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Goodin v Colonial Mutual Superannuation Pty Ltd[2011] QDC 38

Goodin v Colonial Mutual Superannuation Pty Ltd[2011] QDC 38

DISTRICT COURT OF QUEENSLAND

 

CITATION:

Goodin v Colonial Mutual Superannuation Pty Ltd [2011] QDC 38

PARTIES:

BRETT JAMES GOODIN
(Plaintiff)

AND

COLONIAL MUTUAL SUPERANNUATION PTY LTD
(First Defendant)

v

COLONIAL MUTUAL LIFE ASSURANCE SOCIETY LTD
(Second Defendant)

FILE NO/S:

D869/09

DIVISION:

 

PROCEEDING:

Trial

ORIGINATING COURT:

District Court, Brisbane

DELIVERED ON:

25 March 2011

DELIVERED AT:

Brisbane 

HEARING DATE:

17, 18 June 2010

JUDGE:

McGill DCJ

ORDER:

Judgment for the plaintiff in terms to be finalised.

CATCHWORDS:

INSURANCE – Duty of Utmost Good Faith – total and permanent disablement – liability dependent on satisfaction of insurer – whether breach of duty shown in decision to reject claim

SUPERANNNUATION AND PENSIONS – Permanent Incapacity – liability dependent on satisfaction of insurer – whether decision to reject claim valid

Re Beloved Wilkes’ Charity (1851) 3 Mac & G 440, 42 ER 330 – considered.

Curwen v Vanbreck Pty Ltd [2008] VSC 338 – cited.

Davis v Rio Tinto Staff Superannuation Ltd (2002) 118 FCR 170 – cited.

Edwards v The Hunter Valley Co-op Dairy Co Ltd (1992) 7 ANZ Ins Cas 61-113 – cited.

Finch v Telstra Super Pty Ltd (2010) 84 ALJR 726 – cited.

Hannover Life Re of Australasia Ltd v Sayseng [2005] NSWCA 214 – applied.

Karger v Paul [1984] VR 161 – considered.

Kowalski v MMAL Staff Superannuation Fund Pty Ltd (No. 3) [2009] FCA 53 – cited.

Re Londonderry’s Settlement [1965] Ch 918 – considered.

McArthur v Mercantile Mutual Life Insurance Co Ltd [2002] 2 Qd R 197 – applied.

Sayseng v Kellogg Superannuation Pty Ltd [2007] NSWSC 583 – cited.

Tonkin v Western Mining Corporation Ltd (1998) 10 ANZ Ins Cas 61-397 – cited.

Vance v MIM Coal Staff Fund Pty Ltd [1999] QSC 210 – cited.

White v State Public Sector Superannuation Scheme [1997] QSC 24 – cited.

Wyllie v National Mutual Life Association Ltd (1997) 217 ALR 324 – cited.

COUNSEL:

C. Newton for the plaintiff

K.A. Barlow for the defendants

SOLICITORS:

Maurice Blackburn for the plaintiff

Cooper Grace Ward for the defendants

  1. [1]
    On 24 December 2001 the plaintiff, who was then in employment, became a member of the Colonial Super Retirement Fund, a superannuation fund established by trust deed of which the first defendant is trustee.  The second defendant is an insurance company which has provided an insurance policy to the trustee in respect of its members; the plaintiff’s interest in the policy was paid for from contributions to the fund by or on behalf of the plaintiff.  The insurance policy provided benefits in various circumstances, including upon total and permanent disablement.
  1. [2]
    The plaintiff has worked in various positions since he left school in 1979, ultimately working as a delivery driver, delivering alcohol to bottle shops: p 15.  He had been doing this work for about one year when on 25 May 2004 he suffered an injury to his lower back, which prevented him from continuing to work.  He was dismissed from that employment on 18 April 2005.  He has not worked since.  He has no clerical skills or expertise:  p 17.

History of the claim

  1. [3]
    On 22 April 2005 the plaintiff made a claim to the second defendant for the benefit payable on total and permanent disablement.[1]  The form identified doctors who had been seen by the plaintiff in connection with this injury, and authorised the second defendant to obtain medical information from doctors who had been consulted or who might be consulted in the future.  One of the doctors identified was Dr Scott-Young, an orthopaedic surgeon, and as a result of the claim having been made the second defendant sought a report in relation to the plaintiff from Dr Scott-Young, which was provided, dated 12 September 2005.[2]  His report appears to have been produced by putting together the body of a series of letters or reports which had previously been written by Dr Scott-Young to others who had been enquiring about the plaintiff, mainly WorkCover.
  1. [4]
    The report noted that following an incident in November 1999, when the plaintiff developed pain in his back while working as a delivery driver, he was examined by Dr Scott-Young who diagnosed a pre-existing asymptomatic spondylolisthesis that was secondary to a long-standing pars intra-articularis defect.  By 19 January 2001 the plaintiff had had reasonable resolution of his symptoms, though he was not pain free.  At that stage Dr Scott-Young diagnosed a 5% permanent impairment based on the underlying degenerative condition.  There was further exacerbation following another incident at work, which brought the plaintiff back to Dr Scott-Young on 6 July 2004.  At that stage, apart from the spondylolisthesis, there was desiccation of the L5-S1 disk, which was producing pain but had not at that stage produced nerve damage and no permanent impairment was expected from this exacerbation.
  1. [5]
    According to the report, by 18 November 2004 his symptoms were relatively mild, having been helped by an epidural injection on 8 October 2004.  The work-related aggravation had not fully ceased.  At that stage Dr Scott-Young thought that further work in his previous employment would reactivate his symptoms and a career change away from truck driving should be considered.  On 31 March 2005 Dr Scott-Young reported to WorkCover that the plaintiff continued to have intermittent symptoms aggravated by mechanical activity and relieved by rest to a certain extent, which were inhibiting him from being aggressive with his rehabilitation program.  At that stage the plaintiff was certified as totally incapacitated for work, and Dr Scott-Young had been asked if he was now able to return to work with any guidelines about work restrictions.  Dr Scott-Young’s response was:

“I am happy for Mr Goodin to return to work.  Obviously, work that is fairly light and sedentary would be in his best interests.  Heavy manual labour, whilst nor precluded, is not a wise idea.  Generally, his lifting, bending, and twisting should all be limited to structures less than 10 kg.”

  1. [6]
    In answer to the next question, Dr Scott-Young expressed the opinion that the plaintiff had reached maximum medical improvement and that the effects of the aggravation had ceased, so that there was no permanent impairment as a result of that aggravation; inferentially, any continuing impairment was as a result of the pre‑existing degenerative condition.
  1. [7]
    In response to a further request for information from the second defendant Dr Scott-Young provided a further letter dated 27 January 2006 in which he indicated that the prognosis for the plaintiff’s condition when last seen was good, that no further treatment was required, that his motivation to return to work was poor, but that the plaintiff would be able to work as a truck driver, security officer or factory hand but he may have intermittent symptoms:  Document 20.  What had occurred was an aggravation of a pre-existing condition and he “suffered no permanent impairment”.  However, the underlying pathology “obviously results in a degree of symptomatology.”  He then reiterated the view that the plaintiff has some capacity to work in the occupations mentioned, or “he could entertain the idea of more light and sedentary occupations and may need some formal retraining.  In reality, it comes down to motivation … .”  In response to a further question, he advised the plaintiff “is fit to return to work, but is not motivated to do so.”  When asked what kind of work and what occupation he would be capable of performing, the response was:  “That is really up to the patient and any functional capacity experts to work out, rather than me.”
  1. [8]
    Following this, the second defendant wrote to the plaintiff on 27 March 2006 advising that on the information they had obtained the plaintiff’s condition was not preventing him from engaging in work on a full-time basis as a truck driver, security officer, or factory hand, occupations for which he was reasonably suited:  Document 21.  This was said to be based in particular on the reports provided by Dr Scott-Young.  The letter went on to state:

“Before we make a final decision regarding your claim, we would like to give you the opportunity to provide further information in support of your claim.  We have attached copies of the information on which we have made our preliminary decision for your reference.”

  1. [9]
    It was said on behalf of the plaintiff that this involved a decision which was taken in breach of the rules of natural justice. It seems to me, however, that on the contrary the letter involved compliance with the rules of natural justice. It is well recognised in other contexts that the communication of a preliminary decision or preliminary view is not something which involves a breach of the rules of natural justice, at least as long as there is a willingness to hear a submission seeking to reverse that preliminary view.[3]  Indeed, in some circumstances, for example in court, the ventilation of a preliminary view may be a useful means of encouraging submissions addressed to an issue which might otherwise have been overlooked, or which might not have been addressed with enough care.[4]  Accordingly, in my view this did not involve a breach of natural justice; it was a communication of a preliminary decision or view, and the final decision was not taken until later.
  1. [10]
    In response, the plaintiff on 3 April 2006 wrote to the second defendant (Document 22), in effect putting further submissions before it, and enclosing a report from another specialist, Dr Langley.  The plaintiff referred to his continuing difficulties with pain and with an inability to walk, stand or sit for any long period, and the fact that he had applied to CRS Australia for retraining and had been told to come back in six to nine months, and referred to seeing a Dr Maxwell, who was a neurologist.  He also indicated that Dr Scott-Young had advised him against returning to truck driving and lifting, but had refused to fill out superannuation forms on the ground that no-one should be touching their super fund until they had retired.  He noted that it took Dr Scott-Young nine months to provide his report to their office, which suggested he was not concerned about the plaintiff’s well-being.  He also denied that his motivation to work was poor.
  1. [11]
    Dr Langley’s report (Document 19) had been apparently provided to the plaintiff’s solicitors following an examination on 6 January 2006.  Dr Langley recorded complaints of ongoing pain in the lower back, with stabbing pain in the left buttock and pins and needles down the left leg.  The plaintiff was not working, and had not returned to golf or baseball or softball.  Dr Langley concluded that the plaintiff had an aggravated spondylolisthesis in the lower back which was causing continuing symptoms and disabilities, including with employment.  His employment was said to have been affected, and Dr Langley continued:

“I believe that his condition will be aggravated if he returns to the heavier type of work that he was doing.  Therefore, he should be under the guidance of a rehabilitation officer, such as the CRS, to help him return to some form of work of a lighter nature where there is no heavy lifting involved.”

