Jones v United Super Pty Limited

1. [1]

   On 16 April 2014, the first defendant United Super Pty Limited, as trustee of the Construction and Building Unions Superannuation Fund (“CBUS”), notified the plaintiff Mr Clinton Jones that, having reviewed all the evidence, including additional information provided since the original claim, it had on 8 April 2014 resolved that he did not satisfy the applicable definition of “totally and permanently disabled” (“TPD”), and that the declinature of his claim previously notified on 3 April 2014 was confirmed. Both those notifications followed decisions of the second defendant Hannover Life Re of Australia Limited (“HLRA”), on 28 January 2014 and 21 March 2014 respectively, that the plaintiff was not “totally and permanently disabled” within the definition contained in the policy by which members of CBUS were insured for, inter alia, TPD benefits. In these proceedings, instituted by a statement of claim filed on 18 November 2014, Mr Jones contends that the decisions of the first defendant and the second defendant are void, and that he is TPD within the applicable definition.

2. [2]

   The CBUS trust deed, dated 7 April 2003, provides that a benefit is payable to a member if the member ceased to be gainfully employed prior to attaining 65 years of age and suffers “Total and Permanent Disablement” (clause 5.12). “Total and Permanent Disablement” is defined as follows (clause 7.2; emphasis added):

3. [3]

   An “Insured Benefit” means the proceeds of any “Policy” effected by the trustee in respect of the disablement of a Member, and “Policy” means any policy of assurance, including any policy which provides that benefits shall be payable to the Trustee on the disablement of a Member. It is common ground that in this case, the relevant benefit was an insured benefit, under HLRA’s “Group Life Policy VGL 4163”, and thus that the applicable definition is that in the Policy, which is relevantly as follows:

4. [4]

   The Glossary in the Policy contains the following relevant definitions:

5. [5]

   Mr Jones claims to have been unable to follow his usual occupation since at least 10 October 2011, which is therefore the putative Date of Disablement. It is common ground that the “agreed benefit”, to which Mr Jones would be entitled if otherwise eligible, is $100,000.

History

1. [6]

   Mr Jones was born on 30 June 1982 and is thus now 34 years of age. He gained his school certificate (in New South Wales) in 1998, obtaining an “Excellent – A” result in Technics, “Very Good – B” in Geography, and “Substantial – C” in English and Science, but only “Satisfactory – D” in Mathematics and Visual Arts. He left school at the end of year 10, following which he served an apprenticeship with R F Aitken Roofing Contractors, which he completed in March 2003, qualifying as a tradesman roof plumber with a Certificate 3 in metal roof plumbing. He subsequently gained a number of additional tickets, including PACI (Professional Association of Climbing Instructors), asbestos removal class B, safe work at heights ticket, EWP over 11 metres, 20 ton non-slew crane, occupational health and safety induction, and explosive power tools.

2. [7]

   On 10 December 2002, he suffered a repetitive strain injury of the lower back when lifting metal roof and wall sheets over a parapet wall to a fellow worker. Pain restricted his ability to perform the full range of his duties, and it worsened. A disc prolapse at the lumbosacral level of moderate degree on the left posterolateral side with displacement of the left S1 nerve root was diagnosed, for which he had a hemi-laminectomy by Dr Sheridan on 27 June 2003. This operation was successful, providing immediate relief. Following physiotherapy, he returned to work in October 2003, as a roofing supervisor with Vostek Industries, with a reduced but continuing requirement to engage in repetitive or heavy lifting. He remained with Vostek until January 2007.

3. [8]

   In late 2006, he applied to enlist in the Australian Defence Force, but his application was unsuccessful due to his history of a spinal operation. In December 2006, he accepted an offer of a supervisory position with CMC Metal Roofing in Townsville. He commenced work there in January 2007 and remained there until September 2009, as “Site Supervisor Foreman”. He left CMC in late 2010 to take up a position as supervisor with Larnic Contracting, a roofing company which, though based in Cairns, had many jobs in Townsville, where he resided, which he supervised. He remained in that position for about 12 months, when Larnic failed, and in January 2011 returned to CMC as a supervisor.

4. [9]

   Although the operation in June 2003 had been successful, it did not entirely resolve his symptoms.

5. [10]

   Dr Peter Conrad saw him, in connection with a workers compensation claim, on 29 November 2004, and reported, on 30 November 2004, that he continued to have pain in his lumbar spine which radiated down the back of his left leg, worse when bending or lifting or while standing or sitting for long periods; he could no longer play indoor cricket, as he had in the past. Straight leg raising was 60° on the right and 45° on the left. The doctor’s opinion was that he had suffered a disc prolapse probably at L4/5 [1] and had ongoing back pain and left-sided sciatica manifesting as a radiculopathy. The doctor reported:

6. [11]

   Dr Conrad calculated a “whole person impairment” of 16%.

7. [12]

   Mr Jones was seen by Dr Pillimer, for the workers compensation insurer, on 13 January 2005. Straight leg raising was 75° on the right and 60° on the left. He reported that Mr Jones had developed back pain as a result of persistent bending and lifting of heavy metal sheets over a wall over several weeks, which eventually spread down his lower left limb, leading to surgery with a very satisfactory result such that he now had only intermittent discomfort in his left lower limb, but ongoing discomfort in the lower lumbar region. He observed that Mr Jones was back at work as a foreman in roof plumbing and managing with that, provided that he avoided the heavier aspects, and felt that there was no reason why he should not continue in that manner, though it was predictable that he would have ongoing problems with his lower back and may have intermittent ongoing problems in his left lower limb. He assessed an 11% “whole person impairment”.

