Wilson v Certain Underwriters at Lloyds Subscribing to Policy Number B1115T131599

The pleadings

1. The plaintiff commenced these proceedings by Statement of Claim filed on 19 November 2015. By an Amended Statement of Claim filed on 9 March 2016, the plaintiff pleads: 1. At all material times the plaintiff, Mr Stuart Wilson, was employed by Cootes Transport as a truck driver; 2. At all material times Cootes Transport put in place with the defendants, a personal accident and sickness policy of insurance to provide benefits for any of its employees or contractors who became injured and were unable to work (paragraph 3); 3. At all material times the plaintiff was a member of the plan under the policy (paragraph 4); 4. On 16 January 2014, the plaintiff sustained a serious injury to his right shoulder in a surfboard accident (paragraph 5); 5. In April 2014, the plaintiff was made redundant at Cootes Transport. He was unable to return to work prior to being made redundant (paragraph 6); 6. At all material times the defendants acted through their agents Corporate Services Network in respect of handling claims under the insurance policy (paragraph 1); 7. The plaintiff made a claim on the group personal accident and insurance plan and payments were made to him for temporary total disablement. The plaintiff has undergone surgery for his injury (paragraphs 7-8); 8. By letter dated 17 July 2015, the defendants reduced payments made to the plaintiff to 25% of the weekly benefit, alleging that the plaintiff possessed a partial capacity to return to his pre-injury role as a (fuel) tank driver "full-time with specific restrictions" (paragraph 10); 9. At all material times from 17 July 2015, the plaintiff has been temporarily totally disabled from returning to work within the policy of insurance. By reducing the payments to 25% on 17 July 2015, the defendants are alleged to be in breach of the contract of insurance and their actions have repudiated the contract of insurance (paragraph 12); 10. The plaintiff claims damages in respect of that breach and repudiation being the difference between the amount he should have been paid in weekly benefits and the amount that he was paid (paragraphs 12-13); 11. The plaintiff also claims damages under the policy being for the capital sum of $75,000 which it is alleged he should have been paid on the basis of total and permanent disability under the contract of insurance (paragraph 13).
2. By a Defence filed 19 May 2016, the defendants put in issue all of the allegations in the plaintiff's Amended Statement of Claim. In particular, the defendants deny: 1. That at all material times from 17 July 2015, the plaintiff has been temporarily totally disabled from returning to work under the insurance policy; 2. That the defendants were in breach of the contract of insurance by reducing the weekly payments to the plaintiff to 25% on 17 July 2015; and 3. That the plaintiff is entitled to damages for the alleged breaches of the contract of insurance.
3. By a Cross-Claim filed 28 February 2018, the defendants sued for the recovery of $126,666. In oral submissions, counsel for the defendants/cross-claimants agreed that the amount sought was limited to the amount paid to Mr Wilson to date in weekly payments being the sum of $126,214.28.
4. In the Cross-Claim, the defendants/cross-claimants plead: 1. The contract of insurance between the defendants and Cootes Transport Pty Ltd ("Cootes") being policy number B1115T131587 (paragraph 1); 2. That at all material times, including on 16 January 2014, the plaintiff was an employee of Cootes and an insured under the contract of insurance; 3. On or about 16 January 2014 the defendants suffered injury when he was thrown from and hit by his surfboard; 4. On or about 24 January 2014, the plaintiff made a claim for benefits under the contract of insurance; 5. The claim was accepted by the defendants and temporary total disablement weekly benefits were paid to the plaintiff in the sum of approximately $1,500 per week from 30 January 2014 to 21 July 2015; 6. On or about 21 July 2015, the plaintiff's weekly benefits were reduced to 25% in allowance of his temporary partial disablement; 7. The total amount paid by the defendants to the plaintiff under the contract of insurance in weekly benefits was $126,214.28; 8. At all material times the plaintiff was an insured under a policy of insurance issued by Colonial First State; 9. On 17 June 2016, the plaintiff made a claim on the policy issued by Colonial; 10. On or about 22 September 2016, Colonial accepted the claim made on the Colonial policy by the plaintiff and on 26 September 2016 paid to the plaintiff the sum of $126,666; 11. Pursuant to the contract of insurance in issue, the defendants are entitled to restitution of benefits or entitlements received by the plaintiff from sources other than the defendants after weekly benefits have been paid, relying on Clause 4 of the general conditions of the policy. It is pleaded that the plaintiff has received the sum of $126,666 in benefits from Colonial being a source after the defendants had paid weekly benefits; 12. The defendants/cross-claimants claim restitution from the plaintiff of the amount paid.
5. In his Defence to Cross-Claim filed in court on 5 April 2018, the plaintiff in substance admits many of the allegations in the Cross-Claim but denies any entitlement of the defendants/cross-claimants to recover the amounts which he has been paid by Colonial.

Matters not in issue

1. The following matters appeared not to be in issue between the parties: 1. The defendants entered into a contract of insurance with Cootes which was a written policy with the policy number B1115T131587; 2. At all material times, the plaintiff was an employee of Cootes and an insured person under the contract of insurance; 3. On about 16 January 2014, the plaintiff suffered injury when he was thrown from and hit by his surfboard; 4. On and from about 24 January 2014, the plaintiff made a claim for benefits under the contract of insurance which was accepted by the defendants and temporary total disablement weekly benefits were made to the plaintiff in the sum of about $1,500 per week from 30 January 2014 to 21 July 2015; 5. On and from 21 July 2015, the plaintiff's weekly benefits were reduced to 25% on the basis that the plaintiff had only a temporary partial disablement under the contract of insurance. This meant that the defendants commenced paying the plaintiff approximately $375 per week from 21 July 2015 to 27 January 2016; 6. The defendants have made no lump sum payment benefit to the plaintiff under the contract of insurance; 7. At all material times, the plaintiff was insured under an insurance policy issued by Colonial First State Investments Ltd which also covered the plaintiff for injury; 8. On 17 June 2016, the plaintiff made a claim under the policy issued by Colonial which was accepted, and on 26 September 2016 Colonial paid the plaintiff the sum of $126,666.

