Bassanelli v QBE Insurance [2003] FMCA 412 (26 September 2003)

Last Updated: 6 October 2003

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BASSANELLI v QBE INSURANCE

[2003] FMCA 412

HUMAN RIGHTS - DISABILITY DISCRIMINATION - where the applicant applied for travel insurance - where the applicant claimed that she did not want a policy to cover her pre-exiting medical condition - where the applicant was denied cover because of her pre-existing medical condition - whether this denial was unreasonable.

Human Rights and Equal Opportunity Commission Act 1986 (Cth) s.46PO

Disability Discrimination Act 1992 (Cth) ss.4, 5, 24, 46

Equal Opportunity Act 1994 (Vic) s.17(5)(c)

Disabled Peoples International (Australia) Limited v Telstra Corporation Limited HREOCA Matter H95/51

Xiros v Fortis Life Assurance [2001] FMCA 15

Waters v Public Transport Corporation [1991] HCA 49; (1991) 173 CLR 349

Applicant:

DENICE MARALYN BASSANELLI

Respondent:

QBE INSURANCE (AUSTRALIA) LIMITED

File No:

AZ 76 of 2003

Delivered on:

26 September 2003

Delivered at:

Sydney

Hearing dates:

8 & 9 September 2003

Judgment of:

Raphael FM

REPRESENTATION

Solicitor for the Applicant:

Mr S Palyga

Counsel for the Respondent:

Mr S Walsh

Solicitors for the Respondent:

Phillips Fox

ORDERS

(1) The Court declares that the respondent unlawfully discriminated against the applicant in breach of ss.5 and 24 of the Disability Discrimination Act 1992 by declining to issue to her a policy of travel insurance on 19 July 2002.

(2) The Court orders:

(i) That the respondent pay to the applicant damages of $5,000 together with interest at the rate prescribed by the NSW Supreme Court rules from 19 July 2002 to the date of judgment in the sum of $543.70.

(ii) The respondent to pay the applicant's costs to be calculated in accordance with Part 21 Rule 21.10 and Schedule 1 of the Federal Magistrates Court Rules.

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE

AZ 76 of 2003

DENICE MARALYN BASSANELLI

Applicant

And

QBE INSURANCE (AUSTRALIA) LIMITED

Respondent

REASONS FOR JUDGMENT

Introduction

1. On 10 April 2003 Ms Bassanelli filed an application in this court pursuant to s.46PO of the Human Rights and Equal Opportunity Commission Act 1986 seeking a determination as to whether she had been discriminated against by the respondent contrary to ss.5 and 24 of the Disability Discrimination Act 1992 (Cth) following the respondent's refusal to issue her with a travel insurance policy on or about 19 July 2002. The applicant seeks a declaration, apology and damages.

2. The respondent submits that it was entitled to decline to issue the policy relying on the exemption contained in s 46 of the DDA which is relevantly in the following form:

"46(1) [Refusal to offer]

This part does not render it unlawful for a person to discriminate against another person, on the ground of the other person's disability, by refusing to offer the other person:

(a) ...

(b) ...

(c) a policy of insurance against accident or any other policy of insurance; or

(d) ...

(e) ...

if:

(f) ...

(g) in a case where no such actuarial or statistical data is available and cannot reasonably be obtained - the discrimination is reasonable in regard to any other relevant factors."

3. At all relevant times the applicant was suffering from metastatic breast cancer. It is accepted by the respondent that this condition constitutes a disability within the definition in s 4 of the DDA, namely:

"(c) The presence in the body of organisms causing disease or illness."

4. The respondents conceded that the refusal of the policy of insurance could, in the circumstances, be considered to be the treating of the applicant less favourably because of her disability than, in circumstances that are the same or are not materially different, the respondent treated or would have treated a person without the disability.

5. The respondent concedes that there was no actuarial or statistic data relied upon or available when it came to the decision not to issue a policy of insurance to the applicant but submitted the discrimination was reasonable having regard to any other relevant factors.

History and evidence

6. The applicant, who was born on 3 August 1965, deposed that in or about July 2002 she won a competition to travel to Japan. On 19 July 2002 she went with her husband to RAA Travel in Hindmarsh Square Adelaide to obtain travel insurance for the trip. The applicant had utilised the services of this organisation before, as she was an RAA member. The applicant completed an application form for a policy of insurance issued by the respondent. In the form, which is found within Exhibit A of the applicant's affidavit of 10 April 2003, she stated that she had been diagnosed with early breast cancer in May 1997 and with metastatic breast cancer in December 2000. She indicated she was being treated hormonally with four weekly biophosphonate infusion as a day care patient. She also stated on the form that she was currently taking the following medications - Femara, Zoloft, Celebrex, Panadol/ Panadeine when required. The applicant stated in her evidence that she did not expect to obtain insurance for any cancer related claim but she did seek cover for potential losses in the course of travel which were not related to her pre-existing condition such as theft, lost luggage, other accidental injury, injury to or illness of her husband and liability insurance etc. The form which the applicant completed is entitled "A Preliminary Medical Appraisal Form". The applicant completed Part A. Part B is a doctor's declaration, which was not completed. The applicant was not asked to complete it by the travel agent nor was any medical opinion from any of her treating doctors sought by the insurance company. The form was marked "urgent reply pls" and the evidence of the respondent, through Ms Thompson, is that the application went first to a Ms Judith Bierworth. She assessed the application against the respondent's criteria for applications containing evidence of "challenging conditions" found as Exhibit A to Ms Thompson's affidavit. This document contains the following:

