TAL Life Ltd v Shuetrim; MetLife Insurance Ltd v Shuetrim

2015/151747 MetLife Insurance Ltd (Appellant) Benjamin Shuetrim (First Respondent) FSS Trustee Corporation (Second Respondent) TAL Life Ltd (Third Respondent) Representation: Counsel: I M Jackman SC, S Walsh (TAL Life Ltd) J E Sexton SC, J G Duncan (MetLife Insurance Ltd) B W Rayment QC, A Coombes (First Respondent) Submitting appearance (Second Respondent)

Solicitors: HWL Ebsworth Lawyers (TAL Life Ltd) TurksLegal (MetLife Insurance Ltd) Firths (First Respondent) Mills Oakley Lawyers (Second Respondent) File Number(s): 2015/150468; 2015/151747 Publication restriction: Nil Decision under appeal Court or tribunal: Supreme Court of NSW Jurisdiction: Equity Citation: [2015] NSWSC 464 Date of Decision: 24 April 2015 Before: Stevenson J File Number(s): 2013/289552

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] HEADNOTE [This headnote is not to be read as part of the judgment] Mr Shuetrim joined the NSW Police Force in 2007, prior to which he trained and worked as a mechanic. While undertaking training with the Police Force in September 2011, he sustained an injury to his left elbow. He ceased active duties in November 2011. He was subsequently diagnosed with an anxiety disorder which was related to his employment with the Police Force. Mr Shuetrim was medically discharged from the Police Force in November 2012. The appellant insurers, MetLife and TAL, issued policies of insurance in respect of Total and Permanent Disablement (TPD) to the Trustee of Mr Shuetrim's superannuation fund. In early 2013, Mr Shuetrim lodged a claim with the Trustee for TPD benefits under these policies. In order to satisfy the definition of TPD in the TAL policy, Mr Shuetrim was required to have "provided proof to the satisfaction of [TAL] that [Mr Shuetrim] has become incapacitated to such an extent as to render [him] unlikely ever to engage in or work for reward in any occupation or work for which [he] is reasonably qualified by reason of education, training or experience." The wording of the MetLife policy was similar. By late 2013, neither insurer had determined Mr Shuetrim's claim. He commenced proceedings against MetLife in September 2013, and joined TAL in December 2013, on the basis that the insurers had constructively denied his claims. TAL declined Mr Shuetrim's claim in December 2014, and MetLife declined his claim in February 2015. Mr Shuetrim amended his pleadings to allege that in declining his claim, each insurer had acted in breach of their duty to him to act in good faith and fair dealing. The primary judge adopted a two-stage approach. First, his Honour determined that both MetLife and TAL had acted in breach of their duties to Mr Shuetrim in determining his claims. His Honour found that MetLife breached its duty by failing to give proper weight to a vocational assessment report, and that TAL breached its duty by failing to refer to particular medical and psychiatric opinion as well as the vocational assessment report. These breaches were held to be so unreasonable as to vitiate the insurers' decisions. Secondly, his Honour determined that Mr Shuetrim did satisfy the definition of TPD in each policy. Judgment was entered in favour of Mr Shuetrim against both insurers. On appeal, MetLife and TAL both challenged the primary judge's conclusions that they had breached their duties of good faith and fair dealing to Mr Shuetrim, and that Mr Shuetrim satisfied the respective definitions of TPD. TAL also challenged the two-stage approach taken by the primary judge, despite having acceded to that approach at trial, and submitted that the decision should have been remitted to it in the event of breach. Held by Leeming JA, Beazley P and Emmett AJA agreeing, allowing the appeals: Construction of the TPD clauses 1. The statement in the headnote of White v The Board of Trustees [1997] 2 Qd R 659 that "'unlikely' meant 'improbable' in the sense of a less than 50 per cent chance" is erroneous: at [81], [86], [189]-[190]. White v The Board of Trustees [1997] 2 Qd R 659, considered; Beverley v Tyndall Life Insurance Co Ltd [1999] WASCA 198; 21 WAR 327, followed 1. The phrase "unlikely ever" in the TPD clauses does not mean "less than 50 per cent". A real chance that a person will return to relevant work, even if it is less than a 50% chance, will preclude an insurer being satisfied that the Insured Person is unlikely ever to return to relevant work. Conversely, the insurer will be satisfied if there is merely a remote or speculative possibility that an Insured Person will return to such work: at [88]-[91], [190]. 2. Consideration of the utility of dictionary definitions: at [80]. Thiess v Collector of Customs [2014] HCA 12; 250 CLR 664, 2 Elizabeth Bay Road Pty Ltd v The Owners - Strata Plan No 73943 [2014] NSWCA 409; 88 NSWLR 488, Comcare v Martinez (No 2) [2013] FCA 439; 212 FCR 272, R McDougall, "Construction of contracts: The High Court's approach" (2016) 41 Aust Bar Rev 103, referred to Breach of duty 1. MetLife did not breach its duty to Mr Shuetrim by failing to give the vocational assessment report, which was highly equivocal, "any, or any proper, weight": at [100]-[102]. 2. TAL did breach its duty to Mr Shuetrim by failing to have regard to medical and psychiatric opinions expressed after the "relevant time". These opinions were relevant to TAL's determination of Mr Shuetrim's claim: at [147]-[154]. The two-stage approach 1. TAL should not be permitted to reverse its forensic decision made at trial, in circumstances where that decision significantly affected the course of the trial: at [164]-[167]. Sze Tu v Lowe [2014] NSWCA 462; 89 NSWLR 317, Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631, referred to 1. Despite being the subject of some judicial criticism, the two-stage approach in Edwards v The Hunter Valley Co-op Dairy Co Ltd has been applied in considered appellate decisions in New South Wales, Queensland and arguably Western Australia, which have consistently been applied in first instance decisions across Australia, and shall not be departed from: at [168]-[188]. Edwards v Aberayron Mutual Ship Insurance Society (1876) 1 QBD 563, Edwards v The Hunter Valley Co-op Dairy Co Ltd (1992) 7 ANZ Ins Cas 61-113, HCF Life Insurance Company Pty Ltd v Kelly [2002] WASCA 264, McArthur v Mercantile Mutual Life Insurance Co Ltd [2002] 2 Qd R 197, Hannover Life Re of Australasia Ltd v Sayseng [2005] NSWCA 214; 13 ANZ Ins Cas 90-123, Birdsall v Motor Trades Association of Australia Superannuation Fund Pty Ltd [2015] NSWCA 104; 89 NSWLR 412, considered Did Mr Shuetrim satisfy the definition of TPD? 1. The evidence supplied by Mr Shuetrim did not satisfy the Court that he was unlikely ever to engage in or work for reward in any occupation or work for which he is reasonably qualified by reason of education, training or experience: at [191]-[209].

Judgment Beazley P: concurring judgment [1] Leeming JA: judgment [2] Factual background [4] The TAL and MetLife policies [6] Assessment by TAL and MetLife of the claims [13] TAL's determination of the claim [18] MetLife's determination of the claim [22] Reasons of the primary judge [29] Finding of breach by TAL [31] Finding of breach by MetLife [36] The appeals [40] The duty owed by the insurers to Mr Shuetrim [47] The proper construction of the TPD clauses [59] Uncontroversial propositions [60] "Unlikely ever to engage" [68] White v The Board of Trustees [77] The use made of White v The Board of Trustees [83] The meaning of "unlikely ever" [88] Was there a "fatal flaw" in MetLife's letter? [92] Mr Shuetrim's notice of contention in MetLife's appeal [103] Did MetLife fail to accord procedural fairness? [104] Did MetLife fail to have regard to Mr Shuetrim's affidavit? [107] Did MetLife refer to opinions dealing with remote possibilities? [110] Did MetLife fail to make a determination? [114] Was TAL in breach? [117] The parties' submissions [120] Medical opinions [124] Psychiatric opinions [142] Conclusions on medical and psychiatric evidence [147] Should Edwards be overturned? [156] TAL's submissions [157] TAL should not be permitted to reverse its forensic decision made at trial [164] Edwards should not be overturned [168] Did the primary judge err in finding that Mr Shuetrim satisfied the definition of TPD in the TAL policy? [189] The finding which should be made [191] Orders [210] Emmett AJA: concurring judgment [214]

1. BEAZLEY P: I have had the advantage of reading in draft the reasons of Leeming JA. I agree with his Honour's reasons and proposed orders.
2. LEEMING JA: The appellant insurers, TAL and MetLife, challenge in separate appeals and on different grounds, the decision by the primary judge that the trustee of the superannuation fund of the respondent, Mr Benjamin Shuetrim, be paid amounts in respect of Total and Permanent Disablement (TPD) under two policies it had taken out for the benefit of members. The principal issues which arise are fourfold. First, whether the primary judge erred in construing the TPD definition ("unlikely ever to engage in or work for reward"). Secondly, whether the insurers in refusing the claims breached a duty enforceable by Mr Shuetrim. Thirdly, whether in the event of breach the court should remit Mr Shuetrim's claim to the insurers to redetermine. Fourthly, whether the primary judge erred in concluding that Mr Shuetrim satisfied the definition in both policies.
3. For the reasons which follow, I have concluded that the construction of the TPD definition applied by the primary judge (and other judges at first instance) was incorrect, seemingly because of the erroneous reporting of a Queensland decision. I think that the primary judge was right to find that TAL breached a duty enforceable by Mr Shuetrim, but wrong to find that MetLife was in breach. I have rejected TAL's submission that a long-standing line of authority authorising courts to determine questions of this nature be overturned, but I have upheld its submission that Mr Shuetrim has not shown that he satisfied the TPD definition. The result is that I propose that both appeals be allowed.

Factual background

1. Mr Shuetrim was born in 1976 and completed his Higher School Certificate in 1994. For around the next 10 years he worked as a mechanic, having obtained a Mechanics Trade Certificate in 1997. In 2006 he completed an Associate Degree in Policing Practice at Goulburn and in February 2007 he became a probationary constable with the NSW Police Force. During his service he was exposed to a series of traumatic events, the detail of which it is unnecessary to summarise. On 21 September 2011, while undertaking training as part of his deployment to the Middle Eastern Organised Crime Squad, he sustained injury to his left elbow. Over the next two months he attended work on modified duties and for restricted times. His last day at work was 21 November 2011.
2. Mr Shuetrim had continuing problems with his elbow. He underwent a left elbow arthroscopy on 9 May 2012. It will be necessary in what follows to address in detail the numerous medical and psychological assessments in evidence in this proceeding, which were obtained by his own solicitors, as well as by each of TAL, MetLife and his former employer's workers compensation insurer. It suffices for present purposes to state that Mr Shuetrim applied for and received workers compensation payments from immediately after his physical injury. He was medically discharged from the Police Force on 22 November 2012 and, it may be assumed, received the benefit to which he was thereby entitled.

The TAL and MetLife policies

1. In early 2013 Mr Shuetrim (by his solicitors) made a claim upon policies of insurance taken out by the trustee of his superannuation fund, FSS Trustee Corporation (the Trustee), in respect of TPD. It is those claims, which were refused by both insurers but determined favourably to Mr Shuetrim by the primary judge, which have given rise to these two appeals.
2. The Trustee filed a submitting appearance shortly before the trial, following the decisions by TAL and MetLife to deny cover. The Rules of the fund authorised the Trustee to acquire insurance policies "to provide insured benefits for members". Clause 11.2 of the Rules was in these terms: "The insured benefit of a member is: (a) limited to the extent that the Trustee is able to effect cover under an insurance policy; (b) only payable to the extent that the Trustee receives payment from the insurer under an insurance policy."
3. The Rules had effect as if they were set out in the trust deed: cl 2.2. It was not suggested that any other clause in the trust deed or Rules was relevant. It will be seen that, unlike some other cases, Mr Shuetrim's entitlement to benefits as a member of his superannuation fund was not dependent upon the formation of an opinion by the Trustee of the fund, but, instead, was entirely contingent upon the insurer making payment to his Trustee.
4. For historical reasons that need not be explained, the Trustee had entered into two group policies of insurance which might respond to the claim made by Mr Shuetrim. Each policy provided cover for TPD, defining it in similar terms.
5. Under the Basic Policy provided by TAL, TPD was relevantly defined as follows: "…The Insured Person having been absent from their Occupation through Illness or Injury for 3 consecutive months (where the Insured Person's condition is unclear it is reasonable to defer assessment) and having provided proof to the satisfaction of us that the Insured Person has become incapacitated to such an extent as to render them unlikely ever to engage in or work for reward in any occupation or work for which he or she is reasonably qualified by reason of education, training or experience."
6. Under the Blue Ribbon Policy provided by MetLife, which provided additional cover for police officers, TPD was relevantly defined as follows: "…The Insured Member having been absent from their Occupation with the Employer through injury or illness for six consecutive months and having provided proof to our satisfaction that the Insured Member has become incapacitated to such an extent as to render the Insured Member unlikely ever to engage in any gainful profession, trade or occupation for which the Insured Member is reasonably qualified by reason of education, training or experience."
7. It was at all times common ground that the first limb of both clauses was satisfied (namely, absence from work through injury or illness for three, or six, consecutive months). The critical limb for the purposes of this litigation was and is the second, which turned on "proof to the satisfaction of us" and "proof to our satisfaction" that Mr Shuetrim was "unlikely ever" to return to employment in the circumstances stated in the definition of TPD.

Assessment by TAL and MetLife of the claims

1. Mr Shuetrim's lawyers made a series of requests to both insurers to determine his claim, and ultimately commenced proceedings against MetLife on 25 September 2013. TAL was joined on 9 December 2013. As originally formulated, Mr Shuetrim alleged that MetLife and TAL had constructively denied his claim for TPD benefits and sought orders that the benefits of $597,287 and $207,216 be paid by MetLife and TAL respectively to his Trustee.
2. Shortly after lodging his claim, the Trustee told Mr Shuetrim's solicitors that there had been an "unprecedented number of claims for TPD" under the Blue Ribbon Policy. The Trustee advised that there could be delays attributable to the fact that medical opinions which were directed to whether the former police officer was entitled to a medical discharge would not necessarily resolve questions arising under the definition of TPD. The Trustee also advised that a member might be requested to undergo interviews, examinations and vocational and functional assessments, and that: "Failure or refusal to participate in vocational assessments, independent medical examinations, etc, or to provide requested information results in a delay in the claim assessment and possible suspension or denial of the claim."
3. A remarkable fact of this dispute is the time between lodgment of claim and determination by the insurers. There is no occasion in these appeals to express a view as to the cause of that delay. (This was an issue at trial, but was resolved favourably to the insurers, and was not reagitated on appeal.) It suffices to say that Mr Shuetrim's solicitors took a firm approach as to their client's rights, and repeatedly asserted an entitlement to a favourable determination whilst declining on behalf of their client to participate in assessments. I say that not to express a view as to the appropriateness of that stance, but by way of explanation for the delay which, as will be seen, is a critical feature of the assessment and determination of Mr Shuetrim's claims.
4. Both prior to and in the early stages of the litigation, Mr Shuetrim refused to attend appointments arranged for vocational assessment. Ultimately, by order made on 30 June 2014 following a contested hearing, Mr Shuetrim was required to submit to vocational assessment. He was assessed by Ms Strinic on 8 July 2014. That date is important. Although in the second half of 2014 a number of medical reports were served by Mr Shuetrim's solicitors and documents were produced on subpoena by various practitioners and from the NSW Police Force, the reports available to Ms Strinic were from 2012 and early 2013, more than a year earlier.
5. By late 2014, neither insurer had made a determination as to whether to accept liability under the policies. Following a contested hearing on 5 December 2014, a judge granted both insurers leave to use documents provided under compulsion in the litigation for the purposes of determining Mr Shuetrim's claims.