The contract of insurance

1. Exhibit A in the proceedings was the contract of insurance that was entered into by Oxford Insurance Brokers Ltd on behalf of the defendants with an insured described as "Cootes Transport on behalf of Members of Cootes". It was accepted on the pleadings in relation to the Cross-Claim that the reference to Cootes Transport was a reference to Cootes Transport Pty Ltd. The contract of insurance had a unique reference number being B1115T131644. The type of policy was a Personal Accident and Sickness Insurance policy with the insured persons being described as "Members of Cootes Transport who elect to join the Plan". The period of insurance was from 1 October 2013 to 1 October 2014. The sum insured was $208,000 for any one Insured Person for any one claim. Various different weekly benefits and lump-sum benefits were described in the schedule as follows: SECTION A: WEEKLY BENEFITS Temporary Total Disablement caused by Injury: As selected but not to exceed 85% of gross Earnings to an overall maximum of AUD2,000.00 per week. Temporary Total Disablement caused Sickness: As selected but not to exceed 85% of gross Earnings to an overall maximum of AUD2,000.00 per week. Temporary Partial Disablement: Waiting Period: As defined. Waiting Period: 14 Days, but 28 Days each and every loss for football activities. Maximum Benefit Period: 104 weeks but not beyond the age of 67 Years Additional Benefits: As per Policy.
2. The law chosen by the parties in the contract of insurance was the laws of the Commonwealth of Australia.
3. The policy wording in the contract of insurance ("policy") had as the operative or insuring clause the following: "OPERATIVE CLAUSE We the Underwriters hereby agree with the Insured Person, to the extent and in the manner herein provided, that if an Insured Person sustains an Injury or a Sickness during the Period of Insurance, We will pay to the Insured Person, or to the Insured Person's executors or administrators, according to the compensation stated in the Schedule after the total claim shall be substantiated under this insurance." (page 13).
4. The definitions in the policy which are relevant include the following: "1. Accident shall mean a sudden, unexpected unusual, specific event which occurs at an identifiable time and place during the Period of Insurance; Exposure resulting from a mishap to a conveyance in which the Insured Person is travelling; … 6. Injury shall mean any identifiable physical bodily injury resulting from an Accident which occurs whilst this Insurance is in force and which results in any of the events specified in the Insurance, within twelve (12) calendar months from the date of its occurrence. Injury does not include: 6.1 Any consequence of an Injury that is ordinarily described as being a sickness, illness or disease; 6.2 Any degenerative condition. 7. Insured shall mean the person or entity named as such in the Schedule. 8. Insured Person shall mean the Insured Person shown or described in the Schedule. … 13. Permanent Total Disablement shall mean disablement resulting from an Injury and which has lasted for at least twelve (12) calendar months from the date of such Injury and which thereafter is beyond hope of improvement and which entirely prevents the Insured Person from carrying on their usual occupation or business. … 18. Temporary Partial Disablement shall mean disablement which prevents the Insured Person from attending to a substantial part of his or her business or occupation and which results in his or her earnings being reduced by at least 25% and is under the regular care and acting in accordance with the instructions or professional advice from a Medical Practitioner. Where an Insured Person returns to work in a reduced capacity the weekly benefit amount payable shall be the difference between the Temporary Total Disablement Benefit and the weekly wages earned. If the Insured Person does not return to work the weekly benefit amount shall be 25% of the Temporary Total Disablement benefit. 19. Temporary Total Disablement shall mean that as a result of Injury or Sickness the Insured Person is wholly and continuously prevented from engaging in his or her usual business, occupation or profession. If the Insured Person ceases to be employed or is not employed then Temporary Total Disablement means disablement that entirely prevents the Insured Person from engaging in any occupation for which they may be suited by way of their education, training or experience. In both instances the Insured Person must be under the regular care of and acting in accordance with the instructions or professional advice of a Medical Practitioner."
5. Section A of the Table of Conditions in the policy refers to Weekly Benefits (page 16). Section B of the Table of Conditions in the policy refers to lump-sum benefits "as a result of injury only" and includes a 100% lump sum payment for "2. Permanent Total Disablement" (page 17). The maximum lump sum insured is $75,000 under the policy (page 1). On page 19 of the policy are exclusions "applicable to all sections". This provides: "No Benefits are payable under this Insurance for any Conditions resulting from Injury or Sickness which: … 9. Is a neurosis, psycho-neurosis, psychosis, mental, emotional, fatigue, stress or anxiety condition disease or disorder or any condition which is a consequence of the treatment of any of these conditions."
6. On page 21 of the policy are set out General Conditions. These General Conditions include the following: 4. Weekly Benefits will be reduced by any other benefits or compensation the Insured Person is entitled to receive or entitled to claim for lost income however payable from any other source as a result of the same condition. If the Insured Person surrenders, commutes, redeems or releases such claim or entitlement (whether in whole or in part), the total amount of benefits under this Insurance will reduce by the amount of payment to which the Insured Person would have been entitled or had the right to claim. Benefits or entitlements received from other sources after Weekly Benefits have been paid under this Insurance must be refunded by the Insured Person to Us. 5. If the Insured Person's condition becomes permanent in accordance with the Definition of Permanent Total Disablement, all Weekly Benefits will cease and the appropriate Lump Sum Benefit will become payable. In addition, no temporary benefits already paid will be deducted from the Lump Sum Benefit. … 7. Cover under this Insurance will cease immediately in respect of an Insured Person if: 7.1 their premium payment is not made within thirty (30) days from the date due other than as a result of inadvertent error on the part of the Insured; 7.2 they are paid Weekly Benefits for the maximum period stated in the Schedule or 100% of the Lump Sum Insured Benefit; 7.3 the Insured Person retires or stops actively seeking work; 7.4 the Insured Person's relationship with the Insured which made them eligible for cover under this insurance ceases. Cover will cease at the time they depart from work on the last day of employment with the Insured; 7.5 the Insured Person dies; 7.6 the Insured Person reaches norma! retirement age or age 65 whichever is the earlier, unless otherwise specified in the Schedule. 8. Weekly Benefits shall cease to be payable to an Insured Person on claim, if that Insured Person: 8.1 becomes entitled to the payment of Weekly Benefits for the maximum period stated in the Schedule; 8.2 becomes entitled to the Lump Sum Benefit and they are paid a 100% of the Lump Sum Insured stated in the Schedule; 8.3 accepts early retirement or voluntary redundancy except if it is as a direct consequence of disablement which is a current, accepted claim under this Insurance; 8.4 dies; 8.5 is engaged in gainful work or occupation except if the work or occupation existed prior to the disablement and it is not related to or replacing the work for which benefits are being claimed under this Insurance; 8.6 returns to normal work or duties, or is cleared by the Medical Practitioner to return to normal work or duties whether such work is available or not."