"Conditions that are even more challenging and should be considered for "NO POLICY" are as follows:

Terminal cancer - prohibited to cover under policy Metastatic cancer"

Ms Bierworth wrote on the form which had been faxed to the respondent "No policy" "Metastatic breast cancer."

Ms Bierworth then took the application to Ms Thompson who confirmed it and a fax was sent in a standard form to the travel agent. This is found at page 21 of the exhibits to Ms Bassanelli's affidavit of 30 June 2003. The fax is in the following form:

"19/07/2002

Attention: ANNE

Re Client: MRS D BASSANELLI

Unfortunately NO POLICY whatsoever may be issued on our behalf.

Consideration has been given to many factors including the medical condition(s), length of the trip, destination and age.

Should you have any questions please contact the Medical Appraisal Department on the above telephone number.

R A A TRAVEL"

7. Mrs Bassanelli did not contact QBE again. With the assistance of RAA she found another insurer, Mercantile Mutual, who was prepared to issue a policy to her which did not cover claims arising out of her existing condition and she travelled to Japan. She has since travelled to other places and obtained policies of insurance to do so.

8. The applicant made a complaint against the respondent to the Human Rights and Equal Opportunity Commission on 2 September 2002. The Commission, which received representations from the respondent investigated the complaint. On 26 March 2003 the Commission wrote to the applicant advising her that it had decided to terminate the complaint because the President was satisfied that the alleged unlawful discrimination was not unlawful discrimination. The President took the view that the information relied upon by the respondent was reasonable in the circumstances and that the decision which the respondent took was based upon information on which it was reasonable to rely and was therefore able to obtain the benefit of the exemption from discrimination contained in s.46(1) of the DDA.

The applicant

9. Ms Bassanelli gave evidence relying on her affidavit of 10 April 2003 and her further affidavit of 30 June 2003. She gave evidence that her condition was not aggressive and had a slow rate of progression. She exhibited a report from Dr Parnis dated 12 December 2000. This document is found at [004] of her affidavit of 30 June 2003. All references in [ ] will be to that paginated affidavit. The applicant stated that in all respects as at July 2002 she was in a healthy condition. She deposed that she travelled with her family to Uluru and Darwin between June and July 2001 and had planned to travel to the Gold Coast in October 2001, both with Ansett holidays. For both holidays she was covered through travel insurance arranged on the telephone with Ansett. She had advised Ansett on both occasions of her breast cancer and insurance had been granted to her excluding breast cancer related events. She did not go on the October 2001 holiday as by that time Ansett had collapsed.

10. Ms Bassanelli and her husband have travelled overseas since July 2002 having gone to Japan between April 11 and April 23, 2003. On this occasion they applied for insurance with Insurance Brokers of SA Pty Limited and were issued with an insurance policy underwritten by a joint venture between QBE and Mercantile Mutual. She went on a cruise in July 2003 and again obtained travel insurance from the same group.

11. In evidence the applicant stated that she was not undergoing chemotherapy in July 2002 nor has she since. She was not experiencing any symptoms of myleo suppression in July 2002, she had no symptoms of deep vein thrombosis or anaemia, she did not have compromised immunity or bone fractures nor was she undergoing any psychiatric treatment as at July 2002. She stated that when she received a copy of the fax from QBE to RAA on 19 July 2002 she was devastated. She was in shock. She stated that she was very upset and very angry. She could not believe that she was being denied insurance because she had cancer. She had a feeling that she had become a liability to the world. She could not understand how the insurance company had declined to issue a policy without asking for any other information than the preliminary information that she had filled in on the proposal form. She could not understand why she could not have been given cover for, at least, the non-medical claims. As she said in evidence:

"I could not see how having cancer made it more likely that I would lose my luggage or be robbed."

To her mind QBE should have offered her a policy that excluded claims arising out of her metastatic cancer condition or out of claims arising out of any related condition, ie cover her for other health claims as well as the non-health claims. But at the very least they could have covered her for non-health matters.

12. Under cross-examination the applicant admitted that she knew the application was urgent and she had expected that someone might want a doctor's report but that she did not obtain one before she applied for the insurance. There was considerable discussion about an entry in the application form as to whether or not she had made a claim under a travel policy for a figure in excess of $2,000.00. It transpired that she had made such a claim in relation to the cancellation of a trip to Perth. I do not think that the applicant gave her responses to these questions in as open a manner as I would have expected from her other evidence. However, there is no suggestion here that the applicant gave any information relating to her condition that was not correct and this is not a case where a claim has been refused so that a wrongful declaration might be relevant. The only relevance of this information goes to the applicant's credit generally. I am satisfied that the evidence which I heard from the applicant on other matters was truthful (it was mostly uncontroversial) and that her reaction to questions on this aspect of the application form were defensive rather than dissembling.

