DISTRICT COURT OF QUEENSLAND
CITATION:
Holman v Brisbane Roar Football Club Pty Limited [2021] QDC 300
PARTIES:
BRETT HOLMAN
(Plaintiff)v
BRISBANE ROAR FOOTBALL CLUB PTY LIMITED ACN 136 768 566
(Defendant)FILE NO:
2934/20
DIVISION:
Civil
PROCEEDING:
Trial
ORIGINATING COURT:
Brisbane District Court
DELIVERED ON:
30 November 2021
DELIVERED AT:
Brisbane
HEARING DATE:
25 November 2021
JUDGE:
Porter QC DCJ
ORDER:
- Judgment in favour of the Plaintiff in the amount of $369,433.26.
- The Defendant to pay the Plaintiff interest in the amount of $41,815.80 pursuant to section 58 of the Civil Proceedings Act 2011 (Qld).
- The Defendant to pay the Plaintiff’s costs of the proceeding on the standard basis.
CATCHWORDS:
INSURANCE – CONSTRUCTION OF POLICY - where plaintiff injured in an official A-League match – where the injury prevented plaintiff from participating in professional football between 14 April 2018 and 9 May 2020 – where plaintiff made claim for total temporary disablement benefits under the policy – where defendant received the benefit payable under the policy – whether plaintiff is entitled to the total temporary disablement benefit payable under the policy – whether defendant either held the proceeds on trust for plaintiff, or alternatively was required to account to him for the proceeds as received by defendant as his agent
COUNSEL:
M. Doyle for the Plaintiff
M. Jones for the Defendant
SOLICITORS:
Gadens Lawyers for the Plaintiff
Mills Oakley for the Defendant
BACKGROUND
Football Federation Australia Limited (FFA) is the national governing body for football in Australia, including the A-League.[1] The Club is (and was at all material times) an A-League Club (the Club).[2] The Professional Football Association Inc (PFA) represents its members, who include A-League players, and is their appointed exclusive bargaining agent.[3]
[1] SOC [1(b)], admitted Defence [1].
[2] SOC [1(a)(iii)], admitted Defence [1].
[3]SOC [1(e)], admitted Defence [1].
The Plaintiff (Mr Holman) was a professional football player, and a member of the PFA between September 2016 and May 2019. He played for the Club in the A-League between about September 2016 and May 2019.
On about 23 September 2016, Mr Holman, the Club and FFA entered into an ‘A-League Standard Player Contract’, pursuant to which Mr Holman was engaged to play for the Defendant in the A-League between 1 September 2016 and 31 May 2018 (First SPC). For the period between 1 June 2017 and 31 May 2018, Mr Holman’s annual salary (including superannuation) was $372,300.
On or about 7 June 2017, the Brisbane Roar, the other A-League football clubs and FFA (identified as the Policy Holder) on the one hand, and Arch Insurance on the other, entered into a Professional Sports Group Accident Insurance Policy (the Policy).[4] In broad terms, the Policy provided Lump Sum benefits, Temporary Total Disablement (TTD) benefits and Additional Benefits payable where A-League players (and others) sustained bodily injury caused by an accident which occurred during the period of cover under the Policy, being 30 June 2017 to 30 June 2018.
[4] Exhibit 1, tab 8.
On 14 April 2018, Mr Holman sustained an injury while playing in an official A-League match on behalf of the Club. As a result, he was prevented from participating in professional football from 14 April 2018 to 9 May 2020, though it is evident from the Claim under the Policy referred to below, that it was expected by all parties that Mr Holman would be playing again within six weeks.
On about 15 May 2018, Mr Holman, the Club and FFA entered into a further ‘A-League Standard Player Contract’, pursuant to which Mr Holman was engaged to play for the Club in the A-League between 1 June 2018 and 31 May 2019 (Second SPC). Pursuant to the Second SPC, Mr Holman’s annual salary (including superannuation) was $178,000.
On about 18 June 2018, Mr Holman completed and signed an Arch Insurance claim form claiming benefits under the Policy (the Claim). The Claim included medical evidence and a copy of the First SPC. It will be noted that the Claim was made after the First SPC had expired and while the Second SPC was current. However, the First SPC was in force at the time of the injury. On the same day, an officer of Brisbane Roar forwarded Mr Holman’s insurance claim to the insurer, inviting the insurer to ask for any further information required.
So far as I can see, the Claim did not specify which of the three categories of benefit available under the Policy was claimed by Mr Holman, and there is no evidence of any correspondence about that issue. However, it is common ground that the insurer who accepted the claim paid TTD benefits.
Specifically, between 4 July 2018 and 3 June 2019, the Club received the TTD benefit payable under the Policy for the period between 12 May 2018 and 31 May 2019, in the total amount of $369,433.26 (the proceeds).[5] The amount of the proceeds is equivalent to Mr Holman’s salary under the First SPC for the period 12 May 2018 and 31 May 2019, capped in accordance with the Policy at $350,000 in any 52 week period.
[5] SOC [21], admitted Defence [17].
Although it was not specifically stated, it appeared to be common ground, and at least impliedly admitted on the pleadings, that that sum was paid by way of weekly payments in accordance with the Policy.[6] In the same period, the Club paid Mr Holman’s salary under the two SPCs from time to time in the amount of $198,456.06.[7] There is a dispute as to whether the correct measure of the benefits payable under the Policy was by reference to the salary calculated under the First SPC or calculated under the Second SPC. If the latter, I understand it to be common ground that the insurer has overpaid benefits under the Policy by $170,976.66.
[6] SOC [18], Defence [14(a)].
[7] Defence [14(b)], admitted Reply [1].
Accordingly, while Mr Holman has been paid the sums due under his successive SPCs while injured, the Club has received the TTD benefits which the insurer has paid under the Policy in an amount which considerably exceeds the amounts paid to Mr Holman.
THE ISSUES AT TRIAL
By this proceeding, Mr Holman contended, on the proper construction of the Policy, that it is he, rather than the Club, who was entitled to the TTD benefits paid to the Club by the insurer and that the Club either held the proceeds on trust for him, or alternatively, was required to account to him for the proceeds as agent. Mr Holman’s statement of claim also advanced claims for damages for misleading or deceptive conduct, but did not pursue those at trial, thereby considerably narrowing the issues. Both parties made further reasonable and helpful concessions at trial. Ultimately, three issues remained for resolution:
(a)Was Mr Holman, rather than the Club, the person entitled to receive the TTD benefits?
(b)If so, was the TTD benefit properly calculated by reference to the First SPC, or by reference to the amount to which he was entitled pursuant to the First and Second SPCs from time to time during the injury period?
(c)If the latter (and accordingly on the proper construction of the Policy, the insurer had overpaid the amount of the benefit to the Club by $170,976.66), is Mr Holman nonetheless entitled as against the Club to that overpayment?
One further issue, joined on the pleadings and in the outlines, was resolved by counsel during the trial. Mr Holman contended, by his pleadings and by his written opening, that the proceeds were received by the Club either on trust for him or as his agent and that the Club was required to account to him as principal for that sum.
