October 11, 2017

Jones on Appeal

Hannover Life Re of Australasia Ltd v Jones [2017] NSWCA 233

On 14 September 2017, the New South Wales Court of Appeal dismissed Hannover Life Re’s appeal ordering that it pay Mr Jones the disputed TPD benefit plus costs.   


Mr Jones left school in year 10 and had only ever worked as a metal roofing tradesman.  In December 2002, Mr Jones suffered a repetitive strain injury of the lower back (the Injury) when lifting heavy metal sheets.  Mr Jones underwent successful surgery and despite constant pain, continued to work until October 2011 when he reinjured his back. Mr Jones was 29 years old at the relevant date of assessment.

Hannover declined Mr Jones’ TPD claim on the basis the Injury would not prevent him from returning to work in a light entry-level role such as in retail (hardware), delivery driving or in customer service/telemarketing, which, according to Hannover, were roles within Mr Jones’ education, training or experience (ETE).  Although there was medical evidence which suggested that Mr Jones also suffered from some kind of psychological illness and fear of re-injury, Hannover did not consider the illness represented an impediment to returning to work.

At First Instance:

The Supreme Court of New South Wales held that Hannover’s decision to decline the claim was unreasonable and that Mr Jones was TPD. Brereton J found that Hannover failed to take into account relevant considerations, holding (most notably) that:

  • In addition to the Injury, Mr Jones suffered from Fear Avoidance Syndrome which was a significant psychological impediment and presented a genuine obstacle to returning to work;
  • Hannover did not consider the combined effect of the Injury and the Fear Avoidance Syndrome and the practical realities Mr Jones would face when returning to workforce; and
  • Hannover erred in deciding that the light entry-level roles were roles within Mr Jones’ ETE as his ETE had not ‘shaped and prepared’ him for those roles and most significantly, he did not have any previous experience in customer service.

On Appeal:

Gleeson JA aptly described the role of the court in circumstances such as these, stating “As I have said, the task for the court in the present case is not to assess what it thinks is reasonable and thereby conclude that any other view displays error…Rather, the criterion of the reasonableness of an insurer’s decision is whether the opinion formed by the insurer was not open to an insurer acting reasonably and fairly in the consideration of the claim”.

Referring to Mr Jones’ Fear Avoidance Syndrome, the Court of Appeal concluded:


“Here the insurer failed to take into account a significant component of Mr Jones’ incapacity. That failure by the Insurer was a failure to take into account a relevant consideration. Plainly, the failure by the Insurer to take into account a relevant consideration was a failure to act reasonably and fairly in undertaking the task of forming the opinion as to Mr Jones’ disablement…”


Referring to Mr Jones’ ETE, Gleeson JA affirmed Brereton’s judgment and concluded that although Mr Jones was physically able to engage in the suggested alternative light roles and those roles did not require any retraining they were not occupations for which he was “fitted” by his ETE.  Specifically, Gleeson JA stated:

“The ETE clause requires the Insurer to examine the occupations for which the claimant is “fitted” in the sense of the occupation for which his education, training, and experience has prepared him.  This naturally is shaped by his vocational history…”


Take Away:

The decision in Jones makes it plain that:

  • Insurers must consider the combined effect of all of the claimant’s injuries and illnesses in addition to the practical realities they face when returning to workforce in assessing whether or not they are TPD even with respect to a capacity based definition; and
  • In having regard to the claimant’s ETE, insurers must consider occupations the claimant is 'fitted' by his/her ETE, rather than merely occupations for which the claimant may otherwise be physically or mentally be capable of performing.


Please contact Grace Young or Henry Hall if you would like further information.