Hart v MetLife Insurance Limited [2022] NSWSC 1157 (31 August 2022)

Last Updated: 1 September 2022

Supreme Court New South Wales

Case Name:	Hart v MetLife Insurance Limited
Medium Neutral Citation:	[2022] NSWSC 1157
Hearing Date(s):	8 - 10 August 2022
Date of Orders:	31 August 2022
Decision Date:	31 August 2022
Jurisdiction:	Equity
Before:	Black J
Decision:	Answers to separate questions: 1. The Second Defendant did not breach its duty and obligations in considering and declining the Plaintiff’s claims on 9 August 2021 2. The Second Defendant did not breach any duty or obligation to the Plaintiff in failing since 15 November 2021 to reconsider the Plaintiff’s claims. 3. Given the answers above, the third question does not arise. Parties to bring in agreed short minutes to give effect to this judgment or their respective short minutes of order and submissions within 7 days.
Catchwords:	INSURANCE — Claims — Where plaintiff originally made a claim for workers compensation in relation to a back injury and received adjustments to her employment duties — Where plaintiff was subsequently diagnosed with post-traumatic stress disorder and claimed it amounted to total and permanent disablement (“TPD”) — Where defendant insurer denied the plaintiff’s claim for payment of a benefit under two policies on the basis of TPD — Whether the plaintiff’s psychical or psychological injuries engaged either policy at the relevant times —Whether the defendant breached any of its duties or obligations in considering and denying the plaintiff’s claim — Whether the defendant breached any duty or obligation in failing to reconsider the plaintiff’s claims
Cases Cited:	- Beverley v Tyndall Life Insurance Co Ltd (1999) 21 WAR 327; [1999] WASCA 198 - Board of Trustees of the State Public Sector Superannuation Scheme v Gomez [2018] QCA 67 - Carroll v United Super Pty Ltd [2018] NSWSC 403 - Edwards v The Hunter Valley Co-op Dairy Co Ltd & Anor (1992) 7 ANZ Ins Cas 61-113 - Gilberg v Maritime Super Pty Ltd (2009) NSWCA 325 - Hannover Life Re of Australasia Ltd v Jones [2017] NSWCA 233 - Hannover Life Re of Australasia Limited v Sayseng (2005) 13 ANZ Ins Cas 90-123; [2005] NSWCA 214 - Heitman v Guardian Assurance Co Ltd (1992) 7 ANZ Insurance Cases 61-107 - Hossain v Minister for Immigration and Border Protection (2018) 264 CLR 123; [2018] HCA 34 - MetLife Insurance Ltd v Hart [2021] FCA 410 - MetLife Insurance Ltd v Hellessey [2018] NSWCA 307 - MetLife Insurance Ltd v MX [2019] NSWCA 228 - Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421; [2019] HCA 3 - MZAPC v Minister for Immigration and Border Protection (2021) 95 ALJR 441; [2021] HCA 17 - Newling v FSS Trustee Corporation and MetLife Insurance Ltd (No 2) [2018] NSWSC 1405 Newling v MetLife Insurance Ltd [2019] NSWCA 149 - Nile v Club Plus Superannuation Pty Ltd [2005] NSWSC 55 - Savelberg v United Super Pty Ltd trading as Cbus Superannuation Fund & Anor [2011] NSWSC 1482 - TAL Life Ltd v Shuetrim (2016) 91 NSWLR 439; [2016] NSWCA 68 - Tomlinson v Ramsay Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28 - Ziogos v FSS Trustee Corporation as Trustee of the First State Superannuation Scheme
Category:	Principal judgment
Parties:	Marie Hart (Plaintiff) Aware Super Pty Ltd (First Defendant) MetLife Insurance Ltd (Second Defendant)
Representation:	Counsel: A Coombes (Plaintiff) S Lloyd SC/J Harrison (Second Defendant) Solicitors: Firths (Plaintiff) Moray + Agnew (Second Defendant)
File Number(s):	2022/77139

JUDGMENT

1. By a Statement of Claim filed on 17 March 2022, the Plaintiff, Ms Marie Hart sought specified relief in a claim against Aware Super Pty Ltd (to which I will refer, abbreviating its former name, as “FSS”) and MetLife Insurance Limited (“MetLife”). By a Notice of Discontinuance dated 30 March 2022, Ms Hart discontinued the proceedings against FSS so they now only continue against MetLife. The relief sought, so far as it concerns MetLife, relevantly, includes declarations that MetLife’s decision of 9 August 2021 to decline Ms Hart’s claim for payment of a benefit under two policies described as the “PBR Policy” and the “FSS Policy” is void and without effect and that, by failing or refusing to reconsider her claims under each of the PBR Policy and the FSS Policy, MetLife has breached its duty and obligations to her. By orders made on 25 July 2022, Hammerschlag CJ in Eq ordered, under Uniform Civil Procedure Rules 2005 (NSW) r 28.2 that three questions be answered before all other questions in the proceedings. I set out and address those questions below.

Pleaded facts and chronology

2. Certain facts are common ground between the parties and others are in dispute, as they emerge from Ms Hart’s Statement of Claim and MetLife’s Defence and a judgment of Derrington J in earlier proceedings in MetLife Insurance Ltd v Hart [2021] FCA 410 (“FCA Judgment”). I have drawn the chronology which appears below from the pleading, MetLife’s summary of the facts found in those proceedings (MFI-2) (to the extent that those facts are not contested by Ms Hart) and my review of the documents tendered in these proceedings. Other findings in the FCA judgment were not common ground; MetLife contends they give rise to issues estoppels and Ms Hart responds they either are not necessary to the matters determined by that judgment and do not give rise to an issue estoppel, or they are not findings of fact or mixed fact or law so as to give rise to an estoppel. Counsel rightly addressed the applicable principles in the course of submissions, and referred to case law including the High Court’s decision in Tomlinson v Ramsay Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28. I have ultimately not found it necessary to determine that dispute, where I would reach substantially the same conclusions as Derrington J had reached as to those matters, for substantially the same reasons. It is preferable that I outline my reasoning below, on the basis that any issue estoppel would lead to the same result.
3. Ms Hart pleads (SCO [5]) that she was a member of the New South Wales Police Force (“NSWPF”) from 29 August 2003 to 3 July 2016 and a member of the First State Superannuation Fund (“Fund”) from August 2003 to date. It is common ground (MFI-2, [7]-[8], FCA Judgment [4]-[5]) that Ms Hart was a member of the NSWPF from 29 August 2003 until her official discharge on 3 July 2016 and that, at all relevant times, the First State Superannuation Scheme provided superannuation benefits to members of the NSWPF and FSS was the trustee of that scheme.
4. Ms Hart pleads (SOC [8]) that, from 1 July 2005 to 30 September 2011, MetLife was the insurer on risk under the PBR Policy; MetLife admits that it was the insurer under that policy in that period and relies upon its terms. Ms Hart also pleads (SOC [9]) that, from 1 December 2007 to 30 November 2010, MetLife was the insurer on risk under the FSS Policy; MetLife admits that it was the insurer under that Policy and relies upon its terms. Ms Hart also pleads (SOC [10]) that, while the PBR Policy and the FSS Policy were in force, she was an “insured member” for the purposes of the PBR Policy and a “covered person” for the purposes of the FSS Policy; MetLife admits that matter, but pleads that the PBR Policy ceased to be “in force” on 30 September 2011 and the FSS Policy ceased to be “in force” on 30 November 2010. It is also common ground that MetLife ceased to provide cover under the respective policies when TAL Life Ltd (“TAL Life”) assumed new liability for any new claims arising under them from the date of such cessation, except for certain claims in respect of which MetLife remained “on risk” and that, in effect, TAL Life was substituted for MetLife as the provider of insurance to the fund members pursuant to those policies (MFI-2 [11], FCA Judgment [6]).
5. Ms Hart in turns pleads (SOC [11]-[15]) extracts of the terms of the FSS Policy and the PBR Policy. Dealing first with the FSS Policy, cl 7.1 provided for the payment of a benefit when a Covered Person (as defined) was eligible for Total and Permanent Disablement (if the Covered Person had that cover), while cover under the policy was in force, subject to the provisions of the policy. The FSS Policy in turn defined the term “Total/ly and Permanent/ly Disablement/Disabled (TPD)” by reference to specified circumstances, the relevant circumstance here being that:

“The Covered Person having been absent from their Occupation through Injury or Illness for 6 consecutive months and having provided proof to the satisfaction of us that the Covered Person has become incapacitated to such an extent as to render the Covered Person unlikely ever to engage in or work for reward in any occupation or work for which he or she is reasonably qualified by reason of education, training or experience.”

6. Clauses 12.2 and 12.3 of the FSS Policy dealt with termination of the Policy, as follows:

“12.2 If on the day this Policy terminates a Covered Person is not actively performing all the duties of their Occupation and is not working their usual hours free from any limitation due to illness or injury then we will continue to cover the Covered Person for Total and Permanent Disablement Cover subject to clause 12.3.

12.3 The Covered Person is covered only for the reason they were not actively performing all the duties of their Occupation and working their usual hours free from any limitation due to Illness or Injury on the last working day immediately before the termination of this Policy.”

7. Clause 13.2 in turn provided, as a condition of payment of any Benefit (as defined), that the Covered Person provided MetLife with such evidence to substantiate the claim as it may reasonably require.
8. Turning now to the PBR Policy, the term “Insured Event” was there defined as:

“An illness (including sickness, disease or disorder) suffered, or, bodily injury occurring, to a Police Officer while an Insured Member.”

9. Clause 3 provided for payment of a specified benefit if, relevantly, an Insured Member “suffers TPD” while the policy was in force, subject to the provisions of that Policy. The term “TPD” was defined as “Total and Permanent Disablement” as defined in the First Schedule to the policy and that schedule defined that term, relevantly, under cl 6(b) as including:

“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 Insured Member having been absent from their Occupation with the Employer through injury or illness for six consecutive months and having provided proof to our satisfaction that the Insured Member has become incapacitated to such an extent as to render the Insured Member unlikely ever to engage in any gainful profession, trade or occupation for which the Insured Member is reasonably qualified by reason of education, training or experience.”

10. Clause 7.3 of the PBR Policy required the Insured Member to provide such evidence to substantiate the claims as MetLife may reasonably require, as a condition of payment of any benefit, and also required the insured member to submit to medical examinations in specified circumstances.
11. Ms Hart in turn pleads (SOC [16]) and it is common ground that, when MetLife went off risk in respect of the PBR Policy, its cessation of risk under the PBR Policy was subject to the terms of IFSA Guidance Note 11.00 as at 1 September 2000 (“IFSA Terms”). While Ms Hart did not there identify the basis on which the IFSA Terms bound MetLife, MetLife responds (Defence [13]) that in July 2011, MetLife and FSS executed a deed, which annexed the IFSA Terms (as defined). By that deed dated 6 July 2011 (“2011 Deed), FSS and MetLife documented the terms on which MetLife ceased to provide cover under the PBR Policy.
12. It is common ground that, by cl 1.2 of the 2011 Deed, MetLife remained ‘on risk’ in respect of Insured Members under the IFSA Terms until it "goes ‘off risk’ for such Insured Members pursuant to the IFSA Terms.” It is also common ground (MFI-2, [31]-[33]; FCA Judgment [82]-[84]) that:

“Clause 13.3 of the IFSA Terms made provision for members of the fund who had suffered an injury or illness prior to the takeover date to receive cover in respect of new events that occurred after that date...

Clause 13.3 of the IFSA Terms is to be read with the definitions of “not at work” and “new events cover”, and has the general effect that members who are not performing their normal work duties on the working day immediately preceding the takeover date will be covered by the new insurer for claims arising after that date, other than in respect of conditions that arise directly or indirectly from the sickness or injury that caused the member to be not performing their normal duties on that date. This gives effect to the second guideline expressed in cl 8.1 that “generally the incoming insurer is responsible for claims arising on or after the takeover date”, on the basis that liability for conditions that exist on the working day immediately preceding the takeover date or that relate to such conditions has arisen before the takeover date...

The converse of clause 13.3 of the IFSA Terms is that the previous insurer remains on risk in respect of claims arising from events that do not attract new events cover. This was made clear by cl 13.4...”

13. Clause 13.4 of the IFSA Terms in turn provided that:

“The previous insurer remains ‘on risk’ to provide cover for any TPD claim arising from any condition caused by sickness or injury, which is not new events cover.

The previous insurer remains ‘on risk’ for any claim eventuating from an event or, any condition caused by sickness or injury from which an insured member:

● was absent from their work on the last working day prior to the takeover date;

● suffered in any period occurring after the last working day but prior to the takeover date, which causes the member to be not at work on the takeover date:

● was in receipt of workers compensation, rehabilitation benefits or other income support benefits on the takeover date; or

● was attending work on the takeover date but not at work on that date.”

14. The term “at work” was defined on the IFSA Terms as follows:

““at work” means the member is actively performing all the duties of his usual occupation with the Employer and is not in receipt of and/entitled to claim income support benefits from any source including workers’ compensation benefits, statutory transport accident benefits and disability income benefits. A member who does not meet these requirements is correspondingly described as “not at work”.

