Dukker v Challenge Recruitment Limited [2011] QDC 108

DISTRICT COURT OF QUEENSLAND CITATION: Dukker v Challenge Recruitment Limited [2011] QDC 108 PARTIES: Lauren Dukker (Plaintiff) v Challenge Recruitment Limited (Defendant) FILE NO/S: 2083 of 2010 DIVISION: Trial PROCEEDING: Trial ORIGINATING COURT: District Court, Brisbane DELIVERED ON: 23 June 2011 DELIVERED AT: Brisbane HEARING DATE: 17 and 18 March 2011 JUDGE: A/Judge Farr SC, DCJ ORDER: 1. The plaintiff’s claim is dismissed. CATCHWORDS: INSURANCE – THE POLICY – insurance benefit – total and permanent disablement benefit – whether the plaintiff’s disability became total and permanent while she was engaged in regular remunerative work for the defendant or within six months of the cessation of that regular remunerative work – plaintiff failed to establish that her disability became total and permanent within the terms of the policy INSURANCE – THE POLICY – insurance benefit – total and permanent disablement benefit – whether AMP would have paid out on the total and permanent disability policy if the relevant form had been submitted promptly by the employer – plaintiff failed to establish AMP would have paid out on the claim TORTS – NEGLIGENCE – ESSENTIALS FOR ACTION FOR NEGLIGENCE – DUTY OF CARE – SPECIAL RELATIONSHIPS AND DUTIES – EMPLOYER AND EMPLOYEE – WHERE ECONOMIC OR FINANCIAL LOSS – whether defendant employer breached duty of care to plaintiff employee to not cause financial loss to the plaintiff – where the defendant’s delay in submitting questionnaire to AMP was a failure to act reasonably and financial loss to the plaintiff was foreseeable, however the defendant’s actions did not in fact cause financial loss to the plaintiff -- 1 of 22 -- 2 Kilvington v Grigg & Ors [2010] QDC 496 at [58] – [60] per McGill J, cited Caltex Oil (Australia) Pty Ltd v The Dredge ‘Willemstad’ (1976) 136 CLR 529 at [104] per McHugh J, cited Fortuna Seafoods Pty Ltd v The Ship ‘External Wind’ [2008] 1 Qd R 429 at 437 [6] per McMurdo P, cited Perre v Apand Pty Ltd (1999) 198 CLR 180, cited Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515 at [74] per McHugh J, cited United Superannuation Pty Ltd v Harrison [2001] FCA 1468 at [49] – [50] per Wilcox J, followed CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – IMPLIED TERMS – GENERALLY - whether there is an implied term of the contract between the plaintiff employee and the defendant employer that the defendant will act in good faith and not in a manner such as to damage the relationship of confidence and trust between employer and employee – the authorities lean to the existence of such an implied term in a contract of employment – the defendant may owe a duty to the plaintiff pursuant to an implied term to promptly forward forms to AMP for the purpose of arranging insurance cover – however dishonest conduct on the part of the plaintiff in giving false answers offends the implied term that the parties act in good faith in a relationship of mutual trust and confidence Wright v Groves (2011) QSC 066 at [53], [55] per Lyons J, cited Thomson v Orica Australia Pty Ltd [2002] FCA 939 at [141] per Allsop J, cited Russell v The Trustees of the Roman Catholic Church for the Arch Diocese of Sydney [2008] NSWCA 217 at [30] – [31] per Basten JA, cited Taske v Occupational and Medical Innovations Limited [2007] QSC 118 at [53] per Moynihan J, cited COUNSEL: J McClymont for the plaintiff JS Miles for the defendant SOLICITORS: AK Compensation Lawyers Pty Ltd for the plaintiff Bradley’s Lawyers for the defendant -- 2 of 22 -- 3 [1] The plaintiff was employed by the defendant, a labour hire organisation, pursuant to a Contract of Employment dated 4 March 2005, in a part time capacity as an administrative officer or a customer service officer. She was 18 years of age, her date of birth being 23 May 1986. [2] The plaintiff applied for employment with the defendant by email on 3 March 2005. She underwent telephone screening by the defendant on or about the same day. During that telephone conversation she was informed that the job was a data processing role at Telstra, working 25 hours per week (5 hours per night from 4.00pm to 9.00pm), earning $17.45 per hour. [3] On Friday 4 March 2005 the plaintiff attended an interview with Cathy Dickie (nee Murphy) who was then an employee of the defendant.1 At that interview, the plaintiff was provided with a number of forms to complete. The forms included a Contract of Employment entitled “Employee Agreement”2 which included the term: “10. I accept that payment of superannuation is governed by the appropriate legislation.” [4] Other forms completed by the plaintiff that day included a document entitled “Registration Kit”,3 another entitled “Medical Disclosure”4 and another entitled “AMP Insurance Questionnaire”.5 The questionnaire amounted to an application by the plaintiff to AMP for insurance benefits in the form of an Extra Death Benefit of $100,000 (which is of no relevance to this matter) and a Total and Permanent Disablement (TPD) Benefit, also of $100,000. The application for TPD did not require the disclosure of the details of the applicant’s medical history. The questionnaire did however contain the following passages: “AMP Flexible Lifetime Super (FLS) provides certain insurance benefits. To help us assess whether to provide you with these insurance benefits, we need you to complete this form and send it to… … This questionnaire will be sent to AMP for the purpose of deciding whether to provide insurance benefits to you. I request Extra Death Benefit of $100,000 and Total and Permanent Disablement Benefit of $100,000. • Your Duty of Disclosure • What you must tell us You must answer all the questions in this questionnaire completely and accurately. This helps us to decide whether to provide the insurance benefits and how much to charge and whether any special 1 The plaintiff does not recall the name of the woman who interviewed her and Ms Dickie does not specifically recall the interview of the plaintiff. Documentary exhibits (Exhibits 16 and 7) however confirm that Ms Dickie was the interviewer. 2 Exhibit 7. 3 Exhibit 6. 4 Exhibit 8. 5 Exhibit 9. -- 3 of 22 -- 4 rules should apply. Your duty continues until we advise you that we have accepted your application for insurance. If you don’t tell us correctly If (sic) you don’t provide true and correct answers in this questionnaire we may be able to treat your cover as if it never existed or pay nothing, or keep your policy going but reduce the amount we pay. Two of the criteria of eligibility for the Total and Permanent Disability Benefit are hours worked and occupation. I understand that if I am not eligible for Total and Permanent Disability Benefit (sic). I will be covered for Extra Death Benefit and this will be confirmed in a letter.”6 [5] At the end of that document is a request for the applicant to sign and date it with a declaration that the answers are true and correct. In evidence, the plaintiff said that she never received that letter. [6] The plaintiff answered some but not all of the questions in this questionnaire. She advised that she smokes, on average, six cigarettes a day. She failed to provide any details regarding her current occupation, type of industry she works in, the number of hours she works per