13. The applicant was asked why she did not take up the offer contained in the refusal letter to contact QBE. The applicant stated that she saw no point in doing so. She felt that the refusal was so clear and unambiguous. She thought it was more important to put her efforts into obtaining a policy as she wished to travel on the intended trip. The applicant also accepted that she knew that some policies, which did not require medical history, gave cover on the basis that the insured was in good health when making the application.

14. The applicant's affidavit exhibits a large number of other insurance policies. The most up to date QBE policy effective February 2003 states at [31]:

"We will not pay any claim arising from illness or injury where a terminal prognosis was made, in relation to any medical condition, whether related or not to the cause of the claim, prior to the certificate of insurance being issued."

15. The policy which she obtained from Mercantile Mutual entitled "The Safe Trip" policy excluded "any medical problem or related medical complication of which, before you applied for this insurance you were aware, or could be expected to be aware, may lead to claim under this policy". [41]

At [148] a policy entitled "Smart Cover" underwritten by Allianz Australian Insurance Limited is exhibited. It states at [151]:

"There is no cover under this insurance for any claim which arises from a pre-existing medical condition suffered by you unless we have accepted your application for additional cover for the condition and you have paid any additional premium we have asked you for."

It also has a reference to the duty of disclosure in the following form at [151]:

"When answering our questions you must be honest and you have a duty under law to tell us anything known to you and which a reasonable person in the circumstances would include in answer to the question."

This policy has a detailed booklet which at [157] discusses people with pre-existing medical conditions and states:

"You are not automatically covered under this insurance if you have a pre-existing medical condition."

16. Another policy exhibited to the applicant's affidavit was one issued by St George Travel entitled "The St George Travel Protect Insurance" underwritten by CGU. This commences at [170] and at [176] under the heading "Pre-existing medical condition" that term is defined. On the same page and under the heading "Important information" the policy states:

"When you take out this policy, cover is provided on the understanding that:

1 When you purchase the policy you are medically fit and do not know of any reason why your journey may need to be cancelled or disrupted."

At [182] under the heading "What we will not pay for under any section of this policy" is included pre-existing medical conditions of any person. However, the policy does appear to allow for insurance of pre-existing medical conditions at an extra premium but such cover is not automatically granted and is subject to medical investigation.

17. There is another policy which commences at [205] underwritten by CGU. At [218] it is indicated that cover under the policy is provided on the understanding that:

"When you purchase the policy you are medically fit and do not know of any reason why your journey may need to be cancelled or disrupted."

18. At [239] a "Travellers Choice" policy is exhibited. This is underwritten by AIG and dated March 2002. At [245] there is an exemption:

"What is not covered

Any existing health disorder unless agreed to by us in writing."

At [247] a Harvey World Travel Insurance Policy effective 1 July 2002 is exhibited. This offers an opportunity to insure for pre-existing medical conditions which are otherwise excluded. This policy is underwritten by Australian International Insurance Limited. It also contains a requirement to disclose investigative tests that have been carried out and excludes any illness or condition for which a terminal prognosis was given prior to the issue of the policy.

19. In answer to a question from me the applicant, through her Counsel conceded that her condition was one for which there was a terminal prognosis.

Michael John Garrard

20. Mr Garrard, the former Deputy General Manager of QBE Travel, filed an affidavit on behalf of the respondent dated 29 July 2003. In his affidavit he confirmed that the decision to refuse cover to Mrs Bassanelli was made by Ms Thompson as manager of QBE Travel's medical appraisal department and was within her authority. He stated that QBE did not offer a baggage only policy because it was not economically viable for the company to do that by the time they had factored in administrative and printing costs.

21. Mr Garrard deposed to being aware of a number of high cost claims that QBE had to pay out in the past where it had been very difficult, if not impossible, to differentiate between the claimants' pre-existing medical conditions and the medical conditions suffered by them while travelling. He stated that it was for this reason that QBE was very cautious about simply offering a policy whereby any pre-existing condition was excluded from being covered. He stated that the costs involved in such matters might be several thousands of dollars going up to hundreds of thousands of dollars. He gave an example of one case in the United States which had cost well over $100,000.00 although this was in respect of a person who suffered from a heart condition. He gave evidence that over the twenty years or so in which he had been dealing with this type of claim he had fifty or more very difficult claims. Under cross-examination he stated that QBE would have between 30,000 and 35,000 claims a year under the travel insurance policies. Mr Garrard made the point, which was confirmed by Ms Thompson, that claims for medical treatment or repatriation are claims which are frequently made while the claimant is travelling and therefore a decision as to whether or not to meet the costs had to be made very quickly and with very little time to investigate the matter fully. He stated:

"What this means is that where an applicant has a significant risk of medical complications occurring while travelling, and there is a real chance that a dispute may arise about what medical conditions have been excluded by policy exclusions relating to pre-existing conditions, QBE will deny a policy."