It seemed unlikely to me that, if I found that Mr Holman was entitled to part or all of the proceeds, the Club would maintain that he was not entitled to be paid those funds. I queried whether the Club would be willing to concede that it would pay the proceeds to him if I found he was entitled to the proceeds, thus obviating the need to resolve the issue about the basis in law for that entitlement to arise. After considering the matter over lunch, Mr Jones (who appeared for the Club) stated that the Club was not seeking to deprive Mr Holman of legitimate entitlements and stated that:[8]
if Mr Holman was entitled to the whole of the sum that the club received, the club will pay any amount which was payable to Mr Holman and which hasn’t already been paid to him without an order. So that leaves open your Honour finding either that he was entitled to his salary plus the 385 figure or his salary plus the 170 or his salary plus zero.
[8] TS 86.34.
Based on that undertaking, it is unnecessary for me further to consider the basis upon which Mr Holman would be entitled to be paid the proceeds received by the Club. However, I consider the Club’s concession rightly made. Putting the trust issues to one side, it seems clear that, if he was entitled to the TTD benefit, then the Club received the proceeds as his agent and had an obligation to account to him in the event that he was entitled to the proceeds under the Policy. The specific clauses of the Policy relating to payment confirm that conclusion.[9]
THE POLICY
[9] See Clause 11 on page 24 of the Policy and Clause 11 on page 25 of the Policy which, in my view, provide a mechanism for the insurer to be able to get a good discharge by paying in accordance with the direction of the Policy Holder involved in the claim. They have no relevance to the entitlement to benefits so paid. Where the Covered Person makes a claim and is entitled to the benefit, and the Policy Holder directs payment to itself, it must be doing so as the agent for the Covered Person. It is unnecessary to expand further on this issue.
Preliminary observations
The fundamental issue to be resolved is the proper construction of the Policy. Before setting out its relevant terms, some preliminary points need to be made.
First, the pleadings and evidence dealt with other contracts involving the parties to these proceedings, particularly an Enterprise Bargaining Agreement (Exhibit 1, tab 7) and a Club Participation Agreement (Exhibit 1, tab 5). It was common ground that on the issues as ultimately joined by the parties at trial, those contracts were irrelevant. It was also common ground that for the purposes of the construction of the Policy, the First and Second SPCs were irrelevant (though they were relevant to the calculation of the amount of the TTD benefit).
Second, the documents which contain the Policy terms require some explanation. Like many other issues in this trial, the parties reached a substantive consensus on this issue, and as I understood this position, that consensus is as I have set out below. Independently of that, this point represents my own conclusions.
The Policy appears at tab 6 of Exhibit 1. It is made up of two distinct documents.
(a)The first is the Policy Schedule. It comprises six pages but there are no page numbers, or paragraph or clause numbers. It appears at pages 285 to 290 of Exhibit 1. For convenience, I will use those page numbers in references to the Schedule.
(b)The second is the Product Disclosure Statement (PDS). It is a single document of 28 numbered pages. I will use the PDS page numbers in references to that document.
The PDS is in turn divided into two distinct sections:
(a)The Policy wording or the Policy terms, which commence at page 13 with the definitions (the Policy terms); and
(b)The balance of the PDS, which comprises various statements, some of which relate to the terms of the Policy and some of which do not, at pages 1 to 12.
The dichotomy is not perfect as the Policy terms incorporate by reference the section in the balance of the PDS under the heading “When does a COVERED PERSON’S access to benefits under the Policy begin and end?”.[10]
[10] PDS at pages 5-6.
Apart from the express incorporation by reference, the contractual status of the balance of the PDS is unclear. The Schedule identifies the “Policy Wording” by reference to a lengthy word processing identification number. That number appears on every page of the PDS, suggesting that the whole PDS comprises the terms of the Policy. On the other hand:
(a)The “Summary of Insurance” section of the PDS states that it does not form part of “the terms of the insurance”;
(b)There are numerous inconsistent and ambiguous statements in the Policy terms and the balance of the PDS as to what comprises the contract of insurance;[11]
(c)There are various disclosure and information provisions in the balance of the PDS which are not, in any view of it, promissory or relevant to the terms of the insurance (privacy and renewal advice, for example);
(d)There are some remaining sections which can be characterised as relevant to the Policy terms and might or might not be part of those terms: see the section headed “How benefits are provided under this insurance” below.
[11] See the extracts below from the PDS from page 3, the first paragraph under “Summary of Insurance”, the statement as to the scope of the insurance cover on page 5, the description of the Policy on page 6 and the definition of Policy in the Definitions.
As I understood the position, counsel for both parties agreed that, with the exception of parts of the balance of the PDS incorporated by reference, the sections of the balance of the PDS which could be characterised as relevant to the Policy terms were not part of those terms but could be considered in construing those terms.
Ultimately, the place of any contractually ambiguous part of the balance of the PDS in the identification and construction of the scope of the insurance probably has to be determined on a section by section basis. Ultimately, the resolution of the issues in this case did not turn on such an analysis.
The dispute at trial can be summarised as follows: what was the value of the TTD benefit, and which of the Club or Mr Holman was entitled to that benefit, in circumstances where the Club had paid all of Mr Holman’s contract salary while he was injured?
That dispute turns on resolving the following characterisation issue. Did the TTD section of the Policy:
(a)directly insure the salary payable to Mr Holman under his SPCs while he was unfit to play; or
(b)provide a benefit distinct from his entitlement, if any, to payment pursuant to the SPCs while he was unfit to play?
The Club contends that the former is the correct characterisation of the TTD benefit. The Club submits that as the Policy insured the salary payable to Mr Holman under his SPCs while he was unfit to play, the person entitled to the benefit was determined by reference to which of the Club or Mr Holman suffered a loss in respect of his contractual salary while he was injured.
The Club contends that if Mr Holman was not paid his contractual salary by the Club while unfit to play, then the loss fell on Mr Holman and he was entitled to indemnity for that loss of salary under the TTD section of the Policy. On the other hand, if the Club did pay his salary, then the Club suffered the loss in relation to the contractual salary because it paid for Mr Holman’s playing services while receiving none. On this analysis of the effect of the TTD section of the Policy, as the Club had paid Mr Holman’s contractual salary, it had suffered the ‘loss’ and was entitled to the TTD benefit.
Mr Holman contends that the latter is the correct characterisation of the TTD benefit. He submits that the Policy provided a TTD benefit distinct from his entitlement, if any, to payment pursuant to any contract a player might have. He contended that the role of the salary paid under any player contract in the TTD benefit was limited to identifying a basis for calculating the benefit to which the player alone was entitled.
He submitted, alternatively, that even if both the Club and a player could be entitled to TTD benefits, the benefit in fact was paid on his claim. The Club had made no claim, and accordingly, even if the Club could claim, it had not.
So, the broad point of inquiry to which an answer is sought, by construction of the Policy, is whether the TTD benefit in effect insured the salary actually payable while the player was unfit or provided a separate benefit for the player dehors any contractual entitlement to salary while unfit.
The Schedule
The Schedule relevantly provides:
THIS IS TO CERTIFY that in accordance with the authorisation granted to the undersigned (“The Service Company Coverholder”) by Arch Underwriting at Lloyd’s – Syndicate 2012 (“The Underwriter”) and in consideration of the premium specified herein, the said Underwriter is hereby bound, to insure in accordance with the terms and conditions contained herein or endorsed hereon and the wording attached to this Certificate.