15. There is a dispute as to whether Ms Hart was “not at work” for the purposes of the PBR Policy and the 2011 Deed and IFSA terms on the “takeover date”, 1 October 2011, by reason of her back injuries and whether Ms Hart only ceased work permanently some three years later as a result of psychiatric illness or, more specifically, post-traumatic stress disorder (“PTSD”) (MFI-2, [3]-[4]; FCA Judgment [2]). I will address that dispute below.
16. Ms Hart in turn pleads (SOC [20]-[21]) that, on or about 29 November 2006, or at least from 2006 on, she suffered injuries to her neck, left shoulder, lower back and left hip in the course of service with the NSWPF and she was on sick leave or otherwise performing restricted duties with the NSWPF from 30 November 2006 to 5 October 2010. It is common ground that, on 19 February 2007, Ms Hart made a claim for workers’ compensation pursuant to an unrelated policy in respect of a back injury; the onset of this injury commenced not long after she had joined the NSWPF and was the consequence of her wearing a gun belt in the course of her general duties; the sequelae of her injuries worsened over time and, from 6 October 2010, she was placed on permanently restricted duties in the role of an exhibits officer and, in that position, she worked three, eight-hour days per week (MFI-2, [12], FCA Judgment [7]).
17. Ms Hart pleads (SOC [22]) that, on or about 1 January 2010 (prior to the takeover date for both policies) she developed psychological illnesses in the course of her service with the NSWPF, which she particularises as PTSD and major depression, and this issue in dispute. Ms Hart also pleads (SOC [23]) that she was placed on permanently restricted duties with the NSWPF on or about 6 October 2010.
18. Ms Hart made a lengthy statement (Ex J1, 585) dated 27 September 2012, and with a handwritten note “signed 05/10/2012”, likely in respect of a claim for workers compensation, which set out her history and her duties with the NSWPF and emphasised the development of her back pain while she was performing general duties with the NSWPF, referred to the diagnosis of degenerative change involving the vertebral end plates in the mid-lumbar region at the L3-4 level and the lower lumbar facet joints, and referred to her subsequent work on restricted duties at the NSWPF. She also addressed incidents which subsequently occurred in respect of that work, including a chemical leak. That statement briefly referred to her developing depression, possibly in 2011 and connected with her physical injuries, as follows:

“I have not previously been diagnosed or treated for depression in the past.

However, I suspect I may have been depressed a year earlier, during the trial of more hours and whilst I was in a lot of pain. It was a Friday, so my pain levels would have been peaking, I felt work was not supporting me with my injury because if they did they wouldn’t have the opinion I was OK, and kept telling me to go back to my doctor for increased hours. A fellow worker gave me his gun to hold while he moved his car. I thought about using it on myself.”

Ms Hart then refers briefly to subsequent developments.

19. Numerous medical reports after November 2012 are also in evidence. I will refer to several of the earliest reports here, and to later reports on which the parties relied in dealing with the separate questions raised below. A report of Dr Graham George dated 11 December 2012 (Ex J1, 679) relating to his psychiatric assessment of Ms Hart, recorded her work history and her previous physical injuries while at work, recorded that she had suffered “chronic pain from 2006” and referred to her back pain or spinal pain from wearing a police belt and to the fact that she had been on restricted duties from 2010 onward. He recorded the information that Ms Hart provided him concerning her dissatisfaction with her work environment at the NSWPF. Dr George referred to “Acute Stress Disorder, superimposed on chronic Major Depression (related to chronic pain)” and to “pain related to her spinal problems”. The term “acute stress disorder” was used with a technical meaning, which he addressed in subsequent further reports.
20. Dr George also there referred to the need for NSWPF to accept Ms Hart’s permanently modified duties and observed that he believed that:

“[M]ore than likely, she had an acute stress disorder superimposed on chronic major depression. She appears to have a low grade chronic major depression which could easily be treated more aggressively.”

He also observed that that Ms Hart’s “low grade chronic major depression” was related to her “chronic pain” and that Ms Hart had “limited psychological resources to cope generally, given the fact that she suffers chronic pain”. He concluded that Ms Hart was able to work the hours that she currently worked, on her permanently restricted duties schedule, and recommended her referral to a psychiatrist for further treatment.

21. By a further report dated 6 May 2013 (Ex J1, 770), Dr George explained that his reference to an “acute stress disorder” was to matter arising from a particular meeting concerning her work and was a “self-limiting disorder of less than four weeks”, but that underlying that “may well be a low-grade chronic major depression”. By his letter dated 24 June 2013 (Ex J1, 806), Dr George again noted that:

“Ms Hart has an underlying depressive disorder related to chronic pain and it may be ongoing for a considerable period of time. An acute stress disorder is a self-limiting disorder of less than 4 weeks and resolves accordingly to removal of a stressor or appropriate treatment.

The only comment I can make is that in terms of severity, the underlying chronic depressive disorder is more important to treat ...”

22. In his report dated 28 February 2013 (Ex J1, 718), Dr Balanza, a consultant psychiatrist, referred to Ms Hart’s “mixed depressive and anxiety symptoms which have been present for some time, and have worsened in the past five to six months, in the context of experiencing increased pressure and harassment from work to increase her work hours”, and referred to her severe physical pain. He observed that Ms Hart’s:

“primary diagnosis is more consistent with an adjustment disorder with mixed depressed mood and anxiety, secondary to poorly controlled chronic pain and ongoing work-related stress.”

23. It is common ground that, in August 2014, Ms Hart was diagnosed with PTSD (MFI-2, [13]; FCA Judgment [8]).
24. Ms Hart pleads (SOC [24]-[25]), and MetLife denies that, on or about 19 December 2014 she ceased active duties with the NSWPF as a consequence of her physical injuries and psychological illnesses. There is a dispute as to whether that resulted only from her PTSD (MFI2, [14], FCA Judgment [8]). There is also a dispute as to whether, as found by Derrington J in the FCA Judgment, by reference to several medical certificates of Dr Soni, Ms Hart’s physical conditions did not prevent her from engaging in full time work for the six months following her cessation of work in December 2014, but only confined her to restricted duties (MFI-2 [36]; FCA Judgment [120]). Ms Hart also pleads that on or about 19 June 2015, six months later, she suffered “total and permanent disablement” for the purposes of each of the PBR Policy and the FSS Policy.
25. It is common ground that, in March 2016, Ms Hart lodged a claim with FSS that she was totally and permanently disabled and she completed a claim form directed to the current insurer, TAL Life; and Ms Hart’s employment with the NSWPF terminated on 3 July 2016 upon her official discharge (MFI-2, [15]-[16]; FCA Judgment [8], [9]). A NSWPF “Employer’s Statement” dated 13 November 2017 (Ex J1, 1560) recorded the reason for Ms Hart ceasing work as “psychological and physical injuries (see medical discharge file)” and also referred to the medical discharge file for the question whether Ms Hart was working in a reduced capacity or in restricted duties when she ceased all duties.
26. It is also common ground that, on 8 December 2017, TAL Life denied liability for the claim on the basis that it was not “on risk” in relation to the claim and it confirmed that view on 3 January 2018 (MFI-2, [17]; FCA Judgment [8], [9]). By its letter dated 3 January 2018, TAL Life advised that it was unable to approve Ms Hart’s claim, and that it was its position that she was not “at work” at any time after 1 October 2010, because she was restricted in hours and duties and receiving WorkCover support, and did not meet the “at work” requirements of the TAL policies (Ex J1, 1718). No challenge was brought by Ms Hart to TAL Life’s decision in these proceedings and the question of the correctness or otherwise of that decision does not arise in these proceedings.
27. It is common ground that, after TAL Life rejected her claim, Ms Hart made a claim to MetLife for TPD under the two policies on 18 February 2018 (MFI-2, [18], FCA Judgment [10]). By her “statement of claim” (a form rather than a Court document) provided to FSS and MetLife on that date (Ex J1, 1750), Ms Hart recorded she had been diagnosed with PTSD by A/Prof Robertson about August 2014, diagnosed with PTSD by Dr Smith in 2015, and diagnosed with a back injury in 2006. She recorded her belief that she had “two injuries back and psychological” and that she stopped work because of her medical condition, and “could not return due to mental health decline and physical decline”. She also stated that:

“I worked restricted duties from 2006 for back injury hours varied from fulltime to as little as 15 hours per week.

Also restricted due to psychological hours – days [sic].”

28. By an undated and detailed document headed “Member’s Timeline” prepared by Ms Hart, no later than the end of 2014, she also provided a record, going back to at least September 2010, of matters which she considered had contributed to her PTSD (Ex J1, 4113).
29. A/Prof Robertson in turn provided a “Medical Statement” to FSS and MetLife dated 8 March 2018 (Ex J1, 1787), to which I will refer further below.
30. It is common ground that, on 27 April 2018, MetLife advised that it believed that it was not “on risk” in relation to the claim, on the limited information with which it had then been provided, but also advised in its letter of rejection that was prepared to consider further information if made available and to reassess the claim (MFI-2, [19]; FCA Judgment [50]); FSS did not respond to that letter until 12 October 2018, and MetLife then reconfirmed that, on the basis of the information it possessed, it did not consider it was “on risk” (MFI-2, [20]; FCA Judgment [51]).
31. It is common ground that, on 16 April 2019, MetLife was provided with Ms Hart’s personnel file from the NSWPF and, on 2 May 2019, it wrote to FSS advising that the file had disclosed documents that had not previously been seen by it, it had considered them and had revised its views, and it now considered Ms Hart was “not at work” on the “takeover date” of 1 October 2011, being the day on which its liability under the PBR Policy ceased, because she was on restricted duties as a consequence of her back pain as identified in the medical certificates of Dr Soni, and because she was in receipt of income support benefits (MFI-2, [21]; FCA Judgment [52]). It is also common ground that, on 10 May 2019, MetLife informed FSS of its requirements to progress the assessment of Ms Hart’s TPD claim under the PBR Policy, including that Ms Hart present herself for examination by a physiotherapist and an orthopaedic surgeon for which appointments had been made, and Ms Hart then refused to attend those examinations and MetLife was required to pay cancellation fees in respect of the aborted appointments (MFI-2, [22]; FCA Judgment [11] and [53]), and Ms Hart also refused to provide an authority to enable certain documents sought by MetLife to be obtained (MFI-2, [23]; FCA Judgment [12]). On 29 May 2019, FSS emailed copy of MetLife’s letter to Ms Hart, provided an explanation as to why it was sent and offered her assistance in relation to her compliance with MetLife’s requests (MFI-2, [24]; FCA Judgment [54]). Ms Hart then refused to authorise the provision of information to MetLife and stated that she would not attend the appointments which had been made for her until a final determination had been made as to which of the insurers were on risk in relation to her claim (MFI-2, [25]; FCA Judgment [55]).
32. It is common ground that, by letters dated 31 May 2019 and 4 July 2019, MetLife addressed these matters and also noted that, because Ms Hart was working reduced hours on 30 September 2011 and therefore “not at work”, it remained on risk for TPD arising out of the conditions that had prevented her from being “at work” as at that date and contended that it was necessary for it to consider whether she was unlikely to return to relevant work until a date in 2031 and, for that purpose, was entitled to inquire into her circumstances since she left work. MetLife identified its requirements in that respect; FSS passed that letter to Ms Hart; Ms Hart then advised FSS that it should deal with her solicitors; and MetLife again wrote to FSS on 11 September 2019 setting out the information that it had previously sought but had not received: (MFI-2, [26]-[28]; FCA Judgment [56]-[58]).
33. By letter dated 12 October 2018 (Ex J1, 1862), FSS expressed its view of the proper allocation of Ms Hart’s claims as between TAL Life and MetLife, namely that it considered that TAL was on risk for the Basic Policy (as defined) claim; MetLife may be on risk for the PBR claim in respect of her physical injury; and TAL may be on risk for the PBR claim in respect of her psychological injury. Plainly, at least TAL Life does not appear to accept the correctness of that view.
34. On 18 October 2018, Ms Hart made a complaint to the Superannuation Complaints Tribunal (“SCT”) against FSS (Ex J1, 1877). MetLife was joined to the SCT proceedings and, on 28 April 2020, advised the SCT that it was still assessing Ms Hart’s claim and had not yet made a decision, and contended that the SCT lacked jurisdiction (Ex J1, 2862). The SCT proceeded to determine the complaint and, on 26 October 2020, handed down its decision (Ex J1, 3242-3286). It found that MetLife had constructively rejected Ms Hart’s TPD claim under the FSS Policy (Ex J1, 3242-3 [2(2)], [5]) but also found at ([88]) that MetLife had no liability for that claim which had reasonably been rejected. That decision was not challenged in the appeal to the Federal Court which I address below and I return to its significance below. The SCT also determined that MetLife had constructively rejected Ms Hart’s TPD claim under the PBR Policy and set aside that decision and substituted a decision that the claim be accepted (Ex J1, 3242-3, [2(1)], [6], [7]). That decision was overturned on the appeal to the Federal Court to which I now turn.
35. On 25 November 2020, MetLife commenced proceedings challenging the SCT’s decision as to the PBR Policy (but not the FSS Policy) in the Federal Court, and the notice of appeal was subsequently amended on 5 February 2021 (Ex J1, 3296-3305). On 30 April 2021, Derrington J delivered the FCA Judgment, and I have referred above to several factual findings reached in that judgment, which are now largely common ground between the parties. In summary, Derrington J held, in respect of Ms Hart’s claim for a TPD benefit under the PBR Policy, that the terms on which MetLife ceased being “on risk” under the PBR Policy limited its liability in respect of claims made after 30 September 2011 to those related to any injury or illness that had resulted in Ms Hart being unfit for the purposes of her ordinary duties on 30 September 2011 (FCA Judgment [2]). His Honour found that Ms Hart was “not at work” on 30 September 2011 by reason of her back injuries (FCA Judgment [2]) and Ms Hart only ceased work permanently some three years after 30 September 2011 as a result of psychiatric illness (FCA Judgment [2]). His Honour also held that, when Ms Hart’s claim for a TPD benefit was ultimately made on MetLife, it sought to investigate the causal issues relevant to its potential liability, but Ms Hart refused to cooperate with that investigation (FCA Judgment [2]). His Honour held that the causes of the delay, during which Ms Hart’s entitlements have not been recognised or determined, do not include the conduct of MetLife, which has dealt with her claim in an expeditious and professional manner (FCA Judgment [3]).
36. MetLife had there advanced four grounds to set aside the SCT’s decision, on the basis of error of law. The first ground, which was successful, was that the SCT had erred in concluding that MetLife had constructively rejected Ms Hart’s claim under the PBR Policy (FCA Judgment [77]).
37. The second ground, which substantially overlaps with the matters in issue in these proceedings, is that the SCT erred in law by failing to consider and determine that MetLife was not “on risk” in relation to Ms Hart’s claim for PTSD (FCA Judgment [78]). Mr Lloyd, with whom Mr Harrison appears for MetLife, submits and I accept that this ground necessarily required the Court to make findings as to the proper construction of the IFSA Terms to which I referred above. I have also referred above to aspects of Derrington J’s findings as to the effect of that IFSA Terms which are now common ground. His Honour observed that, on and after the takeover date, being from 1 October 2011, TAL Life was responsible for new claims of the FSS scheme members pursuant to the PBR Policy, except to the extent provided by that policy and the IFSA Terms (FCA Judgment [79]). His Honour also observed (at [82]) that cl 13.3 of the IFSA Terms made provision for members of the fund who had suffered an injury or illness prior to the takeover date to receive cover in respect of new events that occurred after that date. His Honour observed that cl 13.3 is to be read with the definitions of “not at work” and “new events cover”, and has the general effect that members who are not performing their normal work duties on the working day immediately preceding the takeover date will be covered by the new insurer for claims arising after that date, other than in respect of conditions that arise directly or indirectly from the sickness or injury that caused the member to be not performing their normal duties on that date. This gives effect to the second guideline expressed in cl 8.1 that “generally the incoming insurer is responsible for claims arising on or after the takeover date”, on the basis that liability for conditions that exist on the working day immediately preceding the takeover date or that relate to such conditions has arisen before the takeover date (FCA Judgment [83]). His Honour observed that the converse of cl 13.3 of the IFSA Terms is that MetLife remains on risk in respect of claims arising from events that do not attract new events cover, as was made clear by cl 13.4 of the IFSA Terms (FCA Judgment [84]). His Honour observed that the complementary nature of the positions provided by cll 13.3 and 13.4 of the IFSA Terms gives effect to the third and fourth guidelines stated in cl 8.1, in particular that the takeover is to be “seamless” and that there must be continuity of cover (FCA Judgment [85]).
38. MetLife there advanced the same contention that it put before the SCT and in this proceeding, namely that (as summarised in FCA Judgment [87]):

