Hellessey v MetLife Insurance Ltd

[2017] NSWSC 1284

Supreme Court

New South Wales

Medium Neutral Citation:

Hellessey v MetLife Insurance Limited [2017] NSWSC 1284

Hearing dates:

5-9 December 2016, 27-28 April 2017

Date of orders:

25 September 2017

Decision date:

25 September 2017

Jurisdiction:

Equity

Before:

Robb J

Decision:

(1) The second defendant’s rejection of the plaintiff’s claim was not valid and effective.

 

(2) The plaintiff has established that, at the assessment date, she was incapacitated by her psychological injury in a manner that satisfied the TPD definition in the policies.

 (3) The parties should agree the amount to which the plaintiff is entitled and provide short minutes of order that state that amount.

Catchwords:

INSURANCE — Life insurance — Whether second defendant validly rejected plaintiff’s claim — Whether plaintiff was totally and permanently disabled at the assessment date.

  INSURANCE — Claims — Utmost good faith — Whether second defendant breached duty of utmost good faith — Whether second defendant ‘constructively denied’ the plaintiff’s claim.

Legislation Cited:

Insurance Contracts Act 1984 (Cth) s 13.

Cases Cited:

Birdsall v Motor Traders Association of Australia Superannuation Fund Pty Ltd (2015) 89 NSWLR 412; [2015] NSWCA 104
Butcher v Port [1985] 1 NZLR 491
Chammas v Harwood Nominees Pty Ltd (1993) 7 ANZ Ins Cas 61-175
Chapman v United Super Pty Ltd [2013] NSWSC 592
Edwards v Hunter Valley Co-op Dairy Co Ltd (1992) 7 ANZ Ins Cas 61-113
Folan v United Super Pty Ltd [2014] NSWSC 343
Gomez v Board of Trustees of the State Public Superannuation Scheme [2017] QSC 98
Hannover Life Re of Australasia Ltd v Colella (2014) 47 VR 1; [2014] VSCA 205
Hannover Life Re of Australasia Ltd v Sayseng [2005] NSWCA 214; 13 ANZ Ins Cas 90-123
Hearne v Street (2008) 235 CLR 125; [2008] HCA 36
Jones v United Super Pty Ltd [2016] NSWSC 1551
Kamm v New South Wales (No 4) [2017] NSWCA 189
Lend Lease Real Estate Investments Ltd v GPT RE Ltd [2006] NSWCA 207
McArthur v Mercantile Mutual Life Insurance Co Ltd [2002] 2 Qd R 197; [2001] QCA 317
Mehmet v IOOF Investment Management Ltd [2015] NSWSC 1914
Minister for Administration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18
New Zealand Shipping Company v Societe des Ateliers et Chantiers de France [1919] AC 1
Panos v FSS Trustee Corporation [2015] NSWSC 1217
Repatriation Commission v Hill (2005) 142 FCR 88; [2005] FCAFC 7
Shuetrim v FSS Trustee Corporation [2015] NSWSC 464
Suttor v Gundowda (1950) 81 CLR 418; [1950] HCA 35
TAL Life Ltd v Shuetrim (2016) 91 NSWLR 439; [2016] NSWCA 68
Tonkin v Western Mining Corporation Ltd [1998] WASCA 101
Weber v Tiss Pty Ltd [2005] NSWSC 67
Wells v Australian Aviation Underwriting Pool [2004] QCA 43
Wheeler v FSS Trustee Corporation [2016] NSWSC 534
Ziogos v FSS Trustee Corporation [2015] NSWSC 1385

Category:

Principal judgment

Parties:

Bernadette Hellessey (plaintiff)
FSS Trustee Corporation (first defendant)
MetLife Insurance Limited (second defendant)

Representation:

Counsel: B Dooley SC and P Bingham (plaintiff)
G Watson SC and C Purdy (defendant)

  Solicitors: Slater and Gordon Lawyers (plaintiff)
HWL Ebsworth Lawyers (defendant)

File Number(s):

2015/241436

Table of contents

Introduction

TPD definitions

Events that caused Ms Hellessey’s PTSD and Major Depressive Disorder

Pleaded case concerning MetLife’s response to claim

Primary issues

Proper construction of TPD definition

Legal principles

When will the insurer’s decision be reasonable?

Should the insurer’s decision be subject to critical analysis?

What is the significance of the timing of the medical evidence?

When will the insurer have constructively rejected the claim?

Why can the court decide whether the claimant is TPD?

What is the effect of the insurer agreeing to reconsider the claim?

What is the significance of the words “unlikely ever”?

What should be done when there is psychological injury?

What are the consequences of the incapacity that must be established?

MetLife’s first procedural fairness letter dated 12 April 2004

Ms Hellessey’s application

Dr Durrell’s reports

Mr Ward’s reports

Dr Falk’s reports

Vocational assessment report

Dr Hodgson’s reports

Dr Bertucen’s report

MetLife’s internal email dated 4 September 2014

Processing of claim by MetLife

First rejection dated 22 December 2014

Treatment of Dr Falk’s reports

Treatment of Mr Ward’s reports

Treatment of Dr Bertucen’s report

Treatment of Dr Hodgson’s reports

Treatment of vocational assessment report

Treatment of surveillance report

Treatment of Facebook posts

Failure to deal with Dr Durrell’s reports

Adequacy of MetLife’s reasoning

Request for review of first rejection

MetLife’s second procedural fairness letter dated 10 September 2015

Dr Bertucen’s 17 August 2015 report

Second rejection dated 19 October 2015

Adequacy of MetLife’s reasoning

Request for review of second rejection

Dr Westmore’s report

Release of ‘implied undertaking’

MetLife’s third procedural fairness letter dated 11 May 2016

Communications after MetLife’s third procedural fairness letter

MetLife’s fourth procedural fairness letter dated 31 October 2016

Third rejection dated 30 November 2016

Lay evidence

Evidence of Ms Bernadette Hellessey

Affidavit evidence

Cross-examination

Credibility of Ms Hellessey’s evidence

Evidence of Mr Paul Hellessey

Evidence of Ms Gloria Eves

Evidence of Ms Maree Manning

Evidence of Ms Lahnee (Lorraine) Cleary

Evidence of Mr Daniel Harvey

Medical evidence

Evidence of Dr Anthony Durrell

Evidence of Professor Mattick

Evidence of Mr Peter Rawling

Evidence of Dr Bruce Westmore

Ms Hellessey’s Facebook posts

Ms Hellessey’s medication

Alleged first constructive rejection

Entitlement to contest the validity of the first and second rejections

Validity of first and second rejections

Internal MetLife report that TPD finding was probable

Alleged second constructive rejection

Validity of third rejection

Summary of the process that led to the third rejection

Third rejection letter dated 30 November 2016 (pars 520 to 534 above)

Fourth procedural fairness letter dated 31 October 2016 (pars 440 to 519 above)

Third procedural fairness letter dated 11 May 2016 (pars 387 to 426 above)

MetLife’s treatment of the evidence

MetLife’s treatment of Ms Hellessey’s sworn lay evidence

MetLife’s rejection of Mr Rawling’s supplementary report

MetLife’s rejection of Dr Westmore’s supplementary report

MetLife’s rejection of Mr Rawling’s report

MetLife’s failure to engage seriously with the evidence of Dr Durrell

MetLife’s rejection of Dr Westmore’s primary report

MetLife’s reliance upon the vocational assessment report

MetLife’s reliance upon Dr Bertucen’s 17 August 2015 report and Dr Hodgson’s 13 May 2012 report

MetLife’s rejection of Dr Westmore’s supplementary report dated 20 June 2016

MetLife's reliance upon Professor Mattick’s report

MetLife’s determination of the significance of Ms Hellessey’s activities

Horse related shows and events

Facebook posts

Fairymead

Palomino Association and the Goulburn Pony Club

Shopping activities

Conclusion as to validity of third rejection

Entitlement of Ms Hellessey to TPD benefits

Conclusion

Judgment

Introduction

1. The plaintiff, Ms Bernadette Cyd Hellessey, commenced these proceedings by statement of claim filed on 18 August 2015, in which she joined FSS Trustee Corporation (the Trustee) and MetLife Insurance Ltd (MetLife) as defendants.

2. The Trustee has at all material times been the trustee of the First State Superannuation Scheme (Scheme), of which Ms Hellessey has been a member. Under the rules governing the Scheme, Ms Hellessey was entitled to a benefit if by reason of illness or injury she satisfied the definition of Total and Permanent Disablement (TPD). The rules also permitted the Trustee to provide the benefit by means of insurance policies entered into by the Trustee for the benefit of the members of the Scheme.

3. Relevantly, the Trustee entered into two policies of insurance with MetLife called the “Blue Ribbon” Group Life Insurance Policy and the “MetLife Insurance” Group Life Insurance Policy.

4. Ms Hellessey was formerly a member of the New South Wales Police Force from which she was retired by reason of her acquiring Post Traumatic Stress Disorder (PTSD) and Major Depressive Disorder as a result of events that occurred in the course of her duties as a police officer. Ms Hellessey ceased work on 30 August 2010 and has not worked since.

5. Ms Hellessey claims that she is entitled to be paid a benefit under the rules of the Scheme, and that under each of the policies MetLife is required to pay the TPD benefit provided for in the policies to the Trustee for Ms Hellessey’s benefit.

6. Ms Hellessey claims that if the Trustee is entitled to be paid the benefits under each of the policies, the amounts payable will be not less than $618,653 in the case of the Blue Ribbon policy, and not less than $170,100 in the case of the MetLife Insurance policy.

7. The Trustee and Ms Hellessey have come to an accommodation and the case has proceeded upon the basis that Ms Hellessey has prosecuted her claim against MetLife for recovery of the amounts that she claims are payable by MetLife under the policies to the Trustee. If Ms Hellessey succeeds in her claim, then the court will make orders in terms that are appropriate to ensure that she receives the benefits to which she is entitled under the Scheme. The Trustee did not participate in the hearing. MetLife did not object to the arrangement whereby Ms Hellessey prosecuted against it the Trustee’s claims under the policies.

TPD definitions

8. Clause 6 of the First Schedule to the Blue Ribbon policy contained the definition of TPD relevant to that policy as follows:

TOTAL AND PERMANENT DISABLEMENT:

While covered under this Policy Total and Permanent Disablement shall mean:

(a)   The Insured Member suffering the loss of use of two limbs or the sight of both eyes or the loss of use of one limb and the sight of one eye (where limb is defined as the whole hand or the whole foot), or

(b)   In the case of an Insured Member whose Normal Hours are 15 hours each week or more at the time of the Insured Event giving rise to the claim:

The Insured Member having been absent from their Occupation with the Employer through injury or illness for six consecutive months and having provided proof to our satisfaction that the Insured Member has become incapacitated to such an extent as to render the Insured Member unlikely ever to engage in any gainful profession, trade or occupation for which the Insured Member is reasonably qualified by reason of education, training or experience.

(c)   In the case of an Insured Member whose Normal Hours are less than 15 hours each week at the time of the Insured Event giving rise to the claim:

The Insured Member, because of injury or illness becomes permanently unable to perform the basic activities normally undertaken as part of everyday life. This will be evidenced by being unable to undertake any two of the activities listed below:

(i)   Bathing - to shower or bathe

(ii)   Dressing - to dress or undress

(iii)   Toileting - to use the toilet including getting on and off

(iv)   Feeding - to eat & drink

(v)   Mobility - to get in or out of their wheelchair

(vi)   Continence - to control bladder and bowel function

If the Insured Member can perform the activity on their own by using special equipment the Insured Member will not be considered unable to perform the activity.