8. [13]

   However, the symptoms became more troublesome in mid-2011. Mr Jones was loading asbestos sheeting, which was quite heavy, into a bin when he noticed some soreness in his back, which increased significantly, and he developed right leg pain, which became more severe than the back pain. (The 2002 injury had produced left leg pain). He presented to a GP, Dr Kazums, on 7 September 2011, who noted:

9. [14]

   On the same day, he had a CT scan of the lumbar spine, which was reported as showing, at L5/S1, a prominent central disc protrusion with calcification, somewhat more pronounced towards the left side. The previous hemi-laminectomy at S1 on the left side was noted.

10. [15]

    Mr Jones ceased working at about this time, and on 10 October 2011, his employer CMC closed down. Its jobs and its employees were transferred to other contractors, but Mr Jones did not resume work.

11. [16]

    On 1 December 2011, he had an MRI of the lumbar spine, which was reported as showing evidence of pressure anterior on the thecal sac at L5/S1 with the appearance of central disc protrusion with a tear in the annulus fibrosis slightly more pronounced on the right side:

12. [17]

    He was seen by Dr Bookallil, neurosurgeon, for the workers compensation insurer, who on 17 February 2012 reported that he was then taking up to six Panadeine Forte per day; that after the 2003 operation there was a marked reduction in the left leg pain and pins and needles, but that he still had some intermittent back pain; and that he had been off work for four months and then went back to normal work, where he had some limitations but the job was still a heavy one. Thereafter he had occasional back pain, for which he occasionally took Nurofen, but remained in continuous employment. Then:

13. [18]

    On examination, Mr Jones had marked impairment of back movement. Straight leg raising was 50° on the right but 90° on the left. Dr Bookallil observed:

14. [19]

    To the question “What is the expected prognosis for the worker’s injury to resolve and/or return to work?”, he answered:

15. [20]

    Dr Bookallil assessed a 15% “whole person impairment”.

16. [21]

    On 23 February 2012, Mr Jones was seen by Dr Anderson, neurosurgeon, who reported that having previously undergone a L5/S1 micro-discectomy on the left side, for left-sided leg pain, he had more recently developed bilateral leg pain, worse on the right, radiating down the right leg. Although considering that surgery was a not unreasonable option, Dr Anderson suggested initially a more conservative approach, with an epidural steroid injection. An MRI on 29 March 2012 was reported as showing desiccation and narrowing of the L5/S1 disc in keeping with early to moderate disc degeneration, and an associated retrolisthesis of L5 on S1, with a broad-based left paracentral disc protrusion at the L5/S1 level, indenting the thecal sac without causing canal stenosis:

17. [22]

    Dr Anderson saw him again on 17 May 2012, and suggested that at this stage he might benefit from an epidural steroid injection rather than further surgical exploration. On 24 May 2012, Mr Jones had a caudal epidural steroid injection by Dr Anderson, who also noted a history of pilonidal sinus.

18. [23]

    On 14 June 2012, Mr Jones’ (former) employer CMC provided a statement to CBUS, which noted that he supervised five employees, was occasionally (one-third of the time) required to lift and carry 20kgs or more, that he was employed to do roof plumbing duties at various sites, and that he last worked on 10 October 2011 when CMC ceased to trade.

19. [24]

    On 4 July 2012, Mr Jones was seen again by Dr Anderson, who reported that Mr Jones did not feel that he had benefited greatly from the caudal injection. His straight leg raising was decreased (to 30° bilaterally). Dr Anderson doubted that further surgery would be of benefit, and referred him to Dr Marshman, neurosurgeon, for further investigation – particularly of discogenic pain.

20. [25]

    Dr Marshman first saw Mr Jones on 22 August 2012. In his report to Dr Anderson of that day, he noted the annular tear and considered that there might well be chemical irritation of the S1 root and the L5 root:

21. [26]

    On 30 August 2012, Mr Jones had a sacral epidural by Dr Marshman. On 12 September, Dr Marshman noted “a significant improvement”, with no distal pain or sensory disturbance, but a continued ache in the right hamstring which made him limp. Mr Jones declined a repeat injection and elected to try an antineuropathic drug, Gabapentin. On 3 October, Dr Marshman noted increased pain in the left leg, and that Mr Jones felt “drunk” on the Gabapentin, and recommended further surgery, to which Mr Jones consented. On or about 10 October, Dr Marshman reported to Gallagher Bassett, who was managing Mr Jones’ workers compensation claim, that although the sacral epidural had “considerably improved him”, he still had bilateral sciatica, with the left leg far worse than the right:

22. [27]

    On or about 16 October 2012, Mr Jones had a redo laminectomy, by Dr Marshman, following which on 24 October Dr Marshman reported to Dr Anderson:

23. [28]

    On 31 October 2012, Dr Marshman provided a “Confidential Medical Report” to HLRA, in which he described the post-operative course as “Excellent. Now has residual right sciatica”. In response to a question: “At the current time, can the claimant do his/her normal job”, he ticked “No”, and added “Unable to work safely as roofer or plumber given continued R sciatica”. In answer to the question: “If you do NOT expect the claimant to EVER return to his/her normal work do you think he/she will ever 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”, he at first ticked “Yes”, then changed his answer to “No”, and added “Desk work, non-labouring work in stores”. [2]

24. [29]

    On 28 November 2012, Dr Marshman reported to Dr Anderson:

25. [30]

    On 5 December 2012, according to Dr Marshman’s report of that date, Mr Jones, although he felt better than pre-operatively, still had pain in the right calf, and walked in a restricted fashion.

26. [31]

    On 9 January 2013, Dr Marshman reported to Dr Pioc, general practitioner:

27. [32]

    On 20 March 2013, Dr Marshman noted that he was stable, with continued right sciatica, and “fear-avoidance mechanism +++”. He planned no further appointment, and reported to Dr Pioc:

28. [33]

    On 22 August 2013, Dr Marshman provided a report to CBUS, relevantly as follows (emphasis added):

29. [34]

    On 30 August 2013, CBUS requested HLRA to assess Mr Jones’ claim. On 25 September, HLRA requested a functional capacity evaluation (“FCE”) and a vocational assessment.

