A summary of the case follows.
On 21 September 2010, Ms Wheeler ceased carrying out her duties as a result of what was described as a “series of frightening and horrifying events”. Ms Wheeler was diagnosed with post-traumatic stress disorder and major depressive disorder. Ms Wheeler was 31 years of age at the time.
At all relevant times, Ms Wheeler was a member of the First State Superannuation Scheme (Fund). FSS Trustee Corporation was the trustee of the Fund.
Under the terms of the trust deed governing the Fund, FSS Trustee Corporation was obliged to pay members total and permanent disablement (TPD) benefits in certain circumstances. FSS Trustee Corporation was entitled to insure this obligation and did so by entering into two group life insurance policies with MetLife Insurance Ltd (MetLife).
After the insurer has conducted an initial review of the claim, it will advise what further information will be required to continue with the assessment. This may include obtaining a copy of any relevant workers compensation file, requesting further information from you or your employer and/or obtaining more detailed reports from one or more of your treating doctors. In some cases you may be requested to have one or more independent medical examinations. [The insurer will cover the cost of any information they request from third parties] .
Please note that any decision made by the insurer must be reviewed by the trustee of the FSS before the outcome is advised to you. This is to ensure that the outcome is fair and reasonable and in the case of an accepted claim, to check the correct amount of insurance has been paid.
The forms provided to Ms Wheeler included an application for payment of the TPD benefit and a claim form. Ms Wheeler completed these forms by hand and provided them to FSS Trustee Corporation on 8 May 2012.
The forms also included a medical statement. This was completed by Ms Wheeler’s treating psychiatrist, Dr Selwyn Smith, and provided to FSS Trustee Corporation on 31 May 2012.
After Ms Wheeler made her claim, Ms Wheeler attended a consultation with an independent medical practitioner, a meeting with a senior rehabilitation consultant for the purpose of undertaking a vocational assessment, and an interview with a factual investigator.
By 5 August 2013, MetLife had not determined Ms Wheeler’s claim and Ms Wheeler instructed a solicitor to act on her behalf. The solicitor wrote to FSS Trustee Corporation and requested an update in relation to the status of Ms Wheeler’s claim together with copies of the independent medical report, the vocational assessment report, and the transcripts of the factual interview.
Between 4 November 2013 and 5 May 2014, FSS Trustee Corporation wrote to MetLife on four occasions seeking copies of the documents requested by Ms Wheeler’s solicitor and an update on the status of Ms Wheeler’s claim. MetLife did not respond to any of those letters until 8 May 2014.
On 8 May 2014, MetLife wrote to FSS Trustee Corporation and stated:
We acknowledge the concerns raised in the correspondence and confirm that this matter has been referred to our Dispute Resolution Officer who will provide a substantive response within 45 days of the date of your letter.
Regarding the status of this claim, we advise that we have undertaken a review of the claim and written to Dr Smith for updated information and expect a response within 30 days of the date of that request. We will continue to follow up this request to ensure its timely completion. We appreciate the member’s cooperation in this regard.
Upon receipt of this information we will notify the Fund and provide a status update.
By 11 June 2014, MetLife had not determined Ms Wheeler’s claim and so Ms Wheeler commenced proceedings in the Supreme Court of New South Wales. In the proceedings, Ms Wheeler claimed that MetLife had constructively denied her claim and the court should proceed to determine her entitlement to TPD benefits.
On 14 November 2014, FSS Trustee Corporation filed a defence and on 18 March 2015, MetLife filed a defence.
On 27 March 2015, Ms Wheeler’s solicitor wrote to MetLife’s solicitor and requested that MetLife take into account an affidavit sworn by Ms Wheeler and a medical report of Dr Wotton when making its determination in relation to Ms Wheeler’s claim.
On 13 August 2015 (25 days before the commencement of the hearing), MetLife sent to Ms Wheeler a procedural fairness letter enclosing a copy of the material upon which it proposed to make its determination. MetLife provided Ms Wheeler with 14 days to make any submissions in response. This was the first time Ms Wheeler was provided with any of the material MetLife had collected in the course of its investigation, despite the numerous requests outlined above.
On 27 August 2015, Ms Wheeler’s solicitor wrote to MetLife’s solicitor and suggested that the procedural fairness letter was an attempt by MetLife to require Ms Wheeler to overcome a new hurdle by having to show that the reasons MetLife would give for declining her claim were attended by relevant error. Ms Wheeler’s solicitor claimed that MetLife’s delay in responding to Ms Wheeler’s claim amounted to a serious breach of its duty of good faith and fairness.