POLICY HOLDER: Football Federation Australia Limited ACN 106 478 068 and all its subsidiaries, and:
…
Brisbane Roar FC operated by Brisbane Road Football Club Pty Ltd (ABN 49 136 768 566)
…
TYPE OF INSURANCE: Professional Sports Group Personal Accident Insurance
POLICY WORDING: ARCHPDSPRO201604V1
INSURANCE PERIOD: From 4pm at 30 June 2017 to 4pm at 30 June 2018
COVERED PERSONS: Category 1 : Hyundai A-League Players
Category 2 : …
…
| OPERATIVE PERIOD OF COVER | A) Engaging in official club matches / activities including championship, club, country or other State representative matches /activities (including A-league All stars fixtures, Asian Champions League; exhibition matches; National Premier Leagues and FFA Cup); |
As to the scope of cover relating to each category of benefits, the Schedule relevantly provides:
SECTION 1 SUMP SUM BENEFITS SUM INSURED COVERED EVENT 1 ACCIDENTAL DEATH Category 1-6:
$150,000COVERED EVENTS 2-34 As per Table of Benefits 1 Category 1-6
$150,000SECTION 2 TEMPORARY TOTAL DISABLEMENT Category 1 TEMPORARY TOTAL DISABILITY Benefit Maximum weekly
SALARY capped at total maximum claim of $350,000 per annum
Maximum Percentage of SALARY 100% Maximum BENEFIT PERIOD (weeks) 104 weeks, other than for players 35 years of age or date of BODILY INJURY whereby which the maximum BENEFIT is 52 weeks.
...
SECTION 3 ADDITIONAL BENEFITS Rehabilitation expenses
Dependent child assistance
Home and or vehicle modification
…$500
$500
$10,000
By the Endorsements, the Schedule relevantly provides:
ENDORSEMENTS:
…
TEMPORARY TOTAL DISABLEMENT BENEFIT
It is hereby noted and confirmed that the maximum annual TEMPORARY TOTAL DISABLEMENT BENEFIT is capped at $350,000 per annum. The weekly SALARY payable will be paid at the full weekly contract value until any BENEFIT payable reaches a total of $350,000 within any 52 week period. BENEFITS will then cease until the next 52 week BENEFIT PERIOD falls due on the anniversary date of the first payment for the covered event.As a matter of clarity, SALARY does not include sign on fees.
…
The balance of the PDS
The relevant PDS provisions, other than those which form part of the Policy terms, are as follows:
(a)By page 3, relevantly:
This Produce Disclosure Statement (PDS) which incorporates the POLICY wording is an important document that contains details of the POLICY. This document is prepared by ARCH for and with the assistance and consent of the INSURERS who are responsible for it.
(b)By page 4, relevantly:
How benefits are provided under this insurance
The benefit of the cover under this insurance is extended to persons who meet the specified eligibility criteria (see the definition of the ‘COVERED PERSON’ in the “Definitions” section).
If any COVERED PERSON suffers a loss of the type described in this document, they have a right to recover the amount of their loss from US in accordance with this POLICY solely by operation of section 48 of the Insurance Contracts Act 1984 (Cth). They can make a claim for the benefits detailed in this document but do not enter into any agreement with US and are not charged by US for the right to make a claim for those benefits.
COVERED PERSONS have no right to cancel or vary the POLICY or its cover – only the POLICY HOLDER (as the contracting insured) and WE can do this. If WE cancel or vary the POLICY or its cover, WE do not need to obtain a COVERED PERSON’S consent to do so.
…
(c)By pages 5 to 6, relevantly:
The insurance cover is subject to the terms and conditions (including limits and exclusions) set out in the POLICY.
Therefore the COVERED PERSONS should read this document carefully and keep it in a safe place. Please keep detailed particulars and proof of any loss the COVERED PERSON suffers and proof of the COVERED PERSON’S eligibility for this insurance.
Neither WE nor the POLICY HOLDER hold anything on trust for, or for the benefit or on behalf of, COVERED PERSONS under this insurance arrangement. The POLICY HOLDER does not:
·act on OUR behalf or a COVERED PERSON in relation to the insurance;
·have any authorisation to provide any financial product advice, recommendations or opinions about the insurance; and
·receive any remuneration or benefits from US.
…
When does a COVERED PERSON’S access to benefits under the POLICY begin and end?
A COVERED PERSON may only make a claim for benefits for which cover is available in accordance with the POLICY terms and conditions (including limits and exclusions).
1.A COVERED PERSON’S OPERATIVE PERIOD OF COVER begins at the EFFECTIVE DATE OF COVER.
2.A COVERED PERSON’S OPERATIVE PERIOD OF COVER ends on the earlier of:
·the time they cease to be a COVERED PERSON;
·the date and at the time shown on the SCHEDULE as the end of the INSURANCE PERIOD;
·the time the POLICY HOLDER requests that such COVERED PERSON no longer has access to benefits such as a COVERED PERSON;
·the date that the COVERED PERSON attains the age of 35 unless otherwise agreed to by US in writing;
·the date the POLICY is cancelled by the POLICY HOLDER or US;
·the time the COVERED PERSON’S contract of employment or services is terminated;
·the time the COVERED PERSON’S contract of employment or services is altered to decrease:
- compensation; and / or
- the period of the contract,unless WE are notified of the alteration and agree in writing to continue the coverage under the POLICY; and
·the 3rd (third) business day after the day on which WE advised the POLICY HOLDER in writing that the COVERED PERSON is no longer eligible to access the benefits or such later time as WE may specify in the notice.
We are not obliged to notify a COVERED PERSON of termination of the POLICY.
The Policy terms
The relevant Policy terms provide (keeping in mind that the section in [35](c) above as to when access to benefits begins and ends is incorporated into the Policy terms):
(a)By the Definitions section:
ACCIDENT(AL) means a single, sudden and unexpected event, which occurs at an identifiable time and place during the COVERED PERSON’S OPERATIVE PERIOD OF COVER and which directly and independently causes BODILY INJURY or death.
ASSURED means the person or entity identified in the SCHEDULE who shall be entitled to the benefits covered hereunder other than that due in the event of ACCIDENTAL death.
BENEFICIARY means the person designated in the SCHEDULE to receive the benefit under the POLICY (or executors or administrators of the COVERED PERSON if no BENEFICIARY is named in the SCHEDULE) in the event of the ACCIDENTAL death of the COVERED PERSON.
BENEFIT PERIOD means the maximum duration for which a TEMPORARY TOTAL DISABLEMENT claim may be paid.
COVERED PERSON means the person/s identified in the SCHEDULE.
EFFECTIVE DATE OF COVER means the date the person as either identified in the SCHEDULE or declared to US is added to the POLICY as a COVERED PERSON.
OPERATIVE PERIOD OF COVER means the specified period for which a COVERED PERSON has access to benefits under the POLICY as explained in “When does the COVERED PERSON’S access to benefits under the POLICY begin and end?”
POLICY means OUR contract with the POLICY HOLDER, consisting of this document, the SCHEDULE and any other documents WE state form part of the terms and conditions of OUR contract with the POLICY HOLDER (such as additional endorsements or Supplementary PDS).