30. [35]

    The FCE dated 31 October 2013 was prepared by Ms Hanrahan, occupational therapist, who said of his duties before ceasing employment in September 2011:

31. [36]

    The FCE determined that he could lift up to 11.8kg. Mr Jones reported that he could drive for some 90 minutes, but then required a break for 15. In activities of daily living he required his wife’s assistance to shower his lower limbs, to dress his lower limbs, and to put on shoes and socks, and had difficulties with toilet transfers. He reported his pain at ranging from 5 to 8 on a 10-point scale. Under “Psychosocial Assessment”, Ms Hanrahan reported:

32. [37]

    Postural tolerance testing yielded the following results:

33. [38]

    Mr Jones did not complete a lift from floor to bench, for fear that it would aggravate his spine injury. He lifted a weight of 11.8kg from bench to overhead on three occasions, with pain in the lumbar spine reported at 6/10. Likewise, he carried a weight of 11.8kg over 20 metres, with pain in the lumbar spine reported at 6/10. Ms Hanrahan concluded (emphasis added):

34. [39]

    Ms Hanrahan noted that Mr Jones had not performed his pre-injury duties as a metal roofing tradesman in any capacity since September 2011; that that job was denoted as “very heavy”; and that given his assessed restrictions he would not be able to perform the main duties of a metal roofing tradesman. On the basis of his past injury history, she considered that the classification of “medium” would carry a moderate risk of further injury; thus she recommended that he select work classified “Light”:

35. [40]

    The vocational assessment report was prepared by Ms Allison, a rehabilitation consultant. Though her report was dated 28 October 2013, Ms Allison had access to the FCE, as well as to the reports of Dr Marshman, the plaintiff’s statement of 30 October 2012, his “education, training and experience” form dated 30 October 2012, his occupational history of 30 October 2012, the employer’s statement by CMC dated 14 June 2012, and a copy of the Gallagher Bassett workers compensation claim file. The Executive Summary in her report notes that each of Dr Marshman, Dr Bookallil and Dr Conrad had reported that Mr Jones should avoid all activities associated with roof plumbing, and continued:

36. [41]

    Ms Allison reported that the plaintiff was co-operative throughout the assessment. She reviewed his self-reported functional tolerances, and the FCE measured tolerances, culminating in a verbatim quotation of the above summary from the FCE. She also more or less replicated the FCE conclusion in respect of psychosocial status. As to his educational history, it was noted that he completed year 10 at the age of 15 years; and that he “never really liked school”, being “more hands on”. He reported “basic” computer skills – he could type and send an email, and perform “Google” searches, but was not able to operate programs such as Excel and Word. He reported “average” literacy and numeracy skills. His employment history was entirely in the roofing industry.

37. [42]

    Ms Allison noted that Mr Jones reported that a future disc fusion would be required, but he would abstain from it as long as functionally possible – he then estimated that it would be at least five years before he considered this intervention, but as will be seen in fact he came to such surgery much sooner.

38. [43]

    Ms Allison then identified a list of “transferable” employment skills said to be possessed by Mr Jones, categorised as “Communication Skills”, “Administrative Skills”, “Computer Skills”, “Adaptability and Flexibility”, “Organisational Skills”, “Occupational Health and Safety”, “Logistic Skills”, “Trade Specific Skills”, and “Licenses/Tickets/Credentials”. Some examples included:

39. [44]

    These excerpts represent a rather grandiose description of this roofing plumber’s basic skills.

40. [45]

    The report then identified a number of employment options: retail sales assistant (particularly in hardware); console operator/service station attendant; light parcel/courier/delivery driver; and customer service advisor (including telemarketing), each of which was considered vocationally suitable and functionally appropriate for Mr Jones.

The first declinatures

1. [46]

   The material to which I have so far referred is that which was available at the time of the first decision of HLRA and CBUS to decline Mr Jones’ claim.

2. [47]

   HLRA’s decision was communicated to CBUS in a letter dated 28 January 2014. It summarised, in dot-point form, some of the information gleaned from the Employer’s Statement of 14 June 2012, the Member Statement of 30 October 2012, the Confidential Medical Report of Dr Marshman of 31 October 2012, the Plaintiff’s Occupational History and Education, Training and Experience statement of 30 October 2012, the workers compensation file of Gallagher Bassett (which contained the report of Dr Bookallil of 17 February 2012, and the report of Dr Marshman of 22 August 2012), the report of Dr Marshman of 22 August 2013, the Functional Capacity Evaluation of Ms Hanrahan of 31 October 2013, and the Vocational Assessment report of Ms Allison of 28 October 2013. It set out the applicable definitions of “total and permanent disablement”, “regular remuneration work” and “date of disablement”, and proceeded (emphasis added):

3. [48]

   CBUS reviewed HLRA’s decision, and on 26 March 2014 concluded:

4. [49]

   CBUS communicated that decision to Mr Jones by letter dated 31 March 2014.

The second declinatures

1. [50]

   Meanwhile, however, Mr Jones sought a reconsideration of HLRA’s decision, having obtained a further report from Dr Giblin, dated 27 November 2013. Dr Giblin diagnosed “a well-recorded history of a soft tissue injury to his low back 10th February 2003 with resultant subsequent surgery in June 2003”, and a history of “persisting symptomatology thereafter being exacerbated in 2011 and having further surgery in 2012”. Under the heading “Prognosis”:

2. [51]

   As to treatment and management, Dr Giblin said:

3. [52]

   Dr Giblin assessed a 17% permanent “whole person impairment”.

4. [53]

   Having considered Dr Giblin’s report, HLRA confirmed its earlier decision, in a letter to CBUS dated 21 March 2014 (emphasis added):

5. [54]

   CBUS reviewed and agreed with that decision on 8 April 2014, and communicated its decision to Mr Jones by letter dated 16 April 2014.