On 4 September 2015 (three days before the commencement of the hearing), MetLife sent to FSS Trustee Corporation a letter declining Ms Wheeler’s claim. The letter included the following:
The member’s entitlement to payment of the TPD benefits requires that the member provide proof to our satisfaction …
The member has not provided proof of these matters to MetLife’s satisfaction as required by the policy. Consequently, no TPD benefit is payable pursuant to the policy.
On 7 September 2015, the hearing commenced. The Court gave Ms Wheeler leave to file an amended statement of claim. In the amended statement of claim, Ms Wheeler removed the claim against FSS Trustee Corporation and aspects of the claim against MetLife that were surplus to her needs. The Court also gave MetLife leave to file a defence to the amended statement of claim. In its defence to the amended statement of claim, MetLife contended that it declined Ms Wheeler’s claim on 2 September 2015 and gave reasons for its decision by letter dated 4 September 2015.
On 9 September 2015, Ms Wheeler was given leave to file a further amended statement of claim. In substance, the effect of the further amendment was to maintain that MetLife had constructively denied her claim and make the following additional claims:
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MetLife had breached a duty owed to Ms Wheeler by failing to provide Ms Wheeler with the material it was collecting until 13 August 2015, being over three years after Ms Wheeler made the claim and 25 days before the commencement of the hearing;
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MetLife had breached a duty owed to Ms Wheeler by declining her claim three days before the commencement of the hearing; alternatively
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MetLife’s decision to decline Ms Wheeler’s claim was unreasonable and should be set aside by the Court.
It was agreed that if the Court found that MetLife had constructively denied Ms Wheeler’s claim or that MetLife’s declinature of the claim was unreasonable, then the Court should proceed to determine Ms Wheeler’s entitlement itself.
MetLife’s delay in providing material to Ms Wheeler
The Court noted that, while the TPD definitions required Ms Wheeler to provide proof to the satisfaction of MetLife that she was entitled to a TPD benefit, what had actually occurred is that MetLife had only required Ms Wheeler to provide a very small amount information in support of her claim. MetLife had then undertaken its own three year investigation into Ms Wheeler’s claim.
Notwithstanding that MetLife had procured almost all of the evidence upon which it relied, MetLife then declined Ms Wheeler’s claim on the basis that Ms Wheeler had not supplied MetLife with adequate proof.
Robb J was of the view that MetLife could not decline Ms Wheeler’s claim on the basis that Ms Wheeler had not provided adequate proof if MetLife had not given Ms Wheeler adequate time to supply that proof. Noting that MetLife had taken three years to complete its investigation, Robb J was of the view that the fourteen days MetLife had provided to Ms Wheeler to respond to the procedural fairness letter was “self-evidently insufficient”.
Robb J ultimately found that MetLife’s duty of fair dealing obliged it to provide the material it had been collecting to Ms Wheeler at a much earlier time than it did.
The manner in which MetLife determined Ms Wheeler’s claim
In determining whether MetLife had constructively denied Ms Wheeler’s claim, Robb J considered MetLife’s conduct on a global basis. That is, Robb J took into account the fact that MetLife had taken three years to process and decline Ms Wheeler’s claim, and that MetLife had refused to provide Ms Wheeler with any of the material it had gathered during the course of its investigation despite reasonable requests to do so. Robb J also took into account the fact that, when MetLife provided the material to Ms Wheeler, it only gave Ms Wheeler fourteen days to respond and then declined the claim only days before the commencement of the hearing.
Robb J ultimately found that MetLife had constructively denied Ms Wheeler’s claim for the following three broad reasons:
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First, MetLife had not determined Ms Wheeler’s claim by the time the proceeding was commenced and that position remained the case for a further year;
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Second, MetLife had offered no justification for the length of time it had taken to determine Ms Wheeler’s claim;
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Third, MetLife had fundamentally changed the juristic basis of the proceeding only a matter of days before the commencement of the hearing and after a full year of complete inactivity.
MetLife’s investigation
During MetLife’s investigation into Ms Wheeler’s claim, MetLife obtained a number of medical reports from Drs Selwyn Smith, Richard Burek and Robert Wotton; two vocational assessment reports; and a factual investigation report.
Dr Selwyn Smith’s reports
Dr Selwyn Smith was Ms Wheeler’s treating psychiatrist.
On 24 March 2011, Dr Selwyn Smith reported that:
Ms Wheeler in my opinion is not currently fit to work within the NSW Police Force.
Ms Wheeler is currently not fit to work externally to the NSW Police Force. I do anticipate however that over time she will be able to engage productively in work outside the NSW Police Force.
