Schuhmacher v Zurich Australia Ltd
[2014] QDC 136
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- Unreported Judgment
- Schuhmacher v Zurich Australia Ltd[2014] QDC 136
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Schuhmacher v Zurich Australia Ltd[2014] QDC 136
Schuhmacher v Zurich Australia Ltd[2014] QDC 136
DISTRICT COURT OF QUEENSLAND
CITATION: | Schuhmacher & Ors ATO The Schuhmacher Superannuation Fund v Zurich Australia Limited [2014] QDC 136 |
PARTIES: |
PHILIP SCHUHMACHER AND VICKI SCHUHMACHER AS TRUSTEES OF THE SCHUHMACHER SUPERANNUATION FUND (First Plaintiff)
and
PHILIP JAMES SCHUHMACHER (Second Plaintiff)
and
ZURICH AUSTRALIA LIMITED (Defendant)
|
FILE NO/S: | D381 of 2012 |
DIVISION: | Civil |
PROCEEDING: | Application |
ORIGINATING COURT: | District Court at Townsville |
DELIVERED ON: | 13 June 2014 |
DELIVERED AT: | Townsville |
HEARING DATE: | 16 May 2014 |
JUDGE: | Durward SC DCJ |
ORDERS: |
|
CATCHWORDS: LEGISLATION: CASES: | PRACTICE & PROCEDURE - PLEADINGS – MATERIAL FACTS – whether plaintiffs’ pleadings defective – whether material facts adequately pleaded – whether defendant knows the case to meet – whether on pleadings a case has been made out. INSURANCE – DISABILITY – TERMS OF POLICY – CONSTRUCTION OF TERMS – LIABILITY OF INSURER – whether plaintiffs’ claim is within terms of TPD policy – construction – whether terms as to period of time or end date of material qualifying event pleaded whether actual dates required to be pleaded with precision with respect to policy requirements of ‘absence from work’ and ‘uninterrupted period of three months’ in order to qualify under the terms of the policy. PRACTICE & PROCEDURE – PLEADINGS – PARTICULARS – whether plaintiffs’ pleading adequately particularised – where plaintiffs have exhausted all material facts relevant to qualifying events for claim in policy – where no further particularisation possible – whether sufficient to make out case. PRACTICE & PROCEDURE – APPLICATIONS – LEAVE TO AMEND – where late in time – whether respondent plaintiffs prejudiced – whether leave should be given. Rules 157 – 158, 161 and 171 Uniform Civil procedure Rules 1999. Giles v National Mutual Life Association of Australia Limited (1986) 4 ANZ Ins Cas 60-751; Erzurumlu v Kellogg Superannuation Pty Limited [2013] NSWSC 1115; Bailey v FCT (1977) 136 CLR 214; Carway v Mercedes Benz Australia [2010] FCA 72; Sides Engineering Pty Ltd v Energetech Australia Pty Ltd [2005] FCA 1672; NRQ v MEQ Nicklel Pty Ltd [1991] 2 Qd R; Harvey v Commonwealth Scientific and Industrial Organisation [2000] 2 Qd R; Hancock v State of Queensland [2000] QSC 469; Halloran v Harwood Nominees Pty Ltd & Anor [2007] NSWSC 913. |
COUNSEL: | A J Moon of counsel for the First and Second Plaintiffs K Holyoake of counsel for the Defendant |
SOLICITORS: | Roberts Nehmer McKee for the First and Second Plaintiffs Cooper Grace Ward for the Defendant |
- [1]The applicant Zurich Australia Limited (“the applicant”), by application filed on 7 May 2014, sought an order requiring the respondents Philip Schuhmacher and Vicki Schuhmacher as Trustees of the Schuhmacher Superannuation Fund (“the first respondents”) and Philip James Schuhmacher (“the second respondent”), (together, referred to as “the respondents”) to provide further and better particulars of their claim. The applicant applied for leave to file an amended application that sought, in addition to the order sought in the initial application, an order that certain allegations in the amended statement of claim and particulars be struck out. The respondents opposed the request for leave. I will determine that issue in this judgment.
The claim
- [2]So far as is relevant, the first respondents entered into an insurance contract with the applicant on 11 January 2006 which provided, inter alia, for a “Standard ‘own’ occupation TPD” insurance cover. The second respondent is the life insured. The total and permanent disability policy is an option that was activated by the first respondents, who are the owners of the insurance policy.