Shirley Anne Thompson

22. Ms Thompson is the medical appraisals manager of the respondent. She is a trained general nurse, a midwife and holds a diploma in business management. She has considerable nursing experience in coronary care, orthopaedics and operating theatre nursing. She had been in the medical appraisal department for four years and during that time oversaw and formulated the medical underwriting guidelines used by QBE. She had approximately four nurses under her who made decisions on applications for policies including Ms Bierworth who had made the decision in this particular case. When Ms Bierworth came to her with the form she made an assessment about the extent and severity of the applicant's medical condition based upon the information contained in the form. She stated that from her own knowledge and experience she was able to determine that the applicant did not pose an acceptable risk for QBE due to the possible medical complications that could occur whilst she was undertaking her travel. She took into account the fact that the applicant was travelling to Japan which was a country where medical costs were very expensive indeed and there was some difficulty in communication with the medical practitioners. She took a view from examining the medicines with which the applicant was being treated that she may have problems with her bones, that there was an increased risk of infections and blood clotting disorders and that there was a real risk that any condition from which the applicant suffered might be exacerbated by her underlying condition. She stated:

"In my opinion, and from the cases I have been involved in, whatever medical event befell the applicant, be it accidental injury or illness, it would be more complicated, the prognosis poorer and the medical event may have precipitated the final stages of her underlying disease. On site medical care and any repatriation costs would be higher than for any client without similar underlying disease. This made it too great a risk for QBE to agree to offer the applicant a policy."

23. In her affidavit the witness cited a case which had been insured by HIH but taken over by QBE where a claim amounting to $670,000.00 had been made. This related to a cancer sufferer who had been hospitalised for pneumonia in Los Angeles and then developed cardiac and renal failure. The traveller's doctors had determined that he had moved into the final stages of cancer and was repatriated home to die. It would appear that because the initial problem was respiratory, the company had accepted liability under the policy. She gave another example of a traveller who had declared having cancer on the medical appraisal form, had that condition excluded but suffered from intracranial bleeding whilst abroad. As a MRI also indicated that the patient was suffering from brain metastases it was thought that her problems were being exacerbated by this condition. However, there was a dispute between the doctors and no final determination could be made before the patient had died.

24. The witness explained that she was always happy to discuss decisions not to insure with a potential traveller. She stated that QBE had taken a position whereby they did not wish to provide insurance for people that was not suited for their purposes. She would explain this to applicants who had been refused a policy. However, she did agree that on occasions and after the situation had been fully explained to the intending insured and confirmed by that person in writing, she would use her discretion to issue a policy which excluded cover for medical conditions.

25. Ms Thompson gave evidence that the policy with Mercantile Mutual which the applicant took out for her travel to Japan was a very specialised policy and only issued in limited numbers to insurance brokers. She said that it could not be compared with the generally available policy that was the subject of these proceedings. She said that the three major travel insurers did not offer automatic cover for pre-existing conditions but did require a traveller to fill out a form which indicated what these conditions were. This allowed the insurer to make an informed decision as to whether or not to provide any cover. She said that in respect of Ms Bassanelli the matters which she took into consideration were the fact that she was (1) travelling to Japan; (2) the fact that she had metastatic breast cancer; (3) the fact that the cancer appeared to have spread to the applicant's bones and (4) that the applicant was taking Femara. She understood that the burden of proof in relation to refusing indemnity to an insured fell upon the insurer and this was also a concern. She stated that there was a higher risk of DVT in a person with metastatic cancer and that some people with metastatic disease that had been unsymptomatic found that the disease became symptomatic after an air trip. She noted that in order to travel to Japan the applicant would be undertaking two lengthy air trips in the space of a few days.

26. Under cross-examination the witness stated that she did not consult any texts at the time she made her decision. She confirmed that she did not ask for any further information and that the letter that was sent out was a standard letter. She advised that the information that she had seen indicated to her that the applicant had a very short life expectancy as the time between being diagnosed with cancer and being diagnosed with metastases was three years. She would expect the applicant to only have a further life expectancy of three years from the diagnosis of metastases. However, she admitted that she had not seen the applicant nor obtained any information about her condition.

27. Ms Thompson stated clearly in cross-examination that "there was no way in which we were going to give cover for this risk." She made it clear that it did not matter what doctor's reports were presented to her by the applicant, a policy decision had been taken that metastatic cancer would not be covered and that therefore no policy would issue.