  1. [12]
    On 25 May 2006 the second defendant wrote again to the plaintiff confirming an opinion that, while the plaintiff’s condition may be of a permanent nature, it is not totally disabling or preventing him from returning to any occupation for which he had suitable education, training or experience:  Document 23.
  1. [13]
    On 3 March 2007 the plaintiff saw a neuro-surgeon, Dr Campbell, for the purposes of a report:  Document 24.[5]  At the time of the examination the plaintiff was complaining of lower back pain and stiffness, the former occurring daily and at fairly severe levels, with radiation into the left buttock, and associated numbness and pins and needles into the left leg.  The symptoms were aggravated by various activities including prolonged sitting or standing, walking long distances and various household duties.  He had difficulty finding a comfortable sleeping position.  He was at that stage not looking to re-enter the workforce because of the severity of his pain.  On examination there was a slow and cautious gait and a slight limp, difficulty in squatting, and decreased mobility in the lumbar spine with pain at the extremities, and tenderness and guarding over the left lumbar paraspinal muscles.
  1. [14]
    Dr Campbell’s opinion was that the plaintiff had suffered an aggravation of a pre-existing lower back condition which had led to chronic pain.  In his opinion the plaintiff’s prognosis to return to work as a truck driver was poor, and indeed to return to the workforce in any capacity was poor due to a combination of his age, lack of education and training for sedentary type work, the stigma of a lower back complaint, the poor sitting tolerance and the inability to lift and bend.  The condition was stable and stationary, though deterioration was possible.  In relation to the assessment of disability, Dr Campbell thought the plaintiff was now realistically unemployable in any area for which he was trained, educated or skilled:  p 158.  In sedentary type work he would need retraining and may struggle with prolonged sitting, and would require a job which allowed frequent position changes.
  1. [15]
    On 6 December 2007 solicitors for the plaintiff wrote to the second defendant requesting a review of the decision.[6]  The letter went on to make submissions in relation to natural justice considerations, made submissions on various medical reports, and referred to fresh medical evidence in the form of reports from Dr Weidmann, neurosurgeon, dated 30 May 2007, and an occupational therapist, Mr Hoey, dated 24 October 2007.  The solicitor submitted that the plaintiff’s condition was severe, unremitting and totally disabling on a continuing basis, and that he was fundamentally unemployable.
  1. [16]
    The report of Dr Weidmann[7] referred to various complaints of pain and other difficulties similar to those in other reports.  On examination there were no objective neurological findings.  Radiological studies revealed a spondylolisthesis and the dehydration of the disk, indicating a longstanding degenerative change with no apparent neurological compression.  Dr Weidmann described the symptoms as consistent with the diagnosis, although far more disabling than one would generally expect.  The condition was said to be stable and not to require further investigations, no treatment was suggested and he was said not to be a candidate for surgical intervention.  His employment options were said to be limited; he should avoid any employment requiring prolonged bending or heavy lifting.  He accepted that the plaintiff would now have trouble returning to truck driving, but was suitable for other employment that did not require bending or lifting.  The employment restriction was due to the degenerative condition rather than specifically the aggravations in May 2004.
  1. [17]
    Mr Hoey, the occupational therapist, expressed the view that the plaintiff was no longer fit for work as a truck driver, or indeed any of the heavier jobs in the skill level 4 or 5 of the Australian qualifications framework.[8]  Specifically, he was said to be unfit for work as a cleaner, factory process worker, labourer, or transport driver.  It was noted that he had only ever worked in low skilled, physically demanding occupations, with no qualifications, training or experience for higher occupations, and he had difficulty with relatively short periods of sitting, standing or walking.  Given his age and the length of time he had been unemployed, the probability of returning to work was less than 20%.  Ultimately he concluded that the plaintiff was really only qualified for physically demanding jobs but was now precluded from them, so that he was unlikely to ever engage in remunerative work for which he was reasonably fitted by way of education, training or experience.
  1. [18]
    Mr Hoey’s report referred to some involvement with the Commonwealth Rehabilitation Service, and on 28 April 2008 the second defendant sought copies of reports held by that service:  Document 31.  A copy of the CRS file was provided to the second defendant under cover of a letter of 22 September 2008:  Document 37.
  1. [19]
    On 2 February 2009 the second defendant wrote confirming its view that the plaintiff’s condition was not preventing him from returning to any occupation for which he had suitable education, training or experience:  Document 42.  Reference was made to the fact that a “vocational assessment” had been obtained dated 21 November 2008.[9]
  1. [20]
    This analysis identified three relevant categories of employment, delivery driver, truck driver and security officer and guard. A truck driver was said to have a medium classification in the dictionary of occupational titles; the other two were said to be light, or sedentary in the case of security officer. With regard to truck driver, it was suggested that a position which did not require manual handling, for example if he were delivering products unloaded by forklift, would be within his capacity and consistent with his experience and training. With regard to security officer, it was noted that some of this work involves monitoring closed circuit television systems, and the view was expressed that it is possible for people with back injuries to obtain work in such roles.
  1. [21]
    Thereafter nothing relevant has happened until the matter reached this court. I should add that during the trial it was admitted on behalf of the defendants that the plaintiff could not carry out the duties of a factory hand or furniture removalist (p 17), nor could he carry out the duties of a truck driver in the position that was his last employment before ceasing work:  p 18.[10]  That position involved a good deal of manual handling, putting cartons of bottles of alcohol on to pallets manually, and then unloading the cartons from the truck manually and delivering them to a shop.

Trust deed and policy

  1. [22]
    The trial was conducted on the basis that the relevant version of the trust deed was that set out in Document 2.[11]  Under the Clause 4.1 the trustee may establish one or more plans within the fund, and it was agreed that the relevant plan was Plan 1.  Plan 1 (which starts on p 48) provided in Clause 4(c) (p 49):

“A member is entitled to the accumulation balance on total and permanent disablement (which includes the proceeds of any life product[12] payable in respect of the member).  The trustee may pay the accumulation balance in such instalments and on such other conditions as it determines.”

  1. [23]
    The definitions in Clause 1 of the trust deed include (p 20):

“Total and permanent disablement:

  1. (a)
    if a policy insures the member for total and permanent disablement benefits, has the meaning under the policy;
  1. (b)
    if no policy is in force, means disablement which in the opinion of the trustee means that the member is unlikely ever to engage in any gainful occupation for which the member is for the time being reasonably qualified by education, training or experience.”
  1. [24]
    It was agreed that the policy issued by the second defendant insured the plaintiff for total and permanent disablement benefits, and accordingly the effect of this definition is that the expression “total and permanent disablement” for the purposes of the plan and trust deed has the meaning under the second defendant’s policy.
  1. [25]
    It was common ground that the terms of the policy were those set out in Schedule A to an agreement between the defendants dated 30 June 2003:  Document 1.  Clause 1.3 of that policy provided that subject to such cover being provided for a particular member:  “we will pay a benefit on the total and permanent disablement of the insured member.”  The expression “total and permanent disablement” was defined in various ways but it was common ground that the applicable definition was (on p 9e):

“disablement where we are satisfied on medical or other evidence that an insured member:

(a)(i) has been absent from employment for six consecutive months because of sickness or injury; and

 (ii) is so disabled that the insured member is prevented from ever engaging in his or her own occupation or any occupation for which he or she is reasonably suited by education, training or experience.”