week or the number of weeks she works per year. She also failed to describe the main duties of her occupation and the percentage of time spent on each duty.7 [7] In evidence, the plaintiff said that she did not then know the relevant details to enable her to answer those questions. [8] At some unknown later time, an unknown person completed the answers to questions one to three.8 The form was retained by Ms Dickie after its partial completion on 4 March 2005. It was then received in the office of AMP Agent Mark Borg on 16 June 2005 and notations upon it show that AMP underwriters approved the application for TPD Benefits on 23 June 2005. It is not known what happened to it between 4 March 2005 and 16 June 2005. If it had been processed in the usual way, it would have been sent from the defendant’s Brisbane office to the defendant’s head office in Adelaide together with the monthly spreadsheets setting out the full details of each employee in Queensland and the amount of each such employee’s nine per cent superannuation guarantee payment. It would then have been sent to Mr Borg’s office, together with the superannuation spreadsheets for all employees nationwide. Mr Borg’s office would then have date stamped the questionnaire and forwarded it to AMP for processing. At the end of that process AMP would have assessed the application and notified the applicant of the outcome. [9] In this matter, the plaintiff’s superannuation policy with AMP was established by 17 May 2005.9 AMP notified the plaintiff by letter dated 4 July 2005 that TPD Benefits had been included as part of her plan effective from 4 July 2005.10 [10] AMP had previously written to the plaintiff by letter dated 19 May 200511 (which by pure coincidence was the plaintiffs last day at work) confirming the establishment of her 6 Punctuation as shown on the form itself is repeated here. 7 Questions 1-3 in Exhibit 9. 8 Exhibit 10. 9 See Exhibits 4, Document 1; 11 and 18. 10 Exhibit 4, Document 17. -- 4 of 22 -- 5 superannuation plan on 17 May 2005 and advising her that she could apply for additional insurance benefits including the TPD Benefit upon her completing and returning the questionnaire accompanying that letter. The questionnaire was identical to the one she partially completed on 4 March 2005. [11] The plaintiff ceased work on 19 May 2005. She lodged a claim for TPD Benefits on 5 December 2005. The claim was declined by AMP on 5 June 2006 on the basis that the plaintiff had failed to disclose the change in her occupational status, namely the cessation of her employment on 19 May 2005, at the time the policy issued on 4 July 2005. In June 2008, the plaintiff (through her solicitors) sought a review of AMP’s decision. In August 2008, AMP advised the plaintiff that upon review it maintained its decision to decline the claim. In July 2010 the plaintiff filed a Claim and Statement of Claim in this proceeding. Nature of Claim [12] The plaintiff claims the sum of $100,000 for damages for the loss suffered by the plaintiff as a result of the defendant’s negligence, breach of its fiduciary duty or breach of its contractual duty owed to the plaintiff together with interest pursuant to the Supreme Court Act 1995 (Qld) plus costs. The TPD Policy [13] As would be expected, AMP issued a Product Disclosure Statement (PDS) for “Flexible Lifetime – Super”.12 Page 22 of that document is headed “Optional insurance”. The Optional insurance includes a choice of TPD Benefits. Under the heading “When does my cover start?”, the PDS states “Your cover starts when we tell you in writing…”. Under the heading “Premium Quote” it is noted that AMP will deduct premiums from the superannuation plan to pay the cost of the optional insurance cover. The premium will depend on the cover selected. [14] The PDS relevantly defines totally and permanently disabled as follows: “You are totally and permanently disabled if your disability meets the definition of disablement in Part 1 of this definition and your disability starts while you were engaged in regular remunerative work (or within six months after you cease regular remunerative work). … Part 1 You are disabled if you suffer an illness or injury and: • The illness or injury wholly prevents you from engaging in regular remunerative work for at least six months in a row; and • Since you became ill or injured, you have been under the regular care and attention of a doctor for that illness or injury; and 11 Exhibit 4, Document 1. The plaintiff denied ever receiving this letter due to a change of address. 12 Exhibit 5 – Issue 2, 20 September 2004. -- 5 of 22 -- 6 • In AMP Lifes opinion, the illness or injury means that you are unlikely to ever work in regular remunerative work for which you are reasonably fitted by education, training or experience.” [15] It is agreed by both the plaintiff and the defendant that the regular remunerative work referred to in Part 1 of the definition, is the work which the plaintiff was engaged in with the defendant. Plaintiff’s Medical History [16] The plaintiff suffers or has suffered from a number of serious medical problems i.e. • endometriosis; • asthma; • constant and continuing bowel problems; and • supraventricular tachycardia. It appears that the symptoms, if not the diagnosis, for these medical problems long pre-date the plaintiff’s employment with the defendant. The plaintiff’s medical history has been placed before the court detailing the dates and places of medical appointments and, where the information is recorded, the reason for the appointment and the treatment offered. For present purposes I do not need to reproduce that information in this judgment. Evidence of Dr Trevor Myers [17] Dr Trevor Myers, consultant physician, provided a medico-legal report to the plaintiff’s solicitors dated 1 February 2010.13 He concluded at paragraph 5: “In view of the history, current symptoms and clinical findings, I have no doubt that this patient is totally and permanently disabled and will remain so despite the extensive medical treatment which she is having and which she will require for the remainder of her life.” [18] Dr Myers did not address in his report the question of when the plaintiff’s disabilities started. [19] The plaintiff tendered a diary note of a telephone conversation that occurred on 9 March 2011 between Dr Myers and the plaintiff’s counsel, which Dr Myers confirmed as being accurate by his signature on 13 March 2011. 14 That note relevantly reads: “Today I was present for a telephone conversation between Ms Jessica McClymont of counsel and Dr Trevor Myers. 1. Ms McClymont asked Dr Myers whether he believes, based upon Lauren Dukker’s history, as relayed to him and on the assumption that this is a true and correct history, that she has been continually, totally and permanently disabled since the onset of her symptoms in 2005. 13 Exhibit 1. 