Weber v Tiss Pty Ltd

[2005] NSWSC 67

CITATION:	Paul Weber v Tiss Pty Limited & Ors [2005] NSWSC 67
HEARING DATE(S):	02/12/04; 03/12/04; 03/02/05; 04/02/05
JUDGMENT DATE :	18 February 2005
JUDGMENT OF:	Nicholas J
DECISION:	Para 67

CATCHWORDS:	Superannuation - claims for benefit - total and permanent disablement - insurance - challenge to opinion of insurer on TPD where insurer's opinion was element in whether insurance was available to trustee - insurer did not form such opinion - whether failure to form such opinion was unreasonable - whether insurer's decisions to refuse the claims were invalid
CASES CITED:	Alessi v National Mutual Life Association of Australia Limited (1982) 2 ANZIC 60-481 Chammas v Harwood Nominees (1993) 7 ANZIC 61-175 Edwards v The Hunter Valley Co-op Dairy Co Limited (1992) 7 ANZIC 61-113 Heitman v Guardian Assurance Co. (1992) 7 ANZIC 77-483 Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 Muinos v Johnson & Johnson Retirement Benefits Limited (5 December 1996, BC9605916)
PARTIES:	Paul Weber - Plaintiff Tiss Pty Limited - First Defendant NRG Victory Australia Pty Limited - Second Defendant Hannover Life Re of Australasia Limited - Third Defendant
FILE NUMBER(S):	SC 6052/03
COUNSEL:	D A Baker - Plaintiff V M Heath - Defendants
SOLICITORS:	Firths The Compensation Lawyers - Plaintiff Blake Dawson Waldron - Defendants

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Nicholas J

18 February 2005

6052/03 Paul Weber v Tiss Pty Limited & Ors

JUDGMENT

1 His Honour: Mr Paul Weber (the Plaintiff) as a member of the Timber Industry Superannuation Scheme (the fund) of which Tiss Pty Limited, the First Defendant, was the trustee (the trustee), sought the payment of benefits from the fund on the basis of his total and permanent disablement resulting from injuries to his left arm and shoulder. The First Defendant held a policy of insurance with NRG Victory Australia Pty Limited (the Second Defendant) which was succeeded by Hannover Life Re of Australasia Limited, the Third Defendant, as the insurer (the insurer) under which the fund was insured for total and permanent disablement benefits payable to members of the fund.

2 The Plaintiff first applied for the benefits on about 4 March 1997. The trustee informed him that his application was refused by letter of 1 December 1997. He was informed of the refusal of subsequent applications by the trustee’s letters of 13 May and 27 November 2003. In each case the trustee gave effect to the insurer’s decision to decline the claim under the policy.

3 It was accepted by both parties that the question for determination in these proceedings was whether each of the decisions of the insurer of 22 July 1997, 14 April and 7 November 2003 was invalid in that it was unreasonable.

4 The plan was constituted by a trust deed and rules dated 22 March 1985. The term “total and permanent disablement” is defined in rule 1.2 of the first schedule to the deed in the following terms:

““total and permanent disablement” means disablement of a Member resulting from an illness accident or injury to the Member which commenced or occurred whilst a Member and as a result of which:
(a) the Member has been precluded for a period of six consecutive months after the date of occurrence of such event from following any occupation for which the Member is reasonably suited by education training or experience, and
(b) the Member will, in the opinion of the Trustee after consideration of medical evidence satisfactory to it, continue to be so disabled to such an extent as to render the Member unlikely ever again to resume work in or attend to any such occupation;
and “totally and permanently disabled” shall have a corresponding meaning PROVIDED THAT where at any time all or part of the benefit payable in the event of total and permanent disablement is insured with an insurance company, the term “total and permanent disablement” shall bear the meaning ascribed to it in the relevant policy in lieu of the above definition;”

5 The policy of insurance affected by the trustee with the insurer relating to members of the fund contained a definition of the term “total and permanent disablement”. Relevantly, it is in these terms:

“”Total and Permanent disablement” means a Member
…
(b) Having been absent from work through injury or illness for an initial period of six (6) consecutive months and in The Victory’s opinion being incapacitated to such an extent as to render the Member 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”.