TAL's determination of the claim

1. On 17 December 2014, TAL determined Mr Shuetrim's claim. The entirety of TAL's letter is reproduced at [201] of the primary judge's reasons. In summary, TAL advised that it considered July 2012 to be a reasonable date to which to defer the assessment of the claim, following the completion of Mr Shuetrim's arthroscopy. TAL then summarised the medical and psychological opinions available to it in the period in or around July 2012. TAL's letter observed that Mr Shuetrim's general practitioner at that time, Dr West, had indicated that the elbow procedure had been successful and stated that: "We have received no other significant medical opinion in relation to the elbow condition in the period shortly after July 2012."
2. In relation to the psychological and psychiatric evidence, TAL's letter noted that: "• Dr Jones, his general practitioner, indicated that there may be a need for him to find alternative employment; • Dr Calthorpe, his psychiatrist, indicated that if he was ever to work again, it would need to be in an alternate vocation, having previously observed that the Member's circumstances and personal attributes pointed to eventual restabilisation and success; and • Ms Walsh, his psychologist, indicated that there was consideration of a resignation from the Police, and a return to work as a mechanic. Ms Walsh expressed pessimism about the prospects of the Member returning to work for the Police, but expressed some optimism about the prospects of employment in other roles."
3. TAL's letter then stated: "It is significant that the medical evidence in or about July 2012 does not support a conclusion that the Member was unlikely ever to return to work, except possibly for work as a Police Officer. We observe that the Member has a history of qualifications and employment outside the New South Wales Police Force. He has obtained qualifications and a licence as a mechanic, which licence he indicated that he continued to hold as at 2014. He has held a number of employed positions as a technician and mechanic, which involved both technical work and administrative management. He has also undertaken work as a company director of diesel imports and/or importer/distributor of diesel additives, which work we understand he carried out as a sole trader. The evidence indicates that, from a vocational perspective, the Member was and is capable of work as a mechanic or as a sales representative (dealing with motor vehicle parts and accessories). Accordingly, we have formed the view that: • as at the date for assessment, being July 2012, the medical evidence does not indicate a permanent incapacity for work as a mechanic or sales representative, nor that it was unlikely that the Member would engage in such work; and • the Member was qualified for such work, by reason of his education, training and experience. We are therefore not satisfied that the Member was, at the date for assessment, incapacitated to such an extent as to render him unlikely ever to engage in or work for reward in any occupation or work for which he was reasonably qualified by reason of education, training or experience. Thus, we have formed the view that the Member did not meet the relevant Policy definition, and is therefore not entitled to a benefit as claimed."
4. The letter added that TAL had proceeded to a formal determination of the claim "as a result of the pressure of time arising from the progress of the related proceedings in the Supreme Court of New South Wales". It invited the Trustee and Mr Shuetrim to present any further material or submissions to TAL if they wished to do so.

MetLife's determination of the claim

1. Coincidentally on the same day, MetLife wrote to Mr Shuetrim's solicitors advising them of the material which they proposed to take into consideration in determining Mr Shuetrim's claim. The letter stated: "The purpose of this letter is to make you aware of the material that we will consider when making a determination in relation to the claim, to give you the opportunity to respond to any material which you consider may be adverse to the claim, and to provide any clarification that you may feel necessary with respect to the material."
2. On 22 December 2014, Mr Shuetrim's solicitors responded in the following terms: "We refer to your client's correspondence of 17 December 2014 and advise you that this letter does not comply with what is acceptable procedural fairness. Be that as it may we invite your client to make a decision immediately on this claim as we have done so on numerous occasions in the past."
3. By letter dated 10 February 2015, MetLife determined to decline Mr Shuetrim's claim. Its letter occupies six and a half single spaced pages and is reproduced, in its entirety, at [240] of the reasons of the primary judge. It suffices for present purposes to observe that the primary judge concluded that the letter "contains an accurate summary of Mr Shuetrim's education, training and experience as well as a reasonably balanced view of the medical opinions concerning Mr Shuetrim's condition." His Honour added at [242]: "Unlike TAL, MetLife acknowledged that the weight of medical opinion was that Mr Shuetrim was not able to return to work as a police officer or as a mechanic and that there were some opinions which offered some support for Mr Shuetrim's claim that he was TPD." On appeal, Mr Shuetrim did not dispute the accuracy of that summary.
4. Critical for the purposes of MetLife's appeal was his Honour's reasoning at [243] and [244]: "However, in my opinion, the letter has a fatal flaw in that it states, without qualification, that: 'Vocational options were identified in the vocational assessment report of Ms Julie Strinic dated 24 July 2014.' It is true that Ms Strinic identified vocational options. But Ms Strinic did not conclude that any were suitable. Indeed, she concluded that the options of motor vehicle mechanic, landscaper or gardener, and sales representative were not suitable. As I have set out above, she also concluded that although Mr Shuetrim had knowledge and skills apposite to employment as a motor vehicle parts and accessories sales representative (so that, all other things being equal, he had 'medium' prospects of being able to pursue this occupation) his reported anxiety condition rendered such employment unsuitable (with further assessment required). Ms Strinic reached a similar conclusion concerning the possibility of Mr Shuetrim being employed as an inquiry clerk or service advisor, stating that his 'physical capacity to perform this role is unclear'. Ms Strinic recommended that Mr Shuetrim's ability to 'physically perform the above identified roles be further assessed psychologically and physically'."
5. Following receipt of the insurers' letters, Mr Shuetrim amended his pleadings to allege that by declining his claim, each insurer had acted in breach of their duties (he also maintained an allegation that there had been a breach in failing to make a decision prior to those decisions, but nothing turns on this for present purposes because the primary judge rejected the allegations and Mr Shuetrim made no attempt to reagitate them on appeal). The presently relevant particulars of breach were as follows: "b) failed to consider correct question; c) failed to act with fair dealing; d) failed to act reasonably in consideration and determining the claim."
6. Both insurers accepted that Mr Shuetrim had standing to bring the proceedings, but denied they had breached obligations to him.
7. Mr Shuetrim supplied lengthy submissions shortly prior to the commencement of the hearing. His affidavit was read without objection and he was cross-examined, relatively briefly, by counsel then appearing for MetLife. He was not cross-examined by counsel then appearing for TAL. The balance of the (four day) hearing was occupied with taking the judge through the documentary evidence and making submissions.

Reasons of the primary judge

1. The primary judge observed that it was common ground that there were two distinct stages of the enquiry. The first was whether there had been a breach of the insurers' duties to act in good faith and fair dealing to Mr Shuetrim. The second, which only arose if there was a finding of breach, was whether in the court's opinion Mr Shuetrim satisfied the definition of TPD.
2. The primary judge considered that both TAL and MetLife had breached their obligation to act in good faith and fair dealing to Mr Shuetrim. In each case, his Honour considered that the reasons for declining cover were so unreasonable as to vitiate the insurers' decision: at [202] and [249]. His Honour did so for very different reasons.

Finding of breach by TAL

1. In the case of TAL, his Honour focussed upon the absence of reference in TAL's letter of 17 December 2014 to a series of letters from medical practitioners and psychiatrists in 2013 and 2014. His Honour characterised this evidence as follows (at [212]): "However, each of those doctors expressed opinions about Mr Shuetrim's elbow which were potentially relevant to his condition as at July 2012. For example, Dr Pillemer recorded that Mr Shuetrim told him that he did not feel that Dr Biggs's 9 May 2012 operation had helped him at all and noted that Mr Shuetrim had 'residual signs and symptoms'. Dr Pillemer did opine that Mr Shuetrim's position was 'almost certain to improve significantly with the passage of time' but his assessment of Mr Shuetrim's condition as at 27 May 2013 was inconsistent with Dr West's opinion. Dr Patrick opined that Mr Shuetrim's position had not improved 'significantly with the surgical intervention'. Although Dr Breit disagreed with Dr Patrick's assessment of extremity impairment, he did agree that Mr Shuetrim's impairment was permanent. Dr Wong opined that there was a significant restriction on Mr Shuetrim's elbow flexion and a mild restriction in extension and pronation. TAL made no reference to these opinions and, evidently, had no regard to them."
2. Further, his Honour concluded that TAL's letter suggested that there was some ambiguity as to the possibility of Mr Shuetrim returning to the Police Force, a matter as to which his Honour said "medical opinion was united": at [219].
3. The primary judge was also critical of TAL's statements that Mr Shuetrim "was and is" capable of working as a mechanic, because it did not have regard to the opinions of Drs Pillemer, Martin and Jones, and "was and is" capable of working as a sales representative, because it did not take into account the opinion expressed by Ms Strinic.
4. Finally, his Honour referred to the concluding section of the letter in the following terms, at [229]: "TAL's letter concluded with the statement, under the heading '[p]rocedural fairness', that 'as a result of the pressure of time arising from the progress of the related proceedings in the Supreme Court of New South Wales' TAL had 'proceeded to a formal determination' (that is, without 'procedural fairness')."
5. His Honour concluded at [230]: "In all those circumstances, my conclusion is that TAL's consideration of whether or not Mr Shuetrim was TPD was so unreasonable as to constitute a breach of its obligations of good faith and fair dealing to Mr Shuetrim. The result is that its decision is vitiated and I should now proceed to consider, for myself, whether Mr Shuetrim was TPD."

Finding of breach by MetLife

1. As noted above, the primary judge concluded that MetLife, unlike TAL, had given a reasonably balanced summary of the material available to it. However, his Honour said at [243] that there was a "fatal flaw" in its letter declining cover. His Honour said that the letter "failed to give Ms Strinic's opinion any, or any proper, weight when coming to its decision": at [246]. I will examine in more detail below the reasons given by the primary judge for reaching that conclusion. His Honour then said at [247]-[249] that: "MetLife's letter states that there were 'no clear opinions among the available evidence that Mr Shuetrim is unlikely ever to engage in any other gainful profession, trade or occupation for which he is reasonably qualified' and that '[i]nstead, the medical evidence is characterised largely by findings that Mr Shuetrim could return to work in an alternate vocation'. In my opinion, it was a breach of MetLife's duty of good faith and fair dealing to Mr Shuetrim to express that opinion without endeavouring to reconcile it with the findings of Ms Strinic. In my opinion, that failure was so unreasonable as to constitute a breach of MetLife's obligations to Mr Shuetrim sufficient to vitiate its decision."

Finding that Mr Shuetrim was TPD

1. In accordance with what was then common ground between all parties, the primary judge therefore turned to consider for himself whether Mr Shuetrim was TPD. The primary judge distinguished the evidentiary onus upon insurers to "introduce evidence" to show that specific occupations were open to Mr Shuetrim, and Mr Shuetrim's ultimate onus to show that he satisfied the definition of TPD. Having found that the insurers had discharged their evidentiary onus, most of his Honour's reasons (at [254]-[307]) were directed to whether Mr Shuetrim had made out his case on this issue.
2. The primary judge relied heavily upon Mr Shuetrim's 5 June 2013 statement and his 6 March 2014 affidavit in which he claimed that he had been unable to perform the type of work later identified by Ms Strinic. His Honour observed that the insurers did not challenge this evidence, nor, "otherwise than very generally", did they challenge what Mr Shuetrim had said to any of the doctors.
3. The primary judge summarised the cross-examination by counsel for MetLife of Mr Shuetrim based upon posts made by him and his wife on Facebook pages (these are addressed in more detail below), and concluded that Mr Shuetrim had exaggerated the likely effect of his disabilities on his "everyday life": at [263] and [299]. The dispositive reasoning was as follows: "264 But Mr Duncan did not direct one question to Mr Shuetrim on what I regard as the critical issue; namely, Mr Shuetrim's capacity at the relevant date to engage in occupations for which he was reasonably qualified by reason of his education, training or experience, especially in the two occupations identified by Ms Strinic as potentially suitable. 265 That leaves Mr Shuetrim's evidence on those matters unchallenged. As I have said, I do not agree with Mr Duncan's characterisation of that evidence as being of 'little to no benefit'. On the contrary, that evidence, if accepted, shows in my opinion that Mr Shuetrim is incapacitated in the manner I have set out at [254] and is thus TPD. … 303 The fact remains that Mr Shuetrim's evidence on the critical question, his capacity to work, remains unchallenged. 304 As I have set out above, in his 5 June 2013 statement, Mr Shuetrim said that there was 'no way my conditions will allow ... me to successfully work as a Retail Shop Assistant, Grocer or Store Clerk', that he would not be able to concentrate or focus on work sufficiently to engage in the role of 'Process Worker and Console Operator' and that his 'depleted concentration due to my elbow pain levels' would 'inhibit my prospects of being a sound candidate for office employment' (see [145] above). 305 In his affidavit of 6 March 2014, Mr Shuetrim said that he could not see himself returning to work in employment 'such as retail, sales, security or grocery type work', that employment as 'process, and console work are not achievable' and that his 'panic attacks and anxiety from the thought of social situations, interaction and conversation' would prevent him from being able to 'remain in any type of office environment' (see [148] above). 306 Mr Shuetrim was not cross-examined about these matters. In those circumstances, I am not prepared to reject his evidence. Indeed, I accept it."

The appeals

1. MetLife's grounds of appeal fell into two categories. First, MetLife challenged the conclusion of the primary judge that it had breached its obligations to Mr Shuetrim of good faith and fair dealing. Secondly, it challenged the primary judge's conclusion that Mr Shuetrim was a person who met the definition of TPD.
2. TAL's appeal was more elaborate. First, grounds 1 to 4 challenged the finding of breach of duty, including specific grounds directed to error by the primary judge in "taking an unduly rigorous and technical approach to the analysis of [TAL's] declinature letter" (ground 2) and in finding that TAL had not taken into consideration medical evidence dating after "in or about July 2012" (ground 3). Secondly, while acknowledging that the primary judge had proceeded on a basis to which all parties had agreed, nevertheless, relying upon doubts expressed by McPherson JA in McArthur v Mercantile Mutual Life Insurance Co Ltd [2002] 2 Qd R 197 and Basten JA in Birdsall v Motor Trades Association of Australia Superannuation Fund Pty Ltd [2015] NSWCA 104; 89 NSWLR 412, TAL claimed that the primary judge erred in himself determining whether or not Mr Shuetrim satisfied the definition of TPD; rather, TAL submitted that the court should have remitted the question to it to determine (ground 6). Thirdly, TAL challenged the conclusion that, on the evidence, Mr Shuetrim satisfied the definition of TPD (ground 5).
3. For his part, Mr Shuetrim submitted that TAL should not be permitted, on appeal, to submit that the course to which all parties had acceded at trial was one that was wrong. He added that, had it been suggested that the court not itself determine the question whether Mr Shuetrim satisfied the TPD definition, he would have adduced evidence of his impecuniosity as a discretionary consideration telling against that course. It followed, according to Mr Shuetrim, that this was a case where an appellant ought not be permitted to raise on appeal a pure question of law.
4. Mr Shuetrim also sought leave, albeit only during the hearing of the appeal, to advance by way of notice of contention a series of alternative bases for supporting the trial judge's determination in respect of each insurer.
5. Mr Shuetrim contended that the decision of the primary judge that MetLife's decision was void or vitiated should be affirmed on the additional grounds that: "(a) the decision of MetLife unfairly failed to take account of the plaintiff's affidavit sworn on 6 March 2014 and the annexed statement dated 5 June 2013; (b) the MetLife decision incorporated reference to opinions expressed by medical practitioners dealing with remote possibilities; (c) the MetLife decision failed to contain a determination of the first respondent's claim in that MetLife merely stated that proof to its satisfaction had [not] been provided; (d) the reasonable and fair response of MetLife to the claim should have been to admit it." Mr Shuetrim also maintained that MetLife denied him procedural fairness.
6. Mr Shuetrim sought to maintain the conclusion that TAL's decision was vitiated on the additional ground that "TAL failed to determine the claim of [Mr Shuetrim] by finding merely that proof had not been provided to its satisfaction of the matters stated in the definition of total and permanent disablement, and that it disregarded the plaintiff's affidavit and statement."
7. MetLife and TAL objected to most of the belated notices of contention. The Court indicated that it would rule on them when delivering judgment.

