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Federal Court of Australia - Full Court Decisions |
Last Updated: 30 August 2002
Howitt-Steven v Unisuper Ltd [2002] FCAFC 272
SUPERANNUATION - appeal from decision of single judge dismissing appeal on questions of law from decision of Superannuation Complaints Tribunal - appellant sought to claim disablement benefits from his Superannuation Fund - claim made in 1997 for "severe depression and anxiety, insomnia" - claim refused by Trustee on the basis of an undisclosed medical condition - appellant had suffered an "adjustment disorder and secondary alcoholism" in 1994 which he had not disclosed at the time he joined the superannuation scheme - Tribunal, on a different ground, dismissed the complaint as appellant had not provided an "accurate statement" - amendments to the Superannuation Trust Deed in July 1997 - decision of Tribunal in October 1997 - whether amended Deed applied to appellant - construction of Deed - point not taken before primary judge
APPEALS - role of appellate court - appeal from decision of a single judge on appeal from an administrative tribunal on questions of law - whether new points allowed to be taken on appeal - consideration of the role of the appellate court - whether exceptional circumstances
Superannuation (Resolution of Complaints) Act 1993 (Cth), ss 19, 46
Superannuation Industry (Supervision) Act 1993 (Cth), ss 100, 101
Insurance Contracts Act 1984 (Cth)
Federal Court of Australia Act 1976 (Cth), ss 19, 22, 24, 27, 28
Federal Court Rules, O 13
National Mutual Life Association of Australia Ltd v Campbell [2000] FCA 852; (2000) 99 FCR 562, referred to
Local Government Superannuation Board v Thorne [2002] FCA 848, considered
Queensland v JL Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146, referred to
Cubillo v Commonwealth [2001] FCA 1213 at [255], referred to
CDJ v VAJ (No 1) [1998] HCA 76; (1998) 197 CLR 172, cited
Allesch v Maunz [2000] HCA 40; (2000) 173 ALR 648, referred to
White v Minister for Immigration and Multicultural Affairs [2000] FCA 232; (2000) 96 FCR 511, discussed
Coulton v Halcombe [1986] HCA 33; (1986) 162 CLR 1, referred to
Branir Pty Ltd v Owston Nominees (No. 2) Pty Ltd [2001] FCA 1833, considered
Crampton v The Queen [2000] HCA 60; (2000) 176 ALR 369, considered
Reischauer v Knoblanche (1987) 10 NSWLR 40, referred to
Spunwill Pty Ltd v BAB Pty Ltd (1994) 36 NSWLR 290, referred to
Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (´1990) 20 NSWLR 310, referred to
White Property Developments Ltd v Richmond Growth Pty Ltd & Ors [1998] FCA 26,
referred to
White Property Developments Ltd v Richmond Growth Pty Ltd & Ors [1998] FCA 1422,
cited
Fry v Commission for Superannuation [1984] FCA 211; (1984) 2 FCR 472, applied
Liversidge v Anderson [1941] UKHL 1; [1942] AC 206, referred to
Simmons Ltd v Hay (1964) 81 WN (Part 1) (NSW) 358
Notcutt v Universal Equipment Co (London) Ltd [1986] 1 WLR 641
Finch v Sayers [1976] 2 NSWLR 540
Butterworths "Practice and Procedure High Court and Federal Court of Australia" at [33,025.5]
WARREN ARTHUR HOWITT-STEVEN v UNISUPER LTD
N1592 of 2001
MADGWICK, DOWSETT & STONE JJ
28 AUGUST 2002
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA |
|
NEW SOUTH WALES DISTRICT REGISTRY |
N1592 of 2001 |
BETWEEN: |
WARREN ARTHUR HOWITT-STEVEN APPLICANT |
AND: |
UNISUPER LTD RESPONDENT |
JUDGES: |
MADGWICK, DOWSETT & STONE JJ |
DATE OF ORDER: |
28 AUGUST 2002 |
WHERE MADE: |
SYDNEY |
1. The appeal be dismissed with costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA |
|
NEW SOUTH WALES DISTRICT REGISTRY |
N1592 of 2001 |
BETWEEN: |
WARREN ARTHUR HOWITT-STEVEN APPLICANT |
AND: |
UNISUPER LTD RESPONDENT |
JUDGES: |
MADGWICK, DOWSETT & STONE JJ |
DATE: |
28 AUGUST 2002 |
PLACE: |
SYDNEY |
INTRODUCTION
1 This is an appeal from a judgment of a judge of this Court by which her Honour dismissed an appeal to the Court on questions of law from a decision of the Superannuation Complaints Tribunal ("the Tribunal") brought pursuant to s 46 of the Superannuation (Resolution of Complaints) Act 1993 (Cth) ("the Complaints Act").
2 The appellant, Mr Howitt-Steven, is a permanently disabled former clerical employee of the University of Sydney. The respondent ("the Trustee") is the Trustee of the Superannuation Scheme for Australian Universities ("the Fund" or "the Scheme") established by a trust deed ("the Deed") that covers, among others, administrative clerical staff at that and other universities.
3 The Trustee refused the applicant's claim on the basis that he had a pre-existing, undisclosed medical condition. When the appellant complained to the Tribunal, it dismissed his complaint upon a different basis, namely that he had provided a statement as to his previous health which was not "accurate".
BACKGROUND
4 The following material (adopted from a written summary outlined by the Tribunal) indicates the immediate background to the matter:
* The appellant was born on 16 February 1946 and, at the time of the hearing before the Tribunal was 54 years of age.
* On 18 October 1994, whilst employed elsewhere, the appellant was admitted to hospital for one week suffering from a condition diagnosed as adjustment disorder and secondary alcoholism. The appellant explained (in a letter to the Trustee in July 1997) that his increase in alcohol consumption in 1994 was due to work related stresses, was short lived and did not include anxiety or depression.
* The appellant was employed in an administrative capacity by the University of Sydney from January 1995.
* When the appellant joined the Fund on 10 April 1996 he wrote "no" on the Health Declaration Form in response to a question which asked if he had ever had a mental or nervous disorder.
* On 11 February 1997 the appellant ceased attending at work (and permanently ceased employment on 5 June 1998).
* On 10 April 1997 he applied for payment of a disablement benefit describing his illness or injury as "severe depression and anxiety, insomnia". In his disablement claim nomination form, he said symptoms of his condition had first appeared in November 1994 and that he had been hospitalised because of them in November 1994. This form was supported by a form completed by Dr S who first attended the appellant on 19 February 1997 and said that the appellant's symptoms first appeared in November 1994.
* The disablement claim was denied by the Trustee on or before 5 June 1997. The Trustee's original decision was that the appellant was "not eligible to claim (a disability benefit) in accordance with Clause B.13 of the Trust Deed". The reason given was that the appellant had failed to disclose his symptoms of depression and anxiety when he applied for Membership of the Fund in April 1996.
* A complaint was lodged with the Trustee in respect of its decision and was received by the Trustee on 30 June 1997.
* The Deed was amended on 1 July to make Cl B.13 more liberal.
* The Trustee reviewed the complaint on 13 October 1997 and decided to apply cl B.13 in its amended form, but nevertheless affirmed its original decision. The appellant was notified of this decision on 17 October 1997.
* A complaint was received by the Tribunal on 5 November 1997. The appellant asserted that he had filled out his claim form to the best of his ability at the time and had not attempted to conceal any medical information. He said he had attempted to correct incorrect information on his original claim form and he claimed that the Trustee should have given him a more favourable review. The appellant asserted that the decision of the Trustee that he was not eligible for a disablement benefit was unfair and unreasonable.
* On 5 June 1998, the appellant permanently ceased employment.
* The appellant claims that the condition he suffered from in 1994 and the condition which was the basis of his claim in April 1997 are not the same. He denies he was suffering from the condition complained of at the time he joined the Fund in April 1996.
* The disablement benefit amount is an annual pension of $19,855.00 or, if the appellant is determined to have had an undisclosed pre-existing condition, a single lump sum of $15,200.00 paid as a restricted benefit in accordance with cl B.13 of the Trust Deed and calculated in accordance with the formula set out at cl B.6. [Thus, if the applicant has say thirty years of life in front of him, the pension would be worth some hundreds of thousands of dollars in present day values, rather than the mere $15,200.00 lump sum which the Trustee determined he should be paid.]
* No benefit has been paid to the appellant by the Trustee.
* The appellant applied for Department of Social Security (DSS) sickness benefits on 22 May 1998 and as at 2 August 1999 was in receipt of a Disability Support Pension.
JURISDICTION OF THE TRIBUNAL
5 This complaint was investigated by the Tribunal only after confirmation that the Trustee had dealt with the complaint under s 101 of the Superannuation Industry (Supervision) Act 1993 (Cth) ("SIS Act") - see [16] below. The Tribunal therefore determined that it had jurisdiction pursuant to s 19 of the Complaints Act. Section 19 provides:
"(1) The Tribunal cannot deal with a complaint under section 14 or 14A unless the complainant satisfies the Tribunal that:(a) a complaint about the same subject matter was previously made to an appropriate person under arrangements for dealing with such complaints made under section 101 of the Supervision Act; and
(b) the complaint so made was not settled to the satisfaction of the complainant within 90 days or such longer period as the Tribunal allows."
6 The statutory framework within which the Tribunal is to function was unexceptionably described by the primary judge, drawing on National Mutual Life Association of Australia Ltd v Campbell [2000] FCA 852; (2000) 99 FCR 562 at 565. It need not be again rehearsed here.
THE TRUST DEED
7 It appears that the relevant Deed was established in 1982 and was subsequently amended on a number of occasions. The provisions of the Deed were replaced in their entirety by a Deed of Amendment dated 16 January 1990, which was subsequently amended numerous times.
8 From its recitals and cl 5, it appears that the Deed's purpose was to establish a superannuation scheme for Australian universities in respect of the relevant "superannuable classifications" of employees. It appears that the Scheme extends at least to the University of Sydney, a large employer, and its large clerical-administrative staff. The present significance of these matters is that there is no reason to believe that the framers of the Deed and its various amendments were immune from general community and relevant employees' expectations that the latter would be treated fairly and in a measured way, appropriate by community standards. These circumstances are part of the factual matrix against which the Deed is to be interpreted: in Local Government Superannuation Board v Thorne [2002] FCA 848, Mansfield J said (at [33]-[35]):
"There are in effect two possible alternative constructions of Rule 21. ...In selecting which of those two alternatives is the appropriate one, I am mindful of the nature of the Scheme and of The CCA Plan. In Mettoy Pension Trustees Ltd v Evans [1990] 1 WLR 1587 at 1610, Warner J said:
`... the court's approach to the construction of documents relating to a pension scheme should be practical and purposive, rather than detached and literal ... [A]lthough there are no special rules governing the construction of pension scheme documents, the background facts or surrounding circumstances in the light of which those documents have to be construed - their `matrix of fact' to use the modern phrase coined by Lord Wilberforce - include four special factors. The first factor is that ... the beneficiaries under a pension scheme such as this are not volunteers. Their rights have contractual and commercial origins. They are derived from the contracts of employment of the members. The benefits provided under the scheme have been earned by the service of the members under those contracts and, where the scheme is contributory, pro tanto by their contributions. Secondly, ... pension scheme documents have to be construed in the light of the requirements of [the relevant statutory authorities]...'