14 Exhibit 2. -- 6 of 22 -- 7 Dr Myers stated in response that, provided that the history is correct, he believes that Ms Dukker would have been disabled firstly, by her symptoms in 2005 due to the fact that as a result of these symptoms, she then came to have a number of operations in April 2006. Dr Myers said he believes that there is likely to have been an objective basis for those symptoms. Dr Myers went on to say that once Ms Dukker had had her surgeries, the undergoing of that surgical treatment would have disabled her from employment from the time that she has had the ileostomy bag. 2. Secondly, Ms McClymont asked Dr Myers whether, on the basis of the history and assuming the correctness of that history, the disablement had its onset at the time of engaging in regular remunerative work, which was the work she was doing with Telstra. Dr Myers said that to answer to (sic) that again relies on the history given, but based on that history, he says that Ms Dukker would have been disabled from that time. 3. Thirdly, Ms McClymont asked Dr Myers about the definition of total and permanent disablement in the policy and whether Ms Dukker’s illness or injury wholly prevents her from engaging in regular remunerative work for at least six months in a row and the illness or injury means that she is unlikely to ever work in or attend to regular remunerative work for which she is reasonably fitted by education, training or experience. Dr Myers believed that Ms Dukker does meet this definition saying that she might occasionally be capable of undertaking some sporadic work but would be unlikely to be fit to engage in regular remunerative work.” [20] Under cross examination however, Dr Myers’ evidence differed on this topic: “Now, what I am suggesting to you, Doctor, is that this plaintiff’s disability in fact started before she engaged in regular remunerative work for the defendant, which started on 4 March 2005. Based on the medical history, particularly that contained in the records of the Cleveland Central Medical Centre, do you accept the proposition that she was so disabled prior to the 4th March 2005?— No, I can’t be - I don’t know whether that was the case or not. What I do know is the history that was given to me was that the disability, which in my opinion has prevented her from working ever again, that is to say her bowel problems, started at the time when she was first employed by – after – in 2005 and that the concatenation of events after with the various surgeries were the things that leave her in the present predicament such as she won’t be able to – to work. The things of which I’m aware prior to her employment, that is the polycystic ovaries syndrome, while it might have disabled her temporarily -- 7 of 22 -- 8 would not have prevented her from working in the long term, nor would asthma, nor would her rheumatoid condition. So the condition for which I think – is a consequence of which I think she is unable to work is her bowel problem, which from my understanding started in 2005.”15 … “Now, the history, I suggest to you, when one reads the records of the Redlands Hospital and the General Practitioners Clinic, indicates that Ms Dukker’s disablement did not have its onset at the time she commenced regular remunerative work with Telstra in 2005 but rather it had its onset over a period of many years prior to March of 2005. Do you agree with that proposition? -- No, I don’t. To simplify matters, the girl had been constipated all of her life. She was having some abdominal pains and some discomfort, sure, and some doctor visits for this but she was able to keep going and was able to do remunerative work. Looking at her sickness certificates delivered by her local doctor, she was only off work for one or two days at a time and not all that frequently until December 04, when she was off for a week, and that was about the only time off work. I think the total disability came as a consequence – after her first operation. Had the operations not taken place, its quite possible she may have been able to continue to work just having constipation, having abdominal pain, but everything happened following the surgery. The first operation, the colectomy was unsuccessful. This led to an ileostomy, which was unsuccessful and which prolapsed and which led to repair, which led to abdominal pain, which led to a totally untenable situation. That ----- Those procedures – sorry, I didn’t mean to interrupt you. Continue if you hadn’t finished? - - No, no, that’s fine. Those procedures that you are talking about took place from 2006 onwards? - -Yes. And I suggest to you, firstly, that you rather downplay the significance of the symptoms prior to March 2005 by saying that the plaintiff had some problems prior to that time. It was, I suggest to you, far more significant than that? - -Well, they didn’t seem, really, to prevent her from working. As I said, with the sick leave certificates she was only off for a day at a time and seemed able to continue doing a number of jobs. I don’t know why she left each job or when but it became crucial in 2005.”16 ... “Can I also inform you, doctor, that in her claim form for her insurance claim – Document 11 Exhibit 4 your Honour – in response to questions 21 and 22, she said this. Question 21 asked, “What is the exact nature of your injury or illness?”, and the plaintiff wrote, “Severe endometriosis. Severe asthma. Severe bowel problems. Supraventricular tachycardia.” 15 Transcript p 1-88, l 58 to p 1-89, l 21. 16 Transcript p 2-54, l 20 – p 2-55, l 10. -- 8 of 22 -- 9 She was then asked in question 22, “On what date did the injury occur or did you first become ill?” She answers, “28th of February 2003. Different dates for different conditions.” Dr Myers, can I again suggest to you that the plaintiff’s – the onset of the plaintiff’s disablement was prior to the March 2005, asking you to assume the correctness of the answers that had been provided and the occupational history and the records of the medical practitioners and specialists that you have before you? - - Again, her work history is reasonably good for a girl who left school at 14 or 15, although at times she was only working 25 hours. I don’t know whether that was because she was unable to or because the work wasn’t available, but she was virtually employed for the whole time with very little time off work. Now, the illnesses that she has, endometriosis certainly is a problematical condition that will trouble her for her whole life that it wouldn’t be of the severity that would stop her from working permanently. The supraventricular tachycardia results in episodes of rapid heartbeat. She had unsuccessful surgery for it, but it would not prevent her from working in virtually any capacity, and I know that over recent years she’s had no treatment at all for that, and that seems to still be under control. So, none of those things, I don’t think, would have prevented her from working and none of them are severe enough until 05 to make her totally and permanently incapacitated. Now, everything that she had had its seeds in childhood, really, and come on over a period of time, but they weren’t severe enough until 2005 to prevent her from working in any occupation, and that severity was grossly - - - I’m sorry, I just didn’t hear what you said last? - - Oh, that severity was grossly exacerbated by the unsuccessful surgery which she’s had which has now rendered her completely incapacitated.”17 … “Has it been ultimately determined from what you can tell from the medical reports and records particularly, I suppose, those of Drs Stevenson and Johnston, what this young lady has that’s caused the need for the significant surgery? - - No, its not. It has not. Initially the girl