Newling v Metlife Insurance Limited

BELL P: I have had the benefit of reading in draft the detailed reasons of Emmett AJA and agree with them.

In relation to Ground 3, I agree with Emmett AJA that it is not necessary to decide whether the obligation to act fairly and reasonably in circumstances where an insurer owes a duty of good faith to an insured person gives rise to an implication that the insurer is required to give reasons for a decision. That is an important question, but in circumstances where, as his Honour has indicated, adequate reasons were provided, the question of principle is better left to be decided in a case where no reasons or arguably inadequate reasons (if reasons are required) were given by the insurer.

LEEMING JA: I agree with Emmett AJA.

EMMETT AJA:

The Policy relevantly provided that, if, while the Policy was in force, an insured member of the Scheme suffers total and permanent disablement, as defined in the first schedule to the Policy, MetLife would pay to the Trustee a sum in respect of the insured member. Clause 6 of the first schedule to the Policy relevantly provided that “total and permanent disablement” was to mean, in the case of an insured member whose normal hours are 15 hours each week or more at the time of the “Insured Event” giving rise to the claim:

The Member claimed to have suffered total and permanent disablement within the meaning of the Policy and claimed to be entitled to be paid the relevant sum by the Trustee. The Trustee sought payment under the Policy from MetLife. MetLife declined to make a payment.

The Member commenced proceedings in the Equity Division of the Supreme Court seeking a declaration that the determination made by MetLife, to the effect that the Member did not suffer total and permanent disablement for the purpose of the Policy, was void and without effect. She also sought a positive declaration that she has suffered total and permanent disablement for the purpose of the Policy and an order that MetLife pay to the Trustee, in trust for her, the amount payable under the Policy in respect of her total and permanent disablement. The Trustee was joined as first defendant and MetLife was joined as second defendant. The Trustee filed a submitting appearance and MetLife has defended the proceedings.

The essence of the dispute between the Member and MetLife is to be found in paras 20 and 21 of the Member’s amended statement of claim filed on 14 November 2017, by which she made the following allegations:

In its defence to the amended statement of claim, MetLife responded to paragraph 20 by admitting that:

On 10 November 2017, a judge of the Equity Division (the primary judge) made orders under r 28.2 of the Uniform Civil Procedure Rules 2005 (the UCPR) that several questions be decided separately from and before any other questions in the proceedings. During the hearing, the primary judge expressed concerns about the formulation of the questions. However, the parties requested his Honour to answer the questions as formulated even though there may be potential for the answers to lead to further debate. The questions were whether, in declining the Member’s claim, MetLife:

On 9 October 2018, the Member filed a notice of intention to appeal from the orders made by the primary judge and on 14 December 2018 filed a summons seeking leave to appeal. However, having regard to the order dismissing the proceedings, the view was subsequently taken, quite correctly, that leave was not required. Notice of appeal was filed on 25 February 2018. An amended notice of appeal was filed on 15 May 2019. The grounds of appeal were not amended but the amended notice of appeal set out the facts that the Member says that the primary judge ought to have found. Before dealing with the grounds, it is necessary to describe the Member’s claim and MetLife’s dealing with the claim. Having regard to the nature of the grounds relied upon by the Member, that will entail an examination of some of the medical evidence that was before MetLife in making its decision.

On 20 March 2012, the Member completed a document entitled statement of claim in relation to the Scheme and MetLife (the Claim Form). The Claim Form contained four sections dealing with personal details of the Member, occupation details of the Member, details of the Member’s disability and a declaration and authority. The Claim Form was accompanied by a medical statement by Dr L Bong (the Medical Statement) and a vocational questionnaire completed by the Member. The Medical Statement summarised the Member’s present condition as “severe symptoms lumbar radiculopathy” and stated that the Member was “permanently incapacitated” from 28 November 2011.

On 28 May 2012 a form entitled “Employer’s Statement Total and Permanent Disability Claim” (the Employer’s Statement) and a questionnaire provided by Pillar Superannuation Administration Corporation were completed on behalf of the NSW Police Force. The Employer’s Statement said that the condition that caused the Member to cease work was “Psychological & (Back Injury)”.

Over the ensuring months, the Member underwent medical examinations of various kinds. Ultimately, MetLife wrote to the Member on 2 March 2015 with respect to the total and permanent disability claim that had been made by her through the Trustee. The letter relevantly said as follows:

On the same day, MetLife wrote to the Trustee in relation to the Member’s total and permanent disability claim, confirming that MetLife had conducted a review of the information on the file and that its investigations into the claim were at a stage where it would be interested in any comments or submissions that the Member wished to make regarding the material acquired to date. The letter to the Trustee enclosed the letter of 2 March 2012 addressed to the Member and its enclosures.

On 10 March 2015, the Trustee wrote to the Member’s solicitors, Messrs Walter Madden Jenkins (the Member’s Solicitors). The Trustee enclosed the letter of 2 March 2015 from MetLife addressed to the Member and enclosed documents that had not previously been seen by the Member’s Solicitors. The Trustee invited any “final submission” with respect to the material provided by MetLife.

On 23 April 2015, the Member’s Solicitors wrote to the Trustee with respect to the Member’s claim. They requested that the Trustee, in making a determination, also take into account additional reports from other medical practitioners, being Dr S Smith, Dr J Scougall, Dr R Pillemer and Dr V Panjratan. The letter submitted that the available evidence made it clear that the Member met the definition of total and permanent disablement and that her claim should be accepted.

The letter of 23 April 2015 then referred to MetLife’s letter of 2 March 2015. The Member’s Solicitors stated that they intended to address every document listed by MetLife in that letter notwithstanding that, in respect of many of the documents, “no ‘possible adverse information’ appears to be contained therein”. The 23 April 2015 letter concluded by asserting that the totality of the evidence indicated that the Member met the definition of total and permanent disablement and was therefore entitled to payment of the benefit. The letter asserted that there was no incontrovertible evidence upon which MetLife could conclude that the Member could engage in any gainful profession, trade or occupation for which she is reasonably qualified by reason of education, training or experience. It asserted that opinions to the contrary were either merely hypothetical or did not consider the totality of the evidence and therefore should not be taken into account.