The remaining two factors are not relevant for present purposes. Those remarks were cited with approval by Waddell CJ in Eq in Lock v Westpac Banking Corporation (1991) 25 NSWLR 593 at 602. See also per Ryan, Tamberlin and Finkelstein JJ in Scully v Commissioner of Taxation (1990) 84 FCR 41 at 49-50.
In endeavouring to discover the intention of the parties to the Scheme, having regard to its words, it is necessary to have regard to the whole of the wording of the Scheme. The meaning of Rule 21 may be informed by other parts of it. It is also appropriate to prefer a construction of Rule 21 which will avoid consequences which appear to be "capricious, unreasonable, inconvenient or unjust": per Gibbs J in Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99 at 109."
9 The Tribunal "determined that Deeds amended to 30 November 1994 and 6 April 1998 were relevant to its consideration as they were respectively the Deed that was applicable at the time the appellant applied to join the Fund (10 April 1996) and the Deed that was applicable on the date when the appellant ceased employment (5 June 1998)".
10 The relevant clauses of the Deed were as follows:
Clause 1, dealing with interpretation, provides:
"...Category II member means a member who was admitted to membership of the Scheme after 31 December 1989.
Disablement and incapacity
`disablement' in relation to a member means being absent from employment through injury or illness for three months within a period of twelve consecutive months and in such state of health (not due to or induced by any wilful action on the part of the member designed or intended to bring about a state of health to obtain a benefit under the Scheme) as in the opinion of the Trustee, after consideration of all the facts and evidence before it, renders the member permanently incapable of performing duties or engaging in employment for which the member is or was by reason of training and experience, reasonably qualified;
`temporary incapacity' in relation to a member means being absent from employment through injury or illness for three months within a period of twelve consecutive months and in such state of health (not due to or induced by wilful action on the part of the member designed or intended to bring about a state of health to obtain a benefit under the Scheme) as in the opinion of the Trustee renders the member for the time being unable to perform his or her own duties or any other duties for which he or she is by training and experience reasonably qualified and which is available at the member's employer;
..."
Clause 5 provides:
"Unless otherwise agreed between the employer and the Trustee, employees eligible for membership are:(a) employees who on or after the commencing date are within superannuable classifications as declared by the employer and approved by the Trustee;
(b) any person nominated by an employer and accepted by the Trustee as being eligible for membership."
Clause 6 provides:
"(1) Every eligible employee shall as a condition of membership complete an application for membership in such form as the Trustee shall from time to time determine and in so doing shall be deemed to agree to comply with and to be bound by the provisions of the Deed.(2) The Trustee may in relation to the employees of an employer or generally require applicants for membership of the Scheme to undertake such medical examinations including blood tests and provide such statements of medical history in such form as the Trustees may specify or require. Any employees who fails to undertake or fails to pass such medical examinations including any blood tests or fails to provide a satisfactory statement as aforesaid may at the discretion of the Trustee be refused membership of the Scheme or may be admitted to membership on such special conditions relating to benefits contributions or otherwise as the Trustee may determine and notify to the employee and the employer concerned.
(3) Where the Trustee is of the opinion that a member has made a false, misleading or inappropriate statement as to the member's age, state of health or otherwise or has failed to disclose any relevant fact or information in relation to his or her application for membership or in any medical examination or test for the purposes of the Scheme the Trustee may reduce or adjust any benefit payable to or in respect of the member in such manner as the Trustee may determine."
11 A limited temporary incapacity benefit is payable under cl 19 in the event of the member's disablement as follows:
"(1) Subject to sub-clause (4) hereof, the temporary incapacity benefit shall be paid for such period up to six months as the Trustee shall determine provided that the Trustee may extend the period of payment on such basis as the Trustee thinks fit for a further period or periods provided that the total period during which the temporary incapacity benefit shall be paid shall not exceed twelve months.(2) The temporary incapacity benefit shall be paid by monthly instalments commencing on such dates as the Trustee shall determine in any particular case.
(3) There shall be no increase in the amount of the temporary incapacity benefit.
(4) The temporary incapacity benefit shall cease to be payable on the first to occur of the following:
(a) the member returning to active employment with the employer;
(b) the member's death;
(c) the member's disablement; or
(d) the member ceasing to be in the service of the employer ... "
Clause 16 provides that Division B of the Deed applies in respect of all Category II members.
12 Division B of the Deed contained the following:
"B.1 This Division applies in respect of Category I members who so elect or who are deemed to so elect and in respect of all Category II members....
B.3 Subject to the Deed other than the provisions of Division A and to any agreement or undertaking entered into or given pursuant to clause 12(2) the Trustee shall pay or cause to be paid out of the Fund in the event of a member ceasing to be in the service:
(a) (i) by retirement on or after the member's 55th birthday - at the option of the member a retirement pension calculated in the manner set out in clause B.4 or the lump sum benefit referred to in clause B.7;
(ii) on disablement - the disablement pension calculated in the manner set out in clause B.5;
(iii) on death in service - the benefits referred to in clause B.6; or
(iv) for any reason not coming within any of the previous paragraphs - the lump sum benefit referred to in clause B.7; and
(b) the supplementary benefit referred to in clause B.14.
...
B.4 The retirement benefit at the option of the member shall be:
(a) an immediate pension payable for the life of the member at an annual rate calculated in accordance with the following formula:
benefit salary x benefit service x pension factor x ASF; ["ASF" appears designed to provide for part-time employees -the applicant's ASF would be 1]
(b) a single lump sum payment of an amount calculated in accordance with the following formula:
benefit salary x benefit service x lump sum factor x ASF;
(c) (i) an immediate pension for the life of the member at such annual rate not exceeding the rate referred to in paragraph (a) as the member selects, together with
(ii) a lump sum of an amount calculated in accordance with the following formula:
(100 - R)% x the single lump sum referred to in paragraph (b)
where "R" is the ratio of the pension selected by the member to the pension referred to in paragraph (a), expressed as a percentage.
...
B.5 (1) The disablement benefit prior to age 65 shall be an immediate pension payable until the member's 65th birthday or earlier death at an annual rate calculated in accordance with the following formula:
benefit salary x 60% x ASF
(2) On attaining age 65 the disablement benefit at the option of the member shall be:
(a) an immediate pension payable for the life of the member at an annual rate calculated in accordance with the following formula:
benefit salary x benefit service x pension factor x ASF;
(b) a single lump sum payment of an amount calculated in accordance with the following formula:
benefit salary x benefit service x lump sum factor x ASF;
(c) (i) an immediate pension for the life of the member at such annual rate not exceeding the rate referred to in paragraph (a) as the member selects, together with
(ii) a lump sum of an amount calculated in accordance with the following formula:
(100 - R)% x the single lump sum referred to in paragraph (b)
where "R" is the ratio of the pension selected by the member to the pension referred to in paragraph (a), expressed as a percentage.
...
Clause B.8 - Temporary Incapacity Benefit
B.8 (1) Subject to any agreement or undertaking entered into pursuant to the provisions of the Deed, the Trustee shall pay a temporary incapacity benefit in respect of any member who is either:
(a) absent from active employment with the employer; or
(b) employed in work that is less remunerative than the member's previous employment with the employer;
by reason of temporary incapacity. "
(2) The temporary incapacity benefit shall be at an annual rate calculated in accordance with the following formula:
Benefit salary x 60% x ASF
and shall be payable subject to the terms and conditions set out in this clause and clauses 19 and 20."
The history of cl B13
13 Up to 30 June 1997, cl B.13 read:
"Notwithstanding anything expressed or implied to the contrary in this Division, where the Trustee is of the opinion based on such evidence as the Trustee considers satisfactory that the member died or became disabled or suffered temporary incapacity within three years of joining the Scheme by reason of a condition which existed at the time of joining the Scheme which was not disclosed to the Trustee at the time or the member did not provide an accurate statement in a form approved by the Trustee as to the member's health and such other matters as the Trustee may require at the time the member joined the Scheme, the benefit in respect of the Member's death or disablement shall be a lump sum calculated in accordance with the following formula:benefit salary x contribution service x 20% x ASF
The temporary incapacity benefit under Clause B.8 shall not be payable unless by reason of special or exceptional circumstances the Trustee other determines in any particular case."
14 By a further Deed of Amendment dated 1 July 1997 cl B.13 was:
"amended by deleting the following from the first sentence:`which was not disclosed to the Trustee at that time or the member did not provide an accurate statement in a form approved by the Trustee as to the member's health and such other matters as the Trustee may require at the time the member joined the Scheme.' "
15 The effect was that, on and from 1 July 1997, cl B.13 read:
"Notwithstanding anything expressed or implied to the contrary in this Division, where the Trustee is of the opinion based on such evidence as the Trustee considers satisfactory that the member died or became disabled or suffered temporary incapacity within three years of joining the Scheme by reason of a condition which existed at the time of joining the Scheme, the benefit in respect of the Member's death or disablement shall be a lump sum calculated in accordance with the following formula:..."
The "internal review" of the Trustee's decision
16 Sections 100 and 101 of the SIS Act provide:
"100. The object of this Part is to impose special duties on the trustees and investment managers of superannuation entities.101. (1) The trustee of a regulated superannuation fund other than an excluded superannuation fund ... must take all reasonable steps to ensure that there are at all times in force arrangements under which:
(a) beneficiaries have the right to make inquiries into, or complaints about, the operation or management of the fund in relation to the beneficiary making the inquiry or complaint; and
(b) inquiries or complaints so made will be properly considered and dealt with within 90 days after they were made.
...
(2) A person who intentionally or recklessly contravenes subsection (1) is guilty of an offence punishable on conviction by a fine not exceeding 100 penalty units."