  1. [26]
    In these circumstances, whether the definition is satisfied in a particular case depends on whether the insurer is satisfied on medical or other evidence that the qualifying event in (i) has occurred and the degree of disability in (ii) is present. The term “we” is in turn defined as the second defendant, and that means that the question of whether a benefit is payable under the policy depends on the satisfaction of the second defendant. It follows that whether a member is entitled to the accumulation balance on total and permanent disablement under the plan in the trust deed depends on whether the second defendant is satisfied of the matters referred to in the insurance policy. No doubt the intention was to link the entitlement to payment under the plan with the payment of the benefit under the policy, so that a situation would not arise where there was a liability to pay under one but not a liability to pay under the other.
  1. [27]
    At the trial both parties made submissions on the basis that each of the defendants took a relevant decision, though in each case by applying the same test, the test set out in the policy. In these circumstances, it was necessary to consider to what extent each decision was susceptible of challenge in court proceedings, which was said to be different depending on whether it was a decision of an insurer (subject to the obligation under s 13 of the Insurance Contracts Act) or a decision of a trustee (subject to the ordinary obligations enforceable in equity).  If my analysis is correct, however, the only relevant decision was that of the insurer; if it emerges in these proceedings that the insurer ought to have been satisfied, it necessarily follows that the accumulation balance, including any amount payable under the policy, was payable by the first defendant to the plaintiff.
  1. [28]
    After the decision in this matter was reserved and I had the opportunity to consider the terms of the documents to which I have referred, I had my associate write to counsel raising this issue and inviting further submissions on it. Counsel for the plaintiff did not dispute this analysis. Counsel for the defendants generally adopted this analysis, though it was submitted that the first defendant had independent fiduciary duties which required it to consider whether the second defendant had made a proper decision in accordance with the policy. I agree with the submission that if the insurer determines that a member has total and permanent disablement as defined in the policy, then the trustee need only be satisfied that the insurer is so satisfied in order to be satisfied that the member has met the test of total and permanent disablement under the trust deed. If, however, the insurer is not satisfied, it may well be that the trustee’s fiduciary obligation requires it to consider whether the insurer has properly applied the policy terms and has good grounds not to be satisfied that the member is totally and permanently disabled. In my opinion it is not necessary to decide that in the present case, on the view that I take about the appropriate outcome. It was further submitted that the trustee retained a discretion as to the timing of payment of the accumulated balance which it was submitted was absolute under Clause 5.3(e).  That issue does not at present arise in this matter, but I would have thought that even if this is an example of a true discretion, the exercise of it would still be subject to the constraints discussed by the High Court in Finch v Telstra Super Pty Ltd,[13] referred to below.

Obligations of an insurer

  1. [29]
    The obligations of an insurer in the position of the second defendant, where there is a policy in place with the trustee of a superannuation fund under which in certain circumstances a payment is to be made by the insurer to the trustee of the fund by reference to a particular member, where the trustee of the fund will hold the payment received from the insurer for the benefit of the member, were considered by the Court of Appeal in New South Wales in Hannover Life Re of Australasia Ltd v Sayseng [2005] NSWCA 214.  The court there confirmed the applicability of the approach in an earlier decision[14] that there was a duty of good faith and fair dealing on the insurer which required it to have due regard for the interest of the member of the fund.  Where payment depended on an opinion by the insurer as a condition of its own liability, that duty required it to consider and determine whether it should form the opinion, to address the correct question in doing so, and to act reasonably in doing so.  In addition, there was an obligation to give the member an opportunity to respond to detailed and adverse medical reports obtained by the insurer.  I accept that that approach is applicable in this matter.  The defendants did not dispute any of the principles accepted in Hannover.  Consistently with that approach, this issue is not what opinion I would form on that question on the evidence before me.  Rather, the question is whether the insurer has approached the matter properly as set out above, and the decision arrived at by the insurer was one that was reasonably open on the material before it.[15]
  1. [30]
    I note that the reasoning in Hannover can only have been supported by the recent decision of the High Court in Finch v Telstra Super Pty Ltd (supra).[16]  That matter concerned the obligation of a trustee where the relevant opinion was one for the trustee to form, and the court emphasised that this was not a matter of the discretion of the trustee, but rather an ingredient in the performance by the trustee of a trust duty, which was owed to the members of the superannuation fund.  However, some of the matters referred to by the High Court in its reasons, namely the public importance of superannuation, and the detailed regulation of it under Commonwealth statutes, apply as well in cases like the present, and the court emphasised that this public significance was something which would encourage judicial control rather than deter it:  [36], and see [66] where the court emphasised the importance of the opinion and its place in the superannuation scheme as justifying a high duty on the trustee in those circumstances.

First decision – material

  1. [31]
    At the time of making the first decision the second defendant had a good deal of material about the plaintiff, apart from the medical reports referred to earlier. In the claim form itself the plaintiff complained of problems with his neck and lower back, pain in left buttock and pins and needles down the left leg, and that he could only walk for short periods. He said that he cannot now play with his son or hold his one-year-old child for very long and cannot play golf or baseball. He referred to ongoing physiotherapy and hydrotherapy, and said he had had two injections into the spine.
  1. [32]
    The claim form was said to be Document 17 in Exhibit 1, but this is only the part of the claim form completed by the plaintiff; according to the notation at the bottom right-hand corner of the pages, he completed the first five pages of a 14-page claim form.  An employer’s report from Gold Coast Transport, Document 16, was pages 13 and 14 of the form.  The employer said that his skills could not be used for other work with its organisation, and it did not have any alternative job openings and did not have any work the employee could perform.
  1. [33]
    Pages 9 and 10 of the claim form consisted of a statement by Dr Maxwell, a neurologist, who had seen the plaintiff on 9 February 2005 and who described his medical impairments as a mild disk bulge C6/7, spondylolisthesis L5/8 – long standing, and pain symptoms.  He did not believe maximum rehabilitation had been achieved, and thought the plaintiff could perform light alternative or modified duties that involved no lifting greater than 10 kilograms.  When asked if he believed the patient was ever likely to resume work in his own or any other occupation, the doctor replied “Yes – no lifting” and circled “other occupation”.  He did not consider that the plaintiff would never work again in any capacity.  Overall, this statement is not very helpful to the plaintiff.
  1. [34]
    Pages 11 and 12 of the claim form were a statement by the plaintiff’s GP, Dr House, dated 10 February 2005; Document 12.  Dr House thought that maximum rehabilitation had been achieved and that the plaintiff could not perform light alternative or modified duties.  When asked about whether the plaintiff was ever likely to return to work and whether retraining or rehabilitation was a future possibility, the response was “No – yes, future possibility”, which suggests that rehabilitation or retraining was a future possibility.  The next question, about whether the plaintiff will never work again in any capacity, produced an answer part of which I had difficulty reading, but it refers to “in a different field 1-3 years from now” which suggests there was a possibility of some kind of work being undertaken at some point in the future.  A similar question about whether the patient will recover and be able to perform any work in the future appears to have elicited the answer:  “Prognosis is guarded – may work three to four years from now.”  I have not been able to identify what pages 6, 7 and 8 of the claim form included, but presumably whatever it was was before the decision maker at the time.
  1. [35]
    There were a number of other medical reports which were presumably before the decision maker at that time; it was admitted on the pleadings that the defendants had them available. These may be summarised as follows:
  1. (a)
    Dr Bensoussan – 2 June 2004 – CT scan of spine – Confirmed early degenerative changes in the cervical spine, spondylolisthesis L5-S1, secondary to long-standing bilateral L5 pars defects, with associated degenerative change including generalised annular bulging.  There was some other disk abnormality noted but it was expected that nerve routes were unaffected, though it was not possible to exclude some compromise of them.
  1. (b)
    Dr Pascoe – 18 August 2004 – Electromyography report – Essentially no abnormality was detected but this was said not to exclude a radiculopathy.
  1. (c)
    Dr Carlisle – 10 September 2004 – Report to WorkCover – Complaints of constant low back pain with intermittent radiation into left buttock down back of left leg to knee associated with numbness.  A return to work trial lasted one day.  The doctor thought that the plaintiff was then totally incapacitated for all employment, but that there was further appropriate treatment in the form of an epidural injection, and the effects of the aggravation had not yet abated, being expected to reach maximum medical improvement in late November 2004.  The doctor also noted that the plaintiff will be unable to return to his previous employment in the long term irrespective of the outcome of that treatment, and will need to obtain sedentary employment due to the pre-existing spinal condition.
  1. (d)
    Dr Scott-Young – 21 September 2004 – Report to WorkCover – At that stage Dr Scott-Young was reporting to WorkCover that the plaintiff was capable of light duties, that there would be no permanent impairment associated with the aggravation, and that overall the plaintiff’s prognosis was guarded and surgery will in all probability be necessary in the future.  He was recommending the injection into the spine.
  1. (e)
    Dr Lee – 8 October 2004 – Radiologist – This confirms that the epidural injection occurred on this date, without complication, and that the plaintiff’s pain is in the distribution of the left S1 nerve route.
  1. (f)
    Dr Scott-Young – 22 November 2004 – Report to WorkCover – The epidural was reasonably successful in getting relief from symptoms; a rehabilitation programme is essential to get him back on track.  He probably could work in his previous employment but the work would reaggravate his symptoms, and he should consider a career change and not pursue truck driving in the future.
  1. (g)
    Dr Carlisle – 25 November 2004 – Assessment of permanent impairment for WorkCover – Notes that the benefit of the injection was temporary as the symptoms increased again in late October after an airline flight to New Zealand.  At that stage the main symptom was low back pain caused by activity and prolonged sitting.  There was no impairment specifically associated with the aggravation.  The effects of the aggravation were thought to have ceased, and the current symptoms were attributable to the underlying condition.
  1. (h)
    Dr House – 15 December 2004 – GP – The plaintiff is totally incapacitated for his normal duties as a truck driver.  Eventually he could resume his duties as truck driver.  He is not totally incapacitated for any and all forms of work and if suitable duties can be found, he can resume work now.
  1. (i)
    Dr Maxwell – 9 February 2005 – Neurologist – Very little to find clinically.  He has ongoing pain symptoms.  Various suggestions were made for possible treatment. He should obviously avoid going back to any occupation which requires lifting.
  1. (j)
    Dr Scott-Young – 31 March 2005 – Further report to WorkCover – Happy for the plaintiff to return to work.  Fairly light sedentary work would be in his best interests.  Lifting, bending and twisting should be limited to less than 10 kilograms.  The current problems related to the pre-existing condition, and the effects of the aggravation had ceased.
  1. (k)
    Dr Lee – 15 April 2005 – Radiologist – Further epidural anaesthetic undertaken without complications. 
  1. (l)
    Dr Carlisle – 12 May 2005 – A very short note expressing agreement with Dr Scott-Young’s zero assessment for the impairment associated with the aggravation.[17]