POLICY HOLDER means the company, association, club or individual noted as the insured on the SCHEDULE, with whom WE have entered into the contract of insurance. They are the contracting insured.
SALARY means:
·for a COVERED PERSON who is a salaried employee, their gross weekly rate of pay excluding, bonuses, commissions, overtime or allowances averaged over the twelve (12) months prior to the BODILY INJURY, or averaged over a shorter period if the COVERED PERSON has been in that role for less than twelve (12) months; or
·for a COVERED PERSON on a set duration CONTRACT it means the weekly annual contractual value. This can include annual salary, match payments and superannuation as declared to US. Weekly Salary is calculated daily at 1/365 of the annual contractual value for each day a COVERED PERSON is unfit to play. It does not include sponsorship contract values.
SCHEDULE means the document attached to this POLICY and is part of the insurance. A new SCHEDULE is issued on each renewal.
TEMPORARY TOTAL DISABLEMENT/DISABILITY means disablement which temporarily and totally prevents the COVERED PERSON from participating in their OCCUPATION.
(b)By the Covered Events in section 1:
Section 1 – Lump Sum Benefits:
In the event a COVERED PERSON sustains a BODILY INJURY caused in and of itself by an ACCIDENT which occurs during the OPERATIVE PERIOD OF COVER and which solely and independently of any other cause results in any of the below listed COVERED EVENTS, within 365 days from the date of the ACCIDENT, the UNDERWRITERS agree to pay benefits as set out in the table of COVERED EVENTS, provided an amount is showing on the POLICY SCHEDULE for that event.
Benefits payable for this Section 1 shall be reduced by any sum already paid under Section 2 – TEMPORARY TOTAL DISABILITY benefits and Section 3 – Additional benefits under the POLICY.
Subject to the terms, conditions and exclusions of this POLICY, WE will also pay the additional benefits set out in Section 3 for BODILY INJURY, covered by this POLICY, unless any specific benefit is specified as ‘not covered’ in the SCHEDULE.
Table of COVERED EVENTS
COVERED EVENTS Percentage of SUM INSURED as showing on the SCHEDULE 1. ACCIDENTAL death 100% 2. PERMANENT Quadriplegia or Paraplegia 100%
(c)By Section 2:
Section 2 – TEMPORARY TOTAL DISABILITY Benefit
In the event that the COVERED PERSON sustains a BODILY INJURY caused in and of itself by an ACCIDENT which occurs during the OPERATIVE PERIOD OF COVER and which, solely and independently of any other cause, results in TEMPORARY TOTAL DISABILITY within three (3) days of the date of such ACCIDENT then WE agree to pay the ASSURED, the benefit amount up to either the maximum BENEFIT PERIOD stated in the SCHEDULE or until the end of the COVERED PERSONS contract, whichever is specified in the SCHEDULE.
All benefits under Section 2 are subject to the BENEFIT PERIOD, EXCESS PERIOD and percentage of SALARY as shown on the SCHEDULE.
(d)By Section 3:
Section 3 – Additional Benefits
Rehabilitation Expenses
In the event that a COVERED PERSON has a valid claim for Section 1 – COVERED EVENT 2 PERMANENT Quadriplegia or Paraplegia or Section 2 – TEMPORARY TOTAL DISABLEMENT under the POLICY, and as the result of a referral from a HEALTH CARE PRACTITIONER to a rehabilitation provider they incur costs, WE will reimburse the COVERED PERSON up to a maximum of $500 for the actual rehabilitation expenses incurred for any one valid claim per COVERED PERSON under the POLICY.
Dependent child assistance
In the event there is a valid claim for Section 1 – COVERED EVENT 1 – ACCIDENTAL death or Section 2 – TEMPORARY TOTAL DISABLEMENT, WE will pay a maximum benefit of $500 for each of the COVERED PERSON’S dependant children for actual reasonable costs incurred by the COVERED PERSON’S dependent children as a direct result of the ACCIDENTAL DEATH or TEMPORARY TOTAL DISABLEMENT.
In memoriam benefit
Should a COVERED PERSON have a valid claim for a COVERED EVENT 1 – ACCIDENTAL DEATH under the POLICY, WE will pay the maximum benefit of $1,000 for actual reasonable costs incurred with the proper observance of the passing of a COVERED PERSON by the POLICY HOLDER.
Overseas medical expenses/medical evacuation benefit:
If during the OPERATIVE PERIOD OF COVER and whilst on an overseas team tour, a COVERED PERSON suffers a BODILY INJURY whilst playing or training in the SPORT:
WE will pay for any one BODILY INJURY:
1. The reasonable cost of emergency medical, hospital, ambulance or other MEDICAL EXPENSES incurred in the treatment of the COVERED PERSON that are actually and necessarily received during the overseas team tour.
2. Any expenses related to the evacuation of a COVERED PERSON including any expenses incurred in the event qualified medical staff are required to travel with the COVERED PERSON.
In the event that evacuation is required all expenses incurred are required to be certified and agreed by US.
If WE determine that the COVERED PERSON should return home to Australia for treatment and YOU or the COVERED PERSON do not agree to do so, then WE will pay the ASSURED the amount which WE determine would cover the COVERED PERSON’S MEDICAL EXPENSES and/or related costs had YOU or the COVERED PERSON agreed to OUR recommendation. YOU and/or the COVERED PERSON will then be responsible for any ongoing or additional costs relating to or arising out of the event YOU have claimed for.
(e)By the General Conditions (starting at page 23):
GENERAL CONDITIONS APPLYING TO THE POLICY
1. We shall not be liable under the POLICY for more than one BODILY INJURY for a COVERED PERSON, where the COVERED PERSON has already had a successful claim under the POLICY for one of the COVERED EVENTS 1-34.
2. Benefits will not be payable for more than one of the COVERED EVENTS 1-34 arising out of the same BODILY INJURY. In that event, the highest benefit applicable will be payable.
3. Any benefit payable for COVERED EVENTS 1-34 will be reduced by the amount of any benefit paid or payable for TEMPORARY TOTAL DISABLEMENT benefits under Section 2 in respect of the same BODILY INJURY.
No TEMPORARY TOTAL DISABLEMENT benefit will be payable, unless the COVERED PERSON is gainfully contracted at the time of the BODILY INJURY.
4. No TEMPORARY TOTAL DISABLEMENT benefit will be payable for greater than fifty two (52) weeks in total in respect of any one BODILY INJURY, unless otherwise stated on the SCHEDULE.
5. No benefits are payable to a COVERED PERSON for TEMPORARY TOTAL DISABLEMENT unless, as soon as possible after the BODILY INJURY, the COVERED PERSON seeks and follows medical advice as prescribed by a HEALTH CARE PRACTITIONER.
6. No benefits are payable for more than one (1) BODILY INJURY that occurs for the same period.
7. The TEMPORARY TOTAL DISABLEMENT benefit will be reduced by the amount of any other benefit in relation to a BODILY INJURY which the COVERED PERSON is entitled to receive under any statutory workers’ compensation or transport accident compensation scheme or legislation or any insurance policy specifically covering the same risk. This means that the benefit payable under the POLICY will be the amount by which the benefit payable under the POLICY exceeds the other benefits to which the COVERED PERSON is entitled. If the COVERED PERSON receives the above payments from other parties after the claim with US is finalised, the COVERED PERSON must repay to US the amount which the COVERED PERSON was paid from US in excess of what the COVERED PERSON was entitled under the POLICY.
