Shuetrim v FSS Trustee Corporation

The plaintiff, Mr Benjamin Shuetrim, was a member of the New South Wales Police Force from January 2007 until 22 November 2012, on which date he was medically discharged.

During that period, Mr Shuetrim was also a member of a superannuation fund known as the First State Superannuation Scheme (“the Fund”).

The first defendant, FSS Trustee Corporation (“the Trustee”), is the trustee of the Fund.

The Trustee effected insurance policies with the second and third defendants, MetLife Insurance Ltd and TAL Life Ltd, for the benefit of its members.

The TAL policy is known as the “Basic Policy” and is available to all members of the Fund. The MetLife policy is known as the “Police – Blue Ribbon Policy” and comprises additional cover for police officers.

Each of the policies provides cover for “Total and Permanent Disablement” (“TPD”). I shall use the acronym TPD as shorthand for the terms Total and Permanent Disablement, Total and Permanent Disability, and Totally and Permanently Disabled as the context requires.

Under the Basic Policy (with TAL), TPD is relevantly defined as follows:

Under the Blue Ribbon Policy (with MetLife), TPD is relevantly defined as follows:

The differences in substance between the TPD wordings are that, first, the TAL policy refers to the insured person being absent from his or her occupation for three consecutive months (whereas the MetLife policy refers to six consecutive months) and, second, the TAL policy has the parenthetical qualification following the reference to “3 consecutive months”. I discuss this further below. Otherwise it is common ground that although the wording in the definitions differs a little, the definitions are to the same effect.

On 15 February 2013 Mr Shuetrim lodged a claim for TPD benefits with the Trustee. He claims to suffer from an anxiety disorder and lateral epicondylitis, or “tennis elbow”, of the left elbow arising in the circumstances I set out below.

Mr Shuetrim and the Trustee have now settled. Mr Shuetrim withdrew his claims against the Trustee, and the Trustee has entered a submitting appearance.

Thus, the active respondents to Mr Shuetrim’s claim are TAL and MetLife, both of whom deny liability to indemnify Mr Shuetrim.

It is, however, agreed that if Mr Shuetrim is entitled to indemnity for TPD, the TPD amount under the Basic Policy is $207,216 and under the Blue Ribbon Policy is $597,287.

Mr Shuetrim commenced these proceedings against MetLife on 25 September 2013 and joined TAL as a defendant on 9 December 2013. On those dates, neither MetLife nor TAL had made any decision in respect of Mr Shuetrim’s claim.

TAL formally declined Mr Shuetrim’s claim on 17 December 2014 for reasons it gave that day. MetLife formally declined Mr Shuetrim’s claim on 23 January 2015, for reasons it gave on 10 February 2015.

Before me it was not in issue that Mr Shuetrim had standing to sue TAL and MetLife (see the observations of Ball J in Erzurumlu v Kellogg Superannuation Pty Ltd [2013] NSWSC 1115 at [54] set out at [33] below).

Mr Shuetrim seeks declarations that TAL and MetLife “constructively denied” his claims under the relevant policies by reason of not having made any decision until the dates referred to at [15]. Mr Shuetrim also seeks declarations that the decisions themselves are “void and of no effect”. Mr Shuetrim also seeks declarations that he satisfies the TPD definition in each policy and orders that TAL and MetLife pay him the amounts referred to in [13] above together with interest under s 57 of the Insurance Contracts Act 1984 (Cth). It is common ground that I should deal with any question of interest separately, and later.

Mr Shuetrim was born in August 1976 and is now 38 years old.

Mr Shuetrim completed schooling at year 12 in 1994, obtaining a Higher School Certificate. He then commenced a Mechanics Trade Certificate as an apprentice in 1995 while working full time for Scuderia Veloce Motors. Mr Shuetrim completed the theoretical component of this course at several TAFEs and finally completed the course and obtained certification in 1997.

He then continued to work as a tradesman mechanic with Scuderia Veloce Motors and later Denlo Motors Volvo in Parramatta, Motorline Southside Volvo in Brisbane and finally Alto Volvo Motors in Gordon.

In a statement dated 5 June 2013, Mr Shuetrim gave the following unchallenged evidence concerning his time with the Police Force:

21 November 2011 was Mr Shuetrim’s last day at work and, as I have mentioned, he was medically discharged from the Police Force a year later, on 22 November 2012.

In his statement, Mr Shuetrim also dealt with a business that he had established called “Diesel Imports” as follows:

The Fund was established under the First State Superannuation Act 1992 (NSW). Pursuant to s 13(1) of that Act, on 19 February 1999, a trust deed (“the Trust Deed”) was executed to make provision for and with respect to the workings of the Fund.

By a Deed of Variation effective on 1 July 2012, the previous provisions of the Trust Deed were deleted and replaced by the provisions of the Deed of Variation and the rules annexed to the Deed of Variation (“the Rules”).

The Rules provide that the Trustee might acquire insurance policies “to provide insured benefits for members” and that:

My attention was not drawn to any other of the Rules. No counsel suggested there was any provision in the Rules, or in the Deed of Variation, which was relevant to the proper construction of the TPD definitions in the TAL and MetLife policies.

It was common ground before me that there are two distinct stages of the enquiry with which I am concerned.

The first is whether the failure of TAL and MetLife to make a decision until 17 December 2014 (in the case of TAL) and 23 January 2015 with reasons given on 10 February 2015 (in the case of MetLife), or the decisions themselves, bespeak a breach by the insurers of their duty to Mr Shuetrim to act in good faith and fair dealing (perhaps more accurately described as their duty to act with utmost good faith; see s 13 of the Insurance Contracts Act and Basten JA in Birdsall v Motor Trades Association of Australia Superannuation Fund Pty Ltd [2015] NSWCA 104 at [4]). At this stage of the enquiry, I am not called on to express any opinion as to whether Mr Shuetrim was in fact TPD at the relevant time, and am concerned only with the question of alleged breach of the insurer’s duty.

If my conclusion is that the insurers have not acted in breach of their duty of good faith and fair dealing (whether by failing to make a decision, or by the making of the decisions), that is the end of the matter.

The second stage, only reached if the answer to the question posed in the first stage is “yes”, is whether, in my opinion, Mr Shuetrim is in fact TPD.

Thus, in Hannover Life v Sayseng [2005] NSWCA 214, Santow JA, with whom Spigelman CJ and Tobias JA agreed, cited with approval the summary of principles adopted by the trial judge (Bryson J) relevant to the “first stage” of enquiry (at [36] and [50]). Bryson J, in turn, derived these principles from the observations of McLelland J in Edwards v The Hunter Valley Co-op Dairy Co Ltd (1992) 7 ANZ Ins Cas 61-113 at 77,536-7 as follows:

As to the first stage of the enquiry, Young AJ put the matter this way in Chapman v United Super Pty Ltd [2013] NSWSC 592 at [53]:

Ball J summarised the matter in Erzurumlu at [54] as follows:

In Birdsall v Motor Trades Association, Basten JA has very recently expressed the opinion that the matter I have set out at [32(f)] above (and thus at [31]) concerning the second stage of the enquiry, and the line of authority leading to Santow JA’s evident acceptance of it in Hannover v Sayseng, “may need to be reconsidered” (at [22] to [28]). Basten JA referred to the doubts about that question expressed by McPherson JA in McArthur v Mercantile Mutual Life Insurance Co Ltd [2001] QCA 317; [2002] 2 QdR 197 (especially at [19]). However, it seems to me that I am bound to follow that line of authority. No counsel suggested otherwise. And in Birdsall, Meagher JA, with whom Gleeson JA agreed, did not suggest it should not be followed, or seemingly doubt its correctness (at [50] and [58]); although referring at [58] to McPherson JA’s “thoughtful analysis” in McArthur v Mercantile Mutual.

There are two limbs to the TPD definition in the TAL and MetLife policies. The first requires that Mr Shuetrim be absent from his occupation through injury or illness for three consecutive months in the case of TAL and six consecutive months in the case of MetLife. There is no dispute about those matters in this case.