“It is also not in doubt that, before the Tribunal, MetLife contended that it was not on risk in relation to Ms Hart’s claim by reason of the operation of the [IFSA Terms]. It had submitted that Ms Hart was a member who was “not at work” due to her back injuries as at 30 September 2011, being the date on which it went “off risk”, and that the condition which caused her to cease work in December 2014 was her unrelated PTSD condition.”

39. MetLife also there contended that Ms Hart was entitled to “new events cover” provided by TAL Life and that it was not liable for the psychological illness (identified as PTSD arising from traumatic events) that caused her to cease work three years after the takeover date, and would be liable only if her TPD resulted directly or indirectly from her back injury (FCA Judgment [92]).
40. Derrington J there addressed evidence on which Ms Hart relied to contend that she had been suffering from anxiety and depression before MetLife ceased to be on risk (at [95]) and observed that:

“It was submitted that this indicated that Ms Hart’s psychological condition was a reason as to why she was “not at work” on the working day immediately preceding the takeover date. In particular, it says that the reference to suffering anxiety and depression for the two years prior to 14 February 2013, evidenced her having psychological conditions prior to the takeover date on 30 September 2011. The inference sought to be drawn from this letter by the respondents is not logically available. As Mr Williams SC submitted, no inference can arise from Dr Soni’s letter that Ms Hart was “not at work” on 30 September 2011 as a consequence of her suffering psychological injuries. It may be that she suffered from such a psychological condition at that time, but the letter does not suggest that it was of such a nature that incapacitated her from work to any degree. Rather, Dr Soni’s assessment as identified in the certificate of 10 September 2011, which covered the period including 30 September 2011, identified the cause of her incapacity as being her back pain and the recommended limits on her activities were related to its sequelae. If her psychological condition was a cause of her inability to work, one might have expected Dr Soni to identify it.”

41. I note that observation here not to address any question of issue estoppel but because MetLife contends that, irrespective of whether it bound the parties, MetLife’s later rejection of this kind of inference could not be said to be unreasonable or lacking in good faith, where it reflected Derrington J’s reasoning. MetLife was also successful in its challenge to the SCT’s reasoning on this basis.
42. The third ground of appeal advanced by MetLife concerned the construction of the PBR Policy, where Derrington J summarised its submissions (FCA Judgment [113]) as follows:

“They commenced with a consideration of the definition of “TPD” relevant to the present case and the requirement in the first limb that the member be absent from their occupation for a period of six consecutive months “through injury or illness”, and, in the second limb, that the member has become incapacitated to the required degree. It was submitted that the definition required the illness or injury referred to in the first limb – that which kept the member absent from employment for six months – must also be the cause of them being totally incapacitated. It was further submitted that, in this case, Ms Hart was prevented from working for the relevant six month period from 19 December 2014 by reason of the onset of a psychological condition and not from the back injuries which she had been suffering in September 2011 when MetLife’s liability under policy came to an end.”

43. Derrington J also held that the consequence of the cessation of MetLife’s liability pursuant to the PBR Policy from 30 September 2011 and the application of cl 13 of the IFSA Terms is that TPD cover under the PBR Policy provided by MetLife was available thereafter, only in respect of the condition, or any directly or indirectly related condition arising from it, which caused the relevant member to be “not at work” on the working day immediately preceding the takeover date (FCA Judgment [126]). His Honour held that the application of cl 13.4 of the IFSA Terms to the PBR Policy is that MetLife will only be liable for a TPD claim arising from any condition caused by sickness or injury that does not attract “new events cover”, that is, a medical condition (or directly or indirectly related condition) arising from sickness or injury that caused the member to be “not at work” on working day immediately preceding the “takeover date”; that (the claim for TPD against MetLife arose from two causes or conditions: the psychiatric illness, which caused Ms Hart to be absent from work for six months, and her physiological injuries, which (concurrently with her psychological injuries) is claimed to have rendered her unemployable; and that the TPD claim did not arise only from a condition or conditions caused by the physiological injuries that caused Ms Hart to be “not at work” on the working day immediately preceding the takeover date, but from two causes, only one of which met that description (FCA Judgment [127]). His Honour also found that, because MetLife’s liability became limited following the takeover date as provided by the IFSA Terms, and Ms Hart was not absent from work during the six months in question as a result of her back pain, MetLife has no liability in respect of the claim (FCA Judgment [127]). MetLife again contends that these findings are, at least, relevant to what it is reasonable and in good faith for MetLife to have done in considering the claim after this judgment was handed down.
44. The fourth ground argued that the SCT had erred in finding that its purported rejection was not fair and reasonable (FCA Judgment [132]) and Derrington J did not, strictly, determine that matter and observed (at [137]) that, on the basis of the other conclusions he had reached, “it may be unlikely that this question would need to be addressed by the [SCT] in any event when it is called upon to reconsider Ms Hart’s claim.”
45. By letter dated 18 May 2021, although that the matter had been remitted by the Federal Court to the Australian Financial Complaints Authority, the successor to the SCT, FSS wrote to MetLife inviting it to complete its assessment of Ms Hart’s claims “with the least possible delay” (Ex J1, 3415).
46. On 9 June 2021, MetLife sent a letter, described as a “procedural fairness letter” to Ms Hart, who was then representing herself, copied to FSS (Ex J1 32-75). That letter referred to Ms Hart’s claims under both the PBR Policy and the FSS Policy and indicated that:

“This is MetLife’s procedural fairness letter and is a preliminary step taken prior to MetLife determining your TPD claim.

This letter sets out MetLife’s current position about our liability for your TPD Claim. MetLife invites you and the Fund to respond and/or provide to MetLife any further assessment or submissions which you and/or the Fund consider appropriate to our assessment.”

47. The letter commenced with a chronology of Ms Hart’s service with the NSWPF, noted the proceedings in the SCT concerning the FSS Policy and identified two reasons why, on MetLife’s then view, MetLife was not at risk under the FSS Policy, by reference to the SCT’s determination and because, in MetLife’s view, Ms Hart did not satisfy the definition of TPD in the FSS Policy, having regard to the terms of the policy, medical evidence as to Ms Hart’s conditions, and observations of Derrington J in the FCA Judgment. That letter also referred, in respect of the PBR Policy, to the IFSA Terms, to the application of those terms to Ms Hart’s claim under the PBR Policy, and again to observations of Derrington J in the FCA Judgment, and outlined why MetLife’s then view was that Ms Hart did not satisfy the first limb of the definition of TPD in the PBR Policy. MetLife also responded to criticisms that Ms Hart had previously made of its conduct in respect of the claims. A claims information sheet enclosed with that letter referred to the extent of cover under the relevant policy and that letter also attached a detailed chronology.
48. By letter dated 25 June 2021 (Ex J1, 76), Ms Hart’s new solicitors responded, briefly, to MetLife’s position, taking issue with that position but offering little by way of evidence or analysis to address it. That letter advanced an argument, not now pressed, that MetLife was liable to cover Ms Hart for PTSD, because the accidents or incidents in which she had been involved while working with the NSWPF occurred when it was on risk, as distinct from her condition of PTSD arising in that period.
49. Ms Hart in turn pleads her claim to a TPD benefit of the terms of PBR Policy and the FSS Policy and pleads (SOC [29]) that, on 9 August 2021, MetLife declined her claim. MetLife admits that, on 9 August 2021, it corresponded with FSS and declined the claim that she had lodged on 18 February 2018. By its letter dated 9 August 2021, MetLife advised of its decision to decline Ms Hart’s claims (ExJ1, 78-84), addressing the matters raised in Ms Hart’s solicitors letter of 25 June 2021, and expressly adopting the reasoning set out in its letter of 9 June 2021, which it also summarised. It then summarised those reasons, which I do not repeat here.
50. More than three months later, by letter dated 15 November 2021, Ms Hart’s solicitors wrote to MetLife (ExJ1, 85) and provided a copy of Ms Hart’s further statement signed on 21 September 2021; a report of A/Prof Robertson dated 13 October 2021 and the solicitors’ instructions to him dated 29 September 2021; and a report of Dr Lewington dated 8 November 2021 and the solicitors’ instructions to him dated 3 November 2021. I will address those documents in addressing the second question for determination in these proceedings below. Ms Hart’s solicitors requested MetLife to “review the enclosed documents and reconsider this claim with a view to accepting it within 28 days” and indicated that, if they had not been advised of the acceptance of this claim within 28 days, they expected to be instructed to commence proceedings without any further communication or delay.

Whether MetLife breached its duties in considering and declining Ms Hart’s claims on 9 August 2021

51. The first of the separate questions posed by Hammerschlag CJ in Eq’s orders made on 25 July 2022 is:

“1. Did [MetLife] breach its duty and obligations in considering and declining [Ms Hart’s] claims on 9 August 2021? (See Statement of Claim [34]).

52. This question derives from Ms Hart’s Statement of Claim (SOC [34]), where Ms Hart pleads MetLife’s breach of its duties as at 9 August 2021. Before turning to the pleaded breach, it is necessary to note the scope of MetLife’s duties as pleaded by Ms Hart (SOC [33]) as follows:

“At all material times, in considering and determining [Ms Hart’s] claims under each of the PBR Policy and the FSS Policy, [MetLife]:

(a) Owed [Ms Hart] a duty of utmost good faith;

(b) Had an obligation to act fairly and reasonably in considering and determining its opinion; and

(c) Had an obligation to consider and determine the correct question for the purposes of determining its liability under the PBR Policy.”

