A job is not an occupation – the Supreme Court of NSW clarifies what is a life insured’s “occupation” under an “Own Occupation” TPD definition

The Supreme Court of NSW has handed down its decision in Murphy Mcarthy & Associates Pty Limited (Administrator Appointed) v Zurich Australia Limited [2024] NSWSC 1203.

The decision provides important guidance on the meaning of an ‘Occupation’ in the context of ‘Own Occupation TPD’ cover, including the necessary distinction between an ‘Occupation’, and the specific duties and tasks of a person’s work which together comprise a ‘job’.

The proceedings were brought by the policy holder, Murphy Mcarthy & Associates Pty Limited (MMA), on an ‘Own Occupation TPD’ cover with respect to Mr Francis Heron. Mr Heron was a self-employed sub-contractor who worked with MMA as a ‘Construction Manager / Project Supervisor’.

MMA operated primarily on small to medium scale projects, including projects involving pipe-laying, stormwater and drainage. The work performed by employees and contractors of MMA involved digging and working in trenches in some projects.

Due to arthritis requiring a total left hip replacement in late 2021, MMA alleged that Mr Heron had become TPD because he was unlikely ever again to perform his ‘Own Occupation’.

In particular, MMA’s position was that Mr Heron’s ‘Own Occupation’ as a Construction Manager / Project Supervisor necessarily involved him working in trenches, sometimes in wet conditions and confined spaces, and that this was something he was now prevented from doing due to his condition. It became apparent during the proceedings that Mr Heron had since returned to sub-contract work as a ‘Project Supervisor’ with another construction company, although it was submitted that this specific role did not involve underground trench work.

Zurich, who was represented by HWL Ebsworth, was successful in defending the proceedings on the basis that Mr Heron was not relevantly disabled.

The key take-aways are:

• An ‘occupation’ in the context of a life insured’s ‘Own Occupation’ cannot be determined merely by considering the collection of tasks and duties they were performing immediately prior to the injury, sickness or illness causing cessation of work. This is because “particular duties may be common to more than one occupation, such that it is necessary to draw a distinction between duties or tasks, and an occupation”.¹
• As such, the Court rejected the ‘granular’ approach to the assessment of Mr Heron’s ‘occupation’, which proposed that the only relevant consideration was the specific tasks and duties he was performed immediately prior to ceasing work. While the latter could represent the description of a particular ‘job’, this information alone will be insufficient to identify the ‘occupation’ of a life insured.²
• To determine a life insured’s ‘Own Occupation’, an insurer will need to consider not only their ‘job’ (being their collection of specific work tasks and duties) but also their broader qualifications, experience and work history.
• As a result of that analysis, an insurer will necessarily arrive at a more generic descriptor representing the life insured’s occupation. To use a biological metaphor, “occupation” is comparable to a genus, whereas a particular job with its unique duties and tasks is a species of that genus^3.
• Whether or not the performance of a specific task or duty is ‘essential’ is not determinative of a life insured’s occupation, and could even have the potential to be unhelpful or misleading.⁴
• For example, it may be ‘essential’ that a psychologist and social worker each be able to provide counselling services.⁵ Clearly though, they are engaged in different occupations which is why a broader analysis (and not a granular one merely focused on task and duties) is necessary.
• The ‘essentiality’ of a particular task or duty becomes more acutely relevant once the broader occupation has been identified. As stated by Kunc J, “[i]f the extent of a disability prevents performance of an essential task, then there will no real likelihood of a return to the ‘occupation’”.⁶
• The issue of evaluating the ‘essentiality’ or otherwise of a specific task will depend significantly on the facts and evidence presented in each case.

Ultimately, taking this approach the Court found that Mr Herron’s “Own Occupation” was “Construction Manager/Project Supervisor”. Mr Heron’s experience and qualifications were directed to, and enabled him to perform, the duties of this occupation. Where Mr Heron carried out manual work while in the trenches (which post-surgery of his hip he could not safely undertake), this was an example of him “helping out” rather than being in the course of performing his supervisory role. In fact, even if the evidence was that Mr Heron could not safely enter, work in and exit trenches at all, the Court found that the extent of his disability was not such that it was unlikely that he would ever again be able to engage in his “Own Occupation”. This was because working in trenches was not something he was required to do in every job and not essential for him to be able to engage in his “Own Occupation”.

Another matter supporting this conclusion was consideration of “Total” in the context of TPD highlighting the commercial purpose of the policy to provide a benefit when the effect of the disability completely (totally) prevents participation in the life insured’s “Own Occupation”. Mr Heron’s successful post-operative outcome meant his disability did not result in such complete incapacity.

The proceedings brought by MMA were dismissed with costs.

This article was written by Jason Stevens, Partner, Andrew Gawthorne, Special Counsel and Jessica Turner, Associate.

¹MMA v Zurich per Kunc J at [57]; see also Minister for Immigration & Multicultural Affairs v Hu (1997) 79 FCR 309 per the Court at [322 – 323] (Hu).
²MMA v Zurich per Kunc J at [57] & [59].
³MMA v Zurich per Kunc J [59] ⁴MMA v Zurich per Kunc J at [57] ⁵MMA v Zurich per Kunc J at [57] see also Hu
⁶MMA v Zurich per Kunc J at [103]