- [3]There was a previous insurance agreement taken out in about 2002 between the second respondent and the applicant, wherein the applicant was the owner of the policy. It is not clear that the parties agree that the first insurance policy was “upgraded” or whether an entirely new insurance policy was commenced in 2006. However, that is not a matter that falls for resolution, if at all, on this application. Mr Holyoake, counsel for the applicant, has asked me to construe the Insurance Contract, by reference to the terms and conditions of the policy document, for the purpose of this application.
Background
- [4]The second respondent was a real estate agent and the principal in a corporation titled “PJ Schuhmacher Pty Ltd”. In or about August 2009 Schuhmacher developed a significant lower back pain with aching in his right leg (the “sickness”), as defined in the insurance agreement.
- [5]He claims that he is totally and permanently disabled by reason of the sickness and specifically that he has been by reason of the sickness prior to and continuing or commencing on and continuing, on alternative dates, absent from active employment solely as a result of the sickness for an uninterrupted period of at least three consecutive months and as a result of the sickness is unlikely to ever work for reward or otherwise in his own occupation for the rest of his life.
- [6]In the Amended Statement of Claim the material allegations are pleaded in the following terms:
“7. In or about August 2009 the second plaintiff developed a Sickness (as defined in the insurance contract) in that the second plaintiff was suffering from significant lower back pain with aching in his right leg (“the Sickness”).
8. By reason of the Sickness and prior to 10 August 2009 and continuing:
(a) the second plaintiff has been absent from active employment solely as a result of the Sickness for an uninterrupted period for at least three consecutive months; and
(b) the second plaintiff solely as a result of the Sickness is unlikely to ever work for reward or otherwise in the Second Plaintiff’s own occupation for the rest of his life.
8A. In the alternative to paragraph 8 herein by reason of the Sickness and commencing on 23 January 2010 and continuing:
(a) the second plaintiff has been absent from active employment solely as a result of the Sickness for an uninterrupted period for at least three consecutive months; and
(b) the second plaintiff solely as a result of the Sickness is unlikely to every work for reward or otherwise in the Second Plaintiff’s own occupation for the rest of his life.
9. Accordingly, in accordance with the Terms of the Insurance Contract, the second plaintiff has suffered total and permanent disablement from at the latest, November 2009.
9A. In the alternative to paragraph 9 hereof, in accordance with the Terms of the Insurance Contract, the second plaintiff has suffered total and permanent disablement from at the least, 23 January 2010.”
- [7]The second respondent’s claim was refused by the applicant.
- [8]With respect to the allegations of the respondents about the second respondent’s sickness and so far as is relevant, the applicant pleads in its Defence that:
“8. As to paragraph 8 of the statement of claim, the defendant:
(a) denies that the second plaintiff has been absent from active employment solely as a result of sickness for an uninterrupted period of at least three consecutive months prior to 10 August 2009 because the second plaintiff was not absent from active employment for three consecutive months prior to 10 August 2009;
(b) denies that prior to 10 August 2009 the second plaintiff solely as a result of sickness was unlikely to ever work for reward or otherwise in the second plaintiff’s own occupation for the rest of his life because the second plaintiff is not unlikely to ever work (for reward or otherwise) in his own occupation for the rest of his life solely as a result of sickness;
(c) denies that continuing from 10 August 2009 the second plaintiff solely as a result of sickness was unlikely to ever work for reward or otherwise in the second plaintiff’s own occupation for the rest of his life because the second plaintiff was not unlikely to ever work (for reward or otherwise) in his own occupation for the rest of his life solely as a result of sickness; and
(d) is unable to plead further until the allegations have been adequately particularised.”
- [9]The applicant’s defence with respect to the alternative date pleaded by the respondents in the Amended Statement of Claim, in paragraphs 8A and 9A, are in the circumstances likely to be in the same terms, save for the dates, as pleaded by the applicant in paragraph 8 of the Defence.
- [10]With respect to the allegation by the second respondent that he is totally and permanently disabled, the applicant pleads in its Defence that the second respondent was not entitled to receive any benefit under the Insurance Contract because he has not satisfied the criteria for a total and permanent disability benefit; and that the Insurance Contract does not provide for a “TPD ‘own’ occupation - option” benefit. It is the latter type of disability benefit that the respondents had asserted was the material benefit, which is denied by the applicant who maintained that the benefit was a “standard ‘own’ occupation TPD” benefit.