53. There was little disagreement between the parties as to the scope of the relevant duties. Mr Coombes relied on McLelland J’s decision in Edwards v The Hunter Valley Co-op Dairy Co Ltd & Anor (1992) 7 ANZ Ins Cas 61-113 (“Edwards”) as authority for the scope of that duty. Mr Lloyd referred to Santow J’s summary of the applicable principles, by reference to that decision, in Hannover Life Re of Australasia Limited v Sayseng (2005) 13 ANZ Ins Cas 90-123; [2005] NSWCA 214 at [36], where his Honour observed that:

(a) There was an implied obligation on Hannover to consider and determine whether it should form an opinion on the matter which was a condition of its own liability;

(b) That obligation involved consideration and determination of the correct question;

(c) Hannover was under a duty of good faith and fair dealing which required it to have due regard for the interest of the claimants, meaning Mr Sayseng, as well as the Trustee;

(d) Hannover was also obliged to act reasonably in considering and determining what its opinion was;

(e) If the view taken by Hannover can be shown to have been unreasonable on the material before it, its decision can be successfully attacked;

(f) If Hannover’s decision is successfully attacked, the matter upon which its opinion was required becomes one for determination by the Court;

(g) It has been held to be unfair for an insurer to act upon detailed and adverse medical reports obtained by the insurer itself without giving the claimant an opportunity to balance the report by obtaining a detailed report from a treating doctor, or giving the claimant a chance to answer the adverse elements in the report (citations omitted).

Mr Coombes pointed out that the formulation of the duty in Edwards had also been accepted in MetLife Insurance Ltd v MX [2019] NSWCA 228 (“MX”) at [75] – [80].

54. Mr Lloyd also drew attention to the observations of Leeming JA (with whom Beazley P and Emmett AJA agreed) in TAL Life Ltd v Shuetrim (2016) 91 NSWLR 439; [2016] NSWCA 68 at [47]- [55], as to the manner in which an insurer may owe a duty of utmost good faith to an insured, through a trustee. Mr Lloyd also referred to Hannover Life Re of Australasia Ltd v Jones [2017] NSWCA 233 (“Jones”), where Meagher JA stated (at [5]) that it was “accepted that the relevant principles” are as stated in Edwards and confirmed in Sayseng, and where Gleeson JA (with whom Macfarlan JA and Meagher JA agreed) observed at [121] that:

“As I have said, the task for the court in the present case is not to assess what it thinks is reasonable and thereby conclude that any other view displays error. It may also be accepted that there can be a range of opinions available to an insurer acting reasonably and fairly on the material before it.... the criterion of reasonableness of an insurer’s decision is whether the opinion formed by the insurer was not open to an insurer acting reasonably and fairly in the consideration of the claim.”

55. Mr Lloyd also refers to the decision on appeal in Newling v MetLife Insurance Ltd [2019] NSWCA 149 at [78]- [80] where Emmett AJA (with whom Bell P and Leeming JA agreed) observed that:

“... It was entirely a matter for MetLife as to the weight that should be given to the different materials before it for the purposes of making its decision.

... 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 ...

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.”

56. Both Mr Coombes and Mr Lloyd also refer to MetLife Insurance Ltd v Sandstrom [2021] NSWCA 123 for the observation of Basten JA (with whom Meagher JA agreed) said at [19] that the importance of group life superannuation policies means that “at least careful scrutiny of the evidence as to whether the insurer has properly understood and fairly complied with its contractual obligations should be applied”.
57. Mr Coombes also submitted that MetLife’s duty of utmost good faith imposed an obligation on it to exercise its rights and discharge its obligations as conferred by the contract of insurance with the good faith and fair dealing, and that duty required it to act with utmost good faith dealing in considering and determining Ms Hart’s claims: Ziogos v FSS Trustee Corporation as Trustee of the First State Superannuation Scheme [2015] NSWSC 1385 (“Ziogos”) at [65]-[66]. He submitted that MetLife’s duty of utmost good faith was broader than the obligation to act reasonably and fairly and applies to all aspects of the claims handling process, and includes providing Ms Hart with an opportunity to consider and respond to any information obtained by MetLife which may be adverse to her interests: Beverley v Tyndall Life Insurance Co Ltd (1999) 21 WAR 327; [1999] WASCA 198 at [13] and [91] – [95]; Ziogos at [68]; Jones at [71]. He submitted that the duty of good faith and fair dealing required MetLife to give reasons for its decision, and it was only by examining those reasons that it would be possible to determine whether MetLife acted in good faith in forming the opinion it was required to form; and such reasons must explain the actual path of reasoning by which MetLife arrived at its conclusion: Ziogos at [75]; Carroll v United Super Pty Ltd [2018] NSWSC 403 at [102]; MX at [154].
58. Mr Coombes also submitted that the obligation to act reasonably and fairly in forming an opinion required MetLife to give an objective, even handed and realistic consideration to the whole of the evidence, uninfluenced by personal beliefs, prejudice, suspicion, or speculation, and that obligation applies both to the process of consideration and the decision that arises at the conclusion of that process: Savelberg v United Super Pty Ltd trading as Cbus Superannuation Fund & Anor [2011] NSWSC 1482 at [13]; MetLife Insurance Ltd v Hellessey [2018] NSWCA 307 (“Hellessey”) at [50]. He also submits that the standard by which the reasonableness of MetLife’s decision is to be measured is whether the opinion it formed, on consideration of the material before it at the time it formed that opinion, was not open to an insurer acting reasonably and fairly in consideration of the claim; that an opinion of an insurer that is objectively reasonable in conformity with that standard can only be determinative of the claim to which it relates, if the insurer in question has also acted fairly and reasonably in assessing that claim and forming its opinion; and that the Court’s task when examining whether MetLife breached its obligation to act fairly and reasonably is to consider the reasonableness of both the opinion formed by the insurer and the process by which the insurer formulated that opinion: Jones at [112]; Hellessey at [80]. Mr Coombes also submits that, in complying with its obligation to consider and determine whether it should form an opinion on TPD, MetLife was required to consider and determine the correct question: Edwards at 77,536; Jones at [65]–[67].
59. Turning now to the pleaded breach of MetLife’s duties as at 9 August 2021, Ms Hart pleads (SOC [34]) that:

“In considering and declining [Ms Hart’s] claims on 9 August 2021, [MetLife] breached its duty and obligations to [Ms Hart].

Particulars of breach

(a) Determining, without a reasonable basis for doing so, that [Ms Hart] was “not at work” as at 1 October 2011, for the purposes of the PBR Policy and the [IFSA Terms], by reason only of her “back injury”

(b) Determining, without a reasonable basis for doing so, that [Ms Hart] was “not actively performing all the duties of their Occupation and is not working their usual hours fee from any limitation due to Illness or Injury”, for the purposes of the FSS Policy, by reason only of her “back injury”

(c) Determining, without a reasonable basis for doing so, that [MetLife] was not on risk under the PBR Policy in respect of [Ms Hart’s] psychological illnesses;

(d) Determining, without a reasonable basis for doing so, that [MetLife] was not on risk under the FSS Policy in respect of [Ms Hart’s] psychological illnesses;

(e) Failing to give any, or any proper consideration, to medical evidence supportive of the proposition that [Ms Hart] was “not at work” as at 1 October 2011, for the purposes of the PBR Policy and the [IFSA Terms], by reason of both her psychological illnesses and her physical injuries;

(f) Failing to give any, or any proper consideration, to medical evidence supportive of the proposition that [Ms Hart] was “not actively performing all the duties of their Occupation and is not working their usual hours fee from any limitation due to Illness or Injury”, for the purposes of the FSS Policy, by reason of both her psychological illnesses and her physical injuries;

(g) Forming an opinion that was not reasonably available to [MetLife], having regard to all the information available to it at the time it formed its opinion;

(h) Failing to give any, or any proper consideration, to the evidence of A/Prof Michael Robertson to the effect that [Ms Hart] commenced to suffer from psychological illnesses on or around 1 January 2010;

(i) Stating, without a reasonable basis for doing so, that the decision of the Superannuation Complaints Tribunal in Determination number D20-21/066 was determinative of the [MetLife]’s liability to [Ms Hart] under the FSS Policy;

(j) Failing to give adequate reasons for its decision.

60. It is appropriate and convenient to address this claim by reference to Ms Hart’s particularised case, although her submissions were not organised in that manner, and then to return to a wider question as to the alleged breach.
61. Ms Hart’s first particular of breach (which concerns the PBR Policy) is that MetLife lacked a reasonable basis for determining that Ms Hart was “not at work” as at 1 October 2011, for the purposes of the PBR Policy and the IFSA Terms, by reason only of her “back injury” (SOC [34] particular (a)). That raises the question whether Ms Hart was not at work at that date by reason of psychological difficulties or, more narrowly, the PTSD condition with which she was later diagnosed. For completeness, there may be a degree of inconsistency in the parties submissions as to whether this was to be determined on 30 September 2011 or 1 October 2011, but nothing turns on that or the references to those dates in this judgment where there is no suggestion that Ms Hart’s position changed over those two days.
62. Mr Coombes submits that, in order to reach the decision that MetLife reached in respect of the PBR Policy, it must have been satisfied that Mr Hart was “not actively performing all the duties of [her] Occupation” and “not at work” on the takeover date for the PBR Policy; she was “not at work” on that date due to sickness or injury; she was suffering from the physical injury on those occasions and was “not at work” by reason of the physical injury; she was not suffering from a psychological injury on those occasions; and the “injury or illness” through which she was later absent from her occupation in the six month period after she ceased work with the NSWPF, from 19 December 2014 to 19 June 2015, for the purposes of the first limb of the definition of TPD under the PBR Policy (“first limb period”) was the psychological injury. MetLife has reached each of those conclusions, as is apparent from its observation in the 9 August letter that:

“There is simply no reliable evidence, contemporaneous or otherwise, that the member was suffering from PTSD causing her absence from work on the termination of the FSS Policy and the PBR Policy.

...

The member’s claim under the PBR Policy

...

On the takeover date (1 October 2011), the medical condition which caused the member to be ‘not at work’ was certified in the WorkCover NSW Medical Certificate issued on 10 September 2011 to be ‘Left neck/shoulder pains, T8-9 disc protrusion, lower lumbar pains radiates to the left lateral foot’ (the back injury).

Accordingly, from 1 October 2011, MetLife remained on risk only for TPD claims based upon the back injury and ‘related conditions’ (if any). Conversely, MetLife was not thereafter ‘on risk’ for TPD claims arising from conditions not ‘related’ to the back injury (such as PTSD).

The evidence is that in the relevant six-consecutive-month period (19 December 2014 to 19 June 2015) the member was absent because of PTSD and not because of the back injury or any ‘related’ condition.”