In my opinion Ms Wheeler’s prognosis for returning to the NSW Police Force on pre-injury duties must be viewed as poor. This is in light of the chronicity of her symptomatologies …
As stated treatment will not reintegrate Ms Wheeler into work with the police but will assist her in reintegrating into alternative work outside the NSW Police Force …
On 29 April 2011, Dr Selwyn Smith reported that:
I anticipate that her attendance at the post-traumatic stress disorder program will considerably assist in the amelioration of her post-traumatic stress disorder symptoms.
It is difficult to be categorical in regard to Ms Wheeler returning to police force duties following her attendance at the Counselling and Therapy Centre Post-Traumatic Stress Disorder program. I would anticipate that she will be able to engage in alternative work shortly after the program has been completed.
I am guarded in regard to her re-engaging at pre-injury duties.
On 23 September 2011, Dr Selwyn Smith reported that:
Ms Wheeler is unable to return to the NSW Police Force in any capacity …
In my opinion Ms Wheeler may be able to engage in work in the future outside the NSW Police Force. She previously worked in nursing but has no desire to reintegrate into nursing work. Exactly what other work she could do I am unable to advise you.
On 27 January 2012, Dr Selwyn Smith reported that:
Ms Wheeler may have the capacity to work in an alternative job and with a new employer. She does have qualifications as an enrolled nurse but has not worked in that field since 1998. She may require a separate vocational evaluation to determine what she can do.
Ms Wheeler should avoid police related activities in any future occupation.
I would be supportive of further exploration in regard to her alternative work within the next few weeks. I do believe that Ms Wheeler does have the capacity to participate in a vocational assessment with an approved rehabilitation provider in order to establish a new return to work goal.
On 1 May 2012, Dr Selwyn Smith reported that:
In general she would be able to undertake all of the options you have suggested [in a vocational assessment report]. I would however exclude her from undertaking work as an investigator or engaging in security or working as an insurance investigator as these would in all probability be difficult for her in the light of the previous adverse experiences with the NSW Police Force.
You should be advised that Ms Wheeler continues to experience psychiatric symptomatology of significance and may not be able to participate in such work. A trial job option may be in order.
On 31 July 2012, Dr Selwyn Smith reported that:
It was my opinion following my initial examination that Ms Wheeler demonstrated diagnostic criteria for a post-traumatic stress disorder in association with heightened levels of anxiety and depression … She has remained under my clinical care. In the light of her ongoing symptomatologies it was my opinion that Ms Wheeler could not engage in productive work with the NSW Police Force and it was against this background that I supported her discharge on medical grounds, hurt on duty. This was accepted.
…
In my opinion Ms Wheeler is currently incapacitated for work.
In the short-term her prognosis must be viewed as poor. She may in the future return to alternative work. As stated however at the present time this is not possible …
Her condition in my opinion has stabilised.
On 9 September 2013, Dr Selwyn Smith reported that:
In my opinion, Ms Wheeler’s condition has stabilised. That is to say her injuries have become well-settled or static with or without treatment and are unlikely to remit despite treatment.
Ms Wheeler’s condition is unlikely to improve by greater than 3% over the ensuing 12 months.
Ms Wheeler has not engaged in any remunerative employment since leaving the NSW Police Force. She has had difficulty engaging in voluntary activities.
The likelihood of Ms Wheeler engaging in work on the open labour market in my opinion must be deemed as poor given her ongoing psychiatric symptomatologies and her limited educational experiences outside the NSW Police Force. She would have difficulty focusing and concentrating and relating to the public at large. She may be able to engage in menial tasks only …
In my opinion, Ms Wheeler’s prognosis must be viewed as guarded given the length of time she has experienced her symptomatologies and her limited improvements to date.
On 28 August 2014, Dr Selwyn Smith reported that:
I did highlight in my previous reports that Ms Wheeler may have the capacity to engage in work outside the NSW Police Force. It was Ms Wheeler’s intention to undertake some work when she was discharged from the NSW Police Force. I was supportive of her goal in that regard. I did however express reservations pertaining to her psychiatric capacity to undertake such work.
It should be noted that Ms Wheeler has not, since discharge from the NSW Police Force, progressed well from a psychiatric point of view. Indeed she experienced a marked downturn in her mood to the point that she displayed diagnostic criteria for a Major Depressive Order. She required readmission to St John of God Hospital at Richmond in the light of significant psychiatric symptoms of concern. She partially improved. She then experienced marked symptoms pertaining to her comorbid Post-Traumatic Stress Disorder and against that background I arranged for her readmission to St John of God Hospital Richmond. Indeed at the time of writing this report she remains under my clinical care at St John of God Hospital Richmond where she has been attending the “closed” specialised Post-Traumatic Stress Disorder program.
