Assurance et réassurance
In Felix v NULIS Nominees (Australia) Ltd  FCA 596, Stewart J upheld a determination of the Superannuation Complaints Tribunal (Tribunal) that an Insurer's decision to decline a TPD claim on the basis that the Applicant had failed to satisfy either limb of the TPD definition was fair and reasonable.
The decision closely examined the Insurer's reliance on an Earning Capacity Assessment report and other evidence indicating that the Applicant had retained a residual capacity for part-time work, despite being terminated by her employer as a consequence of her injury. The decision diverges from the recent trend by state courts to vitiate decisions of life insurers for failing to take into account the likelihood of a claimant being able to obtain work when considering the second limb of the TPD definition.
The Applicant commenced employment at a call centre on 31 January 2008 and consequently joined the Plum Super Fund (the Fund) whereby she became covered for Total and Permanent Disablement (TPD) under a policy of group life insurance issued by AMP Life Limited (AMPL) to the then Trustee of the Fund.
On 28 March 2008 the Applicant suffered an injury to her right ankle and knee whilst on a journey to work. Thereafter and until 15 January 2010 she attended work on limited basis and presented medical certificates indicating she was unfit for her normal duties. The Applicant last attended work on 15 January 2010 and on 4 February 2010 her employer terminated her employment on the basis that she was unable to fulfil the inherent requirements of her job on a full-time basis.
The Applicant submitted a WorkCover claim. On 24 March 2011 the WorkCover insurer received an Earning Capacity Assessment Report (ECA Report) prepared by an occupational physician and vocational assessor. The ECA Report incorporated a functional assessment, review of medical evidence, a transferable skills analysis, vocational history review and a labour market analysis. The ECA Report identified three suitable work options:
The Applicant submitted a claim for TPD which was declined by AMPL on 14 January and 16 November 2015. The primary grounds for decline were that the Applicant:
did not satisfy the first limb of the definition as she did not suffer from a functionally impairing condition that would have prevented her from performing her usual occupation or a suitable alternative role for at least six months as at 15 July 2010;
did not satisfy the second limb of the definition as there was medical evidence which certified her as fit to perform roles identified in the ECA Report, at least on a part-time basis.
The applicable TPD definition consisted of two limbs and relevantly provided:
A person insured is totally and permanently disabled if he or she is:
Part (a) Unlikely to work
When all of the following apply to the person insured:
The Tribunal considered that that AMPL's decisions to decline the TPD claim were fair and reasonable given the evidence before it.
Specifically in relation to the first limb the Tribunal noted that when the Applicant ceased work on 15 January 2010 she was certified fit to perform part-time work with restrictions. Whilst her employment was terminated on the grounds that she could not fulfil the inherent requirements of her job on a full-time basis, the Tribunal agreed that there was no evidence to suggest that she had a functionally impairing condition that prevented her from being able to perform her usual occupation of call centre operator.
In relation to the second limb, the Tribunal found that as at 15 July 2010 the Applicant had retained a part-time capacity for work for which she was reasonably qualified by her education, training and experience. The Tribunal held that the roles identified in the ECA Report were roles for which the Applicant was reasonably qualified. Accordingly the Tribunal held the Applicant did not satisfy the second limb.
The Applicant appealed the Tribunal's determination arguing that it erred in law by:
Interpreting the TPD definition and finding that the Applicant could not satisfy the first limb of the TPD definition by demonstrating that she had suffered an injury or sickness that stopped her working in her then present occupation continuously for a period of 6 months;
Finding that the relevant date of assessment was 6 months after the Applicant ceased work as opposed to the date of assessment by AMPL. [Note this ground was not pressed further during the appeal];
Determining that the alternative duties she had been certified fit for by her doctors were duties for which she was reasonably qualified by reason of her education, training or experience to perform;
Finding that three employment options identified in the ECA Report were roles for which the Applicant was reasonably qualified. It was arguedthat the authors of that report had applied a transferable skills test rather than identifying roles which the Applicant had been prepared for by virtue of her vocational history;
Failing to take into account the actual likelihood of a person with the injuries and sickness of the Applicant obtaining work in the context of the second limb which required consideration of whether or not the Applicant was 'unlikely ever to be able to work'.
The Court rejected all of the Applicant's pressed grounds of the appeal and upheld the Tribunal's determination.
The Applicant argued that she only needed to succeed in establishing one of her 4 pressed grounds of appeal. However the Court held she needed to establish ground 1 and one of the other grounds.
This ground was the main focus of the Court's analysis.