Issue
- [11]Hence the litigation primarily concerns the issue of the second respondent being totally and permanently disabled: that is, whether he was “absent from active employment solely as a result of the ‘Sickness’ for an uninterrupted period of at least three consecutive months; and solely as a result of the ‘Sickness’ is unlikely to ever work for reward or otherwise in his own occupation for the rest of his life”.
The Insurance Contract
- [12]The Insurance Contract (“the Policy”) provides for death benefits and for total and permanent disablement (“TPD”) benefits, so far as is relevant.
- [13]The material terms of the Policy are as follows:
“Total and Permanent Disablement (TPD) benefits
TPD benefit
The TPD benefit amount is payable upon the total and permanent disablement of a Life Insured covered for this benefit. [The Policy provides a Standard ‘own occupation’ TPD option, amongst other options, for a Life Insured and, if so provided, the benefit amount].
TPD option
The TPD benefit amount is payable upon the total and permanent disablement of a Life Insured covered for this benefit. The Life Insured must suffer total and permanent disablement when this policy is in force and before the applicable benefit expiry date.
Total and permanent disablement (TPD) means (a), (b), (c), (d) or (e):
(a) …
(b) The life insured is ‘Unable to Work’ through Sickness or Injury. ‘Unable to Work’ means that the life insured has been absent from active employment solely as a result of Sickness or Injury for an uninterrupted period of three consecutive months and:
- …
- If the life insured is covered for ‘own’ occupation TBD (as shown on your Policy Schedule), the life insured solely as a result of Sickness or Injury, is unlikely to ever work (for a board or otherwise) in his/her own occupation for the rest of his/her life.
(c) …
(d) …
(e) The life insured has been absent from active employment solely as a result of Sickness or Injury for an uninterrupted period of three consecutive months and as a result of Sickness or Injury the life insured is unlikely to ever perform any occupation to which his/she is fitted by education, training and experience for the rest of his/her life which would pay remuneration at a rate greater than 25% of his/her earnings during his/her last 12 consecutive months of works.”
The applicant’s submissions
- [14]The applicant alleges that the second respondent’s pleading does not bring him within the terms of the Insurance Contract.
- [15]Mr Holyoake in his written outline submitted that in order for the second respondent to bring himself within the terms of the entitlement to a TPD benefit under the Policy, the respondents must adequately plead (and then prove), inter alia, material facts which establish that:
“(a) The second plaintiff has be absent from active employment;
(b) Such absence from active employment has been for an uninterrupted period of there consecutive months;
(c) Such absence from active employment is solely as a result of “sickness” or “injury”;
(d) The plaintiff is unlikely to ever work (for reward or otherwise) in his or her own occupation for the rest of his/her life solely as a result of “sickness” or “injury”;
(e) Each of the above elements existed so that the plaintiff suffers total and permanent disablement when the policy is in force and before the applicable benefit expiry date.”
- [16]In the outline he submitted that the Amended Statement of Claim did not plead material facts which brings the plaintiff’s claim into the terms of the policy: specifically, that in the pleading in paragraphs 7, 8A, 9 and 9A of the Amended Statement of Claim, the use of the words “prior to 10 August 2009 and continuing” or alternatively “commencing on 23 January 2010 and continuing” are defective, in that they do not state:
“(a) The employment which was active which the plaintiff was absent from;
(b) The period of three months which was:
(i) Uninterrupted; and
(ii) Consecutive.
during which the plaintiff was so absent from active employment”.
Request for further and better particulars
- [17]The applicant by Request dated 11 January 2013, sought further and better particulars. They were provided by the respondents by letter dated 15 March 2013, but the applicant submits that the are inadequate, especially the words that appear within those particulars, namely: In paragraph 3 (a) the word (a) “intermittently”; in paragraph 4 (a) the words “at least”; in paragraph 4 (b) the words “unable to maintain continuity”; in paragraph 4 (c) the absence of any date being specified; and in paragraph 5, the words “at least” in the phrase “for an uninterrupted of at least 3 consecutive months.”