was constipated for a great deal of her life and had very slow transit time of faeces through her bowel and they considered that she might have a congenital problem whereby you lack the appropriate nerve fibres to progress material along the bowel. That is Hirschsprung’s Disease. In point of fact, when she had all the surgery, none of these things were found, and looking at the pathology report from Dr Machet or Machet, all he found was what we call a cathartic colon, that is melanosis coli which is the result of the colon being overstimulated by aperients over a long period of time. By what? - - Things to make it go, aperients. Oh, I see? - -Yes, over a long period of time, so she had the misfortune to have very extensive and not altogether successful surgery, and in the absence of a diagnosis even before or post operatively - - - 17 Transcript p 2-56, l 40 to p 2-57, l 20. -- 9 of 22 -- 10 Could you just repeat that last passage, please? - - Unfortunately she suffered a misfortune not to have a definitive diagnosis either before or after the surgery, so that it wasn’t a structural disorder whereby we can call in Crohn’s disease or ulcerative colitis or any of the demonstrable things but a function disorder, that is to say the bowel just didn’t work properly. So, Dr Myers, this had been a problem which had been present in the plaintiff for many years prior to March 2005? - -Yes. But which perhaps manifested itself in more significant symptoms in about May – April/May 2005? - -That’s precisely what I’m saying. But she has already been -----?—Yes. -----to see Dr – sorry, I have just forgotten his name. Dr Fanning, a gastroenterologist -----?—Yes. -----on the 24 th of February 2005 and Dr Fanning referred her to Dr Stevenson, Dr Stevenson, the colorectal surgeon, whom she saw on 18 March 2005? - -Yes. So, the problems were severe enough in February of 2005 for her to be referred to her GP by her GP to Dr Fanning. He was concerned enough to send her to Dr Stevenson, who wasn’t – who didn’t see her until 18 March 2005. So, although the symptoms might have been getting worse in May they were certainly getting significantly worse, I suggest to you, in early 2005, such that she had some presentations to the Redlands Hospital followed by visits to her GP, and in turn referrals to a gastroenterologist and a referral by that gastroenterologist to a colorectal surgeon? - - Yes. That suggest, doesn’t it, that this lady’s condition had started prior to March of 2005? - - I’m not disputing that for a moment. What I’m saying is that this girl had obvious health problems for a long period of time but they’d never been such as to prevent her from working until May 2005 and then they were compounded following the surgery which occurred subsequent to that. Dr Myers, is it the case that the plaintiff really only became totally and permanently disabled from work following the surgical procedures- - -? - -Yes. - - - - - - in 2006? - - I would have thought so, yes. All right? - - But I don’t know what happened at the end of 2005 after she stopped – after she stopped work. She was declared unable to work and then had the various surgical procedures which went so wrong. So, you are quite simply unable to express an opinion on her capacity to engage in regular remunerative work throughout the remaining course of -- 10 of 22 -- 11 2005 after the 19th May 2005? - - Yes, but I understand that people wrote certificates to say that she was unable to work during that period of time.” Now, can I suggest to you, Dr Myers, that you are not in a position to express an opinion that the plaintiff was totally and permanently disabled from work for the period of six months after she last worked on the 19th May 2005? - - I would not be in a position to say that, because I wasn’t there, but the people that were apparently thought that she was unfit to work. All right. Dr Myers, in your opinion, did the plaintiff, in fact, become totally and permanently disabled from participating in regular remunerative employment after the total colectomy on the 24th April 2006? - -Yes, yes. That, of course, was before the ileostomy of the 15 th September 2006?- - Yes. So that first surgical procedure really put her on a downhill path, I suppose? – It seemed to be the case, yes.”18 [21] In re-examination, Dr Myers then said: “Doctor, having regard to those symptoms, do you have any cause to change the opinion which is expressed in the second paragraph of your opinion as recorded in the telephone note of 9 March 2011? - - No, not really, no. And, doctor, do you have any cause to change the opinion which you expressed in the paragraphs which are numbered 2 of that record of your opinion? - - No.”19 The Plaintiff’s Claim [22] The plaintiff claims the sum of $100,000 for damages for the loss suffered as a result of the defendant’s negligence or for breach of fiduciary duty or contractual duty owed to the plaintiff. [23] The plaintiff alleges that the defendant expressly or impliedly represented to the plaintiff that the forms had been forwarded to AMP for the purpose of the plaintiff becoming a member of the AMP Superannuation Fund and for the purpose of arranging the insurance cover requested by the plaintiff. [24] The plaintiff alleges that the particulars of the express or implied representation can be found in the payslips to the plaintiff which contained entries recording the payment to AMP of Superannuation contributions on her behalf. [25] Further or in the alternative, the plaintiff alleges that the defendant owed a duty of care to the plaintiff and or was under a fiduciary duty to the plaintiff to promptly forward the forms to AMP for the purpose of, inter alia, arranging the insurance cover requested by the 18 Transcript p 2-61, l 5 to 2-62, l 55. 19 Transcript p 2-66, l 5 to l 12. -- 11 of 22 -- 12 plaintiff. In a further alternative the plaintiff alleges that it was an implied term of the contract of employment between the plaintiff and the defendant that the defendant would do so. [26] The plaintiff alleges that the defendant, contrary to its representation and in breach of its duty of care, fiduciary duty or contractual duty, did not forward the forms to AMP until or about 16 June 2005, and as a result the plaintiff incurred damages, being the loss of benefit payable pursuant to the policy in the sum of $100,000. The Defence [27] The defendant denies: (a) that it owed a duty of care of the kind alleged by the plaintiff; (b) that it was under a fiduciary duty to the plaintiff of the kind alleged; and (c) that it was an implied term of the contract of employment that the defendant would forward the insurance questionnaire to AMP. [28] The defendant says that it complied with its obligations at law, paying superannuation contributions on behalf of the plaintiff as it was statutorily required to do. [29] The defendant further alleges that the plaintiff has not only failed to prove causation, but has also failed to establish the existence of a duty of care, or of a fiduciary duty or the existence of an implied provision in the contract of employment. [30] The defendant further pleads that even if a fiduciary duty is imposed on the defendant, that duty does not reach to the extent pleaded by the plaintiff. [31] Finally, the defendant pleads that the