Reynolds v Norwich Union Life Australia Ltd
[2002] WASC 193
REYNOLDS -v- NORWICH UNION LIFE AUSTRALIA LTD [2002] WASC 193
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2002] WASC 193 | |
| Case No: | CIV:1540/1999 | 23 JULY 2002 | |
| Coram: | MASTER SANDERSON | 12/08/02 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Application granted | ||
| B | |||
| PDF Version |
| Parties: | MARK GEORGE REYNOLDS NORWICH UNION LIFE AUSTRALIA LTD (ACN 006 783 295) |
Catchwords: | Practice and procedure Application to have plaintiff medically examined Turns on own facts |
Legislation: | Nil |
Case References: | Heitman v Guardian Assurance Co Ltd (1992) 7 ANZ Ins Case 61,107 McArthur v Mercantile Mutual Life Insurance Co Ltd [2001] QCA 317 Reynolds v Norwich Union Life Australia Ltd [2000] WASC 122 Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
NORWICH UNION LIFE AUSTRALIA LTD (ACN 006 783 295)
Defendant
Catchwords:
Practice and procedure - Application to have plaintiff medically examined - Turns on own facts
Legislation:
Nil
Result:
Application granted
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Category: B
Representation:
Counsel:
Plaintiff : Mr K H M Wong
Defendant : Ms P L Sealy
Solicitors:
Plaintiff : Friedman Lurie Singh
Defendant : Minter Ellison
Case(s) referred to in judgment(s):
Heitman v Guardian Assurance Co Ltd (1992) 7 ANZ Ins Case 61,107
McArthur v Mercantile Mutual Life Insurance Co Ltd [2001] QCA 317
Reynolds v Norwich Union Life Australia Ltd [2000] WASC 122
Case(s) also cited:
Nil
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1 MASTER SANDERSON: This is the defendant's application seeking an order that the plaintiff submit himself to medical examination by two medical practitioners. The application is brought under O 28 r 1(1), which is in the following terms:
"(a) Where it becomes material in any cause or matter before the Court to consider the question of the physical or mental condition of any party, any opposing party may serve on such first-mentioned party a notice to submit himself for examination at a specified time and place by a medical practitioner provided and paid by the party requiring the examination. At any such examination a medical adviser chosen by the party to be examined shall be entitled to be present if the party so desires.
(b) Where the party objects to complying with the notice, or in default of agreement as to the time and place of the examination, or if any matter shall arise in relation to such examination, either party may apply to the Court for an order as to whether or not the objecting party shall submit himself for examination, or as to when and where such examination may be made, or as to any other matters to facilitate the examination.
(c) If the Court is of opinion that either party has been unreasonable in the matter it may order that party to pay costs of the application and any other costs unnecessarily occurred in consequence."
2 The defendant seeks to have the plaintiff examined by two separate practitioners. It is open to question whether, by its terms, O 28 r 1(1) allows the Court to order examination by more than one medical practitioner. However, this was not a point taken by the plaintiff at the hearing. Rather, it was submitted that any evidence which the defendant might obtain as a consequence of the examination was irrelevant to the issue between the parties and that the order ought be refused. To adopt the wording of O 28 r 1(1)(a), such evidence was not "material in any cause or matter before the Court". In the light of that submission it is necessary to examine the issues between the parties as they emerge from the pleadings.
3 By his amended statement of claim (filed 19 October 2000) the plaintiff pleads that in or about March or April 1995 he entered into a
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- contract of life insurance with the defendant. Pursuant to the policy, the defendant promised to pay the plaintiff the sum of $426,710 if the plaintiff became "totally and permanently disabled" as that phrase was defined in cl 3.4 of the policy. The plaintiff pleads that on 20 June 1995 he suffered a back injury and ceased work. He attempted to return to work in August 1995 but was unsuccessful. He has not worked since. On 29 May 1997 the plaintiff made a claim under the policy on the basis that he was totally and permanently disabled. The defendant denied the claim. The plaintiff says that the denial of liability was based on three grounds. These grounds are set out as particulars to par 8 of the amended statement of claim. Relevantly, for present purposes, the plaintiff pleads by par 8.1 that the defendant advised in writing that:
"It is the Claims Committee opinion that Mr Reynolds is not Totally and Permanently Disabled as defined in the policy conditions".
"10.1 The Plaintiff supplied to the Defendant in accordance with its requirements certification from two treating medical practitioners that the Plaintiff was totally and permanently disabled as defined in the Policy.
10.2 Between 29 May 1997 and 27 March 1998 the Plaintiff provided further reports from medical practitioners concerning the extent of his disablement.
10.3 The Defendant failed to act fairly and reasonably in considering the medical evidence provided by the Plaintiff.
10.4 The Defendant failed to give the Plaintiff details of what other medical reports or other documents or information it took into account in considering the Claim.
10.5 The Defendant failed to permit the Plaintiff to respond to any reports including medical reports, adverse to the Plaintiff, obtained by the Defendant."
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5 It is important to note precisely how the plaintiff's claim is framed. What the plaintiff says is that under the terms of the contract he was entitled to payment of a specified amount when and if he became totally and permanently disabled. He says that has occurred and in May 1997 he made a claim under the policy. The defendant refused to make payment. On the plaintiff's case the defendant's refusal to make payment must be seen as a breach of the contract of insurance. The plaintiff then had two options. Either he could accept that repudiation of the contract and sue for damages, or he could affirm the contract and seek to enforce its terms. It is clear from the way the amended statement of claim is drafted that the plaintiff took the second of those two options. He seeks to enforce the contract. On the plaintiff's claim then, the relevant question is whether, as at 29 May 1997, he was totally and permanently disabled. That is why it is now said that any medical examination which takes place in 2002 is irrelevant. On the plaintiff's case, what is at issue is whether the defendant, on the material it had before it, was entitled to reject the plaintiff's claim as it did in its letter of 27 March 1998. Even if one or other of the medical practitioners to whom the defendant wishes to refer the plaintiff was able to offer a view as to the plaintiff's condition in May 1997, that evidence would be irrelevant.
