Eyles v Norwich Union Life Australia Ltd

[2008] NSWSC 741

CITATION:	Eyles v Norwich Union Life Australia Ltd [2008] NSWSC 741
HEARING DATE(S):	17/07/08
JURISDICTION:	Equity Division
JUDGMENT OF:	Young CJ in Eq
EX TEMPORE JUDGMENT DATE:	17 July 2008
DECISION:	Decline to make the orders in the notice of motion which is dismissed with costs.
CATCHWORDS:	PROCEDURE [429]- Discovery- Discovery only ordered if reasonably necessary- Court must give effect to the overriding purpose of the Civil Procedure Act 2005 to facilitate the just, quick and cheap resolution of the real issues in the proceedings- Categories of documents sought do not focus on the real issue namely whether the plaintiff has had a heart attack.
LEGISLATION CITED:	Civil Procedure Act 2005, ss 56-60
PARTIES:	David Eyles (P) Norwich Union Life Australia Limited t/as Aviva (D)
FILE NUMBER(S):	SC 6069/07
COUNSEL:	E G Romaniuk (P) J Gleeson SC (D)
SOLICITORS:	Kennedys (P) TurksLegal (D)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

YOUNG CJ in EQ

Thursday 17 July 2008

6069/07 – EYLES v NORWICH UNION LIFE AUSTRALIA LTD

JUDGMENT

1 HIS HONOUR: This is a notice of motion filed by a plaintiff who considers that the defendant wrongly rejected his claim for benefit under an insurance policy when he says he suffered a heart attack.

2 The pleadings in the amended statement of claim not only raise that particular issue but there is a claim in prayer (iv) that:

“In addition, an order for damages occasioned by reason of the defendant's breach of contract and/or breach of the good faith obligation pursuant to s 13 of the Insurance Contracts Act 1984 (Cth) and/or conduct contrary to s 52 of the Trade Practices Act 1974 (Cth) and/or s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth)."

3 Those prayers are allegedly supported by the pleadings in paras 10 and 11 of the statement of claim. Paragraph 10 says:

“Further, or in the alternative, the defendant's conduct in relying upon the requirement for Q waves to be present as part of the definition of a heart attack amounts to a breach of the defendant's duty of utmost good faith pursuant to ss 13 and 14 of the Insurance Contracts Act 1984 (Cth).”

4 Paragraph 11 reads:

“Further, or in the alternative, the defendant's conduct in refusing to pay the plaintiff pursuant to the policy in respect of the heart attack constitutes conduct that is misleading and deceptive or likely to be misleading and deceptive contrary to s 52 of the Trade Practices Act 1974 (Cth) and/or s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth).”

5 The particulars as to para 10 say that contemporary medical opinion ceased reliance on the presence of Q waves as a diagnostic tool and that the method or standard of proof specified by the defendant does not accord with contemporary opinion. Further, the defendant's failure in this respect amounts to a failure to act in accordance with good faith and that the defendant has, in fact, continued to offer similar insurance cover in the market place in which "heart attack" is relevantly defined by reference to new electrocardiographic changes consistent with myocardial infarction.

6 The defence denies para 10 and para 11 but also pleads that the para 11 claim does not, in any event, fall within s 52 of the Trade Practices Act and is out of time.

7 On 5 March 2008, the solicitor for the plaintiff wrote to the solicitor for the defendant seeking discovery of a series of documents under eight headings or categories which can be summarised as follows:

1. The defendant's claim file with respect to the payee's claim;

2. All "recovery money" policy documents providing trauma benefits issued by the defendant from 1996;

3. All product disclosure statements likewise;

4. The defendant's underwriting guidelines in relation to “recovery money” for the same period;

5. The defendant’s claims handling guidelines in relation to “recovery money” for the same period;

6. All documents including underwriting guidelines and claims handling guidelines relating to the change in definition of “heart attack” from 1 January 1996 to date;

7. All claim files in relation to claims accepted by the defendant for “heart attack” trauma benefits; and

8. All claim files under the associated “Protection First” range of policies in the same period.

8 This court has found over the ages that discovery and interrogatories can be employed even innocently to cause far too much expense and delay to proceedings, and can divert the focus away from the main issue in the proceedings.

9 Accordingly, the policy these days is that discovery is only to be ordered if it is reasonably necessary. Moreover, the court is bound to give attention to ss 56 to 60 of the Civil Procedure Act 2005.

10 Section 56 says:

“(1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.
(2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by the rules of court when it interprets any provision of this Act or of any such rule …".

11 Section 57 provides that the court in any case management exercise is to bear fully in mind the requirements of s 56.

12 Section 60 requires the court to take into account when there is any matter before it, that the cost to the parties is proportionate to the importance and complexity of the subject matter in dispute.

13 One would have thought that essentially when a person insures himself against having a heart attack whether he has had a heart attack or not is a matter of looking at the definition in the policy and applying it to the evidence both medical and lay. However, the plaintiff says in the instant case that that is a bit old-hat and that plaintiffs are entitled to litigate all issues and here there is more than that issue. There are the issues which are thrown up by paras 10 and 11 of the statement of claim and the plaintiff is entitled to litigate them all.

14 That, however, is no longer true and after s 56, the court must see that the real issue between the parties is focused upon. That is in my view whether the plaintiff has had a heart attack.

15 Now it may well be that that issue should be determined ahead of other issues so that paras 10 and 11 can be kept in reserve by the plaintiff, but it would not be appropriate in a claim for $750,000 to allow large sums of money to be spent on discovery and in preparation of the peripheral case and so extending the hearing time.

16 However, in this present case, even if that were wrong, the way in which para 10 is currently pleaded seems to focus on the defendant's failure, if it be a failure, to deal with what is a heart attack by applying contemporary tests. Rather it is said to apply some discredited test.

17 Now that appears to be the focus of para 10 but it is not the whole focus. However, on that focus, that very issue will have to come up in dealing with the principal matter, that is, whether the plaintiff suffered a heart attack, in which case (unless there is something special in the policy which does not appear to be the situation), the medical evidence will enable the court to make the determination one way or the other.

18 Accordingly, I am not satisfied that the matters which are sought in Kennedys’ letter of 5 March 2008 are reasonably necessary for the just, quick and cheap disposal of the proceedings and I decline to make the orders sought in the notice of motion which is dismissed with costs.

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