Key Takeaways

The decision in McDonald v Resolution Life Australasia Limited and NM Superannuation Pty Ltd is consistent with a long line of cases in which insurers have been successful in compelling plaintiffs to undergo medical exams, and in particular psychometric testing. Those decisions include (in life insurance cases) Price v Clearview Life Nominees Pty Ltd & Ors [2023] NSWSC 597, Harrod v MetLife [2019] NSWSC 28, and Sharman v MetLife Insurance Limited [2021] NSWSC 1199.

In some of these cases, the courts have placed limitations around the scope or form of testing. However a 2023 decision of the NSW Court of Appeal (State of NSW v Hollingsworth [2023] NSWCA 152 (4 July 2023) suggests that the court may not have any power to impose conditions upon how an expert carries out an examination. This is particularly relevant to psychometric testing, where in the past the court has ordered that a plaintiff not undergo any tests as to credibility, or that an examination be recorded. The imposition of such restrictions may be beyond the courts power, and consequently a defendant should not readily agree to such restrictions.

Overview

The plaintiff, Leanne McDonald claimed a sizeable TPD benefit from Resolution Life Australasia Limited (RLA) and the trustee on the basis that she suffers, amongst other conditions, major depressive disorder and PTSD.

The plaintiff’s evidence included reports from both a psychiatrist and clinical psychologist. The clinical psychologist had performed psychometric tests, on which the psychiatrist had commented.

Despite the plaintiff having served such evidence, the plaintiff objected to undergoing psychometric testing at the defendants’ request and only agreed to be examined by a psychiatrist on very limited terms.

Consequently, the defendants sought orders compelling the plaintiff to be medically examined by a psychiatrist and undergo psychometric testing. The defendants were entirely successful in this application. The court held that it was reasonable for the plaintiff to undergo both examinations, for two reasons:

1. So the defendants could respond to the evidence served by the plaintiff, and
2. A party has a right to determine what evidence it will bring forward in any case. That includes the defendants’ right to bring forward evidence resulting from a psychiatric examination and psychometric testing.

The court also permitted the defendants to serve subpoena for production, before the completion of evidence. The plaintiff’s solicitors often object to this, on the basis that it is a breach of Equity Practice Note 11. “Exceptional circumstances” need to be shown to permit the service of subpoena for production in these circumstances. Here the court found that “exceptional circumstances” were established by the fact that this was a constructive declinature case and due to the commencement of the proceedings, the insurer could no longer use authorities to obtain information. The subpoena documents were required for the insurer to determine whether the TPD definition was satisfied.

The defendants obtained a costs order in its favour.

Conclusion

The decision confirms that an insurer (and trustee) has a right to have a plaintiff appropriately medically examined, including undergoing psychometric testing.

Insurers should also be cautious in agreeing to any restrictions on the manner in which an expert carries out their assessment.

Further information / assistance regarding the issues raised in this article is available from the author, Catherine McAdam, Partner, or your usual contact at Moray & Agnew.