Professor Richard Fox

28. Evidence was called from Professor Fox who is the Director of the Department of Clinical Haematology and Medical Oncology at the Royal Melbourne Hospital. He provided a medical report for the purposes of the proceedings before HREOC. That report is contained as Exhibit A to his affidavit. He was also asked some specific questions in a letter and the letter and his response is exhibited. His evidence confirmed the evidence given by Ms Thompson of the difficulties which an insurer might face in respect of a claim by a person who was suffering from metastatic cancer in knowing whether the condition was caused or related to the cancer or was independent of it. For example, he quoted the problems that such people had with bony lesions and general bone deterioration. If a person fell and broke a leg at the site of a bony lesion then it was clear that the break was caused or attributed to by the cancer. But if the person fell and suffered a break at another part of her bone this may be caused by the general weakening of the bone structure or may not have been. He also dealt with the problems of DVT while flying.

29. Under cross-examination Professor Fox accepted that the medical condition of the applicant at the time as he was now advised indicated that she was a person who was able to travel and he accepted that a person with metastatic cancer should be able to enjoy as much of a normal life as possible. One of the points that he made regarding insurance was that people frequently insured for travel some months in advance. The proposed traveller's health condition at the time of travel might therefore be very different to that which it was when he or she made the proposal. He accepted that in this case the health condition of Ms Bassanelli was unlikely to have changed between the time she made the application and the time she flew. He also accepted that the travel that she was going to take was for a very short period of time.

30. Dr Charles Corke, the Medical Director of OMEGA Assistance which is a subsidiary of QBE and QBE's consulting doctor, corroborated Professor Fox's evidence. He was not cross-examined as to his evidence.

Findings

31. Although there was little dispute between the parties on the facts of this case and on some of the medical evidence it is appropriate that I make the following findings. I find that the applicant is a person who suffers a disability as defined in s.4 of the DDA by reason of her condition of metastatic cancer. I find that she sought from the applicant a policy of travel insurance on 19 July 2002 for travel to Japan between 26 and 31 of that month. I find that the policy was declined because the applicant suffered from the disability previously defined. I accept the evidence of Professor Fox that a person suffering from metastatic cancer is not a person who could be considered to be "in good health" for the purposes of an insurance policy disclosure. I further note the applicant's own admission that her condition has been diagnosed as terminal. I find that there are other insurance companies who will issue policies without requiring disclosure of current health conditions relying either on a "good health" warranty and/or exclusion of cover for pre existing conditions. I find that the respondent has now altered its policy so that there is a total exclusion for all forms of health cover where a terminal prognosis has been made. I find that Ms Thompson had the authority, which she exercised from time to time, to issue a policy which excluded health cover and that this discretion was available to her at the time the applicant applied for her policy. I accept the applicant's evidence that the form of wording of the letter sent by the respondent to RAA was such as to give a reasonable person the impression that there was little or no point in communicating further with the company. I accept the evidence of Ms Thompson that she had no intention whatsoever of granting cover to the applicant in the circumstances of the case. I find that the respondent made no attempt to obtain further information from the applicant about her condition or seek any medical opinions.

32. I accept that a person with metastatic cancer does present difficult problems for an insurer and that the respondent's witnesses articulated these problems. I accept that the applicant's destination of Japan would have buttressed Ms Thompson's decision not to provide the applicant with a policy because of the communication difficulties and the expense of hospital treatment. I accept that it might be difficult to establish in any particular case whether a medical condition that occurs to a traveller is caused or exacerbated by her underlying disease. I note that in an insurance career of twenty years the former deputy general manager of the respondent's travel insurance division had no more than fifty difficult cases and that the quantum of current claims under the travel policies underwritten by QBE are between 30,000 and 35,000 a year.

Discussion and decision

33. I found that the applicant has a disability within the meaning of s.4 of the DDA and it was not seriously disputed that in those circumstances the respondent discriminated against her within the meaning of s.5 in that she was refused a policy of insurance which constituted less favourable treatment than that which would have been received by a person who did not have her disability and who would have been granted a policy. On the basis of the evidence the respondent would appear to have engaged in conduct contrary to s.24 of the DDA in that it has discriminated (as that term is defined in s 5) against the applicant on the ground of the applicant's disability by refusing to provide her with the services which it provides to persons without her disability. The respondent did not abandon any defence under s.24(2) of the DDA but did not argue very strongly that the provision of a policy to the applicant would have imposed unjustifiable hardship upon it. Unjustifiable hardship was considered by Sir Ronald Wilson in Disabled Peoples International (Australia) Limited v Telstra Corporation Limited HREOCA Matter H95/51 where the President stated:

"The term unjustifiable hardship is not defined in the DDA. Section 11 provides a list of some of the factors that may be considered in determining unjustifiable hardship but the DDA does not specifically define the term itself. ... All relevant circumstances are to be taken into account including the nature of the benefit or the detriment, the effect of the disability, and the financial circumstances of and costs to the respondent in eliminating the discrimination. In my opinion the content of the term "unjustifiable hardship" will depend upon the circumstances of each case. In the present case, the meaning of the term will emerge from:

(i) Identifying what magnitude or difficulty would confront the respondent, from the point of view of both the respondent and the objective bystander, if there were to be a finding of unlawfulness; and

(ii) Establishing whether or not imposing the relevant obligation is justified by reference to the benefit or fairness, if any, that would come from imposing it."