On 15 July 2015, MetLife wrote to the Member saying that it was assessing her claim for a total and permanent disability benefit that had been submitted to the Trustee. The letter stated that the Member’s entitlement to the benefit was assessed by reference to the provisions of the Policy. It then said that MetLife had concluded the inquiries that Metlife considered were required for assessment of the Member’s claim and had considered the information obtained from those inquiries as well as all the information provided by the Member or provided on her behalf.

MetLife’s 15 July 2015 letter then referred to the letter of 23 April written by the Member’s Solicitors to the Trustee that “responded to material previously provided to you". MetLife said that it had since received further information relating to the Member’s claim and had also received a copy of her historical workers’ compensation file claims. MetLife said that its letter was intended to provide the Member with the information that MetLife presently had and to invite her again to respond or provide any further information or submissions that she considered appropriate to MetLife’s assessment of her claim.

The 15 July 2015 letter enclosed a number of documents. The first was a claim information sheet setting out the applicable total and permanent disablement definition in the Policy, together with other details relevant to the Member’s claim. The second was a copy of what was described as “the information presently available to MetLife” about the Member’s claim, together with an index of that information. The fourth enclosure was described as an “information summary” in relation to the information being considered by MetLife in assessing the Member’s claim (the Information Summary). The 15 July 2015 letter stated that the Information Summary did not refer to every document as it was not practicable to do so and that the fact that any particular document was not specifically addressed did not mean that it was not included in MetLife’s consideration of the Member’s claim.

Under the heading “Our Assessment”, MetLife’s letter of 15 July 2015 said that, “having regard to all the information, [MetLife] note[d]the following”. Then followed seven items under the heading “For TPD” and 14 items under the heading “Against TPD". Under the heading “Current Position”, MetLife stated that the information available to date had not led MetLife to form the opinion that the Member had become incapacitated to such an extent as to render her unlikely ever to engage in any gainful possession, trade or occupation for which she was reasonably qualified by reason of education, training or experience.

The first two items under the heading “For TPD” in the body of the letter of 15 July 2015 were as follows:

The first item under the heading “Against TPD” in the body of the letter of 15 July 2015 was as follows:

The 15 July 2015 letter said that, if the Member had “any additional information” that she considered supported her claim or if she wished to make any submission about the information provided with the 15 July 2015 letter, she should do so in writing within 28 days. The letter ended by saying that, after the end of 28 days, MetLife would finalise its consideration.

The Information Summary was a document of some 38 pages. It listed several of the documents enclosed by reference to the title of the document, author and date of the document, the content of the document and “MetLife Comment” in relation to the document. By way of example, the first document was a report of Dr Selwyn Smith to the Member’s workers’ compensation insurer dated 30 January 2012. Under the heading “Content” the Information Summary stated as follows:

The Member’s Solicitors responded to MetLife’s letter of 15 July 2015 by a letter of 18 August 2015 addressed to the Trustee. That letter took issue with the final item in the 15 July 2015 letter concerning the Member’s normal working hours and requested MetLife to state its position as to the applicable definition of “total and permanent disablement”. The Member’s Solicitors went on to say that they considered that MetLife had for some considerable time been in possession of sufficient information to enable it to determine the Member’s claim and to cause MetLife to be satisfied that the Member had suffered total and permanent disablement for the purposes of the Policy. The letter requested that, if MetLife did not propose to alter its position as to the applicable definition of total and permanent disablement, MetLife proceed to determine the Member’s claim immediately. Apart from that letter, there was no other response on behalf of the Member to MetLife’s letter of 15 July 2015.

In the meantime, apparently prior to receipt of the Member’s Solicitors’ letter of 18 August 2015, MetLife had written to the Trustee on 14 August 2015 saying that the 15 July 2015 letter had been written to provide an opportunity to comment on the information that MetLife had obtained during the assessment of the Member’s claim and that MetLife had received no response. Under the heading “Our Decision”, MetLife’s 14 August 2015 letter said that MetLife had not formed the opinion that the Member had become incapacitated to such an extent as to render her unlikely ever to engage in a gainful profession, trade or occupation for which she is reasonably qualified by reason of education, training or experience.

The 15 July 2015 letter also said that, if the Trustee or Member had additional information that might affect MetLife’s decision or if the Trustee or Member was unhappy with MetLife’s decision, the Trustee was invited to communicate with MetLife. The letter stated that, where the Trustee or the Member was dissatisfied with the decision, a further review under MetLife’s “Internal Dispute Resolution Process” could be requested to allow the Trustee and the Member “to voice their concerns” regarding Metlife’s decision. The letter ended by saying that, if the Member remained dissatisfied following a review under MetLife’s internal dispute resolution process, the Member may wish to contact the Financial Ombudsman Service, saying that the Financial Ombudsman was an independent body providing free assistance for consumers.

A somewhat curious exchange of emails between MetLife and the Trustee took place in October 2015. First, on 20 October 2015, Ms Ellen MacDougal, a claims team manager with MetLife, sent an email to Ms Roslyn Canning, a senior technical and claims specialist with the Trustee, referring to the Member’s Solicitors’ letter of 18 August 2015. Ms MacDougal asked Ms Canning whether “MetLife’s decline decision, determined on 14 August 2015, has now been communicated” to the Member’s Solicitors. Ms Canning responded later on 20 October 2015, saying that MetLife had advised the Trustee “not [to] issue its decision letter of 14 August and that a new decision letter would be issued”. Thus, it appears that the reason why the Member’s Solicitors had not seen the letter of 14 August 2015 was that it had not been sent to them or to the Member at that stage.

