Date for assessment of TPD – Uncertainty in Queensland

13 April 2017

A point of contention between plaintiffs’ lawyers and insurers regarding TPD claims in Queensland is the date at which TPD is to be assessed.

TPD policies usually require the insurer to form an opinion whether the insured person has become incapacitated for work by reference to criteria set out in the TPD definition. Most policies contain either a three month or a six month qualifying period after the insured person ceases work through injury or sickness during which they must remain absent from work. The position usually taken by insurers is that the date at which TPD is to be assessed is at the end of the qualifying period in the policy.

The position in this regard is for all intents and purposes settled in NSW. In Hannover Life Re of Australasia Ltd v Dargan [2013] NSWCA 57 the New South Wales Court of Appeal noted that it was common ground between the parties that the date at which disablement was to be assessed was at the end of the qualifying period. Bathurst CJ, with whom McFarlane, Meagher and Hoeben JJA and Tobias AJA agreed, cited with approval the reasoning of Brereton J in Halloran v Harwood Nominees Pty Ltd [2007] NSW SC 913. In that case, Brereton J found that the assessment had to be made at the end of the six month qualifying period.

The position is not so clear in Queensland, primarily because of the absence of case law on the issue. In McArthur v Mercantile Mutual Life Insurance Company Ltd [2001] QCA 317, there was no consensus between the judges of the Queensland Court of Appeal as to the relevant date. Muir J was of the view that the relevant date was the date of communication of the insurer’s decision on the claim. However, Muir J’s comments were obiter. McPherson JA said it was not clear to him that the date is the date ‘at which the defendant’s opinion was, or ought to have been formed and communicated’. However, he considered that it was unnecessary in the circumstances to determine the date.

Commentators sometimes cite the McArthur Queensland Court of Appeal decision as authority for the proposition that the approach to the date for assessment issue in Queensland is at odds with the NSW line of authorities. However, viewed in perspective, there was no consensus between the judges in the McArthur decision as to the preferred date for assessment, and this issue was not central to determining the matter.

While the issue has still not been finally judicially decided in Queensland, insurers can take heart from some recent decisions of Queensland courts. In a decision of the Queensland District Court in Reynolds v Sunsuper Pty Ltd and Anor [2016] QDC 129, handed down on 7 June 2016, Dorney DCJ noted that it was agreed between the parties that “the New South Wales approach” to the date of assessment was to be adopted in that case. However, Dorney J, although not asked to decide that issue, expressed no reservations about the approach taken. He did go on to apply other interstate judgments on other issues so it is reasonable to infer that, if asked to rule on this issue, he may likely have applied the NSW line of authorities to the date of assessment.

In an interlocutory decision of the Queensland District Court in Robinson and Anor v Westpac Life Insurance Services Limited [2017] QDC 40 Smith DCJ, when considering an application by the insurer to strike out portions of the plaintiff’s pleadings and an application for further and better particulars, considered the matter of McArthur v Mercantile Mutual Life Insurance Company Limited and the NSW authorities and decided that the relevant date for assessment could either be the end of the qualifying period, or the date of first refusal of the claim by the insurer. He struck out parts of the plaintiff’s Statement of Claim that alleged three other alternative dates for assessment.

Until this issue is determined by a superior Queensland court, it may continue to be a point of contention between insurers and plaintiffs’ lawyers, but we believe that ultimately the approach of the NSW line of authorities ought to be followed in Queensland.

This article was written by Tony Scott, Partner.

Subscribe to HWL Ebsworth Publications and Events

HWL Ebsworth regularly publishes articles and newsletters to keep our clients up to date on the latest legal developments and what this means for your business.

To receive these updates via email, please complete the subscription form and indicate which areas of law you would like to receive information on.

Contact us