FEDERAL COURT OF AUSTRALIA
Alcoa of Australia Retirement Plan Pty Ltd v Thompson [2002] FCA 256
SUPERANNUATION – complaints tribunal – functions – decision of trustee that member not totally and permanently disabled – complaint by member to tribunal – tribunal decision to set aside trustee’s decision and substitute decision that member was totally and permanently disabled – whether tribunal in error of law in apprehension of its function - whether tribunal failed to take into account relevant considerations – whether tribunal misconstrued trust deed
Superannuation (Resolution of Complaints) Act 1993 (Cth) ss 14, 14(2), 14A, 14A(1), 14AA(2), 15A(1), 15B(1), 15CA(1)(b), 15E(1) and (3), 15F(1) and (10), 15H(1) and (3), 15J(1) and (10), 36, 37, 37(3), 37(4), 37(6), 37(6)(b)(ii), 37A(7)(b), 37B(4), 37C(5)(b)(ii), 37CA(5), 37D(4), 37E(6)(b)(ii), 37F(4), 37G(6)(b)(ii), 46(1), 46(4)
MacGillivray on Insurance Law 9th ed. at p 711
Pope & Ors v Lawler & Ors (RD Nicholson J, 7 May 1996, unreported) cited
National Mutual Life Association of Australia Ltd v Jevtovic (Sundberg J, 8 May 1997, unreported) referred to
Adkins v The Health Employees Superannuation Trust Aust Ltd [1997] FCA 794 cited
National Mutual Life Association of Australasia Ltd v Campbell [1999] FCA 1717 cited
National Mutual Life Association of Australasia Ltd v Campbell (2000) 99 FCR 562 cited
Maciejewski v Telstra Super Pty Ltd [1998] NSWSC 376 cited
Beverley v Tyndall Life Insurance Co Ltd (1999) 21 WAR 327 cited
Seafarers’ Retirement Fund Pty Ltd v Oppenhuis (1999) 94 FCR 594 cited
Retail Employees Superannuation Pty Ltd v Crocker [2001] FCA 1330 referred to
Flexiplan Australia Ltd v Pankhurst & Ors [2001] FCA 1535 referred to
Victorian Chamber of Manufactures v The Commonwealth (1943) 67 CLR 335 cited
Szuster v Hest Aust Ltd & Anor [2000] SADC 2 cited
Chammas v Harwood Nominees Pty Ltd (1993) 7 ANZ Ins. Cas 61-175 referred to
Re Mann v Director-General of Social Services (1982) 4 ALNN 146 cited
White v Board of Trustees [1997] 2 Qd R 659 cited
Australian Broadcasting Commission v Australasia Performing Right Association Limited (1973) 129 CLR 99 referred to
Riley v National Mutual Life Association of Australasia Ltd & Anor (1986) 4 ANZ Insurance Cases 60-684 referred to
ALCOA OF AUSTRALIA RETIREMENT PLAN PTY LTD v DAVID THOMPSON
W351 of 2001
RD NICHOLSON J
15 MARCH 2002
PERTH
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IN THE FEDERAL COURT OF AUSTRALIA |
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W351 of 2001 |
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BETWEEN: |
ALCOA OF AUSTRALIA RETIREMENT PLAN PTY LTD (ACN 065 702 454) APPLICANT
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AND: |
DAVID THOMPSON RESPONDENT
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DATE OF ORDER: |
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WHERE MADE: |
THE COURT ORDERS THAT:
1. The application be allowed.
2. The determination of the Superannuation Complaints Tribunal dated 9 April 2001 be set aside.
3. The matter be remitted to the Tribunal for reconsideration according to law.
4. Submissions be heard on costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
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IN THE FEDERAL COURT OF AUSTRALIA |
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W351 of 2001 |
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BETWEEN: |
ALCOA OF AUSTRALIA RETIREMENT PLAN PTY LTD (ACN 065 702 454) APPLICANT
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AND: |
RESPONDENT
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JUDGE: |
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DATE: |
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PLACE: |
REASONS FOR JUDGMENT
1 This is an application by way of “appeal” from a determination of the Superannuation Complaints Tribunal (“the Tribunal”) made on 9 April 2001. The decision set aside a decision of the applicant and determined that a total and permanent disability benefit (“TPD benefit”) ought to be paid to the respondent. It further determined that an ill-health benefit (“IH benefit”) which had already been paid to the respondent, should be deducted from the TPD benefit.
2 The application is brought in reliance upon s 46(1) of the Superannuation (Resolution of Complaints) Act 1993 (Cth) (“the Complaints Act”). Subsection 46(1) permits such an application by way of appeal “on a question of law”. The jurisdiction of the Court is accepted by both parties. Section 46(3) of the Complaints Act provides the Court is “to hear and determine the appeal” and a discretion is provided for it to “make such order as it thinks appropriate”. Such orders, without limitation, may “include an order affirming or setting aside the determination of the Tribunal and an order remitting the matter to be determined again by the Tribunal in accordance with the directions of the Court”: s 46(4).