17 Section 19(1) of the Complaints Act provides:
"The Tribunal cannot deal with a complaint under section 14 or 14A unless the complainant satisfies the Tribunal that:(a) a complaint about the same subject matter was previously made to an appropriate person under arrangements for dealing with such complaints made under section 101 of the [SIS] Act"
It would appear that, pursuant to this obligation, the Trustee committed to a "Membership Committee" (which included members of the Trustee's Board of Directors) the function of reviewing claims. The Membership Committee, on 13 October 1997, decided to apply the provisions of Cl B.13 as it then stood, that is in its post 1 July 1997 terms (as set out at [15] above), however the Committee considered that the applicant had a "pre-existing condition". The minutes of a meeting of the Trustee's Board of Directors indicate that, in the absence of any member of the Committee, it "confirmed the decision of the Membership Committee that Mr Steven's claim was due to a condition which existed at the time of joining the Scheme and so should be restricted" (emphasis added). It is tolerably clear that the Board thereby accepted the advice that the clause, cl B.13, in its post 1 July 1997 form applied.
18 After this, on 3 November 1997, the appellant registered his complaint with the Tribunal.
The course of proceedings preliminary to the Tribunal's decision
19 The Tribunal's officers unsuccessfully attempted to conciliate the matter and gathered information from the parties. In the course of this, the Trustee's "Membership Manager", Ms Cox, responded on 1 December 1997 to a letter of 5 November 1997 from the Tribunal's staff which had sought, among other things, the Trust Deed and each "supplemental deed or amendment" and an indication of the "latest amendment to the Trust Deed/Rules which the Trustee considered in reaching its decision and in reviewing its decision". The Trustee's response, via Ms Cox, included the following:
"Trust Deed amendment number 15 [that is the amendment dated 1 July 1997] is the latest amendment to the [Scheme's] Trust Deed relevant to this claim ...The Trustee determined [the appellant] had failed to disclose a pre-existing condition and that his benefit should be restricted in accordance with Clause B.13. [The appellant] was advised of the decision on 5 June 1997."
20 Ms Cox also provided minutes to the effect summarised above at [17] as to the Trustee's later consideration of the matter and said "The Trustee upheld the decision of the Membership Committee to decline the claim".
21 The Tribunal's staff then, on 17 December 1997, wrote to the appellant seeking further medical information. That letter indicated what the matter at issue was:
"I refer to the complaint you have made regarding the decision of the Trustee that you are ineligible to claim a disability benefit under Clause B.13 of the Trust Deed on the basis that you became disabled by reason of a condition which existed at the time of joining the Scheme which was not disclosed to the Trustee. Your claim is on the basis of severe depression, anxiety and insomnia.It is therefore important to try and establish whether your present condition existed when you applied to join the fund in April 1996. Please obtain reports from Dr Gilkes and Dr Smith addressing this particular question."
22 On 10 May 2000 the appellant's solicitor made short written submissions clearly directed only to the question of whether the applicant's condition had been a pre-existing one.
23 Ultimately, by letters of 16 May 2000, the "Chairperson" (see s 7 of the Complaints Act) of the Tribunal wrote to the parties, advising of the intended "Review Meeting" (provided for by s 59 of the Complaints Act) and inviting written submissions.
24 In response, on 29 May 2000, Ms Cox wrote on behalf of the Trustee:
"The Trustee contends that [the appellant] made a false statement regarding his state of health (Clause 6(3)) and his benefit is therefore restricted in accordance with Clause B.13 of the Trust Deed."
25 Clause 6(3), set out at [10], it will be recalled, provides:
"Where the Trustee is of the opinion that a member has made a false, misleading or inappropriate statement as to the member's age, state of health or otherwise or has failed to disclose any relevant fact or information in relation to his or her application for membership or in any medical examination or test for the purposes of the Scheme the Trustee may reduce or adjust any benefit payable to or in respect of the member in such manner as the Trustee may determine."
26 Also, in response to the Tribunal's invitation, the appellant's solicitors made further submissions on 16 June 2000 (before they were given a copy of Ms Cox's submissions of 29 May 2000). The solicitors argued that there had been two different "conditions" suffered by the appellant. Later, when they had Ms Cox's submission, the appellant's solicitors again referred to factual matters and set out an extract from cl B.13 that made it clear that they did not understand that there was any question that the clause in its post 1 July 1997 form did not apply.
The Tribunal's Reasons for Decision
27 Introducing the case, the Tribunal said:
"The Trustee's original decision was made on 20 May 1997 and was that [the appellant] was `not eligible to claim (a disability benefit) in accordance with Clause B.13 of the Trust Deed'. In other words, the Trustee maintained that the operation of Clause B.13 of the Deed was such as to prevent a payment being made. Clause B.13 places a restriction on disability benefit in circumstances where pre-existing medical conditions are not disclosed at the time of joining the Fund."
28 After referring to its "[j]urisdiction", the Tribunal said:
"The Tribunal determined that Deeds amended to 30 November 1994 and 6 April 1998 were relevant to its consideration as they were respectively the Deed that was applicable at the time [the appellant] applied to join the Fund (10 April 1996) and the Deed that was applicable on the date when [the appellant] ceased employment (5 June 1998)."
29 A number of the Deed's provisions thought relevant were then set out. They did not include cl 6 (of the main part of the Deed - hereafter "main cl 6").
30 The Tribunal then said:
"Under the Deed amended to 16 January 1990, clause B.13 originally restricted benefits payable in circumstances where the Member died or became disabled as a result of [AIDS].However, by the Deed of Amendment dated 20 June 1994, B.13 was replaced with new wording which deleted the reference to [AIDS] and instead restricted benefits payable in circumstances where there were `pre-existing conditions';
[the text of cl B13 as at [13] above was then set out]
By a Deed of Amendment dated 30 November 1994, Clause B.13 was amended by replacing 20% with 21%."
31 Summarising the submissions, the Tribunal wrote:
"The Complaint submitted that the Trustee has improperly determined that he was suffering from a `condition which existed at the time of joining the scheme' as referred to in Clause B.13 of the Deed. The conditions are entirely separate and this is supported by medical evidence.The Trustee's Submission
The Trustee submitted that the Complainant made a false statement about his state of health (Clause 6(3)) and that his benefit is restricted in accordance with Clause B.13 of the Deed."
32 Without explanation as to why it did not have regard to the later form of Cl.B.13, the Tribunal purported to apply it in its 1994-1997 form. The Tribunal said:
"Whilst it is not altogether clear from Clause B.13 whether the condition to be disclosed is a `pre-existing condition' or `a condition existing at the time of joining the Scheme' the wording of the Health Form attached to the application suggests that the Trustee seeks disclosure of pre-existing conditions. As to whether the Complainant may have been suffering a mental or nervous disorder at the time he joined the Fund, the Tribunal notes ... a pre-existing illness from 1994 onwards `in a fluctuating way', but does not conclude that the Complainant had the condition at the time he joined the Fund....
The Tribunal was persuaded by the findings and reasonings of Dr K. The Tribunal concluded that even if subtle differences could be determined between the 1994 and the 1997 conditions, the Complainant should have dislosed the existence of the 1994 condition when applying for Membership of the Fund in 1996. It was the Tribunal's view that the 1994 condition of adjustment disorder was in the nature of a mental or nervous disorder which ought to have been disclosed.
The second limb of clause B.13
For the reasons set out above, the Tribunal is of the view that the Complainant was also in breach of the second limb of Clause B.13 in that the Complainant did not provide an accurate statement as to his health when he joined the Fund.
Accordingly, the Complainant's Complaint is dismissed. Furthermore, the Tribunal does not find that there are special or exceptional circumstances to justify payment of the benefit under clause B8." (emphasis added)
33 The Tribunal added some adverse remarks about the appellant's credibility. They were at least in part, as the primary judge described them, "harsh" and may even have been legally erroneous. However, in the view I take of the matter, it is not necessary to explore that issue further.
34 On the question of what the Trustee might have done had it known what the Tribunal regarded as the "facts", the Tribunal said:
"If these facts had been known to the Trustee at the time of the Application for Membership, it was likely that the Trustee would not have afforded full cover to the Complainant....
FURTHER OBSERVATIONS
The Trustee should reimburse the Complainant for the cost of premiums associated with the provision of full disability cover. This is because the Trustee was unlikely to have agreed to provide the cover, had full and proper disclosure of his medical condition been given by the Complainant." (emphasis added)
35 The Tribunal expressed its formal determination as follows:
"The Tribunal affirms the decision of the Trustee in this case and directs that the benefit under Clause B.13 of the Deed be paid accordingly."
The proceedings in this Court
36 The Notice of Appeal to the Court from the Tribunal's decision as amended referred to a great many supposed errors of law. Given the Tribunal's finding that the appellant had not had his disabling condition when he joined the Scheme, and that after the 1 July 1997 amendment to cl B.13 the appellant could not have been caught by that clause, it is remarkable that the amended Notice of Appeal included the following assertions:
"The applicable version of the Trust Deed of the Superannuation Scheme for Australian Universities (the Scheme) was the version current as at the date of the Applicant's claim. The Tribunal erred in determining that the applicable version of the Trust Deed governing the Scheme was the one in force at the University of Sydney. Accordingly, the Tribunal considered the wrong version of date when the Applicant ceased employment with the Trust Deed and erred in so doing."
37 It is equally surprising that the amended Notice of Appeal did not question the Tribunal's mode of interpretation of cl 13 in its pre-July 1997 form, insofar as it required the appellant to "provide an accurate statement ... as to [his] health ...".
38 The only other question of law raised that may have any present significance was:
"The Tribunal erred in law in its determination that the Respondent's conduct was fair and reasonable as follows:...
2.10.4 The Tribunal failed to apply the principal [sic] that the onus of proving non-disclosure lies with the Trustee: see Commercial Union v Beard & Ors [1999] NSWCA 422 (25 November 1999)."
The decision of the primary judge
39 Her Honour was moved at the outset to say, with some restraint:
"The amended notice of appeal is less helpful than is desirable in identifying the questions of law upon which the Applicant appealed to this Court. The written submissions of the Applicant contain the following paragraph ..."
That paragraph was a series of summary propositions.
40 Ultimately her Honour had to attempt to "conclude" which questions of law the appellant was relying on. It should be noted that none of this lack of proper assistance to the Court appears to have been attributable to any personal fault of the appellant.
41 So far as is otherwise presently relevant, her Honour noted that:
* the Tribunal "found, and it is accepted by the parties" that Division B (including of course cl B.13) in its pre 1 July 1997 form applied.