The second limb is whether Mr Shuetrim has become incapacitated to such an extent as to render him unlikely ever to “engage in or work for reward in any occupation” (in the TAL policy) or to “engage in any gainful profession, trade or occupation” (in the MetLife policy) for which he is “reasonably qualified by reason of education, training or experience”. As I have mentioned, it is common ground that the difference in wording in the definitions is not material.

Brereton J considered indistinguishable wording in Halloran v Harwood Nominees Pty Ltd [2007] NSWSC 913 and said at [76]:

Recently, Hall J also considered indistinguishable wording in Banovic v United Super Pty Ltd [2014] NSWSC 1470. His Honour cited, with approval, Brereton J’s observations in Halloran v Harwood Nominees and added at [76] to [79]:

To adopt the language used by Hall J in Banovic, it is incumbent on the insurers to consider relevant information and to make reasonable enquiries in order to ascertain whether there existed work or employment which Mr Shuetrim was reasonably capable of performing having regard to the nature and extent of his impairment, and whether such work was available (at [129], citing Alcoa of Australia Retirement Plan Pty Ltd v Frost [2012] VSCA 238 per Nettle JA at [66], Redlich JA and Davies AJA agreeing).

The range of work open to Mr Shuetrim is, the evidence in this case reveals, likely to be limited by his post-accident disabilities and the associated or consequential difficulty in competing in the open employment market. Thus, taking all these matters into account, the question in the present case is how likely is it that Mr Shuetrim would be able to find work or an occupation for which he is suited by his education, training or experience, taking into account all the limitations and practical realities of his post-accident situation (adopting the language of Hall J in Banovic at [132] and [133]).

I am concerned with the question of whether, on the evidence, it is probable that Mr Shuetrim would actually obtain work for reward for which he is qualified by education, training or experience (and not merely “special light duties”) and whether his condition has disabled him from doing what he is qualified to do. I must take a realistic and common sense approach to the matter (for example see Nicholas J in Sayseng v Kellogg Superannuation Pty Ltd [2007] NSWSC 583 at [64]).

There is, of course, a distinction to be drawn between the “legal onus” on the one hand, that is “the burden of proof as a matter of law and pleading…of establishing a case”, and the “evidentiary onus” of sustaining “the burden of proof in the sense of introducing evidence” on the other. The former “is always stable” but the latter “may shift constantly” (Purkess v Crittenden [1965] HCA 34; 114 CLR 164 at 167 to 168 per Barwick CJ, Kitto and Taylor JJ, citing Phipson on Evidence (10th ed 1963, Sweet and Maxwell) at [92]).

The TPD definitions in the policies require that Mr Shuetrim provide “proof” to the satisfaction of TAL and MetLife that he is relevantly incapacitated.

It was thus for Mr Shuetrim to place before TAL and MetLife material which would satisfy them that Mr Shuetrim fell within the TPD definition.

In that sense, there was an evidentiary onus on Mr Shuetrim (for example see Hallen J in Lazarevic at [159]).

But prior to the commencement of proceedings, no question of legal onus arose. As Young AJ said in Chapman v United Super at [70]:

However, as Mr Bleasel, who appeared with Mr Coombes for Mr Shuetrim, accepted, once proceedings were commenced Mr Shuetrim bore the onus at both stages of the enquiry: first to show that the insurers had acted in breach of their obligations of good faith and fair dealing (by not making a decision until December 2014/January 2015, or by the making of those decisions); and, second, if those matters were made out, to show that he was in fact TPD at the relevant time.

Nonetheless, an evidentiary onus may remain on the insurers to produce some material to show that there are specific occupations for which the applicant for TPD benefits is likely suited.

Thus, in the particular context of definitions such as the TPD definitions in the policies in this case, Marks J said in Gedeon v First State Super Trustee Corporation [2005] NSWIRComm 62:

It is common ground that the question of whether Mr Shuetrim satisfied the definition of TPD in either policy is a “prognostic” decision. The definition is concerned with “a present unlikelihood of something occurring in the future” (per Jessup J in Auspine Staff Superannuation Pty Ltd v Henderson [2006] FCA 1281 at [64]).

The question arises as to whether the definition requires that TAL or MetLife make a decision at a particular time.

Mr Bleasel described this as the “relevant time for the prognostic decision”.

Mr Hanson, who appeared for TAL, submitted that, in the case of the TAL policy, the “relevant time” was at the end of the “3 consecutive months” during which the insured person had been absent from his or her occupation “through Illness or Injury”, unless the parenthetical wording in the definition was enlivened by the insured person’s condition being unclear such as to make it “reasonable to defer assessment”. TAL’s case in these proceedings is that the “relevant time” in these circumstances was July 2012, being a time after the “3 consecutive months” during which Mr Shuetrim had been absent from work through illness or injury (the period from his last day at work on 21 November 2011 to 21 February 2012) together with the further period to July 2012 during which, according to TAL’s case, it was “reasonable to defer assessment” of Mr Shuetrim’s position.

Mr Duncan, who appeared for MetLife, submitted that, in the case of the MetLife policy, the relevant date was at the end of the “6 consecutive months” period referred to in the TPD definition during which Mr Shuetrim had been absent from his occupation through injury or illness; that is, May 2012, which was six months after 21 November 2011.

On the other hand, Mr Bleasel contended that the “3 consecutive months” and the “6 consecutive months” in the TAL and MetLife policies represent no more than the earliest date upon which the relevant assessment could be made. Mr Bleasel submitted that the relevant date for each policy is the date on which the insurers actually made their decision (or must be deemed to have made a decision: see the discussion on “constructive denial” below at [150] to [197]).

During submissions, my attention was directed to a number of TPD cases where the question of the relevant time for assessment was considered.

Differing views have been expressed in those cases as to the relevant date. Very often, those views have been informed by provisions in the relevant trust deed or governing regulations which cast light on the question: for example Bannister v National Mutual Life Association of Australia Ltd and State Fire Commission (Supreme Court of Tasmania, Zeeman J, 9 October 1990, unrep); Maciejewski v Telstra Super Pty Ltd [1999] NSWSC 341 per Windeyer J at [7] to [12]; Constantinides v Du Pont Superannuation Fund Pty Ltd [2002] FCA 534 per Marshall J).

As I have said, no counsel suggested that any provision of the Deed of Variation or of the Rules touches on the question of the relevant date. Accordingly, although decisions such as those referred to at [58] provide some guidance, the question of the relevant date for assessment in this case must turn on the proper construction of the insurance policies themselves, and in particular of the TPD definitions in the policies.

Neither of the TPD definitions states, in terms, at what date the insurer must assess whether the insured person is incapacitated to such an extent as to satisfy the TPD definition.

However, the parenthetical expression in the TAL Policy to which I have referred above speaks of a circumstance “where the Insured Person’s condition is unclear” and “it is reasonable to defer assessment”. The language is awkward. But its effect is, in my opinion, to reserve to the insurer the right to “defer assessment” in a circumstance where “the Insured Person’s condition is unclear” if it is “reasonable” to do so.

In my opinion, such “assessment” must be the assessment by the insurer of whether the insured person has provided proof to its satisfaction that the insured person has become relevantly incapacitated.

The deferment of that assessment must be from the end of the “3 consecutive months” during which the insured person has been “absent from their Occupation through Illness or Injury”; there is no other time identified in the TPD definition from which such a deferment could date.

That suggests that, but for a circumstance warranting a deferment of the assessment where the insured person’s condition is unclear, such assessment is to take place at the end of that three month period.

In my opinion, that is the proper construction of the TAL TPD definition.

The MetLife TPD definition does not contain the parenthetical expression which appears in the TAL TPD definition. However, my opinion is that it should also be construed so as to require consideration by the insurer of the insured person’s capacity, or lack of it, at the expiry of the insured person’s absence from their occupation for the period referred to (six consecutive months, rather than three months as in the TAL policy).

An insured person cannot be TPD within the meaning of the MetLife definition unless he or she is absent from his or her occupation through illness or injury for six consecutive months. It is, in my opinion, implicit in the definition that such incapacity must arise from the injury or illness that caused the six month absence from work. The definition thus requires consideration of whether the incapacity results from that injury or illness. The TPD definition thus directs attention to the insured person’s capacity, or lack of it, at the end of that period. That is, in my opinion, the time at which the insurer must consider whether the insured person is incapacitated in the manner called for by the definition. Otherwise, it would be open to an insured person to seek to satisfy the insurer, at any time after having been absent from work for six months, and perhaps many years later, that he or she was relevantly incapacitated by reason of the injury or illness that led to his or her absence from work.