On 21 October 2015, Ms MacDougal apologised “for not sending through an updated decline letter” and said that MetLife was working to produce “an updated decline letter”. On 23 October 2015, Ms Canning sent an email to Ms MacDougal saying that the Trustee did not appear to have received “the decision letter” from MetLife and referred to a “SCT conciliation conference” on the following Monday. Ms Canning asked when “the letter [would] be available”. Later on 23 October 2015, Mr Andrew McFarlane, a technical claims manager with MetLife, sent an email to Ms Canning confirming that MetLife relied on its letter of 14 August 2015 issued to the Trustee “and for the purpose of the conciliation on Monday”. Ms Canning asked in a further email whether or not there would be a further decision letter from MetLife in relation to the Member’s claim. Mr McFarlane responded that there would be “no further decision letter issued”.

It appears that the letter of 14 August 2015 was in the hands of the Trustee and the Member for the purpose of any conciliation conference that may have taken place. Further, the primary judge recorded that the parties had informed him that the Member had exercised her right to review by the Claims Review Committee. However, no evidence was adduced as to the issues raised in the review or the decision of the Committee or as to any conciliation conference.

On 9 November 2015, Ms Jane Hogan, an insurance specialist with the Trustee, sent an email to Ms MacDougal, referring to “MetLife’s declinature of 14 August 2015”. Ms Hogan said that, in the Trustee’s view, the evidence supported the position that the Member met the relevant Policy definition of total and permanent disablement at the relevant date of assessment of 2 March 2012 and had continued to meet the definition. Ms Hogan requested that MetLife reassess the claim in light of the Trustee’s comments. The letter requested a response within 14 days, being “mindful of the related complaint under review by the SCT”.

Ms Hogan then stated that the Member was a 45 year old former intelligence officer who had worked as a fraudulent claims manager for two years, and 22 years within the NSW Police Force. The email asserted that the Member was claiming “chronic back pain and left S1 radiculopathy, Adjustment Disorder with Depressed and Anxious Mood, mild Alcohol abuse.” The email asserted that, despite the fact that the Member had undergone a reasonable amount of treatment in the form of consultation with her GP, orthopaedic surgeon/neurosurgeon, psychiatric and psychological treatment, hydrotherapy and analgesic, she had not worked in any capacity for over four years and had failed to recover.

Ms Hogan then stated that the relevant definition of total and permanent disablement required MetLife to consider whether the Member was unlikely ever to engage in or work for reward in any occupation or work for which she is reasonably qualified by reason of education, training or experience. She asserted that MetLife must consider whether there is “no real chance” or it is “improbable” that the Member will ever work again, and that in determining whether the Member was “unlikely” ever to be able to work, not only the physical capacity but the realities of the labour market must be considered.

Ms Hogan then observed that MetLife’s decision to decline the Member’s claim relied heavily on the opinion of Dr Ng and Dr Robinson that the Member was capable of performing alternate duties. She said that, while that may be the case, there were other reports that indicated otherwise. Ms Hogan then referred to various reports of Dr Smith of January 2012, April 2012, October 2012 and August 2013 and of Dr Bong of March 2012 and November 2012. She said that, since Dr Smith was the Member’s long-standing treating psychiatrist and Dr Bong was the long-standing treating GP, the opinions of both “should have some weight”.

Ms Hogan then referred to the report of Dr Louise Crowle, an independent occupational physician, of March 2012 that said that the Member had reached “maximum medical improvement” on the basis that she had elected not to proceed with surgery. Ms Hogan asserted that, while incapacity for work included consideration of the Member’s anxiety and depression, her low back condition independently rendered her unfit for work and that situation was likely to continue in the foreseeable future.

Ms Hogan then referred to an employability assessment arranged by MetLife, which identified various roles as potentially suitable for the Member. She said that, while Dr Ng considered there was no psychiatric disorder preventing the Member from performing any of those occupations and Dr Robinson believed there was no serious physical problem that would prevent the Member from working, neither doctor had considered the relevant definition of total and permanent disablement or “the real world likelihood of the Member obtaining any of the roles identified”. Ms Hogan referred to Dr Smith’s report that, given the length of time that the Member had experienced her symptoms, it was most doubtful that she would improve to any significant extent in her capacity to undertake such work.

Ms Hogan ended her email by saying that, given what she had said, the Trustee would appreciate MetLife’s reconsideration of the Member’s claim. She said that the Trustee considered that, based on the reports already obtained, adequate evidence was held on MetLife’s file for the review to be conducted.

On 7 January 2016, MetLife responded to Ms Hogan’s email of 9 November 2015. MetLife said that it had carefully reviewed the Trustee’s comments on the information provided but did not intend to respond to every point. It said that, having carefully reviewed, in the light of the Trustee’s comments, all the evidence in relation to the Member’s claim, it seemed to MetLife that the Trustee’s observations were premised on the acceptance of the Member’s reporting of her claimed disabilities and failed to have any regard to the evidence providing objective assessment and observation.

The letter then referred to the Trustee’s comments that Metlife’s decision to decline relied heavily on the opinions of Dr Ng and Dr Robinson that the Member was capable of performing alternate duties, and the Trustee’s comments that there were “other reports which indicate otherwise”. MetLife acknowledged that there were “other reports”, a fact that, it said, was clearly demonstrated in the Information Summary. The letter asserted that MetLife did not give undue weight to the opinions of Dr Ng and Dr Robinson, and that it had had regard to all the evidence, both medical and otherwise, when evaluating those opinions.

