FEDERAL COURT OF AUSTRALIA

Auspine Staff Superannuation Pty Ltd v Henderson [2006] FCA 1281

SUPERANNUATION – total and permanent disablement – definition in fund rules different from underlying insurance policy – member entitled under fund rules but not policy – provision in fund rules for discretionary payment – provision deleted after disabling event but before decision of trustee – whether provision available to supply deficiency arising from absence of insurance payment – whether unfair or unreasonable for trustee not to have made payment under discretionary payment provision – whether error of law by Superannuation Complaints Tribunal

INSURANCE – policy taken out by trustee of superannuation fund – policy covered total and permanent disablement – whether member unlikely ever to engage in regular remunerative work for which he was reasonably fitted by education, training and experience – correct time for making that assessment – whether error of law by Superannuation Complaints Tribunal

Superannuation (Resolution of Complaints) Act 1993 (Cth)

Insurance Contracts Act 1984 (Cth)

Accident Compensation Act 1985 (Vic)

Goldie v Minster for Immigration and Multicultural Affairs (1999) 56 ALD 31

Employers First v Tolhurst Capital Ltd (2005) 143 FCR 356

AUSPINE STAFF SUPERANNUATION PTY LTD v PHILIP HENDERSON AND AMP LIFE LIMITED

V583 OF 2005

JESSUP J

26 OCTOBER 2006

MELBOURNE

THE COURT ORDERS THAT:

1.                  The applicant’s appeal from the determination of the Superannuation Complaints Tribunal that the applicant pay the amount of the insured benefit that the respondent would have received had AMP Life Ltd been obliged to pay under the relevant policy of insurance with interest at the rate payable under s 57 of the Insurance Contracts Act 1984 from 10 April 2004 be allowed and the said determination be set aside.

2.                  The matter of the said determination be remitted to the Tribunal to be determined again in accordance with the reasons of the court published this day.

3.                  The applicant’s appeal from the determinations of the Tribunal otherwise be dismissed.

4.                  The cross-applicant’s cross appeal from the determination of the Superannuation Complaints Tribunal to affirm the decision of the second cross-respondent be allowed and the said determination be set aside.

5.                  The matter of the said determination be remitted to the Tribunal to be determined again in accordance with the reasons of the court published this day.

6.                  The parties have leave to file, within 7 days, their submissions on the question of costs.

REASONS FOR JUDGMENT

1                     Before the court are two appeals on questions of law pursuant to s 46 of the Superannuation (Resolution of Complaints) Act 1993 (Cth) (‘the Complaints Act’) arising out of a decision of the Superannuation Complaints Tribunal (‘the tribunal’) published on 13 May 2005. On 14 June 2005 Auspine Superannuation Pty Ltd (‘the trustee’) appealed from certain determinations, made in the course of the decision, in which appeal Philip Henderson (‘the complainant’) was named as respondent. On 5 September 2005, the complainant cross-appealed from another determination made in the course of the decision, in which appeal the trustee and AMP Life Ltd (‘the insurer’) were named as respondents.

2                     The decision of the tribunal and the determinations which it made disposed of a complaint pursuant to s 14(2) of the Complaints Act by the complainant, in which he asserted that he had been unfairly and unreasonably denied payment of a total and permanent disablement (‘TPD’) benefit from the Auspine Staff Superannuation Fund (‘the fund’) of which he was a member and of which the trustee was the trustee. The trustee had taken out a policy with the insurer to cover itself for the payment of TPD and other benefits out of the fund, and the insurer had denied payment in the circumstances of the case. Following the lead of the insurer, the trustee denied the complainant a payment by way of TPD benefit from the fund.

3                     The complainant was born in 1946. In 1991, he commenced employment as credit manager with a company which, by the time of events relevant to this proceeding, was called Auspine Limited (‘the employer’). On 1 July 1997, he became a member of the fund. According to his claim for a TPD benefit, in 1998 and early 1999 he became affected by work-related stress which, he claimed, had been caused by two general managers. He consulted a general practitioner, Dr P C Nelson, on 3 March 1999, and took a period of leave (which appears to have been covered by workers compensation payments). The complainant returned to work, but the stress returned, and he was obliged to cease working again. The last day upon which he worked was 19 May 1999. The complainant continued to be covered by workers compensation payments. On 8 December 2000, the complainant ceased employment with the employer, but there is no evidence of the act or circumstances which constituted this event. The workers compensation payments ceased on 4 May 2001. On 26 June 2001, the complainant made a claim for TPD benefits from the fund. It was that claim which commenced the series of events which has lead to the present appeal.

The fund rules

4                     On 31 October 1994, the employer and the trustee executed a deed to which were annexed rules. The fund had been in existence for some time, but the previous rules were wholly replaced by the rules annexed to the deed of 31 October 1994. Those rules were divided into a series of articles. Article 1 contained definitions; art 2 dealt with the subject of eligibility for, and membership of, the fund; art 3 dealt with contributions, both by members and by the employer; art 4 dealt with the subject of ‘benefit, entitlement and determination’; art 5 was concerned with the payment of benefits; art 6 dealt with the administration of the fund; art 7 was concerned with the assets, expenses and investments of the fund; art 8 covered records, accounts and evaluations; art 9 contained provisions governing the appointment, removal and functions of the trustee; art 10 provided for the admission to the fund of an ‘associated employer’, and provisions relevant to that matter; art 11 was concerned with the winding up of the fund; and art 12 dealt with the replacement of the employer, should it be unable or unwilling to continue as a contributor. There were thirteen schedules to the rules, and I shall refer to them only as necessary in my reasons which follow.

5                     Article 4 of the rules was divided into seven separate rules, the heading to each of which was, for the most part, explanatory of the subject matter dealt with therein. Those headings were: normal retirement benefit; late retirement benefit; permanent disablement benefit; death in service benefit; death in retirement benefit; other termination of service and other benefits. Rule 4.3, ‘permanent disablement benefit’, provided as follows:

“A Member who retires from Service on the grounds of Permanent Disablement shall be entitled to receive a Permanent Disablement Benefit determined in accordance with Schedule 10 hereto.

Where a Member is not acceptable at standard rates under any insurance policy which the Trustees may effect for the purposes of reinsuring a portion of a Permanent Disablement Benefit the amount of any Benefit otherwise payable under this Rule may be reduced by such amount as the Trustees may consider appropriate. The Member shall be advised of any such reduction.”

6                     Schedule 10 provided that the ‘permanent disablement benefit’ would be ‘the member’s accrued benefit as at the date of permanent disablement’. The term ‘member’s accrued benefit’ was not defined in the rules, but item (b) of Sch 7 provided that the ‘accrued benefit’ would be ‘the sum of the accrued member benefit and the accrued employer benefit’. The accrued member benefit had two parts. The first part was the ‘accumulated member contributions’ at the beginning of the financial year, increased by contributions made by the member during the year and by the proceeds of any individual insurance policies on which premiums, funded out of member contributions, had been paid, and decreased by the amount of those premiums and by benefits paid in respect of the member during the year. The second part required that there be added to the first part an amount representing a share of the profit for the financial year, determined in accordance with provisions there set out. The accrued employer benefit likewise had two parts. The first part was the ‘accumulated employer contributions’ at the beginning of the financial year, increased by contributions made by the employer during the year and by the proceeds of any individual insurance policies in respect of the member on which premiums, funded out of employer contributions, had been paid, and decreased by the amount of those premiums and by benefits paid in respect of the member during the year, to the extent that they could not be dealt with under the corresponding provisions of ‘accumulated member contributions’. The second part required that there be added to the first part an amount representing a share of the profit for the financial year, determined in accordance with provisions there set out. What was significant (in the context of the present case) about these provisions of Sch 7 and Sch 10 was the circumstance that a part of the permanent disablement benefit was the proceeds of insurance policies received in respect of the member in question.

7                     Although, as I have noted above, the rules provided for the payment of a benefit in the event of ‘permanent disablement’, that term was not defined. Instead, the rules contained a definition of ‘total and permanent disablement’, as follows:

“Total and Permanent Disablement: In relation to a Member means a Member who, is the absolute and final opinion of the Trustee is by reason of permanent incapacity or permanent invalidity unlikely to engage in any occupation for which the Member is reasonably qualified by eduction, training and experience and which provides an equivalent level of remuneration to that Member as if the Member were gainfully employed PROVIDED THAT if the Trustee has effected a Policy in relation to the Member the Trustee may determine that the meaning of Total and Permanent Disablement shall, subject to a Relevant Requirement, in respect of a Member be modified so as to be identical to the circumstances in which an amount is payable by the insurer under such Policy. The term “Totally and permanently Disabled” has a corresponding meaning for the purpose of this Deed.”

It was uncontroversial, both before the tribunal and before the court, that the entitling event under cl 4.3 – ‘permanent disablement’ – was the same as the event defined in the rules as ‘total and permanent disablement’.

8                     The other provision of the rules which should be noted was r 4.7, which provided as follows:

“Notwithstanding anything to the contrary herein contained the Trustee in its absolute discretion may pay to a Member at any time any amount provided that such payment will not prejudice Government Approval of the Fund.”

9                     The rules annexed to the deed were further amended, in respects not presently relevant, on 1 July 1996. The rules as so amended remained in those terms, including the terms to which I have referred above, when the complainant joined the fund in 1997 and when he ceased working on 19 May 1999.

10                  In August 1997 – ie just after the complainant joined the fund – the trustee published a ‘member booklet’. Although it was implicit in the trustee’s submissions that this booklet received at least some distribution amongst fund members, that was not a relevant fact, and the tribunal made no finding about it. The terms of certain explanations contained in the booklet were, however, relevant. Under the heading ‘Introduction’, the following appeared in the booklet:

“The Auspine Staff Superannuation Fund provides you and your family with valuable benefits on your:

·        retirement;

·        death;

·        total and permanent disablement; or

·        leaving employment.

This is an employer sponsored Fund, the sponsoring employer being Auspine Limited.

The Fund was established in 1985 and provides accumulation benefits for all members.

Contributions are paid to the Fund and accumulate with interest. The accumulated balance of these contributions is your entitlement on leaving service for any reason.

There are also insured benefits which are payable in the event of your death or disablement provided the necessary insurance cover is in place and the insurance claim is accepted.

This approach is very much like a savings account, topped up with some insurance cover. Concessional tax rates apply to savings accumulated in approved superannuation arrangements, but access to your savings is restricted by rules designed to “preserve” your savings until retirement.