Brereton J came to the same conclusion when considering the indistinguishable TPD definition in Halloran v Harwood Nominees.

Thus, Brereton J said at [33]:

Brereton J’s decision was cited with approval by Bathurst CJ, with whom Macfarlan, Meagher and Hoeben JJA and Tobias AJA agreed, in Hannover Life v Dargan at [41].

Ball J came to the same conclusion in Erzurumlu in relation to a similar TPD definition.

At [55] his Honour said:

Ball J referred to the decision of Nicholas J in Sayseng [2007] NSWSC 583. I do not myself read Nicholas J’s judgment as expressing the opinion attributed to him by Ball J. In that case, the insurer submitted that Mr Sayseng had failed to prove that “at any relevant time” he was TPD (at [60]). His Honour concluded that, contrary to that submission, Mr Sayseng was TPD “at all times relevant to his claim” (at [74]).

Further, in Folan v United Super Pty Ltd [2014] NSWSC 343, Nicholas AJ (as his Honour then was) considered a TPD definition indistinguishable from that in the MetLife policy. Following Brereton J in Halloran v Harwood Nominees and Ball J in Erzurumlu, his Honour concluded that “[t]he time for assessment is upon the expiration of the six month qualifying period” (at [66]).

For what it matters, this was also the view advocated by Mr Shuetrim’s solicitors, Firths, in the course of correspondence with MetLife’s insurers. Thus, on 13 May 2014 Firths stated:

The determination of the “relevant time for the prognostic decision” can be critical in cases where there has been some intervening fact or circumstance which warrants a fresh assessment of the insured person’s condition; for example, later retraining or employment.

In this case, as Mr Bleasel submits, there is no evidence of any such intervening fact or circumstance.

However, the relevant date is itself relevant to a consideration of the reasonableness of the assessment ultimately made by both TAL and MetLife of whether or not Mr Shuetrim was TPD.

The focus of the enquiry is whether is Mr Shuetrim was TPD at the relevant time.

There is in evidence before me medical opinion arising from medical consultations that occurred around and prior to the relevant dates.

There is also in evidence before me such material coming into existence after the relevant time. Those reports are admissible and relevant “provided that they are pertinent to the determination of [Mr Shuetrim’s] condition at the relevant time” (per Muir J, with whom McMurdo P agreed in McArthur v Mercantile Mutual at [74]).

In this case, there is no evidence of “any fact or circumstance intervening between any relevant earlier time and the date of the opinions which would deprive them of probative value in respect of [Mr Shuetrim’s] condition at that earlier time” (McArthur v Mercantile Mutual at [78]; and see [77] above). Therefore, much of the later medical material in this case is “pertinent” to the relevant questions.

It is common ground that, as a result of the incident on 21 September 2011, Mr Shuetrim suffered a lateral epicondylitis (or “tennis elbow”) condition.

Immediately after the incident Mr Shuetrim had pain killing injections which gave only short term relief.

He consulted Dr Daniel Biggs, an orthopaedic surgeon, on 8 December 2011. In his report that day Dr Biggs said:

Mr Shuetrim saw Dr Biggs again on 2 February 2012. Dr Biggs reported that Mr Shuetrim “has had complete symptom recurrence” and referred him for an MRI scan.

Following the MRI scan, Mr Shuetrim saw Dr Biggs again on 16 February 2012 on which occasion Dr Biggs recommended “surgery in the form of left elbow arthroscopy and lateral release”.

Dr Biggs performed the elbow arthroscopy and lateral release on 9 May 2012 and reported that there were no complications.

Dr Biggs reviewed Mr Shuetrim on 16 May 2012 and 27 June 2012 and noted that Mr Shuetrim was “progressing satisfactorily” but that:

On 17 July 2012, Dr Thaddeus West reported to Mr Shuetrim’s workers compensation insurer:

Dr West had, until shortly before his report, been Mr Shuetrim’s general practitioner. By 4 July 2012, Dr Louise Jones had become Mr Shuetrim’s GP. Nonetheless, and understandably, the insurers placed much weight on Dr West’s letter. Indeed, as I set out below, it was the only report that TAL took into account concerning Mr Shuetrim’s elbow condition when making its decision on 17 December 2014.

In an Attending Doctor’s Statement dated 11 September 2012, Dr Jones referred to a “resolving elbow injury”. On 26 January 2013, Dr Jones recorded that Mr Shuetrim had ceased physiotherapy and that there was “no improvement”.

Mr Shuetrim was referred by MetLife to another orthopaedic surgeon, Dr Roger Pillemer. On 27 May 2013, Dr Pillemer recorded that Mr Shuetrim told him that he did not feel that Dr Biggs’s 9 May 2012 surgery had helped him at all. Dr Pillemer further recorded that Mr Shuetrim had “residual signs and symptoms” of lateral epicondylitis.

Dr Pillemer opined that:

The evidence suggests that Dr Pillemer’s optimism was not, in this case, justified. There is no evidence before me that Mr Shuetrim’s lateral epicondylitis has improved.

Thereafter Mr Shuetrim saw one further orthopaedic surgeon, Dr Robert Breit on 15 January 2014, as well as two general surgeons, Dr W G D Patrick on 25 June 2013 and Dr S K Cyril Wong on 1 July 2014.

Each of those doctors expressed differing views as to the extent to which Mr Shuetrim had lost the effective function of his left arm. Dr Patrick opined that Mr Shuetrim had lost 20 per cent effective function. Dr Breit thought there to be “1% upper extremity impairment”. Dr Wong found there to be significant restriction in flexion, mild restriction in extension and pronation at the left elbow, with a 13 per cent upper extremity impairment.

Dr Breit opined that Mr Shuetrim’s impairment was permanent.

The weight of the medical evidence is that Mr Shuetrim had an anxiety and adjustment disorder at the relevant time. The evidence suggests that, to a large extent, this disorder was brought about by Mr Shuetrim’s experience whilst in the Police Force, and in particular by reason of his treatment by his peers within the Police Force immediately following his elbow injury.

Mr Shuetrim consulted Ms Louise Walsh, a psychotherapist and counsellor who on 17 January 2012 diagnosed Mr Shuetrim as suffering from an anxiety and adjustment disorder.

On 9 March 2012 Ms Walsh recommended that Mr Shuetrim see a consulting psychiatrist, Dr Michael Calthorpe, “[g]iven the severity of his symptoms and the level of distress Mr Shuetrim experiences when planning his return to work” as a police officer. Ms Walsh later opined that Mr Shuetrim’s adjustment disorder was secondary to his elbow injury and “workplace grievances”. Ms Walsh recorded that those grievances resulted from an “incident in 2011 involving peers where Mr Shuetrim felt unsupported inhibiting his trust in his employer.”

On 23 April 2012, Ms Walsh referred Mr Shuetrim to Dr Calthorpe. In her letter to Dr Calthorpe, Ms Walsh said:

Dr Calthorpe saw Mr Shuetrim on 28 May 2012 and concluded that Mr Shuetrim was suffering from “a severe stress reaction associated with work experiences” but concluded that, overall, the circumstances pointed to “eventual rehabilitation and success”.

Thus Dr Calthorpe stated:

A month later, Mr Shuetrim was referred by his workers compensation insurer to another consulting psychiatrist, Dr Graham George. Dr George saw Mr Shuetrim on 28 June 2012.

Dr George diagnosed Mr Shuetrim as suffering from a “Generalised Anxiety Disorder incorporating panic phenomena” and “Mild Major Depression with Anxious Mood”.

Dr George opined that:

On 11 September 2012, Dr Jones reported that Mr Shuetrim still suffered “anxiety attacks [and] social withdrawal” and was improving but “slowly”.

On 26 January 2013, Dr Jones reported that Mr Shuetrim had “reduced panic attacks, mood stable on medication”.