The duty owed by the insurers to Mr Shuetrim

1. Mr Shuetrim's statement of claim did not separately allege the duty owed by MetLife and TAL to him. For that reason, the insurers' defences did not identify the precise duty owed by them to him; rather, they merely denied the breach of duty alleged. There is, in truth, a measure of complexity in identifying the duty undoubtedly owed by the insurers to a member of the superannuation fund.
2. In part the complexity arises from statute. The statutory implied term of utmost good faith imposed by s 13 of the Insurance Contracts Act 1984 (Cth) in the form it took at the time the MetLife and TAL policies were entered into, merely imposed obligations of utmost good faith upon the parties to the contract, that is to say, upon each of the insurers and the Trustee. (Amendments introduced by the Insurance Contracts Amendment Act 2013 (Cth) extend the duty of utmost good faith owed by the parties to a contract of insurance to a "third party beneficiary", who may make a claim to recover "any loss" under s 48. However, the transitional provisions make it clear that they do not apply to policies such as those provided by MetLife and TAL, entered into prior to 2013, and so they must for present purposes be put to one side.)
3. The obligation to act in utmost good faith, of course, predates statute. As Emmett J said in AMP Financial Planning Pty Ltd v CGU Insurance Ltd [2005] FCAFC 185; 146 FCR 447 at [88]-[89], the concept of utmost good faith or uberrima fides has always been present in the law of insurance, and encompasses notions of fairness, reasonableness and community standards of decency and fair dealing, and may be breached by capricious or unreasonable conduct which falls short of dishonesty. That part of his Honour's reasons was agreed with by Moore J and, on appeal, by Gleeson CJ and Kirby and Crennan JJ: CGU Insurance Ltd v AMP Financial Planning Pty Ltd [2007] HCA 36; 235 CLR 1 at [15] and [128].
4. In part the complexity derives from the facts of this case. The insured under both policies was the Trustee, not Mr Shuetrim. This was not a dispute between insurer and insured, such that the insured could sue directly on the contract. Further, the Trustee promised to remit payment of any TPD payment to Mr Shuetrim if and only if the payment was made by the insurer. Unlike the position in Birdsall, the trust deed did not require the Trustee to form an opinion at all, and there could be no suggestion that the Trustee had delegated its obligation to do so to the insurer, so that the obligations owed by the Trustee to Mr Shuetrim in equity and under statute were not directly applicable.
5. In Edwards v The Hunter Valley Co-op Dairy Co Ltd (1992) 7 ANZ Ins Cas 61-113 at 77,536, McLelland J distinguished between the duties owed by trustee and insurer, in terms which were not disputed by any party: "It is next necessary to examine the nature and content of Zurich's relevant obligations under the policy. Those obligations were contractual and not fiduciary. Zurich was an insurer, not a trustee. Since the commercial purpose of the policy was, relevantly, to provide insurance against the risk of total and permanent disablement, and since the policy was expressed in terms requiring the formation by Zurich of a particular opinion as a condition of Zurich's own liability, there was clearly an implied obligation on Zurich to consider and determine whether it should form that opinion. That involved a consideration and determination of the correct question .... Furthermore, in the exercise of powers affecting the interests both of itself and the claimant, Zurich was under a duty of good faith and fair dealing which required it to have due regard for the interests of the claimant."
6. MetLife contended, consistently with what had been said in Zurich Australian Insurance Ltd v Metals & Minerals Insurance Pte Ltd [2009] HCA 50; 240 CLR 391 at [24], that the (pre-2013) statutory provisions did not make Mr Shuetrim a party to the contract nor purport to confer contractual or equitable rights upon him. Moreover, the insurance policy did not extend insurance to Mr Shuetrim personally. It followed, as Bryson J observed in Sayseng v Kellogg Superannuation Pty Ltd [2003] NSWSC 945 at [78], that the reasoning in Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107 is inapplicable.
7. MetLife maintained that the duty owed by it to Mr Shuetrim was a duty of good faith and fair dealing, as opposed to a duty of utmost good faith. Further, MetLife submitted that Mr Shuetrim was not himself entitled directly to enforce the policy, because it was the Trustee, not he himself, who was entitled to payment pursuant to the policy: Hannover Life Re of Australasia Ltd v Sayseng [2005] NSWCA 214; 13 ANZ Ins Cas 90-123. The generality of that proposition fails to have regard to the facts that the Trustee held the benefit of MetLife's and TAL's obligations to act in utmost good faith on trust for its members including Mr Shuetrim, and that in "special" or "exceptional" circumstances a beneficiary may bring proceedings in the beneficiary's own name which ought otherwise to have been brought by the trustee.
8. Originally, the view appears to have been taken that that was possible only in cases where the trustee's claim was equitable: see for example Ramage v Waclaw (1988) 12 NSWLR 84 at 91. I am of the view that it includes proceedings at law (such as suing under a policy of insurance), a view which has been upheld repeatedly at first instance: see Lidden v Composite Buyers Ltd (1996) 67 FCR 560 (Finn J); Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432 at 436-437 (Cohen J) and Chahwan v Euphoric Pty Ltd [2009] NSWSC 805; 73 ACSR 252 at [18] (Brereton J). The restriction to proceedings in equity was originally a consequence of the jurisdictional limits of chancery, and it was well established that a beneficiary could in appropriate circumstances advance a claim at law in the name of the trustee. Sir John Romilly MR reviewed the numerous authorities that existed in 1854 where such an equity had been "occasionally although cautiously enforced by this Court" in Stainton v The Carron Company (1854) 18 Beav 146 at 156; 52 ER 58 at 62. That accords with what was said in Hayim v Citibank NA [1987] AC 730 at 748: "These authorities demonstrate that a beneficiary has no cause of action against a third party save in special circumstances which embrace a failure, excusable or inexcusable, by the trustees in the performance of the duty owed by the trustees to the beneficiary to protect the trust estate or to protect the interests of the beneficiary in the trust estate."
9. Those principles require some refinement where there are many beneficiaries, often comprising different classes: see El Sayed v El Hawach [2015] NSWCA 26; 88 NSWLR 214. However, in the present case it is clear that Mr Shuetrim was the only member of the superannuation fund with an interest in the choses in action against TAL and MetLife to the extent they involved the assessment and determination of the claims made by him under the policies. In such a case, the requisite special or exceptional circumstances will be satisfied by a failure by the trustee to sue on a cause of action in the performance of the duties owed by the trustee to the beneficiary to protect the trust estate or to protect the interests of the beneficiary.
10. The statement of claim passed over all of the foregoing and was certified under s 347 of the Legal Profession Act 2004 (NSW) as if there were a claim for damages. There was no such claim. The only relief sought other than declaratory relief was that the insurers pay to the Trustee amounts said to be owing under the policies.
11. The best way to read this statement of claim is that it amounted to a claim for specific performance. There are two possibilities: either that Mr Shuetrim sued for breach of duty owed directly to him, or else he sued for breach of duty owed by each insurer to his Trustee, his Trustee being unwilling to do so. Because the pleading deliberately eschews an allegation of a duty of utmost good faith (one was originally alleged, and then deleted), the former is more probable.
12. Happily, it is not necessary to express a final view on the cause of action pleaded by Mr Shuetrim. Nothing in the resolution of these appeals turns upon the precise formulation of duty owed by either insurer, or upon the nature of the right sought to be vindicated by Mr Shuetrim. Standing was at all times conceded, and on the view I take, the answers to the questions whether TAL and MetLife were in breach do not turn upon the precise formulation. However, before turning to why I have concluded that TAL was, and MetLife was not, in breach, it is necessary to address the construction of the TPD definition.

The proper construction of the TPD clauses

1. There were two main differences between the TPD definitions. The "waiting period" was three months in the case of TAL's policy, and six months in the case of that of MetLife. Further, the clause in TAL's policy included parenthetic words "(where the Insured Person's condition is unclear it is reasonable to defer assessment)". Because of the conclusions I have reached in relation to there being a breach of duty by TAL but not by MetLife, it will be convenient to focus upon the TAL clause, although most of what follows is applicable to both.

Uncontroversial propositions

1. I do not regard the following as controversial. First, the clause does not turn upon the fact that the Insured Person is unlikely ever to undertake employment, but instead is expressed to turn upon the state of mind of the insurer.
2. Secondly, in considering the matter and reaching a state of satisfaction, the insurer is required to act reasonably. That has been worked out in a series of decisions dating from the mid-nineteenth century, to which McLelland J referred in Edwards v The Hunter Valley Co-op Dairy Co Ltd at 77,536: "Where under a contract, rights or liabilities depend upon the subjective state of mind of a party, eg the party's approval, opinion or satisfaction, of or about something, it can be a difficult question whether the party is subject to an implied obligation in reaching that state of mind, or failing to reach it, as the case may be, to be bound by objective standards of reasonableness .... However in the field of insurance, it is well established that where under a contract of insurance an element of the insurer's liability is expressed in terms of the satisfaction or opinion of the insurer, the insurer is obliged to act reasonably in considering and determining that matter."
3. Thirdly, there are limits to what flows from the obligation to act reasonably. As McLelland J added: "To say that an insurer must act reasonably in forming or declining to form an opinion is not to say that a Court can substitute its own view for that of the insurer. As North J pointed out in Doyle at 529, 'reasonable persons may reasonably take different views'. Unless the view taken by the insurer can be shown to have been unreasonable on the material then before the insurer, the decision of the insurer cannot be successfully attacked on this ground."
4. Fourthly, the words "proof to the satisfaction of us" reflect an obligation on the part of the Insured Person to provide evidence in support of his or her claim.
5. Fifthly, the clause does not turn on the insurer being satisfied that the Insured Person will never be able to resume employment, but the lesser threshold that he or she is "unlikely ever" to do so. The clause is thus more readily satisfied than the language in Manglicmot v Commonwealth Bank Officers Superannuation Corporation Pty Ltd [2011] NSWCA 204; 282 ALR 167 regarded by Giles JA as "quite emphatic": at [88].
6. Sixthly, all of the foregoing is subject to the obligations of good faith on the part of the insurer, as well as the (overlapping) implied obligations to act reasonably and to do all that is necessary to enable the other party to have the benefit of the agreement (see Mackay v Dick (1881) 6 App Cas 251 at 263, Butt v M'Donald (1896) 7 QLJ 68 at 70-71 and Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 450), as set out in the passage in Edwards reproduced above.
7. Seventhly, the closing words of the definition ("any occupation or work for which he or she is reasonably qualified by reason of education, training or experience") are known, according to W I B Enright and R M Merkin, Sutton on Insurance Law (4th ed 2015, Thomson Reuters), vol 2 at 583, as the "ETE clause". That clause materially narrows the scope of the coverage given by the TPD definition, from the perspective of the Insured Person. This was one of the points made by the Trustee in its letter to Mr Shuetrim about the difference between medical discharge and coverage under the clause. In the present case, there was a deal of support for the proposition that Mr Shuetrim could never return to the NSW Police Force. As has been seen, MetLife accepted as much. But that alone is insufficient to satisfy the clause.
8. It is not necessary for the purposes of these appeals to dwell upon the ETE clause. I note however that it is settled law that a person who can undertake part-time work is not totally and permanently disabled: Manglicmot v Commonwealth Bank Officers Superannuation Corporation; Hannover Life Re of Australasia Ltd v Dargan [2013] NSWCA 57; 83 NSWLR 246.

"Unlikely ever to engage"

1. In the course of construing the clause, at [38], the primary judge relied upon what had been said in Halloran v Harwood Nominees Pty Ltd [2007] NSWSC 913 at [76] that "unlikely" in this context meant "a probability of less than 50%". The authority cited was White v The Board of Trustees [1997] 2 Qd R 659 at 673. The primary judge framed the question for determination as whether "it is probable that Mr Shuetrim would actually obtain work for reward for which he is qualified by education, training or experience (and not merely 'special light duties')": at [42] (emphasis added). When applying the clause at the conclusion of his judgment, his Honour said at [255]: "The expression 'unlikely ever' means that Mr Shuetrim must show that, probably, he would not during that period of 30 years 'ever' obtain relevant employment" (emphasis added).
2. All parties directed submissions to the question of construction.
3. For reasons of clarity and concision, in what follows I shall refer to the clause requiring proof to the insurer's satisfaction that the person is "unlikely ever to return to relevant work". I am conscious that the ETE clause must also be satisfied: that the insurer must not only be satisfied that the Insured Person is unlikely ever to return to his or her former employment, but also that he or she is unlikely ever to engage in or work for reward in other occupations (namely, occupations or work for which he or she is reasonably qualified by reason of education, training or experience). The difference may in many cases be material. In the present case it is determinative. But especially in light of a measure of confusion in the authorities, which is the result of a series of negatives in the language and meaning, it seems desirable to confine attention to the simpler formulation for immediate purposes.
4. TAL submitted that in Halloran and elsewhere, the holding in White had been misstated, principally because of an error in the headnote in the Queensland Reports, and because of some inconsistent aspects of White J's reasons in White. TAL referred to Beverley v Tyndall Life Insurance Co Ltd [1999] WASCA 198; 21 WAR 327 as the "leading intermediate appellate decision" where the conclusion of meaning reached by White J in White was described as "no real chance or even improbable" (at [32]), something consistent with White J's later decision in Wiley v The Board of Trustees (Supreme Court (Qld), White J, 3 April 1997, unrep). After referring to White, White J said in Wiley: "[T]he ordinary meaning of 'unlikely' means no real chance. Other cases use the test 'improbable'."
5. TAL also submitted that the suggestion in the headnote of White, and decisions following it, that "the test can be reduced to a percentage assessment fails to grapple with the reality that the question, by its very nature, is commonly not susceptible of demonstration by scientific proof".
6. TAL invoked a range of dictionary definitions ("not likely to happen or be; improbable; probably not going (to do, be, etc)"; "holding out little prospect of success; unpromising"; "not likely to occur or come to pass; improbable in respect of occurrence"). TAL also submitted that the adverb "ever" had dictionary meanings of "at all times" and "in all cases", enabling the insurer to look well into the future.
7. Mr Jackman SC also made the following submission: "[I]n the particular context of our clause ... there is a further reason which doesn't appear in all of these definitional clauses to [prefer] the stronger view of no real chance and that is that the parenthetic words in our definition deal with the situation where a condition is unclear. Now, if something is unclear, then the scales are finely balanced and in those circumstances the insurer has the ability to defer assessment, but when the insurer comes to making the assessment, the way that our definition operates, it proceeds on an assumption that the condition is no longer unclear, that is it's clear one way or the other and if it's clear one way or the other, one then wouldn't construe 'unlikely' by adding the extra words in the sense of more unlikely than not. If it's clear, then there's no difficulty applying the test of no real chance, but there has been confusion in the authorities which seems to have been occasioned more by the head note and, perhaps, some of the reasoning of White J which at one point seemed to proceed on the basis that there wasn't a significant difference between the rightful formulations, but we would submit there is and her Honour was correct in the ultimate conclusion that was reached."
8. MetLife maintained that the term "unlikely ever to engage in or work for reward" was a composite phrase whose meaning could be distorted if the words "unlikely" and "ever" were considered independently. When the phrase was read as a whole, Mr Sexton SC submitted that it does not reflect "a distinction between 49% and 51%, but a more stringent overall test".
9. Mr Shuetrim emphasised the utility of the analysis in White and drew a distinction between the mere unlikelihood of a member being engaged in employment as opposed to "more remote" possibilities. Mr Shuetrim said that it was the former, not the latter, to which the satisfaction of the insurer was to be directed, and that mere speculation or optimism was insufficient. I did not understand Mr Shuetrim to defend the proposition that a 49% chance of returning to relevant work was sufficient to satisfy the definition.