This booklet outlines the main features of the Fund.”

Under the heading ‘Contributions’ it was stated that the employer made contributions in accordance with the requirements of the superannuation guarantee legislation, and that members were permitted, though not required, to make their own contributions. Under the heading ‘Vesting’, the following appeared:

“All contributions made to this Fund are “fully vested”. This means that on leaving service for any reason, at any age, you receive the total of all contributions made, with interest, less tax, insurance premiums and an allowance for administrative expenses.”

Under the heading ‘Benefits’, the benefits available under various circumstances were described, and the following appeared under the sub-heading ‘Benefit of Total and Permanent Disablement’:

“The Trustee also arranges insurance cover which can be claimed should you become totally and permanently disabled and be unable to continue working at your usual occupation or any other occupation for which you are reasonably fitted by education, training or experience.

Total and permanent disablement (“TPD”) can be assessed after you have been absent from work for a continuous period of six months. It is important that you make sure that you advise the Trustee before you leave the Fund and before the 6 months has expired if you think you may need to claim this benefit.

Your benefit in the event of total and permanent disablement will be equal to:

-                     the total amount of all account balances held in your name in the Fund; and

-                     any insured benefit payable.

The Fund’s insurer will request medical evidence relating you your disablement and their opinion will be taken into account when the Trustee decides if you can be paid this benefit.

Please provide immediate written notification to the Personnel Officer if any event occurs which could lead to a disablement claim being lodged. Failure to provide notification can result in a claim being rejected.”

On 26 November 1999 – ie 6 months and 7 days after the complainant ceased work, but while he remained employed by the employer – the trust deed was very substantially amended. The amending deed contained a number of recitals, including Recital F, which read: ‘the effective date of this amending deed is 1 July 1996’. Under cl 11.4 of the deed as amended, the trustee had the following powers (amongst others):

“(a) to settle, compromise or submit to arbitration any claims matters or things relating to the Deed, the Rules, the Fund or to the respective rights and obligations of the Principal Employer, an Employer, the Members, their Personal Representatives or other beneficiaries;

(b) to commence, carry on, defend, compound, settle, abandon or otherwise deal with proceedings (including legal proceedings) relating to the Deed, the Rules, the Fund or the respective rights and obligations of the Principal Employer, an Employer, the Members, their Personal Representatives or other beneficiaries;”

11                  The ‘permanent disablement benefit’ was the amount which would have been payable on death, which amount in turn involved two elements: first, the ‘member’s fund credit’, and secondly, an ‘insured amount’ which depended upon which of certain options the member had selected in relation to life insurance. I need not go further into the detail of that, as r 7.3 of the amended rules provided that the benefit payable upon TPD would not be greater than the sum of -

“(a) the Member’s Fund Credit at the date used for calculation of a benefit; and

(b) The amount received from the Insurance Company (if any) as elected by the Member and payable under the Master Policy to the Trustee to provide a benefit in respect of the particular Member under this Rule.”

The definition of TPD in the amended deed was the same as that in the original rules. It is also important to note that the amended deed no longer contained a provision in the terms of cl 4.7 of the deed as last amended in 1996, to which I have referred in par 8 above.

The insurance policy

12                  On 1 January 1997, the trustee entered into an insurance policy, called a ‘group superannuation policy’, with the insurer. Under that policy, the insurer said that it would, subject to the conditions set out therein,

“pay to the Trustees on the death or Total and Permanent Disablement of an Insured Person the Group Life Insurance in respect of such Insured Person ascertained in accordance with Condition 4 hereof ….”

Condition 4 provided, amongst other things, that, subject to the policy, ‘in the event of … Total and Permanent Disablement …. of an Insured Person the amount of Group Life Insurance in respect of him as at … the Date of Disablement …’ would be paid to the trustee. The claimant was an insured person within the meaning of the policy. The expression ‘Date of Disablement’ was defined to mean the later of the date on which the illness, accident or injury commenced or occurred which led to TPD, or the date on which the insured person was last at work. In the circumstances of the complainant, to the extent that this definition was relevant, it was the second meaning which operated.

13                  The policy defined ‘Total and Permanent Disablement’ of an insured person as a disablement which:

“(1) occurs prior to his sixty-fifth birthday, and

(2)           occurs while he is insured for Total and Permanent Disablement under this policy, and

(3)           Occurs while he is in the active service of the Employer,

and either:

(a)          results from an illness, accident or injury and results in him being continuously absent from his employment for at least six consecutive months commencing prior to his sixty-fifth birthday and AMP has determined that it is unlikely he will ever be able to engage in any regular remunerative work for which he is reasonably fitted by education, training or experience …

or

(b)          [not relevant]

This definition was quite different from the corresponding definition appearing in the rules of the trust deed under the fund. A difference which was of great importance in the present case was the additional qualifier in the definition in the rules after the word ‘experience’, namely the words ‘and which provides an equivalent level of remuneration to that Member as if the Member were gainfully employed’.

14                  Before leaving the policy, I should refer also to an earlier policy which the trustee had taken out with the insurer, in July 1993. For some reason which does not appear, that earlier policy was also in the materials before the tribunal. No party suggested that it was relevant. However, it contained a definition of the expression ‘Date of Disablement’ which included the following paragraph:

“(c) in the case of “Total and Permanent Disablement” as a result of the cause in sub-paragraph (a) of its definition (not immediately preceded by a period during which benefits were paid in respect of Temporary Total Disablement), or in the case of Accidental Disablement, the date six months after the later of:

(i)                 the date on which the illness, accident or injury commenced or occurred, and

(ii)               the date on which the Insured Person was last at work.”

The difference between this definition and the definition in the policy which applied in the facts of the case is that this definition interposes a period of six months between the date on which the illness etc occurred, or the person was last at work, and the date which is defined as the date of disablement.

the COMPLAINANT’S circumstances

15                  Returning to the complainant’s own circumstances, as I have said, he consulted his general practitioner, Dr Nelson, in March and again in May 1999. In a letter over the hand of another practitioner at the same practice (Dr Ridgway) which was in evidence, it is stated that Workcover certificates were provided following the complainant’s absence from work after 19 May 1999. In the same letter, it is stated that the complainant presented with a perforated duodenal ulcer in July 1999 (which required him to remain absent from work during that month).

16                  The complainant was examined by two psychiatrists engaged by the relevant workers compensation insurer in late 1999. Dr Garland reported to the insurer on 17 November 1999. In its decision of 13 May 2005, the tribunal noted that Dr Garland considered that the complainant was capable of working full time at his usual job, and that no treatment was indicated. The other psychiatrist who saw the complainant at about this time was Dr Mendelson, who reported to the workers compensation insurer on 18 November 1999. The tribunal noted that Dr Mendelson diagnosed a mild anxiety state, and was of the opinion that the complainant could work full time.

17                  By a report dated 20 September 2000, Dr O’Kelly, a clinical psychologist, said that the complainant first consulted her on 26 March 1999. The tribunal noted that Dr O’Kelly diagnosed anxiety and depression attributed to workplace stress, and recommended a rehabilitation course and a gradual return to work on a part-time basis. In the following month, October 2000, Dr Ridgway (who had by then replaced Dr Nelson at the general practice which the complainant visited) reported to the workers compensation insurer. The tribunal noted that Dr Ridgway found the complainant to be partially disabled, but able to return to work. She advised against returning to his former employment.

18                  On 15 February 2001, Dr Mendelson again saw the complainant, and on that day reported to the workers compensation insurer. According to the tribunal, Dr Mendelson diagnosed a mild anxiety state, and was of the opinion that the complainant could work full time. Dr Mendelson’s own report states that there was no indication that the complainant had any loss of work capacity, despite his continuing mild symptoms of anxiousness. He added that the complainant required ongoing assistance in trying to secure employment consistent with his previous work experience and qualifications. In February 2001, the complainant was also seen by Dr Strauss, a consultant psychiatrist. According to the tribunal, Dr Strauss found that the complainant was not totally and permanently disabled, and was fit to work, but was not fit to return to his previous employment. In his report, Dr Strauss said that he did not believe that the complainant had a psychiatric illness as such, and believed that his condition was well controlled. He said that the complainant did have a permanent incapacity for employment because of his employment with the employer, and that the complainant had a work-related incapacity, and was not capable of pre-injury employment. On the other hand, Dr Strauss said that the complainant was not ‘totally incapacitated’.

19                  Dr Jakobovits, a gastro-enterologist, examined the complainant on 6 April 2001. He expressed an opinion as to the relationship between the stress experienced by the complainant and his perforated ulcer, but, as the tribunal noted, gave no opinion regarding employability.

20                  On 8 May 2001 the complainant was seen by Dr Epstein, a psychiatrist. The tribunal noted that Dr Epstein assessed the complainant’s psychiatric impairment at 15% and his physical impairment at 5%, concluding that the complainant’s work capacity was limited by both psychiatric and physical factors. On this subject, Dr Epstein’s report noted that the complainant had ‘a psychiatric impairment of 20%, of which 5% relates to the concern over his congenital condition, which is not work-related’. Dr Epstein said that the work-related psychiatric impairment was 15%. He said that his current work capacity was limited to some degree by his psychiatric state, and also by a non-work-related physical condition.

21                  The applicant himself obtained two reports in June 2001. The first was from Dr Hewett, who had replaced Dr Ridgway as the complainant’s general practitioner, who referred to certain physical conditions from which the complainant suffered, and who expressed the opinion that the complainant could not cope with any positions at his old company, because of past events. He said that the complainant could not manage such jobs as accounts clerk, market research interviewing, dispatch clerk, or ticket salesperson. He expressed the view that the only appropriate jobs for the complainant would be low stress and part-time clerical positions, and that he would not be able to consider even those positions for the next 6 to 12 months at least. The other report of June 2001 was a further report from the psychologist, Dr O’Kelly. The tribunal noted that Dr O’Kelly advised that the complainant could not resume work, or undertake rehabilitation, as the thought of both of those recommendations markedly increased his level of anxiety. Dr O’Kelly expressed the view that the complainant was ‘currently incapable of returning to employment’.