Until May 2013 Mr Shuetrim was also regularly seeing his psychotherapist, Ms Walsh. His last appointment with Ms Walsh was on 16 May 2013. Ms Walsh stated that at that time Mr Shuetrim “was reportedly feeling well enough to self-care and maintain his progress”. Later, on 8 July 2014, Mr Shuetrim told Ms Julie Strinic, a psychologist who compiled a “Vocational Assessment Report” to which I refer below, that he found Ms Walsh too “directive” rather than “supportive” of him.

On 22 May 2013 MetLife arranged for Mr Shuetrim to see a forensic psychiatrist, Dr Adam Martin.

Dr Martin also found Mr Shuetrim to have a generalised anxiety disorder and a “Panic Disorder with agoraphobia”.

The weight of the evidence also establishes that, by reason of his elbow injury, Mr Shuetrim is not able to return to his previous occupations as either a mechanic or a police officer.

Dr Calthorpe’s opinion was that the “severe stress reaction” that Mr Shuetrim had suffered “associated with work experiences” also made it unlikely that Mr Shuetrim could return to the Police Force.

Dr Calthorpe did add that Mr Shuetrim’s “personal, marital and work history” and his “considerable personal attributes” pointed to “eventual restabilisation and success” provided that he received “appropriate professional assistance and support from family and friends”.

Dr George was also clear that it was unlikely that Mr Shuetrim could return to the Police Force. Dr George thought that Mr Shuetrim had “high trait anxiety”, that his “policing duties have then put him in situations which precipitate anxiety” and that his anxiety disorder was “substantially related to his employment” as a police officer.

The extracts I set out above at [107] from Dr George’s report suggest he thought there was a possibility of “remission”. However, Dr George was clear that Mr Shuetrim’s prognosis for return to work with the Police Force in either an operational or non-operational capacity was extremely poor.

As stated above, on 17 July 2012 Mr Shuetrim’s former GP, Dr West, expressed a very different opinion, namely that Mr Shuetrim was “fit to resume normal duties” and that “I have completed my task in getting him back to work free of his original injury” (see [90] above).

Dr West’s optimism is not reflected in any other evidence before me. It was, I understand, common ground before me that, despite Dr West’s opinion, Mr Shuetrim was not at the relevant times, and is not now, fit to return to the Police Force.

On 26 January 2013, Dr Jones expressed that view that Mr Shuetrim could not return to the Police Force or to work as a mechanic, and that his future employment in other fields was “still unknown”.

Dr Pillemer’s opinion, based upon his assessment of Mr Shuetrim on 27 May 2013, was that although Mr Shuetrim was not fit to resume work as a police officer he was fit for a “wide range of employment opportunities and activities that do not place excessive stress on his left elbow region”.

Dr Martin agreed that Mr Shuetrim was not fit for work as a police officer or mechanic but that “he may be best suited to a job in some form of gardening or farming capacity” and suggested that “vocational assessment may be helpful”.

Dr Patrick accepted that Mr Shuetrim could not do police work but opined that he “might possibly be able to do some light horticultural type work, working largely ‘one armed’”.

Dr Breit agreed that it was unlikely Mr Shuetrim could return to his “pre-injury duties” (that is, as a police officer) and said that Mr Shuetrim should not be placed in a position of “potential confrontation where he may be required to protect himself from others”. Dr Breit said that “from the musculoskeletal viewpoint” Mr Shuetrim could apply for sedentary work.

Thus, although the weight of medical opinion at May to June 2012 (the relevant times) and later was that Mr Shuetrim was not fit to resume to return to the Police Force or to his former occupation as a mechanic, some optimism was expressed by the doctors as to Mr Shuetrim’s ability to do light horticultural or sedentary work.

On 8 July 2014, in the circumstances I discuss below, Mr Shuetrim attended on a psychologist, Ms Julie Strinic, at an organisation called Advanced Personnel Management (“APM”). Based on her interview with Mr Shuetrim, Ms Strinic produced a “Vocational Assessment Report” dated 24 July 2014.

Ms Strinic’s report of 24 July 2014 stated that:

Ms Strinic reported that Mr Shuetrim stated he was “unable to drive due to his functional limitations with his left elbow injury and also due to his anxiety symptoms”. She further reported that “he no longer socialises with friends and family due to his anxiety” and had “lost interest in previously pleasurable activities such as socialising with friends and family”.

Ms Strinic reported:

Ms Strinic then discussed various “[o]ptions [i]dentified”.

The first option was that Mr Shuetrim return to work as a motor vehicle mechanic. Ms Strinic concluded:

Ms Strinic then considered possible work for Mr Shuetrim as a landscaper or gardener and concluded:

Ms Strinic then considered the possibility of Mr Shuetrim becoming a sales representative for motor vehicle parts and accessories and concluded:

Finally, Ms Strinic considered whether Mr Shuetrim could do work as an inquiry clerk or service advisor. She concluded:

The report of Dr Paul to which Ms Strinic referred was not in evidence before me. Mr Bleasel informed me that he had been unable to locate it. There is no other evidence that Mr Shuetrim saw Dr Paul.

Ms Strinic’s report continued:

Overall Ms Strinic concluded:

Ms Strinic thus opined that Mr Shuetrim had the “transferable” and “customer service” skills and “extensive knowledge” apposite for a sales representative in the area of motor vehicles and accessories, but that because of his “reported restrictions relating to generalised and social anxiety” this option was not considered suitable and further assessment of the suitability of such a role was required.

Ms Strinic also thought occupation as an inquiry clerk or service advisor was suitable for Mr Shuetrim to pursue based on his education, training and experience, but that his physical capacity to perform that role was “unclear”. Ms Strinic concluded that although Mr Shuetrim “presented with sound transferable skills”, suitable vocational options could not be determined because of his “presenting physical and psychological symptoms”.

A few months later, on 12 September 2014, Mr Shuetrim’s then GP, Dr Nadir Sher, expressed the opinion that there was “more than 90 per cent” certainty that Mr Shuetrim was “unable to join any form of employment”. However, Dr Sher concluded that Mr Shuetrim could be retrained to do something different and “with extensive retraining and rehabilitation [would] be able to perform some sort of meaningful work”. Dr Sher’s opinion was expressed briefly and I am inclined to place far more weight on Ms Strinic’s more considered observations.

On 7 June 2013 Firths served on the Trustee Mr Shuetrim’s 5 June 2013 statement referred to at [21] above.

In that statement, in addition to the matters set out above, Mr Shuetrim made these observations about his “everyday life”:

As can been seen from these extracts, much of Mr Shuetrim’s statement speaks of his then present condition. However, it is clear enough that Mr Shuetrim is saying in the statement that his physical and mental condition has not changed since the onset of his physical and mental symptoms in 2011. Thus he said, at [26], that “since the onset” of his elbow and anxiety condition his sleeping patterns have been affected and “this has remained unchanged to present”. At [33] Mr Shuetrim compares his social activities from “prior to the onset of my injury and resulting stress and anxiety” to the then present situation and speaks of what he can no longer do. Overall, a fair reading of Mr Shuetrim’s statement is that he is describing both his position in June 2013 and at all times since the incidents of 2011, including on the relevant dates (May and July 2012). In so doing, Mr Shuetrim is giving an account of his condition which is to much the same effect as the various medical practitioners’ record he gave to them.

For those reasons, I do not accept Mr Duncan’s submission that Mr Shuetrim’s statement was not speaking as at the relevant date (May 2012 for MetLife) and is therefore “of little to no benefit”.

In the statement, Mr Shuetrim went on to say this about “prospects of future employment”:

Again, a fair reading of this part of Mr Shuetrim’s statement, especially when considered in the context of the earlier paragraphs that I have set out at [142], is that Mr Shuetrim is saying that the “condition” (see his [35]) and “physical limitations” (see his [37]) which render him unable to pursue the occupations to which he refers are those which obtained since the 2011 incidents (including on the relevant dates of May and July 2012).

On 6 March 2014 Mr Shuetrim swore an affidavit in these proceedings to which he annexed his 5 June 2013 statement.

