This summary is about this question:

1. Whether the insurer MetLife had acted with the utmost good faith in the consideration of the TPD claim; and

2. What does “unlikely” mean? Within the definition (§) of the TPD policy ie whether the insured was “unlikely to ever engage in any gainful profession for which she is suited by education, training or experience”.

The case clarifies what “unlikely” means.

Ziogos v FSS & Metlife [2015] NSWSC1385 (Equity)
NSW Supreme Court
Justice Ball

This is a case involving a NSW Police Officer, her psychological injury and her claim for a TPD benefit.  The TPD claim sought both a Basic Benefit and also a special benefit called a PBRI (Police Blue Ribbon Insurance benefit).

The main issues in this case are:

1. Did the insurer MetLife act with the utmost good faith in the consideration of the claim; and

2. What “unlikely” means within the definition (§) of the TPD policy ie whether the police officer was “unlikely to ever engage in any gainful profession for which she is suited by education, training or experience”. This is a case that  clarifies what “unlikely” means.


The female police officer had a 16 year career with the NSW Police Force.

Two years after her HSC Officer Ziogos went to the Police Academy. After being made a Probationary Constable she worked in General Duties at Flemington and Parramatta police stations.

Next Officer Ziogos worked in Highway Patrol for 6 years by which time she became a Sergeant at Blacktown Police Station.

But between 2006 and 2009 her psychological symptoms developed and by 2009 Officer Ziogos would cry uncontrollably when travelling home from work. She was referred to Dr Smith a consultant psychiatrist. Officer Ziogos was diagnosed with Post Traumatic Stress Disorder. There had been in her career in General Duties a ‘significant number’ of traumatic incidents involving deaths, suicides, murders and other horrific events.

Officer Ziogos was then medically discharged from the NSW Police in 2011. At about that time she made a claim for TPD benefits. It took MetLife 2 years, until March 2013, to decline the claims.  Her declined claims were then referred for review at the Claims Review Committee (CRC), a special committee within First State Super. The CRC also declined her claim.

Ms Ziogos then took her claims to the Supreme Court of New South Wales.

Justice Ball heard this case.

Ball J said that an insurer when faced with a claim by an insured owes the insured a duty of utmost good faith – sometimes described as a ‘duty of good faith and fair dealing’ – in its dealing with claim. That duty applies at common law and it also appears in the Insurance Contracts Act 1984 (Cth), as a result of amendments that took effect in 2013 (ss 13, 48A).

[66] What this means is that MetLife must act with the utmost good faith in determining whether the insured had provided proof to its satisfaction that a particular state of affairs existed (i.e. within the (§ )definition).

[68] The duty of utmost good faith is broader than the implied term. It applies to all aspects of the claims handling process. So, for example, it required MetLife to consider the claim within a reasonable time period after the claim was made, although what a reasonable time period is depends very much on the circumstance of the case.

[73] “… the duty of utmost good faith is not to be equated to the implied obligation to act reasonably and forming an opinion concerning, or being satisfied about, a particular matter …

 “If an insurer forms an opinion or reaches a state of satisfaction about a matter and acts reasonably in doing so, it is difficult to see how the insurer breached its duty of utmost good faith merely because in forming that particular opinion or satisfied about that particular matter.”

[74] MetLife submitted that the question about whether the insured suffered from a TPD i.e. Post Traumatic Stress Disorder, was purely objective.  In other words, Metlife was of the view that if it considered that its decision was “in the range” of what was reasonable then that was the proper discharge of its duties under the contract.  The Judge rejected that submission.

His Honour said that what is required is for the insurer to form an opinion itself, and in so doing, to act in the utmost good faith, and that it was not sufficient in the way that MetLife reached its decision.

[75] Ball J looked carefully at the reasons provided in the decision by MetLife. He examined the reasons by MetLife very closely.  This is because:

“where an insured person’s rights depend not on the objective fact (whether or not the insured suffered from TPD) but on the insurer’s opinion concerning that question, the requirement of utmost good faith requires the insurer to explain how it reached the decision it did so that the insured person can be satisfied that the decision itself was reached in the utmost good faith”.

[79] The question in issue in this case was whether MetLife had properly satisfied itself that the insured was “unlikely ever to engage in any gainful profession or occupation for which she was reasonably qualified by reason of education, training or experience”.

[81-85] Ball J considered what “unlikely” to work again meant.

The decision of White J in White v Board of Trustees [1997] 2 QdR 659, was quoted and affirmed, and that decision is also supported by the Full Court of Western Australia in Beverley [1999] WASCA 198, and also by Brereton J in Halloran [2007]

NSWSC 913.

[81] As to what “unlikely” means, the often quoted extract from White J’s decision is:

“The addition of “ever” to the condition allows the Board to look well into the future but does not, in my view, affect the degree of unlikelihood to which regard must be had.  There is a body of opinion to which I have referred which would say that “unlikely” means “improbable” in the sense of a less than 50 per cent chance. In ordinary usage this may be much the same as saying that there is no real as opposed to a remote chance of the designated event occurring or to take up one of the dictionary meanings, the prospect of the event occurring is unpromising.”

