Martin v TAL Life Limited - [2015] VCC 921

IN THE COUNTY COURT OF VICTORIA

Revised
Not Restricted

AT MELBOURNE

COMMERCIAL DIVISION
EXPEDITED CASES LIST

Case No. CI-14-00438

PETER JAMES MARTIN	Plaintiff
v.
TAL LIFE LIMITED	Defendant

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	16 - 20 and 27 March 2015
DATE OF JUDGMENT:	8 July 2015
CASE MAY BE CITED AS:	Martin v. TAL Life Limited
MEDIUM NEUTRAL CITATION:	[2015] VCC 921

REASONS FOR JUDGMENT

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Catchwords: Insurance – Income protection policy – Plaintiff establishing a consulting business – Diagnosed with prostate cancer – First claim paid by insurer – Unsuccessful attempt to resume his business activities – Second claim made three years later based on a diagnosis of Post Traumatic Stress Disorder – Whether the plaintiff qualified under the terms of the policy – Whether unable to earn income threshold “solely” as a result of suffering psychological sickness – Extent and effect of plaintiff’s psychological symptoms – Relevance of failure to make a timely second claim – Whether the plaintiff was under the “regular care” and carrying out the recommended treatment of medical practitioners – s.54 Insurance Contracts Act 1984 (Cth).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J J Gleeson QC and Ms G F Gray	Corrs Chambers Westgarth
For the Defendant	Mr R Cavanagh SC and Mr D Christie	Turks Legal

HIS HONOUR:

1Peter Martin was diagnosed with prostate cancer in June 2008 when he was aged 49. The diagnosis came as a shock to Mr Martin and his wife Stacey. Surgery in December 2008 removed the cancer but left Mr Martin concerned about the possible recurrence of the cancer and the consequences of incontinence and erectile dysfunction.
2Mr Martin had for many years been employed as a salesman for companies specialising in the sale of computer systems and software. In 2004, he took a redundancy package and commenced his own consulting business, with a view to mentoring and coaching executives of companies undergoing structural changes.
3After his cancer diagnosis, Mr Martin spent some months researching his treatment options. Following surgery, Mr Martin attempted to return to work in April 2009. This was not successful, and essentially Mr Martin has done little work since his diagnosis.
4In 1992, Mr Martin took out income protection insurance with a forerunner of the defendant TAL Life Limited. In 2008, the insurer met Mr Martin’s claim in respect of his inability to work due to the diagnosis and treatment of his prostate cancer.
5On 28 June 2012, Mr Martin submitted a further claim relating to the consequences of the diagnosis of prostate cancer and the treatment to remove the cancer. Mr Martin claimed he suffered Post Traumatic Stress Disorder with anxiety, insomnia and depression which prevented him from working. The claim was rejected by the insurer. The present action was brought to recover what Mr Martin said were his entitlements pursuant to the income protection policy of insurance.
6A number of factual and legal issues were raised for decision in the proceeding. Apart from the medical evidence and contemporaneous documents, oral evidence was given by Mr Martin, his wife and a friend, Mr Michael Lurie.
7The critical factual matters to be determined on the evidence were as follows:
a.whether, between his retrenchment in 2004 and his diagnosis in June 2008, Mr Martin was genuinely attempting to start a consulting business or whether the limited financial returns during this period accurately reflected his endeavours;
b.whether, after Mr Martin’s recovery from his cancer surgery, he continued to be genuinely affected by psychological symptoms which prevented him working;
c.whether the delay by Mr Marin in making a second claim on his insurer, and his limited medical attendances for treatment prior to late 2011, had been sufficiently explained;
d.whether Mr Martin is a malingerer who has exaggerated his psychological symptoms and their effect on his ability to work, with a view to improperly seeking monetary gain; and
e.whether the treatment undertaken by, or offered to Mr Martin, should have been more successful in the circumstances, than it has proved to be.

8The determination of Mr Martin’s entitlement under the insurance policy included matters of construction of the policy and its application to the facts. These issues were as follows:
a.did Mr Martin suffer psychological illness following the diagnosis and treatment of his prostate cancer;
b.did the psychological illness affect Mr Martin’s capacity to earn income from his business;
c.was Mr Martin unable to earn at least the equivalent to 80% of the income he earned in the period of twelve months over the 5 years before the incapacity, which reflected his highest level of earnings;
d.was the psychological illness, the subject of the claim made on 28 June 2012, in respect of “the same or related injury or sickness” to which the earlier claim in 2008 was made;
e.did Mr Martin submit a claim in respect of the incapacity within a reasonable time, and if not, what is the effect of his failure to do so;
f.did Mr Martin consult medical practitioners and receive treatment in relation to his sickness, and if not, what is the effect of his failure to do so; and
g.if Mr Martin is entitled to recover pursuant to the insurance policy, to what sum is he entitled?

Admissibility of disputed evidence
9At the conclusion of the evidence, there remained outstanding objections in relation to the admissibility of a number of documents the plaintiff wished to tender, and to which the defendant objected on the ground of relevance:
a.three reports by a neuropsychologist; and
b.the documents at pages 1315-16 and 1417-18 of the plaintiff’s court book.

10In my view, the documents in paragraph (a) have marginal relevance. They will be admitted into evidence although neither party appeared to rely on the documents in final submissions. The documents in paragraph (b) are a relevant part of the factual narrative and there is no reason why they should not be admitted into evidence.

Establishment of Mr Martin’s consultancy business
11Peter Martin was born in 1958. He completed an electrical apprenticeship and worked as an electrical contractor for some years. In the 1980s, he obtained employment as a salesman in the information technology industry working for a number of different companies involved in selling systems and software. Servicing these clients required an understanding of their business operations.
12Mr Martin married in 1994. His wife worked in “financial markets” and later made a career change. She has for many years worked as a financial planner. Mrs Martin said that her husband supported her through this change of career.
13In 2004, after Mr Martin was retrenched from his job with a software company, he decided to set up his own consultancy business. This he hoped would involve coaching and mentoring company executives as their businesses were transitioning through major structural changes such as merger or “succession”.
14Mrs Martin supported her husband in this process. They said that they understood that establishing a business of this sort may take 4 or 5 years, and considerable effort would be required before there would be significant financial reward.
15Apart from consulting work, Mr Martin hoped to gain appointments as a non-executive member of company boards. Mr Martin worked from home. He attended courses and seminars, researched potential clients and extensively “networked” in an attempt to establish the contracts that he considered would be necessary before he secured the substantial consulting contracts and board positions which were his goals. Mr Martin gave as examples of the likely financial return; acquiring five board positions each paying about $30,000 per annum, and winning contracts worth about $20,000.
16Mr Martin’s salary at the time of his redundancy was about $120,000 per annum and he said the total package was worth about $150,000. He apparently was very successful at his work. The financial returns from his consultancy business in the initial years were, however, very modest.
17Mr Martin obtained two Board appointments, to “Womensport and Recreation NSW Inc” from 2003 to 2004 and the “Shoalhaven Tourism Board” from 2006 to 2008. Both appointments were voluntary and non-remunerative. Between 2004 and 2008, Mr Martin invoiced clients as follows-
financial year to 30 June 2005 $ NIL
financial year to 30 June 2006 $9,000 (about 30 hours work)
financial year to 30 June 2007 $2,850 (less than 10 hours work)
financial year to 30 June 2008 $5,040 (less than 20 hours work)

18Mr Martin and Mrs Martin said in their evidence that this was not unexpected. The invoiced clients were the “low hanging fruit” and were not the substantial clients Mr Martin hoped would form the basis of his business. The voluntary board memberships were a necessary stepping stone to the remunerated non-executive board memberships to which Mr Martin hoped to obtain.
19This evidence of Mr and Mrs Martin as to the steps necessary to establish such a business was largely unchallenged. In final submissions, defendant’s senior counsel Mr Cavanagh SC, submitted that I should consider the evidence in the light of what was “common knowledge and common sense”. I do not consider that there is any basis for me to go beyond the evidence in the case, except in limited ways. For example, Mrs Martin said in evidence that many businesses failed in their third year. I consider that it is generally accepted, without requiring specific evidence, that a significant proportion of new businesses fail within a few years of their establishment.
20Mr Cavanagh SC submitted that recovery in the proceeding by Mr Martin, in relation to the second claim made in June 2012, of a sum calculated by reference to Mr Martin’s earnings during his employment in 2004, would be an absurd result. However, such a conclusion would not necessarily defy “common sense” and could only be reached if that result followed from appropriate findings of fact and construction of the relevant provisions of the insurance policy.
21It should also be noted that:
a.on 14 July 2006, Mr Martin wrote to his financial advisor as follows:
“I have just faxed the change of adviser form to your office.
As discussed I am considering a career change around establishing my own business in consulting. In order to invest in the business I may draw a minimal salary in the initial years with the intent of regaining a higher remuneration than the current position in the future.
On review of my policy and discussions with Tower I need you to re-confirm the following:
The policy established in 1992 is a guaranteed amount of $16,618 and provided I maintain the premium payments and work in a white collar professional environment there is no change of terms in the policy. This applies if I decided to pay myself just $20k pa for an unlimited period of time.
I look forward to your response”.
b.the advisor apparently forwarded Mr Martin’s email to the insurer. The insurer’s reply was as follows:
“Please accept this email as confirmation that the above Loss of Income policy in the name of Peter Martin is an Agreed Value policy and therefore any changes to the client’s income/occupation will not need to be advised to us.
If you have any further queries in relation to the above, please feel free to contact me.
Have a lovely day”.
c.it is assumed that when the insurer paid the entitlement under the policy following the first claim in 2008, that the entitlement was calculated by reference to the salary received by Mr Martin prior to his retrenchment in 2004.

22On the plain reading of the definition in clause 17.8 of “pre-injury/sickness monthly income”, it is contemplated that the benefit to be paid for a qualifying claim is to be calculated having regard to the highest “12 consecutive month period in the 5 years before [the insured] suffered a loss of income”.
23The definition of “loss of income” in clause 17.3 contemplates, in the alternative formulation, that an insured may have periods of inability to earn income through unemployment or maternity leave. In the circumstances, the construction adopted by the insurer’s representative in the email exchange in July 2006 and, apparently, at the time of the payment of benefits following the first claim by Mr Martin, seems consistent with the policy’s provisions.
24The insured’s entitlement depends on whether a “capability” threshold of “earning 80% or more of your pre-injury/sickness monthly income” is established. The fact that the relevant “monthly income” may be determined by the income earned many years before, and in very different employment, is simply the application of the policy terms, and that result whether it might be, is not necessarily absurd nor inappropriate.
25In the present case, the evidence supports the following conclusions:
a.Mr Martin, by 2004, had a substantial employment history and had acquired relevant skills which would be useful in his proposed business;
b.Mrs Martin supported her husband’s transition to the new business. She also had the professional experience to understand and assist that process;
c.as a couple, they had the financial resources to ensure that Mr Martin could invest sufficient time in establishing the foundations needed for his proposed business without needing to take remunerative work which might not be so directed;
d.Mr Martin, over the years from 2004 to 2008, pursued the networking, research and marketing tasks with substantial vigour, working long hours and with the continuing confidence that his business venture would be successful;
e.Mr Martin was challenged during cross-examination about the work he had performed during this period in preparing “proposals” for prospective clients. A folder of proposals was later tendered in evidence. Mr Martin was not further cross-examined about this issue or about the documents. The proposals appear to be substantial documents reflecting significant research and consideration by Mr Martin.

26As to whether, ultimately, Mr Martin’s business would have been successful cannot be determined, and it is probably not necessary to attempt to do so. What can be said, in my view, is that Mr Martin had throughout the period before the prostate cancer diagnosis in June 2008, pursued what he and his wife considered were the necessary pre-conditions to the establishment of a long-term remunerative consultancy business.

Mr Martin’s medical history
27Mr Martin claims that, following his diagnosis and treatment for prostate cancer, he suffered from psychological problems which prevented him from pursuing his business activities or other employment.
28After June 2008, Mr Martin did not invoice any clients and, according to him, was unable to effectively pursue his business activities. Initially, this was because he was researching treatment options and later, after recovery from his surgery, as a result of psychological issues.
29During this later time, Mr Martin said that he tried to work, as he had previously, but was:
a.unable to drive long distances, or in heavy traffic;
b.did not feel comfortable in social situations, including meetings and seminars;
c.was unable to concentrate or do the complete corporate analyses of which he was previously capable.

