IN THE COUNTY COURT OF VICTORIA
AT Melbourne
COMMON LAW DIVISION	Revised
Not Restricted
Suitable for Publication	
General List
Case No.CI-22-00676

 Nathan Rich	Plaintiff	
		
v		
		
TAL Life Limited	Defendant	

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JUDGE:	Clayton	
WHERE HELD:	Melbourne	
DATE OF HEARING:	27 – 28 June 2024, 1 July 2024	
DATE OF JUDGMENT:	21 November 2024 	
CASE MAY BE CITED AS:	Rich v TAL	
MEDIUM NEUTRAL CITATION:	[2024] VCC 1844		

REASONS FOR JUDGMENT
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Subject:	TOTAL AND PERMANENT DISABILITY INSURANCE

Catchwords: 	Whether total and permanent disablement insurance policy responds to claim – where there is injury to neck and shoulder – where there is a pre-existing injury – whether exclusion clause for cervical spine applies – whether other reasonable and prudent insurers would apply exclusion clause – onus of proof - whether insured aware of pre-existing injury -  whether interdependent or concurrent causes of disability – whether  insured totally and permanently disabled

Legislation Cited:	Insurance Contracts Act 1984 ss 29(6), 29(7), 47; Insurance Contract Amendment Bill 2013

Cases Cited:	Baker v Local Government Superannuation Scheme [2007] NSWSC 1173
	Darling Island Stevedoring and Lighterage Co Ltd v Jacobsen (1945) 70 CLR 635
Fidelity and Casualty Company of New York v Mitchell [1917] AC 592
Folan v United Super Pty Ltd [2014] NSWSC 343
Halloran v Harwood Nominees Pty Ltd & Anor [2007] NSWSC 913
LCA Marrickville Pty Ltd v Swiss Re International SE [2022] FCAFC 17
McCarthy v St Paul International Insurance Co Ltd [2007] FCAFC 28
Plaintiff M47/2018 v Minister for Home Affairs (2019) 265 CLR 285
Pressnell v FSS trustee Corporation [2016] VCC 448
Preston v AIA Australia Ltd [2014] NSWCA 165
Vines v Djordjevitch [1955] HCA 19

Judgment:	The plaintiff is entitled to the insured amount. 

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APPEARANCES:
	Counsel	Solicitors	
For the Plaintiff	Mr P Nolan	Maurice Blackburn	
			
For the Defendant	Ms N Hassan	HWL Ebsworth 	

HER HONOUR:

Background

1	In May 2014, the plaintiff, Nathan Rich applied for total and permanent disablement cover with the defendant TAL Life Limited (“TAL”). 
2	In September 2014, TAL issued a policy which included payment of a lump sum if Mr Rich “becomes Totally and Permanently Disabled” (“TPD benefit”). Totally and Permanently Disabled was relevantly defined to mean that:
solely because of a Sickness or Injury, the Life Insured has not been working in any occupation for three consecutive months and, in our opinion, after consideration of medical and any other evidence, is incapacitated to such an extent as to render the Life Insured unlikely ever to be able to work in any occupation for which they are reasonably suited by training, education or experience which would pay remuneration at a rate greater than 25% of the Life Insured’s earnings during their last 12 months of work.
3	Between 1 July 2015 and 1 June 2016, Mr Rich worked as a spray painter and panel beater at a spray painting workshop.
4	On 1 June 2016, Mr Rich was in a motor vehicle accident. Following the accident, Mr Rich suffered neck and shoulder pain and restricted range of motion.  He was diagnosed with a left paracentral protrusion, left C6 nerve root impingement, and a left shoulder soft tissue injury and rotator cuff tear.
5	After the car accident, between 14 November 2016 and 11 May 2017, Mr Rich was employed on a part time basis as a workshop manager for Barry Dickson Paint & Panel (“Barry Dickson”).   This was a position funded by the Transport Accident Commission (“TAC”). He ceased that work on 11 May 2017 in order to undergo anterior cervical spine fusion. He has not returned to work since.  Mr Rich says that after surgery his surgeon advised him he would never return to automotive spray painting or panel beating and the TAC subsequently ceased funding the position at Barry Dickson.
6	Mr Rich made a claim on his insurance policy with TAL for the TPD benefit in September 2017. 
7	He claimed his “compression of spinal cord C5/C6” and “tear in left shoulder” rendered him totally and permanently disabled for any occupation for which he would be suitable by reason of his education, training and experience.
8	Mr Rich claims that the only occupation for which he is suitable is as an automotive spray painter.
9	In his application form for insurance with TAL, Mr Rich represented that he had never had or received medical advice or treatment for back or neck pain. 
10	In fact, Mr Rich had medical advice and treatment for neck pain on a number of occasions before 2014.  For the purpose of this proceeding, Mr Rich accepts that his application misrepresented his neck condition.  
11	On 6 April 2018, TAL exercised its rights pursuant to section 29 of the Insurance Contracts Act 1984 (“the Act”) which relevantly provides as follows:
29 Life insurance 
Scope
(1) This section applies where the person who became the insured under a contract of life insurance upon the contract being entered into:
(a) failed to comply with the duty of disclosure; or
(b) made a misrepresentation to the insurer before the contract was entered into;
but does not apply where:
(c) the insurer would have entered into the contract even if the insured had not failed to comply with the duty of disclosure or had not made the misrepresentation before the contract was entered into; or
(d) the failure or misrepresentation was in respect of the date of birth of one or more of the life insureds.
…
(6) If the insurer has not avoided the contract or has not varied the contract under subsection (4), the insurer may, by notice in writing given to the insured, vary the contract in such a way as to place the insurer in the position (subject to subsection (7)) in which the insurer would have been if the duty of disclosure had been complied with or the misrepresentation had not been made.
(7) The position of the insurer under a contract (the relevant contract) that is varied under subsection (6) must not be inconsistent with the position in which other reasonable and prudent insurers would have been if:
(a) they had entered into similar contracts of life insurance to the relevant contract; and
(b) there had been no failure to comply with the duty of disclosure, and no misrepresentation, by the insureds under the similar contracts before they were entered into.
12	Pursuant to section 29(6), TAL varied the terms of Mr Rich’s TPD cover to include an exclusion clause (the cervical spine exclusion) as follows:
No benefit is payable under this policy for any claim resulting directly or indirectly from any disease or disorder of the cervical spine, including its intervertebral discs, nerve roots or supporting musculature or any complications thereof.
This exclusion does not apply where, in the opinion of independent medical assessments acceptable to TAL, the disability was not to any extent caused by, or attributable to, directly or indirectly, any preexisting condition relating to the excluded disease or disorder.
13	TAL declined Mr Rich’s claim on his insurance. 
14	TAL says Mr Rich is not entitled to be paid the TPD benefit because:
(a)	It was entitled to impose the cervical spine exclusion;
(b)	The cervical spine exclusion operates to discharge TAL from any liability even if Mr Rich satisfied the TPD definition;
(c)	Section 47 of the Act does not preclude TAL from relying on the cervical spine exclusion; and
(d)	In any event, Mr Rich has not established that he is totally and permanently disabled within the meaning of the policy.
15	Mr Rich says he is entitled to be paid the TPD benefit because:
(a)	He meets the definition of totally and permanently disabled;
(b)	The exclusion clause does not apply;
(c)	Even if it does apply, the cervical spine injury is a new injury; and
(d)	Even if the cervical spine injury is not a new injury, he is totally and permanently disabled by reason of his shoulder injury.
Issues
16	The issues in this case are:
(a)	Does the exclusion clause apply having regard to:
(i)	Sections 29(6) and 29(7) of the Act; and 
(ii)	Who bears the onus of establishing the position of “other reasonable and prudent insurers”;   
(b)	If the exclusion clause applies, is TAL prevented from relying on it by reason of s47 of the Act;
(c)	If the exclusion clause applies is there a separate and distinct injury to the cervical spine;
(d)	If the exclusion clause applies is Mr Rich entitled to rely only on the shoulder injury to recover under the policy;
(e)	If so, has Mr Rich established that he is totally and permanently disabled within the meaning of the policy in relation to his shoulder injury. 
17	For the reasons that follow my answers to these issues are as follows: 
(a)	(i)	Yes
(ii) the insurer
(b)	No 
(c)	No 
(d)	Yes 
(e)	Yes 
Does the exclusion clause apply?
18	Mr Rich accepts, for the purposes of this case, that he made a misrepresentation in his application for insurance. He was asked “have you ever had or received medical advice or treatment for any of the following….back or neck pain including sciatica*”.  He answered no.  The form says “if you answered yes to a question marked with an asterisk, please complete the specific questionnaire included in the application”.
19	Mr Rich gave evidence that prior to 2008 he had had years of neck pain and he had a CT scan in 2009. He had told his doctor in 2009 that his neck pain was between 7 and 10 out of 10 in severity and he agreed in evidence that he had experienced pain that severe. He also agreed than he had had more than three separate episodes of neck pain.
20	He said at the time of completing the application for insurance he was not aware of ever having had a disc protrusion or any radiculopathy.  He had not been told, following a CT scan in 2009, that he had a disc bulge in his neck.  He was not aware that his headaches and pain were originating from nerves in his neck.  He did not agree that he had had two injections into nerves in his neck.
21	He said he had not had any treatment in October 2009 for his neck and had not taken any time off work for any neck problem in October 2009.  He said after his motorbike accident in 2012 he had a sore left shoulder which did not require him to have any time off work.  He did not have any scans following that motorbike accident.  He said at the time of applying for insurance he had no understanding of any neck issues and he had no neck symptoms.
Medical evidence of neck problems/headache
22	In June 2007, Mr Rich saw general practitioner, Dr Andrew McDonald, who noted the following:
“headaches location varies, some nausea and vertigo. Past hx (history) head injury.”
23	In September 2008, he saw Dr Rimas Liubinas who recorded “neck pain for years bike accident related.  Right side with decreased ROM to the right to 45 degrees.  Ok looking to the left. No scans ever, pins and needles in arm occasionally. TP to trapezius in upper and lower, multifidi, sub occipital, semispinalis cervicis, scm, scalenus, R G43 good relief with ROM increase to 90 degrees looking Right.  Diagnostic imaging requested CT neck.”
24	In November 2008 he had a CT scan which showed loss of usual curvature suggesting muscle spasm.  Disc bulge at C5-6 with no significant thecal sac or lateral nerve root compression.  Normal facet joint articulation.
25	In October 2024, he returned to Dr Liubinas and said he felt better, had a reasonable ROM of neck and decrease in headaches.  Dr Liubinas noted “still with lump in neck right posteriorly TP to this only (no xylocaine) and rhomboids trapezius.”
26	On 8 October 2024 his headaches had improved.  
27	On 21 October 2008, he saw general practitioner Dr Henry Plange after a motorbike accident. He had difficulty weight bearing and had some grazing on his patella. Dr Plange recommended oral antibiotics and referred him for x-ray and ultrasound of the right knee.  
28	The x-ray showed “no definite fracture.”
29	In  April 2009, he attended Dr Bruce Mitchell, pain specialist.  Dr Mitchell reported that he presented with years of debilitating  right sided cervical and occipital pain and had a background of being a professional motorbike rider and having had multiple fractured bones and internal bleeding on one occasion. Dr Mitchell recorded that pain was primarily on the right side of neck and trapezius with headaches going to both sides of his frontal area and into both eyes.  
30	Dr Mitchell recorded Mr Rich’s  pain severity as 9/10 when off voltaren and “can get down to 5/10 when on this medication”.  Dr Mitchell noted the pain is classic somatic ache which was aggravated by any attempt at sport and particularly turning his head.  He noted it eased with chiropractic treatment and voltaren in fairly high doses. Dr Mitchell did not consider there were any flags for systemic disease or any symptoms of radiculopathy.  On examination he noted Mr Rich was markedly tender over C2/3 and C5/6 joints.
31	In May 2009 Dr Mitchell administered left third occipital nerve and C5/6 medical branch block for “neck pain for investigation.”
32	On 28 May 2009 he had another right third occipital nerve and bilateral C5/6 medial branch block.