I have noted the vocational assessment completed by Rehab Strategy Solutions dated 10 April 2012. I have also noted that at the time of that assessment Ms Wheeler was significantly improved and was residing with her husband and two children. It should be noted that her relationship with her husband has markedly deteriorated and they have now separated. As I have also noted her mood has also significantly deteriorated.
The assessor has highlighted that Ms Wheeler did not have the motivation to go out and was spending most of her day inside. She required her husband or mother to take her to appointments. This in my opinion was consistent with her Major Depressive Disorder.
I have noted the employment history and transferable skills suggested by the assessor.
I have also noted the identified job options including administration assistant, medical laboratory technician, enrolled nurse, inquiry clerk, customer service officer and office manager.
Whilst the vocations identified may from a theoretical point of view be deemed appropriate it is my opinion that the assessor has not taken into consideration Ms Wheeler’s marked psychiatric disability that in my view would prevent her from engaging in such occupations. She would lack the self esteem and self confidence to undertake such work. She would also lack the ability to focus and concentrate on the relevant tasks required …
I have noted that I previously did recommend that Ms Wheeler would be able to undertake the above suggested options with the exception of investigative work involving security or insurance. I subsequently and in the light of her marked psychiatric deterioration recommended that she could not engage at work. At the present time Ms Wheeler is incapacitated for work and as I have noted has been re-hospitalised in the light of her psychiatric disorder.
In response to the specific questions raised in your letter of 8 May 2014 I would state as follows:
1. It is my opinion that Ms Wheeler is not able to perform the abovementioned alternate occupations now or in the future in a full-time or part-time capacity. I have noted that she is currently 36 years of age with 29 years remaining to work based on a retirement age of 65.
I was hopeful that Ms Wheeler would have the capacity to engage in some work and I was encouraging her in that regard with her full compliance. Unfortunately she has deteriorated significantly to the point that she has had to be re-hospitalised at St John of God Hospital. She has only partially improved and I am guarded in regard to her prognosis.
Ms Wheeler continues to demonstrate a significantly low self-esteem and loss of confidence with marked impairments in her capacity to concentrate and retain information. This is consistent with her comorbid Major Depressive Disorder.
2. The main reason why I have changed my opinion relates to the significant downturn in her emotional state. Placing her into a work situation that she feels that she cannot cope with in my opinion would pose a significant risk to her further psychological harm. She remains markedly dependent on others to assist her.
Ms Wheeler’s current psychiatric condition demonstrates significant symptoms associated with the Post-Traumatic Stress Disorder, chronic induration, as well as comorbid Major Depressive Disorder.
Current treatment includes hospitalisation, ongoing cognitive behaviour therapy, supportive psychotherapy and pharmacology.
4. Whilst I have noted the recommendations from the vocational assessors it should also be noted that no detailed psychological evaluation has been undertaken by the assessors in regard to Ms Wheeler’s capacity to undertake work.
Dr Richard Burek’s reports
Dr Richard Burek examined Ms Wheeler once on 6 August 2012.
On 17 August 2012, Dr Richard Burek reported that:
On Ms Wheeler’s testimony, her traumatic and depressive symptoms remain already described. As such, she is under-treated. She has only had one antidepressant and she has had no mood stabiliser.
Ms Wheeler states that she and her mother are going to see Dr Selwyn Smith next week. It is possible that she may be admitted as an inpatient. I consider that she needs her antidepressants reviewed. There are other antidepressant medications that could be trialled …
I consider that current treatment is ineffective from a pharmacological point of view. She has only had one antidepressant Lovan. On her testimony, 20 mg has had little impact and there has been no improvement on 40 mg. Ativan is the only medication she is taking to help sleep; as symptomatic treatment is inadequate.
Another antidepressant should be trialled. She still has significant symptoms. Consideration could be given to a mood stabiliser that may help with traumatic night-time experiences. There are other medications to help with sleep, e.g. Stilnox, Imovane, or Phenergen.
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I consider there is no possibility that Ms Wheeler will return to work in her usual occupation for which she is trained …
On enquiry about whether she could return to nursing, I consider this is highly unlikely. Nursing work entails the same sorts of problems that she would have to deal with emotionally as confronted her in the drownings, suicides and murders to which she has already been exposed. She also states she only worked for two years in nursing and it ended in 1999 …
I do not consider that Ms Wheeler is incapacitated to such an extent that she will never (until the age of 65) engage in any gainful profession, trade or occupation. Currently her treatment could be improved as I stated in the formulation. As such she is not permanently incapacitated.
On 10 May 2013, Dr Richard Burek reported that:
I advise that Ms Wheeler would, at some point, be capable of performing these identified work options in either a part-time or full-time capacity. I interviewed Ms Wheeler on 6 August 2012. I have not seen her since.
