Podrascanin v Westscheme Pty Ltd - [2004] WADC 73

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: PODRASCANIN -v- WESTSCHEME PTY LTD & ANOR [2004] WADC 73

CORAM: MARTINO DCJ

HEARD: 7 APRIL 2004

DELIVERED : 22 APRIL 2004

FILE NO/S: CIV 2220 of 2003

BETWEEN: PETRA PODRASCANIN
Plaintiff
AND
WESTSCHEME PTY LTD
First Defendant
LUMLEY LIFE LTD
Second Defendant

Catchwords:

Insurance - Total and permanent disablement - Opinion not formed by insurer - Practice and procedure - Defendants' application for summary judgment

Legislation:

Nil

Result:

Defendants' application for summary judgment dismissed

Representation:

Counsel:

Plaintiff:     Mr T Lampropoulos
First Defendant             :     Mr P L Harris
Second Defendant         :     Mr P L Harris

Solicitors:

Plaintiff:     Vertannes Georgiou
First Defendant             :     Ilberys
Second Defendant         :     Ilberys

Case(s) referred to in judgment(s):

Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
Heitman v Guardian Assurance Co Ltd (1992) 7 ANZ Insurance Cases 61‑107
McArthur v Mercantile Mutual Life Insurance Co Ltd [2002] 2 Qd R 197

Case(s) also cited:

HCF Life Insurance Co Pty Ltd v Kelly [2002] WASCA 264
Maciejewski v Telstra Super Pty Ltd (No 2) [1999] NSWSC 341
Rapa v Patience, unreported; SCt of NSW; BC8500888; 4 April 1985
Tonkin v Western Mining Corporation Ltd (1998) 10 ANZ Insurance Cases 61397
Zurich Australia Ltd v Trajkoski [2002] WADC 248

MARTINO DCJ:

Introduction

This is an application by the defendants for summary judgment pursuant to O 16 r 1 of the Rules of the Supreme Court on the ground that the defendants have a good defence to the plaintiff's claim on the merits.
The plaintiff ("Ms Podrascanin") is a member of the Westscheme Superannuation Fund ("the Fund"). The first defendant ("Westscheme") is the trustee of the Fund. The second defendant ("Lumley Life") has issued to Westscheme a group life insurance policy which provides to Westscheme cover for members of the Fund ("the Policy"). Ms Podrascanin's claim in this action arises out of a claim she has made under the Policy for benefits for total and permanent disablement.
The principles upon which I am to determine the application for summary judgment are well settled. The power to order summary judgment is to be exercised with care and is not to be exercised unless there is no real question to be tried: Fancourt v Mercantile Credits Ltd(1983) 154 CLR 87.

The Statement of Claim

In her statement of claim Ms Podrascanin pleads that she suffered injury on 9 November 2001 when emptying rubbish from metal bins in the course of her employment as a cleaner. The injuries she claims to have suffered are neck injury, right shoulder injury, psychiatric illness and elevated blood pressure.
Ms Podrascanin claims that as a result of those injuries she is unable to perform any of her duties as a cleaner and is unable to engage in or work for reward in any occupation or work for which she is reasonably suited by education, training or experience. She claims to have notified Westscheme and Lumley Life of her claim for benefits under the policy and the Fund on the grounds of her being totally and permanently disabled.
Ms Podrascanin claims:
1.In breach of alleged obligations under the Fund Westscheme "has failed and/or refused to make a determination as to whether [Ms Podrascanin] is totally and permanently disabled within the meaning of the policy";
2.In breach of alleged obligations under the Policy Lumley Life "has failed and/or refused to make a determination as to whether [Ms Podrascanin] is totally and permanently disabled within the meaning of the policy";
3.In breach of alleged duties to act with utmost good faith, to deal fairly with Ms Podrascanin and to investigate and make a determination of her claim within a reasonable time Westscheme "has failed to investigate and make a determination in respect of [Ms Podrascanin's] claim within a reasonable time";
4.In breach of alleged duties to act with utmost good faith, to deal fairly with her and to investigate and make a determination of her claim within a reasonable period of time Lumley Life "has failed to investigate and make a determination in respect of [Ms Podrascanin's] claim within a reasonable period of time".
Ms Podrascanin claims to have suffered loss and damage as a result of those alleged breaches. The loss and damage is particularised as being the value of the total and permanent disablement benefit payable under the policy.

