Summers v The National Mutual Life Association of Australasia - [2013] TASFC 5

[2013] TASFC 5

COURT: SUPREME COURT OF TASMANIA (FULL COURT)

CITATION:Summers v The National Mutual Life Association of Australasia [2013] TASFC 5

PARTIES: SUMMERS, Geoffrey Douglas
v

THE NATIONAL MUTUAL LIFE ASSOCIATION OF AUSTRALASIA (ABN 72 004 020 437)

FILE NO/S: 260/2012
JUDGMENT

APPEALED FROM: Summers v The National Mutual Life Association of Australasia [2011] TASSC 69

DELIVERED ON:  2 May 2013
DELIVERED AT:  Hobart
HEARING DATE:  15 and 16 November 2012
JUDGMENT OF:  Evans J, Porter and Wood JJ

CATCHWORDS:

Insurance – Accident, sickness and income protection insurance – Conditions, warranties and exceptions – Total and permanent disablement and total incapacity – Need for claimant to show that not engaged in "any occupation" – Whether the term "occupation" is confined to full-time work.

Halloran v Harwood Nominees Pty Ltd [2007] NSWSC 913; Manglicmot v Commonwealth Bank Officers Superannuation Corporation Pty Ltd [2011] NSWCA 204, considered.
Aust Dig Insurance [1203]

REPRESENTATION:

Counsel:
             Appellant:  B W Rayment QC and M Gollan
             Respondent:  M E O'Farrell SC and C R Hanson
Solicitors:
             Appellant:  Firths – The Compensation Lawyers
             Respondent:  Turks Legal

Judgment Number: [2013] TASFC 5
Number of paragraphs: 133

Serial No 5/2013
File No 260/2012

GEOFFREY DOUGLAS SUMMERS v THE NATIONAL MUTUAL LIFE ASSOCIATION OF AUSTRALASIA (ABN 72 004 020 437)

REASONS FOR JUDGMENT FULL COURT

EVANS J
PORTER J
WOOD J
2 May 2013

Order of the Court

Appeal dismissed.

Serial No 5/2013
File No 260/2012

GEOFFREY DOUGLAS SUMMERS v THE NATIONAL MUTUAL LIFE ASSOCIATION OF AUSTRALASIA (ABN 72 004 020 437)

REASONS FOR JUDGMENT FULL COURT

EVANS J
2 May 2013

The appellant, Geoffrey Summers, sued the respondent, the National Mutual Life Association of Australasia ("National Mutual") for entitlements he claimed under an income protection insurance policy ("the Policy") issued by Australian Casualty and Life Pty Ltd ("ACL"). National Mutual is responsible for any liability established against ACL under the Policy. Mr Summers had made a number of claims for total disability benefits pursuant to the Policy since 22 November 1993. His claims had been accepted for two periods subsequent to that date but otherwise rejected. It was his contention that he had been totally disabled within the meaning of the policy for the whole period from 22 November 1993 and he would be so incapacitated for the rest of his life.

The action was heard by Tennent J who, in her judgment, Summers v The National Mutual Life Association of Australasia [2011] TASSC 69, found in favour of Mr Summers for one period in issue but against him in respect of two other periods. He has appealed against the rejection of his claim in relation to one of these periods.

Mr Summers, having been the plaintiff in the proceedings before her Honour, was so described in her decision. I will do likewise in these reasons.

The accidental injuries that were the subject of the plaintiff's various claims were:

·     a shoulder injury suffered in a fall on 22 November 1993;
·     injuries to his knees or a knee, suffered in a fall on 3 January 1997; and
·     a back injury suffered in an incident involving his young son on 28 September 2002.

To appreciate what was ultimately in issue between the parties at trial, it is convenient to detail the circumstances of the claims by reference to the following periods:

·     22 November 1993 to 8 June 1995. This claim was abandoned by the plaintiff at the commencement of the trial as it was statute barred.
·     8 June 1995 to 21 June 1997. This claim had been accepted and the benefits paid.
·     21 June 1997 to 21 January 1998. This claim had been rejected and was in issue.
·     21 January 1998 to 20 January 2000. This claim had been accepted and the benefits paid.
·     From 21 January 2000 and ongoing. This claim had been rejected and was in issue.

The plaintiff's claim for the period 21 June 1997 to 21 January 1998 was rejected by Tennent J, and that rejection is not the subject of this appeal. His claim for the period from 20 January 2000 and ongoing was allowed to 7 March 2006 but dismissed thereafter. His appeal relates to that dismissal.

At this point it is convenient to set out the following provisions in the Policy:

"1.4     'Injury'
Means injury to You caused by an accident occurring while this Policy is in force. If Total Disability commences after 30 days from the date of an accident, the Total Disability will be deemed to be caused by a Sickness.
1.5      'Maximum Benefit Period'
[The effect of this clause is that the maximum benefit period for an accident is the claimant's life, and for sickness is five years.]
…
1.7      'Partial Disability'
Means that, immediately following a period of Total Disability and because of the Injury or Sickness which directly caused the Total Disability, You:
(a)       are under the regular care and attendance of a Doctor;
(b)are able to perform one or more duties of Your occupation but are unable to perform all the duties of Your occupation on a full time basis; and
(c)are earning Income from Your occupation or another occupation at a monthly rate of less than 75% of Your Pre-Disability Income.
…
1.9'Pre-Disability Income'

Means the average monthly Income earned by You in the 12 months immediately prior to the date of commencement of Total Disability.
…
1.11 'Sickness'
Means sickness or disease suffered by You which manifests itself while this Policy is in force.
1.12 'Total Disability'
Means:
(a)during the first 2 years of a period of Total Disability, Your continuous inability to perform each and every duty of Your occupation as a result of such an Injury or Sickness;
(b)beyond the first 2 years of such period of Total Disability, Your continuous inability, as a result of the Injury or Sickness, to perform any gainful occupation for which You are reasonably suited by education, training or experience;
(c)You are under the regular care and attendance of a Doctor for such Injury or Sickness; and
(d)You are not engaged in any occupation; and for the purposes of this definition, the words 'inability to perform each and every duty of Your occupation' in paragraph (a), above, mean that You are unable to perform at least one of the duties of Your occupation necessary to producing Your Income.
…
2.1Total Disability Benefits
(a)In the event of Your Total Disability, a Total Disability Benefit will be paid monthly in arrears, accruing from the date of the expiration of the Waiting Period.
…
2.2Partial Disability Benefit
(a)In the event of Your Partial Disability, a Partial Disability Benefit will be paid monthly in arrears, …
3.2Concurrent Disability

Where You are Totally Disabled because of more than one Injury or Sickness, or from both, whether related or not, benefits are payable in respect of only one Injury or Sickness as We shall determine, based on medical evidence.
…
7.5Contract of Insurance

This Policy, including the Application, any schedule, notice or endorsement issued by Us in relation to the Policy, constitutes the entire agreement between the parties and any prior arrangements, agreements, representations or undertakings are superseded. No modification or alteration of any clause of this Policy will be valid except in writing signed by Us."

Her Honour identified the following elements the plaintiff had to establish in order to substantiate an entitlement to total disability benefits in the first two years after an injury or sickness:

·     that he was continuously unable to perform each and every duty of "Your occupation" as a result of the injury or sickness, cl 1.12(a);
·     that he was under the regular care and attendance of a doctor for that injury or sickness, cl 1.12(c); and
·     that he was not engaged in "any occupation", cl 1.12(d).

As can be seen, the first dot point above pays no express regard to the somewhat unfortunately placed supplementary definition at the end of cl 1.12(d) which reads: "and for the purposes of this definition, the words 'inability to perform each and every duty of Your occupation' in paragraph (a), above, mean that You are unable to perform at least one of the duties of Your occupation necessary to producing Your Income". For present purposes, this supplementary definition adds nothing to the meaning of cl 1.12(a).

As to an entitlement to total disability benefits beyond the first two years of such a disability, her Honour said that the second and third elements are the same as those set out in the second and third dot points in par[8] above, and that the first element is that he was continuously unable as a result of injury or sickness to perform any "gainful occupation" for which he was reasonably suited by education, training or experience, cl 1.12(b).

With regard to the meaning of the terms "gainful occupation" and "any occupation", her Honour held that they should be interpreted as meaning full-time work. Whilst this interpretation of "gainful occupation" has not been challenged, this interpretation of the term "any occupation" is disputed by National Mutual. I will address this issue at the end of these reasons.

Background findings

Her Honour found that in October 1993, Pace Tasmania Pty Ltd ("Pace") was operating the Rocky Cape Tavern ("the tavern"). The plaintiff was involved in running the tavern. On 11 November 1993, he completed an insurance application form for an income protection policy of insurance with ACL. In that form he stated that he was a hotel proprietor and company director and his duties were hotel administration and management; he said he worked 50 hours per week and that his occupation involved 10% manual work. He named Pace as his employer and said he employed eight people.

An interim insurance cover certificate was issued to the plaintiff on 16 November 1993, and in due course the Policy issued, its commencement date being 8 March 1994.

On 22 November 1993, the plaintiff slipped and fell at work and displaced his shoulder. He was taken to hospital and under anaesthetic his shoulder was re-positioned. He did not complete a claim form referrable to this incident but reported it to the financial adviser through whom he had arranged his insurance cover. He did not see his general practitioner about his shoulder until 14 July 1994. He was referred to a surgeon, Mr Einoder, in relation to a subluxing shoulder joint in August 1994. In January 1995 he consulted another surgeon, Mr Deacon, as, in the words of Dr Crozier, the plaintiff "still had considerable discomfort and episodes of subluxation".

In January 1995, the tavern ceased operating as it formerly had due to a significant fire. Its bottle-shop continued to operate for a period after the fire. It is not clear when the bottle-shop closed. An administrator was appointed to Pace in June 1995. With the closure of the tavern the plaintiff's ability to perform the role he had performed at the tavern prior to 22 November 1993 ceased, irrespective of his physical capacity.

In early May 1995, the plaintiff lodged a claim with ACL referrable to his shoulder injury.

On 8 June 1995, Mr Deacon operated on the plaintiff's shoulder.

The period from 8 June 1995 to 21 June 1997

On 26 July 1995, ACL accepted the plaintiff's claim for total disability benefits referrable to his shoulder from 8 June 1995. There was no evidence before her Honour of why or on what basis ACL did so. As the accident when the shoulder was injured occurred on 22 November 1993, which was before the commencement of the Policy, it was not covered by the Policy. Her Honour postulated that ACL may have accepted the claim by mistake, or may have treated the effects of the operation on 8 June 1995 as a sickness.