The Applicant had argued that use of the phrase 'stops… working' implied a construction that she must be stopped from doing the work or job she was engaged in prior to her injury. Further she argued that as her employment was terminated on the basis that she was unable to fulfil the inherent requirements of her job on a full-time basis, the Tribunal erred in finding she did not meet the first limb.
The Court rejected the Applicant's argument that the first limb of the definition required her to be only stopped from working in the job or the work she was engaged in immediately prior to the injury.
The Court noted that in Hannover Life Re of Australasia Ltd v Colella  VSCA 20, the Victorian Court of Appeal was required to interpret a similar first limb TPD provision and held that 'any' and 'unable to do any work' meant being unable to do any job or remunerative work for which the person was otherwise suited.
The Court was not satisfied that a proper construction of the first limb was that the Applicant had to be prevented from doing the job she did prior to her injury.
However the Court noted that even if it was prepared to accept the Applicant's interpretation, the Tribunal had determined that the Applicant did not suffer from a functionally impairing condition that prevented her from working as a call centre operator and there was evidence before the Tribunal that she was fit to work with restrictions as a call centre operator during the six month waiting period.
The Applicant argued that the Tribunal erred in determining that the Applicant was deemed fit by her medical practitioners for alternative duties. The Applicant argued that the alternative duties were not work or duties for which she was reasonably qualified by reason of her ETE.
The Court noted that the Tribunal had in fact cited in its reasons that the alternative duties included the three employment roles identified in the ECA Report. The Court held that it was open for the Tribunal find that it was fair and reasonable for AMPL to have determined the Applicant did not satisfy the second limb. Accordingly no error in law was established.
Further, the Court noted that much of the Applicant's submissions on Ground Three sought to challenge factual findings of the Tribunal rather than any identified error of law. This was outside the ambit of the Court's review jurisdiction.
The Applicant argued that the Tribunal erred in determining that the vocational options identified in the ECA Report were actually roles that she was reasonably qualified for by reason of her ETE. She argued that the ECA Report applied a transferable skills test rather than identifying the Applicant's vocational history and roles she was prepared for by virtue of that history.
Relying on cases like Jones v United Super Pty Ltd  NSWSC 1551, the Applicant argued that the Tribunal erred in concluding that, based on a transferable skills analysis, she was qualified for the roles.
The Court noted that AMPL's definition required that the Applicant be 'qualified' for the roles whereas the TPD definition in Jones required that an Insured be reasonably 'fitted'. The Court noted that the ECA Report identified roles which were wholly congruent with the Applicant's own vocational history and therefore it was open for the Tribunal to find that she did not fulfil the second limb of the TPD definition as she was qualified for those roles.
The Applicant argued that the Tribunal failed to consider as at the date of assessment the likelihood of the Applicant obtaining work within her ETE given the injuries and sicknesses she suffered from.
The Court noted that the ECA Report had also included a labour market analysis which identified that there was a reasonably accessible labour market for the options identified as suitable. Further the Court held that the Tribunal correctly identified that AMPL's TPD definition expressly provided that it was immaterial whether the work, occupation or regularly duties to be performed were on a full time, part-time or any other basis.
The Court observed that the fact that the Applicant has found it difficult to obtain work is not the issue. The Court noted that the policy insures for TPD, not against the unavailability of work, an observation which the Victorian Court of Appeal had made in Collela.
The Tribunal's Decision to affirm AMPL's decision provides an interesting contrast to the reasoning adopted by state Courts when undertaking a 'stage 2 enquiry' in TPD claims.
In respect of the first limb, the circumstances surrounding the Applicant's termination of employment, are often cited by claimants as the basis by which they satisfy the first limb of the TPD definition. The Court drew a distinction between the Applicant being terminated on the basis that she could not perform her role on a full-time basis and the first limb of the TPD definition requiring that an insured must be stopped from doing any occupation or regular duties.
In respect of the second limb, the Court made supportive commentary in favour of the Colella decision. Collela, has stood apart from the recent thread of NSW case law in finding that when assessing the likelihood of an insured person being able to engage in future work, a life insurer is not required to consider the availability of that work.
There has been a divergence between NSW and Victorian Courts regarding the relevant matters a life insurer must take into account when assessing the likelihood of being able to work. NSW Courts (see for example Carroll v United Super) have expressed the view (albeit in obiter) that an insurer must assess likelihood with reference to a claimant's particular circumstances including their location, whilst it remains the position in Victoria that when assessing the likelihood of work, an insurer does not have to take into account the availability of work.
In the current climate, where the public health measures and the consequential economic impact of a pandemic will likely mean that there are less employment opportunities in a range of industries the Courts may be inclined to place greater weight on other factors such as the availability of work when assessing whether an insured person is able to work.
It remains to be seen how the Courts will approach this issue.