Guirgis v Westpac Life Insurance Services Ltd
[2014] VCC 2039
•19 December 2014
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CIVIL DIVISION | Revised Not Restricted Suitable for Publication |
COMMON LAW
GENERAL LIST
Case No. CI-13-00683
| THEREZE GUIRGIS | Plaintiff |
| v | |
| WESTPAC LIFE INSURANCE SERVICES LTD (ACN 003 149 157) | Defendant |
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JUDGE: | HIS HONOUR JUDGE DYER | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 30 May, 2, 3, 4, 5, 6, 10 and 11 June | |
DATE OF JUDGMENT: | 19 December 2014 | |
CASE MAY BE CITED AS: | Guirgis v Westpac Life Insurance Services Ltd | |
MEDIUM NEUTRAL CITATION: | [2014] VCC 2039 | |
REASONS FOR JUDGMENT
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Subject:INSURANCE
Catchwords: Income protection insurance – Duty of disclosure – Allegation of fraud – Meaning of sickness - Avoidance of the policy – Onus and burden of proof – Credit issues – Counter claim
Legislation Cited: Insurance Contracts Act 1984; Accident Compensation Act 1985
Cases Cited:Briginshaw v Briginshaw (1938) 60 CLR 336; Jones v Dunkel (1959) 101 CLR 298; Tyndall Life Insurance Co Ltd v Chisholm (2000) 11 ANZ Ins Cas 90–104; NRG Victory Australia Limited v Hudson (2004) 13 ANZ Ins Cas 90-121; Derry v Peek (1889) LR 14 App Cas 337; David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353; Jones v Dunkel (1959) 101 CLR 298
Judgment: Judgment for the plaintiff. Counterclaim dismissed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr A Donald | Maurice Blackburn |
| For the Defendant | Mr C Hanson | Sparke Helmore |
HIS HONOUR:
Introduction
1 Thereze Guirgis was working as a pharmacist in 2007. She and her husband Gemal Tadros had been living in rental accommodation for some years since arriving in Australia in 2003. In 2007 Ms Guirgis and her husband decided to buy a house, and approached the Westpac Banking Corporation to obtain a mortgage to allow them to purchase the home.
2 At around the same time, a representative of the defendant, Westpac Life Insurance Services Ltd (“Westpac”), met with her and her husband to assist in a review of their income protection insurance. Although there was considerable disagreement between the parties as to what went on between the plaintiff, her husband, and the representative of the defendant, there is no doubt that by mid-September 2007 the defendant had issued policies of income protection insurance to both the plaintiff and her husband.
3 All appeared well until October 2011 when the plaintiff submitted a claim, as she had reduced her working hours because of a fibromyalgia condition and shoulder pain. The defendant responded promptly, requesting some further information in order to assess the extent of any partial disability payments to be made under the policy. Ultimately this claim was overtaken by other events, with the defendant advising the plaintiff in December that no benefits would be paid, as her wages exceeded her pre-disability income for the period claimed. There was no suggestion of any avoidance of the policy at this time.
4 From late 2011 a “paper war” between the parties developed with the defendant making payments to the plaintiff for a period of one month’s partial disability and about five months’ total disability in April 2012.
5 The plaintiff had made a claim on her employer for workcover benefits in the meantime and had also advised Westpac on 11 April that the conditions producing her total disability had expanded to include “depressed mood”.
6 Westpac then advised Ms Guirgis in May that it proposed to avoid the policy subject to her having an opportunity to respond. It would appear she did not, and the defendant avoided the policy by letter dated 28 June 2012.
7 In this proceeding the plaintiff claims entitlement to a benefit under the defendant’s insurance policy as from 29 November 2011. The benefit claimed is determined in accordance with the policy, and is subject to indexation and other factors. The amount claimed by the plaintiff as from the commencement date of the period of total disablement was $6,053 per month.
8 The policy in dispute is one which would continue until the plaintiff reaches the age of sixty-five years, subject of course to the persistence of the relevant total disability. The monetary value for the plaintiff is therefore quite significant.
9 Westpac denies liability on two principal bases. First, it claims that there has been fraudulent non-disclosure and/or fraudulent misrepresentation by the plaintiff prior to the policy being issued to the plaintiff. Alternatively, it says that the condition said to produce total disablement is in fact a pre-existing illness or ailment and is not covered by the definition of “sickness” in the policy itself; therefore, the policy simply does not respond to the plaintiff’s condition.
10 The defendant also counter-claims in respect of benefits that were paid to the plaintiff in respect of payments made to her between 8 November 2011 and 20 April 2012. These payments related mainly to periods of partial and/or total disability commencing in April 2011. The amount claimed in the counter-claim was in the order of $34,000.
11 The trial involved a considerable body of evidence called both from lay and expert witnesses. In addition, a large number of exhibits were tendered.
12 Mr Hanson, who appeared for the defendant, accepted that his client carried the onus to prove fraudulent misrepresentation or non-disclosure prior to the policy being issued, and accepted that the standard of the proof required would be in accordance with the Briginshaw test.[1]
[1]Briginshaw v Briginshaw (1938) 60 CLR 336
13 Mr Hanson also indicated at the opening of the case that there would be no medical evidence called by the defendant challenging the current level of disability afflicting the plaintiff. It was essentially an all or nothing case.[2]
[2]Transcript (“T”) 6, Line (“L”) 4–14
The Evidence
14 Ms Guirgis gave evidence, as did her husband, Gemal Tadros. She relied additionally upon medical evidence led from her treating psychiatrist, Dr Hogan; a treating rheumatologist, Professor Littlejohn, and her treating general practitioner, Dr Fouad Dawood.
15 The defendant called evidence from Mr Ivo Janjis, an underwriter; Mr Tony Kinivan, a financial adviser; and two treating doctors who attended the plaintiff prior to the commencement of the insurance policy. Dr Marie Feletar, a rheumatologist, had seen Ms Guirgis on referral from a general practitioner on three occasions between July 2006 and March 2007. The other doctor called was Dr Andrew Gibson, also a rheumatologist, to whom the plaintiff was referred in February 2007. He investigated her condition and saw her on two further occasions in July and October of that year.
16 In addition to the oral evidence that was called, the parties each tendered a large number of exhibits to which I will refer in the course of these reasons.
17 Ms Guirgis gave evidence over some three sitting days. Given the nature of the defence relied upon, she was quite extensively cross-examined by Mr Hanson. Without going into unnecessary detail, I regarded the following matters as relevant from her evidence-in-chief:
·In late 2006 or early 2007, Ms Guirgis, a pharmacist, and her husband, (described as an accountant), had decided to buy a house because of an increase in the rental in the house in which they were living in Templestowe.
·Her husband had dealings with the Westpac Bank and arrangements were made for them to borrow $495,000 to assist in the purchase.
·The plaintiff was working at a pharmacy and would finish work every day around 7.00 or 8.00pm. Her husband was working as a night manager and night auditor at a hotel at that time.
·Her husband told her that someone from the bank to discuss a new insurance product and had arranged for someone to visit at their home.
·The plaintiff gave evidence that a Mr Tony Kinivan visited them at Foote Street, Templestowe, first on 2 August 2007 and again on 3 and 9 August.
·Mr Kinivan came to see them on his way home and met with she and her husband in the dining room on the first occasion.
·The discussions concerned a new insurance policy to provide an extension of benefit from five years to aged sixty-five with a “buy back” option. The plaintiff stated this was described as a new product. The plaintiff evidence was that Mr Kinivan had told her that with her wages increasing between 2003 and 2007, she was:
“… eligible to take the total and permanent disability policy until the age of sixty-five rather than just for five years.”[3]
[3]Transcript (“T”) 63, L2-5
·At that first meeting, the plaintiff stated she and her husband had:
“… signed the buy back for both of us and we’ve signed on that day, I believe – we’ve signed one form. I think it was the buy back and the extension of my cover. And he said that he’s going to come back again for other forms to be filled out.”[4]
·At that first meeting, the plaintiff was advised that the new policy would pay a benefit of $5,380 per month, as against $4,619 with her then current arrangements.