Analysis

  1. [36]
    The plaintiff’s submission focused on the fact that the reports were mostly addressed to WorkCover and mostly addressed the issue which was of particular concern to WorkCover, namely the effect of the aggravation associated with the work injury rather than the overall effect of the plaintiff’s condition in terms of the definition. It is certainly true that a number of the reports make specific reference to the issue which would have been relevant to WorkCover, but generally speaking the reports distinguished between the effects of the aggravation, which were treated as having abated by late 2004, and the effects of the underlying condition, which was responsible for whatever continuing problems the plaintiff had. To the extent that the reports refer to those continuing problems, and discuss the prognosis in relation to them and the effect of them on the plaintiff’s future employment, they were relevant to the issue the second defendant had to consider.
  1. [37]
    The only example of confusion I have identified in the reports is in the report of Dr Scott-Young of 27 January 2006 in response to a question about the effect of the plaintiff’s condition, which was obviously directed at the overall condition.  Dr Scott-Young responded in the second sentence:

“In terms of permanent impairment, I have already stated that my view is that the plaintiff had aggravated a pre-existing condition and suffered no permanent impairment.”

  1. [38]
    That on its face was misleading and showed a confusion on the part of Dr Scott-Young between the effect of the aggravation and the effect of the condition.  However, the report went on to speak about the underlying pathology, in a way which ought to have revealed that the reference to “no permanent impairment” was a reference to the effect of the aggravation rather than the underlying pathology.  In other words, on this occasion Dr Scott-Young was addressing the wrong question, but I would expect that that error would have been fairly obvious to anyone considering this material objectively.  The fact that he was looking at the wrong issue does not demonstrate that the decision maker was doing so.
  1. [39]
    It was submitted that the second defendant should have provided a copy of the definition of totally and permanent disabled which was relevant to the issue it was considering, so that that issue could be considered by the doctors directly. Most of the reports, however, were not directed to a consideration of that particular issue. In my opinion the real issue is whether the decision maker applied the correct test, not whether any particular doctor whose report was before the decision maker addressed that particular test.
  1. [40]
    There was a complaint on the pleadings about a failure to give the plaintiff proper notice of the material on which the first decision was based.[18]  In the present case, however, the second defendant made available with its letter of 27 March 2006 all of the reports referred to above except the report from Dr Langley, which had been obtained by the plaintiff and was forwarded by him, and the brief note by Dr Carlisle of 12 May 2005, which in itself was really of no consequence.  In these circumstances no criticism can be made about failure to disclose information relied on prior to the making of the first decision.[19]
  1. [41]
    Part of the difficulty confronting the court in assessing the first decision is that there are no reasons provided for the decision; the letter conveying that decision simply states the conclusion which was adverse to the plaintiff. I accept that there is no obligation to give reasons in these circumstances, and that the decision is therefore not vitiated on that basis, but it does make it more difficult to understand the reasoning process and to determine whether or not the proper approach has been adopted. The court is largely reduced to an exercise of determining whether on this material a decision maker could, consistently with the obligations on an insurer, arrive at a decision adverse to the plaintiff.
  1. [42]
    The material reflects a range of opinion as to the plaintiff’s capacity for continuing work, ranging from Dr Scott-Young’s final view that the plaintiff can return to truck driving, security work and work as a factory hand, to Dr House’s view that the plaintiff is unfit for anything expect for perhaps sedentary work (for which the plaintiff has no training or experience).  Most of the intermediate positions leave unclear the question of whether the particular test in the insurance policy has been met.  This is particularly because the issue of what work the plaintiff could still do has not been closely related to the occupations the plaintiff is reasonably suited for by education, training or experience.  If the issue turned on the interpretation of those reports, it may well be that the criticism could be advanced that the insurer had failed properly to investigate this question so as to determine whether any residual capacity for work on the part of the plaintiff meant that he did or did not satisfy the test of total and permanent disablement in the policy.  If, however, the insurer was entitled to act on the opinions of Dr Scott-Young, it seems to me that there was no real need for further inquiry because those opinions were clearly inconsistent with the proposition that the plaintiff was so disabled as to be prevented from ever engaging in his own occupation, that is, of truck driver.
  1. [43]
    Counsel for the plaintiff was very critical of the reports of Dr Scott-Young, and indeed of the attitude of the doctor more generally.  It was submitted that the views in the reports were internally inconsistent, in particular the proposition that the plaintiff could return to truck driving while on the other hand that he should consider a career change because truck driving would reaggravate his symptoms.  Certainly the impression from Dr Scott-Young’s major report is that the plaintiff’s symptoms would not be so severe as to prevent him from continuing to work as a truck driver provided that that did not involve any significant lifting on his part, though he would be likely to suffer symptoms in that occupation which may well prompt him to seek some alternative employment.  Relating that to the test in the policy, it could I think reasonable be concluded that the effect of that opinion was that, although engaging in his occupation of truck driver had been made more difficult for the plaintiff, because it would be necessary to obtain a position which did not involve significant lifting, and he would be subjected to painful symptoms either constantly or from time to time, the disability was not so great as to prevent him from ever engaging in that occupation in the future.  Such a view would only have been supported by the proposition in the final report from Dr Scott-Young that the plaintiff could return to truck driving, which proposition was not qualified as it had been in the earlier reports.  That was said in itself to be a further inconsistency.
  1. [44]
    There is the further consideration that it is clear that Dr Scott-Young did not think the plaintiff was making sufficient efforts to rehabilitate himself, and that the plaintiff’s continuing unemployment may well be related to inadequate rehabilitation.  In those circumstances, it is more difficult to conclude that the test in the policy has been satisfied, because, even if the plaintiff has been prevented by his current symptoms from continuing to work as a truck driver, if he engaged in the more rigorous rehabilitation campaign contemplated by Dr Scott-Young, he may well be able to do so.  On that basis, the test has not been satisfied.  In this respect, the doctor’s opinion that the plaintiff was not motivated to return to work is of some relevance.  As I would interpret the test in the policy, the issue is not whether the plaintiff will in fact ever work again, but whether the plaintiff will be prevented from working again (in a relevant occupation) by his disability.  If the plaintiff could by greater efforts overcome his disability sufficiently so as to be able to work again in a relevant occupation, but is not motivated to do so, the test in my opinion is not met, because he is prevented from working by his lack of motivation.
  1. [45]
    Reliance was also placed on the inconsistency said to arise in the final report between the statement that the plaintiff is fit to return to work, and that it is up to the plaintiff and any functional capacity experts to work out what work he is capable of doing. It was submitted that that suggests that the doctor was accepting that the issue of what work the plaintiff could now do was complicated, and was inconsistent with the proposition that he could return to work as a truck driver. But I do not think that this answer is necessarily inconsistent with the opinions expressed elsewhere in that letter; it would be consistent on the basis that the doctor thought there were lots of things the plaintiff could do, but that the detail of just what that involved would have to be worked out by somebody else, and would depend to some extent on the motivation of the plaintiff. The reference to the issue being to some extent up to the plaintiff suggests the doctor was answering the question by reference to what occupation the plaintiff will perform rather than what occupation the plaintiff could perform. However, I do not think that an issue of this nature is assisted by a minute analysis of every comment made by the doctor in a report of this nature; it is preferable to look at the overall effect of what is said in the report. Viewed in this way, Dr Scott-Young’s opinion is clearly enough that the plaintiff is not prevented by his disability from ever engaging in his own occupation in the future.
  1. [46]
    It was also submitted that Dr Scott-Young’s opinion was tainted with his bias against people accessing superannuation payments prior to their reaching retirement age, on the basis that this put an additional burden on the community.  That he had such a view, and indeed held it fairly strongly, emerged clearly enough during cross-examination,[20] and on the basis of his cross-examination I would conclude that Dr Scott-Young was hostile to the idea of the plaintiff receiving a payout of his superannuation fund, which is what he understood the issue was about[21] and that this bias affected the opinions that the doctor expressed in his reports.  If it knew that, the insurer ought to have disregarded those reports, but of course the insurer did not have the benefit that I had of the cross-examination during the trial, and it does not appear to me that there was anything in the reports themselves, or any other material which was before the insurer, which could reasonably have alerted the insurer to the existence of this bias at the time the decision was made.  In these circumstances, it does seem that unhappily Dr Scott-Young’s bias does not vitiate the insurer’s decision; at least, I have not seen any authority for the proposition that it does, nor has any been cited to me.
  1. [47]
    On the face of it, therefore, if the insurer accepted the opinion of Dr Scott-Young, the plaintiff’s claim necessarily failed.  The issue then arises as to whether it was reasonable for the insurer to accept that opinion, given the conflicting opinions which were also before it.  Most of the material before the insurer, however, was not as compelling, for one reason or another.  Early statements that the plaintiff was unfit for employment were made at a time when full recovery from the aggravation had not been achieved.  The much more favourable opinion of the general practitioner was the opinion of a general practitioner, and the insurer can scarcely be criticised for preferring the opinion of a relevant specialist.  A number of the other reports were really only relevant to the history of the matter and did not throw much light on the plaintiff’s prospects.
  1. [48]
    The only two reports which require some serious consideration as potentially offsetting Dr Scott-Young’s reports are the reports of the other two specialists, Dr Maxwell and Dr Langley.  But Dr Maxwell said nothing about the prospects for future employment, and merely suggests a range of possible avenues which may well lead to an improvement of the symptoms or at least better management of them.  It was not inconsistent with Dr Scott-Young’s opinion.  Dr Langley’s opinion was that work involving heavy lifting had been excluded, which was the type of work the plaintiff was doing, but it assumed a capacity to do work of a lighter nature without the heavy lifting with the benefit of appropriate rehabilitation guidance.  That opinion can be viewed as supporting to some extent the views of Dr Scott-Young, who has also accepted that the plaintiff should not be engaged in heavy lifting, but is of the opinion that the plaintiff can otherwise work as a truck driver.  In those circumstances, it cannot be said that the effect of Dr Langley’s report was to render it unreasonable simply to accept the opinions of Dr Scott-Young.
  1. [49]
    Further investigation could have been undertaken, but on the material then available an insurer could reasonably have concluded that this was a clear enough case where further investigations were not necessary, and that the test in the policy had not been satisfied. Overall, I am not persuaded that it has been shown that taking the first decision as it did involved a breach by the second defendant of its duties as an insurer.