Evidence relied upon by the plaintiff

1. The plaintiff tendered the policy which became Exhibit A.
2. The plaintiff also tendered as Exhibit B in the proceedings a table of payments which showed that the plaintiff was paid weekly benefits as a result of his injury by the defendants from 30 January 2014 to 19 January 2016 in the amount of $126,214.28. The evidence shows that there was a substantial reduction in payments made to the plaintiff from 21 July 2015 which coincided with the reduction to 25% of weekly benefits as a result of a decision made by the defendants.
3. The plaintiff, who as I stated above, was self-represented at the final hearing, attempted to tender various medical and related reports which had not been served on the defendants. Following argument the applications to rely on these various reports and related materials were rejected.
4. The plaintiff read an affidavit sworn by him on 28 March 2018 which set out evidence in relation to his position at Cootes, his retrenchment by Cootes in March 2014 when it went into receivership, a shoulder injury in January 2014, his various medical conditions, his asserted permanent pain in his arm, the payments he received from the defendants, various medical examinations of him as requested by the defendants and the effect of his arm injury on his marriage, family and financial position. He was not cross examined on his affidavit.
5. Overall, I formed from the hearing the opinion that the plaintiff was an honest and sincere man who had been apparently severely affected by a series of adverse life events. He was hampered by a lack of legal representation. His previous solicitor had ceased to act for him. He did his best to present his case simply and clearly.

Evidence for the defendants

1. The defendants relied on a letter from Colonial to the plaintiff dated 3 February 2017 which established that the plaintiff was paid $126,666 by Colonial on 26 September 2016 for a mental illness and a shoulder disability.