30The evidence suggests that his activities of daily life became very restricted. In the period after June 2009, they included:
a.paying bills and doing simple household tasks that his wife set for him;
b.playing competitive golf (18 holes), twice a week;
c.two golfing holidays with a few friends to Thailand, a cruise with his wife and regular weekends at their holiday home;
d.meetings at inner city venues with an old business colleague, Mr Lurie;
e.reading the newspaper, responding to emails and some internet research;
f.doing what was required by his lawyers in the present proceeding.

31Prior to the cancer diagnosis, Mr Martin’s health issues do not appear to have affected his capacity to pursue his work activities. He had never made a claim on his income protection policy. Nevertheless, it is apparent that Mr Martin had, over many years, suffered from a range of ailments that required regular medical attention.
32It is not necessary to detail his medical history except to note some matters which were later considered relevant by medical examiners, particularly Dr Michael Epstein, a consultant psychiatrist to whom Mr Martin was sent for medico-legal purpose by his solicitors in January 2015.
33The matters of medical history noted by Dr Epstein included:
a.Mr Martin’s father died in 1978 at age 62 when Mr Martin was 20 years old. His father had experienced multiple heart attacks;
b.in 1994, Mr Martin injured his lower back in a skiing accident. After a period off work, he continued to have occasional back spasms, a flare-up and a “slipped disc”. This required chiropractic treatment, and once required hospitalisation;
c.he has taken medication for elevated cholesterol levels since 2001;
d.since 2002, he has experienced some problems swallowing and has taken Zantac, a medication for reflux;
e.he and his wife were involved in a serious motor vehicle accident in 2003. They were uninjured although their car was “written off”. He later had “occasional nightmares and flashbacks”;
f.following periods when “he was often fatigued and bothered by perceptual distortions when driving”, Mr Martin was referred to a neurologist, Professor Dominic Rowe. Mr Martin complained of a range of symptoms, including episodes of “fuzziness in his head” that occurred while driving and that it was “difficult for him to concentrate in heavy traffic”;
g.Professor Rowe referred Mr Martin to a “Vertigo and Neurology Clinic”. After investigation in March 2008, it was noted Mr Martin “stated that for the previous five years [he] had feelings of fatigue with a dull frontal headache when he felt dizzy and unbalanced which was particularly noticeable when driving”;
h.in April 2008, a CT investigation of Mr Martin’s lower back also showed a mildly enlarged prostate. In June 2008, after a PSA blood test and a biopsy he was diagnosed by a urologist, Mr Peter Nash, with prostate cancer;
i.Mr Martin was also diagnosed with a “herniated cervical disc”;
j.on 22 December 2008, Mr Martin had a robotic prostatectomy for his prostate cancer performed by an urological surgeon, Mr Raji Kooner. Although the cancer was successfully removed, he was left with erectile dysfunction.

Effect of the cancer diagnosis and subsequent surgery
34Mr Martin said that after being told he had cancer, he was “shell-shocked”. He and his wife “broke-down” when they got home after seeing the urologist. Mr Martin was concerned to obtain “independent” medical advice. Over the next few months, he consulted a wide range of medical specialists and alternative medicine practitioners. Mr Martin searched the internet exploring the merits of treatment options both locally and overseas.
35This process was described by Mr Martin’s medical treaters as “well researched and thorough” (Dr Greer), and as exhibiting “obsessive traits” and evidence of “hyper-vigilance” (Dr Joffe).

36Mr Martin ceased work in June 2008. On 1 October 2008, he submitted an “Initial disability claim form” to the insurer claiming that he was unable to work because of “disability” arising from “spinal issues/herniated disc” and “prostate cancer”. The claim was allowed by the insurer. The spinal issues have no present relevance to the matters in dispute between Mr Martin and the insurer.
37The claim form was supported by an “initial attending doctor’s statement” prepared by Dr Helen Greer, a general practitioner, dated 8 October 2008. These two documents contained the following information:

Claim form
a.describing the “current symptoms” of his prostate cancer, Mr Martin wrote, “Stress and anxiety in regards to the numerous treatment options over the last 3 months. Averaging 3-4 hours sleep”;
b.describing how his current symptoms “prevent you from working”, Mr Martin wrote, “Disturbed sleep resulting in lack of concentration, ability to take client notes, unable to drive safely with nerve spasms in the hand. Limited use of computer”;
c.although Mr Martin’s business had continued to trade, his activities were restricted to being able to “respond to email/phone in a limited capacity”;
d.in the previous 12 months before the “disability commenced”, he had received income of $10,000. Due to his disability, he had “no income”;
e.Mr Martin provided “additional information and comments”, including that, “I have not been fit for work since diagnosis on the 12^th June 08 for cancer and coupled with the spinal injuries my mental and physical capacity has been severely impacted”.

Doctor’s statement
a.in commenting on the “objective” symptoms (confirmed by examination) of the cancer, Dr Greer stated, “Nil for prostate except anxiety due to diagnosis”;
b.Dr Greer noted that Mr Martin’s symptoms of “anxiety/stress” from the cancer diagnosis (and the “daily pain” associated with his right arm) prevented him from performing his “occupational duties”;
c.at the time, Mr Martin was awaiting surgery on 10 December 2008 and the “outcomes and recovery” from that surgery would determine whether his recovery were delayed.

38Dr Greer had first seen Mr Martin on 17 September 2008 although he had been a patient at Dr Greer’s medical practice at Miller Street, North Sydney for 10 years. This was the practice Mrs Martin attended. Dr Margaret Hamilton of 287 Military Road, Cremorne had been Mr Martin’s general practitioner for the previous 4 years.
39Dr Hamilton referred Mr Martin to Mr Nash, the urologist in 12 May 2008. In her clinical notes on 21 June 2008, she recorded that Mr Martin had told her that, when Mr Nash had given the cancer diagnosis, “he was very brief and no empathy”. She also recorded, “Naturally concerned about treatment options, very long discussion re this”.
40Dr Hamilton also saw Mr Martin on 26 and 31 July, 12 August and 3 November 2008. On the last occasion she noted, “Has been seeing old GP Dr Greer who has a lot of pts [patients] with prostate cancer”.
41On 3 November 2008, Dr Hamilton wrote to the insurer as follows:
“Currently he has no symptoms from this condition, but the diagnosis caused severe stress and anxiety. After he learned of his condition he has seen several specialists and other practitioners and is currently deciding on the treatment options available. Surgery is planned for early December 2008.
Since 12/6/2008 he has been unable to work. This is partly due to the extreme distress this unexpected diagnosis caused, partly due to his having to see a variety of specialists and have several tests in hospital, and partly due to another condition causing him difficulty in driving. He has also had poor sleep and concentration. As his work depends on him being able to travel, meet clients face to face for long periods and concentrate fully, he had been unable to do any of this”.
42Mr Martin apparently first saw Dr Greer in mid-September 2008. Her first note was that Mr Martin was the “husband of Stacey Martin”. Her notes on 2 October 2008 suggest that she was expecting to receive Mr Martin’s clinical records from Dr Hamilton. Mr Martin seems to have seen Dr Greer on at least two dates in September, two dates in October and on 6 November 2008.
43Dr Greer’s notes are extensive, but not easy to interpret. It does appear, however, that the matters she recorded in her Doctor’s report dated 8 October 2008 attached to Mr Martin’s claim and in her letter to the insurer dated 8 November 2008 are supported by the clinical notes taken at the time of her examinations of Mr Martin. The notes make frequent references to anxiety, stress, sleeping problems, panic attacks and, on at least one occasion, to depression.
44Dr Greer’s clinical notes for Mr Martin’s attendances in later years were the subject of submissions by the parties. Mr Cavanaugh SC, in cross-examination of Mr Martin, suggested that the absence of references to psychological symptoms or Mr Martin’s inability to pursue his business activities meant that it was likely Mr Martin was not so affected.
45Mr Martin’s counsel in their final submissions referred to a degree of inconsistency in Dr Greer’s notes, submitting that, “just as Dr Greer failed to record in her notes Mr Martin’s complaints to her of fatigue, fuzzy headedness, difficulty concentrating etc on the very day she referred him to the specialist, she failed to record these complaints in her earlier notes”. I have taken account of the parties’ submissions in my consideration of Mr Martin’s medical history, particularly as recorded by Dr Greer.

Medical history before the submission of the second claim on 28 June 2012
46The insurer allowed Mr Martin’s first claim and paid him the appropriate benefits under the income protection policy from 10 July 2008 to 5 April 2009. On 28 June 2012, Mr Martin made a second claim relying upon “post traumatic stress disorder”, which was the label given to his condition by a respiratory and sleep physician, Dr David Joffe, at his first consultation with Mr Martin on 17 November 2011.
47Mr Martin continued to see medical practitioners during the period following the first claim. Mr Martin had prostate surgery performed by Mr Kooner on 11 December 2008. Mr Martin’s expectation was that following a recovery period he would return to work on 6 April 2009.
48The second claim form dated 28 June 2012 completed by Mr Martin that day. It is supported by an Initial Attending Doctor’s Statement which contains a declaration dated 26 June 2012 by Dr Hamilton that the contents of the statement are “true and correct”. Some parts of the statement were completed by Mr Martin and other parts by Dr Hamilton. Dr Greer also completed an Initial Attending Doctor’s Statement on 19 July 2012.
49The relevant parts of these three documents are as follows:

Claim form
a.the “illness” suffered by Mr Martin was described by him as “Post trauma stress disorder diagnosed by Dr Joffe”, with current symptoms of “chronic insomnia with anxiety”;
b.under “Doctor details”, there are references to both Dr Greer and Dr Hamilton. Later there is reference to Dr Joffe (“respiratory and sleep physician”) as a specialist also consulted by Mr Martin and who he is “required to attend every 3 months”;
c.the “treatment… currently receiving” is described as “Lexapro 10mg, Tolvon 10mg or Doxepin 10mg”;
d.the response to the question asking which “symptoms prevent you from working” was, “I’m unable to concentrate due to the lack of sleep and sudden dizzy spells prevents me from driving and concentrating”;
e.“immediately prior” to his disability, Mr Martin said he was “working in a reduced capacity" because, “I was light headed and could not continue”;
f.Mr Martin said that in his business, “I should be invoicing a daily rate of between $800 - $1,500 a day” and that he was being “supported [by] my wife’s income”;
g.By way of “additional information”, Mr Martin said that after the cancer diagnosis, “Dr Greer referred me to treatment options for herniated discs and early stages of insomnia. After numerous sleeping pill trials she then referred me to Dr Joffe who diagnosed post traumatic stress disorder in Oct 2011. A sleep study confirmed chronic insomnia with new drugs being prescribed. I’ve now returned to Dr Hamilton to consult with Dr Joffe to regain my health”.

Doctor’s statement of Dr Hamilton dated 26 June 2012
a.it was noted that Mr Martin had been a patient of Dr Hamilton at the practice since January 2004 and that Mr Martin was also seeing Dr Greer;
b.the “illness/diagnosis” was “Post Trauma Stress Disorder”, and symptoms had begun on 1 June 2009. These words were inserted in the document by Mr Martin before he saw Dr Hamilton, although she declared that the statements were true and correct;
c.the “current symptoms” were listed as “insomnia, poor concentration” and these symptoms were stated to be “described by patient”;
d.these symptoms prevented Mr Martin performing his “occupational duties” as it was “very difficult to concentrate”;
e.Mr Martin had noted on the form that there was a “sleep study confirming very poor sleep patterns”;
f.Mr Martin had noted that he was currently being treated with “Lexapro – 10mg, Tolvon – 10mg, Doxepin – 10mg”;
g.Mr Martin noted that he had had a “similar illness”, “during prostate cancer diagnosis”;
h.Mr Martin described himself as a “business consultant – self employed” which Dr Hamilton wrote involved duties of “consulting of professional services – office located”.