22                  On 26 June 2001, the complainant’s solicitors applied, on his behalf, for a TPD benefit from the fund. Their letter enclosed four documents: an employee statement; an initial medical report; a certified copy of proof of age document; and a medical certificate from Dr Hewett dated 29 January 2001. The employee statement was on a pro-forma supplied by the insurer. The first item of information inserted on the form on behalf of the complainant was the name of the plan under which the complainant was submitting the claim, namely, the fund. For the reason he ceased work, the complainant stated:

“Work related stress caused by abuse from two general managers, to myself and my assistant which was reported to managing director and on file at Workcover Authority.”

As to the exact nature of the injury or illness, the complainant stated ‘work-related stress and secondary depressive illness’. He said that the injury or illness first occurred on 3 March 1999. He stated his education level, namely, ‘Senior Cambridge Leaving Certificate (equiv 1^st yr. Uni)’ and ‘Certificate of Business Studies (3 yr Cert)’. He said that he was an associate senior member of the Australian Institute of Credit Management. He gave his other training or skills as ‘Microsoft Excel/Word/Internet’. He set out his employment history, including the fact that he had been a credit manager with the employer since 1991. With this form, the complainant included a list of employment positions for which he had applied (or for which applications had been made on his behalf) since July 2000.

23                  The ‘Initial Medical Report’ included with the solicitors’ letter of 26 June 2001 was over the hand of Dr Hewett, and was dated 27 March 2001. In the section for a statement of the history of the illness or injury from which the complainant suffered, Dr Hewett said:

·          “Work related stress + secondary depressive illness

·          Referred for counselling to psychologist Monica O’Kelly

·          Sustained perforated duodenal ulcer in July 1999, probably related to stress”

When asked to answer the question ‘at the current time, can the complainant do his/her normal job?’ Dr Hewett ticked the box marked ‘no’. When asked to state what duties the complainant was unable to perform, Dr Hewett said ‘totally incapacitated’. When asked when he expected the complainant to be fit to return to his normal work, Dr Hewett said ‘will not return’. Dr Hewett was then asked to state why he thought that the complainant would never return to any type of work, and he said:

“Suffers from anxiety/depression which is debilitating. Could not cope with full time work. Probably could not cope with part-time work in future, even if available.”

In his medical certificate dated 29 January 2001, Dr Hewett certified –

“That in my opinion on the balance of probabilities [the complainant] is unlikely to ever be able to work again in a job for which he is reasonably qualified by education, training, or experience because of injury/illness from May 1999.”

Dr Hewett recommended the application for disability benefits.

24                  In July 2001, the fund provided an ‘employer statement’ to the insurer. It said that the complainant was last actively at work on 19 May 1999, that the complainant ceased work ‘due to work-related injury’, that the complainant had had extensive experience as a credit manager, and that the employer had no alternative jobs available which were appropriate to the complainant’s level of skill and experience.

25                  As the forms to which I have referred suggest, the complainant’s claim for a TPD benefit, and a corresponding employer statement, were forwarded to the insurer. The insurer arranged for the complainant to be seen by a psychiatrist, Dr Sale. In his report dated 19 March 2002, as the tribunal noted, Dr Sale found that the complainant was fit to return to work at that time, even as a credit manager, and on either a full-time or a part-time basis. Dr Sale said that there was ‘no psychiatric diagnoses warranted’ and, when asked whether he considered that any treatment would be helpful, he stated that the complainant ‘probably requires less treatment rather than more treatment’. Indeed, Dr Sale said he had gained the impression that ‘some aspects of the treatment’ may have impeded rather than furthered the prospects for rehabilitation.

26                  By letter dated 17 April 2002 addressed to the fund, the complainant’s claim was rejected by the insurer. The insurer considered the employee statement, the employer statement, the initial medical report and certificate provided by Dr Hewett, and the report dated 19 March 2002 provided by Dr Sale. The letter continued:

“The report from Dr I Sale Independent Psychiatrist notes the following:

Mr Henderson was neatly presented, his affect was tense but otherwise unremarkable. There were no unusual features to his overall behaviour or thought process. Cognitive functions were intact however, his personality was somewhat obsessional.

Dr Sale notes that other than some anxiety about his current situation and the financial implications there is little to find clinically. Dr Henderson can’t understand why Mr Henderson requires on-going treatment from a psychologist, when in his opinion there is no psychiatric diagnosis warranted.

Dr states that he does not consider Mr Henderson to be TPD and that he could work on a full-time basis and that if there was a position made available to him, he would be fit to return to such work.

In view of general trustee responsibilities, it is important that the Trustees review the medical evidence and the determination made by AMP, and be satisfied that AMP’s decision is a reasonable one. AMP recommends that this review be documented in the minutes of a Trustee meeting.

If the Trustees are in agreement with AMP’s decision, it is their responsibility to promptly advise the claimant of the results of his claim application. Alternatively if the Trustees disagree with AMP’s decision, they should write to AMP, documenting their reasons and requesting consideration based on further specialist medical evidence.”

27                  Having considered the insurer’s letter of 17 April 2002 and taken its own advice, on 2 August 2002 the trustee wrote to the complainant (by means of a letter on the trustee’s behalf from Mercer Human Resource Consulting Pty Ltd). The trustee said:

“The Trustee determined that, based on the evidence available, you do not satisfy the requirements of the Trust Deed and underlying insurance policy to be able to be paid a Total and Permanent Disablement benefit.”

The trustee said, for a TPD benefit to be paid, the conditions of the deed had to be satisfied. It referred to the provisions of the rules that specified the entitlement of a member of the fund in the event of the member being totally and permanently disabled (being the provisions to which I have referred in par 12 above), and to the definitions of TPD in each of the amended deed and the insurance policy. The trustee continued:

“AMP as insurer, has advised that based on its assessment of the claim, it is unable to admit a claim for Total and Permanent Disablement.”

The trustee then gave the complainant 28 days to submit further evidence to support his claim, failing which ‘the trustee will treat the claim as denied’. There was no further evidence, and the claim was denied.

28                  Three things may be noted about the trustee’s letter of 2 August 2002. First, the trustee referred only to the deed and rules as amended in November 1999. It did not purport to decide the matter by reference to the rules in place on the last day the complainant worked, 19 May 1999. Secondly, the trustee did not state, in terms, that it had decided that the complainant was not totally and permanently disabled within the meaning of the deed (even as amended). As noted above, it said that the complainant did not satisfy the requirements of the deed to be able to be paid a TPD benefit. This could have meant and, in the context of the response from the insurer which had recently been received, most probably did mean, no more than that the full amount of the TPD benefit under the deed could not be paid because there was no amount received from the insurer (see r 6.2 under the deed as amended as set out in par 12 above). Thirdly, although the letter of 2 August 2002 stated that the trustee had considered the complainant’s claim on 24 July 2002, by letter addressed to the tribunal dated 7 November 2003, the trustee said that there were no minutes of the meeting at which that consideration was undertaken, and that ‘the decision was documented by letter to the complainant dated 2 August 2002’.

29                  By letter dated 7 February 2003, the complainant made a complaint to the trustee pursuant to arrangements which complied with s 101 of the Superannuation Industry (Supervision) Act 1993 (‘the SIS Act’). Enclosed with that complaint were two medical reports. The first was a further report from Dr O’Kelly dated 1 November 2002, which the tribunal (referring also to a report from Dr O’Kelly made on 10 April 2004) said indicated that the complainant had deteriorated to such an extent that he was TPD and could not return to work. Dr O’Kelly’s report of 1 November was, in fact, not quite so categorical. She provided a formal diagnosis that the complainant had suffered ‘a major depressive episode’, she said that it was her impression that the complainant would not be able to manage working as a credit manager, she said that the complainant would have great difficulty managing the demands of employment that were appropriate to his levels of education and training and she said that she believed that the complainant would also have difficulty managing less demanding clerical tasks. The second report was a further report from Dr Hewett dated 25 November 2002. The tribunal said that this report was ‘non-contributory’ although it noted that Dr Hewett had declared the complainant to be totally unfit for any form of work. In the report, Dr Hewett said that the complainant was suffering from anxiety and depression, and made the comment that, while the ‘Workcare pressures continued’ the complainant’s condition would not satisfactorily resolve. On the balance of probabilities, Dr Hewett said that the complainant would never again be capable of performing the job of a group national credit manager, and was totally unfit for that position. He continued:

“In view of his education, past training and experience, I do not believe he could move into any other suitable employment now or in the near future. He is certainly not suitable for retraining now, owing to his emotional problems, and I believe this will continue to be the case in the foreseeable future.”

30                  The trustee referred the complainant’s letter of 7 February 2003, with enclosures, to the insurer. These were in turn referred by the insurer to Dr Sale, for a further opinion. In a report to the insurer dated 16 June 2003, Dr Sale said that there was nothing in the further material that caused him to alter his previous opinion (given in March 2002). He considered that the complainant had ‘received excessive psychological treatment that has caused him to perceive himself as psychologically fragile and an invalid.’ He continued:

“At the most, I consider that Mr Henderson could be diagnosed as suffering from an adjustment disorder. It is certainly not a serious psychiatric condition such as major depression.

There are a number of issues that will act against Mr Henderson is [sic] resuming work (eg his age, being a workers compensation claimant, his long absence from work, his perception of himself as an invalid and his family difficulties). However, I do not accept that he is totally and permanently impaired as a result of the clinical illness that would cause him to be unlikely ever to be able to engage in any regular remunerative work for which he is reasonably suited by education, training or experience.”

31                  By letter date 9 September 2003 to the trustee, the insurer referred to Dr Sale’s most recent report, and said that there was no basis to consider that the complainant was TPD. It said that the insurer was ‘comfortable with upholding the original denial decision’. By letter dated 16 October 2003 to the complainant, the trustee said that it had, at a meeting held on 14 October resolved, ‘that their original decision to deny the claim be affirmed’.

32                  On 17 March 2004, the complainant applied to the trustee for a further review of its decision not to grant him a TPD benefit, and enclosed a report from Dr Ots. On 28 June 2004, the trustee notified the complainant that it had resolved to affirm its original decision to deny the complainant’s claim. On 15 July 2004, the complainant applied again to the trustee for a review of its decision to deny him a TPD benefit. He enclosed a report from Dr O’Kelly dated 10 April 2004, and a report from Dr Hewett dated 5 July 2004. On 8 November 2004 the insurer advised the trustee that it did not propose to change its previous decision regarding the complainant, and on 30 November 2004, the trustee again advised the complainant that it had affirmed its original decision. The three medical reports to which I have referred in this paragraph generally supported the complainant’s claim that he was totally and permanently disabled, but I do not believe I need to say anything further about them in these reasons.