·Mr Kinivan did not take the plaintiff through any lengthy documents:
“Most of it, I didn’t see because it – most of the pages were crossed. I've seen only this one, which is the amount of money that I have to agree that I will be able to pay later.”[5]
“The first meeting took maybe 45 minutes, an hour max.”[6]
·The plaintiff was shown Exhibit A, an application for Westpac protection plans and this was tendered in evidence. She agreed that she believed the bank was giving her a good deal with the increased coverage:
“It seemed to be the better coverage if you had to pay off the mortgage in the longer term – yes.”[7]
·No medical history was taken from the plaintiff or her husband at the first meeting and no additional paperwork was left. Ms Guirgis denied specifically any product disclosure statement or policy wordings being left with her.
[4]T63, L7-11
[5]T65, L4-7
[6]T65, L14-15
[7]T67, L13-15
18 Her evidence continued, describing a visit by Mr Kinivan on the evening of 3 August 2007. She was taken to documents which were later tendered as Exhibit B. She agreed that she had signed this document on 3 August when her husband and Mr Kinivan were present at her home. She gave further evidence in relation to that meeting, stating:
“I advised Tony at the beginning that I've seen a doctor on 25/7 and I told him that I did a full blood test and I did investigations and a few tests and I asked him two questions because some of the form, there were, like, dates that I had to fill in and I advised him that, ‘I'm not going to remember the dates exactly’. He said, ‘Okay put roughly the dates that you are going to remember and explain whatever you know’ because at the same time we are going to sign for my authority to the doctors to get a feedback – not a feedback, a full report from the doctors.”[8]
[8]T70, L12-22
19 Ms Guirgis identified sections of the quite lengthy document which had been completed by her.
20 Ms Guirgis gave evidence about medical treatment she had received. I noted in particular:
·She had first seen Dr Fouad Dawood in 2003 as a family doctor.
·She had had a colonoscopy in 2004. The colonoscopy was normal.
·She may have had a further colonoscopy “last year”.[9]
·She had muscle pain in her left arm, chest wall and neck and was referred to Dr Gibson, rheumatologist.
·She had seen Dr Feletar, another rheumatologist, in relation to a localised pain in her shoulder. She was referred by Dr Nofreet Dawood, the mother of her usual general practitioner.
·She was first aware of shoulder pain in about 2004 and saw Dr Feletar in approximately 2006.
[9]T77, L9-11
21 The evidence concerning the completion of the documents continued . The plaintiff was shown further documentation (Exhibit C) which was an 11 page document, perhaps inappropriately entitled “Short Form Application – Westpac Protection Plans”. This document had been signed by both the plaintiff and her husband on 9 August 2007 and witnessed by Mr Kinivan on the same date.
22 Ms Guirgis’s evidence identified documents which were tendered as Exhibits D and E, being policy schedules to both the income protection and term life policies provided under covering letters dated 17 September 2007.
23 In December 2007, Ms Guirgis changed her employment to the Roxburgh Park Pharmacy. She described the work as busy and involving quite long hours. She was managing the pharmacy including its staff and the dispensary. She ordinarily worked Monday to Thursday from 9.00am until 7.00pm on the first three days, and working until 9.00pm on the Thursday. She would have Friday, Saturday and Sunday off “unless I have to cover someone”.[10] She described the nature of that work in considerable detail.
[10]T93, L17-22
24 I regarded her evidence concerning the security aspects of the work involving her responsibility as a managing pharmacist and the clientele of the pharmacy including persons requiring Methadone prescriptions as significant. There were also some difficulties with staff members who were difficult to manage.
25 By mid-2008, Ms Guirgis had become “very stressed, I was very down”.[11] Dr Fouad Dawood was still her general practitioner and sent her to see Dr Geoffrey Littlejohn, a rheumatologist, in the second half of 2008.
[11]T102, L15-16
·She was complaining of aches and pains when she first saw Dr Littlejohn. She believes it was October 2008. She was told by him:
“I have fibromyalgia which is … it can get like worse by my long hours and my lifestyle, which is I'm working too hard. … he prescribed me a medication called Cymbalta, a very low dose.”[12]
Dr Littlejohn was the first doctor to tell her that she had a diagnosis of fibromyalgia.
·The plaintiff believed she was referred to Dr Littlejohn:
“… because I had like problems with my shoulders. Right one was okay but the left one was persistent … the pain is spreading to the neck and back over my shoulder. And I think at that time I had lower back pain as well and some aches and pains.”[13]
[12]T104, L14-20
[13]T106, L11-18
26 Ms Guirgis described that she was following the treatment given by Dr Littlejohn until the end of 2011. She had taken some brief time off work in 2008 and then returned to the pharmacy. She had taken a holiday for about a month to Egypt.
·In 2010:
“I was getting worse, like my left shoulder was getting worse and I had a problem with a swollen leg.”[14]
·Ms Guirgis described her sleep as very, very bad by 2009. She also described her general mood as being very down.
[14]T110, L18-25
27 By 2010 Ms Guirgis was having difficulties with stock control and general staff behaviour at the pharmacy. This continued into 2011. She had a legal and ethical responsibility to call the pharmacy owner and report drug discrepancies to him. She did not believe she was supported by the pharmacy owner in dealing with staff. She noticed this particularly after returning to work following her annual leave at the end of 2010. In 2011 she suspected two staff members of stealing drugs of addiction medication.
28 In 2011 she was suffering frequent nightmares and in the morning would not be able to get up and go to work. She described a particular event occurring on 4 November 2011. This caused her to go home and she was affected over the weekend. She suffered another anxiety attack about ten days later at the pharmacy which resulted in her being taken in a wheelchair to the medical clinic where she had a ECG performed. By that time, she had informed the owner that she could not go on and was intending to cease work at the end of the year.
29 Ms Guirgis gave evidence about claims made in relation to her income protection policy. The first was when she telephoned the bank and spoke to a person identified as “Everett”. She believed this was in April 2011. The substance of the conversation was that the plaintiff told Everett she was going to reduce her working hours by ten and
“I want to make sure that I will be covered.”
The reply was,
“Nil, your policy is not covering you for reducing hours.”[15]
[15]T126, L23-26
30 She related this initial claim to the problems with her leg swelling when she was under the care of Dr Littlejohn.
31 Between April and October 2011, Ms Guirgis did actually reduce her hours and was working a total of 30 to 32 hours per week.
32 Ms Guirgis described giving formal notice of her claim for income protection:
“Actually in October my husband is the one who called the bank and he asked for the head of the department on this.”[16]
[16]T128, L9-13
33 A document dated 7 October 2011, being the first notice of claim, was tendered as Exhibit F in the proceeding. That notice of claim described the fibromyalgia condition and was in relation to the reduction of hours.
34 Correspondence was received by Ms Guirgis from the insurer in a letter dated 20 October 2011 tendered as part of Exhibit G. This requested the completion of a claim for continuing benefits form, the provision of a medical attendance statement and various documents relating to Ms Guirgis’s earnings.
35 The plaintiff responded faxing some 31 pages of material to Everett on 29 October 2011. This was also part of Exhibit G.
36 Mr Everett Milton, on behalf of the defendant, wrote again to the plaintiff on 9 November 2011. This was a detailed letter admitting Ms Guirgis’s income protection claim backdated to 7 March 2011. The letter set out the calculations which had been made and included a payment for partial disability and a re-crediting of premiums paid during that period of partial disability. This was tendered as Exhibit H. The correspondence was copied to Mr Tony Kinivan by email.
37 The next document identified was a medical attendance statement completed by Dr F Dawood on 25 November 2011. This was accompanied by two further payslips provided by the plaintiff. Those documents were tendered as Exhibit J.
38 On 9 December 2011 the insurer wrote to the plaintiff advising:
“No benefit payable as wages earned exceeded pre-disability income.”
This document was tendered as Exhibit K.
39 After receiving that letter from the defendant, it is apparent that Ms Guirgis completed a claim for compensation under the provisions of the Accident Compensation Act 1985. The claim was rejected. Exhibit L, a bundle of documents from Gallagher Bassett dated 24 January 2012, makes reference to
“… your claim for compensation (weekly payments and medical and like expenses) dated 14 December 2011.”[17]
[17]Defendant’s Court Book (‘DCB”) 430
40 For completeness, it should be noted that the letter from Gallagher Bassett rejected the plaintiff’s claim for accident compensation referring particularly to the often troublesome s82(2A).
41 The plaintiff’s focus returned to her claim with Westpac. She then identified in evidence a further letter from Mr Milton dated 9 February 2012 advising of a payment made under the policy for partial disability between 6 November 2011 and 5 December 2011. This letter was tendered as Exhibit M.