Doctor’s statement of Dr Greer dated 19 July 2012
a.Mr Martin had been her patient “since 17/9/08” although he “also sees Dr Hamilton”;
b.The nature of his “illness/diagnosis” was “prostate cancer leading to subsequent post traumatic stress disorder”;
c.Mr Martin’s symptoms began on “1/1/09” and Dr Greer saw him on “20/1/09”;
d.His “subjective” current symptoms, as he reported, were “insomnia, poor concentration, anxiety”;
e.His “objective” current symptoms, as confirmed upon “examination” were “anxiety, lack of focus, poor sleep despite consultation with sleep physician and trial of medication”;
f.These symptoms made it “very difficult to focus in interview situation when working”;
g.A sleep study “on 6/1/12” confirmed “severe reduction in sleep efficiency”;
h.Mr Martin first consulted Dr Greer “for this condition” on “20/1/09” and had ceased working as a result of being “totally disabled” on “1/6/09”;
i.Reference was made to his medications and that he “would benefit from psychology treatment aimed at PSTD management”;
j.It was noted that Mr Martin had had “this or a similar…illness before”, as the “symptoms began at time of prostate cancer diagnosis but became more evident in January once surgery was over and anxiety about the surgery was gone”;
k.Dr Greer was “unable to say” when she would expect Mr Martin would return to work, “until response to treatment seen”.

Income protection policy of insurance
50Mr Martin entered into the income protection policy of insurance in about 1992. He has continuously paid the premiums since that time. The relevant terms and conditions of the policy are as follows:
LO15.0 EXTENT OF COVER
Subject to the payment of premium as shown in the Schedule, if you suffer a Loss of Income after the Risk Commencement Date and while this Benefit is current, we will pay the Monthly Income Benefit described in the Appendix, but subject to the terms and conditions set out in the Policy.
LO17.3 LOSS OF INCOME in respect of a particular claim means
(a)you are not capable of earning 80% or more of your Pre-Injury/Sickness Monthly Income by way of personal exertion from your normal occupation solely as a result of you suffering from an Injury or Sickness; and either
(b)you are not working, or
(c)you are working in an occupation trade or business to a limited extent and earning less than 80% of your Pre-Injury/Sickness Monthly Income solely as a result of you suffering from an Injury or Sickness.

If at the time you suffer a Loss of Income you have been unemployed or on maternity leave for 12 months or more (a) above will be replaced by the following:
“you are not capable of earning 80% or more of your Pre-Injury/Sickness Monthly Income by way of personal exertion from any occupation for which you are reasonably suited by reason of education, training and experience solely as a result of you suffering from an Injury or Sickness; and either”

LO17.8 PRE-INJURY/SICKNESS MONTHLY INCOME is your highest average Monthly Income during any 12 consecutive month period in the 5 years before the date you suffered a Loss of Income. Pre-Injury/Sickness Monthly Income will be increased by the Indexation Factor after each consecutive 12 months on claim.
LO18.0 INCOME REPLACEMENT BENEFIT
The Income Replacement Benefit is payable monthly after the Waiting Period for a maximum of the Benefit Payment Period for so long as you suffer a Loss of Income. In no event will an Income Replacement Benefit be payable for any period greater than 60 days prior to the date we receive written notification of the fact that you are earning less than 80% of your Pre-Injury/Sickness Monthly Income because you are only capable of working to a limited extent in an occupation, trade or business.
LO18.5 No Benefits are payable unless you are under the regular care of, and carry out the treatment recommended by a registered Medical Practitioner (not being you).
LO34.0 RECURRENT CONDITIONS
If within 6 months from the end of a period in which an Income Replacement Benefit was paid you again qualify for the payment of the Income Replacement Benefit for the same or related Injury or Sickness, the Injury or Sickness shall for all purposes be deemed to be a continuation of the former Injury or Sickness and the Waiting Period, and any relevant indexation increase between the claim periods, shall not apply.
LO37.0 CLAIMS AND GENERAL CONDITIONS
In the event of a claim you must:
(a)give us written notice of the claim, within 30 days of suffering a Loss of Income, or as soon as reasonably possible thereafter; …
(c)remain under the regular care of, and carry out the treatment recommended by, a registered Medical Practitioner (not being you) with the exception of the Loss of Profits Benefit;

Determination of issues – 1. Whether Mr Martin suffered a psychological illness
51The policy covers Mr Martin, if he were to suffer a “loss of income”. The phrase “loss of income” is defined in clause 17.3 as an incapacity to earn “pre-injury/sickness monthly income… solely as a result of you suffering from an injury or sickness” (emphasis added). By clause 17.10, “sickness means any illness or disease first manifesting itself while this benefit is current”.
52The first task is to determine whether Mr Martin suffered from a “sickness” in the form of a psychological illness. The various diagnoses by the treating and examining doctors were as follows:
a.Dr Hamilton, Mr Martin’s general practitioner, in the initial attending doctor’s statement dated 26 June 2012 adopted the description of the illness/diagnosis as “post trauma stress disorder” (Mr Martin), with symptoms of “insomnia, poor concentration…described by patient” (Dr Hamilton);
b.Dr Greer, Mr Martin’s general practitioner in her initial attending doctor’s statement dated 19 July 2012, described the illness/diagnosis as “prostate cancer leading to subsequent post traumatic stress disorder” with symptoms of “insomnia, poor concentration, anxiety”, as reported by Mr Martin, and symptoms of “anxiety, lack of focus, poor sleep”, as confirmed by Dr Greer upon her examination;
c.Dr Joffe, Mr Martin’s respiratory and sleep physician, on 17 October 2011, considered that Mr Martin met “almost all of the criteria” of post traumatic stress disorder, by reason of his “heightened anxiety, excessive vigilance and behaviour”, including “sleep related anxiety”;
d.Dr Newman Harris, a psychiatrist who consulted Mr Martin upon the referral of Dr Joffe on 4 April 2013, was of the opinion that Mr Martin had “multi-faceted” issues requiring psychiatric intervention, which he considered would “prove challenging”. Dr Harris noted that Mr Martin had reported “troubles with sleep initiation and maintenance”, that he was “apparently” a “controlling, obsessional person” and was “cranky, hyper-vigilant and prone to overreacting”, with “unresolved grief” over his father’s death;
e.Dr Brian Potter, a consultant psychiatrist, examined Mr Martin at the request of the insurer for “approximately 70 minutes” on 29 July 2013. Dr Potter considered that Mr Martin had been “left traumatised from his experience of the diagnosis of cancer and subsequent treatment” and that this fulfilled the criteria of a “chronic adjustment disorder with mixed anxiety and depression”, although not post traumatic stress disorder;
f.Mr George Haralambous, a clinical and forensic psychologist and neuropsychologist, examined Mr Martin at the request of the insurer’s solicitors on 19 June 2014. His assessment included a clinical interview, the administration of psychological tests and a review of previous medical reports, and subsequently the later report of Dr Michael Epstein. Mr Haralambous considered that, “it can be reliably stated” that Mr Martin’s “purported psychological and cognitive complaints” are “substantially exaggerated and/or embellished”. Mr Haralambous stated in a further report dated 13 February 2015, under the heading “Evidence of malingering” that, “The presence of indications of malingering does not preclude the possibility of genuine illness at some level. However people with genuine diagnoses do not need to embellish. They will be able to convey their condition without exaggeration”;
g.Dr Michael Epstein, a consultant psychiatrist, examined Mr Martin at the request of his solicitors on 21 January 2015. Dr Epstein considered that Mr Martin’s “ongoing panic disorder and his fears about his health have led on to the development of a chronic adjustment disorder with mixed anxiety and depressed mood. He has significant obsessional personality traits that add to his level of anxiety”. Dr Epstein “could see no evidence of malingering and I could see no evidence that he has a post traumatic stress disorder although he does have some symptoms of traumatisation arising from the time of the [cancer] operation”.

53From this summary, it can be seen that the conclusion reached by Mr Haralambous is “at odds” with the views of the treating doctors (Drs Hamilton, Greer and Joffe) and the examining psychiatrists (Drs Harris, Potter and Epstein). Dr Greer, Dr Joffe, Dr Epstein and Mr Haralambous gave oral evidence before me and were cross-examined.
54In respect of the views of Dr Hamilton, Dr Joffe and Dr Harris, Mr Haralambous considered that their opinions did not appear to have been “informed by any objective or evidence based measures”. Further, Mr Haralambous considered that Dr Joffe’s opinion appeared to have “transgressed the boundary of his professional expertise”. In the circumstances it is necessary to examine Mr Haralambous’ reports and oral evidence in some detail.
55Assessment of the evidence of Mr Haralambous: Mr Haralambous saw Mr Martin for over four hours. He had available to him all relevant medical reports. He administered four tests and interspersed the testing by taking a comprehensive history from Mr Martin.
56The tests conducted were as follows:

a.the Minnesota Multiphasic Personality Inventory – 2 (“MMPI-2”) for the “assessment of personality and psychopathology”. The test has 567 questions and usually takes an hour to an hour and a half to complete. Mr Haralambous reported that there was a “possible over-reporting of psychological dysfunction” although Mr Martin endorsed “psychological symptoms that rarely go together”. The test findings indicated “exaggerated or non-credible complaints of disturbed cognitive functioning”;
b.the Test of Memory Malingering (“TOMM”) is a “systematic method for discriminating behaviour credible and non-credible complaints of concentration and/or memory impairment”. Mr Haralambous reported that Mr Martin’s performance on the test was “not consistent with genuine cognitive dysfunction”, but rather suggested “exaggeration and/or embellishment of memory and cognitive dysfunction”;
c.the Word Memory Test (“WMT”) is a “test that is commonly used to assess the validity of memory complaints through the immediate and delayed recognition of word-pairs”. Mr Haralambous reported that Mr Martin’s score was “not consistent with genuine disturbances of concentration or memory” and was “more consistent with exaggeration and/or embellishment of cognitive impairment”;
d.the Rey 15 Item Memory Test (“RFIT”) assesses the “validity of memory complaints”. Mr Haralambous reported that Mr Martin’s results were “not consistent with genuine impairment of concentration or memory”.

57Dr Epstein said in a letter to Mr Martin’s solicitors that he “did not comment” on the testing conducted by Mr Haralambous “because neuropsychological testing is outside my area of expertise. I have no knowledge of the methodology of the specific test you described. You will need a second opinion from a neuropsychologist with regard to that matter”.
58At the hearing, no expert evidence was led on behalf of Mr Martin in relation to the testing. Mr Martin described in his evidence the consultation with Mr Haralambous. He said he was “not so much not impressed but I just thought, ‘Here’s a level of testing that to me was just an insult to what you should be testing for’… and I just felt, ‘Well, how is this testing me for my business skills to return to work?’”.
59Mr Martin said, “I was getting a level of frustration, and I’m sure I probably - you know, I probably buggered up a few of them. I probably threw a couple of curly ones in there”. When asked by his counsel whether he had been exaggerating or making up his story entirely, Mr Martin replied, “All I know is that I’m keen to get back to work and I haven’t been a malingerer”.
60When cross-examined by Mr Cavanagh about this evidence concerning the consultation with Mr Haralambous, Mr Martin said that he was “overwhelmed by the process and I wanted to get to the end as soon as we can”. Mr Martin “admitted” to deliberately putting in “one or two” incorrect answers. He said that this was not to “throw him off the scent”, but “because I felt the test wasn’t even close to what it should have been testing for, [that is] to establish, can I get back to work”.
61Mr Haralambous said in his oral evidence that Mr Martin’s oral evidence “suggests more active misrepresentation than throwing in a few curly ones” and what the MMPI-2 test results showed was that, “in a careful, non-random manner, the plaintiff has endorsed a considerably large number of items more characteristic of exaggeration or embellishment with psychological disturbances, but in a careful, non-random and deliberate manner”. Mr Halamabous said that, “across the three trials”, this suggested that Mr Martin was “a bit more active in terms of an attempt to present oneself as more impaired than is likely to be the case”.
62Mr Haralambous saw his task in reporting upon Mr Martin as considering whether Mr Martin was “limited in vocational ability by the ‘psychological impact’ of the physical diagnosis [of prostate cancer]”. Mr Haralambous said that Dr Hamilton’s opinion that Mr Martin was unable to work “partly due to the extreme distress this unexpected diagnosis caused” and because he was not able to “meet clients face-to-face for long periods and concentrate fully” was not “informed by any objective or evidence based measures”.
63Dr Haralambous also referred to the fact that Mr Martin had been “subsequently and variously diagnosed with Post Traumatic Stress Disorder (PTSD) and a Chronic Adjustment Disorder with Mixed Anxiety and Depression”, although he dismissed these as inappropriate diagnoses.
64Mr Haralambous was a poor witness. He was argumentative and combative and would not concede the least point without initial obfuscation and pedantry. In his reports, Mr Haralambous was critical of the views expressed by the treating doctors and examining psychiatrists. He also said that “Dr Joffe appears to have transgressed the boundary of his professional expertise”.
65The cross examination of Mr Haralambous on this statement alone covers six pages of transcript. After being informed of Dr Joffe’s experience treating over 500 servicemen “with symptoms and manifestation of post-traumatic stress”, Mr Haralambous’ responses included the following:
a.at transcript page 467, having heard these matters, he would not “modify in any way” his criticism of Dr Joffe;
b.at transcript page 472, he accepted that his “criticism of [Dr Joffe] for having transgressed the boundary of his professional expertise is misplaced”.