34. In this case the magnitude of difficulty above will be the difficulty in dealing with a probable non-English speaking medical practitioner in a foreign country who is anxious to admit or provide a procedure or medication to an insured person. It would also encompass the difficulty of claims causation. But, I believe this is the nature of the respondent's business. It has set up a department containing trained persons in order to assist it to carry out this responsibility. In cases where the risk might be greater the insurer would be entitled to charge a higher premium. I am satisfied that providing this service would not have required the respondent to provide a service in a situation of unjustifiable hardship.

35. The respondent has equally not abandoned a defence that the applicant did not take advantage of the opportunity to discuss matters with Ms Thompson and thus achieve an outcome that would have been satisfactory to her. I have come to the view that this is not a defence that is open to the respondent because the communication from it to the applicant's travel agent could not reasonably suggest any such outcome. I am also satisfied that even if the applicant had spoken to Ms Thompson she would have maintained the position which she maintained before the court that she would not grant a policy to a person with metastatic cancer. My first finding absolves the applicant from criticism of not attempting to persuade Ms Thompson to give her a policy which excluded health risks for herself although I have found that Ms Thompson had the power and did in fact on occasions provide such policies.

36. It follows from the above that as in the case of Xiros v Fortis Life Assurance [2001] FMCA 15 the only real issue in this case is whether the respondent is entitled to the benefit of the exemption from liability provided in s.46(2) of the DDA. When he considered the matter in Xiros Driver FM referred to Waters v Public Transport Corporation [1991] HCA 49; (1991) 173 CLR 349 where the High Court gave consideration to the meaning of the word "reasonable" in s 17(5)(c) of the Equal Opportunity Act 1994 (Victoria):

"16. The majority in that case found that the word referred to what was reasonable in all the circumstances of the case. At page 395, their Honours At page 395, their Honours, Dawson and Toohey JJ adopted the following quote from the Federal Court decision in Secretary, Department of Foreign Affairs and Trade v Styles [1989] FCA 342; (1989) 23 FCR 251 at page 263:

The test of reasonableness is less demanding than one of necessity but more demanding than one of convenience... The criterion is an objective one which requires the court to weigh the nature and extent of the discriminatory effect on the one hand against the reasons advanced in favour of the requirement or condition on the other. All the circumstances of the case must be taken into account."

37. Xiros was a case in which statistical data was provided. This is not such a case. I must therefore take into account all relevant circumstances. The first point I would make is that the fact that one insurer may provide cover for a particular risk does not mean that it is unreasonable for another insurer to decline it. The court must first look, objectively, at the reasons put forward by the insurer for declining the risk and consider the evidence brought to justify that decision. The reasonableness or otherwise of that evidence can be tested against the conduct of other insurers who are offered the same risk.

38. It must be borne in mind at all times that Ms Bassanelli never asked to be covered for her pre-existing condition. She did not expect to obtain such cover. Ideally she wanted to be covered for medical events that were not associated with her pre-existing condition and the other usual contents of a travel policy such as loss of baggage, money, cancellation etc.

39. The reasons put forward by the respondent for declining to issue a policy are the problems surrounding claims causation issues. These are the problems discussed by Ms Thompson and Professor Fox of having to make a speedy decision at the telephone to a hospital whether to provide indemnity or not on the basis of scanty information. I can understand that this would be difficult. I can understand the pressures that are placed upon an insurer who would know full well that if it refuses cover a sick patient might be turned out of the hospital, or if she is retained there find herself with a crippling bill at the end of the day. I accept that there will be cases where it is difficult to decide even on the best evidence if a claim is causally related to a pre-existing condition. But it seems to me that this is what insurers do. Insurers essentially take a bet upon whether a particular set of circumstances will or will not occur. In order to calculate the amount of the premium they assess actuarially their previous claims history, which will include cases where very large claims have been paid because of the acceptance of risk under the type of circumstances outlined which may not otherwise have been accepted. The cost of these mistakes is then built into the policy costs of the very large number of people who take out travel insurance policies with the respondent. I say "large number" because we know that 30,000 + people make claims a year.

40. On the other hand, I accept that it is reasonable for an insurer to try and limit its risk. Insurers are not expected to cover "odds on" bets. The applicant in this case was happy for the insurer to limit its risk by excluding her pre-existing condition. This is what the other insurers whose policies were exhibited to the applicant's affidavit attempted to do. QBE (and apparently two other insurers) took a policy decision not only to follow that path but also to obtain as much information as possible to assess a risk, that is their prerogative. If it is a reasonable decision then it may exempt them from the rigours of the DDA. The evidence which was given by Ms Thompson on this point - in respect of the other insurers - was not entirely satisfactory. It was hearsay evidence. No policies of insurance were tendered. No statistics were provided as to the numbers of policies the other insurers issued. Although no objection was made to the evidence I cannot give it very much weight in the absence of this easily produced information.