Ms Podrascanin's claim for benefits

On 23 September 2002 Ms Podrascanin's solicitors wrote to Westscheme. In that letter they informed Westscheme that Ms Podrascanin appeared to be totally and permanently disabled as a result of injuries she suffered on 9 November 2001 and requested claim forms to enable Ms Podrascanin to submit a claim for total and permanent disability.
Section 4.02 of the Policy deals with the making of claims under the Policy. It is in the following terms:
"Section 4.02 Evidence of a Claim
1.After notification of a claim we will provide a claim form which must be fully completed and returned to us within a reasonable period of time, together with evidence of the claim. This may include death certificates, reports from medical practitioners or such other information we may deem necessary to consider the claim.
2.The provision of any employer reports, or reports from treating medical practitioners, as may be required by us to lodge a claim, is the responsibility of the Insured Person, including the cost of such reports.
3.Lumley will pay for any subsequent medical professional service expenses we may require to determine a claim to the extent that those costs are limited to those related to fulfilling our specific requests for information."
On 3 October 2002 Westscheme wrote to Ms Podrascanin care of her solicitors. Enclosed with that letter were forms of member's statement of claim, two attending medical statements and a work duties statement. On or about 3 December 2002 Westscheme received from Ms Podrascanin's solicitors the completed forms. These included a form completed by Dr L Sam in which Dr Sam expressed the opinion that Ms Podrascanin would not be able to return to either part time or full time work and a form completed by Dr F Ng, psychiatrist, in which Dr Ng also expressed the opinion that Ms Podrascanin would not be able to return to part time or full time work.
On 10 December 2002 Westscheme forwarded those completed forms to Lumley Life.
In those forms Ms Podrascanin disclosed that she had made a claim for workers' compensation for the injuries allegedly suffered by her. On 3 January 2003 Lumley Life wrote to the workers' compensation insurer ("Wesfarmers") requesting all medical and rehabilitation information that Wesfarmers had on file regarding Ms Podrascanin. On 6 January 2003 Lumley Life wrote to Ms Podrascanin's solicitors informing them that they had requested a copy of Ms Podrascanin's workers' compensation file "to enable us to further assess her claim".
On 15 March 2003 an employee of Lumley Life telephoned Wesfarmers. He was told that Wesfarmers had forwarded an authority to Ms Podrascanin's solicitors for Ms Podrascanin to sign to authorise the release of information to Lumley Life. On 14 April 2003 the employee of Lumley Life again telephoned Wesfarmers and was informed that Wesfarmers had not received the authority signed by Ms Podrascanin. On the same day the employee of Lumley Life telephoned Ms Podrascanin's solicitors. In an affidavit sworn 17 December 2003 by Graeme Rex Jones of Lumley Life in support of the application for summary judgment Mr Jones has deposed that the employee of Lumley Life informed Ms Podrascanin's solicitors of Lumley Life's "outstanding requirements for the assessment of the Claim". On 11 June 2003 the employee of Lumley Life again telephoned Wesfarmers and was informed that an authority from Ms Podrascanin had not been received. In his affidavit Mr Jones deposes that the employee of Lumley Life then telephoned Ms Podrascanin's solicitors "and left a message".
By letter dated 27 June 2003 Ms Podrascanin's solicitors forwarded to Westscheme a copy of a report from Dr L Sam dated 18 March 2003 and of a report from Dr R Goodheart, consultant neurologist, dated 19 June 2003. In that letter Ms Podrascanin's solicitors wrote "we would appreciate it if you could please assess our client's claim within 4 weeks". By letter dated 3 July 2003 Westscheme forwarded those medical reports to Lumley Life.
By letter dated 30 June 2003 Ms Podrascanin's solicitors wrote to Westscheme. Ms Podrascanin's solicitors forwarded a copy of that letter to Lumley Life. The letter was received by Westscheme on 5 August 2003 and by Lumley Life on 6 August 2003. In that letter Ms Podrascanin's solicitors noted that a decision on Ms Podrascanin's claim had not been received, and wrote "we would be grateful if you could provide us with your decision on our client's claim within the next fortnight".
The employee of Lumley Life handling Ms Podrascanin's claim telephoned Ms Podrascanin's solicitors on 6 August and 7 August 2003. In his affidavit Mr Jones has deposed that the employee of Lumley Life "again spoke to [Ms Podrascanin's] solicitor to again confirm Wesfarmers had still not received [Ms Podrascanin's] signed authority form and that [Lumley Life] needed to review the worker's compensation file and the medical and rehabilitation information it would likely contain to enable [Lumley Life] to properly consider the Claim". On the same day Lumley Life wrote to Ms Podrascanin's solicitors enclosing a copy of the authority required by Wesfarmers.
Ms Podrascanin's solicitors again wrote to Westscheme and sent a copy to Lumley Life. That letter is dated 30 June 2003, although that appears to be an error. The letter was received by Westscheme on 21 August 2003 and the copy received by Lumley Life on 22 August 2003. In that letter Ms Podrascanin's solicitors informed Westscheme that unless a decision was made with respect to her claim within 14 days a writ of summons would be issued.
On 2 September 2003 a company acting on behalf of Lumley Life wrote to Dr Ng requesting a report on Ms Podrascanin. On the same day Westscheme wrote to Ms Podrascanin's solicitors. In that letter Westscheme informed Ms Podrascanin's solicitors that Lumley Life required a copy of the medical and rehabilitation information held by Ms Podrascanin's workers' compensation insurers and that they would be requesting a specialist's report from Dr Ng.
By letter dated 19 September 2003 addressed to Westscheme and copied to Lumley Life, Ms Podrascanin's solicitors wrote:
"The provision of the worker's compensation file is irrelevant for the decision making process in assessing our client's application. If you are not satisfied with the medical evidence provided, you ought to have our client examined by an independent specialist.
In the circumstances, our client has instructed us to issue a writ."
Ms Podrascanin commenced this action by a writ of summons filed on 6 October 2003. In his affidavit Mr Jones has deposed that Lumley Life cancelled its request for a report from Dr Ng as a consequence of that action

