Roof Plumber Awarded TPD Benefit After Insurer Loses Appeal
Published 07 Dec 2017
The New South Wales Court of Appeal recently dismissed an appeal made by Hannover Life Re of Australasia Ltd, ordering that it pay Mr Jones the Total and Permanent Disability Benefit in accordance with the Superannuation Policy plus costs.
By way of background, Mr Jones, the First Respondent, injured his lower back during the course of his employment as a roof plumber in around 2011. As a result of his injury Mr Jones underwent surgery to the lower back and returned to work for a short period before he reinjured his back. After surgery, Mr Jones’ treating doctors certified that he was unfit to return to his employment duties.
Mr Jones lodged a claim for the disablement benefit under the Construction and Building Unions Superannuation Fund. Under the policy Mr Jones was required to satisfy the definition of “Total and Permanent Disablement” which required that the insured person be “unable to follow their usual occupation by reason of accident or illness for six consecutive months and in the insurers opinion, after consideration of medical evidence satisfactory to us, is unlikely ever to be able to engage in an Regular Remunerative Work for which the insured is reasonably fitted by education, training or experience”.
The Trustee and the Insurer declined Mr Jones TPD claim. It was accepted by both that Mr Jones would never be able to return to his pre-injury duties as a tradesman, however he had capacity to engage in work in a number of entry-level positions that required no retraining. These positions included retail sales, courier/delivery drivers, console operator and customer service adviser.
After the claim was rejected Mr Jones commenced proceedings in the Supreme Court of NSW and at first instance, the Primary Judge concluded that the decision to decline Mr Jones TPD claim was incorrect because the insurer had breached it’s contractual obligation to act reasonably in considering the claim, and that Mr Jones did in fact meet the TPD definition under the policy. Hannover Life Re of Australasia Ltd lodged an appeal, forming the view that the Primary Judged erred in his decision.
The Court of Appeal looked at the following issues:
- Whether the primary judge erred in his approach to the tasks of the Court in reviewing the insurers opinion that Mr Jones was not TPD;
- Whether the primary judged erred in construing the ETE clause in the policy;
- Whether the primary judge erred determining that Mr Jones satisfied the TPD definition in the policy.
In respect to the above issues, The NSW Court of Appeal concluded the relevant inquiry is whether the opinion formed by the insurer was not open to the insurer acting reasonably and fairly in considering and determining the claim. Glesson JA explained: “The task for the court in the present case is not to assess what it thinks is reasonable and thereby conclude that any other view displays error … Rather, the criterion of the reasonableness of an insurers decision is whether the opinion formed by the insurer was not open to an insurer acting reasonable and fairly in the consideration of the claim”.
The Court of Appeal found that the insurer had failed to act reasonably as it failed to take into full consideration Mr Jones physical and psychological incapacity. It was noted that the medical evidence relied upon by the insurer took into consideration Mr Jones physical capacity to perform his employment duties, but gave no consideration to whether his psychological injury impacted his ability to gain and maintain adequate employment.
The Court of Appeal also found that there was no error in the Primary Judges construction of the ETE clause. Glesson JA stated: “the ETE clause requires the Insurer to examine the occupations for which the claimant is “fitted” in the sense of the occupation for which his education, training, and experience has prepared him.” And therefore the Court of Appeal concluded that the Primary Judge did not incorrectly find that the only work for which Mr Jones was reasonable fit for was manual work. The NSW Court of Appeal dismissed the appeal and ordered that it pay Mr Jones the TPD benefit plus costs.
If you have suffered an injury or have been diagnosed with a medical condition that has diminished your capacity to carry out your employment duties, than you may be entitled to lodge a TPD claim with your Superannuation Policy. If you would like any assistance in preparing and lodging your TPD Claims, please feel free to contact our No Win No Fee Lawyers on our toll free contact number, 1800 004 878 and arrange a no obligation consultation with one of our Personal Injury Accredited Specialist.