…
11. Unless the POLICY HOLDER otherwise directs, all benefits shall be paid to the ASSURED, or, in the case of the COVERED PERSON’S ACCIDENTAL death, to the COVERED PERSON’S BENEFICIARY.
(f)By Item 6 on page 25:
6. COOPERATION and OTHER INFORMATION
At all times the POLICY HOLDER and/or COVERED PERSON must give US all the information and assistance WE may reasonably require and provide such evidence to support the COVERED PERSON’S entitlement to a benefit WE may reasonably ask. This evidence may include, but is not limited to the following:
· written authorities allowing US to access medical, financial or other relevant information, which may include personal and sensitive information; and
· evidence of the COVERED PERSON’S income, earnings or periodic payments the COVERED PERSON received from other sources. WE may require verification of this information by way of a financial audit; and
· details of any other insurance covering the same, or similar, condition for which the COVERED PERSON is making the claim.
(g)By Item 8 on page 25:
8. SUBROGATION
We have the right to recover from any person against whom the COVERED PERSON may be able to claim any money paid by US. WE will have full discretion in the conduct, settlement or defence of any claim in the COVERED PERSON’S name. The amount recovered will be applied first to reducing the amount by which the COVERED PERSON’S loss exceeds the payment made by US. Any balance remaining after the COVERED PERSON has been fully compensated for the COVERED PERSON’S loss, up to the amount WE have paid to the COVERED PERSON to settle the COVERED PERSON’S claim (including OUR legal fees for recovery), will be retained by US.
ANALYSIS
Preliminary observations
The following general observations should be made about the construction of the Policy terms.
First, there is no consistent form of words used to describe the obligation to pay a benefit or sum. There are different forms of words in Section 1,[12] Section 2,[13] and in the various heads of benefit and payments under Section 3.
[12] “The Underwriters agree to pay benefits”.
[13] “We agree to pay the Assured”.
Second, and perhaps more significant, the meaning of the word Assured is ambiguous and must be construed in the context in which it is used on each occasion. I note the following:
(a)Assured is defined by reference to two criteria: one which identifies a person (a person or entity identified in the Schedule) and the other which identifies a legal entitlement of such a person to a benefit under the Policy (entitled to the benefits covered hereunder…);
(b)Both the Club and Mr Holman (as a Category 1 Covered Person) meet the first criterion;
(c)The identification of the meaning of Assured therefore turns on identifying, as a matter of construction, the person in the Schedule who is entitled to a particular benefit under the Policy;
(d)The insuring clause of the TTD (Section 2) defines that entitlement, to the extent it does in any express way, by reference to the Assured. So, for Section 2, the Assured is the person in the Schedule who is the Assured. The definition is circular as it is used in Section 2.
(e)The Assured cannot be taken to have the same meaning as insured. The Policy Holder is said to be the insured under the Schedule. However, the Policy uses the different term Assured in various parts of the Policy and it is thereby reasonable to infer that it is not intended to have the same meaning as insured;
(f)Assured is used on three other occasions in the Policy, but not in a way which elucidates its meaning in Section 2. Relevantly:
(i)In the Overseas Medical section, it is used in a way which could refer to either the Covered Person or the Policy Holder;
(ii)In Clause 11 at page 24, it draws a deliberate distinction between the Policy Holder and the Assured in a way which suggests it refers to the Covered Person (i.e. that clause could be read as meaning that the benefits shall be paid to the Covered Person, unless it is paid to the Covered Person’s beneficiary for accidental death, though again this is not clear. Why not just say the benefits shall be paid to the Assured?).
Analysis of Section 2
Having made those observations, I move to the analysis of Section 2 which articulates the TTD benefit. That clause can be broken down into three elements:
(a)The first element identifies the circumstances in which the benefit becomes payable: “In the event that the Covered Person…sustains Bodily Injury caused…by an Accident which occurs in the Operative Period of Cover and which…results in TTD…”
(b)The second element identifies the obligaton to pay the benefit: “We agree to pay the Assured the benefit amount”;
(c)The third element identifies the duration of the obligation to pay the benefit as being either “up to the maximum Benefit Period stated in the Schedule” or “until the end of the Covered Person’s contract, which ever is specified in the Schedule”.
As to the first element, it is admitted that the right to the benefit was enlivened by the circumstances of Mr Holman’s injury. He suffered his foot injury by an Accident as defined. It is also accepted that this happened in the Operative Period of Cover, being the period of currency of the Policy. There is a substantial dispute, however, about the effect of the definition of Operative Period of Cover to which I will return.
The second element raises the central issue for consideration: who is the Assured in the circumstances of this case? I will return to this.
The third element identifies two alternative maximum periods for which TTD benefits might be paid, the choice between them to be identified by the Schedule.
Both alternatives contemplate that benefits are only paid while a player remains unfit. That is provided, albeit a little obscurely, by the definition of Salary. Reference to that definition shows that a Covered Person in Mr Holman’s position will fall within the scope of the second dot point (see paragraph [36](a) above). It is tolerably clear to me (and I understood the parties agreed) that the effect of that definition is that the obligation to pay weekly Salary under the Schedule persisted only so long as the player was unfit to play.
The Schedule shows that the insurer and the Policy Holders adopted the first alternative for the duration of the Benefit Period: that the benefit amount will be up to the maximum Benefit Period. That follows because that is what is stated in the Schedule as it relates to Section 2 Category 1 TTD claims (see paragraph [33] above). The Policy therefore expressly omits limiting the period for which benefits can be paid to the period of a Covered Player’s contract.
In my view, this is a factor which favours Mr Holman’s construction of the character of the TTD benefit because it expressly excludes, by deliberate election of the parties to the Policy, a significant link between the Covered Player’s contract and the benefit i.e. it elects to treat as irrelevant the continued existence of that contract after the accident, to the maximum period for which benefits are payable.
A further aspect of the language of Section 2 favours Mr Holman’s construction. The construction advanced by the Club is in substance one which construes Section 2 as insuring a loss. That loss is said to be the loss arising from Mr Holman’s inability to play while being entitled to payment for playing under his contract. The Club contends that if he is paid under the contract, the loss falls on the Club. If the Club does not pay, the loss falls on Mr Holman. The Club’s case is that Section 2 then responds to whoever has suffered that loss.
The difficulty facing that contention is that Section 2 contains no language which reflects insurance of a loss. The language of Section 2 more resembles life insurance, in that it is not articulated by reference to indemnity for a loss, but rather as a contract to pay a sum of money upon a contingency.[14]
[14] Theobald v Railway Passengers Assurance Co (1854) 10 Ex 45, 53 (Alderson B); Cigna Insurance Asia Pacific Ltd v Packer (2000) 23 WAR 159, [27] (Malcolm CJ).