Background circumstances
3 The Tribunal was satisfied as to the following circumstances. The complainant was born on 22 March 1963. He qualified as a boilermaker before commencing employment with ALCOA of Australia Pty Ltd (“the Employer”) on 26 March 1984. Initially he worked as a plant operator but subsequently as a maintenance foreman.
4 Sometime in 1994 the respondent claimed to suffer numerous symptoms which continued and increased until June 1998 when he was unable to continue working. Two subsequent attempts to have him return to work on a part-time basis were unsuccessful. His employment with the Employer was terminated on 30 October 1999.
5 On 21 October 1999 the respondent lodged a claim for payment of a TPD benefit. The amount of TPD benefit claimed by him was $318,006. At the same time he claimed an IH benefit in the amount of $104,111.
6 On 18 February 2000 the applicant declined the claim for the TPD benefit. The applicant reconsidered the claim on 18 May 2000 but again declined it.
Relevant trust deed
7 The claim made by the respondent was as a member of a plan (“the Plan”), the subject of a Trust Deed originally dated 15 December 1989 but later amended by a Deed dated 29 December 1997 (“the Amended Deed”). The applicant is the trustee of the Plan.
8 Clause 1.1 of the Amended Deed relevantly defines “total and permanent disablement” for the purposes of the Plan as follows:
“Total and Permanent Disablement:In relation to a Member means:
(a) …
(b) … having, in the opinion of the Trustee after consideration of medical evidence, become incapacitated by reason of any physical or mental sickness injury or infirmity to such an extent as to render the Member unlikely ever to engage or work for reward in any occupation or work for which the Member is reasonably suited by education, training or experience.”
Clause 2.3.4 of the Amended Deed provides the benefit is payable upon a member leaving employment by reason of being totally and permanently disabled prior to reaching the retirement age. The “Retirement Age” is defined in cl 1.1 as being 65. Otherwise, the Amended Deed provides for the payment in the case of termination prior to the retiring age of either an IH benefit or a Termination benefit. In this case, the respondent was paid the former.
Jurisdiction and powers of review by Tribunal
9 The reconsideration by the Tribunal came about as a consequence of a complaint by the respondent. The applicant made his complaint to the Tribunal in reliance on s 14(2) of the Complaints Act, which reads:
“14(2)Subject to subsection (3) and section 15, a person may make a complaint (other than an excluded complaint) to the Tribunal, that the decision is or was unfair or unreasonable.”
No issue arises to challenge the fact that the complaint was properly made.
10 Section 37, the focus of the grounds of appeal, supplements the provisions of s 14(2) by addressing the Tribunal’s powers which arise in relation to complaints made under s 14. At the relevant date (the date of the review by the Tribunal) that section read as follows:
“37(1) For the purpose of reviewing a decision of the trustee of a fund that is the subject of a complaint under section 14:
(a) the Tribunal has all the powers, obligations and discretions that are conferred on the trustee; and
(b) subject to subsection(6), must make a determination in accordance with subsection (3).
(2) …
(3) On reviewing the decision of a trustee, insurer or other decision-maker that is the subject of, or relevant to, a complaint under section 14, the Tribunal must make a determination in writing:
(a) affirming the decision; or
(b) remitting the matter to which the decision relates to the trustee, insurer or other decision-maker for reconsideration in accordance with the directions of the Tribunal; or
(c) varying the decision; or
(d) setting aside the decision and substituting a decision for the decision so set aside.
(4) The Tribunal may only exercise its determination-making power under subsection (3) for the purpose of placing the complainant as nearly as practicable in such a position that the unfairness, unreasonableness, or both, that the Tribunal has determined to exist in relation to the trustee’s decision that is the subject of the complaint no longer exists.
(5) The Tribunal must not do anything under subsection (3) that would be contrary to law, to the governing rules of the fund concerned and, if a contract of insurance between an insurer and trustee is involved, to the terms of the contract.
(6) The Tribunal must affirm a decision referred to under subsection (3) if it is satisfied that the decision, in its operation in relation to:
(a) the complainant; and
(b) so far as concerns a complaint regarding the payment of a death benefit – any person (other than the complainant, a trustee, insurer or decision-maker) who:
(i) has become a party to the complaint; and
(ii) has an interest in the death benefit or claims to be, or to be entitled to benefits through, a person having an interest in the death benefit;
was fair and reasonable in the circumstances.”
Section 37 appears in Div 3 of Pt 6 of the Complaints Act. Division 3 is titled “The Review Meeting”. The procedure which the “meeting” is required to follow is addressed in s 36 in the following terms:
“36 The Tribunal, in reviewing a decision or conduct:
(a) is not bound by technicalities, legal forms of rules of evidence; and
(b) is to act as speedily as proper consideration of the review allows, having regard to:
(i) the objectives laid down by section 11; and
(ii) if the complaint relates to a fund – the interests of all the members of the fund; and
(c) may inform itself of any matter relevant to the review in any way it thinks appropriate.”