Pursuant to cl 1.12(a) benefits were only payable for up to two years. There was no similar limitation on the benefits payable on a cl 1.12(b) claim although the maximum benefit period for a sickness was five years, cl 1.5. This suggests that ACL accepted liability to pay the plaintiff benefits pursuant to cl 1.12(a) not cl 1.12(b), as on 23 January 1997, a representative of ACL told the plaintiff his entitlement to benefits would terminate after two years, that is, on 21 June 1997. The representative also said that ACL would pay out the plaintiff's entitlement to that date and this was done. Before her Honour there was no issue between the parties as to the plaintiff's entitlement to benefits during this period.

The period from 21 June 1997 to 21 January 1998

On 28 January 1997 (five days after the plaintiff was told that his entitlement to benefits would terminate on 21 June 1997), the plaintiff lodged a claim with ACL in which he stated that he had injured his knee in a fall on 3 January 1997. The claim included statements from Dr Crozier that the plaintiff had attended him on 28 January 1997 for a left knee injury which Dr Crozier described as a "bruised medial meniscus". Dr Crozier said the plaintiff was able to return to part-time work at "anytime".

The plaintiff saw Dr Crozier again on 13 February 1997. In March or early April 1997, the plaintiff travelled to the Philippines. It is unclear for how long he was there. He saw Dr Crozier again on 15 July 1997. There is no evidence the plaintiff saw any other medical practitioner in respect of his shoulder or his left knee between February and July 1997. He did not attend Dr Crozier between 15 July 1997 and January 1998. During the latter part of 1997 the plaintiff again travelled in the Philippines and also Japan and China. The plaintiff said that in the course of seeing a doctor in Japan he told the doctor his knees were playing up.

For the purposes of the claim for this period the plaintiff had to establish that he had been under the regular care and attendance of a doctor for the injury or sickness that was the subject of the claim, cl 1.12(c). Her Honour found that for almost the entirety of the period the plaintiff travelled overseas, and that during it he saw Dr Crozier on 15 July 1997, and an unnamed and unidentified doctor in Japan on an unspecified date. Her Honour concluded that two visits to doctors during this period could not possibly satisfy the requirement that the plaintiff be under the regular care and attendance of a doctor, and for this reason her Honour dismissed this portion of his claim.

Notwithstanding this conclusion her Honour went on to address whether the plaintiff had satisfied cl 1.12(a) or (b). About them her Honour said:

"120 As to the physical capacity to satisfy either … (a) or (b), the evidence about what the plaintiff did or did not do while he was travelling was scant. The claim forms and accompanying physicians' statements up to and including that dated 13 January 1997, all indicated the plaintiff was not totally disabled or was only partially disabled. The next certificate in time, being that of 28 January, again did not suggest a total disability. As to that of 15 July 1997 (the next one tendered to the Court after that of 28 January), Dr Crozier did not complete the parts of the form as to disablement, simply writing on the form that the plaintiff had not worked since he had surgery on his shoulder on 8 June 1995. It can be inferred the plaintiff was physically able enough to travel overseas and to travel through a number of countries. Apart from what I have identified, there was simply no evidence which could persuade me the plaintiff had met either criteria (a) or (b)."

The plaintiff has not appealed the dismissal of this claim or these findings.

The period from 21 January 1998 to 20 January 2000

By a form dated 16 January 1998, the plaintiff made a claim referrable to his "knee injury" which he said had occurred when he "fell in the bush", and as to which he said he was first treated on 28 January 1997. That form included statements to a similar effect from Dr Crozier.

In August 1999 the plaintiff and Dr Crozier completed documents to the effect that the plaintiff had injured both his knees in a fall in January 1997. Whilst her Honour noted the inconsistency between this information and the earlier advice that only one knee had been injured in January 1997, after reviewing the evidence, her Honour accepted that the plaintiff had injured both his knees in January 1997.

On 21 January 1998, the plaintiff saw an orthopaedic surgeon, Mr Fletcher, who reported that:
"Geoffrey has had intermittent problems with the left knee for the last twelve months or so. He has frequent giving way, occasional locking and a degree of swelling. On examination today there is no effusion but medial line joint tenderness in the left knee. From a clinical point of view, I think Geoffrey has a torn medial meniscus. I am going to place him on the waiting list for left knee arthroscopy."
For reasons which her Honour said were not clear from the evidence, ACL began paying benefits to the plaintiff with effect from 21 January 1998. Whilst Mr Fletcher's report of 21 January 1998 made no mention of the plaintiff being permanently disabled, as the date of that report coincides with the date from which ACL began paying benefits, it seems that Mr Fletcher's advice that the plaintiff had a torn medial meniscus in his left knee and had been placed on a waiting list for a left knee arthroscopy prompted the initiation of the payments.

In December 1998, Mr Fletcher performed an arthroscopy on the plaintiff's left knee in the course of which the medial meniscus was debrided.

In a letter dated 8 September 1999, Dr Crozier advised ACL that he had seen the plaintiff on a number of occasions between June 1998 and August 1999, and on each occasion the plaintiff mentioned that his knees were still troubling him. Dr Crozier said:

"I doubt if anything further could be performed to alleviate the knee pain. He will have to accept a more sedentary occupation not involving carrying weights, torsional knee movement or walking any significant distance.
His previous employment as a Tavern Manager involved general administration as well as physical duties such as carrying boxes in the Liquor Store. He is no longer able to perform these physical tasks.
Initially he was active in AMWAY, but the market saturation and leveraging seems to have disillusioned him and now only pays for his domestic usage.
He is articulate, gregarious and presentable and with guidance should find a niche in the market."

By a letter dated 7 January 2000, Dr Crozier wrote:
"In reply to the six questions posed by Mr Summers to me.
(1)       He has been unable to perform each and every duty of his occupation as a result of his injuries to his knee and shoulder. He is unable to perform any heavy manual work as this gives him too much pain later.
(2)       His continuous inability was a direct result of the injury.
(4)       He has been under my regular care and attendance for these injuries.
(6)       He has been unable to perform his duties on a full time basis but is able to do some of the duties on a part time basis.
(7)       I consider his condition to be long term and it appears to be permanent.
(8)       I do not expect his condition to improve and it will probably deteriorate with age."
On 20 January 2000, ACL ceased paying the benefits it commenced paying to the plaintiff on 21 January 1998. Once again, this suggests that ACL considered that it had accepted liability to pay the benefits pursuant to cl 1.12(a) and terminated them on the basis that pursuant to that clause the benefits were only payable for up to two years. Before her Honour there was no issue between the parties as to the plaintiff's entitlement to benefits during this period.

Period from 21 January 2000 to 7 March 2006

On 13 April 2000, the plaintiff lodged a claim in which he referred to two problem knees and one permanently damaged and impaired shoulder as being the reasons why he could not work.

During 2000 Mr Fletcher performed an arthroscopy on the plaintiff's right knee.

On 26 April 2003, the plaintiff completed a form directed to National Mutual that referred to him having suffered a back injury on 28 September 2002 which had occurred when his seven year old son unexpectedly jumped on him while he was sitting in a lounge chair.

Her Honour dealt with the plaintiff's claim referrable to this period on the basis that the first element he had to establish was that he was continuously unable, as a result of injury or sickness, to perform any gainful occupation for which he was reasonably suited by education, training or experience, cl 1.12(b). No issue was raised with regard to the second element the plaintiff had to establish that is, that he was under the regular care and attendance of a doctor.

The following findings of her Honour are relevant to what occupation, if any, the plaintiff was reasonably suited to:

"66      Information about the plaintiff's personal and work history is relevant to the question of whether he is suited for some type of work by reason of education, training and experience and whether he has been engaged in any occupation. The plaintiff was born in 1964. He attended school in the north west of Tasmania leaving at the end of year 12. He did not pass English, and believes he may not have passed maths either. He hated school and could not wait to leave. On leaving school, he went to work for his father. His father had a small arts and crafts second hand dealership. The plaintiff acquired a small truck and used to pick things up and sell them in his father's shop. He said he was not a salesman, his father was. He did this for a year or so or when he was not doing anything else. When he was about 20, the plaintiff bought a campervan. He then went off driving around Australia, obtaining work as he went. He arrived in Darwin, and got work at the Casino as a drink waiter. He then left the campervan in Darwin and came home to Tasmania. He remained in Tasmania for about 12 months. He did labouring and driving work, obtaining an endorsement on his licence to enable him to drive heavy machinery.
67       The plaintiff then returned to Darwin. He had had surgery for a groin injury suffered while playing football and went there to recuperate. The plaintiff played various sports as a young person. Rather than any consistent involvement in any sport, prior to any injuries, he played various sports from time to time. After recuperating, the plaintiff travelled to Indonesia. While diving off islands there, he suffered from the bends. He came back to Australia, not fully recovering for nearly 12 months. He then travelled to Malaysia where he remained for about six months, before travelling to Nepal and India for about three months. He then returned to Malaysia via Thailand. He had some work there. His employer asked him to go to Japan to have a look at some poker machines for a proposed casino. The plaintiff travelled to Japan, initially intending to be there about three weeks. However, the arrangements for him to look at poker machines fell apart, and so the plaintiff began applying for work teaching English. It was through this process that he met Mr Paul Stebbings who was then operating an English language school for Japanese residents. The plaintiff obtained work with Mr Stebbings and also worked for others doing the same type of work. He did this type of work for nine or ten months.
68       Mr Stebbings wanted to set up a language school in another country. He discussed this with the plaintiff. The plaintiff said Mr Stebbings liked and trusted him. The plaintiff said he would do this type of work for Mr Stebbings, but only in Tasmania. As a consequence, Mr Stebbings came to Tasmania and bought the tavern. His intention was to set up an English language school at the tavern for Japanese people. The language school never eventuated. The tavern however was an existing business. The plaintiff said he was hired to manage the tavern in October 1989. Pace was set up as the corporate vehicle to purchase the tavern. That company was registered on 31 October 1990. That is also the approximate time which the plaintiff gave to potential investors as being when the business began operating. It is more likely to be the time at which the plaintiff was hired as manager.
69       At or around the time the company, Pace, was registered, the plaintiff was appointed a director, its company secretary and public executive officer. When the plaintiff began work at the tavern, a lady by the name of Natalie Radford, who had been employed by the previous owners, remained to do all the bookwork and run the office. A part-time accountant, Christine Monson, was employed in about 1992. At a practical level, the plaintiff fulfilled the role of manager of the tavern. He spent a good deal of his time on site, often staying in one of the tavern's cabins if one was available, or in his parents on-site mobile home. He was, as was typical of managers of hotels in relatively isolated areas, a very hands on manager, carrying out various duties as required.
70       In his oral evidence, the plaintiff described his role at the tavern. He said initially he was employed to work about 25 hours per week, but it quickly became 100 hours. He also said that he was working at this level when he had his dealings with Mr Tubbs [the financial adviser through whom he had arranged the Policy] late in 1993. He used to set up the hotel in the morning, run the bar in the morning until other staff came, do the orders for the bottle shop, move kegs, furniture and the piano as required, do crowd control for events as required and lock up the tavern at night. Towards the end of his role, he also did rostering and ordered liquor stocks. The secretary did the invoices and all the bookkeeping. He did not do any of that. Any administration work he did would have taken no more than a few hours each week."

