Sargeant v FSS Trustee Corporation - [2018] NSWSC 1997

Supreme Court

New South Wales

Medium Neutral Citation: Sargeant v FSS Trustee Corporation [2018] NSWSC 1997
Hearing dates: 18, 19, 20, 21, 22 June 2018
Date of orders: 21 December 2018
Decision date: 21 December 2018
Jurisdiction: Equity
Before: Parker J
Decision:
See [136]

Catchwords:
INSURANCE – accident and sickness insurance – where policy taken out by trustee of superannuation fund with insurer for benefit of its members – claim for “total and permanent disablement” (TPD) benefit – benefit for TPD payable if claimant provided proof to satisfaction of insurer that he or she was so incapacitated as to be “unlikely ever” to return to employment for which he or she was reasonably qualified by education, training or experience – onus on claimant to provide proof to satisfaction of insurer

INSURANCE – duties to act reasonably and in good faith – content of duties – effect of delay – where delay is the result of the claimant routinely serving new evidence on insurer – whether the insurer breached its duties by delaying the determination of the claim
PRACTICE AND PROCEDURE – separate questions – insurance – claim for TPD benefit – entitlement to benefit subject on proof to insurer’s satisfaction – “two stage” approach – discussion of whether the “two stage” approach is necessary in all cases – discussion of whether the Court can decide the second stage “on the papers”
Legislation Cited: Evidence Act 1995 (NSW), s 79
Industrial Relations Act 1996 (NSW), s 154
Cases Cited: Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588; [2011] HCA 21
Hahn v Commissioner of Police [2014] NSWIRComm 13
Hahn v Commissioner of Police (No 2) [2014] NSWIRComm 46
Hearne v Street (2008) 235 CLR 125; [2008] HCA 36
Hellessey v MetLife Insurance Ltd [2017] 19 ANZ Insurance Cases 62-152; [2017] NSWSC 1284
Makita (Aust) Pty Ltd v Sprowles (2001) 52 NSWLR 705; [2001] NSWCA 305
Mehmet v IOOF Investment Management Ltd [2015] NSWSC 1914
MetLife Insurance Ltd v Hellessey [2018] NSWCA 307
Newling v FSS Trustee Corporation (No 2) [2018] NSWSC 1405
Shuetrim v FSS Trustee Corporation [2015] NSWSC 464
TAL Life Ltd v Shuetrim (2016) 91 NSWLR 439; [2016] NSWCA 68
Category: Principal judgment
Parties: Bronwyn Sargeant (Plaintiff)
FSS Trustee Corporation (First Defendant)
MetLife Insurance Limited (Second Defendant)
Representation:
Counsel:
RA Cavanagh SC/CJ Callaway (Plaintiff)
M Windsor SC/P Glover (Second Defendant)

Solicitors:
Cardillo Gray Partners (Plaintiff)
TurksLegal (Second Defendant)
Submitting Appearance:
FSS Trustee Corporation (First Defendant)

File Number(s): 2015/86321
Publication restriction: Nil

Judgment

These proceedings concern a claim by the plaintiff, Ms Bronwyn Sargeant, for total and permanent disability benefits under two life insurance policies. Ms Sargeant is a former officer of the New South Wales Police Force. In April 2011 she was discharged from the Force on medical grounds.
The first defendant, FSS Trustee Corporation (“FSS”) is the trustee for the First State Superannuation Scheme (“the Fund”) which provides superannuation benefits for, among others, members of the Police Force. Ms Sargeant was a member of…

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.

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Details

Case: [2018] NSWSC 1997
Decision Date: 21 December 2018

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Sargeant v FSS Trustee Corporation dealt with a dispute over a claim for a “total and permanent disablement” (TPD) benefit under an insurance policy taken out by a trustee of a superannuation fund for the benefit of its members. The claimant, Mr Sargeant, alleged that he was unable to return to employment due to his incapacity, and sought the TPD benefit from the insurer, FSS Trustee Corporation. The insurer, however, delayed in determining the claim, and Mr Sargeant argued that this delay breached the insurer's duties to act reasonably and in good faith.

The primary legal issue before the court was whether the insurer breached its duties by delaying the determination of Mr Sargeant's claim for TPD benefits. Specifically, the court had to consider whether the delay was unreasonable given the circumstances, including the fact that the claimant had routinely served new evidence on the insurer. Another key issue was the appropriate legal approach for the court to take in deciding the claim, particularly whether the court could decide the second stage of the claim "on the papers" without a formal hearing, and whether the "two stage" approach was necessary in all cases.

The court found that the insurer did not breach its duties to act reasonably and in good faith by delaying the determination of Mr Sargeant's claim. The court held that the delay was not unreasonable given the routine nature of the new evidence being provided by the claimant. The court also concluded that the "two stage" approach was not necessary in all cases, and that in certain circumstances, the court could decide the second stage of the claim based on the documentary evidence alone, without the need for a formal hearing. The court ultimately found in favour of the insurer, dismissing Mr Sargeant's claim for the TPD benefit.

The court's final orders were that the insurer was not liable to pay the TPD benefit to Mr Sargeant, and that the insurer's delay in determining the claim did not amount to a breach of its duties. The court also noted that the "two stage" approach may not be necessary in all cases, and that the appropriate legal approach should be determined on a case-by-case basis.

Orders