Swain v Hest Australia Limited

[2003] TASSC 104

[2003] TASSC 104

CITATION:              Swain v Hest Australia Limited & Anor [2003] TASSC 104

PARTIES:  SWAIN, Cheryl
  v
  HEST AUSTRALIA LIMITED ACN 006 818 695

ROYAL & SUN ALLIANCE FINANCIAL SERVICES LIMITED ACN 001 698 228

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  ORIGINAL
FILE NO/S:  665/2001
DELIVERED ON:  16 October 2003
DELIVERED AT:  Hobart
HEARING DATES:  9 October 2003
DECISION OF:  Master S J Holt

CATCHWORDS:

Procedure – Discovery and interrogatories – Interrogatories – Upon what matters – What questions disallowed – Purpose of proving authenticity of documents – Unnecessary – Irrelevance.
Supreme Court Rules 2000 (Tas), rr399, 406, 409 and 410.
Aust Dig Procedure [465] and [467]

REPRESENTATION:

Counsel:
             Plaintiff:  L A Harper
             Second defendant:  A R Mills
Solicitors:
             Plaintiff:    Hilliard & Associates
             Second defendant:  Piggott Wood & Baker

Judgment Number:  [2002] TASSC 104
Number of Paragraphs:  14

Serial No 104/2003
File No 665/2001

CHERYL SWAIN v HEST AUSTRALIA LTD ACN 006 818 695 and
ROYAL & SUN ALLIANCE FINANCIAL SERVICES LIMITED ACN 001 698 228

REASONS FOR DECISION  MASTER S J HOLT

16 October 2003

1. By application filed 3 September 2003 the plaintiff has applied for an order that the second defendant answer interrogatories.  Twelve interrogatories, each containing sub-questions, were administered and objection was taken to all except interrogatory 12(a).  During the course of the hearing counsel for the plaintiff advised that he was not pursuing answers to the first six interrogatories. 

1. Because relevance was a ground of objection it is necessary to examine the pleadings.  In her statement of claim the plaintiff alleges that she was a nursing home employee who along with her fellow employees was a member of a superannuation plan.  The trustee of the superannuation plan took out a disability insurance policy with the second defendant for the benefit of members.  The plaintiff says that she became totally and permanently disabled from work and applied for a disability benefit.  Under the policy the second defendant was obliged to determine whether the plaintiff was disabled.  On 4 August 1998 the second defendant rejected her claim.  The plaintiff says that on 16 November 1998 she made the second defendant aware of a medical report of Dr Andrew Maclaine-Cross dated 9 November 1998 and requested a reconsideration of her claim and that on 1 May 2000 the second defendant again rejected the claim.  The pleading continues as follows:

“26     The policy effected by the Firstnamed Defendant with the Secondnamed Defendant is a contract for the benefit of the Third Party, including the Plaintiff, and is a contract upon which the Plaintiff is entitled to sue the Secondnamed Defendant directly.

27 At all material times the Secondnamed Defendant, in its capacity, as Insurer owed the Plaintiff a duty pursuant to Section 13 of the Insurance Contracts Act 1984 to ensure that the Secondnamed Defendant’s duties and powers are performed and exercised in good faith.

28       At all material times the Secondnamed Defendant, in its capacity, as Insurer owed the Plaintiff a duty arising out of the contract between the Secondnamed Defendant and the Firstnamed Defendant for the benefit of the Plaintiff to act in good faith towards the Plaintiff and to fairly assess her claim on the basis of all relevant evidence.

29       The duties owed by the Secondnamed Defendant to the Plaintiff referred to at paragraphs 27 and 28 above include:

(a)       The duty to afford the Plaintiff an opportunity to know the contents of and respond to any adverse medical reports the Secondnamed Defendants relied upon;  and

(b)       The duty to reconsider any decision adverse to the Plaintiff in the light of new evidence, including the decision to reject the total and permanent disablement claim.

30       In respect of the Secondnamed Defendant’s decision of 4 August 1998 and 13 October 1999 (sic) to deny the Plaintiff’s claim for total and permanent disability, the Secondnamed Defendant has breached both the duties referred to … above in that the Secondnamed Defendant’s decision was against the weight of the medical evidence and did not constitute a real and genuine consideration of the merits of the Plaintiff’s claim.

31       In respect of the Plaintiff’s request that the Secondnamed Defendant reconsider its decision not to grant a total and permanent disablement benefit, the Secondnamed Defendant has breached its duty referred to at paragraphs 27 and 28 above in failing to carry out that reconsideration in the light of new evidence and within a reasonable time.”