66An example of Mr Haralambous’ combative and generally unhelpful responses was the exchange during cross-examination of an instance referred to by Dr Harris as having occurred during his examination, when Mr Martin had “become tearful” when asked about his father’s death. Dr Harris had expressed the view in a letter to the referring physician that, “there is plainly some significant unresolved grief over the demise of his father and this quite possibly resonated with his own recent experiences of cancer”.
67In cross-examination of Mr Haralambous, Mr Gleeson asked about the statement by Dr Harris in the process of exploring Mr Haralambous’ view that Dr Harris’ opinion “does not appear to have been informed by any objective or evidence based measures”. Mr Gleeson suggested that Mr Martin’s tearfulness, when discussing his father’s death with Dr Harris, was “an objective basis on which to make those observations”.
68Mr Haralambous’ responses were a series of questions, including:
a.“So what you’re saying is, can we assume from one brief recorded instance of someone crying that all the rest follows”;
b.“Is that your question then whether Mr Martin crying is diagnostic – it has diagnostic significance?”

69Mr Gleeson pursued the issue of whether tearfulness might be “an objective measure”. Mr Haralambous responded:
a.“If I can just say that one crying is not an indication of diagnosable pathology”;
b.“I think we’re all familiar with people crying but it not necessarily being diagnosable pathology”;
c.“I believe it’s an indicator but not necessarily a conclusive one”.

70The last response was appropriate and should have been given promptly and without the many minutes of obfuscation before that point was reached. Mr Haralambous’ oral evidence on this matter can be contrasted with the approach he adopted in his own written report when recording his observations of Mr Martin during his examination. At pages 10 and 16, he recorded that Mr Martin “was not obviously depressed, his mood was predominantly euthymic, he was at times jovial and jocular, he was never tearful …” (emphasis added).
71As Mr Haralambous had finally conceded in cross-examination, tearfulness may be “an indicator but not necessarily a conclusive one” of psychological issues. Although Mr Haralambous expressed his familiarity with the experts code of conduct, his performance as a witness was not, in my view, what should be expected of an expert witness.
72Mr Haralambous appeared to believe that as a consequence of the tests he had conducted, the statements by Mr Martin to his treating doctors and examining psychiatrists, could be altogether discounted and did not provide “objective or evidence-based measures of psychological functioning”.
73When Mr Haralambous was asked by Mr Gleeson whether he accepted that his “conclusion is that Mr Martin suffers from no mental illness”, Mr Haralambous responded, “my conclusion is that Mr Martin does not present with objectively verifiable manifestations of diagnosable pathology”.
74Mr Haralambous, in his second written report, noted that, “people with genuine diagnoses do not need to embellish. They will be able to convey their condition without exaggeration”. He also noted that, “the presence of indications of malingering does not preclude the possibility of genuine illness at some level”.
75Mr Haralambous was taken, in cross-examination, to professional articles discussing the tests he had conducted with Mr Martin, and their limitations. Mr Haralambous said that, “As a generalisation”, he agreed “based on well-recognised studies, that nonetheless people with genuine diagnoses do embellish”. In Mr Martin’s case, however, “there was no other conclusion that I could draw, other than that he was exaggerating and / or embellishing”. He said he was “not going to speculate as to why he was exaggerating on embellishing although, you know, it was clearly occurring within the context of a claim where there was substantial secondary gains”.
76By this statement, Mr Haralambous appeared to be suggesting that Mr Martin had deliberately misrepresented his symptoms and the effect of any disability for the purpose of assisting his insurance claim.
77In my view, this conclusion should not be accepted in light of the following matters:
a.Mr Martin did not make a second claim until 28 June 2012. This was four years after the initial diagnosis of cancer, and more than three years after the insurer stopped making payments under the first claim;
b.Mr Martin had not been provided with a cogent explanation for his condition until his first consultation with Dr Joffe on 17 November 2011;
c.consistently, since the diagnosis of prostate cancer in June 2008, Mr Martin’s treating physicians had recorded the symptoms upon which the later diagnoses by Dr Joffe, Dr Harris, Dr Potter and Dr Epstein were made. Dr Epstein had specifically considered the question of whether Mr Martin was malingering. He tested the matter, during his examination, and rejected that conclusion; and
d.despite wanting to return to work in April 2009, and making a genuine attempt to do so, Mr Martin was unable to achieve a level of functioning which was necessary if he were to continue to develop his consulting business.

78In the circumstances, I am unable to accord much weight to much of the evidence of Mr Haralambous, although I will later return to further consider the results of his testing. I consider that the preponderance of evidence supports the conclusions reached by the treating physicians Drs Greer, Hamilton and Joffe and the examining psychiatrist, Drs Harris, Potter and Epstein that Mr Martin suffered psychological symptoms and illness as a consequence of the diagnosis and treatment of his prostate cancer.
79I consider that, apart from the matters contemporaneously recorded by the general practitioners in their clinical documents and the documents supporting the insurance claims, that the conclusions I have reached about Mr Martin’s psychological problems are supported by the oral evidence of Mr and Mrs Martin and Mr Lurie.
80The evidence of these witnesses, and to some extent the medical records of the treating doctors and the histories taken by the examining doctors, dealt with the following matters:
a.the efforts taken by Mr Martin to establish his business prior to his cancer diagnosis;
b.the effect of the cancer diagnosis on his capacity to pursue his day to day and business activities;
c.the investigation of treatment options and his fears relating to the eradication of the cancer and the other possible consequences of the treatment options;
d.the results of the surgery and the ongoing issues relating to incontinency and erectile dysfunction;
e.Mr Martin’s changed mood and his capacity to carry out the activities critical to the success of his business, including personal engagement, driving a motor vehicle and intellectual tasks;
f.the pursuit of Mr Martin’s claim in the proceeding.

81Mr Cavanagh SC was critical of Mr Martin as a witness, submitting that his evidence was “inconsistent and contradictory”, particularly in the following respect:
a.he declined psychiatric treatment at the recommendation of Dr Joffe and had not reported any symptoms referable to PTSD for at least two years of the period for which he sought benefits;
b.he was able to give evidence from the witness box without any difficulty understanding or answering questions and his appearance was not that of a flat affect or of a depressed person;
c.he tended not to answer questions in a direct manner;
d.contrary to the PBS records, he maintained that he was taking Lexapro at least throughout most of the period. He could not have been taking Lexapro in 2010 or most of 2011 because he had not filled a script until November 2011;
e.he gave evidence that he could not see his clients in far off areas because he could not drive in peak hour, however he drove to golf twice a week along a short section of Military Road (one of the busiest roads in Sydney);
f.he undertook a large amount of exercise “for a man his age”;
g.although he gave evidence that he could play golf, it was unlikely he could do so to the level he claimed, if he were suffering from dizzy spells or an inability to concentrate because of insomnia;
h.the idea that he had difficulty with travel or crowds was contrary to his golf trips overseas to Thailand and going on a cruise. He did not appear to mention these matters to Dr Joffe. Dr Joffe had indicated in his evidence that one of the indicators of PTSD was restricted recreational activities and exercise;
i.he complained to Dr Joffe that he no longer went to the gym, however he told Dr Epstein that he did go to the gym;
j.the symptoms he identified in his claim form were not symptoms he complained of to his doctors;
k.his complete lack of knowledge of his own financial affairs was inconsistent with the portrayal of himself on his professional website;
l.his own evidence as to his symptoms was inconsistent;
m.he admitted to being involved full time running his case, but did not indicate he had any difficulty dealing with his lawyers or understanding the details of his claim;
n.he met his friend Mr Lurie at a busy bar on a Friday evening about once a month despite his claims that he avoided crowds. He also stated that he attended the drinks by bus, although he had stated he was unable to take public transport to visit clients because he suffered panic attacks on public transport;
o.his evidence as to his previous business activities was exaggerated in that he created an impression of working up to 70 hours per week when, in fact, he had not done any paid work since September 2007;
p.he made deduction claims for business expenses in his 2011 tax return, although he said he did not work during this period.

82I consider, however, that Mr Martin’s evidence and his demeanour as a witness was generally not inconsistent with his presentation to treating and examining doctors (apart from Mr Haralambous) and was what might have been expected of a person with Mr Martin’s medical history and life experiences.
83Mr Martin has a long history of medical issues which have troubled him over many years. He has personality traits which would appear to pre-dispose him to a lesser capacity to deal with problems confronting him in his life. And yet, until his cancer diagnosis, Mr Martin apparently performed at a high level of activity during his years as an employee and later when he commenced his own business.
84Mr Martin clearly did not cope with the diagnosis of prostate cancer. Nevertheless, he approached the matter with determination and logical endeavour. His chosen treatment, robotically directed surgery, was not criticised as an inappropriate decision. The surgery was successful in eradicating the cancer, although the spread of the cancer was apparently more extensive than had been hoped.
85In the aftermath of the surgery, Mr Martin had the reassurance from PSA testing that, at least in the short term, his cancer had been treated. The incontinence issues following the operation were relatively minor, although of some significance in his ability to engage with the social interaction necessary for the success of his business venture.
86The surgery, however, left Mr Martin with serious problems with erectile dysfunction. He and his wife explored the suggested options with disturbing results. This factor, and other matters relating to Mr Martin’s “moods”, impacted significantly on his personal relations, particularly with his wife.
87Whilst golf continued to play an important part in Mr Martin’s life, as physical exercise, relaxation and social intercourse, it is one of the few positive factors in the comparison of Mr Martin’s life before his diagnosis with prostate cancer. Without his cancer, or another life event of similar significance, I consider it likely that Mr Martin would have pursued matters as he had prior to June 2008, including the development of his consulting business.
88Mrs Martin was a more impressive witness than her husband. It is likely that she has been a very important factor in the level of coping by Mr Martin since his diagnosis. It seems clear also that Mrs Martin has for many years accepted primary responsibility for the major financial decisions in their marriage.
89Mrs Martin’s evidence on all critical matters supported the general thrust of her husband’s evidence. Similarly, Mr Lurie‘s evidence supports the conclusions I have reached about the level of Mr Martin’s capabilities, particularly in performing tasks relating to business matters, both before and after June 2008.
90Whilst I have reached these conclusions on the question of the extent of Mr Martin’s psychological illness, the issue of Mr Martin’s entitlements under the insurance policy depends on whether he brings himself within the terms of the policy.

Determination of issues – 2. Whether Mr Martin’s illness incapacitated him and resulted in a relevant “loss of income”
91Mr Cavanagh SC submitted that a reading of the policy terms, particularly clause 17.3, required Mr Martin to prove the following matters, in order to establish a relevant loss of income:
a.Mr Martin suffered from an injury or sickness;
b.he was not working, or was only working in an occupation trade or business to a limited extent, and earning less than 80% of his pre-injury/sickness monthly income;
c.his inability to earn the limited income arose “solely” as a result of him suffering from the injury or sickness.

92Reference was also made to:
a.clause 17.8 which defined “pre-injury/sickness monthly income” as Mr Martin’s “highest average monthly income during any 12 consecutive month period in the 5 years before the date you suffered a loss of income”;
b.clauses 18.1 and 18.2, relating to the quantification of the “monthly income benefit”.