Review of insurer’s decision

1. [55]

   In the present context, where under a contract of insurance, an element of the insurer’s liability is expressed in terms of the opinion of an insurer, the insurer has an implied obligation to consider and determine whether it should form the relevant opinion, which involves a consideration and determination of the correct question; and in the exercise of powers affecting the interests both of itself and of a claimant such as Mr Jones, the insurer is under a duty of good faith and fair dealing requiring it to have regard to the interests of the claimant, and an obligation to act reasonably in determining and considering the matter. [4] Thus the insurer’s decision will be liable to be reviewed and avoided by the court where:

   1. (1)

      The insurer misdirects itself in law, that is to say, it asks the wrong question;

   2. (2)

      The insurer takes into account an irrelevant consideration or fails to take into account a relevant consideration; or

   3. (3)

      The insurer otherwise does not act fairly, in good faith and reasonably in forming an opinion as to the plaintiff’s disability. [5]

2. [56]

   HLRA appears to have accepted that Mr Jones had been unable to follow his usual occupation by reason of accident or illness for six consecutive months, and thus satisfied the first limb of the definition. The question which HLRA resolved adversely to Mr Jones was whether he was “unlikely ever to be able to engage in any Regular Remunerative Work for which the Insured Person is reasonably fitted by education, training or experience”. In that respect, while accepting that Mr Jones would not return to his pre-injury roofing/tradesman duties, HLRA was (emphasis added) “not convinced that based on his current physical restrictions along with his education, training and experiences, that he will never return to some form of meaningful employment”. The essence of the insurer’s reasoning was (1) Mr Jones’ physical restrictions did not preclude him from engaging in Regular Remunerative Work as a hardware retail salesperson, as a courier/delivery driver, as a console operator, and as a customer service adviser/telemarketer (“the suggested occupations”); (2) these were entry level positions, so that no retraining was required; (3) employment in those occupations was available in Townsville; and (4) given that he was relatively young, it could not be said that he was unlikely ever to be able to engage in work in one or more of those occupations.

3. [57]

   The plaintiff submitted that the insurer set the bar too high, and that the test does not require the insurer to be “convinced” that he will “never return to some form of meaningful employment”, but only that it be “unlikely that he will ever be able to engage in any Regular Remunerative Work for which he is reasonably fitted by education, training or experience”. However, whatever might have been the position at the time of the hearing, it must now be accepted that in this context, “unlikely ever” does not mean that it is merely “improbable” in the sense of a less than 50 per cent chance, but that there is “no real chance” (as distinct from a remote or speculative possibility) of a return to relevant work. [6] This renders the task of a claimant more difficult than had been assumed in earlier cases. [7] When the insurer’s reasons are read as a whole, including the reference in terms to the policy definition, it is clear that the insurer concluded that it was unpersuaded that there was no real chance that Mr Jones would one day return to work, in one of the suggested occupations. In that respect, I do not accept that the insurer imposed too stringent a standard of certainty of future incapacity.

4. [58]

   The plaintiff also submitted that in giving weight to the plaintiff’s relative youth, the insurer’s decision was infected with the same error as had been identified in Ziogos v FSS Trustee Corporation as Trustee of the First State Superannuation Scheme, [8] in which Ball J said:

5. [59]

   However, it is now established that the relative youth of a claimant is relevant, and that a young claimant will find it more difficult to establish total and permanent disability than a more elderly one, as Leeming JA explained in Shuetrim: [9]

6. [60]

   The plaintiff further submitted that it was in any event unreasonable to conclude that his physical restrictions did not preclude him from engaging in the suggested occupations. To sustain that submission, bearing in mind that it is for the claimant to provide the insurer with the requisite evidence to establish his or her claim, [10] the plaintiff must show that, on the medical evidence before the insurer, it would have been unreasonable to form any opinion other than that Mr Jones was so physically restricted as to be incapable of performing the requirements of those occupations.

7. [61]

   None of the medical evidence available to HLRA when it made its decisions affirmatively stated that Mr Jones was physically incapable of performing the tasks of the suggested occupations. The high-point of that evidence was that of Dr Giblin, who said that theoretically, he might be fit for a sedentary job, avoiding the specified physical restrictions, preceded by the appropriate vocational rehabilitation, although his work environment would need to be very friendly. Dr Marshman reported that (with retraining) it was possible for him to undertake a desk job. In my view, the medical evidence available to HLRA was not such that the only reasonable conclusion was that his physical restrictions were such that he could not perform any of the suggested occupations.

8. [62]

   However, physical capacity to perform work is only one aspect of the likelihood of an insured being able to engage in suitable work, [11] which is affected also by other factors, including psychological makeup, and the availability of such work.

9. [63]

   At least until recently, the practical availability of suitable work for the insured was regarded as relevant to the likelihood of his or her engaging in it. [12] However, a number of decisions, including of intermediate appellate courts in other jurisdictions, have adopted a more restrictive view, to the effect that the concept of “unlikely ever to (be able to) engage” in work is concerned solely with the capacity of the insured to perform suitable work, and not the availability of such work. Thus in Repatriation Commission v Hill, [13] the Full Court of the Federal Court of Australia said, albeit in the context of the interpretation of a determination under legislation relating to veterans’ entitlements:

10. [64]

    In Wells v Australian Aviation Underwriting Pool, [15] de Jersey CJ said:

11. [65]

    In Hannover Life Re of Australasia Ltd v Colella, [17] Garde AJA (with whom Ashley JA and Beach JA concurred) drew on these authorities to state that (1) the expression “unable to do any work“ is concerned with the capacity of the person to perform remunerative work of a kind for which the person is otherwise suited, and (2) a person may have the capacity to perform work, even though the occupation or employment is not available in the town or region in which the person lives, as the test is not concerned with the availability of employment or work to the person – rather it is concerned with the person’s capacity to perform remunerative work for which the person is otherwise suited. His Honour elaborated that the policy insured the capacity of an insured to perform work in an occupation or remunerative employment, not the actual availability of work for the insured in the occupation or remunerative employment in the town or region in which the insured resides (emphasis added):

12. [66]

    Academic writing has also endorsed this narrower approach. [18] And the defendants submit that if anything that position may be stronger in this case, where the policy wording is not the conventional “unlikely ever to engage” but “unlikely ever to be able to engage”. However, I do not consider that the phrase was intended to have a materially different meaning. Ability to engage in work is not governed solely by capacity, but also by opportunity.