In late-1993, the plaintiff and Ms Monson, the tavern's part-time accountant, had been minded to take over the tavern. The plaintiff became involved in arrangements to refinance the tavern's borrowings. Ms Monson assisted the plaintiff to prepare documentation for potential investors in the tavern. As to the documentation her Honour concluded:

"75 … From the spelling, the manner of typing and the phraseology, when compared to material the plaintiff acknowledged composing, it is apparent in my view that the plaintiff prepared that material, and that it demonstrates an understanding by him of how the tavern business worked and what he needed to put forward to persuade a potential investor to come on board."

Correspondence was put into evidence referrable to a valuation of the tavern in October 1993, which included a letter written by the plaintiff. Her Honour said of the letter, it "demonstrates an understanding of the financial concepts involved in valuing a business".

More generally, with regard to some of the correspondence in evidence her Honour said:

"79 In his evidence, the plaintiff sought to distance himself from these various letters, and to minimise his managerial role in the tavern, and his knowledge of the matters in the documents to which I have referred. I simply do not accept his evidence as to this. The manner in which the material is written suggests clearly that the plaintiff, at least as at late 1993, had an ownership style involvement in the tavern business. He treated himself as a principal and dealt with credit providers and potential investors in that mode. The written material contradicts the plaintiff's assertion that Mr Stebbing's had the ultimate say on matters, and the Court heard nothing from Mr Stebbings."

Another matter that her Honour addressed in the context of the plaintiff's capacities was his involvement in a claim by Pace against FAI for an insurance payout in relation to the 1995 tavern fire. That claim was outstanding in 1998. As to it her Honour said:

"80 … In June 1998, the plaintiff was referred to a firm of solicitors in Melbourne in relation to that claim. That firm then proceeded to act for him, not Pace. Those solicitors, Gadens, confirmed that from June 1998 they dealt regularly with the plaintiff in negotiating with the liquidator of Pace "in relation to funding the cause of action and ascertaining the merits of the cause of action as a prerequisite to Mr Summers agreeing to fund the prosecution of it." As at June 2000, funding had been put in place to enable the action against FAI to be prosecuted. Gadens confirmed that the plaintiff had reached agreement with the liquidator of Pace to indemnify it for the costs of the claim.
81 The solicitors, as at July 2000, held over $60,000 in their trust account provided to them by the plaintiff pursuant to the agreement with the liquidator. The solicitors also confirmed that the plaintiff had paid some $36,000 in legal fees to them. The plaintiff in his oral evidence suggested this money came from Mr Stebbings, and indeed suggested that Gadens were not acting for him at all. His explanations were implausible and I do not accept them. … The plaintiff was also questioned as to the outcome of the proceedings against FAI. It seems a payment was ultimately made, although there was no evidence as to how much and when. The plaintiff said he did not get any of it. Again I do not accept the plaintiff's evidence as plausible. The question must be asked, why would someone take the steps the plaintiff did to ensure the action proceeded, and indemnify the liquidator for his costs to ensure it did, unless there was an expectation of receiving some benefit at the end of the process? To suggest otherwise is beyond belief."

The evidence before her Honour did not establish with any certainty who was the actual provider of the sum of a little in excess of $100,000 that was paid to Gadens between June 1998 and July 2000.

Her Honour said there was little evidence about what the plaintiff was doing from early 1998 and thereafter, save that the plaintiff said that he did not work. His evidence was that he had not worked at all throughout the entire period referred to.

Whilst the plaintiff put some taxation records into evidence, they did not include any records for the financial years from and including those ended 30 June 1998 to 30 June 2003.

Her Honour dealt in detail with the medical evidence that was before her from upwards of eight doctors. With regard to a number of the reports that were put into evidence, her Honour made observations to the effect that the facts the doctors had been asked to assume for the purposes of their reports were not consistent with the evidence at trial. More generally, her Honour noted that in forming their opinions the doctors had relied on what the plaintiff said about the impact of the injuries upon him and his capacities.

An illustration of this reliance is what the plaintiff said to Dr Stephen Doig, an orthopaedic surgeon, who saw the plaintiff at the request of his solicitors for the purposes of a medico-legal report in around August 2006, and who provided a further report on 14 July 2009. For the purposes of the latter report Dr Doig was asked to assume a number of matters which included that the plaintiff had stated "quite specifically that he did not have any management skills … [and] that he had no administration skills". On the basis of the evidence available to her Honour, these statements were not correct.

An example of the evidence before her Honour is that of Dr Ian Hoyle, a general practitioner with approximately 25 years' experience. He had never treated the plaintiff, but saw him on three occasions for the purposes of medico-legal reports, the first occasion being in February 2006. His then diagnosis was that the plaintiff was suffering from chronic right shoulder pain due to capsulitis and fibrosis post-surgery, bilateral anterior knee pain due to chondromalacia patellae and possible menisci degeneration and intervertebral lumbar disc degeneration and bulging with possible nerve root irritation. His prognosis was that the plaintiff's condition would gradually deteriorate over the following 10 to 20 years with the onset of insidious degenerative disease within the joints and structures injured. After seeing the plaintiff on 31 May 2008, Dr Hoyle provided a report in which he said:

"I believe that Mr Summers' physical capacity would be limited to performing some light physical duties and/or administrative office type work for up to twenty hours a week if adequately trained. However, given his previous occupational history and lack of availability of unskilled light work and untrained office administration work I think that it would be very difficult for him to acquire any gainful employment. With regards to the specific definitions of his Australian Casualty & Life policy I would say that:
aMr Summers was unable to perform each and every duty of his occupation continuously since his shoulder reconstruction in June 1995, and that
bHe has been unable to perform any gainful occupation because of the compounding effect of his shoulder injury in 1993 and bilateral knee injuries in January 1997. His back injury in September 2002, added insult to his previous injuries. Combined with his lack of qualified light manual skills (such as repairing computers) or qualified administration skills (such as a Certificate in Business) and the employment market, have prevented him performing any gainful occupation. He has been unable to perform all of his usual duties due to the shoulder injury in November 1993, and perform any gainful occupation due to a combination of the shoulder injury and the knee injury since January 1998. I would, however, qualify this by saying that he may well be able to return to some restricted part time work after suitable training."

A different example is the evidence of Dr Peter Stevenson, a consultant physician, who examined the plaintiff at the request of the ACL's solicitors on 30 January 2007. In his report dated 8 February 2007 Dr Stevenson said of the type and extent of employment duties that the plaintiff was fit for:
"He can certainly do sedentary work and probable light physical work. Again, I do not really see major impediment to management of a tavern. He appears to have a somewhat uncommitted relationship with the workforce for some years. But if his motivation is to work rather than assumption of an invalid role, I do not see any major pathology greater than I see motivated humans regularly overcome.[sic]"
Her Honour observed with regard to the period January 2000 and following that the medical evidence needed to be considered in the context of a man who had injured both knees at a time when he had a pre-existing shoulder problem. Her Honour noted that the Court had almost no contemporaneous medical evidence for the period early-2000 and immediately following, and that the plaintiff had last been seen by a specialist in relation to his shoulder in June 1995, and in relation to his knees in 2000. Her Honour commented that this was surprising, given the extent to which the plaintiff said he was disabled by his injuries.

The following extract from her Honour's decision contains her findings referrable to the period under consideration.

"164     I will deal firstly with the period commencing January 2000 and immediately following. I accept that the plaintiff was educated to year 12 but did not satisfactorily complete that year. On his own evidence, he did not like school and could not wait to leave. At no stage thereafter has he completed or indeed even attempted any sort of further formal training of any description. At the end of 1990, having worked overseas for some time, the plaintiff commenced his role with the tavern. Up until that time, the plaintiff appears to have had little difficulty in obtaining work, even though it was invariably predominantly manual work. As to the work at the tavern, the plaintiff has, in my view, not only exaggerated the hours he worked, but also the component of those hours which was devoted to manual activity. However, whatever the precise balance of work was, there can, in my view, be little doubt that a significant portion of the plaintiff's day-to-day work at the tavern was of the manual variety. In addition, the plaintiff performed a number of tasks which were consistent with an ownership style role. He had skills, obviously self taught, which enabled him, with assistance, to negotiate deals with people who wished to use the venue for concerts and functions, provide relevant information to a valuer of the tavern for refinancing purposes, comment on the valuation prepared with obvious knowledge of valuation methods, prepare material for potential investors in the tavern, and hold himself out as a person who had sufficient interest in Pace that he was a suitable guarantor for its borrowings.
165     The plaintiff, in his evidence, at all times attempted to present himself as the uneducated hands on manager who only really ever did physical work, with the 'real' boss, Mr Stebbings, usually having the last word on all major decisions. I do not accept that characterisation of either his own role or that of Mr Stebbings. The plaintiff could have had Mr Stebbings give evidence about a number of matters on this trial which might have put the assertions of the plaintiff beyond doubt. He did not do so. The plaintiff also had sufficient knowledge of, and involvement in, Pace that he was prepared to indemnify the liquidator to ensure the fire claim was pursued.
166     There was the plaintiff's involvement with Amway. While clearly he had initial plans to set himself up in business in this area, I am not satisfied, in the end, that that went anywhere such as to be able to provide the plaintiff with a full time income had he wanted it. There is also of course the plaintiff's skills in the teaching of English. I accept the type of work he did in Japan in this area would not in any way qualify him to teach in Australia.
167     Going back therefore to the period I need to consider, which is early 2000, and the time thereafter, the plaintiff clearly had acquired some skills of a managerial and entrepreneurial type. However, there is no evidence that, with the closure of the tavern and the removal in effect of the vehicle in which the plaintiff had gained, and was using those skills, the skills were of a type which would have enabled the plaintiff to obtain employment. I doubt, for example, whether the plaintiff's ability to spell and compose documents would have qualified him to work for an independent employer.
168     I am satisfied, in all the circumstances, that the plaintiff was, as at early 2000, because of the restrictions placed on his capacity to perform manual functions by his knee injuries, continuously unable by reason of those knee injuries, combined with a problem shoulder, to perform any gainful occupation for which he was reasonably suited by education, training and experience. Was he engaged in any occupation in this period? There is no evidence he was.
169     I conclude in all the circumstances that the plaintiff was, as at January 2000, totally disabled such as to have been entitled to have benefits continue to be paid beyond January 2000. …
170     The question which then arises is, for how long did this situation continue. There is the evidence of Dr Sands as to the situation as at January 2001. Having regard to that evidence, I can be satisfied that the position as to the disability of the plaintiff remained at least up until that time. There was however no medical evidence at all relating to the period between January 2001 and January 2003 when Dr Markabawi saw the plaintiff. The plaintiff saw Dr Markabawi in relation to back pain. All the Court knows is that, from time to time, the plaintiff attended the Somerset Medical Practice. That leaves the Court in the position of having to determine whether, on the balance of probabilities, the plaintiff's physical incapacity continued after January 2001 and, if so, for how long. That conclusion, if it is drawn, is one which can only be inferred from the plaintiff's situation in 2000 and perhaps that in 2003 when he saw Dr Markabawi. Dr Markabawi did not give any evidence about the plaintiff's position in 2003, save what might be said to be a retrospective general view given three years later.