42 Exhibit N was a further medical attendant’s statement signed by Dr F Dawood on 23 March 2012. This document made specific reference to “major depressive disorder” and noted a referral of Ms Guirgis to the psychiatrist, Dr Hogan. It also referred to the fibromyalgia condition.
43 On 20 April 2012 Mr Milton again wrote to the plaintiff on this occasion advising payment of a total disability benefit totalling $24,215 for the period 6 December 2011 to 5 April 2012. It was clear from that correspondence that Mr Milton had received a copy of the worker’s compensation letter in addition to the claim form, payslips and medical attendance statement.
44 On 15 May 2012 Mr Milton again wrote to the plaintiff, on this occasion advising that the defendant did not accept liability for the claim:
“… because your claimed condition does not satisfy the policy meaning of ‘sickness’.”[18]
[18]Exhibit P DCB 449
45 The letter was quite detailed, set out the basis for the decision being taken and provided Ms Guirgis with an opportunity to respond. It also cautioned that the insurance contract could be avoided from inception by the insurer in certain circumstances.[19]
[19]Exhibit P DCB 452
46 On 28 June 2012 Mr Milton wrote again to the plaintiff advising that the defendant had avoided the policy in accordance with s29(2) of the Insurance Contracts Act 1984 (Cth) (“ICA”).
47 The plaintiff’s evidence continued describing her referral to Dr Hogan, the psychiatrist, and her ongoing treatment. Of significance in this regard was the plaintiff’s evidence that she had had no previous psychiatric history prior to the events in 2011 leading to the anxiety attack.[20] There was no challenge to the fact that she continued to suffer symptoms of anxiety, depression and stress and had not been able to return to employment.
[20]T151, L8-12
48 Ms Guirgis was cross-examined in some detail by Mr Hanson. It was not surprising, given the nature of the defence taken, that much of the cross-examination focussed on the plaintiff’s knowledge of her pre-existing medical conditions prior to August 2007. I noted the following matters as relevant to that aspect of the cross-examination:
·The plaintiff attended the Dandenong Hospital in April 2003 with an irritability of the bowel described as Irritable Bowel Syndrome (“IBS”). She was provided with medication.
·She told the attending medical officer that she had a 20 year history of IBS.[21]
[21]T180, L17-18
·In September 2003, the plaintiff attended Dr Fouad Dawood for the first time. He performed tests including a CT scan of the low back and an echocardiogram (“ECG”). She was then referred to Dr Rasaratnam.
·On 11 December 2003, Dr Rasaratnam reported to Dr Dawood:
“She presents with a long standing history of chronic IBS symptoms.”
The plaintiff agreed with this history and the fact of having such symptoms.[22]
[22]T194, L21-25 and Exhibit 2
·Dr Rasaratnam arranged for the plaintiff to have a colonoscopy in April 2004.[23]
[23]T196, L15-30
·The plaintiff agreed that the results of the colonoscopy confirmed that she had IBS in April 2004.[24]
[24]T203, L20-26 and Exhibit 3
·When further questioned about the admission to Dandenong Hospital in April 2003, the plaintiff could not remember spending the night in the hospital and had earlier given evidence that she went home after a few hours. The hospital records that were tendered record an attendance at 21.25 hours and a discharge at 11.50 hours on the following day.[25]
[25]Exhibit 5 and T240, L22-29
·The plaintiff did not recall any discussion with Dr Dawood in August 2004 about fibromyalgia. The clinical notes on 16 August 2004 recorded:
“Reason for visit ? fibromyalgia.”[26]
[26]T242, L8-14
·On 30 October 2004, the plaintiff completed a proposal for insurance with the defendant in relation to an earlier policy and had responded negatively to a question as to whether she had previously suffered from fibromyalgia. The document disclosed Dr Fouad Dawood as her treating doctor as from March 2003. The plaintiff did not agree that what she had put in the document was incorrect.[27]
[27]T248, L11-28
·In early 2005, Ms Guirgis went to Dr Dawood with localised pain in her left shoulder.[28]
[28]T253, L5-30
·She had an injection of hydrocortisone and local anaesthetic in December 2005 in the left shoulder.[29]
[29]T254, L23-25
·Ms Guirgis agreed that the left shoulder had improved by December 2005 but agreed she had been referred to Mr Danny Chan, an eye and ear specialist for dizziness in December 2005.[30]
[30]T255, L4-14
·In May 2006 Ms Guirgis was referred to Dr Colin Little for allergy or rhinitis.[31]
[31]T258, L5-15
·In June 2006 Ms Guirgis was referred by Dr Nofreet Dawood to Dr Marie Feletar, rheumatologist. She saw Dr Feletar a few times in 2006 in relation to the pain in her shoulder.[32]
[32]T258, L16-27 and Exhibits 6, 7 and 8
·When she saw Dr Feletar, Ms Guirgis had right shoulder impingement symptoms.[33] (The letters passing between Dr N Dawood and Dr Feletar were tendered for identification as Exhibits 6 and 7.)
[33]T260, L4-11
·The treatment from Dr Feletar included an injection into the right shoulder and a referral for physiotherapy so that the plaintiff was able to elevate and rotate her arm normally, and
“So I was a hundred per cent back to normal after the physio.”[34]
[34]T261, L21-24
·Dr Feletar also injected the left shoulder which had previously been injected by Dr Dawood in 2005.[35] (At this stage, a further letter from Dr Feletar to Dr Dawood dated 13 July 2006 was tendered for identification as Exhibit 8.)
[35]T262, L6-10
·The plaintiff was referred to Dr Colin Little, allergist, in October 2006. At that time she denied having irritable bowel syndrome every day.
“It will come and go, depends on what I eat, but not every day.”[36]
[36]T263, L24-25
·Ms Guirgis returned to Dr Feletar in March 2007 for either tendonitis or bursitis in one of her shoulders. She denied Dr Feletar had spoken to her about fibromyalgia.[37] (At this stage a report from Dr Little to Dr Dawood dated 3 October 2006 was tendered for identification as Exhibit 9. Additionally, Dr Feletar’s letter to Dr Dawood of 22 March 2007 was tendered for identification as Exhibit 10.)
[37]T265, L24-29
·The plaintiff denied that in May 2007, Dr Fouad Dawood had referred her for a mental health plan.[38]
[38]T266, L28 – T267, L14
·The plaintiff agreed she was referred to Dr Stephen Hall, rheumatologist, around that time.[39]
[39]T308, L24-31
·The plaintiff did not see Dr Hall but saw Dr Andrew Gibson, another rheumatologist, in June 2007.[40] She again denied being informed of any mental health plan in or around May 2007. She also denied any knowledge of a mental health plan in 2012. (A letter from Dr F Dawood to Dr J Cygler dated 25 May 2012 enclosing mental health plan dated 2 May 2007 was tendered for identification as Exhibit 12.)
[40]T310, L23-25
·The plaintiff agreed she had been told about fibromyalgia around 2008.[41]
[41]T311, L13-18
·When Ms Guirgis saw Dr Gibson, she was concerned about other diagnoses, especially cancer and Lupus causing symptoms.[42] (Dr Gibson’s letter dated Dr N Dawood dated 13 June 2007 was tendered as Exhibit 13 for identification.)
·In July 2007 the plaintiff was referred to Dr Trevor Gin for episodes of blurred vision.[43] (The report of Dr Gin to Mr William Law dated 5 July 2007 was tendered as Exhibit 14 for identification.)
·The plaintiff returned to see Dr Gibson to check her blood test results on 25 July 2007.[44] She was told her Vitamin D was very low and her iron levels were slightly low.
·The plaintiff saw Dr Gibson again in October 2007:
“I was better at that time, yes.”[45]
She was offered cortisone injections but refused because:
“It helped me maybe 30, 40, 50 per cent plus the physio but other than that it’s not something I'm going to be on all my life.”[46]
(Further letters from Dr Gibson to Dr N Dawood between August and October 2007 were tendered as Exhibit 13 for identification.)