Submissions of the parties

1. The plaintiff made oral submissions in support of his claim. The plaintiff submitted, in summary: 1. He is entitled to the sum of $29,785.72, being the weekly benefits of $1,500 per week for 104 weeks less the $126,214.28 which has already been paid to him by the defendants, on the basis that his entitlement should not have been reduced from a 100% entitlement to a 25% entitlement on 17 July 2015. This constituted an alleged breach of the contract of insurance by the defendants; 2. He is entitled to the capital sum under the policy for a Permanent Total Disablement of $75,000; and 3. The defendants should not under their Cross-Claim be entitled to the payment of the amounts claimed paid to the plaintiff by Colonial.
2. The defendants relied on both oral submissions and detailed written submissions. These submissions, in very general summary, were as follows: 1. The maximum to which the plaintiff was potentially entitled under the policy of insurance with the defendants was 104 weeks of weekly benefit payments up to a maximum of 85% of average weekly earnings. The defendants have paid out to the plaintiff a total of $126,214.28 which is established by Exhibit B; 2. Accordingly, the claim made by the plaintiff is for the sum of $29,785.72 being $156,000 (the maximum weekly benefits claimable) less the $126,214.28 which has already been paid which represents the difference between Temporary Total Disablement benefits and Temporary Partial Disablement benefits in the period from 17 July 2015 to 19 January 2016; 3. The plaintiff has not tendered any medical evidence which establishes that there was a Temporary Total Disablement as opposed to a Temporary Partial Disablement in the period from 17 July 2015 to 19 January 2016. Therefore, the claim for $29,785.72 should be rejected as it is not established on the evidence. The medical reports relied on by the plaintiff had not been served and were not admitted into evidence; 4. The plaintiff is not entitled to claim the capital sum of $75,000 on the basis that he satisfies the definition of Permanent Total Disablement within the meaning in the policy. There is no evidence that the plaintiff has ever made a claim for Permanent Total Disablement under the policy and none is pleaded. The Amended Statement of Claim merely pleads in paragraph 9: "The Plaintiff had notified the Defendant, though [through] its Agents, of his intention to receive Total and Permanent Disablement Benefits pursuant to the insurance policy". 1. There is also no pleading, even if the plaintiff did make such a claim, as to the basis upon which the defendants' presumed denial was not open to then acting reasonably and fairly when considering the claim. There is no pleading or evidence that a claim was actually made. Nor is any evidence before the court that the plaintiff satisfied the definition of Permanent Total Disablement. The court's jurisdiction to determine the claim for Permanent Total Disablement is only enlivened once the defendants breach the terms of the insurance policy. That is done by the defendants rejecting, either expressly or constructively, the claim made for Permanent Total Disablement made pursuant to the policy by the plaintiff. As no claim has ever been made formally, there can be no breach of the policy. A claim can be made now by the plaintiff for Permanent Total Disablement; 2. The Amended Statement of Claim contains no causal link between the breach pleaded and damages for the amount the plaintiff would be entitled to if he satisfied the definition of Permanent Total Disablement; 3. Further, in relation to the claim for damages brought by the plaintiff in reliance upon the alleged breach of the policy by the defendants in relation to the payment of weekly benefits, the proceedings were commenced in 2015 when the relevant period had not expired. The plaintiff therefore was required to accept the alleged repudiation of the policy by the defendants and sue for damages which he has not done; 4. The plaintiff has served no medicolegal evidence to substantiate the entitlement to Permanent Total Disablement benefit; 5. The defendants under the Cross-Claim are entitled to seek restitution from the plaintiff in accordance with the terms of the policy in the sum of $126,214.28. Under Clause 4 on page 21 of the policy, it is a term of the policy that if the plaintiff receives benefits or entitlements from other sources after the defendants have paid the plaintiff weekly benefits, then those benefits or entitlements must be refunded to the defendants pursuant to the policy; 6. On 17 June 2016 the plaintiff made a claim on a total and permanent impairment policy held with Colonial First State Investments Ltd which accepted the plaintiff's claim and on or about 26 September 2016 paid to the plaintiff the sum of $126,666. This is not disputed in the Defence to the Cross-Claim; 7. The evidence clearly establishes that the plaintiff received the sum of $126,666 from Colonial following payment of weekly benefits by the defendants. This sum was paid after the last weekly benefit was paid by the defendants to the plaintiff being on 19 January 2016: see Exhibit B; 8. Accordingly, the plaintiff received benefits or entitlements from Colonial after weekly benefits in the sum of $126,214.28 had been paid by the defendants. It follows that the defendants are entitled to judgment against the plaintiff for that amount pursuant to Clause 4 of the policy; 9. Section 45 of the Insurance Contracts Act 1984 (Cth) ("the Act") has no application to the present situation such as to render Clause 4 on page 21 of the policy void in accordance with s 45(1) of the Act. That is because the plaintiff was not a party to the contract of insurance with the defendants but only fell within the insuring clause. It was submitted that it was held in Zurich Australian Insurance Ltd v Metals & Minerals Insurance Pte Ltd (2009) 240 CLR 391; [2009] HCA 50, that s 45 of the Act is only concerned with "other insurance" policy provisions "affecting double insurance where the insured is a party to the relevant contracts of insurance". It does not allow room for a construction which would include a non-party insured among the ranks of those who have "entered into" the relevant contract. The inclusion of persons not parties to the relevant insurance contract would be inconsistent with the ordinary or any plausibly extended meaning of "entered into" in relation to insurance contracts: at [26]. See also the minority in Zurich at [39]-[40] who agreed with the majority on this point. This conclusion was found to be part of the binding reasoning in Zurich Australia by the Court of Appeal in Lambert Leasing Inc v QBE Insurance (Australia) Ltd [2016] NSWCA 254 at [120]-[134]. Zurich, above, was also followed by the Court of Appeal in TAL Life Ltd v Sheutrim [2016] NSWCA 68.