171     The defendant conceded that the plaintiff now has pathology in both knees. However there needs to be a nexus established between the injury and physical consequences from time to time. The plaintiff told the Court he could not work from 2000 and thereafter because of his injuries. He has not supplied any taxation records for the period to 30 June 2003 which might provide some insight into what, if anything, he was doing. For example, they would have assisted with a finding the plaintiff was not engaged in any occupation, one of the criteria he needed to satisfy. The records he did supply for the period thereafter show that he commenced to receive social security benefits some time in the financial year ended 30 June 2004.
172     ... It is … necessary to return to the question, was the plaintiff entitled to a total disability benefit, perhaps this time dealing with the period January 2001 to July 2003?
173     That conclusion, as I have already indicated, is one which can only be inferred from the medical evidence given in hindsight by medical practitioners who did not see the plaintiff until some considerable time after this period, and whose views were affected in some cases by inaccurate information, and a further claimed injury to the back. Whether the inference is open needs to be considered in the context of:
-          the plaintiff's evidence he could not work because of his injuries,
-the lack of any financial records or independent evidence about what, if anything, the plaintiff was doing during this period.

174 On the balance of probabilities, given the medical evidence, I am satisfied the criteria contained in the definition of total disability have been met for this period as well. … "

Her Honour's decision with regard to this period has not been appealed.

Salamanca Promotions Pty Ltd

The above claim was allowed to 7 March 2006, the date when Salamanca Promotions Pty Ltd ("Salamanca"), was incorporated. An extract from ASIC's records of Salamanca shows that the plaintiff was a director of and the secretary of this company when it was incorporated, and at all relevant times his address was its registered office and principal place of business. The plaintiff's apparent role in Salamanca was a significant factor in her Honour's failure to be satisfied with regard to his claim for the period subsequent to 7 March 2006 and into the future. It is her Honour's rejection of this claim that is the sole subject of this appeal.

Grounds of appeal 3, 4 and 7 were abandoned. The remaining grounds of appeal are:

"1Her Honour erred in fact and in law in finding, against the weight of the evidence, that the Plaintiff could work full-time for Salamanca … .
2Her Honour erred in fact and in law in failing to assess damages having found the [Defendant] to have repudiated the contract of insurance and the [Plaintiff] to have accepted that.
5Her Honour erred in fact and in law in failing to find that the activities the [Plaintiff] was found to have done for Salamanca … amounted to a gainful occupation within the meaning of the policy.
6Her Honour erred in fact and in law in finding that full-time employment with Salamanca … amounted to a gainful occupation within the meaning of the policy.
8Her Honour erred in fact and in law in failing to find that the Plaintiff's employment history was in work predominantly physical in nature.
9Her Honour erred in fact and in law in failing to allow the Plaintiff to reply to the evidence of witnesses called by the Defendant, the content of which was not put to the Plaintiff but was relied on by Her Honour in making findings that the Plaintiff:
(a)undertook activities for Salamanca … ; and
(b)had the capacity to effectively work full-time for that company."

Before turning to the claim for the period from 7 March 2006 and the grounds of appeal, I will refer to the course of the proceedings insofar as they relate to Salamanca and some of the evidence referrable to that company.

At the outset of the trial counsel for each party opened. Neither counsel mentioned Salamanca. The plaintiff commenced giving evidence on 7 June 2011. He concluded his evidence-in-chief on 8 June 2011. He was cross-examined on 8, 9 and 14 June. His cross-examination was interrupted on three occasions to interpose the evidence of medical witnesses called on his behalf. On the fourth day of his evidence he was asked about Salamanca. Prior to this, he had not volunteered any information about Salamanca, and no reference had been made to it.

When questioned about Salamanca, the plaintiff acknowledged that he had been a director of the company. He said that it was not exactly correct that he and Kelvin Markham started the company. In response to direct questions he said he thought it built websites for businesses, he reckoned it had made enquiries about domain names for the purpose of setting up websites, he believed that it had reserved domain names for different businesses, and he believed its registered office was 4 Dobson's Lane, Boat Harbour. As to whether he dealt with customers of Salamanca, he said:

"Well very rarely. Occasionally they ring the house, my house where I live, after Salamanca Promotions so I do take some calls but I try not to."

He said it was not right that he would go and do deals on behalf of Salamanca with various businesses around the State, but that he sometimes went with Peter Fulton, the business manager of Salamanca, when Mr Fulton made sales; Mr Fulton had never given him any commission from a sale; he, the plaintiff, did not have the IT skills or business skills needed to be employed by the company, and his only real involvement with the company was to help out on occasions as a friend or family member, but at a very low level of activity.

His cross-examination concluded with the following exchange:

"Since 2006 you've been occupied with Salamanca Promotions transacting business on its behalf……Well I take that to be incorrect because occupied suggests being employed. I have not been employed in any capacity ever with Salamanca Promotions Pty Ltd.
And you've being operating that business out of your house at the registered office at 4 Dobsons Lane?……And that would also, I would suggest, be incorrect because my father lived at 4 Dobsons Lane until his death, that was his home as well, and before his death I sold the house back to the company, or sold it to Salamanca Promotions which at that stage was effectively my father's company. I rented accommodation back off the company, two hundred and fifty dollars a week, which I paid rent to that company for that accommodation to live at that place, and that company is now owned by Paul Stebbings, who is the proprietor of that company."

It is pertinent that in the immediately above exchanges, the plaintiff confined the basis for his denial that he had been occupied with and transacting business on behalf of Salamanca since 2006 to the fact that he had not been employed in any capacity by the company, and he confined the basis of his denial that he had operated the business out of his house at 4 Dobson's Lane to the fact it was not his house. So confined, his answers were not a denial that since 2006 he had been transacting business on behalf of Salamanca and had been operating the business.

When re-examined, the plaintiff was not asked any questions about his involvement in Salamanca.

Peter Fulton was called as a witness by the plaintiff. Mr Fulton's evidence included the following. Since 2006 he had done sales work on commission for Salamanca and done some bookkeeping for the company as well. He was an agent of the company, not an employee. He was a friend of the plaintiff. They met socially, probably two or three times a week to touch base. Amongst the things they talked about was, "the IT market because we're both into computers and we talk about websites". On occasions when Mr Fulton was working on sales for Salamanca, the plaintiff had accompanied him.

As to the plaintiff's involvement in what Mr Fulton was doing for Salamanca, Mr Fulton said:

"Virtually minimal. I've done 99.99 percent of the sales work and – and all the follow up work and everything like that. At times Mr Summers has been with me he's just mainly getting out of the house and give us the company while I'm on the road.
And has he had involvement in the – any of the affairs of Salamanca Promotions to your observation?......No he's not an employee of the company. He's not a director of the company or a shareholder of the company and he's never been on any commission basis either."

When cross-examined, Mr Fulton said that he was not aware of the plaintiff having any dealings with any of the customers of Salamanca for the purpose of transacting its business, and the only employee or contractor engaged by it besides Mr Fulton was a contractor in Hobart who did all the IT work. In selling the Salamanca's products, Mr Fulton said he would approach a business to establish if it had a website or not, and if not, whether it was interested in having one. If so, he would work out the price of building the website, gather the information necessary to build it, and forward the information to the IT contractor in Hobart. As to the price, he said there was a core price that was the same for all businesses but there was some flexibility on pricing. It was pretty much a standard product.

Martin McConnon was called as a witness by National Mutual. His evidence included the following. He was the owner manager of the Barilla Holiday Park business. In around 2006, he was approached by Kelvin Markham on behalf of Salamanca with regard to a webpage for his business. Mr Markham helped put a webpage together, and Salamanca maintained the website for nearly four years. After a time Mr Markham left the company and Mr McConnon received a telephone call from a man he subsequently met, and came to know as Geoff Summers, who told him not to deal with Mr Markham because he, Mr Summers, was the principal contact for the business. Thereafter Mr Summers visited him in person at his place of business and told him that he was the person to talk to if he had any issues with the website. When cross-examined Mr McConnon was asked whether the meeting at his business was attended by Mr Fulton as well as the plaintiff. He initially responded that he did not recollect Mr Fulton, and when later pressed with the proposition that both men were at the meeting, he said that he was trying to remember but it was a while ago.

The next witness called by National Mutual was Kelvin Markham whose evidence-in-chief included the following.

He and the plaintiff were the first two directors of Salamanca. At the outset Mr Markham had been a 50% shareholder, he being the beneficial and legal owner of one share, and the plaintiff's father, Barrie Summers, holding the other share.

The business of Salamanca was basically developing websites which gained traffic and then selling advertising space to tourism operators and others for whom the content drew relevant readership. He carried on that business as a sole trader before the incorporation of Salamanca. He met the plaintiff at business conferences and seminars over the four or five years prior to 2006, when they had had general discussions about how things were going on in each other's enterprises. He had told the plaintiff that he was discussing forming a company with another friend, the plaintiff had expressed interested in becoming involved, and this resulted in he and the plaintiff agreeing to incorporate Salamanca, which they did.

He, Mr Markham, had experience in developing websites and selling advertising. This was his responsibility in Salamanca. He was the person who directed the production of content and dealt with clients. Others involved were a number of different contractors at different times. During the time that he and the plaintiff were together involved in the company, he, Mr Markham, kept doing what he did and the plaintiff was responsible for the financial side of things. He saw the plaintiff on a regular, about weekly, basis, mainly in Hobart but also on the north-west coast. There would not have been too many days when they did not speak on the telephone about morale and finances. They motivated each other, talked about strategy, the direction of the business, clients and so forth.

His remuneration arrangement with Salamanca was $600 pay per week, the payment of his home rental which was initially $300 and later $390, a travelling allowance of $100 per day, car expenses, a portion of his electricity account, telephone and internet access and the supply of some office consumables. He had no recall of the financial arrangements between the plaintiff and the company being discussed or settled. He had discussions with the plaintiff about finances, cash-flow, planning, budget, trying to anticipate turnover and broader expectations about the profitability of the business in the medium to long-term.

Initially he had used his own motor vehicle, but this had ceased when he and the plaintiff together arranged for the company to purchase two vehicles. He took one of the vehicles and the plaintiff took the other.

Mr Markham's engagement with the company had been terminated by the plaintiff on 11 June 2008. Prior to the termination he had resigned as a director of the company but he was still the owner of one share and he had continued to work for the company as he had previously. When his engagement was terminated the plaintiff took Mr Markham's backpack which had his laptop and everything in it, the keys to the company car and the car.