The complaint in the tribunal

33                  On 31 July 2003, the complainant lodged the complaint with the tribunal which lead to the present appeal. The complainant was permitted to proceed in this way under s 19 of the Complaints Act, notwithstanding that his complaint to the trustee under s 101 of the SIS Act remained unresolved. In his complaint form, the complainant said:

“On the basis of my claim and the material provided in support, I have satisfied the definition of disability under the Superannuation Scheme and/or insurance policy and the refusal/failure to pay the disability benefit is unfair or unreasonable.”

34                  Before proceeding to consider the progress of the complainant’s complaint within the tribunal, I should note some features of the statutory framework under which the tribunal operated. The particular complaint was made under s 14 of the Complaints Act, which applies ‘if the trustee of a fund has made a decision … in relation to … a particular member … of a regulated superannuation fund’. The ground upon which such a complaint may be made is ‘that the decision is or was unfair or unreasonable’. Because the complaint in the present case related to a disability benefit under a contract of insurance between the trustee and the insurer, the tribunal was empowered under s 18(1)(c) of the Complaints Act to decide that the insurer should be a party to the complaint. I note that, on 13 August 2003, the insurer was joined as a party in the present case.

35                  The powers of the tribunal, in a complaint under s 14 of the Complaints Act, are set out in s 37 of that Act. In such a situation, the tribunal has all the powers, obligations and discretions that are conferred on the trustee. In a case in which an insurer has been joined as a party, the tribunal must, when reviewing the trustee’s decision, also review any relevant decision of the insurer and, for that purpose, has all the powers, obligations and discretions that are conferred on the insurer. Subsections (3)-(6) of s 37 are important in the present case, and I shall set them out in full:

“(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.”

36                  It should be noted from these provisions that the obligation of the tribunal is to review the decision of the trustee and the insurer, and that the tribunal is obliged to make a determination of some kind. In practice, it would seem that, in most cases – and certainly in the present case – the tribunal is required to consider first whether the decision under review was ‘fair and reasonable in the circumstances’, and if satisfied that it was, is required to affirm that decision. That may not exhaust the tribunal’s powers of affirmation under s 37, but however that may be, if the tribunal decides to make a determination other than one of affirmation, it must do so with a view to placing the complainant as nearly as practicable in such a position that the unfairness, unreasonableness, or both, that the tribunal has determined to exist no longer exist.

37                  Returning to the course of the complaint in the present case, the tribunal held a meeting to review the decision of the trustee on 22 February 2005, and announced its decision, and determinations, on 13 May 2005. It determined the matter on the papers without a hearing. The tribunal determined that the relevant version of the deed was that which in fact applied when the complainant ceased work, 19 May 1999. The tribunal referred to the relevant provisions of the trust deed and of the insurance policy. As to the latter, it referred to the definition of ‘date of disablement’ in the previous policy made in 1993. No party was able to explain why the tribunal made this reference.

38                  The tribunal then referred to the actual background of the complaint, and to the medical reports which were in evidence before it. It referred to the submissions, and to the reply submissions, of the complainant, the trustee and the insurer. It then referred, under a heading in these terms, to the ‘complainant’s education, training and experience’.

39                  The tribunal then commenced its consideration of the matter before it. It said:

“The question is not whether the Tribunal would reach a different decision on the material before it, but is rather addressed to assessing the reasonableness and fairness of the Trustee and Insurer’s decisions.”

In this, the tribunal was clearly correct. The tribunal next considered ‘which definition of TPD should the trustee have used in its decision to deny the complainant’s claim’. It held that the correct version was the deed applicable at the time the complainant ceased working. This was May, not November, 1999. Then the tribunal considered whether the trustee had made a determination to modify the definition of TPD and the deed in accordance with the proviso in the definition. I shall say something further about this point below, as it was a matter relied upon by the trustee before me. The tribunal held that there had been no such modification, and that the definition of TPD in the deed was that which is set out before the proviso.

40                  The tribunal then turned its attention away from the trustee’s obligations under the deed to the insurer’s obligations under the policy. For reasons which will appear, it is necessary to set out a lengthy passage from the tribunal’s reasons in which it affirmed the decision of the insurer:

“For the insurer the correct date for assessment is six months [after] the date on which the Complainant finished work as the result of the claimed illness, ie 19 November 1999.

Those medical practitioners who reported in 1999 and early 2000, all found the Complainant was able to work full-time, although return to work with the Employer was to be avoided as such re-exposure had the potential to reactivate his anxiety state. The Tribunal notes that the Complainant ceased work on 19 May 1999.

Dr MK in September 2000 recommended a gradual return to work programme, initially part-time. Dr RR (GP) on 17 October 2000 declared the Complainant not to be totally and permanently disabled and Dr NS on 21 November 2001 made the same assessment but advised against a return to work with the Employer.

Dr RH declared the Complainant to be TPD on 27 March 2001 but on 25 June 2001 assessed the Complainant as fit for part-time work in a low stress environment. On 25 November 2002, Dr RH found the Complainant to be totally and permanently unfit for work.

In 2004, Drs MK and PO declared the Complainant to be TPD.

At the time the Complainant ceased work and for the ensuing 10 months, no reporting medical practitioner found the Complainant unable to work or to be TPD. It has been suggested (Dr IS – report of 14 March 2004) that the Complainant’s excessive psychiatric/psychological treatment has led him to be believe that he is psychological invalid.

At the time the Complainant ceased work and for 10 months thereafter there is no medical opinion that he was unable to work full-time.

There is a distinction between a person believing he/she is TPD and that person, in fact being TPD.

The distinction exists regardless of whether the belief is reasonably held as the result of the professional treatment given or not. In the present case, having regard to both:

(a)               there being no medical opinion supportive of the Complainant being unable to work full time at the time he ceased work and for the 10 month period thereafter; and

(b)               the opinion of Dr IS that it is the Complainant’s excessive treatment which has led him to believe that he is a psychological invalid,

it was open to the Insurer to decide that the Complainant’s disablement did not occur while the Complainant was in the active service of the Employer as is required by Clause 1(3) of the definition. Further, while the preponderance of the medical opinion was that the Complainant ought not return to his previous Employer, it was, on the information contained in the medical reports, not unfair and unreasonable for the Insurer to conclude that the Complainant would be able to obtain regular remunerative work for which he is reasonably fitted by education, training or experience. It is not necessarily the case that, according to the definition contained in the Insurance Policy, that that work be remunerated at the same level of remuneration the Complainant was receiving at the time he worked for the Employer. The only requirement arising from the Insurance definition is that that work be “regular” which in the context, the Tribunal understands to be a reference to the Complainant working full time as he was at the time he ceased work.”

In the light of these considerations, the tribunal held that the decision of the insurer to deny the TPD benefit should be affirmed.

41                  The tribunal then returned to the obligation of the trustee under the deed. It pointed to the provision in the definition of TPD in the trust deed, by which the complainant would have been covered unless the work which he could have obtained was at an equivalent level of remuneration as if he were gainfully employed. It continued:

“While somewhat cumbersome, the Tribunal takes the proviso to mean that if the member, as the result of the disability, is unlikely to be able to obtain employment in the area in which he/she is qualified at a rate remunerated at the rate previously paid by the Employer, then that Member would be entitled to receive a TPD benefit. A fair reading of the medical reports would reasonably lead the Trustee to the conclusion that the Complainant, even if he could obtain work with another employer, needed to be in a less stressful position than the position he occupied prior to his finishing work with the Employer. At that time, he was the Group National Credit Manager for the Employer. While there is no specific evidence available on the point, common sense would, given the nature of the Complainant’s disability, result in a reasonable trustee concluding that it would be unlikely that the Complainant would be able to obtain employment at that level of remuneration which involved less stress. As is apparent, the Trustee did not reach such a decision. Accordingly, the Tribunal is satisfied that the Trustee’s decision was unfair and unreasonable in its operation in relation to the Complainant in the circumstances. The Trustee should have determined the Complainant was entitled to be paid the TPD benefit.”

In the circumstances, the tribunal decided that the decision of the trustee ought to be set aside and a decision substituted that the complainant was entitled to be paid the TPD benefit.

42                  The tribunal then considered the provisions of the deed (Sch 10 and Sch 7 as referred to above) which set out the components of the TPD benefit that ought, in the tribunal’s view, to have been paid to the complainant. It noted that there were no ‘proceeds’ of the policy which could be paid to the complainant (since it had affirmed the decision of the insurer to reject the claim under the policy). The tribunal then said:

“Since, as the Tribunal has found, the Trustee did not modify the definition contained in the Trust Deed to accord with that found in the policy and the Trustee did not explain the limitations of the policy requirements applicable to TPD claims, it was not unreasonable for the Complainant to conclude that the Trust Deed definition of TPD would result in his having insured coverage on the same basis as provided in the Trust Deed. Had the Trustee drawn the discrepancy to his attention or modified the Trust Deed definition to comply with the definition contained in the Insurance Policy, the outcome may well have been different. But it did not, and as a result, the Trustee, in order to rectify the resulting unfairness and unreasonableness, ought to have given consideration to the exercise of the power contained in Article 4.7 of the Trust Deed. For the Trustee not to have done so renders its decision unfair and unreasonable in its operation to the Complainant in the circumstances.

The Tribunal, standing in the shoes of the Trustee (see s.37(1) of the Complaints Act) and exercising the power of the Trustee, determines, in order to place the Complainant as nearly as practicable in a position that the unfairness and unreasonableness that the Tribunal has found to exist (s.37(4) of the Complaints Act), that the Trustee pay the amount of insured benefit the Complainant would have received had the Insurer been obliged to pay under the Policy with interest at the rate the Insurer would have bee obliged to pay under s.57 of the Insurance Contracts Act 1984 from 10 April 2004, that being the date of the latest medical report form the Complainant to the Trustee, to the date of payment.”