White v The Board of Trustees

1. The headnote in White v The Board of Trustees [1997] 2 Qd R 659 stated: "Held: (1) That in the definition 'unlikely' meant 'improbable' in the sense of a less than 50 per cent chance."
2. In White, the clause which required the formation of an opinion as to TPD was found in the trust deed, rather than an insurance policy, but it was not suggested that anything turned on that difference. The Board was to form an opinion, after obtaining the advice of not fewer than two medical practitioners, that the member's disablement was "such as to render the member unlikely ever to be able to work again …". Two of the medical practitioners relied upon by the Board were Dr Bell and Dr Rodney. White J summarised the critical reasoning by the Board at 673-674 as follows: "Those passages from Dr Bell's and Dr Rodney's second report which the Board regarded of particular assistance do not, in my view, direct attention to the right question. Where Dr Bell writes: 'In the future, however, he should be capable of undertaking alternative employment, provided it is outside the Queensland Police Service.' he is, I think, saying that he might work, and when read with the following passage 'and it is simply not possible to consider that he will never be capable of undertaking any form of employment at any stage', it is plain that he is dealing in more remote possibilities well beyond the ambit of the definition. Similarly where Dr Rodney writes: '… it would seem inconceivable to me, because of his age, that he wouldn't somewhere return to the workforce… Police officers do have skills of interactions and administrative type of work so perhaps it is one of these areas that he may find himself eventually able to slot into …' he too is in the realm of remoter possibilities."
3. In reaching that conclusion, White J started with dictionary definitions, then addressed the construction given to the word "unlikely" in a range of statutory contexts: under the Marine Insurance Act 1906 (UK) in Polurrian Steamship Company Ltd v Young [1915] 1 KB 922 and Rickards v Forestal Land, Timber and Railways Co [1942] AC 50; under the Matrimonial Causes Act 1929 (SA) in Davis v Davis [1943] SASR 203; under s 86A of the Credit Act 1984 (NSW) in Australian Guarantee Corporation Ltd v Commissioner for Consumer Affairs (1992) ASC 56,152; and under s 45D of the Trade Practices Act 1974 (Cth) in Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees' Union (1979) 27 ALR 367. Her Honour also had regard to the construction given by Commissioner Roberts-Smith QC of the word in a similar definition of TPD in Ivkovic v Australian Casualty & Life Ltd (1994) 10 SR(WA) 325.
4. If I may respectfully say so, what clearly emerges from White J's collection of judgments in which the word "unlikely" has been explained in comparable and less comparable contexts is merely that it has been held to denote different meanings in different contexts. That conclusion means merely that "unlikely" is no different from most English words. It also illustrates the inutility of dictionary definitions in construing a legal text (in this case, a clause in an insurance policy). Dictionary definitions may assist in identifying the range of possible meanings a word may bear in various contexts, but will not assist in ascertaining the precise meaning the word bears in a particular context. As much was recognised by a unanimous High Court (and earlier by Learned Hand J) in Thiess v Collector of Customs [2014] HCA 12; 250 CLR 664 at [23] when observing that a mature and developed jurisprudence does not "make a fortress out of the dictionary"; see also 2 Elizabeth Bay Road Pty Ltd v The Owners - Strata Plan No 73943 [2014] NSWCA 409; 88 NSWLR 488 at [81]. Although the distinction between the dictionary definition of a word and its legal meaning is not often well understood, it is clear that dictionaries are no substitute for the interpretative process, as was observed by R McDougall, "Construction of contracts: The High Court's approach" (2016) 41 Aust Bar Rev 103 at 115; see also Comcare v Martinez (No 2) [2013] FCA 439; 212 FCR 272 at [68] (Robertson J).
5. White J, following that review, said at 672 that: "There is a body of opinion to which I have referred which would say that 'unlikely' means 'improbable' in the sense of a less than 50 per cent chance. In ordinary usage this may be much the same as saying that there is no real as opposed to a remote chance of the designated event occurring or to take up one of the dictionary meanings, the prospect of the event occurring is unpromising". It seems likely, as Mr Jackman SC submitted for TAL, that that passage was the source of the holding in the headnote. In that passage, White J appears to have equated the meaning of "a less than 50 per cent chance" with "no real as opposed to a remote chance". If that is so, I respectfully would not agree.
6. However, later, at 673, White J stated that "in approaching the task of informing its opinion the Board did not have regard to the ordinary meaning of 'unlikely' as meaning no real chance or even improbable and entertained something more remote as sufficient". It is that sentence which reflects the proposition actually applied by her Honour in the decision.

The use made of White v The Board of Trustees

1. At the level of authority, what matters is not so much the reasoning of White, but the part of it which has been endorsed at the intermediate appellate level. In Beverley v Tyndall Life Insurance, Ipp J adopted the conclusion arrived at by White J in White, stating at [32] that: "Her Honour applied the ordinary meaning of the term which she considered to be 'no real chance or even improbable'."
2. What precisely Ipp J meant is disclosed by considering the particular facts before him. At [67]-[68], Ipp J identified the error in the decision at first instance. A medical opinion had stated that "the probability remains that [the appellant] will not obtain sufficient functional status to return to the workforce". His Honour stated that the appellant's domestic functional capacity to improve "was expressed only as a speculative possibility or a hope". Ipp J said that the finding at first instance that it was not unreasonable for the insurer to rely upon that medical opinion to reject the appellant's claim "ignores, with respect, the meaning of 'unlikely'".
3. Malcolm CJ and Anderson J agreed with this aspect of Ipp J's reasons.
4. As I read both Ipp J's endorsement of White and his Honour's application of it to the resolution of the appeal, his Honour was not proceeding on the basis identified in the headnote of White that "unlikely" meant a probability of less than 50%, but instead was rejecting the view that an insurer could rely upon a "speculative possibility" or a "hope". That said, his Honour did not in terms identify error in the headnote in White or inconsistency in its reasoning.
5. Consistently with the headnote in White, but inconsistently with its reasoning as reproduced above, on at least two occasions it has been said that White is authority for the proposition that "unlikely" means a less than 50% chance: see Halloran at [76] and Ziogos v FSS Trustee Corporation as Trustee of the First State Superannuation Scheme [2015] NSWSC 1385 at [82]. This aspect of the first of those decisions, which was delivered ex tempore, has been criticised as "obiter, unreasoned and must be doubtful": see Sutton on Insurance Law at 590. The same work states at 589-590: "The expression 'unlikely ever' sets a very high standard of probability: 'permanent state of affairs', 'no real chance' or 'improbable'. The words 'look well into the future' and connote a permanent state of affairs so far as can be seen based on the evidence at the time of assessment."

The meaning of "unlikely ever"

1. It seems clear to me that the headnote of White has caused some subsequent decisions to depart from what was applied in Beverley (as well as by White J herself in Wiley). Further, I accept TAL's submission that in most cases any attempt to express a likelihood in percentage terms will have merely the illusion of mathematical precision. I also agree with TAL's submission that the bracketed words in the TAL policy tell against the construction in the headnote. Those words confirm what flows from the ordinary meaning of the language of "unlikely ever", namely, that where there is a real chance that a person may return to relevant work, even though it could not be said that a return to relevant work was more probable than not, the insurer would not be satisfied that the definition applies. "Unlikely ever" is, in this context, much stronger than "less than 50%".
2. What follows is this. To make an assessment of TPD, it is not sufficient for the insurer to be satisfied that it is more likely than not that the person will never return to relevant work. On the other hand, if there is merely a remote or speculative possibility that the person will at some time in the future return to relevant work, an insurer will not, acting reasonably and in compliance with its duties, be able to be satisfied that the person is not TPD. The critical distinction is between possibilities which are readily contemplatable even though they may not be more probable than not, and possibilities which are remote or speculative. A real chance that a person will return to relevant work, even if it is less than 50%, will preclude an Insured Person being unlikely ever to return to relevant work.
3. I would reach this conclusion independently of authority, but note that it accords with what was said in Beverley by the Western Australian Court of Appeal.
4. To anticipate what follows, for an Insured Person to be unlikely ever to return to relevant work does not mean merely that it is more probable than not that he or she will not ever return to relevant work. The primary judge, understandably following what was stated in the headnote of White and in two recent first instance decisions, applied an incorrect test.

Was there a "fatal flaw" in MetLife's letter?

1. There are, as MetLife submitted, a series of errors in the summary of Ms Strinic's vocational assessment report reproduced in [243]-[244] of the reasons of the primary judge. The primary judge had said: "However, in my opinion, the letter has a fatal flaw in that it states, without qualification, that: 'Vocational options were identified in the vocational assessment report of Ms Julie Strinic dated 24 July 2014.' It is true that Ms Strinic identified vocational options. But Ms Strinic did not conclude that any were suitable. Indeed, she concluded that the options of motor vehicle mechanic, landscaper or gardener, and sales representative were not suitable. As I have set out above, she also concluded that although Mr Shuetrim had knowledge and skills apposite to employment as a motor vehicle parts and accessories sales representative (so that, all other things being equal, he had 'medium' prospects of being able to pursue this occupation) his reported anxiety condition rendered such employment unsuitable (with further assessment required). Ms Strinic reached a similar conclusion concerning the possibility of Mr Shuetrim being employed as an inquiry clerk or service advisor, stating that his 'physical capacity to perform this role is unclear'. Ms Strinic recommended that Mr Shuetrim's ability to 'physically perform the above identified roles be further assessed psychologically and physically'."
2. It is true that Ms Strinic concluded that the occupations as a motor vehicle mechanic and a landscaper (gardener) were unsuitable. However, it is somewhat difficult to determine what Ms Strinic was saying in relation to the third option considered, namely, a sales representative (motor vehicle parts and accessories). It is best to reproduce the entirety of this section of the report: "Sales Representative (Motor Vehicle Parts and Accessories) The vocational option of Sales Representative was identified as a potential option for Mr Shuetrim, given he has transferrable skills applicable to this industry. Specifically, Mr Shuetrim has extensive knowledge of and experience in the motor vehicle and mechanical industry. Furthermore, he has extensive customer service skills having worked as a Senior Technician within various Auto businesses. These skills are likely to be highly regarded in this industry, as specific qualifications are not generally required for this type of role. While Mr Shuetrim could still seek employment as a Sales Representative in this industry as no minimum education is generally required, this occupation is still rated as medium. Mr Shuetrim's specific functional abilities have not been formally assessed and as such it is difficult to determine his ability to sustain work as a Sales Representative (Motor Vehicle Part and Accessories). Mr Shuetrim also reported restrictions relating to generalised and social anxiety as noted above. As such this role would also require interaction and communication with supervisors, co-workers and customers, thereby placing Mr Shuetrim in an emotionally vulnerable position if he was to undertake this type of work. Therefore, based on the available medical information and lack of available and current physical and psychological functional information relating to Mr Shuetrim's work capacity, this option was not considered suitable. Further assessment of the suitability of this role for Mr Shuetrim is required."
3. There are two relatively minor difficulties with what the primary judge said about this vocational option. First, although it is true that the penultimate sentence concludes "this option was not considered suitable", that is difficult to reconcile with the concluding sentence which required further assessment of the suitability of this role for Mr Shuetrim. If read literally, the last two sentences contradict one another. Reading the passage as a whole, I would regard Ms Strinic as expressing the opinion that based on the limited medical and psychological information available to her, she could not conclude the option was suitable but, rather than excluding the possibility, recommended further assessment of it. That is consistent with a paragraph on the previous page of Ms Strinic's report, which followed her summary of the medical information available to her, and which was in the following terms: "In light of the different medical opinions provided, and noting there is no current medical evidence available to provide medical information relating to Mr Shuetrim's psychological and physical work capacity, the occupations identified as part of this Vocational Assessment are based primarily on Mr Shuetrim's education, training and experience. Further medical opinion will need to be sought to confirm if these occupations would be medically suitable given the above differing medical opinions, and given that there is no recent medical evidence to provide information about Mr Shuetrim's current psychological and physical improvements, functional abilities and his prognosis."
4. Secondly, the primary judge misread the rating of "medium" given to this option by Ms Strinic. Earlier references to the italicised ratings made it plain that that was a reference to the physical demand level of the occupation, rather than the prospects of Mr Shuetrim being able to pursue this occupation.
5. Those two errors are relatively minor. Not so the third and fourth. The third may be seen in the concluding sentence of [244]. What in fact Ms Strinic's report stated was as follows: "Further vocational options considered appropriate based on Mr Shuetrim's transferable skills, and which are meaningful, however requiring further assessment of his physical and psychological work capacity to determine the suitability of the roles includes: • Book keeper • Administration (Justice industry) • Factual Investigator • Library Assistant • Claims Officer • Court Clerk • Security Guard • Customs Officer It is recommended that Mr Shuetrim's ability to physically perform the above identified roles be further assessed psychologically and physically."
6. The primary judge did not, at this point in his reasons, mention any of the eight vocational options which Ms Strinic considered to be "appropriate based on Mr Shuetrim's transferable skills", notwithstanding that each required further assessment. To the contrary, his Honour's quotation of Ms Strinic's recommendation of further psychological and physical assessment to determine whether Mr Shuetrim had the "ability to physically perform the above identified roles" reads as confined to the four roles earlier referred to in [244], rather than the eight vocational options proposed by Ms Strinic for consideration.
7. Moreover, the primary judge summarised Ms Strinic's overall conclusions at [245] as follows: "Overall, Ms Strinic's conclusions were that: • she was unable to determine a suitable vocational option for Mr Shuetrim due to 'conflicting medical evidence and limited information available relating to his current physical and psychological work capacity'; and • although Mr Shuetrim had 'sound transferable skills', she could not determine a suitable vocational option 'due to his presenting physical and psychological symptoms' and many occupations were 'not in accordance with his functional and psychological tolerances based on a review of available medical evidence'."
8. The passage from which that summary is drawn is less pessimistic: "Mr Shuetrim presented for the assessment casually attired and cooperative, and was observed to exhibit signs of anxiety through flat affect and holding his left hand with his right hand during the course of the assessment. Mr Shuetrim presented with sound transferable skills however due to his presenting physical and psychological symptoms, suitable vocational options were unable to be determined from a review of limited and current medical information. There are a number of vocational options deemed appropriate for Mr Shuetrim to pursue in accordance with his education, transferable skills, demonstrated aptitudes, and age. However, many occupations were not in accordance with his functional and psychological tolerances based on a review of available medical evidence."
9. It is certainly true that Ms Strinic's opinion was heavily qualified. The main qualification was the need for there to be more up to date medical and psychological opinion. This was a recurring theme throughout the report. It is to be recalled that when she saw Mr Shuetrim on 8 July 2014, she had not been briefed with any medical or psychological opinion that was more recent than 12 months, and many of the early opinions were guarded.
10. Fairly read, Ms Strinic's detailed assessment was highly equivocal. I do not consider that, of itself, it could sustain any opinion as to the likelihood or unlikelihood of Mr Shuetrim returning to relevant work. Subject to qualifications, she found that there were "a number of vocational options deemed appropriate for Mr Shuetrim to pursue in accordance with his education, transferable skills, demonstrated aptitudes and age."
11. I respectfully disagree with the criticism made by the primary judge that MetLife "failed to give Ms Strinic's opinion any, or any proper, weight when coming to its decision": at [246]. Her highly equivocal opinion was not one which was required to be given more weight than it was given. Nor was it a breach of MetLife's duty of good faith and fair dealing for it to express the opinion that it did without first reconciling that opinion with Ms Strinic's findings. In short, on a fair reading, Ms Strinic's findings were wholly consistent with the opinion that Mr Shuetrim had failed to provide proof to MetLife's satisfaction that he had become incapacitated to such an extent as to render him unlikely ever to engage in any gainful profession, trade or occupation for which he was reasonably qualified by reason of education, training or experience.