Mr Markham said that the plaintiff had been a social friend and that it was loosely part of his arrangement with the company that, when in Hobart, staff of the company would stay at his house as the company was paying the rental. He said the plaintiff had a key to his house.

Mr Markham's evidence-in-chief concluded during the morning of 16 June 2011. Thereupon Mr Rayment QC, counsel for the plaintiff, sought and obtained an adjournment in order that he could seek the plaintiff's instructions before cross-examining Mr Markham and in order to examine a Supreme Court file on proceedings that had been taken by Salamanca against Mr Markham. The proceedings had by that time been settled and dismissed. The trial was adjourned until the following day when the cross-examination of Mr Markham commenced.

Mr Markham's evidence when cross-examined included the following. He agreed that he had a business relationship with a business named "Roam Free" and so did Salamanca. He denied asking his accountant to set up a trust structure into which he proposed putting some of the business of Salamanca. After Mr Rayment had cross-examined Mr Markham for some time about the dispute between him, Salamanca and the plaintiff, her Honour queried the relevance of this line of questioning. Mr Rayment responded that it went to credit and directly to an issue. Thereafter, her Honour, on numerous occasions, queried the relevance of Mr Rayment's cross-examination on that dispute and related matters, and on one occasion said that unless Mr Rayment established the relevance of his questions in that regard she would stop him. Notwithstanding her Honour's interventions, Mr Rayment went on to cross-examine Mr Markham at considerable length with regard to these matters. Evidence elicited from Mr Markham included his agreement that prior to the formation of the company he had discussed with the plaintiff that he, Mr Markham, would continue to work on the technical side or on the sales side of the business as a contractor. As to the proposition that there had been no planning discussions concerning the company's business between him and the plaintiff, or discussions of a budgetary-type nature, he said that of course there were.

With regard to his involvement with the plaintiff in the company, Mr Markham said:

"There was a constant flow of direct communication between the two of us in relation to all matters associated with the company, employees, budgets, clients, bank accounts, etcetera, for the whole time and a constant flow of email records, SMS records and telephone records … "

He denied knowing of the proceedings between the plaintiff and National Mutual until he saw it in the court list and attended the court on the first day of the hearing.

The written submissions filed on behalf of the plaintiff on this appeal include several complaints that her Honour confined Mr Rayment's cross-examination of Mr Markham, and in one instance it is asserted that in consequence Mr Markham's evidence could not be properly tested. These contentions are not the subject of a ground of appeal, and, in any event, they should be rejected. It is clear from a reading of the transcript of the cross-examination of Mr Markham that her Honour's efforts to get Mr Rayment to focus on more relevant matters and discourage him from exploring matters that he considered to be of concern did not deter him from doing so. In so saying, I am not suggesting that Mr Rayment was not entitled to fully cross-examine Mr Markham with regard to his credit, and in particular his ill-will towards the plaintiff. Mr Rayment did so.

Andrew Langmaid was called as a witness by National Mutual. His business involved warehousing seed potatoes. He said he dealt with the plaintiff when he engaged Salamanca to develop a website for his business and dealt with him over the period of about four years that the website was maintained. He dealt with the plaintiff by telephone and in person at the office of Mr Langmaid's business in Latrobe which the plaintiff visited several times, mostly on his own, but on one occasion with another person. As to the other person, Mr Langmaid said he had been unable to recall his name until the morning of the day that he gave evidence when he had been phoned by a person named Peter Fulton and this had reminded him that Peter Fulton was the other person. Mr Langmaid said that when Mr Fulton phoned him, Mr Fulton enquired whether Mr Langmaid had been approached by a legal firm for information with regard to Salamanca and the plaintiff. Mr Langmaid told Mr Fulton he had been subpoenaed. Later that morning, about two hours before Mr Langmaid gave evidence, he had been phoned by the plaintiff who said he was sorry that Mr Langmaid had become involved in the matter and suggested to Mr Langmaid that it may be helpful if he did not remember anything. Mr Langmaid told the plaintiff that he was going to answer questions regardless of what anybody wanted. When cross-examined Mr Langmaid stood by his evidence that the plaintiff had suggested to him that it may be helpful if he did not remember anything. Mr Langmaid agreed he had met the plaintiff when the plaintiff called at Mr Langmaid's business to speak to one of his employees. He said that the plaintiff had spoken to him about building a website for Mr Langmaid's business. He had no recall of dealing with a Mr Markham. He said he first dealt with the plaintiff and later dealt with others. The plaintiff had been fairly instrumental in gathering the information for the website. He said the plaintiff "took photos of our premises and stuff to put on the website". Save for the plaintiff's phone call shortly before Mr Langmaid gave evidence, Mr Langmaid's last conversation with the plaintiff had been in 2008 when Mr Langmaid cancelled the website.

Mr Langmaid was the final witness called by National Mutual.

Findings referable to Salamanca

Her Honour's findings with reference to Salamanca included the following:

"83 At all material times, the plaintiff lived at 4 Dobsons Lane, Boat Harbour. His parents shared the home with him, at least until his father's death in June 2007. As at January 2007, the plaintiff was the registered proprietor of the property although there was no direct evidence as to when he became the registered proprietor. The only information is that, when the plaintiff wrote to Mr Turner in October 1993, he said he owned the property then. On 30 January 2007, the plaintiff transferred the property to a company, Salamanca Promotions Pty Ltd, for a consideration of $250,000. The plaintiff said he sold the property because he could not afford to pay the mortgage. After the transfer, the plaintiff continued to reside in the property as a tenant, and continued to do so at the time of trial.

84 Salamanca Promotions Pty Ltd was registered on 7 March 2006. Its registered office and principal place of business were stated to be 4 Dobsons Lane. The plaintiff was a director and secretary of the company from registration in 2006 until 28 March 2007. He held those positions at the time he transferred the Dobsons Lane property to the company. He was also at some stage a shareholder.
85 ASIC records show that:
·the plaintiff's father, Barrie Summers, became a director when the plaintiff resigned that position. Barrie Summers ceased to be a director on 11 June 2007, that is less than three months after his appointment;
·Paul Stebbings became a director on 18 July 2008. At the same time he acquired all the issued shares in the company;
·prior to that, the issued shares had been held as to 51 shares by Terri Spinks (the plaintiff's partner) and 49 shares by a Kelvin Markham;
·Terri Spinks became a director on 30 July 2010;
·Peter Fulton became a director on 30 July 2010 but resigned on 19 February 2011.

86 The plaintiff's evidence relating to the involvement of various parties in this company was completely at odds with the ASIC records. He said his father started the business. He also said that Mr Stebbings had money to invest and put money into the company over time on the basis that he would get shares. He ended up putting enough money in such that he bought out all the equity in the company. When the plaintiff's father died, his shares were supposed to go to Mr Stebbings. However the records show the plaintiff's father had only one share, and that went to the plaintiff's brother on the father's death. The plaintiff was asked about how it was his partner Ms Spinks acquired shares and whether she had paid for them. At that point, the plaintiff professed not to know, and said only that everything was done correctly. It was suggested to the plaintiff that Ms Spinks had never been an active participant in the company's business. The plaintiff responded:
'Well she's just been a director and shareholder, she's never held another position, she's never made any money out of it, she's never made sales or anything like that … She only did it to help out Pop on his deathbed, that's effectively it.'

With respect, again this is at odds with records which show Ms Spinks did not become a director until July 2010, three years after the plaintiff's father died. It is also at odds with the correspondence sent by Ms Spinks to Mr Markham when he had a falling out with the company. I do not accept the plaintiff's evidence about these matters.
87       The plaintiff was questioned at some length about his involvement with the company's business. He repeatedly told the Court that he had no involvement, save as an office bearer to assist his father, and no skills which would enable him to do so. The extent of his involvement was that he occasionally visited clients with Mr Fulton, but really only to keep him company. Mr Fulton, who was a long time friend of the plaintiff's, confirmed that the plaintiff used to come with him occasionally but was never paid any commission. He also said that he and the plaintiff were 'into computers' and talked about websites in their regular talks. Mr Fulton also described his role with the company which involved him visiting prospective clients and offering them the company's 'core' package. If there was a need for any IT discussions he would refer the client to the company's technician.
88       The defendant called evidence from two witnesses who had had dealings with the company. The first, Mr McConnon, had first dealt with Kelvin Markham from about 2006. He said he received a telephone call from 'a guy by the name of Geoff' who told him he was the principal contact for the business and not to deal any more with Mr Markham. This person, whom he identified as Geoff Summers, actually came to see him. Mr McConnon said he did not ever meet Mr Fulton, although he agreed he was having difficulty remembering.
89       The second, Mr Langmaid, said he had dealt with the company. The person he dealt with was the plaintiff. He met him several times and also spoke to him on the telephone. On one occasion the plaintiff came with another person. Mr Langmaid said that up until the day he gave evidence he could not remember that second person's name. However, on the morning he gave evidence, Mr Peter Fulton telephoned him out of the blue and he made the connection with the company. He also had a telephone call from the plaintiff on the same morning. Mr Langmaid, despite cross-examination, remained of the view that the plaintiff was the main person he dealt with, even referring to the plaintiff having taken photos for Mr Langmaid's business website.
90       Mr Markham was also called to give evidence. It is clear that he had an initial involvement with the company and that he left it after a dispute. The plaintiff and his partner, Ms Spinks, figured significantly in the severance of Mr Markham's ties with the company. His evidence generally contradicted that of the plaintiff as to the extent of the plaintiff's involvement in the company. I do not find it necessary to make specific findings as to his credit. The only comment I would make is that in my view his evidence was coloured to a degree by his dispute with the plaintiff over the company and I had already formed the view, absent his evidence, that I did not accept the plaintiff's evidence as to his lack of involvement with the company."

The plaintiff's credit

Her Honour's assessment of the plaintiff's credit played a pivotal role in her failure to accept his evidence to the effect that on and since the incorporation of Salamanca he had been unable to perform any gainful occupation and was not engaged in an occupation.

None of her Honour's adverse findings with regard to the plaintiff's credit are the subject of a specific ground of appeal. Her findings include the following:

"32 The plaintiff's credit was put squarely in issue on the trial. Before dealing with any factual background, I need to comment upon my assessment of the plaintiff's credit generally. I had an opportunity to observe the plaintiff in the witness box over a number of days. He was not an impressive witness. Generally, when pressed on a topic which he realised could impact against him, he became argumentative and would not respond to questions. He was often evasive. He also became vague. At times, he had no memory of matters. At other times, when it clearly suited him, he had a good recall of events or situations. He was at all times at pains to minimise his abilities and present himself as an uneducated person, and one with no talent to do anything other than basic physical work. On every occasion where it appeared he may have had more involvement in business matters than he was prepared to admit to, he launched into involved explanations as to why it was he happened to be involved or have some knowledge, which explanations were clearly intended to suggest his presence or knowledge was almost accidental. At times, his explanations and his suggested lack of knowledge about matters were implausible and inconsistent with documentary evidence.
33 For these reasons, I am not prepared to accept the plaintiff's evidence on a number of subjects unconditionally. I will do so where the facts are not controversial, are uncontradicted or where they are supported by other evidence."