11 Section 37A immediately follows s 37. It addresses complaints under s 14A (concerning decisions of trustees to admit persons to life policy funds). In s 37A, the Tribunal’s basis of review also requires it to consider whether “the decision, in its operation in relation to the complainant, was fair and reasonable in all the circumstances”.
Tribunal’s reasoning
12 In its reasons the Tribunal, under the heading “The issues” stated:
“The payment of an Ill Health benefit involves a decision by the Trustee that the Complainant had become medically unfit to continue in the employment of the Employer (clause 2.3.5 of the Deed). Accordingly, it is accepted by the Trustee that the Complainant suffers a physical and mental sickness. The issue is as to whether or not that sickness is such that it renders him unlikely to ever engage in work for reward or any occupation or work for which he is reasonably suited by education, training or experience.”
13 The Tribunal’s reasons then recounted that a lengthy submission from the applicant (as trustee of the Plan established by the Deed) examined in detail medical reports and sought to point out inconsistencies with respect to the respondent’s evidence. It said that the applicant as trustee had submitted that the respondent was well above average intelligence and mental capacity, had experience as a Supervisor with significant responsibilities and was equipped to work in a number of alternative environments. Accordingly, the applicant had submitted that the decision it reached was “fair and reasonable in all the circumstances”.
14 The Tribunal then recorded that in the respondent’s submission in response, he had also examined the medical reports and submitted he had been treated unfairly as a consequence of the applicant’s interpretation of the medical evidence. The respondent claimed the major contributing factor to his deterioration of health arose from the chemicals in the environment in which he was working.
15 The Tribunal then turned to examine for itself the medical reports. In doing so it said:
“The Tribunal considered that it was not its duty to establish the Complainant’s medical diagnosis, but rather, to decide if the operation of the Trustee decision to deny the Complainant a TPD benefit was fair and reasonable in the circumstances.
Thus, the Tribunal turned its attention to those reports which specifically addressed the Complainant’s current and future working capacity at the time he ceased work in June 1998, to determine whether or not he satisfied the criteria for TPD as defined in the Trust Deed.”
16 The Tribunal also briefly reviewed the respondent’s employment history.
17 The essential part of the Tribunal’s reasoning then appears under the heading “Tribunal’s deliberations”. It is helpful to assemble these under the following numbered paragraphs to which reference can be subsequently made.
(1) Firstly, the Tribunal said further of its role:
“The question for the Tribunal is whether or not the operation of the Trustee decision to deny the Complainant a TPD benefit was fair and reasonable in the circumstances. If so, the Tribunal must, pursuant to sub-s.37(6) of the Complaints Act, affirm this decision. As discussed earlier, it is not the role of the Tribunal to reach a diagnosis of the Complainant’s illness in this case, but to determine whether the illness from which he suffers affects his work capacity and whether it does so permanently.”
(2) In relation to the evidence of the respondent’s medical practitioners, the Tribunal said that despite many investigations they had not reached a consensus on his diagnosis.
(3) In relation to the respondent’s capacity for work, the Tribunal noted that Dr S, the respondent’s treating general practitioner, and Dr O, the Employer’s medical officer, had stated unequivocally that the respondent is totally and permanently disabled for all work due to his many symptoms, particularly extreme lethargy.
(4) After reviewing aspects of various medical evidence, the Tribunal said:
“In other words, these practitioners believe that although some form of limited work may, at some time in the future, be a possibility, it is more likely than not that the Complainant would not be fit enough to work more than 20 hours per week and certainly not full time. The Tribunal is satisfied that an ability to perform part-time work does not mean that the Complainant is not totally and permanently disabled. The Tribunal notes that the capacity to engage in any work or occupation usually implies a capacity to engage in full-time work where the person concerned was so engaged prior to the relevant injury – Re Mann v Director-General of Social Services (1982) 4 ALN N146; Chammas v Harwood Nominees P/L [No] (BC9301704 – unreported, 14 April 1993).”
(5) After reviewing further medical evidence the Tribunal said:
“In weighing all of the medical evidence, the Tribunal is satisfied that the majority of medical opinions support the Complainant’s contention that he is, more likely than not, permanently unfit for full time work notwithstanding the lack of consensus as to the exact nature of his disease and that he meets the definition of TPD. Consequently, the Tribunal is satisfied that the operation of the decisions of the Trustee and the Insurer to deny the Complainant’s claim for a TPD benefit was not fair and reasonable in the circumstances.”
(6) The Tribunal then made its determination in the following terms and with reference to provisions of s 37 of the Complaints Act:
“Pursuant to sub-s.37(1)(a) of the Complaints Act, the Tribunal has all the powers, obligations and discretions of the Trustee. Sub-section 37(6) of the Complaints Act provides that the Tribunal must affirm the Trustee and the Insurer decisions if it is satisfied that their operation, in relation to the Complainant, was fair and reasonable in the circumstances. The Tribunal is not so satisfied. Consequently, in accordance with the requirements of sub-ss.37(3)(d)(4) and (5) of the Complaints Act the Tribunal sets aside the Trustee decision and determines that the TPD benefit ought be paid to the Complainant. The III Health benefit which has presumably already been paid to the Complainant, ought be deducted from the TPD benefit which the Tribunal has found to be payable.”