63. Mr Lloyd responds that, as a matter of construction of the PBR Policy, MetLife remains on risk only as to the back injury that, it contends, caused Ms Hart to be “not at work” on 30 September 2011 and any conditions related to that back injury, and is not on risk in respect of PTSD. He also submits that her claim cannot succeed under the first limb of the TPD definition in the PBR Policy because, during the first limb period, she was not absent from work due to her back-related conditions, but was absent because of PTSD for which MetLife was not on risk. Mr Lloyd elaborates that argument at some length. I do not understand there to be any substantive dispute between the parties as to the manner in which the PBR Policy, the Deed or the IFSA Terms applies in the relevant circumstances. The dispute is instead focussed on factual matters, namely Ms Hart’s contention that she was not “at work” as at 30 September 2011 by reason of her psychological condition (put more generally rather than only by reference to PTSD) and that she was absent from work in the first limb period by reason of her physical injuries, so as to have the benefit of cover under the PBR Policy even if MetLife is correct that she was not “at work” at 30 September 2011 by reason of physical injuries rather than psychological injuries.
64. Mr Coombes also submits that MetLife’s reference to “reliable evidence” indicates some qualitative enquiry or assessment by MetLife in relation to the evidence as to the time of onset of Ms Hart’s psychological injury; that MetLife was entitled to undertake a qualitative assessment of that evidence and that the 9 August 2021 letter did not indicate what evidence was considered, what evidence was discarded or discounted as unreliable and how MetLife came to the conclusion that the evidence was not “reliable”. That cannot establish a lack of reasonable basis for the decision, on its merits, as distinct from a failure fully to explain the decision, to which I refer below.
65. Mr Coombes recognises that MetLife’s 9 June 2021 letter specifically identifies some fifteen documents as relevant to MetLife’s decision in this regard. However, Mr Coombes submits that MetLife failed to have regard to several items of evidence relevant to the question when Ms Hart first began to suffer from her psychological illness, referring to Ms Hart’s statement dated 5 October 2012 (particularly paragraphs 212 & 213) (Ex J1, 611); Ms Kwok’s reports 8 November 2012 and 13 March 2013 (Ex J1, 669, 731); Dr Soni’s referral to A/Prof Robertson on 25 July 2014 (“She got mental injury ...” [sic]) (Ex J1, 1071); A/Prof Robertson’s report 5 August 2014 (Ex J1, 1077), which Mr Carroll suggests had been ignored other than as to A/Prof Robertson’s diagnosis; Ms Hart’s “Timeline of events” from August 2003 to November 2014 (particularly the entries “Sept-2010”, “01/01/2011” and “25/05/2011”) (Ex J1, 4113); a NSWPF document entitled “Sensitive: Health Information” dated 17 March 2016 (Ex J1, 1361); and A/Prof Robertson’s “Medical Statement” 8 March 2018 (Ex J1, 1787). The documents to which he refers appear to be directed to the proposition that Ms Hart was suffering from a psychological illness or PTSD prior to 1 October 2011, and was not at work on the takeover date at least for that reason.
66. Mr Lloyd responds that the listing of the fifteen documents in MetLife’s 9 June 2021 letter should not be treated as a list of every document that MetLife considered, but impliedly as the most relevant documents, where it then had voluminous documentation in its possession. The volume of that documentation is apparent from the documents that the parties originally sought to tender in these proceedings, before they made a more rigorous assessment of what was likely to be material to the Court’s decision. Although the phrasing of MetLife’s 9 June 2021 letter does not make that proposition clear, on balance, I accept it, where it seems unlikely that MetLife would have gone to the trouble and cost of obtaining documents from the NSWPF and obtaining numerous medical reports and then not review them in order to reach its decision. Mr Lloyd also submits that the documents to which Mr Coombes refers are “barely relevant (if relevant at all)” and “not inconsistent with MetLife’s finding”; that the first, second and fifth of those documents concern matters that predate the first limb period by a couple of years and say nothing meaningful as to why Ms Hart was absent from work in the future, although I interpolate that they are potentially relevant to the position at 30 September 2011; he submits that the third document is in the same category, although closer in time to the first limb period; and that A/Prof Robertson’s report is not inconsistent with Ms Hart being absent in the first limb period by reason of PTSD and mental illness related to traumatic events. He submits that the sixth and seventh of those documents postdate the first limb period and do not purport to say why Ms Hart was absent during that period. He also submits that there is no basis to infer that MetLife failed to consider the material, or that it failed to consider something that was “truly relevant”.
67. It seems to me that the documents to which Mr Coombes refers are not sufficiently material to establishing the relevant fact, which I understand here to be whether Ms Hart was not “at work” as at 1 October 2011 by reason of the PTSD that was subsequently diagnosed, to support a claim for breach of the relevant duties, as distinct from the position in respect of the first limb period on which Mr Lloyd’s submission focussed. The first of those documents, Ms Hart’s statement dated 5 October 2012 (particularly paragraphs 212 & 213), made on 27 September 2012, acknowledged that Ms Hart had not previously been diagnosed or treated for depression, but referred to her suspicion that she had been depressed a year earlier (in 2011), apparently by reason of the pain of her physical injuries. That evidence does not provide any rational basis for a finding that Ms Hart’s previously suffering PTSD was reason for her being absent from work at that time, when she was then present at work. The second, Ms Kwok’s reports, refer to evidence of depression again associated with the physical injury and not to PTSD, which was not then preventing Ms Hart from working the restricted hours her physical condition would allow. The third, Dr Soni’s referral, emphasises Ms Hart’s physical difficulties, refers to Ms Hart’s “mental injury” as being anxiety or depression, linked to pressures by her superiors at work to change duties, not to traumatic events, and notes that she had previously made an unsuccessful worker’s compensation claim, apparently for these matters, which was declined where she had no past history of depression or mental health issues.
68. Ms Hart did not establish that the fourth document, A/Prof Robertson’s report 5 August 2014, was in fact “ignored other than as to A/Prof Robertson’s diagnosis”, since that does not follow from MetLife’s express reference to it for a relevant matter. That report recognises Ms Hart’s depression relating to pain but raises, for the first time in evidence, a suggestion of “chronic post-traumatic stress disorder”, which it suggests Ms Hart had not disclosed to the worker’s compensation insurer; and again notes that Ms Hart had no previous psychiatric problems”. That document does not provide any rational basis for finding that the PTSD then diagnosed existed at 1 October 2011, nearly 3 years earlier, still less that it had caused her not to be “at work” at that time, given the other evidence that she was not in fact “at work” in the relevant sense at that time because of her physical difficulties.
69. The fifth document, Ms Hart’s timeline, was not prepared until the end of 2014 and emphasises traumatic incidents in the NSWFP which she now perceives as contributing to the PTSD with which she has been diagnosed. I consider that document should be given significantly less weight than contemporaneous documents, because Ms Hart’s perception of events, by this time, will inevitably have been shaped by later developments. In any event, it provides no support for a proposition that Ms Hart’s then undiagnosed PTSD had caused her not to be “at work” at 1 October 2011, given the other evidence that she was not in fact “at work” at that time at that time because of her physical difficulties.
70. Mr Lloyd submits that the sixth document, the NSWPF “Health Information” dated 29 March 2016, postdates the first limb period and has little probative weight; presumably, the same submission would be made so far as it postdates the takeover date. This document potentially assists Ms Hart so far as is refers to both psychological issues affecting her, described as PTSD and depression, as well as physical difficulties. However, it dates her psychological injury from 7 September 2012 and records that she commenced “suitable duties” after that psychological injury from 13 October 2012. It refers to her being certified as unfit for work as a result of her psychological injury from January 2015, although the basis of that certification is not disclosed and it is not in evidence. That document again provides no support for a proposition that Ms Hart’s then undiagnosed PTSD had caused her not to be “at work” at 1 October 2011. It has not been established that MetLife did not have regard to it, particularly where it is common ground, as noted above, that MetLife was provided with Ms Hart’s personnel file from the NSWPF in April 2019 and, on 2 May 2019, wrote to FSS advising that the file had disclosed documents that had not previously been seen by it, it had considered them and had revised its views in response to them.
71. Mr Lloyd submits that the seventh document, A/Prof Robertson’s “Medical Statement” dated 8 March 2018, also postdates the first limb period and has limited weight. This document refers to Ms Hart’s “present condition”, as at 8 March 2018, as “chronic PTSD due to cumulative exposure to traumatic stress” and refers to the fact that A/Prof Robertson had only treated Ms Hart since 2014 and she had “nil previous psychiatric disorder”. That document was plainly not capable of supporting any reliable inference that Ms Hart’s then undiagnosed PTSD had caused her not to be “at work” at 1 October 2011 and there was no relevant dispute, at least as between Ms Hart and MetLife, as to the fact that she suffered from PTSD in 2018. The absence of specific reference to the documents to which I have referred above does not support a finding of breach of the pleaded duties on the part of MetLife.
72. Ms Hart’s second particular of breach (in respect of the FSS Policy) corresponds to her first particular of breach as to the PBR Policy, and is that MetLife lacked a reasonable basis for determining that Ms Hart was “not actively performing all the duties of their Occupation and is not working their usual hours f[r]ee from any limitation due to Illness or Injury”, for the purposes of the FSS Policy, by reason only of her “back injury” (SOC [34] particular (b)).
73. Mr Coombes again submits that, in order to reach the decision it reached in respect of the FSS Policy, MetLife must have been satisfied of substantially the same matters as in respect of the PBR policy. He draws attention to MetLife’s observation in the 9 August 2021 letter that:

“There is simply no reliable evidence, contemporaneous or otherwise, that the member was suffering from PTSD causing her absence from work on the termination of the FSS Policy and the PBR Policy.

...

The member’s claim under the FSS Policy

...

The reason why the member was not actively performing all the duties of her occupation on 30 November 2010 was certified in the WorkCover NSW Medical Certificate dated 5 September 2010 as ‘Lower back pain (Muscular-ligamentous), L sciatica ... neck pain’.

MetLife therefore remained on risk for TPD after the FSS Policy terminated ‘only’ to the extent that a claim was based upon ‘Lower back pain (muscular-ligamentous), L sciatica ... neck pain.’

The evidence is that in the relevant six-consecutive-month period (19 December 2014 to 19 June 2015) the member was absent from her work with the NSWPF because of PTSD and not because of ‘Lower back pain (muscular-ligamentous), L sciatica ... neck pain’.

74. Mr Coombes submits that the matters to which he referred in respect of the PBR Policy, which I addressed above, would also warrant setting aside the 9 August 2021 decision to decline Ms Hart’s claim on the FSS Policy. Where that submission is put on the same basis as that submission in respect of the PBR Policy, I do not accept it for the same reasons.
75. Ms Hart’s third particular of breach (which concerns the PBR Policy) is that MetLife lacked a reasonable basis for determining that it was not on risk under the PBR Policy in respect of Ms Hart’s psychological illnesses (SOC [34] particular (c)). Mr Lloyd submits that particulars (c)-(f) to paragraph 34 raise the same point as particulars (a)-(b) of that paragraph. The first basis on which this could have been put was the construction of the PBR Policy, the Deed and the IFSA Terms but the parties appeared to be in agreement as to that matter, and to approach it in the same manner as Derrington J in the FCA Judgment. The second basis on which it could be put was that MetLife lacked that reasonable basis, because Ms Hart was not “at work” on 1 October 2011 because of psychological difficulties or PTSD, but I have addressed that question in dealing with particular (a) above. The third basis on which this could be put, which was not expressly pleaded but was addressed by both parties in submissions, was that, while MetLife was correct that it was only on risk for Ms Hart’s physical injuries, she was prevented by those physical injuries (as distinct from by PTSD) from working in the first limb period. I now turn to that question.
76. Mr Coombes in turn attacks MetLife’s reasoning, or possibly its reasons, as to whether Ms Hart was absent from work as a result of her physical injury during the first limb period. The first basis of that attack is limited to what was said in the 9 August 2021 letter, excluding the 9 June 2021 letter, and I do not accept that approach.
77. Mr Coombes alternatively accepts that the 9 June 2021 letter also refers to several relevant documents, and Mr Lloyd submits that those documents were plainly relevant, where they were eight contemporaneous reports and certificates as to Ms Hart’s medical condition, which originated from Ms Hart’s treating doctors, Dr Abraszko and Dr Soni. I accept that those documents supported MetLife’s conclusion that Ms Hart was not unable to work during the first limb period by reason of her physical injuries. Immediately prior to that period, the reports dated August 2014, October 2014 and November 2014 (Ex J1, 1083, 1098, 1125) of Dr Abraszko, a neurosurgeon and spinal surgeon, expressed the view that she could continue to perform suitable work for five hours per day, three days per week. During that period, Ms Hart’s treating doctor, Dr Soni, also certified on several occasions that Ms Hart was capable of undertaking suitable work on that basis, including on 7 January 2015, 3 February 2015, 23 February 2015, 17 March 2015 and 21 April 2015 (Ex J1, 1185, 1188, 1194, 1206, 1212). There is also evidence consistent with MetLife’s conclusion that Ms Hart could not work within the first limb period by reason of PTSD, and she referred to the traumatic events which gave rise to her PTSD in her statement dated 28 April 2015 (Ex J1, 1215), and at least depressive symptoms were recognised in reports of Ms Kim (Ex J1, 1183) and Dr Smith (Ex J1, 1229).
78. In addition, shortly before Ms Hart ceased work with the NSWPF on 19 December 2014, and the first limb period commenced, A/Prof Robertson observed (Ex J1, 1135) that:

“I do not believe that Senior Constable Hart is likely to return to pre-injury duties as a consequence of her psychiatric symptoms. I believe she is on a trajectory to medical retirement as a consequence of chronic PTSD and depression.”

He also observed that her current duties were “exacerbating her PTSD and depression” and that her “mental health” would be best served by her being discharged from the NSWPF “on psychiatric grounds”. A/Prof Robertson there acknowledged her physical injuries but did not suggest they required her retirement from the NSWPF. That report seems to me to be consistent only with her ceasing to work with the NSWPF in the first limb period because of her PTSD and depression.

79. Mr Coombes then submits that:

“There is no indication that MetLife gave any consideration to other relevant evidence including, for example:

a. Dr Soni’s medical certificates dated 22 June 2015 , 22 July 2015 , 21 August 2015 and 18 September 2015 certifying the plaintiff as having no current work capacity due to her physical injuries for the period 22 June 2015 to 22 October 2015 [Ex J1, 1240, 1258, 1266, 1269];

b. Dr Soni’s report 17 April 2017 – “During her work cover injury since 2006 she had tried to work but was stopped due to increase intenily (sic) of her spinal pain symptoms. I think as discussed above that she wouldn’t be able to go to work for a long time in the future” [Ex J1, 1459];

c. Dr Abraszko’s referral to Dr Adler, 9 April 2015 – “Marie had L3/L4 total disc replacement and now suffers from L5/S1 pain but does not want to have fusion and RF lesion is the only remaining option to improve her pain” [Ex J1, 1209];

d. Dr Abraszko’s report 10 February 2016 – “She did not return to work after the lower back pain at L5-S1 level because the insurance refused to pay for her treatment” [Ex J1, 1294];

e. Dr Dixon’s report 23 February 2015 – “As stated above, she is unfit to work as a police officer and would be restricted in any occupation reasonably available to her in the open labour market eg hospitality or clerical duties, for the reasons stated above. ... She is unfit for work due to her low back pain and lumbar stiffness and radicular complaint with a poor sitting and standing tolerance as well as her neck pain and stiffness and left shoulder brachalgia. This incapacity arises from the nature and conditions of her employment as a NSW Police Officer”;

f. NSWPF document entitled “Sensitive: Health Information” dated 17 March 2016;

g. TAL Member’s Statement 15 March 2016 [Ex J1, 1353];

h. MetLife Statement of Claim 18 February 2018 [Ex J1, 1750].

