Key Takeaways

In the decision of Felix v NULIS Nominees (Australia) Ltd, the FCA has dismissed a statutory SCT appeal by a super member against the SCT’s decision to affirm a TPD decline involving an ‘unlikely ever to be able’ TPD definition.

The affirmation was based on the FCA’s acceptance that the relevant vocational evidence which the insurer and trustee relied upon and which identified relevant alternative ETE jobs, was sound in all respects. Significantly however, in reaching its decision, the FCA endorsed the Victorian appellate decision of Hannover Life Re of Australasia Ltd v Colella (VSCA 2014) stating that:

‘The relevant cover is insurance against total and permanent disablement, not against the unavailability of work for the insured. See Colella at [34].’

Brief Facts

The member was a former call centre operator. Her employment was terminated on medical grounds and she has never worked again.

She lodged a TPD claim which the insurer and trustee declined on the grounds she was not relevantly disabled during the waiting period. Additionally, the insurer and trustee concluded, on the basis of a vocational report obtained during the workers’ compensation claim, that the member could return to work within her ETE, being work as a call or contact centre operator, clerical and administrative worker and in customer service.

The SCT affirmed the denial of the claim. Relevantly, the SCT held that ‘at the assessment date [being the conclusion of the waiting period] the member retained a part-time capacity for work for which she was reasonably qualified by ETE’ – being the three identified employment options in the vocational rport.

Judgment

On appeal, the FCA ruled that the SCT had properly conducted its review function when it affirmed the decision by the insurer and trustee to decline the TPD claim.

The First Limb Of The TPD Definition

The preliminary issue was a construction point relating to the wording of the first limb of the TPD definition which required the member to ‘suffer an injury or illness which stops the person insured working in any business, occupation or regular duties continuously for 6 months’ [emphasis added].

The member had argued that she satisfied the first limb because her injury ‘stopped her working’ in her usual occupation as a call centre operator¹. The FCA was unpersuaded by the restrictive construction adopted by the member that the first limb was limited to her usual occupation. In that respect it drew on the interpretation of the VCA in Colella, that the word ‘any’ and the similar expression ‘unable to do any work’ meant any occupation or remunerative work of the kind for which the person was otherwise suited².

The Second Limb Of The TPD Definition

The second limb of the TPD definition required the insurer to form an opinion, after consideration of the evidence satisfactory to it, that the member was:

‘unlikely ever to be able to work in any business, occupation or regular duties…for which [she] is reasonably qualified by ETE’.

The FCA dismissed a Hannover Life Re of Australasia Ltd v Jones (NSWCA 2017) style argument that she was unsuited to the three identified work options in the vocational report noting that the roles ‘were wholly congruent with the applicant’s own vocational history’.

The member also contended that the SCT erred in that it failed to consider the actual likelihood of a person with the injuries and sickness of the member, being able to obtain the nominated ETE work.

The FCA found no error of law on the part of the SCT on this point noting that the SCT made its findings with regard to the ‘applicant’s capacity’ for relevant ETE work after having ‘identified relevant restrictions on her ability to work’. The FCA elaborated that the findings of the SCT were plainly open to it, noting that the vocational report contained a labour market analysis that explicitly considered ‘work opportunities within the geographic range of the applicant’s capabilities for driving and using public transport’ and it had demonstrated a reasonably accessible labour market for the identified roles.

Having made these findings that the nominated jobs were available and accessible to the member (being the test required in a non ‘unable’ TPD definition), the FCA importantly directed its concluding remarks to Colella as follows:

‘The fact that the applicant has in fact subsequently found it difficult to obtain work is not the point. The relevant cover is insurance against TPD, not against the unavailability of work for the insured. See Colella at [34].’

Implications

The distinction between the ‘unlikely ever’ TPD definition on the one hand and an ‘unable’ or ‘unlikely ever to be able’ TPD definition on the other hand has for some time now, been topical.

Many have felt that the fact that an ‘unable’ definition was wholly capacity based and not concerned with the availability and accessibility of work, was conclusively determined in the VCA decision of Colella. For example, submissions were put to that effect and seemingly accepted by the PJC in its report into the life insurance industry of March 2018.

However, parochial distinctions appeared to emerge in a string of later NSWSC decisions³ which seem to cast doubt on the application of Colella outside of Victoria⁴.

As is often the case with SCT TPD appeals, the FCA in this matter did not feel the need to engage in an extensive review of competing (mainly NSW) TPD decisions dealing with the differences between the ‘unlikely’ and ‘unable’ TPD definition, so perhaps the decision lacks somewhat in terms of judicial horsepower. That stated, as evidenced by the quote from the judgment we have referenced twice, there can be no doubt that the judgment endorses the view in Colella that an ‘unable’ TPD definition is concerned with the capacity for an ETE job, not the availability and accessibility of same. On this basis, this judgment is certainly one to note.

¹ She contended that the first limb required her to suffer an injury or illness which stops her from doing the actual job she was doing immediately before the injury, and not any job whatsoever. She argued that ‘any’ means ‘a’ and emphasised the use of the present tense in the expression ‘stops… working’.
² The FCA found that the wording in Colella was very close to the wording in the present case on the basis the word ‘stops’ should be given a meaning synonymous with ‘prevents’ and that ‘prevented from working in any business etc’ is the same as being ‘unable to work in any business etc’.
³ See for example Carroll v United Super Pty Ltd (NSWSC 2018), Jones v United Super Pty Ltd (NSWSC 2016), Lazarevic v United Super Pty Ltd (NSWSC 2014) or discussion in Hellessey v MetLife Insurance Ltd (NSWSC 2017)
⁴ Although note the logic of Colella was endorsed in Queensland in the decisions of Reynolds v Sunsuper Pty Ltd & Anor (QDC 2016) and Wilkin v TAL Life Limited & Anor (QDC 2017)