1. The plaintiff seeks a declaration that the rejection of her claim by the second defendant was void and an order remitting the matter to the second defendant for re determination in accordance with any directions which may be issued by the Court.  Alternatively, the plaintiff claims a declaration that she is entitled to the benefit and payment of the disability benefit and interest.

1. The only allegations which have been admitted are that the second defendant issued a disability policy for the benefit of persons including the plaintiff and rejected the plaintiff’s claim for a benefit. 

1. The second defendant’s obligations to the plaintiff will be determined by reference to the terms of the policy of insurance.  The only terms of the policy pleaded are the term implied by the Insurance Contracts Act 1984, s13, which requires the parties to act towards each other with the utmost good faith and the term requiring the second defendant to determine whether the claimant is disabled from work. Although it is alleged that the second defendant had as part of its good faith obligation a duty to disclose all medical reports upon which it intended to rely to the plaintiff with a chance to respond, there is no allegation that it failed to do so. It may be that the pleadings require revision in this respect.

1. On the basis of the existing pleadings the questions to be determined at trial will include the following:

(a)       What was the medical evidence available to the second defendant?

(b)       Was the rejection of the claim against the weight of that evidence?

(c)       Was there a failure to consider the report of Dr Maclaine-Cross?

(d)On the basis of the answers to the above questions, should it be inferred that the rejection of the claim was in breach of the second defendant’s obligation to act towards the plaintiff with the utmost good faith?

1. The six disputed interrogatories respectively concern six annexed medical reports (not including the report of Dr Maclaine-Cross) and are each in the following terms:

“Refer to the document annexed hereto and marked with the letter … and state:

(a)Whether this document is a report of Dr … commissioned by the Second Named Defendant.

(b)Whether this document was relied upon by the Second Named Defendant in assessing the Plaintiff’s claim.”

The objection in each case is the same, namely:

“The Second Named Defendant objects to answering this interrogatory as it is not relevant as it does not relate to a matter in issue between the parties and is objectionable.  Further, it is an interrogatory as to the contents of a document and therefore improper.”

1. At the hearing of an application for answers to interrogatories the party to whom the interrogatory was administered is not  confined by the objections originally taken and is not precluded from arguing that the interrogatory should be disallowed for other reasons, for example, as being unnecessary:  Royal & Sun Alliance Assurance Australia Ltd v Falzon [2002] TASSC 52. Counsel for the second defendant submitted:

(a)Part (a) of each of the interrogatories goes to proof of authenticity of a document and it is unnecessary to use interrogatories for this purpose before it has been ascertained whether or not authenticity will be in dispute.

(b)Part (b) of each interrogatory enquires as to matters unrelated to the issues in dispute as disclosed by the pleadings in that there is no allegation that the second defendant wrongly relied on any reports and the only allegation of a wrongful failure to consider a report concerns the report of 9 November 1998 of Dr Maclaine-Cross which is not the subject of any of the interrogatories.

(c)Part (b) of each of the interrogatories is vague in that it does not identify whether the enquiry as to reliance relates to the initial determination on 4 August 1998 to reject the plaintiff’s claim or the subsequent decision on 1 May 2000 to maintain that rejection and so should be disallowed as oppressive. 

1. Part (a) of the interrogatories goes to whether the copy documents attached are true copies of the medical reports of particular doctors which were available to the second defendant in its consideration of the plaintiff’s claim.  If they were they are relevant documents as they will be part of the Court’s assessment of whether or not the rejection of the claim was “against the weight of the medical evidence”.  In National Australia Bank Ltd v Rusu & Ors (1999) 47 NSWLR 309, Bryson J held in considering the New South Wales Evidence Act 1995 (which in all respects relevant to this application is identical to the Tasmanian Evidence Act 2001) that the Act did not abolish the need to prove the authenticity of a document to be tendered (except in the case of documents more than 20 years old, s152) and said at par19:

“… a finding that the evidence is what the party claims it to be is distinguished from the question whether the evidence is relevant;  authenticity is something on which relevance depends.”

In my view, part (a) of each interrogatory is entirely concerned with proving the authenticity of the copy medical reports annexed. 

1. The stage has not been reached where it is necessary to prove authenticity by interrogation as it is common ground that the plaintiff has not relied on the procedure set out in the Supreme Court Rules 2000, r399, which is as follows:

“(1)At any time after discovery of documents and before the filing of a certificate of readiness or joint letter of readiness or the making of an order that the proceedings be set down for trial, whichever occurs first, a party to a proceeding may serve on any other party a notice requiring that other party to admit the authenticity of the documents specified in the notice.