80. These documents appear to be directed to establishing that Ms Hart was absent from work during the first limb period by reference to her physical injuries, despite the evidence on which MetLife relied to which I referred above. Mr Lloyd responds that, obviously enough, Dr Soni’s medical certificates after June 2015 and his report of April 2017 postdate the first limb period and could not be used to contradict his certifications given during the first limb period that Ms Hart was able to undertake restricted duties to which I referred above. Mr Lloyd accepts that Dr Abraszko’s referral and report recognise that Ms Hart had back injuries at that time, but submits that they do not suggest they were the reason for her absence from work during the first limb period; and he submits that Dr Dixon’s report was directed to Ms Hart’s ability to undertake general policing work, rather than addressing her ability to undertake restricted duties on a part-time basis; and that the other documents do not provide contemporaneous or cogent evidence why Ms Hart was absent during the first limb period. Mr Lloyd submits that these documents do not provide any real support for a proposition that Ms Hart was absent from work for six months throughout the first limb period, by reason of her back injury, particularly given the contrary medical evidence that relate, in the case of Dr Soni’s medical certificates, to a large part of that period.
81. I am again not persuaded that the absence of specific reference to these documents impugns the adequacy of MetLife’s reasons, or its reasoning, or supports a finding of breach of the pleaded duties on the part of MetLife. It also does not seem to me that these documents establish that MetLife lacked a reasonable basis to conclude that Ms Hart was not absent from work during the first limb period by reason of her physical injuries, as distinct from the PTSD that had by then been diagnosed. The first category of documents, Dr Soni’s medical certificates for the period after June 2015 did not seek to contradict, and were not capable of contradicting, the certificates he had given for the period to May 2015 indicating that Ms Hart’s physical difficulties did not prevent her from working restricted hour in the first limb period. The second document, Dr Soni’s report dated 17 April 2017 had little probative weight for that question, since the proposition in that document that Ms Hart ceased to work “due to” her “spinal pain symptoms" was not supported by any reasoning; at least for the first limb period, it is inconsistent with the contemporaneous medical certificates given by Dr Soni; and it is also inconsistent with the evidence that Ms Hart’s PTSD at some point became at least a major and likely the operative factor in Ms Hart’s inability to work. Dr Abraszko’s referral to Dr Adler and his February 2016 report indicate the fact of Ms Hart’s back injuries, which is not disputed, but not that Ms Hart’s physical difficulties prevented her from working, at least for restricted hours, in the first limb period; and the quoted causative statement from Dr Abrazko’s report is no more than an assertion, or an assumption of fact, as to a factual matter outside his expertise.
82. Dr Dixon’s report was also of limited significance. Although he expresses the view that Ms Hart was “unfit to work as a police officer” and unfit for work “due to her lower back pain” and other matters as at February 2015, during the first limb period, he does not address the position as to restricted duties and his observation that she would be “restricted” in clerical duties, rather than excluded from performing them, left open the possibility of her performing that work including in the first limb period. I have addressed the NSWPF “Health Information” document above. Ms Hart completed the TAL Member’s Statement dated 15 March 2016 which referred to the nature of her back injury and to “PTSD, depression, anxiety” and addressed the extent of her physical difficulties arising from her back injury. It does not seem to me that the failure to refer to that document, alone or with other documents, supports the pleaded breaches of duty, where there was no controversy that Ms Hart was suffering from such injury, and it would not displace the certifications by her treating doctor, who would obviously aware of these matters, that her physical injuries did not prevent her working restricted hours in the first limb period. Ms Hart’s MetLife Statement of Claim was completed in February 2018, and there is no reason to think that MetLife did not have regard to that document, without needing specifically to refer to it. By that time, it was again likely that Ms Hart’s perception of events had been affected by intervening matters.
83. Mr Coombes submits that the documents identified above contain information capable of supporting the contentions advanced by Ms Hart regarding her TPD claim, namely that (implicitly, for the first category of documents) “her psychological condition caused her to be ‘not at work’ at the time MetLife went off risk under each policy” and (implicitly, for the second category of documents) “she ceased active duty in December 2014 through, at least in part, her physical injuries”. Mr Coombes in turn submits that these matters are:

“on their own or in combination, sufficient to constitute breaches of MetLife’s duty and obligations to [Ms Hart] and to warrant setting aside the 9 August 2021 decision to decline [Ms Hart]’s claim on the PBR Policy.”

I do not accept that submission, for the reasons noted above in dealing with the two categories of documents.

84. Ms Hart’s fourth particular of breach (in respect of the FSS Policy) corresponds to her second particular of breach as to the FSS Policy, that MetLife lacked a reasonable basis for determining that it was not on risk under the FSS Policy in respect of Ms Hart’s psychological illnesses (SOC [34] particular (d)). Where that submission is put on the same basis as that submission in respect of the PBR Policy, I do not accept it for the same reasons.
85. Ms Hart’s fifth particular of breach (in respect of the PBR policy) is that MetLife failed to give any, or any proper consideration, to medical evidence “supportive” of the proposition that Ms Hart was “not at work” as at 1 October 2011, for the purposes of the PBR Policy and the IFSA Terms, by reason of both her psychological illnesses and her physical injuries (SOC [34] particular (e)). I have addressed the documents relevant to that matter above. Ms Hart has not established that proposition, because I do not consider that the documents on which she relies support that she was not “at work” by reason of both those matters. At best, they establish the fact that Ms Hart then had psychological difficulties that, on the balance of the evidence, did not prevent her from being “at work” at that time. Any failure to give consideration to that evidence was not sufficiently material to establish a breach of the pleaded duties, where it would not establish the matters for which Ms Hart contends.
86. Ms Hart’s sixth particular of breach is that MetLife failed to give any, or any proper consideration, to medical evidence supportive of the proposition that Ms Hart was “not actively performing all the duties of their Occupation and is not working their usual hours f[r]ee from any limitation due to Illness or Injury”, for the purposes of the FSS Policy, by reason of both her psychological illnesses and her physical injuries (SOC [34] particular (f)). I have addressed the documents relevant to that matter above and do not accept it from the same reasons I did not accept that submission in respect of the PBR Policy.
87. Ms Hart’s seventh particular of breach is that MetLife formed an opinion that was not reasonably available to it, having regard to all the information available to it at the time it formed its opinion (SOC [34] particular (g)). Mr Lloyd responds that this particular does not identify a particular opinion, and submits that, if it relates to the opinion(s) attacked by particulars (a)-(f), it should be rejected for the same reason. I assume that the relevant “opinion”, not specifically identified by this particular, is that MetLife was not on risk for Ms Hart’s claim under the PBR Policy and the FSS Policy. It was not unreasonable for MetLife to form that opinion for the reasons set out above.
88. Ms Hart’s eighth particular of breach is that MetLife failed to give any, or any proper consideration, to the evidence of A/Prof Robertson to the effect that Ms Hart commenced to suffer from psychological illnesses on or around 1 January 2010 (SOC [34] particular (h)]. This particular appears to refer to A/Prof Robertson’s “Medical Statement” dated 8 March 2018, which stated that Ms Hart’s psychological condition commenced on 1 January 2010 (Ex J1, 1787). It was not established that MetLife did not consider that report. In any event, I am not persuaded that it was unreasonable for MetLife not to give any substantial weight to that opinion. First, A/Prof Robertson did not begin to treat Ms Hart until 2014 and had no direct knowledge of her condition as at 1 January 2010; an assertion, without more, of that matter by A/Prof Robertson had no greater weight than an assertion of that matter by Ms Hart. Second, that opinion does not distinguish between depression and anxiety on the one hand, which Ms Hart had suffered at an earlier time but which did not prevent her working the restricted hours her physical difficulties permitted, and the PTSD which appears to have developed at a later time. Third, A/Prof Robertson did not there identify any basis for attributing that date to the commencement of Ms Hart’s psychological illnesses generally or her PTSD specifically. Fourth, he also did not there express any view as to any impact of Ms Hart’s psychological illnesses generally or her PTSD specifically on her working capacity, at least prior to December 2014. It seems to me that that opinion supports neither of the propositions which Ms Hart seeks to establish, that her not being “at work” as at 1 October 2011 resulted from her PTSD or that she was unable to work in the first limb period because of her physical injuries. This matter does not establish, alone or together with the other matters on which Ms Hart relies, the pleaded breach of duties.
89. I recognise that, as Mr Lloyd points out, A/Prof Robertson later provided an explanation of the basis on which he attributed that starting date to Ms Hart’s PTSD in his report dated 13 October 2021, which was not available to MetLife at the time of its 9 August 2021 decision, and referred to Ms Hart’s recollection of “first endorsing or acknowledging her symptoms”. There is also an open question whether that explanation itself reflects the elaboration of those symptoms in Ms Hart’s further statement dated 21 September 2021, which had been provided to A/Prof Robertson prior to the preparation of that further report, but was not available to him when he first attributed that date to that condition.
90. Ms Hart’s ninth particular of breach (in respect of the FSS Policy) is that, without a reasonable basis for doing so, MetLife treated the SCT’s decision as determinative of its liability to Ms Hart under the FSS Policy (SOC [34] particular (i)). Mr Coombes points to MetLife’s observation in its 9 August 2021 letter that:

“...at [88] of the Determination, the SCT determined that MetLife had no liability for the member’s claim under the FSS Policy. This took effect upon the making of the Determination, was not appealed by any party to the Complaint and was not raised during the appeal to the Federal Court (which, as noted, only concerned MetLife’s PBR Policy).

Accordingly, the Determination brought the member’s TPD claim under the FSS Policy to an end, and MetLife has no liability for that claim. ...

Pursuant to the SROC Act, the parties to the Complaint are bound to give effect to the Determination which determined that member’s TPD claim does not respond to the TPD cover the member held under the FSS Policy.”

91. Mr Coombes fairly accepts that the SCT’s determination was binding on MetLife and Ms Hart as parties to the SCT complaint (other than to the extent that determination was set aside by Derrington J) and I proceed on the basis of that concession. He submits that MetLife’s 9 August 2021 letter (and the 9 June 2021 letter) is “premised on a misunderstanding of what was determined by the SCT in terms of [Ms Hart’s] claim on the FSS Policy”; he refers to the scope of the SCT’s statutory jurisdiction; and he submits that:

“the SCT did not determine that MetLife had no liability to the plaintiff under the FSS Policy. Rather, it determined that MetLife’s “Decision 2”, which the SCT defined as MetLife’s decision “constructively rejecting the Complainant’s TPD claim, pursuant to the cover arising under the Trustee’s basic policy” was fair and reasonable.”

I do not address his several further criticisms of the basis of the SCT’s decision, which take matters no further where he accepts that Ms Hart is bound by it.

92. Mr Coombes in turn submits that:

“Accordingly, to the extent that MetLife and the plaintiff were bound by the SCT’s determination in relation to the FSS Policy, they were, at most, only bound to accept that MetLife’s purported constructive declinature of the claim on the FSS Policy was fair and reasonable. That determination cannot be said to have been dispositive of all issues relating to MetLife’s liability under the FSS Policy. For example, it could not prevent MetLife from revisiting, of its own volition, its liability under the FSS Policy in respect of the plaintiff’s claim. That is, in effect, what MetLife did when it made the decision set out in the 9 August 2021 letter. On any fair and reasonable consideration of the SCT’s determination, MetLife could not have concluded (and then asserted to the plaintiff) that the SCT had made a binding determination that MetLife had no liability to the plaintiff under the FSS Policy. In reaching that conclusion and relying on the purported determination as the basis for declining the plaintiff’s claim on the FSS Policy, MetLife failed to act with utmost good faith and breached its obligation to act fairly and reasonably.”