13. [67]

    Courts in this State have not, at least so far, adopted this more restrictive approach. In Wheeler v FSS Trustee Corporation ATF First State Superannuation Scheme, [19] Robb J observed that the requirement that the insurer consider “the actual, or real possibility of employment, rather than a theoretical possibility” [20] “survived” the decision in Shuetrim. As Garde AJA also stated in Colella, [21] to be practical and meaningful, the concept of capacity to perform work must be in the context of an occupation or employment recognised in the community; there is no useful concept of work outside of remunerative activity within the framework of existing occupations or employment. I find it difficult to accept that someone who has always resided and worked in a regional town may be regarded as not TPD because there are jobs which he or she could physically perform, but only on the other side of the country. They would have lost the ability, which they formerly had, to work in any employment for which they were fitted by education, training or experience, where they live.

14. [68]

    In this case, it cannot be said that the insurer did not have regard to the availability of work in the suggested occupations: its reasons included that “the Townsville area in which the Member resides had numerous opportunities in each of the occupations listed above”. However, even if availability of suitable employment were not relevant, there is nothing to suggest that ability to work is to be judged only by physical factors, to the exclusion of the psychological. The insurer’s reasons do not go beyond a conclusion that physically Mr Jones should be able to perform the tasks of the suggested jobs. Mr Jones’ well-evidenced fear-avoidance syndrome provided a strong reason why, even if he could theoretically physically perform them, he would not psychologically be able to do so. There was a substantial body of evidence before the insurer that his fear-avoidance syndrome was an obstacle to his performing work. In particular, Dr Marshman had stated that the prognosis for a return to work (both medium and long-term) was poor without successfully addressing both his right sciatica and psychological factors including fear-avoidance; and that psycho-social factors, especially fear-avoidance beliefs, which had been present all along, had become predominant. The FCE listed fear-avoidance among the factors that may be a barrier to his recovery. There was no suggestion that his fear-avoidance was other than genuine; unsurprisingly so in a man in his thirties who had an impressive earlier work history, reported high levels of pain (5 to 8 on a ten-point scale), was unable to dress his lower limbs unaided or tie his shoelaces, was using analgesia, and had been prepared to submit to two operations on his back, [22] and multiple injections to it, in the hope of relieving it. It is in those circumstances unsurprising, and not unreasonable, that he would be reluctant to risk triggering any aggravation. Indeed, as has been noted, Dr Giblin described “common sense based self-imposed physical restrictions” as “the mainstay of his treatment”.

15. [69]

    The insurer’s reasons address only physical capacity, and not ability having regard to Mr Jones’ psychological makeup, most significantly his fear-avoidance syndrome. Dr Marshman’s view that the suggested occupations were within his capacity, on which the insurer chiefly relied, when read in the context of the whole of his evidence, was plainly a view about physiological capacity, shorn of the psychological overlay. The insurer’s reasons also indicate that while consideration was given to the availability of such employments, little heed was given to the difficulties which Mr Jones would encounter in competing for such employment, given what Dr Giblin described as his need for an understanding boss and a very friendly work environment. Accordingly, the insurer’s reasons reveal a failure to take into account the impact of the plaintiff’s fear-avoidance syndrome, and his competitive disadvantages, and thus to take into account significant components of the plaintiff’s incapacity and properly and fairly to assess whether he was likely to be able to engage in the suggested occupations.

16. [70]

    Moreover, the question remains whether the suggested occupations were occupations for which Mr Jones was “reasonably fitted by education, training or experience” (“the ETE clause”). The insurer has treated the suggested occupations as work for which Mr Jones is “reasonably fitted” by education, training or experience, not on the basis that Mr Jones has had any particular education, training or experience that prepares him for such work, but because they are ‘entry level’ positions for which no further education, training or experience is required. This is no doubt because it is well-established that a claimant is not to be regarded as fitted by education, training or experience for an occupation for which he or she would be suited only after retraining. [23]

17. [71]

    However, a job which a person may be able to perform without further education, training or experience is not necessarily one for which he or she is reasonably fitted by education, training or experience. It is not necessary, in order to satisfy the TPD definition, that the insured must be incapable of any regular remunerative work, but only that he or she be incapable of regular remunerative work for which he or she is reasonably fitted by education, training or experience. The ETE clause confines the scope of the “regular remunerative work” from which the insured is disabled to that for which the insured is reasonably fitted by education, training or experience. In that phrase, the word “by” is important – it postulates a connection between the suggested future work, and the insured’s past education, training and experience. The concept of an occupation or work “for which the Insured Person is reasonably fitted by education, training or experience” directs attention to the insured’s vocational history to date, and to occupations for which that vocational history fits the insured. It refers not to any work for which the insured might have physical and mental capacity without further training, but to work for which the insured has been prepared and shaped by education, training and/or experience. The purpose of the provision is to provide a benefit for those who are disabled from following the vocations for which their past education, training and experience has prepared them – not any occupation which may be conceived, however far removed from his or her vocational history, which can be performed without further education, training or experience. The policy insures the capacity of an insured to perform regular remunerative work, not simpliciter, but in an occupation for which the insured’s education, training and experience has prepared him or her. In that way, it insures against loss of the ability to pursue those employments or careers for which the insured has been prepared and shaped by his or her past vocational history. The point is illustrated by the reverse of the current type of situation: a surgeon whose tertiary education was in medicine and whose entire vocational history was in surgery, who lost the fine motor skills required for surgery, but was otherwise physically fit, would not be reasonably fitted by education, training or experience for work as a manual labourer, even though he or she might be perfectly capable of performing it without further training.