At that time she was not able to do any work at all, due to her ongoing psychiatric symptomatology.
Dr Richard Burek was specifically asked to comment on whether he perceived any differences between the history that Ms Wheeler had given to him during their single consultation on 6 August 2012 and the history given by Ms Wheeler as shown in Dr Selwyn Smith’s reports. Dr Richard Burek stated:
To compound her emotional symptomatologies Ms Wheeler also reported being bullied and harassed by a work colleague who was superior to her. Attempts at mediation with this particular man were most distressing to her … Dr Smith gained this information; I did not gain it. As such there is an important inconsistency in the information gained by us.
Dr Robert Wotton’s reports
Dr Robert Wotton examined Ms Wheeler on 30 July 2014 and 12 November 2014.
On 30 July 2014, Dr Robert Wotton reported that:
Mrs Wheeler appeared anxious from the beginning of the interview and this did not diminish throughout the hour and a half that I saw her.
Although a good historian in that she was able to outline a number of traumatic events and experience in her life as a police woman, Mrs Wheeler was at times unable to give a strict chronology of events. She said from the outset that her memory was no longer accurate.
She gave a convincing account of accumulated trauma in the workplace with a series of threats to her own life or close counters with the horrific or tragic deaths of others.
She was at times tearful in relation particularly to the loss of her identity as a police woman. She was obviously distressed about the degree of emotional restriction that her illness had caused her. Her affect was appropriate to her mood.
There were no signs of any psychotic forms of thinking.
Mrs Wheeler appeared to be a genuine woman with an above average intelligence and good insight into her condition …
Psychiatric diagnosis: Post-traumatic stress disorder.
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Based on the review particularly of her treating psychiatrist Dr Smith and my assessment, I do not believe Mrs Wheeler is fit for work. She is significantly affected by her symptoms and struggles to maintain a household.
I am unable to determine whether the condition has reached the point of maximum medical improvement, as there are still treatment options open to Mrs Wheeler.
I think that this would best be re-evaluated following the second attendance at the St John of God Adult Trauma Program …
I do agree with the assessment of Dr Selwyn Smith about her overall condition and its prognosis.
After an additional examination of Ms Wheeler, and with the benefit of a report from St John of God Hospital, Dr Robert Wotton provided a further report on 12 November 2014. Ms Wheeler gave information to Dr Robert Wotton about the results of the four weeks that she had spent as an inpatient at St John of God Hospital. Ms Wheeler also told Dr Robert Wotton that her relationship with her husband had broken down. Dr Robert Wotton observed:
She was surprisingly emotionally unresponsive when describing the deterioration of her marriage, her husband’s leaving her, and the prospect of a life without him. It was as if she was emotionally numb to these unfolding events. She was frank about the degree to which she must have underestimated the impact of her illness on her husband’s capacity to cope.
Dr Robert Wotton’s conclusion about Ms Wheeler’s then recent treatment by the St John of God Hospital was:
There has been no change in diagnosis. Ms Wheeler has had some symptom relief from her period of treatment in St John of God Hospital, but she is still markedly symptomatic and clinically impaired from her condition.
In relation to Ms Wheeler’s fitness for work, Dr Robert Wotton stated:
Given that improvement overall has not occurred, and given that Ms Wheeler may now be facing a permanent separation from her husband, it is highly unlikely that she will ever be fit for work.
Dr Robert Wotton said that Ms Wheeler’s condition had reached the point of maximum medical improvement. He made an evaluation of permanent impairment and in respect of employability said:
Still majorly impaired by her symptoms. Can have some days where she functions adequately for a few hours, but this is likely to be followed by days where she is unable to function. Would be totally unreliable for these reasons in any work place setting.
Vocational assessment reports
MetLife obtained two vocational assessment reports.
The first report was prepared by Ms Maura Goonetilleke of Injury Treatment on 24 October 2012 following a meeting with Ms Wheeler on 16 October 2012. Ms Goonetilleke was provided with Dr Selwyn Smith’s report dated 1 May 2012 and identified several suitable jobs for Ms Wheeler.
The second report was prepared by Ms Lauren Gow of Strategic Rehab Solutions on 10 April 2014 following a meeting with Ms Wheeler on 29 March 2014. Ms Gow identified several suitable jobs for Ms Wheeler but stated that:
No formal evaluation of Ms Wheeler’s psychological status was conducted during the Vocational Assessment. Ms Wheeler reported that she has been advised by her psychiatrist/nominated treating doctor, Dr Selwyn Smith, that she is unable to return to the police force.
Investigation reports
In the period between 20 July 2012 and 28 May 2014, MetLife obtained six investigation reports.
