Yesterday Justice Dorney of the District Court of Queensland handed down his decision in Reynolds v Sunsuper Pty Ltd & AIA Australia Limited . The decision is welcomed by insurers as it vets numerous issues which are often the subject of dispute when considering claims for total and permanent disablement (TPD) benefits.
In December 2011, the Plaintiff, Lisa Reynolds resigned from her employment as a head gardener due to recurring skin ‘cancers’ which required ongoing treatment.
In September 2013, the Plaintiff lodged an application for a TPD benefit under a policy of insurance held with the Defendants, Sunsuper Pty Ltd and AIA Australia Limited. The Plaintiff’s application for a TPD benefit was declined on 2 January 2014.
In June 2014, the Plaintiff commenced proceedings against the Defendants alleging she was entitled to the TPD benefit claimed.
POLICY OF INSURANCE & DEFINITION
The relevant definition of TPD in the policy, which was undisputed between the parties, was as follows:
“Where at the Benefit Calculation Date, the Insured Member was Employed:
- Is unable to perform his/her occupational duties based on the work performed at the time of disablement by reason of an injury or sickness for a period of three (3) consecutive months since the Benefit Calculation Date as a result of the injury or sickness; and
- the Company, after considering all relevant medical evidence which is reasonably available, then determines that it is unlikely that the Insured Member will ever again be able to be gainfully employed in his/her usual occupation, or any other occupation for which he/she is reasonably suited by education, training or experience…”
Also undisputed between the parties were the following issues:
- The relevant date of assessment was 1 March 2012 (being 3 months from the date of the Plaintiff’s resignation);
- The Plaintiff had a skin condition with recurrent skin lesions and cancers which precluded her from working in outdoor occupations in daylight; and
- The Plaintiff was not able to return to her “usual occupation” as a gardener or any outdoor work.
DECISION & LESSONS
Justice Dorney found in favour of the Defendants and stated “I am satisfied on the balance of probabilities that the Plaintiff was, as at 1 March 2012, a member who was not within the ambit of the definition of TPD in the Insurance Policy; and, as such, she is not entitled to the benefit it provided.”
The judgment will have a significant impact on many aspects of the law in this area. However, we summarise the key “take-home” points from the judgment below:
- Any evidence relating to improvement or deterioration after the relevant date of assessment is irrelevant except to the extent that it is pertinent to the determination of the Plaintiff’s condition at the relevant time.
- The meaning of “unlikely... ever again” is to be characterised as “a real chance that a person would return to relevant work, even if it is less than 50%, will preclude an Insured Person being unlikely ever to return to relevant work.”. Justice Dorney commented “that test, necessarily, takes all relevant facts, including the age of the member, into account as at the assessment date.”
- It is not disputed that “gainfully” means “for reward”
- A insured person’s education, training and experience covers both an occupation which a member could, with reasonable diligence, acquire the abilities to do and an occupation which a member is capable of doing with further training that would be reasonable to undertake (such as a short qualifying course of training or retraining).
- It is difficult to see how “actual” availability can be a necessity when there is no geographical limit in the definition of TPD, unless limited to the potentially elusive concept of a “real” occupation.
- There is no requirement for the Defendants to prove the Plaintiff could obtain and maintain a job.
- The overall context of the definition of TPD, which requires commercial structure for its application, requires “incapacity rather than unemployment, or an available labour market position”. Justice Dorney went onto say “it is a question of realistic physical capacity, not labour market availability.”
- The definition of TPD only excludes casual work where it is of an intermittent nature.
- Unsuccessful applications for employment may reflect unemployment trends or alternative applicants being preferred. Unemployment itself is not sufficient to qualify the member as TPD.
- There were inconsistencies and inaccuracies in the Plaintiff’s statutory declaration and application for TPD. As such, she was taken to be an inaccurate historian (although not found to be deliberately untruthful). As such, the Court relied on documentary evidence where possible.
- An insured person, who will require a somewhat onerous treatment regime in the future, could use annual leave and potentially sick leave to accommodate that treatment regime. Further, part-time or casual work would likely accommodate such treatment regime as work hours and availability could be organised around treatment requirements.
The decision in Reynolds (which has been delivered on the back of the New South Wales Court of Appeal decision in Shuetrim) will provide an added layer of comfort to insurers in the assessment of TPD claims.