Period since 7 March 2006 and into the future

In the course of rejecting the plaintiff's claim in respect of the period from 7 March 2006 and into the future, her Honour said:

"176     Moving to the period commencing March 2006, the plaintiff still had to satisfy the Court that he was, at this time at least, continuously unable to perform any gainful occupation by reference to his injuries, and he was not engaged in any occupation. In my view, if he were capable of performing a gainful occupation and/or was engaged in an occupation, he will not have satisfied the criteria in cl 1.2 and will, as a consequence, not have been entitled to benefits.
177     This requires a consideration of the level of involvement of the plaintiff in the company, Salamanca Promotions. I will say at the outset that I am satisfied the plaintiff was involved in the company from its inception, and that that involvement was not simply as his father's nominee. While the evidence of Mr Markham as to the ultimate breakdown of his involvement with that company may have been coloured by animosity towards the plaintiff and his partner, there was no reason for his evidence about how the company operations began to be so coloured. That clearly paints the plaintiff as an active participant in the set-up of the company and its ongoing activities. Were I to need to rely on Mr Markham's evidence alone for conclusions as to this, I may not have been prepared to do so. However, when regard is had to the ASIC records, the evidence of the plaintiff and the evidence of Mr Langmaid and Mr McConnon, I am satisfied the plaintiff was engaged actively in the operations of the company from its inception and continues to be so.
178     The plaintiff's taxation records for the years ended 30 June 2006, 2007 and 2008 show no income, save for social security. There were no records for the years ended 2009 and 2010. However that is not determinative of either an inability to engage in a gainful occupation or being actually engaged in one.
179     The plaintiff told the Court that Mr Stebbings was going to close the company down because it was not making money. Because of my views about the plaintiff's credit regarding his involvement with the company, the fact that no evidence was led from witnesses who could have been expected to give relevant and cogent evidence about these matters (Mr Stebbings and Ms Spinks), and no evidence was led from Mr Fulton who, as a person involved in the keeping of financial records for the company would have been expected to have some idea of its financial position, I do not accept that the company was to be closed down. The plaintiff's partner's role in the company disclosed by ASIC records and her involvement in Mr Markham's demise, suggest a significant interest in the operations of the company. I do not need to be satisfied that the plaintiff is a current office holder in the company nor an employee receiving income from it. It is sufficient, in my view, to find, as I do so, that he undertakes activities on behalf of the company as and when he sees fit and has the capacity to effectively work full-time for that company.
180     The term 'gainful occupation' in cl [1.12(b)] should not be interpreted to mean only full-time employment with an employer independent of the plaintiff. To give the term such a restrictive meaning would be a nonsense. The plaintiff gained skills in his work with the tavern. Those skills should not simply be ignored on the basis an independent employer might not find them appealing. They are skills which are useful to the plaintiff in the context of the operations of Salamanca Promotions as they have been described. As a consequence of the foregoing, the plaintiff has not satisfied the Court that, at least from March 2006, he was continuously unable to perform a gainful occupation within the context of cl [1.12(b)] of the Policy."

Ground 9

I will deal first with ground 9 which contends that her Honour erred in failing to allow the plaintiff to reply to the evidence of witnesses called by National Mutual, the content of which was not put to the plaintiff but was relied on by her Honour in making findings that the plaintiff undertook activities for Salamanca and had the capacity to effectively work full-time for that company.

Following the close of National Mutual's case, counsel for the plaintiff, Mr Rayment, said to her Honour, "As to [the] case in reply I would need to call the plaintiff to deal with the evidence of Mr Langmaid and … to a certain extent that of Mr Markham". It having been explained to Mr Rayment that the plaintiff could not, as a matter of right, call evidence in reply, but that application could be made to re-open the plaintiff's case, Mr Rayment sought leave to recall the plaintiff in order to "deal primarily with" Mr Langmaid's evidence of the phone conversation he had with the plaintiff about two hours before Mr Langmaid gave evidence when the plaintiff, "in effect, asked Mr Langmaid to pretend that he had no recollection of relevant matter[s]". Mr Rayment also sought leave "to lead from the plaintiff the circumstances in which he asked Mr Fulton to ring [Mr Langmaid] in the first place".

As noted by her Honour with regard to the telephone evidence, that evidence was clearly not a surprise brought about by the defence. It was not a case of the defence holding anything back. The plaintiff had not made the phone call to Mr Langmaid until after the plaintiff had completed his evidence, so he could not have been questioned about it by the defence.

Her Honour refused to grant leave for the plaintiff to be recalled to give evidence referrable to the phone conversation with Mr Langmaid. It is not necessary to go any further with this aspect of the application for leave to recall the plaintiff as this ruling by her Honour is not the subject of a ground of appeal.

Mr Rayment also applied to recall the plaintiff to respond to Mr Langmaid's evidence about the degree of the plaintiff's involvement in dealings with Mr Langmaid, and to allow the plaintiff to respond to evidence of Mr Markham that went beyond that which was put to the plaintiff when he gave evidence.

As to recalling the plaintiff to respond to Mr Langmaid's evidence, her Honour said:

"As far as the degree of involvement of the plaintiff with Mr Langmaid, who was a client of the company Salamanca Promotions, or his business was, there is no question in my mind that when the plaintiff was cross-examined he was given every opportunity to give evidence about the level of his involvement with the company, Salamanca Promotions. His evidence quite clearly was that he did not deal with clients of the company and that his only involvement as far as meetings with clients was concerned was when he travelled along with Mr Fulton. So while the position as described by Mr Langmaid tells a different story it is one where the plaintiff has already quite clearly nailed his colours to the wall. He says that level of involvement did not occur. In those circumstances I see no value whatsoever in allowing … the plaintiff's counsel leave to recall the plaintiff to give evidence about that issue."

With regard to recalling the plaintiff to respond to evidence of Mr Markham, her Honour said:

"As to the evidence of Mr Markham, again, it is quite clear on the evidence that Mr Markham has given a different version, if I can call it that, of what the plaintiff's involvement in the company Salamanca Promotions is said to be. But again, and it's highlighted by the passage to which Mr O'Farrell referred on page 311 of the transcript; the plaintiff has … made it perfectly clear in his evidence that he had no involvement in the setting up of the company and no involvement in its day to day operations, and to put him in the witness box and have him simply deny Mr Markham's evidence takes the matter no further than it already … is. There is an issue clearly joined between the parties as to the level of involvement of the plaintiff in this particular company, and that's an issue that I need to determine and quite frankly, a denial from the plaintiff is not going to take the matter any further than we already are."

The portion of the transcript to which Mr O'Farrell SC, counsel for National Mutual, had referred is as follows:

"So, Mr Summers, you say then that you were never involved to any degree with setting up this business with Mr Markham and actually running the business with Mr Markham?……Well I've told you my level of involvement already.
Yes…..I've never been an employee, a contractor, a salesman.   I've never received a commission on a sale.   I've never received any money from it.   My father put the money in.   My father went away on holidays at times he wanted me to be a director so there was someone to sign the paperwork when he wasn't there.   If he'd been there all the time he would have been the director at all times.   When he returned in March 2007, I think it was, from his last trip the directorship was put back into his name.
I'll just stop you there, Mr Summers.   Righto, Mr Summers.   Now despite your shoulder, knee and back injuries I suggest to you that you're able to work on businesses like Salamanca Promotions Pty Ltd…..Well unfortunately I don't have the skill – Salamanca Promotion – Salamanca Promotions Pty Ltd builds websites for companies I –
Yeah.   And you're able to go and -……That's I – I don't have any skills – I've never built a single website.
No…..I've never entered one piece of information on a website. I don't have a website of my own and –
Well that's smart………I've no requirement for a website of my own. So I don't have the IT skills to be part of that business.
No. But the business Mr Summers -……….All the capacity – all the capacity to get the IT skills.
Mr Summers – the business employs -………As far as –
Mr Summers – the business employs technicians, doesn't it, who build the websites? You know that……As I was answering your question – the – on the business side of it I don't have any of the business qualifications either – I don't have any degrees and so on to operate the business side of it. Now Mr Fulton, who is the business manager, since inception of that business, does have those qualifications and skills.
Mr – Mr -…..So he does that. The only involvement my family has really had, be it my father, my wife or myself, has – has been as office bearers – I've borne those positions on behalf of my father when my father was either overseas or away as he trusted me to do so."

Although ground 9 contends that: "Her Honour erred in fact and in law in failing to allow the plaintiff to reply to the evidence" there referred to, no real effort was made during the course of the appeal to establish that her Honour so erred. Instead, counsel for the plaintiff on the appeal sought to derive some benefit from her Honour's refusal to allow the plaintiff to be recalled on the basis that it diminished the weight that could be given to the evidence about the plaintiff's involvement in Salamanca. An illustration of this is the following written submission:

"61 The difficulties already adverted to about the evidence, and the course taken by the trial judge both in confining the cross-examination of Mr Markham, and in refusing to allow the appellant to call a case in reply, makes the vague findings of the primary judge of 'active involvement' 'as and when the Appellant sees fit', without a finding of a contract of employment or remuneration, or the time spent by the appellant on behalf of Salamanca Promotions, or the nature of the functions performed, makes the circumstances concerning Salamanca Promotions entirely insufficient to displace or modify or cast any doubt upon the correctness or cogency of the substantial body of medical evidence called in the case, such that in the submission of the appellant, the finding in the last sentence of paragraph [179] … should be discharged on appeal, with the consequence that the damages claimed by the appellant should have been allowed in full."

The failure of the written submissions to advance any arguments in support of ground 9 was drawn to Mr Rayment's attention. He said that the ground was an issue and that he would certainly address it. He did not do so, save for a submission in the course of his reply to the effect that the manner in which her Honour had controlled his cross-examination of Mr Markham required her Honour to allow the re-opening of the plaintiff's case to recall the plaintiff. There is no substance to this submission.

As explained in Goldsmith v Sandilands (2002) 190 ALR 370 by Kirby J from pars[52] to [59], in most parts of Australia, and this includes Tasmania, each party in a civil trial is expected to tender the entirety of its evidence before the close of its case. Any evidence that is not tendered during the party's case can only be received if that party is given leave by the court to re-open its case and to tender the evidence that was overlooked or that only became relevant as a result of the conduct of the opponent's case. This procedure is designed to avoid extending needlessly the length of the trial and the pursuit of side issues. A large discretion is reserved to the trial judge in civil trials to allow a party to re-open its case. The guiding principle for the grant or refusal of leave to call evidence in response to the evidence of another party is, ultimately, what the justice of the case – including procedural fairness - requires. On an appeal, the exercise of the judge's discretion in such matters is subject to the usual restraints upon an appellate court's disturbance of a discretionary decision.