·Ms Guirgis agreed that she was first diagnosed with fibromyalgia by Dr Littlejohn in October 2008.[47]
[42]T314, L2-4
[43]T316, L13-18
[44]T317, L19-21
[45]T319, L19
[46]T320, L14-16
[47]T321, L27-29
49 The cross-examination of Ms Guirgis turned to the meetings with Mr Kinivan prior to the commencement of the insurance agreement. On this topic, the following matters were noted by me:
·Ms Guirgis did not recall seeing Mr Kinivan on 4 July or receiving a:
“Westpac Financial Services Guide on that date.”[48]
[48]T325, L25-31 and T326, L1-4
·Ms Guirgis denied it was 4 July that Mr Kinivan sat down and filled out a client profile with her but maintained this occurred on 2 August.[49]
[49]T326, L27-30
·Ms Guirgis disagreed with propositions that Mr Kinivan had first attended on 4 July 2007, returned on 11 July and completed his meetings with the plaintiff and her husband on 9 August 2007, when a number of documents were signed. Ms Guirgis disagreed with this proposition and repeated that Mr Kinivan had been there on 2, 3 and 9 August.[50]
[50]T339, L23-26
·Ms Guirgis could not recall receiving a document entitled “Westpac Financial Services Guide” on 4 July 2007.[51]
[51]T332, L20-26
·The plaintiff denied that in July 2007 she still had widespread pain as noted by Dr Gibson in June 2007.[52]
·When completing the insurance documentation she had answered “no” to questions about “hernia, intestinal, bowel disorder” because she did not consider irritable bowel syndrome to be a bowel disorder. Additionally, in answering “no” to questions concerning “chronic pain syndrome or fibromyalgia”, she had answered in that manner because no one had told her at that time she had fibromyalgia.[53]
·She agreed to question 8 she had answered “yes” to questions about shoulder pain but also added that the degree of recovery was 100 per cent.[54]
·In relation to question concerning “full details of investigations and treatment” she had written “Dr Fouad Dawood” but not Dr Feletar.[55]
·Ms Guirgis denied a suggestion that she had completed this documentation to put herself in the most favourable light and maintained she had completed it to the best of her knowledge and signed a consent to get the full history from her doctors.[56]
·There was extensive further cross-examination about apparent failures by Ms Guirgis to mention aspects of her medical history and treatment in the completion of this documentation. She maintained she had completed the documentation information about her health in the same way as she gave information about her wages.[57]
·She was further cross-examined particularly in relation to the irritable bowel problem predating the insurance contract and repeated that she had completed the personal statement while Mr Kinivan was at her home and it took roughly an hour:
“An hour or more than an hour, I can’t remember exactly.”[58]
·She denied the proposition that Mr Kinivan had left her the form to complete.
[52]T341, L3-30
[53]T342, L23-31
[54]T343, L1-18
[55]T344, L5-28
[56]T424, L17-23
[57]T432, L12 – T433, L2
[58]T439, L1-4
50 Ms Guirgis was cross-examined about the WorkCover claim she had completed. She agreed it was initially rejected but was subsequently paid after she went to a Medical Panel.
51 The cross-examination continued in relation to financial matters with the plaintiff’s tax returns for the years ended 30 June 2011 to 30 June 2013 being tendered as Exhibits 16, 17 and 18.
52 In relation to financial matters, I regarded the following cross-examination as relevant.
·In the 2013 tax year, Ms Guirgis had received $76,820 from Gallagher Bassett, the WorkCover insurer.[59]
·Ms Guirgis maintained she was completely unable to work but had a registered business name “Thereze’s HMR (Home Medicine Review)” which was operated with other pharmacists as consultants.[60]
·The business income for HMR in 2013 was $76,694.[61]
·She had mentioned the business to Dr Hogan and Dr Fouad Dawood and to the bank and the WorkCover insurer.
“They both know that I have this business, but I can’t do it.”[62]
·She disagreed that this business was building up:
“I think it’s gone down, I think.”[63]
·She has continued her registration with the Pharmacy Board up until the date of hearing.[64]
·She was no longer receiving WorkCover payments.[65]
[59]T448, L28-31
[60]T449, L3-26
[61]T450, L10-11
[62]T451, L11-25
[63]T452, L26-28
[64]T454, L6-10
[65]T454, L11-12
53 When re-examined, the following matters were noted:
·After seeing Dr Gibson on 25 July 2007, Ms Guirgis was asked to return for a review in three months and not prescribed any medication.[66]
·When she saw Dr Gibson in October 2007, she was told she had to leave work and do exercise otherwise she will have capsulitis. She was offered an injection in one of her shoulders.[67] After October 2007, Dr Gibson made no further appointment.[68]
·When she saw Professor Littlejohn in 2008 the pain was worse.[69]
[66]T456, L22-30
[67]T457, L16-20
[68]T458, L6-10
[69]T458, L11-13
54 Ms Guirgis’s husband, Gemal Tadros, gave evidence. He described applying for a loan to buy a home in October 2007, stating that he had preapproval from the Westpac Bank for a housing loan. He described having insurance arranged through Westpac in 2004 when he and his wife were living in Rowville. His usual bank branch was in Rowville but when he and his wife moved to Templestowe the nearest branch was at The Pines.
55 He received a call regarding insurance from “Tony” who asked to meet with Mr Tadros and his wife to do a review of the policy. Mr Tadros initially went to the bank himself as he was free in the morning and was asked to come in with his wife.
56 Mr Tadros gave evidence that there were three meetings with Tony; the first on 2 August 2007 and:
“He came back the next day as well. So he came two days in a row, and a week after.”[70]
[70]T490, L6-8
57 At the first meeting Tony described a new product known as a “Payback” and said the insurance for his wife could be extended from five years to age sixty-five.
58 Mr Tadros described the first meeting as occurring in the evening at the dinner table at their home. He agreed to various signatures on the documents that were prepared including a credit card authorisation which was given on 9 August. He described the timing of the meeting on 2 August as:
“… nearly over half an hour until Thereze came, then we sit together at least over an hour.”[71]
[71]T497, L12-15
59 Mr Tadros stated that the proposed insurance was income protection for Thereze, joint life insurance for both he and his wife and trauma insurance for himself.
60 The meeting held on 3 August was to finish what was left over from the previous day and concluded with Tony taking the forms and stating:
“We will call you later.”[72]
[72]T501, L19-22
61 Mr Tadros identified his signature where it appeared on the relevant documents. He also identified parts of the documents that had been completed by his wife and areas containing strike throughs which he stated had been completed by Tony. Of some significance was Mr Tadros’s evidence that he had written in “Dr Andrew Gibson” in one of the documents requesting details of his wife’s treating medical practitioners.[73] He denied that he had heard Tony say anything to either his wife or himself about disclosure.[74]
[73]T505, L7-21
[74]T506, L3-6
62 Mr Tadros gave evidence about the meeting on 9 August and agreed he had signed documents including credit card authorities. The meeting concluded as follows:
“Just Tony took the paperwork with him and he told me ‘I will be in touch and will send you a copy or I will drop it in your mail box’.”[75]
[75]T511 L8-11
63 Mr Tadros gave evidence that he believed the insurance arranged through Tony had remained in place since 2007.
64 Mr Tadros was cross-examined. I noted the following matters as relevant:
·He did not recall Tony coming on 4 July 2007 or giving him or Ms Guirgis a Westpac Financial Services Guide on that date.[76]
[76]T523, L12-18
·When shown a document described as “Customer Acknowledgment” and signed by him on 4/7/07, he agreed that it was his signature. This document was tendered as Exhibit 20.
·He agreed that when having the home loan preapproved at the Westpac branch, there had probably been discussion about someone coming to discuss insurance.[77]
·In relation to evidence that would be given by Mr Kinivan regarding an analysis on 5 July, Mr Tadros stated that he remember:
“Mr Tony, we had a discussion over the phone together and then, and when he introduced himself he says, ‘There’s something new on the market and this is what we call payback and we can do something about Thereze’ and we discussed everything.”[78]
·He denied receiving any disclosure booklet from the bank or from Tony at the second meeting said to be 11 July.[79]
·Mr Tadros disagreed that Tony had made phone calls to the home on a number of occasions including 16 July:
“… because he hasn’t been in our house in July.”[80]
·Mr Tadros disagreed with suggestions that further calls of the same nature had been made on 23 July, 26 July, 30 July and 8 August inquiring:
“How are you going with the documents?”[81]
·He agreed that after the meeting on 9 August, he had received a further call from Tony and had to attend at Tony’s office to provide details of his height and weight.[82] This further document dated 13 August 2007 was tendered as Exhibit 21.
