Atton v National Mutual Life Association of Australasia

[2007] NSWSC 310

CITATION:	Atton v National Mutual Life Association of Australasia [2007] NSWSC 310
HEARING DATE(S):	19/03/07
JUDGMENT DATE :	10 April 2007
JUDGMENT OF:	Gzell J
DECISION:	Judgment for the defendant with costs.
CATCHWORDS:	CONTRACTS - General Contractual Principles - Construction and Interpretation of Contracts - Income protection policy of insurance - Sickness benefit less than injury benefit - Sickness defined to include total disablement from injury that did not start within 30 days of injury - Whether total disablement started within that period - No new principles
PARTIES:	John Atton - Plaintiff National Mutual Life Association of Australasia - Defendant
FILE NUMBER(S):	SC 3573/05
COUNSEL:	Mr M Lawson - Plaintiff Mr R Cavanagh - Defendant
SOLICITORS:	Thomas Mitchell Solicitors - Plaintiff Turkslegal - Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

GZELL J

TUESDAY 10 APRIL 2007

3573/05 JOHN ATTON v NATIONAL MUTUAL LIFE ASSOCIATION OF AUSTRALASIA

JUDGMENT

The issue

1 John David Atton was insured under an income protection policy. National Mutual Life Association of Australasia became the insurer under the policy. The policy drew a distinction between an injury and sickness, the latter giving rise to lesser benefits. Mr Atton sought a declaration that he sustained an injury in terms of the policy.

The background

2 Mr Atton was a director and shareholder of John Atton Engineering Pty Ltd. He was also an employee. His company had contracted with Alstom Engines Pty Ltd to provide his services as superintendent to coordinate work being done by employees of his company and employees and subcontractors of Alstom. The work was maintenance and repairs of the naval vessel HMAS Tobruk at Garden Island.

3 On 11 August 1999, while performing a safety inspection, Mr Atton twisted his right knee and immediately felt severe pain. He was carried off the ship back to an office on the harbour where he took pain killers and completed paperwork until 8.00 pm. Thereafter until the end of the contract, Mr Atton performed his tasks from the office. Work on the Tobruk ceased on Friday 3 September 1999. In the period from his accident to that date Mr Atton worked full time and drew a full salary from his company.

4 Mr Atton said he did not work from 4 September 1999 to 6 September 1999, from 8 September 1999 to 11 September 1999, from 13 September 1999 to 14 September 1999 and from 18 September 1999 to 22 September 1999. However, that period covered three weekends and followed the completion of the contract on the Tobruk. On 7 September 1999, Mr Atton attended a debriefing and was paid. On 12 September 1999 he was paid for liaising with subcontractors in Sydney. On 15 September 1999 Mr Atton was looking at tender documents in Sydney for which he claimed he was paid for 40 hours including travel time.

5 On 23 September 1999, Mr Atton said he resumed work. This was another long-term project at the Eraring Power Station. When he was working on such projects he was required to work long hours and did so.

6 When not working on long projects, Mr Atton worked in his workshop. He said that between 22 September 1999 and 7 January 2000 he was unable to attend to this work on an average of two or three days per week. He explained this evidence. He did not mean that there were two or three days a week in which he did no work in his workshop. He said he summed the number of hours that he worked each day and converted those hours to notional days on an eight-hour per day basis.

7 Mr Atton saw Dr Townson on 18 August 1999. Dr Townson referred him for physiotherapy. He did not prescribe any medication. There is no evidence that Mr Atton received any physiotherapy treatment. He did not tell the doctor that he was incapable of working. He said that the doctor told him that he had not sustained a serious injury to his knee and it should improve.

8 On 11 November 1999, Mr Atton saw Dr Meredith who diagnosed a tear of his right medial meniscus and referred him to Dr Ridhalgh, an orthopaedic surgeon, whom Mr Atton saw on 15 November 1999. The doctor agreed that he had a medial meniscals tear and would benefit from surgery. In his report of 12 December 1999, Dr Meredith expressed the view that Mr Atton was currently fit for his normal duties and, following the arthroscopy, this should be enhanced. There might be a few days at the time of the operation where he would be unfit for work.

9 Mr Atton ceased work on 27 December 1999, the arthroscopy was performed on 7 January 2000 and he returned to work on 23 February 2000.

10 Mr Atton completed a claim form on 24 January 2000. In answer to the question: “When did you cease all work?” Mr Atton answered at 7.00 am on 27 December 1999. The claim was accepted by National Mutual and Mr Atton was paid from 10 January 2000 to 27 February 2000.

11 In the middle of 2002, Mr Atton was referred to Dr Lindsay Laird, another orthopaedic surgeon, who performed a second arthroscopy on 16 September 2002. Mr Atton said he attempted to return to work on 9 October 2002 but was unable to do so. Mr Atton lodged a second claim form dated 30 September 2002. The claim was accepted and Mr Atton has been in receipt of benefits under the policy since 16 October 2002.

12 Mr Atton lodged a third claim form on 17 October 2003 in which to the question “When did you cease all work?” he answered 3 September 1999.

13 Mr Atton was examined by other medical practitioners whose reports were in evidence. They do not, in my view, advance the case. National Mutual accepts that Mr Atton has been totally disabled within the meaning of the policy since 16 October 2002.

The policy

14 The policy provided benefits on total disablement, death, and partial disablement following total disablement. The schedule to the policy stated the monthly benefit at $3,250. For partial disablement following total disablement the monthly benefit was multiplied by the fraction constituted by the difference between the insured’s pre-disability income and the income after disablement divided by the pre-disability income. The schedule defined the benefit period as life for injury and five years for sickness. The policy defined total disablement in cl 2 in these terms:

“If the person insured is totally disabled, we will pay you the monthly benefit. The person insured is totally disabled if, because of an injury or sickness, he or she is:

§ unable to perform at least one income producing duty of his or her occupation;

§ not working; and

§ under the regular care and attendance of a medical practioner.”