6 It was common ground that if the Plaintiff became totally and permanently disabled within the policy definition the benefits which would be payable to him under the fund, and for which insurance cover was provided under the policy, is the sum of $31,200.00.

7 It was accepted on both sides that the court should approach the matter in accordance with the principles stated in Edwards v The Hunter Valley Co-op Dairy Co Limited (1992) 7 ANZIC 61-113 at p 77,536. There it was held that in forming an opinion relevant to its liability under a contract of insurance the insurer is obliged to act reasonably in considering and determining the matter. It also held that unless the view taken by the insurer can be shown to have been unreasonable on the material then before it, the decision of the insurer cannot be successfully attacked on this ground. (See also e.g. Heitman v Guardian Assurance Co. (1992) 7 ANZIC 77-483).

8 It was also accepted that the insurer is not required to undertake the detailed consideration required of a court hearing (Chammas v Harwood Nominees (1993) 7 ANZIC 61-175 at p 78,001); and that the insurer’s statement of reasons for declining a claim should be understood as a practical document intended to inform the claimant of the basis of the decision rather than detailed reasons with reference to the evidence relied upon comparable to a judgment of a court or tribunal. The reality must be recognised “… that the reasons of an administrative decision-maker are meant to inform and not to be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed”. (Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at p 272).

Background

9 The following are matters of common ground and, in any event, are established on the evidence.

10 The Plaintiff was born on 17 March 1965 and on 24 January 1990 became a member of the fund. On 22 June 1992 he commenced employment with Peter Furnivale at a sawmill at Bowraville, New South Wales. G & M Langham Pty Limited (the employer) became his employer when it purchased the sawmill on 23 January 1995.

11 On 23 October 1995 the Plaintiff reported to the employer that he had sustained an injury to his left shoulder. He undertook light duties as a Canadian saw operator until 5 December 1995. By reason of absence from work and holiday closure of the mill he did not resume these light duties until 22 January 1996. He worked intermittently until 7 June 1996 when he ceased work. He has not returned to work since.

The decision of 22 July 1997

12 On about 4 March 1997 the Plaintiff applied to the trustee for the insured benefit. The application and related material were sent to the insurer for its consideration.

13 The evidence to which the insurer had regard for the purpose of considering whether it should form the opinion referred to in cl (b) of the policy definition comprised:

(a) The Plaintiff’s application for payment of benefit – disablement form dated 4 March 1997.

(b) Employer’s statement dated 26 March 1997 including its letters to the workers’ compensation insurer of 18 December 1995, 9 January, 22 January, and 14 June 1996 which contained information as to the Plaintiff’s duties and periods of work, and the circumstances in which he ceased work.

(c) Medical report of Dr P Foster dated 18 March 1997.

(d) Letter from the Plaintiff to the fund dated 29 April 1997.

(e) Screen prints of the Plaintiff’s record.

(f) Return to Work Plan of Northern Rehabilitation Management dated 22 April 1996.

(g) Plaintiff’s birth certificate and driver’s licence.

(h) Report of Dr Jeremy Power dated 1 July 1997.

14 In summary, the lay evidence was as follows:

15 On 23 October 1995 whilst working as a mill hand employed by G & M Langham Pty Limited at its sawmill at Bowraville the Plaintiff experienced pain in his left shoulder and elbow which caused him to cease work. His work was manual, and included tailing out, stacking, sorting and sawing timber, cleaning, and operating a Canadian saw and a docking saw. The physical requirements of the job included lifting and carrying loads sometimes in excess of 20 kilograms, and reaching above his shoulders.

16 He was examined by Dr P Foster on 26 October 1995, and returned to work on light duties shortly thereafter. He carried out light duties as a Canadian saw operator and sorting timber until 4 December 1995. Canadian saw work requires minimal lifting and is mainly press button control work. He was absent from work between 5 December 1995 until the reopening of the sawmill on 22 January 1996. On that day the Plaintiff worked at light duties for about three hours during which his shoulder was aching. As there were no suitable duties for him, he ceased work and went home.

17 On 30 April 1996 the Plaintiff returned to work in accordance with the recommendations of the work plan prepared by Northern Rehabilitation Management dated 22 April 1996. His duties included operating a Canadian saw. He was restricted from doing repetitive work using the left hand or arm, lifting over five kilograms with the left arm, and working above shoulder height. Thereafter he worked on the Canadian saw, end plating, and sweeping. He did not work above shoulder height or do any heavy lifting.