[77]T526, L1-9
[78]T528, L25-29
[79]T529, L13-18
[80]T533, L3-8
[81]T533, L9-13
[82]T537, L12-26
65 There was some re-examination of Mr Tadros concerning the contents of the documents. The matters raised are largely answered in the documents themselves.
66 Dr Hogan, psychiatrist, was the only other witness called on behalf of the plaintiff. He had first seen Ms Guirgis on 22 December 2011 on the referral of Dr Fouad Dawood. He was continuing to treat her and had provided a written report in January 2014 diagnosing the plaintiff as:
“… suffering from a chronic pain syndrome, fibromyalgia, and a Major Depressive Disorder attributable to work stresses.”[83]
[83]T212, L11-17
He had prepared some six reports which were tendered as Exhibit R.
· When cross-examined, I noted the following matters as relevant. Prescribed drugs in 2004 including Lovan were prescribed at a sub-therapeutic dosage with respect to:
“a genuine Major Depressive Disorder.”[84]
·By August 2012 Ms Guirgis was suffering from both a Major Depressive Disorder and chronic pain which were both contributing to her inability to work.[85]
·He did not believe he had been informed that Ms Guirgis was in business on her own account in 2012 or 2013. He did not think this was ever actually implemented. It would be a significant piece of information.[86]
·The gross business income of $77,000 in 2012/2013 would be surprising.
·Notwithstanding the general attack on the credibility of Ms Guirgis as a historian, it was not suggested to Dr Hogan that the plaintiff had a capacity to return to full time work.
[84]T221, L15-28
[85]T226, L12-16
[86]T229, L10-19
67 Dr Fouad Dawood, Dr Marie Feletar and Dr Andrew Gibson were all called to give evidence concerning the consultations they had had with Ms Guirgis over the years prior to the commencement of the relevant insurance contract in mid-2007. These witnesses were all called on behalf of the defendant. There is little point in canvassing the records maintained by them, as they were all quite properly put to Ms Guirgis when she was extensively cross-examined. Documents tendered for identification were tendered absolutely through these witnesses.
68 Professor Littlejohn had first treated the plaintiff in October 2008. He had diagnosed her suffering from fibromyalgia which he described as:
“It’s a standard medical term to describe a clinical condition with characteristic features and we call that fibromyalgia … that’s its core feature is widespread muscle pain.”[87]
[87]T272, L23 - 27
69 His six medical reports prepared between 1 October 2008 to 19 January 2011 together with a report of an MRI scan of the lumbar spine taken in July 2010 were tendered as Exhibit S.
70 In cross-examination he agreed that he had seen Ms Guirgis at the request of Dr Fouad Dawood and noted a referral letter dated 20 June 2008 which was tendered as Exhibit 11. This letter advised:
“Ms Guirgis has been diagnosed with fibromyalgia by a rheumatologist.”[88]
[88]T273, L29-30
71 He further agreed that his opinion had been sought in relation to a confirmation of that diagnosis. He described the condition as:
“It’s usually a stress related condition which causes amplification of the pain pathways, which then results in a pain process being activated within the body. It has a correlation with stress.”[89]
[89]T275, L26-30
72 The defendant called two lay witnesses, Mr Tony Kinivan, financial adviser, and Mr Ivo Janjis, underwriter.
73 Mr Kinivan had been a financial adviser for 13 years and was employed by the Westpac Banking Corporation until January 2012. His first involvement with Mr Tadros and later Ms Guirgis came from an “opportunity detail” dated 26 June 2007. This was tendered as Exhibit 22. On this document, Mr Kinivan had noted the following:
“27/6/07: Wants to review current joint policy and wife needs to top up her IP and possibly decrease waiting period.”[90]
[90]Exhibit 22
74 Mr Kinivan described meeting Ms Guirgis and her husband on three occasions and his description of the meetings was impressive. Mr Kinivan had prepared a statement of advice dated 11 July 2007 and identifying Ms Guirgis and her husband. This was a 19 page document and was quite thorough in terms of the requested review of insurance needs. It was tendered as Exhibit 26. Mr Kinivan’s actual business diary for the calendar year 2007 was also tendered.
75 In the course of his evidence, Mr Kinivan was shown Exhibit A, being the application for Westpac protection plans and was asked to describe its relationship with the product disclosure statement. He described this as a tear out section.[91] Mr Kinivan also described the manner in which the personal statement (Exhibit B) was completed. His evidence was that the document would have been provided at the first visit:
“It is common practice for me to provide the personal statement to clients on the first appointment if they were likely to go ahead and, given they already had a current policy and were wanting to increase it, it was reasonable that they would be going ahead.”[92]
[91]T628, L16-25
[92]T631, L3-10
76 Mr Kinivan’s original business diary for the 2007 year was tendered as Exhibit 24. Having had the opportunity to review that document, I am more confident in accepting the accuracy of Mr Kinivan’s evidence regarding dates and the sequence of events leading up to the application for insurance being lodged with Westpac.
77 Mr Kinivan’s evidence also assisted in explaining the process whereby the proposal completed with Mr Kinivan’s assistance would actually be underwritten. Exhibit 25 was an intranet printout identifying Ms Guirgis and noting on 14/9/07:
“Borderline standard rates (plus 50% waived).”
This entry also identified Ivo Janjis.
78 Mr Kinivan was cross-examined. I noted the following matters as relevant:
·The final meeting with the plaintiff and her husband was on 9 August at their home.[93]
[93]T646, L16-22
·At the time of the first meeting, he did not know Ms Guirgis was a pharmacist.[94]
[94]T647, L2-6
·The first meeting was gathering information to then provide a statement of advice.[95]
[95]T650, L3-7
·It was highly probable that Mr Kinivan left the medical questionnaire because:
“They’ve already got cover with Westpac and it was just topping it up.”[96]
[96]T651, L30 – T652, L1
·In relation to the medical questionnaire, Mr Kinivan agreed that he had crossed through parts that were irrelevant.
·At the second meeting Ms Guirgis and Mr Tadros were working through the form together. There were also other forms being completed at the same time:
“It’s highly likely that I did read to check to see if there was stuff missing.”[97]
“The practice is to look for omissions in the document, so things that weren’t completed.”[98]
·He agreed that either he or his assistant had access to Westpac standard rates which would be used to prepare the financial advice proposal.
·He agreed with the proposition that the form completed by Ms Guirgis on 9 August 2007 alerted him probably to the fact that Dr Gibson was most likely a specialist practising with rooms at Cabrini Hospital.[99]
·He denied the suggestion that at no stage did he leave a copy of the policy wording or the product disclosure statement with Ms Guirgis or Mr Tadros at any of their three meetings.[100]
·He is based in Sydney and had been an underwriter for 13 or 14 years. He had previously worked for about six years with CommInsure also an underwriter. He had performed what was described as a “blind underwrite”:
“I don’t recall underwriting the application that many years ago, and obviously a claim has sort of come in and some evidence was presented that wasn’t initially presented to me when I initially underwrote the application, and I was asked for my opinion based on that evidence whether I would have offered cover or not.”[101]
[97]T653, L18-19
[98]T655, L2-4
[99]T659, L6-31
[100]T663, L30 – T664, L2
[101]T546, L1-6
79 Mr Janjis’s position as an underwriter was that he would either recommend that the policy be underwritten or not underwritten, or done on special terms.