Consistent with the Supreme Court Civil Procedure Act, s45, this ground of appeal could only succeed if:

· her Honour had proceeded on a wrong principle, or otherwise contrary to law, or on irrelevant or insufficient materials, or had misapprehended the facts, or had failed to consider any material facts;
· or her adjudication was founded wholly or in part on an erroneous finding of fact, or an erroneous determination in point of law; or by reason of further evidence received by this Court, the adjudication should be reversed or varied.

No submission advanced on behalf of the plaintiff addressed any of these matters, and the material before this Court does not establish any of them.

I would dismiss ground 9.

Grounds 1, 5, and 6

I will deal with these grounds together as that is the way in which they were dealt with on the appeal. The written and oral submissions advanced on behalf of the plaintiff were not clearly linked to the grounds. Mr Rayment finessed a request that he relate the submissions to the grounds and explained that the written submissions "were intended to introduce the appeal and do so comprehensively". He adopted much the same approach in the course of his oral submissions.

As drawn, the grounds under consideration do not confront the fundamental problem faced by the plaintiff on the trial and on this appeal which is that he bore the onus of proof. In order to establish an entitlement to total disability benefits during the period in question, it was necessary for the plaintiff to satisfy her Honour that:

·     he was continuously unable, as a result of injury or sickness, to perform any "gainful occupation" for which he was reasonably suited by education, training or experience, cl 1.12(b);
·     he was under the regular care and attendance of a doctor for that injury or sickness, cl 1.12(c); and
·     he was not engaged in "any occupation", cl 1.12(d).

By reason of her Honour's unchallenged findings on the plaintiff's lack of credibility, her Honour could not give any real weight to the plaintiff's evidence that he was unable to perform any gainful occupation and had not engaged in any occupation during the period in question. Moreover, his want of credibility similarly undermined the weight that her Honour could give to the medical evidence. Whilst there was clear objective evidence of the plaintiff's shoulder injury and his knee injuries, this evidence only went so far as to provide a basis upon which it could be concluded that those injuries disabled the plaintiff to the extent that he said they did. However, with reference to the period in question, the plaintiff's want of credit, compounded by the evidence of his actual involvement with Salamanca, put her Honour in the position that she was not satisfied by what the plaintiff said was the disabling impact of the injuries upon him and his evidence to the effect that he was not involved in activities for Salamanca.

The central theme of the written and oral submissions advanced on behalf of the plaintiff is that in allowing his claim for the period from 20 January 2000 to 7 March 2006, her Honour accepted the medical evidence, and accordingly it was not open to her Honour to find other than that, consistent with the medical evidence, the plaintiff's claim in relation to the period subsequent to 7 March 2006, was also established.

The following written submission is an example of the way in which this proposition was advanced:
"The appellant's primary submission about his capacity to work full-time is that the matter was resolved at trial by the medical evidence. Whatever may be the effect of the commentary contained in the judgment concerning the medical evidence it does not amount to a rejection of that evidence, and when considered on its face (indeed even in light of the judge's comments concerning the evidence) it is irreconcilable with the finding made in paragraph [179] … that the Appellant was capable of working full-time in any occupation, let alone one for which he was reasonably suited by education training and experience."
As has already been explained, the flaw in this submission is that it ignores the importance of the credibility of the plaintiff to establishing the extent of his incapacity and his non-engagement in any occupation. Her Honour had cogent evidence that the plaintiff had been actively involved in setting-up Salamanca, and had engaged actively in the operations of that company since its incorporation. This evidence coupled with her Honour's general findings with regard to the plaintiff's credibility make it entirely understandable that her Honour did not accept the plaintiff's claims that he was unable to work and had not worked. The medical evidence did not establish these matters. In the absence of credible evidence from the plaintiff to supplement the medical evidence about these matters, it was almost inevitable that her Honour found as she did.

Ground 1 contends that her Honour erred in fact and in law in finding, against the weight of the evidence, that the plaintiff could work full-time for Salamanca. For the purposes of the consideration of this and other grounds, it is necessary to give close attention to her Honour's decision with regard to the period from March 2006. At par[176], her Honour in substance said that in order for the plaintiff to establish his claim for this period, he had to satisfy the Court:

· that he was continuously unable to perform any gainful occupation (cl 1.12(b)); and
· that he was not engaged in any occupation (cl 1.12(d)).

In par[177] her Honour found that the plaintiff had been an active participant in setting-up Salamanca and had been actively engaged in the operations of the company from its inception and continued to be so.

In par[179] her Honour rejected the plaintiff's evidence that Salamanca was to be closed down as it was not making money. That finding is not the subject of a ground of appeal. Her Honour found that the plaintiff undertook activities on behalf of Salamanca as and when he saw fit, and had the capacity to effectively work full-time for the company.

In par[180] her Honour, after addressing the meaning of "gainful occupation", concluded that the plaintiff had not satisfied her that, at least from March 2006, he was continuously unable to perform any gainful occupation as required by cl 1.12(b).

Although her Honour found that the plaintiff undertook activities on behalf of the company as and when he saw fit, and had the capacity to work full-time for the company, she did not make an express finding on whether the plaintiff had established that he had not been engaged in "any occupation" as required by cl 1.12(d). This may be because, as explained in par[11] of these reasons, her Honour construed the term "any occupation" in cl 1.12(d) as meaning full-time work. I will come back to this interpretation. Her Honour's finding that the plaintiff had the capacity to work full-time for the company was not a finding that he was working or had worked full-time for the company.

Refocusing on ground 1, at the conclusion of par[179] of her decision, her Honour in effect found, as asserted in this ground, that the plaintiff could work full-time for Salamanca. On the evidence before her Honour referrable to the plaintiff and Salamanca, that finding was open to her, and for the reasons that have already been given, it was not a finding against the weight of the evidence. The medical evidence alone did not establish that the plaintiff could not work full-time. The plaintiff's evidence was incapable of establishing that he could not work full-time. The evidence with regard to Salamanca was that the plaintiff had engaged actively in the operations of the company from its inception. When Mr Markham had been engaged by the company, he had been engaged full-time. Following the termination of Mr Markham's engagement, there was evidence that the plaintiff performed work that had previously been performed by Mr Markham. In any event, the impugned finding goes beyond that which was necessary. Her Honour needed to go no further than find that she was not satisfied on the balance of probabilities that the plaintiff was unable to perform a gainful occupation for which he was reasonably suited.

Ground 5 reads: "Her Honour erred in fact and in law in failing to find that the activities the [Plaintiff] was found to have done for Salamanca … amounted to a gainful occupation within the meaning of the policy". No doubt this ground was intended to contend that her Honour erred in failing to find that the activities the plaintiff was found to have done for Salamanca did not amount to a gainful occupation. For the reasons given her Honour did not err in failing to so find. The question for her Honour was whether the plaintiff had satisfied her that he was continually unable to perform a gainful occupation. She found against him on this question in the last sentence of par[180] of her decision. It was not necessary for her Honour to go further and determine whether the activities that the plaintiff had performed for Salamanca amounted to a gainful occupation within the meaning of the policy.

Ground 6 contends that her Honour erred in fact and in law in finding that full-time employment with Salamanca amounted to a gainful occupation within the meaning of the policy. Her Honour did not so find. As explained in par[179] of her decision, her Honour in effect found that the plaintiff had the capacity to work full-time for Salamanca, and in the last sentence of par[180] she found that the plaintiff had not satisfied her that, at least from March 2006, he was continuously unable to perform a gainful occupation. That finding was as far as her Honour needed to go and it was open, if not unavoidable, on the evidence before her.

I would dismiss grounds 1, 5 and 6.

Ground 8

Ground 8 contends that her Honour erred in fact and in law in failing to find that the plaintiff's employment history was in work predominantly physical in nature. The evidence as to the plaintiff's employment history concluded with the evidence of his work at the tavern. As to this work, her Honour said at par[164]: "However, whatever the precise balance of work was, there can, in my view, be little doubt that a significant portion of the plaintiff's day-to-day work at the tavern was of the manual variety". There is no substantive distinction between this finding and that which ground 8 contends that her Honour should have made.

I would dismiss ground 8.

Ground 2

The remaining ground of appeal is ground 2. It contends that her Honour erred in fact and in law in failing to assess damages, having found the defendant to have repudiated the contract of insurance and the plaintiff to have accepted that. In reality this ground does no more than identify that which would have followed had the plaintiff established an entitlement to benefits subsequent to March 2006. He has not, so I would dismiss this ground.

In result I would dismiss all of the grounds of the appeal.

"any occupation"

There is however the outstanding question of the interpretation of the term "any occupation" in cl 1.12(d). As mentioned in pars[11] and [108] of these reasons, her Honour interpreted this term as meaning full-time work. Her Honour gave this meaning to that term in the course of dealing with a submission made by Mr Rayment during the trial on the interpretation of the somewhat differently qualified term "gainful occupation" in cl 1.12(b).

Mr Rayment submitted to Tennent J that the term "gainful occupation" should be interpreted as being full-time work in a recognised occupation and not a special light duties occupation for injured workers. In addressing this submission, her Honour referred to Halloran v Harwood Nominees Pty Ltd [2007] NSWSC 913, and Manglicmot v Commonwealth Bank Officers Superannuation Corporation Pty Ltd [2011] NSWCA 204. Those decisions consider a number of authorities that deal with provisions in broadly similar terms to cl 1.12(b). Having set out an extensive summary of the authorities taken from the decision in Manglicmot, her Honour said:

"29      I have set out the above summary in full because it … highlights the need to consider each disablement clause in the context of the policy in which it appears.
30       The Policy in the present case was designed in the first instance to provide a policy holder with an income at a designated level in the event that he or she was unable through injury or sickness to continue the work which was producing their income at the time the Policy came into force. The plaintiff applied for the Policy at a time when he was in full-time employment. The Policy made specific provision for the plaintiff to claim a partial disability benefit where he could perform some only of the duties of the occupation he held at the time the Policy was taken out, as opposed to all of the duties on a full-time basis, and could only earn income to a level less than 75% of his pre-disability income from either his pre-injury occupation or indeed any occupation. In those circumstances, the Policy contained a formula for calculating the benefit by reference to the total disability benefit figure. This partial disability benefit was clearly designed to deal with a situation where a claimant could work part-time.
31       It follows in my view that the term 'gainful occupation' and 'any occupation' in cl 1.[12](a), (b) and (d) should be interpreted as meaning full-time work."