18 The Plaintiff ceased work on 7 June 1996 and obtained a medical certificate stating he was unfit for any duties until 30 June 1996. On 10 July 1996 he terminated his employment.

19 In his application for payment of benefit dated 4 March 1997 the Plaintiff stated that he had been a sawmill hand for four and a half years, and described the duties to which I have referred. He detailed occupations performed since he finished school as “Gosford Electrical”, “Tidy Car”, and “Radvara”. He described his level of education as “Year 10 certificate”, and stated he had no other skills or trade apprenticeship qualifications.

20 Relevantly Dr Foster’s report of 18 March 1997 contained the following questions and answers:

“9. At the current time can the claimant do his/her normal job	No
…
If “NO” (a) Which work duties is the claimant unable to do?	No manual work in mill
10 If you do NOT expect the claimant to EVER return to his/her normal work -
(a) Do you think he/she will EVER be able to do a job for which he/she is reasonably fitted by education, training or experience	At present level of education and training only suited to manual labour. Retraining possible
(b) Please list examples of jobs which in your view would be appropriate	Office, desk work. Bar work. Storeman. Shop worker
11. If you think that the claimant will NEVER return to any type of work, please give detailed reasons for this”.

21 In his report of 1 July 1997 Dr Power noted that the Plaintiff “… left school in 1980 and was employed as a car detailer for the next 7½ years. He commenced working as a mill hand in 1990 and worked in pretty well every position over the next few years”. After noting the Plaintiff’s symptoms which included experiencing left shoulder pain every day, neck pain, and limitation of use of his left arm, Dr Power expressed the view that as at 23 October 1995 he was probably suffering from a sprained left shoulder due to the repetitive nature of his duties. Relevantly, the report concluded with the passage quoted in the insurer’s letter of 22 July 1997 (para 22). He found no organic cause for the symptoms. He believed that the Plaintiff was unfit for further employment in the sawmill, but presently fit for employment in alternative industries involving manual labour. He said:

“Working as such on light duties if available would be appropriate, with a return to full duties anticipated over a two month period”.

22 By letter dated 22 July 1997 the insurer informed the trustee of its decision to decline the claim. It says:

“We refer to the above claim and advise that after carefully reviewing all available medical information, we are unable to deem Mr Weber totally and permanently disabled within the policy conditions.
To ensure an accurate assessment was made, we arranged for Mr Weber to be medically examined by an independent Surgeon, Dr J Power on 1st July 1997. In his Report dated 1st July 1997, Dr Power states:
“Investigations have in the main proved negative, and minor wear and tear changes in his cervical spine as demonstrated radiologically do not appear to be contributing to his ongoing symptoms”.
“In short, I cannot explain why his symptoms have apparently persisted. Certainly no organic cause has been demonstrated”.
Dr Power further states:
“Given an apparent high persisting illness conviction, I believe it is unrealistic to anticipate this man’s further employment in a saw mill. However, I believe he is presently fit for employment in alternative industries. Given his vocational background and present location, job opportunities would be restricted largely to Shire Council labouring, abattoir or farm work. Working as such on light duties if available would be appropriate, with a return to full duties anticipated over a two month period”.
Therefore, as you would appreciate, medical evidence suggests Mr Weber is fit to return to unskilled employment. Considering this fact together with his employment history, which includes seven years as a car detailer, we do not feel Mr Weber can be deemed totally and permanently disabled and therefore his claim is declined.
Attached is all medical evidence for your perusal and should you have any queries, please contact this office”.

23 By its letter dated 1 December 1997 the trustee advised the Plaintiff’s solicitors of the insurer’s decision and of the contents of the letter to the trustee of 22 July 1997. The trustee informed the solicitors that it had reviewed the insurer’s decision and agreed with it.

24 Mr D A Baker, of counsel, appeared for the Plaintiff. He submitted that the decision was flawed on the grounds that, firstly, it evidences an unreasonable failure to consider Dr Foster’s report and, secondly, that it was based on a finding that the Plaintiff was fit for work as a car detailer, a finding which was not open on the evidence and represented a basic misunderstanding of it.