43                  As is apparent from the above, the tribunal’s reasoning involved the following elements. First, under the policy, it had not been established that it was unlikely that the complainant would ever be able to engage in any regular remunerative work for which he was reasonably fitted by education, training or experience. In the circumstances, the decision of the insurer to decline the claim under the policy was fair and reasonable. Secondly, under the deed, it was unlikely that any future occupation in which the complainant might be engaged would provide him with an equivalent level of remuneration to that which he had received in his employment with the employer. Accordingly, the complainant ought to have been regarded as totally and permanently disabled, and to have been entitled to a TPD benefit. The decision of the trustee to the contrary was unfair and unreasonable. Thirdly, a significant element of the TPD benefit payable under the deed was the proceeds of the policy. As a result of the (fair and reasonable) decision of the insurer, there were no such proceeds. Despite the fact that he ought to have been held to be totally and permanently disabled, the complainant did not, therefore, receive the full TPD benefit. Fourthly, the tribunal had an obligation under s 37 of the Complaints Act to make a determination which, as nearly as practicable, placed the complainant in a position which was no longer affected by the unfairness and unreasonableness of the trustee’s decision. Fifthly, the tribunal, standing in the shoes of the trustee, had all the powers which the trustee had when it rejected the complainant’s claim. One of those powers was that arising under r 4.7 of the rules, namely, the power, in the absolute discretion of the trustee, to ‘pay to a member at any time any amount’. This power should be exercised to require the trustee to pay, from its own resources, the amount of the insured benefit which the complainant would have received had the insurer been obliged to pay under the policy, together with interest under the Insurance Contracts Act 1984 (Cth).

44                  As is clear from the provisions of the Complaints Act to which I have referred, the trustee was obliged to resolve the complaint before it by determination. What I have referred to as the tribunal’s decision of 13 May 2005 is a fourteen page document headed ‘Review Determination and Reasons’. A reading of that document discloses the following determinations under s 37(3) of the Complaints Act:

·                 A determination to affirm the decision of the insurer upon the ground that that decision was, in its operation, fair and reasonable in the circumstances;

·                 A determination to set aside the decision of the trustee upon the ground that that decision was unfair and unreasonable in the circumstances;

·                 A determination to substitute for the decision of the trustee a decision that the complainant was entitled to be paid the TPD benefit by the trustee;

·                 A determination, in compliance with subs (4), that the trustee pay the amount of the insured benefit that the complainant would have received had the insurer been obliged to pay under the insurance policy, with interest at the rate the insurer would have been obliged to pay under s 57 of the Insurance Contracts Act from 10 April 2004.

the trustee’s appeal

45                  It was submitted by Mr Hanks QC, who appeared for the trustee, that the tribunal’s determinations involved various errors of law. First, he submitted that it was an error for the tribunal to have held that the version of the deed and rules under which the complainant’s entitlement should have been assessed was that which existed in May 1999, when the complainant last worked. Mr Hanks submitted that the trustee was obliged to operate by reference to the version of the deed and rules which was current when the complainant submitted his TPD claim on 26 June 2001. By then, the deed and rules had been amended in November 1999. Mr Bingham, who appeared for the complainant, submitted that, when the complainant retired from service on the ground of permanent disablement – which he said, and the trustee accepted, occurred in May 1999 – he was thereupon entitled to the benefit of the operation of r 4.3 of the rules as existed at that time. It was immaterial, he submitted, that the request for that benefit was made some time later. Mr Hanks responded with a submission in the alternative, based on Recital F of the amending deed of 26 November 1999. He submitted that, even if the date at which the complainant’s entitlement was to be determined was May 1999, the amendments to the deed operated retrospectively from 1 July 1996, with the result that it was the amended deed which defined that entitlement. Mr Bingham rejoined with a reference to reg 13.16(1) of the Superannuation Industry (Supervision) Regulations 1994, which made it a standard of regulated superannuation funds that a beneficiary’s right or claim to accrued benefits, and the amount of those benefits, must not be altered adversely to the beneficiary by amendments of the governing rules of the fund. On both of these aspects, I accept Mr Bingham’s submission. Assuming for the purposes of argument that the complainant did retire on 19 May 1999 on the ground of permanent disablement, I consider that r 4.3 in its amended form gave rise to an immediate entitlement to be paid the TPD benefit for which the rules then made provision. Likewise, by the operation of reg 13.16, if the complainant in fact had such an immediate entitlement when he retired, no subsequent amendment of the deed could retrospectively affect that entitlement detrimentally to the complainant. I do not believe that this aspect of the tribunal’s decision involved any error of law.

46                  Mr Hanks next submitted that r 4.3 in its unamended form was not sufficient to deliver to the complainant the benefit of the insurance policy because, even if it be accepted that the complainant retired on the ground of permanent disablement, there were no proceeds of the insurance policy which could be applied for the complainant’s benefit in accordance with the provisions of Sch 7 and Sch 10 to which I have referred in par 6 above. That proposition appears to be sound, and to have been recognised as such by the tribunal, since the tribunal found it necessary to exercise the trustee’s power under r 4.7 of the rules to determine that there be a discretionary payment made to the complainant in an amount equal to that which he would have received had he been totally and permanently disabled within the meaning of the policy. At this level, according to the submission of Mr Hanks, it was no longer possible to treat the unamended version of the deed and rules as applicable, since r 4.7 (unlike r 4.3) did not speak as at the date of the complainant’s retirement from service: it invested the trustee with a discretion to make an exceptional payment and, necessarily, spoke as at the date when that discretion came to be exercised. That date was well after the amendments to the deed and rules in November 1999. Neither r 4.7, nor anything closely approximating that rule, survived those amendments. Mr Hanks submitted that it was an error of law for the tribunal to have proceeded on the basis that r 4.7 was available to the trustee in June 2001 when the complainant lodged his application, or at any time thereabouts. For his part, Mr Bingham submitted that r 4.7 was expressed to be an overriding provision, and that the trustee had an absolute discretion under that rule.

47                  Under s 37(1)(a) of the Complaints Act, the tribunal had all the powers, obligations and discretions that were conferred on the trustee. I am prepared to read this provision in the sense of conferring on the tribunal the powers etc that the trustee had at the time of its own decision under the rules of the fund. As I have indicated, the tribunal decided that the trustee, having found (as it should have) that the complainant was totally and permanently disabled, and having noted (as it did) that r 4.3 would not deliver to the complainant the proceeds of any insurance policy, should then have concluded that the unfairness of such an outcome could and should be rectified under r 4.7. In other words, in the tribunal’s thinking, r 4.7 should have been brought into play when the trustee made its own decision as to the complainant’s entitlement. This could not have been earlier than the date upon which the insurer advised the trustee that it had denied the claim under the policy. This was much later than 26 November 1999, when r 4.7 was, by amendment, removed from the deed and the rules. At the time when, according to the tribunal, the trustee should have acted under r 4.7, the rule was gone. Regulation 13.16(1) is of no benefit to the complainant in this respect, as on no view could the possibility that the trustee might make a discretionary payment to him in excess of his entitlement be regarded as an ‘accrued benefit’. For these reasons, I consider that the tribunal’s determination that it was unfair and unreasonable for the trustee not to have resorted to r 4.7 to make a payment to the complainant equivalent to that which he would have received under the policy was erroneous. The error involved was one of law.

48                  Mr Bingham submitted that, if cl 4.7 of the original rules was not available at the time the trustee made its decision, a similar result was achievable by recourse to the trustee’s powers under cl 11.4 of the amended deed, to the relevant provisions of which I have referred in par 11 above. If this was so, it would not affect that conclusion I have reached above which was concerned with what the tribunal actually did, rather than with what it might have done. However, Mr Bingham submitted that, if I were of the view that the trustee had made an error of law in relying upon cl 4.7, I should remit the matter to the tribunal for consideration of the question whether a like result might have been achieved under cl 11.4 of the amended deed. I could take that course only if I was of the view that the payment of a sum equivalent to the permanent disablement benefit under the original rules would have been a regular and lawful exercise of the trustee’s powers under cl 11.4 of the amended deed. I do not believe that it would. Paragraphs (a) and (b) of cl 11.4 are, in my opinion, empowering rather than entitling; that is to say, they give the trustee the usual range of functional powers to do various things in furtherance of its responsibilities under the deed. Although the trustee would have power under cl 11.4, for example, to compromise a claim, that power, in my view, would not make it lawful for the trustee to pay to a member of the fund a sum to which the member was not entitled, or to pay out of the fund, in its discretion, a sum which was not referable to a member’s entitlement, or at least lying along the axis of a potential entitlement. On the facts of this case, I do not believe it would be consistent with the amended deed for the trustee to purport to exercise its power under cl 11.4 thereof because the sum to which the complainant was entitled as at May 1999 under the original rules fell short of what the trustee considered, in its discretion, to be a fair and reasonable payment in the circumstances. If follows that, under s 37(5) of the Complaints Act, it would not have been within the power of the tribunal to have had recourse to cl 11.4 of the amended deed for that purpose.

49                  Mr Hanks next argued that, if recourse to cl 4.7 of the original rules had been available to the trustee as a matter of timing in the present case, it would have constituted a breach of trust for the trustee to have made the payment thereunder that the tribunal held to constitute a fair and reasonable outcome in the circumstances of the complainant. Mr Hanks’ proposition was that all moneys held in the fund, whether they represented member contributions, employer contributions or profit, had to be allocated to members of the fund. He submitted that, for the trustee to have made a payment to the complainant under cl 4.7 (being a payment to which he was, by definition, not otherwise entitled and which, also by definition, went beyond the moneys that had been allocated to him) would necessarily have required the trustee to draw upon moneys in the fund which had been allocated to other members. In an accumulation superannuation fund which complies with the requirements of the SIS Act, these propositions sound as though they ought to be correct, but, on analysis, they involve a number of assumptions of fact in relation to matters which were not dealt with by the tribunal, and not thoroughly explored in the evidence before the court. There was no provision of the original rules which, in terms, directly required the trustee to allocate every incoming dollar to the account of one or other of the members. It is true that the provisions of Sch 7 to the rules required the accumulated contributions made by a particular member, and by the employer with respect to that member, to be available for that member should an occasion arise when the ‘accrued benefit’ became payable to him or her. However, Sch 7 did not, at least explicitly, require the trustee to build up the account of each member according only to the investment earnings of the accumulated amount of the contributions which had been made in relation to him or her. Rather, the trustee was required to add to each member’s account an amount representing a share of the profit for the financial year to date. The rules left much unexplained as to how the ‘profit’ would be derived in a particular case. The rules otherwise made provision for the trustee to meet expenses from time to time (presumably including, as Mr Bingham pointed out, the costs of conducting litigation such as this), and those expenses would have had to have come from somewhere. Likewise, the trustee was empowered to make such provision as it thought fit for ‘any particularly adverse or favourable circumstances known to the trustee’. I do not believe that these and other questions have been sufficiently investigated, either in point of fact or in point of law, for me to hold that recourse to r 4.7 in the way proposed by the tribunal would necessarily have been a breach of trust for the trustee. Since I have decided that cl 4.7 was not, in any event, available in the particular circumstances of the complainant, for me to decide the breach of trust point would be to go beyond what was necessary to resolve the matter before the court and that consideration, together with the others referred to in this paragraph, leads me to the conclusion that I should not attempt to make a finding on this aspect of Mr Hanks’ submissions.