33	In October 2009, Mr Rich tended Ballarat Practice Group regarding exacerbation of neck pain. The medical records note that Mr Rich said he was having a radiofrequency ablation procedure in Melbourne soon, and that he was taking Voltaren but it was not helping.  The record notes a tender knot in the right  occipital region. Mr Rich was diagnosed with neuralgia, and was recommended to have a trial of lyrica, a medication prescribed for nerve pain
34	Mr Rich returned to Ballarat Practice Group in November 2009.  The notes record the lyrica was effective and pain recurred when he ran out.  He was prescribed a trial of valpro 200-400mg twice daily.
35	In May 2011, Mr Rich attended his medical practitioner to inquire about botox for chronic headaches.
36	In June 2011, he reported ongoing pain.  It is not clear from the medical record whether this relates to neck pain or other pain, given earlier appointments for ear pain caused by infection and a later appointment noting that antibiotics ‘didn’t help.
37	In August 2011, Mr Rich was noted to have had headaches for 2 days which felt different to his usual migraine.  A CT scan and bloods were normal and he was diagnosed with migraine.
38	He attended Ballarat Health Service Emergency Department complaining of headache for  10 days, and tingling on the right side of his face for the last week. The discharge notes recorded his past history of migraines  and noted that on this occasion he had nausea and blurred vision. He had no vomiting and his gait was normal.  Neurological exam was normal except for “light funny sensation” in his right face and “bit blurry” vision.  He had no neck tenderness and the CT was normal.
39	In November 2012, Dr Reddy recorded Mr Rich “fell off motorbike 3-4 weeks ago. Left upper back and left neck pain since.  Feels weak in left upper limb, tender cervical midline.  Advised CT scan and review.”
40	The CT of the cervical spine noted:
“Clinical indications.: Fall from motorbike 1 month ago. Ongoing neck and left upper back pain.’
‘Findings: I have not identified a fracture. I have not identified a large disc protrusion -I have not identified direct body injury – cause for weakness and ongoing neck and upper back pain not identified.” 
41	In  February 2012 he was referred to Dr Thomas Kraemer, consultant neurologist for an opinion regarding chronic occipital headaches.  Dr Kraemer recorded that MRI did not support the idea of low CSF pressure headache.
42	In March 2012 Mr Rich said he had good relief for about 3 days after injection of both occipital nerves with Dr Kraemer.
43	He  had another occipital nerve injection.  He was advised to have further injections or seek assessment by a pain specialist if he had recurrent pain.
44	In November 2012 a CT reported normal neck and upper back pain “most likely muscular”.  Dr Reddy advised Mr Rich to have physiotherapy and prescribed anti-inflammatory medication.
45	In August 2013 Mr Rich was noted to have had shoulder pain for 5 weeks and reported that physiotherapy was not helping. He reported having an anxious mood.
46	The next attendance in evidence is in 2018 after Mr Rich had moved back from NSW after 5 years away.  No medical records from his period in NSW are in evidence.  Dr Reddy recorded MVA (motor vehicle accident) 2016, neck and shoulder injury.
Position the insurer would have been in but for the misrepresentation
47	TAL relied on an affidavit of Ms Vicki Chapman, Principal Underwriter for TAL in which she outlined the automated underwriting process used by TAL at the time of Mr Rich’s application.
48	The process permitted a potential life insured to apply online through an automated process which asked a series of questions. The questions and outcomes are housed within the Underwriting Rules Engine (“URE”). The URE captures the potential life insured's response to each question and provides different pathways to further questions depending on the answers provided. Through this process the URE can:
(a)	Conclude a policy can be offered; and
(b)	Determine the terms of an offered policy; or
(c)	Refer the application for review by human underwriter.
49	Referral for human review would occur when the answers given fall outside the URE parameters.  
50	TAL also relied on an affidavit of Mr Andrew Harris, Technical Underwriting Specialist with TAL, who gave evidence and was cross examined. Mr Harris said the critical question in the application form was Question 11: “Have you ever had or received medical advice or treatment for any of the following?...Back or neck pain including sciatica?”
51	Mr Harris said that if Mr Rich had answered “yes” to Question 11, the URE would have prompted him to answer a series of automatically generated further questions. 
52	In the appendix to his affidavit, Mr Harris set out the path of questions generated by the URE.
53	The plaintiff submits that Mr Harris then made a number of assumptions as to how he believes Mr Rich would have answered the subsequent automated questions, and used these assumptions to conclude that the cervical spine exclusion would have been automatically applied.    
54	Mr Rich says TAL has failed to establish what the outcome would have been if he had not made the misrepresentation.  For example, one of the prompted questions the URE would have asked Mr Rich was “how many separate episodes of this condition have you had?”  Nowhere in the application is the term “episode” defined, and it was left to the applicant to determine what an “episode” was.  Mr Rich submitted that the term “episode” is open to a variety of interpretations and one cannot know how that question would have been answered.
55	The fact that Mr Rich agreed in cross-examination that the truthful answer to the question about the number of episodes would have been “more than three” does not mean that, in the context of completing the application and having the surrounding questions to provide context, I can be satisfied that Mr Rich would have given any particular answer leading to any particular outcome.
56	Mr Rich says all that can be concluded is that he would have been asked more questions, to which further unknown responses could have resulted in:
(a)	more questions;
(b)	referral for manual underwriting; or
(c)	insertion of an exclusion clause.
57	The plaintiff says I cannot be satisfied that the insertion of the exclusion clause was where TAL would inevitably have landed, had the misrepresentation not been made.   
58	TAL says if Mr Rich had correctly answered “yes” to Question 11 the URE would have prompted him to select a condition from a drop down list.  The conditions in the drop down list include “neck pain”, “prolapsed disc”, “bulging disc”, “stiff neck” and so on.
59	TAL says that all the various pathways provided by the URE would have resulted in the exclusion clause for the cervical spine being imposed, had Mr Rich answered those questions truthfully.  For example, if he had answered “yes” to disc bulge, the exclusion clause would have applied.  If he had answered “no” to the disc bulge he would have been asked how many separate episodes of the condition he had had.  If he had truthfully answered “more than three” the exclusion clause would have applied, even if he had never had any time off work and was able to perform his usual activities and duties of his occupation.  
60	I cannot accept the plaintiff’s submission that, if the misrepresentation had not been made, all I can be satisfied of is that Mr Rich would have been asked further questions which would have resulted in unknown responses and unknown outcomes.
61	Mr Rich had medical advice and treatment in relation to his neck in September 2008, April 2009, October 2009 and November 2012.  He had had long-standing neck pain in 2008, suggesting previous episodes of neck pain prior to 2008.  
62	I do not accept that the term “episode” is so open to interpretation that Mr Rich’s answer cannot be known and that therefore the URE pathway that resulted would be unknowable.  I do not accept that the “context questions” Mr Rich would have been asked, had he correctly answered Question 11, would render the outcome unknowable.  There are a finite number of pathways.  I have followed them all.  Any truthful answer to the questions prompted in the URE would have resulted in the application of an exclusion clause.  
63	I am satisfied that, pursuant to section 29(6) of the Act, imposing the exclusion clause put TAL in the position it would have been in, had the misrepresentation not been made.
What would other reasonable and prudent insurers have done?
Who bears the onus of proof?
64	Section 29 of the Act goes on to provide: 
(7) The position of the insurer under a contract (the relevant contract) that is varied under subsection (6) must not be inconsistent with the position in which other reasonable and prudent insurers would have been if:
(a) they had entered into similar contracts of life insurance to the relevant contract; and
(b) there had been no relevant failure in relation to the similar contracts.
(8) For the purposes of subsection (7), a contract of life insurance (the similar contract) is similar to another contract of life insurance (the relevant contract) if:
(a) the similar contract provides insurance cover that is the same as, or similar to, the kind of insurance cover provided by the relevant contract; and
(b) the similar contract was entered into at, or close to, the time the relevant contract was entered into.
65	The plaintiff says that TAL is obliged to ensure that the cervical spine exclusion applied was not inconsistent with an exclusion that would have been imposed by other reasonable and prudent insurers.  The plaintiff says TAL has failed to meet its obligation, as it relied only on the evidence of an employee of TAL, Mr Harris, and I could not be satisfied on Mr Harris’ evidence that other reasonable and prudent insurers would have applied the exclusion.
66	TAL says that it does not bear the onus of proving what other reasonable and prudent insurers would have done.  This is because section 29(7) does not impose a pre-condition to the exercise of TAL’s rights under section 29(6).  Rather it introduces a special exception or condition which defeats or answers the right.