25 Ms V M Health, of counsel, appeared for the Defendants. She submitted that is was reasonably open to the insurer to decline the claim on the basis that the medical evidence suggested the Plaintiff was fit for unskilled employment. It was also put that the letter indicated account had been taken of the Plaintiff’s employment history and experience which included some years of work as a car detailer, and that it could not reasonably be understood to state a finding that the Plaintiff was fit to work as a car detailer.

26 The insurer stated that all available material information was carefully reviewed. When regard is had to the content of Dr Foster’s report and to the report of Dr Power it would not be reasonable to infer that it had been ignored or not taken into account merely because the letter contains no specific reference to it.

27 The answers given by Dr Foster to questions 9 and 10 in his report are not free from ambiguity, a careful reading of which shows that his opinion of the Plaintiff’s incapacity is open to different interpretations. From the answer to 10(a) it was reasonably open to the insurer to have concluded that had Dr Foster thought that the Plaintiff would not ever be able to do a job for which he was reasonably fitted by education, training or experience he would have answered it simply “No”. However, instead, his answer included the statement “At present level of education and training only suited to manual labour”. Upon reading this answer in context it would not be unreasonable to conclude that the opinion was that, although the Plaintiff was unable to do manual work in the mill, he remained able to do similar work in the future.

28 In forming its opinion the insurer was required to make a reasonable assessment of the whole of the evidence before it. In my view it was open to find no apparent inconsistency between the views of Dr Foster and Dr Power in reaching the conclusion that the medical evidence suggested that the Plaintiff was fit to return to unskilled employment. Neither, in terms, excluded him from future unskilled employment. Alternatively, it was a matter for the insurer to decide what weight should be given to each medical report. In the circumstances and with regard to the content of each, it has not been shown that it would have been unreasonable to attach greater weight to Dr Power’s report than to Dr Foster’s, and I reject Mr Baker’s submission that the letter evidences an unreasonable failure to properly consider Dr Foster’s report.

29 Furthermore, the letter is incapable of being reasonably understood to assert that the Plaintiff was fit to work as a car detailer or that the decision was based on an erroneous understanding of the medical evidence that he was. Read in context, the reference to his years as a car detailer says no more than that it was a part of the Plaintiff’s employment history and a factor which had been considered.

30 On my assessment of the material before it, I am not persuaded that the insurer’s decision and refusal to form the necessary opinion as advised in the letter of 22 July 1997 was unreasonable and, accordingly, the Plaintiff’s challenge to it fails.

The decision of 14 April 2003

31 By the application of payment for benefit-disablement dated 13 March 2003 the Plaintiff again applied to the trustee for payment of the benefit. The application and related material was sent by the trustee to the insurer for its decision on 24 March 2003. It comprised the following:

“(a) the Plaintiff’s Application for Payment of Benefit Form – Disablement dated 13 March 2003;
(b) Confidential Medical Report of Dr Thandar Htwe dated 14 March 2003;
(c) medical report of Mr K M Fuller dated 20 October 1999;
(d) medical report of Mr S Nade dated 9 March 1998;
(e) medical report of Dr P R T Bloomfield dated 10 January 1997;
(f) medical report of Dr P Foster dated 23 October 1996;
(g) medical report of Dr P Foster dated 19 May 1998;
(h) radiological report of Dr R Welshman dated 25 May 2000;
(i) radiological report of Dr F Newman dated 8 December 1999;
(j) radiological report of Dr D Lingard dated 30 April 1997;
(k) radiological report of Dr P Buchanan dated 8 May 1997;
(l) radiological report of Dr P MacIntosh dated 7 March 1996;
(m) radiological report of Dr F Newman dated 9 January 1996;
(n) the Plaintiff’s group certificates for the financial years ending 30 June 1995, 1996 and 1997; and
(o) screen prints of the Plaintiff’s record”.

32 The insurer considered this information and all of the material previously provided by the trustee in reaching its decision to decline the application. By letter dated 14 April 2003 the insurer informed the trustee of its decision in the following terms:

“Please be advised we have reviewed your most recent letter dated 24 March 2003 with attachments and have determined that our original decision to decline this claim remains unchanged.