Medical evidence
18 The Tribunal examined all medical reports and summarised those now mentioned.
19 Dr H, treating Occupational Physician (for the respondent) noted on 10 November 1998 there was no diagnosis to explain the respondent’s symptoms save chronic fatigue and chemical intolerance. On 29 June 1999 he described his injury as minor to moderate in severity, leading to partial unfitness for future work possibly limiting work to 15 or 20 hours per week and in the character of alternative and restricted work. On 29 July 1999 he wrote of the respondent’s inability to return to his work environment and probable requirement of training to facilitate entry in alternative work. On 14 August 2000 he stated the respondent was now disabled.
20 M/s C, Clinical Psychologist (for the respondent) found the respondent on 26 November 1998 to be not anxious or severely depressed but as having some stress symptoms. On 8 August 2000 she reported a permanent disability of 30%.
21 Dr R, Physician (for the respondent) concluded on 15 December 1998, that the respondent has had a genuine illness of the chronic fatigue type which would make it very difficult for him to return to work in the foreseeable future.
22 Dr T, Psychiatrist (for the Employer), found on 26 August 1999 the respondents presentation to be consistent with his total disability so that he would be functionally unable to perform any work. Any other type of intervention would not return him to a form of meaningful work.
23 Dr L, Thoracic Physician (for the Employer), concluded on 13 September 1999 the respondent had no identifiable organic disorder and so no limitation to his fitness for resumption of work in his former job or similar employment. On 8 December 1999 (after reading Dr W’s report referred to below) he stated conclusions or recommendations concerning prognosis or fitness for employment were entirely speculative. He said the issue was one of credibility generally and in relation to the respondent.
24 Dr W, Physician (for the respondent), gave the opinion on 17 September 1999 that the respondent was totally unfit for the work he was doing previously. He could only undertake very light work and probably not full-time. 15 hours a week was a possibility. On 13 December 1999 Drs W, like Dr R and T, considered the respondent had significant disability and was profoundly affected by fatigue with minimal exertion. He put his impairment disability at 20%.
25 Dr S, Treating General Practitioner (for the respondent) stated on 20 September 1999 that the respondent’s symptoms made him unable to attend work so that he was totally unfit for work and would remain so. On 21 October 1999 she restated these views. On 5 December 1999 she opined that the respondent’s permanent disability was in excess of 30%.
26 Dr O, the Employer Medical Practitioner, agreed on 2 November 1999 with Dr S’s contention that in the foreseeable future was TPD. On 17 January 2000 Dr O stated he could not exclude the possibility of recovery but did not foresee it.
27 Dr Co, Physician (for the Employer), stated on 28 December 1999 the respondent was unfit for work, certainly at his former occupation.
28 Dr E, Occupational Physician (for the Employer), on 3 February 2000 said he had no doubt the respondent was TPD although he is capable of work (elsewhere).
29 Dr Ca, Toxicologist (for the Employer) relied only on the respondent’s statement and did not make his assessment of the respondent’s capacity for work.
30 There was therefore arguably support in the medical evidence for the Tribunal’s finding in the first sentence of the paragraph quoted in (5) above. An issue on the application, however, is whether that was the proper basis for the Tribunal to proceed to the second sentence in the same passage.
Grounds of review
31 The applicant initially relied upon eight grounds of review, not all of which were pursued. The first, second and fifth grounds address the manner in which the Tribunal purported to address s 37 of the Complaints Act. The third ground relies on an allegation of the Tribunal acting contrary to the terms of the Deed. The fourth ground relies on a failure by the Tribunal to take into account certain relevant considerations. The sixth relies on a failure by the Tribunal to generally and properly consider the medical evidence. The seventh relies on the Tribunal taking into account irrelevant considerations in the form of irrelevant medical opinions. These reasons will deal only with the aspects of these grounds pressed in argument.
Failure to address correct question
Submissions for applicant
32 It is said that whilst the Tribunal came close to asking itself the correct question at one point, it is clear that in substance, and overall, it did not ask itself whether the decision complained of was “fair and reasonable in the circumstances” as required by s 37(6) of the Complaints Act, but asked the more narrow and different question of “whether in its opinion the respondent was totally and permanently disabled”.
33 The submission continued by stating that in this regard, the Tribunal:
(a) said that “the issue” was whether the respondent’s (alleged) sickness was such as to, in effect, render him totally and permanently disabled;
(b) confined its attention to medical reports which “specifically addressed the [respondent’s] current and future capacity in order to enable it to determine whether or not he satisfied the criteria for TPD…”;
(c) said that its “role” was “to determine whether the illness from which [the respondent] suffers affects his work capacity and whether it does so permanently”; [Point (1) above].