However, the language of Section 2 does not necessarily exclude the construction contended for by the Club. The benefits are payable to the Assured. The definition of Assured leaves open the prospect that the Policy Holder (including the Club) may be an Assured, and it was certainly open to the drafters to have provided the TTD benefit be paid to the Covered Person if only the Covered Person was to be entitled to the benefit.[15] Attention must therefore be turned to the balance of the Policy to identify the proper construction of Section 2.
[15] Though the inconsistent and ambiguous use of Assured in the Policy makes it impossible to conclude, just from the use of this word, that the Policy Holder is also an Assured under Section 2 and if so, in what circumstances.
Contentions advanced by the Club
It is convenient to begin with the contentions of the Club advanced in respect of the balance of the Policy terms. The Club makes the following points.
At a broad level, the Club contends that the overall approach to the construction of Section 2 is a sensible commercial construction because:
(a)On Mr Holman’s construction, the effect of the Policy would be to give persons in the position of Mr Holman a windfall benefit: he would obtain his salary under this contract and the weekly TTD benefit. The Club submitted this was unlikely to be the objective intention;
(b)On Mr Holman’s construction, Policy Holders in the position of the Club would have an inducement not to pay players, such as Mr Holman, under a player’s contract while the player was unfit and to leave the player to recover that loss as a TTD benefit; and
(c)The Club’s construction addresses what was said to be the obvious commercial purpose of the TTD clause: to provide both the Club and the player with protection against the effect of injury while a playing contract was on foot.
Turning to the language of the Policy, Mr Jones submitted that the Policy demonstrated an intention that only the salary payable under the player’s contract from time to time was recoverable as a TTD benefit. He submitted that this demonstrated a direct link between the entitlement to salary under a contract and entitlement to a TTD benefit. That link compelled the conclusion that the person entitled to the benefit was the person out of pocket in respect of payments due under the player’s contract. He sought to make that good as follows.
The starting point was the definition of Salary. Mr Jones emphasised the penultimate sentence of the second dot point. As I understood it, he submitted that because this sentence referred to the weekly Salary being determined by reference to a notional daily sum, it compelled the conclusion that weekly Salary was determined by reference to what the Covered Person’s contract provided on each day the person was unfit: that is, it was calculated by reference to the entitlement of the player under his or her contract each day the player was unfit.
He then turned to the Endorsement dealing with the TTD benefit.[16] The Club focussed on the start of the second sentence stating that the “weekly Salary payable will be paid at the full weekly contract value”. Again, it was submitted that this clause also linked the TTD benefit to the entitlement of the player under his or her contract each day the player was unfit.
[16] See PDS at page 4 and paragraph [34] above.
One difficulty facing this construction, of course, is that it necessarily contemplates that if a player’s contract is terminated while the player remains unfit, the entitlement to TTD benefits will terminate. This is directly inconsistent with the option elected in the Schedule for the duration of TTD benefits as explained in [45] above.
The Club sought to meet that problem by relying on the provisions under the heading “When does a COVERED PERSON’S access to benefits under the POLICY begin and end?” set out in paragraph [35] above (the Operative Period terms) (which were incorporated by reference into the Policy terms by the definition of Operative Period of Cover in the Definitions section).
The Club submitted that the phrase “claim for benefits” in the chapeau provision should be construed as always speaking. That is, the provision identifies when an initial claim for a benefit may be made and for how long there can be a continuing claim (read as meaning continuing entitlement) for that benefit after it was first made.
On that premise, the Club contends that the antepenultimate dot point in the Operative Period terms has the effect that an extant entitlement to receive TTD benefits, pursuant to a claim already accepted, can be ended (despite the player remaining unfit) when the player’s contract is terminated. This is said to demonstrate that, contrary to the implication from the election revealed by the Schedule, the continuing entitlement to receive a benefit after a claim is accepted is subject to the continuation of the contract. Thus, again, the entitlement to TTD benefits is said to be linked to the entitlement under the player’s contract from time to time (and therefore to be intended to insure the party who suffers the loss resulting from the inability to play).
The Club submits that these textual propositions together demonstrate that:
(a)The weekly Salary amount, and the entitlement to continue receiving the weekly Salary amount, was determined by the player’s contract from time to time;
(b)Therefore, the entitlement to benefits for Mr Holman was reduced for the period during which he was unfit and his contractual rights were defined by the less generous salary in the Second SPC; and
(c)Perhaps more adventurously, this link between the TTD benefit and the entitlement under the actual contract in place from time to time supported the conclusion that the purpose of the TTD benefit was to insure the loss arising from him being unfit, but being entitled to the salary under the contract.
In my view, each of the propositions of construction in paragraphs [53], [54] and [57] are wrong.
As to the proposition in paragraph [57], the Operative Period terms are incorporated by the definition of Operative Period of Cover. That definition states that the Operative Period terms explained “the specified period for which a Covered Person has access to benefits under the Policy”. It can be accepted that that is a different period from the Insurance Period identified in the Schedule (which is the year to 30 June 2018). However, the need for a particular definition of this kind is obvious when it is kept in mind that the Policy confers benefits on numerous Covered Persons. It is unremarkable that the Policy wording seeks to define when the benefits are available for each Covered Person within the Insurance Period, in the sense of identifying when a Covered Person must suffer an accident for the Policy to respond.
Looked at in that way, each of the circumstances in the dot points are harmonious. They each identify a point at which a person, who was a Covered Person at the start of the period of insurance, ceases to be such either because of an act by the Policy Holder, the Insurer or the Covered Person. There is no need to infer the broader meaning for the phrase “claim for benefits”, contended for by the Club, to give reasonable operation to the language of the Operative Period terms.
Further, under the Club’s construction, a player’s entitlement to claim a TTD benefit could accrue but be subsequently terminated while the player was still unfit because of the termination of his or her playing contract. This is inconsistent with the terms of the Policy identified by the election in the Schedule between the options for maximum period of cover in Section 2.
Finally, and perhaps most tellingly, is the use of the phrase “Covered Person’s Operative Period of Cover” in the definition of Accident set out in paragraph [36](a) above. This makes plain, in my view, that the purpose of the definition of Operative Period of Cover is to identify the period within which a claim for a particular person may arise. It is not concerned with the continuation of the benefit period once such a claim has arisen and an entitlement to TTD benefits (or any other benefits for that matter) has accured.
The construction of the Operative Period terms contended for by the Club is one which, in my view, is strained on the words used. It would require support from other terms to sustain it. Not only is there no such support, for the reasons I have given, the relevant express terms tell against that construction.
I now turn to the points raised in paragraphs [53] and [54] above. They are conveniently dealt with together because they raise the common question of how the Policy identifies the sum by reference to which the TTD benefit is to be calculated. I recognise that the Policy is not consistent in its language in this respect.
Section 2 provides for a “benefit amount”. Remarkably, this key concept is not defined anywhere that I could locate. It is therefore necessary to infer what the benefit amount is from other parts of the contract. Unhelpfully, the other parts of the Policy are not consistent or clear in their use of language.
The starting point is the Schedule. It provides, relevantly, next to the words TTD benefit: “Maximum weekly Salary”. Read with Section 2, it is tolerably clear that the Schedule at this point communicates that the benefit amount under Section 2 is up to[17] the Maximum weekly Salary.