- [18]It was submitted further that the ‘inadequacy’ was further demonstrated in a letter from the lawyers for the respondents to the lawyers for the applicant dated 17 April 2014, namely that:
“1(a)(ii) The plaintiffs cannot by reference to date specify the ‘later periods thereafter intermittently’ as those are the best particulars that the plaintiffs can give other than that the ‘later periods thereafter intermittently’ concluded by no later than November 2009 or 23 January 2010 from at least which date the second plaintiff did not ever work again for reward or otherwise and the second plaintiff’s own occupation solely as a result of the Sickness.
(b) The best particulars which the plaintiffs can provide is that the second plaintiff was absent from active employment solely as a result of Sickness for an uninterrupted period of at least 3 consecutive months from late October/early November 2008 and was unable to perform any duties in from and after those months.
(d) As to paragraph 8(b) of the statement of claim and paragraph 4(c) of the particulars:
(iii) the date from which the second plaintiff was unlikely to ever work for reward or otherwise in the second plaintiff’s own occupation was from in or about November 2009 and in any event from no later than 23 January 2010;
(ii) The plaintiffs cannot specify periods by reference to dates of the ‘extended absences from work’ other than to say from in or about November 2009 and by no later than 23 January 2010 the second plaintiff was absent from work and did not ever work again for reward or otherwise in the second plaintiff’s own occupation solely as a result of the sickness.
- (e)As to paragraphs 3 and 9 of the statement of claim and paragraph 5 of the Particulars the plaintiffs cannot provide further particulars of the date from which the second plaintiff was absent from active employment solely as a result of the Sickness for an uninterrupted period of at least 3 consecutive months other than it was from late October/early November 2008 and from in or about November 2009 and no later than 23 January 2010 the second plaintiff was absent from work and did not ever work again for reward or otherwise in the second plaintiffs own occupation solely as a result of the Sickness.”
Respondent’s submissions
- [19]Mr Moon for the respondents submitted in his written outline, that:
“7. It is apparent from the material filed on behalf of the applicants that the second plaintiff’s sickness is not necessarily one which precludes him from doing anything at all which might relate to the employment but that his sickness makes him vulnerable to long periods of inability to perform many functions as a result of which he is effectively unable to engage in active employment as provided for in the policy and is entitled to cover.
8. Because of the nature of and the consequences of the sickness upon the second plaintiff, it is not always possible to point to specific days or dates but rather it is necessary to talk about periods of time in which the second plaintiff has been affected by his sickness so that he has been unable to engage in active employment.
9. Again it is apparent from the material relied upon by the defendant that the plaintiffs have provided such particulars as they are able to and indeed the particulars which have been provided by adequate to enable the plaintiff to properly prepare and defend the proceedings.
12. The plaintiffs were unable to be any more precise in terms of exact dates than they already have been and that has been made obvious in the correspondence between the parties solicitors. (Letters form the plaintiffs’ solicitors to the defendants’ solicitors dated 11 April 2013… and 23 April 2013…”
- [20]Mr Moon submitted that the applicant was seeking evidence and not particulars; that the date was a factual matter for the plaintiffs to prove and for the court to find; and that it was not necessary to specify a date that exactly coincided with the end of the three month period.
Discussion
- [21]Mr Holyoake relied on three authorities on the issue of an ‘end date’ for the 3m period.
- [22]In Halloran v Harwood Nominees Pty Ltd & Anor [2007] NSWSC 913, Brereton J discussed “the relevant date” in the context of it being a decisive requirement of proof: “that is, the date as at which the assessment of total and permanent disability was to be made”. His Honour referred to Giles v Naional Mutual Life Association of Australia Limited (1986) 4 ANZ Ins Cas 60-751, where the insurance policy used the words “throughout the immediately preceding continuous period of six months”. The trial judge wrote that “I consider basically that I must look at that date to see if the cause of action was then established”. However, the ‘sate’ of cessation of work was described as “in August 1983” and the ‘date’ the claim arose, “if at all”, was described as “in February 1984.”
- [23]Hence, the precise date within a stated month was not a necessary particular.
- [24]In Erzurumlu v Kellogg Superannuation Pty Limited [2013] NSWSC 1115, Bell J at 55 wrote “… the question whether a member suffers from total and permanent disablement is to be determined at the time and by reference to the facts that exist at the time the member first suffers from total and permanent disablement in accordance with the policy”. His Honour wrote that “… the preferable approach is the one adopted by Brereton J [in Halloran]: that is, “when the qualifying period before any benefit is payable expires”.
