TAL Life Ltd v Shuetrim; MetLife Insurance Ltd v Shuetrim [2016] NSWCA 68

TAL Life Ltd v Shuetrim; MetLife Insurance Ltd v Shuetrim [2016] NSWCA 68

The primary judge erred in applying an incorrect construction of 'unlikely ever' in TPD clauses, i.e. as 'less than 50%' probability, rather than requiring the absence of a real chance of return to work. TAL breached its duty by failing to consider relevant medical evidence but Mr Shuetrim did not establish on the correct test that he satisfied the TPD definition. MetLife did not breach its duty. Upon judicial finding of breach, the court—not the insurer—may decide if TPD condition is fulfilled, but in this case Mr Shuetrim failed to prove that condition.

Parties
Appellant: TAL Life Ltd; First Respondent: Benjamin Shuetrim; Second Respondent: FSS Trustee Corporation; Third Respondent: MetLife Insurance Ltd; Appellant: MetLife Insurance Ltd; Third Respondent: TAL Life Ltd
Jurisdiction
Australia
Judgment Date
07 April 2016
Procedural Posture
Appeal / Judgment of Court of Appeal
Outcome
Appeals allowed; trial orders set aside; proceedings dismissed as against insurers.
Legal Topics
Total and Permanent Disablement Insurance, Procedural Fairness, Duty of Good Faith and Fair Dealing, Construction of Insurance Policies, Standing of Beneficiaries Under Group Insurance Policies, Waiver of Procedural Fairness, Remedies Upon Breach of Insurer’s Duty, Approach to Judicial Determination of Insurer’s Opinion Clauses
Insurance Law Trusts Law Total and Permanent Disablement Insurance Procedural Fairness Duty of Good Faith and Fair Dealing Construction of Insurance Policies Standing of Beneficiaries Under Group Insurance Policies Waiver of Procedural Fairness +2 more

Case Brief

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Parties

TAL Life Ltd

Appellant

Benjamin Shuetrim

First Respondent

FSS Trustee Corporation

Second Respondent

MetLife Insurance Ltd

Third Respondent

MetLife Insurance Ltd

Appellant

TAL Life Ltd

Third Respondent

Procedural Posture

Appeal / Judgment of Court of Appeal

Legal Issues

  1. 1 Whether primary judge erred in construing TPD clauses ('unlikely ever to engage in or work for reward')
  2. 2 Whether insurers breached enforceable duty to Mr Shuetrim
  3. 3 Whether court or insurer should determine if TPD is satisfied upon breach

Ratio Decidendi

The primary judge erred in applying an incorrect construction of 'unlikely ever' in TPD clauses, i.e. as 'less than 50%' probability, rather than requiring the absence of a real chance of return to work. TAL breached its duty by failing to consider relevant medical evidence but Mr Shuetrim did not establish on the correct test that he satisfied the TPD definition. MetLife did not breach its duty. Upon judicial finding of breach, the court—not the insurer—may decide if TPD condition is fulfilled, but in this case Mr Shuetrim failed to prove that condition.

Court Disposition

Appeals allowed; trial orders set aside; proceedings dismissed as against insurers.

Orders

  • In TAL's appeal: Appeal allowed; orders 1-9 of 19 June 2015 set aside; proceedings dismissed as against TAL.
  • In MetLife's appeal: Leave granted for Mr Shuetrim to rely on notice of contention; appeal allowed with costs; orders 1-9 of 19 June 2015 set aside; proceedings dismissed as against MetLife with costs.