Firstly, at time of our original assessment in July 1997 medical opinion from Dr Power, surgeon, stated that although Mr Weber would be unfit to work in a saw mill, he would be capable of working in alternate light unskilled work. As previously noted, Mr Weber worked for seven years as a car detailer and this is believed to be within his physical capabilities.
Secondly, when reviewing the additional medical evidence we note the following comments:
Dr K Fuller states in his report dated 20 October 1999 that:
“Mr Weber does, I believe, have permanent partial incapacity for work. I regard him as permanently unfit for any work that involves heavy or repetitive use of his left upper limb. He is permanently unfit for any work that involves use of his left arm at or above shoulder level. He is permanently unfit, in my opinion, for the type of employment he was doing whilst he worked for Graham Langham Sawmill”.
Dr S Nade states in his report dated 9 March 1998 that:
“Mr Weber has limited education and most of his working life has been a labourer. At present he is unable to work in any job which requires him to use his left upper limb. If he could be found which is right handed only, and suitable for his limited skills and qualifications, then he could possibly work in such a role. However the likelihood of such a position being available in the region where he lives is likely to be remote”.
Therefore when considering all medial information in its totality, it seems Mr Weber may not be fit to return to heavy manual work as performed in the Saw Mill. However, medical opinion is that Mr Weber is capable of working in other unskilled light work such as the duties he was previously performing as a car detailer.
There continues to be no medical opinion stating Mr Weber is totally and permanently disabled and accordingly our decision to decline this claim remains unchanged”.

33 In addition to the material in relation to the first claim, the evidence before the insurer was, in summary, as follows:

34 Dr P R T Bloomfield in his report dated 10 January 1997 stated his belief that the Plaintiff may be suffering from left shoulder instability and subluxation with a possible labral tear. He sought details of the Plaintiff’s earlier investigations, including radiological reports. He felt there was more to the Plaintiff’s problem than just his left shoulder.

35 Relevantly, the report of Dr Lingard of 30 April 1997 indicated a probable small protrusion of the C4/5 invertebral disc.

36 Dr Nade in his report of 9 March 1998 referred to the Plaintiff’s occupational history as follows:

“Mr Weber left school in about 1982 at fourth form. He then did some jobs labouring and painting. He worked for Gosford Electrical doing switchboard wiring. He was then employed as a car detailer for Tidy Car for seven and a half years. After that he moved to the north coast of New South Wales. He had been employed as a sawmill labourer for five and a half years, approximately one year with his first employer, and four and a half years with G & M Langham Pty Ltd at Bowraville Sawmill”.

37 As to the Plaintiff’s fitness for work the report said:

“Mr Weber has limited education and most of his working life has been a labourer (sic). At present he is unable to work in any job which requires him to use his left upper limb. If he could be found (sic) which is right handed only, and suitable for his limited skills and qualifications, then he could possibly work in such a role. However the likelihood of such a position being available in the region where he lives is likely to be remote”.

38 The report concluded with the opinion that the Plaintiff had impairment of function of his left shoulder. It was described as a current impairment but Dr Nade was unable to say whether or not it would remain permanent.

39 Dr Foster’s report of 23 October 1996 records that the Plaintiff stopped work because he was unable to find any position at the mill that was suitable. He said “… He is a man of simple means and can only work as a labourer and I wonder if there is anything we can do to get this fellow back into the workforce”. He thought his major problems related to his left shoulder.

40 Dr Foster’s report of 19 May 1998 records that since first seeing the Plaintiff in October 1995 he has had an ongoing problem with arm, shoulder, and neck pain as a consequence of his original injury. He considered it was a difficult diagnostic problem for which all forms of therapy had failed. He noted that since September 1996 he has continued with major problems relating to his left arm, shoulder and neck and remains unfit for employment.

The report included the following:

“He had no problems prior to taking up this employment and has not been able to work since. He is a man of limited education and depends enormously on his ability to work physically for future employment and whilst he is so severely incapacitated I do feel he has no further employment opportunities.
Whilst I previously estimated his impairment to be at 25% I do feel that this figure is probably higher considering his only asset is his ability to do manual labour. As to the exact percentage I am not really prepared to make this judgment. I do feel this should be made by someone who is specialised as an occupational physician”.

