from a medical practitioner that the injury rendered the appellant unlikely ever to be able to attend to any gainful profession or occupation. A duly qualified medical practitioner had been asked so to certify but had not done so and consistent with his reports on the material before him would not have been prepared to do so. Accordingly the Trustee was entitled, if not bound, to refuse the claim.

1. A similar conclusion was reached in Stevedoring Employees Retirement Fund Pty Ltd v Gilberg [2006] FCA 1590. There, the relevant insurance policy required a report from at least two medical practitioners appointed by the trustee which stated that, in their professional view, certain matters had been satisfied, including that the insured was permanently incapable of performing work in any job for which they are reasonably qualified. The policy also provided for the appointment of one or more additional practitioners in the event of a disagreement between the practitioners who were first approached. In those circumstances, the policy required the trustee to base its determination solely on the opinion of the additional practitioner or practitioners so appointed.
2. The trustee in that case appointed several medical practitioners to provide an opinion, all of whom considered that the insured was not permanently incapable of performing duties in an occupation for which he was reasonably qualified. The Court found that, as a result, no occasion arose for the trustee to consider exercising their power under the policy to give a benefit (at [52]):

Dr Oates' opinion is clearly a 'medical opinion' about the relevant issues, in particular the issues raised by Rule 17(c)(ii)(B). His opinion on these matters is consistent with the opinions of the three medical practitioners whose reports were sought by the Trustee for the purposes of Rule 17(c), Drs Synnott, Hall and Walsh. It is contrary to the opinions expressed by the medical practitioners upon whom Mr Gilberg relied. Rule 17 required the Trustee to base its determination solely on Dr Oates' medical opinion. No occasion arose for weighing the totality of medical opinion. The Trustee in my view was correct to conclude that Mr Gilberg had no entitlement to a TPD benefit because the conditions for such an entitlement stipulated by Rule 17 had not been satisfied.

1. In the present case, the respondents submit that, in circumstances where there is no certification of his disablement by a medical practitioner appointed by the Insurer, Mr Nafar has no prospect of establishing an entitlement to a TPD benefit under the Policy. That seems to be undoubtedly correct.
2. This is not a case, though, where the Insurer and Trustee have sat back and done nothing in respect of Mr Nafar's claim. The evidence shows that they have referred Mr Nafar for assessment by several doctors, including Drs Dunn, Ng, Trifiletti and Navin. None was able to certify that he met the definition of TPD:

(a) Dr Dunn's report dated 11 July 2022 stated (emphasis added):

Turning now to the ADL's aspect of the policy, there were strong suggestions that the patient was unable to perform his ADL's because of pain rather than any psychiatric reason. In fact his emotional symptoms were notable for their absence from most of the medical reports of the time. It would be almost impossible for even a melancholic depression to incapacitate a patient of this age to this degree. While late-age depressions can be utterly incapacitating and leave patients with paralysing psychomotor retardation, those patients are almost invariably aged 70 or more and have a very high response rate to assertive biological treatments for depression including ECT. If he really is unable to perform those ADL's it must be for a physical reason and I am happy to leave my CMO colleagues to comment on those.

(b) Dr Ng's report dated 18 July 2022 stated on page 6 (emphasis added):

I have reviewed the documentation and from a psychiatric point of view Mr Nafar does not satisfy the Activities of Daily Living TPD definition at any point prior to 30 June 2019. There is no positive evidence that the psychiatric disorder was severe enough as to grossly interfere with the activities of daily living, from a psychiatric point of view. There have been various descriptions of Mr Nafar being able to take care of himself but being limited by pain. There have been descriptions of him being able to drive. There have been descriptions of him being able to feed himself and get out from his residence. He can certainly feed himself and toilet himself and transfer. Any problems dressing or bathing would be physical limitations and not psychiatric.

(c) Dr Trifiletti's report dated 21 July 2022 stated on pages 22 - 23 (emphasis added):

It is confirmed the claimant has high level disability following a back injury in December 2017 with significant psychiatric comorbidity. There is marked deconditioning, mood disturbance, low level function and reliance on passive therapies (including carers) all of which is associated with a poor prognosis.

However I do not consider there is demonstrable evidence of medical requirement for standby care to perform at least 2 out of 5 activities of daily living prior to 30/06/2019.

...

Therefore it is my opinion, whilst ADL care may have been provided this was not medically indicated nor supported by the medical evidence at the time.

(d) Dr Navin's report dated 12 August 2022 states on page 4 (emphasis added):

Based upon the material supplied, I consider that Mr Nafar did not meet the "ADL" TPD definition outlined at any point in time prior to 30 June 2019.

1. Moreover, it appears that the Insurer went further and engaged two other doctors to review and consider surveillance footage of Mr Nafar and comment upon it:

(a) Dr Johnson's report dated 21 July 2023 states:

The surveillance footage does not reflect a person who is:

- unable to wash himself, bath or shower;

- unable to put on and take off garments;

- unable to get on and off the toilet; and

- unable to move in and out of a chair without assistance.

