Brett Holman is a household name for all Australian football fans. He spent most of his professional football career overseas playing in the Dutch Eredivisie, Premier League and UAE Pro League before returning to Australia in 2016 for a final swansong in the A-League with Brisbane Roar FC. He also made 63 appearances for the Australian national team, notably scoring two of Australia’s three goals at the 2010 World Cup.
Unfortunately, Holman’s swansong in the A-League was unexpectedly cut short. In April 2018, towards the end of the 2017–18 season, he sustained an injury while playing for the Roar in an A-League match against Perth Glory, which prevented him from participating in professional football (Injury). At that time, he was a marquee player for the Roar with an annual salary of $372,300 including superannuation.
The Roar was a party to an insurance policy with Arch Insurance known as the Professional Sports Group Accident Insurance Policy (Policy). The Policy identified Football Federation Australia, the Roar and all other A-League clubs as the ‘Policy Holder’ and A-League players (which included Holman) as ‘Covered Persons’.
Relevantly, the Policy provided for certain benefits, including Temporary Total Disablement (TTD) benefits, that were payable in circumstances where an A-League player sustained bodily injury caused by an accident during the period of cover. The TTD benefit payments were calculated based on the A-League player’s contracted salary at the time of injury, capped at $350,000 in any 52-week period.
Having sustained the Injury towards the end of the 2017–18 season, Holman signed a new player contract with the Roar approximately one month later in May 2018 for the 2018–19 season. The salary under the new contract was reduced to $178,000 including superannuation.
The following month, Holman completed and signed an insurance claim form, claiming benefits under the Policy in relation to the Injury (Claim). The Claim was then submitted to the insurer by an officer of the Roar.
The insurer accepted Holman’s Claim and paid $369,433.26 to the Roar between July 2018 and June 2019. The payments were for TTD benefits under the Policy.
As Holman sustained the Injury at a time when his original contract with the Roar was in force, the TTD benefit payments were calculated based on his then annual salary of $372,300 (subject to the above-mentioned cap).
While the Roar received $369,433.26 from the insurer for TTD benefits payable under the Policy, it did not pass on those payments to Holman. Rather, the Roar contended it was only required to pay Holman the salary payable under his new player contract, being $178,000 including superannuation.
Conversely, Holman contended that on the proper construction of the Policy it was he, rather than the Club, who was entitled to the TTD benefits paid by the insurer.
The dispute at trial concerned the value of the TTD benefit, and whether the Roar or Holman was entitled to that benefit, in circumstances where the Roar paid Holman’s contract salary while he was injured (i.e., the reduced salary payable under the second player contract that was entered after the Injury).
In considering those issues, the Court was required to carefully analyse the terms of the Policy to determine its proper construction. Unfortunately, many of the terms were inconsistent and ambiguous and there was no consistent form of words used to describe the obligation to pay a benefit or sum.
Of particular significance in this case was the ambiguity of the TTD section of the Policy. That section required the insurer 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‘.
While the word ‘Assured’ was defined to mean ‘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‘, the Schedule did not identify any particular person or entity as being the ‘Assured’.
As his Honour observed, the word ‘Assured’ could not be taken to have had the same meaning as ‘insured’, and indeed it was reasonable to infer that ‘Assured’ was not intended to have the same meaning as ‘insured’ given the Policy used the term ‘Assured’ in various parts.
Thus, to identify the meaning of ‘Assured’, his Honour looked at who in the Schedule was entitled to a particular benefit under the Policy (noting ‘Assured’ was defined to mean ‘a person or entity identified in the SCHEDULE who shall be entitled to the benefits covered hereunder‘).
In relation to the TTD benefit, and having regard to various text-based and other considerations (including the ‘compelling consideration’ that it was Holman, not the Roar, who suffered the Injury and faced the risk of being unable to earn his living as a result of the Injury), his Honour Judge Porter found that the Policy conferred that benefit on Holman regardless of whether, and to what extent, the Roar paid him sums under his player contract.
His Honour also confirmed that on the proper construction of the Policy, the calculation of the TTD benefit was not affected by Holman’s entry into the second player contract: “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.”
Accordingly, the Court agreed Holman was the ‘Assured’ and that he was entitled to receive the entire $369,433.26 that the insurer paid to the Roar. The Court also ordered the Club to pay Holman’s costs, as well as interest in the amount of $41,815.80.
As with most insurance cases, the outcome in this matter turned on the terms of the applicable policy. This case is a reminder that when considering the proper construction of an ambiguous insurance policy, one must have careful regard to all relevant terms and textual indications, and the contexts in which key words and phrases are used.
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Guy Edgecombe, Partner
Mitchell Byram, Senior Associate