The claim by the plaintiff for further weekly benefits

1. As stated above, the plaintiff seeks damages for breach of the contract of insurance arising from the decision of the defendants to reduce the plaintiff's weekly benefits from 17 July 2015 from 100% of $1,500 per week to 25% of $1,500 per week, on the basis that the defendants had erroneously formed the view that the plaintiff was only temporarily partially disabled within the policy.
2. This claim is essentially for the difference between $1,500 per week for 104 weeks ($156,000) and the amounts paid to the plaintiff which totalled $126,215.28. That difference is $29,785.72 which is calculated by subtracting $126,215.28 from $156,000. The difference is the financial difference between payments on the basis of Temporary Total Disablement and Temporary Partial Disablement within the policy in the period from 17 July 2015 to 19 January 2016 when the 104 weeks expired.
3. As the plaintiff is asserting a breach of contract by the defendants he has the onus of establishing that breach. The definitions of Temporary Partial Disablement and Temporary Total Disablement are in Clauses 18 and 19 on page 14 of the policy (Exhibit A). Temporary Total Disablement means that "as a result of Injury or Sickness the Insured Person is wholly and continuously prevented from engaging in his or her usual business, occupation or profession." Where the plaintiff ceases to be employed, as occurred in April 2014, then Temporary Total Disablement means "disablement that entirely prevents the Insured Person from engaging in any occupation for which they may be suited by way of their education, training or experience". The definition notes that the Insured Person "must be under the regular care of and acting in accordance with the instructions or professional advice of a Medical Practitioner".
4. In the case of Temporary Partial Disablement, this is defined as meaning "disablement which prevents the Insured Person from attending to a substantial part of his or her business or occupation and which results in his or her earnings being reduced by at least 25% and is under the regular care and acting in accordance with the instructions or professional advice from a Medical Practitioner". The definition is expanded in the case where the Insured Person (as defined) either returns to work or does not return to work. Where the Insured Person does not return to work (as here) the weekly benefit amount "shall be 25% of the Temporary Total Disablement benefit."
5. The first argument raised by the defendants to negate the plaintiff's claim is that at the time the Statement of Claim was filed, which was 19 November 2015, the period for payment for the 104 weeks had not expired. That expiry date was 19 January 2016. It was submitted that in those circumstances the claim should be rejected on the basis that there is no evidence that the plaintiff had terminated the contract of insurance as a result of a repudiation by the defendants of that contract.
6. In my view, there are two answers to that submission. The first is that the plaintiff was not party to the contract of insurance. The contract of insurance was between Cootes and the defendants. Secondly, the pleading on which the plaintiff relies is the Amended Statement of Claim which was filed by him on 9 March 2016. By that stage, the 104 weeks had expired. If the plaintiff was right in his case that there had been a breach of the contract of insurance by the defendants then he could have pursued that claim at that stage. Even though the plaintiff was not a party to the contract of insurance, he was a third-party beneficiary under a contract of general insurance and accordingly has a right to recover from the insurer, in accordance with the contract, the amount of any loss suffered by him even though as a third party beneficiary he is not a party to the contract: s 48(1) of the Act.
7. The next submission by the defendants is that the plaintiff's claim must fail because the plaintiff has not tendered any medical evidence to establish that he fell within the definition of Temporary Total Disablement in Clause 19 on page 14 of the policy as opposed to falling within the definition of Temporary Partial Disablement. The plaintiff attempted to tender medical evidence at the trial. However, this was rejected as it had not been served on the defendants. There was no satisfactory evidence before me to establish that the plaintiff fell within the definition of Temporary Total Disablement under the policy from 21 July 2015. As there was no evidence to substantiate the plaintiff's assertion of a breach by the defendants in relation to the decision to reduce the weekly benefits, this aspect of the plaintiff's claim must be rejected.
8. In those circumstances, it is unnecessary for me to consider the further submissions of the defendants that the decision to reduce the plaintiff's weekly benefit payments was a subjective decision made by the defendants in accordance with the policy and the plaintiff has to establish that it was not open to the defendants acting reasonably and fairly to make that decision: Hannover Life Re of Australasia Limited v Jones [2017] NSWCA 233 at [121]. If I had to decide this point, I would find that that Court of Appeal case is inapplicable as the clause in that case involved a reference to the "insurer's opinion" as opposed to the clause in the current proceedings. See Hannover Life, above, at [86]-[88] and [112]-[121]. No case considering a covering clause similar to the present one was referred to by the defendants in their submissions.
9. However, as indicated above, the evidence does not establish that the plaintiff fell within the definition of Temporary Total Disablement, principally because there is no medical evidence supporting the plaintiff's position as at 21 July 2015 extending to 19 January 2016.