[17] Recalling that the benefit is payable only while the player is unfit to play: see paragraph [44] above.
The next step is the definition of the word Salary. It is uncontentious that the second dot point of the definition is the relevant one for Covered Persons in Mr Holman’s contractual position. That definition, however, is not easily construed. The following should be noted:
(a)It introduces in the first sentence the expression weekly annual Contract value. Read with the next sentence, this seems to contemplate the totalling up of the whole of the annual benefits in the nature of income under the contract and finding the weekly average of that total. Though it does not say as much expressly, there is no other explanation for the inclusion of the word weekly, which is important because it is included in the Schedule phrase;
(b)This sits awkwardly, however, with the express definition in the third sentence of weekly Salary, which is said to be a daily average of the annual contractual value for each day the player is unfit. It is even harder to read together with the first two sentences because it uses the phrase annual contractual value in contrast to weekly annual Contract value;
(c)One might have hoped that the capitalised word Contract might have been linked to a definition, but despite being written in the Policy in capitals (the format usually used by the Policy to identify defined terms), there is no definition of Contract.
The last step is to consider the endorsement in the Policy for TTD (the TTD endorsement). An endorsement ordinarily extends the scope of cover under a Policy in some specific respect. Unfortunately, the TTD endorsement related to the TTD benefit does not assist in resolving the issue in this proceeding.
The first sentence seems to restate the effect of the Schedule. The Club focuses on the second sentence as I have explained in paragraph [54] above. That sentence uses the phrase weekly Salary, which appears in the Schedule and the definition of Salary. However, I reject the Club’s submission that the second sentence in the endorsement defines what weekly Salary means. To my mind, the overall purpose of the TTD endorsement is to explain how the annual limit imposed by the Schedule is to be administered. It assumes the meaning of weekly Salary is defined elsewhere and explains that it will be paid at the full weekly contract value until $350,000 is paid. The purpose of this, in my view, is to make clear that the annual benefit is not to be paid pro rata over 52 weeks but paid in full each week until the limit is reached. Accordingly, the TTD endorsement is irrelevant to construing what the Policy provides as to the calculation of the amount of the TTD benefit or period for which TTD benefits are payable. It does not assist the Club’s argument at all.
Finally, on the TTD endorsement, I note that there is no definition of Maximum weekly Salary. What work does the word Maximum do? It seems to me, taken with the TTD endorsement, that it is intended only to communicate that the weekly Salary calculated is to be paid in full each week, not averaged out over a year to total $350,000.
We are therefore left with the definition of Salary. To my mind, the only way to read the second dot point in an intelligible manner is to ignore the word “weekly” where it appears in the first sentence. If that is done, the definition is internally consistent and intelligible in that:
(a)The first two sentences identify what the person’s (total) Salary is, being his or her annual salary under his or her set duration contract.
(b)The next sentence identifies how one determines the weekly Salary to which the player is entitled as a TTD benefit. That is seven times the daily value of the contract derived from its annual value for each day the player remains unfit.
I do not accept that this supports the Club’s submission that the definition necessarily incorporates the idea that there is no weekly Salary if there is no contract in place because it has been terminated. The definition is concerned with an annualised total value of the contract. That notion is inconsistent with the notion that when the contract ceases, there is no longer any weekly Salary. The purpose of the contract is to permit the calculation of an annual value and once that is done, the role of the contract is at an end.
This is consistent with one of the few clear propositions in the Policy and Schedule: that being that the termination of the contract does not affect the maximum period of TTD benefits.
The only location where the rights under the Policy are arguably characterised as being rights to indemnity for loss is in the “How benefits are provided” section in the PDS. It is doubtful that that section is part of the contractual promises comprising the Policy terms and, in any event, aspects of that section also tend to support Mr Holman’s construction. Ultimately, I do not think this part of the PDS provides support for either construction.
For these reasons, I reject the Club’s contention that any of the textual matters to which it points sustains the conclusions in paragraph [59].
Considerations favouring Mr Holman’s contention
Having rejected the arguments advanced by the Club favouring its construction, it remains to be determined whether the construction advanced by Mr Holman is, in any event, correct.
I consider that it is. In my view, on the proper construction of the Policy, it provides for a TTD benefit calculated on the contract extant at the time of the accident until a player is fit to play, regardless of the termination or variation of the player’s contract in the meantime.
Further, I consider that Section 2 confers that benefit on Mr Holman regardless of whether, and to what extent, the Club paid sums due under the First or Second SPCs from time to time. I have formed that view for the following reasons.
First, as I have explained, I have rejected the Club’s contention that the Policy insures the loss arising under his playing contract from Mr Holman’s inability to play, but the Club remaining obliged to pay him. Once that contention is rejected, there is no link between the obligations and entitlements under the SPCs from time to time and the TTD benefit payable on the accident occurring in the relevant circumstances. What remains is an obligation to pay an amount dehors the SPCs while Mr Holman remains unfit. Either the Club or Mr Holman must be entitled to that benefit. There are no other candidates. In identifying who is entitled to the TTD benefit, the compelling consideration is that it is Mr Holman who suffers the accident and Mr Holman who faces the risk of being unable to earn his living as a result.
In reaching that conclusion, it must be kept in mind that the TTD benefit can arise in any one of several circumstances. It might arise where the player’s contract provides for termination on serious injury. It might arise where the player’s contract expires just after the injury and he or she cannot secure another because of the injury, leaving them unable to earn a living until they are no longer injured (exactly the period that the TTD benefit is payable). It might arise where the player’s club becomes insolvent or, for some reason of its own convenience, chooses not to pay the salary under the contract while the player is injured. All these scenarios are possible. I can see no basis for focussing just on the factual scenario in this case as informing the construction of the insuring clause. Further, these further scenarios all involve the injured player, not his or her Club, being exposed to risks of loss of income by reason of injury rendering him or her unfit to play.
Second, the Club accepts that Mr Holman was (variously):[18]
(a)a person who was entitled to receive a benefit under the Policy upon TTD;
(b)a person to whom the benefit of the insurance cover provided by the Policy extended, and so a third-party beneficiary of the Policy, within the meaning of s. 11 Insurance Contracts Act 1984 (Cth) (ICA); and
(c)a person entitled to claim a benefit under the Policy pursuant to s. 48(1) of the ICA.
[18] SOC [13(a)], [13(b)], [13(c)], [13(d)], admitted Defence [10(c)].
Those concessions can scarcely be doubted, given the form of the Policy and its subject matter: that being insurance arising on accidental injury to a professional athlete which renders him or her unfit to play. They support the inference that out of Mr Holman and the Club, it is Mr Holman who is entitled to the TTD benefit if it arises.
Third, in my view, there is nothing uncommercial or even unusual about an accident policy which provides benefits to the person injured in addition to, and regardless of, any contractual right to continued payment. It is an additional protection which, in some cases, might result in the player being better off than he or she otherwise would have been, or it might not. I add that when considering the position of professional athletes, the conclusion that they would obtain any windfall TTD benefit, even when a contract continues to be paid, is far from certain. An injury can just as easily prevent the earning of a higher contract from better on field performances as provide a windfall for someone who would not have had that good fortune.