The second decision

  1. [50]
    The decision maker on the second occasion had all of the material that was before the first decision maker, and in addition the reports of Dr Campbell, Dr Weidmann and Mr Hoey, the Commonwealth Rehabilitation Service file, which was provided in September 2008, and the labour market analysis, all of which have been referred to earlier.  The decision maker in this case was called, and explained the basis of her decision:  she was at the time a team manager of the team responsible for assessing claims of this nature.  Before the matter got to her, it had been considered by the complaints resolution team, and she had discussed aspects of the matter with members of that team, though she was the one who made the decision from the point of view of the second defendant:  p 7. 
  1. [51]
    The defendants submitted that regard cannot be had to the evidence she gave of her reasons, based on Karger v Paul [1984] VR 161 at 166.  That case was a challenge to the exercise of a discretionary power by a trustee unaffected by the considerations applicable in superannuation cases, although principles stated there as to the basis on which a trustee’s exercise of discretion may be challenged have subsequently been applied in superannuation cases.[22]  McGarvie J at p 165 referred to the principle that trustees are not bound to disclose reasons for the exercise of a discretionary power, although if they do give reasons, their soundness can be considered by the court.  He then rejected a submission that regard could be had to reasons given in evidence in that matter, stating: “It would defeat the policy which underlies the principle if beneficiaries could, by alleging lack of good faith against the trustees in an action and for practical purposes thus virtually obliging them to disclose in evidence the way in which they went about exercising the discretion, obtain a right to examination and review of the discretion which they would otherwise not have.  The exception to the principle seems to proceed on the basis that if trustees of their own volution disclose their reasons they are treated as waiving their immunity and inviting examination and review of the reasons.”
  1. [52]
    No authority was cited for this proposition. One of the decisions he had cited earlier, Re Beloved Wilkes’ Charity (1851) 3 Mac & G 440, 42 ER 330, was a case where in response to a challenge trustees filed an affidavit giving some but not full reasons for their decision.  Lord Chancellor Truro stated the proposition that the court may have regard to the reasons given if the trustees give them, and proceeded to consider the contents of the affidavit.   The other decision cited earlier, Re Londonderry’s Settlement [1965] Ch 918, was a case where disclose of some trust documents was refused on the basis that that would give the beneficiaries indirect access to the reasoning of the trustees, and had nothing to do with when reasons in fact given by the trustees can be considered.  In these circumstances, I have some difficulty in seeing why a distinction should be drawn between reasons given in evidence and reasons given ex curia.  However, the proposition does not apply here.  The second defendant is not a trustee, and its decision can be (and is) challenged on the ground that it was unreasonable, which is not available as a ground for the challenge of a trustee’s discretion.  The position of the second defendant was therefore different from that stated at p 165.  In any case, no allegation of lack of good faith was made against the second defendant in the statement of claim para 24, so that in this case the second defendant was not “virtually obliged” to call this evidence.  It did not call the first decision maker, but chose to call the second, and of its own volition led from her the reasons for the decision.  If it is a question of whether an immunity has been waived, it was clearly waived here.   
  1. [53]
    The evidence of the decision maker revealed that the decision to reject the claim on the second occasion was made on a fairly narrow basis. She focused on employment in the form of driving and security work, and rejected a return to driving because of the limited sitting tolerance, and because a lot of driving work requires the lifting of goods: p 6.  However, she was of the view that the plaintiff would still be able to do sedentary types of security work, on the basis that he was capable of sedentary work, that his experience fitted him for work of that nature as he had previously worked in the security industry, and the labour market analysis revealed that sedentary security work appeared to be available.  Accordingly, she considered that there was still work available which the plaintiff was not prevented from doing by the state of his back, so that he did not meet the test under the policy.
  1. [54]
    On the basis of this approach, the conflict between Dr Scott-Young and the other specialists as to the extent to which the plaintiff could continue to do some kind of non-sedentary work, and any possible inconsistency within the reports of Dr Scott-Young on that matter, really became irrelevant, at least in terms of my consideration of the decision:  on that issue, the matter was in fact resolved in favour of the plaintiff.  The medical reports on the other hand do not seem to rule out sedentary work, and Mr Hoey in his report expressed the opinion that the plaintiff “is now capable of occupations in the sedentary range only”.[23]
  1. [55]
    The labour market analysis (Document 38) divided security work into work as a security officer, which was given a physical classification of sedentary in the dictionary of occupational titles index, and as a security guard, which was given a classification of light in the same index.  The report also referred to the availability of work monitoring closed circuit television systems and home alarm systems, and security work at a theme park, a university, an airport or hospital, which was said to provide excellent casual employment opportunities for people with disabilities.  The author of the report said that in her experience it was possible for people with back injuries to obtain work as a security officer in such roles.  The report gave a number of advertised positions which it was thought might be suitable for the plaintiff.
  1. [56]
    Ultimately her conclusion was that fairly sedentary security work would certainly be possible in this situation: p 6. The report was relied on, not as to whether the plaintiff could undertake such work, but simply for the availability of positions in the security industry which could be characterised as sedentary: p 8. She also took into account the job description which had been obtained by a colleague for the role previously undertaken by the plaintiff: Exhibit 2.

The licence issue

  1. [57]
    In reasoning in this way, the decision maker did not address the question of whether or not the plaintiff could get any licence necessary in order to enable him to do such work; her approach was that she had no reason to consider that his previous security licence had expired: p 11.  This is not a matter directly considered in the labour market analysis, though I note that one of the examples of advertised positions on p 5 of that analysis makes reference to a Queensland security licence being required.  The plaintiff’s original application on p 4[24] in section C(b) sought a statement of whether he “had any other skills or had he attended any courses or other qualifications?  If so, please provide dates and details.”  What the plaintiff wrote in there was as follows:

“Expired – senior first aid

 – security officer licence

 – gun licence

 2001-2002”

  1. [58]
    When asked about this, the decision maker said she did not recall taking from that section of the form that the plaintiff had a security officer’s licence which had expired: p 27.  However, she said, looking at it now, she could not say whether it appeared that it was just the senior first aid qualification that had expired but all three.  My own view is that that entry does objectively suggest that the security licence has expired; if nothing else, it was a reminder that a licence is required to work as a security officer.  In any case, I would expect that the licensing of security officers is these days so notorious that anyone concerned with an issue of this nature ought to be aware that a licence is required for a person to work as a security officer.
  1. [59]
    The applicable legislation in Queensland is the Security Providers Act 1993, which ought not to be hard to find.  Under that Act the term “security officer” is defined in s 7(1) as “a person who, for reward, guards, patrols or watches another person’s property, including by – (a) personally patrolling the property; or (b) personally monitoring the property by operating an audio-visual or visual recording system, a radio or other electronic monitoring device.”  It does not include an employee who guards, patrols or watches an employer’s property, unless that person is employed principally to guard, patrol or watch the employer’s property, or is employed to guard, patrol or watch licensed premises of the employer:  subsections (4), (5).  Accordingly the term “security officer” in the Act would correspond to the concept of security officer contemplated in the labour market analysis, which the decision maker concluded the plaintiff could undertake.
  1. [60]
    A security officer is within the definition of “security provider” in s 4 of the Act, and by s 9(1) a person may not carry out the functions of a security provider unless that person holds the appropriate licence.  Under s 11 a person is entitled to a licence if the chief executive is satisfied that the person is 18 years or more, has successfully completed an approved training course for carrying out the functions, or the category of functions, for each type of security provider for which the licence is sought, and is an appropriate person to hold the licence.  By subsection (2)(a), if a person has previously held a licence, that satisfies the requirement of the approved training course if it is in respect of the same functions or category of functions as those covered by the previous licence, and if the previous licence was held within one year before the day the applications for the licence was received.  It would appear to follow from this that, assuming the licence he held expired more than 12 months earlier, it would be necessary for him to complete a new training course when applying for the licence.
  1. [61]
    Under s 16 the maximum term for which a licence may be issued is three years.  It may be renewed, but only on an application for renewal before the licence expired:  s 20(1).  An approved training course means a training course approved by the chief executive.  The statute provides for a number of factors to be taken into account in relation to the question of whether an applicant is a fit and proper person to obtain a licence.  There was no evidence as to whether or not there were any particular factors applicable to this plaintiff which would have been relevant to that issue, and obviously no consideration was given to that issue by the decision maker.
  1. [62]
    There was some evidence from the plaintiff in the course of cross-examination that when he was with the Commonwealth Rehabilitation Service they sent him to do another security course with a company. He went to that company and spoke to the person in charge and told him about the injury and “he told me that I was wasting his time and his company’s time and money and then I went back and told CRS that and she got upset for me telling him the truth and that’s when I said, you know, I’ve had enough and I went and told my missus that she can go back to work.”[25]  There was no evidence before me of what, if anything, appears on the CRS file in relation to this incident, and hence was part of the material available to the decision maker at the relevant time.  She was aware of the CRS file, but had no recollection of seeing reference to such an incident on that file:  p 10.  What she recalled about the file was that they had provided previous assistance and been partly responsible for achieving the position at Sanctuary Cove, and had tracked his progress while he was there, and that that work had ceased but not because of a reason connected with disability.  Her recollection is that the file suggested that there were no plans to attempt a return to security work because he did not want to do that sort of work.
  1. [63]
    Neither party put the CRS file before me. The plaintiff’s solicitors must have had the same file, and hence the same information, as that provided to the decision maker, because the second defendant obtained the file from the plaintiff’s solicitors. In these circumstances, I am not prepared to assume that there was anything on the file which would or ought to have alerted the decision maker to any difficulties which had been experienced by the plaintiff in seeking to obtain a security licence. At some point the decision maker prepared a file review document (Exhibit 13) which referred to the CRS file, noted that the plaintiff was initially referred to CRS in 2001, and included the statements:

“CRS was able to get him a security role at Sanctuary Cove where he remained for some time.  It appears that he was sacked from this role because they thought he was stealing – his employer later discovered that it wasn’t him – he advised CRU [sic] that he ‘was over’ security work.”

  1. [64]
    More recently nothing was done by way of rehabilitation until August 2006 because prior to that time he had been certified as unfit for work by doctors. The note continued:

“Insured did not proceed with program as CRU worker advised him that he would be S23 and there would be program costs involved.  Insured advised that he would see his lawyer before proceeding.”

  1. [65]
    Accordingly there is no evidence that the decision maker knew about any difficulty which the plaintiff had with a security officer training course. Nevertheless, it does seem to me that there is an issue in relation to licensing which was overlooked by the decision maker. As I indicated earlier, it ought to have been apparent, either as a matter of general knowledge or because of reference to security officer licences in the material, that a person required a licence in order to work as a security officer in Queensland (and I suspect elsewhere in Australia).  In these circumstances, a consideration of whether the plaintiff could work as a security officer involved a wider consideration than simply whether he was physically capable of doing the tasks required of a person in that position, and whether there were jobs available in which the tasks required were within his physical capacity; in my opinion, it also involved a consideration of whether he had or could obtain any necessary licence.
  1. [66]
    That a licence was necessary ought to have been known to the decision maker, but no inquiry seems to have been made as to whether the plaintiff did still have that licence, or could obtain one. The maximum term of a licence of three years is readily available from the statute, or no doubt from any enquiry made as to the term of the licence; I do not think that it was reasonable to assume that a licence once obtained would continue indefinitely. Given that the plaintiff had not worked as a security officer for some years, the possibility that his licence might have expired in the meantime ought certainly to have been considered by the decision maker. In those circumstances, some attention should have been directed to the issue of whether a licence could be obtained.
  1. [67]
    There is no material as to what is required to complete an approved training course, and whether the plaintiff in his current condition could in fact complete that course. It may be, for example, that some element of unarmed combat training is involved in the approved training course, or some particular level of physical fitness is required, with which the plaintiff could not cope. There is no evidence about these matters,[26] but the point is that these were not matters which were investigated.  It is in my view not enough simply to consider whether there are jobs out there which the plaintiff could physically do, if before he could legally do such jobs it was necessary for him to obtain a licence which required him to complete a training course that he could not complete.  Indeed, if the plaintiff would not even be accepted to participate in a training course, he would necessarily not be able to obtain a licence and would therefore not be able to work even in the most sedentary of security officer positions.
  1. [68]
    The issue under the policy is not whether the plaintiff can do work in the abstract; it is directed to the more practical question, of whether the plaintiff is prevented by his disability from working in the real world.[27]  To take a hypothetical example, assume that the licensing requirements for a commercial airline pilot include a certain level of uncorrected visual acuity.  If a commercial airline pilot, because of some progressive eye condition, suffered deterioration in his vision, he might no longer meet that requirement, though the necessary level of visual acuity could easily be obtained by a correction with spectacles or contact lenses.  By the use of those aids the pilot could in fact perform the tasks required of a commercial airline pilot, but he would not be allowed to do so if the licensing requirement was based on uncorrected visual acuity.  In such circumstances, assuming the deterioration in the eye sight was irreversible, he would be prevented from working in the future as a commercial airline pilot.
  1. [69]
    It follows that in my view the decision maker failed to have regard to a consideration which was not only relevant but which was an essential step in the process of coming to the decision in the way that she did. She rejected the claim on the basis that the plaintiff was not prevented from working as a security officer doing sedentary work, taking into account his physical capacity for sedentary work, that it was an occupation for which he was fitted by experience, and that such work was potentially available, but not the question of whether he could lawfully undertake such work. In my opinion that was a relevant consideration, and a failure to take it into account has the result of invalidating her factual conclusion that he could still do that work and was therefore not prevented by his disability from doing relevant work, so as to meet the definition of being totally and permanently disabled. The second defendant thereby failed to act reasonably in determining what its opinion was.
  1. [70]
    It would appear to follow from the evidence given by the decision maker that if the plaintiff would not be able to obtain a licence because he could not complete satisfactorily an approved training course for a security officer, he is totally and permanently disabled for the purposes of the policy. When this point was raised with the decision maker, she said that this would depend on whether there were unskilled sedentary occupations that could reasonably be obtained without previous experience: p 14.  There was no evidence that such occupations exist, or could accommodate the plaintiff’s limited sitting tolerance.
  1. [71]
    I should say something of the ground raised on the pleading of breach of procedural fairness. This was confined by particulars to a failure to disclose the documents referred to in para 20(a) to (o) of the statement of claim.  But all these documents were disclosed, with Document 21, except for the report of Dr Langley, which the plaintiff provided himself.  The Labour Market Analysis, Document 38, was the only document not disclosed before the final decision, but that was not relied on in the case as particularised.  I did not understand counsel for the plaintiff to press any application to amend the particulars.  It follows that this ground cannot be made out.