6 At present the defence is to be found in an amended defence filed 7 July 2000. (As far as I can ascertain no further amended defence has been filed in response to the amended statement of claim dated 19 October 2000). The defendant admits the policy and refers to certain of its terms which are not presently relevant. By par 5(c) of the amended defence, it is pleaded that cl 3.4(iii) of the policy requires that the plaintiff provide to the defendant "satisfactory proof" of total and permanent disablement. Reference is then made to cl 3.3(a) of the policy. This clause, it is said, is pleaded and deals with what is meant by "total and permanent disablement". Paragraph 5 (d)(ii) pleads one of the definitions it is said is found in cl 3.3(a) of the policy. It is unclear whether what is pleaded is the verbatim wording of the clause or its meaning. Either way, the pleading itself puts the position as follows:
"Where, in the opinion of the defendant, the plaintiff becomes so disabled by bodily injury or disease that he will never be able at any time in the future to perform any work follow any occupation or engage in any business for remuneration, gain or profit for which he is reasonably qualified by education training or experience provided always that such disablement must have begun after the commencement of Policy clause 3.3(a)(ii) of the Policy."
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7 In other words, what the defendant says is that what the policy requires is, when a claim is made, the defendant form an opinion as to whether or not the plaintiff is totally and permanently disabled. This is a very different position from a situation where a policy entitles an insured to payment when and if he becomes totally and permanently disabled as that phrase is defined in the policy. If the defendant's pleaded position is correct (and it has not been suggested otherwise by the plaintiff) then the defendant is not in breach of its contract. It has formed an opinion that the plaintiff is not totally and permanently incapacitated. That was made clear by its letter of 27 March 1998 as referred to in par 8 of the plaintiff's statement of claim. It is difficult to see then how the plaintiff's claim can succeed.
8 Leaving to one side the plaintiff's claim as presently pleaded, what may in due course be alleged is that the defendant, in coming to the conclusion that the plaintiff was not totally and permanently incapacitated, in some way breached its contract with the plaintiff. It might, for instance, be said that there was an implied term that in reaching its opinion the defendant was required to act reasonably and that it has not done so. Alternatively, it might be said that in reaching a conclusion the plaintiff was not totally and permanently incapacitated, the defendant breached its duty of good faith which undoubtedly exists between an insured and insurer in a situation such as this. Whether either or both of these claims are made by the plaintiff, or whether the action is framed in an altogether different way remains to be seen. But what is clear is that the plaintiff faces difficulties in seeking to enforce the contract. The facts in this case are not dissimilar to the facts in McArthur v Mercantile Mutual Life Insurance Co Ltd [2001] QCA 317. That case dealt with a policy of insurance and it too required the insurer to form the opinion as to whether or not an insured was totally and permanently disabled. However, in that case the insurer did not actually form such an opinion. Such a failure was seen by the Court as a breach of the contract of insurance which amounted to a repudiation. The insured was entitled to accept that repudiation and sue for damages: see McPherson JA, par 10 - par 11. The Court concluded that if the insured took that course then medical evidence of the insured's condition obtained subsequent to the date of the claim was relevant.
9 It is at least arguable that as the pleadings are framed at present, the plaintiff's claim cannot succeed and there is therefore no point in ordering the plaintiff to attend for medical examination. That makes determination of the application difficult. At the very best, the statement of claim would need to be amended to plead an implied term that the opinion formed by
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- the defendant would be reasonable, based on the medical evidence. But it has been argued, and it would seem preferable to make orders on the summons at this point, rather than have the matter returned for further argument at a later date. Furthermore, what the defendant seeks at the moment is to have the plaintiff examined by two medical practitioners. This will no doubt lead to written reports which, as required by the rules, will be disclosed to the plaintiff's solicitors. But there is no guarantee that the defendant will be permitted to lead this evidence at the trial. It is for the trial Judge to determine what evidence is relevant to the issues between the parties. It is a far better option to allow the examinations and the consequent reports with the trial Judge to determine what use is to be made of the evidence at trial.
10 During the course of his submissions, counsel for the plaintiff relied on a decision of Master Bredmeyer in relation to interrogatories: see Reynolds v Norwich Union Life Australia Ltd [2000] WASC 122. In his reasons the learned Master referred to the decision of Franklyn J in Heitman v Guardian Assurance Co Ltd (1992) 7 ANZ Ins Cases 61,107. It was said, based upon this decision, where the learned Master had declined to order interrogatories, no medical examination ought be ordered. Essentially, counsel submitted that the defendant was seeking to achieve the same end by a different means.
11 The Master's decision was undoubtedly based directly on the decision in Heitman. A reading of this decision shows clearly that it is at odds with the decision in McArthur. It is difficult to see how the two can possibly be reconciled. It may be at trial the decision in Heitman will be followed, although it is a decision of a single Judge of this Court as against McArthur, which is a decision of the Court of Appeal in Queensland. If that is so, then any evidence obtained in a medical examination would be irrelevant and no doubt excluded. But that does not alter the fact, in my view, that the better course would be to allow the medical examinations to take place in anticipation that the trial Judge may find the reasoning in McArthur persuasive and medical evidence obtained subsequent to the date on which the claim is made would therefore be relevant.
12 In my view orders should be made in terms of the chamber summons. I will hear the parties as to the precise form of orders and as to costs.
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