67	Section 29(7) does not appear to have been judicially considered and, in TAL’s submission, general principles ought be applied to determine where the onus lies.  TAL relies on:
(a)	the principle set out by the High Court that it is “not only an elementary rule of the law of evidence, but a rule of common sense, that the burden of proof is upon the party who asserts a fact, not on the party who denies it”. 
(b)	The reasoning of Dixon J in Darling Island Stevedoring and Lighterage Co Ltd v Jacobsen “If the provision is part of the legislative attempt to define the conditions upon which a right arises, then like all other elements, proof of the conditions described in the provision will lie with the party claiming the right. However, if the true nature of the qualification is to introduce a new matter, not as part of the primary grounds of liability, but as a special exception or condition defeating or answering liability otherwise existing, then the onus of proof lies with the party relying on the qualification by way of answer”. 
(c)	The principles set down by the High Court in Vines v Djordjevitch set out that:
(i)	Determining where the burden of proof lies is a matter of ascertaining the legislative intention;
(ii)	Legislation that imposes liability or a particular right may rely on qualifications, exceptions or provisos, but it may be sufficiently clear that the whole amounts to a statement of the complete factual situation which must be found to exist before anybody obtains a right or incurs a liability under the provision.
(iii)	On the other hand, the purpose of the enactment may be to lay down a generally applicable principle of liability and then to provide some special grounds of excuse which may defeat or exclude the general right.  If it expresses a exculpation or excuse which denies the general right or liability, the party seeking to rely on the additional or special matter bears the onus.
68	TAL says Divisions 1 and 2 of Part IV of the Act set out the insured’s duty of disclosure and obligations relating to misrepresentations.  Division 3 sets out the insurers remedies for non-compliance with those duties of disclosure.
69	The structure of section 29 indicates the distribution of the onus of proof.  Subsection 1 sets  out the conditions in which the section applies.  Subsection 6 sets out the conditions under which an insurer can vary the contract so as to put itself in the position it would have been in.  Subsection 7 then allows the right in subsection 6 to be defeated or excluded based on additional or special facts – inconsistency with the position of other reasonable and prudent insurers.
70	TAL submits that the “factual conditions” set out in subsection 7 are expressed negatively, indicating that the onus is on the party relying on the presence of facts, not their absence, and that the facts are objective matters about which either party is able to obtain expert evidence.
71	A further dispute arose between the parties as to whether, as TAL submitted,  the plaintiff was required to specifically plead that the imposition of the exclusion clause was contrary to the practice of other reasonable and prudent insurers, or whether, as Mr Rich submitted, it was sufficient to deny more generally TAL’s entitlement to rely on the exclusion clause.
Findings on onus
72	The legislation provides a right to an insurer to vary a contract, but places limitations on that right.  The insurer, under section 29(6) can only vary the contract so as to put itself into the position it would have been in if the misrepresentation had not occurred.  The right is further limited by the operation of section 29(7) to require consistency between the insurer and other reasonable and prudent insurers in varying a contract.
73	Regardless of whether a matter ultimately ends up at Court, the wording of the legislation requires the insurer to ensure that its position under a contract that is varied under subsection (6) is not inconsistent with the position which other reasonable and prudent insurers would have taken.
74	This, on the plain wording of the section, imposes an obligation on an insurer to know and understand what is happening generally within the insurance market and to ensure that the variation it is seeking to impose is consistent with the sorts of variations other insurers are imposing.
75	This view is supported by the explanatory memorandum which provides:
“When an insurer is endeavouring to establish whether the variation is or is not inconsistent with how other reasonable prudent insurers would have varied a similar contract, an insurer would generally be required to seek a view from one or more third parties as to what other reasonable or prudent insurers would have acted. These third parties may include but would not be limited to underwriters.
Underwriters normally have a good understanding of the development of life insurance products in the market place, this understanding would enable them to make judgements and decisions based on what a reasonable and prudent insurer would have been likely to have done at the time the relevant contract was entered into.” 
76	I do not accept the submission that section 29(6) provides a right which is then able to be defeated if particular circumstances exist.
77	It would not fulfil the protective intention of the legislative provision to ensure general consistency in the insurance market,  to enable an insurer to impose any variation it liked which put it in the position it would have been in but for the misrepresentation, and then require the insured to challenge the variation by establishing that it was inconsistent with what other reasonable and prudent insurers would have done.
78	The right of the insurer to vary the contract under section 29(6) is limited by:
(a)	The requirement that the variation put it in the position it would have been in but for the misrepresentation; and
(b)	The requirement that the insurer’s position not be inconsistent with the position of other reasonable and prudent insurers.
79	Prior to imposing the variation, the insurer must already have had regard to the position of other reasonable and prudent insurers, otherwise the purported variation under section 29(6) would be unenforceable.
80	If the insurer must satisfy itself that its position under section 29(6) is not inconsistent with the position of other reasonable and prudent insurers, it would tend to follow that, in any subsequent trial, the insurer bears the onus of proof.  It would be strange indeed if the legislation required the insurer to satisfy itself about the position of other reasonable and prudent insurers and then required, in litigation, the insured to prove that other reasonable and prudent insurers would have acted differently. If the insurer cannot prove that its conduct was not inconsistent with the position of other reasonable and prudent insurers, there is no requirement for the insured to prove that other reasonable and prudent insurers would have done differently.
81	It follows from this finding that, in relation to the pleading point, I am not persuaded that the plaintiff is required to specifically plead that the defendant has failed to establish that the insurer’s position is inconsistent with other reasonable and prudent insurers.  The defendant must establish that the exclusion clause applies pursuant to both sections 29(6) and 29(7).  
82	However if I am mistaken in this finding, it is of no consequence in this proceeding, because, for the reasons below, I am satisfied on the evidence that TAL has established that other reasonable and prudent insurers would have made the same variation and imposed the same exclusion.
Other reasonable and prudent insurers
83	Mr Rich submitted that the only evidence of what other insurers would have done came from Mr Harris, who, as an employee of TAL, was not a reliable source of evidence.
84	Further, Mr Rich says Mr Harris did not know if other insurers would have had similar or the same decision-making processes as used by TAL, and acknowledged many unknowns in relation to the way guidelines used by other insurers would be interpreted.  
85	Mr Rich says TAL has failed to discharge its onus to establish that its position is not inconsistent with the position of a reasonable and prudent insurer.
86	TAL says Mr Harris’s evidence establishes that its position is not inconsistent with other reasonable and prudent insurers.
Findings on other reasonable and prudent insurers
87	Mr Harris has worked as an underwriter in life and disability insurance for approximately 17 years.  He is currently employed at TAL and was an underwriter in 2014 when Mr Rich submitted his application.  He was not involved in the assessment of Mr Rich’s original application but he was the underwriter who undertook the retrospective underwriting process for Mr Rich’s claim that involved the application of the exclusion clause under section 29(6).
88	He previously worked as an underwriter at AXA Australia and Macquarie Life.
89	He explained that the process of underwriting for cases that were not assessed automatically through the URE was to utilise an underwriting manual which provides guidelines.
90	TAL used the “Munich Re” guidelines, which he explained were the reinsurer guidelines.   Mr Harris said the Munich Re guidelines were also used by AXA Australia when he worked at AXA and BT, which had been recently acquired by TAL.
91	Mr Harris said that there was very little discretion on underwriters in applying the reinsurance guidelines, and that reinsurers conduct audits to ensure the guidelines are being followed.
92	He said if he was working for a different insurer, such as AXA or Macquarie, and applying the Munich Re guidelines, he would have reached the same conclusion to apply the cervical spine exclusion.
93	Mr Harris had undertaken what he terms the “29(6) opinion”.  He explained that “any variation that you make to a contract must not be inconsistent with other reasonable and prudent insurers.  So in order for TAL to satisfy that requirement and show that we’re not being unreasonable, the process is this s29(7) document where we outline the variation we’ve done and give a statement as to why we feel it's not inconsistent, and if that’s the statement we come to, then we provide reinsurance guidelines utilised by other life insurers across the Australian retail life insurance market”. 