MetLife’s letter then dealt specifically with Dr Smith’s opinions and comments. MetLife said as follows::

The letter of 7 January 2016 then observed that the Member had consistently asserted that her functional tolerances included a maximum ability to sit for five minutes, stand for less than five minutes and to lift objects of up to 5 kg. It said that those functional tolerances asserted by the Member were in contradiction to the surveillance evidence showing her able to shop for up to two hours and to drive for lengthy periods. The letter then referred to other medical evidence of Dr Crowle, Dr Bong and Dr Robinson, and stated that MetLife considered that the opinion of Dr Ng demonstrated an objective and considered opinion “more so than that of Dr Smith”. The letter observed, in relation to the evidence of Dr Crowle and Dr Bong, as follows:

MetLife’s letter then explained why it gave greater weight to the opinion of Dr Robinson. In July 2013, after reviewing the surveillance evidence, Dr Robinson said that there had probably been an overstatement of the pain in the Member’s spine and that a review of the surveillance evidence showed that the Member had little difficulty with movement and that there was clearly no problem demonstrated or observed in the surveillance evidence. MetLife said that even prior to reviewing the surveillance evidence, Dr Robinson had said that the Member’s subjective symptoms were disproportionate to the objective clinical examination findings. That opinion was reaffirmed after reviewing the surveillance evidence.

Under the heading “Our Decision”, the letter of 7 January 2016 said that MetLife maintained the opinion previously given, namely, that the Member had not become incapacitated to such an extent as to render her unlikely ever to engage in a gainful profession, trade or occupation for which she is reasonably qualified by reason of education, training or experience. The letter repeated the observation made at the end of the letter of 14 August 2015 that, should the Member remain dissatisfied following a review under MetLife’s “Internal Dispute Resolution Process”, the Member might wish to contact the Financial Ombudsman Service.

The primary judge observed that the Member sought to enforce the rights of the Trustee as the insured party to secure a payment under the Policy. If she succeeded, MetLife would pay the benefit to the Trustee, who would then account for it to the Member. His Honour noted that no point was taken by MetLife about the fact that the Trustee had played no active part in the proceedings.

The primary judge considered that the Member’s claim under the Policy must be analysed in accordance with a two stage approach [1] . Thus, the terms of the Policy do not require MetLife to pay unless proof has been presented to its satisfaction that the Member’s claim is valid. MetLife had not been so satisfied. The first stage requires that the Member demonstrate that MetLife’s failure to be so satisfied involved a breach of its obligations as insurer under the Policy. If, but only if, that is established, it would then be necessary to embark on the second stage, of determining whether the conditions of the Policy were in fact satisfied.

After describing the Member’s history, the primary judge examined the evidence before MetLife in some detail. In particular, his Honour described the course of communications involving MetLife, the Trustee and the Member, as summarised above. His Honour then described the claims made in the Member’s amended statement of claim. After reviewing relevant authorities, his Honour concluded that the test of unreasonableness to be adopted required the Member to demonstrate that Metlife’s decision was not one that was open to “an insurer” acting reasonably. His Honour observed that that test was not specific to Metlife as the particular insurer whose decision was in question and that, if MetLife’s determination was one that could have been made by “an insurer” acting reasonably, it must be sustained.

In her amended statement of claim, the Member characterised the process of declinature of her claim under the Policy as involving two distinct determinations. The first was made by the letter of 14 August 2015 and the second by the letter of 7 January 2016. That distinction was maintained in the course of argument before this Court.

The Member’s contention that MetLife had failed to make a decision was based on the proposition that MetLife had stated that it had not “formed the opinion” that the Member was relevantly incapacitated. The primary judge concluded that the contention was unsound because the onus lay on the Member to provide proof to MetLife’s satisfaction that she had become incapacitated to the relevant degree. His Honour concluded that, in saying that it had not formed a relevant opinion, MetLife was saying that it was not satisfied on the material presented to it that the Member was so incapacitated.

The primary judge observed that, since the Policy contained no express obligation for MetLife to give reasons for any decision, any obligation to give reasons for a decision could only arise by way of implication. The primary judge rejected the Member’s contention that the duty of good faith imposed on MetLife necessarily carried with it an obligation to give reasons. His Honour considered that, if it was sufficient for MetLife’s determination to be open to “an insurer” acting reasonably and fairly, an inability to understand MetLife’s particular process of reasoning did not necessarily mean that breach was established. His Honour considered that the Court could decide whether a decision fell within the permissible range without knowing the specific reasoning process followed by MetLife.

The primary judge accepted that, since the process of assessing the Member’s claim was under the control of MetLife, MetLife was obliged to adopt an assessment procedure that gave the Member a full and fair opportunity to prove her claim to MetLife’s satisfaction. That included both defining the issues under consideration and presenting the evidence that bore on those issues. However, there was no right of appeal from MetLife’s determination, which was not even the final step. While the Policy provided for a review of MetLife’s decision by the Claims Review Committee, such a review was not an appeal and the Claims Review Committee was not constrained by any requirement to identify error in MetLife’s original decision. His Honour concluded that there was no necessary implication that MetLife give reasons for its decisions.

The primary judge observed that the process of assessment did not begin in earnest until MetLife’s letter of 2 March 2015, from which time onwards, the Member’s Solicitors were representing the Member and responded to MetLife’s correspondence on her behalf. Further, before obtaining its own medical advice, MetLife sought and obtained a report from the Member’s treating psychiatrist, Dr Smith. MetLife later provided to Dr Smith copies of the reports it had obtained from Dr Robinson and Dr Ng. His Honour considered that Dr Smith therefore had a fair opportunity to respond to the material obtained by MetLife, and that he did so. His Honour observed that the surveillance evidence was clearly disclosed as potentially adverse to the interests of the Member. Responses to that evidence were provided by Dr Smith and by the Member’s Solicitors. It was not suggested by the Member’s Solicitors that MetLife ought to have obtained any further medical evidence for the purposes of its assessment. His Honour rejected the Member’s contention as to unfairness in the assessment process.