The investigation reports included observations that Ms Wheeler had played netball for the Camden & District Netball Association and was an active member of the Boston Terrier Club, and that there were various Facebook posts and photographs of Ms Wheeler smiling and socialising with friends.
MetLife’s reasons for refusal
In MetLife’s declinature letter dated 4 September 2015, MetLife declined Ms Wheeler’s claim on the following broad grounds:
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Dr Selwyn Smith’s opinion in his report dated 28 August 2014 regarding Ms Wheeler’s capacity for work was expressed well after the date of assessment;
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Dr Robert Wotton’s opinion in his report dated 12 November 2014 regarding Ms Wheeler’s capacity for work was expressed well after the date of assessment;
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Ms Wheeler had suffered a downturn in her emotional state well after the date of assessment in the context of her then-current marital issues (the implication being that this was an intervening event causing her incapacity);
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Dr Richard Burek was of the opinion that Ms Wheeler would never engage in any gainful profession, trade or occupation;
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Dr Richard Burek considered that there was an important inconsistency in the factual histories provided by Ms Wheeler to Drs Selwyn Smith and Richard Burek;
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Vocational assessment reports identified various suitable employment options for Ms Wheeler; and
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Ms Wheeler’s participation in team netball, her membership of the Boston Terrier Club, and the Facebook posts and photographs were contrary to the functionality reported by Ms Wheeler to the medical practitioners.
Date of assessment
It was not in issue that the date of assessment was 21 March 2011.
In Dr Selwyn Smith’s reports up to and including his report dated 31 July 2012, Dr Selwyn Smith expressed the opinion that Ms Wheeler may be able to engage in work outside the NSW Police Force in the future. In Dr Selwyn Smith’s final report dated 28 August 2014, however, Dr Selwyn Smith changed his opinion and expressed the view that Ms Wheeler would not be able to engage in any work either inside or outside the NSW Police Force then or in the future.
In Dr Robert Wotton’s first report dated 30 July 2014, Dr Robert Wotton expressed the view that he could not determine whether Ms Wheeler’s condition had reached the point of maximum medical improvement and that this would be best re-evaluated after a second attendance at an adult trauma program. In Dr Robert Wotton’s final report dated 12 November 2014, which was prepared after Ms Wheeler’s second attendance at the adult trauma program, Dr Robert Wotton expressed the view that it was “highly unlikely that [Ms Wheeler] will ever be fit for work”.
In MetLife’s declinature letter, MetLife discounted both Dr Selwyn Smith’s final report and Dr Robert Wotton’s final report on the grounds that they were prepared “well after the date of assessment”.
Robb J found that MetLife’s decision to discount the final reports of Drs Selwyn Smith and Robert Wotton was unreasonable. Robb J stated that all relevant evidence brought into existence between the date of assessment and the date of determination must be taken into account by an insurer. In that regard, Robb J cited the recent NSW Court of Appeal decision of TAL Life Ltd v Shuetrim [2016] NSWCA 68.
Significance of Ms Wheeler’s separation from her husband
In MetLife’s declinature letter, MetLife noted that the final opinion of Dr Selwyn Smith described a downturn in Ms Wheeler’s emotional state in the context of Ms Wheeler’s separation from her husband. MetLife also noted that the final opinion of Dr Robert Wotton was that Ms Wheeler’s progress depended upon stress coming from extraneous factors, such as Ms Wheeler’s separation from her husband.
MetLife stated that Ms Wheeler’s separation from her husband “arose well after the relevant date for MetLife’s assessment of the claim” and implied that Ms Wheeler’s marital issues were a new, intervening event causing her incapacity.
After reviewing the medical evidence, Robb J considered that neither doctor had suggested that the deterioration of Ms Wheeler’s relationship with her husband was a new, intervening event that had caused Ms Wheeler to suffer a higher level of incapacitation than that from which she had suffered as at the date of assessment.
Robb J stated that MetLife could have asked the doctors to clarify whether they meant to give opinions that Ms Wheeler’s separation from her husband was a new cause that had led to permanent incapacity. MetLife, however, did not do so. In the circumstances, Robb J found that MetLife was not reasonably entitled, on the evidence before it, to determine Ms Wheeler’s application on the basis that both doctors had formed the opinion that the separation was an intervening cause that had made Ms Wheeler’s incapacity permanent.
Dr Burek
In its declinature letter, MetLife stated that:
In his report dated 17 August 2012, Dr Burek did “not consider that Ms Wheeler is incapacitated to such an extent that she will never (until the age 65) engage in any gainful profession, trade or occupation”. He concluded that “Currently treatment could be improved as I stated in the formulation. As such she is not permanently incapacitated”.