50                  Mr Hanks’ next submission was that, even if r 4.7 was otherwise available, and if recourse to it would not have amounted to a breach of trust, the way the tribunal in fact used the rule in the circumstances before it did not constitute a bona fide exercise of the tribunal’s discretion in that regard. He submitted that, in point of fact, there were no funds available for a payment to be made under r 4.7, because all funds had been allocated to the accounts of various members. As will be apparent, this is a variation of the submission with which I have most recently dealt, and one which required consideration of facts and circumstances which were not before the tribunal. As such, the point could not reveal an error of law, a circumstance which Mr Hanks accepted. He submitted, however, that the reason that the necessary facts were not before the tribunal was that the tribunal had given no indication that it might resolve the matter before it by reference to r 4.7 (and the complainant had not based his complaint upon that rule). This took Mr Hanks to another point which he developed later, namely, that the trustee had been denied natural justice by the tribunal. That is a matter to which I shall turn, but it is clear that the particular point to which the present submission relates cannot, of itself, be regarded as demonstrating an error of law on the part of the tribunal.

51                  Mr Hanks next pointed to the proviso in the definition of ‘total and permanent disablement’ in the original rules. He submitted that the trustee had effected a policy in relation to the complainant, and had determined that the meaning of TPD was identical to the circumstances in which an amount was payable under the policy. If sound, this submission would mean that, instead of the definition of TPD set out in par 7 above, the rules would, in effect, be deemed to contain the definition of TPD set out in the policy (see par 14 above) and, therefore, that there could never be the kind of discrepancy between the outcomes under the two different definitions which the tribunal held to have arisen in the present case. A similar submission was made to the tribunal, and it decided the matter as follows:

“The next issue is whether or not the Trustee made a determination to modify the Trust Deed definition to make it identical with the definition contained in the Insurance Policy. The Tribunal notes the wording of the definition requires the Trustee to make a decision “in respect of the Member”. This indicates that an individual decision would need to be made with respect to each member to whom the Trustee determined the modification would apply. The definition does not contemplate the adoption of an overall policy approach to enable the Trustee to make the modification in respect of all members. In any event, the mere adoption of a policy to apply the modification does not amount to such a determination. The wording relied on by the Trustee in the Booklet (quoted earlier) does not establish notification to members that the Trustee has reached any such determination. It merely recites the requirements of the Insurer in its assessment of claims under the definition in the Insurance Policy.”

The tribunal held that the definition of TPD in the rules had not been modified.

52                  To the extent that the tribunal held that the power of modification contained in the proviso to the definition of TPD in the original rules could be exercised only with respect to each member individually, and not across the population of members of the fund as a whole, I am inclined to think that too narrow a view of that power was taken. It is, however, undesirable that I say anything further on that subject, since the tribunal’s alternative basis for rejecting the trustee’s submission, as set out in the passage quoted above, was purely factual, and was sufficient, of itself, to justify that rejection. It was clearly open to the tribunal to find, as a matter of fact, that the terms of the member booklet did not constitute a determination under the proviso to the definition of TPD. In these circumstances, I would hold that the tribunal’s decision that the definition was not modified was not affected by any relevant error of law.

53                  Mr Hanks next submitted that, when properly understood, the tribunal’s decision discloses that the real element of unfairness and unreasonableness upon which it made its determination did not relate to the decision of the trustee at all, but related to quite different facts and circumstances, and, therefore, that the tribunal had gone outside its mandate under s 37 of the Complaints Act. Mr Hanks pointed to the tribunal’s conclusion that the decision of the trustee that the complainant was not entitled to a TPD benefit was unfair and unreasonable. That decision, he submitted, was the only one which the trustee made in relation to the complainant. Had it made what the tribunal regarded as the only fair and reasonable decision in the circumstances, it would have held that the complainant was entitled to a TPD benefit. Mr Hanks submitted that such a decision would have left the complainant in precisely the same situation as that in which he in fact found himself, namely, a situation in which he was ostensibly paid a TPD benefit, but one which lacked the component constituted by the proceeds of the policy. Mr Hanks pointed out that, in order to secure an outcome which would deliver to the complainant a benefit equivalent to that which he would have received had he been TPD under the policy, the tribunal was obliged to rely upon certain other acts and omissions of the trustee which had nothing to do with the decision the subject of the complaint. Those acts and omissions were the trustee’s failure to modify the definition in the rules to accord with that found in the policy, the trustee’s failure to explain the limitations of the policy requirements applicable to TPD claims, and the trustee’s failure to draw to the attention of the complainant the discrepancy between the two definitions of TPD. According to Mr Hanks, these were not elements of the trustee’s decision at all, and in seeking to put them to rights, the tribunal had gone beyond the minimum necessary to place the complainant as nearly as practicable in a position in which the unfairness and unreasonableness determined to exist ‘in relation to the trustee’s decision’, as required by s 37(4) of the Complaints Act, no longer existed.

54                  Mr Bingham responded to this submission by pointing out that the essence of the tribunal’s reasoning was that the trustee ought to have appreciated that the receipt of a TPD benefit which did not include any element referable to the proceeds of the policy was manifestly unfair and unreasonable. Once it was accepted that the conclusion that the complainant was not totally and permanently disabled was unfair and unreasonable, it likewise followed, according to Mr Bingham, that for the complainant to receive anything less than was contemplated by the rules in the case of a member who was totally and permanently disabled would necessarily also be unfair and unreasonable. He submitted that this is precisely what the tribunal held, and that the holding involved no error of law.

55                  I consider that the first part of Mr Hanks’ submission is sound. The complainant’s complaint related only to the decision of the trustee communicated by letter dated 2 August 2002. The tribunal held that it was unfair and unreasonable for the trustee to have decided that the complainant did not come within the definition of TPD in the rules. It substituted its own decision that that the complainant was entitled to be paid the TPD benefit by the trustee. However, in the circumstances of the complainant, that benefit had no component constituted by the proceeds of the policy. That result was brought about by the terms of the policy, not by any decision of the trustee. It is the result which would have been ordained by the rules had the trustee decided, as the tribunal considered would have been fair and reasonable, that the complainant was entitled to the TPD benefit.

56                  However, I do not consider that the second part of Mr Hanks’ submission is sound. It proceeds from a misunderstanding of the tribunal’s decision. It is true that the tribunal referred to other acts and omissions of the trustee – its failure to modify the definition in the rules to accord with that found in the policy, its failure to explain the limitations of the policy requirements applicable to TPD claims, and its failure to draw to the attention of the complainant the discrepancy between the two definitions of TPD – and held that there was a “resulting unfairness and unreasonableness” which needed to be “rectified”. But it was not the unfairness and unreasonableness of these other acts and omissions, of themselves, that the tribunal addressed under s 37(4): it was the unfairness and unreasonableness of the trustee’s failure, as part of its decision notified on 2 August 2002, to effect such a rectification by recourse to r 4.7 of the original rules. I do not, therefore, consider that the tribunal’s decision can be validly criticized on the ground that the tribunal sought to apply the remedial terms of s 37(4) to some act or omission other than the decision about which the complaint had been made.

57                  Mr Hanks next submitted that the trustee had been denied procedural fairness by the tribunal, in that r 4.7 had not been relied on by the complainant, and the tribunal had said nothing to alert the trustee to the possibility that the matter before it might be resolved by recourse to r 4.7. Mr Hanks relied upon the following words of the Full court, spoken with reference to the Administrative Appeals Tribunal, in Goldie v Minster for Immigration and Multicultural Affairs (1999) 56 ALD 31, [35]:

“It is well-established that before the Tribunal is entitled to make a decision against a party on a basis entirely different than that relied on by the other party, it must give the person affected notice that it is considering whether to make a determination adverse to him on that particular basis and a reasonable opportunity to deal with the case the Tribunal is contemplating.”

This passage was adopted as applicable also to the tribunal, in proceedings under s 37 of the Complaints Act, by Branson J in Employers First v Tolhurst Capital Ltd (2005) 143 FCR 356, [69]. Her honour said:

“In my view, the above observations of the Full Court are equally applicable to the Tribunal when conducting a review under the Complaints Act. The obligation on the Tribunal to afford procedural fairness to the parties to a review means that it may not make a determination adverse to the interests of a party to that review without giving that party a reasonable opportunity to make written submissions to the Tribunal on the approach that the Tribunal is contemplating.”

58                  Mr Bingham submitted that it could not be said, in the present case, that resort to r 4.7 of the original rules constituted a basis for upholding the complainant’s complaint which was ‘entirely different’ from the matters which had been before the tribunal. He referred to a submission made by the trustee to the tribunal that, under the fund rules, the maximum benefit that the trustee could pay to a fund member, in the event of TPD, could not be greater than the sum of the member’s fund credit and the amount received from the insurer. Mr Bingham submitted, in effect, that the trustee was implicitly recognising that a possible outcome to which it was potentially exposed was that the tribunal might well require it to pay the complainant a sum which was greater than his fund credit and the amount received from the insurer. He submitted that, if so, r 4.7 would have been brought into play, and that the trustee ought to have been alive to this. I note, however, that, when the complainant responded to the trustee’s submission to which Mr Bingham referred, he said that the rules would allow the fund to compromise a claim made against it by a member in circumstances where the definition of TPD in the rules had been satisfied, but where there was no entitlement under the insurance policy.