94	That document, titled “Sections 29(7) Opinion” sets out six guidelines or reference manuals considered for the purposes of establishing that the position of TAL was not inconsistent with other reasonable and prudent insurers:
(a)	CLUE prolapsed Intervertebral Disc Guidelines;
(b)	CLUE Cervical Strain, Sprain or Pain Guidelines;
(c)	CLUE Depressive Disorder Guidelines;
(d)	CLUE Anxiety Guidelines;
(e)	LifeGuide Back Pain Guidelines;
(f)	LifeGuide Anxiety, mood, Stress and Adjustment Disorders Guidelines.
95	The CLUE guidelines were authored by Gen Re, the LifeGuide guidelines were authored by Swiss Re.
96	Mr Harris said that a retail life insurer utilising Swiss Re or Gen Re reinsurers, would have reached the same conclusion to exclude the cervical spine, had they received the application from Mr Rich with the same information. 
97	For example, the Gen Re guidelines provides an exclusion if someone has had more than 2 episodes of pain within three years.  Mr Harris said he would interpret that guideline as two episodes of pain, at least one of which was within the three years of making the application.
98	Mr Harris said an underwriter is assessing risk.  To some extent, the particular questions that a potential insured was asked would not make any difference to the outcome, because the insurer is assessing risk, and the risk is the same, based on the underlying profile of the potential insured.
99	While he was attacked on the pathways that would follow depending on the specific answers to questions that a potential insured might give, for example revolving around the discreet number of episodes, or the length of the episodes, I accept his evidence that the underlying risk remained unchanged and would have been treated the same whether the Swiss Re, Gen Re or Munich Re guidelines were followed.
100	The tension between Mr Harris’ evidence and Mr Rich’s submission seems to be this: In Mr Rich’s submission, because TAL used an automated underwriting engine that prompted questions based on the previous answer, and because Mr Harris was not familiar with all the automated underwriting engines used at different companies, (or whether automated underwriting engines were used at all), I ought not be satisfied that Mr Rich’s answers to questions would have resulted in the cervical spine exclusion.
101	However I understood Mr Harris’ evidence to be that, regardless of the questions prompted by an automated underwriting engine, the guidelines upon which they were built were the same or substantially the same.  The outcome, given the actual facts of Mr Rich’s medical history - multiple attendances and treatment over a number of years – would always have resulted in a cervical spinal exclusion being imposed.
102	Mr Harris impressed me as a straightforward and honest witness.  Although he is an employee of TAL I had no reason to doubt that his evidence was reliable.  There was no suggestion that his evidence about the guidelines used by other insurers with which he was familiar was not accurate.
103	There was no submission that the Swiss Re or Gen Re guidelines were not used by reasonable and prudent insurers, nor that AXA, Macquarie Life and BT were not reasonable and prudent insurers.
104	I accept that:
(a)	applying the Munich Re guidelines adopted by TAL, the exclusion clause would have applied;
(b)	other insurers used the Munich Re guidelines;
(c)	using the Munich Re guidelines at AXA or Macquarie would have also resulted in the exclusion clause being applied;
(d)	using Swiss Re or Gen Re guidelines would also have resulted in the exclusion clause being applied; and
(e)	the wording of the exclusion is dictated by the Munich Re guidelines and cannot be changed.
105	I am satisfied that the position of TAL in imposing the exclusion clause for the cervical spine was not inconsistent with the position other reasonable and prudent insurers would have been in if they had entered into the contract and the misrepresentation had not been made.
Is TAL prevented from relying on the exclusion clause by reason of s47
106	Mr Rich says TAL is prevented from relying on the exclusion clause by reason of the operation of section 47 of the Act. 
107	That section applies where a claim under a contract of insurance is made in respect of a loss that occurred as a result, in whole or in part, of a sickness or disability to which a person was subject or had at any time been subject.
108	Section 47(2) provides:
Where, at the time when the contract was entered into, the insured was not aware of and a reasonable person in the circumstances could not be expected to have been aware of, the sickness or disability, the insurer may not rely on a provision included in the contract that had the effect of limiting or excluding the insurer’s liability under the contract by reference to a sickness or disability to which the insured was subject at a time before the contract was entered into.
109	Mr Rich says that the exclusion clause TAL seeks to rely on only operates where a disability is attributable to a pre-existing neck disorder.  The exclusion clause does not seek to exclude cervical spine disorders whenever arising.
110	Mr Rich says that, if he was not aware and could not reasonably be expected to have been aware of his cervical spine disorder, TAL may not rely on the exclusion clause.
111	Mr Rich says he was aware of having intermittent and transient periods of neck pain over the preceding years.  At the time of applying for insurance coverage he was not aware of ever having a disc protrusion or any radiculopathy and says he was never told that he had those disabilities, or that he had cervical spondylosis or disc degeneration in his cervical spine.
112	Both Myron Rogers and Dr Akil have reviewed the CT scan from November 2012 and confirmed that it shows a cervical disc prolapse that was, apparently, missed by the radiologist who reported on the scan.  Mr Rich says as a consequence of the radiologist not reporting on the disc prolapse, he was not aware and could not reasonably have been aware that he had a prolapse.
113	TAL says that I should not accept that Mr Rich was unaware that he suffered a sickness or disability at the time he entered into the contract.  It is not believable that Mr Rich had forgotten about:
(a)	“years of debilitating neck pain” pre-dating 2008;
(b)	the 7-10 out of 10 pain he had described to Dr Mitchell;
(c)	the two branch block injections he had undergone; and 
(d)	the further pain he experienced after his motorbike accident in 2012.
114	TAL says,  even if I accept Mr Rich’s evidence that he was not aware of his cervical spine condition, a reasonable person in Mr Rich’s position would have been aware and thus section 47 is not engaged.
115	TAL notes that the section is concerned with sickness or disability, not diagnosis. The fact that Mr Rich may not have been aware of a diagnosis of degenerative disc disease, or cervical spondylosis, is not relevant if he was, or should have been, aware of the disability produced by such a condition, being neck and head pain.
Was or should Mr Rich have been aware of a neck problem prior to entering into the insurance contract?
116	I am satisfied that Mr Rich either was aware, or ought reasonably to have been aware, that he had received medical advice and treatment for neck pain prior to 2014.
117	The medical records disclose at least four separate episodes between 2008 and 2012  when Mr Rich obtained medical treatment or advice in relation to neck pain.  In September and October 2008 he attended his general practitioner with neck pain and was referred for a CT scan which disclosed a disc bulge at C5/6 with no significant thecal sac or lateral nerve root compression. 
118	The medical records show there was a follow up appointment with discussion of the results of the CT scan.  Although Mr Rich says he was not told he had a disc bulge, it is unlikely that his doctor did not discuss those results given that Mr Rich had been experiencing pain and the disc bulge could provide an explanation for the pain.  It is more likely that Mr Rich has either forgotten or did not absorb this information at the time. 
119	More difficult to accept is his assertion that he did not have two nerve block injections into his cervical spine in 2009.  He accepted that he was, at least from time to time, in severe pain up to 10 out of 10 in his neck.  Understandably he sought medical advice in relation to this extremely severe pain.  He obtained that advice and was referred to pain specialist Dr Bruce Mitchell. While guided injection into the neck is not major surgery, it is sufficiently invasive that I would expect Mr Rich to have remembered it occurring, albeit that it happened five years before he completed his application form.
120	Although I generally found Mr Rich to be a straightforward and honest witness, who did his best to assist the Court, he clearly did have two nerve block injections.  Given the multitude of medical attendances and treatment he has had since his motor vehicle accident in 2016, he may have forgotten about these long ago nerve block injections.  However I consider that a reasonable person in Mr Rich’s position, at the time of completing the application well prior to the accident, would remember having two nerve block injections into his neck in 2009.
121	Further, although the 2012 CT scan apparently failed to identify the cervical disc prolapse, and therefore it is reasonable that Mr Rich was not told of its existence in 2012, he nevertheless had been referred for a CT scan in the context of ongoing neck pain for more than a month, following a motorbike accident.  One would imagine that, even if that neck pain had resolved shortly thereafter, it might have triggered his recollection of his earlier treatment with nerve block injections.
122	TAL is accordingly not precluded from relying on the exclusion clause by reason of section 47 of the Act.
Do the terms of the exclusion clause prevent Mr Rich from recovering under the policy?
123	Mr Rich says, even if the exclusion clause applies, there can be more than one claim arising from one act or set of circumstances which causes distinct and separate losses.  Mr Rich is entitled to recover even where one loss is excluded, where there is a distinct and separate loss that is not excluded.