Finding on disability

  1. [72]
    It was common ground between the parties that, if I concluded that the second defendant’s decision was defective in that it had failed to comply with the obligations of an insurer when making such a decision, the appropriate course was for me to determine the issue of whether the plaintiff met the test in the policy at the relevant time.[28]  For this purpose, additional evidence may be received, so that I am not confined to the evidence that was before the decision maker.[29]  To this end, I heard evidence from the plaintiff, and further evidence from Dr Campbell, Dr Scott-Young and Mr Hoey.  I have already made some reference to the effect of Dr Scott-Young’s evidence; because of the bias referred to earlier, no great significance can be attributed to statements of opinion which are adverse to the plaintiff.  In these circumstances, almost the only parts of his evidence on which any reliance can be placed is his acceptance that the plaintiff is suffering genuine pain, and that this is wearing him down and adversely affecting him psychologically:  p 34.
  1. [73]
    Dr Campbell advanced the proposition that the spondylolisthesis was not related to the plaintiff’s current problem, and that there was a coincidental chronic soft tissue musculo-ligamentus injury in the spine:  p 45.[30]  He conceded that he had not formed a view as to whether the plaintiff could do the duties of a security officer:  p 44.  He was not asked to attempt to do so in the witness box.  At p 48 he said that if suitably trained for a sedentary occupation it was worth attempting, but made no reference to the issue mentioned in his report of the effect of limited sitting tolerance in relation to any sedentary occupation.  He said it was common for patients to say that they had difficulty getting employment if they say they have a bad back:  p 49.
  1. [74]
    An additional report of Mr Hoey was tendered for trial:  Exhibit 5.  This was the result of a further assessment undertaken on 24 May 2010.  Mr Hoey was of the opinion that the plaintiff had occupational restrictions in the form of decreased tolerance for long periods of sitting, standing or walking, that he was unfit for heavy or repetitive lifting, and there were restrictions with forward bending, twisting, heavy pushing or pulling of loads.  He had a capacity for occupations in the sedentary range only, as detailed in the dictionary of occupational titles.  Mr Hoey was of the opinion that the plaintiff was unfit to work as a truck driver or a furniture removalist.  Mr Hoey also expressed the opinion that many employers were reluctant to employ someone with an injury.
  1. [75]
    Mr Hoey had tested the plaintiff for his capacity for work in administrative roles, and found a very low score on a test which is not related to specific training but regarded as an indicator of successful performance in administrative roles generally.  Overall, he was of the opinion that the plaintiff was precluded from any occupation for which he was reasonably qualified by reason of education, training or experience.  Under cross-examination Mr Hoey at p 53 said that physically the plaintiff may be capable of work as a security officer if it predominantly involved sitting with standing or walking for brief periods not amounting to one-third of the working day.  Again, the difficulty with this answer is that it is based on the assumption that the plaintiff can undertake sedentary work, without having I think sufficient regard to the limited tolerance for sitting.  Mr Hoey’s explanation of the plaintiff’s inability to work as a security guard, however, was based on the proposition that he did not have a licence which was required now for such work, and that the sedentary positions for security guards were sought after positions, ordinarily filled by more experienced workers who had previously “done their time” on more vigorous roles which the plaintiff could not perform:  p 56.
  1. [76]
    It was accepted that the plaintiff could not work as a furniture removalist or a factory hand, or as a truck driver if that involved any significant lifting. The decision maker took the view that the plaintiff’s limited sitting tolerance would prevent him from working as a truck driver at all. That on all the medical evidence is a reasonable conclusion, and is consistent with the plaintiff’s evidence that he has limited sitting tolerance, and cannot drive a motor vehicle for any great length of time. The consequence is that I would come to the same conclusion as the decision maker on the evidence before me, that the plaintiff is no longer able to work as a truck driver.
  1. [77]
    The only other occupation for which the plaintiff is suited by education, training or experience is work as a security guard.[31]  He was previously trained for this position and had some experience in it, and accordingly it is within the test in the policy.  The immediate obstacle, however, is that the plaintiff no longer has the necessary licence.  The practical question therefore becomes one of whether the plaintiff can reasonable obtain the necessary licence.  There is no evidence as to what would be required for the plaintiff now to undertake the required course, and it may well be that the requirements of the course are different from the requirements at the time the plaintiff previously undertook it, at which point the course was certainly physically undemanding:  p 24.  The plaintiff was effectively turned away from the course more recently, although it is not entirely clear from his evidence whether that was because the training organisation[32] concluded that he would be unable to complete the course satisfactorily, or concluded that there was no point in training him because his back problems would mean that nobody would ever employ him as a security guard.
  1. [78]
    During the trial it seemed to me that there was no point in considering potential occupations for which the plaintiff would require a licence if he did not possess the necessary licence; this followed from the fact that the test assumes that the member could otherwise engage in the occupation. On reflection, however, it may be that this was too sweeping an approach, at least in the case of someone who had previously possessed the relevant licence, and had actual experience of this kind of work. In those circumstances, I think it is relevant to consider whether he could get the relevant licence again, so that he could again work in the area. If one approaches the matter in that way, it follows that for the plaintiff to discharge the onus on him it is necessary to show that he would not get that licence in those circumstances, and accordingly the deficiencies in the evidence about what would have to be done in order now to get a licence are a problem for the plaintiff at this point in the trial. Accordingly, I am not prepared at this stage in the reasoning process to rule out security guard on the basis that the plaintiff does not have a licence and there is no evidence that he could now get one.
  1. [79]
    It does seem to me, however, that there is a further impediment to the plaintiff’s being able to work now as a security guard. The plaintiff said that he could no longer do the sort of work that was required at Sanctuary Cove, his previous employment in this field, because he would not now possess the sitting tolerance or the walking tolerance required in that position. That in my view is consistent with most of the medical evidence which recognises the problem of sitting and walking tolerance. Even if technically that position would be classified as a sedentary one, it seems to me that the plaintiff has considerable problems in undertaking even sedentary work, because of his limited tolerance for sitting. The particular problem the plaintiff faces on the basis of his evidence is that the only position which gives him any sort of real relief from his back pain is lying down: p 21. If the plaintiff has problems with a sitting tolerance and can only get relief from the pain produced by an extended period[33] of sitting by lying on the floor, it seems to me that he is really not fit for sedentary occupations either; there are not many sedentary occupations which one can perform while lying on the floor, and I think it clear enough that security guard, even in a most undemanding position, would not be among them.  His limited tolerance for driving would rule out a security guard position which involved significant driving in a vehicle, such as the one at Sanctuary Cove, or which involved driving around various sites checking them, either on a regular basis or in response to alarms.
  1. [80]
    The plaintiff’s evidence of what he could do was not challenged in cross-examination, and I accept his evidence. He is the one who knows his limitations best. On the basis of that evidence he could not do even most forms of “sedentary” work: p 21.  Even a position which essentially required him to sit at a desk monitoring surveillance images would be beyond him; there would not be much point in employing someone to monitor images if he had to keep lying on the floor.
  1. [81]
    I am conscious of the fact that the test in this case, “prevented from ever engaging”, is a more rigorous test than that used in a number of policies considered in other cases, where the text is “unlikely ever to work again”, though it may not be much more rigorous, if “unlikely” is given its ordinary meaning, of no real chance.[34]  In any case, I am applying the test in the policy according to its terms.  Where the matter involves a finding of fact on my part, I make that finding on the balance of probabilities.  I do not accept that, on this test, difficulties in obtaining actual employment are not relevant.
  1. [82]
    There is the practical consideration in relation to employability identified by Mr Hoey and to some extent Dr Campbell; physically undemanding jobs of this nature are likely to be keenly sought after, and to be awarded to employees with some seniority, so that they are unlikely to be available to people such as the plaintiff even if such jobs do exist and become available from time to time.  That is particularly the case with a plaintiff who is going to have difficulty in obtaining employment anyway because he has a painful back, a situation which may well be aggravated by a presentation which is affected by the psychological effect on him of the persistent back pain.  The test has to be applied in the real world, even if the defendants do not have to point to a particular job with a particular employer which is available and with which he can cope.[35]
  1. [83]
    In the light of the evidence in this matter overall, I consider that the plaintiff’s back pain is such that he is prevented by it from ever engaging in the future in his former occupation of delivery driver, or any occupation for which he is reasonably suited by education, training or experience. I find that that has been the situation since before November 2007, so that during the period of the policy the plaintiff met the definition of total and permanent disablement. Accordingly, he is entitled to have paid the benefit payable in those circumstances.
  1. [84]
    The significance of the timing arises because the insurance policy has expired, in November 2007: Document 26.  The plaintiff could not afford to make the necessary payment to continue the insurance:  p 33.  That, however, did not produce the result that the claim necessarily failed; if the claim process which had been initiated during the period when cover was available ought to have produced a decision favourable for the plaintiff, then the plaintiff is entitled to succeed.  It does mean, however, that the defendant’s submission is correct, that it is relevant to show that the plaintiff met the test in the policy prior to the time when the policy expired.  That might not necessarily be at the time when the claim was made; I can imagine a situation where a member makes a claim, there is a preliminary decision that he does not meet the criteria but he is given the opportunity to make further submissions, and in response he puts forward a further medical report indicating that the condition has deteriorated further, on the basis of which the insurer accepted he now met the test.  So long as the policy was still current at the time of the further deterioration, the plaintiff would succeed.
  1. [85]
    Accordingly, I think it is sufficient to determine whether the plaintiff met the test at that time. The issue, however, is theoretical, because the medical evidence was that the plaintiff’s condition was stable prior to the end of 2007, and there was no evidence of subsequent deterioration. The two reports of Mr Hoey, prepared in October 2007 and May 2010, described essentially the same condition and come to essentially the same conclusion.  The plaintiff’s evidence was that his back had been in essentially the same condition since the further injury in 2004:  p 22.  Accordingly I think that the defendant’s submission is technically correct, but the point is of no practical significance in the present case.
  1. [86]
    It was submitted on behalf of the defendants that the assessment must be made at the date at which the plaintiff first met the first part of the test in the definition, that is, six months after he ceased working. I do not accept that that is the correct interpretation of the definition in the policy. In order to meet the definition the decision maker has to be satisfied of two things, but there is nothing to say that both have to be first satisfied at the same time. There is certainly no reason to imply such a limitation into the definition: it would produce a capricious test, if it had the effect that a person whose condition was such that it had not stabilised for a period beyond six months would not meet the test because it could not be said six months after the person left employment whether or not the second limb was satisfied. Plainly in that situation if ultimately it emerges that the second limb is met, the definition is satisfied. I therefore reject that submission.

Conclusion

  1. [87]
    It was admitted that the amount of the benefit was $163,500. However, the second defendant’s liability was to pay that amount to the first defendant; the first defendant then had an obligation to pay the balance in the fund, including that amount, to the plaintiff. As counsel pointed out, this is subject to a discretion as to the timing of the payment which is a matter, at least in the first instance, for the first defendant. It would not be open to the first defendant to dispute the proposition that the plaintiff was totally and permanently disabled for the purposes of the trust deed. However, in the present case it seems to me that strictly speaking the second defendant should make the payment to the first defendant[36] and at this stage there should be only declaratory relief against the first defendant.  I will hear submissions before finalising the judgment.
  1. [88]
    A claim for interest was also advanced. The second defendant did not dispute that interest was payable under the Insurance Contracts Act 1984 (Cth) s 57, and the only issue was from when interest should run.  The plaintiff’s first proposition was that interest should run from 26 May 2006 when the claim ought to have been accepted, but I have not interfered with the first decision.  In the alternative, a claim for interest was made as from the date the second decision was communicated to the solicitors for the plaintiff, 2 February 2009.  Ultimately it does not seem to me that the plaintiff was pressing for interest from an earlier date, on the basis that there was unreasonable delay in making that decision.
  1. [89]
    A complicating feature is that interest is to be calculated at a particular rate referable to the 10-year treasury bond yield. I think that it would be better for me to receive further submissions, which hopefully will not provoke any disagreement between the parties, as to the appropriate calculation in accordance with the prescribed rates to the date of judgment. Accordingly I will invite further submissions as to that amount. I assume that in the light of the outcome, the appropriate order for costs will be that the defendants pay the plaintiff’s costs to be assessed, but I will invite submissions on that issue as well when the reasons are published.