Mr Shuetrim's notice of contention in MetLife's appeal

1. That conclusion makes it necessary to address Mr Shuetrim's notice of contention in MetLife's appeal. Despite its lateness, it is better to deal with the notice of contention on its merits, and it is convenient to deal first with procedural fairness.

Did MetLife fail to accord procedural fairness?

1. It is not necessary to enter into an analysis of the extent to which notions of procedural fairness intrude into this area of private law. I do not agree that in the circumstances of these proceedings, there was a failure to accord procedural fairness on which Mr Shuetrim can succeed. I put to one side the fact that this was not pleaded (although, as MetLife fairly acknowledged in address, a complaint to similar effect had been made in the written submissions supplied in advance of the trial (see para 34.3 on p 24 of the plaintiff's written submissions dated 6 March 2015)). It is sufficient to have regard to Mr Shuetrim's solicitor's letter dated 22 December 2014, which is reproduced above. Mr Shuetrim cannot be heard to maintain on appeal that there was a denial of procedural fairness when MetLife determined his claim after sending him its letter of 17 December 2014 in circumstances where his solicitors at the time invited MetLife "to make a decision immediately on this claim". Whatever the content of MetLife's obligation to hear from Mr Shuetrim before deciding his claim adversely to him, it may be waived, and this is the clearest case of waiver.
2. Mr Shuetrim pointed to a letter dated 23 December 2014 from the Trustee's solicitors which also complained that MetLife's letter did not adequately satisfy the requirements of procedural fairness. MetLife (by its solicitors) responded to this by supplying Mr Shuetrim's solicitor's letter of 22 December 2014 to the Trustee, noting that "as you will see, the plaintiff has requested that an immediate determination is made with respect to his claim". Although there ensued subsequent correspondence in which the solicitors for the Trustee maintained that a separate obligation to accord procedural fairness was owed to the Trustee, ultimately the Trustee formed the view and informed Mr Shuetrim's solicitors that "[the Trustee] considers that each of the decisions of MetLife and TAL were open to them on the evidence before them and not unfair or unreasonable in their operation in relation to the plaintiff" (letter of 24 February 2015), and filed a submitting appearance.
3. Where, as here, Mr Shuetrim and the Trustee were separately represented at all times, and asserted separate and independent duties owed to them by MetLife, I do not see how Mr Shuetrim can on the one hand waive his entitlement to procedural fairness from MetLife, and at the same time rely upon a breach of any obligation owed by MetLife to the Trustee, at least in circumstances where the Trustee filed a submitting appearance.

Did MetLife fail to have regard to Mr Shuetrim's affidavit?

1. Mr Shuetrim also seeks to maintain the finding of breach by MetLife by reason of its failure to take into account his affidavit which had been served in the proceedings and ultimately was read without objection. The affidavit annexed a 10 page statement dated 5 June 2013. Paragraphs 34 to 42 of that statement, under the heading "prospects of future employment", expressed Mr Shuetrim's view that there was "absolutely no way" that he would ever be able to return to a position within the Police Force, either operational or nonoperational. He said that he would be unable to attend to an alternative role: "[T]here is no way my conditions will allow me to successfully work as a Retail Shop Assistant, Grocer or Store Clerk. Mentally I cannot deal with people and I will be sure to spiral into a panic attack after 20 or 30 minutes of turning up to work. I cannot handle face to face interaction and try to avoid it as best I can."
2. He went on to address and exclude the possibilities of his working as a process worker or console operator, or mechanic or clerk or administrative assistant. He concluded: "Therefore based on my previous training, education and experience there is absolutely no job that I would be able to attend to on a full-time, part-time or casual basis in my locality due to the limitations of my left elbow injury and subsequent stress, anxiety and deteriorated mental health. My inability to make appropriate decisions and the erratic side effects and nature of my stress levels and anxiety make it futile for me to even attempt to get out of the house on regular occasions. This also inhibits my ability to successfully undertake any form of retraining. There is no way I would be able to regularly attend university classes, lectures or seminars. I have a fear of gatherings and crowds and would not be able to mentally get myself to the classes."
3. As has been seen, the primary judge saw Mr Shuetrim cross-examined about aspects of his statements, and found that he had exaggerated his symptoms. MetLife did not have that advantage in early 2015. Even so, I can see no breach of duty in an insurer relying upon medical and psychiatric evidence in order to reach the state of satisfaction that an Insured Person is unlikely ever to return to work. It cannot be the case that it is unreasonable, or in breach of an obligation of good faith and fair dealing (or for that matter of utmost good faith) for an insurer to rely not upon the inevitably self-serving statements by the insured and instead to rely upon professional opinion. To be clear, that view does not contain an implied criticism of the sincerity of Mr Shuetrim's statements. I am instead agreeing with TAL's submission that "[o]ne thing Mr Shuetrim can't do and doesn't do in his statement is to tell us how he is going to be feeling in five, ten, 20, 30 years' time. It's impossible for Mr Shuetrim, without medical qualifications, to give an opinion about whether he's ever going to recover to the point of being able to work again".

Did MetLife refer to opinions dealing with remote possibilities?

1. Mr Rayment QC, who appeared for Mr Shuetrim on appeal (although not at trial), explained the distinction required to be drawn by the wording of the TPD definition by reference to White and Beverley as follows: "So you ask yourself would this definition, in our submission, something like this, is there any clinical sign to indicate to an appropriately qualified person that the claimant is likely to go back to some form of relevant work? If you only have someone saying, 'I hope he can' or 'in the ordinary course with appropriate treatment he could', then you have crossed the line into what her Honour describes as the more remote possibilities and that is, we submit, a quite important determination about a clause such as your Honours have in this case, quite important, and what it means is that if, after an appropriate period of time, no such clinical sign [has] emerged or no such matter which shows a real chance of returning to work has emerged, then the clause is satisfied."
2. I substantially agree with this submission. A mere expression of hope that a person will return to a relevant form of work is insufficient to sustain an opinion that the clause is not satisfied. Conversely, clinical evidence that there is a real chance of returning to work will sustain an opinion that the clause is not satisfied. However, I would not agree that an opinion in terms that "in the ordinary course with appropriate treatment a person would return to a relevant form of work" would necessarily be insufficient to sustain an opinion that the clause is not satisfied. To the contrary, I think that it might, depending on the particular facts and degree of uncertainty; it might also warrant deferring the assessment date.
3. I do not consider that MetLife inappropriately relied on opinions which were too remote to address the test. After accepting that there was a consensus of opinion that Mr Shuetrim was not capable of returning to work as a police officer or as a mechanic, the critical paragraph of its letter dated 10 February 2015 was: "However, there is a lack of findings among the large volume of medical evidence that demonstrates that Mr Shuetrim was, at the relevant date, then unlikely ever to engage in any gainful profession, trade or occupation for which he is reasonably qualified by reason of education, training or experience. There are instead, expressed within the medical evidence, a number of conclusions that Mr Shuetrim could return to work in a vocation outside of policing or mechanics. Therefore, MetLife is not satisfied that, on the balance of probabilities, Mr Shuetrim was TPD as at the relevant date."
4. MetLife made its decision on the basis that it was not satisfied that Mr Shuetrim fell within the definition of TPD, rather than positively being satisfied that he did not fall within the definition. This accords with the ordinary meaning of the clause. It was not the case that MetLife relied upon remote possibilities of a return to the workforce to form the view that the definition did not apply, but that Mr Shuetrim had not provided proof to its satisfaction. That distinction may in some cases be a fine one, but it is important, and obviously MetLife was required to reach a state of satisfaction consistently with its duty of good faith and fair dealing. (If anything, the amendments in 2013 to the Insurance Contracts Act 1984 (Cth) will heighten the duty to which an insurer is now subject.) I do not consider that, on a fair reading of its letter, this ground of the notice of contention is established.

Did MetLife fail to make a determination?

1. Finally, Mr Shuetrim contends that "MetLife merely stated that proof to its satisfaction had [not] been provided". That ground picks up the distinction to which I have referred in the previous paragraph. It amounts to saying that the letter did not determine Mr Shuetrim's claim. I disagree, for two reasons. The first is that the letter is, quite precisely, reflecting the language of the policy. The consequence of MetLife not being satisfied that Mr Shuetrim satisfied the TPD definition was that his Trustee was not entitled to be paid the benefit sought by him. The second is that the submission is inconsistent with the way in which all parties have, hitherto, conducted the litigation. Following receipt of MetLife's letter, Mr Shuetrim amended his pleading and alleged that MetLife made a decision declining the claim. This occurred in circumstances where Mr Shuetrim maintained an allegation that MetLife had failed to determine the claim prior to that time.
2. It follows that this final aspect of the notice of contention is not only ill-founded, but also inconsistent with the forensic decisions made at first instance.
3. While there should be a grant of leave to Mr Shuetrim to rely upon the notice of contention, the result is that MetLife's appeal should be allowed. I turn to TAL's appeal.

Was TAL in breach?

1. The bulk of the criticisms made by the primary judge of TAL's letter of 17 December 2014 related to the fact that it made no reference at all to the medical and psychological opinions expressed in 2013 and 2014. The primary judge addressed that deficiency at [205]-[223].
2. There were two other matters to which the primary judge referred. The first was the statement by TAL that Mr Shuetrim "was and is" capable of working as a mechanic or as a sales representative. His Honour said that that statement failed to have regard to Ms Strinic's report to the effect that those options were not considered suitable: at [224]-[228]. Secondly, the primary judge said at [229]: "TAL's letter concluded with the statement, under the heading '[p]rocedural fairness', that 'as a result of the pressure of time arising from the progress of the related proceedings in the Supreme Court of New South Wales' TAL had 'proceeded to a formal determination' (that is, without 'procedural fairness')."
3. The primary judge relied upon "all those circumstances" to conclude that TAL had breached its obligations of good faith and fair dealing to Mr Shuetrim.

The parties' submissions

1. On appeal, TAL submitted that the primary judge had read its letter of 17 December 2014 too narrowly. It relied upon what had been said in Weber v Tiss Pty Ltd [2005] NSWSC 67 at [8] that "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."
2. TAL also submitted that the primary judge erred in inferring that TAL had failed to have regard to the medical and psychiatric opinions of 2013 and 2014. It submitted that "[t]he letter is equally capable of being read as not regarding the later medical evidence as sufficiently clear or probative (especially in light of the disagreements between the experts at later points in time) to alter the clear effect of Dr West's opinion as at July 2012, and therefore of little weight". TAL acknowledged that its letter "does not express the reasoning process for treating the later medical evidence as not sufficiently weighty to override the opinions as at July 2012, but one cannot conclude from that omission that the decision to take that approach to the evidence was unreasonable". In oral submissions, TAL confirmed that ultimately its submission rested upon a failure by Mr Shuetrim to discharge the onus he bore to make out a case of breach of duty.
3. In response, Mr Shuetrim emphasised that TAL chose to adduce no evidence explaining the reasoning process adopted by it. TAL's letter was tendered (by Mr Shuetrim) on an unrestricted basis.
4. The parties also exchanged submissions in relation to the way in which TAL's letter had dealt with Mr Shuetrim's vocational assessment, and the question of procedural fairness. On the view I take, it will not be necessary to summarise or resolve the competing submissions on those (relatively minor) aspects of TAL's letter. However, it is necessary, and not only in order to resolve this ground, but also when dealing with the final ground of TAL's appeal, to deal with the medical and psychiatric opinions, which were available to TAL at the time. I summarise each of those bodies of materials below in turn.