The primary judge gave considerable attention to the Member’s complaints that there was unreasonableness in the assessment of her medical condition. The first complaint was that MetLife disregarded the opinion of Dr Smith on the basis that he had not seen the surveillance evidence. The Member contended that Metlife’s statement that Dr Smith had not commented on the surveillance footage was incorrect. His Honour rejected the Member’s contention by reference to a more detailed version of Metlife’s comment in the Information Summary, which went to whether the Member’s claims of disability were reliable. His Honour found it was open to say that Dr Smith did fail to comment on this point in his report. His Honour did not accept that MetLife approached Dr Smith’s report on the incorrect assumption that he had not seen the surveillance evidence but concluded that there was nothing unfair or unreasonable in MetLife proceeding on the basis that the points made in the Information Summary had not in fact been answered.

The second complaint about unreasonableness in the assessment of the Member’s medical condition was the assertion that MetLife preferred the opinions of medical experts engaged by it over the opinions of the Member’s treating doctors, without sound reasons for doing so. His Honour observed that the assessment of the medical evidence, and the resolution of conflicts in it, were essential aspects of any decision in relation to the Member’s claim. His Honour observed that there was no dispute that the Member had at least a degree of impairment as a result of her back injury, and that the issue was the extent of her disabilities, both physical and psychiatric, and their effect on whether, as at the relevant time, she was disabled from working again. His Honour observed that those questions were critically dependent upon self-reporting by the Member and that MetLife was not obliged to accept everything that was said by the Member or on her behalf and was entitled to be doubtful, or even sceptical, if such doubt or scepticism were reasonably open.

In those circumstances, the primary judge considered that it was wrong to suggest that the only question before MetLife was whether its doctors’ opinions were preferable to those of the Member’s treating doctors. His Honour considered that to frame the question in that way presupposed that the case presented by the Member’s doctors was complete and compelling. His Honour also considered that it was wrong to suggest that MetLife needed to have “sound reasons” for reaching conclusions other than those reached by the Member’s treating doctors. MetLife was not obliged to approach the assessment on the footing that the material put forward by the Member prima facie established her claim and that MetLife’s doctors had to rebut the claim.

The primary judge then addressed the Member’s alleged disability resulting from her back injury, observing that there was no dispute that the injury resulted in some degree of ongoing pain and loss of sensation in the Member’s foot. His Honour referred to the March 2012 report by Dr Crowle that the Member’s low back condition rendered her unfit for work and that that situation was likely to continue in the foreseeable future. His Honour observed that Dr Crowle seemed to have been told, or assumed, that when Dr Bong certified that the Member was fit only for restricted duties in May 2009, that was because of her back condition. However, his Honour observed, that was not the impression created by Dr Smith’s report to MetLife, which further suggested that the Member’s period of leave for several months in 2009 was attributable to the psychiatric condition diagnosed by Dr Smith. His Honour did not consider that the period of leave sat comfortably with the allegation by the Member of aggravation to her back injury in June 2009. His Honour referred to inconsistencies to which attention was drawn by Dr Scougall in a report of September 2010, between what he was told by the Member about the date of her hospital visits and what the hospital records showed.

The primary judge considered that, although it was clear from Dr Smith’s account that the Member’s superior in the Police Force treated her leave applications with some scepticism, it was unnecessary for the Court to try to get to the bottom of whether that scepticism was justified. Further, his Honour said, it was not necessary for MetLife to do so. His Honour concluded that it was reasonably open to MetLife to proceed, as it did, by obtaining an expert orthopaedic opinion from Dr Robinson, which directly addressed the issues raised under the Policy. His Honour considered that, once MetLife had adopted that course, it was under no obligation to give decisive weight to Dr Cowle’s earlier opinion, especially when that might only lead to further inquiry about the circumstances in which the opinion was given.

The primary judge observed that Dr Robinson’s conclusions were not wholly based on the surveillance evidence. Further, his Honour said, it was not MetLife’s responsibility to try to make a medical assessment of the Member’s disability. His Honour considered the Dr Robinson was in an ideal position to judge whether the surveillance evidence was inconsistent with the Member’s earlier presentation, and MetLife was entitled to rely upon reputable medical opinion. His Honour was not persuaded that there was any reason why MetLife should have second-guessed Dr Robinson’s opinions. His Honour concluded that MetLife was under no obligation to accept, in the face of Dr Robinson’s opinions, that the Member’s ongoing back problems were themselves disabling.

The primary judge referred again to the proposition emphasised on behalf of the Member that Dr Smith was her treating psychiatrist and that, in any conflict between Dr Smith and Dr Ng, Dr Smith’s opinion should be preferred as he was more familiar with the Member’s circumstances. However, his Honour observed, the weight to be given to that argument was a matter for MetLife. It was open to MetLife to regard Dr Ng’s report as more persuasive, particularly in circumstances where the “onus” lay on the Member, observing that that would have been sufficient had Metlife thought that Dr Ng’s report left the extent of the Member’s disabilities in doubt. His Honour considered that that was sufficient to justify MetLife’s conclusions as to the psychiatric issue, although his Honour considered that there were also other factors that could reasonably have supported a refusal to accept Dr Smith’s conclusions.

The primary judge considered that there were aspects of the Member’s psychiatric claim that invited scepticism, or at least further explanation. The Member did not seek to explain or justify her refusal to supply information to Dr Ng. Further, she did not make any response of her own to the suggestion that the surveillance evidence undercut her claim. His Honour considered that, even if Dr Smith had been right in saying that the surveillance evidence was not inconsistent with what had been reported to him concerning the Member’s alleged psychiatric condition, it was not so readily reconciled with the claims made in the Member’s later statement that she was unable to shop because of anxiety in dealing with people and inability to remember things. His Honour concluded there was nothing unfair or unreasonable in MetLife’s refusing to be satisfied that the Member had a permanent and disabling psychiatric condition that would prevent her from working at all in the future.