* Only limited submissions were addressed to the Court on the proper construction of cl B.13 of the Deed. It was submitted on behalf of the appellant that, as he was not aware at the time that he applied to join the Scheme that he had earlier been diagnosed as having a nervous or mental disorder, it was unfair and unreasonable of the Trustee to invoke cl B.13 of the Deed. However, it was not argued that an "accurate statement" within the meaning of cl B.13 of the Deed was a statement which accurately reflected the member's knowledge concerning his or her health at the relevant time. At a later point her Honour said:
"The Applicant did not contend that `an accurate statement' within the meaning of cl B.13 of the Deed is a statement which accurately reflects the Applicant's state of knowledge at the time that the statement is provided. That the Applicant did not so contend is confirmed by a consideration of his Amended Notice of Appeal and his written and oral submissions. The Amended Notice of Appeal identifies an aspect of the proper construction of cl B.13 as a question of law raised on the appeal but not this aspect. No submissions were advanced by the Applicant as to the true meaning of the expression "an accurate statement" appearing in cl B.13 and, presumably for this reason, no answering submissions were made by the Trustee. Further, the attempts of the Applicant's counsel to place reliance on s 21 and s 26 of the Insurance Contracts Act 1984 (Cth) ("the Contracts Act") suggest that the Applicant's concerns with respect to the Tribunal's failure to advert to the submission identified in [46] above arose independently of the proper construction of cl B.13.An application made on behalf of the Applicant to further amend his Amended Notice of Appeal during the course of the hearing to place reliance on s 21 of the Contracts Act was refused as the Court accepted that the Trustee would be prejudiced by the amendment."
* On the issue of the proper construction of cl B.13, the submission advanced on behalf of the appellant was that the Trustee had misinterpreted the Deed by equating a "pre-existing condition" with a condition that existed at the time of his application to join the Scheme. The appellant contended that, whatever the nature of his 1994 illness, that condition no longer existed at the time of his application to join the Scheme. Her Honour said:
"Counsel for the Trustee, as I understood his submissions, accepted that there was no relevant condition `which existed at the time of joining the Scheme which was not disclosed to the Trustee at that time' within the meaning of cl B.13 of the Deed. It is therefore unnecessary for me to consider this issue further."
* Counsel for the Trustee contended that the decision of the Tribunal was supported by its finding that the appellant "did not provide an accurate statement in a form approved by the Trustee as to [his] health ... at the time [he] joined the Scheme" within the meaning of cl B.13 of the Deed. Counsel for the appellant, on the other hand, contended that cl B.13 did not, on a proper reading, provide two separate bases upon which the benefit payable under the Deed would be the lump sum calculated in accordance with the formula set out in cl B.13. Counsel argued that cl B.13 was throughout concerned with conditions which existed at the time that the member joined the Scheme.
Her Honour held:
"The `statement in a form approved by the Trustee as to the member's health' within the meaning of cl B.13 is, in my view, the "Personal Health Statement" which the Applicant was required to complete when he applied to join [the Scheme]. Question 3 of the Personal Health Statement asked `[h]ave you ever had any of the following?' A number of conditions is then listed, including `mental or nervous disorder'. It is plain that this question is not designed solely to elicit information as to the Applicant's present state of health but is rather intended to establish whether the Applicant for membership of [the Scheme] has ever suffered from any of the nominated conditions.In my view the Tribunal rightly concluded that cl B.13 has two limbs. That is, that the lump sum benefit provided for by cl B.13 is payable where the Trustee is, relevantly, of the opinion:
(a) that the member became disabled within three years of joining the Scheme by reason of a condition which existed at the time of joining the Scheme which was not disclosed to the Trustee at that time; or
(b) that the member did not provide an accurate statement in a form approved by the Trustee as to the member's health.
The submission that the Tribunal misconstrued cl B.13 by finding that the clause was concerned with disclosures concerning pre-existing conditions, as opposed to conditions existing at the time of joining [the Scheme], is rejected.
...
Although the Tribunal may be thought to have been somewhat harsh on the Applicant in assessing his credibility, it appears to have made its assessment of his credibility after concluding that his complaint should be dismissed. As the written submissions of the Applicant appear to recognise, the findings of the Tribunal as to the Applicant's credit were not relevant to the decision that it was required to make. In the circumstance, no legal relevance attaches to the Tribunal's assessment of the Applicant's credibility."
42 Her Honour found no substance in any of the other matters raised and discussed in the appellant's amended Notice of Appeal.
The course of proceedings before the Full Court
43 The Notice of Appeal from the primary judge's judgment began with the following assertions:
"The Court erred in construing clause B.13 of the Trust Deed as providing for the payment of a lump sum benefit. The Court should have held that clause B.13 merely restricted the amount of the disablement benefit otherwise payable under clause B.3 of the Trust Deed.The Court erred in applying the form of clause B.13 as at the date the appellant joined the Scheme (10 April 1996) and as at the date he made a claim for a benefit under the Scheme (10 April 1997). The Court should have applied the form of clause B.13 as at the date the appellant ceased to be in service within the meaning of clause B.3 of the Trust Deed, being 5 June 1998. On that date, the form of clause B.13 restricted payment of a disablement benefit only where the member became disabled by reason of a condition which existed at the time of joining the Scheme. The respondent conceded that the appellant had no relevant illness or disorder at the time of joining the scheme which was not disclosed [to] the respondent at that time."
44 As to the construction of the pre-July 1997 form of clause B.13, the Notice of Appeal proffered:
"The Court erred in construing the form of clause B.13 as at 10 April 1997 as having two limbs, the second of which governed the disablement benefit payable to a member where the respondent was of [the] opinion that the member did not provide an accurate statement in a form approved by the respondent as to the member's health. The Court should have [construed] the form of clause B.13 as at 10 April 1997 as being applicable only where a member suffered disablement or temporary incapacity within three years of joining the Scheme without providing an accurate statement as to his health at the time he joined the Scheme....
The Court erred in concluding that the appellant's statement as to his health was not `accurate' within the meaning of the form of clause B.13 as at 10 April 1997. The Court should have found or held that the appellant's statement as to his health was `accurate' within the meaning of the form of clause B.13 as at 10 April 1997, in that, as the respondent conceded, the appellant had no relevant illness or disorder at the time of joining the scheme which was not disclosed [to] the respondent at that time."
45 It was only in the course of oral argument that a supposed necessity to read down the "accurate statement" part of the clause was ultimately sought to be raised.
The nature of the appeal to the Federal Court from the Tribunal
46 Section 46 of the Complaints Act provides:
"(1) A party may appeal to the Federal Court, on a question of law, from the determination of the Tribunal.(2) An appeal by a person under subsection (1) is to be instituted:
(a) ...
(b) in accordance with rules of court made under the Federal Court of Australia Act 1976.
(3) The Federal Court is to hear and determine the appeal and may make such order as it thinks appropriate."
47 Order 53B of the Federal Court Rules applies the provisions of Order 53, designed for the Administrative Appeals Tribunal, to appeals from the Tribunal. Order 53(2) and Form 55A require that each question of law raised on the appeal should be specified in the notice of appeal. However, Order 13 provides a very broad power to the Court to permit amendments of pleadings and, as here, what might be thought of as quasi-pleadings. Order 13 rule 2 provides:
"(1) Subject to the following provisions of this rule, the Court may, at any stage of any proceeding, on application by any party or of its own motion, order that any document in the proceeding be amended, or that any party have leave to amend any document in the proceeding, in either case in such manner as the Court thinks fit.(2) All necessary amendments shall be made for the purpose of determining the real questions raised by or otherwise depending on the proceeding, or of correcting any defect or error in any proceeding, or of avoiding multiplicity of proceedings.
...
(7) An amendment may be made even if the effect of the amendment is to add a new claim for relief or foundation in law for a claim for relief (whether by way of substitution for an existing claim for relief or foundation in law or not) if the new claim for relief or foundation in law:
(a) arises out of the same facts or substantially the same facts as those already pleaded to support an existing claim for relief by the party applying for leave to make the amendment; or
(b) subject to subrule (9), arises, in whole or in part, out of facts or matters that have occurred or arisen since the commencement of the proceeding.
(8) Subject to subrule (9), an amendment of a pleading may be made even if the amendment pleads a fact or matter that has occurred or arisen since the commencement of the proceeding.
(9) Paragraph (7) (b) and subrule (8) do not permit an amendment that would have an effect inconsistent with any statute that limits the time within which an action or a proceeding of a particular kind may be brought or instituted." (emphasis added)
Conclusions
(1) The nature of the appeal to the Full Court
48 To understand the proper scope of our role it is necessary first to understand the proper scope of the role of the primary judge in an "appeal" from an administrative tribunal on questions of law.
49 Such an "appeal" involves the exercise of the court's original jurisdiction. Section 19 of the Federal Court of Australia Act 1976 ("the FC Act") provides:
"(1) The Court has such original jurisdiction as is vested in it by laws made by the Parliament.(2) The original jurisdiction of the Court includes any jurisdiction vested in it to hear and determine appeals from decisions of persons, authorities or tribunals other than courts."
50 As to that jurisdiction, s 22 of the FC Act provides:
"The Court shall, in every matter before the Court, grant, either absolutely or on such terms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by him or her in the matter, so that, as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters avoided."
51 Thus Order 13, referred to above, merely reflects the legislative policy expressed in s 22 that the Court should justly grant all remedies to which any party is entitled, provided that the claim is properly brought forward, so as to determine completely and finally all matters in controversy between the parties. Where the "appeal" to the Court is limited to questions of law, I take the effect of s 22 to be that the Court should determine all legal questions in controversy between the parties. It is an everyday occurrence that such legal questions become better understood and more accurately stated in the course of litigation.
52 Section 22 not only grants the Court wide powers, it mandates values to be observed in their exercise. In general, however inconvenient to the Court it may be, mere considerations of case management cannot stand in the way of the Court's primary function of doing justice between the parties: Queensland v JL Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146.
53 Section 24 of the FC Act gives the Court jurisdiction to hear and determine appeals from judgments of the Court constituted by a single judge.
54 Section 27, enabling the Court on an appeal to draw its own inferences of fact and, in its discretion, to receive further evidence, is of relevance here, even though the initiating "appeal" to the Court itself from the Tribunal was only "on ... questions of law". Often enough, some evidence will be necessary before the primary judge can determine the merits of such a question. A common example is a question of whether a tribunal breached an obligation to give a party a right to a fair hearing. As the Full Court put it in Cubillo v Commonwealth [2001] FCA 1213 at [255], referring to the effect of CDJ v VAJ (No 1) [1998] HCA 76; (1998) 197 CLR 172 and Allesch v Maunz [2000] HCA 40; (2000) 173 ALR 648, "it has been authoritatively determined that an appeal to this court is by way of rehearing". That observation necessarily applies also to appeals from single-judge decisions. (It may be noted that White v Minister for Immigration and Multicultural Affairs [2000] FCA 232; (2000) 96 FCR 511, in which a contrary view was expressed, was decided before Allesch v Maunz and did not refer to the observations in CDJ at 2000-1; it must be regarded as superceded by Allesch).