(d) stated that on the majority of the medical opinions, the Tribunal “is satisfied … that [the respondent] is … permanently unfit for full time work … and meets the definition of TPD”; [Point (5) above]
34 It is further submitted that by thus addressing an incorrect and erroneously narrow question, focussing solely on the medical reports, the Tribunal failed to consider the true and broader question of whether the trustee’s decision was “fair and reasonable in the circumstances”. It is submitted the Tribunal failed to identify (save for the attempted, and it was submitted, erroneous construction of the Deed referred to below) in what respect or respects it could be said the trustee’s decision was unjust or inequitable or outside the limits of appropriateness: Pope & Ors v Lawler & Ors (RD Nicholson J, 7 May 1996, unreported) cited in National Mutual Life Association Of Australia Ltd v Jevtovic (Sundberg J, 8 May 1997, unreported) at 9; and overlooked relevant considerations and unreasonably failed to make appropriate inquiries.
35 These submissions rely on Jevtovic at 10 – 11; Adkins v The Health Employees Superannuation Trust Aust Ltd [1997] FCA 794; National Mutual Life Association of Australasia Ltd v Campbell [1999] FCA 1717, affirmed on appeal in National Mutual Life Association of Australasia Ltd v Campbell (2000) 99 FCR 562 (“NML”).
Submissions for respondent
36 The submissions for the respondent commence by addressing the issue of statutory construction. It is submitted that s 37 must be read as a whole. It is said subs 37(1) puts the Tribunal in the place of the trustee upon a complaint and requires the Tribunal to make one of the four orders set out in subs 37(3), but by the operation of subs 37(6) requires the Tribunal to make the order affirming the decision if it is satisfied the trustee’s decision was fair and reasonable. The obligation to affirm arises only if the trustee is satisfied the decision was fair and reasonable.
37 Turning to the evidentiary position, it is submitted the trustee put forward no evidence that its decision was fair and reasonable. The trustee provided no reasons. Nor has it put in evidence any minutes of the meetings. It is submitted assertions made in the applicant’s unsigned and unattributed submission about documents and matters the directors considered and the care they took, is not evidence and must be disregarded. A trustee is not obliged to give reasons for its decision but will have a hard time showing its decision was fair and reasonable without reasons: Maciejewski v Telstra Super Pty Ltd [1998] NSWSC 376 per Young J.
38 Turning to the trustee’s submission, it is submitted it was largely confined to justifying the decision even to the point of seeking to rely on a matter which was not before the trustee at the time of its decision (a workers compensation transcript). The trustee elected to justify the decision, not the process or the reasoning which are the other matters relevant to the fairness and reasonableness of the decision. The Tribunal cannot be criticised for failing to go into the process or reasoning when there was no evidence before it on that subject, only generalised and self-serving assertions made within submissions.
39 Then it is said that in any case the great weight of the medical evidence elicited by the respondent and his former employer supported the respondent’s claim, and no reasonable person in the trustee’s position could have rejected the claim: Beverley v Tyndall Life Insurance Co Ltd (1999) 21 WAR 327 per Ipp J at 346 –7. Among these medical reports were reports from eminent doctors, two of them professors. All but one of these reports supported the respondent’s application and the exceptional report was from a “thoracic physician” whose specialty would not seem to extend to multiple chemical sensitivity, chronic fatigue syndrome and fibromyalgia. Even the evidence of the employer’s company doctor supported the application.
Function of Tribunal
40 The hearing before the Tribunal in a hearing de novo, with the Tribunal standing in the shoes of the trustee: Seafarers’ Retirement Fund Pty Ltd v Oppenhuis (1999) 94 FCR 594 at 599 per Merkel J. It is not therefore confined to the evidence which was before the trustee. In Retail Employees Superannuation Pty Ltd v Crocker [2001] FCA 1330 at [29] Allsop J said:
“… the Tribunal is not engaged in a form of judicial review. It reviews the decision (as expanded by s 4) complained of from the position of the trustee or insurer (paras 37(1)(a) and 37(2)(b)). The Tribunal may find, in its opinion, in some degree (see subs 37(4), the decision to be unfair or unreasonable and may act under subs 37(3) to give effect to its view of the merits as long as subs 37(5) is not infringed. It seems to me that this analysis accords with the approach described by the Full Court in National Mutual v Campbell, supra at 570 – 71 [32] and [33] and see also Kirby J in Attorney-General v Breckler (1999) 197 CLR 83 at 129 [88].”
41 The Full Court in NML said at 566:
“When exercising its powers under s 37(3), the Tribunal is engaged in a task that results from a complaint that the decision being reviewed is or was unfair or unreasonable, or both. The claimed unfairness or unreasonableness, which was the subject of the complaint, is the central object of the review. The terms of s 37(4) confirm that this is so.