18. [72]

    Thus the first question should be, for what occupations is this claimant fitted by his or her education, training and employment. It is a mistake to first search for occupations which an insured might be able physically and mentally to perform without further education, training or experience, rather than to examine the insured’s vocational history and to identify from it the occupation or occupations for which his education, training or experience has prepared the insured.

19. [73]

    Mr Jones is educated only to School Certificate level, and barely that. His training is in the roofing industry, and his vocational experience is as a manual labourer in the roofing industry. It has frequently been recognised that a man of limited education, who has spent his working life in manual labour, is fitted by his education, training and experience only for manual labour. That is not to say that there may be no other occupation to which he may be able to adapt; but if there is, it is not one for which he has been fitted by his past education, training and experience. Thus, in Repatriation Commission v Hill, [24] the Full Court of the Federal Court of Australia said:

20. [74]

    In Alcoa of Australia Retirement Plan Pty Ltd v Frost, [25] Nettle JA (with whom Redlich JA and Davies AJA agreed) said:

21. [75]

    And in Hannover Life Re of Australasia Ltd v Dargan, [26] Bathurst CJ illustrated how experience as a truck driver could prepare a worker to be a taxi-driver, notwithstanding that some (minor) further training and qualification might be required, while work as a manual labourer did not prepare a worker for clerical duties:

22. [76]

    The only work for which Mr Jones was reasonably fitted by education, training or experience was manual labour, in which he had been consistently engaged since the age of about 16 when he left school, and in which the insurer accepted that he was never again likely to engage. The inquiry need have proceeded no further.

23. [77]

    The work of a retail sales assistant, service station console operator, courier/delivery driver or customer service adviser/telemarketer was not work for which he was reasonably fitted by his education, training or experience; even if it is conceivable that he might be able to adapt to it, without undergoing further formal training, that has nothing to do with his education, training and experience. Although he may have had some discrete transferable skills, that is not the same as being fitted for an occupation by education training and experience. In this respect, the vocational assessment, focussing as it does on so-called transferable skills, misses the point. The identification of some skills acquired or developed in one occupation, which may be applied in another, does not necessarily mean that the worker is fitted by experience for the second occupation. Having some of the requisite individual skills does not equate to being fitted for the employment as a whole: capacity to perform remunerative work is different from capacity to perform a work task. It does not follow that because a person is physically capable of performing one or more work tasks that there is an ability to engage in remunerative work. [27] The insurer engaged in a theoretical exercise, removed from reality, in identifying possible employments, unconnected with Mr Jones’ employment history, for which he might have had transferable skills for discrete tasks, but for which as a whole he had no education, training or experience. The insurer’s error is manifested in the comment in its second decision that “Dr Giblin’s opinion only takes in one aspect of the Member’s vocational history as a roof plumber, he does not expand on alternative or suitable roles …” – which rather disregards that the plaintiff’s entire vocational history was as a roof plumber.

24. [78]

    Moreover, with the possible exception of courier/delivery driver, all the suggested occupations involve customer contact and service. Mr Jones’ education, training and experience has not prepared or fitted him for customer service positions. His vocational history reveals no experience in or aptitude for customer service; as he told Ms Allison, he had always been more a “hands on” person. It was suggested that what the vocational assessment somewhat ebulliently described as his “excellent communication skills” and “high level of analytical skills” made him suitable, but the communication skills which he may have as a roofing supervisor – with the other workers – are quite different from those required of a person dealing with customers (whether as a salesperson, a console operator, or a customer service adviser).

25. [79]

    Thus the insurer erred in law in its application of the ETE clause, in treating jobs for which no further training was required, although unrelated to his education, training or experience, as jobs for which he was fitted by education, training or experience. The insurer should first have identified the occupation(s) for which Mr Jones’ education, training or experience fitted him, of which in reality there was but one – that of manual labour – in which the insurer accepted that he was never likely to engage.

26. [80]

    It follows that the insurer’s decision is void for error of law, in that it:

    1. (1)

       took too narrow a view of the concept of “unlikely to be able to engage in Regular Remunerative Work”, in failing to have regard to the psychological obstacles and competitive disadvantages that would adversely impact his ability to gain employment, thus failing to take into account a significant component of the plaintiff’s incapacity; and

    2. (2)

       treated jobs for which no further training was required, although unrelated to his education, training or employment, as jobs for which he was fitted by education, training or employment.

27. [81]

    The trustee’s decisions, insofar as they are relevant, relied upon and adopted the insurer’s decisions, and are vitiated by the same matters.

28. [82]

    In those circumstances, the court can substitute its decision for that of the insurer. [28] In doing so, evidence which was not available to the insurer, may nonetheless inform the Court’s decision.

Subsequent developments

1. [83]

   On 18 June 2014, Dr Marshman reported to Dr Pioc that Mr Jones, after a long period of deliberation, now wanted to consider a fusion procedure. Mr Jones came to this decision, despite reservations, in the hope of gaining relief from his leg and back pain. Ultimately, on 4 November 2014, he underwent a fusion of L5/S1 by Dr Marshman who reported, on 23 December 2014, that Mr Jones had been doing extremely well, but after ceasing analgesia had suffered increased back pain and “restless legs”, which had improved since re-instituting Endep. On 3 February 2015, Dr Marshman reported that he was “stable now on the Lyrica and Amitriptyline”, and on 12 May Dr Marshman discharged him from his care.