80 Mr Janjis’s evidence was that when he received the summary of a person’s medical history, if there had been a history of IBS:
“I would have asked for further information”[102]
“This information would have been initially comments on the application and then I would request a doctor’s report.”[103]
[102]T547, L21-28
[103]T547, L29-31
81 Mr Janjis referred to:
“… mostly following guidelines set by the company… If someone had a serious heart complaint or life threatening disease, they are not an ideal candidate for TPD insurance … or life insurance.”[104]
[104]T549, L20-27
82 His evidence continued:
·If he had been told of an episode of IBS in April 2003 requiring hospital admittance, that would have absolutely been of significance to him:
“Well it’s a bit more than just a GP visit. So the severity would have indicated to me that it was a lot more severe than just having to go to a GP.”[105]
[105]T550, L11-13
“A confirmed diagnosis basically we are able to either offer insurance or deny insurance.”[106]
[106]T550, L29-31
·In relation to the question concerning “repetitive strain injury, chronic fatigue syndrome … or fibromyalgia” a “Yes” ticked on the form would have had significance for him:
“Fibromyalgia is an extremely debilitating disease, and under our guidelines at the time we wouldn’t have offered insurance.”[107]
[107]T551, L22-30
·If Mr Janjis had been told there had been consultations in June and July 2007 with separate rheumatologists he would have requested a report to confirm the diagnosis, if in fact it was a diagnosis of fibromyalgia.[108]
[108]T552, L6-11
·In relation to shoulder pain, if information had been given of injections in both left and right shoulders in mid-2006, Mr Janjis would be looking to see whether there has been a full recovery or not.[109]
[109]T553, L25-30
·If there had been a tick against fibromyalgia, Mr Janjis would have to investigate it by way of getting doctors’ reports from the relevant doctors but the first course of action is always going to the general practitioner.[110]
·If there had been a referral to a specialist, he would go to the specialist if the general practitioner’s report did not provide that information.[111]
·If he had been told that the person seeking insurance had fibromyalgia, he would have declined the application.[112]
·He would not have offered insurance to anyone that was on medicated treatment for depression.[113]
·A disclosure of the use of Lexapro for two to three months in the past would result in cover not being offered:
“if she was on treatment for depression.”[114]
·Episodes of blurred vision, vertigo and a long term history of fatigue would also be of relevance.[115]
·His evidence concerning a mental health plan was that it:
“… would suggest that it was a lot more – it was a fairly sort of chronic condition for which she needed to be treated on a long term basis.”[116]
[110]T554, L8-11
[111]T554, L20-27
[112]T555, L1-3
[113]T555, L12-16
[114]T556, L20-27
[115]T558, L5-13
[116]T559, L10-13
83 Mr Janjis was cross-examined and was shown documents entitled “Blind Underwrite Referral” which were later tendered as Exhibit W. In cross-examination, his evidence was as follows:
·He had no independent recollection of actually underwriting the risk in August or September 2007.[117]
[117]T560, L17 – T561, L4
·In 2007 Unified Health Care Group were the main service provider and would obtain medical evidence if needed.[118]
[118]T563, L28-31
·The probability is that Mr Janjis would have received Ms Guirgis’s and Mr Tadros’s applications at the same time.[119]
[119]T568, L10-14
·He would then look at the applications and personal statement.[120]
[120]T569, L21-22
·In looking at the insurance details, Mr Janjis would see that the proposers are not new applicants but have already got insurance policies with Westpac.[121]
·Mr Janjis had started writing life, TPD and income protection insurance from the late nineties.[122]
·The criteria in relation to the health questionnaire is fairly much the same across such policies.[123]
·In August 2007 he would allocate approximately 15 to 20 minutes to check a personal history in such an application.[124]
·The documents provided included an authority to obtain medical information about the proposer.[125]
·Mr Janjis had authorised UHG to obtain a medical report from Dr Fouad Dawood in August 2007.[126]
·Mr Janjis agreed that the information provided by Ms Guirgis included the name and address of Dr Andrew Gibson.
·Mr Janjis was unaware that Dr Andrew Gibson was a specialist practising at Cabrini Hospital. He did not request UHG to obtain a report from Dr Gibson.
·Mr Janjis disagreed with the proposition that the underwriter relied more heavily on the medical authority and the information from the doctors rather than what has been stated in a proposal.[127]
[121]T569, L25-28
[122]T574, L20-22
[123]T574, L26-29
[124]T577, L4-7
[125]T578, L28 – T579, L4
[126]Exhibit T
[127]T594, L20-25
84 The cross-examination then turned to the blind underwrite proposals tendered in evidence.[128] These were in fact four proposals forwarded to Mr Janjis on 9 January 2012. The four proposals relate to policies issued in 2004 and 2007 and are sequentially numbered 154 to 157. The first proposal relates to income protection, death and TPD commencing in November 2004 and referred to in applications signed on 30 October 2004. The document tendered in evidence was not signed by Mr Janjis and it is in any event largely irrelevant to the present proceeding.
[128]Exhibit W
85 The blind underwrite proposal numbered 155 and that numbered 157 each relate to the income protection, death and TPD insurance commencing on 14 September 2007 and issued on the basis of the application signed by Ms Guirgis on 2 August 2007. It appears identical in terms with the document numbered 157 which was the subject of considerable cross-examination. Each of those blind underwrite proposals relating to the 2000 insurance was completed with Mr Janjis indicating that cover would not have been offered on any terms and giving the reasons:
“Fibromyalgia diagnosis that predated this application – nondisclosure and treatment for depression – nondisclosure.”[129]
[129]Exhibit W
86 Each of the blind underwrite proposals is signed by Mr Janjis on 11 January 2012. Each of the blind underwrite proposals relating to the 2007 insurance included the following material which was provided to Mr Janjis:
(1)Application form dated 3 August 2007;
(2)Personal medical attendance report completed by Dr Fouad Dawood (general practitioner) on 7 September 2007;
(3)Clinical notes from Dr Fouad Dawood (general practitioner);
(4)Medical reports from Dr Marie Feletar (rheumatologist) dated 13 July 2006 and 23 March 2007;
(5)Medical report from Dr Trevor Gin (ophthalmologist) dated 5 July 2007;
(6)Medical report from Sue Hyland (physiotherapist) dated 12 April 2006;
(7)Medical report from Dr Brindi Rasaratnam (gastroenterologist) dated 12 December 2003;
(8)Eight medical reports from Dr Andrew Gibson (rheumatologist) dated 13 June 2007, 2 August 2007, and 29 October 2007;
(9)Medical report from Dr Danny Chan (ear, nose and throat surgeon) date 14 February 2006; and
(10)Ultrasound of shoulder dated 12 April 2005.
87 The cross-examination concerned document number 157 which was the final blind underwrite referral relating to the 2007 insurance. When cross-examined as to the blind underwrite, Mr Janjis agreed that he had a report from Dr Gin, an ophthalmologist, who had recorded:
“Thank you very much for referring Thereze, a thirty-three year old lady, who has had three episodes of bilateral simultaneous blurred vision over the last 18 months.”[130]
[130]Exhibit 14
88 Mr Janjis agreed that he had read this letter prior to doing the blind underwrite and knew that Ms Guirgis had presented to Dr Gin with blurred vision.[131]
[131]T597, L12-23
89 In the blind underwrite he had not recorded blurred vision as a reason for refusing an offer of insurance.
90 Mr Janjis was also asked whether he a report from Dr Rasaratnam, a gastroenterologist, and did he know that the report was something to do:
“… with the gastro, that sort of thing.”[132]
[132]T598, L24- 27
91 He agreed that that was also not in the document as a reason for denying insurance after saying in his evidence-in-chief that irritable bowel syndrome was a serious condition and he would not underwrite if that had been disclosed.
92 Mr Janjis agreed that in doing a blind underwrite, the document itself requested:
“The underwriting guidelines at the time of the policy was originally underwritten must be attached.”[133]
[133]T599, L21-28
93 Mr Janjis agreed that the document numbered 156 in the blind underwrite referral (relating to the 2004 insurance) originally had the endorsement that cover would have been offered on the basis that:
“… no benefit should be payable under the policy for any disability caused by irritable bowel syndrome and/or any complications thereof.”
94 He further agreed this had been crossed out and the insurance had been denied on any terms noting:
“Client had consulted GP for the treatment of her fibromyalgia which predated her application submission.”[134]
[134]T601, L14-31
95 It should be noted at this stage that the blind underwrite proposal number 156 has no copy of any report from Dr Rasaratnam attached to it and it is difficult to otherwise explain why the original exclusion was endorsed on it absent Mr Janjis considering all four documents as one.
96 Additionally, the omission of any reference to the condition of blurred vision which had been noted on three occasions and resulted in the referral to an ophthalmologist had not been referred to all in any of the blind underwrite referrals.
97 When Mr Janjis was asked questions about the personal medical attendance record provided to him as part of the blind underwrite referral, he agreed that the general practitioner had made no reference to the condition fibromyalgia.[135] He then went on to say, if the general practitioner had stated that the plaintiff had not been diagnosed with fibromyalgia he would not accept that statement.[136]
[135]T604, L5-15
[136]T604, L28-30
98 I found Mr Janjis difficult to understand in his answers on this issue. At one passage he stated:
“That is the reason why we write to the GP, because they would have an intricate knowledge of the their health history.”[137]
[137]T605, L20-23
99 He then responded to the proposition:
“So if the GP told you that the patient didn’t suffer from fibromyalgia, that would be an end of the matter, wouldn’t it?”