The plaintiff's lump sum benefits claim

1. The second claim made by the plaintiff in the proceedings is for breach of contract in relation to lump sum benefits in the amount of $75,000.
2. This is the maximum lump sum benefit payable under Section B of the policy on page 17 being for "2. Permanent Total Disablement" as a result of an injury. Under general condition 5 of the Policy (page 21): "If the Insured Person's condition becomes permanent in accordance with the Definition of Permanent Total Disablement, all Weekly Benefits will cease and the appropriate Lump Sum Benefit will become payable. In addition, no temporary benefits already paid will be deducted from the Lump Sum Benefit."
3. Clause 13 of the definitions on page 14 of the policy defines Permanent Total Disablement as meaning: "Disablement resulting from an Injury and which has lasted for at least twelve (12) calendar months from the date of such Injury and which thereafter is beyond hope of improvement and which entirely prevents the Insured Person from carrying on their usual occupation or business."
4. On the evidence, the plaintiff suffered an Injury within the policy which lasted for at least 12 calendar months from the date of the injury. The question therefore arises as to whether there is evidence that the disablement of the plaintiff was after the period of 12 calendar months from the date of injury and was "beyond hope of improvement and which entirely prevents the [plaintiff] from carrying on their usual occupation or business."
5. The plaintiff submits that he was Permanently Totally Disabled within the policy and is entitled to the lump sum benefit of $75,000.
6. The defendants dispute the plaintiff's entitlement to this amount on a number of grounds.
7. The first ground is that there is no evidence before the court that the plaintiff has actually made a "Permanent Total Disablement" claim to the defendants under the policy. There was no evidence before me of any letter or other communication showing that such a claim had been made and that it had been rejected by the defendants. Further, paragraph 9 of the Amended Statement of Claim is as follows: "The Plaintiff had notified the Defendant, through its Agents, of his intention to receive Total and Permanent Disablement Benefits pursuant to the insurance policy". This is a somewhat vague pleading. However, it seems to assert only a notification of an intention to claim, not an actual claim. Accordingly, in my view there is force in the defendants' submission. On the evidence, the plaintiff has never made a formal claim and remains, subject to other arguments, entitled to make a claim. This basis alone would be fatal to the plaintiff's claim for this amount.
8. The second basis relied upon by the defendants is that there is no proper evidence to show that the injury received by the plaintiff "is beyond hope of improvement" and "entirely prevents [the plaintiff] from carrying on their usual occupation or business". There is simply no evidence before me which satisfies me of this matter. This is not a conclusion which can be reached by the court without proper evidence which almost certainly would have to be of a medical expert nature. This is a second reason for rejecting this part of the plaintiff's claim.
9. The third basis initially relied upon by the defendants was that if the court determines (contrary to my view above) that the plaintiff has made a Permanent Total Disablement claim under the policy, that he is prevented by general condition 7.4 of the policy (page 21) from making the claim. Clause 7.4 provides: "Cover under this Insurance will cease immediately in respect of an Insured Person if: … 7.4 The Insured Person's relationship with the Insured which made them eligible for cover under this insurance ceases. Cover will cease at the time they depart from work on the last day of employment with the Line insured."
10. This submission was not pressed in final submissions.
11. Fourthly, the defendants submit that there is no evidence that any material was ever provided to the defendants which would establish that the plaintiff satisfied the definition of Permanent Total Disablement. The court only has jurisdiction to determine a claim for damages once the defendants have breached the terms of the contract of insurance by rejecting, either expressly or constructively, the claim for Permanent Total Disablement made by the plaintiff pursuant to the policy. Accordingly, it is argued that the plaintiff has not lost any opportunity to make a claim for Permanent Total Disablement: see Brescia v QBE [2007] NSWSC 598 at [510]-[515].
12. In my view, there is force in this submission. The evidence before the court establishes neither a breach by the defendants of the policy nor a loss of opportunity to claim by the plaintiff.
13. The defendants also submit that the principles in Wayne Tank and Pump Co Ltd v Employers' Liability Assurance Corporation Ltd [1974] QB 57 apply with the result that the defendants were entitled to avoid indemnity pursuant to the policy. Wayne Tank stands for the general proposition that where there are two or more causes, one falling within an insuring clause in the policy of insurance and one falling within an exclusion to the policy, an insurance policy will not respond although the question will always be a matter of the proper construction of the insurance policy.
14. In Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd [2008] NSWCA 243, Allsop P (with whom Beazley and Campbell JJA agreed) stated as follows at [263]: "[263] In these circumstances, where there are two or more causes and one falling within an insuring clause and another falls within the exclusion, the policy will not respond: Wayne Tank and Pump Co Ltd v The Employers' Liability Assurance Corp Ltd [1974] QB 57. In McCarthy v St Paul International Insurance Co Ltd (2007) 157 FCR 402 at 429-438 [88]-[116] I examined in detail the content and operation of the so-called "Wayne Tank rule" and the English and Australian cases dealing with it. Without setting it out, I repeat what I there said. Ultimately it is a matter of construction of the policy. Did the parties intend the policy to respond in circumstances where a claim is brought about in circumstances that are encompassed by the contractual exclusion?
15. The Wayne Tank case was also referred to by the Court of Appeal in Preston v AIA Australia Ltd [2014] NSWCA 165.
16. The only evidence in relation to the cause of the plaintiff's alleged disablement is as follows: 1. In his affidavit sworn 28 March 2018, the plaintiff in the Annexure marked A refers to the fact that he was diagnosed with ADHD and bipolar disorder whilst employed with Cootes. The plaintiff also notes as follows: "I did five stints totalling 49 days in rehab from 28/10/2014 to 12/06/2015"; and 2. The two letters which are Exhibit 1 and Exhibit D both refer to the plaintiff having a "physical disability (shoulder [injury])" and a "mental illness".
17. However, Exhibits 1 and D related to the claim by the plaintiff under his Colonial First State Investments Limited insurance policy, not the current policy. In my view, the evidence is not sufficient for me to determine that the Wayne Tank principle applies. There is no medical evidence before me in relation to the reason for the liability arising being the reason why the plaintiff could not work in his usual occupation. For these reasons, I do not think that I can determine that the policy does not respond because the plaintiff's Injury arose from two or more causes.
18. In conclusion, for the reasons which I have set out above, in my view the plaintiff has failed to establish his claim for Permanent Total Disablement. In particular, there is no evidence to establish that the plaintiff was permanently and totally disabled within Clause 13 on page 14 of the policy and similarly, there is no evidence that a claim has been made by him for benefits for Permanent Total Disablement which has been declined. Unless the plaintiff can establish that there was a claim made which has been wrongly declined there can be no breach of contract.
19. I reject the second aspect of the plaintiff's Amended Statement of Claim.