Medical opinions

1. Mr Shuetrim's elbow arthroscopy had been undertaken on 9 May 2012. The surgeon (Dr Biggs) reviewed Mr Shuetrim on 16 May and 27 June 2012 and noted satisfactory progress although added that there was some residual discomfort, ongoing physiotherapy was required and that Mr Shuetrim was unfit for lifting anything greater than 3.5 kg for a further two months.
2. On 17 July 2012, Dr West reported to Mr Shuetrim's workers compensation insurer: "It is my opinion, that following his operation which was successful and that [sic] he was fit to resume normal duties - possibly graded at first I did write @ one stage he had anxiety when he over-heard a conversation about him from police administration but this should have ceased when the police offered him many opportunities to change venues at work, hours, conditions etc. It may be that he has previous stress anxieties that are unrelated to this incident - he has a psychologist for these. I am of the opinion that I have completed my task in getting him back to work free of his original injury."
3. Shortly before making that report, Dr Jones had replaced Dr West as Mr Shuetrim's general practitioner. Her notes (made available on subpoena) confirm that the first consultation took place on 4 July 2012 and commence: "[K]nown to Dr West in Quakers Hill, is on a work covers claim [L]ast GP disagreed strongly with his psychiatrist report Psychiatrist does not feel he can return to police force, GP disagrees 4/52 later sent to an alternative psychiatrist who stated the same, not to return to police force." The notes also record that Mr Shuetrim "gets physio x2/week, L arm still 50% weaker than R, is l handed."
4. Dr Jones wrote on 11 September 2012 that it was unknown when Mr Shuetrim would be likely to be certified fit to return to work, referring to his anxiety and depression, as well as to a "resolving elbow injury".
5. Dr Jones provided a medical certificate dated 26 January 2013. It stated: "Benjamin Shuetrim has been seeing me for more than a year re work related issues. Ben will never be able to resume duties as a police officer or mechanic. As regards future employment in other fields, this is still unknown pending on progress."
6. Dr Jones recorded the following notes at that consultation: "[C]hatted also re long term aims I am not willing to say permanently and completely [incapacitated] as there is hope for employment [in] other fields in the future Actions: Medical certificate given."
7. Mr Shuetrim lodged his TPD claim with the Trustee in February 2013, which referred it to MetLife and TAL in March 2013. MetLife referred him for medical examination by Dr Pillemer, an orthopaedic surgeon. Dr Pillemer's report of 27 May 2013 recorded that he would "certainly accept that he is not fit at this stage to get back to his pre-injury duties as a police officer", but then gave the following prognosis: "The vast majority of people with lateral epicondylitis do improve with time and often this takes many many months. I see no reason why Mr Shuetrim should not show improvement in the future."
8. Dr Pillemer recorded that Mr Shuetrim "does not feel the surgery has assisted his symptoms at all" and expressed the opinion that he was not fit to get back to his pre-injury duties on either a part-time or full-time basis, but that he was: "fit for a wide range of employment opportunities and activities that do not place excessive stress on his left elbow region. Importantly, in my opinion, his condition is almost certain to improve significantly with the passage of time. People very rarely remain with any residual impairment and disability following lateral epicondylitis, even in the presence of failed surgery."
9. Mr Shuetrim's solicitors arranged for him to be examined by Dr Patrick, a general surgeon, on 25 June 2013. Dr Patrick's report dated 9 July 2013 was directed to the AMA 5 Guidelines, made applicable by WorkCover Guidelines, and concluded that by reason of his ongoing symptoms in relation to his left elbow, he suffered from 12% Whole Person Impairment. His report referred to "ongoing troublesome pain" and "markedly diminished grip strength". He expressed some views about the psychological state of Mr Shuetrim, and then added, "He has some interest in environmental things and might possibly be able to do some light horticultural type work, working largely 'one armed'".
10. The letter from Mr Shuetrim's solicitors had asked Dr Patrick in terms for his opinion whether Mr Shuetrim satisfied the definition of TPD. It stated: "If you are supportive of his claim could you kindly state your opinion as follows: 'In my opinion, Mr Shuetrim is incapacitated to such an extent as to render him unlikely ever to engage in any gainful profession, trade or occupation for which he is reasonably qualified by education, training or experience.'" The letter also asked Dr Patrick to provide a brief explanation for that view and provided examples ("such as he cannot perform regular employment day in and day out, not without retraining, etc").
11. Dr Patrick did not in his report of 9 July 2013 state his opinion in the terms requested by Mr Shuetrim's solicitors. In a subsequent letter dated 14 October 2013, Dr Patrick said: "I do believe that Ben Shuetrim does satisfy the definition. As he is he is not able to perform regular employment day in and day out - he is essentially, largely 'one armed' and given the nature and extent of his ongoing symptomatology as described, and considering the fact that there are both physical and psychological factors of significance here I do believe that the definition is satisfied."
12. What caused Dr Patrick to prepare a later report, employing the language suggested by Mr Shuetrim's solicitors, is not known, but it is not suggested on the face of the report or elsewhere that Dr Patrick saw his patient subsequently or had regard to material not available to him when he provided his initial report.
13. The workers compensation insurer arranged for a further examination by Dr Breit, an orthopaedic surgeon, on 15 January 2014. Dr Breit was also provided with Dr Patrick's reports. Dr Breit was extremely critical of the way in which Dr Patrick had used the WorkCover and AMA Guides. His conclusion was that Dr Patrick's assessment was "totally invalid". He assessed permanent impairment of 1% WPI.
14. Mr Shuetrim was examined again on 19 June 2014 by Dr Wong, a general surgeon, who produced a medical assessment certificate. He considered that there was "unexplained deterioration in the range of motion at the left elbow particularly in the last 5 months". He shared Dr Breit's reservations about Dr Patrick's report, and agreed that Dr Breit's method of assessment was in accordance with the Guidelines. Because of the unexplained deterioration in extension and pronation subsequent to Dr Breit's report he applied a different methodology and concluded a 5% WPI.
15. Mr Shuetrim had been seeing Dr Jones throughout the first half of 2014. He saw Dr Sher, his third general practitioner, for the first time on 12 September 2014. On that date, Dr Sher completed a "Progress Attending Doctor's Statement" for TAL, in which in answer to the question "Please advise when the Patient is expected to be fit to return to work" he had written "Never". A deal of weight was given to this in submissions. I think it must be construed as being confined to returning to work as a police officer, because on the same day the same practitioner wrote a letter to Mr Shuetrim's solicitor which stated: "He won't be able to work in the police again, I think it will be absolutely true that is not able to work in the police force. However he could be retrained to do something different, as he is left handed and the same elbow is affected. Therefore with certainty more than 90% he is unable to join any form of employment since he ceased his job in and around 21 November 2011. As he is left handed, and still have problems with the left elbow, complicated by his depression and stress, He could not be able to work in the same capacity again as a policeman or a mechanic. However with extensive retraining and rehabilitation he will be able to perform some sort of meaningful work or occupation."
16. Significant difficulties attend this letter. First, what has been reproduced above corrects numerous spelling and punctuation errors. Secondly, and substantively, it is necessary to reconcile the unequivocal statements about Mr Shuetrim's capacity to return to work following retraining (in the second and last sentences reproduced above) with the third sentence (which on its face ascribes a certainty of "more than 90%" to an historical truth, namely, Mr Shuetrim's inability to return to work since November 2011). It is sufficient for present purposes to observe merely that the doctor was not unequivocally of the view that Mr Shuetrim would never return to work outside the police force.
17. A letter dated 22 October 2014 from Mr Shuetrim's solicitors invited Dr Sher to review Ms Strinic's report (referred to as "APM's report"), and stated: "We draw your attention to the last page of the report wherein there are comments in relation to unsuitability of our client being able to perform any work based on his education, training or experience because of his physical and psychological disabilities. Could you kindly review the report and advise whether you are of the opinion that our client meets the definition. If so could you kindly state your opinion as follows: In my opinion, on the balance of probabilities, after reviewing APM's report of 24 July 2014 Mr Shuetrim satisfied the definition of total and permanent disablement. Could we kindly have your report at your earliest convenience as our evidence must be served by 29 October 2014."
18. A document dated 29 October 2014 was tendered. It is unclear if it was an internal record of the doctor's notes, or something which was sent to Mr Shuetrim's solicitors (it is described in the appeal papers as a "report" but it is unsigned and bears the appearance of an internal record). The first 14 paragraphs are identical to the corresponding paragraphs in two documents also purportedly drafted by Dr Sher, both dated 9 October 2014, including observations that "[h]e has anxiety and panic episodes, could be improved with psychological support", "[t]he barriers to treatment will be his anxiety and depression, but with constant presuation [sic] it could be dealt with", "[c]onstant support, physio, psychological help could make him able to retrain for particular outdoor activities" and "Mr Sheutrim will need further psychological and physical fitness activities to make him start a new job or skill him in a particular field ?? outdoor activities - referral to vocational training programme.". The final paragraph in the document dated 29 October 2014 was not present in the earlier documents, and appeared to respond verbatim to the letter of 22 October 2014 from Mr Shuetrim's solicitors: "I think on balance of probabilities, after reviewing APM's reports of 24th July 2014, Mr Shuetrim satisfied the definition of total and permanent disablement."

Psychiatric opinions

1. From May 2012, a series of psychiatric opinions were obtained. The first was Dr Calthorpe, who expressed the view that it was highly unlikely that Mr Shuetrim would be able to return to active service with the Police, but that "[h]is personal, marital and work history plus his considerable personal attributes point to eventual restabilisation and success, provided he receives appropriate professional assistance and support from his family and friends".
2. In the course of his application for medical discharge, Mr Shuetrim was examined by Dr George, who concluded in a report dated 28 June 2012 that he suffered from an anxiety disorder which was "substantially related to his employment" with the Police Force. He said that there were "no other contributing factors" and expressed the conclusion that "I do not believe that Mr Shuetrim has any capacity for either part time or full time work in an operational or non-operational capacity either now or in the future."
3. Dr George rejected as a possibility that Mr Shuetrim be issued a permanently modified duties certificate and recommended medical discharge. He said that ongoing psychological therapy was "absolutely necessary" on a weekly basis until he had good remission of symptoms, "then he can slowly be weaned down off therapy". Dr George said, "I would imagine he will be seeing a psychologist through to the end of this year".
4. Dr Martin, a forensic psychiatrist, examined Mr Shuetrim at the request of MetLife and produced a report dated 28 May 2013. He regarded Mr Shuetrim as a "genuine historian who I did not believe was embellishing or feigning disability". He said that it was difficult to say whether his ongoing treatment would result in his return to gainful full time employment "as the prognosis is fairly poor considering the amount of time Mr Shuetrim has been out of work". Dr Martin regarded Mr Shuetrim's work capacity as "probably fairly low at this point in time". He said: "Given his current symptoms, he may be best suited to a job in some form of gardening or farming capacity. I suspect he would be able to function at some sort of level in this type of environment. I would suggest vocational assessment may be helpful."
5. Dr Martin said that "I do believe that [Mr Shuetrim] could be considered to be 'totally and permanently disabled to ever work in an occupation where they are suited by means of their education, training or experience', where it is difficult to imagine Mr Shuetrim being able to successfully work in any capacity in the police force or as a mechanic (given his ongoing difficulty with his left elbow, which is his dominant hand)." Dr Martin's conclusion was: "Again, I am not convinced that Mr Shuetrim would ever be likely to return to work within his education, training or experience before he reaches retirement age, in the sense that I cannot envisage him being able to successfully return to work with the police or as a mechanic, for which his education and training has prepared him for. However, I do believe it would be in both his best interests and quite within his capacity, at some stage to work in some other capacity for which he might require a vocational assessment and/or possible rehabilitation and, as noted above, I can [imagine] that he would be able to work in the field of gardening or farming or something related to his interests in permaculture."

Conclusions on medical and psychiatric evidence

1. The situation then may be summarised as follows. In relation to Mr Shuetrim's elbow, there was a body of contradictory material, all of which tended to detract from what had been said immediately after the operation by Dr West. More importantly, in relation to Mr Shuetrim's psychiatric assessment, there was a substantial body of material to the effect that he was unable to return to the Police Force, from which indeed he had been medically discharged.
2. All of that material was pertinent to the determination of Mr Shuetrim's condition at the relevant time. I do not consider that the inference invited by TAL, namely, that the subsequent material was insufficiently probative and therefore not referred to in TAL's 17 December 2014 letter, should be drawn.
3. An ordinary reading of TAL's letter of 17 December 2014 discloses that its author has been at pains to qualify the material to which he would refer to material written on or shortly after July 2012. It is for that reason that, repeatedly, the letter includes express temporal qualifications: "by July 2012, the medical opinion regarding the Member's elbow condition was …", "we acknowledge that in July 2012, the Member was reporting significant stress …", "we note that in or about this time … [Drs Jones and Calthorpe and Ms Walsh made various reports]", "it is significant that the medical evidence in or about July 2012 does not support a conclusion …", all of which leads to the ultimate expression of a view that "as at the date for assessment, being July 2012, the medical evidence does not indicate a permanent incapacity for work as a mechanic or sales representative, nor that it was unlikely that the Member would engage in such work" (emphasis added to the preceding quotations).
4. There can be no doubt that the medical and psychiatric opinions expressed in 2013 and 2014 were relevant to the consideration by TAL of the probability of Mr Shuetrim being able to return to work after July 2012. In McArthur v Mercantile Mutual Life Insurance at [74], Muir J said: "Medical reports coming into existence after the relevant time will be admissible provided that they are pertinent to the determination of the appellant's condition at the relevant time." McMurdo P agreed with Muir J. McPherson JA also agreed with this aspect of Muir J's reasons, adding that it accorded with "the principle that the court does not speculate when it may know": at [23]. The primary judge relied upon that statement of principle.
5. More recently, the High Court's decision in Finch v Telstra Super Pty Ltd [2010] HCA 36; 242 CLR 254 at [18] is confirmatory of the position. Of a materially identical clause in a trust deed, the High Court said that the member was entitled to submit that: "It can now be seen that the reason why I ceased to be a Telstra Employee was a state of affairs making it unlikely that I will ever engage in any gainful Work again. What matters is that that state of affairs arose while I was a Telstra Employee. It does not matter that the symptoms of that state of affairs emerged more clearly after I left Telstra's employment."
6. Moreover, I consider that there is real difficulty in accepting the unqualified applicability of the statement of principle in Weber v Tiss Pty Ltd on which TAL relies to the facts of this case. TAL's letter of 17 December 2014 was no ordinary letter declining cover. It was a letter supplied, after repeated requests by Mr Shuetrim's solicitors, in circumstances where TAL had been, for more than a year, a defendant to proceedings in which Mr Shuetrim complained that it had constructively denied his claim. It is near inconceivable that the author of the letter was unaware that it would be scrutinised at the final hearing which was shortly to take place, nor that it had not been reviewed by lawyers, especially given that it was sent two days before a directions hearing in the matter which took place on 19 December 2014, and was dated 12 days after TAL had been granted permission to use documents produced in the litigation for the purposes of determining Mr Shuetrim's claim.
7. I conclude that TAL was basing its failure to be satisfied only on material from around July 2012. That conclusion is based on reading the letter as a whole, in particular the repeatedly qualified statements which excluded reference to the body of more recent material in its possession. I do not accept the submission that it should be inferred that TAL formed but did not communicate the view that the more recent reports were not of any material probative weight.
8. I did not understand it to be in issue that a failure by TAL to consider a body of material from 2013 and 2014, if that be the correct construction of its letter, was other than a breach of duty by it. In Finch v Telstra Super Pty Ltd, the High Court said that for a trustee to knowingly exclude relevant information from consideration would be a breach of duty: at [66]. The same is true in respect of the duty owed by TAL, and it matters not, for the purposes of this case, whether that duty be formulated as a duty of utmost good faith or of good faith and fair dealing.
9. That conclusion means that it is unnecessary to address Mr Shuetrim's notice of contention in TAL's appeal. Nor is it necessary to address a fall-back argument advanced by Mr Shuetrim, namely, that the time at which the policy definition was to be applied was not confined to July 2012, but extended to subsequent times. In any event, in light of the finding by the primary judge that the relevant date of assessment was July 2012 (at [203]), TAL correctly submitted that a notice of contention was required if this fall-back submission were to be advanced on appeal.

Should Edwards be overturned?

1. This Court's decision in Birdsall was delivered two days prior to the decision of the primary judge. The primary judge was alive to this. He noted at [35] the reservations expressed by Basten JA in that appeal, as well as those expressed by McPherson JA in McArthur v Mercantile Mutual Life Insurance. However, his Honour considered that he was bound to follow the existing line of authority, and that no counsel had suggested otherwise: at [35].