Total and permanent disablement

The relevant definition of total and permanent disablement in the policy is as follows:
"An Insured Person shall be considered as totally and permanently disabled as follows:
The Insured Person is absent through injury or illness from employment for six consecutive months and in the opinion of Lumley, after consideration of medical and/or other evidence, having become incapacitated to such an extent as to prevent the Insured Person from engaging in their own occupation, or any other occupation for which the Insured Person is reasonably suited by education, training or experience."
Where the definition of total and permanent disability in an insurance policy requires the insurer to form the opinion that the insured is totally and permanently disabled the insured is not entitled to benefits under the policy unless the insurer has formed the opinion that the insured is totally and permanently disabled or it is unreasonable on the evidence provided to fail or refuse to form the relevant opinion: Heitman v Guardian Assurance Co Ltd (1992) 7 ANZ Insurance Cases 61‑107, McArthur v Mercantile Mutual Life Insurance Co Ltd [2002] 2 Qd R 197.
Westscheme and Lumley Life contend that they were entitled to require Ms Podrascanin to provide an authority to Wesfarmers to release information concerning her worker's compensation claim to Lumley Life before Lumley Life formed an opinion on her claim. It is certainly arguable that Lumley Life was so entitled. However it is also arguable that Lumley Life was not entitled to require that information. Section 4.02 of the Policy sets out the evidence required in support of a claim. It is arguable that Ms Podrascanin has provided to Lumley Life the information required by that section of the Policy. That section of the Policy entitles Lumley Life to obtain further medical opinion. However the opinion requested on behalf of Lumley Life from Dr Ng was not requested until approximately nine months after the claim was made. It is arguable that it was unreasonable to wait that length of time before seeking further medical opinion.
Westscheme and Lumley Life also have referred to cl 8.4 of the trust deed of the Fund which requires participants in the Fund to provide all information and evidence and sign all documents requested by the trustee. However that clause concerns participation in the Fund. It is arguable that it has no relevance to Ms Podrascanin's claim under the Policy.
In my view it cannot be said that Ms Podrascanin's claim that Westscheme and Lumley Life have acted in breach of their duties to her and have acted unreasonable is so lacking in merit that there is no real question to be tried. It follows therefore that the application for summary judgment fails.