Case: Halloran v Harwood Nominees Pty Ltd [2007] NSWSC 913
Outcome: cited
On 16 April 2003, Colonial wrote to Mr Smelt concerning Mr Kowalski and the life insurance policy relating to him. The letter stated in part: We refer to the claim by Mr Kowalski who was a life insured covered under a group life insurance policy ("the policy") issued by the State Government Insurance Commission (SGIC) ("now Colonial") to Mitsubishi Motors Australia Employees' Superannuation Fund. Mr Kowalski made a claim for Total and Permanent ("TPD") benefit on 20 February, 1992 claiming that the Life Insured had been absent from employment since 16 August, 1991 as a result of emotional stress and pathologically intense state of anxiety and that he was TPD. After considering medical evidence available to it, SGIC denied the claim for TPD benefits on 4 August, 1992 on the basis that the evidence supported that the insured was not TPD. We note that Colonial subsequently re-examined Mr Kowalski's claim and affirmed its decision to deny the claim by letter dated 13 June, 2001. We note you subsequently requested that Colonial review the claim on 3 July, 2001 taking into consideration further medical evidence. Colonial reviewed the claim at this time and communicated its decision to you via email correspondence on or about August, 2001. Mr Kowalski however, alleges that Colonial did not re-examine his claim as requested. We deny this allegation. Mr Kowalski has contacted Colonial on a number of occasions regarding his claim including a recent letter dated 14 February, 2003. We note that the policy is between Colonial and the Trustee. Therefore, we are writing to Mr Kowalski informing him that any future questions he has about the policy should be directed to the Trustee and not Colonial. We have examined our file and provide the following summary of the assessment of Mr Kowalski's claim for your information: The insured's claim has been assessed by determining whether he was TPD as at February, 1992. We refer to the policy provisions for an explanation of the assessment of the insured's claim in this way. Under the policy the period of cover ends on the earliest to occur of: - the end of the term of group life policy or its earliest termination, or - the termination of employment, or - cessation of gainful employment by the life insured as reflected in the following provisions of the Group Life Policy. Clause 4 (Duration of Cover) of the Group Life Policy provides: "The insurance cover evidenced by this Policy issued pursuant to the Proposal shall be effective from midnight of the Commencement Date until midnight of the same date of the month as the anniversary in which the contract guarantee period expires." "Contract Guarantee Period" in the Group Life Policy is defined to mean the period from the commencement date to 1 st February, 1992. Clause 5(2) of the policy provides that "Cover in respect of a Life Insured ceases at the earliest of the following events" including: (ii) termination of service with the employer and (v) cessation of gainful employment Accordingly, the insured's claim must be assessed by determining whether he was TPD as at February, 1992 or any earlier date on which the insured's employment was terminated prior to this date or the insured ceased gainful employment prior to this date. If you would like us to reassess the life insured's claim then you should provide us with documents that you consider relevant to whether the life insured was TPD as at February, 1992. We note that we are already in possession of copies of the following documents: Medical Report of Dr Scanlon dated 28 October, 1991 Workers Compensation Medical Certificate dated 23 February 1993 including comments by Dr Jagerman Notes of JA Fountain, solicitor acting for Mitsubishi Motors Australia Ltd attending Dr McFarlane dated 29 April 1993. Please note that we are in possession of several other documents however these are not relevant to the reassessment of the life insured's TPD claim as at February, 1992 and therefore have not been listed. Please provide any additional documents, which you consider are appropriate if you consider that Mr Kowalski's claim should be reassessed. (Emphasis added.) This letter was copied to Mr Kowalski. There is nothing in the material to which I have been taken to suggest that the Trustee sought the reassessment referred to in the last quoted paragraph or that it disputed the insurer's view as to the period of cover. I should add I have emphasised the paragraph where Colonial limited its liability to February 1992. While this may have been the case insofar as concerned Colonial in respect of any TPD Benefit claim, it was not the case for the Trustee. From February 1992 until the termination date in 1994, the Trustee "self insured" in respect of any possible TPD Benefit claim by Mr Kowalski: on insuring benefits see Trust Deed cl 8; see also Halloran v Harwood Nominees Pty Ltd [2007] NSWSC 913. (viii) In mid-2003 Mr Kowalski and others acting on his behalf sought to obtain a copy of Colonial's determination of August 2001. The Trustee's solicitors denied having a copy of it. (ix) In March and April of 2004 the Trustee's solicitors wrote to Mr Kowalski and to his union indicating on instructions that no formal application for a TPD Benefit was made to the Trustee in October 1998. In the letter to Mr Kowalski, the solicitors further observed that, in consequence, no such application was considered or rejected at that time.