55 The philosophy of doing substantial justice between the parties that, pursuant to s 22 of the FC Act, is to guide the Court in its original jurisdiction is also appropriate in the exercise of the appellate jurisdiction. This is apparent from s 28 (and perhaps especially from s 28(4)) which, again, both broadly empowers the Court and commands the Court to observe certain values in exercising those powers. Section 28 provides:
"(1) Subject to any other Act, the Court may, in the exercise of its appellate jurisdiction:(a) affirm, reverse or vary the judgment appealed from;
(b) give such judgment, or make such order, as, in all the circumstances, it thinks fit, or refuse to make an order;
...
(3) The powers specified in subsection (1) may be exercised by the Court notwithstanding that the notice of appeal asks that part only of the decision may be reversed or varied, and may be exercised in favour of all or any of the respondents or parties, including respondents or parties who have not appealed from or complained of the decision.
(4) An interlocutory judgment or order from which there has been no appeal does not operate to prevent the Court, upon hearing an appeal, from giving such decision upon the appeal as is just."
56 As the learned authors of Butterworths' "Practice and Procedure High Court and Federal Court of Australia" put it in their commentary on s 28 at [33,025.5]:
"This section of the Act is a `modal' section, that is, it sets out the methods in which the court may treat an appeal and the courses open to the court on appeal. Contrast this with s 24 which is a substantive section conferring jurisdiction upon the court to hear appeals: Kovac v R (1977) 15 ALR 637 at 642. As to when the court will intervene to vary a judgment or verdict, see Anderson v R (1977) 19 ALR 212; Whim Creek Consolidated (NL) v FCT (1977) 17 ALR 421 at 426; [1977] FCA 19; 31 FLR 146 at 151; 8 ATR 154 at 158 and notes to s 24, above. Section 28 confirms that the court has sufficient power in exercising its appellate jurisdiction to ensure that a decision given on appeal is just and not constrained by the technical form of the appeal. However, permission to argue a point on appeal, including a point of law, not taken at trial remains in the discretion of the court and the exercise of that discretion will depend upon it being clear that facts relevant to the application of any question of law have been determined and that it is expedient and in the interests of justice that the point is decided. Indeed, it may be necessary to show a risk of injustice if leave to argue the point is denied. Certainly, though, leave will not be granted where it involves the presentation of a different case to the one presented at trial where the opposing party might have had an opportunity to augment its case to deal with the point: WT Partnership (Aust) Pty Ltd v Sheldrick (1999) 96 IR 202; BC9903471; [1999] FCA 843."
57 Thus, unless there is irremediable procedural injustice to a party, the Full Court should strive to determine all questions of law properly arising in an appeal to it from the judgment of a single judge in a proceeding confined in its nature to legal questions.
58 What is considered an irremediable procedural injustice will vary. The most obvious case is where there is an irremediable loss of the opportunity to investigate or to bring evidentiary material to counter a question not raised at first instance. Increased or unnecessary costs can usually be remedied. However, in some cases, even the lavish application of indemnity costs will be no adequate balm: people involved in litigation often have great non-monetary investments in it of their time, anxieties, hopes and expectations. Corporations do not have feelings but may have invested much paid time of their servants and agents in the litigation which is difficult to quantify and to bring within a costs order
59 Further, where parties are clearly well-advised and merely tactical choices have been made as to which legal questions are to be agitated or as to how they are to be presented, the legitimate interests of all parties and the overriding public interest in the regular, efficient and orderly conduct of litigation, and in its finality, will often raise an issue of injustice militating against new points being taken on appeal.
60 The reluctance of the courts, for good reasons, to permit
"the main area for the settlement of disputes [to] move from the court at first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish" (per Gibbs CJ, Wilson, Brennan and Dawson JJ in Coulton v Halcombe [1986] HCA 33; (1986) 162 CLR 1 at 7)
has often been stated and recently by a Full Court of this Court in Branir Pty Ltd v Owston Nominees (No. 2) Pty Ltd [2001] FCA 1833 at [34] - [39]. Even in a criminal case, exceptional circumstances must be shown: Crampton v R [2000] HCA 60; (2000) 176 ALR 369 at [7] - [8]. Relevant matters to the maintenance of a firm line were referred to by Gleeson CJ in Crampton at [14] - [19]. They may be summarised as:
* the "overarching societal interest in the finality of litigation in criminal [and I would add, civil] litigation";
* the common position that fresh counsel are retained for an appeal increases a tendency to look for a new approach and thereby to seek to treat the primary hearing as a preliminary skirmish;
* the risks inherent in an appellate court in hindsight assessing the facts as to the wisdom of a course taken by counsel;
* the necessity, for an adversarial system, of generally regarding the parties as bound by the conduct of their counsel; and
* preservation of judicial neutrality by leaving it to the parties to define the issues and to select the evidence and arguments which they will rely.
A degree of care may be necessary in applying such well-settled principles to an appeal to the Full Court of this Court. In Allesch v Maunz, dealing with the indistinguishable statutory regime governing appeals to the Full Court of the Family Court of Australia, Gaudron, McHugh, Gummow and Hayne JJ said at 653-4:
"For present purposes, the critical difference between an appeal by way of rehearing and a hearing de novo is that, in the former case, the powers of the appellate court are exercisable only where the appellant can demonstrate that, having regard to all the evidence now before the appellate court, the order that is the subject of the appeal is the result of some legal, factual or discretionary error, whereas, in the latter case, those powers may be exercised regardless of error. At least that is so unless, in the case of an appeal by way of rehearing, there is some statutory provision which indicates that the powers may be exercised whether or not there was error at first instance. And the critical distinction, for present purposes, between an appeal by way of rehearing and an appeal in the strict sense is that, unless the matter is remitted for rehearing, a court hearing an appeal in the strict sense can only give the decision which should have been given at first instance whereas, on an appeal by way of rehearing, an appellate court can substitute its own decision based on the facts and the law as they then stand." (emphasis added)
And in CDJ McHugh, Gummow and Callinan JJ said (at 199-202):
"The question of the circumstances in which the Full Court of the Family Court should exercise its discretion to receive further evidence, in exercise of the power conferred by s 93A(2), is therefore to be determined as a matter of statutory construction. That matter should not be approached as if the common law procedures which gave rise to the principles laid down in such authorities as Wollongong Corporation conclusively indicate the proper construction of the statutory provision.The common law procedures were interlocutory in nature in the sense that they were directed to the issue whether there should be an order for a new trial. They involved the exercise of original jurisdiction. In contrast, the statutory appeal is directed to whether the orders made below should be set aside and, if so, what orders should be made in their place to determine the outcome of the litigation. An order for a retrial is one, but not the only, order that the appellate court may make. Moreover, such an order is an order of last resort. In that context, the admission of further evidence has to be seen from a different perspective from that which would be appropriate if the statute did no more than repeat the common law procedures. For example, in a statutory appeal it may be the respondent who seeks to introduce further evidence to buttress the favourable findings already made and to resist the substitution by the appellate court of its orders for those of the trial court.
The scope of s 93A(2)
In the exercise of the discretion conferred by a power such as s 93A(2), the critical factor is the subject matter of the proceedings with which the appeal is concerned. This is because the purpose of the power to admit further evidence is to ensure that the proceedings do not miscarry. Tests such as those stated in Wollongong Corporation based on the need for finality in litigation are therefore not necessarily applicable to cases in which the interests of third parties, such as children, are at stake, although factors such as finality, discoverability of the evidence and its likely effect on the orders made are usually relevant to the exercise of the discretion. In an application at common law to admit further evidence, the court applies principles, bordering on fixed rules. In an application under s 93A(2) and similar provisions, the Full Court or Court of Appeal weighs factors, although it may of course develop guidelines for weighing those factors and exercising the discretion.Moreover, even at common law, the grounds for admitting further evidence of matters occurring before judgment were not inflexible. The common law courts have always reserved to themselves an exceptional power to set aside a verdict on the ground of further evidence where the interests of justice require it. In McCann, Dixon CJ, Fullagar, Kitto and Taylor JJ said:
`The grounds upon which the court proceeds in granting the remedy ... have never become completely stereotyped; they have always possessed some flexibility and have been governed by the overriding purpose of reconciling the demands of justice with the policy in the public interest of bringing suits to a final end.'
...Still another consideration is that the discretion is given to an appellate court hearing an appeal against an order made in the exercise of original jurisdiction. No doubt it is true that, because the appeal is by way of rehearing, the Full Court's jurisdiction is neither purely appellate nor purely original. In Attorney-General v Sillem, Lord Westbury LC pointed out that `[a]n appeal is the right of entering a superior Court, and invoking its aid and interposition to redress the error of the Court below.' Appellate jurisdiction in the strict sense is jurisdiction to determine whether the order of the court below was correct on the evidence and in accordance with the law then applicable. In contrast, the Full Court of the Family Court must decide the rights of the parties upon the facts and in accordance with the law as it exists at the time of hearing the appeal. Speaking of the similar jurisdiction of the English Court of Appeal, the Master of the Rolls, Sir George Jessel, said that the appeal is a `trial over again, on the evidence used in the Court below; but there is a special power to receive further evidence.' Nevertheless, it is highly unlikely that Parliament in conferring jurisdiction on the Full Court to hear appeals intended that s 93A(2) should be construed in a way that would have the practical effect of obliterating the distinction between original and appellate jurisdiction. Nor can the availability of further evidence relevant to the issues in the appeal be treated as equivalent to a ground of appeal, proof of which prima facie entitles the appellant to a new trial. The power to admit the further evidence exists to serve the demands of justice. Ordinarily, where it is alleged that the admission of new evidence requires a new trial, justice will not be served unless the Full Court is satisfied that the further evidence would have produced a different result if it had been available at the trial. Without that condition being satisfied, it could seldom, if ever, be in the interests of justice to deprive the respondent of the benefit of the orders made by the trial judge and put that person to the expense, inconvenience and worry of a new trial." (emphasis added)
61 The fact that, in that case, their Honours were concerned with the question of admitting further evidence does not diminish the force of their observations on the breadth of the power of the Family Court and this Court on appeals from primary judges. It is, in my view, neither possible nor desirable to entirely immunise an appeal to the Full Court raising non-discretionary questions of law against the somewhat broader approach appropriate in an appeal by way of rehearing where error in the order appealed from is the relevant question. Other considerations as well as the necessity not to obliterate the distinction between original and appellate jurisdiction are relevant to a determination of what will "serve the interests of justice". That legal questions should be correctly decided is an important value in its own
right. As the Privy Council observed (per Lord Watson) in Connecticut Fire Insurance Company v Kavanagh [1987] UKPC 2; (1892) AC 473 at 480:
"When a question of law is raised for the first time in a court of last resort, upon the construction of a document, or upon facts either admitted or proved beyond controversy, it is not only competent but expedient, in the interests of justice, to entertain the plea."