Conclusion in relation to the claims in the Amended Statement of Claim

1. As both claims made by the plaintiff in the Amended Statement of Claim have been rejected, the plaintiff's claim in the Amended Statement of Claim fails.

The defendants' claim in the Cross-Claim

1. Clause 4 of the general conditions of the policy (page 21) has been referred to above. I repeat it again here for convenience: 4. Weekly Benefits will be reduced by any other benefits or compensation the Insured Person is entitled to receive or entitled to claim for lost income however payable from any other source as a result of the same condition. If the Insured Person surrenders, commutes, redeems or releases such claim or entitlement (whether in whole or in part), the total amount of benefits under this Insurance will reduce by the amount of payment to which the Insured Person would have been entitled or had the right to claim. Benefits or entitlements received from other sources after Weekly Benefits have been paid under this Insurance must be refunded by the Insured Person to Us.
2. The pleadings in the matter are relevant to this issue. The following is pleaded in paragraphs 8 to 14 of the Cross-Claim filed by the defendants on 28 February 2018: 1. At all material times the plaintiff, Mr Wilson, was an insured under a total and permanent disablement policy issued by Colonial First State (paragraph 8); 2. On 17 June 2016, Mr Wilson made a claim on the Colonial policy (paragraph 9); 3. On or about 22 September 2016, Colonial accepted the claim made on its policy by Mr Wilson (paragraph 10); 4. On or about 26 September 2016, Colonial paid Mr Wilson the sum of $126,666 (paragraph 11); 5. Pursuant to Clause 4 of the general conditions of the policy, the defendants are entitled to restitution of benefits or entitlements received by Mr Wilson from other sources after Weekly Benefits have been paid under the policy (paragraph 12); 6. Mr Wilson has received the sum of $126,666 in benefits and entitlements from other sources after the defendants have paid Weekly Benefits under the policy (paragraph 13); 7. The defendants seek restitution from Mr Wilson of the amount of $126,666 in accordance with Clause 4 of the policy.
3. In his Defence to the Cross-Claim filed on 5 April 2018, Mr Wilson disputes paragraph 8 on the basis that the claim from Colonial was through his superannuation fund and that he has never had two separate insurance policies but otherwise agrees with paragraphs 9-11 of the Cross-Claim while disputing paragraphs 12-14 of the Cross-Claim. In relation to the question of two insurance policies, one being with Colonial, the only evidence on the point is in Exhibits D and 1. Both letters from Colonial to the plaintiff commence: "I am pleased to inform you that your Total and Permanent Disability (TPD) Insurance claim has been accepted by the insurer."
4. On the basis of these letters, there appear to be two insurance policies benefiting Mr Wilson being the Colonial policy and the present policy under consideration. Although the evidence is limited on the issue, it seems that there was an insurance policy benefit under a superannuation fund to which Mr Wilson was a member. Each letter is headed "First Choice Employer Super".
5. Accordingly, the matters pleaded in paragraph 8 of the Defence to the Cross-Claim by Mr Wilson are not established.
6. As set out above, it does not appear that s 45 of the Act is applicable in the present case. This is on the basis that Mr Wilson was not a party to the contract of insurance for both the Colonial and the defendants' policies of insurance but merely had the benefit of the policy with the defendants. Being a party to both contracts of insurance was stated to be a requirement of s 45 of the Act by the Court of Appeal in Lambert Leasing Inc v QBE Insurance (Australia) Ltd [2016] NSWCA 254 at [131]-[134]. Although I am not convinced that this was the ratio of the High Court in the Zurich case, above, I regard myself as bound by the Court of Appeal's analysis in Lambert Leasing. Accordingly, as s 45 of the Act is inapplicable, the question arises as to the proper interpretation of Clause 4 of the general conditions of the policy relied on by the defendants.
7. It does not appear that the principles of construction applicable to a contract of insurance are substantially different to those applicable to any commercial contract. In Wilkie v Gordian Runoff Ltd [2005] HCA 17; (2005) 221 CLR 522 the majority of the High Court stated as follows in [15] and [16]: "[15] In McCann v Switzerland Insurance Australia Ltd, after observing that, as a commercial contract, a policy of insurance should be given a businesslike interpretation, Gleeson CJ added: Interpreting a commercial document requires attention to the language used by the parties, the commercial circumstances which the document addresses, and the objects which it is intended to secure. [16] The immediate questions of construction of the Policy turn upon the relationship between Extension 9 and Exclusion 7. In construing the Policy, as with other instruments, preference is given to a construction supplying a congruent operation to the various components of the whole. Counsel for the appellant submitted that his construction gives effect to this precept, and put to one side any principle of interpretation resolving doubts in the appellant's favour as one of the Insured."
8. These statements by the High Court have been followed in numerous later decisions by appellate courts including by the New South Wales Court of Appeal: see Malamit Pty Ltd v WFI Insurance Ltd [2017] NSWCA 162 at [20].
9. In Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7, the majority of the High Court stated the following at paragraph [35]: "[35] Both Verve and the Sellers recognised that this court has reaffirmed the objective approach to be adopted in determining the rights and liabilities of parties to a contract. The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean. That approach is not unfamiliar. As reaffirmed, it will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding "of the genesis of the transaction, the background, the context [and] the market in which the parties are operating". As Arden LJ observed in Re Golden Key Ltd, unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption "that the parties … intended to produce a commercial result". A commercial contract is to be construed so as to avoid it "making commercial nonsense or working commercial inconvenience"."
10. In Zhang v ROC Services (NSW) Pty Ltd [2016] NSWCA 370, Leeming JA (with whom Sackville AJA agreed) stated as follows at paragraph [89]: "[89] The contract is to be read as a whole. It is not only permissible but mandatory to have regard to how the potential legal meanings fit with the other provisions of the contract. That accords with the basal principle of construction stated and applied in Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522; [2005] HCA 17 at [16]) that: In construing the Policy, as with other instruments, preference is given to a construction supplying a congruent operation to the various components of the whole."
11. In Vero Insurance Ltd v Australian Prestressing Services Pty Ltd [2013] NSWCA 181 Meagher JA (with whom Beasley P and Simpson JA agreed) stated as follows at paragraph [40]: [40] Before considering these arguments and the construction of the exclusion clause, it is necessary to note some relevant principles. The language of a particular provision in a contract of insurance must be construed having regard to its other terms, the commercial circumstances which it addresses and the objects which the parties can be presumed to have intended to secure by making their contract: McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; 203 CLR 579 at [22]; Wilkie v Gordian Runoff Ltd [2005] HCA 17 ; 221 CLR 522 at [15]. Words used in a contract which have an ordinary or literal meaning will usually be given that meaning unless consideration of the text and context provide a principled basis for adopting some other meaning. For example, words will not be given their ordinary or literal meaning if they have another specialised meaning and, by reference to the text and admissible evidence of surrounding circumstances, reasonable persons in the position of the parties would be presumed to have intended that the words have that specialised meaning: Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; 149 CLR 337 at 350-352; Holt & Co v Collyer (1881) 16 Ch D 718 at 720.
12. This was followed in AAI Ltd trading as Vero Insurance v GEO Group Australia Pty Ltd [2017] NSWCA 110 at [53] per Payne JA (with whom Macfarlan and Simpson JJA agreed).