124	He says his pre-existing cervical spine condition had been dormant and inactive since November 2012.  The motor vehicle accident produced a separate and distinct injury to the cervical spine.
125	In addition, Mr Rich says his shoulder injury is sufficient in itself to cause total disablement.
Mr Rich’s injuries
126	Mr Rich claims he has suffered injuries to the neck and left shoulder, which cause pain and restriction of movement, and that he also suffers migraine headaches.
127	Mr Rich says that after the car accident he went home but as the day progressed, he started getting a really bad headache and his left shoulder was “killing” him. 
128	He was taken to Shepparton Hospital, by ambulance, on 3 June 2016. At hospital he had a CT and MRI scan of his cervical spine, and an x-ray of his left shoulder. The results of the CT and MRI scan revealed a ‘left lateroposterial disc protrusion C6-7 with potential C7 impingement.’ The left shoulder x-ray did not reveal any bony fractures. The plaintiff was discharged on 3 June 2016.
129	Following the accident, Mr Rich described a “massive burning pain in the front” of his left shoulder, and an “aching pain” that “just wouldn’t go away”. He could not lift his arm to even shoulder height. 
130	Mr Rich said he could  “feel it in the base of the neck” and would have “balance issues” due to “nausea”. He had a tingling feeling down his arm into his fingers. 
131	He said the sensations in his neck and arm were different from those in his left shoulder. 
132	On 10 October 2016 Mr Rich consulted Ms Prue Keith, orthopaedic surgeon.  She noted his complaint of constant burning feeling around his shoulder, with pain into the arm and medial forearm, reduced range of motion in the shoulder, reduced strength in the shoulder, pain along the rim of the trapezius muscle and tingling into the left hand.  She noted that he had prior shoulder problems.   At that time Ms Keith considered that most of Mr Rich’s symptoms were related to a nerve root lesion requiring neurosurgical opinion.
133	She recommended injections into the left acromioclavicular joint to see if that “settles down some of the focal shoulder pain”. 
134	On 9 November 2016 Mr Rich had a nerve root injection at C6 with an excellent result for about three weeks, with almost no pain.  Ms Keith speculated that a C6 left discectomy may be required.
135	Mr Rich consulted neurosurgeon Peter Turner on 25 January 2017 who recommended an anterior cervical discectomy and interbody fusion at C5-6.  Mr Turner considered the operation had a 90% chance of improving Mr Rich’s arm pain but only a 70-80% chance of relieving his head and neck pain. 
136	Mr Rich went on to have a C5-6 fusion and decompression of the C6 nerve roots with Mr Peter Turner on 15 May 2017.   It appears that he initially had a good response to that surgery in terms of his neck condition, but the pain returned to his pre-operation state after about three months. 
137	By 10 November 2017 Mr Rich was experiencing nausea, headaches and vomiting regularly.  His arm pain had improved but he continued to have pain in his neck and shoulder.  Mr Turner referred Mr Rich back to Ms Keith for further assessment of his shoulder.
138	Ms Keith noted in her report of 26 February 2018 that once Mr Rich “started to wean out of” his neck brace he developed increasing headaches. 
139	Although initially Ms Keith had considered Mr Rich’s primary issue related to his cervical spine, it became apparent that his shoulder was a discrete cause of difficulty.    Ms Keith noted his complaints of pain and aching through the shoulder and centre of the joint, which was worse with use.  She noted his feeling that the shoulder was slipping out of the joint and then reducing and that this was causing a sense of the shoulder “locking”.
140	On 11 April 2018 Ms Keith wrote to Mr Rich noting that x-ray and MRI showed no abnormalities, but as he felt the shoulder was unstable the “gold standard” was investigate arthroscopy.  She noted “that would be the next step if you are severely affected enough.  If you are not and your shoulder has improved, then there is no point in doing that and we would not touch you at all”.
141	Mr Rich did feel that his shoulder symptoms had not improved and his shoulder remained unstable.  On 29 May 2018 he progressed to an arthroscopy of the shoulder, with the understanding that if any findings demonstrating instability were found under examination, the surgery would proceed to a stabilisation.
142	Ms Keith found a “very worn area of the anterior aspect of the glenoid” which she has noted in her operation report as “anterior 30% +++++ soft mobile chondral surface with yellowish discolouration”.  She noted that the shoulder was anteriorly unstable with no posterior instability,  and there was a mid-substance tear in the labrum between “7 o’clock and 10 o’clock” which, I understand, defines the torn area within the labrum.  Ms Keith performed a shoulder stabilisation procedure on the basis of her findings under anaesthetic.
143	On review on 6 September 2018 Ms Keith noted that three months post-operatively Mr Rich still had some aching, a range of motion that was “quite poor” and some weakness in the left shoulder.
144	Mr Rich’s left shoulder continued to cause him pain and restrictions.  On 6 June 2022 he consulted Mr Steve Csongvay, orthopaedic surgeon.  Mr Csongvay noted Mr Rich’s complaints of “primarily anterior left shoulder pain with referred pain down the front of the arm, front of the forearm and involvement of the radial aspect of the hand with episodes of burning sensation especially with activity such as riding his bike”.  Mr Csongvay noted that Mr Rich complained of discomfort at rest and at night and that he experienced “regular clunking and crepitus” around the anterior aspect of the left shoulder.  Previous cortisone injection into the shoulder had given him temporary relief.  Ultrasound scan in February 2022 had shown a full thickness tear of the subscapularis with supraspinatus tendinosis, acromioclavicular joint swelling and a subluxated biceps tendon.  Mr Csongvay considered he had symptoms related to his shoulder, but also ongoing symptoms related to his neck, with radiculopathy-type symptoms.
145	On 13 June 2022 Mr Csongvay reviewed Mr Rich after an MRI scan and noted a moderately high grade articular surface partial thickness tear of the subscapularis with associated biceps tendinopathy and instability, with likely instability of the biceps tendon anchor at the level of the superior glenoid labrum.  He also had minor focal supraspinatus tendinosis.
146	Mr Csongvay noted that “it is clear to me that Nathan’s shoulder injury has deteriorated with progression of subscapularis tendon tear and also ongoing instability and irritation from an unstable biceps which possibly has destabilised the superior glenoid labrum, resulting in his current shoulder symptoms”. Mr Csongvay also considered that Mr Rich had radiculopathy symptoms which were contributing to his shoulder discomfort and weakness.
147	Mr Csongvay considered Mr Rich required a biceps tenotomy and possibly tenodesis and subscapularis tendon debridement and likely repair with possible further stabilisation of the superior glenoid labrum.  Mr Rich has not undergone this surgery as he says he cannot afford it.
Is there a separate and distinct injury to the cervical spine?
148	Mr Rich relies on the evidence of his treating neurosurgeon Dr Akil, who said that “…the presence of prior neck discomfort does not necessarily mean that the Plaintiff would have at some point radiculopathy, which is a nerve compression related pain or symptoms. It might develop, it may not develop. However, an accident can actually create circumstances that can produce these symptoms or accelerate these symptoms. But without an accident, it doesn't necessarily mean that he would develop radiculopathy or require surgery.” 
149	Mr Rich says a dormant or inactive condition which merely creates a propensity to develop a disabling consequence is insufficient to preclude him from recovering under the policy.
150	However, Mr Akil could not say that the cervical spine symptoms were not to any extent caused by or attributable to the pre-existing cervical spine problem given that the records indicated Mr Rich had suffered severe symptoms in his cervical spine since 2009.
151	Neurosurgeon Myron Rogers, in his report of 7 May 2023, says that the changes seen on MRI of the cervical spine post the car accident were present prior to the accident and did not demonstrate a left C6 neural compression. 
152	He notes that there is objective evidence from 2008 of neck pain and imaging demonstrating degenerative change in the C5/6 disc.  CT scan from 16 November 2012 showed a large postero-lateral disc prolapse extending into the foramen and compressing the C6 root.  This finding was missed by the radiologist reporting at the time.
153	CT scan of 24 December 2015 showed mild foraminal narrowing and a posterior annular bulge more pronounced to the left of midline.  MRI of 1 September 2016 showed contact with the left C6 root.  Subsequent MRI on 12 October 2016 confirmed these findings.
154	In Mr Roger’s opinion the car accident did not result in any direct injury of the cervical spine or the C5/6 disc.
155	Based on the radiology before and after the car accident, and the opinions of Mr Akil and Mr Rogers, I am not satisfied that the cervical spine injury Mr Rich now suffers is a separate and distinct injury from his cervical spine impairment that pre-dated the injury.  The exclusion clause applies to any disease or disorder of the cervical spine, including its intervertebral discs, nerve roots or supporting musculature or any complications thereof, unless the disability was not to any extent caused by, or attributable to, directly or indirectly, any pre-existing condition relating to the excluded disease or disorder.