93The amount to which Mr Martin would be entitled, if he otherwise qualified for a benefit, would under clauses 18.1 and 18.2 depend on whether he was “actively engaged for reward in an occupation, trade or business and working at least 30 hours per week as a direct result of an injury or sickness”.
94I have previously referred to Mr Cavanagh SC’s submission that there was something incongruous with Mr Martin claiming that he was entitled to be paid a benefit under the policy based on his earnings five years before his cancer diagnosis when he was an employee of a software company, and the fact that for about four years prior to the diagnosis, Mr Martin had only earned minimal income from his consultancy business.
95However, as Mr Cavanagh SC himself emphasised, Mr Martin’s entitlement under the policy depended upon him satisfying the terms of the policy. It is necessary therefore to examine whether the circumstances of Mr Martin’s illness bring him within the terms of the policy and entitle him to be paid appropriate benefits. In this regard, Mr Cavanagh submitted that the “purpose” of the policy was “to cover an insured person in respect of his inability to earn income because of disablement”, and that the policy terms should be interpreted having regard to this purpose.
96On behalf of Mr Martin, it was submitted that although initially (between 1992 and 1996), the policy was to compensate during a period of disablement, thereafter the policy was a “loss of income” policy. Further, there was no limitation on the type of occupation from which Mr Martin’s pre-sickness monthly income may be drawn.
97On behalf of the insurer, it was submitted that the word “solely” in clause 17.3 “must be given meaning. It essentially required a finding that there is no other reason why” Mr Martin was not capable of earning 80% or more of his pre-injury/sickness monthly income.
98Mr Martin’s counsel on the other hand, submitted that, “the use of the word ‘solely’ in the phrase ‘not capable… solely as a result of your suffering’, properly construed, means nothing more than that the injury or sickness must, of itself, cause the lack of capability”.
99Mr Martin’s counsel submitted that the fact that the substitute paragraph, which applies if the insured had been “unemployed or on maternity leave for 12 months or more”, and which includes the word “solely”, must mean something other than an inability to claim if there exist concurrently operating causes of incapacity to earn the threshold level of income.
100In my view, the word “solely” is included in clauses 17.3 to indicate that the injury or sickness would by itself, be solely causative of the incapacity of the insured to earn 80% or more of the relevant pre-injury or sickness monthly income. On the basis of the analysis of the evidence I have undertaken, I consider that Mr Martin has established this causative link.
101The insurer submitted that the only medical evidence adduced by the plaintiff in support of the proposition that he has been incapable of earning income came from Dr Epstein, and not from his treating doctors. Doctors Greer, Hamilton and Joffe, had not suggested that Mr Martin was unable to work during any particular period. Mr Cavanagh submitted that “instead, [Mr Martin] relied upon a medico-legal psychiatrist, Dr Epstein, so as to establish the relationship between his sickness and inability to earn 80% of his pre-disability income”.
102The insurer submitted that Mr Epstein’s evidence, during the trial, was to the effect that Mr Martin could see clients and do all those duties associated with his work. When specifically asked what aspects of the job the plaintiff could or could not do, Dr Epstein stated that the plaintiff would be fit for many forms of work.
103The insurer also pointed to the fact that Dr Epstein did not know, at the time of his examination, that the plaintiff did things such as go on overseas holidays, play golf twice a week, go on a cruise or meet his friend Mr Lurie. Dr Epstein agreed that Mr Martin would not have been suffering from an adjustment disorder at the time of Dr Joffe’s report of 30 April 2012.
104In response, plaintiff’s counsel relied on Dr Epstein’s evidence that it is common for people suffering depressive conditions to not discuss their mental state with their GP and that Mr Martin’s frequent medical attendances for various ailments without specific mention of symptoms of depression or anxiety could, in itself, be a manifestation of his anxiety.
105In re-examination, Mr Gleeson asked Dr Epstein, “at what capacity would [Mr Martin] have been able to work” if he had received “early treatment”, as Dr Epstein had conceded in cross-examination.
106Dr Epstein stated that Mr Martin would have been “more likely to have responded to treatment back in 2009, 2010, 2011 than he would now” and that he would have encouraged Mr Martin “to go back to work on a part-time basis and over a period of time, gradually build up his level of activity in conjunction with support from me, and it may be that he reaches the level of functioning that he did before, but he may not”.
107In my view, the totality of the evidence, including that of Dr Epstein, does support the conclusion that Mr Martin’s sickness led to an inability to earn 80% of his pre-disability income as that concept is defined in the insurance policy. The critical evidence, in this regard, is the comparison of Mr Martin’s capacity for work before and after his cancer diagnosis, and the most likely explanation for the difference being that it was due to his psychological symptoms which prevented him from building his consulting business into a viable source of income.
108Mr Martin was paid benefits under the policy in respect of the first claim made on 1 October 2008. Those benefits were paid for the period 10 July 2008 to 5 April 2009. The “illness” in respect of which the payments were made was “prostate cancer” causing symptoms of “stress and anxiety in regards to the numerous treatment options” and “disturbed sleep resulting in lack of concentration”.
109The “treatment options” involved the consideration of three factors; principally, the removal of the cancer, but also the possibility of Mr Martin suffering, post-treatment, from erectile dysfunction and incontinence. The surgery in December 2008 successfully removed the cancer, although its spread was more extensive than had been anticipated. Following the surgery, Mr Martin had limited incontinence but suffered, and continues to suffer, significant erectile dysfunction.
110According to Mr Martin, his symptoms of stress, anxiety, disturbed sleep and poor concentration continued. It will be necessary to later examine the reporting of those symptoms and the treatment offered and undertaken.
111Mr Martin and Mrs Martin gave evidence that his symptoms, which prevented him returning to work in mid-2009, were matters which continued until Dr Joffe diagnosed Mr Martin as suffering from Post Traumatic Stress Disorder in October 2011, and which led to the second claim being submitted to the insurer in June 2012.
112Mr Cavanagh SC submitted that, quite apart from the general lack of credible evidence of any significant psychological issues, the evidence did not support the conclusion that Mr Martin was suffering from symptoms of psychological illness between mid-2009 and October 2011 when he consulted Dr Joffe. Mr Cavanagh submitted further that, if there were evidence of relevant symptoms in late 2011, by 2013, Mr Martin’s condition had effectively resolved.
113Dr Hamilton had been consulted by Mr Martin about his back pain in April 2008. The investigation of this issue led to the discovery of the prostate cancer. After this diagnosis, Dr Hamilton said that Mr Martin had “been unable to work. This is partly due to the extreme distress this unexpected diagnosis caused…” However, by November 2008, Dr Hamilton anticipated that, after prostate surgery, she “would expect him to be able to return to work”.
114Dr Hamilton saw Mr Martin on 16 February 2010. Dr Hamilton did not see Mr Martin again until 26 June 2012. During this period, Mr Martin saw other doctors at the practice, as follows:
2011: 14 February, 3 March and 21 November (Dr Allison).
2012: 4 May (Dr Laforest), 23, 28 and 30 May (Dr Keys).

115Dr Greer saw Mr Martin on about 20 January 2009. She supervised his attempted return to work in April 2009 and his inability to sustain his work activities. On 30 July 2009, Dr Greer recorded in her clinical notes, “Trying to get back to work and build it up but hard…financial times”. His subsequent attendances at the practice after 30 July 2009 (generally seeing Dr Greer) were as follows:
13 July, 5 and 12 August, 11 October 2010 (Dr Allman) and 7 December 2010;
24 August and 17 November 2011;
19 July 2012.

116Dr Greer said in evidence that because of the gaps between 30 July 2009 and 13 July 2010 and between 7 December 2010 and 24 August 2011 she would not be able to comment on Mr Martin’s medical condition during those periods.
117Dr Joffe first saw Mr Martin on 17 October 2011 upon the referral of Dr Greer. Before the appointment, Mr Martin filled out a questionnaire for Dr Joffe, which included the following questions, all of which he answered in the negative:
“Do you sleep well?”
“Do you wake refreshed?”
“Are you excessively sleepy during the day?”
“Have you fallen asleep during the day in inappropriate circumstances, eg at the traffic lights?”
“Have you noticed deterioration in your memory or concentration?”

118After the consultation, Dr Joffe reported to Dr Greer that Mr Martin’s “sleepiness is not a major problem for him during the day nor does he have any issues with performance of his daily tasks or limitations of short term memory, attention or concentration”.
119Dr Joffe made a diagnosis of post traumatic stress disorder and noted that he had given Mr Martin a “course of psychological retraining to help overcome some of the sleep related anxiety and have arranged for a diagnostic sleep study”.
120By 30 April 2012, and treatment with Lexapro, Tolvon and Doxepin, Dr Joffe reported “a marked improvement in [Mr Martin’s] daytime tiredness” and that Mr Martin was “looking so cheerful and well”. Although Mr Cavanagh SC suggested that this report indicated that Mr Martin was “well” at this time, any improvement was not sustained.
121On 30 July 2012, Dr Joffe adjusted the medication, introducing a “low dose Endep”. Mr Martin had submitted his second claim on 28 June 2012. After this time, Mr Martin’s medical condition began to be affected by his claim and the ongoing dispute with the insurer. On 15 October 2012, Dr Joffe noted that Mr Martin had “entered into difficult territory with his financial insurance which, of course, has triggered more anxiety and agitation”.
122On 12 February 2013, Dr Joffe referred to Mr Martin’s “persisting battles with his insurance company which is a persisting stimulus to his anxiety”. On 4 April 2013, Dr Harris confirmed that, “the report of refusal of the insurer to fulfil their commitments has formed a focus upon which he can direct all of his frustration and he has become quite engulfed by it”.
123The insurer rejected the second claim and notified Mr Martin’s solicitors of that fact on 18 September 2013. The insurer was “willing to accept that Mr Martin is currently suffering from an Adjustment Disorder as diagnosed by Dr Potter. We are willing to accept that he [Mr Martin] was first treated for the symptoms relating to this by Dr Joffe on 17 October 2011, however, we do not accept the diagnosis of PTSD by a Respiratory Sleep Physician (Dr Joffe). In addition, we do concede that Mr Martin would be medically eligible to receive a benefit from 17 October 2011, however, as the financial information he has provided indicates that his Pre Disability Sickness Income is nil, there are no benefits payable under the Policy, arising out of this claim”.
124At another part of this judgment, I shall examine the evidence relating to Mr Martin’s medical care and treatment and whether he failed to carry out any recommended treatment. I there conclude that, at all relevant times:
a.Mr Martin was under the regular care of a medical practitioner;
b.he carried out the treatment recommended by his medical practitioners.

125I am more persuaded on the evidence that, from about the time of Mr Martin’s diagnosis that he suffered from prostate cancer, he continued to have psychological symptoms which prevented him from effectively carrying out the critical tasks involved in the development of his consulting business.
126The matters which primarily lead me to this conclusions are as follows:
a.Mr Martin’s cancer diagnosis was unexpected and immediately affected him;
b.as a result of his predisposition, he worried obsessively about the means of best treating the cancer and the consequences of the treatment;
c.to a significant degree, his fears were realised as the cancer was more widespread than anticipated and he was left with effectively untreatable and serious erectile dysfunction;
d.following his surgery, Mr Martin planned to return to work in April 2009, although this was unsuccessful;
e.the treating general practitioners, Drs Hamilton and Greer, identified at a very early stage reactive physiological symptoms which made it difficult for Mr Martin to return to work;
f.Mr Martin was prescribed medication for the treatment of these symptoms from as early as 8 October 2008 when Dr Greer prescribed the anti-depressant Lexapro;
g.he regularly consulted doctors over many years whilst he struggled to work;
h.Mr Martin’s level of dysfunction was confirmed by the evidence of his wife and of Mr Lurie and in the histories taken by the treating doctors;
i.Mr Martin did not have a history of having been motivated by the pursuit of compensation. The second claim was only made after Dr Joffe provided a diagnosis which linked Mr Martin’s symptoms to the cancer diagnosis;
j.although there may be disagreement among the treating and examining doctors (apart from Mr Haralambous) about the precise condition from which Mr Martin suffers, there is no dispute that it is essentially the same problem from which he suffered following the cancer diagnosis and which has continued to affect his ability to effectively pursue his business activities;
k.the problems Mr Martin has faced have been the psychological consequences of his cancer diagnosis and surgery, and their aftermath.