The Member’s complaint that MetLife acted unreasonably in assessing the likelihood of the Member obtaining work was that MetLife failed to give any consideration to the real prospect of the Member actually obtaining full time or part time employment within her education, training or experience, taking into account her physical and psychological capacity for work and her local labour market. The primary judge held that the phrase “unlikely ever to engage” in work means what it says and that it is not enough to demonstrate, on the balance of probabilities, that a claimant will not work again. Rather, the existence of a “real chance”, representing a less than a 50% chance, will be sufficient to defeat a claim [2] . At the same time, his Honour observed, a “real chance” is not to be equated to a mere possibility or to speculation on the insurer’s part that the claimant will not work again.

The primary judge rejected the Member’s contention that no proper consideration had been given to “the real world likelihood” as to whether the Member would actually find a suitable job that she was capable of doing. His Honour considered that the Member’s contentions advanced to MetLife tended to overlook that the onus was on the Member to provide proof of her inability to work. While Metlife took it upon itself to obtain a vocational assessment report, it was not enough, his Honour said, for the Member to adopt the defensive posture of seeking to pick holes in the suggestions that were put forward in that report. Rather, it was for the Member to prove affirmatively, to MetLife’s satisfaction, that there was no real chance that she would work again. His Honour concluded that, having regard to the deficiencies in the Member’s case on the question of obtaining work, and the uncertainties about her claimed disabilities, it was reasonably open to MetLife not to be satisfied that she was unlikely ever to engage in suitable alternative employment in the future.

The primary judge concluded that each of the questions posed should be answered “no”. Since the parties agreed that, in that event, the proceedings should be dismissed with costs, his Honour made that order.

The Member raised ten grounds of appeal in her amended notice of appeal. In her submissions in support of the appeal, the grounds were grouped as follows:

Grounds 1, 2 and 3 in the amended notice of appeal are that the primary judge:

The thrust of the Member’s contentions in relation to those grounds is based on the observation by his Honour that this Court had explicitly adopted a test of unreasonableness that requires a plaintiff to demonstrate that the decision in question was not open to “an insurer” acting reasonably, being a test that is not specific to the particular insurer in question such that a decision that could have been made by any insurer, acting reasonably, should be sustained [3] . The Member characterises that approach as imposing an “objective test of reasonableness” to the exclusion of all other factors. It is significant that the Member does not suggest that any decision of this Court should not be followed.

It is not disputed that an insurer must act fairly and reasonably in assessing and determining a claim [4] . Therefore, the Member contends, an opinion of an insurer that is objectively reasonable can only be determinative of the claim to which it relates if the actual insurer in question has also acted fairly and reasonably in assessing that claim and forming its opinion. She says that the task of the Court is to consider the reasonableness not only of the opinion formed by the insurer, but also the process by which the insurer formulated that opinion. That can only be determined, she says, if the insurer’s reasoning is disclosed.

The Member contends, further, that the duty of good faith owed to a claimant by an insurer under a group life policy such as the Policy gives rise to an obligation on the part of that insurer to give reasons for declining a claim. Thus, she says, in order for a claimant to ascertain whether an insurer has acted fairly and reasonably in considering and forming its opinion, it is necessary to examine both the reasoning process of the insurer and, where necessary, the procedure adopted by the insurer when considering and forming its opinion. To undertake that examination, the Member says, the reasons of the particular insurer must be available for consideration, since the examination of the reasons and the process are crucial where the terms of the contract of insurance “appoint the insurer as judge in its own cause”. She asserts that, in the absence of evidence of the reasons and process, the only option available to a claimant is to start with the denial of the claim, examine the material available to the insurer in denying the claim, and then speculate as to how the particular insurer arrived at that result. She says that, in the absence of evidence of the insurer’s reasons, the weight placed by the insurer on particular evidence, whether the insurer considered or understood the evidence, and whether the insurer addressed the correct question could only be the subject of speculation.

Further, the Member contends, where an insurer does not give reasons for its decision, and a claimant seeks to challenge the decision in judicial proceedings, the Court must engage in a merits review of the decision, which is impermissible. [5] Thus, she says, an insurer’s reasons are required in order to enable a claimant to be satisfied that the decision was reached in good faith. Without the ability to examine the insurer’s reasons for a particular determination, a claimant will be in the invidious position of having to determine whether to accept or contest the determination, based on speculation as to the process and path of reasoning followed by the insurer in dealing with the claim. That, the Member asserts, is manifestly unfair to a claimant and would deny a claimant the opportunity of correcting errors in an insurer’s characterisation of evidence or to provide an explanation or clarification for matters misunderstood by or troubling the insurer.

Thus, the Member contends, in the absence of reasons for a decision to decline a claim, even if there may exist an identifiable path of reasoning through the evidence to the conclusion that the claim be declined, that path will not be available to a claimant or a court considering a challenge to the insurer’s determination. It is only where there is evidence establishing both that the insurer identified a particular path of reasoning and that the insurer followed that path to make the determination to decline the claim that a claimant and the court can be properly satisfied that the insurer reached its decision to decline the claim in a manner consistent with the duty of good faith. The Member asserts that such evidence can only be in the form of a contemporaneous statement of reasons given by the insurer, or the decision maker employed by the insurer, at the time when the determination is made.

The Member contends that reliance by the primary judge on the objective test of unreasonableness led his Honour to omit proper consideration of the question of whether MetLife acted reasonably and fairly in assessing and determining her claim. She asserts that reliance on that test of unreasonableness prompted his Honour to conclude that MetLife was not obliged to give reasons for its decisions to decline her claim.

A trustee is not required to give reasons for the exercise of a discretion imposed by the relevant trust instrument [6] and it may therefore be arguable that a member of the Scheme would not be in any different position so as to be entitled to require the Trustee to give reasons, simply because the Trustee had arranged to insure against any liability that it might have to a member in respect of the Scheme. For the reasons set out below, I consider that MetLife provided adequate reasons for its decision in relation to the Member’s Claim. Accordingly, Ground 3 does not arise and it is not necessary to decide whether the obligation to act fairly and reasonably in circumstances where an insurer owes a duty of good faith to an insured person gives rise to an implication that that insurer is required to give reasons for a decision.

