Australia: Revisiting retraining in TPD within the insurance policy

Insurance Update

In May 2009, Mr Birdsall suffered an injury to his right wrist and shoulder while lifting a heavy box at work. He was a member of the Motor Trades Association of Australia Superannuation Fund (the Fund) and made a claim for a benefit available under a group life insurance policy issued by Metlife Insurance Limited in favour of the Fund. Both Metlife and the trustee rejected his claim. He then commenced proceedings in the Equity Division of the Supreme Court seeking declarations that he was, and had been since October 2010, totally and permanently disabled within the meaning of the policy issued by Metlife.

He alleged that both the trustee and Metlife owed him a "duty of good faith and fair dealing". He alleged that the trustee had breached this duty as it had "delegated" to Metlife the authority to exclusively determine whether he suffered from a relevant incapacity. As against Metlife, he alleged that there had been a failure to consider the evidence from his treating medical practitioners and the fact that he had made several applications for employment without success.

The judge at first instance agreed that Metlife and the trustee had both failed to consider the medical evidence and job applications. The bundle of unsuccessful job applications was described as "a relevant consideration that each ought to have considered and it was unreasonable for each not to have done so".

However, having made that determination, the judge at first instance ultimately concluded that, having considered all of the evidence, he was not satisfied that it had been established that Mr Birdsall was within the definition of Total Permanent Disability (TPD) in the policy and the trust deed. He therefore held that he was not entitled to the TPD benefit.

Mr Birdsall challenged the correctness of that determination in the Court of Appeal.

On appeal, the Court noted that Mr Birdsall had accepted that he was physically capable of performing each of the 3 roles identified by Metlife. He also gave evidence that, as a result of applying for a job as a vehicle parts interpreter, he understood that he had to be familiar with a particular computer program, which skill could be obtained by completing a TAFE course. He agreed that with "suitable training" he should be able to do that job. However, Mr Birdsall challenged the primary judge's conclusion that the description "work which [he was] reasonably capable of performing by reason of education, training or experience" did not exclude the possibility of a need for further training where that training would not change the character of the work for which he was already fitted but would enable him to use his existing skills to pursue work of that character. He also challenged the primary judge's conclusion that any further training he would have required would have been minimal and it would have been reasonable in the circumstances for him to undertake that training to enable him to utilise his existing skills.

He argued that the commercial purpose of the policy was to provide a benefit in the event that at the relevant date the insured person was unable to obtain employment without further training. In support of the proposition that employment that requires re-training is not work for which a person is reasonably fitted, Mr Birdsall relied upon the decision of Brereton J in Halloran v Harwood Nominees Pty Limited [2007] NSW SC 913. This submission was not accepted by the Court of Appeal, which referred instead to the decision in Hannover Life Re of Australasia Limited v Dargan [2013] NSWCA 57. The appeal judges agreed with the primary judge's conclusion that the need for further training did not mean that Mr Birdsall was not already capable of performing the roles to which it was directed. The expression "reasonably capable" recognises the reality that a person may have to undertake specific training or certification to enable him or her to engage in particular employment for which he or she is otherwise qualified by education, training or experience. That training or certification may be available in the form of a TAFE or other certification course or from the employer.

The Court of Appeal also agreed with the primary judge's conclusion that any further training or certification required would have been minimal and that, in the circumstances, it was reasonable for Mr Birdsall to undertake that training in order to gain employment utilising his existing skills and experience. The Court of Appeal therefore upheld the primary judge's decision in not being satisfied that Mr Birdsall was within the definition of TPD in the policy.

The Appeal judges also raised a number of issues which, due to the way in which the appeal was framed, did not require determination. Specifically, the parties had agreed that it was appropriate for the Court to decide Mr Birdsall's entitlement to the benefit. Basten JA in particular was troubled by this assumption, noting that the Superannuation Industry (Supervision) Act 1983 (SIS Act) provided for an alternative independent decision-making process for a dissatisfied insured and beneficiary. As the SIS Act conferred on the Superannuation Complaints Tribunal all the powers, obligations and discretions that are conferred on the trustee, the Tribunal is therefore placed in the position of the trustee and its decision is substituted for that of the trustee. Although Mr Birdsall did not seek to exercise any rights he may have had under the SIS Act, the existence of the legislative scheme, which provides for challenge to decisions on the basis that they were "unfair or unreasonable", militates against departure by the Supreme Court from the conventional approach to decisions of trustees.

The Court also referred to the tension between the definition of permanent incapacity in the SIS Act and that contained within the policy, which required Metlife to form an opinion as to Mr Birdsall's entitlement to the benefit. Specifically, Basten JA noted that neither the trustee, nor the parties, nor the Court at trial, considered how the phrase "in our opinion", as it appeared in the policy operated for the purposes of the trustee's decision. He also commented that, given that the Superannuation Regulations required a trustee to be reasonably satisfied that an application met the standard test of incapacity before payment of a benefit could be made, the courts may need to re-examine the way in which they dealt with contractual provisions making an entitlement to benefits conditional on the opinion or satisfaction of the insurer.

However, as the appeal was dismissed, it was not necessary to further explore these issues. It will be interesting to see how these issues are dealt with in future TPD cases.

The decision follows in the footsteps of Hannover Life Re of Australasia Limited v Dargan and recognises a person may need to undertake specific training or certification to enable him or her to engage in particular employment for which he or she is otherwise qualified by education, training or experience.

Birdsall v Motor Trades Association Superannuation Fund Pty Ltd [2015] NSWCA 104

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.