93. Mr Lloyd responds that Ms Hart did not challenge the SCT’s decision and that no further material (at least of substance) was provided by Ms Hart between the date of that decision and MetLife’s decision of 9 August 2021, in respect of her claim under the FSS Policy and that MetLife’s approach to whether it was on risk under the PBR Policy was also applicable to the FSS Policy.
94. It seems to me that, once Ms Hart accepts (as she does) that she was bound by the SCT’s finding that it was fair and reasonable to constructively decline her claim under the FSS Policy, then she cannot establish the pleaded breach of the duty of utmost good faith, or a failure to act “fairly and reasonably” in determining the claim, at least absent further information of substance, and she does not and could not identify any such information provided after the SCT’s decision and prior to the 9 August 2021 letter, or suggest that her solicitor’s response to the 9 June 2021 letter conveyed such further information. The 9 August 2021 letter did not involve MetLife “revisiting”, of its own volition or otherwise, its liability under the FSS Policy; instead, it there contended, and Ms Hart here accepts that, that matter was resolved by SCT’s determination. Ms Hart’s further contention that reliance on the SCT’s decision to decline her claim under the FSS Policy involved a failure to act “with utmost good faith and breached its obligation to act fairly and reasonably” does not establish how either can be established by MetLife acting consistently, rather than inconsistently, with a decision of an independent statutory tribunal by which both she and MetLife were bound.
95. Ms Hart’s tenth particular of breach is that MetLife failed to give adequate reasons for its decision (SOC [34] particular (j)). Mr Coombes submits that MetLife declined Ms Hart’s claim under each of the PBR and FSS policies by its letter dated 9 August 2021 to FSS, to which I referred above, and notes that that letter contains a “summary” of MetLife’s reasons for declining the claim and states that MetLife’s reasons “are set out in our letter to 9 June 2021”. Mr Coombes submits that, as a preliminary step to any examination of MetLife’s reasons for declining Ms Hart’s claim, the Court must determine whether the content of the 9 June 2021 letter forms no part, some part (in tandem with the 9 August 2021 letter) or the entirety of MetLife’s reasons for declining Ms Hart’s claim. He submits that MetLife’s reasons are confined to the 9 August 2021 letter, for several reasons. I do not accept that submission, where the reader of the 9 August 2021 letter would understand its reasoning by reference to the more detailed articulation of that reasoning in the 9 June 2021 letter, albeit there put as a preliminary view, to which that reader’s attention was drawn by the 9 August 2021 letter. That does not have the consequence that the 9 June 2021 letter was a final decision made without reference to the partial response dated 25 June 2021 of Ms Hart’s solicitors, as Mr Coombes contended; it was, as it said, a preliminary view, but was not displaced by that response for the reasons set out in the 9 August 2021 letter.
96. Mr Coombes in turn submits, expanding on the scope of MetLife’s obligation to give reasons to which I referred above, that MetLife’s duty of utmost good faith obliged it to provide reasons sufficient to explain how it reached the decision that it did; a judicial standard of reasoning is not required; and, where a letter is prepared by an insurer in circumstances where it is legally represented and there is (or in this case, has been) litigation between the insurer and the claimant at the time that letter is written, closer scrutiny should be given to it than it might receive in other circumstances, referring to Shuetrim at [152]; Ziogos at [75]; MX at [154]. I recognise that, in Newling v MetLife Insurance Ltd [2019] NSWCA 149, the Court of Appeal left open the question whether a requirement to give reasons for a decision could be implied from an insurer to act fairly and reasonably, where it owed a duty of good faith to an insured person. It is also not necessary to decide that question here.
97. Mr Coombes notes that the 9 August 2021 letter identified two reasons for MetLife to decline liability under the FSS Policy, that the SCT determined that MetLife had no liability under the FSS Policy and that determination was not the subject of any appeal and was binding as between Ms Hart and MetLife; and that, even if the SCT’s determination was not binding, MetLife only remained on risk under the FSS Policy after 30 November 2010 in respect of Ms Hart’s physical injury, and her absence from work in the first limb period and consequently the first limb of the FSS TPD clause was not satisfied. Mr Coombes in turn recognised that the 9 August 2021 letter identified a single reason for MetLife declining liability under the PBR Policy, that, as he summarises it:

“[Ms Hart] was “not at work” on 1 October 2011 by reason of her physical injury only and accordingly MetLife was on risk under the PBR Policy, from 1 October 2011 onwards, in respect of the physical injury only. The terms of the PBR Policy required [Ms Hart] to establish that she was absent from work for 6 months from 19 December 2014 because of the physical injury. The “evidence” establishes that in the relevant period the plaintiff was absent from work solely as a result of her psychological injury and consequently the first limb of the PBR TPD clause was not satisfied.”

98. Mr Coombes in turn observes that both TPD clauses required satisfaction of two limbs, the first being satisfaction of the factual enquiry as to six consecutive months absence from work through injury or illness in the first limb period, and the second requiring formation of an opinion by MetLife as to its satisfaction (or lack of) in relation to the relative likelihood of the claimant returning, in the future, to work within their education, training or experience. He points out that, where MetLife decided that Ms Hart had not satisfied the first limb of both TPD clauses, MetLife did not proceed to form an opinion in relation to the issue raised by the second limb. Mr Coombes then addresses the matters on which Ms Hart relies to challenge the substance of MetLife’s decision. I have addressed those matters above. Even if an error in the reasoning process was enough to establish a failure to give “adequate” reasons, Ms Hart has not established such an error for the reasons noted above.
99. I should now return to a wider aspect of this question. First, it seems to me that the decision at first instance in Newling at [180], and the Court of Appeal’s approach on appeal (at [54], [76]-[77], [84]) provides support for the view that whether MetLife acted in breach of the duty of utmost good faith or unfairly or unreasonably is to be determined in the context of the process that it adopted, including the fact that it provided an opportunity for Ms Hart or her solicitors to respond to the preliminary views which it had set out in a comprehensive manner in its 9 June 2021 letter, and it could reasonably and fairly have regard to the fact that no additional documents had been drawn to its attention as being either inconsistent with the documents to which it had referred, or as supporting a different inference to that which it had indicated it would likely draw, at the time it made its determination.
100. Second, I accept Mr Lloyd’s wider submission that MetLife did not breach the pleaded duties in dealing with this claim, where its analysis in respect of the PBR Policy and its application in the circumstances of Ms Hart’s claim was consistent with the reasoning of Derrington J in the Federal Court; no documents or matters had been drawn by Ms Hart or her solicitors to its attention, after the date of that decision and in response to its 9 June 2021 letter, which could undermine that analysis; and, in particular, Ms Hart and her solicitors had not then suggested that the documents on which they now seek to rely before me were inconsistent with Derrington J’s analysis or MetLife’s analysis set out in its 9 June 2021 letter. It may well have been a breach of the pleaded duties for MetLife to depart from that analysis, without good reason to do so, but it was consistent with those duties to adopt it where no good reason to depart from it had been shown. I have addressed the question of the relevance of the SCT’s decision to the claim under the FSS policy above.
101. Third, it is not strictly necessary to determine MetLife’s wider claim that it was not in fact or in law liable under the PBR Policy in order to determine these matters or the separate questions referred to me, although the conclusions that I have reached above would have the consequence that Ms Hart could not establish that she was not “at work” as at 1 October 2011 by reason of her PTSD claim for the purposes of the PBR Policy, or that TPD was established in respect of her physical injuries for the purposes of the first limb period, or that MetLife was at risk for her PTSD claims under the PBR (or indeed the FSS) Policy. For completeness, an issue also arose in submissions as to a potential difficulty in dealing with coordinate causes of an insured’s TPD under the PBR Policy, the Deed and the IFSA Terms. That issue might arise, for example, if Ms Hart suffered a physical injury when MetLife was on risk, and a psychological injury when TAL Life was on risk, and each injury was sufficient to cause her to be absent from work for the first limb period. It does not seem to me that the PBR Policy, the Deed or the IFSA Terms provide any clear solution to that difficulty. However, it is not necessary to address it further, where the evidence does not indicate that Ms Hart’s physical injury covered by MetLife was the cause of her not being at work during the first limb period.
102. I note, for completeness, that Mr Coombes’ written opening submissions addressed several unpleaded matters, including the significance or otherwise of Ms Hart’s previous refusal to attend medical examinations arranged by MetLife; MetLife’s response to her criticisms of it for delay, which were rejected by the FCA Judgment; and a claim, unsupported by any pleading of material facts, that MetLife “lacked the capacity to approach [Ms Hart’s] claim in a rational, fair and reasonable manner”. Mr Coombes did not press that issue at the hearing and I need not address it.

Whether MetLife breached its duty in failing to “reconsider” Ms Hart’s claims since 15 November 2021

103. Ms Hart in turn pleads that, on 15 November 2021, her solicitors wrote to MetLife enclosing further medical evidence in support of her claims and asking MetLife to “reconsider” her claims and (SOC [32]) that, to date, MetLife has failed or refused to reconsider her claims. MetLife accepts in its Defence that it has not “reconsidered” the claim lodged by Ms Hart on 18 February 2018.
104. The second of the separate questions posed by Hammerschlag CJ in Eq’s orders made on 25 July 2022 is:

2. Did [MetLife] breach any duty or obligation to Ms Hart in failing since 15 November 2021 to reconsider Ms Hart’s claims? (See Statement of Claim [35]).

105. This question derives from Ms Hart’s Statement of Claim at [35], where Ms Hart alleges that:

“35. Further or in the alternative, by failing or refusing since 15 November 2021 to reconsider [Ms Hart’s] claims, [MetLife] breached its duty and obligations to [Ms Hart].

Particulars of breach

(a) Failing to act with utmost good faith

(b) Failing to reconsider the plaintiff’s claim, within a reasonable time or at all

(c) Failing to, within a reasonable time or at all, form an opinion in relation to the plaintiff’s claims

(d) Failing to act fairly, reasonably and in good faith by failing to form an opinion at a time when [MetLife] was in receipt of further information relevant to [Ms Hart’s] claims such as to cause [MetLife], acting fairly, reasonably, in good faith and with due regard to [Ms Hart’s] interests, to reconsider whether it should form an opinion as to whether the plaintiff has suffered “Total and Permanent Disablement” for the purposes of each of the PBR Policy and the FSS Policy

(e) Failing to, within a reasonable time or at all, consider and determine whether, in light of its receipt of fresh evidence relevant to the plaintiff’s claims, it should form an opinion on the question of whether the plaintiff has suffered “Total and Permanent Disablement” for the purposes of each of the PBR Policy and the FSS Policy.

106. The term “reconsider” here is ambiguous, since it could be directed an allegation that MetLife did not address its mind to that question, or an allegation that MetLife did not reverse the view it had previously held, which would only be established if that view was previously incorrect. Mr Coombes preferred the former construction of the claim in oral submissions. It is again appropriate and convenient to determine this claim by reference to Ms Hart’s particularised case, although here submissions were again not organised in that manner.
107. I first address the relevant correspondence, to which Mr Coombes refers. On 15 November 2021, Ms Hart’s solicitors wrote to MetLife enclosing new reports of A/Prof Robertson and Dr David Lewington (a spine and rehabilitation physician), along with a further detailed statement of Ms Hart and requesting MetLife reconsider and accept Ms Hart’s claim within 28 days. On 2 December 2021, MetLife’s solicitors wrote to Ms Hart’s solicitors taking issue with the 28 day period within which Ms Hart’s solicitors had suggested the reconsideration should occur. On 8 December 2021, Ms Hart’s solicitors wrote to MetLife’s solicitors raising MetLife’s duty of utmost good faith in the context of the reconsideration request, seeking confirmation whether MetLife would reconsider the claim and confirming that Ms Hart was willing to reach agreement with MetLife as to a reasonable time period within which reconsideration could occur. It appears that MetLife and its solicitors did not respond to that letter.
108. Mr Coombes submitted that MetLife’s duty of good faith required it to reconsider Ms Hart’s claims once it was presented with new evidence pertinent to the question of MetLife’s liability under each of the PBR and FSS policies. He further submitted that:

“The question of whether an insurer has a duty or obligation to reconsider a decision to decline liability when presented with fresh evidence relevant to the question of its liability has not been the subject of extensive judicial consideration. There are a number of decisions to the effect that a superannuation trustee has a duty to reconsider a claim when presented with fresh evidence indicative of the possibility of a different outcome for a claim [here citing Tonkin v Western Mining Corporation Ltd [1998] WASCA 101, (1998) 10 ANZ Insurance Cases 61-397 at 74,268; Gilberg v Maritime Super Pty Ltd [2009] NSWCA 325 at [28] and Board of Trustees of the State Public Sector Superannuation Scheme v Gomez [2018] QCA 67 at [27]]. It is acknowledged that each of those decisions turn, to some extent, on the construction of the terms of the relevant trust deeds. It is further acknowledged that the relationship between a superannuation fund member and a superannuation trustee is not identical to that between a superannuation fund member and the group life insurer on risk in respect of the members of that fund. However, the duties and obligations of a superannuation trustee and a group life insurer are sufficiently analogous as to suggest that a similar duty or obligation to reconsider exists on the part of an insurer. The existence of a duty or obligation to that effect appears to have been accepted by Franklyn J in Heitman v Guardian Assurance Co Ltd [(1992) 7 ANZ Insurance Cases 61-107 at 77,491 – 2] and was accepted by the parties and Brownie J in Nile v Club Plus Superannuation Pty Ltd [[2005] NSWSC 55 at [36]].

In the present instance, the terms of each of the PBR Policy and the FSS Policy interpose the formation of an opinion by MetLife as a condition of liability, thus rendering MetLife a judge in its own cause. The plaintiff (or any other claimant under those policies) must present evidence to MetLife to cause it to form the opinion necessary to trigger liability under each policy. It is implicit in the requirement that a claimant present evidence substantiating a claim to MetLife that, on presentation by a claimant of such evidence, MetLife will consider that evidence. Moreover, in circumstances where MetLife has elected to make the formation of its opinion a condition of liability and requires a claimant to present evidence to it to enable the formation of that opinion, it would be acting other than with utmost good faith if it then refused or failed to consider evidence presented to it by a claimant, including in a context where it is presented with new evidence and asked to reconsider its initial decision.”

