Wild v FSS Trustee Corporation as trustee of the First State Superannuation Scheme
[2017] NSWSC 237
•10 March 2017
Supreme Court
New South Wales
Medium Neutral Citation: Wild v FSS Trustee Corporation as trustee of the First State Superannuation Scheme [2017] NSWSC 237 Hearing dates: 10 March 2017 Decision date: 10 March 2017 Jurisdiction: Equity Before: Stevenson J Decision: Order for separate determination of issues
Catchwords: PRACTICE AND PROCEDURE – total and permanent disability policy - application by insurer for separate determination of question of whether insurer’s decision to decline indemnity can be vitiated - whether separate determination would twice expose plaintiff to cross-examination - undertaking by insurer not to cross-examine plaintiff if called on hearing of separate question Legislation Cited: Civil Procedure Act 2005 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)Category: Procedural and other rulings Parties: Simon Charles Wild (Plaintiff/Respondent)
FSS Trustee Corporation as trustee of the First State Superannuation Scheme (First Defendant)
MetLife Insurance Ltd (Second Defendant/Applicant)Representation: Counsel:
Solicitors:
A Johnson (Plaintiff/Respondent)
S Robertson (First Defendant)
S J Walsh (Second Defendant/Applicant)
Slater & Gordon (Plaintiff/Respondent)
Thomson Geer (First Defendant)
HWL Ebsworth (Second Defendant/Applicant)
File Number(s): SC 2015/378414
EX TEMPORE Judgment
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Between 1988 and 2011, the plaintiff, Mr Wild, was a member of the New South Wales Police Force. It is common ground that he was discharged on medical grounds on 13 October 2011.
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At all relevant times, Mr Wild was a member of First State Superannuation Scheme and was, assuming otherwise qualified, entitled to total and permanent disability (TPD) benefits under an insurance policy underwritten by the second defendant, MetLife.
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Mr Wild alleges that by reason of his experience in the Police Force, he now suffers from a serious psychological illness in the nature of post-traumatic stress disorder.
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I am informed that there will be no dispute at the hearing that Mr Wild does suffer from such a condition, although no doubt its precise extent and effects will be matters debated at the hearing.
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Mr Wild has made a claim under the policy. On 1 December 2014 MetLife declined the claim. Mr Wild commenced these proceedings on 24 December 2015, seeking declaratory and other relief arising from that circumstance (and some other circumstances not relevant to today's application).
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MetLife calculates that the quantum of the TPD sum insured, assuming Mr Wild were entitled to it, is in the order of $635,000.
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It is common ground that in cases such as this there are two "stages" of inquiry. The first stage is to determine whether, in light of the material available to the insurer at the time the decision was made, its decision to decline indemnity can be vitiated on one or other of the available bases.
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The second stage, only reached if the plaintiff is successful at the first stage, is whether the plaintiff is in fact totally and permanently disabled within the meaning of the policy.
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By notice of motion filed 16 December 2016 MetLife seeks orders to the effect that the first stage be heard separately and before the second stage.
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The reasons proffered as to why the Court should accede to the application are that:
the first stage will be a discrete inquiry focusing on material available to MetLife at the time it made its decision, which inquiry is said to be very likely to be based entirely on documentary material;
such an inquiry is likely to conclude within a day or so of Court hearing time and that the likely costs of the parties for such an inquiry will be in the order of $55,000;
otherwise, the matter will take at least another six days and the costs incurred will be many hundreds of thousands of dollars; and
if the plaintiff fails at the first stage, that will bring an end to the proceedings.
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Although there is clearly substance in these contentions, I hesitated at first to accede to MetLife's application because of my apprehension that there may be some overlap between material relevant to the first and second stages of the inquiry.
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I was particularly concerned about the possibility that, were I to accede to MetLife's application, Mr Wild may have to give evidence and be cross-examined at both stages of the inquiry.
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I was concerned about that prospect as Mr Wild's medical condition appears to be such that to impose upon him the prospect of being cross-examined twice, possibly about some or all of the events leading to his claim, might cause distress to him, exacerbate his condition and otherwise be unjust to him.
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That possibility arose because one of the reasons given by MetLife in declining liability arose from conclusions it stated it drew from surveillance footage showing Mr Wild engaging in various activities at his local surf club and elsewhere.
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In that regard, in its letter declining liability, MetLife referred to a report prepared by Associate Professor Kaplan who has produced a report for MetLife.
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MetLife's letter said:
“A/Prof Kaplan said that on the basis of the new evidence provided to him, there appeared ‘to be and inconsistency between Mr Wild’s behaviour and the clinical environment and outside the clinical environment. There could be a number of explanations for this, including a response to treatment’.
A/Prof Kaplan said that as it appeared that the Member can work at the surf club as a bar assistant without any difficulty and A/Prof Kaplan could see no reason why the Member could not return full time work provided this excluded Police duties. As to whether the Member could return to full time or part time employment now or within the next 21 years, A/Prof Kaplan replied ‘yes’.” [Emphasis added]
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Mr Johnson, who appeared for Mr Wild, said that an issue will arise at the first stage of the inquiry as to whether MetLife acted reasonably or otherwise in accordance with its duty, by failing to investigate what "explanations" there may be for Mr Wild being able to act as is evidently revealed in the surveillance footage.
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Mr Johnson said in that regard, he would wish to adduce evidence from Mr Wild at the first stage of the inquiry to show the materiality of MetLife's alleged failure to carry out those investigations.
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Once Mr Johnson explained those matters, Mr Walsh, who appeared for MetLife, informed me that, were I to accede to MetLife's application and were Mr Wild to give evidence at the hearing of the issues to be decided separately and such evidence be admitted, MetLife would undertake not to cross-examine Mr Wild on that evidence; no matter what it was.
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Mr Robertson, who appeared for the first defendant, informed me that his client is prepared to offer the same undertaking.
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There remains the possibility that other evidence, particularly medical evidence, will be relevant to both stages of the inquiry so that, if Mr Wild succeeds at the first stage, such evidence would have to be adduced twice.
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That, however, appears to me to be a remote possibility and must be balanced against the benefit to the parties, and to other litigants in the Court, to adopt a course which may well save time, costs and Court resources.
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In those circumstances, and only because of the undertakings now proffered by the defendants, I am prepared to make the orders sought in the notice of motion.
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I invite counsel to confer and agree on the short minutes needed to give effect to these reasons.
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I order that the costs of this motion be costs in the cause.
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Decision last updated: 14 March 2017
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