Fourth, I disagree that any of the propositions in paragraph [51] sustains the conclusion in the chapeau part of that paragraph that Mr Holman’s construction is uncommercial:
(a)I have dealt with the first point in paragraphs [82] and [85] above;
(b)The second point is also unpersuasive once one concludes that the TTD benefit is not one directed in substance to providing indemnity for whoever suffers the loss resulting from the inability to play. If a player has a right to payment under his or her contract while injured and an additional right under an accident policy, that is a matter that benefits the player. If a club chose not to comply with the player’s contract and not pay the player while unfit where there was a right to do so, the player would be free to sue the club on the contract and, other things being equal, would win. There is nothing I could identify in the Policy which would make the entitlement to a TTD benefit a defence to a failure to comply with the player’s contract; and
(c)The third point is answered by my construction of the rights conferred by Section 2 overall.
Other text-based considerations favouring Mr Holman’s construction
Finally, there are textual indications in the Policy and Schedule supporting the construction favoured by Mr Holman.
First, Clause 6 of the Claims procedure heading provides, under the heading “Cooperation and Other Information”:
At all times the POLICY HOLDER and/or COVERED PERSON must give US all the information and assistance WE may reasonably require and provide such evidence to support the COVERED PERSON’S entitlement to a benefit WE may reasonably ask.
This clause requires cooperation to support the Covered Person’s entitlement to a benefit. It says nothing about providing information in support of the Policy Holder’s entitlement to a benefit in the context where the Policy Holder is specifically mentioned in the clause. This is consistent with the conclusion that the Policy contemplates benefits under the Policy being for the Covered Person, not the Policy Holder.
Second, the Policy provides Lump Sum Benefits on the same contractual preconditions as the TTD benefit: that is, where a Covered Person suffers a Bodily Injury by reason of an Accident during the Covered Person’s Operative Period of Cover. ‘Lump Sum Benefits’ are addressed in Section 1 of the Policy Wording. It is perhaps most clear in respect of such ‘Lump Sum Benefits’ that they are payable to the Covered Person.[19] That is clear from the nature of the ‘Covered Events’ in respect of which a Lump Sum Benefit is payable (which include events such as loss of a limb).[20] Importantly, any Lump Sum Benefits payable are to be reduced by the amount of any TTD benefit paid or payable in respect of the same Bodily Injury.[21] There is no exception or exclusion if the TTD benefit is paid to the Policy Holder. On the Club’s construction of the Policy, this would work an injustice on a Covered Person where the TTD benefit was paid to the Policy Holder, particularly where the amount received by the Policy Holder is more than the amount payable under any contractual entitlement.
[19]Or in the event of death, the Covered Person’s Beneficiary.
[20] Policy Wording, Section 1, Table of Covered Events.
[21] Policy Wording, Section 1; and Policy Wording, General Conditions Applying to Policy, Clause 3.
Third, Additional Benefits are addressed in Section 3 of the Policy. It is similarly clear that most of those benefits are payable to the Covered Person. For instance, Additional Benefits are payable in respect of such matters as “Dependant child assistance” and “Home and vehicle modification”.[22] In several cases, those benefits are expressly stated to be payable only where the Covered Person has made a valid claim for a Lump Sum Benefit or TTD benefit. That also tends to support the conclusion that the benefits under the Policy generally are intended to be paid to the Covered Person.
[22] Policy Wording, Section 3.
Fourth, Section 2 provides that a TTD benefit is payable where a Covered Person suffers a Bodily Injury during the “Operative Period of Cover”. I have analysed the definition of that phrase and the terms incorporated by reference to that definition in paragraphs [61] to [65] above. Bearing in mind the conclusions on construction reached there, it should not be overlooked that the definition of that phrase refers only to the “the specified period for which a COVERED PERSON has access to benefits under the POLICY”. There is no mention of the period within which the Policy Holder has access to benefits. The omission of a reference to a Policy Holder in a definition so central to the nature of the cover granted is consistent with an intention that only a Covered Person has such access. It cannot be explained away by simply asserting that the Policy defaults to the Insurance Period for the Policy Holder because the definition of Operative Period of Cover defines the circumstances to which the TTD benefit in the Policy responds.
Fifth, I refer to Clause 7 of the General Conditions Applying to the Policy, which provides (inter alia) that:
The TEMPORARY TOTAL DISABLEMENT benefit will be reduced by the amount of any other benefit in relation to a BODILY INJURY which the COVERED PERSON is entitled to receive under any statutory workers' compensation or transport accident compensation scheme or legislation or any insurance policy specifically covering the same risk. … If the COVERED PERSON receives the above payments from other parties after the claim with US is finalised, the COVERED PERSON must repay to US the amount which the COVERED PERSON was paid from US in excess of what the COVERED PERSON was entitled under the POLICY. …
This clause creates a direct link between the TTD benefit and the recovery of any sum by the Covered Person under statutory or other insurance policies covering the “same risk”, being accidental injury resulting in TTD. I note first that the introductory words do not consider which of the Policy Holder and the Covered Person was to receive the TTD benefit for the clause to apply, and that is an unlikely circumstance if the Policy contemplated the Policy Holder as a potential Assured.
More material is the fact that the clause requires the Covered Person to repay any amount due under the clause without reference to whether it is the Covered Person or the Policy Holder who received the TTD benefit. This is an extremely unlikely provision to be made if the Policy contemplated the Policy Holder as a potential Assured. Why should the Covered Person repay money not paid to him or her? And one cannot assume that in all cases, the player will have been paid under a playing contract as explained in paragraph [82] above.
Finally, I note that the subrogation provision set out in paragraph [36](g) does not appear to contemplate subrogation to the rights of a Policy Holder.
There were other provisions relied upon by Mr Holman as favouring his construction, but on reflection, they seemed to be equivocal or not of much assistance on the issue of the meaning of Assured in Section 2.
CONCLUSION
For these reasons, I find that Mr Holman was the Assured who was entitled to the TTD benefit payable under the Policy in relation to his injury and I find that the amount to which he was entitled was the whole of the sum that the Club received from the Insurer, being $369,433.26.
This conclusion obviates the necessity to decide whether, if Mr Holman’s entitlement was limited to the lower rather than the higher amount, the benefit of the overpayment by the insurer should, as a matter of law, remain with the Club or should be paid to Mr Holman. I make this observation, however. If the insurer had overpaid, on my analysis, those funds were received as agent for Mr Holman. The Club’s obligation would therefore be to account to him for the funds received as agent, whether there was an overpayment or not. However, the effect of doing so would be likely to expose Mr Holman to any restitutionary claim which the insurer could advance based on a payment made by mistake of fact or law, and provide the Club with a defence to such a claim. If on the other hand, the insurer sued the Club while the overpayment amount had not been accounted for, the claim would lie against the Club.[23] However, once the Club was aware (to the relevant standard to attract equitable intervetion) of any mistake by the insurer, however, payment over is unlikely to provide a defence if effect is given in Queensland to the emerging law favouring the granting of a constructive trust remedy in those circumstances.[24]
[23] Mason, Carter & Tolhurst, Restitution Law in Australia (3rd ed, 2016) at [441].
[24] Wambo Coal Pty Ltd v Ariff (2007) 63 ACSR 429.