And the answer is:
“No, it wouldn’t because they are not qualified to make a diagnosis like that.”[138]
[138]T605, L21-28
100 The cross-examination continued, raising the issue of insurance being issued to proposers who were being treated for depression. Mr Janjis agreed with the proposition:
“A:If a person back in August 2007 was taking any form of antidepressant medication, no risk would have been written….That’s correct.
Q:It was a guideline that said that, was it?---
A:Yes.”
He agreed with the proposition that no risk was written to any proponent for insurance if that proponent was taking antidepressant medication.[139]
[139]T606, L31 – T607, L24
101 Mr Janjis was asked later about the guidelines and the definition of “treatment for depression”. He was asked whether treatment for depression meant being on medication for depression or a mental health plan. He replied:
“They’re on medication and on a mental health plan – it’s one or the other.”[140]
[140]T609, L16-22
102 He later added:
“This could also mean counselling as well.”[141]
[141]T610, L25-29
103 Mr Janjis was re-examined in relation to the blind underwrite referrals. He added the following to his earlier evidence:
·Dizziness was not recorded because it was not disclosed in the personal statement.[142]
·In relation to the absence of any reference to IBS, he stated that at the time of the blind underwrite:
“Perhaps I might not have been aware of it.”[143]
·If IBS had been the only condition noted in the blind underwrite:
“We potentially could have offered it with an exclusion I think. … If it was current it potentially could have been declined. It would depend on the severity.”[144]
·In 2007 if there had been a medical condition disclosed and Mr Janjis required further information for clarity, he would have requested a medical report.[145]
·In response to a question from me, Mr Janjis stated that there was no doubt that he clearly would have had the relevant guidelines when he had to do the blind underwrites.[146]
[142]T612, L19-21
[143]T612, L29 – T613, L4
[144]T613, L5-11
[145]T614, L9-12
[146]T614, L27-30
Analysis
104 The first question that needs to be addressed concerns the circumstances in which the insurance was issued to Ms Guirgis in 2007. In relation to the factual circumstances of the insurance contracts, I am generally persuaded that Mr Kinivan has a more accurate record and therefore recollection of these events than does either Ms Guirgis or her husband. Given that Ms Guirgis has suffered from an emotional condition leading to her disability, it is not surprising that her recollection of events and details may be less reliable than that of a person who is not suffering from such a condition. Additionally, Mr Kinivan has produced his work diary which supports his evidence insofar as dates and times are concerned. Further, Exhibit 20 strongly suggests that some form of Product Disclosure Statement was left by Mr Kinivan.
105 Nevertheless, I am not persuaded that Ms Guirgis behaved in any way during the course of her meetings with Mr Kinivan so as to attempt to mislead or deceive either him or Westpac as to the state of her medical condition.
106 Much of this case turned on the state of knowledge held by Ms Guirgis in relation to an alleged pre-existing fibromyalgia condition. Her clear evidence was that she was not actually told she had fibromyalgia until 2008 when she was given this information by Professor Littlejohn.
107 I was impressed by the evidence of Dr Gibson and Dr Feletar and I am inclined to prefer their evidence to that of Ms Guirgis in relation to what she was told in their consultations. As a matter of probability, I find that the condition fibromyalgia had at least been mentioned to her both by Dr Gibson and Dr Feletar prior to August 2007.
108 There is a real anomaly in this case. Why would Ms Guirgis wish to mislead the insurer as to the existence of fibromyalgia or indeed irritable bowel syndrome in her application for insurance, and then advise in that same application that she had recently seen Dr Andrew Gibson who is acknowledged to be a specialist rheumatologist practising at the Cabrini Hospital?
109 Westpac through Mr Kinivan chose to conduct its business dealings with Ms Guirgis at her home during the evening in circumstances of relative informality. I accept Mr Kinivan’s evidence that he would check the documentation to ensure that it was sufficient for the insurer before it was submitted. It is abundantly sensible that a person in his position would not go to the trouble of submitting applications for insurance containing what he could recognise as fatal flaws for the insurer’s underwriting team.
110 The facts in this case are that Ms Guirgis did suffer some conditions over the years between 2003 and 2007. Those conditions included irritable bowel syndrome and some degree of neck and shoulder pain. She had had medical treatment. Nevertheless she had continued to work over that period and was in full time employment earning more money than she had previously earned when insured by Westpac in 2004.
The submissions of the parties
111 Mr Hanson on behalf of Westpac initially relied upon a defence based upon s29 of the Insurance Contracts Act 1984 (Cth). I was referred to Tyndall Life Insurance Co Ltd v Chisholm,[147] especially at [68] and [74], per Debelle J:
“A fraudulent misrepresentation is a representation which is false and which is made either knowingly, or without belief in its truth, or recklessly, not caring whether it be true or false and with the intention that it should be acted upon by the insurer.”[148]
“There will be a fraudulent non-disclosure if the insured knowingly fails to disclose a matter which he knows to be a matter relevant to the decision of the insurer whether to accept the risk and if so on what terms ... There is no reason why fraudulent non-disclosure would not also include recklessness ...”[149]
[147](2000) 11 ANZ Ins Cas 90–104
[148]Tyndall (supra) [68]
[149]Tyndall (supra) [74]
112 Reference was also made to a later decision of the Full Court of the Western Australian Supreme Court in NRG Victory Australia Limited v Hudson.[150] In a lengthy review of the authorities concerning fraudulent misrepresentation, Parker J referred to a long line of authority where fraudulent misrepresentation had been considered in contract law. This included reference to Derry v Peek,[151] where the fraud was defined as “the making of a false representation knowingly, or without belief in its truth, or recklessly without caring whether it be true or false”. Ultimately, there was no dispute as to the definition of fraudulent misrepresentation in this case as Mr Donald on behalf of the plaintiff also referred me to NRG Victory Australia Limited v Hudson on this point.
[150](2004) 13 ANZ Ins Cas 90-121
[151](1889) LR 14 App Cas 337
113 The defendant submitted that I should examine the evidence of Ms Guirgis’s knowledge on 3 August 2007 as to the state of her health. Such an inquiry is warranted by the operation of s21 of the Insurance Contracts Act 1984 which requires an insured to “make disclosure to the insurer” of ―
“… every matter that is known to the insured, being a matter that:
(a)the insured knows to be a matter relevant to the decision of the insurer whether to accept the risk and, if so, on what terms; or
(b)a reasonable person in the circumstances could be expected to know to be a matter so relevant.”[152]
[152]Insurance Contracts Act, s21(1)
114 The defendant’s submission continued urging that a finding of fraudulent non-disclosure or misrepresentation would then require a consideration of s29(1)(c) of the ICA. This would necessitate a consideration of whether the insurer would, in any event, have entered into the policy absent the failure by Ms Guirgis to make the fraudulent non-disclosure. In this regard, I was referred in particular to the evidence of the underwriter, Mr Janjis.
115 The Act also requires a consideration of s31 of the ICA which concerns an assessment of the prejudice flowing to the insurer should the policy remain in force.
116 The second limb of the defendant’s submissions concerned an analysis of the “sickness” giving rise to Ms Guirgis’s total disability claim. The argument advanced by Mr Hanson was that, in essence, the sickness was a pre-existing illness and therefore one to which the policy did not respond as it did not fit the policy definition.
117 Finally, submissions were made in relation to the counter-claim. It was submitted that a finding for the defendant in relation to either of its defences would trigger an entitlement to judgment on the counter claim as the monies which had been paid up until mid-2012 were paid under a mistaken belief of the insurer’s obligations to the plaintiff.[153]
[153]David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353
118 The submissions made by Mr Donald on behalf of the plaintiff were directed towards the resolution of four essential questions:
· Did the defendant have the right by operation of s29(3) of the ICA to avoid the contract by reason that the plaintiff fraudulently failed to comply with her duty of disclosure and/or made a fraudulent misrepresentation?
· If yes, should avoidance be disregarded by the court in exercise of its power under s31 of the ICA?
· If yes, does the plaintiff have a sickness within the meaning of the policy wording which occurred after the commencement date of the contract to which the policy responds (14 September 2007)?
· If yes, is or has the plaintiff been totally disabled within the meaning of the policy wording, thereby crystallising the obligation of the defendant to pay the disability benefit?