Purpose of particulars
The application for TPD is made pursuant to r. 161 UCPR. Particulars are necessary to define the issues for and prevent surprise at trial; and to enable the opposing party to plead: r 157(a) and (b) respectively; NRQ v MEQ Nichol Pty Ltd [1991] 2 Qd R at 594-5; Harvey v Commonwealth Scientific and Industrial Organisation [2000] 2 Qd R at [20]-[22].
Further, particulars serve the purpose of preparation for trial in providing clarity and focusing disclosure: Hancock v State of Queensland[2000] QSC 469 at [9].
However, a party can only be required to give those particulars that the part is able to provide: that much is axiomatic. When a party exhausts its knowledge of what it says are the facts, then that is sufficient: it can do no more.
Bailey v FCT (1977) 136 CLR 214, at 228; Carway v Mercedes Benz Australia[2010] FCA 72, at [17]; Sides Engineering Pty Ltd v Energetech Australia Pty Ltd [2005] FCA 1672, at [5]-[7].
The amended application: the reserved question of leave
Insofar as the leave to amend the application is concerned, Mr Moon opposes the grant of leave. It appears that is founded on the lateness of the amendment and the element of surprise.
Whilst the amendment seeks and alternative remedy and would, if leave was granted, open an alternative potential consequence in this application, it is late in time and gives the respondents inadequate notice.
However, the question of leave really becomes academic because of the view I have expressed about the pleadings in the course of dealing with the issue of further and better particulars. I have determined that the respondents’ pleading is not deficient. Hence the issue of striking out the part of the pleading does not arise.
I refuse leave to amend the application.
Conclusion
- [25]The respondents have the onus of establishing that the second respondent is able to bring himself within the terms of the insurance contract. Insofar as any exclusion from the insurance contract is concerned, Zurich has the onus of proof.
- [26]If the respondents have pleaded all that they can by way of particulars, what follows? Is the pleading “defective” or is the pleading potentially “evidentially deficient”? Are the respondents therefore merely at risk of their case failing? Those terms just referred to above are contextually different: In The Macquarie Dictionary, 2nd Revised Edition the term “defective” is defined as meaning “having a defect; faulty; imperfect”; and the term “deficient” is defined as meaning “lacking some element or characteristic; defective; insufficient; inadequate or wanting”. Even though the term “deficient” has one meaning of “defective”, it is broader and holistically different in the context discussed here.
- [27]Mr Holyoake relied on Rubenstein v Truth and Sportman Ltd [1960] VR 473 and a statement by Adam J at p 476 about a failure to state all material facts, particulars of facts which have been pleaded, in his amended application to strike out part of the respondents’ pleading. I do not consider this authority assists the applicant. The ‘date’ contended for by Mr Holyoake as being material is not, as he submits, a specific date within a month, but may be a point of time within a month or within a period of works spanning two or more months; or a point of time reflected by the occurrence of an identified event that occurrence of which can be pleaded. It may not necessarily be a specific ‘day’ or ‘date’.
- [28]In my view the respondents have pleaded the material facts. They have pleaded all they can as particulars. Their pleading is not ‘defective’. At the end of the day, which will be at trial, it will be a matter of proof on the evidence that will inform the court.
- [29]A risk of failure is not an analogous to there being no prospect of success or an impossible case to succeed upon. The applicant knows the respondents case. They are entitled to try and prove that at trial. If the applicant contents, upon construction of the Policy and upon evidence at trial, that there is a deficiency, then that is a matter for the trail judge to determine. I do not consider that it is for me to construe the Policy, in the absence of evidence, on this application. Further, I do not consider that the applicant is embarrassed or prejudiced in its Defence by reason of the plaintiff not being able to particularise periods of time by reference to specific dates.
- [30]The application for further and better particulars is refused.
- [31]Further, leave to amend the application is refused for the reasons I have stated.
Costs
- [32]The respondents, having been successful on the application, should have their costs, on the standard basis.
Orders
1. The Defendant’s application for Further and Better Particulars is refused.
2. Leave to amend the Defendant’s application is refused.
3. The defendant is to pay to the plaintiffs their costs of and incidental to the application on the standard basis or otherwise as assessed.