156	Mr Rich had a pre-existing disease or disorder, being degenerative change in the cervical spine with a large disc bulge compressing the C6 root, as shown on imaging in 2012.  That was, on his evidence, asymptomatic at the time of the car accident.  The car accident appears to have aggravated or exacerbated his underlying condition.  However it is the underlying condition, together with the aggravation, that is causing his current symptoms.  I do not accept that the current symptoms of his cervical spine arise from a condition that is not “to any extent” attributable to the underlying condition. 
157	This means that the exclusion clause applies and Mr Rich is precluded from any claim arising from his cervical spine.
Can Mr Rich can rely on his shoulder injury alone?
158	Mr Rich says that, even if he is precluded from any claim in relation to his neck, he nevertheless is entitled to claim in relation to his shoulder injury.
159	TAL says Mr Rich is precluded from recovering under the policy.  TAL submits that Mr Rich was insured for a loss caused by becoming totally and permanently disabled.  To establish he is totally and permanently disabled he must establish that “solely because of a sickness or injury, the Life Insured has not been working in any occupation for three consecutive months and, in our opinion, after consideration of medical and any other evidence, is incapacitated to such an extent as to render the life Insured unlikely ever to be able to work in any occupation for which they are reasonably suited by training, education or experience which would pay remuneration at a rate greater than 25% of the life Insured’s earnings during their last 12 months of work.”
160	TAL says this requires Mr Rich to prove that:	
(a)	He is incapacitated to the relevant degree; and
(b)	The incapacitation is solely because of sickness or injury.
161	Although TAL does not admit that Mr Rich is totally and permanently disabled, for the purposes of considering this aspect of his claim under the policy, TAL says that any such incapacity arises from a constellation of symptoms, some of which derive from his neck and some from his shoulder.
162	This means that there are two concurrent causes of his disability, the neck and the shoulder.  The exclusion clause rules out any claim in relation to the cervical spine.
163	TAL submits that the two causes are concurrent and interdependent, such that the court cannot be satisfied that, in the absence of the cervical spine injury, Mr Rich would be totally and permanently disabled.
164	However even if the causes are not interdependent, TAL submits that the words of the policy evince an intention that his claim would be excluded.  The exclusion clause provides that any claim resulting “directly or indirectly” from the cervical spine is excluded.  Those are broad words which indicate that the cervical spine does not need to be the sole, dominant or direct cause of the incapacitation.
165	The exclusion does not apply where the disability was not “to any extent” caused by or attributable to the pre-existing condition, either directly, or indirectly.  In TAL’s submission this means that if there is any connection at all between the incapacitation and the cervical spine disorder, the claim will be excluded.
166	TAL says that the use of the word “disability” is significant as it is not the cause of the “injury” that matters, but the cause of the “disability”.  Where the definition of “totally and permanently disabled” requires the incapacitation to be solely because of sickness or injury, the cause of the disability must be referable to the sickness or injury.   TAL submits that the “disability” is the entirety of the symptoms, illness, disease or disorder that impact on Mr Rich’s work capacity.  If any part of his capacity to work is impacted by his cervical spine, that forms a part of his overall “disability” for the purposes of the policy.
167	TAL says Mr Rich has not proved that his disability was not, to any extent, caused by the pre-existing cervical spine disorder and relies on the following:	
(a)	On 10 October 2016, Ms Prue Keith, treating orthopaedic surgeon, suspected that most of Mr Rich’s symptoms were related to a nerve root lesion affecting his shoulder and arm.
(b)	On 21 October 2016, Ms Prue Keith reported that Mr Rich’s large disc protrusion was a major contributor to his symptoms.
(c)	On 25 January 2017, Mr Peter Turner, treating orthopaedic surgeon, reported that the abnormality of the C5-6 disc was very likely responsible for the symptoms Mr Rich was experiencing.
(d)	On 23 January 2018, Dr Steven Ring, treating neurosurgeon, reported that Mr Rich’s headaches occurred most days of the week and were related primarily to the cervical pathology.
(e)	On 6 September 2018, Ms Keith reported that Mr Rich reported weakness in the left shoulder. Ms Keith suspected that this was due to a combination of post-surgery and pre-existing cervical issues.
(f)	On 31 May 2019, Mr Turner reported that when last seen, Mr Rich was complaining of continuing pain in the neck and shoulder region, combined with a little bit of pain in the right arm. It was unclear to Mr Turner the extent to which these symptoms may be accounted for by his cervical condition and how much they may be attributable to ongoing shoulder issues.
(g)	On 6 June 2022, Mr Steve Csongvay, treating orthopaedic surgeon, reported that Mr Rich did have symptoms related to his shoulder, but he still had ongoing symptoms related to his neck.
(h)	In oral evidence, Dr Slesenger agreed that both the neck and the shoulder injuries were contributing to Mr Rich’s total decrease in function. He agreed there was a degree of crossover between the neck and shoulder injuries such that his neck symptoms might relate to radiating pain from the shoulder and there is a component to his neck symptoms that could cause radiating symptoms into the shoulder.
168	TAL says I cannot be satisfied on the evidence, that Mr Rich’s disability is not impacted by the interdependent nature of his injuries.
169	However, even if the neck and shoulder injuries are not interdependent, TAL submits that they are concurrent causes such that the “Wayne Tank” principle is engaged:
(a)	If the two causes are concurrent and interdependent, in that neither cause would have caused the loss but for the other, the exclusion will prevail and the insurer bears no liability. 
(b)	If the two causes are independent, then the terms of the policy must be closely considered and applied to the facts.  The policy cannot respond if the intention of the parties was that no cover is provided for any loss caused by a particular cause and the loss was so caused. However, if the parties’ intention was that the policy would not respond if only the excluded clause was the sole cause of the loss, the existence of that concurrent excluded cause is irrelevant. 
(c)	The parties intention is to be objectively ascertained by reference to the wording of the policy. As the exclusion clause applies, the words of the exclusion express the contractual intention of the parties. The Court’s task is therefore to construe the meaning of those words objectively, and to apply them to the facts.
170	Dr Slesenger agreed that an assessment of incapacity is a holistic exercise that takes account of all symptoms.  Mr Rich gave evidence about the pain, headaches and nausea caused by his cervical spine injury.  TAL submits that Mr Rich’s incapacity derives at least in part from this injury, and consequently he is excluded from recovering under the policy.
171	Mr Rich submits that an insured can recover for a disability that is distinct from any pre-existing condition.  The intention of the exclusion clause was not to preclude Mr Rich from recovering under the policy if his pre-existing neck condition contributed to any extent to his disability.  If that was the intention there would scarcely be any point in taking out the policy as the pre-existing condition was likely to always contribute to some degree of impairment.  Rather, the intention of the exclusion clause was to exclude a disability arising, directly or indirectly from the cervical spine.
172	Mr Rich says his shoulder impairment does not arise directly or indirectly from the cervical spine, and the court is entitled to consider the impairment caused by his shoulder impairment alone.
Findings on whether Mr Rich can rely on shoulder injury alone
173	 In Preston v AIA Australia Ltd the NSW Court of Appeal found that the terms of the policy precluded recovery by the plaintiff, because his disability was caused by a combination of his pre-existing and later injuries.
174	TAL relies on this case for the correctness of its interpretation of Mr Rich’s policy.
175	In Preston the terms of the policy defined “total disablement” to mean that:
due to accidental injury the [insured] is:
•	unable to perform one or more duties of the insured’s occupation, that is important or essential in producing income; and
•	following the advice of a Medical Practitioners; and
•	not working (whether paid or unpaid).
176	Accidental injury was defied as “a physical injury which is caused solely and directly by violent, accidental, external and visible means, which occurs while the benefit is in force and which results solely and directly and independently of a pre-existing condition or any other cause in total disablement.  Sickness directly resulting from the medical or surgical treatment rendered necessary by the physical injury will not constitute ‘Accidental Injury’”.
177	Injury was defined as “a physical injury which occurs whilst the Policy is in force and which results solely and directly and independent of a pre-existing condition or any other cause in Total or Partial Disablement within one year of the date of its occurrence. Sickness directly resulting from the medical or surgical treatment rendered necessary by the physical injury will not constitute “Injury”.
178	The insured had broken both his ankles in 1996. This left his ankles with a degenerative arthritic condition and vulnerable to further injury.  In 2009 he sprained his left ankle.  This aggravated his earlier injury.  The Court held that the policy was not intended to provide cover for aggravation of an earlier injury that had occurred before the policy came into effect. 
179	In Preston, the claimed disability was to the same body part that suffered the pre-existing condition, and the wording of the policy required the disabling condition to be caused by violent, accidental, external and visible means and to result in total disablement solely and directly and independent of a pre-existing condition or any other cause.