41 Dr Fuller’s report of 20 October 1999 noted the Plaintiff’s present complaints included that heavy use of the left arm increased shoulder and back pain, and that he was unable to work with his left arm above shoulder level. His opinion included the following:

“I believe that Mr Weber’s complaints with regard to his neck and left upper limb are due to small cervical disc protrusion at the C4/C5 level and also to rotator cuff tendonitis affecting the left shoulder. It is possible there has been a rotator cuff tear sustained as a result of Mr Weber’s employment with Graham Langham Sawmill.
…
I think the probability is now that the present neck and left upper limb complaints and disabilities are permanent.
…
Mr Weber does, I believe, have permanent partial incapacity for work. I regard him as permanently unfit for any work that involves heavy or repetitive use of his left upper limb. He is permanently unfit for any work that involves heavy lifting and unfit permanently for any employment that involves use of his left arm at or above shoulder level. He is permanently unfit, in my opinion, for the type of employment he was doing whilst he worked for Graham Langham Sawmill”.

42 Dr Htwe’s report of 14 March 2003 included the following questions and answers:

“9. At the current time, can the claimant do his/her normal job?	No
…
If “No” which work duties is the claimant unable to perform?
Permanently unfit for any work that involves heavy lifting and unfit permanently for any employment that involves use of left arm at or above shoulder (as assessment by Dr K Foster Oct 20, 1999)
10. If you do NOT expect the claimant to EVER return to his/her normal work do you think he/she will EVER be able to do a job for which he/she is reasonably fitted by education, training or experience?
If “Yes” please list examples of jobs which in your opinion would be appropriate:
If “No” please give detailed reasons:
Lack special skills apart from working as a labourer”

43 The Plaintiff’s application of 13 March 2003 contained information substantially similar to that in his application of 4 March 1997. He advised that since 23 July 1999 he had been entitled to a workers’ compensation disability pension. He described his work with Gosford Electrical between 1 June 1981 and 15 March 1982 as spray painting, and with Tidy Car between 13 October 1982 and 1989 as car cleaning.

44 Mr Baker submitted that in light of all of the information before it the insurer’s decision was unreasonable on a number of grounds. Firstly, it evidences an unreasonable failure to take into account the reports of Dr Foster. Dr Foster’s description in his report of 23 October 1996 of the Plaintiff as a man of simple means who could only work as a labourer when read with the answers to questions 9 and 10 in his report of 18 March 1997 indicate that the Plaintiff’s education, training, or experience enabled him to work only as a labourer, an occupation for which he was unfit. To enable him to work in some other occupation would require retraining. It was put that this opinion was given unambiguous emphasis in the report of 19 May 1998 in the passages quoted above (para 40).

45 Secondly, Mr Baker put that all of the medical information, when duly considered and evaluated, provides no support for the insurer’s conclusion that the Plaintiff “… is capable of working in other unskilled light work such as the duties he was previously performing as a car detailer”, or that car detailing was, in fact, light, unskilled work.

46 Mr Baker also submitted that there was no evidence whatsoever to support the belief that it was within the Plaintiff’s physical capabilities to work as a car detailer. If such belief was founded on Dr Power’s opinion in his report of 1 July 1997 it could only be the product of such a grave misunderstanding of what was said as to render the decision unreasonable.

47 For the Defendants, Ms Heath submitted, in short, that the decision to decline the claim was one reasonably open on the evidence. In particular, it was submitted that the finding that the Plaintiff was capable of performing car detailing was not inconsistent with the evidence as to his capacities within the range of restrictions considered. She further submitted that the work of car washing and cleaning is a matter of general knowledge for which no expert evidence is required and that, in any event, if the finding was in error it was not essential to the decision and did not render it unreasonable.

48 The evidence in the Plaintiff’s applications, the employer’s statements, and the return to work plan demonstrates that the type of work for which the Plaintiff was suited by reason of his education, training and experience was unskilled labour using both arms, which was repetitive work which required the ability to carry and lift heavy loads, sometimes above shoulder height. The medical evidence established to a high degree of probability that with the loss of full use of his left arm the Plaintiff was permanently unfit for work of this kind.

49 Dr Fuller’s opinion was that the Plaintiff was permanently unfit for the type of employment he was doing whilst he worked at the sawmill. That was the very type of work he was suited to perform by reason of education, training or experience. Dr Nade’s opinion left no room for doubt. He noted the Plaintiff was qualified to work as a labourer. His opinion was that he was unable to work in any job which required use of his left upper limb, and was fit only to work in some jobs which were “… right handed only”. A reasonable reader would understand him to say that the Plaintiff was incapable of performing the type of work for which he was suited.