9. Clause 3 of the Blue Ribbon policy required MetLife, subject to the provisions of the policy, to pay to the Trustee the Sum Insured in respect of a member, if that member “suffers from TPD while this policy is in force”.

10. The MetLife Insurance policy contained an identical definition of TPD in the Definitions section of the policy, save that it contained an additional provision that is not material to the present case, which provided that TPD also included the situation where the member suffered from permanent deterioration or loss of intellectual capacity so as to be required to be under continuous care and supervision by another adult on a permanent basis.

11. The part of the definition of TPD that is relevant to the present case is that set out in par (b) of the TPD definition above concerning the occurrence of an injury or illness that incapacitates the member to such an extent as to render the member unlikely ever to engage in any gainful profession, trade or occupation for which the member is reasonably qualified by reason of education, training or experience.

12. It has been necessary to set out the other components of the definition of TPD for the purpose of dealing with an argument put by MetLife in final submissions to the effect that the court should assess the extent of the incapacity that was required to satisfy par (b) of the definition in cases where the injury or illness has led to psychological incapacity, by comparing that incapacity in some way against the physical incapacities described in the other paragraphs. I will return to this issue below.

13. The parties agreed that the six consecutive months during which Ms Hellessey was absent from her employment through injury or illness ended on 1 March 2012. I will refer to this date as the “assessment date”.

Events that caused Ms Hellessey’s PTSD and Major Depressive Disorder

14. Ms Hellessey provided in her affidavit a detailed explanation of the experiences that she had while in the Police Force that caused her to suffer from what she claims to be chronic PTSD and Major Depressive Disorder. MetLife has not challenged that evidence. It is nonetheless fitting that the evidence be recorded, albeit in a somewhat abbreviated form.

15. Ms Hellessey was made a constable in the Police Force on 4 May 2001. She said in her affidavit that she had attended numerous traumatic incidents including fatal motor vehicle accidents, cases of death and abuse of children, murders, suicides, violent crime scenes and assaults, drug and alcohol abuse, aggressive behaviour from criminals, and other traumatic incidents.

16. In May 2001, she attended a fatal truck crash in which the truck had rolled down a hill, and she had to remove the deceased truck driver’s personal items when the corpse was on the roof of the truck and “squashed” in the truck.

17. While she was still a probationary constable, she attended the site of a suicide where a 19-year-old boy had hung himself from a tree. The deceased’s head was black. Ms Hellessey and her partner had to cut him down from the tree. Ms Hellessey had to deliver the death message to the family. She was required to accompany the family to identify the body at the morgue. The rope was still attached to the deceased.

18. Ms Hellessey attended a fatality at a home in which a 40-year-old man had died in his sleep. His wife refused to believe that the deceased was dead. On another occasion Ms Hellessey was called to a scene where a 30-year-old man had died on a lounge, and Ms Hellessey had to deal with the deceased’s partner who became extremely upset when a crime scene was established.

19. On 13 April 2002, Ms Hellessey’s highway patrol partner was killed on duty in his highway patrol vehicle. Ms Hellessey was at home getting ready for her shift with her partner when she was called by a colleague who told her that her partner had been killed but that she still had to go to work to do point duty. She was driven to the accident scene and instructed to guard the scene. She was at the scene of the crashed vehicle from 6 PM to 2 AM. She saw her partner’s body in the car where it remained until 1 AM when it was removed by the ambulance. She vomited on the side of the road when her partner’s body was being removed from the car.

20. A few weeks following her partner’s death, she had to protect the unlicensed, drink driver who killed her partner from the media when he was attending court.

21. Subsequently, Ms Hellessey attended a number of other traumatic incidents involving domestic disputes, car accidents and incidents involving mental patients. This often involved people who had been killed and had suffered horrific injuries, including infants as well as a number of suicides.

22. Ms Hellessey gave the following evidence in her affidavit about the most traumatic incident that she suffered:

25. The most notable traumatic incident occurred on 16 November 2004. While I was sitting and typing at my desk, my colleague, Senior Constable [name suppressed] came up behind me and removed my service pistol from my holster, proceeded to waive the gun around in the air and then pointed it at me. He removed the magazine from the gun and gradually emptied the magazine by throwing bullets at me. I cowered and covered myself as the bullets hit me. The bullets were also hitting a metal chair. It made a noise that made me think that the bullets would go off. I said “Oh my God, it’s going off, I’m going to die”. I was fearful that the gun was going to be discharged because I had loaded the gun before my shift and knew there was one bullet remaining in the chamber. I repeatedly said to [suppressed], “Stop! Give the gun back” and “You fucking idiot, give it back”. I thought I was going to die. I was terrified. [Suppressed] then stripped the pistol and put all the parts in a pile on the floor. After he left the room, I sat there with my head in my hands thinking what just happened. It was a blur…

23. Ms Hellessey said that her psychological symptoms started at this time. She felt humiliated, angry, scared and numb. She felt dazed and confused about the incident for a long time after the incident. She was very scared of the person responsible for the incident from that point on. She felt he was out of control and capable of anything.

24. On 22 November 2004, Ms Hellessey was required to attend a scene where a 20-year-old man was waving and pointing a gun at houses, shops and passing motorists in a residential area. Ms Hellessey and her partner approached the man with their guns trained on him. They handcuffed the man and then discovered that the gun was not real. They were then told that the man was disabled and fascinated with guns. Ms Hellessey was distressed and disturbed after the incident as she had almost shot at a disabled man.

25. On the same day as this incident, Ms Hellessey was required to attend a high-speed motor vehicle collision where three people had been killed when their vehicle had crashed into a pole. The vehicle was ripped in half and the occupants of the vehicle had been ejected from the vehicle, except for a 15-year-old girl who was 7 months pregnant at the time. The limbs had been ripped off the two male occupants’ bodies in the collision. Ms Hellessey performed point duty at the scene for several hours during which she could see what was left of the victims. There was a victim’s leg on the driveway. There was part of a victim’s head and skull on the telegraph poll where the car had hit and body parts around the car. Ms Hellessey was required to cover the body parts up as she was waiting for the crime scene investigation team to attend. Ms Hellessey said that she felt physically ill, nauseous and overwhelmed. For a long time after the incident, she had nightmares of the body parts that she had seen.

26. Also on that same day, Ms Hellessey was directed with her partner to a domestic dispute at around 3 AM. A male person had assaulted his partner in front of their toddler children.

27. After these events, Ms Hellessey felt overwhelmed and stressed. She felt numb, lost her appetite, and was anxious and depressed. She was unable to sleep.

28. On 6 December 2004, a doctor gave Ms Hellessey a Work Cover Certificate certifying that she was unfit to work from 30 November 2004 to 13 December 2004. Ms Hellessey was diagnosed with anxiety and conversion reaction and referred for counselling.

29. Ms Hellessey began to develop sleep paralysis, and was waking up during the night, unable to move her body, and having a ‘panic’ attack feeling that someone was holding a pillow or blanket over her head. Ms Hellessey was given antidepressants by her general practitioner, and lost approximately 10 kg in weight due to stress.

23. Ms Hellessey remained fearful of encountering the police officer who was responsible for the incident with her gun, and during the time she was off work she had a panic attack when she saw the officer at a supermarket. Ms Hellessey stopped going out of the house by herself after she saw the officer on a number of occasions around the local area. Ms Hellessey was certified as fit for normal duties from 11 January 2005.

24. Ms Hellessey arranged to be transferred to Hay to get away from the police officer who had threatened her. She was on full duties between July 2005 and January 2008. In January 2008, a drug affected man assaulted her and two other officers, as well as hospital staff. From January 2008, Ms Hellessey was on restricted duties. She did not carry a weapon and was not engaged in operational duties.

25. In July 2006, Ms Hellessey was subpoenaed to give evidence at the criminal trial of the police officer who had threatened her. Ms Hellessey gave evidence over a day and a half and was cross-examined. She described it as “a horrific experience”. She was scared as the police officer was in the court room. She said: “I was shaking like a leaf. My hands would not stop shaking. I was sweating. I felt sick. I was pregnant at the time”.

26. On 7 February 2008, Ms Hellessey was back at work at the Hay police station after having returned to duty from maternity leave. She was called to attend to an incident with a probationary constable. A man she knew was laying in the gutter. The man was aggressive and had to be taken to hospital with a police guard. At the hospital the man said to her: “I know you. You have two little girls. You live on my street. I’m going to slit their throats. Your German shepherd won’t be able to stop me. You better watch your back. I’m going to kill your kids”. Subsequently, Ms Hellessey was engaged in restraining the man and taking him home with another police officer. The man ran away and had to be restrained when he ran towards a main road. He was taken back to the hospital where he continued to yell threats at Ms Hellessey, saying: “I am going to kill you, I am going to kill your kids”.

27. The next day at work Ms Hellessey had a panic attack and felt fearful. She was shaking and crying. She was taken to hospital.

28. After that incident Ms Hellessey was put on restricted duties permanently. She was under medical treatment.

29. In October 2008, Ms Hellessey was transferred to the Goulburn Academy on permanent restricted duties. She was given a clerical type role where she investigated matters within the police college.

30. Ms Hellessey was given psychological treatment and was prescribed medication by her general practitioner. Towards the end of October 2009, Ms Hellessey had a recurrence of panic attacks, and was prescribed Zoloft. In May 2010, Ms Hellessey had some panic attacks and sleep paralysis and her Zoloft was increased from 25 mg to 100 mg daily.

31. On 31 August 2010, Ms Hellessey was walking within the Police College and she thought she saw the officer who had threatened her sitting at a desk, which caused her to have a panic attack. She ran away screaming and eventually ran into her husband who was also working at the College. She saw her general practitioner and was put off work and has not returned since.

32. Ms Hellessey said that after that time she has never been able to properly control anxiety and panic attacks and does not believe that she will ever be able to consider working again.

33. Ms Hellessey said in her affidavit:

74. After the incident on 31 August 2010 I was overwhelmed with anxiety. I had intrusive thoughts virtually every day about people killing or hurting my children, thinking back to all the accidents and deaths that I had seen and thinking about [suppressed] and I started finding that I could not drive for long distances because I was getting anxious and did not have the confidence to drive. All I was thinking about was that we would die if I was doing the driving and I became overprotective of my children. I was continually frightened that they would be harmed in some manner. I started finding that the very sight of a police uniform was upsetting and seemed to bring on panic. I started to get the sleep paralysis that I had before, but now it was occurring much more regularly. The sleep paralysis is that I think that I am awake but my body is totally paralysed and I cannot move and quite often someone is smothering me. I have to lay there and eventually I force myself to break out of it.

75. I found that I was suffering from shaking. Often my heart was beating at very high rates and I was sweating. I was very irritable and angry and quite aggressive.

41. Ms Hellessey then gave evidence that she was referred to see Dr Durrell on 5 October 2010, and she has seen him regularly since that time, and often has had consultations over the phone during periods when she was having problems controlling her anxiety. Ms Hellessey also went to see Mr Ward, psychologist, on about 14 March 2011.

Pleaded case concerning MetLife’s response to claim

42. The present case is not the usual simple one in which the insurer has failed to determine an application for a TPD benefit, or has rejected the application after issuing a single procedural fairness letter (as such letters are commonly described). In this case MetLife has issued four procedural fairness letters and rejected Ms Hellessey’s application three times over a period of almost five years. The last rejection was effectively on the steps of the court, as it was delivered to Ms Hellessey’s solicitors only a day or so before the commencement of the hearing. MetLife reconsidered the application following requests by the Trustee or Ms Hellessey for that to occur. However, in each case MetLife went beyond a simple reconsideration, and obtained new information upon which to base its determination. Consequently, the manner in which MetLife has responded to Ms Hellessey’s claim has had a complex, interrelated and evolving history. As will be seen below, when the facts of this case are laid out in the necessary detail, this matter is exceedingly complicated. It will be necessary to address at the outset in relatively simple terms the history of Ms Hellessey’s application in relation to the matters raised by the pleadings.