In that affidavit, Mr Shuetrim stated:

Again, although the focus of this evidence is on Mr Shuetrim’s then present condition, Mr Shuetrim also speaks historically; he speaks of continued disabilities at [8], [10], [15] and [16]. A fair reading of this evidence is that Mr Shuetrim was saying that his position remained as it was in 2011, and at the date of his June 2013 statement.

As I have mentioned, Mr Shuetrim claims that, by the commencement of these proceedings, both insurers had “constructively denied” his entitlement to indemnity.

Mr Duncan submitted that the expression “constructive denial” is a mere “colloquialism” and that the correct question is whether, in circumstances where an insurer has not made a decision to accept or deny an insured person’s claim, that failure constitutes a breach of the insurer’s duty of good faith and fair dealing.

In his reply submissions, Mr Bleasel accepted that proposition and submitted:

Thus, the first matter for consideration is whether the manner in which TAL and MetLife dealt with Mr Shuetrim’s claim up to the time they made a decision was itself a breach of their duty of good faith and fair dealing.

In view of the conclusions to which I have come (see below) concerning TAL’s decision of 17 December 2014 and MetLife’s decision of 23 January 2015 (with reasons given on 10 February 2015) it is not necessary for me to decide this issue.

However, I am not persuaded that the fact that neither TAL nor MetLife made a decision before those dates itself bespeaks a breach of their duty of good faith and fair dealings with Mr Shuetrim. That is, I am not persuaded that, prior to the dates of those decisions, either TAL or MetLife “constructively denied” liability to indemnify Mr Shuetrim.

I will outline my reasons briefly.

Mr Shuetrim sustained injury to his elbow on 21 September 2011. His last day at work was 21 November 2011. He was medically discharged from the Police Force on 22 November 2012.

Mr Shuetrim made his claim for TPD benefits on 15 February 2013 when his solicitors, Firths, served on the Trustee a large number of documents, including a “Member’s Statement” that Mr Shuetrim had executed on 17 January 2013 in which he formally claimed TPD benefits. Also enclosed with that letter were a large number of medical reports.

The Trustee referred Mr Shuetrim’s claim to MetLife and TAL on or about 19 March 2013.

The reason for the delay was explained by a letter that the Trustee sent to Mr Shuetrim, care of Firths, on 18 March 2013:

The letter went on to explain aspects of the process of “TPD Assessment” and continued:

On 24 April 2013 MetLife wrote to Firths notifying them of the appointments with Drs Martin and Pillemer and also stating that “to enable us to consider this claim further, we have arranged a Vocational Assessment for your client to attend” with Ms Paula McCormack on 7 June 2013.

On 10 May 2013 Firths wrote to the Trustee indicating that Mr Shuetrim would attend the medical examinations with Drs Martin and Pillemer.

However, in relation to the appointment that MetLife had made for Mr Shuetrim to attend a vocational assessment, Firths wrote:

On 14 May 2013 MetLife replied as follows:

On 30 May 2013 Firths replied to MetLife’s letter of 14 May 2013 as follows:

MetLife replied by letter of 3 June 2013 that repeated the contents of its letter of 14 May 2013 and concluded:

Before me, there was debate as to whether cl 7.3 of the MetLife policy entitled MetLife to require that Mr Shuetrim attend a vocational assessment. Clause 7.3 obliged Mr Shuetrim to provide to MetLife “such evidence to substantiate the claim as we may reasonably require” and to “submit at our expense to a medical examination”. It did not, in terms, oblige Mr Shuetrim to submit to a vocational assessment.

However, the obligations of good faith and fair dealing are bilateral (for example per Santow JA in Hannover Life v Sayseng at [54]).

In my opinion, in the context of a claim by Mr Shuetrim that he was TPD, it was quite reasonable for MetLife to require, as a condition of it considering his claim, that he attend a vocational assessment.

More to the point, I do not consider that it was a breach by MetLife of its obligation of good faith and fair dealing to require Mr Shuetrim to submit to such an assessment.

Firths replied on 4 June 2013 as follows:

On 7 June 2013 MetLife wrote to the Trustee as follows:

On 7 June 2013 Firths served on the Trustee Mr Shuetrim’s 5 June 2013 statement.

Firths’ covering letter included:

On 25 June 2013 the Trustee wrote to Firths as follows:

The Trustee then set out the TPD definition from the MetLife policy in cl 7.3 and continued:

Firths’ response on 18 July 2013 to the Trustee’s letter of 25 June 2013 included the following:

In my opinion, Firths’ combative response to MetLife’s suggestion of a vocational assessment, and to the Trustee’s observations on the subject, was unwarranted.

MetLife may also have gone a little far when it said to the Trustee on 7 June 2013 that Mr Shuetrim’s refusal to attend a vocational assessment showed that he “does not wish to proceed with the assessment of his claim”. MetLife may also have acted a little precipitately by simply closing its file. However, I do not consider that MetLife’s refusal to further consider Mr Shuetrim’s claim pending his attendance at a vocational assessment was unreasonable or a breach of its duty of good faith and fair dealing.

At around this time TAL also arranged to have Mr Shuetrim attend a vocational assessment.

Thus, on 14 August 2013, a rehabilitation counsellor from Konekt Australia Pty Ltd wrote to Mr Shuetrim stating that she had endeavoured to contact him on several occasions and that he had been referred to Konekt by TAL for “an assessment of your potential to return to suitable work, based on your capabilities”.

On 26 August 2013 Firths wrote to the Trustee referring to the letter from Konekt and stating:

It may have been inappropriate for TAL or its consultant to write directly to Mr Shuetrim. However, again, I do not think it unreasonable that TAL refused to consider Mr Shuetrim’s claim further following upon his refusal to attend a rehabilitation counsellor.

Thereafter, on 25 September 2013 Mr Shuetrim commenced these proceedings against MetLife and, on 9 December 2013, joined TAL to the proceedings.

On 8 May 2014 the solicitors for MetLife again raised with Firths the question of Mr Shuetrim submitting to a vocational assessment.

The solicitor stated:

Firths replied on 13 May 2014:

On 16 June 2014 MetLife filed a notice of motion seeking an order that Mr Shuetrim submit to a vocational assessment. The motion was defended but on 30 June 2014 the Registrar made the order sought by MetLife.

Only then did Mr Shuetrim attend on Ms Strinic.

On 20 August 2014 this matter was set down for hearing.

In the meantime Firths served further medical reports. For example, on 4 August 2014 they served a report by general surgeon Dr Wong dated 1 July 2014 and on 13 October 2014 served a report by Mr Shuetrim’s then GP Dr Sher dated 12 September 2014.

In around October 2014 a dispute arose as to whether MetLife should have access to documents produced on subpoena by Dr Biggs, Dr West, Ms Walsh and other entities, including the NSW Police Force. At this point, MetLife had not yet made a determination as to whether to accept liability to indemnify Mr Shuetrim (for example see Hearne v Street [2008] HCA 36; 235 CLR 125).

On 28 October 2014 MetLife filed a notice of motion seeking leave to use the documents produced in answer to those subpoenas:

That motion was also defended but on 5 December 2014 Lindsay J granted both MetLife and TAL leave to so use the documents.

When those circumstances are considered, together with the fact that, during the period from 15 February 2013 to the end of 2014 Firths were regularly serving on the insurers (very often repetitively) medical reports and other material, I am not persuaded that, prior to its decision in January 2015, MetLife acted in breach of its duty of good faith and fair dealing so as to have “constructively denied” liability to indemnify Mr Shuetrim.

As Mr Bleasel points out, TAL was a good deal less active than MetLife and, to a large extent, appears content to have ridden in MetLife’s wake. However, I am not persuaded its failure to make a decision prior to 17 December 2014 was, itself, a breach of its duty of good faith and fair dealing to Mr Shuetrim.

So far as concerns the insurer’s decisions, the relevant principles are summarised by Nicholas J in Weber v Tiss Pty Ltd [2005] NSWSC 67 at [8] as follows:

However, as the authorities I have set out above emphasise, the insurer must, when making its decision, act reasonably and consistently with its duty of good faith and fair dealing to the insured. The insurer must ask itself the correct question, take into account all of the relevant material and not misstate the effect of the material before it.

On 17 December 2014 TAL decided to decline liability to indemnify Mr Shuetrim.