The exercise of the s 37(3) power is subject of a number of constraints:
§ first, the Tribunal must not do anything under s 37(3) that would be contrary to law, in the governing rules of the Fund concerned and, if a contract of insurance between an insurer and trustees is involved, to the terms of the contract (s 37(5));
§ secondly, the Tribunal must affirm the decision if it is satisfied that the decision, in its operation in relation to the complainant, was fair and reasonable in the circumstances (s 37(6));
§ the Tribunal may only exercise its s 37(3) powers for the purpose of placing the complainant as nearly as practicable in such a position that the unfairness, unreasonableness, or both, that the Tribunal has determined to exist in relation to the trustee’s decision that is the subject of the complaint no longer exists (s 37(4)).”
42 Kirby J in Attorney-General (Cth) v Breckler (1999) 197 CLR 83 made related points at [87]:
“…by s 37, the Tribunal is restricted in the response which it may give to such a complaint. Specifically, it must not do anything “that would be contrary to law, to the governing rules of the fund concerned” and, if relevant, to the terms of a contract of insurance. In effect, these restrictions require the Tribunal to form a view (necessarily not conclusive) about the requirements of the applicable law, including the meaning of the rules of the fund and of any relevant contract of insurance.”
43 The importance of consideration of conformity with the governing rules or the terms of the policy in determining whether a decision of the Tribunal was fair and reasonable was also referred to by Lee J in Flexiplan Australia Ltd v Pankhurst & Ors [2001] FCA 1535 and by Allsop J in Crocker. As Allsop J said at [27]:
“The task of the Tribunal and the meaning of the phrase “unfair and unreasonable” are inextricably intertwined and both are governed by the Act, and, especially, by s 37. It is the decision of the Trustee, recognising its obligation to act in conformity with the governing rules of the fund, and the decision of the Insurer, recognising its obligation (and entitlement) to act in conformity with the terms of the relevant policy, which must be reviewed for unfairness or unreasonableness. The unfairness or unreasonableness must be of the decision (as expanded by s 4) under, and in conformity with, the governing rules or the terms of the policy. It is not some other perceived (rightly or wrongly) unfairness or unreasonableness in and about the conduct of the fund.”
44 In Jevtovic Sundberg J said:
“In the matter to which the Tribunal must first direct its attention under s37, in a case such as the present, is whether it is satisfied that the decision, in its operation in relation to the complainant, was fair and reasonable in the circumstances. That is made clear by s37(1)(b) – the obligation to make a determination under subs(3) is “subject to subs(6)” – and by subs(4) – the Tribunal’s power to make a determination under subs(3) is conditioned upon it having found that the decision was unfair or unreasonable or both.”
45 The respondent challenged this formulation, contending that the Tribunal could exercise the powers in s 37(3) without first determining that the trustee’s decision was unfair or unreasonable. I do not agree because before the Tribunal can decide which of the courses of action it would take pursuant to s 37(3) it has to know whether or not it is required to affirm the decision as a consequence of s 37(6). That requires it to form the opinion whether the decision was unfair or unreasonable.
46 The expression “unfair or unreasonable”, in addition to its use in s 14(2) and s 37(4), is used elsewhere in the Complaints Act: s 14AA(2) (decisions contrary to law); s 14A(1), (2) (complaints about decisions of trustees to admit persons to life policy funds); s 15A(1), (3) (complaints about conduct of insurers concerning sale of annuity policies); s 15B(1), (6) (complaints about decisions of insurers under annuity policies); s 15CA(1)(b) (statements to the Commissioner of Taxation by a superannuation provider); s 15E(1), (3) (conduct of RSA providers); s 15F(1), (10) (complaints about decisions of RSA providers); s 15H(1), (3) (complaints re sale of insurance benefits); s 15J(1), (10) (complaints about decisions of insurers). This usage demonstrates the use of the phrase as a basis for complaint in relation to a decision or conduct, either occurring in its own particular circumstances of authority, documentation and occurrence.
47 The expression “fair and reasonable”, apart from its use in s 37(6)(b)(ii), is also used elsewhere in the Complaints Act. Section 14A(4) prescribes matters to which regard must be had in determining whether the decision of the trustee to admit a person to life policy fund was “fair and reasonable” – namely, whether there was undue influence or pressure or material misrepresentation. The expression is also used in s 37A(7)(b) (complaints under s 14A); s 37B(4) (complaints under s 15A); s 37C(5)(b)(ii) (complaints under s 15B); s 37CA(5) (complaints under s 15CA); s 37D(4) (complaints under s 15E); s 37E(6)(b)(ii) (complaints under s 15F); s 37F(4) (complaints under s 15H); and s 37G(6)(b)(ii) (complaints under s 15J). Generally these provisions follow the form of s 37(6) and require affirmation of the decision under review if it is found to be fair and reasonable in the circumstances.
48 The expressions “unfair and unreasonable” and “fair and reasonable” therefore take their meaning from the place and context which they occupy in the Complaints Act: NML at 571; Crocker at [26]. That context is one which requires reference to the contextual foundations of a decision under review in the governing rules and terms of any relevant policy.