180	The medical evidence established that the relevant “Accidental injury”, being the left ankle sprain, aggravated an earlier injury and the consequence of total disablement therefore did not arise solely and directly from the accident, nor was it independent of the pre-existing condition.  Therefore the policy did not respond.
181	I am not persuaded that Preston stands for the proposition propounded by TAL – that concurrent injuries cannot be assessed separately if each contributes to the disability.  The terms of the policy, while bearing some similarity, are not the same.  The insuring clause in Preston required the accident to be the cause of the disablement solely and directly and independent of a pre-existing condition.  If that wording applied to Mr Rich’s case, he would, in my view, be entitled to recover for the shoulder if it alone was sufficient to render him disabled.  The policy in Preston did not respond because the subsequent ankle sprain was not independent of the pre-existing condition.  Without the earlier fracture, the sprain would not have rendered the insured disabled.
182	This was different to the situation in Fidelity and Casualty Company of New York v Mitchell [1917] AC 592 in which the insured sprained his wrist which failed to heal because of an earlier tubercular infection.  The policy covered the insured against a bodily injury sustained through accidental means and resulting “directly independently and exclusively of all other causes” in total disablement.  The Privy Council held that the accident had a double effect – it sprained the risk and induced what had previously been only a “tuberculous tendency” to become a tuberculous condition.  The two conditions acted together and were both causes of the disabling condition, but had only one cause, the accident.  
183	In that case, although there was a pre-existing condition of a “tuberculous tendency” the court was satisfied that the disabling condition resulted directly, independently and exclusive of all other causes from the accident.
184	Mr Rich’s policy requires that he be incapacitated for work ‘solely because of sickness or injury’ and that no benefit is payable for any claim resulting from any disease or disorder of the cervical spine unless “the disability” was not to any extent caused by or attributable to the pre-existing condition.  
185	TAL submits that “the disability” comprises all and any injuries that contribute to the incapacity. Because Mr Rich’s overall incapacity comprises both neck and shoulder injuries, and the neck is a pre-existing condition, he cannot recover.
186	TAL’s interpretation of the exclusion clause does not, in my view, express the intention of the parties.  Somewhat paradoxically, on the defendant’s submission,  Mr Rich could recover if he fractured his cervical spine and was rendered paraplegic, because his disability in that event?  – paraplegia – although affecting the same body part, would  not be to “any extent caused by” the pre-existing condition.  But, on TAL’s analysis, injury to almost any other body part would not be covered because his “disability” would, inevitability be impacted by his pre-existing cervical spine condition.
187	To recover, Mr Rich must be able to establish that he is unlikely ever to be able to work in any occupation, solely because of a sickness or injury.   The exclusion clause requires that the disability be caused by something other than the pre-existing disease or disorder.
188	This means Mr Rich must prove that, separate from his cervical spine condition, he has a sickness or injury that renders him unlikely to ever be able to work in any occupation for which he is suited.
189	The wording in the exclusion clause that provides that it does not operate where “the disability” was not to any extent caused by the cervical spine is intended, in my view, to relate to the cervical spine.  A disability to the cervical spine that is not attributable to the pre-existing condition is not excluded.
190	The submission that “the disability” must necessarily mean the entirety of all the symptoms, consequences and ailments that afflict Mr Rich, would result in Mr Rich being unable to recover under the policy in almost all circumstances because his pre-existing degenerative neck condition was likely to always cause him some symptoms.  
191	If Mr Rich is incapacitated for work only by reason of a combination of both his shoulder and his cervical spine, and excluding the cervical spine would not render him totally and permanently disabled, he cannot recover.  However, the wording of the policy does not mean Mr Rich is precluded from recovering if his shoulder injury alone is sufficient to render him incapacitated for work. 
Is Mr Rich totally and permanently disabled?
192	TAL submits that Mr Rich must prove that his disability is not to any extent caused or attributable directly or indirectly to his cervical spine, and that no such opinion is in evidence.
193	However because of my analysis above, I do not accept that Mr Rich must prove that the cervical spine is not causing any of his problems.
194	Rather, the test is whether, solely because of the shoulder injury, Mr Rich is incapacitated for work to the relevant degree.
Current symptoms
195	Currently, with respect to the left shoulder, Mr Rich describes a “very bad burning in the front of the shoulder, and just this bad ache at the back that just does not go away.” He said that his left shoulder symptoms restrict the use of his left arm “in everything I do with it, if I do anything it just aggravates it and makes the neck worse and my neck will lock up.” He said that since the surgery with Ms Keith his shoulder symptoms have deteriorated. 
196	In respect to his neck Mr Rich said his symptoms were similar to his pre-operative condition with bad pain in the base of his neck and headaches, and a feeling of nausea because of the pain, which also caused difficulties standing on occasion. He said the headaches come and go, and that sometimes he can wake and fall over immediately. 
197	Mr Rich also has problems with his left arm, which he described as pain down his arm and numbness in his fingers accompanied by a tingling sensation which was different to his left shoulder pain.  
Capacity to work
198	Both Dr Akil and Dr Slesenger opine that the Plaintiff, by reason of his injuries, is unlikely ever to be able to work in any capacity as an automotive spray painter and panel beater.
199	In his report dated 15 May 2023 Dr Akil noted that MRI after the accident showed  moderate acromioclavicular joint osteoarthritis with impingement of the supraspinatus muscle belly and a small partial tear of the superior insertion site of the subscapularis.  Dr Akil noted Mr Rich continued to have persistent left shoulder pain radiating towards the medial aspect of his arm and forearm down to his fingers.  The pain was associated with parasthesia in those regions.
200	Mr Akil opined that Mr Rich’s ability to return to work as a spray painter “is severely restricted”, that the job would require Mr Rich to use his arms, do overhead reaching and to be in awkward positions.  He considered that “the persistent headache, the presence of pain in his left shoulder (his dominant side) as well as the parasthesia that is affecting his left arm will hinder any plans to return to his previous job”. 
201	He considered that the persistent pain in Mr Rich’s shoulder, neck and his inability to sit or stand for reasonably long periods “will affect his ability to return to even a sedentary type of employment”. 
202	Dr Slesenger said that both the neck and shoulder injuries contributed to Mr Rich’s decrease in function.  He assessed the dominant shoulder injury as “a very significant impairment”.  Although he accepted that there was a component of the disability related to the neck injury he considered the shoulder was probably the more serious injury when assessing work capacity, as it would be difficult to create or adapt a work environment to accommodate the injury.
203	He said that it was possible to disentangle Mr Rich’s functionality in his left shoulder from his cervical spine injury.  He noted that Mr Rich was able to distinguish his shoulder pain from his neck pain and had learned what things aggravated his neck and what things aggravated his shoulder.  
204	He noted that Mr Rich had shoulder restrictions that were not related to his neck and that the reduced function and restricted range of movement in the shoulder caused pain and impacted on his ability to operate in the open job market. 
205	He considered, based only on the shoulder injury, that Mr Rich would have difficulty attending work reliably or consistently and would have difficulty working, even in an administrative role, within the automotive repair industry.  He considered that, due to the shoulder injury, Mr Rich had no capacity for his former occupation.
206	Mr Rich said his work prior to the car accident required him to pull parts off a vehicle using ratchets, spanners and jacks, sanding back damaged areas using a mechanical sander that weighed about 10kg, and repairing panels using a “dint puller” that weighted around 15 or 20kg.  He had to apply primer to the vehicle using an air-fed mask that covered his head and sat on his neck, mounted to his body.  He would then dry the vehicle using a hand held air-gun and would  reassemble the removed panels.  Some of the tasks would take several hours each.  
207	Mr Rich said he would not be able to perform any of the roles or duties required by his pre-injury employment.  He said “I just could not hold my arm up, or have that weight on my neck, I just couldn’t do it.”
208	While working at Barry Dixon he did light duties as a Workshop Manager including quoting on jobs, preparing documentations and generally supervising the workshop.  He said he had fluctuating pain during the course of this employment and required time off this work.  Even though it was part-time he said he did not attend every day.
209	This job was, apparently, created for him as part of a TAC sponsored return-to-work program.  After his surgery, when he was advised that he would not be able to return to his former role as a spray-painter, the role at Barry Dixon ceased.
