Savelberg v United Super Pty Ltd trading as Cbus Superannuation Fund & Anor [2011] NSWSC 1482

Supreme Court New South Wales

Medium Neutral Citation: Savelberg v United Super Pty Ltd trading as Cbus Superannuation Fund & Anor [2011] NSWSC 1482 Hearing dates: 14.10.11, 10.11.11 Decision date: 05 December 2011 Before: Nicholas J Decision: Par 76 Catchwords: SUPERANNUATION - total and permanent disablement - claims for benefit - whether incapacity of the insured person satisfied the definition of "total and permanent disablement" under the policy - whether decisions of insurer to refuse the claims were unreasonable and invalid - whether interest payable under s 57 Insurance Contracts Act 1984 (Cth) Cases Cited: Dargan v United Super Pty Ltd & Anor [2011] NSWSC 1316 Hannover Life Re of Australasia Ltd v Sayseng [2005] NSWCA 214 Paul Weber v Tiss Pty Ltd [2005] NSWSC 67 Sayseng v Kellogg Superannuation Pty Ltd & Anor [2007] NSWSC 583 Szuster v Hest Aust Ltd & Anor [2000] SADC 2 Category: Principal judgment Parties: John Savelberg - plaintiff United Super Pty Ltd trading as Cbus Superannuation Fund - first defendant Hannover Life Re of Australasia Ltd - second defendant Representation: Counsel: R Johnson - plaintiff S J Walsh - defendants Solicitors: Byrdens Law Office - plaintiff TurksLegal - defendants File Number(s): 10/321183

Judgment 1Mr John Savelberg, the plaintiff, claimed entitlement to superannuation benefits for total and permanent disablement (TPD) on 9 May 2007 resulting from injuries to his head and legs suffered when he was struck by falling steel components at his place of work. United Super Pty Ltd, the first defendant (the trustee) was the trustee of the superannuation fund, Construction and Building Union's Superannuation Fund (Cbus). Hannover Life Re of Australasia Ltd, the second defendant (the insurer) insured the fund with respect to obligations to pay total and permanent disablement benefits. 2The benefit payable to the plaintiff under the policy was a lump sum benefit of $100,000 in the event he suffered TPD as defined in the policy. 3The plaintiff has not worked since the accident. He first applied for the benefit on 28 February 2008. On 23 September 2009 the insurer informed the trustee that the claim was declined. On 26 October 2009 the trustee informed the plaintiff's solicitors of this decision. On 8 December 2009 the plaintiff's solicitors sent further medical evidence to the insurer and requested it review its determination to deny the claim. On 14 December 2009 the insurer informed the trustee that, having considered the additional material, the claim was declined. 4On 24 June 2011, following a review of further medical evidence, the insurer accepted the claim. On 7 September 2011 payment of the TPD benefit was made to the plaintiff's solicitors. 5The primary question for determination in these proceedings is whether each of the decisions of the insurer of 23 September 2009 and 14 December 2009 was invalid in that it was unreasonable. The plaintiff claims interest on the amount of $100,000 for the period 29 September 2009, alternatively 14 December 2009, to 20 June 2011 when liability was admitted. He also seeks an order for the costs of the proceedings, which were commenced by statement of claim filed on 28 September 2010. 6The claims for interests and costs were opposed. The defendants sought an order for costs in their favour if it is found that the insurer acted reasonably in declining the claim prior to acceptance of liability. 7By cl 5.12, the trust deed provided for the payment of the amount of any insured benefit to a member who had suffered TPD and who had ceased to be gainfully employed prior to attaining the age of 65. It is common ground that the plaintiff had ceased to be gainfully employed prior to age 65. 8Clause 7.2 of the trust deed provided that the term "total and permanent disablement" should be given the meaning ascribed to it in the relevant policy. 9Relevantly, cl 1.3.1 of the Group Life Policy (the policy) contained the definition of "Total and Permanent Disablement" as follows: "Total and Permanent Disablement in respect of an Insured Person who was gainfully employed within the six months prior to the Date of Disablement is where: 1.3.1 The Insured Person is unable to follow their usual occupation by reason of accident or illness for six consecutive months and in our opinion, after consideration of medical evidence satisfactory to us, is unlikely ever to be able to engage in any Regular Remuneration Work for which the Insured Person is reasonably fitted by education, training or experience;" 10The term "Regular Remuneration Work" was defined in the policy as follows: "An Insured Person is engaged in regular remunerative work if they [sic] are doing work in any employment, business, or occupation. They [sic] must be doing it for reward - or the hope of reward - of any type." 11It was common ground that the plaintiff was an "Insured Person" who was gainfully employed within the six months prior to the date of disablement and was unable to follow his usual occupation for six consecutive months.