62 In Branir (supra) the necessity to confine this principle to cases where there is no chance of prejudice to the other party was, with respect, powerfully restated.
63 The nature of the case will be relevant to such considerations. The actual practice of the courts has often been tender, for example, where issues of status are involved - criminal, bankruptcy and Australian residency rights are cases that come to mind: see BC v Minister for Immigration & Multicultural Affairs [2002] FCAFC 221 at [30]- [38].
64 In the present case, the following matters are relevant:
* the issues are likely to have an importance beyond the present parties: it seems probable that there will be other, though few (see [69]), cases more or less similar to that of the appellant: in Crampton Kirby J referred (at [60]) to the desirability of preventing the repetition of legal error.
* the case touches the appellant's livelihood;
* the respondent was under a statutory obligation (criminally enforceable if intentionally or recklessly disregarded) to produce all documents or parts of documents considered by it to be relevant to the appellant's complaint to the Tribunal: see s 24 of the Complaints Act. Upon the analogy with discovery, indeed a fortiori, the respondent cannot be permitted to rely on other documents. It is, in the nature of the matter, highly unlikely that there is any non-documentary evidence that the respondent could or would wish to produce. No actual suggestion of the possibility of any such material was made. In any case, lest the highly unlikely should nevertheless be the actuality, I would reserve liberty to apply on this aspect.
* There would appear to be the possibility of further litigation should we not permit reliance to be placed on the matters sought to be argued. There is, for example, an arguable case that the Tribunal denied the appellant procedural fairness and failed to comply with its statutory duty to give reasons as to the way that it dealt with cl B.13. Despite the respondent's admission to the Tribunal (against litigious interest) that the post 1 July 1997 form of the clause was relevant and operative, I assume, as the primary judge held, that it was theoretically open to the Tribunal to go behind this. However, that would be so only if the appellant had been apprised of the Tribunal's possible intention to do so and given an opportunity to argue to the contrary. Such argument to the contrary might certainly have been put, despite the way that the appellant's subsequently retained counsel evidently viewed the matter when it came to appealing to the Court from the Tribunal's decision. The appellant and his solicitors were not put on notice that anyone regarded this matter as being in issue. A legitimate expectation that only the later form of the clause would be considered, absent notice to the contrary, had surely been engendered. The situation has similarities to the position of an appellant to a District or County Court, in the familiar "all grounds" appeal against a decision of a magistrate in a criminal case. The District Court can increase a sentence when the appeal has concerned guilt or supposedly excessive severity by the magistrate. However, as a matter of longstanding practice the Court does not do so, without putting the appellant on notice of his or her risk: Reischauer v Knoblanche (1987) 10 NSWLR 40 at 47. If the rules of natural justice were breached, proceedings in the nature of a constitutional writ or otherwise under s 39B of the Judiciary Act 1903 (Cth) might be brought.
* Likewise, the matter was so central to the Tribunal's decision that written reasons were arguably required as to why it chose to override the Trustee's own approach to the matter. Section 39B, subject to discretionary matters and questions of Anshun estoppel, might be available to test the failure to give such reasons.
* Costs can amply be provided for. The respondent is not a natural person: no question of non-monetary prejudice arises. It appears unlikely that, apart from legal costs, the Trustee will have incurred any other significant expense in relation to this matter. Any necessary involvement of any of the Trustee's officers or employees in instructing in relation to the proceedings in the Court can be provided for in a costs order.
* The case was manifestly misconceived by the appellant's advocate in the proceedings in this Court before the primary judge.
* The course of proceedings at first instance was (through no fault of the primary judge) apt to divert and prevent her Honour from dealing with the real legal issues thrown up by the case.
* The appellant is not personally responsible for any of the litigious defaults of his erstwhile counsel.
Collectively, despite the course of the proceedings, these factors make this an exceptional case or at least one such that the public interest in regular and orderly proceedings and in the dispensation of justice actually requires, in my opinion, that the Court take the very unusual course of permitting the raising of the points now sought to be relied upon by the appellant.
The operative form of cl B.13
65 If there were no more, the Deed as it existed at the time of the appellant's claim on the Trustee in April 1997 and as at the Trustee's initial determination of it in May or June 1997 would, as the Tribunal considered, have been the operative text. But there was more.
66 There were three additional factors. The first was that, once the appellant chose to seek "internal review" of the Trustee's initial decision (both a right assured to him by s 101 of the SIS Act and a limitation imposed by s 19 of the Complaints Act upon his right to challenge the Tribunal's decision before the Tribunal) that decision of the Trustee changed from one of a final character to one of a provisional or contingent character: the October 1997 "review" decision by the Trustee could have swept away its earlier decision.
67 The second additional factor was that the Deed itself altered that prima facie position. Clause 55 (in the main part of the Deed) provided, so far as is material:
"(1) The Trustee may with the consent of the Consultative Committee at any time and from time to time by deed alter, add to or repeal all or any of the provisions contained in the Deed, including the provisions of this clause other than the provisions of sub-clause (5) hereof....
(3) Any alteration, addition or repeal:
(a) so made shall come into force on the execution of such deed and shall take effect as from that date or as from such other earlier or later date as may be specified for that purpose in such deed;
(b) so made and for the time being in force shall be of the same validity as if it had been originally contained in the Deed and may in like manner be altered, added to or repealed.
(4) The trustees shall notify each member of such alteration, addition or repeal and all members shall be bound thereby. No accidental failure or omission to give any such notification shall prejudice or invalidate the relevant alteration, addition or repeal.
(5) No alteration, addition or repeal as aforesaid shall:
(a) prejudice or affect any pension or other benefit payable under the Scheme or the rights of any member who is then excused from or not liable for contribution;
(b) have the effect of altering the purpose of the Scheme which shall continue to be in the provision of benefits for members and their dependants;
(c) result in the return to any of the employers of any part of the Fund but subject to the provisions of clause 56."
68 Subclause 5(a) is clearly enough beneficially intended in relation to individual members: it was obviously not intended to have an operation such that benefits payable under the Scheme could not be improved. Thus understood, subcl 5(a) is not in issue here, because the 1 July 1997 changes improved the benefits by narrowing the classes of pension claimants relegated to receiving the small cl B.13 lump sum.
69 It follows that the final decision was not made in respect of the appellant's claim until after the execution of the amending deed in July 1997 and that the new cl B.13 took effect before the appellant's claim was determined. The Deed does not expressly provide for such a case. As the amendment deed effected a beneficially intended change, it should be liberally construed as to its intended application in such a situation: there are unlikely to have been many members in such a position, and the relative cost to the Scheme, having regard to the fund's likely size and the likely large number of Scheme members, of such a beneficial application would not be great.
70 The third factor is that such is the way the Trustee itself, by its directors, saw the matter. It is only the Trustee which can (albeit with the consent of a consultative committee) alter the Deed. What should be regarded as the intended application of an alteration of the Deed, when the Deed and the alteration are silent or ambiguous, can best be deduced by knowing what the Trustee itself regarded as its intended application. Although in many cases it only tends to encourage what might be called self-serving opinionation by a party to an instrument to have regard to that party's view of a contract's meaning after it has been entered into, here there is neither injustice nor, as a matter of judicial policy, inutility in doing so. See Spunwill Pty Ltd v BAB Pty Ltd (1994) 36 NSWLR 290; Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 at 316 and White Property Developments Ltd v Richmond Growth Pty Ltd & Ors [1998] FCA 26 (unaffected by the appeal therefrom, see: White Property Developments Ltd v Richmond Growth Pty Ltd & Ors [1998] FCA 1422). The Trustee's own view is a powerful reason to look beyond the prime facie position.
71 Thus, the post July 1997 version of cl B.13 was applicable and, as the Tribunal found as a matter of fact and as was agreed on all hands, the appellant was not caught by it.
The meaning of cl B.13 before its July 1997 amendment
If that view be mistaken, it is necessary to consider Clause B.13 before its 1997 amendment.
72 The Deed was, of course, to be read as a whole and Division B's regime of entitlements was to be read subject to the main part of the Deed: see [8] above. In Division B of the Deed, cl B.3 provides: "Subject to the Deed other than the provisions of Division A... the Trustee shall pay" (emphasis added), among other things, the disablement benefit calculated according to cl B.5. This means that the right to the disablement benefit was subject to cl 6, including cl 6(3) in the main part of the Deed: set out at [10] above.
73 Thus understood, the Deed dealt with the whole question of pre-existing health problems in accordance with an evident conceptual framework which, it may be thought, all "stakeholders", as current jargon calls them, in the provision and receipt of superannuation for University administrative staff, would be likely to find tolerable. That evident framework was this:
(1) Where, at the point of joining the Scheme, information was or came to be at hand that materially increased the risk of an employee becoming disabled or dying, the Trustee might impose special conditions as to benefits, contributions or otherwise. For example, in an extreme case, benefits might be made not payable for condition X. Less draconically, benefits might be reduced, or contributions increased, by some fixed percentage, or a requirement for continuing medical examinations imposed. All of this is seen to by cl 6(2).
(2) At the point of a claim being made, upon death or disability, and regardless of whether the death or disability occurred more than 3 years after the member had joined the Scheme, the benefit might be reduced or "adjusted" (unfavourably to the claimant, no doubt) by the Trustee in the case of a relevantly false, misleading or inappropriate statement in relation to the application for membership, or in a Scheme-related medical examination, or a failure at any such time to "disclose" relevant information: see cl 6(3). There was and is no necessary requirement that the benefit should be "adjusted" to zero; some lesser degree of downward adjustment might be chosen.
(3) Clause B.13 dealt further with the special case of death or disability within three years of joining the Scheme. If it applied, there was to be a draconic and non-discretionary reduction in benefit apt to have dramatic consequences, as the information in this case indicates (see [4]). In the case of a young employee deceased or gravely disabled, any dependants or the employee, respectively, might be left with what it would be fair to call only a pittance, instead of what was plainly conceived to be, in the usual case, affordably decent, if in many cases frugal, support. Unlike main cl 6(3), cl B.13 provided no intermediate position. It is very likely that such a harsh result was intended reserved only for deliberate wrongdoing of the most pertinent kind by a member.
