Hannover Life Re of Australasia v Jones [2017] NSWCA 233
NSW Court of Appeal
Decision date: 14 September 2017
Background
The claimant, Mr Jones, was injured at work as a roof plumber in mid-2011. He had worked as a roof plumber and, apart from his School Certificate, he held a number of industry specific qualifications in roof plumbing.
In 2012, the claimant made a TPD claim under a group life policy issued by Hannover Life Re of Australasia Ltd. Under the policy, the claimant was required to meet the TPD definition which provided required the Insured Person be:
“unable to follow their usual occupation by reason of accident or illness for six consecutive months and in [the Insurer’s] opinion, after consideration of medical evidence satisfactory to us, is unlikely ever to be able to engage in any Regular Remunerative Work for which the Insured Person is reasonably fitted by education, training or experience”.
The insurer and the Fund’s Trustee declined the claim on the basis the claimant could work as a retail sales assistant (hardware), courier/delivery driver, console operator and/or a customer service advisor/telemarketer. Although it was accepted that the claimant would never return to his pre-injury tradesman work, the insurer considered the claimant could work in the above roles, which did not require retraining.
Initial Decision – NSW Supreme Court
The primary judge concluded that the Insurer’s decision to decline the claimant’s claim, had breached its contractual obligation to act reasonably in considering and determining the claim. In making its decision, the Insurer had failed to take into account the claimant’s psychological state, which was a significant component of his incapacity to perform the suggested occupations. The primary judge also found that the Insurer had erred in its application of the phrase “reasonably fitted by education, training or experience” in the policy by treating jobs for which the claimant had some isolated transferrable skills but no vocational history as being jobs for which he was “fitted by education, training or experience”. Rather, his Honour found that there must be a link between the proposed future occupations and insured person’s vocational history.
The Court of Appeal
The Court of Appeal dismissed the insurer’s application and found in favour of the claimant. It held the correct approach to determining what the claimant was” reasonably fitted to do by reason of his education, training or experience”, was to consider his vocational history to date in terms of work for which he had been “prepared and shaped”. That is, the claimant must have already worked in the alternative job, or something very similar to it, or have training for it, if it is to fall within the definition. It is inaccurate to identify occupations which a claimant might be physically and psychologically capable of performing without further education, training or experience (ETE), without taking into account the claimant’s vocational history and to identify from that history any occupations for which that ETE has prepared him or her.
Conclusion
A clause referring to ‘Regular Remunerative Work for which the Insured Person is reasonably fitted by education, training or experience’ requires the identification of occupations for which the claimant’s vocational history “fitted” the claimant and not merely occupations that the claimant could perform without further education, training or experience.