Westpac Life Insurance Services Limited(ACN 003 149 157) v Thereze Guirgis
[2015] VSCA 239
•9 September 2015
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2015 0014
| WESTPAC LIFE INSURANCE SERVICES LIMITED (ACN 003 149 157) | Applicant |
| v | |
| THEREZE GUIRGIS | Respondent |
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| JUDGES: | HANSEN, BEACH and KAYE JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 2 September 2015 |
| DATE OF JUDGMENT: | 9 September 2015 |
| MEDIUM NEUTRAL CITATION: | [2015] VSCA 239 |
| JUDGMENT APPEALED FROM: | [2014] VCC 2039 (Judge Dyer) |
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INSURANCE – Insurance policy – Policy of life insurance – Total disability – Duty of disclosure – Misrepresentation – Whether insured breached duty of disclosure – Whether breach of duty of disclosure was fraudulent – Whether misrepresentation was fraudulent – Whether insurer would have entered into the policy if no breach of duty of disclosure and no misrepresentation – Insurance Contracts Act 1984 (Cth), ss 21 and 29.
INSURANCE – Evidence – Advantage enjoyed by trial judge – Standard of proof – Whether judge erred in respect of standard of proof – Briginshaw v Briginshaw (1938) 60 CLR 336 referred to – Evidence Act 2008, s 140.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr C R Hanson | Sparke Helmore |
| For the Respondent | Mr P Bingham | Maurice Blackburn Lawyers |
HANSEN JA
BEACH JA
KAYE JA:
Introduction
In September 2007, Ms Thereze Guirgis, the respondent, took out a policy of insurance with Westpac Life Insurance Services Ltd, the applicant. The policy provided for the payment of a monthly total disability benefit in the event that the respondent suffered total disability within the meaning of the policy. It also provided for the payment of a monthly partial disability benefit, in the event that the respondent became partially disabled within the meaning of the policy.
In October 2011, the respondent made a claim on the policy. In her claim form, the respondent claimed that she had reduced her working hours because she was suffering from fibromyalgia. She also claimed that arm and shoulder pain prevented her from working. Correspondence was then entered into between the parties setting out their various positions in relation to the respondent’s claim as those positions evolved over time. In April 2012, the respondent advised the applicant that the conditions producing, what was by then said to be total disability, had expanded to include ‘depressed mood’.
Between the time of her original claim and April 2012, the applicant made payments in respect of a number of months to the respondent. However, on 20 June 2012, the applicant wrote to the respondent asserting that the respondent had failed to comply with her duty of disclosure under s 21 of the Insurance Contracts Act 1984 (Cth) (‘the Act’), and advising that the applicant ‘has avoided the policy from inception in accordance with s 29(2) of the Act’.
On 14 February 2013, the respondent issued a proceeding in the County Court, claiming that the applicant was, in breach of the policy, not paying the respondent monthly benefits to which she was entitled under the policy. By its defence, the applicant denied liability, pleading (amongst other defences) that the applicant had validly avoided the policy pursuant to s 29(2) of the Act because the respondent had failed to comply with her duty of disclosure and had made misrepresentations to the applicant before the policy was entered into, and that the failure to comply with the duty of disclosure was fraudulent and the misrepresentations were made fraudulently. In addition to denying liability, the applicant counterclaimed in respect of the monthly payments previously made under the policy by the applicant to the respondent.
On 19 December 2014, following an eight day trial, a judge of the County Court gave judgment for the respondent.[1] The judge dismissed the counterclaim, and made an order in the following terms:
The defendant [applicant] indemnify the plaintiff [respondent] in accordance with the terms of an insurance contract made between the plaintiff and the defendant entitled ‘Westpac Income Protection Plus’ and numbered C3032005.
[1]Guirgis v Westpac Life Insurance Services Ltd [2014] VCC 2039 (‘Reasons’).
