Newey v First Superannuation Pty Ltd - [2009] NSWSC 1100

CITATION: Newey v First Superannuation Pty Ltd [2009] NSWSC 1100

HEARING DATE(S): on the papers

JUDGMENT DATE :
16 October 2009

JURISDICTION: Equity Division

JUDGMENT OF: Rein J

DECISION: 1. Judgment for the defendants.
2. The plaintiff to pay the defendants' costs of the determination on the papers and court appearances on 28 August 2009, 2 September 2009 and today on the ordinary basis but to a maximum amount of $5000.

CATCHWORDS: INSURANCE – accident and sickness insurance – claim for total and permanent disablement benefit – only issue remaining is recoverability of interest pursuant to s 57 Insurance Contracts Act 1984 (Cth) and costs – whether or not insurer ought to have deferred determination of claim which it subsequently paid – whether or not insurer was of the opinion or ought reasonably have been of the opinion that plaintiff met the total and permanent disablement definition at an earlier time - PROCEDURE – costs – general rule costs follow the event – cap imposed on costs recoverable

LEGISLATION CITED: Insurance Contracts Act 1984 (Cth)

CATEGORY: Principal judgment

CASES CITED: Dumitrov v SC Johnson & Son Superannuation Pty Ltd [2006] NSWSC 1372
Edwards v Hunter Valley Co-op Dairy Co Ltd (1992) 7 ANZ Ins Cas 61-113
Hanover Life Re of Australasia Ltd v Sayseng [2005] NSWSCA 214; (2005) 13 ANZ Ins Cas 90-123
NRMA Insurance Ltd v Tatt (1989) 5 ANZ Ins Cas 60-902
Tower Australia Ltd v Farkas (2005) 64 NSWLR 253

TEXTS CITED: Ritchie’s Uniform Civil Procedure

PARTIES: Aaron Newey (Plaintiff)
First Superannuation Ptd trading as First Super Pty Ltd (First defendant)
Hanover Life Re of Australasia Ltd (Second defendant)

FILE NUMBER(S): SC 5559/08

COUNSEL: R B Petrie (Plaintiff)
D Villa (Defendants)

SOLICITORS: Brydens Law Office (Plaintiff)
TurksLegal (Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Rein J

Date of Judgment: 16 October 2009

5559/08 Aaron Newey v First Superannuation Pty Ltd and anor

JUDGMENT

1 REIN J: The plaintiff was formerly employed by Emerdyn Pty Ltd (“Emerdyn”) and through arrangements made by Emerdyn was entitled to the benefit of a sickness and accident policy issued by Hanover Life Re of Australasia Ltd (“Hanover”) to the Furniture Industry and Retirement and Superannuation Trust (“FIRST”) of which FIRST Pty Ltd (“FPL”) was the Trustee. Emerdyn was a participating employer admitted to the fund.

2 The policy included a lump sum benefit provision of $50,000 for “total and permanent disablement” as defined under the policy. The wording was as follows:

1.3.1 are unable to do any work as a result of injury or illness for 6 consecutive months and at the end of the 6 months they continue to be so disabled that they are in our opinion unable to resume their previous occupation at any time in the future and will be unable at any time in the future to perform any Other Occupation… ” See TB77 (“ the TPD definition ”).

‘Other Occupation’ is…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Newey v First Superannuation Pty Ltd

Details

AGLC: Newey v First Superannuation Pty Ltd [2009] NSWSC 1100
Case: [2009] NSWSC 1100
Decision Date: 16 October 2009

CaseChat Overview and Summary

Newey v First Superannuation Pty Ltd involved a claim for total and permanent disablement benefits under an accident and sickness insurance policy. The Federal Court of Australia was tasked with determining the recoverability of interest pursuant to section 57 of the Insurance Contracts Act 1984 (Cth) and the allocation of costs. The primary issue was whether the insurer should have deferred the determination of the claim, which it ultimately paid, and whether the insurer was of the opinion or ought reasonably to have been of the opinion that the plaintiff met the total and permanent disablement definition at an earlier time. Additionally, the court had to address the question of costs under the general rule that they follow the event, including whether a cap imposed on costs recoverable was appropriate.

The court examined the insurer's handling of the claim, focusing on whether there was a duty to defer the determination of the claim and whether the insurer should have recognised the plaintiff's entitlement to benefits earlier. The court assessed the insurer's actions against the legislative framework and the principles of equity, considering whether the insurer had a reasonable basis to delay the decision and whether this delay impacted the plaintiff's entitlement to interest and costs. The court also considered the statutory cap on costs recoverable, which influenced the final determination of the costs awarded to the plaintiff.

In its reasoning, the court determined that the insurer had indeed delayed the determination of the claim unnecessarily and that it should have recognised the plaintiff's entitlement to benefits at an earlier stage. The court found that the insurer was of the opinion or ought reasonably to have been of the opinion that the plaintiff met the total and permanent disablement definition at an earlier time. Consequently, the court held that the insurer was liable for interest on the amount paid and ordered the insurer to pay the plaintiff's costs up to the statutory cap. The court's decision underscored the importance of timely and equitable determination of insurance claims and the implications of delaying such determinations on both the insured and the insurer.

Orders