TAL's submissions

1. TAL submitted on appeal that this Court should overturn one aspect of the reasoning of McLelland J in Edwards v The Hunter Valley Co-op Dairy Co Ltd at 77,537: "The formation by Zurich of the relevant opinion is of the nature of a condition of Zurich's liability under the policy. Zurich cannot rely on non-fulfilment of such a condition if fulfilment was prevented by its own default, and in such an event the issue upon which Zurich's opinion was required to be formed would become one for determination by the Court (see James Noel Eric Butcher v Martin Port (1985) 3 ANZ Ins Cas 60-638; 1 NZLR 491 at 497, 500, 505)."
2. The line of authority commencing with Butcher v Port (1985) 3 ANZ Ins Cas 60-638 was reviewed by Muir J in McArthur v Mercantile Mutual Life Insurance at [62]-[72]. His Honour concluded: "There is thus a substantial body of authority in support of the conclusion that where, as in this case, payment is dependent on the formation by a party to a contract of an opinion as to the existence of a state of affairs and the opinion is not duly formed through the fault of that party, the court may proceed to decide, as a question of fact, whether such state of affairs exists. Having made a determination in favour of the insured the court may then order payment of the sum which would have been payable had the insurer's opinion been duly formed in favour of the insured. That is the course the primary judge took in this case and, not without some misgivings, I accept that it was correct."
3. It may be inferred that the misgivings to which Muir J referred reflected the critical analysis by McPherson JA at [17]-[20]. The gravamen of McPherson JA's criticism was that to take the course adopted in Butcher v Port was "not simply to eliminate a condition precedent relating to proof, but to make it a different contract with a different effect": at [19]. His Honour referred to Canadian decisions in which courts had refused to take precisely that step. That said, his Honour stated "that the decision in Butcher v Port has been followed in Australia on so many occasions that it would be an act of temerity not to follow it here": at [20].
4. The criticisms made by McPherson JA were reviewed and endorsed by Basten JA in Birdsall at [17]-[32], in a passage which was expressly obiter and emphasised that the point had not been the subject of argument, but which stated that McPherson JA's reasons were "powerful" and had "cast much doubt" upon the line of authority: at [28] and [25].
5. TAL properly acknowledged that in light of the considered decision of the Queensland Court of Appeal in McArthur v Mercantile Mutual Life Insurance, this Court had to apply the deference appropriate to be accorded to the considered decision of an intermediate court of appeal: see Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 230 CLR 89 at [135] and CAL No 14 Pty Ltd v Motor Accidents Insurance Board [2009] HCA 47; 239 CLR 390 at [51].
6. MetLife chose not to join TAL's attack, not having raised the point at first instance or in its appeal.
7. There are two independent reasons why, in my opinion, TAL's submission should be rejected. First, TAL should not, in the circumstances of this case, be permitted to depart from forensic choices made at first instance. The second is that TAL has not propounded a sufficiently strong case to convince this Court to overturn Edwards.

TAL should not be permitted to reverse its forensic decision made at trial

1. First, although the question is a pure question of law, the course taken by TAL (and MetLife) was one that significantly affected the course of the trial. Necessarily, the trial was much longer than it would otherwise have been. It is difficult to see why Mr Shuetrim would have been cross-examined had the only issue been whether the insurers were in breach of duty to him. It also seems plausible that much of the evidence adduced should only have been admitted on a limited basis if the only question were whether, in the course of assessing Mr Shuetrim's claim, the insurers had breached their duty to him. In reliance upon such considerations, Mr Shuetrim contended that he would have adduced evidence of his impecuniosity against a decision to limit the hearing in the way TAL now contends. None of that is inherently implausible, and TAL made no response to these submissions in reply.
2. It is not sufficient for an appellant to establish that a new point of law could not possibly have been met by evidence (of course, if it could possibly have been met by evidence, that is an end of the matter: Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438). It is also necessary for an appellant to demonstrate that the respondent would not have conducted the case differently at trial: see for a recent example Sze Tu v Lowe [2014] NSWCA 462; 89 NSWLR 317 at [315]-[316]. It is to that principle that Mr Shuetrim's submission about his impecuniosity is directed. However, I am doubtful that his submission is sound. The question is a binary one: either (as Mr Shuetrim submits) the court should and can form the opinion in the event that it finds breach of duty by an insurer, or (as TAL submits) the court cannot, because so to do is to rewrite the parties' contract.
3. That said, I would reject TAL's submission on a more direct basis. A party does not have a right to insist that a new point be decided on appeal simply because all of the facts have been established beyond controversy or the point is one of construction or of law, as Mason P said, with the agreement of Gleeson CJ and Priestley JA, in Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631 at 645. That appeal illustrates the force of that proposition, which applies even to constitutional points. Parties, especially sophisticated parties which are regular litigants like TAL, are ordinarily bound by their forensic choices taken at trial.
4. What is more, there is the possibility of real unfairness to Mr Shuetrim in the present case if TAL's submission is accepted. TAL acquiesced at trial in an approach which saw the issuing of subpoenas and the cross-examination of Mr Shuetrim, resulting in the production of evidentiary material not otherwise available to it. It is at least potentially unfair having adopted that approach for TAL to be permitted to depart from that course and consider Mr Shuetrim's claim once again, in light of material obtained by events in litigation which, if TAL be right, should not have taken place.

Edwards should not be overturned

1. Putting to one side the foregoing considerations, there is a separate reason for rejecting TAL's submission.
2. Although attention during the hearing of the appeal was directed to this Court's judgment in Birdsall and the judgment of the Queensland Court of Appeal in McArthur, it is important to have regard to the state of authority around the country on this question.
3. In New South Wales, Edwards was followed by this Court in Hannover Life Re of Australasia Ltd v Sayseng at [36], as well as in Birdsall. It is clear that judges at first instance in New South Wales and Queensland are bound by that approach.
4. In addition, there are appellate decisions in Western Australia and Victoria. In Western Australia, the Court of Appeal in Beverley v Tyndall Life Insurance Co Ltd applied this approach, in accordance with agreement of the parties. More significantly, in HCF Life Insurance Company Pty Ltd v Kelly [2002] WASCA 264, Wallwork J, with whom Templeman J and Mathews AJ agreed, adopted the submission of the insured (although it is not entirely clear from the report whether this was in contest): "As the respondent says in his submissions, if the insurer fails to meet the objective standards which govern the exercise of its discretionary judgment when making a determination as regards its liability, then the insurer loses the benefit of that condition and it becomes appropriate for the Court to consider the matter itself .... In this case the learned trial Judge applied that principle and considered the matter for himself. On this appeal this Court must consider whether the learned Judge should have taken that course": at [44], citations omitted.
5. In Victoria, the approach in Edwards was followed in Hannover Life Re of Australasia Ltd v Colella [2014] VSCA 205; 18 ANZ Ins Cas 62-036 at [73], although it seems that there was no argument as to the correctness of the approach.
6. In South Australia and Tasmania I have located no appellate decision, but the approach in Edwards has been followed at first instance (see for example Galaxy Homes Pty Ltd v National Mutual Life Association of Australasia Ltd [2012] SASC 141 at [50]).
7. D Derrington and R Ashton, The Law of Liability Insurance (3rd ed 2013, LexisNexis), vol 2, para 9-10 describe this line of authority without criticism. Sutton on Insurance goes further, and describes this line of authority as "venerable and unimpeachable": vol 2 at 568.
8. The practical reality is that this question is presently settled throughout and beyond Australia. The question sought to be raised by TAL on appeal is the subject of considered appellate decisions in New South Wales, Queensland and arguably Western Australia, which have consistently been applied throughout the country by a large number of decisions at first instance. At least in part, that reflects the high regard accorded to a decision of McLelland J. And for the dozens of trials culminating in decisions at first instance, there are probably hundreds of disputes between insured and insurer which are resolved prior to a determination after a final hearing.
9. Further, if this Court accedes to TAL's submission, then judges in New South Wales will be bound to apply a different approach from those in Queensland, and the position in other States will be unclear, notwithstanding that untold numbers of insurance policies must have been written - and priced - against the presently clear principles of law.
10. If the question of principle were clear cut, there might, even so, be good reason to introduce uncertainty into the law where presently there is none. The basic point made by McPherson and Basten JJA and echoed by TAL is that "there is no jurisdiction for the Court to rewrite the contract or, for that matter, to perform it for the party that has to form the requisite opinion."
11. I respectfully disagree. The attractiveness of TAL's submission is merely superficial. Courts have rewritten parties' contracts for many decades.
12. At law, courts have long declared void contracts which are contrary to public policy, including clauses which amount to an unreasonable restraint of trade, and they have held parties to bargains which are different from their contractual promises (for example, through estoppel by convention). In equity, courts have long refused to enforce clauses which are penalties. Much of equity's auxiliary jurisdiction involves qualifying the rights otherwise available under contract (for example, every case where rescission or rectification is ordered).
13. It may be said that those areas are distant from a contract of insurance which turns upon the opinion formed by an insurer. But there is nothing especially sacrosanct about a contract of insurance. Indeed, statute (notably, the Insurance Contracts Act) has altered the rights between insured and insurer more dramatically than most other contractual relationships. Moreover, the reasoning process underlying Edwards has long been applied in the context of insurance contracts.
14. In Edwards v Aberayron Mutual Ship Insurance Society (1876) 1 QBD 563, the Court of Exchequer Chamber encountered the same issue as arises in TAL's appeal. The directors of a company offering mutual insurance to members failed to determine that a ship had been lost by perils of the sea without hearing from the insured. Amphlett B said at 580 that "it would be unreasonable to compel the plaintiff now to submit his claims again to the directors, they having already prejudged the case in his absence." His Lordship then rejected the defence advanced by the company that the plaintiff's entitlement turned upon the formation of an opinion by the directors, in terms which are squarely directed to TAL's submission (at 580-581): "But it is said that the determination of the directors having been made a condition precedent to bringing an action, a Court, at law at least, cannot interfere, as that would be making a new contract for the parties. I think there is a fallacy in this argument. Courts of Equity have no more power to make new contracts for parties than Courts of Law, and yet they would undoubtedly interfere when a contract is performed on one side and the mode agreed upon for ascertaining the amount to be paid by the other has failed in any way without the plaintiff's fault. Put the simple case, which is in principle the same as that we are considering: A contracts to do work for B, the price to be determined by the engineer of B. The work is done, and before the price is determined the engineer, by some act of his own not necessarily fraudulent, becomes incapacitated to act as arbitrator. I cannot persuade myself that Courts of Law are powerless to prevent the gross injustice of B having the benefit of the work, without compensation to A, except by the inconvenient and often ineffectual course of bringing an action for neglect of duty against the engineer and his employer."
15. The sharp distinction drawn by Amphlett B between the separate jurisdictions of courts of law and courts of equity reflected the fact that the appeal was heard only months before both the Court of Exchequer Chamber, and the Court of Queen's Bench from which the appeal lay - both courts of law - were abolished, and replaced by the High Court of Justice and the Court of Appeal which administered jurisdiction both at law and in equity. But the presently relevant point is that for at least 140 years courts have recognised the difficulties which arise when an insurer's obligation to pay a claim turns upon the formation of an opinion and the insurer's first attempt at reaching that opinion is legally invalid.
16. That is the background against which the presently settled approach to such contracts is to be assessed. It is not a background which gives unchallenged supremacy to the terms of the contract between insurer and insured.
17. The same considerations to which Amphlett B was alive apply today. It is regrettable, but inevitable, that some insurers will form an opinion leading to the refusal of a claim in circumstances where the insurer breaches its duty. Conversely, it is regrettable, but inevitable, that some insured persons will exaggerate their symptoms in order to obtain the benefit of insurance cover to which they are not entitled. And there will, regrettably but inevitably, be cases like the present, where the insurer breaches its duty and the claimant exaggerates his or her symptoms. The solution adopted by the substantial body of appellate decisions is a sensible way to deal with the need to resolve such disputes in a way which is fair to insured and insurer.
18. What is more, Amphlett B's judgment was considered and applied by Muir J in McArthur. In other words, the point sought to be raised by TAL has in terms been rejected in the authorities constituting the presently settled approach.
19. I am conscious that the High Court in Finch v Telstra Super Pty Ltd remitted the claim to the trustee to reconsider the claim, rejecting the appellant's submission that the High Court should itself form an opinion as to TPD. The High Court did so on the basis that it could not be concluded that the trustee was incapable of approaching the task of forming its opinion satisfactorily, and it could not be said that a conclusion in favour of the appellant was the only possible conclusion: at [67]-[68]. That decision provides some support, at least by way of analogy, to TAL's submission.
20. However, no party placed reliance on Finch. My preliminary view is that they were correct not to do so, for different considerations apply to the formation of an opinion by an insurer as opposed to a trustee. A trustee is a fiduciary, and is required to make decisions leading to payments of money none of which is owned beneficially by the trustee. An insurer is not a fiduciary, but may (as in the present case) be operating a business with a view to making a profit, and every decision it makes to grant or refuse a claim will go directly to its profitability. As Mr Rayment emphasised, by reference to what Malcolm CJ had said in Beverley at [6] "in the assessment of a claim under a policy, the insurer is in a very real sense acting as a judge in the insurer's own cause".
21. Bearing all those considerations in mind, there seems to me to be no sound reason to depart from the approach which has been worked out in the body of law which TAL seeks to challenge. Although the doubts expressed by McPherson and Basten JJA are not without force, I am not persuaded that compelling reasons have been shown to alter the existing state of the law.

Did the primary judge err in finding that Mr Shuetrim satisfied the definition of TPD in the TAL policy?

1. I turn to the final ground of TAL's appeal. On a fair reading of the whole of the reasons for judgment, I have concluded that the primary judge applied the test stated in Halloran at [76] that "unlikely" meant a probability of less than 50%. As stated earlier in these reasons, that follows from (a) the reiteration at [38] of the passage from Halloran when his Honour dealt with construction, coupled with the observation that the wording in the TAL and MetLife policies was indistinguishable, (b) the reference at [39] to the same proposition in Banovic v United Super Pty Ltd [2014] NSWSC 1470, and (c) the framing of the test when his Honour turned to applying it to the facts at [255] ("Mr Shuetrim must show that, probably"). Further, it would be entirely orthodox for a trial judge, having cited two recent decisions applying a test of a probability of less than 50%, who proposed to apply the same test, to say no more than appears in the reasons.
2. For reasons already given, in so doing his Honour applied an incorrect test, and one that was unduly generous in favour of Mr Shuetrim. The question posed by the TAL policy (again, I use the shorthand adopted earlier in this judgment omitting the important qualifications imposed by the ETE clause) was not whether the court was satisfied that more probably than not Mr Shuetrim would ever return to relevant work. The question was whether the court was satisfied that there was not a real chance that he would ever return to relevant work.