(2)A party seeking to challenge the authenticity of a document specified in the notice within fourteen days after service, is to serve on the party by whom the notice was given a notice stating that the authenticity of the document is not admitted and is required to be proved at the trial. 

(3)A party on whom the notice is served who fails to give a notice under subrule (2) in relation to a document is taken to have admitted the authenticity of that document unless the court of a judge otherwise orders.”

1. There is nothing to prevent the plaintiff from issuing a notice requiring the second defendant to admit that the annexed copy medical reports are true copies of reports which were in the possession of the second defendant at the relevant times. Part of the combined effect of rr409(3) and 410(3) is to confer on the court a discretion to disallow an interrogatory which is unnecessary or goes to a matter not sufficiently material at that stage of the proceedings. In my opinion, the appropriate course is to first ascertain under r399 whether authenticity is disputed. If there is a dispute interrogatories can issue on the subject and if there is not interrogation about authenticity is clearly unnecessary. The situation can be likened to cases where interrogatories are administered as to injury, loss, expense and damage before the delivery of particulars. This court has held that such interrogatories should be disallowed as premature: see Clarke v Garwood [1995] TASSC 58 and Boxall v Mayne [1997] TASSC 56, cf Peet v Webb [2003] TASSC 97. Counsel for the plaintiff referred to Dunbar v Perc (1956) VLR 583, but there Scholl J said at 588, in relation to interrogatories claimed to be unnecessary:

“Nothing that I have said in the course of this judgment is intended to suggest that the Court has not an unfettered discretion in deciding what is proper and reasonable in the circumstances of any particular case.”

I disallow at this stage part (a) of the interrogatories as being premature, it being yet to be seen whether the interrogatories are necessary in order for there to be a fair trial of the action.

1. Part (b) of the interrogatories asks whether the annexed medical reports were relied upon.  As I have said, an issue raised on the pleadings is whether the determination to reject the plaintiff’s claim was “against the weight of the medical evidence”.  The consideration of that question will not involve an investigation of what the second defendant did or did not do in rejecting the claim.  It will involve a review of all of the medical evidence available to the second defendant to see whether the weight of the evidence favoured accepting the claim and if it did whether that is a sufficient basis independently of or in conjunction with whatever conclusion is reached in respect of the report of Dr Maclaine-Cross for inferring a breach of the obligation of the second defendant to assess the claim with the utmost good faith.  As has already been noted none of the questions relate to the Maclaine-Cross report.  Of the six disputed interrogatories two relate to medical reports of Dr Robert Craven who expresses the opinion that the defendant does not meet the definition of total disablement and one relates to the medical report of orthopaedic surgeon, Mr Robin Jackson, who expresses the same opinion.  There is no allegation that the second defendant wrongly relied on these reports (for example, taking them into account without furnishing the plaintiff with copies and a chance to respond).  Two of the interrogatories relate to reports of neurosurgeon, Mr John Liddell, and orthopaedic surgeon, Mr Scott Fletcher, who opine that the plaintiff is unlikely to be able to resume her former occupation.  There is no allegation that the second defendant failed to consider these reports or wrongly failed to place reliance on them.  The final interrogatory requires the second defendant to refer to an annexed report of occupational therapist, Ruth Feeger, and state whether the report was relied upon.  There is no allegation that the second defendant wrongly relied on this report or wrongly failed to take it into account or rely on it.  In fact the likelihood is that the document was annexed by mistake as interrogatory 12(a) enquires as to whether it is a report of Dr Craven.  I consider the irrelevance objection to part (b) of the interrogatories, to be proper. 

1. Although it is unnecessary for me to consider the submission that part (b) of the interrogatories is objectionable for being vague such that the questions should be disallowed as oppressive, I will consider the objection briefly.  The vagueness is said to arise out of the use of the words “in assessing the plaintiff’s claim” without specifying whether the question relates to the initial assessment or a reconsideration of the claim.  In my view, there is no vagueness.  The interrogatories are not confined to any particular assessment and so it is clear that they are intended to cover both the initial assessment and any reconsideration.  I would not have disallowed part (b) of the interrogatories as being vague and so oppressive. 

1. I have disallowed part (a) of each of the interrogatories and upheld the objection to part (b) and, accordingly, the second defendant has succeeded in its resistance to answering all of the interrogatories pursued by the plaintiff on the hearing of the application.  There will be an order that the application be dismissed.