Their letter of denial of 17 December 2014 was in the following terms:

In my opinion, the consideration given by TAL to the questions at hand was inadequate and so unreasonable that it should be vitiated.

TAL correctly identified the relevant date for its consideration of Mr Shuetrim’s position, namely at the expiry of Mr Shuetrim’s three month absence from work but with such assessment being deferred “if the Member’s condition is unclear as at the ordinary date for assessment”. This accords with my view as to the relevant date for assessment under the TAL policy (see [61] to [65] above).

TAL thus identified July 2012 as being the relevant date on the basis that, although the three month period of Mr Shuetrim’s absence from work expired on 21 February 2011, it was reasonable to defer assessment of Mr Shuetrim’s position until the outcome of his elbow surgery on 9 May 2012 was known.

However, when assessing the outcome of that elbow surgery, TAL had regard only to the opinion of Dr West, Mr Shuetrim’s former GP, who, as I have set out above (at [90]), considered Dr Biggs’s surgery of 9 May 2012 “successful”, that Mr Shuetrim was “fit to resume normal duties” (including, apparently, as a police officer) and that he had now completed his task of “getting [Mr Shuetrim] back to work free of his original injury”.

TAL made no reference to any other medical evidence concerning Mr Shuetrim’s left elbow, stating that it had “received no other significant medical opinion in relation to the elbow condition in the period shortly after July 2012”.

But there was other medical opinion dating from that period relevant to Mr Shuetrim’s condition. There was also later medical opinion which was pertinent to consideration of Mr Shuetrim’s condition as at July 2012.

Dr West himself had certified Mr Shuetrim unfit for work on 22 May 2012 and 25 June 2012.

Dr Biggs, who performed the 9 May 2012 elbow arthroscopy and lateral release, reviewed Mr Shuetrim on 27 June 2012. He said that Mr Shuetrim was “progressing satisfactorily” but “does have some residual antaro-lateral left elbow discomfort” and “remains unfit for lifting of anything greater than 3.5kg for a further 2 months”.

TAL made no reference to Dr Biggs’s report the following year, on 8 May 2013, in which he said “the prognosis remains guarded”.

TAL’s letter also made no reference to the reports of Drs Pillemer, Patrick, Breit or Wong, evidently because those doctors saw Mr Shuetrim later than July 2012 (on 27 May 2013 in the case of Dr Pillemer, 26 June 2013 in the case of Dr Patrick, 15 January 2014 in the case of Dr Breit, and 1 July 2014 in the case of Dr Wong).

However, each of those doctors expressed opinions about Mr Shuetrim’s elbow which were potentially relevant to his condition as at July 2012. For example, Dr Pillemer recorded that Mr Shuetrim told him that he did not feel that Dr Biggs’s 9 May 2012 operation had helped him at all and noted that Mr Shuetrim had “residual signs and symptoms”. Dr Pillemer did opine that Mr Shuetrim’s position was “almost certain to improve significantly with the passage of time” but his assessment of Mr Shuetrim’s condition as at 27 May 2013 was inconsistent with Dr West’s opinion. Dr Patrick opined that Mr Shuetrim’s position had not improved “significantly with the surgical intervention”. Although Dr Breit disagreed with Dr Patrick’s assessment of extremity impairment, he did agree that Mr Shuetrim’s impairment was permanent. Dr Wong opined that there was a significant restriction on Mr Shuetrim’s elbow flexion and a mild restriction in extension and pronation. TAL made no reference to these opinions and, evidently, had no regard to them.

So far as concerns Mr Shuetrim’s anxiety condition, TAL acknowledged that Mr Shuetrim “was reporting significant stress, anxiety and physiological problems” and referred to some of the observations of Dr Jones, Dr Calthorpe and Ms Walsh.

TAL stated that Dr Jones had indicated that there “may be a need for [Mr Shuetrim] to find alternative employment”. If Dr Jones expressed that opinion, any report to that effect has not been drawn to my attention.

What is in evidence is Dr Jones’s 11 September 2012 report which stated that it was “unknown” when Mr Shuetrim would likely be certified fit to return to work and her statement of 26 January 2013 that it was then “still unknown” whether Mr Shuetrim could return to “employment in other fields” than the Police Force or as a mechanic.

TAL recorded that it was “significant” that the medical evidence “in or about July 2012” did not support a conclusion that Mr Shuetrim “was unlikely ever to return to work, except possibly for work as a Police Officer”.

This observation makes clear that TAL excluded from consideration any medical evidence dating from later than “in or about July 2012” that might touch on the question of the likelihood of Mr Shuetrim ever engaging in work for reward for which he was reasonably qualified by reason of his education, training or experience.

The wording used by TAL also suggests that it thought there was some ambiguity about the available medical evidence as to the possibility of Mr Shuetrim returning to the Police Force (“except possibly” for work as a police officer).

As to the latter point, the one matter about which medical opinion was united was that, by reason of his stress and anxiety condition, Mr Shuetrim was no longer suited for work in the Police Force.

Further, there was evidence before TAL which touched on the question of whether, as at July 2012, Mr Shuetrim was “unlikely ever to return to work”.

For example, as I have said, his GP Dr Jones reported on 26 January 2013 that Mr Shuetrim would “never return to work as a Police Officer or Mechanic” and that otherwise his capacity for future employment was “still unknown”.

TAL’s recitation of the test as being whether Mr Shuetrim was “unlikely ever to return to work” also suggests that TAL had not turned its mind to whether the “work” to which Mr Shuetrim could return was work for which he was reasonably qualified by reason of his education, training or experience.

TAL stated that Mr Shuetrim was qualified as a mechanic, and noted that he had held positions as a technician and mechanic, but paid no regard to numerous references in the medical reports to the unlikelihood of Mr Shuetrim being able to work as a mechanic. Although Dr Pillemer opined that, as at 27 May 2013, Mr Shuetrim was fit for a “wide range of employment opportunities”, he excluded activities that placed “excessive stress on his left elbow region”. Dr Martin stated that, as at 22 May 2013, it was difficult to imagine Mr Shuetrim being able to work successfully as a mechanic. And Dr Jones reported on 26 January 2013 that Mr Shuetrim “will never return to work as a police officer or mechanic”. These opinions were “pertinent” to TAL’s consideration of whether, as at July 2012, Mr Shuetrim was unlikely ever to be able to return to work as a mechanic (see [81] above); and yet they were not referred to by TAL and evidently not thought by TAL to be relevant.

TAL also referred to the work that Mr Shuetrim had done “as a company director of diesel imports” and as an “importer/distributor of diesel additives”.

TAL then expressed the view that “from a vocational perspective” Mr Shuetrim “was and is” capable of working as a mechanic or as a sales representative.

TAL’s statement that Mr Shuetrim “was and is” capable of working as a mechanic failed to have regard to the evidence to which I have referred.

Further, TAL’s statement that Mr Shuetrim “was and is” capable of working as a sales representative did not refer to, and evidently did not take into account, the opinion expressed by Ms Strinic in her report of 24 July 2014 that this “option was not considered suitable” because it would “require interaction and communication with supervisors, co-workers and customers, thereby placing Mr Shuetrim in an emotionally vulnerable position if he was trying to take this type of work”.

It is true that Ms Strinic expressed that opinion as at 24 July 2014, but that evidence was capable of relevance to Mr Shuetrim’s position as at the relevant date.

TAL’s letter concluded with the statement, under the heading “[p]rocedural fairness”, that “as a result of the pressure of time arising from the progress of the related proceedings in the Supreme Court of New South Wales” TAL had “proceeded to a formal determination” (that is, without “procedural fairness”).

In all those circumstances, my conclusion is that TAL’s consideration of whether or not Mr Shuetrim was TPD was so unreasonable as to constitute a breach of its obligations of good faith and fair dealing to Mr Shuetrim. The result is that its decision is vitiated and I should now proceed to consider, for myself, whether Mr Shuetrim was TPD.

On 17 December 2014 MetLife sent a letter to Firths stating that:

The letter then set out the TPD definition and continued:

Although MetLife’s letter of 17 December 2014 was evidently intended to afford procedural fairness to Mr Shuetrim, it hardly did so.

The letter did no more than identify the material exchanged between the parties, or produced by third parties during these proceedings, and invited submissions from Mr Shuetrim on the ultimate question; namely, whether he was TPD.

As the Trustee pointed out in its solicitor’s letter of 23 December 2014 to the solicitors acting for MetLife, MetLife’s letter of 17 December 2014 did not notify Mr Shuetrim (or the Trustee) of any matter that MetLife considered to be adverse to Mr Shuetrim’s claim, or of any issues MetLife considered required clarification. On the other hand, MetLife’s letter called on Mr Shuetrim to produce any “material which is adverse to your claim”.

Firths made much the same point in their letter of 22 December 2014 (although more tersely) as follows:

MetLife served its defence on 23 January 2015. In that defence it stated that “it [had] determined to decline the claim”.

On 30 January 2015 Firths wrote to MetLife’s solicitors asking “when do you plan on providing us with your client’s reasons for decision” and drawing attention to the hearing date of these proceedings of 9 March 2015.

On 10 February 2015 MetLife wrote to the Trustee giving its reasons for declining Mr Shuetrim’s claims.

That letter was in the following terms:

MetLife’s letter nominated 21 March 2012 as the relevant date for its consideration of whether Mr Shuetrim was TPD. MetLife stated, incorrectly, that 21 March 2012 was six months “from the date last worked”. In fact, 21 March 2012 was six months from the date of Mr Shuetrim’s elbow injury. Six months from the date Mr Shuetrim last worked was 21 May 2012. As Mr Duncan submitted, and as I have found, the latter date is the relevant date so far as concerns MetLife.

MetLife’s letter extends over seven pages, and contains an accurate summary of Mr Shuetrim’s education, training and experience as well as a reasonably balanced view of the medical opinions concerning Mr Shuetrim’s condition. Unlike TAL, MetLife acknowledged that the weight of medical opinion was that Mr Shuetrim was not able to return to work as a police officer or as a mechanic and that there were some opinions which offered some support for Mr Shuetrim’s claim that he was TPD.

However, in my opinion, the letter has a fatal flaw in that it states, without qualification, that:

It is true that Ms Strinic identified vocational options. But Ms Strinic did not conclude that any were suitable. Indeed, she concluded that the options of motor vehicle mechanic, landscaper or gardener, and sales representative were not suitable. As I have set out above, she also concluded that although Mr Shuetrim had knowledge and skills apposite to employment as a motor vehicle parts and accessories sales representative (so that, all other things being equal, he had “medium” prospects of being able to pursue this occupation) his reported anxiety condition rendered such employment unsuitable (with further assessment required). Ms Strinic reached a similar conclusion concerning the possibility of Mr Shuetrim being employed as an inquiry clerk or service advisor, stating that his “physical capacity to perform this role is unclear”. Ms Strinic recommended that Mr Shuetrim’s ability to “physically perform the above identified roles be further assessed psychologically and physically”.

Overall, Ms Strinic’s conclusions were that:

Since April 2013, MetLife had agitated for Mr Shuetrim to attend a vocational assessment. It was Mr Shuetrim’s refusal to attend a vocational assessment at that time that caused MetLife to close its file in June 2013. MetLife then fought a contested motion in these proceedings to compel Mr Shuetrim to attend on Ms Strinic. And yet it failed to give Ms Strinic’s opinion any, or any proper, weight when coming to its decision.

MetLife’s letter states that there were “no clear opinions among the available evidence that Mr Shuetrim is unlikely ever to engage in any other gainful profession, trade or occupation for which he is reasonably qualified” and that “[i]nstead, the medical evidence is characterised largely by findings that Mr Shuetrim could return to work in an alternate vocation”.

In my opinion, it was a breach of MetLife’s duty of good faith and fair dealing to Mr Shuetrim to express that opinion without endeavouring to reconcile it with the findings of Ms Strinic.

In my opinion, that failure was so unreasonable as to constitute a breach of MetLife’s obligations to Mr Shuetrim sufficient to vitiate its decision.

Accordingly, as with TAL, I must consider for myself whether Mr Shuetrim is TPD.

To the extent that there was an evidentiary onus on the insurers to “introduce evidence” to show that there were specific occupations open to Mr Shuetrim to pursue notwithstanding his elbow and anxiety condition, my opinion is that the insurers have discharged that onus.

First, the insurers pointed to Mr Shuetrim’s own evidence about the business “Diesel Imports” that he conducted in early 2007.

Second, Ms Strinic had identified two occupations for which Mr Shuetrim’s training and experience appear to qualify him (motor vehicle parts and accessories sales representative, and inquiry clerk or service advisor), albeit subject to the qualifications to which I have referred concerning his reported physical and psychological conditions.

The authorities that I have set out above show that Mr Shuetrim must prove that, on the probabilities, he was on the relevant dates (May to July 2012) so “incapacitated” that he is “unlikely ever” to actually obtain employment, on a full time or part time regular basis, in some recognised occupation, which he is likely to be able to obtain, and for which he is reasonably qualified by reason of his education, training or experience.

Mr Shuetrim is now 38 years of age. At the time of his elbow injury, and at the relevant times, he was 35 years of age. He then had a working life expectancy in the vicinity of 30 years. The expression “unlikely ever” means that Mr Shuetrim must show that, probably, he would not during that period of 30 years “ever” obtain relevant employment.

The evidence establishes that Mr Shuetrim has chronic “tennis elbow”.

He has also been diagnosed as having a “severe stress reaction” due to his experiences in the Police Force (Dr Calthorpe), a “Generalised Anxiety Disorder incorporating panic phenomena” (Dr Collins) and a “Generalised Anxiety Disorder” and “Panic Disorder with agoraphobia” (Dr Martin).

As noted at [242] above, in its decision letter of 10 February 2015 MetLife accepted that “there is consensus among the various medical report authors that Mr Shuetrim is unable to return to work as a police officer or a mechanic”. I think that concession well made. The weight of the evidence is that Mr Shuetrim cannot now return to either of his former occupations.

As I have said, Ms Strinic identified two occupations for which Mr Shuetrim has relevant knowledge, experience and skills; sales representative and service advisor or enquiry clerk, especially in the automotive area. Ms Strinic’s conclusion that the former occupation was unsuitable and that Mr Shuetrim’s capacity to pursue the second occupation was unclear was based on the “conflicting medical evidence and limited information available relating to his current physical and psychological work capacity”.

However, Mr Shuetrim gave evidence in his 5 June 2013 statement and in his 6 March 2014 affidavit that at all times since 2011, and thus on the relevant dates of May and July 2012, he has been unable to perform such work (see especially [36], [38] and [41] of his 5 June 2013 statement at [145] above, and [11], [12], [14] and [15] of his 6 March 2014 affidavit at [148] above).

The problem I see for the insurers in this case is that they did not challenge this evidence. Nor, otherwise than very generally, did they challenge Mr Shuetrim about anything he said to any of the doctors. Although some of those doctors expressed a more optimistic view as to Mr Shuetrim’s likely future capacity to work than Mr Shuetrim has, I do not see any of those views as being so irreconcilable with Mr Shuetrim’s evidence that, absent direct challenge, I should reject it.

Mr Hanson did not cross-examine Mr Shuetrim at all.

Mr Duncan did cross-examine Mr Shuetrim and, as I set out below, demonstrated the likelihood that Mr Shuetrim had, in his 5 June 2013 statement, exaggerated to some extent the likely effect of his disabilities on his “everyday life”.

But Mr Duncan did not direct one question to Mr Shuetrim on what I regard as the critical issue; namely, Mr Shuetrim’s capacity at the relevant date to engage in occupations for which he was reasonably qualified by reason of his education, training or experience, especially in the two occupations identified by Ms Strinic as potentially suitable.

That leaves Mr Shuetrim’s evidence on those matters unchallenged. As I have said, I do not agree with Mr Duncan’s characterisation of that evidence as being of “little to no benefit”. On the contrary, that evidence, if accepted, shows in my opinion that Mr Shuetrim is incapacitated in the manner I have set out at [254] and is thus TPD.

