Sheldon v MLC Nominees Pty Ltd & Anor [2006] NSWSC 700

New South Wales Supreme Court

CITATION : Sheldon v MLC Nominees Pty Ltd & Anor [2006] NSWSC 700

HEARING DATE(S) : 7 July 2006

JUDGMENT DATE : 7 July 2006

JURISDICTION : Equity Division

JUDGMENT OF : Palmer J

EX TEMPORE JUDGMENT DATE : 07/07/2006

DECISION : Plaintiff ordered to attend assessment.

CATCHWORDS : PRACTICE AND PROCEDURE – MEDICAL ASSESSMENT – Whether assessment should be ordered to enable all issues to be determined at the trial.

LEGISLATION CITED : Uniform Civil Procedure Rules 2005 - Pt 23 r 4, Pt 23 r 7

McArthur v Mercantile Mutual Life Insurance Company Limited [2001] QCA 317 CASES CITED : Nile v Club Plus Superannuation Pty Limited [2005] NSWSC 55 Sayseng v Kellogg Superannuation Pty Limited [2003] NSWSC 945

Richard Sheldon – Plaintiff PARTIES : MLC Nominees Pty Ltd – First Defendant MLC Limited – Second Defendant

FILE NUMBER(S) : SC 5732/05

COUNSEL : B.W. Rayment QC – Plaintiff A.J. McInerney – Defendants

SOLICITORS : Firths – Plaintiff Turks Legal – Defendants

Ex tempore

1 The Second Defendant, MLC Limited ("MLC"), seeks an order that the Plaintiff attend a vocational and functional assessment pursuant to Pt 23 r 4 or Pt 23 r 7 of the Uniform Civil Procedure Rules 2005 . The application is opposed by the Plaintiff on the ground that the conduct of such an assessment is, at best, premature and may ultimately prove unnecessary. 2 The First Defendant ("Nominees") is the trustee of a superannuation fund known as the Universal Super Scheme ("the Fund") which was established to provide superannuation benefits for the employees of the Police Department Credit Union Ltd, amongst others. Amongst those benefits are benefits to provide for disablement, both total and temporary and total and permanent. MLC has insured the Fund in respect of claims for all disablement benefits which may be payable to members of the Fund. 3 On or about 5 March 2001 the Plaintiff commenced employment with the Police Department Credit Union Ltd and as a result became a member of the Fund. On about 26 or 27 March 2001 he suffered an injury to his neck and back. In September or October 2001 he lodged a claim against the Fund for total and temporary disablement benefits. That claim was allowed and those benefits were paid up until 12 August 2002. 4 On about 26 March 2002 the Plaintiff lodged an application for total and permanent disablement benefits. That claim was declined by letter dated 11 April 2002. The Plaintiff then requested a reconsideration of the decision in June 2004. On 9 December 2004 the Defendants advised that, after reconsideration of the Plaintiff's claim, it had been declined. 5 These proceedings were then commenced by the Plaintiff by Statement of Claim filed on 7 November 2005. In brief summary, the Amended Statement of Claim alleges that in declining the Plaintiff's claim Nominees has been guilty of breach of trust on numerous grounds, essentially turning on the allegation that it has merely rubber-stamped a decision of MLC that the Plaintiff's claim should be rejected. The Plaintiff alleges that MLC has made its decision to reject the claim in bad faith. 6 The relief sought in the Amended Statement of Claim includes an order setting aside all previous decisions of Nominees and MLC, a declaration by the Court in substitution for any further decision of the Defendants that the Plaintiff is entitled to a total and permanent disablement benefit, and orders for the payment of such benefit. 7 On 29 December 2005, MLC wrote to the Plaintiff's solicitor advising that it intended to review its decision to decline the Plaintiff's claim. For that purpose it requested that the Plaintiff attend a functional capacity evaluation and vocational assessment. On 13 January 2006 the Plaintiff's solicitors responded, advising that the Plaintiff refused to undergo such an assessment. Thus the Notice of Motion filed by the Second Defendant has come before the Court 8 It is not in issue that the Court has power to order the assessment sought by MLC under UCPR 23.7. Neither is it in issue that such an assessment may be admissible in evidence if the Court ultimately comes to the conclusion that the decision of Nominees is invalid and that the circumstances warrant the Court substituting its own decision for that of Nominees. These concessions were rightly made by Mr Rayment QC, who appears for the Plaintiff, in light of the decision of the Queensland Court of Appeal in McArthur v Mercantile Mutual Life Insurance Company Limited [2001] QCA 317, the decision of the New South Wales Court of Appeal in Hannover Life Re of Australasia Limited v Sayseng [2005] NSWCA 214, and the decisions at first instance referred to in those judgments. 9 The point argued by Mr Rayment is that there is no reason to order the Plaintiff to undergo the assessment at this stage of the proceedings. He says that the Court should first decide whether the decisions of the Defendants are invalid, as alleged, and whether the Court should then substitute its own determination for that of Nominees. If those issues are not resolved in the Plaintiff's favour, he says, the assessment will be unnecessary. It will only be necessary if the issues are resolved in the Plaintiff's favour, and the Court should wait to see what happens, Mr Rayment says, before putting the Plaintiff to the trouble and expense of undergoing the assessment. 10 The issue for resolution in this application is, essentially, one of case management. In my view, the assessment should be ordered now. My reasons are as follows. 11 There has been no application made by anyone for the determination of separate questions in these proceedings so that, as matters presently stand, all issues fall for final determination at the trial, including the issue whether, if appropriate, the Court should substitute its own finding as to the Plaintiff's disablement for the opinion of Nominees. As I have said, the assessment may be admissible as evidence on that issue. 12 The Plaintiff's claim for a total and permanent disablement benefit is a relatively small one and it has remained unresolved since it was first rejected by the Defendants in April 2002. As matters presently appear to me, it would not be conducive to the just, quick and cheap resolution of the real issues between the parties to determine that the trial be split into two stages. The trial is not likely to be a long one. It may come on for hearing fairly soon if the parties bestir themselves, and it is in the interests of the Plaintiff to have a final determination of all issues sooner rather than later. 13 While in some insurance and superannuation cases of this type splitting the issues in the way which the Plaintiff suggests may be appropriate (see, for example, the course followed by Bryson J (as he then was) in Sayseng v Kellogg Superannuation Pty Limited [2003] NSWSC 945), to proceed in this way is by no means an established rule of practice and procedure: see, for example, Nile v Club Plus Superannuation Pty Limited [2005] NSWSC 55 at para 70. 14 The Plaintiff has adduced no evidence that the conduct of the assessment at this time would cause him undue expense, inconvenience or distress. I am not persuaded that I should, by refusing the Defendants' application, in effect bring about the splitting of issues for trial. 15 For those reasons, the application of MLC will be granted. 16 The Plaintiff is ordered to attend a vocational and functional assessment on 20 July 2006 to be conducted by Empact Pty Ltd. – oOo –