The finding which should be made

1. All parties invited this Court to determine for itself, if it were possible to do so, whether Mr Shuetrim satisfied the TPD definition in the event that TAL's submissions concerning Edwards were rejected. It is true that the primary judge had the benefit of seeing Mr Shuetrim being cross-examined. That was relatively brief (the whole cross-examination occupied 16 pages of transcript) and mostly involved taking Mr Shuetrim to Facebook posts made by him and his wife and inviting him to agree that he had exaggerated his condition. There was acceptance by Mr Shuetrim in the course of that cross-examination of the following matters: 1. Although Mr Shuetrim had said in his affidavit that he had lost "absolutely all contact with my work colleagues", he had in fact remained in occasional contact with at least some of his former work colleagues. 2. Although Mr Shuetrim had complained to doctors that he was anxious about being outside and being in crowds, and had sworn that "[c]rowds of people and peak hour traffic are too much for me to bear" and "I have a fear of gatherings and crowds and would not be able to mentally get myself to the classes", he was able, among other things, to attend and enjoy (i) meals at crowded restaurants, (ii) a soccer match with significant crowds at ANZ Stadium in Homebush, and (iii) a visit to the "Wet'n'Wild" amusement park where he accepted there were hundreds if not thousands of people. 3. Although Mr Shuetrim had said he had difficulties driving (he said that he could only keep his left arm on the steering wheel "for around 10 minutes or so before my left elbow pain becomes too severe" and "I find that I develop panic attacks should the road situation become complicated for me"), and entering busy shopping centres ("[m]erely the thought of shopping or going to shopping centres is an issue for me" and "[a]rriving [at] the car park and seeing a lot of cars will cause me to turn back and go home"), he accepted by reference to a photograph of himself in the driver's seat of his car, posted on his Facebook page, that he had gone to a shopping centre to purchase the sunglasses worn in the photograph, and ultimately accepted that he frequently drove his car in his local area.
2. The primary judge expressly rejected one of Mr Shuetrim's responses, which sought to draw a distinction between occasional and regular attendance at soccer matches, regarding it as disingenuous (at [294]). His Honour stated that Mr Shuetrim had to some extent overstated the effects of his physical and mental conditions (at [263] and [299]), although noted at [300] that the Facebook posts "record only a small number of incidents and outings, and perhaps only those which were happy and trouble free occasions for Mr Shuetrim and his family". Accepting that qualification, the finding that Mr Shuetrim had exaggerated his physical and mental conditions remained an inevitable one, having regard to the disparity between Mr Shuetrim's claims and his posts on social media.
3. The primary judge summarised his conclusion as follows at [260]-[261]: "However, Mr Shuetrim gave evidence in his 5 June 2013 statement and in his 6 March 2014 affidavit that at all times since 2011, and thus on the relevant dates of May and July 2012, he has been unable to perform such work (see especially [36], [38] and [41] of his 5 June 2013 statement at [145] above, and [11], [12], [14] and [15] of his 6 March 2014 affidavit at [148] above). The problem I see for the insurers in this case is that they did not challenge this evidence. Nor, otherwise than very generally, did they challenge Mr Shuetrim about anything he said to any of the doctors. Although some of those doctors expressed a more optimistic view as to Mr Shuetrim's likely future capacity to work than Mr Shuetrim has, I do not see any of those views as being so irreconcilable with Mr Shuetrim's evidence that, absent direct challenge, I should reject it."
4. With respect, there is a measure of overstatement in that summary. Counsel squarely challenged Mr Shuetrim's claimed fear of crowds and of seeing lots of cars and his claimed inability to carry shopping bags in his left arm as "a complete exaggeration". It was put to him that: 1. "You've exaggerated the extent of your disability arising from your anxiety condition, haven't you?" 2. "You've exaggerated your disability in terms of your reaction and aversion to being anywhere where there are crowds of people. That's correct, isn't it?" 3. "You've exaggerated your disability and the way it's affected your continuing contact with work colleagues. That's correct isn't it?" 4. "You've exaggerated your disability to try and make it appear as though you can't possibly be anywhere where there are crowds, you can't deal with people, you can't even go to seminars or lectures because of your fear of crowds of people and that's an exaggeration, isn't it?" 5. "You've exaggerated the extent of your disability to the doctors that you've spoken to. That's correct, isn't it?"
5. Mr Shuetrim denied each of those propositions, save that in relation to the fourth, he said, "There's a difference between outdoor and indoor". That difference was not elaborated on in cross-examination, other than to put to him that it was nonsensical, and there was no re-examination. Mr Shuetrim also maintained that to the extent that he attended crowded venues, he left immediately if there was the onset of any difficulty.
6. On one reading of the dispositive paragraphs [260]-[261] of the reasons of the primary judge, his Honour regarded as determinative the failure to confront Mr Shuetrim with the proposition that he had exaggerated the extent to which his disability affected his prospects of returning to relevant work. That appears to be confirmed by the reasoning at [264], where the primary judge stated, "Mr Duncan did not direct one question to Mr Shuetrim on what I regard as the critical issue; namely, Mr Shuetrim's capacity at the relevant date to engage in occupations for which was reasonably qualified".
7. I respectfully disagree. First, the passages reproduced above from the cross-examination go to Mr Shuetrim's capacity to return to relevant work. Secondly, Mr Shuetrim was taken in cross-examination to paragraph 42 of his 5 June 2013 statement, and directly challenged on its contents: "Q. You see there that you say, 'Therefore, based on my previous training, education and experience there is absolutely no job that I would be able to attend on a full-time, part-time or casual basis in my locality due to the limitations of my left elbow injury and subsequent stress, anxiety and deteriorated mental health.' Do you see that? A. Yes. Q. Then you go on a couple of lines down to justify a reason why you couldn't even be involved in any form of retraining. Do you see the sentence where you say, 'This also inhibits my ability to successfully undertake any form of retraining'? Have you found that sentence? It's about four lines from the bottom. A. Yes. Q. Then you go on to say, 'There is no way I would be able to regularly attend university classes, lectures or seminars. I have a fear of gatherings and crowds and would not be able to mentally get myself to the classes.' Do you see that? A. Yes. Q. That's not true, is it? A. It is true."
8. This is not a case where limited cross-examination precluded findings adverse to Mr Shuetrim; cf Bradley v Matloob [2015] NSWCA 239. In any event, the absence of cross-examination does not mean that a court is required to accept evidence, if, for example, it was inconsistent with other evidence that was accepted, or if it was inherently incredible: Masterton Homes Pty Ltd v Palm Assets Pty Ltd [2009] NSWCA 234; 261 ALR 382 at [105]. In the present case, there was ample basis for evaluating critically whether what Mr Shuetrim said in his affidavit and his statement about his capacity to return to relevant work should be taken at face value, or alternatively be discounted by reference to much of the medical and psychological opinions as well as to his own Facebook posts.
9. It followed therefore that the appropriate finding should have turned upon an evaluation of all of the evidence, not merely what was said, inevitably self-servingly, by Mr Shuetrim. Even had the primary judge not applied an unduly relaxed construction of "unlikely ever", I would accept TAL's submission that his Honour's conclusions of fact are flawed by reason of his failure to undertake that evaluation and to explain why Mr Shuetrim's evidence was to be taken at face value notwithstanding his undoubted tendency to exaggerate.
10. The thrust of the medical evidence was that Mr Shuetrim's left elbow was "almost certain to improve with time". Certainly, that was Dr Pillemer's view, and he was supported by Dr Breit. Dr Patrick disagreed, but I discount his view because (a) I accept the criticisms advanced by Drs Breit and Wong that Dr Patrick had misapplied the AMA guidelines, and (b) I would infer that Dr Patrick's opinion and reasons are derived from language provided to him by Mr Shuetrim's instructing solicitors. I also bear in mind that the question is one of "unlikely ever", which requires an opinion as to the extent (if any) Mr Shuetrim will recover use of his dominant left arm over the remainder of his working life.
11. Next, I regard the evidence from Mr Shuetrim's general practitioners to be a relatively powerful consideration. The first (Dr West) considered that the operation was a success. Mr Shuetrim ceased seeing Dr West.
12. The second (Dr Jones), when asked by Mr Shuetrim or his solicitors to express an opinion which corresponded to the TPD definition, recorded in her notes that "I am not willing to say permanently and completely incapacitated as there is hope for employment in other fields in the future". It is not entirely clear whether that opinion was directed to the ETE clause in the definition of TPD, although in context I think the better view is that it was. But even so, the note reflects a resistance by the medical practitioner to tailoring her opinion to that which Mr Shuetrim (or his lawyers) had urged upon her. Once again, Mr Shuetrim ceased seeing Dr Jones.
13. Even the third (Dr Sher) expressed hope that Mr Shuetrim would return to work. Against this, that doctor was also prepared to reiterate verbatim the words suggested to him by Mr Shuetrim's solicitors, that Mr Shuetrim satisfied the definition of TPD.
14. I accept that there is a conflict in the evidence given by the three general practitioners who saw Mr Shuetrim. I prefer the evidence of the first and second, over the third, because (a) it is closer in time to the relevant time, and (b) Dr Sher's opinion that Mr Shuetrim satisfied the definition of TPD was inconsistent with other opinions expressed by him as to the prospects of improvement, and this inconsistency was not explained by the doctor but coincided with an invitation by Mr Shuetrim's solicitors to express precisely that opinion.
15. Of course, none of the medical practitioners was cross-examined. Their reports were tendered without objection and were admissible for all purposes. The fact that there was no cross-examination does not relieve the court from the task of weighing the cogency of the competing opinions, or, if necessary, discounting the opinions which appear not to comply with orthodox methodologies or which appear to have been prompted by what was suggested by Mr Shuetrim or his lawyers. As Beazley JA (as her Honour then was) said in Taupau v HVAC Constructions (Queensland) Pty Ltd [2012] NSWCA 293 at [132]: "This may and usually does involve the acceptance of one expert or group of experts over another, not on the basis of a demeanour finding, which is unavailable when none of the experts is cross-examined, but on the cogency of the evidence, given the issues addressed." The authorities on this point are collected in Keith v Gal [2013] NSWCA 339 at [127]-[130].
16. Contrary to the weight of medical opinion, Mr Shuetrim maintains that his elbow will never improve. But that cannot be determinative. I mean no disrespect, but his belief as to the position in, say, five years has scant probative value. Mr Shuetrim did not adduce evidence which contradicted the opinion that the "vast majority of people with lateral epicondylitis" improve in time. I accept Dr Pillemer's view that that is so. Nor did Mr Shuetrim produce evidence to explain why he was in the small minority of people who did not improve.
17. Turning to the psychiatric evidence, I accept that Mr Shuetrim is unlikely ever to be able to return to the Police Force. It is for this reason that the ETE clause is determinative of the claim. But whether there is a real and not remote chance that he could at some stage resume work (perhaps part-time) as, for example, a mechanic or in an allied area is a very different question. The evidence of Mr Shuetrim's Facebook posts and his cross-examination confirms that at least in some respects (ability to deal with people, to drive a vehicle, to attend crowded venues), he has exaggerated his claims. To the extent that the history provided by Mr Shuetrim is exaggerated, the psychiatrists' opinions proceed on an incorrect premise: Gjorgovska v AFM Cleaning Services Pty Ltd [2006] VSCA 104 at [28]. Ultimately the onus is upon him to provide evidence sufficient to support the opinion required by the TPD definition, which is an opinion concerned with the remainder of his working life.
18. I have regard to the relative youth of Mr Shuetrim. In Cullinane v Mercer Benefit Nominees Ltd [2006] FCAFC 82; 152 FCR 1 at [88] the joint judgment said, "Given the uncertain nature of the appellant's condition, and the even greater uncertainty as to her long term prognosis, the experts, quite sensibly, appeared to follow the adage 'never say never'." That policy was framed in terms of "unable" rather than "unlikely ever" and required the trustee, rather than an insurer, to form an opinion, but neither distinction detracts from the force of the Full Court's observation. Relatively young people whose medical or psychological condition is uncertain will find it harder to prove to an insurer's or a court's satisfaction that they are unlikely ever to return to work for which they are reasonably fitted by education, training or experience.
19. The ultimate question is whether I am satisfied that, as at July 2012, Mr Shuetrim was unlikely ever to return to relevant work (which is to say in an occupation for which he was qualified by education, training or experience, even if only on a part-time basis). I do not consider that the evidence supplied by Mr Shuetrim sustains that opinion.

Orders

1. For those reasons, I propose that each appeal be allowed, that orders 1-9 made on 19 June 2015 be set aside, and in lieu thereof, that the proceedings be dismissed. Both insurers obtained a stay pending appeal (see Shuetrim v FSS Trustee Corporation [2015] NSWSC 811), so no further substantive orders are required.
2. MetLife has been successful in respect of essentially all issues raised on appeal. Mr Shuetrim must pay MetLife's costs at first instance and on appeal.
3. TAL breached its duty to Mr Shuetrim, and failed both at first instance and on appeal in maintaining that it had not. On appeal, it unsuccessfully sought to alter a line of authority regarding the approach to be taken to proceedings of this nature. However, I have concluded that TAL has succeeded in its fallback contention that this Court should find that Mr Shuetrim did not satisfy the definition in its policy, and I have in substance accepted TAL's submissions on construction (although in part they were not opposed). TAL's success being decidedly mixed, having failed on all save one of its grounds of appeal, I propose that there be no order as to TAL's costs on appeal, with the intention that it bear its own costs. I favour the view that there should also be no order as to the costs at first instance as between TAL and Mr Shuetrim, essentially because despite TAL's ultimate success, its response of 17 December 2014 was seriously flawed. But that is merely a preliminary view, and either party may apply, within the time constraints imposed by r 36.16 of the Uniform Civil Procedure Rules 2005 (NSW), if he or it seeks a different exercise of the discretion as to the costs at first instance.
4. The formal orders I propose are: In 2015/150468 (TAL's appeal): 1. Appeal allowed. 2. Set aside orders 1-9 made on 19 June 2015, and in lieu thereof dismiss the proceedings as against TAL. In 2015/151747 (MetLife's appeal): 1. Grant leave to Mr Shuetrim to rely upon the notice of contention dated 8 March 2016. 2. Appeal allowed with costs. 3. Set aside orders 1-9 made on 19 June 2015, and in lieu thereof dismiss the proceedings as against MetLife, with costs.
5. EMMETT AJA: These two appeals are concerned with the entitlement of Mr Benjamin Shuetrim, a former policeman, to be paid amounts in respect of total permanent disablement under policies of insurance issued by TAL Life Limited (TAL), on the one hand, and Metlife Insurance Limited (Metlife), on the other. The two policies were issued to FSS Trustee Corporation (the Trustee) in its capacity as trustee of a superannuation of which Mr Shuetrim was a member. Both policies respond if proof to the satisfaction of the insurer is provided to the insurer that the relevant Insured Person "has become incapacitated to such an extent as to render [that person] unlikely ever to engage in [certain work] for which [the Insured Person], is reasonably qualified by reason of education, training or experience".
6. Claims were made by the Trustee under the two policies and each of TAL and Metlife declined liability under their respective policies. Mr Shuetrim commenced proceedings in the Equity Division against TAL, Metlife and the Trustee, in which he sought declarations that each of the policies responded to the claims. One of the complaints made by Mr Shuetrim is that he was denied procedural fairness by TAL and Metlife in deciding to reject the claims made on his behalf by the Trustee. A Judge of the Equity Division (the primary judge) concluded that there had been a denial of procedural fairness, that each of the policies responded to Mr Shuetrim's claim and that a declaration should be made that Mr Shuetrim was entitled to the benefits claimed.
7. Four questions were raised in the appeals as follows:

• whether the primary judge erred in construing the relevant definitions of total permanent disability in the policies;
• whether each of TAL and Metlife breached a duty that was enforceable by Mr Shuetrim;
• if so, whether the question should be remitted to TAL and Metlife for redetermination;
• whether the primary judge erred in concluding that Mr Shuetrim satisfied the definition of total permanent disability in the two policies.

1. I have had the considerable advantage of reading in draft form the proposed reasons of Leeming JA. I agree, for the reasons proposed by his Honour, that the construction of the definitions in question applied by the primary judge was erroneous. I also agree with his Honour that the primary judge was correct in finding that TAL breached a duty enforceable by Mr Shuetrim but erred in concluding that Metlife did so. With some hesitation, I also agree with his Honour that the Court should determine the question rather than remit it to the insurers.
2. However, I agree with Leeming JA that Mr Shuetrim has not demonstrated that he satisfies the definition of total permanent disability in either of the policies. Accordingly, I agree with the orders proposed by his Honour.

Amendments 07 April 2016 - [84] - "to the reject" replaced with "to reject" 20 April 2016 - Headnote - paragraph numbering amended 07 October 2016 - [39] - "will allow to me to " replaced with "will allow … me to" [54] - "(1995) 67 FCR 560" replaced with "(1996) 67 FCR 560" [78] - "672-673" replaced with "673-674" [87] - "must be considered doubtful" replaced with "must be doubtful" [187] - "331" replaced with "[6]"; "assessment of the claim" replaced with "assessment of a claim"; "insurer is [in] a very" replaced with "insurer is in a very" [202] - "medical practitioner not to tailor" replaced with "medical practitioner to tailoring" 14 November 2016 - Cases cited - "Lidden v Composite Buyers Ltd (1995) 67 FCR 560" replaced with "Lidden v Composite Buyers Ltd (1996) 67 FCR 560" 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: 14 November 2016