The Member’s claim is that MetLife owed duties and had obligations to the Member. It is not suggested that the Trustee had an entitlement under the terms of the Policy to require MetLife to give reasons for a decision given under the Policy and that the Member is seeking to compel the Trustee to enforce that entitlement. Rather, the Member alleges that MetLife breached its duty to her, failed to act reasonably in considering and determining its opinion and formed an opinion that was not open to it, acting reasonably and fairly.

The Member particularised her allegations of breach of duty by MetLife as follows:

It is clear that the primary judge addressed the allegation made by the Member that MetLife failed to act reasonably and fairly in assessing and determining her claim. The findings made by his Honour and the steps taken by MetLife to afford to the Member, and her advisers, the opportunity of responding to the concerns that MetLife had in relation to her claim are outlined above. His Honour made no error in concluding that the Member failed to make out her allegation that MetLife did not act reasonably and fairly.

Thus, on 15 July 2015, MetLife provided to the Member all of the material on which it based its determination. The letter of 15 July 2015 itself set out, in summary form, the reasons why MetLife considered that certain of the material was “Against TPD”. The Information Summary extracted from the material before MetLife the matters of significance and conveyed MetLife’s comments on that material. The Member was afforded a clear opportunity to respond to that material. To the extent that the Member, or her advisers, wished to challenge the comments made in the letter of 15 July 2015 and in the Information Summary, she was afforded ample opportunity to do so.

By way of example, one of the documents before MetLife was a report from Dr Robinson of 5 February 2013. Under the heading “Content” in the Information Summary, the following appeared:

Clearly, MetLife was conscious of which of the doctors’ reports came from treating doctors and which of them came from doctors retained by MetLife. In the circumstances of the present case, it was not unreasonable or unfair for MetLife to prefer the opinions of the doctors retained by it over the opinions of the Member’s treating doctors. The duty of good faith owed by MetLife to the Member did not require MetLife to prefer the opinion of treating doctors over consulting doctors. It is not a breach of such a duty for greater weight to be given to independent consultants than treating doctors, particularly in circumstances where much of the opinion evidence of the treating doctors was dependent upon the history provided by the Member. MetLife considered that the surveillance evidence indicated that the history provided by the Member to her treating doctors was not reliable.

The conclusions reached and judgements made by MetLife in relation to the evidence before it may not be the only conclusions that could fairly be reached on the basis of that material. However, they were conclusions that were open on the material. Had the Member been able to demonstrate that the analysis of the material by MetLife was so wrong and defective, such that the conclusion reached was simply not open to it, that might be a basis for concluding that MetLife’s decision should not stand. However, the Member fell well short of doing so. It could not be suggested that the only conclusion that could reasonably be reached was one favourable to the Member. Even if the Member were able to demonstrate that a different conclusion was preferable, that of itself would not suffice. The most that she has been able to demonstrate, both before the primary judge and in this Court, is that there are contrary arguments.

In the letter of 15 July 2015, MetLife recognised, by setting out the factors that it regarded as “For TPD”, that there were contrary arguments. Having received no response to the letter 15 July 2015, MetLife wrote its letter of 14 August 2015. It subsequently received the letter of 18 August 2015 from the Member’s Solicitors. That letter did not engage with the reasoning in MetLife’s letter of 15 July 2015.

Subsequently, the Trustee requested MetLife to reconsider the decision conveyed in the letter of 14 August 2015 and, in its letter of 7 January 2016, MetLife maintained the opinion previously given in its letter of 14 August 2015. The letter of 7 January 2016 did not reiterate the material and reasoning contained in the letters of 15 July 2015 and 14 August 2015. Nevertheless, it is quite clear that, by the letter of 7 January 2016, MetLife was confirming the opinion that had previously been communicated for the reasons that had previously been communicated. Thus, MetLife said in the letter that it “maintains the opinion previously given” (emphasis added).

Whether or not it is appropriate to characterise MetLife’s communications as evidencing two distinct decisions, it is clear beyond doubt that there was a single course of correspondence between MetLife, on the one hand, and the Member, the Member’s Solicitors and the Trustee, on the other. Even if it is appropriate to characterise the letter of 7 January 2016 as evidencing a separate decision, following a review, it is clear that MetLife was basing that review decision on the reasoning and materials that had been communicated by the letters of 15 July 2015 and 14 August 2015.

There is no basis for concluding that MetLife did not act reasonably and fairly in assessing and determining the Member’s claim. The primary judge made no error in concluding that it was open to an insurer, acting reasonably and fairly, to reach the opinion reached by MetLife on the basis of the material that was before it. Whether or not MetLife was obliged to give reasons for the decision that it reached, it did in fact give reasons sufficient to enable the Member to know and understand why MetLife reached the opinion that it did. Grounds 1, 2 and 3 must be rejected.

Ground 4 in the amended notice of appeal is that the primary judge undertook an impermissible merits review of the Member’s claim under the Policy. She contends that his Honour erred by applying a test of reasonableness, which caused his Honour to consider that the court could decide whether MetLife’s decision fell within the permissible range, without knowing the specific reasoning process followed by MetLife to reach that decision. The Member contends that, because of his error concerning the test of unreasonableness, his Honour undertook a merits review of MetLife’s decision to decline her claim.

The Member contends that the test adopted and applied by the primary judge invited consideration of whether MetLife’s decision could have been made by a hypothetical “reasonable insurer” and therefore, rather than directing attention to MetLife’s actual reasons for its decision and the process by which it reached that decision, his Honour directed attention to the material available to MetLife, and invited the Court to form its own view as to whether the claim could be declined on that material. That, the Member asserts, entailed a review of the merits of her claim, as opposed to a review of MetLife’s determination and the decision-making process adopted by MetLife that led to that determination.

