Plaintiff v Defendant

2 The Tribunal decided Tower was liable to make monthly payments under the disability income protection policy and ordered Tower to make those payments. It also decided Tower was liable to make payments under the business expense policy, after Mr Filippis supplied certain verified information, which it ordered him to do.

3 Tower has appealed to this Court from the orders of the Tribunal on a question of law. In well-argued submissions, counsel for Tower contended:

• the Tribunal applied the wrong test when determining whether Mr Filippis was eligible to receive payments under the policies
• the Tribunal erred in determining Mr Filippis was so eligible on the basis of the medical evidence alone
• the Tribunal made its decision without taking into account a relevant consideration

4 The issues arising under the disability income protection and the business expense policies are identical, so I will focus exclusively on the former.

5 The disability insurance policy required Tower to pay disability benefits to Mr Filippis if he suffered:

• total disability for at least 14 out of the first 19 days of the waiting period (which the parties agreed was 28 days)
• disability (partial or total) for the balance (if any) of the waiting period
• disability (partial or total) after the end of the waiting period

6 The policy defined "total disability" to mean Mr Filippis was, solely as a result of his sickness or injuries:

• not working; and
• not capable of generating at least two-thirds of his pre-disability monthly income by working in his normal occupation

7 "Working" was defined to mean Mr Filippis was generating income through personal exertion in an occupation, trade or business.

8 In the way the case was run before the Tribunal, the issues were whether Mr Filippis was totally or permanently or partially disabled by reason of the injuries he sustained in the accident and whether he was working.

9 The Tribunal carefully examined the medical evidence, which established Mr Filippis had a quite serious back injury. On the basis of this evidence, it found he was totally disabled. I do not need to go into this evidence because there was no appeal against this finding.

10 Tower's complaint is that, under the policy, the Tribunal had to consider an additional question - whether Mr Filippis was not working. Tower submits Mr Filippis had to satisfy this condition before he could be eligible to receive payments, and the Tribunal could not order Tower to make payments unless it decided he had done so.

11 It would be an error of law pure and simple for the Tribunal to decide in favour of Mr Filippis without finding he was not working during the relevant period. The question is, did it fail to make that finding?

12 The controversy arises because the Tribunal's reasons do not contain an express finding on that specific subject. The reasons reveal a strong focus on Mr Filippis's medical condition. In the critical passage, the Tribunal accepted the medical evidence that "for the entire waiting period the applicant was totally disabled and unable to work at all ..."[1] It went on to decide that Mr Filippis "was not able to work and was not capable of generating any of his pre-disability monthly income."[2]

13 This whole appeal turns on whether, in making those findings, the Tribunal ignored the question whether Mr Filippis was not working, or made an implicit finding in that regard. The Tribunal is obliged to supply reasons for decision that make its path of reasoning clear, especially in regard to the important points in the case; but those reasons have to be read fairly and in context, not trying to find error. I have examined the points of claim, the evidence led in the Tribunal, the transcript of the hearing and the submissions of the parties. I have read the reasons in that light, which has led me to conclude the Tribunal did implicitly find Mr Filippis was not working.

14 The condition that Mr Filippis was not working was clearly in the Tribunal's mind, because it mentioned the relevant parts of the eligibility clause and the definition clause in the reasons. The issue was dealt with in the pre-hearing points of claim, the evidence in the hearing and the post-hearing submissions, so it would be surprising if the Tribunal overlooked it.

15 Relevantly, the evidence in the hearing concerned the activities in which Mr Filippis engaged at his spas bath selling business after the accident. He was the operator of that business, which was his principal if not his only source of income. The evidence was that he attended the business premises for long periods during the day, answered telephone calls, saw customers and did various other things to attempt to keep the business going. His efforts were not successful and the business eventually closed down because he could not pay the rent. This evidence was fully recorded in the transcript of the proceedings in the Tribunal and is mentioned in the reasons.

16 In his evidence, Mr Filippis insisted his activities did not amount to working. He was certainly challenged on that subject. He also gave evidence he made no sales and received no income during the relevant period. He was not challenged on that subject, so the case proceeded on that basis. Tower made an unsuccessful attempt to obtain access to Mr Filippis's business records, but did not take that matter further. In the result, nothing disturbed the evidence that the business had made no sales and that Mr Filippis had received no income during the relevant period.

17 Having looked at the way Tower conducted its case in the Tribunal, I think it was proceeding on the basis that Mr Filippis's activities constituted work, which meant he was not eligible to receive payments. This influenced the way the Tribunal considered the issues in its reasons. Tower's approach was incorrect because it failed to take into account the definition of "working" in the policy, which was satisfied only by Mr Filippis generating income through personal exertion in an occupation, trade or business. Once the evidence that Mr Filippis was receiving no income from his activities went unchallenged, he had to win the debate on that point. The only relevance of Mr Filippis performing work-type activities could be to undermine his case that he was totally disabled from a medical point of view, which is exactly how the Tribunal dealt with the matter.