15 Clause 2 of the policy further provided:

“We will decide whether the person insured’s total disablement is caused by an injury or a sickness, based on medical evidence.

“Injury “ means accidental bodily injury and “sickness” means sickness or disease. However, if the person insured’s total disablement does not start until 30 days after the date of an injury, we will treat the cause as a sickness.”

16 With respect to recurrent disablement, cl 2 of the policy provided:

“If the person insured returns to work for a period of less than 6 months since we last paid you because he or she was totally disabled or partially disabled (clause 4) and, (while the policy is still current), he or she has a recurrence of total disability or a recurrence of partial disability from the same cause or a related cause, then we will treat it as a continuation of the same claim and no waiting period will apply. However, if the person insured returns to full time work for a period of at least 6 months, the claim will be treated as a separate claim.”

17 The waiting period was stated in the schedule as 14 days.

The argument

18 It was submitted on Mr Atton’s behalf that all that was required to exclude the deemed sickness provision was that the total disablement commenced during the 30 day period. It did not need to reach full potential in that period. Nor was it required to remain constant once it had commenced. The total disablement might wax or wane.

19 It was submitted that since Mr Atton did not work on the specified days in September 1999 and since between 22 September 1999 and 7 January 2000 he said he was unable to work on average 2 to 3 days per week, he had established that he had begun on occasions during the 30 day period following his injury to be unable to produce at least one income producing duty of his occupation. On those occasions he was not working and the second condition of the definition of total disablement had begun. Having seen Dr Townson in that period, he had begun to be under the regular care and attendance of a medical practitioner. The consequence was, so the submission ran, that Mr Atton’s total disablement started within the 30 day period and continued thereafter.

20 As to the specified days in September 1999, I am not satisfied that there was work for Mr Atton to perform. The evidence did not satisfy me that the specified non-working days up to 11 September 1999 and beyond that date were because of his knee injury.

21 The work on the Tobruk had ceased on 3 September 1999 and until the debriefing the following week there was no clear evidence that Mr Atton had work that he could not do because of his knee. Likewise between assisting the subcontractors and examining the tender documents there was no such evidence. And, again, there was no evidence before he commenced work on the long term contract at the power station.

22 As to the later period from 22 September 1999 to 7 January 2000, that period is outside the 30 days following the injury and does not assist in establishing that Mr Atton’s total disablement started before 11 September 1999. Furthermore, the evidence did not establish that on any particular day Mr Atton was not working. His evidence was that he averaged work actually done day by day to establish a notional weekly workload.

23 Furthermore, there was no evidence that Mr Atton could not perform any income producing duty. He lost no income during this period. His company paid him as it had done previously. And when Mr Atton commenced work at the power station, he said he worked full time without any time off due to his injured knee.

24 Mr Atton saw Dr Townson once in the 30 day period. He saw no other medical practitioner in that time. Dr Townson prescribed no medication and there was no indication that Mr Atton undertook physiotherapy treatment as suggested by Dr Townson. The phrase “under the regular care and attendance of a medical practitioner” connotes, in my view, more than one visit to a doctor. Regular care connotes repetitive medical assistance and regular attendance connotes a series of appointments.

25 Mr Atton made a statement for workers compensation purposes in which he said that Dr Townson stated that he did not consider that Mr Atton had sustained a serious injury and it would improve. It was submitted that in those circumstances a repetition of attendance with Dr Townson was not warranted. But if not warranted, the inference is that the injury did not totally disable Mr Atton. If he was totally disabled, regular attendances upon a medical practitioner would be required. Hence the logic of including the third condition in the definition.

26 It was submitted that all that was required in the period from 11 August 1999 to 11 September 1999 was a start of total disablement and hence a start of regular care and attendance of a medical practitioner and a visit to Dr Townson constituted that start.

27 But Mr Atton did not return to consult Dr Towson. There was no repetition that might constitute regular care and attendance upon the doctor begun on 18 August 1999.

28 In my view, Mr Atton failed to establish that at any time between 11 August 1999 and 11 September 1999 he satisfied the three conditions of total disablement.

Construction of the policy

29 I do not read the policy in the way submitted. In my view, an insured is not entitled to income protection unless the insured is totally disabled. That requires each of the three conditions to be satisfied. If they are not, there is no need to consider whether the condition is an injury or a sickness. Mr Atton did not satisfy those conditions until about the time he lodged his first claim form on 24 January 2000. It was then necessary to consider the extended definition of sickness and, since Mr Atton’s total disablement had not started within 30 days of his knee injury, National Mutual was entitled to treat the cause as a sickness.

30 It was submitted with respect to the provision relating to recurring disablement that it did not apply to Mr Atton to render the 30 September 2002 claim to be a separate claim. This submission is relevant only if Mr Atton’s total disablement started within 30 days of his knee injury. As I have found that National Mutual was entitled to treat the first claim as a sickness, it does not matter whether the second claim was a continuation of the first claim or a separate one.

31 In any event, I regard the submission as misconceived. It was based upon the proposition that there never was a period of at least six months during which Mr Atton returned to full time work. I reject that proposition. The evidence was that Mr Atton returned to work until his second arthroscopy in June 2002. He minimised standing, crawling and climbing ladders. But he was able to perform his supervisory tasks, he continued to do so and he continued to be paid by his company for working full time.

32 In my view National Mutual was entitled to treat the second claim as a separate one.

Orders

33 Mr Atton has failed to establish an entitlement to the relief claimed by him in his statement of claim. There will be judgment for National Mutual with costs.

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