109. Mr Coombes did not put the suggested duty as a freestanding duty, or as an implied term of the PBR Policy or the FSS Policy, where it would likely have been difficult to satisfy any requirement that it be so obvious that it go without saying or necessary to give business efficacy to the policies, which could readily operate on the basis that decisions were made once on a final basis. Mr Coombes instead put that the relevant duty or obligation arose as an incident of MetLife’s duty of utmost good faith, in the context that cl 7.3 of the PBR Policy and the corresponding term in the FSS Policy which required the insured to provide MetLife with “such evidence to substantiate the claim as we may reasonably require” as a condition to payment of any benefit.
110. Mr Lloyd responds that the PBR Policy and the FSS Policy did not impose an express obligation to “reconsider” a decided claim, and refers to Ziogos at [66] in that regard. Mr Lloyd also points to possible difficulties with the suggested duty, observing that:

“[Ms Hart] does not articulate the deceivingly complicated nature of the alleged duty. Does the duty require MetLife to reconsider all claims indefinitely? If not, what are the alleged deciding factors as to why not? What if, as here, the new material does not properly address MetLife’s analysis that Ms Hart’s claim must fail because the first limb of the definition of TPD was not satisfied by a condition for which MetLife has remained on risk? What commercial objectives of the parties (intended to be secured by the policies) are served by opening the floodgates in this way?

This is not a case where the request for reconsideration was supported by some breakthrough evidence or the revelation of a material mistake in MetLife’s analysis. This is not a case where, notwithstanding the great volume of documents already gathered as at the date of the decline, the claimant provided never before seen cogent or contemporaneous medical evidence to the effect that the medical condition that caused the insured member to be not at work on the working day immediately preceding the takeover date was PTSD. Nor such evidence to the effect that the Insured Member was absent from their Occupation because of the back (or related) injury during the first limb period.”

111. I first address Mr Coombes’ submission that such a duty should be applied to an insurer (or at least a TPD insurer) by analogy to the position of a superannuation trustee, recognising the differences between the two roles that he fairly acknowledged. In Gilberg v Maritime Super Pty Ltd [2009] NSWCA 325, Hodgson JA (with whom Allsop P and Campbell JA agreed) referred to the circumstances in which reconsideration by a trustee would be “appropriate”, in the context of a rule of a fund dealing with total and permanent disablement. Under a heading which referred to a “duty” of the trustee, his Honour observed (at [25]-[27]) that:

“In the case of an application to reconsider, it is relevant for the trustee to take into account the trouble and expense to the Trust involved in obtaining medical reports under par (c), and to the circumstance that the previous determination was a final determination of the previous application.

If the Trustee did not consider that the material provided in support of the new application indicated a reasonable possibility of a different result by reason of circumstances occurring since the previous application or by reason of evidence not reasonably available at the time of the previous application, it would, in my opinion, be appropriate for the Trustee to decline to obtain further reports under par (c) for the purposes of the new application and to refuse the application.

However, if the Trustee considered that the material provided in support of the new application did indicate a reasonable possibility of a different result, by reason of circumstances occurring since the previous application or by reason of evidence not reasonably available at the time of the previous application, and that, having regard to the interests of the applicant and the interests of other members, that possibility justified the expense of appointing medical practitioners to make further reports under par (c), then it would be appropriate for the Trustee to take that course.“

112. The decision in Gilberg was approved in Board of Trustees of the State Public Sector Superannuation Scheme v Gomez [2018] QCA 67 (“Gomez”), where Henry J (with whom Sofronoff P and Fraser JA agreed) observed (at [27]-[28]) that:

“Subject to provision to the contrary, a member’s entitlement to payment of a TPD benefit is not lost irrevocably if the member applies once and fails. The circumstances in which the emergence of further information may warrant reconsideration of a previously unsuccessful application was explained in Gilberg v Maritime Super Pty Ltd, a decision of the New South Wales Court of Appeal. Hodgson JA, with whom Allsop P and Campbell JA agreed, observed that in an application to reconsider it is relevant for the Trustee to take into account the trouble and expense involved in obtaining further reports and the circumstance that the previous determination was a purportedly final determination. However, he explained that if the further material provided in support of an application did indicate “a reasonable possibility of a different result”, then that would justify the expense of seeking further reports.

That decision related to a different statutory scheme than the present, with more specific requirements regarding the receipt of reports. However, the test it propounds for determining whether to reconsider an application – a reasonable possibility of a different result – should be applied here. That is because it derives logically from the duty to give properly informed consideration to an application. If the further information indicates a reasonable possibility of a different result then, until such time as it is considered in addition to the earlier considered information, it can no longer be said the Board has met its duty of giving properly informed consideration to the application.”

113. Mr Lloyd points out, and I accept, that there are obvious differences between the position of a trustee and the position of an insurer, and he refers to the observation of Leeming JA in Shuetrim at [187] that:

“... different considerations apply to the formation of an opinion by an insurer as opposed to a trustee. A trustee is a fiduciary, and is required to make decisions leading to payments of money none of which is owned beneficially by the trustee. An insurer is not a fiduciary, but may (as in the present case) be operating a business with a view to making a profit, and every decision it makes to grant or refuse a claim will go directly to its profitability. As Mr Rayment emphasised, by reference to what Malcolm CJ had said in Beverley at 331, “in the assessment of the claim under a policy, the insurer is [in] a very real sense acting as a judge in the insurer’s own cause”.

114. I am not persuaded that any duty in respect of reopening applicable to superannuation trustees should be extended to insurers generally, or TPD insurers specifically. First, there are extensive statutory regimes for the regulation of insurers and superannuation; the legislature has had ample opportunity to introduce such a duty, if it considered it should exist; and the Court extending that duty to insurers, or TPD insurers, will necessarily impact on the balancing of policy and economic issues in that legislative structure. It is not self-evident that such a duty would promote public policy, where there is a countervailing public benefit in finality in determination of claims. Second, the recognition of such a duty, unbounded by any identified limitation as to the number of times that matters should be reconsidered (which Mr Coombes suggests should be left to future cases), would have significant economic implications in imposing the additional costs of such reconsiderations on insurers (and superannuation trustees or policyholders who pay their premiums), limited only by the appetite of policyholders whose claims were denied to reagitate issues by submitting additional materials and requesting reconsideration. That duty would have wider impacts, because additional decisions made by an insurer in a “reconsideration” of a claim could then potentially be referred to the Australian Financial Complaints Authority or challenged in the Courts as involving a breach of a duty of utmost good faith or to act fairly and reasonably. An insurer could not bring that process to an end by deciding, even reasonably, that enough was enough, because that decision could itself be challenged as a breach of those duties. The question whether the benefit of that duty outweighs its costs cannot be assessed by a Court, which has no empirical basis for an assessment of whether reconsideration applications would be largely meritorious or largely unmeritorious. A Court also has no ability to address transitional issues, where the recognition of such a duty now would potentially require reconsideration of decisions previously made, where a Court’s decision does not only have a prospective effect.
115. Mr Lloyd also submits that the documents provided with the 15 November 2021 letter from Ms Hart’s solicitors would not satisfy the requirements for reopening recognised in Gilberg and Gomez. It seems to me that ,there was were real issues as to the weight to be given to those documents. As Mr Lloyd points out, Ms Hart’s statement dated 21 September 2021 was created 11 years after the FSS Policy terminated, 10 years after the PBR Policy terminated, 6 years after the first limb period ended, although only 15 weeks after the 9 June 2021 letter was issued and six weeks after the 9 August 2021 letter was issued. It is inevitable that Ms Hart’s perception would have been affected by the time that had passed and the disputes as to liability which had intervened. There is a real inconsistency between the emphasis placed by Ms Hart in this statement upon the effect of traumatic events upon her mental condition and her ability to work, and the position which she had put in earlier statements which had emphasised the impact of her physical condition upon her psychological condition and not mentioned “flashbacks and nightmares” arising from traumatic events; and the position put in that statement is also inconsistent with the earlier contemporaneous assessments of her psychological condition, including by Dr George in late 2012 and early 2013 and by Dr Balanza in February 2013 (Ex J1, 718), to which I referred above.
116. The further report of A/Prof Robertson presumably assumed the correctness of Ms Hart’s 21 September 2021 statement, which was briefed to him with a letter of instruction, and expressed views which were plainly outside his expertise without exposing any underlying reasoning process, including as to the consistency of the position now put by Ms Hart with the position that she had previously advised to him in the course of her treatment. A/Prof Robertson expressed a view as to Ms Hart’s condition in mid-2010 although he had not treated her until 2014, and without reference to inconsistent contemporaneous assessments of her medical condition, including that of Dr George (Ex J1, 679). Dr Lewington, who had conducted a single video assessment of Ms Hart, also expressed a view as to her physical condition more than 10 years before that assessment, again without reference to the contemporaneous assessments of her physical condition.
117. However, with considerable hesitation, and notwithstanding the several previous accounts given by Ms Hart of her medical condition at times that are closer to the dates in issue, and the earlier assessments of her medical condition, it seems to me that MetLife could not have reasonably concluded that those documents could be dismissed without further inquiry, or at least without a full assessment of the inconsistencies between them and the evidence it already held, and I could not conclude that those documents did not meet the threshold set in these cases for a reopening, by giving rise to a “reasonable possibility of a different result”, if (contrary to the view that I hold) this approach could or should be extended to an insurer as distinct from a trustee.
118. Second, I address the question of a recognition of such a duty in the insurance cases to which Mr Coombes refers, Heitman v Guardian Assurance Co Ltd (1992) 7 ANZ Insurance Cases 61-107 at 77,491–2 (“Heitman”) and Nile v Club Plus Superannuation Pty Ltd [2005] NSWSC 55 (“Nile”). Mr Lloyd submits that neither Heitman nor Nile established the existence of a “duty” on an insurer to reconsider, and points to Robb J’s reference to an insurer’s agreement to reconsider in Hellessey without any suggestion that the insurer was there obliged to do so. It seems to me that neither Heitman nor Nile provides any reasoned basis for the recognition of such a duty, or identifies any previous English or Australian authority in respect of insurers that has recognised such a duty. I do not consider that I should now recognise such a duty, as an aspect of the duty of utmost good faith, for the same reasons that I have held above that I should not extend any such duty applicable to superannuation trustees to insurers generally or TPD insurers specifically.
119. I should also briefly note the alleged breaches arising from the failure to “reconsider”, for completeness, although it is not necessary to determine them, where the duty has not been established. The first particularised claim, of a failure to act with utmost good faith, is a bare assertion, without identification of any material facts to support it. The second is conclusory, and depends upon the proposition that MetLife should have “reconsidered” the claim, in whatever sense that term is used. The third particularised claim is consequential, since MetLife had already formed an opinion as to Ms Hart’s claim, and this claim cannot succeed unless it was obliged to and had failed to form a new opinion as to that claim. The fourth particularised claim turns on the proposition that MetLife was, at the relevant times, in receipt of further information relevant to Ms Hart’s claims such as to cause it, acting fairly, reasonably, in good faith and with due regard to Ms Hart’s interests, “to reconsider whether it should form an opinion as to whether Ms Hart has suffered “Total and Permanent Disablement” for the purposes of each of the PBR Policy and the FSS Policy.” This appears to be a claim that MetLife should have considered that question, as distinct from a claim that it should have reversed its existing view on doing so. The fifth particularised claim turns on the premise that MetLife should have considered and determined whether, in light of its receipt of fresh evidence relevant to Ms Hart’s claims, it should form an opinion on the question of whether she had suffered “Total and Permanent Disablement” for the purposes of each of the PBR Policy and the FSS Policy. As I noted above, MetLife had already formed an opinion as to Ms Hart’s claim, and this claim cannot succeed unless it was obliged to and had failed to form a new opinion as to that claim.

What relief should be granted?

120. The third question posed by Hammerschlag CJ in Eq’s orders made on 25 July 2022 is:

3. In light of the answers to questions 1 and 2 what, if any relief, should be granted?”

121. Mr Lloyd submits that even if the first and second separate questions were answered “yes”, the third separate question should be answered “no”, because any breach could not realistically have resulted in a different decision, on the basis that the first limb of each definition of TPD in the FSS Policy and the PBR Policy was not satisfied by a condition for which MetLife remained on risk. The correctness of that proposition depends, of course, on the factual matters to which I have referred above. Mr Lloyd also submits that a materiality standard should be applied, in determining whether any relief would be granted, referring to an observation of Parker J in Newling v FSS Trustee Corporation and MetLife Insurance Ltd (No 2) [2018] NSWSC 1405 at [239] and to the way in which the materiality standard has been applied by the High Court in administrative review applications, including Hossain v Minister for Immigration and Border Protection (2018) 264 CLR 123; [2018] HCA 34, Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421; [2019] HCA 3 and MZAPC v Minister for Immigration and Border Protection (2021) 95 ALJR 441; [2021] HCA 17 at [2]. Mr Coombes responds that the application of that standard should not be extended beyond administrative law to applications of this kind.
122. The third question does not arise and it is preferable that I do not determine it, given the conclusions that I have reached above in respect of the first and second questions. I note, however, that it seems to me that materiality will often arise at an earlier stage in dealing with separate questions of this kind, since an error which has no material impact on the result may well not be sufficient to establish breach of the relevant duties. Mr Coombes fairly accepted that he was aware of no authority that was inconsistent with the application of a materiality standard in determining whether those duties were breached.

Orders

123. It is likely that the result of the determination of these separate questions is that the proceedings should be dismissed with costs. I direct the parties to bring in agreed short minutes to give effect to this judgment, including as to costs, within 7 days or, if there is no agreement between them, to bring in their respective short minutes of order and short submissions as to any differences between them.

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