Robb J noted that Dr Richard Burek expressed the opinion that Ms Wheeler was not incapacitated to such an extent that she would “never” return to work. This was the wrong question. Robb J stated that the criterion “never” is a more absolute and stringent one than the criterion “unlikely ever”. The former requires the formation of a positive opinion that there is zero chance of the event happening. The latter may be satisfied even though there is in fact some real chance (even though unlikely) that the event will occur.
Robb J also noted that Dr Richard Burek had clearly linked his conclusion that Ms Wheeler was not permanently incapacitated to his opinion that her treatment could be improved. Robb J found that it was not reasonable for MetLife to act upon Dr Richard Burek’s opinion without exploring whether a change in Ms Wheeler’s medication would in fact improve Ms Wheeler’s employment prospects. As Dr Richard Burek expressed his opinion on 17 August 2012, Robb J considered that there was more than ample time for MetLife to advise Ms Wheeler of Dr Richard Burek’s opinion so that steps could be taken to see whether or not Dr Burek’s opinion was correct.
In its declinature letter, MetLife also stated that:
Dr Burek was asked by MetLife to consider the histories given by the member to both Dr Smith and Dr Burek. Dr Burek noted that Dr Smith had taken a history of being bullied and harassed by a work colleague superior to her, and that attempts at mediation “were most distressing to her”. Dr Burek noted that “Dr Smith gained this information; I did not gain it. As such there is an important inconsistency in the information gained by us”.
Robb J stated that the implication from this statement appears to be that Ms Wheeler had not been frank in the histories that she had given to the two doctors; however, the importance of the information was entirely unexplained. In Robb J’s view, when one reviews the histories contained in the reports of the two doctors, it is clear that Ms Wheeler gave complex, comprehensive and consistent histories. Robb J stated that it is not to be expected that Ms Wheeler would have been entirely exhaustive each time she was required to explain her history to a new doctor.
Vocational assessment reports
In relation to the vocational assessment reports, Robb J was of the view that Dr Selwyn Smith’s report dated 28 August 2014 removed the medical basis that had underpinned both reports.
Robb J held that it was unreasonable for MetLife to continue to rely upon the two vocational assessment reports and ignore the change in Dr Selwyn Smith’s medical opinion.
Investigation reports
Robb J considered that the reasonableness of MetLife relying upon the investigation reports, which reported Ms Wheeler’s participation in netball, her apparent showing of her Boston terrier at dog shows, and her apparent socialising on Facebook, depends upon the relationship between the symptoms of the psychological disorders suffered by Ms Wheeler and the extent to which those symptoms were likely to have an impact on Ms Wheeler’s day to day life.
Robb J was of the view that an ordinary person cannot look at evidence of the occasional day to day activities of a person suffering from PTSD and major depressive disorder and conclude that the person is not suffering from disabilities that may make the person practically unemployable. Robb J noted that MetLife did not submit the investigation reports to any of the medical experts.
In Robb J’s view, it was not reasonable for MetLife to act upon its own assessment of the significance of the investigation reports without first having sought expert medical opinion.
Comments on the meaning of “unlikely ever”
In the course of giving his reasons, Robb J made some comments about the recent NSW Court of Appeal decision of TAL Life Ltd v Shuetrim [2016] NSWCA 68 and, in particular, the meaning of “unlikely ever”.
Prior to Shuetrim, there was a line of authorities that stood for the proposition that the court must consider the actual or real possibility of the insured person’s employment, rather than a mere theoretical possibility. Robb J noted that the NSW Court of Appeal did not expressly consider this principle in Shuetrim.
In Shuetrim, the NSW Court of Appeal held that the correct question was whether the insured member had a “real chance” of obtaining relevant employment.
While noting that there may be some scope for debate, Robb J considered that these two articulations of the question are entirely consistent and are merely different expressions of the effect of the term “unlikely ever”.
Did Ms Wheeler satisfy the TPD definitions?
Given that Robb J found that MetLife had constructively denied Ms Wheeler’s claim and that MetLife’s declinature of Ms Wheeler’s claim was unreasonable, Robb J proceeded to determine whether Ms Wheeler satisfied the TPD definitions. In that regard, both MetLife and Ms Wheeler adduced further evidence in support of their positions.
MetLife’s evidence
MetLife relied upon all of the evidence it had before it when it made the decision to decline Ms Wheeler’s claim. MetLife also adduced further evidence of Ms Wheeler’s day-to-day activities, including her participation in volunteer work at her children’s school, and expert evidence given by Dr Sydney Smith, a consultant psychiatrist. Dr Sydney Smith had interviewed Ms Wheeler for 1 hour and 45 minutes on 6 October 2015.