The applicant seeks leave to appeal against the orders made by the judge on the following grounds:
1.The judge’s finding that at the time she applied for income protection insurance in August 2007 the respondent was neither reckless nor deliberately attempting to conceal from the applicant any relevant medical condition was made in error, being:
(a)against the evidence and the weight of the evidence, as set out in [27 sub-paragraphs formulated by the applicant, one of which sub-paragraphs refers to 16 separate matters, and another of which refers to five separate matters];
(b)contrary to his Honour’s specific findings that, being impressed by the evidence of Dr Gibson and Dr Feletar, he:
·was inclined to prefer their evidence to that of [the respondent] in relation to what she was told in their consultations;
·found, as a matter of probability, that the condition fibromyalgia was mentioned to the respondent by both Dr Gibson and Dr Feletar prior to August 2007.
2.The trial judge misapplied the authority Briginshaw v Briginshaw (1938) 60 CLR 336 by applying a standard of proof intermediate between beyond reasonable doubt and on the balance of probabilities.
3.The finding that the applicant’s underwriter would have issued the insurance policy to the respondent in September 2007 on the same terms had he known of the applicant suffering a fibromyalgia condition:
(a)was contrary to the evidence of the underwriter, who swore he would not have offered insurance in August 2007 had he been aware of the respondent suffering and having suffered fibromyalgia. The underwriter’s evidence in that behalf [sic] was unchallenged in cross-examination and was uncontradicted by other evidence;
(b)incorrectly ascribed to the underwriter knowledge he did not possess, being that Dr Gibson of Cabrini was a specialist rheumatologist.
The relevant provisions of the Act
The respondent’s claim against the applicant was governed by the provisions of the Act. Section 21 of the Act deals with an insured’s duty of disclosure. By s 21(1), an insured has a duty to disclose to the insurer, before the relevant contract of insurance is entered into, every matter that is known to the insured that:
(a) the insured knows to be a matter relevant to the decision of the insurer whether to accept the risk and, if so, on what terms; or
(b) a reasonable person in the circumstances could be expected to know to be a matter so relevant.
Section 26 of the Act deals with certain statements which are said not to be misrepresentations. Section 26 relevantly provides:
(1)Where a statement that was made by a person in connection with a proposed contract of insurance was in fact untrue but was made on the basis of a belief that the person held, being a belief that a reasonable person in the circumstances would have held, the statement shall not be taken to be a misrepresentation.
(2)A statement that was made by a person in connection with a proposed contract of insurance shall not be taken to be a misrepresentation unless the person who made the statement knew, or a reasonable person in the circumstances could be expected to have known, that the statement would have been relevant to the decision of the insurer whether to accept the risk and, if so, on what terms.
Section 29 of the Act governs the rights of an insured and an insurer where there has been a failure to comply with the duty of disclosure or a misrepresentation made before a contract of insurance of the kind entered into between the present parties has been made. Section 29(2) permits the insurer to avoid the contract if the failure to comply with the duty of disclosure by the insured, or the misrepresentation made before the contract was entered into, was fraudulent. However, even in cases of fraudulent failure to comply with the duty of disclosure or fraudulent misrepresentations, the insurer is not able to avoid the contract where the insurer would have entered into the contract even if the insured had not failed to comply with the duty of disclosure or had not made the misrepresentation before the contract was entered into.
The issues in this application/appeal
The central issues in this Court concern the judge’s application of s 29 of the Act. Specifically, the applicant submits that the judge was wrong, on the evidence, to conclude that there was no fraudulent misrepresentation or fraudulent non-disclosure in relation to a diagnosis of fibromyalgia made by at least one medical practitioner who saw the respondent before the policy was issued by the applicant.[2] In support of this submission, the applicant contends that the judge erred in his application of Briginshaw v Briginshaw[3] when dealing with the standard of proof.
[2]At trial, the respondent’s fraudulent non-disclosure and fraudulent misrepresentation case was wider and involved other medical matters in addition to fibromyalgia. However, for reasons which will become clear, involving the width of the applicant’s complaint in respect of its proposed ground 3, the case in relation to fraudulent non-disclosure and misrepresentation in this Court was limited to fibromyalgia, with such other deficiencies in the respondent’s disclosure that were contended for by the applicant being used as a basis to attack the respondent’s honesty and frankness in her dealings with the applicant before the policy issued.