(b) Dr Nielsen's report dated 23 July 2023 states:

The functional impairment summary in paragraph 1.4 of the report request [paragraph 1.4 quoted the allegation in paragraph 15 of the statement of claim] presents a description of severe disability and functional impairment with basic activities of daily living.

In contrast the surveillance footage shows a gentleman who appears functionally independent, being able to walk unaided for distances of at least 1km while carrying a backpack, manage flights of stairs without apparent difficulty, transition unaided in and out of a motor vehicle, and sit without moving or shifting in uncushioned non-ergonomic chairs at a café restaurant.

In my opinion, the observed functional ability in the surveillance footage is substantially inconsistent with functional impairment summary in paragraph 1.4. I would expect a patient with the functional impairments outlined in paragraph 1.4 to also be unable to perform the more physically-onerous activities demonstrated in the surveillance footage.

1. It suffices to say that the observations of Drs Johnson and Nielsen buttress the inability of Drs Dunn, Ng, Trifiletti and Navin to reach a conclusion that the requirements of the Policy were not met. They also demonstrate, as Mr May observed in his written submissions, that even if there was some defect in the Insurer's opinion, the Court would not, on the basis of the evidence currently available, substitute an opinion more favourable than has already been expressed.
2. That being so, it is clear that Mr Nafar has no reasonable possibility of establishing the declaratory relief sought in his Originating Application and Statement of Claim. In particular, paragraphs 4, 5 and 6 of the Originating Application seek declarations to the effect that the benefit is payable under the Policy and that the Insurer should pay the Trustee, and subsequently, the Trustee should pay Mr Nafar. On the basis of the foregoing analysis, that simply cannot occur.
3. There is also no justification for making the declaration sought in paragraph 1 of the Originating Application that the Insurer's decision as to Mr Nafar's entitlement under the Policy is void and of no effect. That is because, fundamentally, the Insurer's decision is of no legal relevance. The pertinent question in this case is whether an entitlement arose under the Policy. In circumstances where the preconditions for any entitlement under the Policy are not met, the correctness or otherwise of the Insurer's decision does not arise.
4. The same can be said for the declaration sought by paragraph 2 of the Originating Application that the Trustee's decision not to pay Mr Nafar is void and of no effect. This is for two reasons. First, as mentioned, this case concerned the construction of the Policy, and whether an entitlement arose under it. There is simply no utility in addressing, one way or another, the Trustee's decision on that question because it is irrelevant. Secondly, it is correct, as Mr May pointed out, that the Trustee's obligation under the Policy is to pay to Mr Nafar that amount which is paid to it by the Insurer. Since no such amount is payable by the Insurer, the Trustee has no obligation to pay anything to Mr Nafar. It follows that there is no basis for making any of the declarations sought and there is no basis for Mr Nafar making any claim as to damages, interest or costs under the Policy.
5. In the result, the claim should be summarily dismissed.

1. Though the issue was not raised by any party at the hearing, it is important that a court is satisfied of its jurisdiction in relation to matters before it. Here, the Originating Application did not identify any basis on which this Court might have jurisdiction. However, paragraph 35 of the Statement of Claim sought interest from the Insurer on the basis of s 57 of the Insurance Contracts Act 1984 (Cth). That claim to interest is one that arises under a law made by the Commonwealth Parliament, and so is within the Court's original jurisdiction under s 39B(1A)(c) of the Judiciary Act 1903 (Cth): Elders Ltd v Swinbank [2000] FCA 56; (2000) 96 FCR 303, 305 [4].

1. The respondents also seek an order for their costs of the application. The ordinary rule in the Federal Court of Australia, and in all courts in this country, is that the successful party is entitled to an order that the unsuccessful party pay their costs. That is not invariable, but it is a rule of thumb, and it is a rule which should be applied unless there are circumstances which justify a departure from it.
2. It was suggested from the Bar table that the disparity in economic power between the parties should be a reason for not making an order for costs. That has never been an appropriate justification for departing from the ordinary rule. Were the Court to go down that path, it would result in people bringing actions against wealthier opponents without the disincentive of a potential costs order. That would only lead to a clogged court system.
3. It should also be noted that, from an early stage in these proceedings, the applicant and those assisting him were implored to carefully consider whether to proceed with the matter given its apparent lack of merit. Despite that earnest warning, the applicant chose to proceed. In those circumstances, there is no basis for not making an order for costs in the respondents' favour.
4. In the result, the applicant is to pay the respondents' costs of the proceeding, including this application, and in the absence of an agreement, such costs are to be taxed on a party/party basis.

1. These are the amended and revised reasons for judgment given on 7 April 2026. Whilst the reasons given above refine and develop those that were delivered ex tempore, the substance of what was said that day has not been changed nor has any other material change been made.

I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Derrington.