plaintiff has failed to prove that her disability started when she was engaged in regular remunerative work with the defendant, or in the alternative, within six months after she ceased regular remunerative work with the defendant. Totally and Permanently Disabled [32] The outcome of this matter depends heavily on whether the plaintiff falls within the definition of Totally and Permanently Disabled as defined in the PDS (see paragraph 14). If so, then the other issues as identified above require careful consideration. If not, the plaintiff’s claim must necessarily fail. [33] It is not disputed that the plaintiff is now disabled.20 The timing of the onset of that disability is however hotly disputed. [34] The plaintiff claims that her disability commenced on 19 May 2005 i.e. her last day of work. The defendant claims that the plaintiff’s disability commenced sometime before she commenced working for the defendant or alternatively, some time after six months had elapsed after she ceased to be engaged in regular remunerative work. [35] There is no doubt that the plaintiff’s last day of work was 19 May 2005. There is equally no doubt that the plaintiff had suffered and was at that time continuing to suffer 20 Paragraph 1 – defendant’s written submissions. -- 12 of 22 -- 13 from a number of health complaints which had commenced well before she took up employment with the defendant. [36] In her unsuccessful claim application (dated 5 December 2005)21 the plaintiff listed “the exact nature” of her “injury or illness” as: “Severe endometriosis, severe asthma, severe bowel problems, Supraventricular tachycardia.” [37] In that same form she said that she first became ill on 28 February 2003. She also said: “… it wasn’t until around 19 May 2005 that my condition got worse especially my endometriosis. The treatment I was taking stopped working and the disease intensified and there is no other treatment I can take for this condition so the pain and symptoms of this disease are very severe and cause me to take strong pain killers every day, there is no cure for this disease. While I was also working at Challenge I started to suffer from severe constipation and bowel discomfort. I am currently getting tests done on my bowel to diagnose my condition. Doctors think I have Hirschsprungs Disease and may have to have my whole large intestine removed. This condition also causes lots of pain and discomfort and the only treatment I can take are painkillers (Tramadol) and laxettes.” [38] As I have already noted it was Dr Myers’ evidence, that the illness which has rendered the plaintiff totally and permanently incapacitated, is that which arose from her “bowel problem”. Dr Myers specifically noted that the plaintiff had not received a definitive diagnosis either before or after surgery, meaning that she did not suffer from a structural disorder, Crohn’s disease or ulcerative colitis or any other “demonstrable thing”. His view, was that the plaintiff suffered from a function disorder arising from the overuse of aperients. [39] Notwithstanding Dr Myers’ answers in re-examination (see paragraph 21 above), he was nevertheless clear in his evidence that: (a) “… the concatenation of events after, with the various surgeries were the things that leave her in the present predicament”; (b) the only health problem that has caused the plaintiff to be unable to work is the bowel problem; (c) the surgery in 2006 grossly exacerbated the symptoms that had been present up to that point in time; (d) the total and permanent disability commenced after the plaintiff’s first operation on 24 April 2006 and that if she had not had that surgery she may have been able to continue to work; (e) that the need for the surgery was not supported by diagnosis either pre or post operatively; and (f) he was in no position to express an opinion that the total and permanent disablement commenced either when the plaintiff was in regular remunerative work or for the period of six months after she finished work on 19 May 2005. 21 Exhibit 4, document 11. -- 13 of 22 -- 14 [40] The defendant has submitted that despite the fact that Dr Myers cannot express an opinion on the plaintiff’s capacity to engage in regular remunerative employment throughout the remainder of 2005 following 19 May, the plaintiff has tendered no medical evidence to support the contention that she had such an ongoing incapacity. The plaintiff in response says that the defendant’s submission is incorrect, and that she has tendered not only Dr Myers’ opinion, but also medical certificates and a letter dated 2 August 2005 by the plaintiff’s general practitioner.22 [41] As I have already noted, Dr Myers’ evidence does not support the plaintiff’s contention. Neither, in my opinion, do the medical certificates contained in Exhibit 3. The certificate dated 9 August 2005 from Dr David Hasoon (the plaintiff’s general practitioner) says: “… in my opinion is suffering from a heart problem as well as bowel problems. She is under the care of cardiologist at present and having ongoing treatment and will need bowel surgery in the near future. She is unlikely to return to work for a long period of time.” That is the only certificate of relevance contained within Exhibit 3. [42] The only other relevant document in that Exhibit is a letter dated 18 January 2006 from Dr Maria Haase (who worked with the plaintiff’s GP, but had only seen the plaintiff herself occasionally) to the Chief Medical Officer for AMP Life Limited. In that letter, Dr Haase, after referring to all of the plaintiff’s medical conditions (both actual and potential) said: “She is definitely unfit to do any work in her previous position, or any work at all until her medical conditions are dealt with.” Of course, this letter was written some eight months after the plaintiff ceased regular remunerative work. [43] There are no medical certificates before the court covering the period 20 May 2005 to 8 August 2005. [44] Given the date of the letter from Dr Haase, it is of no assistance in determining whether the plaintiff’s illness wholly prevented her from engaging in regular remunerative work for at least six months in a row from 19 May 2005. [45] Similarly, Dr Hasoon’s certificate is also unhelpful in that regard. Dr Hasoon places some considerable reliance on the plaintiff’s “heart problem”. Yet Dr Myers was of the view that the plaintiff’s heart problem would not have prevented her from working. Dr Myers also gave evidence that the plaintiff in fact did not require bowel surgery and that it has only been as a result of that unnecessary surgery that the plaintiff has been rendered unfit for employment. Furthermore, the plaintiff’s medical records show that no decision had been made as at August 2005 for the plaintiff to have bowel surgery. In fact, the first referral to the doctor who performed the surgery was not until 3 April 2006, and even then, conservative options were being considered.23 It was after that referral that the plaintiff elected to undergo a laparoscopic total colectomy with rectopoxy.24 Given that 22 See Exhibit 3. 23 Exhibit 3, documents 25 and 30. 