OnePath Life Ltd v Standley [2020] NSWCA 321
- New South Wales Court of Appeal
- Decision date - 10 December 2020
Background Facts
Mr Standley was a Call Centre Manager. He was involved in a motor vehicle accident in August 2015 that caused him physical injuries which he alleged affected his ability to work. He tried to return to work a couple of times but by February 2016 he resigned from the position. The Court considered at that stage he was not, “coping with the work”.
At the time Mr Standley initially lodged his claim total and permanent disablement (TPD) claim, he relied on reports referring only to his physical injuries. During his claim with the insurer, he subsequently also provided medical reports referring to his psychiatric injury, flowing from the motor vehicle accident injuries.
The insurer denied his claim in 2017, on the basis he did not meet the TPD definition in the policy. The insurer considered the date of assessment for TPD was 2 May 2016, this being the end of three consecutive months (February to May) inability to work because of the injuries. The insurer’s view was that there was no evidence of any psychiatric injury as at the date of assessment and there was evidence that the physical injuries were not to the extent that Mr Standley was unlikely ever to ever again be able to engage in his own occupation”.
TPD Definition
The TPD definition provided if, as a result of illness or injury, the life insured has been absent from and unable to engage in their “Own Occupation” for three consecutive months and is disabled at the end of the period of three consecutive months to such an extent that they are unlikely ever again to be able to engage in their “Own Occupation”. The TPD policy defines “Own Occupation” as the most recent occupation in which the insured was engaged prior to the date of disability.
Initial Decision – NSW Supreme Court
The Court held that although Mr Standley was not physically incapable of returning to his own occupation for the whole of the three-month period in question (February to May 2016) or thereafter, the Court accepted his unchallenged evidence that by September 2017 he was suffering from a psychological condition that rendered him unlikely ever to return to his own occupation. In so holding, the Court held that the three month period of absence from work did not have to be the first three month period during which the insured was absent from work, so a later three month period of absence could be used for purposes of the assessment, provided the assessment was made as at the end of a three month period during which he was incapable of working.
The Court of Appeal Decision
On appeal the insurer tried to rely on another clause in the policy, to support its argument that the waiting period must commence when Mr Standley first ceases to work because of his injuries (and not later). However the Court of Appeal stated that “the reference to ‘permanently ceases work’ is not, as OnePath contends, to the insured ceasing work for a particular employer. It is to their ceasing to work in an …occupation ‘permanently’ because of a disability…”. Therefore, this occurred by September 2017, as a consequence of both Mr Standley’s physical and psychiatric condition.
The insurer also argued that the primary judge erred by finding that the insurer did not challenge the psychiatric condition of Mr Standley, as at September 2017 and later, and referred to the cross examination of Mr Standley. The Court of Appeal found that the cross-examination dealt with the original claim for Mr Standley’s physical injuries, rather than the psychological injuries that developed later.
Therefore, the Court of Appeal held the judge did not err and found the evidence as to Mr Standley’s psychological injuries still satisfied the TPD definition.
Conclusion
Under this TPD definition, the three month “waiting period” for TPD did not need to occur at a fixed time.