127I have reached the following conclusions in relation to the question of whether Mr Martin suffered a relevant “loss of income”:
a.Mr Martin suffered, and continues to suffer psychological illness as a result of his diagnosis and treatment for prostate cancer;
b.at the time Mr Martin suffered psychological illness, he was:
i.“actively engaged for reward in an occupation, trade or business”, being the consultancy business he had established in 2005;
ii.“working at least 30 hours per week” in that business, although much of the “work” was not directly remunerative as the business was not firmly established.

c.Mr Martin did little work following his illness, and certainly not to the extent of earning a substantial proportion of what was described in the policy as his “pre-injury/sickness monthly income”;
d.the inability to work and earn a substantial portion of his pre-injury/sickness monthly illness arose solely as a result of him suffering a psychological illness.

Determination of issues – 3. Extent of Mr Martin’s loss of income
128Mr Martin has effectively earned no income since June 2009. If, as I have found, the relevant loss of income is to be calculated by reference to his earnings as an employee many years earlier, there is little doubt that Mr Martin has established that he was incapable as a result of his illness of earning at least 80% of his pre-illness monthly income.
129I consider that it is appropriate to calculate the loss of income by reference to Mr Martin’s income in 2004. Although the second claim was not made until June 2012, the claim was, in my view, a recurrence or continuation of the “sickness” from which Mr Martin suffered as a result of his cancer diagnosis in June 2008.
Determination of issues – 4. Was the second claim for “the same or related injury or sickness”
130On behalf of Mr Martin, it was submitted that clause 34.0 of the policy entitled Mr Martin to make the second claim on 28 June 2012 because he was suffering from “the same or related injury or sickness” as he had been when he made the first claim on 1 October 2008.
131In my view, clause 34.0 is in the policy as a provision for the benefit of the insurer, limiting the quantum of any subsequent claim, for which the insured qualifies within 6 months of the payment of benefits, for “the same or related injury or sickness”. In such circumstances, “any relevant indexation increase between the claim periods, shall not apply”.
132As the provision makes clear, the clause only applies where the insured will “again qualify for the payment of the income replacement benefit for the same or related injury or sickness”. An insured “qualifies” by satisfying the terms and conditions of the policy, including the essential pre-condition being a relevant loss of income “solely as a result of you suffering from an illness or sickness” which prevents the insured working at all or sufficient to earn more than the threshold level of income.
133To some extent, clause 34.0 does no more than restate the entitlement of the insured under the policy, and does so for the purpose of limiting the sum to which the insured may be entitled if he or she satisfied those conditions. However, the clause has some relevance in relation to the question of how an insured “qualifies” under the policy. A “recurrent” illness can be “the same or related”. It does not need to be continuous (from the original qualifying time), as the policy terms accept that an illness may recur.
134The illness is “deemed to be a continuation” of the earlier, if:
a.the insured “again” qualifies;
b.the qualification is for “the same or related” sickness;
c.the qualification is “within 6 months” from the date when a benefit was paid.

135The insurer’s primary submission was that Mr Martin had not “again qualified for the payment of the income replacement benefit for a same or related sickness. It is only in those circumstances that the claim will be deemed to be a continuation of the earlier claim and earlier sickness. He does not qualify for a benefit during the second half of 2009”.
136Alternatively, the insurer submitted that, if the sickness was a “recurrent condition”, that the benefits to which he would be entitled should be calculated on the basis of the income he had earned from his business, which was at most, a negligible sum.
137On the basis of the conclusions I have reached in relation to the evidence, I accept that Mr Martin continued to suffer from psychological symptoms resulting from the cancer diagnosis, the surgery and its aftermath, including the problems relating to erectile dysfunction. These symptoms were essentially the “same” sickness from which he had suffered following the initial diagnosis.
138Accordingly, I am satisfied that clause 34.0 entitles Mr Martin to claim benefits under the policy on the basis that his psychological “sickness shall for all purposes be deemed to be a continuation of the former... sickness”.

Determination of issues – 5. Regular medical care and treatment
139The insurer refers to and relies upon the alleged failure by Mr Martin to comply with clauses 18.5 and 37.0(c) of the insurance policy to defeat the claim. The insurer submits that it is an essential pre-condition to recovery under the policy that Mr Martin remained under the “regular care” of, and carried out the “treatment recommended” by, his doctors.
140The insurer submitted that it was “only obliged to pay when the plaintiff suffers from a sickness in circumstances where the plaintiff is under treatment and adopting the treatment” noting that, the plaintiff “declined to have treatment for his condition and was not reporting any symptoms referable to his condition for at least 2 years of the period for which he seeks benefits”.
141The insurer submitted that Dr Joffe advised Mr Martin to “see a psychiatrist and receive treatment from a psychiatrist”. Mr Martin gave evidence that, after attending Dr Harris once for psychiatric treatment, on referral from Dr Joffe, he did not attend again for financial reasons. The insurer submitted that this “cannot be true”, because Dr Joffe gave evidence in re-examination that Mr Martin had agreed to see a psychiatrist “once his case was over”.
142In relation to this issue, the insurer relied upon:
a.the irregularity of Mr Martin’s attendances upon doctors between July 2009 and July 2010 and between December 2010 and August 2011 in relation to his psychological symptoms;
b.his failure to pursue psychological treatment suggested by Dr Greer on 24 August 2011 and further treatment with the psychiatrist Dr Harris after his referral by Dr Joffe in April 2013;
c.his failure to consistently take the medication Lexapro, prescribed by Dr Greer and Dr Joffe.

143On behalf of Mr Martin, it was submitted that:
a.in the months following his return to work, Mr Martin saw numerous registered medical practitioners including Dr McMahon and Dr Kooner and he continued to see Dr Greer;
b.Mr Martin “did not know how” to seek treatment for a problem he did not understand and which was not “at that stage” (until he saw Dr Joffe) been diagnosed;
c.it followed, therefore, that Mr Martin “did not know how to seek treatment for a problem he did not understand and which had not at that stage been diagnosed”;
d.he had followed all recommended treatment of the doctors he consulted, including taking the medication Lexapro;
e.no psychological or psychiatric treatment had specifically been recommended to Mr Martin;
f.any failure by Mr Martin to obtain treatment for an undiagnosed illness in 2009, 2010 and 2011 could not be regarded as “a deliberate choice”.

144Alternatively, it was submitted on Mr Martin’s behalf that s. 54(1) of the Insurance Contracts Act 1984 (Cth) applied and, if Mr Martin had failed to comply with his obligations under the policy, this did not in the circumstances entitle the insurer to refuse to pay Mr Martin’s claim.
145In response to Mr Martin’s reliance upon s. 54, the insurer submitted that the evidence supported the conclusion that, if Mr Martin had received psychological treatment from the time it was recommended, he would likely have recovered. In the circumstances, the prejudice to the insurer of Mr Martin’s failure to comply with the terms of the policy would be that, unless protected by the Act, it would be obliged to pay Mr Martin’s claim.
146Mr Martin was certified by Dr Greer as fit to return to work in April 2009. The insurer paid benefits under the first claim to 5 April 2009. Later, in the second claim, Mr Martin asserted that he had not worked since 1 June 2009.
147Between 1 June 2009 and the second claim on 28 June 2012, the defendant submitted the evidence disclosed that:
a.Mr Martin generated little, if any, income from his business;
b.apart from the evidence of Mr and Mrs Martin and Mr Lurie there was limited contemporaneous evidence of symptoms which might have prevented Mr Martin pursuing his business activities;
c.only intermittently, and not consistently, Mr Martin took the prescribed medication (including Lexapro) for these symptoms;
d.Mr Martin had regular attendances with doctors, but few at which his “psychological” symptoms were mentioned, or were the focus of the consultation.

148Medication, including Lexapro: Lexapro is an anti-depressant used to treat anxiety. Dr Greer first prescribed Lexapro for Mr Martin on 8 October 2008. The prescription was filled on 23 December 2008. Although Dr Greer wrote further prescriptions for Lexapro on 6 November 2008, 19 January 2009 and 24 August 2011, there is no evidence that any prescriptions for Lexapro were filled until 27 November 2011. After that time, Mr Martin was regularly prescribed, and the prescriptions were filled at reasonable intervals.
149Normison is a medication used to treat insomnia. It was first prescribed for Mr Martin by Dr Greer on 19 January 2009. She issued further prescriptions on 7 December 2010 and 18 July 2012. There is no evidence that these prescriptions were filled.
150Avanza is anti-depressant medication. Dr Joffe prescribed Avanza for Mr Martin on 15 October 2012 and it appears that prescriptions were filled in October and December 2012.
151I consider that the evidence does not support a conclusion that, prior to November 2011, Mr Martin was taking any significant quantity of medication for his symptoms of anxiety. However, I consider that the evidence does support conclusions that:
a.after November 2011, Mr Martin was regularly prescribed Lexapro with an increasing dosage from 10mg to 20mg, and most recently to 30mg;
b.it is likely, because of the intervals at which Mr Martin filled the prescriptions (on average about monthly), during this period, that he was taking the medication.

152Mr Martin agreed in evidence that in the early years that he was taking Lexapro, “you took yourself off it from time to time”. He said that in the year 2009, “I would have experimented throughout the period” and “may have taken myself off for three months at a time”, although on those occasions he would gradually “scale down” the dosage. Mr Martin said that he was affected by the medication he was taking and he appeared to be encouraged by his doctors to monitor the effect of the drugs.
153Mr Martin’s belief was that he was on Lexapro “for the bulk of the time” during 2009 and 2010. The longest time he had taken no Lexapro would be “six months free with nothing” after “scaling off the drugs”, and a second period of six months.
154There is little in the evidence to suggest that the Lexapro has significantly assisted Mr Martin’s management of his symptoms of anxiety during the period during which it is probable he has been taking the medication. It is unclear whether, if Mr Martin had taken the medications prescribed by his doctors regularly prior to November 2011, it would have had any significant effect on his symptoms of anxiety and Mr Martin’s capacity to pursue his business activities.
155Attendance upon doctors: Dr Greer saw Mr Martin on about 5 occasions between mid-September and December 2008. On 3 March 2009, she noted that he was “keen to work, not yet seeing clients, need to sleep better”. In relation to his driving, he was “feeling calmer”. His “sleep [was] not good – wakes early”. Mr Martin had “ceased Lexapro one month ago”, although Dr Greer said, he did not think the Lexapro had any effect.
156On 30 July 2009, Dr Greer noted that Mr Martin was “trying to get back to work and build it up, but hard after so long break”. Dr Greer referred to Mr Martin’s “ED [erectile dysfunction] challenges” including that he had “tried pump / injection”, his visit to hospital emergency and that he would shortly be seeing Mr Kooner again.
157Mr Martin did not see Dr Greer again until 13 July 2010. During this period, Mr Martin twice saw Mr Kooner and saw Dr Hamilton in February 2010 for unrelated issues. The consultation on 13 July with Dr Greer also seems to have focussed on problems other than the aftermath of his cancer diagnosis and treatment.
158Mr Martin saw Dr Greer on four occasions between July and December 2010 and Dr Allison at the practice on two occasions during this period. The focus of the attendances largely concerned unrelated issues although Mr Martin said he told Dr Greer during the consultations that he was still unable to work in his business. On 12 August 2010, Dr Greer noted, “difficulties of getting job, so discussed need exercise to increase mood and to ‘network’ so must fix muscles! Let me know if needs help with mood etc…”
159On 31 August 2010, Mr Martin submitted an application for a “board” position as a non-judicial member of the Legal Services Division. At some stage, Mr Martin had also sought a consulting position as part of “a group of mentors” for insurance company executives. On 7 December 2010, Dr Greer noted, “still not much work but there is a ‘sniff’ of a potential position”, although the precise position was not clarified in the evidence.
160It was at the visit on 7 December 2010 that Dr Greer referred Mr Martin to Dr Joffe in relation to his sleeping problems. Mr Martin did not, however, see Dr Joffe until 17 October 2011, at which time he gave Mr Martin the diagnosis of post-traumatic stress disorder.
161Dr Greer did not see Mr Martin between 7 December 2010 and 24 August 2011, although Dr Allison, at Dr Hamilton’s practice, saw him on 14 February and 1 March 2011. On 24 August 2011, the consultation with Dr Greer concentrated on Mr Martin’s psychological issues. Dr Greer’s notes referred to, “anxiety again” over previous 2 months, “feels tense”, “gets angry, frustrated”, “not sleeping”, “difficult to concentrate”, “some symptoms of depression”, “reduced motivation to go out”, “not much work around”.
162At this visit, Dr Greer apparently arranged the appointment for Mr Martin to see Dr Joffe on 17 October 2011 and raised the possibility of referring him to a psychologist for cognitive behavioural therapy on a mental health care plan.
163From 17 October 2011, Dr Joffe became Mr Martin’s principal treating doctor. He prescribed medication including Lexapro, Avanza and Tolvon . Dr Joffe arranged sleep testing in January 2012 and referred Mr Martin to a psychiatrist, Dr Harris, on 4 April 2013. Mr Martin saw Dr Joffe four times in 2012, and twice in both 2013 and 2014.
164Before Mr Martin saw Dr Joffe on 17 October 2011, he completed a questionnaire where he answered a series of questions (to which I have earlier referred), including the following, all of which he answered in the negative: “Are you excessively sleepy during the day? Have you fallen asleep during the day in inappropriate circumstances eg. At the traffic lights? Have you noticed deterioration in your memory or concentration?”. In his report to Dr Greer on the consultation on 17 October 2011, Dr Joffe effectively repeated the answers given by Mr Martin to the questionnaire.
165Notwithstanding these matters, Dr Joffe made the diagnoses of Post Traumatic Stress Disorder. At times, during his attendances with Dr Joffe, there were improvements in Mr Martin’s symptoms. For example on 30 April 2012, there had been a “marked improvement in sleep and daytime tiredness” and Mr Martin’s “mood appears to have settled further”.
166Mr Martin’s overall medical history, and particularly since the diagnosis by Dr Joffe, appears to confirm the continuation from 2008/2009 of the unresolved psychological issues referred to in the second claim submitted to the insurer in June 2012.
167The insurer submitted that, even if this conclusion were accepted, Mr Martin had failed to comply with an essential pre-condition to his entitlement to be paid benefits under the policy by reason of his failure to remain under regular medical care and carry out recommended treatment. It was submitted by the insurer, that Mr Martin had breached the policy by:
a.failing to visit his general practitioner Dr Greer or any other medical practitioner for any psychological issues, particularly during the following periods:
i.between 30 July 2009 and 13 July 2010 (almost 12 months);
ii.between 7 December 2010 and 24 August 2011 (over 8 months);