59                  The whole proceeding in the tribunal was conducted on the papers. This gave the parties an opportunity to consider, with some accuracy, the range of matters that were advanced before the tribunal by the complainant and what, if any, indications were given by the tribunal as to how it might resolve the matter. It is true that there was a certain confusion as to which version of the deed and rules should apply in the circumstances. It seems that the complainant was working by reference to the original rules, while the trustee made its submissions throughout by reference to the rules as they had been amended in November 1999. Both versions of the rules, however, gave the trustee power to compromise a claim. As I have indicated above, this was a power which, in point of substance not merely procedure, differed from the power originally available under r 4.7. The submissions made to the tribunal centred on the question whether the complainant met the definition of TPD. That definition was relevant under r 4.7 of the original rules. I am satisfied that the complainant only ever sought a TPD benefit from the fund. The kind of benefit for which r 4.7 of the rules provided was, in my view, ‘entirely different’ from that which the complainant sought. It is also evident that the tribunal itself gave the trustee no inkling that it might have resort to r 4.7. As is apparent from other sections of these reasons, it is probable that the trustee would have had a deal to say as to the availability of r 4.7 in the circumstances and, if it were available, as to the appropriateness of having resort to it. Although I have not ruled upon the trustee’s arguments that resort to r 4.7 in the way done by the tribunal inevitably involved a breach of trust, it is apparent from the position taken by the trustee in this proceeding that it would have made a submission on the subject, had the tribunal given it the opportunity. I consider, in the circumstances, that the trustee was denied procedural fairness in relation to so much of the tribunal’s determination as purported to exercise power under r 4.7 of the original rules.

60                  In making a determination adverse to the trustee without according the trustee procedural fairness, the tribunal exceeded its jurisdiction: [reference]. That being so, the determination was, in law, no determination at all: Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476, 506. The determination will have to be set aside on this ground.

61                  I have held that the tribunal’s recourse to r 4.7 of the original rules involved errors of law in two respects. I shall set aside the relevant determination, and remit that matter to be determined again by the tribunal in accordance with these reasons. The other determinations which the tribunal made adversely to the insurer will not be affected.

the complainant’s cross appeal

62                  In presenting the complainant’s cross appeal, Mr Bingham submitted that the tribunal’s determination to affirm the decision of the insurer was affected by errors of law. He first submitted that it was an error of law for the tribunal to have held that the ‘correct date for assessment’ under the policy was six months after the date on which the complainant finished work, ie 19 November 1999. He said that the defined term ‘date of disablement’ in the policy was relevant only for the purpose of identifying the date at which ‘the amount of group life insurance’ should be ascertained under cl 4.2 of the policy. He said that that term was irrelevant to the question whether a condition of TPD existed in relation to the complainant. Mr Bingham submitted that the definition of TPD required that the complainant have been disabled while in the active service of the employer, that the disability have resulted from an illness, accident or injury, and that the disability have resulted in the complainant being continuously absent from his employment for at least six consecutive months. Those conditions being satisfied, it was then necessary that the insurer have determined that it was unlikely that the complainant would ever be able to engage in any regular remunerative work for which he was reasonably fitted by education, training or experience. None of this, according to Mr Bingham, mandated a particular date, being six months after the complainant last worked, at which the assessment should be made.

63                  I do not understand Ms Alpins, who appeared for the insurer, to have taken issue with Mr Bingham’s construction of the definition of TPD in the policy in this respect. I shall return to what she did say about this point presently, but it is important to consider what that definition says, how it operates and whether it requires a decision to be made by the insurer at a particular point in time. Each of pars (1), (2) and (3) of the definition requires that a disablement ‘occur’ at a particular time identified by reference to other events or circumstances. The third of those requirements is that the disablement have occurred ‘while he is in the active service of the employer’ (where active service is defined to include leave of absence with salary or wages and, in certain circumstances, other leave of absence). That a disablement have occurred at this time, however, is not sufficient: it is necessary to turn to the first of the alternative requirements set out in the definition, that contained in par (a) thereof. That requirement contains three cumulative elements, namely –

·                    that the disablement have resulted from an illness, accident or injury;

·                    that the disablement have resulted in the person concerned being continuously absent from his/her employment for at least six consecutive months commencing prior to his/her 65^th birthday; and

·                    that the insurer have determined that it is unlikely that the person concerned will ever be able to engage in any regular remunerative work for which he/she is reasonably fitted by education, training or experience.

It is evident that the earliest date upon which a disablement might become a TPD within the meaning of the definition is the last day of the six consecutive months referred to in the definition. If the insurer has, on or before that day, made a determination of the kind to which the definition refers, the requirements of the definition will, on that day, have been satisfied. If the insurer has not then made such a determination, those requirements will not be satisfied. But the definition does not limit the period within which the insurer might make such a determination: it is not beyond the scope of the definition for the insurer, in a particular case, to make its determination months, or even years, after the last day of the six consecutive months.

64                  On the matter of the insurer’s determination, the definition uses the past tense (‘has determined’) but only in the context of treating such a determination, once made, as a condition which has been satisfied. When it speaks of the nature or quality of the matter to be determined, the definition is concerned with a present unlikelihood of something occurring in the future. That is to say, the insurer must consider whether it is presently unlikely that the person concerned will ever again be able to engage in work of the kind described. It follows that, when it considers whether to make a determination, the insurer must look at the facts as they present themselves at that time. It must consider all of the available material for the purposes of making a decision about the unlikelihood of the person ever engaging in work of the kind described. For the insurer not to take this approach, but to have looked only at facts and circumstances as they existed some time previously, would not be in accordance with the definition of TPD in the policy.

65                  In the present case, the insurer made the decision in which it held that the complainant was not totally and permanently disabled within the definition of TPD on 17 April 2002. Mr Bingham submitted that the insurer was obliged to consider all facts and circumstances as at that date when it came to address the question whether the complainant was unlikely ever again to engage in remunerative work for which he was reasonably fitted by education, training or experience. He said that, in his complaint before the tribunal, the complainant had submitted that the insurer’s decision on 17 April 2002 was unfair and unreasonable, and that for the tribunal to have considered that complaint against a holding that the ‘correct date for assessment’ was 19 November 1999 was erroneous in point of law, in that it was contrary to the definition of TPD in the policy.

66                  Ms Alpins submitted that the question for the tribunal was not whether the insurer had been correct, in some absolute sense, in declining to be satisfied that the complainant was totally and permanently disabled within the terms of the definition, but whether the insurer’s decision in that respect was unfair or unreasonable. She referred to a number of authorities in this court in support of the proposition, which I accept, that it is not the role of the tribunal to consider whether a decision under review in a s 37 proceeding was right or wrong. She also submitted that the tribunal’s reasons should be read as a whole, and without using a fine appellate toothcomb or a disposition which is zealous to discern error in the actual terms in which the tribunal has chosen to express its reasoning. I also accept these propositions. Ms Alpins submitted that the tribunal’s decision in the present case, read fairly and as a whole, disclosed that it had not confined itself to what she described as the second limb of the definition of TPD in the policy. When the tribunal’s decision is read as a whole, she submitted, it is apparent that the tribunal had regard to all of the medical evidence and that it asked itself the right question, namely, whether the decision of the insurer was fair and reasonable in its operation.

67                  Before considering this aspect further, I shall mention the second basis upon which Mr Bingham submitted that the tribunal had erred in point of law. He pointed to the tribunal’s holding that ‘it was open to the Insurer to decide that the Complainant’s disablement did not occur while the Complainant was in the active service of the Employer as is required by clause 1(3) of the definition’. As it happened, Mr Bingham submitted, the insurer never made any such decision: that the disablement occurred while the complainant was in the active service of the employer was never doubted. The focus of the insurer’s consideration was on the question whether the complainant was unlikely to be able to work again etc. Ms Alpins responded that the definition must be read as a whole, and that all the insurer had done was to decline to admit the claim in the case of the complainant. As its letter dated 17 April 2002 indicated, all the evidence was reviewed against the policy definition of disablement. For the tribunal to have held that it was ‘open’ for the insurer to decide that the disablement did not occur whilst the complainant was in active service, was to do no more than to provide a basis upon which the insurer’s decision should not be regarded as unfair or unreasonable in a particular respect. She submitted that this aspect of the tribunal’s reasons did not involve a question of law.

68                  Conscious of the need to avoid using a fine appellate tooth comb, I think that Mr Bingham’s two submissions should be considered together, at least initially. The whole of the relevant part of the tribunal’s reasons, set out in par 40 above, should be read with a view first to identifying what the tribunal meant and only then to asking whether an error of law was involved.

69                  Having made its observation about ‘the correct date for assessment’, the tribunal noted that the medical practitioners who ‘reported in 1999 and early 2000’ all found that the complainant was able to work full-time. As it happens, there were only two practitioners who reported in 1999, and none reported in early 2000. The two who reported in 1999 were Dr Garland and Dr Mendelson, who reported on 17 and 18 November 1999 respectively. Each reported to the workers compensation insurer, and for purposes different from, although analogous to, those arising under the definition of TPD in the policy. Dr Garland said:

“From a psychiatric point of view he is now quite capable in my opinion both of pre-injury employment and also ‘suitable employment’ taking into account factors (a)-(f) relating to ‘suitable employment”.

Manifestly, Dr Garland was concerned with the criteria for ‘suitable employment’ under s 5 of the Accident Compensation Act 1985 (Vic). Dr Mendelson said:

“In my opinion, once there has been some further improvement in Mr Henderson’s anxiety symptoms he will be able to undertake a work trial in a position that is free of significant responsibility and time pressure, but at present he is quite resentful towards his employers, and unless his attitude changes an attempt to return to work with Auspine is likely to lead to an exacerbation of his feelings of anxiousness.”

All of the other practitioners referred to by the tribunal in the third, fourth, fifth and sixth paragraphs in the passage set out in par 40 above reported on the complainant’s condition subsequent to ‘1999 and early 2000’. I note in passing that there appear to be some minor mistakes in the dates allocated by the tribunal to some of these reports: Dr Strauss (NS) reported on 21 February 2001, not 21 November 2001. Dr Sale’s second report was dated 16 June 2003, not 14 March 2004. Nothing, however, appears to turn on these minor errors.