[3](1938) 60 CLR 336 (‘Briginshaw’).
Secondly, the applicant submits that the judge erred in finding that the applicant would have entered into the policy even if the respondent had not failed to comply with the duty of disclosure or had not made misrepresentations before the policy was entered into. Specifically, so far as this submission is concerned, the applicant relies upon the evidence given about the issue and relevance of fibromyalgia, given at trial by the underwriter who wrote the policy back in 2007.
In order to overturn the judgment below and obtain judgment against the respondent, the applicant has to succeed on both issues, namely the fraud issue and also the issue of whether the insurer would have entered into the policy in any event.
The respondent submits the judge did not err on either issue (fraud or entry into the policy in any event). The respondent also seeks to rely upon s 26 of the Act, the relevant parts of which we have set out above, and s 31 of the Act that permits a court to disregard an avoidance of a policy if it would be ‘harsh and unfair not to do so’. While ss 26 and 31 of the Act were raised in the respondent’s reply and defence to counterclaim in the proceeding below, we note that the respondent has not filed any notice of contention in this Court in relation to those issues.
The representations and disclosures made by the respondent to the applicant
Before the policy was issued, the respondent was required by the applicant to complete a ‘personal statement’. On 3 August 2007, the respondent completed the relevant personal statement (‘the personal statement’). The personal statement was a lengthy form that sought answers to a number of questions. It also contained a declaration, signed by the respondent, in the following terms:
I declare that I have read and understood the ‘Duty of Disclosure’ in Section A and declare that I have disclosed on this form, all matters which are required of me.
At two other places in the personal statement, the respondent signed authorities that authorised the applicant to obtain medical or surgical information from medical practitioners, health care professionals, hospitals or other health service providers, whether named by the respondent or not, who had been consulted by the respondent.
In filling out the personal statement, the respondent disclosed that her usual doctor was Dr Fouad Dawood, whom she had been seeing for five years; and that her last consultation with any doctor was on 25 July 2007 with Dr Andrew Gibson at Cabrini. In respect of the consultation with Dr Gibson, the respondent said that the ‘reasons/diagnosis’ was ‘tiredness’ and ‘the treatment’ was ‘vitamin D and iron supplement’. As to the result of the treatment, the respondent wrote ‘getting better’.
Under the heading ‘health details’, the respondent was asked to the best of her knowledge whether she had ever had, or been told that she had, any of the following:
6. Hernia, intestinal or bowel disorder.
7.Repetitive strain injury (RSI), chronic fatigue syndrome (CFS), occupational overuse syndrome (OOS), tenosynovitis, chronic pain syndrome or fibromyalgia.
8.Arthritis, rheumatism or joint problems (eg shoulder, elbow, wrist, knee or ankle).
13.Mental or nervous disorder, anxiety, stress or depression.
14.Injury, pain, strain or disorder of the spine, back or neck.
19.Any physical impairment (including sight and hearing).
20.Any other illness or injury.
The respondent ticked Yes to question 8 and No to everything else.
The personal statement contained a number of additional questions:
21.Are you under any treatment by any medical practitioner (including any other health care professional, hospital or health service provider) or do you take or have you recently taken, any drugs, pills, tablets or medications (including natural remedies) etc; whether prescribed or not?
22.Have you been advised to, or are contemplating seeking any examination, investigation, advice or treatment (including medical or surgical) in the near future, or do you have any symptoms of ill health or disability?
24.Have you within the last five years, had any other illness, injury, operation, blood test, electrocardiogram, ultrasound, X-ray or any other diagnostic tests or have been advised to have a diagnostic test for any reason?
25.Have you consulted any doctors, hospitals or any other health services provider within the past five years, other than as already stated?
The respondent ticked No to each of these questions, except questions 21 and 24. The respondent ticked Yes to question 21 and wrote ‘vitamin D, iron’. She also ticked Yes to question 24 and wrote ‘full blood test (regular) and ultrasound (tendonitis in shoulder)’.