13. Looking at Clause 4 of the general conditions of the policy, the defendants submit under their Cross-Claim that the proper construction of the clause, particularly the last sentence of the clause, is that any benefits or entitlements received from other sources by the plaintiff insured person at any stage after Weekly Benefits have been paid under the insurance policy and relating to any time period must be refunded by the insured person to the defendants.
14. It is submitted that this construction is assisted at least by general condition 5 in the general conditions (page 21) which shows that a Permanent Total Disablement benefit is still a benefit within the policy.
15. A number of factual matters appear to be clear: 1. The plaintiff made a claim under an insurance policy connected with Colonial First State Investments Limited; 2. The plaintiff was paid money under the Colonial policy "on the basis of [his] mental illness and physical disability (shoulder)" (Exhibit 1) or on the basis "that [his] physical disability (shoulder injury) and the mental illness that was caused by that physical disability" (Exhibit D); 3. The lump sum payment was made after the defendants ceased paying Weekly Benefits to the plaintiff on 19 January 2016.
16. In my view, the claim made by the defendants/cross-claimants should fail for the following reasons: 1. Reading Clause 4 of the general conditions in the context of the policy as a whole and reading the last sentence of Clause 4 in the context of the entirety of Clause 4, what appears to be the objective commercial purpose of Clause 4 is to oblige a person in the position of the plaintiff to pay moneys to the defendants which constitute benefits or entitlements received from other sources where those benefits or entitlements received from other sources are to compensate the plaintiff for a loss of income in the period for which the Weekly Benefits have been paid by the defendants; 2. This construction of Clause 4 is, in my view, in accordance with commercial common sense. Otherwise, if the last sentence in general condition 4 was given a wider interpretation as submitted by the defendants, the plaintiff would have to refund benefits or entitlements received from other sources even where those benefits or entitlements, for example under another insurance policy, were meant to compensate the plaintiff for a loss of income for a different period to the period covered by the Weekly Benefits paid by the defendants or a different type of loss. If the wider construction advocated by the defendants was accepted, the plaintiff may well receive no benefits at all from the policy under consideration; 3. There is, in my view, an issue whether the benefits received from Colonial were benefits or compensation received from another source "as a result of the same condition" within general condition 4. While both the letters which are Exhibit D and Exhibit 1 refer to a shoulder disability or shoulder injury, it is not clear on the evidence whether this is the same shoulder injury or condition for which the plaintiff received his benefits from the defendants. There is unsatisfactory evidence on this issue; 4. In my view, it is not clear from Exhibit 1 and Exhibit D that the moneys received from Colonial were for the same period as the moneys received from the defendants under the Weekly Benefits. The onus rests on the defendants/cross-claimants in relation to establishing the entitlement under Clause 4 of the general conditions. The plaintiff was not cross-examined on this issue. My reading of the letters which are Exhibits D and 1 suggests that the moneys received from Colonial relate to disabilities which would preclude the plaintiff from returning to his own or any other occupation in the future, that is after the claim under the Colonial policy was made; 5. Paragraph 9 of the Cross-Claim, which was admitted by Mr Wilson, establishes that Mr Wilson made the claim on the Colonial policy on 17 June 2016, after the date when his Weekly Benefits ceased. This admission on the pleadings leads me to the conclusion that the payment made by Colonial was for total and permanent disability from the date of the claim, being 17 June 2016, and thus related to a different period to the Weekly Benefits paid by the defendants under the policy; 6. The words "after Weekly Benefits have been paid" in the last sentence in general condition 4 indicate to me when reviewed in the context of the clause as a whole, that the amount received for the other benefits or entitlements must have had a connection to the same period for which the Weekly Benefits were paid by the defendants; 7. I do not see that clause 5 of the general conditions assists the defendants in their submission as that relates to a situation where the insured person's condition becomes permanent in the course of the receipt of Weekly Benefits. That does not seem to have been alleged by either party in the present case; 8. In the end, the construction of Clause 4 submitted by the defendants would appear to me to be an unlikely and uncommercial construction. It would mean that even though the plaintiff may have received moneys from two potential different sources covering different periods of loss of income, that the plaintiff would still be obliged to refund the benefits received from the other insurer to the defendants following the payment of Weekly Benefits. That would be a very surprising construction as it would potentially leave a plaintiff not compensated for a relevant period of loss. Much clearer words would be required in my view to support that construction; 9. The defendants submit that I cannot determine from Exhibits D and 1 that the moneys received from Colonial were indeed not for the same period as the Weekly Benefits from the defendants. As indicated above, the onus rests on the defendants and my interpretation of Exhibits D and 1 suggests to me that it was for a period of total and permanent disablement in the future; 10. The reference to "benefits or entitlements" in Clause 4 must be considered. I accept the submission on behalf of the defendants that this term is not defined in the policy. However, in my view it has to be read in the context of the entirety of the clause and the policy as a whole and it must relate to lost income as a result of the same condition and lost income as a result of the same condition for the same period as the Weekly Benefits were paid.
17. Accordingly, I reject the assertions put forward by the defendants/cross-claimants in the Cross-Claim.
18. My review of Exhibit A, the policy, shows a number of matters: 1. Each page is paginated as part of a 25 page document; 2. Each page of the policy is headed "Oxford Insurance Brokers Limited"; 3. The "Form" on page 1 is described as "Oxford Insurance Brokers Limited Personal Accident and Illness Wording 2013 (Kiln) (as agreed by Insurers)"; 4. Page 4 (second appearing) of Exhibit A shows that Oxford Insurance Brokers Ltd is likely the agent of the defendants; 5. Page 4 (second appearing) states that the policy is "Insurance Council of Australia's General Insurance Code of Practice Compliant"; 6. Various pages of the policy suggest the policy was put forward by underwriters at Lloyds: see pages 8, 9 and 10.
19. I infer from these references that Exhibit A was the policy proposed by the defendants to Cootes.
20. The issue therefore arises whether Clause 4 in the general conditions is properly to be regarded in the context of the policy as a whole as attracting the contra proferentem principle in the event of an ambiguity: see Zhang v ROC Services (NSW) Pty Ltd [2016] NSWCA 370 at [136]-[141].
21. Clause 4 in my view should be read contra proferentem if I am wrong that my construction is clear but an ambiguity is found. However, I wish to make it clear that it was not necessary for me to rely upon the contra proferentem maxim in order to come to the conclusion I have reached that the clause should be construed against the defendants. As is clear in paragraph 140 of Zhang, reliance on the contra proferentem maxim is a method of construction of last resort.
22. For the reasons I have given, I reject the claim made by the defendants/cross-claimants in the Cross-Claim.

Disposition

1. I thank counsel for the defendants for his thorough submissions.
2. Having regard to my reasons above I make the following orders: 1. Judgment for the defendants on the Amended Statement of Claim. The Amended Statement of Claim is dismissed. 2. The plaintiff is to pay the defendants' costs of the Amended Statement of Claim proceedings as agreed or assessed. 3. Judgment for the cross-defendant/plaintiff on the Cross-Claim. The Cross-Claim is dismissed. 4. The cross-claimants are to pay the cross-defendant's costs as agreed or assessed of the Cross-Claim. 5. Liberty to the parties to apply within 14 days to vary the costs orders made in paragraphs (2) and (4) above; 6. The exhibits are to be retained on the file.

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