2. [84]

   On 28 October 2015, Dr Marshman provided a report to the defendants’ solicitors, relevantly:

3. [85]

   Dr Marshman agreed that the roles proposed in Ms Allison’s vocational assessment report were ones which Mr Jones could physically perform. Indeed he said that the work of a retail sales assistant was “the minimum I would expect” him to be able to do after the fusion operation, which should have removed the physiological cause of his pain.

4. [86]

   However, despite Dr Marshman’s optimism, the fusion operation did not resolve Mr Jones’ back pain. Mr Jones explained:

5. [87]

   Is the plaintiff TPD?

6. [88]

   It is not in dispute that Mr Jones was gainfully employed within the six months prior to the postulated Date of Disablement, namely 10 October 2011. In order to be TPD, he must satisfy both limbs of the definition, that is to say:

   1. (1)

      that he is unable to follow his usual occupation by reason of accident or illness for six consecutive months; and

   2. (2)

      that he is unlikely ever to be able to engage in any Regular Remunerative Work for which the Insured Person is reasonably fitted by education, training or experience (as at the end of that period of six consecutive months).

7. [89]

   The reference in the first limb to “usual occupation” is to the occupation that was usual for the member at the date of disability, and will typically if not invariably be that in which he was gainfully employed in the six months prior thereto. There is no doubt or dispute that in this case Mr Jones’ usual occupation was that of roof plumber. Nor is there doubt or dispute that he did not follow it for six consecutive months after 10 October 2011. However, although in its decisions the insurer appears to have accepted that Mr Jones met this element, at the hearing, the defendants disputed that it was satisfied, on two grounds: first, that as his employer CMC had ceased to trade, it could not be said that it was accident or illness that prevented him from following his usual occupation; and secondly, that insofar as his inability to work as a roof plumber was attributable to his degenerative disc condition, that was not an accident or illness.

8. [90]

   As to the first of these, the defendants submitted that the clause in the Policy “the Insured Person is unable to follow their usual occupation by reason of accident or illness for six consecutive months” was analogous to that considered by McLelland J in Rapa v Patience [29] and should be construed as involving an absence from the insured’s usual place of employment for the requisite period due to accident or illness; and that the plaintiff could not be said to be absent from his usual employment due to his back condition when the employment relationship was at an end by reason of his employer CMC ceasing to trade. However, in Rapa v Patience, the relevant part of the definition of TPD was ‘absence from the service of the Employer through illness or injury for six consecutive months’, which McLelland J considered was suggestive of a continuation of the relationship of employer and employee for the period of absence. [30] In the present case, the definition – “is unable to follow their usual occupation by reason of accident or illness for six consecutive months” – involves no similar concept of “absence from the service of the Employer”, and instead directs attention to inability to follow the member’s “usual occupation” – not absence from a particular employer. [31] This conclusion is reinforced, in the context of this policy, by the introductory words of the definition, which have the effect that the insured need not even have been in employment as at the date of disability, but only that he or she have been in gainful employment at some time in the six months prior thereto. In the context of a superannuation fund for workers in the building industry – in which employment is traditionally transient and highly mobile – this is hardly surprising. Mr Jones was on any view unable to follow his usual occupation of roof plumber for a period of six months from 10 October 2011.

9. [91]

   As to the second, the defendants submitted that the plaintiff’s disability was occasioned not by accident or illness, but because of a degenerative disc condition, which is an age-related pathological process. The defendants submitted that a degenerative condition which is a natural part of the ageing process which affects the population generally is not an illness.

10. [92]

    Counsel secured a concession from Dr Marshman to the effect that in the term “degenerative disc disease”, the word “disease” was a misnomer:

11. [93]

    However, whether such a condition is an illness within the policy is a question of construction of the policy, not of medical opinion. “Illness” is not defined in the policy, but in the Macquarie Dictionary is defined as meaning “1. A state of bad health; sickness; 2. An attack of sickness”.

12. [94]

    I do not accept that the plaintiff’s degenerative disc disease is not an illness (that is to say, a state of bad health or disease). That it may be an aspect of the aging process which affects the population generally (or at least a substantial part of it) does not deprive it of that character: the same might be said of dementia. Moreover, even if the degeneration were already present, it occasioned no difficulty before 2003, when it first became symptomatic as a result of Mr Jones lifting heavy materials; and thereafter little difficulty until late 2011, when it was aggravated, again as a result of lifting heavy materials. Mr Jones’ inability to follow his usual occupation was occasioned by an asymptomatic condition becoming symptomatic. In ordinary parlance, he would be said to have injured his back in a lifting accident, and it was that accidental injury that resulted in his inability to work. Again, it may be observed that this superannuation fund is intended for the benefit of building industry workers, and given the prevalence of repetitive strain lifting injuries in that industry, it would be remarkable if disability associated with a degenerative disc condition which becomes symptomatic as a result of manual labour was not within the definition.

13. [95]

    Accordingly, I am satisfied that the plaintiff was unable to follow his usual occupation – that of roof plumber – by reason of accident or illness for six consecutive months from 10 October 2011.

14. [96]

    The second limb is whether he is “unlikely ever to be able to engage in or work for reward in any occupation or work for which he is reasonably qualified by education, training or experience”.