Footnotes

[1]  Exhibit 1, document 18 at p 130.  Exhibit 1 is a bundle of 45 agreed documents, and for convenience I shall refer to documents in Exhibit 1 simply as document X.

[2]  Document 18.

[3]Minister for Immigration v Jia Legeng (2002) 205 CLR 507 at [71].

[4]Johnson v Johnson (2000) 201 CLR 488 at [13].

[5]  It is admitted that this report was before the defendants, statement of claim para 20(p), defence para 20, although it is not clear from the other material I have seen how it came into the hands of the defendants.

[6]  Document 28.  The request was said to be made pursuant to the Superannuation Industry (Supervision) Act 1993 s 101 and the Superannuation (Resolution of Complaints) Act 1993 s 19.

[7]  Document 25.

[8]  Document 27.

[9]  Document 38, which describes itself as a “Labour Market Analysis”.

[10]  The limitation was somewhat curious, as the defendants’ evidence was that the relevant decision maker had concluded (unsurprisingly, on the material before her) that the plaintiff was not able to work as a truck driver at all:  p 6.

[11]  This documents is a working copy of the trust deed dated 1 May 1993, as varied by amendments made in (or up to) October 1999, and 21 subsequent amendments up to 4 February 2009.

[12]  Defined in Clause 1.1 as a policy issued by the second defendant, which would include the policy which is applicable in this case.

[13]  (2010) 84 ALJR 726.

[14]Edwards v The Hunter Valley Co-op Dairy Co Ltd (1992) 7 ANZ Ins Cas 61-113.

[15]Tonkin v Western Mining Corporation Ltd (1998) 10 ANZ Ins Cas 61-397; Kowalski v MMAL Staff Superannuation Fund Pty Ltd (No. 3) [2009] FCA 53.

[16]  This decision was delivered after judgment in the matter before me was reserved, but the parties subsequently drew my attention to it.

[17]  This report is not included in Exhibit 1, but was tendered separately:  Exhibit 8.

[18]Wyllie v National Mutual Life Association Ltd (1997) 217 ALR 324 at 342.

[19]  Applying Hannover Life Re (supra) at [36].

[20]  See Day 2 p 31 line 50 – p 32 line 30; p 34 line 50 – p 35 line 23; p 36 lines 22-42.  See also Document 22 p 149, verified by the plaintiff at p 23.

[21]  As indeed it is, though from the plaintiff’s point of view the major consideration is also to obtain access through that fund to the benefit of the insurance payment.

[22]Curwen v Vanbreck Pty Ltd [2008] VSC 338; Vance v MIM Coal Staff Fund Pty Ltd [1999] QSC 210.  See also (2009) 83 ALJ 159.

[23]  Document 27 para [7].

[24]  Document 17 p 128.

[25]  Page 33.

[26]  The plaintiff’s evidence was that, when he originally did the course, it was just a series of lectures with an exam:  p 24.  But that was not before the decision maker, and the requirements may have changed.

[27]  This follows from the terms of the definition, that it is the disability which prevents the plaintiff from engaging in the relevant occupation.  It does not matter why or how the disability produces this effect.

[28]McArthur v Mercantile Mutual Life Insurance Co Ltd [2002] 2 Qd R 197.  This is consistent with the approach in Hannover (supra) at [36](f).

[29]  Ibid at [74].

[30]  Whether or not this is true does not appear to affect the question of what he can do in the future.

[31]  The case was conducted on the basis that these occupations were the only relevant ones.

[32]  I would interpret his evidence at p 33 as being to the effect that he was turned away by a training organisation to which he was sent by CRS, not a prospective employer.

[33]  According to Dr Campbell, over 30 minutes:  Document 24.

[34] White v State Public Sector Superannuation Scheme [1997] QSC 24.  This was not the approach adopted at trial in McArthur (supra), but there was no appeal from that part of the decision: [55].

[35]Davis v Rio Tinto Staff Superannuation Ltd (2002) 118 FCR 170 at [21].

[36]  cf Sayseng v Kellogg Superannuation Pty Ltd [2007] NSWSC 583.

Close

Editorial Notes

  • Published Case Name:

    Goodin v Colonial Mutual Superannuation Pty Ltd

  • Shortened Case Name:

    Goodin v Colonial Mutual Superannuation Pty Ltd

  • MNC:

    [2011] QDC 38

  • Court:

    QDC

  • Judge(s):

    McGill DCJ

  • Date:

    25 Mar 2011

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Australasia Ltd v Sayseng [2005] NSWCA 214
6 citations
Jump To
Cite 1 - [2005] NSWCA 214
Cite 2 - [2005] NSWCA 214
Cite 3 - [2005] NSWCA 214
Cite 4 - [2005] NSWCA 214
Cite 5 - [2005] NSWCA 214
Cite 6 - [2005] NSWCA 214
Curwen v Vanbreck Pty Ltd [2008] VSC 338
2 citations
Jump To
Cite 1 - [2008] VSC 338
Cite 2 - [2008] VSC 338
Davis v Rio Tinto Staff Superannuation Ltd (2002) 118 FCR 170
2 citations
Jump To
Cite 1 - (2002) 118 FCR 170
Cite 2 - (2002) 118 FCR 170
Edwards v The Hunter Valley Co-Op Dairy Limited (1992) 7 ANZ Ins Cas 61-113
2 citations
Jump To
Cite 1 - (1992) 7 ANZ Ins Cas 61-113
Cite 2 - (1992) 7 ANZ Ins Cas 61-113
Finch v Telstra Super Pty Ltd (2010) 84 ALJR 726
5 citations
Jump To
Cite 1 - (2010) 84 ALJR 726
Cite 2 - (2010) 84 ALJR 726
Cite 3 - (2010) 84 ALJR 726
Cite 4 - (2010) 84 ALJR 726
Cite 5 - (2010) 84 ALJR 726
Johnson v Johnson (2000) 201 CLR 488
1 citation
Jump To
Cite 1 - (2000) 201 CLR 488
Karger v Paul (1984) VR 161
4 citations
Jump To
Cite 1 - (1984) VR 161
Cite 2 - (1984) VR 161
Cite 3 - (1984) VR 161
Cite 4 - (1984) VR 161
Kowalski v MMAL Staff Superannuation Fund Pty Ltd (No. 3) [2009] FCA 53
2 citations
Jump To
Cite 1 - [2009] FCA 53
Cite 2 - [2009] FCA 53
McArthur v Mercantile Mutual Life Ins Co Ltd[2002] 2 Qd R 197; [2001] QCA 317
4 citations
Jump To
Cite 1 - [2002] 2 Qd R 197
Cite 2 - [2002] 2 Qd R 197
Cite 3 - [2002] 2 Qd R 197
Cite 4 - [2002] 2 Qd R 197
Minister for Immigration v Jia Legeng (2001) 205 CLR 507
1 citation
Jump To
Cite 1 - (2001) 205 CLR 507
Re Beloved Wilkes' Charity (1851) 42 ER 330
2 citations
Jump To
Cite 1 - (1851) 42 ER 330
Cite 2 - (1851) 42 ER 330
Re Beloved Wilkes's Charity (1851) 3 Mac & G 440
2 citations
Jump To
Cite 1 - (1851) 3 Mac & G 440
Cite 2 - (1851) 3 Mac & G 440
Re Londonderry's Settlement (1965) Ch 918
2 citations
Jump To
Cite 1 - (1965) Ch 918
Cite 2 - (1965) Ch 918
Sayseng v Kellogg Superannuation Pty Ltd [2007] NSWSC 583
2 citations
Jump To
Cite 1 - [2007] NSWSC 583
Cite 2 - [2007] NSWSC 583
Tonkin v Western Mining Corporation Ltd (1998) 10 ANZ Ins Cas 61-397
2 citations
Jump To
Cite 1 - (1998) 10 ANZ Ins Cas 61-397
Cite 2 - (1998) 10 ANZ Ins Cas 61-397
Vance v MIM Coal Staff Fund Pty Ltd [1999] QSC 210
2 citations
Jump To
Cite 1 - [1999] QSC 210
Cite 2 - [1999] QSC 210
Vance v MIM Coal Staff Fund Pty Ltd (2009) 83 ALJ 159
1 citation
Jump To
Cite 1 - (2009) 83 ALJ 159
White v The Board of Trustees, State Public Sector Superannuation Scheme [1997] QSC 24
2 citations
Jump To
Cite 1 - [1997] QSC 24
Cite 2 - [1997] QSC 24
Wyllie v National Mutual Life Association of Australasia Ltd (1997) 217 ALR 324
2 citations
Jump To
Cite 1 - (1997) 217 ALR 324
Cite 2 - (1997) 217 ALR 324

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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