50 The medical opinions, including those of Dr Foster and Dr Htwe, are in substantial agreement that the Plaintiff is unable to do repetitive work involving the use of the left arm above the shoulder of the kind he was qualified to do.

51 The thrust of this evidence is that the Plaintiff is effectively unemployable as an unskilled labourer, and is thus unable to follow the occupation for which he is suited. He is not reasonably qualified for any other occupation. It shows that his injury has rendered the Plaintiff totally disabled for work as a labourer. Although he may be fit for light work involving only the use of his right arm, that is not what he is qualified to do.

52 In its evaluation of the evidence the insurer was required to address the question whether the Plaintiff had the capacity ever again to work in an occupation which he is reasonably capable of performing by reason of education, training, or experience. In my opinion the insurer’s decision to decline the claim clearly reflects a failure to take into account that his limited education, training and experience was insufficient for any work of the kind which the medical evidence suggested he was physically capable of carrying out. The decision also reflects a failure to adequately consider whether, in the real world, work which required only the use of one arm and restricted use of the other was reasonably available for an unskilled labourer such as the Plaintiff. (cf e.g. Alessi v National Mutual Life Association of Australia Limited (1982) 2 ANZIC 60-481 at p 77,725-727; Muinos v Johnson & Johnson Retirement Benefits Limited, (5 December 1996, BC9605916) at pp 7, 8).

53 These failures are sufficient to hold that the decision was unreasonable. As a comment, had the decision been the verdict of a jury it would have been branded as perverse.

54 Furthermore, the terms of the letter give strong support for the finding, which I make, that the insurer’s consideration of the question whether or not the evidence demonstrated that the risk covered by the policy had, in fact occurred was distorted by its groundless belief that the Plaintiff was fit to work as a car detailer. It is simply incorrect to represent, as the letter did, that the medical opinion was that the Plaintiff was capable of working in unskilled work such as the duties he was previously performing as a car detailer. In particular, it has no support from Dr Power’s report. As earlier observed (para 29) his reference to the Plaintiff’s work as a car detailer occurs merely as part of the employment history. His report could not be reasonably understood as suggesting the Plaintiff had a present capacity to do the same, or similar, work. I reject Ms Heath’s submission that this finding was not essential to the decision. Having regard to the whole of the evidence before the insurer, the only rational explanation for the decision is that this finding was central to it.

55 For these reasons I find that the insurer’s discretion was not exercised upon a real and genuine consideration of the range of material before it and, therefore, the failure to form the relevant opinion was unreasonable. Accordingly, I uphold the Plaintiff’s challenge to the decision of 14 April 2003 and hold that the decision is invalid.

The decision of 7 November 2003

56 By letter of 27 October 2003 to the trustee the Plaintiff’s solicitors applied for reconsideration of his claim for total and permanent disablement benefits, and interest. The letter and the Plaintiff’s statements of 7 August and 21 October 2003 were sent by the trustee to the insurer on 30 October 2003.

57 The insurer considered this information and all of the material previously provided by the trustee in reaching its decision to decline the application. By letter dated 7 November 2003 the insurer informed the trustee of its decision in the following terms:

“We wish to advise that we have reviewed the details of this claim and on the totality of all the evidence we are unable to conclude that the member is totally and permanently disabled in line with the terms and conditions of this policy. Therefore, our decision to decline this claim remains unchanged”.

58 The decision maker was one Mr John Kalfas, a senior consultant of the insurer. In his affidavit of 30 November 2004 he explained the decision thus:

“9. On all of the evidence then received by the Second Defendant in respect of the Claim I did not form the opinion that the Plaintiff was TPD in accordance with the definition in the insurance contract. While taking into account the Plaintiff’s subjective view of the limitations on his capacity for work, I noted the restrictions for which he had been medically assessed were ‘no heavy lifting’ and ‘no use of the left arm at or above the shoulder’ and I considered on balance that all the evidence, particularly the medical opinion and radiological evidence, did not establish that the Plaintiff was unable ever to engage in work which he was reasonably capable of performing having regard to his experience as an unskilled manual worker. I also considered that the evidence established the Plaintiff could do light manual work and that he was reasonably qualified for that type of work by his past employment including car detailing”.