White J, 674

“ I conclude that in approaching the task of informing its opinion the Board did not have regard to the ordinary meaning of “unlikely” as meaning no real chance or even improbable and entertained something more remote as sufficient.

Qualifying Period

[86] His Honour next considered the issue of when the insured qualifies to be considered as meeting the definition. Ball J said that it would be appropriate to consider the question of when to make this assessment as being “at the time the insurer forms its opinion or fails to form its opinion consistently with its duty of utmost good faith”.

In other words His Honour did not think the assessment need be done at a point in time 6 mths after ceasing work, but could be at a later time. This in described variously in other cases as 6 months after ceasing work, however Ball J considered the date can be moved into the future.

What was unreasonable?

[87] His Honour next looked at the question of whether MetLife had acted reasonably. In doing so His Honour did not think that MetLife had acted unreasonably by engaging in covert surveillance of the insured. Nor did His Honour think it was unreasonable that MetLife had failed to investigate the claim and make a determination in a timely manner. Nor is the fact that the insurer had requested submissions in relation to material without identifying material that was considered to be adverse (i.e. referring to the Procedural Fairness documentation. His Honour thought that as the insured was legally represented they should be able to work out what was adverse and what was not). Also His Honour did not consider it to be unreasonable that MetLife’s refused or omitted to reconsider the claim, as requested by First State Super, before it went to the Claims Review Committee.

[88] His Honour however did consider that it was unreasonable for MetLife to prefer the opinion of Dr De Saxe and Mr Anderson, psychologist over the opinions of Dr S Smith. Secondly, His Honour considered that Dr De Saxe and Mr Anderson’s opinions were merely speculative concerning what ‘might happen in the future with certain treatment’. The Judge contrasts this with extensive experience of Dr Smith as treating psychiatrist, and a psychiatrist with expertise in PTSD. Thirdly, MetLife had acted on the erroneous belief that the insured was capable of working part-time.

[97] Dr De Saxe had provided written opinion that the insured could work either full-time or part-time. The decision of MetLife, in its reasons which were “expressed very briefly” relied on that opinion, on video surveillance and also on the insured’s age.

[98] His Honour said “in my opinion, MetLife could not reasonably have reached the conclusions it did on the evidence available to it”

[101] It was unreasonable for MetLife to think that the insured could go back to work at some time in the future. That conclusion was based on the opinions of Dr De Saxe and Mr Anderson, the insured’s age and the video evidence. [102] The MetLife doctors had expressed some hope and expectation of a return to work. In other words they were statements about possibilities, rather than statements about what was likely or unlikely given the particular circumstance. For example Mr Anderson’s report was hopeful that the insured would respond to treatment. But there was no evidence of the treatment under consideration being undertaken. There could have been follow-up opinion from Mr Anderson, but they did not seek it.

MetLife routinely has asked their independent doctors whether, as in this case, the insured, with at least 24 years working life remaining, whether her age was relevant. His Honour thought that age would be a relevant factor when taken together with other factors, but stated

“to the extent that MetLife formed the view that at some time the insured would be able to return to work because she had so many working years left of her life, it was confusing what was possible with what was likely and unlikely.”

In this regard His Honour is referring to the decision by White J (above).

[103] It was also unreasonable that MetLife relied upon the opinion of Dr De Saxe, who had said that special psychotherapy treatment would benefit the insured, when Metlife had not “taken some steps to determine”  whether the insured had actually received the treatment, or completed the treatment and so on; ie whether that special treatment had helped her.

[104] His Honour also was of the opinion that it was “unreasonable for MetLife to place any weight on the video surveillance”.  His Honour

“The activities undertaken by the insured in the video bore no relationship to the activities that she would be required to undertake in employment.”

The judge thought that “the video was significant only in that it was generally consistent with the symptoms that she had reported, undermining any suggestion that to some extent or another the insured was malingering”.
In other words, there was nothing in the video that was inconsistent with her diagnosis of PTSD.

[112] It is noteworthy that the Judge recorded this in relation to the insured’s various activities during the conduct of the claim. The Judge didn’t think this was adverse to a decision that she was TPD. The judge took the following into account in coming to the decision that the insured was TPD

“On 31 March, 2010, she acquired a property in Beaumont Hills, and in order to do so she sold two investment properties she owned. She sold a further investment property in Toongabbie that she had bought in June 2009 in April 2013. She has travelled overseas on 4 occasions – to Greece in 2010, Bali in 2011, Greece in 2012 and Greece and Dubai in 2014, it appears in each case with one or more of her parents, and may have travelled to Melbourne once. She drives a car, lives by herself, has on occasions gone to the gym and sometimes meets up with friends. In addition, she had of Facebook page, and although she says that she does not want to engage in any activity that reminded her of the police she followed the Deputy Commissioner of Police on Facebook between 2010 and 2014. MetLife also relies on the fact that the insured had no difficulty giving evidence.”

[124] It follows that the judge formed the view that not only had MetLife acted unreasonably in specific ways in which they managed the insured’s claims but that he also considered that they had breached the duty of utmost good faith, and his honour went on to review the evidence and concluded that the insured was TPD within the meaning of policies.

[125] His Honour awarded the insured the Basic amount, and also the Police Blue Within amount. Those 2 amounts together are about $935,000.