The form went on to request ‘full details’ of any ‘yes’ answer. In response, the respondent provided further details in respect of her answers to questions 8 and 21 (but not in respect of her answer to question 24). In respect to her answer to question 8, the respondent described the condition as ‘shoulder pain’ that commenced on 1 April 2006. She said the date of her last symptom was August 2006 and the degree of recovery was 100 per cent. As to full details of investigations and treatment (including the name and address of the doctor or hospital), the respondent wrote:
Ultrasound, blood test, painkillers and physiotherapy.
Dr Fouad Dawood.
[Dr Dawood’s address]
With respect to her answer to question 21, the respondent described the ‘condition/test/reason’ as ‘blood test, latest one June 2007’ before giving the following details:
Resolved.
Vitamin D deficiency and iron deficiency.
On supplements and getting better with [increased] milk intake and [increased] vegetables and exposure to sun.
It is now necessary to examine some of the detail of the respondent’s medical history prior to and around the time at which the policy was issued.
The respondent’s background and medical history
At the time she completed the personal statement, the respondent was a 43 year old pharmacist with a Bachelor of Science. She was married with two sons, and worked as a pharmacist. Her general practitioner was Dr F Dawood, whom she first saw in 2003.
At the trial, various medical reports, hospital records, letters of referral and medical notes were tendered. These documents disclosed the following.
On 22 April 2003, the respondent attended the Dandenong Hospital emergency department. The records of that attendance contain a nursing assessment that refers to the respondent suffering from ‘generalised abdominal pain’ since the previous day.
On 14 April 2004, Dr Brindi Rasaratnam, a gastroenterologist, wrote to Dr F Dawood, reporting on a colonoscopy. This letter stated that the respondent had had a normal colonoscopy, and that this added support to an initial diagnosis of chronic irritable bowel syndrome.
In December 2005, Dr F Dawood referred the respondent to a treating specialist, Mr Danny Chan, for dizziness.
In June and July 2006, the respondent complained of pain in her left and right shoulders, neck and jaw. On 13 June 2006, Dr Nofreet Dawood (another general practitioner at Dr F Dawood’s practice)[4] referred the respondent to Dr Marie Feletar, a rheumatologist with rooms in Dandenong. Dr N Darwood’s letter of referral to Dr Feletar recorded a past history of left supraspinatous tendinitis and depression. On 19 June, and after examining the respondent, Dr Feletar wrote back to Dr N Dawood. Dr Feletar’s letter stated that the respondent had right shoulder impingement symptoms, and that medications included Lovan, Voltaren and Panadol. On 13 July 2006, Dr Feletar gave the respondent a left shoulder injection — a right shoulder injection having been given at the earlier consultation.
[4]Dr Nofreet Dawood is the mother of Dr Fouad Dawood.
On 3 October 2006, Dr Little, an allergist, wrote to Dr N Dawood concerning a number of allergy related problems that were then being suffered by the respondent. In this letter, Dr Little recorded that diffuse abdominal tenderness had been noted on an examination performed at that time.
On 22 March 2007, Dr Feletar wrote to Dr N Dawood, saying that she had seen the respondent on 14 March 2007, with problems of fibromyalgia and bilateral shoulder impingement symptoms. The left shoulder was said to show bursitis. The letter concluded:
From the point of view of fibromyalgia she also needs to be a bit more proactive. I have suggested five to 10 mg at night (sic) and that she should start an exercise program. Currently she does very little exercise.
In April 2007, the respondent attended Box Hill Hospital in respect of ultrasound guided cortisone injections in her left and right shoulders.
On 2 May 2007, Dr F Dawood compiled a ‘mental health plan’ relating to the respondent. The mental health plan records that the respondent’s problem at that time was ‘increased stress; dysthymic mood’. The goal recorded in the plan was:
Improve daily function.
Teach mechanisms to cope with stress — long and short term.
By the above decrease the impact of the pain caused by fibromyalgia.
Entrench long term mechanisms for coping with stress.
Prevent relapse.
