Supreme Court Dismisses Plaintiff’s Claim Under ‘Any One Duty’ Definition By Peter Riddell | December 2006
Introduction On 17 November 2006, the Victorian Supreme Court dismissed a Plaintiff’s claim for beneﬁts under an income protection policy containing an ‘any one duty’ deﬁnition.1 The decision underlines the importance of credit on the part of Plaintiffs claiming for medical conditions, such as depression or chronic fatigue syndrome, which are largely assessed by the subjective reporting of symptoms. The decision also provides some guidance as to what amounts to a ‘sickness’ under an income protection policy, the Court ﬁnding that “narcissistic personality traits do not constitute disability sickness as contemplated by the policy.”
Facts The Plaintiff, aged 52, was the Managing Director of a wholesale furniture manufacturing business. On 16 May 1997 the business failed and the Plaintiff ceased work at that time. On 30 May 1997, the Plaintiff claimed monthly income protection beneﬁts on a policy he held with the Defendant. He alleged he was totally disabled as a result of a major depressive disorder. The Defendant paid beneﬁts under the policy until 5 November 2004, at which time it ceased beneﬁts on the basis that the Plaintiff was no longer totally disabled. The Plaintiff issued proceedings, alleging that the cessation of beneﬁts amounted to a breach of the policy, and sought total disability beneﬁts from 5 November 2004 onwards. The Policy provided that an insured is ‘totally disabled’ if, because of injury or sickness, he or she is: •
unable to perform at least one income producing duty of his or her occupation;
not working; and
under the regular care and attendance of a medical practitioner.
The Judgment His Honour, Justice Cummins, having considered evidence from both parties, including nine lay witnesses, the Plaintiff himself and seven psychiatrists, found that the Plaintiff had not been “truthful to the psychiatrists and to the court.”
His Honour noted that: “The truthfulness and accuracy of the evidence given before me and histories given by the Plaintiff to the psychiatrists has a double signiﬁcance: for the acceptance of the Plaintiff’s evidence by the Court and for the acceptance by the Court of the psychiatric evidence dependent upon that truthfulness and accuracy.” Having reached the conclusion that the Plaintiff had been intentionally misleading, his Honour considered that “the opinions of the psychiatrists called for the Defendant, particularly of Dr Kornan are to be preferred over those called for the Plaintiff.” Justice Cummins considered that there were four speciﬁc matters of real substance which weighed against the Plaintiff. Firstly, there was an assertion that the collapse of the Plaintiff’s business resulted from the embezzlement by one of the Plaintiff’s business partners. His Honour found that this was “a deliberate and developed untruth.” Secondly, the Plaintiff’s evidence and history as to paracetamol intake (up to 100 tablets in 24 hours) was untrue and was “designed to bolster his claim he is unﬁt for any duties of his former occupation.” Thirdly, the Plaintiff gave untruthful and evasive evidence in relation to his failure to pay tax on over $1 million of income protection beneﬁts he received from 1997 to 2004. His Honour noted that the Plaintiff’s evidence that he did not believe he had to pay tax was undone by his own words written in a document to the Defendant in August 2003: “You are not to go anywhere near the ATO as the ramiﬁcations at this point could be obviously serious to me.” Finally, the Court found that the Plaintiff exaggerated his symptoms and condition and omitted relevant data to the psychiatrists. For example, in cross-examination the Plaintiff gave evidence that over the last two years he had “been incapable of doing anything because I sleep most of the day. I don’t socialise…” However, a review of the Plaintiff’s credit card and other records showed that he regularly socialised, was able to personally arrange ﬁnancing on a BMW vehicle valued at $165,000 and buy and sell four houses and rent another. During the course of the trial, the Plaintiff attempted to change his alleged disability from major depression to “personality disorder”. This was also unsuccessful. Justice Cummins found that “narcissistic personality traits do not constitute disabling sickness as contemplated by the policy.” Having regard to the above matters, his Honour found that the Plaintiff had failed to prove that he is or has been, at any time since 5 November 2004 because of sickness, unable to perform at least one income producing duty of his former occupation as a Managing Director.
Implications Although this case turned largely upon its facts, there are a number of useful learning outcomes. The decision underlines the importance of fully reviewing and assessing a claimant’s credit issues, particularly in mental illness claims where psychiatrists and a court will largely depend upon subjective descriptions of symptoms by a claimant.
Although not speciﬁcally cited in this decision, it is apparent that Justice Cummins followed the reasoning of the High Court in the matter of Whisprun2 where the majority found that once the Plaintiff in that case had no credibility, the trial judge did not make any error in giving little weight to the Plaintiff’s medical evidence. The decision also emphasises the importance of gathering probative evidence, such as ﬁnancial records, which may be used effectively against a claimant where credit is in issue. If this matter had been decided solely on the basis of medical evidence, the outcome may have been different. However, the Defendant was able to adduce evidence to satisfy the Court that the Plaintiff had been dishonest to his psychiatrists as to his history, condition and capacity. The Court also accepted that“narcissistic personality traits”did not constitute a disability sickness as contemplated by the policy. This provides some useful guidance where a policy wording does not speciﬁcally deﬁne ‘sickness’. Finally, the Court conﬁrmed that the Plaintiff’s ‘occupation’ was that being pursued at the time of his alleged disability rather than at policy inception, citing the case of Duncan in support.3 This judgment can be found at http://www.austlii.edu.au/au/cases/vic/VSC/2006/437.html.
McIver v The National Mutual Life Association of Australasia Ltd (2006) VSC 437. TurksLegal were instructed by National Mutual. The
author believes this to be the ﬁrst time in Australia a Superior Court has heard and dismissed a claim pursuant to an ‘any one duty’ income protection policy. 2
Whisprun Pty Ltd (formerly Northwest Export Pty Ltd) v Dixon High Court of Australia 3 September 2003.
Duncan v Prudential Insurance Co Ltd (1999) 10 ANZ Ins. Cas. 61-483.
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Published on Sep 15, 2010
On 17 November 2006, the Victorian Supreme Court dismissed a Plaintiff’s claim for benefits under an income protection policy containing an...