The logic and the structure of cl B.13 itself strongly suggested that that was so. Clause B.13 appears to address two hypotheses material to the Fund's risk:
* The first is that the cause of death or disability was a condition which existed at the time of joining the Scheme but was not then "disclosed" to the Trustee. But one cannot be taken to lose an entitlement for not disclosing what one does not know: see Fry v Commission for Superannuation [1984] FCA 211; (1984) 2 FCR 472. Thus, in order that the first hypothesis disentitle a claimant the member concerned must have failed to tell the Trustee of the disabling (or fatal) medical condition although the member knew that he or she had that condition.
* The second hypothesis apparently addressed by cl B.13 was failure by the member, at the point of joining the Scheme, to provide an accurate statement as to the member's health and such other matters as the Trustee required.
74 The nature of default by a member necessary to satisfy the first cl B.13 hypothesis, so as to justify the extreme reduction in benefits is, as I have sought to explain, understandably narrow and clear, and relates to a centrally material matter. It seems, then, inconceivable that the terminology expressing the second hypothesis should have been intended to justify such a reduction for any lesser default in any markedly less material respect.
75 Thus, that express terminology needs to be understood in the light of a number of implicit qualifications. One is that the subject matter of the offending statement should bear closely upon the likelihood of the existence of the fatal or disabling condition. Another is that the inaccuracy should be of high relevance to such likelihood. A third is that the member concerned must have known that the subject matter was inaccurate. A fourth is that either the member should have known, or any reasonable person in the member's subjective circumstances would have known, that such subject matter would likely be of real relevance to the possible existence or occurrence in the reasonably near future of a disabling or fatal condition. In the light of main cl 6(3), anything less would be both unnecessary and of such a harshness that it cannot reasonably be imputed to the framers of the Deed.
76 In other words, once it is appreciated that the Deed must be read as a whole in its context, and the power and reach of main cl 6 are understood, it is clear that the part of the clause concerned with the member providing an accurate statement as to his or her health must be given a very limited meaning.
77 On that limited meaning, the Tribunal might well have decided that the appellant had not knowingly provided an inaccurate statement and/or that any knowingly inaccurate statement was not such as would properly move the Trustee of this Scheme to exclude the appellant entirely from benefits under the Scheme. The Tribunal made an off-hand reference to this matter, as a kind of post-script to its decision suggesting a contrary view, but this was made without the benefit of having afforded the appellant's solicitors a reasonable opportunity to be heard on that matter and without an exposition of the material it relied upon or its processes of reasoning in relation to its conclusion. Had the matter proceeded as it should have, a quite different conclusion may have been reached. Again, main cl 6 and its context are relevant. The Scheme is not a profit-making venture like an insurance company, but a cooperative arrangement between public educational institutions and their employees aimed at the future welfare of the latter and their dependants for the present benefit of, among others, the former. The "Consultative Committee" is of that bipartite nature. To say the least of it, it is by no means self-evident that, had the Trustee known, at the point of the appellant's application to join the Scheme, of his previous troubles, it would, without more, have abandoned him entirely. Clause 6(2) would have allowed further medical enquiry and, as thought fit, an adjustment of benefits or contributions. Such matters should have been the subject of proper inquiry by the Tribunal and an opportunity should have been given to the appellant to be heard in relation to them.
Consideration of main cl 6(3)
78 By contrast to cl B.13, cl 6(3) is not limited to cases of knowingly "false, misleading or inappropriate" statements (although failure "to disclose any ... relevant [health] fact" is limited to non-disclosure of known facts and, possibly to such facts as a reasonable person in the applicant's position would think relevant, see Fry (supra) and Liversidge v Anderson [1941] UKHL 1; [1942] AC 206. It is the very flexibility of cl 6(2) and (3) that enables this view, along with the reference to "inappropriate" statements. It is not usual to understand an inappropriate statement to be limited to one that was knowingly inappropriately made.
79 The Tribunal might well take the view that the appellant made an intentionally or unintentionally misleading or inappropriate statement. It would, for example, be an outcome well open to the Tribunal on its reconsideration of this matter, from the Trustee's standpoint and bearing in mind the employment context, to make some considerable but reasonable diminution of the benefit payable to the appellant, rather than a reduction of it to nothing or next to nothing. Again, of course, any such course by the Tribunal must be preceded by giving the appellant an opportunity to be heard upon it.
80 On this basis, I would propose that,
(a) subject to (c) below, the appeal should be allowed and the matter remitted to the Tribunal differently constituted for reconsideration according to law;
(b) the parties should bring in, by fax within 7 days, short minutes and submissions as to costs; and
(c) liberty to the respondent to apply generally within 7 days, having regard to the matter referred to in [64] above, should however be granted.
I certify that the preceding eighty (80) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick. |
Associate:
Dated: 28 August 2002
IN THE FEDERAL COURT OF AUSTRALIA |
|
NEW SOUTH WALES DISTRICT REGISTRY |
|
BETWEEN: |
WARREN ARTHUR HOWITT-STEVEN APPELLANT |
AND: |
UNISUPER LTD RESPONDENT |
JUDGES: |
MADGWICK, DOWSETT & STONE JJ |
DATE: |
28 AUGUST 2002 |
PLACE: |
SYDNEY |
DOWSETT & STONE JJ:
INTRODUCTION
81 This is an appeal from a decision of Branson J, dismissing an appeal brought pursuant to s 46 of the Superannuation (Resolution of Complaints) Act 1993 (Cth) (the "ROS Act"), from a decision of the Superannuation Complaints Tribunal (the "tribunal").
RELEVANT EVENTS
82 The respondent, Unisuper Ltd (the "trustee") is the trustee of a superannuation scheme pursuant to a trust deed, originally dated 1 December 1994, to which there have been numerous amendments. The scheme is primarily designed to serve the superannuation needs of Australian universities and their employees. On 10 April 1996 the appellant, who was at that time employed by the University of Sydney, joined the scheme. On 10 April 1997 he signed and subsequently submitted a "disablement claim notification form" in which he asserted that he had ceased work on 11 February 1997, suffering from a disability caused by severe depression, anxiety and insomnia. He indicated that he did not consider himself "ever being able to resume a normal working life in this current type of environment, due to state of mental health". This claim was supported by a medical report submitted by a psychiatrist, Dr Smith. It indicated that the appellant was totally disabled. In the form completed by Dr Smith he was asked (Question 15): "If you consider the claimant to be permanently disabled, please give your reasons ...". He responded: "Poor ability to focus and concentrate on issues at workplace and generalized anxiety and depression." Clearly, Dr Smith considered the appellant's disability to be permanent.
83 In his claim form, the appellant was asked: "If illness, when did symptoms first appear, who did you see and when? Have you suffered from this condition before (details) ...". He provided the information: "November 1994 - Dr Peter Gilkes, and staff at Wandene Private Hospital November 1994 - No." He was asked to give details of all doctors whom he had seen regarding this disability. He responded:
Date |
Name |
Address |
Reason |
Nov ´94 |
Dr P Gilkes |
60 Coachwood Cres, Alfords Point |
Depression/Anxiety |
Nov ´94 |
Resident psychiatrist Wandene Private Hospital |
7 Blake Street Kogarah |
" " |
Dec ´96 |
Dr F Donaghy |
60 Coachwood Cres, Alfords Point |
Insomnia/Depression |
Feb ´97 |
Dr P Gilkes |
60 Coachwood Cres, Alfords Point |
Depression/Anxiety |
Feb ´97 |
Dr S Smith |
13 Grantham Street |
" " |
84 He was also asked (Question 7): "Were you hospitalised, if yes, give details, name of hospital, dates, treatment ...". He responded: "Yes Wandene Private Hospital - Kogarah November 1994 7 days - counselling, prescription drugs."
85 In the application for membership which he completed in 1996, he was asked, (Question 3):
"Have you ever had any of the following?(a) ...
(b) ...
(c) mental or nervous disorder
(d) ...
(e) ...
(f) ...
If you have answered yes to any (a) through (f) please give more details below."
86 At that time, the appellant indicated that he had not previously suffered from mental or nervous disorder.
87 At all material times prior to 1 July 1997, cl B.13 of the trust deed provided:
"Notwithstanding anything expressed or implied to the contrary in this Division, where the Trustee is of the opinion based on such evidence as the Trustee considers satisfactory that the member died or became disabled or suffered temporary incapacity within three years of joining the Scheme by reason of a condition which existed at the time of joining the Scheme which was not disclosed to the Trustee at that time or the member did not provide an accurate statement in a form approved by the Trustee as to the member's health and such other matters as the Trustee may require at the time the member joined the Scheme, the benefit in respect of the Member's death or disablement shall be a lump sum calculated in accordance with the following formula:benefit salary x contributing service x 21% x ASF.
The temporary incapacity benefit under Clause B.8 shall not be payable unless by reason of special or exceptional circumstances the Trustee other determines in any particular case."
88 The death and disablement benefits payable pursuant to this clause would be substantially less than those payable if the clause did not apply.
89 On 5 June 1997 the trustee advised the appellant that on 20 May 1997 it had decided that because of the alleged non-disclosure of his illness in 1994, his benefit was to be limited in accordance with cl B.13. At some time after such notification the appellant sent an undated, hand-written letter to the trustee, which letter is headed "Notice of Complaint". It sought review of the trustee's decision. Although the letter is difficult to read, the thrust appears to be that the appellant's 1994 hospitalization was not for anxiety or depression, but for alcohol abuse brought on by work-related stress causing "emotional symptoms (an adjustment disorder)". In other words the appellant asserted that his 1994 condition had not involved mental or nervous disorder and so disclosure of that prior condition was not required in his answer to question 3. Dr Smith provided a report dated 19 August 1997 in which he also sought to distinguish between the appellant's 1994 hospitalization "in connection with alcohol abuse and a number of personal stressors" and the anxiety and depression for which he was being treated in 1997. Dr Empson, who apparently treated him at the hospital in 1994, said that he was then suffering from an adjustment disorder and an alcohol problem, both of which were short-lived. Dr Empson observed that the appellant drank excessively "because of work-related stressors".