Reasoning
49 In Jevtovic, Sundberg J concluded it was clear from the Tribunal’s own statement of its understanding of its task and from the process of its reasoning, that it had not asked itself whether the decisions complained of were fair and reasonable in the circumstances (the s 37(6) inquiry) but whether in its opinion the respondent was totally and permanently disabled. The result was that the Tribunal had, in that case, failed to appreciate the role assigned to it by s 37(6) and had erred in law.
50 In my opinion the Tribunal similarly erred in this case. It commenced by correctly stating the question it was required to address: see (1) above. It then embarked on an extensive review of the medical evidence. It formed its own view on that evidence: see (5) above. Its decision was based on that view: see (6) above. No other consideration played a part in the resolution of its decision. Specifically there was no evident regard to whether there had been conformity to the governing rules or terms of the relevant policy. Nor did it have regard to other circumstances. In substance the inquiry by the Tribunal was limited to the formation of its opinion on the medical evidence as appearing in the medical reports.
51 In so approaching the matter the Tribunal did not have regard to its proper function as made apparent by the above dicta. It failed to address the correct question by confining itself to a consideration of the medical evidence. I consider this ground of appeal is therefore made out.
52
Failure to take into account relevant considerations
53 The next ground of appeal alleges that the Tribunal erred in law in failing to genuinely and properly take into account the following relevant considerations:
“(i) evidence that the respondent does not suffer from the symptoms complained of sufficiently to constitute “total and permanent disablement”, as that term is defined in the trust deed;
(ii) evidence that the respondent is not unlikely ever to engage or work for reward in any occupation or work for which he is reasonably suited by education, training or experience;
(iii) evidence that the respondent does not suffer from the symptoms complained of sufficiently to constitute “total and permanent disablement”;
(iv) the respondent’s current capacity to perform work, including part time work;
(v) the respondent’s future capacity to perform work, including part time work;
(vi) the respondent’s current capacity for part time employment in determining whether the respondent was “totally and permanently disabled”;
(vii) the respondent’s future capacity for part time employment in determining whether the respondent was “totally and permanently disabled”.”
54 The submission for the applicant is that the Tribunal’s decision was based on, and confined to its review of medical reports. It is said these medical reports addressed the respondent’s reported symptoms to medical practitioners, particularly his reported sensitivities to chemicals associated with everyday life including cigarette smoke. The submission continues to the effect that in confining its view to the medical reports the Tribunal failed to take into account evidence from the respondent himself which could tend to cast doubt on the reliability of his reports of his symptoms to medical practitioners. In this respect reference is made to pars 9.1 – 9.20 of the trustee’s written submissions to the Tribunal and evidence by the respondent in workers compensation proceedings there referred to.
55 I consider the resolution of this ground follows from the reasoning set out on the prior ground. By asking itself the wrong question the Tribunal confined itself to consideration of the medical reports and therefore did not consider “all the circumstances”. It therefore failed to take into account the relevant considerations. This ground should also be allowed.
56 In the light of the resolution of this and the preceding ground in favour of the applicant it is not necessary to consider an argument made for the applicant that an alleged failure by the Tribunal to make inquiries vitiated its decision on grounds of unreasonableness.
Misconstruction of trust deed
57 This ground is directed to the paragraph quoted in point (4) of the earlier summary of the Tribunal’s reasons. It involves the interpretation of cl 1.1 of the Amended Deed in its definition of TPD and particularly to the interpretation of the definition which provides that such disablement exists where incapacity arises “to such an extent as to render the Member unlikely ever to engage or work for award in any occupation or work for which the Member is reasonably suited by education, training or experience”.
58 Submissions for the applicant on this ground commenced with reference to Australian Broadcasting Commission v Australasia Performing Right Association Limited (1973) 129 CLR 99 at 109 where Gibbs J, in referring to the construction of words in a contract, said:
“If the words used are unambiguous the court must give effect to them, notwithstanding that the result may appear capricious or unreasonable, and notwithstanding that it may be guessed or suspected that the parties intended something different. The court has no power to remake or amend a contract for the purpose of avoiding a result which is considered to be inconvenient or unjust. On the other hand, if the language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust, “even though the construction adopted is not the most obvious, or the most grammatically accurate”...”
It is that approach which it is submitted should be brought to the construction of the words “any occupation or work” appearing in the definition under consideration.
59 Next it is submitted the word “any” is one which ordinarily excludes limitation or qualification and which should be given as wider construction as possible: Victorian Chamber of Manufactures v The Commonwealth (1943) 67 CLR 335at 346.
60 It is in this context that attention was then directed to the two authorities referred to by the Tribunal. The first was in Re Mann v Director-General of Social Services (1982) 4 ALNN 146. There an issue arose concerning the construction of the word “work” in a section in the Social Services Act 1947 (Cth). The Administrative Appeals Tribunal there said:
“…we consider that when the Act speaks of a man being incapacitated ‘for work’, that ‘work’ must have the connotation that what we are speaking of there is full-time work because the pension is to support the man full-time, and while there is a small level of earnings permitted, it would, we think, be quite unrealistic and quite wrong to contemplate that because a man can do two, three or four hours work a day that he is to be regarded as being adequately capacitated ‘for work’ …. If only a part-time job can be obtained and held by the person in question, the appropriate degree of capacity is not reached in order to support a finding that he is not incapacitated for work.”