59 In addition to the material in relation to the first and second claims, the evidence before the insurer was, relevantly, as follows:

60 The Plaintiff’s statement of 7 August 2003 in which he said:

“6. I then gained employment with Tidy Car which was car detailing business and performed this work for seven years. My role was primarily to wash, wax, dry and vacuum to (sic) motor vehicles as well as other detailing and cleaning work. This type of work required quite a bit of heavy repetitive work involving both my left and right arms. I could not have performed the work using only my right dominant arm”.
…
19. My symptoms have remained the same since approximately 1996, and I have constant pain in the outer aspect of my left shoulder which goes up into my neck and down into my arm and forearm.
20. The pain is constant which is made worse by any activity using my left arm, even very minor repetitive work.
…
28. I attempt to avoid driving a motor vehicle because when I turn my neck and leave my left arm on the steering wheel for a length of time, it causes me a lot of pain. As a result my wife usually drives if we travel any distance.
…
31. I have been a labourer all my life except for car detailing and the occasional spray painting. I would have difficulties performing car detailing at present because you have to use your left arm as well as your right arm as you need to work very fast. I would have difficulty in spray paining (sic) because you need to use your left hand to move ladders, sheets and other equipment whilst you are paining (sic) with your right arm”.

61 In his statement of 21 October 2003 the Plaintiff gave details of his education, training and experience. He said that he was unable to do office and desk work by reason of his lack of experience and limited education. He said he had reservations about bar work because it requires staff to lift and carry racks of glasses, cartons of beer and spirits, and the stocking of shelves and performance of repetitive work using both right and left arms. He said that the same would apply to the position of a storeman or doing shop work. He also said:

“7. I also would not be able to perform farm work on a full time basis because of the physical requirements of mending fences, lifting bales of hay, moving stock, digging and other heavy work requiring the use of my left and right arms and neck. I have lived on a farm as stated in my previous statement and know that it is quite hard work”.

62 Mr Baker submitted that the decision was unreasonable in that, in addition to the grounds relied upon for the challenge to the decision of 14 April 2003, it is apparent that the insurer ignored, or gave inadequate consideration to, the Plaintiff’s statements as to the limited type of work he was reasonably capable of performing by reason of education, training or experience, and as to the nature of the duties required of car detailers, bar workers, storeman, or farm workers, and to the medical evidence which clearly demonstrated his inability to perform such duties. It was also put that implicit in the insurer’s decision is that the refusal to form the opinion was based upon the erroneous belief which founded the second decision, namely that the Plaintiff was capable of performing duties of the kind required of a car detailer.

63 Ms Heath’s submission in effect built upon the submissions made in support of the reasonableness of the decision of 14 April 2003. It was put that the additional evidence in the Plaintiff’s statements as to his education, training and experience did not compel the insurer to form the relevant opinion, and thus it could not be said that the decision was unreasonable.

64 In my opinion the evidence requires acceptance of Mr Baker’s submissions for the reasons given for my conclusion that the decision of 14 April 2003 was unreasonable. Furthermore, the Plaintiff’s statements, uncontradicted, provided additional evidence which demonstrated that the decision was not reasonably open to a person who had given fair and genuine consideration to the material before him. Further, in my opinion, a rational consideration of the significance of the additional evidence would have inevitably led to the formation of the relevant opinion under cl (b) of the definition in the policy with the result that the claim should have been accepted.

65 Accordingly, I also uphold the Plaintiff’s challenge to the insurer’s decision of 7 November 2003, and hold that the decision is invalid.

66 Had the insurer formed the relevant opinion in response to the Plaintiff’s application of 13 March 2003 it may be expected that it would have been acted upon by the trustee with the result that the benefit would have been paid, so that the Plaintiff would have had no need to make the application of 27 October 2003 to the trustee.

67 For the above reasons the Plaintiff is entitled to a declaration that the decisions of 14 April and 7 November 2003 are invalid. However, both parties requested the opportunity to make submissions as to the form of any final relief or orders after consideration of my reasons for judgment. The question of costs is also outstanding. In the circumstances it is appropriate that I direct the parties to make arrangements with my Associate by 25 February 2005 for the re-listing of the matter.

**********