119 In relation to the operation of s29 and the determination of whether or not there had been fraudulent non-disclosure or fraudulent misrepresentation, Mr Donald also referred to NRG Victory v Hudson. He characterised a fraudulent misrepresentation as one made with an absence of an actual and honest belief in its truth. Mr Donald submitted it needed to be a deliberate decision by the insured to mislead or conceal something from the insurer, or recklessness amounting to indifference about whether this occurs. He submitted that there needed to be proof that knowledge of the matter which was the subject of the non-disclosure or misrepresentation was relevant to the decision of the insurer as to whether to accept the risk and, if so, on what terms. His submissions also raised a consideration of s21(1) of the ICA and quite extensive submissions in relation to the onus of proof insofar as it related to fraudulent misrepresentation or non-disclosure. On this question, ultimately there was no dispute as the test in Briginshaw v Briginshaw[154] was applicable in the present case. The plaintiff’s submissions also raised the application of s26 and s31 of the ICA. Mr Donald submitted in this case that the magnitude of the loss to the plaintiff by avoidance of the policy would vastly outweigh any culpability of the plaintiff in this case, which should be regarded as being at the lower end of the scale of dishonest conduct.
[154](1938) 60 CLR 336
120 In relation to the argument concerning the policy definition of sickness, the plaintiff submitted that Ms Guirgis had proven that she suffered a Major Depressive Disorder which occurred after the commencement date of the contract and that sickness had totally disabled her. In terms of the extent of disability, I was referred to the opinion of Dr Hogan, who gave evidence before me, and also the opinions of Dr White and Dr Adlard, whose reports from 2012 and 2013 were tendered in evidence.[155]
[155]Exhibit U, Exhibit V
121 Both parties urged me to consider the principles of Jones v Dunkel[156] in respect of witnesses who were not called by the opposing party.
[156] (1959) 101 CLR 298
Was there fraudulent misrepresentation or non-disclosure?
122 I have considerable difficulty in accepting the plaintiff’s evidence that she had not been informed that she was suffering from fibromyalgia prior to seeing Professor Littlejohn in 2008. As against this, if she had been reckless in the provision of information to the insurer or deliberately intending to mislead the insurer as to the existence of such a condition, why would she have made any reference to Dr Gibson, her treating rheumatologist, when providing the personal information to Mr Kinivan?
123 I am assisted in the resolution of this question by applying the standard of proof that is described in Briginshaw. Had the issue been one requiring satisfaction merely by a tipping of the scales of justice in favour of the party having the onus, I may have been persuaded that, as a matter of probability, Ms Guirgis had knowledge in August 2007 that she had previously suffered, or was suffering, from fibromyalgia. The conflicting reference to Dr Gibson in the personal information provided militates against such a finding and certainly leads me to a conclusion that she was neither reckless nor deliberately attempting to conceal any relevant medical condition from the insurer.
124 This uncertainty leaves me in some doubt and I could not be comfortably satisfied that she was aware of the fibromyalgia diagnosis in August 2007.
125 Insofar as Ms Guirgis’s knowledge as to the other health issues affecting her, described as Irritable Bowel Syndrome, anxiety, stress or depression, I again note that the information provided to the insurer made reference to her principal treating general practitioner, Dr Fouad Dawood, and indeed the insurer obtained a report from him prior to the policy being issued.
126 It was submitted that I should draw an adverse inference against the plaintiff because of her failure to call Dr Nofreet Dawood or to lead any evidence from Mr Tadros concerning the plaintiff’s knowledge of her health. I find little attraction in this submission. Dr Fouad Dawood was called and the clinical notes from the practice, including the notes of Dr Nofreet Dawood, were canvassed extensively in the cross-examination of the plaintiff.
127 Further, there must be a real question as to the relevance or admissibility of any evidence given by Mr Tadros about his belief as to his wife’s knowledge of her own health.
Did Ms Guirgis know that matters not disclosed concerning her health were relevant to the decision of the insurer regarding the issue of the policy?
128 This matter can be shortly disposed of. There would seem to be little doubt from an examination of the matters contained in Exhibit B, the personal statement made by Ms Guirgis, that she had turned her mind to matters regarding her health. Given the extent to which matters concerning her health are canvassed in this document, it would be perverse to find that either Ms Guirgis, or indeed a reasonable person in her position, would not have known, or reasonably believed, that these matters were relevant to the insurer in terms of its consideration of the issue of a policy.
Would Westpac have entered into the policy in circumstances where Ms Guirgis had not failed to comply with the duty of disclosure or had not made a misrepresentation?
129 If I have incorrectly concluded that there was no fraudulent misrepresentation or fraudulent non-disclosure, I should, for completeness on this issue, consider the effect the claimed non-disclosure would have had on the policy in this case.
130 In final address, Mr Hanson submitted that that question would involve consideration of the evidence of the underwriter, Mr Janjis. I agree in relation to his evidence, I made the following comments:
· The blind underwrite referrals[157] required the underwriter to be provided with a copy of the underwriting guidelines that were current as at the date the policy was originally assessed. Despite this matter being raised with counsel during the course of Mr Janjis’s evidence, no such document was ever produced.
· In relation to the 2007 blind underwrites,[158] the additional material provided to Mr Janjis included a medical report from Dr Trevor Gin (ophthalmologist) noting that Ms Guirgis had three episodes of bilateral simultaneous blurred vision over the last 18 months. There was no reference made in the blind underwrite to any condition of blurred vision.
· The fibromyalgia was given as a reason why a policy would not be issued on any terms in circumstances where the insurer had been aware of Dr Gibson as the treating doctor at the time it issued the policy and had not chosen to obtain any medical report from him.
· The “treatment for depression” also noted in the blind underwrite referral documents does not appear in any of the medical material to be productive of any incapacity or disability.
[157]Exhibit W
[158]Document Nos 155 and 157 of Exhibit W
131 I am not satisfied that the evidence of Mr Janjis is sufficient to persuade me that the insurer would not have issued the policy in September 2007 or would have offered it on different terms.
132 I am fortified in my views in relation to this evidence by the fact that neither the terms and conditions and/or product disclosure statement relevant to the application for insurance were not put into evidence in this case through any witness, nor was it produced as part of the 1,205 pages of documents set out in the Defendant’s Court Book. Similarly, the underwriting guidelines upon which Mr Janjis stated he had relied were not produced. I draw an inference that evidence of these documents would not have assisted the defendant in accordance with the authority in Jones v Dunkel.
Does the policy respond to the sickness?
133 In this case, I am affirmatively satisfied, on the evidence of Dr Hogan and the reports of Dr White and Dr Adlard, that the principal reason for the plaintiff’s total disability has been the development of a major depression, commencing in or about late 2011. This was more than four years after the policy had been issued.
134 Insofar as there has been reference made to the prescription of drugs such as Lexapro prior to the issue of the policy, I note that evidence given, particularly by Dr Hogan, would suggest that this was at a non-therapeutic level.
135 I accept the evidence of the plaintiff as to the changing circumstances of her employment, particularly towards the end of 2011. The difficulties encountered with staff and with her then employer were quite consistent, in my view, with the development of the psychiatric condition which has principally led to her disability. True it is, there may be some involvement from shoulder or neck pain or generalised pains that may fit within the descriptive umbrella of fibromyalgia. Nevertheless, in my assessment, her disability has resulted from a Major Depressive Disorder commencing more than four years after the issue of the policy. It fits within the definition of sickness within the policy and must trigger an entitlement to benefits in accordance with the policy terms.
Conclusion
136 I accept that there has been inaccurate provision of information concerning the plaintiff’s health prior to the time of the issue of the policy. I do not accept that that inaccuracy amounts to fraudulent non-disclosure or fraudulent misrepresentation. I do not accept that the insurer was entitled to cancel the policy in accordance with s29(1) of the Insurance Contracts Act. The purported cancellation of the policy by Westpac in May 2007 was contrary to law.
137 I declare that the policy issued to the plaintiff by the defendant on 14 September 2007 is valid and any benefits due to be paid to the plaintiff in accordance with the terms of the policy are validly enforceable.
138 I further declare that the principal condition suffered by the plaintiff, being Major Depressive Disorder, is a sickness within the meaning of the policy and benefits due under the policy are payable to the plaintiff in accordance with the policy terms.
139 The Counterclaim will be dismissed.
140 I will hear further submissions in relation to the formal orders required and questions of costs.
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