b.failing to take Lexapro as prescribed by Dr Greer between 8 October 2008 and 17 November 2011 save for the prescriptions filled on 23 December 2008 and 27 November 2011;
c.failing to obtain psychological or psychiatric treatment notwithstanding:
i.the suggested referral by Dr Greer to a psychologist for cognitive behavioural therapy on 24 August 2011;
ii.Mr Martin’s failure to return to see the psychiatrist, Dr Harris, after the consultation on 4 April 2013.

168Dr Greer said in evidence that she was unable to comment on the condition of Mr Martin during the two lengthy periods between 2009 and 2011, during which he did not attend her. Nevertheless, I consider that the insurer cannot rely upon clauses 18.5 and 37.0 to defeat Mr Martin’s claim. I rely upon the following matters:
a.as a matter of construction, the clauses appear to apply prospectively, after a claim has been made and accepted, and to govern the circumstances in which benefits will continue to be paid;
b.prior to July 2009, Mr Martin had disclosed to Dr Greer the symptoms from which he suffered and from which I am satisfied he continued to suffer. Dr Greer had, to a large degree, recognised the nature of the symptoms and the extent to which they impacted on Mr Martin’s life. I am unable to conclude, on the evidence, that Mr Martin was not under the “regular care” of Dr Greer or that more frequent attendance was required;
c.at the relevant times, Mr Martin was also attending the surgeon, Mr Kooner, who had operated in December 2008 and was aware of the post-operative difficulties Mr Martin was having with erectile dysfunction. Until Mr Martin was given a diagnosis by Dr Joffe that might explain the symptoms which affected his ability to work he, not unreasonably, would have believed his medical advisors had all the relevant information in relation to his situation and from which they could assist him to get better so that he could return to work;
d.it is possible that, if Mr Martin had attended Dr Greer more regularly, Dr Greer may have suggested at an earlier time, or more strongly, that Mr Martin attend Dr Joffe or receive direct psychological help. This may have led to an earlier diagnosis of PTSD arising from Mr Martin’s reaction to his cancer diagnosis and treatment. I am not, however, persuaded on the evidence that it is more likely than not that Mr Martin would have received effective treatment at an earlier time.

169In relation to Lexapro, the fact of its prescription by Dr Greer is evidence that Dr Greer understood Mr Martin’s symptoms and their significance. However, Mr Martin informed Dr Greer that the medication had little effect on his symptoms and that at times he was not taking the medication. It is not appropriate, in these circumstances, to conclude that there has been a failure to carry out recommended treatment.
170The continued prescription of Lexapro, and the increases in the dosage at later times, does not suggest that, if Mr Martin had taken Lexapro as prescribed prior to the diagnosis by Dr Joffe, that this would have impacted significantly on his capacity to pursue his business activities.
171Psychiatric intervention: In my view, Dr Greer did not “recommend” that Mr Martin undertake cognitive behavioural therapy with a psychologist. It was an option considered at the time when Mr Martin was sent to the sleep physician, Dr Joffe.
172Similarly, it is not clear that Dr Joffe sent Mr Martin to the psychiatrist, Dr Harris, with a view to more than obtaining a confirming opinion as to Mr Martin’s presenting condition. There is no evidence that either Dr Joffe or Dr Harris were recommending, or had communicated to Mr Martin, that ongoing psychiatric treatment was necessary or appropriate. Dr Harris offered to see Mr Martin again. Dr Joffe did not reinforce with Mr Martin that further consultations with Dr Harris, or another psychiatrist, should be undertaken.
173In the circumstances I do not consider that the insurer may refuse to pay Mr Martin’s entitlements under the insurance policy on the basis of the asserted failure to comply with clauses 18.5 and 37.0.
174Section 54 Insurance Contracts Act 1984 (Cth): If I had reached a different conclusion, in relation to clauses 18.5 and 37.0 of the policy and found, that Mr Martin had breached his obligations to “remain under the regular care of, and carry out the treatment by, a registered medical Practitioner”, I would have needed to consider the operation of s. 54 of the Insurance Contracts Act 1984 (Cth).
175The insurer submitted that s. 54 does not apply to clauses 18.5 and 37.0(b) of the policy as the clauses operate “as a condition precedent to the entitlement to a benefit, [as Mr Martin must satisfy] the requirement that he has been under the regular care of and carrying out the treatment recommended by a doctor for all periods that he seeks payment of the benefit”.
176The insurer submitted that:
a.it was not a case where “the insured [had] omitted to do something but rather that something required under the policy did not happen”;
b.alternatively, there was no “omission”, but rather a “deliberate choice on the part of Mr Martin not to seek medical treatment”.

177In support of its first submission, the insurer relied upon the decision of the High Court in Maxwell v Highway Hauliers Pty Ltd [2014] HCA 33, (2014) 312 ALR 330. In my view, the submission relies upon a misreading of the decision and the judgment of the Court, particularly at paragraphs 20 to 23, which does not support the insurer’s contention.
178I also reject the second submission. The insurer relied upon the distinction drawn by Walsh J in Kelly v New Zealand Insurance Co Ltd (1993) 7 ANZIC 61-197, particularly at page 78, 261. Walsh J distinguished “inaction” [the failure to extend the cover beyond the express policy limits] and an “omission”, as referred to in s. 54 of the Act.
179In FAI General Insurance Company Ltd v Australian Hospital Care Pty Ltd [2001] HCA 38; 204 CLR 641, Gleeson CJ at para 60 adopted a different approach to Walsh J in Kelly. In my view, a failure to “remain under the regular care of, and carry out the treatment recommended by a registered medical practitioner” would clearly be an “omission” as that term is defined in s. 54(6) and used, as an extension of the word “act”, in the section.
180Further, the insurer submitted that, if the section applies, the “omissions” of Mr Martin enlivened s. 54(2) as they “could reasonably be regarded as being capable of causing or contributing to a loss”, in respect of which insurance cover was provided.
181It was submitted that, under the policy, the insured was entitled to a benefit if an “injury or sickness” rendered the insured incapable of earning at least 80% of the pre-injury/sickness monthly income. In these circumstances, a failure to remain under medical care and receive recommended treatment would be “capable of causing or contributing to” a continuation of the incapacity and loss of income.
182In relation to Mr Martin, the insurer relied primarily upon his failure to “have obtained psychiatric treatment for his psychiatric illness in 2009, 2010, or 2011”. If Mr Martin had done so, the insurer submitted, he “would have recovered”. The insurer relied on the evidence of Dr Epstein as follows:

T241: Yes. You would agree that if he had had treatment in 2009, 2010, or even 2011, for any psychiatric illness he might be suffering from, it's likely that he would have been given appropriate treatment and been able to work?---Yes, I think so.
T242: That's what you think would have happened [Mr Martin would get better] if he had been under the care of an appropriate doctor receiving treatment back in 2009, 10 or 11?---I think so, yes.

183Dr Epstein, however, qualified his opinion. He said that Mr Martin may or may not have responded to treatment, his “predispositions” would make him difficult to treat and at best he would have initially returned to work on a “part-time” basis.
184In my view, the insurer’s submissions should fail for the following reasons:
a.there is no evidence that a medical advisor recommended to Mr Martin that he undergo continuing psychiatric treatment;
b.Dr Harris saw Mr Martin, upon the recommendation of Dr Joffe, on 4 April 2013;
c.Dr Epstein’s evidence was qualified and it was not established that he “would have recovered” to the degree which would have meant that he was not “incapacitated” to the extent of being unable to earn more than the threshold loss of income.
d.there were not present, what Gleeson CJ described in Moltoni v QBE (2001) 205 CLR 149 at paras 16 and 18, as the requirements of the section. These included the “identification of the amount of damage which the insurer suffered as a result of the act or omission in question” and that “the relevant prejudice suffered is to be measured by reference to what would have happened (as distinct from what could or might have happened) if the act or omission had not occurred”.

Determination of issues – 6. Effect of the timing of Mr Martin’s second claim
185Mr Martin submitted his second claim on about 28 June 2012. This was about 4 years after the diagnosis of prostate cancer, which Mr Martin said in his first claim dated 1 October 2008 had caused symptoms of “stress and anxiety” in regards to the treatment options and “disturbed sleep resulting in lack of concentration”.
186On behalf of the insurer, it was submitted that the failure by Mr Martin to lodge his claim until 28 June 2012 breached the terms of the policy and constituted circumstances in which the insurer was justified in denying benefits to Mr Martin.
187The insurer relied on the following provisions of the policy:
a.clause 18.0, which provides that, “In no event will an income replacement benefit be payable for any period greater than 60 days prior to the date we receive written notification of the fact that you are earning less than 80% of you pre-injury/sickness monthly income”;
b.clause 37.0, which provides that in the event of a claim, the insured must “give us written notice of the claim, within 30 days of suffering a loss of income, or as soon as reasonably possible thereafter”.

188In relation to clause 18.0, the provision was not pleaded by the insurer in its defence and accordingly I can have no regard to it as a basis for denying Mr Martin’s claim. In any event, similar considerations apply as for clause 37.0.
189In relation to clause 37.0(a), Mr Martin relies in response upon s. 54 of the Insurance Contracts Act 1984 (Cth) and the lack of evidence by the insurer of any specific prejudice or quantifiable loss flowing from Mr Martin’s alleged failure to comply with the terms of the insurance policy.
190I consider that if the insurer were entitled to rely upon clauses 18.0 or 37.0(a) of the policy, that s. 54(1) would apply. Essentially the insurer relies upon the same matters of prejudice to its interests as it relied upon the relation to clauses 18.5 and 37.0(c). For similar reasons, I consider that this is not a proper basis for the insurer to refuse to pay Mr Martin’s claim.
191Further, if the “sickness” is a “recurrent” sickness for the purposes of clause 34.0, it is appropriate to conclude as follows:
a.the first claim in 2008 notified the insurer that Mr Martin was earning less than 80% of his pre-sickness income (under clause 18.0) and that he was “suffering a loss of income” (under clause 37.0);
b.Mr Martin arguably made the second claim, “as soon as reasonably possible” after the diagnosis of PTSD by Dr Joffe and the continuation of the symptoms, and notwithstanding being under the care of Dr Joffe.

