Panellists explore ETE for TPD benefits

The complexities of determining eligibility for total and permanent disability were explored at an AILA Qld seminar.

Fiona Hanlon, a Partner at TurksLegal; Benjamin Ruback, Senior Legal Counsel - Claims, at SunSuper; and Barrister Kevin Holyoak, reviewed decisions and how TPD was defined in light of varied policy wordings. Barrister Keith Howe was the moderator.

Ms Hanlon said a specimen TPD policy generally included two limbs, of which part (a) was a qualifier and (b) was more subjective.

When all of the following apply to the person insured:

(a) The person insured has been continuously absent from employment through injury or illness for the waiting period; and

(b) After considering all evidence [the trustees] believe is necessary to reach a view, in [their] opinion the person insured has become incapacitated to such an extent as to render the person insured unlikely ever to engage in, or work for reward in, any occupation or work for which he or she is reasonably qualified by education, training or experience (ETE).

In Aslami v Board of Trustees of the State Public Sector Superannuation Scheme as trustee for the Q Super Fund [ 2019] FCA 1560, the date at which fund member Farid Aslami had sustained an injury or illness that led to him seeking TPD benefits was a key issue (see Resolve December 2019).

Because he had established a business and retrained to sell solar panels, he did not qualify for TPD benefits.

In Williams v Mercer Superannuation (Aust) Ltd & Ors (2017) QDC 289, the issue was whether Pamela Williams was unable to work because she had no job or because she had chronic fatigue syndrome. Ms Williams was made redundant during a six-month period she was off work with CFS.

Ms Hanlon said Ms Williams did not make the qualifying period because there was no proof she was not at work because of illness.

Judge Andrews said: “One cause of the plaintiff’s absence from employment with the participating employer … was the termination of her employment due to redundancy … the plaintiff has not satisfied her onus of proof that after 28 February 2010 her absence from employment was also caused through illness or injury which she was then suffering.

“It is not enough to satisfy the condition that the plaintiff be absent for six months while suffering an injury or illness. The absence must be ‘through’ an injury or illness.”

Mr Hanlon said she interpreted “through” as being akin to “caused by”.

In Ellis v TAL Life Ltd [ 2019] NSWDC 259, Rodney Graeme Ellis had a benign brain tumour which, to be eligible for TPD, had to be “a life-threatening, non-cancerous tumour ... which gives rise to characteristic symptoms … resulting in at least 25%” whole person impairment.

While some medical opinions said Mr Ellis did not have 25% impairment, District Court Judge Hatzistergos found in his favour, saying: “Use of the words ‘resulting in’ should be given their ordinary meaning, ‘to arise as a consequence’.”

in Preston v AIA Australia Ltd [2014] NSWCA 165, Stephen Preston had a prior injury that predisposed him to a later injury. The policy required a physical injury to occur “which results solely and directly and independently of a pre-existing condition or any other cause”.

The court found Mr Preston had “continuing and serious physical consequences from the 1996 injury, which materially contributed to the disability he experienced following the 2009 injury. He was not entitled to receive the TPD benefit because there were two concurrent causes of his disability”.
 
Mr Ruback said he saw only complex cases with multiple causes of injury or illness and late-notified claims, even as much as 20 years, so an employer may have gone broke and GP records destroyed.

He said lawyers needed to work out correct dates with their clients, not present options. “Limb (a) seems straightforward, but that’s not always so for litigated cases.”

Mr Holyoak said limb (b) attracted the most disputes so the more information a claimant could provide to the insurer or trustee the better, to ensure legitimate claims were paid.

In Jones v United Super Pty Ltd [2016] NSWSC 1551, the argument was about Clinton Jones’s ETE and whether he could perform roles other than the one he was working in when injured.

Mr Jones was injured at work as a roof plumber when lifting heavy asbestos sheeting in 2011. He had previously suffered a lower-back injury in 2002.

The essential reason for declinature was the trustee and the insurer considered Mr Jones had a work capacity based on ETE for four occupations which had been identified in a vocational assessment as entry-level positions that required no re-training: retail sales (hardware); courier/delivery driver; console operator; and customer service adviser/telemarketer.

The trial judge disagreed and was supported by the Appeal Court in Hannover Life Re of Australasia Ltd v Jones [2017] NSWCA 233.

Mr Holyoak said the phrase “prepared and shaped”, now a touchstone, first entered the TPD lexicon in Jones v United Super and the subsequent appeal.

He said the question was “whether or not the policy is one which only requires satisfaction of its elements as a fact, or one which requires an insurer (or trustee) to be of an opinion, whether an insured is ‘reasonably fitted’ or suited by ETE”.

Justice Brereton had said: “It is a mistake to first search for occupations which an insured might be able physically and mentally to perform without further [ETE], rather than to examine the insured’s vocational history and identify from it the occupation or occupations for which his [ETE] has prepared the insured”.

He said relevant work, for the “reasonably fitted by reason of [ETE]” wording, was work for which the claimant had been “prepared and shaped” by his or her past vocational history.

The Appeal Court said Justice Brereton “correctly observed that the ETE clause requires the insurer to examine occupations for which the claimant is ‘fitted’ in the sense of occupations for which his ETE has prepared him. That naturally is shaped by his vocational history. [Justice Brereton] correctly focused on the [ETE clause’s] language, not some different notion of the claimant’s capability for his or her ‘usual occupation’”.

Mr Holyoak said he was aware of at least one policy that had been redrafted to include what he called a “Jones eradication clause”.

However, he said every clause must be considered on its own merits.

“If the ETE clause does not require the occupation to be reasonably ‘fitted’ or ‘suited’ a different interpretation may follow.”

He contrasted the decision in Hannover Life of Australasia Ltd v Dargan (2013) 83 NSWLR 246, saying “a potential tension arises because of a line of authorities interpreting the adverb ‘reasonably’ in the composite phrase.

“The plaintiff can be reasonably suited for employment by reason of ETE or a combination of those factors; that is, the phrase is used both disjunctively and conjunctively. The occupation to which the plaintiff is reasonably suited by ETE need not be precisely the same work the plaintiff was performing before her disability or even work that the plaintiff has done in the past.”

So that would include “an occupation which involves abilities which the insured could, with reasonable diligence, acquire” or one the plaintiff could perform with reasonable further training.

Dargan and Halloran v Harwood Nominees Pty Ltd [2007] NSWSC 913 had differing results.

Mr Dargan was a truck driver and labourer. After injuring his back in July 2007 he could not continue his occupation. He retrained as a taxi driver in June 2008 and drove for 20 hours a week. The NSWCA found he was not TPD. His experience as a truck driver, and the need for a limited qualifying course as a taxi driver, meant he was “reasonably fitted” for the occupation and therefore not TPD.

Mr Halloran was a machinery greaser who after injury in 1995 stopped work in 1996 and trained from 1996 to 1998 as a regional project officer responsible for negotiating land rights for Aboriginal communities. The court held he was not qualified for his new occupation by ETE as at the assessment date and his new job involved the acquisition of new ETE.

Mr Holyoak questioned where the dividing line lay between “upskilling” which was reasonable for an insured to undertake or that which was not within the ETE for which the vocational history had “prepared and shaped” the insured.

Mr Ruback said insurers needed a lot of information to make decisions and Jones gave “clear guidance”. “We want to pay valid claims, but we need detail. Lawyers think we are trying to delay by seeking additional information, [but] it is beneficial to hear a detailed history from the insured. Even in the same job, the ETE may be different.”

Ms Halon agreed.”A job title is not a job description. It doesn’t tell you how they did their role. Desktop vocational reports often don’t get the detail.”