41. Ms Thompson said in her evidence that she was influenced in her decision by the fact that the applicant was going to Japan. But she also said that even if the applicant had contacted her and provided her with medical evidence of the type that was submitted at the hearing that this would only have reinforced her decision not to give her a policy. I draw an inference from those remarks that it was more the applicant's condition than her destination that influenced Ms Thompson.

42. Given that QBE provide a policy which excludes pre-existing conditions unless a special premium has been paid and the company has agreed to accept them, and given that the applicant did not seek cover for pre-existing conditions the question is therefore whether it was reasonable for QBE to go that one step further in relation to the pre-existing condition of metastatic cancer and not grant a policy at all. The policies tendered in evidence are issued by major companies. Ms Thompson gave evidence that the policy, which the applicant actually received and which excluded medical events arising out of the pre-existing condition, was a very limited policy in terms of the numbers issued. But there is much to be said for the proposition that an insurance company is even less likely to accept a risk that might result in a catastrophic claim when that risk has to be spread over a premium income of only $100,000.00 as was deposed to.

43. The respondent has provided me with some written submissions concerning the other policies which were exhibited to the applicant's affidavit. In relation to the RAA policy underwritten by QBE which excludes any claim arising from illness or injury where a terminal prognosis was made it is submitted that because of the obligation to disclose a responsible insurer would still determine whether to accept the risk once disclosure as required has been made. The policy does require that pre-existing medical conditions be disclosed. It also requires the traveller to complete the traveller's medical appraisal form. I am not convinced by this argument. It seems to me that once any medical cover is excluded because of a terminal diagnosis there is little point in providing any evidence whatsoever about that existing condition. To my mind the requirement to provide evidence of this nature is a requirement that goes to enabling the insurer to consider whether or not to grant a policy where no terminal condition has been diagnosed. I equally do not see any requirement for the applicant to have disclosed her terminal condition in these circumstances. It is not a matter which would influence the insurer in granting a policy because it is a term that is used to exclude cover. What remains under the policy is cover for events which are not born on by in any way by the insured's medical condition.

44. The respondent refers to the Mercantile Mutual Safe Trip Policy which is the one which the applicant actually took out. He submits:

"Thus, whilst, it is true that the policy is offered by a major participant in the industry, it is not correct that the policy does not require disclosure of pre-existing medical conditions, nor that cover is automatic. Again, the insurer reserves the right to decide not to accept the risk of insuring a person."

The evidence given by the applicant was that she told Mercantile Mutual about her condition and cover was granted.

45. The respondent submits in relation to the QBE/Mercantile Mutual Safe Trip Policy that it requires the traveller to advise of "everything relevant to our deciding whether to accept the risk of insuring you" and therefore that cover is not automatic. The insurer reserves the right to decide not to accept the risk of insuring a person. That must be correct. But is not the real question whether QBE/Mercantile Mutual would insure a person such as the applicant? We know that they would because the applicant has given evidence that she has taken out two policies with them.

46. In relation to the QBE Qantas Policy the respondent submits that at [137] it states:

"If you, or any of your travelling party, has an existing medical condition the medical certificate must be completed and submitted to us for evaluation."

The respondent argues that the insurer still has a right to evaluate the traveller's medical condition which is the same requirement imposed by the respondent in the case before the court. The applicant is not complaining about an insurance company's right to evaluate her medical condition. She is not complaining about the insurance company's right to exclude her pre-existing medical condition from cover. What she is complaining about is the refusal by the insurer to issue a policy which covers her for unrelated matters.

47. The respondent submits in relation to the Smart Cover Policy that at [157] it states:

"You are not automatically covered under this insurance if you have a pre-existing medical condition. This policy also has a disclosure requirement and a "medically fit" warrantee."

48. In respect of the Aussie Travel Cover Policy the respondent says that it is not correct to say that there is no requirement to disclose medical conditions. The policy requires a medical declaration to be completed if cover is for a pre-existing medical condition. It says at [197] that:

"This policy is automatically available to travellers up to age 75 without pre-existing medical conditions."

And at [195] the policy states:

"You must tell us anything that could effect our decision to insure you."

49. Again the respondent is met by the applicant's argument that she was not seeking pre-existing condition cover. The respondent is met by the argument that there is no evidence of what this insurance company would have done if faced with an application from the applicant.

50. The respondent deals with the CGU Travel Policy in which there is a medically fit requirement at [218]. I accept that this is not a relevant policy because of that requirement, which I do not believe that the applicant could fulfil. The respondent then goes on to discuss the Toursafe AIG Policy which states at [242]:

"This policy does not automatically provide cover for travellers with a known existing health disorder. To obtain cover a medical assessment must be performed."

Once again the respondent must be met with the argument that there is no evidence provided that this company would have refused the applicant a policy of the type she had requested from QBE if she had given them the health details which she gave to QBE.