Determination of Issues – 7. Mr Martin’s entitlements under the policy
192Mr Martin’s claim was calculated in accordance with the expert report of Mr Bruce Wilkinson of Munday Wilkinson dated 3 February 2015. There was no dispute, that if Mr Martin were to succeed with his claim, that his past entitlements under the policy are as specified in the report.
193The insurer submitted that, if the Court considered that Mr Martin was entitled to pursue a benefit in the way that he has, the Court must assess his entitlement to a benefit on a period by period basis, pointing out that for the period May 2009 to August 2011 Mr Martin was not under the care of any doctor and not having any treatment for any psychiatric illness. The insurer sought to break the claim down into four periods of time although at other times it was suggested that the insurer should have received monthly reports from Mr Martin’s treating doctors, if he were to pursue a claim.
194In my view, whilst it may be convenient in the consideration of the evidence, to look at particular periods of time, this is not a specific requirement of the policy. It is necessary to consider whether Mr Martin’s claim satisfies the terms of the policy, or there are other legal principles, such as those provided for in s. 54 of the Insurance Contracts Act 1984 (Cth), which might be called in aid.
195Mr Martin gave evidence over three days. He generally answered questions without a break during the morning and afternoon sessions. His responses were usually measured and appropriate. However, the evidence about his work patterns both before and after his cancer diagnosis did not give a clear picture of his activities.
196Mr Martin said that he spent the years prior to his cancer diagnosis establishing his business. The lack of significant financial return was what he had anticipated, and this is evidenced by the letter to his insurance broker, dated 14 July 2006, which the broker sent on to the insurer. For this period, the preponderance of evidence supports Mr Martin’s contention that his consulting business was in the development phase and, despite the limited success of the proposals submitted by Mr Martin, this was not an unexpected outcome, even if the business were eventually to be successful.
197The cancer diagnosis had a significant effect on Mr Martin’s health, and his capacity to work. The insurer’s response to the June 2012 claim was apparently not made until its letter to Mr Martin’s solicitors on 18 September 2013. The letter noted that the claim was “for retrospective benefits from 1 June 2009 and continuing”. The insurer did not, however, accept that Mr Martin satisfied “the terms and conditions of the insurance policy and is not eligible to receive an income protection benefit”.
198The reasons given by the insurer were as follows:
a.it was “willing to accept” Dr Potter’s diagnosis that Mr Martin was “currently suffering from an adjustment disorder”;
b.it did not accept “the diagnosis of PTSD by a respiratory sleep physician” (Dr Joffe);
c.it accepted that Mr Martin was “first treated for the symptoms relating to” the adjustment disorder as diagnosed by Dr Potter when Mr Martin first saw Dr Joffe on 17 October 2011;
d.even if Mr Martin was “medically eligible to receive a benefit from 17 October 2011”, Mr Martin’s pre-disability sickness income at that date, was nil and there were “no benefits payable under the policy, arising out of this claim”.

199The last point depends upon the construction of the policy and, principally, whether clause 34.0 of the policy applies. As for the other matters, the conclusions of the insurer, as at 17 October 2011, are broadly consistent with those I have reached upon an examination of the evidence, although I do not consider them to be determinative of the claim.
200Dr Potter saw Mr Martin on 29 July 2013. Notwithstanding the treatment offered by Dr Joffe since 17 October 2011, the “adjustment disorder” diagnosed by Dr Potter was such that it is likely that, as at July 2013, Mr Martin was incapacitated by reason of his psychological symptoms.
201Mr Cavanagh SC submitted that I should disregard the opinion of Dr Potter because the history given to him by Mr Martin, and upon which Dr Potter relied, was inaccurate. Mr Cavanagh SC referred to the opinion of Dr Potter in 2013 that it was reasonable to accept that Mr Martin would not return to work and that “the primary cause of Mr Martin’s reported psychiatric condition and incapacity is due to the traumatising within his experience of the diagnosis of cancer and the residual side effects of the surgical treatment” and that Mr Martin “remains debilitated in a manner which would interfere with significant work requiring contact with the general public…[and his condition] has left him incapable of any significant return to his previous work”.
202Mr Cavanagh submitted that the opinion of Dr Potter should be disregarded as the history given to him was inaccurate. Specifically, Mr Martin had suggested to Dr Potter that he had been suffering from the symptoms of his condition on an ongoing basis since his diagnosis of cancer, that he was receiving treatment (including taking Lexapro) and that he could not concentrate and had memory problems. Mr Cavanagh referred to Mr Martin specifically telling Dr Joffe in 2011 that he did not have memory problems or concentration problems. Nonetheless, Dr Potter accepted the plaintiff’s history and level of symptomology and gave an opinion based on these matters, as if they were accurate.
203Mr Martin’s counsel submitted that a close examination of the history Mr Martin provided to Dr Potter (as well as to Dr Harris and Dr Epstein) does not support the insurer’s submissions that Mr Martin’s account was untruthful and misleading. On behalf of Mr Martin it was submitted that, “to the contrary, the history provided by Mr Martin during his evidence at trial was consistent with the history reported by each of the psychiatrists” and that “Mr Martin specifically stated at trial that at the examinations conducted by Dr Epstein and Dr Potter, he told them the truth”.
204Further, it was submitted, the insurer’s counsel had not put to Mr Martin that the history he provided to the psychiatrists was untruthful and misleading. In the circumstances, it was submitted on behalf of Mr Martin that “there is no basis for the insurer’s assertion that the psychiatric reports (including the report of Dr Potter commissioned by the insurer) should be disregarded”.
205I consider that the matters relied upon by Mr Cavanagh SC are overstated and that the consistency in the symptoms reported to the general practitioners from 2008, to Dr Joffe in November 2011, to Dr Harris in April 2013, to Dr Potter in July 2013, as recorded by Mr Haralambous in June 2014 and by Dr Epstein in January 2015 supports a conclusion that it is more likely than not that the complaints of symptoms which may have affected Mr Martin’s work capacity continued right through until this year.
206What is not clear on the evidence is:
a.why the focused treatment by Dr Joffe since November 2011 has been seemingly ineffective, although a reported improvement had been noted as early as April 2012;
b.why, if the symptoms were as debilitating as to justify the diagnoses made by Dr Joffe, Dr Potter and Dr Epstein and the concerns of Dr Harris, that Mr Martin has not been treated by a psychiatrist;
c.whether the reported psychological symptoms have been overtaken, since the making of the second claim and the insurer’s refusal of the claim in September 2013, by the dominance of the legal claim in Mr Martin’s life. Whilst Mr Martin said that he approached the claim as he would have approached a “project” in his business, he was unable during his evidence to convincingly explain why it had taken up as much of his time, as he asserted, in the year or so before the trial;
d.the test results of Mr Haralambous have not been challenged. Mr Martin admitted that he deliberately set out to sabotage the testing process. The results suggest a significantly different result than one that would have been achieved by Mr Martin simply “throwing in a few curly ones”.

207Mr Martin’s evidence received support, particularly from his wife’s evidence, and to some degree from Mr Lurie. It might be expected that a spouse and a friend would be sympathetic witnesses. However, there was little in their evidence which did not corroborate Mr Martin’s evidence, or that did not suggest Mr Martin had suffered from psychological symptoms likely to have had a not insignificant effect on his work capacity, particularly whilst he was still in the development phase of his new business.
208However, I have more uncertainty as to Mr Martin’s condition in recent times. The testing by Mr Haralambous casts doubts upon the credibility of Mr Martin. However, for the reasons I have given, I reject the broader opinions offered by Mr Haralambous, and particularly any suggestion that there is little objective evidence that there was never anything much wrong with Mr Martin’s psychological health.
209It is probable, in my view, that when the testing was conducted in June 2014, Mr Martin had become very angry at the insurer’s rejection of his claim and was pursuing his claim (through litigation) with the same determination that he had demonstrated in other personal “projects”, including the establishment of his consulting business after his retrenchment.
210This issue has some relevance in the consideration of whether Mr Martin has established, within the terms of clause 17.3, that the psychological sickness form which he had suffered is the sole cause of any present incapacity.
211As previously discussed, I accept that the word “solely” in clause 17.3 does not exclude a claim where there may be other matters operating to cause the incapacity to earn the required income threshold. Nevertheless, it is clear that an insured will only have an entitlement to claim if he or she can demonstrate that the “sickness” from which they suffer is the operative cause of the incapacity.
212Following the rejection of Mr Martin’s claim in September 2013 and the testing undertaken by Mr Haralambous, there is doubt as to whether Mr Martin’s psychological symptoms have continued as an operative cause of his incapacity, or whether they had been overtaken by Mr Martin’s single-minded pursuit of his insurance claim to a successful conclusion.
213It is difficult to disentangle the evidence in relation to these matters. Dr Epstein saw Mr Martin earlier this year. His opinion suggests that, at the time of the examination, Mr Martin continued to suffer from significant psychological symptoms and was not a malingerer. Dr Epstein said in his oral evidence that he considered, with appropriate psychiatric treatment, Mr Martin would have got better.
214However, this opinion must be considered in the light of my conclusion on the evidence that Mr Martin did not at any stage receive a definite “recommendation” that he attend for continuing psychiatric treatment. Dr Epstein’s opinion is also unclear in some respects, particularly as to the critical issue as to whether, with appropriate treatment Mr Martin would have had, and indeed has at present, sufficient capacity to earn at least 80% of his pre-sickness monthly income as defined in the policy.
215I have considered whether the evidence is sufficient to establish that it is more likely than not that Mr Martin had, at the date of trial, a lack of capacity as a result of his psychological sickness that prevented him earning at least the threshold monthly income.
216I consider that largely on the basis of:
a.his medical history;
b.the facts as I have accepted them in relation to his efforts to pursue his consulting business;
c.the recent opinion of Dr Epstein following his examination

that Mr Martin, at the time of that consultation, satisfied all of the requirements entitling him to claim under the policy to that date.
217Because of the proximity of the examination by Dr Epstein to the date of the trial, I consider that there is not any reason why Mr Martin should not be entitled to those benefits to the time of the trial and to the date of this judgment.
218However, although Dr Epstein “could see no evidence of malingering”, there is in the results of the testing by Mr Haralambous, evidence that it is likely that Mr Martin exaggerated in his responses to the series of tests in a way which invalidated his responses as to his level of incapacity.
219In these circumstances, I would be reluctant to make a positive finding as to any ongoing incapacity by Mr Martin which would justify any further entitlement under the policy. Also, Mr Martin has for some time had significant insight into his medical condition. Although, it is very unlikely that he can resurrect his consulting business in the future, the circumstances which now face Mr Martin may have relevance to the application of s. 54 of the Insurance Contracts Act 1984 (Cth).
220Accordingly, I will decline to make the declaration sought as to any “continuing entitlement”. If Mr Martin wishes to pursue that matter, it will need to be the subject of a further claim and an appropriate assessment of the evidence and the satisfaction of the policy’s requirements at that time.

Proposed orders
221I will make the following orders:
1.A declaration of past entitlement to Loss of Income Benefits within the terms of his insurance policy No. 1020697 (“the Policy”) for the period May 2009 to the date of judgment.
2.An order that the said proceeds be paid to the plaintiff by the defendant.
3.A declaration of past entitlement to the refund of premiums paid within the terms of the Policy for the period May 2009 to the date of judgment.
4.An order that the said proceeds be paid to the plaintiff by the defendant.

222I will hear further from the parties before making final orders, including any orders as to interest and costs.

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Certificate

I certify that the preceding 49 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 8 July 2015.

Dated: 8 July 2015

Mi-Lin Chen Yi Mei
Associate to His Honour Judge Anderson