On the same day (2 May 2007), Dr F Dawood wrote a letter of referral to Dr Stephen Hall, a rheumatologist with rooms at Cabrini. In his referral letter, Dr F Dawood stated that the respondent had previously been referred to a ‘local rheumatologist’ (Dr Feletar) who had diagnosed fibromyalgia and bilateral impingement syndrome of the shoulder joints. Following this referral, the respondent was seen by another rheumatologist at Cabrini, Dr Andrew Gibson (to whom the respondent referred in the personal statement completed for the purpose of obtaining her policy of insurance with the applicant).
Following his examination of the respondent on 13 June 2007, Dr Gibson wrote to Dr N Dawood listing the respondent’s problems as:
1. Central sensitisation syndrome
(a) fibromyalgia
(b) myofascial pain left neck
(c) irritable bowel
2. Rotator cuff disease shoulders (bilateral impingement syndrome).
Dr Gibson noted that the respondent had neck pain, chest wall pain, upper arm muscular pain and diffuse back pain. He recorded in his letter of 13 June that the respondent was ‘concerned that other diagnoses [were] driving her symptoms’. However, he ‘felt’ that the bilateral shoulder impingement and the central sensitisation diagnoses were the most likely explanation, and he said that he would discuss these at the respondent’s next visit.
Dr Gibson next saw the respondent on 25 July 2007. Following this consultation, on 2 August 2007, Dr Gibson again wrote to Dr N Dawood. In this letter, Dr Gibson described the respondent’s problems in the same terms that he had used in his earlier letter, but he added a third problem, recorded as ‘low iron’. Additionally, Dr Gibson noted that a bone scan performed on 20 June 2007 was ‘normal except for mild left sternoclavicular joint arthropathy’.
In his letter of 2 August 2007, Dr Gibson stated that the ‘plan’ was: first, the respondent to see Dr N Dawood for a discussion and investigation of the low iron issue; secondly, to boost the respondent’s vitamin D intake; and thirdly, to have a review in three months to ’talk about a fibromyalgia Cedar Court referral for a multi-disciplinary programme’. The respondent did not see Dr Gibson again before completing the personal statement and the policy being issued (the respondent’s last visit to Dr Gibson was on 24 October 2007, at which time Dr Gibson noted that her ‘general fibromyalgia pains’ were manageable).[5]
[5]This was conveyed by Dr Gibson to Dr N Dawood in a letter dated 29 October 2007.
In addition to seeing Dr Gibson in July 2007, the respondent saw an ophthalmologist. On 5 July 2007, Dr Gin wrote a letter to the referring optometrist at OPSM (copied to Dr F Dawood) in which he noted that the respondent had had three episodes of bilateral simultaneous blurred vision over the last 18 months. Dr Gin expressed the opinion that he thought the respondent’s symptoms were ‘severe enough and persistent enough to warrant migraine medication’.
The trial
At trial, the applicant called no medical evidence challenging the respondent’s level of disability. The respondent (as plaintiff) gave evidence, and called Mr G Tadros (the respondent’s husband), Dr Geoffrey Hogan (a psychiatrist to whom the respondent was referred by Dr F Dawood in December 2011) and Dr F Dawood. The applicant called Dr Feletar, Dr Gibson, Mr T Kinivan (the financial adviser, employed by the applicant, with whom the respondent dealt when seeking to obtain the policy) and Mr I Janjis (the underwriter who considered the respondent’s application for the policy).
In his reasons for judgment, the trial judge set out at some length the relevant evidence of the witnesses who were called.[6] Having read the transcript of the trial, we would adopt the judge’s detailed description of the evidence. It is not necessary to repeat that material here.
[6]Reasons [14]–[103].
For present purposes it is sufficient to note that, notwithstanding extensive and detailed cross-examination of the respondent, the respondent maintained that she completed the personal statement honestly and appropriately. She denied all suggestions of attempting to conceal or minimise her various medical issues, consultations and investigations. Specifically, with respect to the critical issue of fibromyalgia, the respondent gave evidence that, prior to completing the personal statement, no-one had mentioned fibromyalgia to her. In particular, the respondent denied that fibromyalgia was mentioned by her general practitioner, Dr Feletar, or Dr Gibson.
Dr F Dawood was also cross-examined in some detail by the applicant’s counsel. Dr Dawood’s evidence was that at no time prior to the completion of the personal statement was he happy with the diagnosis of fibromyalgia. In substance, Dr F Dawood’s evidence was that there was no discussion of fibromyalgia between him and the respondent prior to her referral in 2008 to another doctor (Dr Littlejohn). This evidence was consistent with Dr F Dawood’s completion of a ‘personal medical attendant’s report’ sent to him, by an agent of the applicant, on 21 August 2007. Dr Dawood completed the personal medical attendant’s report without making any reference to fibromyalgia. In completing this document, Dr Dawood referred only to the respondent’s left shoulder problem and investigations for lethargy. That said, it should be noted, as Dr Dawood conceded in evidence, that the negative answer he gave to the question, ‘Do you know of any other past history, and/or referrals to or treatment by other practitioners?’, was a mistake.
Dr Gibson and Dr Feletar each gave evidence that they had no specific recollection of the consultations they had with the respondent in 2007. Thus, neither of them were able to say that they recollected talking to the respondent about fibromyalgia, or using the word fibromyalgia in discussion with the respondent. However, both Dr Gibson and Dr Feletar gave evidence that, in the light of the content of their various reports, their usual practice would have been to have discussed their diagnoses of fibromyalgia with the respondent.
Mr Kinivan gave evidence of the circumstances in which the personal statement came to be completed by the respondent. In evidence, Mr Kinivan and the respondent gave conflicting descriptions about these matters. It is not necessary to rehearse the details of that conflict in these reasons. It is sufficient to say that the judge preferred Mr Kinivan’s evidence on this issue, and no dispute arises about that in this Court.
Mr Janjis gave evidence of the matters that affected him, as an underwriter, when considering an application for insurance of the kind submitted by the respondent in August 2007. Critical to the applicant’s ground 3 was the evidence of Mr Janjis that fibromyalgia was an extremely debilitating disease, and ‘under our guidelines at the time we wouldn’t have offered insurance’. The substance of Mr Janjis’s evidence was that if the respondent had disclosed the diagnosis of fibromyalgia no insurance policy would have been issued because the ‘guidelines’ would not have permitted it. Mr Janjis was cross-examined extensively about his and the applicant’s failure to produce the guidelines to which he referred. In the end, no guidelines were produced by the applicant at trial, notwithstanding a statement on the various blind underwriting documents completed by Mr Janjis that copies of the relevant portion of the guidelines in existence at the time the policy was originally underwritten were required to be attached to those blind underwriting documents.
The judge’s reasons
While the judge said that he was generally persuaded that Mr Kinivan had a more accurate recollection of events surrounding the completion of the personal statement, he said that he was not persuaded that the respondent behaved in any way during the course of her meetings with Mr Kinivan so as to attempt to mislead or deceive either Mr Kinivan or Westpac as to the state of her medical condition.[7]
[7]Ibid [105].
The judge then said:
Much of this case turned on the state of knowledge held by Ms Guirgis in relation to an alleged pre-existing fibromyalgia condition. Her clear evidence was that she was not actually told she had fibromyalgia until 2008 when she was given this information by Professor Littlejohn.
I was impressed by the evidence of Dr Gibson and Dr Feletar and I am inclined to prefer their evidence to that of Ms Guirgis in relation to what she was told in their consultations. As a matter of probability, I find that the condition fibromyalgia had at least been mentioned to her both by Dr Gibson and Dr Feletar prior to August 2007.
There is a real anomaly in this case. Why would Ms Guirgis wish to mislead the insurer as to the existence of fibromyalgia or indeed irritable bowel syndrome in her application for insurance, and then advise in that same application that she had recently seen Dr Andrew Gibson who is acknowledged to be a specialist rheumatologist practising at the Cabrini Hospital?
…
The facts in this case are that Ms Guirgis did suffer some conditions over the years between 2003 and 2007. Those conditions included irritable bowel syndrome and some degree of neck and shoulder pain. She had had medical treatment. Nevertheless she had continued to work over that period and was in full time employment earning more money than she had previously earned when insured by Westpac in 2004.[8]
[8]Ibid [106]–[110].
As to the issue of whether the respondent had made a fraudulent misrepresentation or fraudulent non-disclosure about the existence of fibromyalgia, the judge said:
I have considerable difficulty in accepting the plaintiff’s evidence that she had not been informed that she was suffering from fibromyalgia prior to seeing Professor Littlejohn in 2008. As against this, if she had been reckless in the provision of information to the insurer or deliberately intending to mislead the insurer as to the existence of such a condition, why would she have made any reference to Dr Gibson, her treating rheumatologist, when providing the personal information to Mr Kinivan?
I am assisted in the resolution of this question by applying the standard of proof that is described in Briginshaw. Had the issue been one requiring satisfaction merely by a tipping of the scales of justice in favour of the party having the onus, I may have been persuaded that, as a matter of probability, Ms Guirgis had knowledge in August 2007 that she had previously suffered, or was suffering, from fibromyalgia. The conflicting reference to Dr Gibson in the personal information provided militates against such a finding and certainly leads me to a conclusion that she was neither reckless nor deliberately attempting to conceal any relevant medical condition from the insurer.
This uncertainty leaves me in some doubt and I could not be comfortably satisfied that she was aware of the fibromyalgia diagnosis in August 2007.[9]
[9]Ibid [122]–[124].
On the question of whether the applicant would have issued the policy in any event if fibromyalgia had been disclosed by the respondent (ground 3), the judge expressed himself as not being satisfied that the evidence of Mr Janjis was sufficient to persuade him that the applicant would not have issued the policy or would have offered it on different terms.[10] In coming to this conclusion, the judge noted that the applicant had not produced the underwriting guidelines upon which Mr Janjis’s evidence was based. Additionally, the judge noted that the respondent had disclosed the existence of Dr Gibson in the personal statement.
[10]Ibid [131].
Fraudulent non-disclosure/misrepresentation (grounds 1 and 2)
Grounds 1 and 2, dealing with the issue of fraudulent non-disclosure and fraudulent misrepresentation, may conveniently be dealt with together. Logically, ground 2 (the applicant’s complaint about the judge’s treatment of the standard of proof) should be dealt with first.
In our view, there is no substance in ground 2. There is no basis for concluding otherwise than that the judge determined that the applicant had failed to satisfy him on the balance of probabilities of any fraudulent non-disclosure or fraudulent misrepresentation by the respondent. The references by the judge to ‘merely by a tipping of the scales’ and not being ‘comfortably satisfied’ follow the language of Dixon J in Briginshaw where his Honour said:
But even where the contest is as to civil rights only, a mere preponderance of evidence, such as would induce a jury to incline to one side rather than the other is frequently insufficient. … This mode of stating the rule for civil issues appears to acknowledge that the degree of satisfaction demanded may depend rather on the nature of the issue. … The truth is that, when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality. … Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal.[11]
[11]Briginshaw (1938) 60 CLR 336, 361–362. See further, s 140(2) of the Evidence Act 2008.
Turning now to ground 1, the applicant submitted that, upon the judge’s acceptance of the evidence of Dr Feletar and Dr Gibson about the discussions they would have had about fibromyalgia, the judge was bound to conclude that the respondent had been told of the diagnosis of fibromyalgia before she completed the personal statement and that her failure to disclose this matter was fraudulent. The applicant’s submission appears to equate the judge’s acceptance that fibromyalgia was ‘mentioned’ by Dr Feletar and Dr Gibson with a finding that the respondent was affirmatively told that she was suffering from fibromyalgia. However, that is not what the judge said. The judge concluded that, while he accepted that fibromyalgia was mentioned by Dr Feletar and Dr Gibson, he could not conclude that the respondent ‘was aware of the fibromyalgia diagnosis in August 2007’.
We see no basis for an attack on this conclusion. The judge had the benefit of seeing and hearing the relevant witnesses, and in particular, of critical importance to the issues in this proceeding, the respondent. The respondent’s evidence was not inherently improbable. It is to be remembered that the respondent’s primary general practitioner (Dr F Dawood) did not think the respondent was suffering from fibromyalgia, and did not discuss such a diagnosis with the respondent. Further, in circumstances where the respondent saw Dr Feletar and Dr Gibson because she was concerned to exclude more serious diagnoses in relation to her then presenting symptoms, it is understandable that, while those doctors may have mentioned the term fibromyalgia in their discussions with her, such a diagnosis may not have registered with the respondent.
There was much to cross-examine the respondent about at trial concerning material that she did and did not include in her personal statement (including the failure to refer to irritable bowel syndrome, various diagnostic procedures and referrals, and attendances upon Dr Rasaratnam, Mr Chan, Dr Little, Dr Gin and Dr Feletar). Consistently with the applicant’s case, counsel for the applicant at trial engaged in such cross-examination. The trial judge had the opportunity to see and hear the respondent’s responses to each issue that the applicant relied (and continues to rely) upon. A different judge hearing this trial may have come to different conclusions about some or all of the respondent’s explanations and evidence. It is sufficient for us to say that, with the very great advantage enjoyed by the trial judge in this case in seeing and hearing the respondent, we are unable to conclude that any error has been shown in the arrival by the judge at the conclusion that he was not satisfied that there was any fraudulent non-disclosure or fraudulent misrepresentation by the respondent in this case.
Entry into the policy in any event (ground 3)
In order to succeed at trial, in addition to establishing a fraudulent misrepresentation or fraudulent non-disclosure, the applicant had to establish that it would not have entered into the policy if the respondent had not failed to comply with the duty of disclosure or had not made the misrepresentation. While Mr Janjis gave evidence that if the respondent had disclosed her fibromyalgia no policy would have issued, this evidence was based upon a written guideline that was never produced. This was a gap in the applicant’s proof. Generously, so far as the applicant was concerned, the judge dealt with it only as a Jones v Dunkel[12] issue. However, in our view, it was more than that: it was in truth, a failure by the applicant to prove the very thing the applicant sought to prove — namely, that its written guidelines would have prevented the writing of the policy. Further, as was first said more than 200 years ago ‘all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted’.[13]
[12](1959) 101 CLR 298.
[13]Blatch v Archer (1774) 1 Cowp 63, 65; 98 ER 969, 970. See further, Swain v Waverley Municipal Council (2005) 220 CLR 517, 525-6 [17] where Gleeson CJ described this proposition as a basic principle of adversarial litigation that accords with common sense and ordinary human experience.
The failure by the applicant to produce the written guidelines upon which it was said the writing of a policy for the respondent would have been refused was a more than sufficient reason for the judge not to be satisfied that the applicant had established that no policy would have been entered into had the respondent disclosed the existence of fibromyalgia.
In addition, we note that when one examines the ‘personal medical attendance’s report’ form that the applicant sent to Dr Dawood before the policy was issued, one does not see any reference on the form to fibromyalgia. The form is a standard medical questionnaire that asks medical practitioners about various medical matters including investigations and treatment in respect of the patient’s respiratory system, cardiovascular system, ‘cancer or tumour of any kind’, ‘central & peripheral nervous system’, mental health and a number of other medical conditions. We would have thought that if fibromyalgia was so serious as to mandate no policy being written, then there would be a question dealing with fibromyalgia amongst the other questions asked of treating medical practitioners. The absence of such a question, coupled with the failure by the applicant to produce the guidelines to which we have referred almost mandated a finding unfavourable to the applicant on the issue of whether it had established that it would not have entered into the policy had fibromyalgia been disclosed by the respondent.
Conclusion
While we have rejected all three of the applicant’s proposed grounds of appeal, we would have held that ground 1 was sufficiently arguable to justify a grant of leave if success on ground 1 alone could have entitled the applicant to any substantive relief from this Court. However, as we have already said, in order for the applicant to obtain substantive relief in this Court, it needed to succeed on ground 3 as well as ground 1. For the reasons we have already given, grounds 2 and 3 are not reasonably arguable. We are not satisfied that they have a real prospect of success. Accordingly, the proposed appeal does not have a real prospect of success.
Leave to appeal must be refused.
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