In essence, however, the Member’s real complaint is that MetLife did not reach a favourable decision on the material that was before it. Her approach before the primary judge was to point to various aspects of MetLife’s reasons, to compare those reasons with the Member’s preferred construction of the evidence and to ask his Honour to conclude that the material could reasonably lead to only one conclusion, namely, that she was totally and permanently disabled. A significant part of the Member’s approach was that MetLife preferred the opinions of the doctors engaged by it rather than the opinions of the Member’s treating doctors.

The Member’s contentions address three aspects of the reasons the primary judge as follows:

The reasoning of the primary judge belies the assertion that he engaged in a merits review of MetLife’s decision. In order to address the submissions made by the Member, his Honour considered the competing expert opinions and inconsistencies in the material referred to by MetLife in its assessment process. His Honour then determined whether MetLife exceeded the bounds of legal reasonableness or fairness on the material before it.

A fair reading of the primary judge’s reasons indicates that his Honour was not endeavouring to stand in the shoes of MetLife and make a decision on the merits. Rather, his Honour was doing no more than considering the complaints made by the Member about MetLife’s reasoning in order to determine whether or not that reasoning could be characterised as going beyond what an insurer, acting reasonably and fairly, could adopt. Rather than engage in a merits review of MetLife’s determination, his Honour considered and rejected the contentions advanced by the Member in support of her contention that the decision made by MetLife was not open to it on the material available to it. Ground 4 must be rejected.

Ground 5 in the Member’s amended notice of appeal is that the primary judge erred in failing to distinguish and separately consider Metlife’s determinations of 14 August 2015 and 7 January 2016. Ground 7 is that his Honour failed to find that the reasons given on 7 January 2016 were Metlife’s reasons for declining the Member’s claim. Ground 8 is that his Honour erred in failing to conclude that the reasons in the letter of 7 January 2016 demonstrated that MetLife acted unfairly and unreasonably and took an unfair and unreasonable view of the material available to it when making its determination to decline the Member’s claim.

The Member contends that the language of the letter of 7 January 2016 and the absence of specific reference to the letter of 14 August 2015 indicate that the letter of 7 January 2016 was intended to stand on its own as an efficacious determination under the Policy. Therefore, she says, it was necessary for the primary judge to make an inquiry as to whether that second determination, and the process by which it was reached, involved any breach of MetLife’s duty and obligations. In that context, the letter of 7 January 2016 was characterised by the Member as “the operative determination”.

The Member complained that the primary judge effectively conflated MetLife’s letters of 15 July 2015, 14 August 2015 and 7 January 2016 and treated them as providing a singular set of reasons in support of the ultimate declinature of her claim by MetLife. She asserts that each “declinature” should stand on its own and that MetLife was not entitled to:

For the reasons indicated above, it is artificial to treat the letters of 14 August 2015 and 7 January 2016 as separate decisions. To the extent that the second letter is a decision on review, it is clear, for the reasons given above, that the second letter confirmed the opinion already formed on the basis of the reasons previously furnished, as well as any additional reasons to be found in the letter of 7 January 2016 by way of response to the request for a review. Grounds 5, 7 and 8 must be rejected.

Ground 6 in the amended notice of appeal is that the primary judge erred in finding that MetLife’s letter of 15 July 2015 and the Information Summary contained reasons for MetLife’s determination of 14 August 2015. The Member contends that it is difficult to understand how MetLife could “pre-emptively” give reasons for a determination ostensibly made approximately one month after those reasons were given.

The Member asserts that the letter of 14 August 2015 makes no reference to the letter of 15 July 2015 or the Information Summary. It is correct that the letter 14 August 2015 begins as follows:

The Member asserts that, in writing the letter 14 August 2015, it would have been open to MetLife to say that the reasons for its decision communicated by that letter were those expressed in the letter of 15 July 2015 and the Information Summary. She asserts that, in the absence of evidence from an officer of MetLife saying that the reasons for declinature were those expressed in the letter of 15 July 2015 and the Information Summary, the primary judge should not have inferred that, in declining her claim, MetLife took into account the content of the letter of 15 July 2015 and the Information Summary when forming the relevant opinion and declining the claim.

The Member also asserts that, even if the primary judge was correct to treat the letter of 15 July 2015 and the Information Summary as forming part of the reasons for the decision communicated by the letter of 14 August 2015, his Honour erred in concluding that they constituted reasons for the determination. Rather, she says, they did no more than summarise aspects of the evidence alleged by MetLife to be either “For TPD” or “Against TPD”. She asserts that MetLife’s reasons for preferring the evidence “Against TPD” over the evidence “For TPD” is not exposed in the letter of 15 July 2015 or the Information Summary.

Further, the Member contends, if the primary judge had considered the letter of 7 January 2016 within the framework of an examination of whether MetLife acted fairly and reasonably in assessing and determining her claim, his Honour could not have been satisfied that the letter of 7 January 2016 was demonstrative of MetLife having acted reasonably and fairly in its assessment and determination of her claim.

For the reasons indicated above, it is clear that the decision on review communicated by the letter of 7 January 2016 was an affirmation or confirmation of the decision previously communicated by the letter of 14 August 2015 for the reasons set out in that letter and the letter of 15 July 2015, including the Information Summary. Ground 6 must be rejected.

Ground 9 is that the primary judge erred in finding that MetLife’s declinature of the Member’s claim did not involve any breach of duty or obligation by MetLife. Ground 10 is that his Honour erred in answering each of the separate questions “no”. These are not so much grounds of appeal as an assertion that the primary judge erred on his ultimate conclusion. Since the Member advanced no separate submissions in support of these grounds, it is not necessary to address them further.

None of the grounds of appeal in the amended notice of appeal has been made out by the Member. It follows that the appeal should be dismissed. Since the summons seeking leave to appeal was unnecessary, for the reasons stated above, the summons seeking leave to appeal should be dismissed. The Member should be ordered to pay MetLife’s costs of the appeal.