A tricky assessment – TPD claims


An interesting case before the NSW Supreme Court disputing the denial of a claim for total and permanent disablement (TPD), where the plaintiff (Standley) sued his insurer for its denial of his TPD claim.

Under the applicable TPD clause, the plaintiff had to demonstrate that as result of illness or injury, he had been absent from and unable to engage in his own occupation for three consecutive months, and that he was disabled at the end of the period of three consecutive months to such an extent that he was unlikely ever again to be able to engage in his own occupation.

The plaintiff claimed to be incapable of returning to his own occupation due to physical injuries and a psychological condition following his motor vehicle accident.

The insurer refused the claim on the basis that the plaintiff was still physically capable of returning to his own occupation despite his injuries and that his psychological condition arose after the relevant date of assessment (being three months after he stopped working (in May 2016).

Relevantly, in the course of the proceedings, the insurer:

  1. did not challenge the veracity of the plaintiff’s alleged psychological issues by:
    1. serving evidence including vocational reports that dealt with the existence of the plaintiff’s alleged psychological condition, or
    2. putting to the plaintiff that he had lied to the medical experts and to the Court about his psychological condition.
  2. conceded that the ‘own occupation’ in the TPD clause meant the plaintiff’s last worked role or similar, on a full time, not part time basis.


Although the Court found that the plaintiff:

  1. exaggerated the physical requirements of his occupation;
  2. was not physically incapable of returning to his own occupation for the whole of the three month period in question being between February 2016 and May 2016;
  3. did not develop his psychological condition during the three month period in question being between February 2016 and May 2016; and
  4. did not meet the criteria for TPD as at May 2016,

it accepted the plaintiff’s unchallenged evidence that by September 2017, the plaintiff was suffering from a psychological condition (being secondary to his relevant physical injuries) that rendered him unlikely ever to return to his own occupation.

The Court ultimately held that:

  1. the three month period of absence from work (at the end of which the plaintiff's likelihood of returning to work is to be assessed) did not have to be the first three month period during which he was absent from work;
  2. a later three month period of absence could be used for purposes of the assessment, provided the assessment was made at the end of a three month period during which the plaintiff was incapable of working,

so as to find in the plaintiff’s favour.


In reaching its conclusion, the Court reasoned [at 63] that:

  1. the plaintiff’s inability to work was an inability continuing from his motor vehicle accident;
  2. the plaintiff is not prevented from maintaining that at some stage (at least prior to the commencement of the proceedings in December 2017):
    1. he was unable to work for a period of three months; and
    2. at the end of that period of three months he was unlikely ever to return to full time employment in his last role.
  3. although:
    1. the TPD clause requires that the assessment of likelihood of return to work must focus on a date that is at the end of a three month period of the insured not having worked due to illness or injury,
    2. the clause does not limit the three months of inability to work to any particular period, and

so the Court is not persuaded that there was any reason to read into the TPD clause any limitation on its scope.

Practical Application

The decision in Standley v Onepath Life Ltd [2020] NSWSC 848 (Standley) is at odds with another first instance Supreme Court decision by a single judge in Halloran v Harwood Nominees Pty Ltd [2007] NSWSC 913 (Halloran).  Although the TPD clause considered in Halloran is not identical to Standley, it relevantly required the plaintiff to prove that he was unable work by reason of injury of illness for six consecutive months.

In Halloran, the Court reasoned [at 36] that:

“…If an employee is not disabled as defined at the relevant date, a subsequent deterioration in his or her condition does not qualify him for a disablement benefit. Conversely, if he or she is disabled as defined at the relevant date, a subsequent improvement in his or her condition does not retrospectively disqualify the employee from the benefit. To adopt the construction …[contrary to the above]… would make the time at which the application for a benefit is made and the time at which it was considered by the trustee decisive rather than the time objectively fixed by the trust deed as at which that decision should be made. It might well result in different decisions properly being made by a trustee on an initial application and on an application for reconsideration, and then a different decision again by a Superannuation Complaints Tribunal conducting a review as at the date that the matter came before it. That result seems to me an undesirable one.”

Halloran has been considered in a number of cases including in the Court of Appeal. In Hannover Life Re of Australasia Ltd v Colella (2014) 47 VR 1 the Court  considered paragraph 36 in Halloran although it did not specifically accept the construction of the policy reasoned in Halloran at 36.  

It appears that Standley does not clarify the interpretation regarding the timing of the relevant assessment period, but rather provides an alternative approach for policy interpretation.. As to which interpretation will be preferred by the Courts will turn on the facts of each case.