24 Exhibit 19. -- 14 of 22 -- 15 Dr Hasoon did not give evidence, his medical certificate, in these circumstances does not by itself, or in conjunction with any other evidence, persuade me that the plaintiff’s disability commenced during or within six months of ceasing regular remunerative work. [46] The plaintiff herself gave evidence that she was incapable of working after 19 May 2005 due to her health problems. I do not however accept her evidence in that regard in the absence of expert evidence. The plaintiff did not impress me as being an entirely truthful witness. She attempted to portray herself as someone who had suffered some minor health problems in the past, which by the time of her employment with the defendant, had been remedied, thus rendering her in a “fine” state of health.25 She also claimed not to have had an extensive medical history as at 4 March 2005. Her medical records26 reveal the inaccuracy of both statements. The descriptor “extensive” is most appropriate in describing her medical history. And in fact, she was at that time, awaiting consultation with a colorectal surgeon upon referral by a gastroenterologist. [47] Similarly, I am of the view that the plaintiff was deliberately untruthful when answering some questions in the document entitled “Medical Disclosure”. In that document she was asked if she currently (i.e. as at 4.3.05) or has ever suffered from certain listed health complaints. In response to the ailments of asthma and heart trouble she answered no. She was also asked if she is suffering from or has ever suffered from any other health problems. She also answered no to that question. Such answers are demonstrably, and in my view, deliberately false. [48] In cross-examination the plaintiff when questioned about this topic admitted that her answers were incorrect. In relation to the existence, past or present, of asthma, she said that she didn’t know why she gave the answer she gave. On the topic of a heart condition, she said that she “didn’t read the question right”, and that she thought that her heart problems had been cured and that she was only being asked about her present circumstances. 27 [49] Similarly, I note that the medical disclosure form also asks: “Do you suffer any medical condition that requires the frequent use of prescribed medication?” Again, the plaintiff answered no, notwithstanding that she was, at that time, using Ventolin, which was a prescription medication, on a daily basis for her asthma.28 [50] Given the plaintiff’s medical history up to that time, 29 I do not accept the plaintiff’s explanations for those misleading answers. In my opinion, she deliberately provided misleading information. 25 Transcript p 1-12, ll 20-30. 26 Exhibit 4. 27 Transcript p 1-70, l 38 to p 1-71, l 36. 28 Transcript p 1-32, ll 15-30. 29 The plaintiff had 21 consultations in the three months prior to 4 March 2005. Those consultations were with her GP, the Redlands Hospital and various specialists. She had undergone a heart ablation on 8 February 2005 and had been referred to a colorectal surgeon by her gastroenterologist on 28 February 2005. During those consultations she complained variously of urinary tract infection, cough, fever, asthma, heart palpitations, low pelvic pain, lower abdominal pain, delayed urination, vomiting, nausea, inability to pass urine for six days, back pain and severe abdominal pain. See Exhibit 3; Exhibit 4 documents 9 and 10; Exhibit 12; transcript p 1-53, l 35 to p 1-55, l 55; p 1-56, ll -- 15 of 22 -- 16 [51] Furthermore, another of the forms completed by the plaintiff on 4 March 2005 was entitled “registration kit”.30 The plaintiff was asked to list three previous employers or managers who could be contacted for a reference. The form states that “personal referees will not be accepted”. The plaintiff nominated two referees, one of whom was her own mother, Julie Dukker. The plaintiff at that time went by the name “Cookson”. She did not reveal that Julie Dukker was her mother, nor did she reveal, as she did under cross- examination, that she not only has never worked under the supervision of Julie Dukker, she has never even worked in the same branch office as her. I do not accept the plaintiff’s excuse that she was not trying to be “tricky” and that the only person at her previous employment that could speak of her had since retired. I have no doubt that a truthful person would not have proceeded in that way. [52] Accordingly, neither the plaintiff’s evidence, Dr Myers’ evidence or the plaintiff’s medical records persuade me that her disability falls within the definition contained in the PDS. I am not persuaded that her illness wholly prevented her from engaging in regular remunerative work for at least six months in a row commencing whilst she was in regular remunerative work or within six months of ceasing regular remunerative work. [53] This is a threshold issue. Given my findings on this point, the plaintiff’s case must fail. I will nevertheless briefly comment on the remaining submissions. The Legal Relationship Between the Plaintiff and the Defendant Duty of Care [54] There is no doubt that an employer owes a duty to take reasonable care to avoid causing harm to an employee, which is usually discussed in terms of an obligation to avoid physical harm to an employee. [55] In the present instance, it is alleged that the defendant’s duty to take reasonable care extends to not causing financial loss to the plaintiff. [56] The principles relevant to determining the existence of a duty of care to avoid economic loss (separate from personal injury or damage to property) were recently summarised by his Honour Judge McGill in Kilvington v Grigg & Ors.31 That was a case in which it was alleged that a medical practitioner had a duty to provide a certificate for the purpose of the plaintiff accessing his superannuation monies on the ground of permanent incapacity. [57] His Honour held as follows: “[58] Liability in Australia for economic loss separate from any personal injury or damage to property dates from the decision of the High Court in Caltex Oil (Australia) Pty Ltd v The Dredge ‘Willemstad’ (1976) 136 CLR 529. In that case it was held that the owners of the dredge which damaged an underwater pipeline were liable to the oil company that owned the oil that used the pipeline, and depended upon its presence for its operations, for economic loss suffered as a result of the damage. The 1-25; p 1-56, l 50; p 1-57; ll 25-35; p 1-33, ll 1-30; p 1-58, l 15; p 1-40; p 1-58, l 35, p 1-60, l 60; p 1- 67, ll 5-20. 30 Exhibit 6. 31 [2010] QDC 496. -- 16 of 22 -- 17 president of the Court of Appeal considered this and subsequent leading authorities in the area in Fortuna Seafoods Pty Ltd v The Ship ‘External Wind’ [2008] 1 Qd R 429. Her Honour said at p 437: ‘This developing area of Australian law has moved incrementally and cautiously. … Caltex and Perre v Apand Pty Ltd (1999) 198 CLR [180] suggest that the determination of whether a defendant owes a claimant a duty of care not to cause mere economic loss will depend on a combination of factors including the reasonable foresight of the likelihood of harm; the defendant’s knowledge or means of knowledge of an ascertainable, determinate class of persons who are at risk of foreseeable harm; the claimant’s vulnerability or whether they are unable to protect themselves from the foreseeable harm; whether the implication of a duty would impair the defendant’s legitimate pursuit of autonomous commercial interests including the existence of any contracts between the claimant and defendant; whether the damage flowed from the occurrence of activities within the defendant’s control; the closeness of the relationship between the parties and the existence of any other special circumstances justifying compensation. There is, however, no simple formula to be applied in determining whether the application of these principles to the facts of this case has the result that “external wind” is responsible for Fortuna Seafoods claimed economic loss. The answer to that question requires some detailed attention to the pertinent facts of this case.’ [59] That case involved facts which had some similarity to the Caltex case, in that it involved damage by the negligent navigation of a ship to property other than the property of the plaintiff, as a result of which the plaintiff suffered economic loss; in this case, the defendant sank a commercial fishing vessel owned by a different company which interfered with the plaintiff’s business processing and selling the catch from that fishing vessel; the two companies had a single integrated business, said to be a common arrangement of the fishing industry. By a majority the Court of Appeal upheld the existence of a duty to the plaintiff in that case. [60] Two things emerge in particular from this passage. The first is that it is necessary for a court to be very careful before concluding that a duty of care not to cause any economic loss exists in any novel situation. The second is that the existence and content in any particular case of such a duty of care depend very much on the individual circumstances of the particular case.” [58] In Perre v Apand Pty Ltd,32 McHugh J said: “What is likely to be decisive, and always of relevance, in determining whether a duty of care is owed is the answer to the question, ‘How vulnerable was the plaintiff to incurring loss by reason of the defendants 32 (1999) 198 CLR 180 at [104]. -- 17 of 22 -- 18 conduct?’ So also is the knowledge of the defendant concerning that risk and its magnitude.” [59] In Woolcock Street Investments Pty Ltd v CDG Pty Ltd,33 McHugh J identified five principles relevant to determining whether a duty of care existed in cases of liability for pure economic loss.34 Those principles were concerned with: • reasonable foreseeability of loss; • indeterminacy of loss; • autonomy of the individual; • vulnerability to risk; and • knowledge of the risk and its magnitude. [60] Taking all of the above matters into consideration, I accept that an employer has a duty to act reasonably to avoid foreseeable financial loss to an employee. [61] In this case, that raises three questions: (i) was this a foreseeable financial loss?; (ii) did the defendant fail to act reasonably to avoid foreseeable financial loss?; and (iii) did that failure, if it is found to exist, in fact cause a foreseeable financial loss? [62] The plaintiff submits that the delay in submitting the questionnaire to AMP was a failure on the part of the defendant to act reasonably. I accept that submission. No explanation has been placed before the court for the inordinate delay in the forwarding of the questionnaire to AMP. I also accept that this was a foreseeable financial loss. I rely on the following in support of those conclusions: • the defendant, through its employee Ms Dickie, had advised the plaintiff that it was compulsory for its employees at Telstra to take out TPD and death insurance;35 • the policy was one specifically negotiated by the defendant with AMP (through its broker) for the benefit of the employees;36 • the defendant assumed the responsibility to forward the insurance questionnaire to AMP in a timely manner; • the defendant knew that the plaintiff was relying on it to do so; • the defendant had not informed the plaintiff that it had not done so; • the plaintiff was vulnerable to economic loss as the result of the defendant’s failure to fulfil its undertaking to send the form in a timely way; • the defendant knew of the plaintiff’s vulnerability; 33 (2004) 216 CLR 515. 34 Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515 at [74]. 35 Transcript p 1-18, l 9; Transcript p 2-21, l 34. 36 Transcript p 2-3, l 7. -- 18 of 22 -- 19 • it was objectively foreseeable that if the insurance questionnaire was not sent in a timely way, the plaintiff could suffer economic loss; • there is no question of indeterminacy of loss; and • no explanation has been provided for the defendant’s failure to process the questionnaire in a timely way. [63] I am comforted in my conclusions by the remarks of Wilcox J (obiter) in United Superannuation Pty Ltd v Harrison,37 a case in which an employee commenced work in June 1997 and died on 29 July 1997, without institution of death cover in conjunction with her superannuation. On an appeal from a decision of the Superannuation Complaints Tribunal, Justice Wilcox said: “[49] This does not mean that Mr Harrison (the executor of the estate of the employee) has no redress. On the contrary, the estate seems to have an irresistible claim against either Lorjona (the employer) or United (the Superannuation Fund Trustee). The delay in nominating Ms Reynolds to Citicorp (the insurer) was clearly the fault of one or both of these companies; and that delay is the reason why no death benefit is payable. [50] If it is correct (as United now asserts), that United heard nothing about Ms Reynolds (the employee) until after her death, it cannot be said that United was responsible for any relevant delay, and therefore the loss of the benefit. However, on that basis, Lorjona was responsible for a lengthy delay that caused loss of the benefit. Lorjona could, and should, have nominated Ms Reynolds to United as soon as she entered the company’s employment; thereby enabling United to nominate her to Citicorp. Any such delay by Lorjona may have been a breach by it of its contract of employment with Ms Reynolds; alternatively, it seems to be a breach of its duty of care towards her.” [64] Furthermore, despite some evidence to the contrary, I accept the plaintiff’s evidence in re- examination when she said: “You have given some evidence about some discussions on the first day and some completion of those forms?---Yes. Did those discussions and the completion of those forms leave you to believe anything about what cover you had for insurance?---I just thought I had the cover that I’d filled out on the forms”.38 [65] The plaintiff was not provided with copies of any of the forms that she completed on 4 March 2005, and was therefore unable to carefully read the fine detail at some later time. In those circumstances, it was not unreasonable for her to have formed such a belief. [66] For these reasons I am of the view that the defendant did have a duty to take reasonable care to avoid causing foreseeable financial loss to the plaintiff. For reasons that I give 37 [2001] FCA 1468 at [49] - [50]. 