It will be observed that the nature of the benefit influenced the construction. Furthermore, it was not the decision of a court.
61 The second decision referred to by the Tribunal was Chammas v Harwood Nominees Pty Ltd (1993) 7 ANZ Ins. Cas 61-175. There Hodgson J commenced by considering the insuring clauses 18.1 and 18.2 in their context where the crucial words were “incapacitated for further employment”. He considered that employment should be limited to full-time employment. To that point Chammas is distinguishable because it addresses different words than those in the present case.
62 However, Hodgson J then examined a question on the back of the claim form which was in the same terms as that in the definition in cl 1.1 of the Amended Deed. He thought that those words sufficiently indicated that the relevant employment was full-time employment.
63 Other decisions were referred to in the course of argument. In Riley v National Mutual Life Association of Australasia Ltd & Anor (1986) 4 ANZ Insurance Cases 60-684, Cosgrove J said of words in the form of the definition in cl 1.1 of the Amended Deed:
“In my opinion the test can be paraphrased as follows: is the incapacity of the plaintiff such as to render it unlikely that he will ever again become a regular member of the work force (i.e. available for work and able to work) in any suitable occupation?”
Cosgrove J rejected a submission that it was necessary to consider whether the plaintiff would ever work again at all, that is to say, would ever even engage in part-time temporary work.
64 In White v Board of Trustees [1997] 2 Qd R 659 consideration was given to a definition of TPD which was “such as to render the member unlikely ever to be able to work again in a job for which the member is reasonably qualified by education, training or experience”. White J, addressing Chammas on a different point, describes the benefit there in issue (“incapacitated for further employment”) as rather different from the expression under consideration by her “and of wider ambit”.
65 In Beverley at 337 Ipp J with whom Malcolm CJ and Anderson J agreed, addressed a requirement in a definition of TPD that an applicant had to be “unable to perform any occupation for which he was reasonably suited by education, training or experience”. He said the only occupation for which the appellant was so reasonably suited was that of cook but added “(or, arguably, a person “wholly engaged in full-time domestic duties”)”. Having regard to the terms of condition 2.38 in the relevant policy he said that the appellant would be unable to perform any occupation for which he is reasonably suited if she is “not capable of doing the important duties” of that occupation.
66 In Szuster v Hest Aust Ltd & Anor [2000] SADC 2,Herriman J considered a clause in the same form as that in issue here. He distinguished Chammas on the basis of the different wording of the insuring clause there and declined to imply any reference to “full-time” into the insuring clause before him.
67 In White at 673-676 the court considered a number of cases dealing with the requirement that the work there involved (“a job”) be one for which the member was “reasonably qualified by education”. A number of the cases there referred to illustrate that the words “any occupation or work” are limited by the words “for which the Member is reasonably suited by education, training or experience”. The same point is made in MacGillivray on Insurance Law 9th ed. at p 711 par [25 – 46]where it is stated that such clauses “must receive a reasonable construction in relation to their object”. It is stated further at p 712 par [25 – 48] that they must therefore be construed in the context of the actual business of the assurer. Here the applicant worked as a maintenance foreman. If the approach followed by the Full Court in Beverley were followed, the occupation or work for which he is reasonably so suited would arguably be a person wholly engaged in full-time maintenance foreman duties.
68 When the definition is applied in this way it is seen that the characterisation of the occupation or work for which the member is so reasonably suited is itself determinative of whether or not the occupation is of a full-time or part-time character. To hold that the words referred to a full-time occupation is not necessarily to imply the words “full-time” into the definition. Rather, it is to state the effect of the application of the words as they appear in the context of the factual circumstances relating to the assured.
69 No submissions took the Court to any other provisions of the deed which are said to bear upon the construction point here in issue.
70 Given the inconclusive nature of authority and the way in which such clauses have been seen to operate in their factual setting, I do not consider that the applicant has established this ground of appeal. I am not persuaded by the arguments which have been made that the Tribunal was in error in the approach which it took on this issue. As I consider the matter should be remitted to the Tribunal to reconsider, the opportunity will arise for the issue to be more fully argued and reasoned.
Conclusion
71 For these reasons I consider the application should be allowed and the matter remitted to the Tribunal for reconsideration.
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I certify that the preceding seventy-one (71) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice RD Nicholson. |
Associate:
Dated: 15 March 2002
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Counsel for the Applicant: |
Mr GH Murphy |
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Solicitor for the Applicant: |
Mallesons Stephen Jaques |
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Counsel for the Respondent: |
Mr I A Morison |
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Solicitor for the Respondent: |
Phillips Fox |
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Date of Hearing: |
7 December 2001 |
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Date of Judgment: |
15 March 2002 |