43. It appears that the Trustee made the claim for the TPD benefits by an Employer’s Statement dated 5 January 2012, which was received by MetLife on 23 January 2012.

44. In par 24 of the statement of claim, Ms Hellessey alleged that the defendants had failed to make a decision in relation to the claim “and have thereby decided to refuse the…insurance claim”. As I understand it, this is an allegation that before MetLife positively rejected Ms Hellessey’s claim the first time, it had ‘constructively’ rejected the claim (to use the expression commonly used in this context). Ms Hellessey also alleged in par 29 that the decision to reject the claim was void and of no effect at law. (The notion that a failure to do something is void and of no effect is curious). Ms Hellessey alleged in par 34 that MetLife is liable to pay to her the TPD benefits under the two policies.

45. By letter to the Trustee dated 22 December 2014, MetLife rejected the claim made on behalf of Ms Hellessey (the first rejection), having sent to Ms Hellessey its first procedural fairness letter on 17 April 2014. The first rejection occurred almost 3 years after the date of the application.

46. In circumstances that I will consider in more detail below, the Trustee asked MetLife to reconsider the first rejection, and it agreed to do so. On 19 October 2015, in a letter to the Trustee, MetLife rejected the claim made on behalf of Ms Hellessey for a second time (the second rejection). That followed the second procedural fairness letter on 10 September 2015

47. Ms Hellessey’s solicitors made a further request to MetLife by letter dated 18 December 2015, for the reconsideration of the rejection, and in circumstances that I will consider in more detail below, MetLife agreed to do so.

48. On 11 May 2016, MetLife sent to Ms Hellessey at her solicitors a third procedural fairness letter to advise Ms Hellessey of the information available to MetLife, and some preliminary considerations that were available, and to give her an opportunity to respond, before MetLife made its third determination of the claim. This is significant because, as will be seen, Ms Hellessey treated this third procedural fairness letter in the amended statement of claim that she subsequently filed as a third rejection of her claim.

49. In fact, MetLife did not deal with the claim further until after it wrote a fourth procedural fairness letter on 31 October 2016. It then wrote a letter to Ms Hellessey at her solicitors on 30 November 2016 rejecting her claim for the third time (the third rejection). That left only two full business days before the commencement of the hearing on 5 December 2016.

50. On 6 December 2016, which was the day on which the hearing effectively commenced, Ms Hellessey was given leave to file an amended statement of claim. The document was signed by the solicitor for the plaintiff on 28 November 2016, and did not contain any allegations concerning the third rejection.

51. In prayer A of the claim for relief, the amended statement of claim sought a declaration that the decisions of MetLife referred to in pars 24, 24D, 24P and 24V were void and of no effect. Prayer B sought a declaration that Ms Hellessey is entitled to the TPD benefits.

52. Paragraph 24 deleted the allegation in the statement of claim that MetLife had failed to make a decision in relation to the claim before the statement of claim was filed, and pleaded the making of the first rejection on 22 December 2014.

53. It is significant that in par 24C(h) Ms Hellessey pleaded the Trustee’s request to MetLife to review the first rejection.

54. Ms Hellessey pleaded the reasons why the first rejection was void and of no effect in par 24B.

55. Paragraph 24D pleaded the second rejection on 19 October 2015. Paragraph 24J pleaded Ms Hellessey’s solicitors’ request for a second review on 18 December 2015.

56. The reasons why the second rejection was void and of no effect are alleged in par 24F.

57. Paragraph 24P alleged that MetLife rejected Ms Hellessey’s claim for a third time on 11 May 2016. As I have noted above, that letter was not a rejection but was in fact the third procedural fairness letter, in anticipation of MetLife making the third decision on Ms Hellessey’s application.

58. Having misconstrued the third procedural fairness letter as the third rejection, Ms Hellessey then alleged the reasons why it was void and of no effect in par 24R. In par 24S Ms Hellessey alleged that various letters constituted a request on her behalf for MetLife to review what she had categorised as the third rejection, but which was not a rejection.

59. Ms Hellessey alleged in par 24T that, by letters dated 7 July 2016 and 24 August 2016, she had informed MetLife that the failure to determine the claim constituted a rejection of the claim. By par 24V Ms Hellessey claimed that, because MetLife had not paid her claim by the date of the further amended statement of claim, it had decided to reject the claim and had thereby “wrongfully, constructively denied” that claim, so that the court ought itself determine on the evidence that she was entitled to the TPD benefits as at the assessment date.

60. Thus, by her pleading Ms Hellessey has alleged that the first rejection and the second rejection were void and invalid, even though requests were made on her behalf that were acceded to by MetLife that it review its decisions. There is an issue in the case whether, as asserted by MetLife, once it agreed at Ms Hellessey’s request to review the first two rejections, Ms Hellessey lost the right to claim that those decisions were ineffective, as a basis for asking the court to determine her TPD claims itself.

61. Ms Hellessey has alleged that the third procedural fairness letter was an invalid third rejection of her claims, when it was not. Although reasons for the letter’s invalidity are pleaded, the letter could not form a basis for the court’s determining Ms Hellessey’s claim itself.

62. Ms Hellessey has also pleaded what is usually called a constructive denial claim in relation to MetLife’s failure to make a third determination of her claim before the commencement of the hearing.

63. In fact, as has been observed above, MetLife delivered the third rejection to Ms Hellessey, between the signing of the amended statement of claim and it being filed in court.

64. In her final written submissions dated 21 December 2016, Ms Hellessey attacked the decision-making process undertaken by MetLife in relation to her TPD claims both on the basis of constructive rejection and on the basis that individual decisions to reject the claims were invalid on the ground of unreasonableness.

65. Ms Hellessey submitted that there was a constructive rejection by reason of the failure of MetLife to make a determination of her claim by the date that the statement of claim was filed on 18 August 2015. That submission was made notwithstanding that the first rejection letter was written on 22 December 2014, and seems to be based on the overall length of time that had elapsed since the claim was first made, together with the time that had elapsed since the Trustee’s request for a review of the first rejection on 24 February 2015. That is a period of about 6 months.

66. As I have noted above, the amended statement of claim deleted the allegation in the original pleading that MetLife had failed to make a determination by the date the statement of claim was filed.

67. Ms Hellessey submitted that a constructive rejection had occurred on a second basis by reason of MetLife having failed to make a redetermination on its review of the second rejection, or what Ms Hellessey misinterpreted as the effect of the third procedural fairness letter, before the date the amended statement of claim was filed.

68. In relation to the actual rejections of her claim by MetLife, Ms Hellessey submitted in her final submissions that the first rejection and the second rejection were invalid on the grounds that they were not reasonable.

69. Ms Hellessey described the 11 May 2016 third procedural fairness letter as the “Third Decline/Procedural Fairness Letter”. She made submissions as to why it also was unreasonable.

70. Ms Hellessey made submissions in her final written submissions (pars 124 to 129) and her oral submissions (T 27/04/17 at 24 and 25) as to why the real third rejection should not be found to be valid. As I understand it, notwithstanding that the third rejection was not dealt with in the pleadings, the parties joined issue on whether the third rejection should be found to be valid and binding or invalid.

71. The approach adopted by Ms Hellessey concerning the validity of each of the rejections is evident in the following oral submission of her counsel (T 27/04/17 at 13.13):

We would say the approach to it, your Honour, is that it is a cascading approach. One decline letter builds upon the second, and then builds upon two procedural fairness letters to incorporate into a final one, so that if your Honour, for instance, finds the first decline letter is decided, was not properly decided, then the plaintiff will be successful at the first stage.

72. Ms Hellessey therefore submitted that it was appropriate to determine the reasonableness of each of the rejections in chronological order, and if Ms Hellessey could demonstrate that any one of them was invalid, then the issue of her entitlement to the TPD benefits should be determined by the court.

73. MetLife relied upon the evidence of the requests made on behalf of Ms Hellessey after each of the first two rejections for MetLife to review its determination, and said that the effect of its agreement to do so was that Ms Hellessey waived any defect in the determination to be reviewed, so that any shortcoming in an earlier rejection would be irrelevant if the third rejection was sustainable. It was MetLife’s case that the only rejection that required consideration was the third rejection.

74. It is appropriate to note at this point two specific aspects of Ms Hellessey’s statement of claim.

75. First, it is not common for claimants to make a case based upon the internal decision-making process of the insurer, but in this case Ms Hellessey pleaded in particular (a) to par 24B of her amended statement of claim that the first rejection was not valid because MetLife had actually satisfied itself that Ms Hellessey satisfied the TPD definition, as evidenced by an internal email dated 4 September 2014, in which one of its officers reported to another that he felt that if the case was to go to court it would rule in favour of the claim, as Ms Hellessey’s treating psychiatrist had known the patient from the date of injury and strongly supported the claim. The email recommended admitting the claim. I will return to this issue below.

76. Secondly, in her amended statement of claim, Ms Hellessey referred to the Claims Review Committee, which was a mechanism created by the terms of the policies for the review of determinations made by MetLife by a committee made up of a nominee of the Trustee, a nominee of MetLife, and an independent person. Ms Hellessey referred in par 24T to a request that her matter be considered by the Claims Review Committee, and in her final written submissions one alternative form of relief requested by Ms Hellessey was that the court order that her claim be referred to the Committee. In final oral submissions Ms Hellessey withdrew that claim for relief.

77. It will be appropriate to note one aspect of MetLife’s defence to the amended statement of claim. In relation to the two policies, MetLife set out in par 12 the specific facts upon which it relied to support its determination that it had not been satisfied that Ms Hellessey had become incapacitated to such an extent as to render her unlikely ever to engage in any gainful profession, trade or occupation for which she is reasonably qualified by reason of education, trading or experience. Omitting particulars, MetLife:

(c)   says that as at 1 March 2011, the plaintiff was 34 years of age and could reasonably be expected to have a further 31 years of working life;

(d)   says that as at 10 March 2011, the plaintiff’s treating general practitioner, Dr Paul Falk, was of the opinion that the plaintiff was fit to work external to the NSWPF;

(e)   says that as at 18 May 2011, the plaintiff’s treating psychologist, Mr Rodney Ward, said he was supportive of the plaintiff participating in a vocational assessment and that she may be fit for paid employment external to the NSWPF in work which was far removed from policing;

(f)   says that as at 30 August 2011 Dr Jeff Bertucen, consultant psychiatrist who assessed the plaintiff on behalf of the NSWPF for the purpose of her application for medical discharge, was of the opinion that the plaintiff may recover to the point where she would be fit for paid employment external to the NSWPF in a position which was unrelated to police work. Dr Bertucen believed that such a recovery may take place within six to twelve months after the plaintiff was medically discharged from the NSWPF;

(g)   says that shortly before the plaintiff’s medical discharge from the NSWPF, Mr Ward was of the opinion on 4 October 2011 that there had been an improvement in the plaintiff’s ‘base line level’ of anxiety;

(h)   says that shortly after the plaintiff’s medical discharge, Dr Falk believed on 11 January 2012 that the plaintiff’s long term goal should be returned to paid employment;

(i)   says that work as a learning and development officer, childcare worker, driving instructor, cashier or sales representative was work for which the plaintiff was reasonably qualified by reason of education, training or experience;

(j)   says that Dr Bertucen believed that, based on his assessment of the plaintiff on 30 August 2011, it was likely that the plaintiff was able to engage in employment as a learning and development officer, childcare worker, driving instructor, cashier or sales representative prior to the plaintiff reaching retirement age.