Mr Duncan cross-examined Mr Shuetrim concerning various posts he and his wife made on their Facebook pages from September 2014 to January this year.

In his statement of 5 June 2013 Mr Shuetrim said, at [33] (set out at [142] above), that:

In cross-examination Mr Shuetrim was shown various posts he had made on the NSW Police Force’s Facebook page in December 2014 and early this year, including an exchange he had with a former colleague about a recent incident which was featured on one of the Facebook pages.

Mr Duncan suggested to Mr Shuetrim that, in the light of that post, it was untrue to say that he had “lost” “absolutely all contact with my work colleagues”. In response, Mr Shuetrim said “I was referring to my immediate work colleagues at the time” and suggested he was referring to a loss of contact with work colleagues “three and a half hours up the coast” (presumably a reference to Mr Shuetrim’s colleagues in the Taree area where he was stationed).

The following exchange occurred:

In a “Member’s Statement” that Mr Shuetrim completed for TAL on 17 January 2013 (which was included in the material served on the Trustee when Mr Shuetrim made his claim for indemnity on 15 February 2013) Mr Shuetrim said:

In his 5 June 2013 statement, Mr Shuetrim made various assertions as to his driving ability “since the exacerbation of my mental health from my elbow injury to present” (at [27] and [28], set out at [142] above). In effect, Mr Shuetrim said that he now only drove short distances, that he would try to avoid complicated traffic situations, that he would “absolutely avoid” driving during peak hour “as well as long distances”, and that he could only drive “for around 10 minutes or so” because of the pain in his left elbow.

Ms Strinic also stated in her report dated 24 July 2014 that Mr Shuetrim told her:

In cross-examination Mr Duncan showed Mr Shuetrim a photograph which Mr Shuetrim’s wife had posted on her Facebook page on 12 January 2014 showing Mr and Mrs Shuetrim, and their three children, in the family car with Mr Shuetrim in the driver’s seat.

Mr Shuetrim gave this evidence:

Mr Shuetrim volunteered the evidence about going to the South Coast. He did not deny that he drove his family to the South Coast. He said that he thought his wife may have driven but that he could not remember.

If, as he said in his 5 June 2013 statement, he “absolutely” avoided driving “long distances”, and if he could only keep his arm on the steering wheel for about 10 minutes and therefore understood it would negligent to drive for longer than that period, it is surprising that he was unable to say whether he did, or did not drive to the South Coast six months later on 12 January 2014.

In his 5 June 2013 statement, Mr Shuetrim said that going shopping was difficult for him and that he only went to shopping centres when they were not busy. Mr Shuetrim stated that he could “only last around 20 to 30 minutes in a shopping centre” and that “merely the thought of shopping” was “an issue for me”.

Mr Duncan showed Mr Shuetrim a photograph that Mr Shuetrim had posted on his Facebook page on 18 December 2014 showing him sitting in the driver’s seat of his car wearing a pair of sunglasses. Adjacent to that photograph Mr Shuetrim had posted “[t]his is [sic] my new sunglass oakley”.

Mr Shuetrim gave this evidence about that photograph:

In his 5 June 2013 statement Mr Shuetrim made statements concerning his anxiety at being in crowded situations. In summary, Mr Shuetrim said that crowds of people were too much for him to bear and that he had a fear of gatherings and crowds.

Mr Duncan put these propositions to Mr Shuetrim:

Mr Duncan showed Mr Shuetrim a series of photographs that Mrs Shuetrim had posted on her Facebook page on 7 September 2014. The photographs showed Mr Shuetrim with his wife and children over a period of several hours at King Street Wharf, including at the Malaya restaurant.

Mr Shuetrim gave this evidence:

Whether or not Mr Shuetrim went inside the Lindt Café at Darling Harbour, the photographs show that Mr Shuetrim spent an extended period, many hours, at King Street Wharf “with lots of people and crowds around”.

Mr Shuetrim was also shown a photograph posted by Mrs Shuetrim on her Facebook page on 2 January 2015. The photograph shows Mr and Mrs Shuetrim and their children at the Bungalow 8 restaurant at Kings Street Wharf (albeit with no other persons visible in the photograph).

Mr Shuetrim gave this evidence:

As I have said, Mr Shuetrim said in his 5 June 2013 statement that “crowds of people…are too much for me to bear”.

Further, in his Member’s Statement of 17 January 2013, Mr Shuetrim said that:

Mr Duncan showed a photograph that Mr Shuetrim had posted on his Facebook page on 10 January 2015 at the ANZ Stadium. The photograph shows Mr Shuetrim’s son with The Emir of Uzbekistan.

Mr Shuetrim gave this evidence:

Mr Duncan then showed Mr Shuetrim the statement from Mr Shuetrim’s Member’s Statement that I have set out at [289] above. Mr Duncan suggested that it was not true for Mr Shuetrim to say that attendance at A league soccer matches “are no longer possible due to crowd anxiety”.

Mr Shuetrim’s response was to say:

In my opinion, that was a disingenuous response and I do not accept it. Contrary to what he said in his Member’s Statement, it is clear that he is able to attend major soccer matches, with large crowds present.

Finally, Mr Duncan showed Mr Shuetrim a post that Mr Shuetrim had made on his Facebook page on 19 September 2014 being a review of Wet’n’Wild Sydney.

Mr Shuetrim had posted:

Mr Shuetrim gave this evidence:

The cross-examination concluded:

Thus, as I have said, Mr Duncan’s cross-examination did reveal that Mr Shuetrim has to some extent overstated the effect of his physical and mental conditions in his everyday life.

The Facebook posts were, however, made between September 2014 and January of this year; that is, several years after the relevant dates (May to July 2012). They record only a small number of incidents and outings, and perhaps only those which were happy and trouble free occasions for Mr Shuetrim and his family.

Mr Shuetrim explained the context of some of the posts in a manner consistent with the account in his 5 June 2013 statement of his “everyday life”. Thus, when answering questions about his attendance with his son at a crowded ANZ Stadium in January this year, he said there was “no interaction with people on a social level” and that it was “just my son and I going to the soccer” (see [291] above).

In relation to his visits to the Bungalow 8 and Malaya restaurants, he said there was a “proviso” that if “something starts happening, then we agree to go and that’s it, we leave” (see [287] above). That comment, which occurred very near the end of Mr Shuetrim’s cross-examination, was, unsurprisingly, not pursued by Mr Duncan; nor was it taken up in re-examination by Mr Bleasal (there was no re-examination). However, I understood Mr Shuetrim to mean that family visits to restaurants are subject to an understanding between Mr Shuetrim and his wife that, if Mr Shuetrim’s condition becomes such that he is no longer able to remain at the restaurant, he and the family leave immediately.

The fact remains that Mr Shuetrim’s evidence on the critical question, his capacity to work, remains unchallenged.

As I have set out above, in his 5 June 2013 statement, Mr Shuetrim said that there was “no way my conditions will allow to me to successfully work as a Retail Shop Assistant, Grocer or Store Clerk”, that he would not be able to concentrate or focus on work sufficiently to engage in the role of “Process Worker and Console Operator” and that his “depleted concentration due to my elbow pain levels” would “inhibit my prospects of being a sound candidate for office employment” (see [145] above).

In his affidavit of 6 March 2014, Mr Shuetrim said that he could not see himself returning to work in employment “such as retail, sales, security or grocery type work”, that employment as “process, and console work are not achievable” and that his “panic attacks and anxiety from the thought of social situations, interaction and conversation” would prevent him from being able to “remain in any type of office environment” (see [148] above).

Mr Shuetrim was not cross-examined about these matters. In those circumstances, I am not prepared to reject his evidence. Indeed, I accept it.

In those circumstances, I am satisfied that Mr Shuetrim has sustained his onus of showing that he satisfies the definitions of TPD in each of the TAL and MetLife policies.

My conclusion is that Mr Shuetrim is entitled to the declarations and orders he seeks concerning the TAL and MetLife decisions of 17 December 2014 and 23 January 2015 and to the orders he seeks concerning his TPD entitlements under the policies in question.

I invite the parties to bring in short minutes to give effect to these reasons.

I will now hear submissions as to costs and as to interest pursuant to s 57 of the Insurance Contracts Act.