70                  Apparently, the tribunal was concerned to draw attention to the variations in the assessments which different practitioners had made of the complainant’s condition at different times. Amongst these assessments made in the first 10 months after the complainant ceased work, there were none which found the complainant to be unable to work full-time. There were later assessments, by contrast, which held the complainant to be totally and permanently disabled. One of the latest assessments was that of the Dr Sale, who opined that excessive treatment had led the complainant to believe that he was a psychological invalid. In the light of all this, the tribunal pointed to the distinction between someone believing that he is, and that person actually being, totally and permanently disabled. The tribunal may then have considered whether it was open to the insurer to consider that the complainant believed that he was totally and permanently disabled when in fact he was not. For this purpose, the tribunal had regard to the matters referred to in the lettered subparas (a) and (b): the absence of medical opinion in the first 10 months which supported the TPD case and the fact that, due to excessive treatment, the complainant may have believed that he was a psychological invalid. Logically, the tribunal might then have considered that it would not have been unfair or unreasonable for the insurer to have, in effect, discounted the later medical assessments in its consideration of the TPD matter; or to have accepted Dr Sale’s view that those assessments drew more upon the complainant’s own belief as to his state of health than upon the objective medical facts. In other words, had the tribunal said that it was open to the insurer, for those reasons, to decide that the complainant was not unlikely to find regular remunerative work for which he was fitted by education etc, the reasoning expressed thereby would have been logical. However, the tribunal did not make such a statement (after subpara (b)). Instead, it said that it was open to the insurer to decide that the complainant’s disablement did not occur while he was in the active service of the employer. It is not obvious why the tribunal made that statement. If it meant to convey that the insurer might, fairly and reasonably, have formed the view that the complainant was not rendered unable to work to the extent required by the definition of TPD during the time that he was in active service, that would have been to mis-state the requirements of the definition. As I have pointed out, the definition requires that the relationship between the disability and the complainant’s likely inability to find work of the relevant kind be addressed as at the time that the insurer comes to consider the matter. It is not disqualifying that the original disability would not then (ie during active service) have justified such a conclusion. If, on the other hand, the tribunal meant to convey that the insurer might, fairly and reasonably, have formed the view that no disability at all occurred while the complainant was in the active service of the employer, such a view would have been completely at odds with the facts as disclosed to the tribunal and with the assumed state of facts which seemingly informed the insurer’s consideration of the matter. For that reason, I would regard this latter reading of the tribunal’s reasons as an unlikely one.

71                  The matter is made the more complex by the sentence commencing with the word ‘further’. Here, the tribunal seems to refer to all the medical reports, not only those made in the first 10 months. Based on those reports, the tribunal expresses a single opinion as to unfairness and unreasonableness which was the very matter which it had to decide under s 37 of the Complaints Act. There is a question whether, by reason of that sentence, whatever previous errors of law are to be found in the tribunal’s reasons should be discounted or held to be unlikely to have affected the result.

72                  I return to the tribunal’s statement that the correct date for assessment was six months after the date on which the complainant finished work. As a matter of construction of the policy, that was not a correct statement. It is not clear why the tribunal made it. It could have been because of a mistaken view of the operation of the definition of TPD in the policy. Alternatively, it could have followed on from the tribunal’s mistaken identification of the definition of ‘date of disablement’ in the policy, to which I have referred in par 14 above. Either way, it seems that the statement, taken on its own, was erroneous in point of law. That being the case, the next question is whether the error might have had any consequences for the way the tribunal went about its task of considering whether the insurer’s decision was unfair or unreasonable. As I have attempted to explain, an examination of the succeeding part of the tribunal’s written reasons does not provide a clear answer to that question. An important element of the reasons was that, within ten months or so after the complainant ceased working, no medical opinion provided support for the proposition that he was totally and permanently disabled. Although other passages may tend to indicate that the tribunal took a broader view, I believe that, once having identified an error of law underlying the tribunal’s determination, I should treat that error as having been of no consequence to the determination itself only in a clear case. Manifestly, the present is not such a case. In the circumstances, the complainant’s cross appeal must be upheld.

73                  As appears from par 70 above, I also think it likely that the tribunal erred in point of law by approaching the case on the basis that the policy required that the complainant have been totally and permanently disabled while in the active service of the employer. Such an error is not patent, however, and it may be said that its discernment relies on too precise a dissection of the broad thrust of the tribunal’s decision. In the circumstances, I am not prepared to go the full distance of finding that the tribunal did err in this respect.

74                  Mr Bingham challenged the decision of the tribunal on a number of other grounds, none of which, in my view, discloses an error of law. First, he analysed the medical reports which were before the tribunal with a view to making good the proposition that the tribunal ‘went wrong in its conclusion that there was no medical opinion supportive of the complainant being unable to work full-time at the time he ceased work and for the ten month period thereafter’. He pointed out that the complainant had been seen by his general practitioner, Dr Nelson, in 1999 and, although he did not report then, in October 2000 Dr Ridgway, who replaced Dr Nelson, reported that, in July 1999, the complainant was unable to work because of a perforated duodenal ulcer. She referred also to the Workcover certificates (based on stress) which had been issued by Dr Nelson at the outset. She referred to various consultations which she had with the complainant in late 1999 and early 2000, and to the complainant’s inability to contemplate work at his former place of employment at that time. Mr Bingham referred also to a report by Dr O’Kelly in September 2000 which referred to early consultations with the complainant. He submitted that it was erroneous for the tribunal to have relied only on those practitioners who ‘reported’ in the period to which it referred. In the view I take, however, whatever justification there may be, at the general level, for Mr Bingham’s criticisms of the tribunal in this respect, there is nothing amounting to an error of law in the approach which the tribunal took. As I have indicated above, it would seem that the tribunal’s reference to the practitioners who reported in 1999 and early 2000 may have been in response Dr Sale’s cautionary note that the long history of medical consultations which the complainant had experienced served only to reinforce his own perceptions of his psychological indisposition. However that may be, the tribunal’s emphasis on the opinions of the practitioners who reported in the early months happened to be the way it approached its task of considering the fairness and reasonableness of the insurer’s decision, and was open to it as a matter of law.

75                  Mr Bingham had a further complaint about this aspect of the tribunal’s reasons. It focussed upon the statement that the ‘only requirement’ in the definition was that the work be ‘regular’, which the tribunal understood to be a reference to the complainant ‘working full-time’. Mr Bingham submitted that the definition said nothing about ‘full-time’ work, but rather required that the work which the complainant might putatively be able to obtain was ‘regular remunerative work for which he is reasonably fitted by education, training or experience’, elements to which the tribunal, in his submission, paid no attention. I consider that Mr Bingham’s criticism of the tribunal in this regard involves too fastidious, and too pedantic, a concentration upon particular words and phrases, and overlooks the context and meaning of the passage in question. When the latter is taken into account, it will be seen that, in this passage, the tribunal was concerned to mark out a single point of distinction between the definition in the policy, and the corresponding definition in the rules of the fund. Both definitions required the decision-maker to consider whether there was likely to be work to which the complainant was fitted to by education, training or experience, and it is manifest from other parts of the tribunal’s reasons that it made its decision in accordance with that requirement. The point at which the definition in the policy departed from the definition in the rules of the fund was that the latter did not require that the work be remunerated at the same level of remuneration as the complainant was receiving at the time he worked for the employer. The definition in the policy does require that the work be remunerative, but not that the remuneration be at the same level as previously. The tribunal was right to point out, in conjunction with its treatment of the ‘remunerative’ element of the work, that the only other qualifier introduced by the definition in the policy was that the work be ‘regular’. I do not understand Mr Bingham to have criticised the use of the concept of full-time work as a synonym for the concept of regular work, and understandably so, since it was in his client’s interests to have the definition in the policy construed in a way that would produce a putative regime of work that was rather more demanding than might be the case, for example, if ‘regular’ were held to encapsulate part-time work. In the circumstances, I do not consider that this aspect of the tribunal’s reasons involved an error of any kind, much less one of law.

76                  As I understood him, Mr Bingham submitted that, separately from the matter with which I have just dealt, the tribunal was in any event in error in failing to consider, and to make explicit findings on, the question whether the putative work in which the complainant might be able to engage was work for which he was reasonably fitted by education, training or experience. He submitted that, in ignoring a central element of the definition in the policy, the tribunal erred in point of law. As I have indicated above, however, it is manifest that the tribunal was conscious of this requirement: indeed, it referred to it in terms in the middle of the very paragraph in which it exposed its reasoning with respect to the decision of the insurer. There was no error of law involved here.

77                  Finally, Mr Bingham referred to a number of respects in which, he submitted, the tribunal had misunderstood or misread the medical reports which were before it. When those reports were properly understood, he submitted, there was no evidence on which the tribunal could conclude that it was not unfair and unreasonable for the insurer to have decided that the complainant could obtain regular remunerative work for which he was reasonably fitted by education, training or experience. The result, according to Mr Bingham, was that the tribunal made a finding of fact for which there was no support, thereby erring in point of law. He referred me to an extract from the judgment of Barwick CJ in Sinclair v Maryborough Mining Warden (1975) 132 CLR 473, 481:

“It was essential that there be material before [the warden] … which would warrant an affirmative conclusion on the substance of the application that the recommendations should be made.”

Mr Bingham referred also to the judgment of the Full Court in City Corp Life Insurance Ltd v Smith [2005] FCAFC 102, [11]:

“There is no doubt that it is an error of law for a tribunal to make a finding of fact for which there is no support.”

I consider, however, not only that the context in which each of these observations was made differs from the present, but also that Barwick CJ, and their Honours in the Full Court, were referring to a state of affairs quite different from that upon which Mr Bingham relies. In this part of his submission, Mr Bingham was not dealing with a ‘no evidence’ point at all: rather, he was seeking to have the court stray beyond its limited role and make findings about the validity of the factual conclusions which the tribunal drew on the basis of the medical reports before it, with a view then to inviting the court to observe that there was no medical evidence which supported the tribunal’s conclusion. Such an approach needs only to be exposed in that way for it to be obvious that it is a long way distant from the discernment of an error of law in the tribunal’s decision. It might also be said that Mr Bingham’s submission in the present respect betrays an attempt to cast the tribunal in the role of an investigator of the question whether the original decision of the insurer was right or wrong. As pointed out earlier in these reasons, the tribunal has no such role. Neither did it purport to perform a function of that kind: it confined itself to consideration of the question whether the insurer’s decision was unfair or unreasonable.

78                  For reasons expressed earlier, however, the complainant’s cross appeal will be allowed, and the relevant determination by the tribunal set aside.

costs

79                  The trustee has succeeded in part as against the complainant, and the complainant has succeeded as against the insurer. Although I would be disposed, in the absence of submissions to the contrary, to make the usual order whereby costs would follow the event, I recognise that one or more of the parties may desire to press for a different kind of order. In the circumstances, I shall give the parties seven days within which to file any further submissions on the question of costs.

Associate:

Dated: 26 October 2006