18 The Tribunal carefully considered the evidence that Mr Filippis performed work-type activities. There was a surveillance video of what he did at the business premises, which the Tribunal thought was of limited use. There was oral evidence of Mr Filippis, which the Tribunal found not to be particularly convincing or credible. The distinct tone of the Tribunal's reasons in relation to this subject is one of scepticism towards Mr Filippis's evidence. For example, the Tribunal referred to the unusual nature of him attending his business while at the same time telling Tower he was unable to work. But the Tribunal found the medical evidence, especially that of the treating doctors, to be convincing. On this basis, it decided Mr Filippis was totally incapacitated and unable to work. In doing so, I am convinced the Tribunal implicitly decided that Mr Filippis's activities did not show he was other than totally incapacitated and unable to work. I think the Tribunal thereby found that Mr Filippis's activities did not constitute "working" within the definition of that term in the policy.

19 In its reasons, the Tribunal said Mr Filippis's evidence was that he attended his business most days "until" about 11am. That was clearly wrong for his evidence was that he did so from about 10am or 11am. In my view, despite the strong supplementary submissions of counsel for Tower to the contrary, this was just a slip in the reasons, which, read fairly and as a whole, show the Tribunal understood the evidence on this subject very well. The slip does not reveal any mistake in the actual reasoning of the Tribunal in this respect.

20 Counsel for Tower submitted the insurance industry was entitled to expect that conditions in policies would be interpreted and applied correctly and with care. That is certainly correct. The question in this case is whether the Tribunal overlooked a critical condition - the one that required the insured not to be working during the relevant period. Tower was entitled to expect that condition to be properly applied. In my view the Tribunal met that expectation. The Tribunal did not apply the wrong test.

21 I have considered the evidence concerning Mr Filippis's activities to see if it was open to the Tribunal to conclude he was not working. In my view, the evidence definitely left that finding open. I think the evidence showed that Mr Filippis was trying to keep up appearances, which proved futile, not that he was working. The Tribunal's decision in this regard cannot be attacked on the ground that the finding could not be supported by the evidence.

DID THE TRIBUNAL PROCEED ON THE BASIS OF THE MEDICAL EVIDENCE ALONE?

23 This ground is simply another way of putting the one I have already dealt with.

24 Tower contends the Tribunal had to be relevantly satisfied of two things: that Mr Filippis was totally (or partially) disabled and that he was not working. That contention is plainly correct. It further contends the Tribunal could not be satisfied Mr Filippis was not working on the basis of the medical evidence alone.

25 I suppose it is theoretically possible for a person to be working even though they are totally disabled. If there is medical evidence of total incapacity and other evidence of working, the tribunal of fact would obviously need to approach both questions with care. To conclude someone was not working on the basis of medical evidence of total incapacity when there was other evidence of working would seem to be an incorrect approach.

26 However, in this case the Tribunal did not adopt such an approach. It properly considered the entirety of the evidence - medical and other - and found Mr Filippis was both totally incapacitated and unable to work. The Tribunal's express consideration of the evidence of Mr Filippis performing work-type activities shows unequivocally that it was mindful of the significance of this evidence. The Tribunal did not make a finding that Mr Filippis was not working on the basis of the medical evidence alone. It did so on the basis of the whole of the evidence.

DID THE TRIBUNAL FAIL TO TAKE INTO ACCOUNT A RELEVANT CONSIDERATION?

28 The relevant consideration allegedly ignored was Mr Filippis's attendance at his business from 10am or 11am daily. Tower contends the Tribunal's mistaken finding on that subject led it to ignore that relevant consideration.

29 The consideration is plainly relevant. But I have already said I do not accept the Tribunal misunderstood the evidence in this respect. The mistaken reference to "until" 11am in the reasons was a slip and does not show the Tribunal failed to take into account the correct position under the evidence.

31 The Victorian Civil and Administrative Tribunal ordered Tower Australia Ltd to make payments to Alex Filippis under a disability income policy and, subject to provision by him of verified information, a business expense policy. Mr Filippis had been injured in a motor vehicle accident by reason of which he claimed he was entitled to those payments.

32 The policies required Mr Filippis to establish that he was medically incapacitated for work to the requisite degree and that he was not working during the relevant period. Tower contended the Tribunal properly applied the first of these conditions, but not the second, and thereby made an error of law. It also contended the Tribunal made a critical erroneous fact-finding, which led it to ignore a relevant consideration. On these grounds it brought an appeal against the decision of the Tribunal on a question of law.

33 In my view none of the grounds have been made out. Although the Tribunal did not specifically find that Mr Filippis was not working during the relevant period, it is clear from the reasons that it did implicitly do so. That implicit finding was open on the evidence. The Tribunal did not approach the matter by reference to the medical evidence alone. It properly considered the other evidence as well. There was an erroneous reference in the Tribunal's reasons. This was a slip, not a mistake in the Tribunal's reasoning. The Tribunal did not ignore a relevant consideration.