15. [97]

    For reasons already explained, in my view Mr Jones was fitted by his education, training and employment for work as a labourer, and for no other employment. The evidence speaks more or less with a single voice that Mr Jones was, as at April 2012, not able, and never likely to become able, to perform the duties of a labourer. His general practitioner Dr Pioc said that he could not go back to his usual work as a roofer, but could perform light duties which would produce less strain on his back, with restrictions that included that he cannot bend, he cannot squat or crouch, he cannot climb stairs, and he has a weight-lifting limitation of 7kgs (using both hands). Dr Marshman said that he could be re-employed as a building supervisor with no manual duties. Dr Bookallil said that he might be able to do light work after surgery. Dr Giblin assessed him as permanently unfit for repetitive bending, lifting and twisting, or medium periods of sitting, standing or walking, and concluded that his back would permanently prevent him from being engaged in his pre-injury work environment. The FCE concluded that Mr Jones had the capacity to work with a low risk of injury in a “light” job load classification, but that his back would not be able to tolerate repetitive movements without compromising safety while performing activities close to the ground. As Matheson J observed in Cavill Power Products Pty Ltd v Royle, [32] in the context of someone whose experience and history was as a labourer, a finding that he was fit to perform light work not involving heavy lifting, repetitive bending and so on is as good as saying no work at all; that is, he is fit for a labouring job in which he did not have to significantly labour. Similarly, in Alcoa of Australia Retirement Plan Pty Ltd v Frost, [33] Nettle JA (with whom Redlich JA and Davies AJA agreed) said:

16. [98]

    He might well have been fitted by his experience for an on-site supervisory job in the roofing industry, if such a job (without labour) existed; but his uncontradicted evidence is that such a job without labour does not exist in the roofing industry:

17. [99]

    And to similar effect, there is no suitable “desk job” in the roofing industry:

18. [100]

    The defendants submitted that Mr Jones was not unlikely ever to be able to engage in employment as a hardware retail salesperson, a courier/delivery driver, a service station console operator, or a customer service adviser/telemarketer. For reasons already explained, even if he were able to engage in these occupations, they are not occupations for which he is fitted by his education, training and experience, not least because they are customer service positions in respect of which he has no education, training, experience, or aptitude. As Mr Jones said in cross-examination:

19. [101]

    Confronted with the FCE which listed his so-called transferable skills, he acknowledged that he had such skills, but “All that relating to roofing, yeah”:

20. [102]

    In respect of telemarketing, for example, he was asked:

21. [103]

    Even if it could be said that, as he had a driving licence and could carry light goods, his education, training and experience fitted him for work as a courier or delivery driver – although he had never engaged in such work and never undertaken any training for it – in my view, he is unlikely ever to be able to engage in regular remunerative work as a courier or delivery driver. Work as a courier would involve getting into and out of the vehicle, lifting and carrying parcels, and walking up and down stairs (which his medical restrictions exclude). Even if such employment is available in or around Townsville, where he lives with his family, he would be at a distinct disadvantage in competing for work, as he would need to disclose his special requirements and restrictions (in particular, light parcels only). Sitting in a vehicle for lengthy periods would risk aggravating his pilonidal sinus, as it has every time he has engaged in prolonged driving. Moreover, he has been advised that even a minor motor vehicle accident could cause his disc implant to sever, snapping his spine; for that reason, not unreasonably, he avoids driving so far as possible.

22. [104]

    This is compounded by his fear-avoidance syndrome which provides a real, if psychological, obstacle to his undertaking such employment. Dr Marshman described the syndrome as follows:

23. [105]

    In cross-examination, Mr Jones gave the following evidence:

24. [106]

    As has already been mentioned, Dr Giblin described “common sense based self-imposed physical restrictions” as “the mainstay of his treatment”. I am satisfied that it is unlikely that he will ever engage in regular remunerative work as a courier or delivery driver.

25. [107]

    The defendants submitted that the plaintiff conceded that he presently has capacity for work, and has applied to Bunnings. On this, the evidence was as follows:

26. [108]

    This does not rise beyond a tentative acceptance that he may be able to perform up to 12 hours of casual work, which falls far short of “regular remunerative work”. Moreover, the restrictions which would have to obtain in connection with his engaging in such occupations – as encapsulated in the following evidence given by Mr Jones in cross-examination – would place him at such a disadvantage in competing for such employment as to make it practically unlikely that he would ever be able to do so:

Conclusion

1. [109]

   My conclusions may be summarised as follows:

2. [110]

   The insurer’s decision is wrong in law, in that :

   1. (1)

      It took too narrow a view of the concept of “unlikely to be able to engage in Regular Remunerative Work”, and in particular failed to have regard to the psychological obstacles and competitive disadvantages that would adversely impact the plaintiff’s ability to gain employment, thus failing to take into account significant components of the plaintiff’s incapacity; and

   2. (2)

      It treated jobs for which no further training was required, although unrelated to anything in his education, training or employment, as jobs for which he was fitted by education, training or employment.

3. [111]

   It follows that the insurer’s decision is void. The trustee’s decisions are vitiated by the same matters.

4. [112]

   In those circumstances, the court can substitute its decision for that of the insurer. It is not in dispute that Mr Jones was gainfully employed within the six months prior to the postulated Date of Disablement, that is to say 10 October 2011. I am satisfied that the plaintiff was unable to follow his usual occupation – that of roof plumber – by reason of accident or illness for six consecutive months from 10 October 2011. The only type of work for which he is reasonably fitted by his education, training and experience is manual labour. It is universally accepted that he is unlikely ever to be able to engage in manual labour. Even if he were reasonably fitted by education, training or experience to be a courier or delivery driver, in my judgment, he is unlikely ever to be able to engage in regular remunerative work in that capacity.

5. [113]

   As the effect of the superannuation trust deed is that in the case of an insured benefit, the policy definition and not the definition in the trust deed is applicable, the Court’s (substituted) decision that Mr Jones is TPD within the policy definition means that there is no further work for the trustee to perform, and there is no need to remit the matter to the trustee for further consideration.

6. [114]

   The decisions of the insurer and the trustee should be declared void; and it should be declared that Mr Jones is totally and permanently disabled within the meaning of the insurance policy. HLRA should be ordered to pay the sum insured (together with interest pursuant to s 57 of the (CTH) Insurance Contracts Act 1984) to CBUS, and CBUS thereupon to pay that sum to Mr Jones. Prima facie, the defendants should pay the plaintiff’s costs, but I will hear counsel on that question if so desired.

7. [115]

   I direct that the plaintiff bring in short minutes to give effect to this judgment on a date to be fixed.