210	Mr Rich said that, given his current state, he could no longer perform the role at Barry Dixon, even if it existed,  “because of my health, I’m just not well enough…. Just the pain in my shoulder and my sickness in the neck, I’d just be calling in sick and it would be unfair. I’m not well.”
211	He said his shoulder symptoms are now worse than they were previously. 
212	He said he could not do administrative or office work: “I just couldn’t hold, sit there still, use my arm, bending down, taking photos, looking under cars, my neck just – I just wouldn’t be able to cope with it.”
213	He said he was not computer literate and uses the internet for Facebook and Instagram only.
214	Mr Rich’s case is that he is totally and permanently incapacitated for any employment by reason of his injury.
215	He submits that the job at Barry Dixon is not evidence of any additional occupation for which he is suited. The capacity to perform work must be a capacity to perform an occupation or employment recognised in the community, that is a job that exists in the real world.  Mr Rich submits that this was a job created for him to try to provide him with a return to work option, but was not a real role that existed.
216	TAL says Mr Rich has failed to establish that there is no real chance that he will return to relevant work.  Mr Rich was not insured for return to work in his ‘own’ occupation, but rather in ‘any’ occupation for which he is reasonably suited by reason of his education, training and experience.  This is a wider range of occupations than the occupations he may have performed in the past.  That occupation does not necessarily need to be in the town in which he resides, and the fact that there may be few employment opportunities in his regional town is irrelevant.
217	Further TAL submits that an occupation need not be a full time occupation and that the reasoning set out by the judge in Pressnell v FSS Trustee Corporation that occupation was limited to a full-time occupation was in error.
218	TAL notes that Mr Rich was working part time prior to the accident and if he can work in any occupation where he earns 25% of his pre-injury earnings, then he is not totally and permanently disabled.  The policy does not respond to partial disablement, and does not provide income protection cover and therefore the word “total” cannot be ignored.
219	TAL says that Mr Rich was able to work as workshop manager at Barry Dixon and this demonstrates his ability to work, at least part time, in an occupation for which he is suited.
220	To recover under the policy, Mr Rich must prove he does not have capacity to earn only $6091 per year, and he has failed to prove there is no real chance that he will ever be able to earn such a small amount again.
Findings on shoulder injury and work capacity
221	Mr Rich has a substantial left shoulder injury.  He has a rotator cuff tear and a labral tear.  He has a significantly reduced range of movement in his left shoulder. 
222	He has had two corticosteroid shoulder injections with little impact on his pain. He has undergone left shoulder repair to try to stabilise the shoulder.  He has residual shoulder pain.  He described variable pain from the shoulder which was now worse than it had previously been, in line with the radiological evidence of deterioration of the shoulder.  I accept that Mr Rich was a generally reliable witness, notwithstanding some difficulty with recalling his pre-existing cervical spine problems.  He did not exaggerate or embellish his symptoms and frankly admitted that his cervical spine is also a cause of very significant problems for him.
223	I accept the evidence of Dr Slesenger that, assessing only the impact of the shoulder injury, and taking into account Mr Rich’s education, training and experience, and his capacity to attend reliably and consistently for work, he is unlikely to return to any employment for which he is suited.  Dr Slesenger has taken a full history and disclosed his path of reasoning in relation to each of the cervical spine and shoulder impairments.  He was also asked to turn his mind specifically to the question of Mr Rich’s capacity for work, taking into account only the shoulder injury.
224	I accept that Mr Rich has no prospect of return to his pre-injury employment.  I am not persuaded that the role at Barry Dixon is a job that exists “in the real world”, in the sense that it was a role designed for him only under a return to work program.  Although Mr Rich may have been providing some assistance to Barry Dixon, the fact that the role ceased once the support of the Transport Accident Commission was withdrawn raises a strong inference that the job was of insufficient utility to warrant the salary once the TAC subsidy was withdrawn.  
225	I do not accept that one can take a selection of skills a worker has by training and experience that remain after an injury, and determine that a job that would use those skills exists and would attract a salary in excess of the relevant threshold.
226	 In Halloran v Harwood Nominees Pty Ltd & AnorBrereton J reiterated that the “occupation” means a “recognised” occupation, not a “special light duties job for injured workers”.  
227	In Baker v Local Government Superannuation Scheme [2007] NSWSC 1173, McDougall J held:
“I have set out already the approach that has to be taken in assessing the availability of alternative work. The Court is required to take a realistic and commonsense approach. There must be a real prospect, and not merely some theoretical possibility, that the work will be available. It should not be work in some special light duties job created for the injured worker. In my view, the evidence on which the Trustee relied falls far short of discharging that onus. I have the very strong impression that the Trustee grasped at the possibility or theory of availability of work, and refrained from turning its mind to the real question which is whether, in the real world, Mr Baker was ever likely to obtain such work.”
228	In Folan v United Super Pty Ltd [2014] NSWSC 343, Nicholas AJ held:
“…The opinion that the plaintiff was fit for office or light duties gave descriptions which were, at best, vague and general. For the purpose of identifying suitability for an occupation in which the plaintiff could be likely to be engaged in the future, the descriptions were empty of content, and invited only speculation. The reasonable reader would understand that Dr Burrow's opinions as to fitness were confined to the plaintiff's physical condition. As to the prospect of "meaningful employment" and "ongoing workability" his opinion, on 7 June 2010, was that it was very unlikely.
…
Furthermore, in my opinion, there was no evidence which supported the proposition that there existed forms of employment for the plaintiff of value in the open market in which he could reasonably engage. Taken overall, the decision reflects a failure to adequately consider whether, in the real world, work which required only the use of one arm and restricted use of the other was reasonably available for a manual labourer, such as the plaintiff.”
229	TAL cannot say that Mr Rich can:
(a)	organise employees with work and job tasks, 
(b)	make sure workers have work to do, 
(c)	provide quotes and service to customers, 
(d)	talk and teach new workers, 
(e)	receive vehicles and deliveries and check that orders have arrived; and 
(f)	check off parts on paperwork; 
and therefore has capacity to work, if it cannot point to an actual job that requires those skills.
230	Further, an actual assessment of the tasks required to perform the work is necessary to understand whether it can be performed by a worker.  An ability to organise workers might, depending on the specific job, require particular computer or human resources skills that Mr Rich does not have.  Receiving vehicles and deliveries might involve bending, lifting and twisting beyond Mr Rich’s capabilities.  The tasks undertaken during the period with Barry Dixon cannot simply be extracted to provide evidence of Mr Rich’s fitness for some other job, in the absence of any evidence that such a job exists.
231	Mr Rich has put forward evidence that I accept that:
(a)	he cannot perform his pre-injury role;
(b)	could no longer perform the role at Barry Dixon; and 
(c)	that the role at Barry Dixon does not represent an actual occupation for which he is suited.  
232	I also accept that his shoulder injury means he could not reliably and consistently attend work, even on a part time basis.  It is not then for Mr Rich to examine every possible occupation and to establish he could not perform it.  
233	Once he has established, on acceptable evidence, his incapacity for work, the onus is on the defendant to propose occupations for which it contends Mr Rich has capacity.  An occupation must be more than a list of tasks.  There must be evidence of an actual occupation which comprises tasks which Mr Rich has the capacity to perform. There must be evidence of the physical requirements of those tasks.  This sort of evidence is commonly seen in reports of vocational assessors which set out the physical requirement of each element of a particular identified job, and occupational physicians who opinion on the worker’s capacity to perform the particular tasks.  There is no such evidence in this case..  
234	Accordingly I am satisfied that Mr Rich has, by reason solely of his shoulder injury, not been working in any occupation for three consecutive months and is incapacitated to such an extent as to render him unlikely ever to be able to work in any occupation for which he is reasonably suited by training, education or experience that would pay remuneration at a rate greater than 25 % of his earnings during his last 12 months of work.
235	For the reasons set out above I am satisfied that the job at Barry Dixon was not a real job for which Mr Rich had capacity by reason of his education, training and experience.  The parties agree that if the Barry Dixon job was not a real job, the date on which Mr Rich became incapacitated is 1 June 2016.
236	Accordingly Mr Rich is entitled to the insured amount as at that date.
237	I will hear the parties on the appropriate orders and on costs.