Plaintiff v First Defendant

Plaintiff v First Defendant - [2011] VSC 257 - VSC 2011 case summary — Zoe

[12]

9 It is well established that a trial judge should follow decisions of fellow judges at first instance unless they are clearly wrong.[11] However, counsel for MetLife contended that the position in this case was not one in which there was a decision which I ought, although not bound, to follow unless I considered it to be clearly wrong, but rather, that I was faced with conflicting decisions of two judges of this Court sitting at first instance, namely the decision of Ashley J (as his Honour then was) in D'Souza and the decision of Kyrou J in CECA. I do not consider the two decisions to be in conflict as submitted. Ashley J (as his Honour then was) did not reject Datafin and Kyrou J in CECA did not purport to overrule or decline to follow D'Souza. In D'Souza Ashley J (as his Honour then was) may properly be understood as distinguishing Datafin on the facts before his Honour rather than deciding not to apply it. His Honour identified three classes of cases in which judicial review was sought against entities, namely, where (a) entities whose exercise of power was grounded in statute, (b) entities whose exercise of power was grounded in contract, and (c) entities whose exercise of power was grounded in "the middle ground". His Honour considered the case before him as one in the second category (namely as one in which the entity's power was grounded only in contract) and regarded Datafin as a case in the middle ground.[12] In D'Souza his Honour considered that the relevant absence of authority for the grant of certiorari was in respect of a decision of a body whose powers "derive only from private contract" (my emphasis).[13] The decision challenged in D'Souza was one whose power derived solely from contract,[14] and, in any event, his Honour concluded that the entity in that case did not exercise public functions and powers in determining whether to elect a candidate to fellowship even though such election had public consequences.[15] In contrast, the decision in CECA specifically adopted the Datafin principle and I ought to follow the decision of Kyrou J unless I consider it to be clearly wrong.[16] I do not consider his Honour's decision to be clearly wrong. On the contrary, I consider his Honour's decision and that in Datafin to be correct and to accord with the fundamental and constitutional role of the Court to ensure that the exercise of public duties is amenable to judicial review.

[19]

12 The insurance industry like many others is regulated by government and that circumstance alone is not sufficient to invoke the Datafin principle. Nor is it sufficient that the decision being challenged has public consequences (as was made clear by D'Souza). MetLife operates under a licence which is conditional upon it being a member of an alternative dispute resolution scheme approved by ASIC. FOS conducts a dispute resolution scheme specifically approved by ASIC under an instrument made pursuant to the Corporations Act 2001. That scheme is governed by a constitution and terms of reference. It is a company limited by guarantee whose objects are directed to the purpose, like its predecessor, of providing "an external dispute resolution scheme which complies with" the Corporations Act 2001.[24] There is no doubt a public interest in a private company providing an alternative dispute resolution mechanism for the benefit of those who come within its terms. The same, however, may be said of the very many private entities, arrangements or industries which are regulated by government and legislation. It may, of course, be said of private law generally. The public interest in the existence of a dispute resolution mechanism to resolve private disputes, however desirable from the point of view of public policy, does not in my view constitute a public function or element which of its nature is sufficient to invoke the principle in Datafin. The public interest evident in the regulatory framework is that there should be a mechanism for private dispute resolution but I do not think it can be said that FOS is exercising a public duty or public element when its jurisdiction is consensually invoked by the parties to a complaint. Mr Mickovski was under no obligation to make use of FOS and the terms of reference makes clear that complainants are not bound by decisions of FOS. Complainants may wish to pursue whatever rights they may have against the member, in this case MetLife, in any other forum. There is in my view no relevant public "duty"[25] or public "element"[26] in FOS being invoked as the means by which a private controversy or complaint may be resolved in a non binding manner. In that regard I agree with, and respectfully adopt, the conclusion in R v Insurance Ombudsman Bureau; Ex parte AEGON Life Assurance Limited.[27]

[49]

A number of medical reports in the member's possession and relied on to grant TPD benefits (and to terminate SCI benefits) in 1999, were first made available to the complainant in 2007 or 2008. The complainant's solicitors assert that these reports themselves constitute relevant facts.
The member questioned why it would be expected to provide this material (and why its failure to do so was a breach of its obligations) when it was admitting a claim, being the claim for TPD benefits.
This submission may be said to be disingenuous. The termination of SCI payments was accompanied by, or immediately followed upon, the decision to grant TPD benefits, and arose from the application of identical, or virtually identical, policy criteria to the complainant's medical condition. This does not make the termination of payments any less an adverse decision, under a different if related policy to the one under which benefits would now be paid. This would have been the case even when the member believed that SCI benefits ceased upon payment of TPD benefits. It is even more the case under the policy terms as set out by the NSW Supreme Court; the cessation of one benefit does not flow from the payment of the other.
However, the member also pointed out - correctly - that the medical reports are not themselves relevant facts but evidence of a relevant fact: whether the complainant was totally and permanently disabled within the meaning of the policy wording. The reports withheld by the member - at least eight reports, taken into account in its decision to pay TPD benefits and cease SCI benefits - did not constitute the only evidence available on this issue.
Further, and most critically, the reports withheld by the member would not have been the only evidence available to suggest a different view of the relevant fact - that is, whether the complainant met the policy definition of total disability.
In a letter from the complainant's solicitors to the member, dated 19 August 2008, several medical reports are cited. These medical reports, mostly dating back to 1999 and 2000, could have provided support for an argument that the complainant was not totally and permanently disabled in 1999 when SCT benefits ceased and TPD benefits were paid.
The complainant was in a position to obtain those reports (with the sole exception of one GP report dating from 2008) and may indeed have had them by, of course, early 2001 at the latest. He was therefore sufficiently placed by that time to be aware that not all the evidence supported the conclusion that he was totally and permanently disabled.
Further, nothing in the material before me suggests that the contents of those reports would have altered the view of this question of fact, such that the complainant could not reasonably have known the relevant fact until he had had the chance to review those reports.

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Judgment (82 paragraphs)

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Cases Cited (12)