(k)   says that the plaintiff has not to date provided proof to the defendant’s satisfaction that the plaintiff has become incapacitated to such an extent as to render her unlikely ever to engage in any gainful profession, trade or occupation for which she is reasonably qualified by reason of education, training or experience…

78. The defence to the amended statement of claim was filed in court during the hearing. It is significant that MetLife only pleaded reliance on medical opinions expressed on about or shortly after the assessment date, 1 March 2011. The latest expression of medical opinion was Dr Falk’s 11 January 2012 report. Although Dr Bertucen’s report was made on 17 August 2015, it was a report concerning his assessment of Ms Hellessey made on 30 August 2011. MetLife ignored all of the later reports, including all of the reports of Ms Hellessey’s treating psychiatrist, Dr Durrell, in pleading its defence to the amended statement of claim.

79. The case pleaded by MetLife in its defence is consistent with the position that it is the apparent likely effect of the claimant’s incapacity as at the assessment date, based primarily upon medical opinions expressed on or about that date, that is determinative of whether MetLife ought to have been satisfied that Ms Hellessey’s incapacity was in accordance with the TPD definition.

Primary issues

80. As I understand the position that the parties finally reached, having regard to the pleadings and the manner in which the proceedings were conducted, the primary issues between them may be summarised as follows:

1. Is it open to Ms Hellessey to claim that MetLife constructively rejected her claim before she filed her statement of claim on 18 August 2015, and if it is, did a constructive rejection occur so that Ms Hellessey’s entitlement to the TPD benefits may be decided by the court?

2. Did the circumstances in which Ms Hellessey requested and MetLife agreed to review its determinations that led to the first rejection and the second rejection have the effect that the only rejection that is operative is the third rejection?

3. If not, was either of the first rejection or the second rejection invalid?

4. In particular, was the first rejection invalid because MetLife rejected the claim after it decided that it was probable that a court would find that Ms Hellessey was entitled to the TPD benefits?

5. Did MetLife constructively reject Ms Hellessey’s claim in the circumstances where, having agreed to review the second rejection, it did not make the third rejection until 30 November 2016?

6. If MetLife was not precluded from determining Ms Hellessey’s claim a third time, was the third rejection invalid?

7. If MetLife’s determination of Ms Hellessey’s claim was invalid by reason of any or all of the rejections being invalid, is Ms Hellessey entitled to be paid the TPD benefits that she has claimed?

Proper construction of TPD definition

81. MetLife raised an argument that on the proper construction of the definition of TPD in the policies, the meaning of par (b) of the definition should be influenced by the terms of the other paragraphs of the definition. That submission was that par (b) “ought to be construed ejusdem generis with these other clauses, giving appropriate recognition to the enormity of the losses for which the other clauses confer exactly the same benefits”. Further: “It cannot have been the intention that only those maimed catastrophically or deprived of fundamental independent living capacity be eligible for TPD benefits but that an insured relying on the occupational cover be entitled to the same benefit for much less significant losses”.

82. MetLife made this submission in its written outline dated 2 December 2016, and supported it in oral submissions made on 27 April 2017. It submitted that par (b) “is only available in the most serious cases” (T 27/04/17 at 33.17). The submission sought to draw comparisons between the seriousness of the injuries and illnesses described in the different paragraphs of the TPD definition.

83. I reject this submission, both as a matter of the proper construction of the TPD definition and the supposed application of the ejusdem generis principle. I will take the statement of that principle from The Interpretation of Contracts in Australia by Lewison and Hughes (Law Book Co, 2012) at [7.12]:

If it is found that things described by particular words have some common characteristic which constitutes them a genus, the general words which follow them ought to be limited to things of that genus.

84. The learned authors set out the following extract from the judgment of Spigelman CJ in Lend Lease Real Estate Investments Ltd v GPT RE Ltd [2006] NSWCA 207 at [31]:

The reading down of general words is one of the most common mechanisms applied in the course of legal interpretation. The Court should not give one word in an interrelated, overlapping list of expressions a meaning that is so broad as to be inconsistent with adjoining words or that renders those words irrelevant.

85. In my view the simple response to MetLife’s submission is that the three or four paragraphs of the TPD definition (as the case may be in the different policies) are not drafted in a manner that suggests that they were intended to form a genus, and the separate paragraphs do not contain general words that may be read down so that their effect is consistent with the other paragraphs. Each paragraph is a separate description of a risk covered by the policy. Far from treating the separate paragraphs as forming a genus, it is more likely that the TPD definition has evolved over a period of time by the accretion of essentially different risks.

86. The result is that each paragraph should be construed according to its own terms by applying the received principles of contractual construction.

87. Furthermore, in my view the submission should be rejected because it is essentially meaningless and impossible of application. One of the difficulties that arise in dealing with psychological injury in the first place is that the injury though universally accepted to be real has a largely subjective manifestation. From the perspective of the court there are no effective objective measures of the true effect and seriousness of the psychological injury (which is why the court is particularly reliant upon expert medical testimony and lay evidence of the outward manifestations of the injury). Consequently, the court cannot accurately assess the seriousness of a particular psychological injury for the purpose of making a judgment as to whether the injury is “most serious” in comparison to the consequences of the physical injuries described in the other paragraphs of the TPD definition. Put shortly, it is nonsense for the court to attempt to distinguish the seriousness of the psychological injury suffered by a person with PTSD and major depression as being more or less serious than the injury suffered by a person who has lost the use of one limb and the sight of one eye. The submission implies that persons who suffer from the serious psychological effects of PTSD and major depression are less seriously injured than a person who has lost one limb and the sight of one eye, for example, because the person in fact is physically uninjured. There is no basis for this implication either as a matter of scientific foundation or ordinary experience.

88. The fact that MetLife put the submission is in my view a serious cause for concern. It is not customary in cases of this kind for the insurer to go into evidence and call the claims managers responsible for the rejection of the claim for a TPD benefit. The claimant and the court are left to divine the insurer’s decision-making process from any procedural fairness letter that has been issued by the insurer and the letter that explains the reasons for the rejection. Those letters generally do not disclose the precise meaning attributed by the insurer to the relevant TPD definition. The definition is usually set out at the beginning of the rejection letter, and the claimant and the court are left to assume that the insurer has adopted a correct construction of the meaning of the definition in determining whether it should be satisfied that the definition applies.

89. The vice of the construction of the TPD definition urged on the court by MetLife in this case is that it proposes a gloss to the meaning of the words of par (b). That is, it suggests that the first step in applying that definition is to determine whether the words apply to the particular case, and the second step is then to make a judgment as to whether in the case of a psychological injury, the seriousness of the consequences to the claimant are such as to put the injury in the same class of seriousness as the physical injuries described in the other paragraphs of the definition.

90. The very making of this submission by MetLife immediately suggested to the court that MetLife may in fact have acted on the basis that par (b) of the TPD definition should be construed in the manner submitted by MetLife. If MetLife in fact did that, in my view it would clearly have asked itself the wrong question in the course of determining whether it should be satisfied that the TPD definition was established.

91. When that possibility was put to counsel for MetLife in oral submissions the response was (T 27/04/17 at 65.37):

I can tell your Honour from the bar table there was something formulated in my head and it’s never been reflected in any instructions I’ve ever received, nor have I seen it anywhere referred to in any document in these proceedings, and what’s more and I think this is pretty relevant it’s not the subject of a pleading.

92. Ms Hellessey could hardly have ever pleaded this argument, because the real decision-making process engaged in by MetLife has always been completely opaque, save for what MetLife has chosen to disclose in its procedural fairness and rejection letters. The submission was first put by MetLife in written submissions delivered at the commencement of the hearing.

93. I have been very concerned by this matter, as a review of all of the evidence that emanated from MetLife would at least support an argument that MetLife may have been influenced by the attitude that underlies the submission in the way that it dealt with Ms Hellessey’s application.

94. As it has happened, however, and as will be seen, I have been able to deal with the issues that arise in these proceedings without having to give any effect to the possibility that MetLife’s determination of Ms Hellessey’s claim was flawed at its inception because MetLife acted upon what I consider to be a seriously misconceived understanding of the proper construction of the relevant part of the TPD definition. I add that I accept counsel’s explanation of the provenance of the submission, but that still leaves room for concern about the approach taken by MetLife in this case.

Legal principles

95. The effect of s 13 of the Insurance Contracts Act 1984 (Cth) as in force at the time the policies were entered into was to impose upon each of MetLife and the Trustee obligations of utmost good faith: TAL Life Ltd v Shuetrim (2016) 91 NSWLR 439; [2016] NSWCA 68 at [48] (TAL v Shuetrim) per Leeming JA (Beazley P and Emmett AJA agreeing). The duty is sometimes called a duty of utmost good faith and fair dealing.

96. As Leeming JA said in TAL v Shuetrim at [49]:

[49] The obligation to act in utmost good faith, of course, predates statute. As Emmett J said in AMP Financial Planning Pty Ltd v CGU Insurance Ltd [2005] FCAFC 185; 146 FCR 447 at [88]–[89], the concept of utmost good faith or uberrima fides has always been present in the law of insurance, and encompasses notions of fairness, reasonableness and community standards of decency and fair dealing, and may be breached by capricious or unreasonable conduct which falls short of dishonesty. That part of his Honour’s reasons was agreed with by Moore J and, on appeal, by Gleeson CJ and Kirby and Crennan JJ: CGU Insurance Ltd v AMP Financial Planning Pty Ltd [2007] HCA 36; 235 CLR 1 at [15] and [128].

97. In the present case, as experience shows often occurs, a time came when Ms Hellessey through her solicitors took over the role of prosecuting the Trustee’s claim against MetLife with the acquiescence of both the Trustee and MetLife. Ms Hellessey acted informally as the Trustee’s proxy. Although at that time Ms Hellessey was not bound by the duty of utmost good faith (see TAL v Shuetrim at [48]), at least in respect of her role in the prosecution of the claim, MetLife was entitled to require Ms Hellessey to conform to the Trustee’s duty of utmost good faith.

98. MetLife was under an implied obligation to consider and determine whether it should form an opinion on the matter which was a condition of its own liability, being whether Ms Hellessey had satisfied the TPD definition. In forming the opinion MetLife was required to consider and determine the correct question. It was also required to have due regard to the interests of Ms Hellessey. See Edwards v Hunter Valley Co-op Dairy Co Ltd (1992) 7 ANZ Ins Cas 61-113 at 77,536 and Hannover Life Re of Australasia Ltd v Sayseng [2005] NSWCA 214; 13 ANZ Ins Cas 90-123 at [36], Santow JA (Spigelman CJ and Tobias JA agreeing).

99. The decision of the Court of Appeal in TAL v Shuetrim establishes the following propositions (Leeming JA):

[60] I do not regard the following as controversial. First, the clause does not turn upon the fact that the Insured Person is unlikely ever to undertake employment, but instead is expressed to turn upon the state of mind of the insurer.

[61] Secondly, in considering the matter and reaching a state of satisfaction, the insurer is required to act reasonably. That has been worked out in a series of decisions dating from the mid-nineteenth century, to which McLelland J referred in Edwards v The Hunter Valley Co-op Dairy Co Ltd at 77,536:

”Where under a contract, rights or liabilities depend upon the subjective state of mind of a party, eg the party’s approval, opinion or satisfaction, of or about something, it can be a difficult question whether the party is subject to an implied obligation in reaching that state of mind, or failing to reach it, as the case may be, to be bound by objective standards of reasonableness … However in the field of insurance, it is well established that where under a contract of insurance an element of the insurer’s liability is expressed in terms of the satisfaction or opinion of the insurer, the insurer is obliged to act reasonably in considering and determining that matter.”

[62] Thirdly, there are limits to what flows from the obligation to act reasonably. As McLelland J added:

“To say that an insurer must act reasonably in forming or declining to form an opinion is not to say that a Court can substitute its own view for that of the insurer. As North J pointed out in Doyle at 529, ‘reasonable persons may reasonably take different views’. Unless the view taken by the insurer can be shown to have been unreasonable on the material then before the insurer, the decision of the insurer cannot be successfully attacked on this ground.”

[63] Fourthly, the words “proof to the satisfaction of us” reflect an obligation on the part of the Insured Person to provide evidence in support of his or her claim.

[64] Fifthly, the clause does not turn on the insurer being satisfied that the Insured Person will never be able to resume employment, but the lesser threshold that he or she is “unlikely ever” to do so. The clause is thus more readily satisfied than the language in Manglicmot v Commonwealth Bank Officers Superannuation Corporation Pty Ltd [2011] NSWCA 204 ; 282 ALR 167 regarded by Giles JA as “quite emphatic”: at [88].

[65] Sixthly, all of the foregoing is subject to the obligations of good faith on the part of the insurer, as well as the (overlapping) implied obligations to act reasonably and to do all that is necessary to enable the other party to have the benefit of the agreement (see Mackay v Dick (1881) 6 App Cas 251 at 263, Butt v M’Donald (1896) 7 QLJ 68 at 70–71 and Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 450), as set out in the passage in Edwards reproduced above.

[66] Seventhly, the closing words of the definition (“any occupation or work for which he or she is reasonably qualified by reason of education, training or experience”) are known, according to W I B Enright and R M Merkin, Sutton on Insurance Law (4th ed 2015, Thomson Reuters), vol 2 at 583, as the “ETE clause”. That clause materially narrows the scope of the coverage given by the TPD definition, from the perspective of the Insured Person…

100. Leeming JA by his sixth proposition emphasised that the foregoing propositions were subject to the obligation of good faith “as well as the (overlapping) implied obligations to act reasonably and to do all that is necessary to enable the other party to have the benefit of the agreement”.

When will the insurer’s decision be reasonable?

101. For the purposes of the present case it is important to note that Leeming JA stated his second proposition simply in terms of the insurer being required to act reasonably. That language was adopted from the judgment of McLelland J, and has been used and applied in a great many subsequent cases.

102. MetLife made a submission that “the appropriate test is (or should be) whether the decision of the insurer was so unreasonable that a reasonable person in that situation could not have made it”. The evident intent of this submission was to expand the latitude given to the insurer to decide for itself whether it was satisfied that the TPD definition had been established.

103. This submission was based upon observations made by Young AJ (as his Honour then was) in Chapman v United Super Pty Ltd [2013] NSWSC 592 at [53], where his Honour said:

In this litigation, the onus is on the plaintiff to establish that the Insurer’s or Trustee’s decision on the material before them to deny the plaintiff indemnity was (a) so unreasonable in all the circumstances that the court is required to intervene, see Tonkin v Western Mining Corporation Ltd [1998] WASCA 101; or (b) that either the Trustee or the Insurer breached some duty to the plaintiff. It is not sufficient for the court to say that had it been the initial decision maker, or if it were an appeal court hearing the matter de novo, it would have come to a different decision. The court must focus on whether the decision of the Insurer or the Trustee or both was so unreasonable that a reasonable person in that situation could not have made it.

104. It must be accepted that Young AJ formulated the principle in a manner consistent with MetLife’s submission in the final sentence of this paragraph. However, earlier in the same paragraph he had expressed the principle in terms of whether the decision was “so unreasonable in all the circumstances that the court is required to intervene”. This latter formulation is consistent with Leeming JA’s second proposition.

105. Young AJ’s statement was repeated by Nicholas AJ in Folan v United Super Pty Ltd [2014] NSWSC 343 at [74], and by Stevenson J in Shuetrim v FSS Trustee Corporation [2015] NSWSC 464 at [33] and Mehmet v IOOF Investment Management Ltd [2015] NSWSC 1914 at [30].

106. In my view, it does not follow from the fact that these judges have set out the extract from Chapman (above) relied upon by MetLife that they intended to endorse Young AJ’s final sentence as expressing the correct basis upon which the court should address the reasonableness of the insurer’s decision-making process. For example, in Mehmet (above) Stevenson J’s final statement concerning the manner in which the insurer was required to determine whether it was satisfied that the requirements of the TPD definition had been established was:

[33] However, as the authorities I have set out above emphasise, the insurer must, when making its decision, act reasonably and consistently with its duty of good faith and fair dealing to the insured. The insurer must ask itself the correct question, take into account all of the relevant material and not misstate the effect of the material before it.

107. That statement of principle is also, with respect, consistent with Leeming JA’s second proposition.

108. A review of the judgment of the Court of Appeal of Western Australia in Tonkin v Western Mining Corporation Ltd [1998] WASCA 101, which was relied upon by Young AJ in Chapman, also shows that the Court of Appeal spoke in terms of aspects of the decision being “reasonable” or “unreasonable”, rather than whether the decision was so unreasonable that no reasonable insurer could have made it. The decision does not support Young AJ’s final sentence in par [53] of his judgment. It does support his Honour’s proposition (a).

109. In my view, the submission made by MetLife should not be accepted. It is an unwarranted gloss on established principle. A trial judge should simply apply the principles stated by Leeming JA in TAL v Shuetrim (above) at [61], [62] and [65].

110. The submission that the requirement that the insurer act reasonably in deciding whether it is satisfied that the TPD definition has been established should be equated to an enquiry as to whether the insurer’s decision was so unreasonable that no reasonable insurer could have made it invites comparison with the Wednesbury principle in administrative law. I have looked to that principle only in so far as it assists in casting light on what the true effect of the submission made by MetLife might be. It is sufficient in this case to look to the observations by Hayne, Kiefel and Bell JJ in Minister for Administration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18 at [64]-[68] (footnotes omitted):

[64] A standard of reasonableness in the exercise of a discretionary power given by statute had been required by the law long before the first statement of “Wednesbury unreasonableness” in Associated Provincial Picture Houses Ltd v Wednesbury Corporation…

…

[66] This approach does not deny that there is an area within which a decision-maker has a genuinely free discretion. That area resides within the bounds of legal reasonableness. The courts are conscious of not exceeding their supervisory role by undertaking a review of the merits of an exercise of discretionary power. Properly applied, a standard of legal reasonableness does not involve substituting a court’s view as to how a discretion should be exercised for that of a decision-maker. Accepting that the standard of reasonableness is not applied in this way does not, however, explain how it is to be applied and how it is to be tested.

…

[68] Lord Greene MR’s oft-quoted formulation of unreasonableness in Wednesbury has been criticised for “circularity and vagueness”, as have subsequent attempts to clarify it. However, as has been noted, Wednesbury is not the starting point for the standard of reasonableness, nor should it be considered the end point. The legal standard of unreasonableness should not be considered as limited to what is in effect an irrational, if not bizarre, decision — which is to say one that is so unreasonable that no reasonable person could have arrived at it — nor should Lord Greene MR be taken to have limited unreasonableness in this way in his judgment in Wednesbury. This aspect of his Lordship’s judgment may more sensibly be taken to recognise that an inference of unreasonableness may in some cases be objectively drawn even where a particular error in reasoning cannot be identified…

See also Kamm v New South Wales (No 4) [2017] NSWCA 189 at [68] (Beazley P).

111. These considerations show that, although there may be scope for debate concerning the relationship between a test of reasonableness and a test that looks to whether the decision was so unreasonable that no reasonable decision-maker could have made it, the latter test is more liberal and would tend to allow the validity of decisions at the extreme margins of what could be regarded as being reasonable. While the decision of an insurer that is so unreasonable that no reasonable insurer in the circumstances could have made it will be invalid, that is not the sole test of invalidity. A decision may also be invalid because it is unreasonable having regard to the limits on the right of the insurer to decide its own liability imposed by its duty of good faith and fair dealing.

112. One final observation should be made concerning the passage in the judgment of Young AJ that has been relied upon by MetLife. Young AJ expressed the test in terms of whether the decision was so unreasonable that the court should intervene, rather than whether some important step in the insurer’s reasoning process was unreasonable. In the various places where the matter was dealt with in Tonkin (above) it was generally expressed in terms of whether or not it was unreasonable on the evidence for the insurer not to find that the TPD definition was satisfied.

113. In Jones v United Super Pty Ltd [2016] NSWSC 1551, Brereton J put the matter this way in reliance upon Chapman and other cases at [60] (footnotes omitted):

The plaintiff further submitted that it was in any event unreasonable to conclude that his physical restrictions did not preclude him from engaging in the suggested occupations. To sustain that submission, bearing in mind that it is for the claimant to provide the insurer with the requisite evidence to establish his or her claim, the plaintiff must show that, on the medical evidence before the insurer, it would have been unreasonable to form any opinion other than that Mr Jones was so physically restricted as to be incapable of performing the requirements of those occupations.

114. This raises the question of whether the real test is that the claimant must be able to satisfy the court that, on the basis of the evidence before the insurer, it would have been unreasonable to form any opinion other than that the claimant was so incapacitated at the assessment date as to satisfy the TPD definition. That is arguably a different test than one that simply requires a conclusion that the decision to reject the claim has been formed as a result of a process of reasoning that is sufficiently unreasonable to justify a conclusion that the decision should be set aside.

115. If that is the test, then claimants will fail in their attempt to invalidate the insurer’s determination even where it can be shown that the insurer has made significant unreasonable errors in its decision-making process, unless the claimant can go further and establish that there was no other way that the insurer could reasonably reject the claim on the evidence.

116. In my respectful view the statements of principle set out by Leeming JA in TAL v Shuetrim (above) do not go that far. The insurer is required to “act reasonably in considering and determining” when forming its satisfaction or opinion as to whether the TPD definition is satisfied, and it must be shown that the view taken by the insurer was unreasonable on the material before it. In my view, if it can be shown on the evidence before the insurer that the actual decision-making process that was adopted by the insurer was sufficiently unreasonable to vitiate the determination, it should not be required of the claimant that he or she be able to exclude all other routes to the insurer reaching the same determination that could have been reasonable.

Should the insurer’s decision be subject to critical analysis?

117. MetLife made a second submission that had the apparent purpose of limiting the extent of the investigation of the insurer’s decision-making process that the court should undertake for the purpose of determining whether the insurer’s decision was unreasonable. MetLife submitted “that an insurer’s decision should not be subjected to a critical analysis” (emphasis in original). It gave as an example that the reasoning process should not be analysed like a judgment under appeal. It said: “That is especially so here because MetLife’s decision incorporates normative judgments and such judgments are not lightly disturbed”.

118. MetLife developed this submission in oral argument by suggesting (T 27/04/17 at 39.16) that the decision by MetLife was “a classic jury question”, because the decision-maker is assembling different kinds of information and assessing the degree of credibility in each and attributing weight here and there”.

119. MetLife made a related submission (T 27/04/17 at 40.17) that the approach that the court should adopt when determining whether or not the decision-making process of an insurer was reasonable should involve “top-down reasoning” rather than “bottom-up reasoning”. The former approach was described in the following terms: “you have a look at the decision and you look at it to determine whether or not on its face it’s unreasonable, in which event it would go” (emphasis added).

120. Counsel for MetLife distinguished what he submitted was the inappropriate approach involving “bottom-up” reasoning by describing the approach that I adopted in Wheeler v FSS Trustee Corporation [2016] NSWSC 534 and in Panos v FSS Trustee Corporation [2015] NSWSC 1217 as involving the incorrect approach. Unusual as this submission may have been, its meaning is startlingly clear and it had the benefit of assisting me to understand what was sought to be made out of the distinction between the “top down” and the “bottom-up” approaches, which otherwise may have eluded me.

121. In both of those cases I analysed in detail the evidence that the insurer had before it when it made the determination that was under challenge. I did that largely because the way that the evidence was presented to the court physically took the form of the inclusion of the procedural fairness letter in the court book, followed by copies of all of the evidence upon which the insurer acted, and then the letter rejecting the claim. In both cases the question whether the insurer’s decision-making process was unreasonable was approached from the perspective of a detailed analysis of the evidence before the insurer.

122. MetLife relied in support of its submission on the judgment of Nicholas J in Weber v Tiss Pty Ltd [2005] NSWSC 67 at [8] where his Honour said:

[8] It was also accepted that the insurer is not required to undertake the detailed consideration required of a court hearing (Chammas v Harwood Nominees (1993) 7 ANZIC 61-175 at p 78,001); and that the insurer’s statement of reasons for declining a claim should be understood as a practical document intended to inform the claimant of the basis of the decision rather than detailed reasons with reference to the evidence relied upon comparable to a judgment of a court or tribunal. The reality must be recognised “… that the reasons of an administrative decision-maker are meant to inform and not to be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed”. (Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at p 272).

123. With respect, I doubt the appropriateness of equating the position of the insurer under a contract of insurance with that of an administrative decision-maker. The latter will have a statutory right to decide the merits of an application where the decision should not be interfered with judicially if made within the confines of the power of the decision-maker. On the other hand, the insurer exercises a contractual power that is confined by an implied contractual obligation that includes a duty to act in the interests of the insured as well as the insurer.

124. It should be remembered that in TAL v Shuetrim at [152], Leeming JA expressed “real difficulty in accepting the unqualified applicability of the statement of principle in Weber v Tiss Pty Ltd”. The letter declining cover in that case “was no ordinary letter declining cover”. His Honour described the circumstances in which the letter had been produced that led him to the conclusion: “It is near inconceivable that the author of the letter was unaware that it would be scrutinised at the final hearing which was shortly to take place, nor that it had not been reviewed by lawyers…” The various procedural fairness letters and letters rejecting Ms Hellessey’s claim in the present case were not prepared in precisely the same circumstances as the letter the subject of Leeming JA’s observations, but they were all prepared in circumstances that justify the inference that great care was taken to justify the reasoning process, in the apparent expectation that the letters would be subject to close scrutiny by the Trustee, Ms Hellessey and the court. The third rejection was prepared in circumstances that were almost identical to the letter considered by Leeming JA.

125. In my view, MetLife is correct in so far as it submitted that the court should not treat a letter written by an insurer rejecting a claim for TPD benefit as if it were a judgment of a court under appeal. However, if the circumstances appear to warrant it, the court will be justified in treating the rejection letter and any associated correspondence as being the work of a highly experienced insurance claims assessor with the assistance of whatever legal advice the insurer may choose to obtain. Given the seriousness of the matter to the claimant, there is a real question as to whether the experienced claims assessor will be any less diligent or capable than a trial judge called upon to make the same determination as the insurer.

126. In any event, proper judicial method requires that the court analyse and understand to the fullest extent possible the evidence available to the insurer and the process of reasoning that is exposed by its correspondence, so that the decision of the court as to whether the insurer has acted reasonably is not made from a position of ignorance.

127. It is not helpful in this area to draw analogies with the operation of juries. The reason that the court does not interfere with the decision of the insurer unless there has been a breach of the duty of good faith and fair dealing, usually because the decision-making process is unreasonable, is a consequence of the wording of the insurance contract. It has little to do with the division of function between the court and the jury in a jury trial. Furthermore, if the “top-down” approach suggested by MetLife were adopted the consequence would often be that the court’s consideration of the insurer’s decision-making would be superficial. The decision would be judged on the appearance of reasonableness rather than actual reasonableness. That approach would not be consistent with the need to determine whether or not in fact the insurer had breached its duty.

128. Quite apart from my own decision in Wheeler (above), it seems to me from a consideration of what other trial judges have done in recent cases in which the insurer’s decision-making process has been found wanting is that the court has engaged in a close but measured analysis of the insurer’s reasoning in response to the evidence that was before it to determine whether the conclusion reached was sufficiently unreasonable to warrant the decision being set aside: see for example Ziogos v FSS Trustee Corporation [2015] NSWSC 1385 at [90]-[104] (Ball J) and Mehmet v IOOF Investment Management Ltd (above) at [53]-[85] (Stevenson J).

What is the significance of the timing of the medical evidence?

129. The TPD definition requires that the claimant be incapacitated at the end of six consecutive months’ absence from work as a result of the injury or illness. This date may conveniently be called the “assessment date”. It is at that date that the incapacity must be such as to satisfy what Leeming JA called the ETE clause. The question is, however, whether or not the claimant’s incapacity objectively satisfies the clause at the assessment date, and not whether the prognosis of the claimant based upon the medical and other evidence available at the assessment date suggests that the ETE clause is satisfied. What is material is not the appearance as at the assessment date but the actual probable consequences of the incapacity.

130. Consequently, where time elapses after the assessment date before the insurer decides whether it is satisfied that the TPD definition has been established, the insurer must have due regard to all medical and other evidence concerning the likely consequences of the claimant’s incapacity as at the assessment date that becomes available: see TAL v Shuetrim at [153] and [154]; Shuetrim v FSS Trustee Corporation (above) at [67] (Stevenson J); and also my observations in Wheeler (above) at [63]. In fact, where there are prospects of the claimant recovering from the incapacity in a manner that will defeat the satisfaction of the ETE clause, the evidence available as at the assessment date may be an unsound basis for determining whether the TPD clause has been satisfied, and the consequences of later and particularly longitudinal evidence may be a more reliable guide to the true nature of the claimant’s incapacity as at the assessment date.

When will the insurer have constructively rejected the claim?

131. The present case raises the question of when the insurer will be taken to have breached its duty of utmost good faith by failing to make a determination as to whether or not it is satisfied that the claimant’s circumstances satisfy the TPD definition, so that the insurer will be treated as being in the same position as if it had made a determination in a manner that breached its duty. The insurer may simply fail to make a determination notwithstanding the elapse of a long period after receiving the application for the TPD benefit, or it may fail to do so notwithstanding the course of correspondence with the Trustee or the claimant. It is customary to refer to the consequences of an unjustifiable delay on the part of the insurer in making a determination of the claim as a “constructive denial” or “constructive rejection” of the claim, although these descriptions are not entirely apt.

132. In Shuetrim v FSS Trustee Corporation (above), which was a case in which the claimant alleged constructive rejection after a course of correspondence between the claimant and the insurer during which the parties engaged in argument about what was required of the claimant before the insurer could be expected to make a determination, Stevenson J determined the question by asking at [153] whether the manner in which the insurers dealt with the claim up to the time when they actually made a decision was itself a breach of their duty of good faith and fair dealing. I respectfully agree with his Honour and will apply that approach in dealing with Ms Hellessey’s claims that MetLife constructively rejected her claim on two occasions.

133. I also agree with the observation made by Stevenson J at [169] that the obligations of good faith and fair dealing are bilateral (in the sense that I have mentioned above where the claimant is the de facto proxy of the actual insured for the purpose of prosecuting the claim).

134. It may be in a particular case, where the most significant factor is simple delay on the part of the insurer in making a determination, that it will be appropriate to focus on the issue of the reasonableness of the insurer’s conduct (which is of course an aspect of the duty of good faith).

Why can the court decide whether the claimant is TPD?

135. TAL v Shuetrim establishes that, if in determining its own satisfaction as to whether the circumstances of the claimant satisfied the TPD definition the insurer breaches its duty of utmost good faith, such as by failing to determine the claim in a reasonable way, the court has power to determine for itself on the evidence presented at the trial whether or not the claimant is entitled to the benefit claimed because the TPD definition (absent the requirement for the insurer’s satisfaction) is satisfied: see [169]-[188].

136. MetLife made a formal submission that this statement of principle by the Court of Appeal is wrong, but accepted that I must apply it in this case. There is accordingly no need for the court to enter upon any detailed consideration of the principles that underlie the power of the court to determine itself whether the TPD definition has been satisfied. It is necessary, however, to give some little attention to the question for the purpose of the consideration of the next legal question that requires my attention.

Shopping activities

987. MetLife’s conclusion concerning Ms Hellessey’s shopping activities (expressed at page 16 of the fourth procedural fairness letter) may not have had great significance to MetLife’s reasoning process. MetLife appears to have acknowledged the strength of Ms Hellessey’s solicitors’ submission that the evidence of transactions was consistent with Mr Hellessey doing the shopping. However, MetLife nonetheless asserted that Dr Westmore, Mr Rawling and Mr Hellessey had reported that Ms Hellessey had “regained the ability and capacity to attend to shopping”.

988. I have discussed the evidence concerning whether or not Ms Hellessey was freely capable of engaging in shopping activities above at pars 482 to 488. The statements made by Dr Westmore, Mr Rawling and Mr Hellessey simply do not support the assertion made by MetLife.

Conclusion as to validity of third rejection

989. For the reasons set out above, I therefore conclude that the third rejection by MetLife of Ms Hellessey’s claim is invalid.

Entitlement of Ms Hellessey to TPD benefits

990. In the circumstances I have considered above it falls to the court to determine on the evidence that was tendered in the proceedings whether or not Ms Hellessey is entitled to the TPD benefits under the policies. Having regard to the evidence, I have determined that Ms Hellessey was at the assessment date incapacitated by her psychological injury in a manner that satisfied the TPD definition in the policies.

991. It is not clear when Ms Hellessey first began to suffer from PTSD and Major Depressive Disorder, as she began to suffer from psychological injuries in about 2004 as a result of her experiences while a member of the Police Force. The doctors who examined or treated Ms Hellessey at around the time that she ceased work as a police officer on 30 August 2010 appear uniformly to have diagnosed her with PTSD and probably secondary depression as well. It is clear that Dr Durrell, her treating psychiatrist, was of that view from early in the period when Ms Hellessey was his patient.

992. All of the medical professionals who were called to give expert evidence at the hearing were of the opinion that Ms Hellessey still suffered from PTSD at that time, including Professor Mattick (par 681 above), except for Mr Rawling, who favoured a diagnosis of Adjustment Disorder with Anxiety and Depression over PTSD (par 699 above). Mr Rawling thought, however, that the specific diagnosis was immaterial.

993. It is necessary to consider the evidence of Professor Mattick discussed in par 679 above concerning Ms Hellessey’s scores in the psychometric tests that Ms Hellessey completed on 13 July 2016. Professor Mattick formed the view that her scores established clear evidence that Ms Hellessey was exaggerating her emotional disturbance. He concluded that the scores did not suggest that Ms Hellessey did not have some emotional problems, but she was exaggerating the extent of them. He concluded (see par 680) that there was no evidence of lack of effort or motivation or deliberately feigning cognitive dysfunction.

994. Mr Rawling also administered psychometric tests to Ms Hellessey. He also reported some apparent exaggeration by Ms Hellessey of the seriousness of her feelings (pars 697 to 709 above). It appears that the level of exaggeration identified by Mr Rawling was less than that found by Professor Mattick. Mr Rawling reached a different conclusion than Professor Mattick, being that expressed at par 699 above: “There was certainly no evidence of factitious failure on cognitive testing. On personality testing, she showed the tendency, common among people with psychological disorders, to see their symptoms as extreme, but there was again no compelling evidence of exaggerated claims of disability”.

995. It is necessary to evaluate the significance of this relatively isolated evidence, coming into existence in mid-2016, in the context of the whole of the evidence concerning the effects of Ms Hellessey’s psychological injury since the assessment date.

996. I accept that the findings of Professor Mattick and Mr Rawling were real and correctly reported. However, I have also accepted the lay evidence of Ms Hellessey’s witnesses concerning her day-to-day behaviour and the limitations on her activities. It must be recalled that Dr Hodgson accepted that Ms Hellessey appeared a genuine and sincere historian and did not believe that secondary gain was playing a role in Ms Hellessey’s current presentation, as at 20 September 2012 (par 227 above). Dr Durrell and Mr Ward examined Ms Hellessey on many occasions over a period of years, and were satisfied that she had the symptoms that they identified in their various reports. It is significant that Ms Hellessey performed the psychiatric tests about five years after the assessment date. As early as Dr Durrell’s 16 February 2013 report (par 189 above), Dr Durrell had reported that ongoing uncertainty concerning her claim was itself a source of considerable anxiety and that Ms Hellessey had limited coping mechanisms due to her PTSD. I have also noted above the Facebook posts made by Ms Hellessey in which she expressed anger towards MetLife as a result of its procrastination and the invasive surveillance it had undertaken (for example pars 746, 752 to 754, 757, 760 and 763 to 765). Speaking neutrally, it is not surprising that Ms Hellessey developed a strong antipathy towards MetLife. Finally, the results of the psychometric tests were put to Dr Westmore who gave the response that is set out at par 719 above.

997. In my view, while it must be accepted that in mid-2016, on a number of occasions, Ms Hellessey exaggerated the significance of her emotional disturbance, when tested objectively, that evidence does not justify a rejection of the overwhelming balance of the evidence that Ms Hellessey continued to be substantially afflicted by the consequences of her psychological injury caused by her PTSD and depression. In particular, I prefer the opinions expressed by Dr Westmore and Mr Rawling to the opinion of Professor Mattick, as I regard the former to be more balanced and justified having regard to the whole of the evidence concerning Ms Hellessey’s circumstances since the assessment date. When Ms Hellessey undertook the psychometric tests, her responses were probably influenced by anger at having to undertake further tests (her application for the benefits having already been rejected twice) and probably also a tendency reported by Mr Rawling for persons with significant psychological disturbance to overstate the seriousness of their condition in the way they articulate their feelings in a test situation.

998. As I explained earlier, MetLife relied upon Ms Hellessey’s Facebook posts, her activities involving horse shows and clubs, and in particular her involvement with Fairymead, as the foundation of an argument that Ms Hellessey’s activities over the period since the assessment date are inconsistent with her having the symptoms that she claims to have.

999. I analysed the principal evidence concerning Ms Hellessey’s Facebook posts at pars 731 to 767 above. I embarked upon that analysis as it appeared to me to be essential for the court to gain an overall understanding of what that conduct by Ms Hellessey signified. It appeared that reliance upon selected aspects of the posts may give an unbalanced view of their significance.

1000. In his 29 September 2013 report, Dr Durrell gave a reasoned response to a request that he comment on Ms Hellessey’s Facebook record from 3 April 2012 to 3 November 2012 (see par 194 above). In my view, even though ultimately a significantly greater number of Facebook posts were relied upon by MetLife than were the subject of Dr Durrell’s report, they only covered a much longer period and did not demonstrate activities by Ms Hellessey that were different in quality or significance to those that were considered by Dr Durrell. He said: “I can confirm that these contacts on Facebook do not represent real-life friendships and in the main these are persons loosely and indirectly associated with Ms Hellessey through her lifelong interest in horse breeding and horse showing”. See also the observation by Dr Hodgson in her 3 May 2013 report (par 231 above):

Ms Hellessey may appear happy in her Facebook postings, but I am unable to give a professional independent opinion as I am doubtful whether or not credence can be given to Facebook comments and photos. These may not have been independently verified and they may not be reflective or indicative of her usual status.

1001. I also refer to Mr Rawling’s opinion in his 8 August 2016 report, set out at par 698 above, in which Mr Rawling explained that observations gleaned during the course of covert intelligence and from reviewing Facebook postings are not clear-cut in cases of psychological injury, because they tell little of the true psychological state at the time. Professor Mattick did not offer any opinion on the significance of the Facebook posts.

1002. I accept the consistent evidence of the medical professionals who have expressed opinions on the subject that Facebook posts made in the privacy of the home of a person suffering PTSD and depression should not be taken at face value for the purpose of drawing conclusions about the true psychological state of the author of the posts. Social phobia is only one of the symptoms of Ms Hellessey’s psychological injury that is supported by the medical evidence. Facebook messages that are posted by a person suffering from social phobia that have been composed on the person’s computer at home do not necessarily have the same significance as would identical statements made spontaneously in person to other persons in a real social context. Such messages are not spontaneous. They are composed and in that sense they are artificial. They may represent an appearance that the psychologically injured person wishes to create.

1003. Care should be taken by persons who enjoy good psychological health concerning the significance that they attribute to Facebook posts made by psychologically injured persons. Logically, persons who enjoy relatively normal psychological health are unlikely to understand the true psychological circumstances of the injured person. Assumptions of cause and effect that are consistent with normal psychological health may not apply to persons with psychological injuries. Not only is there a heightened risk that false conclusions will be reached, but the person with normal psychological health has no objective means of judging when and to what degree that person has made an error when the person draws conclusions based upon the Facebook posts that assume that the maker of the posts is acting in the same way as a person of good psychological health.

1004. The court is in the same position as persons who enjoy good psychological health generally, which is why the court should be particularly careful to have regard to experienced medical opinion concerning the significance of the psychologically injured person’s communications.

1005. In the present case, Ms Hellessey’s treating psychiatrist, Dr Durrell was aware of Ms Hellessey’s use of Facebook and considered it to be “therapeutic” (par 670).

1006. Further, it follows from the analysis of the Facebook posts that I have undertaken above that Ms Hellessey did not in numerical terms make a substantial number of posts. The posts were substantially concerned with Ms Hellessey’s involvement in horse-related activities. Those activities were in general terms known to and recommended by Ms Hellessey’s treating psychiatrist and psychologist (especially pars 194, 202 and 217 above). Dr Durrell reported in his 29 September 2013 report his understanding that Ms Hellessey had been unable to ride, show or lead horses in shows due to her hypersensitivity of being observed by others, and that without the support persons and the anxiolytic medication it was most unlikely that Ms Hellessey would be able to continue with her ‘behind the scenes’ at the Royal Easter Shows and other shows (par 202).

1007. I find that the evidence of Ms Hellessey, Ms Eves, Ms Cleary and Mr Harvey that I have considered above establishes that Ms Hellessey’s involvement with horse shows and other horse-related activities was not inconsistent with her suffering from social phobia (see pars 541, 630, 639 and 655 above). Once it is accepted that even serious cases of PTSD and depression may not prevent the sufferer getting out of bed every day or cause the sufferer to lead a hermit-like existence, the evidence of Ms Hellessey’s limited and restricted personal involvement in horse shows is not inconsistent with the symptoms of her psychological injury that she and her treating medical professionals have identified. In fact, if the evidence is considered in a balanced way, it is consistent with a very limited social existence, and inconsistent with the capacity for Ms Hellessey to successfully engage in the jobs identified in the vocational assessment report.

1008. I also find that the evidence concerning Ms Hellessey’s limited involvement with the Palomino Association and the Goulburn Pony Club does not prove that Ms Hellessey has not suffered from the social phobia that her psychiatrist and psychologist identified. These activities by Ms Hellessey involved occasional meetings over a relatively short period of time with small numbers of people with whom Ms Hellessey was familiar, and also involved limited and rudimentary activities and communications by Ms Hellessey with outsiders. The significance of these activities must be weighed giving due proportion to the evidence given by Ms Hellessey’s lay witnesses, which I have accepted, concerning all of the symptoms of her psychological injury. Those symptoms are not limited to social phobia, but include many additional symptoms, such as detachment, emotional numbing, hyperarousal including insomnia, irritability, poor concentration and hypervigilance (par 183 above).

1009. I also find that Ms Hellessey’s involvement with Fairymead does not have the significance that MetLife attributed to it. It did not concern a business of any significance. It was a name used by Ms Cleary and Ms Hellessey for a number of relatively limited purposes. To the extent that the name was used in connection with any activity that could reasonably be considered to be a business, the business was conducted by Ms Cleary. It was Ms Cleary who owned a stallion that was on occasions the subject of advertisements using the name “Fairymead” in relation to offers that the stallion would service mares. There is no evidence that Ms Hellessey ever earned any money through her involvement with Fairymead. Ms Hellessey always acknowledged her involvement in horse-related activities. As I have noted above, in the documents that she submitted with her application for the TPD benefits she acknowledged a special interest in “horse breeding – showing”, and in relation to belonging to any clubs or organisations she said: “horse associations & clubs”. Although this information was brief, it was fitting in relation to the amount of space allowed for the responses on the form. The evidence shows that Ms Hellessey and Ms Cleary used the name “Fairymead” in relation to their show horses, and in relation to such minor matters as giving small donations to clubs to fund prizes for Ms Hellessey’s children and other club members. It is likely that Ms Hellessey and Ms Cleary made the activities of Fairymead appear more substantial than they were. I am satisfied that their activities involving Fairymead were in relative terms transient and insignificant.

1010. I also find that the evidence concerning Ms Hellessey’s involvement in activities such as occasional shopping is not inconsistent with her suffering from the symptoms that she and her treating medical professionals have reported. I accept Ms Hellessey’s evidence concerning the difficulties that confronted her in going into shops and dealing with shop assistants (par 545 above).

1011. Consequently, I find that the evidence establishes that Ms Hellessey has suffered from serious PTSD and depression, or near equivalent, for at least about six years and possibly significantly longer.

1012. This is an important consideration in determining whether or not, as at the assessment date of 1 March 2012, the incapacity caused by Ms Hellessey’s psychological injury was of such an extent as to render her unlikely ever to engage in any gainful profession, trade or occupation for which she was reasonably qualified by reason of education, training or experience.

1013. MetLife correctly pleaded in its defence that, as at the assessment date, Ms Hellessey had a further 31 years of her nominal working life remaining.

1014. All of the expert medical opinion up to the date of the hearing, with the possible exception of the opinion of Professor Mattick, was to the effect that Ms Hellessey had been incapacitated from undertaking any employment at all.

1015. At the least, about six years of the 31 years has expired without Ms Hellessey recovering the capacity to undertake any employment.

1016. Three of the medical experts who were called to give evidence were of the opinion that the nature of Ms Hellessey’s incapacity was chronic, and that she was sufficiently unlikely ever to be able to engage in employment for which she was qualified that she satisfied the TPD definition as at the assessment date: see in particular Dr Durrell’s evidence at pars 177, 179, 180, 186, 203, 517 and 663 above; Dr Westmore’s evidence at pars 380, 715 and 721 above; and Mr Rawling’s evidence at pars 703 and 709 above. Dr Westmore said (par 715):

PTSD is an illness which is often chronic i.e. the condition can become a lifelong condition from which patients never fully achieve complete remission. That appears to be the case with Ms Hellessey and it is not an uncommon outcome for police officers who are injured in the workplace.

1017. Professor Mattick disagreed with this view and gave the opinion that it is only in cases where PTSD and depression lead to true psychoses that the sufferer will be prevented by his or her psychological injury from undertaking employment over the longer term. That view is at odds with the opinions of all of the other medical professionals that may be found in the evidence in this case (and in other cases where I have received similar evidence). Based on the expert evidence in this case, I consider the prevailing scientific view to be that in a substantial minority of cases of PTSD the injury does not resolve but becomes chronic and is effectively a lifelong affliction. In such cases, the psychological symptoms may effectively incapacitate the sufferer from the ability to gain and undertake employment, even where the symptoms fall well short of psychoses.

1018. Professor Mattick’s contrary opinion may well remain scientifically contestable, but if it were to be established it would require that the position be identified as an issue in the proceedings and be resolved on the basis of contested expert opinion. For the reasons that appear from pars 684 to 694 above, the fact that Professor Mattick held these views emerged only during his cross-examination, as a result of a number of questions asked by the court that were triggered by a number of responses that Professor Mattick had given during his oral evidence. In fairness to Professor Mattick, this whole issue emerged only indirectly, and he was not given an opportunity to formally justify his opinion.

1019. Nonetheless, on the evidence in the present case, I feel I must treat Professor Mattick’s evidence on the basis that it was influenced by his own view that as Ms Hellessey did not suffer from any psychoses, there was no real impediment to her obtaining relevant employment in the longer term, and particularly after she was freed from experiencing the triggers for her psychological symptoms due to her continuing involvement in these proceedings.

1020. Professor Mattick expressed the view that once Ms Hellessey has ceased being reminded of the events that caused her PTSD by her continuing involvement in the proceedings she will improve, and she will be much less affected by her symptoms than she currently reports, which in any event she is overstating (par 683 above). He suggested that Ms Hellessey’s social phobia could be improved by psychological treatments such as cognitive behavioural therapy (par 681). He conceded that no research had been done to prove that where people with PTSD had not successfully responded to the treatments administered for five or 10 years, then a repeat of the treatment was likely to be successful (par 688).

1017. Professor Mattick was the only expert witness to make this suggestion. Mr Rawling did not take the same view. Nor did the two psychiatrists who were called to give expert evidence. I would not, in the circumstances, find that Professor Mattick’s view should prevail, given that he had only examined Ms Hellessey once, albeit that the examination was lengthy and thorough. While I respect Professor Mattick’s view, I do not think that the evidence justifies a conclusion that, although the medication and treatments that Ms Hellessey has received since the assessment date and before that time have failed to cure her symptoms and her consequent incapacity, there were grounds for confidence that some new psychological treatments would be effective.

1018. There is some logic in Professor Mattick’s view that Ms Hellessey will feel better after the proceedings have been completed. She will become free of the need to attend medical examinations and to suffer the anxiety of waiting to learn the outcome of her claim. But there is also logic in the view that, as she has strenuously pursued the claim for some six years, her psychological condition will deteriorate if the claim is rejected. The point is that the evidence does not allow a rational finding concerning the likely consequences of the conclusion of the proceedings. For this reason, I view the suggestion made by Professor Mattick as speculation.

1019. Having read the reports of the medical experts who supported the conclusion that Ms Hellessey’s incapacity satisfied the TPD definition, having heard their cross examination, and having taken into account the observations that I have made in the course of this judgment when analysing the experts’ reports, I have decided that I should accept the opinions expressed by those experts in preference to the opinion expressed by Professor Mattick.

1020. In cases where the evidence establishes that a particular claimant has been completely incapacitated from any employment for a period as long as six years, a number of issues must be addressed before a conclusion could rationally be reached that over the remainder of the working life of the claimant “there is a real chance that [the claimant] may return to relevant work”, to use the words of Leeming JA in TAL v Shuetrim at [88]. The considerations that are relevant will depend upon the nature of the illness or injury, the nature of the incapacity, and the changes that must occur before the capacity for the relevant employment may be regained. As a general matter, it is necessary to address the question: what needs to change, and how likely is the change to occur within a period that will give rise to a real, practical likelihood of employment?

1021. Some illnesses or injuries may resolve spontaneously over time, in the sense of being a response to the innate recuperative capacity of the mind and the body. Some may recover as a result of medication. Others may recover as a consequence of successful medical treatment. In cases where the evidence establishes that, up to the date of the hearing, the claimant remains incapacitated from any employment, a consideration of the likelihood that the claimant will make a sufficient recovery requires that one or more of these causes of recovery be addressed.

1022. The only suggestion made in MetLife’s case in respect of this issue was contained in Professor Mattick’s evidence that, when the proceedings are concluded, and Ms Hellessey is spared the continuing, occasional reminders of the events that caused her psychological injury in the first place, or “triggers” as they are called, Ms Hellessey’s psychological state is likely to improve. As I have observed, that was not a view shared by any of the other medical experts, who regarded her condition as being chronic.

1023. I have set out above a brief summary of the available evidence concerning Ms Hellessey’s medication regime over the period since she has been treated for serious PTSD and depression (pars 768 to 771). It is broadly true that Ms Hellessey has been prescribed a significant level of medication for the whole period, and there has been no suggestion that there is any scientific basis for concluding that Ms Hellessey will ever be free from the need for significant medication. Dr Durrell’s most detailed description of Ms Hellessey’s medication regime was set out in his 20 October 2013 report (par 517 above).

1024. As Ms Hellessey’s treating psychiatrist, Dr Durrell had the benefit of examining her or speaking to her over the telephone on a great many occasions over the whole of the period between the assessment date and the hearing. That experience would naturally assist him in avoiding the errors that could occur from a single examination of a person claiming psychological illness. The evidence establishes, unsurprisingly, that one thing that occurs during the course of treatment of psychological injury by a psychiatrist, is that different medications are trialled in order for the doctor to be able to prescribe the medication that will produce the best result for the patient. That process will enable the doctor to form a scientific view about the likelihood that the medication chosen will lead to a recovery by the patient. In this case Dr Durrell’s experience caused him to express the view on 20 October 2013 (par 517):

Unfortunately the number of trials of psychotropic medications is a poor prognostic sign and further indicates that in terms of clinical outcome that Ms Hellessey will have only modest symptomatic improvements and no curative outcome is possible in her case.

1029. The present case is one in which Ms Hellessey has had the benefit of trials of different medication regimes for a period of some six years, but with the unfortunate result described by Dr Durrell. There was no evidence challenging that view as a matter of medical science. Indeed, MetLife only called expert evidence from the psychologist, Professor Mattick.

1030. There is no adequate basis in the evidence for concluding that Ms Hellessey will spontaneously recover from her psychological injury, and there is no reason to conclude that any form of medication will have that result.

1031. If, as the evidence establishes, Ms Hellessey will be prescribed medication generally of the nature of her present prescriptions into the indefinite future, then the question whether Ms Hellessey is unlikely ever to gain employment in a relevant occupation must be considered by taking into account the likely consequences of Ms Hellessey being continually medicated. In this regard it is important to remember that the unchallenged evidence is that Ms Hellessey is required to take anxiolytics, principally Valium, on an as needs basis, to ward off impending anxiety and panic attacks (see the evidence of Dr Durrell discussed at par 197 above). As I have mentioned, Ms Hellessey’s evidence was that she had taken her medication, including Valium, on the day of her cross-examination.

1032. The vocational assessment report upon which MetLife relied to reject Ms Hellessey’s claim is considered above at pars 223 to 225. The job options identified for Ms Hellessey were learning and development officer/training and development professional, childcare worker, driving instructor, cashier, and sales representative.

1033. While that report has been received into evidence, I would place little weight on it, in the absence of Mr Everett having been called for the purpose of supporting his report and being available for cross examination. Dr Durrell in his 16 February 2013 report (par 189 above) and Dr Westmore in his 9 December 2015 report (par 380 above) directly challenged the validity of the conclusions reached by Mr Everett. On the face of the report, Mr Everett ruled out jobs that had aspects in common with being a member of the police force, or required the use of firearms. However, Mr Everett gave no indication that he took into account the real consequences of the actual symptoms from which the evidence shows Ms Hellessey suffers.

1034. Furthermore, MetLife did not conduct the cross examination of Ms Hellessey as if its case was that she was, or would in the future be, capable of undertaking one of the five forms of employment identified by Mr Everett. MetLife’s counsel cross-examined Ms Hellessey in the manner I have described above (see in particular par 551) as to whether she was capable of engaging in various types of horse-related activity. That was not a case advanced by MetLife before the commencement of the hearing, and Ms Hellessey was not given any adequate notice of it. I am satisfied by Ms Hellessey’s responses in cross-examination that MetLife has not established that Ms Hellessey is, or will in the future be, capable of obtaining the horse-related employment suggested by MetLife notwithstanding the continuing effects of her symptoms caused by PTSD and depression.

1035. I have also set out above at par 606 my observation of Ms Hellessey in the witness box. I was satisfied that Ms Hellessey appeared to be affected by her medication, although the effect was subtle. As I put it, she appeared to be subdued and at least mildly depressed. Her attention was shallow and her responses were somewhat mechanical. I have no means of knowing whether Ms Hellessey has this affect at times when, in addition to her other medication, she feels the need to take Valium to counteract anxiety and panic attacks. However, in my view it is reasonable on the evidence to conclude that at least intermittently when Ms Hellessey is presented with triggers for her anxiety and panic, her medication will have an effect on her appearance and behaviour that is material to her prospects of gaining and retaining employment.

1036. It will be reasonable to consider Ms Hellessey’s employment prospects taking into account that she will owe an obligation to prospective employers to advise them that she continues to suffer from PTSD and depression for which she takes medication, including Valium to ward off anxiety and panic. It is most unlikely that knowledge of those matters will commend itself to potential employers of Ms Hellessey as a childcare worker or driving instructor, and the position may well be little different with the other job options identified.

1037. Even putting aside the potential consequences of Ms Hellessey’s continuing medication regime, the likelihood of her ever gaining relevant employment must be considered having regard to the evidence of the symptoms from which she suffers. Ms Hellessey’s evidence of those symptoms is set out at par 544 above. Mr Hellessey’s evidence in par 13 of his affidavit may be found at par 611. The equivalent evidence of Ms Eves, Ms Hellessey’s mother, is set out at par 628. Although that evidence will be influenced by the individual perceptions and perspectives of the witnesses, I broadly accept it.

1038. The evidence was consistent with the description of the symptoms of PTSD and depression given by Dr Durrell (pars 183, 186, 187 and 189 above), Dr Hodgson’s evidence (par 229), and Dr Westmore’s evidence (par 380). It is also consistent with my description of the symptoms in Wheeler (above) at [48]. Although all of the descriptions differ in various respects, they are substantially consistent. I will set out only the descriptions given by Dr Durrell (par 183) and Dr Westmore (par 380) respectively as follows:

Ms Bernadette Hellessey expends considerable effort to avoid activities, places and people associated with her NSWPF related mental traumas. Ms Hellessey regularly experiences feelings of detachment, emotional numbing and restriction of her range of affects. Ms Hellessey exhibits persistent symptoms of hyperarousal including insomnia, irritability, poor concentration and hypervigilance. The duration of her symptoms is more than one month and her mental injury causes clinically significant impairment in social and occupational functioning

And

… She is socially isolated and withdrawn, depressed in mood, irritable and intolerant. Her capacity to deal with clients, co-workers and supervisors would all be significantly impaired because of her psychiatric illnesses and the associated symptoms.

1039. I am satisfied that, so long as Ms Hellessey suffers from the symptoms of her psychological injury, there is no real likelihood that she will ever be able to engage in relevant employment. It is simply not realistic to expect that a psychologically incapacitated person who cannot be relied upon to get out of bed in the morning, or to properly dress herself, or to communicate naturally with supervisors, co-workers, and the public, will ever be employable in any real way.

Conclusion

1040. Ms Hellessey has established on the evidence that, at the assessment date, she was incapacitated by her psychological injury in a manner that satisfied the TPD definition in the policies.

1041. Ms Hellessey is therefore entitled to judgment for the amount of the benefits plus interest to be calculated. I will leave it to the parties to agree the amount to which Ms Hellessey is entitled and to provide short minutes of order that state the amount that Ms Hellessey should be paid.

1042. Ms Hellessey is also entitled to her costs on the ordinary basis. I will hear the parties on whether any other order for costs should be made.

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Decision last updated: 25 September 2017