38 Transcript p 1-80, ll 9-15. -- 19 of 22 -- 20 elsewhere in this judgment however, I do not accept that the actions of the defendant in fact caused financial loss to the plaintiff. Contractual and/or Fiduciary Duty [67] Given my findings above, there is no reason to embark upon a detailed examination of the existence or otherwise of these duties. [68] The plaintiff has submitted that it is well established in Australia that there is an implied term in a contract of employment that the employer will act in good faith, and more generally, not in a manner such as to damage the relationship of confidence and trust between employer and employee. [69] I don’t necessarily accept that such a proposition is well established. As P. Lyons J said in the recent decision of Wright v Groves:39 “The defendant’s submissions refer to a statement from a leading Australian textbook on this area of the law to the effect that it is part of the English law that a Contract of Employment includes an implied term of trust and confidence; but that there is no definitive High Court decision accepting this as part of Australian law. There is clearly a substantial body of authority in this country which has accepted the implication of such a term, and it may well be thought that the implication of such a term forms part of the ratio of at least some of those decisions. Nevertheless, it is also clear that in some cases there have been expressed reservations about whether such a term is to be implied. I therefore propose to proceed on a basis that this area of the law in Australia is unsettled.” [70] His Honour then identified a qualification on the implied term which arises from the following passage from the judgment of Allsop J (as His Honour then was) in Thomson v Orica Australia Pty Ltd: 40 “… there is ample authority for the implication of a term in a Contract of Employment that the employer will not, without reasonable cause, conduct itself in a manner likely to damage or destroy the relationship of confidence and trust between the parties as employer and employee…” [71] P. Lyons J accepted that if such an obligation exists, it is imposed on both employer and employee.41 [72] In Russell v The Trustees of the Roman Catholic Church for the Arch Diocese of Sydney,42 Basten JA said: “[30] Rothman J considered separately whether there were implied terms of good faith and of not acting, without reasonable and proper cause, in a manner calculated to destroy or seriously damage the relationship of confidence and trust between employer and employee. In relation to the former, he noted that the expressed terms of the contract were basic in 39 (2011) QSC 066 at [53]. 40 [2002] FCA 939 at [141]. 41 Wright v Groves (2011) QSC 066 at [55]. 42 [2008] NSW CA 217. -- 20 of 22 -- 21 their extent and that the parties envisaged a continuing, indefinite period of employment, where the precise extent of the obligations of the employee were not fully known at the time the contract was entered into: at [118]. His Honour continued: ‘In those circumstances, the rights and/or duties reposed in either the employer or the employee would need to be exercised honestly and reasonably; with prudence, caution and diligence, and with ‘due care to avoid or minimise adverse consequences’ to the other party that are inconsistent with the agreed common purpose and expectations of the parties to the contract. But all the while, the parties have the capacity to exercise their rights in their own interests.’ [31] In relation to the second implied term, his Honour noted that the characterisation of an employer/employee relationship has one importing duties of loyalty, honesty, confidentiality and mutual trust, was the subject of high authority, citing, at [129], Concut Pty Ltd v Worrell [2000] HCA 64; 75 ALJR 312 at [17] and [26] (Gleeson CJ, Gaudron & Gumnow JJ) and [51(3)] (Kirby J) and Mahmud v Bank of Credit & Commerce International SA (in compulsory liq) [1998] AC 20: Russell at [99], [132] and [133].” [73] In Taske v Occupational and Medical Innovations Limited,43 a case dealing with unfair dismissal, Moynihan J said:44 “In a case such as this there is an implied term that the parties act in good faith in a relationship of mutual trust and confidence.” [74] Despite the uncertainty of the law in Australia on this point, in my view the authorities lean to the existence of such an implied term in a contract of employment. [75] A difficulty that exists in this matter however in part, arises from the dishonest answers that the plaintiff gave in the documents “Medical Disclosure” and “Registration Kit” (see paragraphs 46 to 51 above). I have no doubt that providing those deliberately false answers for which the plaintiff had no reasonable cause, was conduct which was likely to damage or destroy the relationship of confidence and trust between the parties as employer and employee. [76] Of course, the defendant did not know of the falsity of those answers at the relevant time. Nevertheless, in my opinion, such dishonest conduct on the part of the plaintiff offends the implied term that the parties act in good faith in a relationship of mutual trust and confidence. [77] Given my findings above, I do not need however to decide this issue. 43 [2007] QSC 118. 44 [2007] QSC 118 at [53]. -- 21 of 22 -- 22 Conclusion regarding the legal relationship [78] I find that the defendant owed a duty to the plaintiff to take reasonable care to avoid causing foreseeable financial loss to the plaintiff. The defendant’s actions however did not in fact cause actual financial loss to the plaintiff. [79] The defendant may have also owed a similar duty pursuant to an implied term in the contract of employment or via some fiduciary obligation. I need not determine that issue given my other findings in this case. Would AMP have paid out on the claim? [80] Finally, for the plaintiff to be successful, she would also have to prove on the balance of probabilities, that her claim to AMP would have been paid if the policy had been taken out at the time the plaintiff says it should have. In response, the defendant has argued that the plaintiff has adduced no evidence or proof that: (a) AMP would have reached the same conclusion that Dr Myers reached about the date of the disability becoming total and permanent; and (b) the claim would have been paid. [81] In relation to the former, given my conclusion that the disability did not become total and permanent within six months of 19 May 2005, I am not satisfied that AMP would have paid the insurance claim even if the questionnaire had been submitted promptly. [82] Putting that issue to one side, I note that the plaintiff has adduced no direct evidence that AMP would have paid out on her claim even if: (a) her disability had become total and permanent within the requisite time period; and (b) the questionnaire had been submitted to AMP promptly. [83] Nevertheless, given that this was a policy that required no information about the applicants state of health, I accept that a payout would have occurred if the prerequisites mentioned in paragraph 82 (a) and (b) above had been complied with. [84] Conclusion 1. The plaintiff has failed to establish that her disability became total and permanent while she was engaged in regular remunerative work for the defendant or within six months of the cessation of that regular remunerative work. 2. The plaintiff has failed to establish that AMP would have paid out on the Total and Permanent Disability Policy even if the relevant form had been submitted promptly. Order [85] The plaintiff’s claim is dismissed. [86] I shall hear submissions as to costs. -- 22 of 22 --