In par[31] above, her Honour makes no mention of the term "Your occupation" in cl 1.12(a). However, it may be that in referring to pars(a), (b) and (d) of cl 1.12, her Honour was expressing the view that in the context of the Policy alone the term "Your occupation" meant full-time work. If so, I do not agree. In my respectful view, the meaning of the term "Your occupation" must depend upon the actual occupation of the insured. Whilst the term "occupation" is used on a number of occasions in the Policy, it is not defined. However, the insurance application form completed by an insured for the purposes of a Policy includes full details of the insured's occupation. Clause 7.5 provides that this application is one of the documents that constitutes the agreement between the parties. Accordingly, if an insured stated in the application that his or her occupation was other than full-time, then that would govern the meaning to be attributed to the term "Your occupation" in cl 1.12(a). This possibility does not arise in this case as in his application, the plaintiff stated that he worked 50 hours per week, which amounts to full-time work.

There are manifest differences between the use of the word "occupation" in pars(a), (b) and (d). As pointed out above, "Your occupation" in par(a) refers to the claimant's occupation. In par(b) the word "occupation" expressly encompasses "any gainful occupation for which [the claimant is] reasonably suited by education, training or experience" which would include the claimant's former occupation. In par(d) the word "occupation" is not confined as it is in either pars(a) or (b), but extends to "any occupation" that the claimant is "engaged in".

In pars[29] to [31] of her Honour's decision, she referred to the need to consider each disabling clause in the context of the policy in which it appeared, and concluded that the term "gainful occupation" in par(b), and the term "any occupation" in par(d) should be interpreted as meaning full-time work.

I am in full agreement with her Honour's conclusion that the authorities to which she referred highlight the need to consider each disabling clause in the context of the policy in which it appears. However, this does not require that the same interpretation should be attributed to potentially different terms in distinct paragraphs of a clause, such as "any gainful occupation" in par(b) and "any occupation" in par(d), or that as her Honour found, a common aspect of the meaning of these terms is full-time work.

Mr O'Farrell, counsel for National Mutual, submits that the term "any occupation" in cl 1.12(d) should not be so construed. In his written submissions he notes that her Honour did not elaborate on why this particular term should be interpreted as meaning full-time work and submits that her Honour's finding:

"a)       Does not deal with the apparent different purposes of cls 1.12(b) and 1.12(d). Cls 1.12(b) prescribes a threshold level of disability, whereas cls 1.12(d) proscribes certain activity;
b)        Does not deal with the difference in wording between 'gainful occupation' in cls 1.12(b) (including the qualification that it must relate to 'education, training or experience') and 'any occupation' (without qualification) in cls 1.12(d);
c)        Leaves cls 1.12(d) with no work to do;
d)        Does not consider the operation of the 'Partial Disability' benefit, under which a benefit is payable when an insured, following a period of Total Disability, is 'earning income from Your occupation or another occupation' at a lesser rate than 75% of the insured's Pre-Disability Income because of the relevant Injury or Sickness. If 'any occupation' for the purposes of cls 1.12(d) means full-time work, an insured engaged in anything less than full-time work remains totally disabled and the partial disability provisions have no work to do;
e)        Is not supported by authority."

Before concluding that the terms "gainful occupation" and "any occupation" meant full-time work her Honour referred to the decisions in Halloran v Harwood Nominees Pty Ltd (supra), and Manglicmot v Commonwealth Bank Officers Superannuation Corporation Pty Ltd (supra). Halloran relevantly dealt with a claim of "total and permanent disablement" under an insurance policy that defined that phrase in terms that included words similar to those contained in cl 1.12(b). See pars[26] and [57] of that decision. The relevant requirement was that the claimant be "incapacitated to such an extent as to render [him] unlikely ever to engage in or work for reward in any occupation or work for which he is reasonably qualified by education training or experience". With regard to this requirement Brereton J said at par[76]:

"That phrase can be distilled into the following components.
(1)     unlikely (meaning a probability of less than 50%) [White v The Board of Trustees [1997] 2 Qd R 659, 673]
(2)     ever to engage (meaning on a full-time regular basis) [Riley v National Mutual Life Association [1986] 4 ANZ Ins Cas 60-684, 74063; Chammas; Nile v Club Plus Superannuation Pty Limited [2005] NSWSC 55, cf Wyllie v National Mutual Life Association of Australasia [1997] 217 ALR 324; Sayseng v Kellogg Superannuation]
(3)     in any occupation or work (meaning a recognised occupation, not a special light duties job for injured workers) [Cavill Power v Royale; Dolton v State Authority Superannuation Board [1995] NSWIRC at 159 [11.1]] and being work which he is likely to be able to obtain [Chammas, Nile v Club Superannuation, [64]];

(4) for which he is reasonably qualified by education, training or experience (as at the date of assessment) [Giles, Fernance]."

There is no reference in Halloran to a provision in the policy similar to cl 1.12(d). So whilst that decision is of relevance to the construction of cl 1.12(b), it does not assist in relation to the construction of cl 1.12(d).

The issue that was the subject of the decision of the Court of Appeal (New South Wales) in Manglicmot was whether a policy of insurance with Hannover Life Re of Australasia Ltd "the Hannover policy" provided total and permanent disability benefits where a member was unfit for full-time work but fit for part-time work. It was held that the policy did not entitle a member to benefits when fit for part-time work. Under the Hannover policy the insurer agreed to provide total and permanent disability benefits if an insured person suffered total and permanent disablement during the period covered by the policy. The definition of total and permanent disablement was:

"Total and Permanent Disablement means:
(a) suffering the loss of two limbs or the sight of both eyes or the loss of one limb and the sight of one eye (where limb means the whole hand or the whole foot), or
(b) having been absent from work through injury or illness for an initial period of six (6) consecutive months and in our opinion being incapacitated to such an extent as to render the Insured Person unable ever to engage in or work for reward in any occupation or work which he or she is reasonably capable of performing by reason of education, training or experience."

Giles JA, whose decision was agreed with by Young and Whealy JJA, referred to the above definition of total and permanent disablement as the Hannover TPD clause, and the words "incapacitated to such an extent as to render the member unlikely ever to engage in or work for reward in any occupation or work for which he or she is reasonably capable of performing by reason of education, training or experience" as the common form of wording. In pars[68] to [86], Giles JA addressed Halloran and some ten other decisions that involved the common form of wording or broadly similar provisions. The majority of the decisions he dealt with were to the effect that the provisions under consideration should be construed as relating to an incapacity to perform full-time work. One of the decisions was that of Hodgson J in Chammas v Harwood Nominees Pty Ltd (1993) ANZ Ins Cas 61-175 where Hodgson J so held. Nonetheless, Giles JA, at pars[87] to [89], concluded otherwise. Giles JA said:
"87It does not seem to me sound uncritically to translate what Hodgson J said about limitation to full time employment to the common form wording in different contexts, or to the Hannover TPD clause. Nor has there been a consistent course of construction or application of the common form wording or variants of it.
88The Hannover TPD clause defines total and permanent disablement. It is quite emphatic: the member must be unable ever to engage in or work for reward in any occupation or work. As further context, the member must have been absent from work for six months. Introduction of full time employment or part time employment into the wording, notions which themselves carry uncertainty (what is the standard for full time employment?) is in my view not warranted. The clause requires unfitness to work, without distinction between full time work and part time work other than by regard to the work which the member is reasonably capable of performing by reason of education, training or experience.
89There is nothing inherently unfair or unreasonable in the Hannover TPD clause as so construed. A member who can not work even part time has a need; a member who can work part time has a different need, and one which will vary according to the work the member can perform. The premium will be struck according to the need to be met, and that is found in the terms of the policy of insurance."

Her Honour, having set out pars[86] to [89] from Giles JA's decision in Manglicmot, concluded, as noted in par[118] of this decision, that the term "gainful occupation" in cl 1.12(b), and the term "any occupation" in cl 1.12(d) should be construed as meaning full-time employment. Her Honour's construction of cl 1.12(b) has not been appealed. As to her construction of cl 1.12(d), with respect, I am unable to find in the Policy any reason for introducing into this paragraph the notion that the occupation must be full-time. When cl 1.12(d) is read in conjunction with cl 1.7(c), it can be seen that the aspect of the occupation referred to that is of importance is not whether it is full-time, but whether the claimant is earning less than 75% of his or her pre-disability income from the occupation.

To my mind the scheme of the Policy is that a claimant in receipt of a total disability benefit who becomes engaged in any occupation ceases to be eligible for that benefit by reason of cl 1.12(d), but pursuant to cl 2.2(a) may be eligible for a partial disability benefit as defined in cl 1.7 if the claimant is "unable to perform all the duties of Your occupation on a full-time basis", cl 1.7(b), and is earning income less than "75% of Your Pre-Disability Income", cl 1.7(c). This scheme is undermined if cl 1.12(d) is construed by importing into the term "any occupation" the need for the occupation to be full-time and such a construction could result in incongruous outcomes. An illustration is a claimant receiving a total disability benefit who becomes engaged in an occupation but not full-time. If the disqualification contained in cl 1.12(d) is confined to full-time engagement in an occupation, this claimant's entitlement to a total disability benefit will continue. This outcome flies in the face of cl 1.7 which envisages that such a claimant, if unable to perform all the duties of the claimant's occupation on a full-time basis, and if earning an income of less than 75% of the claimant's pre-disability income, is entitled to a partial disability benefit not a total disability benefit. Moreover, on the basis of the construction postulated, such a claimant, even if earning in excess of 75% of the claimant's pre-disability income, would continue to be eligible for a total disability benefit.

For these reasons I would not construe cl 1.12(d) as applying only where the claimant was engaged in a full-time occupation. Accordingly, consistent with her Honour's findings about the plaintiff's involvement in Salamanca, I would find that an additional reason for dismissing the plaintiff's claim for the period subsequent to March 2006 is that he failed to establish that he was not engaged in any occupation during this period and, in result, he had not satisfied the requirement contained in cl 1.12(d).

For these reasons I would dismiss the appeal.
File No 260/2012

GEOFFREY DOUGLAS SUMMERS v THE NATIONAL MUTUAL LIFE ASSOCIATION OF AUSTRALASIA (ABN 72 004 020 437)

REASONS FOR JUDGMENT FULL COURT

PORTER J
2 May 2013

I have read the reasons for judgment of Evans J. I agree with his Honour's reasons as to the meaning of the term "any occupation" in cl 1.12(d) of the Policy. Otherwise, I generally agree with what his Honour has written.

In my view none of the grounds of appeal has been made out, and the appeal should be dismissed.

File No 260/2012

GEOFFREY DOUGLAS SUMMERS v THE NATIONAL MUTUAL LIFE ASSOCIATION OF AUSTRALASIA (ABN 72 004 020 437)

REASONS FOR JUDGMENT FULL COURT

WOOD J
2 May 2013

I have had the advantage of reading the reasons for judgment of Evans J. I agree with those reasons and would also dismiss the appeal.