51. The respondent makes reference to the Harvey World Travel Policy where at [251] the declaration requires details to be provided if the traveller has undergone any medical investigative tests in the last five years.

52. It seems to me that the status of most of the evidence produced by the applicant and commented upon by the respondent concerning other policies is that it is of little weight with the exception of those policies which the applicant has actually purchased. In regard to the others the applicant has not established to my satisfaction that she would obtain cover under them, even to the limited extent required, but equally the respondent has not established that she would not. It is the respondent who bears the onus of establishing the reasonableness of its conduct.

53. I have weighed the fact that some other insurers are prepared to (and did) grant cover where QBE was not against the evidence which I accepted about the claims causation risks and the anecdotal evidence of catastrophic large claims having been made. I note in regard to the latter that such problem cases are numerically very small over a long period compared with the large number of other claims under these policies. I think that when this is taken into account the costs to the insurer of the claims causation difficulties spread over the large number of policies issued and the number of years of issue would not be great.

54. I find that the refusal of QBE to issue any policy whatsoever to the applicant was unreasonable. The reasons given for not issuing a policy, which excluded all medical events, were that such a policy would be uneconomic and was not a standard form policy for QBE. However, the evidence is that Ms Thompson has in the past issued such policies. Moreover, the company currently issues what is effectively such a policy for a person in the position of the applicant. The respondent argues that this is irrelevant. But I do not agree. It is as relevant as any evidence of subsequent conduct in assessing the reasonableness of past conduct. Thus if an employer institutes a safer system of work following an incident, the conduct can be looked at to see if such a system could reasonably have been employed before. If QBE can within a year issue a policy of the very type that the applicant would have accepted, why is it not relevant to take that into account in assessing the reasonableness of the respondent declining any cover at all to the applicant. The respondents could not really answer the applicant's question as to why she was more likely to lose her luggage than a person who did not have metastatic breast cancer and at the end of the day we can only assume that she was not.

55. The only purpose that I can see for the applicant raising the bar and arguing that it was unreasonable for the respondent not to provide her with a policy which gave her some medical cover but excluded her pre-existing condition is to sound in damages. Whether it does or not I will consider below, but for the purposes of the declaration I will say that I find that in all the circumstances the discrimination by declining to provide her with that restricted level of medical cover was also not reasonable. For the avoidance of doubt the matters which I have taken into consideration in coming to this conclusion are the nature of insurance contracts generally, the history of catastrophic and problem claims provided by the respondents, the whole of the medical evidence which indicated that many of the problems likely to be experienced by someone in the applicant's position could be easily traced back to her pre-existing condition even if some may have given cause for concern and the actions of other insurers in the market in issuing policies to the applicant. I also took into account the fact that the trip was only for six days and that the application for a policy was made only a few days prior to the applicant travelling. I noted that the insurer did not make any attempt to obtain further medical information and that its main witness made it clear that any information that she did obtain would just reinforce her decision. I am of the view that the balancing of these factors weighs in favour of the applicant. It cannot pass the appropriate test of reasonableness being to my mind a decision of convenience only.

Remedies

56. The applicant asks for a declaration, for damages and for an apology. The declaration will be forthcoming. The applicant is entitled to damages for the distress which the respondent's refusal to grant her a policy made her suffer. I accept her evidence on this point. I also note that the applicant was able to obtain a policy reasonably easily and that she did not miss out on her trip to Japan. These matters do not tell greatly against any award because the act of discrimination still occurred and was unlawful. The applicant has indicated that this case constitutes her personal campaign for fair treatment of cancer sufferers. Whilst she is entitled to bring a claim for these reasons she should not personally benefit because their outrage has been assuaged. I do not criticise the respondent for contesting the proceedings. This is apparently the first case in which s.46(1)(g) of the DDA has been considered. I would draw no distinction between the respondent's refusal to grant a policy on the basis of exclusion for pre-existing conditions and the refusal to grant a policy which excluded all medical claims. But I make that finding in the circumstances of this particular case and I can see others in which it might have been more important such as where an applicant was unable to obtain a policy from any other insurer. I am of the view that the appropriate figure for damages in this case is $5,000.00 plus interest.

57. In Rachael Evans v National Crime Authority [2003] FMCA 375, I said this about apologies:

"The applicant has asked for an apology. At the end of the hearing I expressed a view which I have expressed previously in these matters. I do not believe there is much utility in forcing someone to apologise. An apology is intended to come from the heart. It cannot be forced out of a person. If the person does not wish to give it then it is valueless."

58. I think that Ms Bassanelli is equally deserving of an apology as Ms Evans. I would hope that after consideration of these reasons the respondent will provide such an apology based upon its current understanding of this difficult area of law.

59. The respondent should pay the applicant's costs to be calculated in accordance with the Federal Magistrates Court Rules Rule 21.10 and Schedule 1. I certify that this was a case in which it was appropriate for the applicant to employ an advocate.

I certify that the preceding fifty-nine (59) paragraphs are a true copy of the reasons for judgment of Raphael FM

Associate:

Date: