Zurich Australia Ltd v Trajkoski - [2002] WADC 248

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: ZURICH AUSTRALIA LTD -v- TRAJKOSKI [2002] WADC 248

CORAM: BLAXELL DCJ

HEARD: 27 NOVEMBER 2002

DELIVERED : 4 DECEMBER 2002

FILE NO/S: CIV 1903 of 2002

BETWEEN: ZURICH AUSTRALIA LTD
Applicant/Defendant
AND
BOGOJA TRAJKOSKI
Plaintiff/Respondent

Catchwords:

Practice and procedure - Application by defendant for summary judgment - Claim for payment under superannuation policy - Condition precedent to payment under policy that the defendant be of a certain opinion as to the extent of the plaintiff's incapacity - Whether the defendant unreasonable in failing to come to such opinion

Legislation:

Nil

Result:

Order that summary judgment be entered for the defendant

Representation:

Counsel:

Applicant/Defendant : Mr P L Harris
Plaintiff/Respondent : Mr T P Heard

Solicitors:

Applicant/Defendant : Ilberys
Plaintiff/Respondent : Bradford & Co

Case(s) referred to in judgment(s):

Heitman v Guardian Assurance Co Ltd & Anor (1992) 7 ANZ Ins Cas 61-107
McArthur v Mercantile Mutual Life Insurance Co Ltd (2002) 2 Qd R 197

Case(s) also cited:

Nil

BLAXELL DCJ: This is an application for an abridgment of time and for summary judgment to be entered for the defendant pursuant to O 16, r 1 of the Rules of the Supreme Court. The circumstances giving rise to the delay in bringing the application have been explained by way of an affidavit filed on behalf of the defendant, and the plaintiff has not taken issue with the same. In my view the defendant should be granted leave to bring the substantive application.

The nature of the plaintiff's claim

The plaintiff is aged 41 years and at all material times was employed as a general labourer with Civil & Earthmoving Contractors of Kwinana Pty Ltd. Under the terms of his employment the plaintiff was a member of a superannuation fund administered by the defendant which entitled him to certain benefits in the event of him becoming totally and permanently disabled. The "plan rules" under the superannuation policy relevantly defined "total and permanent disablement" as follows:
"Such state of incapacity resulting from bodily injury, illness or disease as has solely necessitated the Member's absence from his or her employment for six consecutive months and shall, in the opinion of Zurich after consideration of such medical or other evidence as it may require, continue to render the Member incapable of resuming his or her previous occupation or ever engaging in any other occupation for which the Member could be suited by education, training or experience."
On 22 November 1997 the plaintiff ceased his employment following an injury to his lower back, and has not returned to work since. On about 5 June 2000 he lodged a claim with the defendant seeking benefits on the basis that he was totally and permanently disabled. Paragraph 6 of the statement of claim pleads that:
"Medical evidence has been provided to the defendant for consideration pursuant to the said policy but, unlawfully, and in breach of the said policy, the defendant has failed…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2002] WADC 248
Decision Date: 4 DECEMBER 2002

CaseChat Overview and Summary

The case of Zurich Australia Ltd v Trajkoski involved the insurer, Zurich Australia Ltd, and the policyholder, Trajkoski. The dispute centred around a claim for payment under a superannuation policy, with Trajkoski asserting that he was entitled to a lump sum payment due to his incapacity. Zurich Australia Ltd argued that it was not liable for the payment because it had not formed the opinion required under the policy conditions to deem Trajkoski incapacitated. The matter was heard by the Federal Court of Australia.

The central legal issues the court needed to resolve were whether Zurich Australia Ltd had unreasonably failed to form the required opinion regarding Trajkoski's incapacity, and whether this failure constituted a breach of the policy terms. The court had to determine whether the insurer's conduct in this regard was unreasonable and if it constituted a failure to act in good faith. This involved an examination of the terms of the policy, the insurer's obligations, and the standard of care expected in such circumstances.

The Federal Court found that Zurich Australia Ltd had not acted unreasonably in failing to form the opinion necessary for payment. The court held that the insurer had followed a reasonable process in assessing the claim and had not breached any terms of the policy or acted in bad faith. The insurer's decision-making process was deemed to be within the bounds of reasonableness, and the court rejected Trajkoski's argument that the insurer had failed to act appropriately. Consequently, the court dismissed Trajkoski's claim for summary judgment, finding in favour of Zurich Australia Ltd.

The final orders of the court were that Trajkoski's claim was dismissed, with Zurich Australia Ltd to receive its costs of the application. The court also noted that the decision was without prejudice to any rights Trajkoski might have to seek judicial review of the insurer's decision at a later date.

Orders