Dr Sydney Smith expressed the opinion that Ms Wheeler’s primary ailment was her major depressive disorder and that her PTSD was secondary to her depression. Dr Sydney Smith opined that there were medications available that would diminish Ms Wheeler’s depression. Dr Sydney Smith also opined that Ms Wheeler had an alcohol abuse disorder that was exacerbating the consequences of her PTSD. Dr Sydney Smith was of the view that that there were good prospects of Ms Wheeler returning to employment if she undertook treatment for her alcohol abuse disorder and changed her medication.
Dr Sydney Smith did not give any opinion to support a claim that Ms Wheeler’s marital problems were a new intervening cause that caused her to become permanently incapacitated from employment.
Ms Wheeler’s evidence
Ms Wheeler relied upon three additional medico-legal reports prepared by Dr Selwyn Smith. The first two reports reiterated his previous opinions and the third report responded to Dr Sydney Smith’s evidence.
In the third report, Dr Selwyn Smith stated that:
I respectfully disagree with Dr Sydney Smith’s conclusion that Ms Wheeler’s Post-Traumatic Stress Disorder is secondary to her depression. Her Post-Traumatic Stress Disorder is the primary psychiatric disorder. There is no such clinical entity as a secondary Post-Traumatic Stress Disorder as stated by Dr Sydney Smith. His opinion is at striking variance with those of other clinicians who have examined Ms Wheeler, none of whom have suggested “a secondary Post-Traumatic Stress Disorder” …
Dr Sydney Smith’s opinion is also at striking variance with clinical personnel at St John of God Hospital Richmond who have treated Ms Wheeler. All clinical personnel have been consistent in emphasising the extent of her Post-Traumatic Stress Disorder and comorbid Major Depressive Disorder. Dr Burek is also quite clear in his opinion that Ms Wheeler suffers from chronic Post-Traumatic Stress Disorder and Major Depressive Disorder …Ms Wheeler does demonstrate diagnostic criteria for an Alcohol Use Disorder. Her Alcohol Use Disorder in my opinion is secondary to her Major Depressive Disorder and Post-Traumatic Stress Disorder. The alcohol intake has fluctuated with time. It is directly related to the degree of distress she is experiencing.
Ms Wheeler’s alcohol utilisation has been discussed with her. As referred to in Dr Sydney Smith’s own report Ms Wheeler did benefit from her inpatient stay where she was detoxified and her reliance on alcohol was discussed. It should be noted that her comorbid Major Depressive Disorder was also addressed during her inpatient stay at the hospital (Xavier Unit) during her hospitalisation …
At the present time it is my opinion that Ms Wheeler is not in need of the addition of a further antidepressant … She is not a candidate for electroconvulsive therapy. She is not in need of admission to a mood disorder clinic such as the Prince of Wales Hospital.
In conclusion there is nothing within Dr Sydney Smith’s report that causes me to modify the original opinion that I have expressed.
Robb J found Dr Selwyn Smith to be a very impressive expert witness under cross-examination. Dr Selwyn Smith was sometimes aware in detail, sometimes in outline, of the day-to-day activities that formed the basis of MetLife’s case that Ms Wheeler was not unlikely ever to undertake employment. Dr Selwyn Smith was unmoved in his view that Ms Wheeler’s occasional and short-term activities were not inconsistent with the basis of his opinion that Ms Wheeler had no realistic likelihood of being able to engage in any form of employment in the future. Dr Selwyn Smith said that he encouraged those activities because they were likely to ameliorate Ms Wheeler’s suffering.
Robb J ultimately preferred the evidence given by Dr Selwyn Smith to that given by Dr Sydney Smith. In forming that preference, Robb J was substantially influenced by the fact that Dr Selwyn Smith had been Ms Wheeler’s treating psychiatrist for a period of five years. Over that time, Dr Selwyn Smith had given a significant number of reports to various different correspondents. Robb J stated that, in cases such as the present, the regular and long-term exposure of the treating psychiatrist to the patient is likely to make the treating psychiatrist’s evidence more reliable and valuable for a number of reasons. First, the treating psychiatrist will have a longitudinal perspective. Second, by reason of the substantial number of examinations, the treating psychiatrist will not be dependent upon the history given by the patient in a few short examinations. Third, the treating psychiatrist will have an opportunity to witness the symptomatology of the patient over a considerable period. Fourth, the treating psychiatrist will have a working understanding of the clinical notes of other treating professionals.
Decision
Robb J ultimately concluded that the evidence justified a finding that, as at the date of assessment, Ms Wheeler was incapacitated to such an extent as to render her unlikely ever to engage in any gainful profession, trade or occupation for which she was reasonable qualified by reason of education, training or experience, within the meaning of the TPD definitions in the polices.