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  • The recent Supreme Court decision of Newling v FSS Trustee Corporation and Metlife Insurance Ltd considers the content of an insurer’s duty to act reasonably and with utmost good faith when assessing claims for total and permanent disablement benefits.
  • Parker J’s application of the test of reasonableness concerning an insurer’s decision may be a useful guide for practitioners advising on whether an insurer breached its duty to act reasonably or its duty of utmost good faith.
  • The decision also considers two different bases upon which the Court may intervene once a breach has been found, and the consequences flowing from each.

The recent decision of Newling v FSS Trustee Corporation and MetLife Insurance Ltd (No 2) [2018] NSWSC 1405 (14 Sept 2018) considers the content of an insurer’s duty to act reasonably and in utmost good faith when assessing total and permanent disablement (‘TPD‘) benefit claims.


The plaintiff was a 48-year-old female officer with the NSW Police Force (‘NSWPF’) who performed desk work following a back injury in 1997. The FSS Trustee Corporation (‘FTC’) was the trustee for a superannuation scheme which provided benefits for NSWPF members including the plaintiff. MetLife insured the FTC in relation to the subject TPD benefit.

The plaintiff ceased work in 2011 and claimed in 2012 that she satisfied the TPD definition by virtue of the back injury combined with an Adjustment Disorder which she claimed was the result of harassment by a supervisor. MetLife declined the claim in 2015.The underlying issue was whether the plaintiff had become incapacitated to such an extent as to render her unlikely ever to engage in any gainful profession, trade or occupation for which she was reasonably qualified by reason of education, training or experience. The present decision is the separate determination of questions as to whether, in declining the plaintiff’s claim, MetLife breached its duty to the plaintiff.

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