90 The records of the Alfords Point Medical Practice (where the appellant had consulted Dr Gilkes and Dr Donaghy) indicated that he had been treated as follows:
Date |
Condition treated |
1989 or 1992 |
work stress and lethargy |
October-November 1994 |
work-related stress |
May 1996 |
sleep problems due to work stress "eighteen months previously" |
February 1997 |
depression |
91 Dr Gilkes had a note concerning the 1994 hospital admission as follows:
"recent severe stress, numerous phone discussions with patient and wife 17/10 - 20/10. Admitted to Wandene under Dr Empson. Work-related stress - problems with three staff members (supervisors) now resolving, coping well, will leave job."
92 The appellant's complaint concerning the rejection of his claim was handled pursuant to the trustee's internal complaints procedure. It was referred to the membership committee and considered and rejected by that committee on 13 October 1997. On that day, the committee's decision was adopted by the board of the trustee. By this time the trust deed had been amended in an arguably material particular. Deed of Amendment (No 15), which took effect on 1 July 1997, deleted all of the words in cl B.13 commencing with the words "which was not disclosed to the trustee ..." to and including the words "... at the time the member joined the scheme". Thus the amended clause read:
"Notwithstanding anything expressed or implied to the contrary in this Division, where the trustee is of the opinion based on such evidence as the trustee considers satisfactory that the member died or became disabled or suffered temporary incapacity within three years of joining the scheme by reason of a condition which existed at the time of joining the scheme the benefit in respect of the member's death or disablement shall be a lump sum calculated in accordance with the following formula ...".
93 In these reasons, the deed of trust in the form in force prior to 1 July 1997 will be referred to as the "trust deed (pre-1997)". The deed in the form in force after that date will be referred to as the "trust deed (post-1997)". Individual clauses, particularly cl B.13, will be similarly identified.
94 It appears from the minutes of the membership committee meeting of 13 October 1997 that:
"The committee reviewed the claim and agreed to enact cl B.13 as it now stands. As Mr Howitt-Steven had a pre-existing condition the appeal was not upheld. Mr Howitt-Steven will be entitled to his resignation benefit only."
95 In the board minutes, it was noted that:
"Professor Wood, as Chairman of the Membership Committee, tabled a memorandum which that Committee had considered immediately prior to the meeting. He indicated that the Membership Committee had decided to apply the provisions of Clause B.13 (as it now stood) to a claim from Mr Warren Howitt Steven, thereby restricting the amount payable to him on account of his disablement.After members of the Membership Committee had retired from the meeting the Board confirmed the decision of the Membership Committee that Mr Steven's claim was due to a condition which existed at the time of joining the scheme, and so should be restricted."
96 It may be significant that the membership committee and the board purported to apply the deed in its amended form. The trustee advised the appellant of the decision by letter dated 17 October 1997. On 3 November 1997 he lodged a "registration of complaint" with the tribunal. Pursuant to the ROS Act, the tribunal had jurisdiction to grant relief where a decision by a superannuation fund trustee was unfair or unreasonable. Relevant statutory provisions will be discussed later in these reasons. In the course of subsequent correspondence the trustee, in a letter to the tribunal dated 1 December 1997, advised that:
"The Trustee determined Mr Howitt-Steven had failed to disclose a pre-existing condition and that his benefit should be restricted in accordance with Clause B13. Mr Howitt-Steven was advised of the decision on 5 June 1997 (attachment 8).UniSuper received a complaint from Mr Howitt-Steven on 30 July. Included with his letter was a copy of the admission form from Wandene Hospital stating he was admitted to the Psychiatric Unit for 8 days from 18/10/94 (attachment 9).
The complaint was considered by the Membership Committee, a sub committee of the ... Board, at meeting MC 97.4 on 13 October 1997.
The Committee declined the claim. An extract from the Minutes is attached (attachment 10).
The Board considered Mr Howitt-Steven's complaint at meeting 97.5 on 13 October 1997. The Trustee upheld the decision of the Membership Committee to decline the claim. An extract of the Minutes is attached (attachment 11).
97 Dr Smith provided a further report which was largely supportive of the appellant's position. This was submitted to the trustee with an invitation to reconsider the claim. In April 1998 the trustee obtained a report from Dr Kornan. He said, referring to Dr Smith's report:
"The personal stressors (the appellant) experienced in October 1994 may or may not have been different to the ones he had in February 1997 but I am perplexed by the sentence which compares impairments to stressors, rather than impairments to impairments. Quite frankly it seems that when he has now been treated by Dr Selwyn Smith that he now is being treated for depression. In my opinion there would have been clearly anxiety/depression in 1994 and thus, in fact, the illness is primarily a continuing ongoing chronic illness situation. Naturally, as often happens in psychiatry, there are some minor or different variations from time to time....
I cannot understand why Dr Selwyn Smith would have ever indicated to you in a previous report that he had not suffered any significant previous psychiatric illness when in fact he obviously had a major pre-existing psychiatric illness requiring inpatient treatment for the adjustment disorder (codeword for anxiety and depression basically) and secondary alcoholism.
To sum up, this is a man who evidently has had a psychiatric admission in 1994 for an adjustment disorder and secondary alcoholism. Adjustment disorder is basically a code word substantially meaning anxiety and depression. Given that there was anxiety and depression in 1994 associated with alcoholism, on the strong balance of probabilities and, as well, that there has been further depression in 1997, I consider that this man had a pre-existing illness from 1994 onwards in a fluctuating way.
To put it in the terms used in your covering letter, I consider that the adjustment disorder suffered in 1994 can be considered a pre-existing condition in relation to his current anxiety and depression from the reading of these files.
98 The appellant's employment was formally terminated on 5 June 1998 although it seems that he had not worked since 11 February 1997. On or about 16 May 2000 the tribunal advised that a review meeting would be held on 17 July, to be conducted "on the papers without oral submissions". A review meeting is apparently the occasion upon which the tribunal determines a complaint. The parties were invited to make relevant submissions in advance of the meeting. The trustee responded to that letter on 29 May 2000, submitting that:
"The Trustee contends that Mr Howitt-Steven made a false statement regarding his state of health (Clause 6(3)) and his benefit is therefore restricted in accordance with Clause B13 of the Trust Deed.
99 This appears to have been the first written reference to subcl 6(3). Clause 6 provided as follows:
"(1) Every eligible employee shall as a condition of membership complete an application for membership in such form as the Trustee shall from time to time determine and in so doing shall be deemed to agree to comply with and to be bound by the provisions of the Deed.(2) The Trustee may in relation to the employees of an employer or generally require applicants for membership of the Scheme to undertake such medical examinations including blood tests and provide such statements of medical history in such form as the Trustee may specify or require. Any employee who fails to undertake or fails to pass such medical examinations including any blood tests or fails to provide a satisfactory statement as aforesaid may at the discretion of the Trustee be refused membership of the Scheme or may be admitted to membership on such special conditions relating to benefits contributions or otherwise as the Trustee may determine and notify to the employee and the employer concerned.
(3) Where the Trustee is of the opinion that a member has made a false, misleading or inappropriate statement as to the member's age state of health or otherwise or has failed to disclose any relevant fact or information in relation to his or her application for membership or in any medical examination or test for the purposes of the Scheme the Trustee may reduce or adjust any benefit payable to or in respect of the member in such manner as the Trustee may determine."
100 The trustee's reference to subcl 6(3) suggested that it was relying on the power conferred by that sub-clause to vary a benefit. Such reliance would seem only to have been necessary if the trust deed (post-1997) were being applied. In its pre-1997 form, cl B.13 itself operated to reduce the benefit. It is possible that the trustee believed that even under the trust deed (pre-1997), exercise of the subcl 6(3) power was necessary. However, when the reference to that sub-clause is taken with the references in the minutes to the amended deed, it seems more likely that in affirming the earlier decision, the trustee believed that it was applying the trust deed (post-1997).
101 The appellant's solicitors also responded to the invitation to make submissions. They submitted that there was a distinction between the work-related stress experienced in 1994 and the depression experienced from February 1997. They also submitted that the tribunal should prefer the evidence of Dr Smith to that of Dr Kornan and that the references to the 1994 hospitalization in the appellant's original claim were in error. They then submitted that:
"In our submission, the trustee has improperly determined that Mr Howitt-Steven was suffering from a `condition which existed at the time of joining the scheme', as referred to in clause B.13 of the Amended Trust Deed. In our submission the conditions are entirely separate, which is supported by the medical evidence."
102 The solicitors wrote a further letter dated 5 July 2000 in which they sought to explain the circumstances surrounding the appellant's hospitalisation in 1994. They asserted that he had believed that he was admitted to hospital to "dry out" and was not aware of any "adjustment disorder". They then submitted:
"At the time that he completed the form, Mr Howitt-Steven was totally unaware of any such diagnosis and accordingly the form was completed in total good faith. It should be noted that the form does not specify in any manner whether or not Mr Howitt-Steven had been admitted to hospital in the last five years and for what he had been treated. If those questions had been asked, then Mr Howitt-Steven would have answered in the affirmative, but given the wording of the question and Mr Howitt-Steven's own information at the time, he answered the form correctly and made no false statement regarding the state of his health."
103 The solicitors then set out part of cl B.13 as follows:
"... died or became disabled or suffered temporary incapacity within three years of joining the scheme by reason of a condition which existed at the time of joining the scheme ...".
104 They submitted that Mr Howitt-Steven had made no false statement and had not been disabled as a result of a condition which existed at the time of joining the scheme.
105 The tribunal rejected the complaint and affirmed the trustee's decision.
LEGISLATION
106 Before considering the tribunal's reasons, it is appropriate to make some brief observations as to its jurisdiction and powers. Pursuant to s 101 of the Superannuation Industry (Supervision) Act 1993 (Cth) (the "Supervision Act"), the trustee was required to have an internal system for dealing with complaints such as that made by the appellant. Pursuant to s 19 of the ROS Act, the tribunal was not to deal with a complaint until such internal procedures had been exhausted. Section 14 of the ROS Act relevantly provided as follows:
"(1) This section applies if the trustee of a fund has made a decision (whether before or after the commencement of this Act) in relation to:(a) a particular member or a particular former member of a regulated superannuation fund; or
(b) a particular beneficiary or a particular former beneficiary of an approved deposit fund.
(1A) ...
(2) Subject to subsection (3) and section 15, a person may make a complaint (other than an excluded complaint) to the Tribunal, that the decision is or was unfair or unreasonable.
...
(6A) The Tribunal cannot deal with a complaint under this section about a decision of a trustee relating to the payment of a disability benefit because of total and permanent disability unless:
(a) the decision is made on or after 1 November 1994; and
(b) the complaint is made within a period of one year after the making of the decision to which the complaint relates.
(6B) The Tribunal cannot deal with a complaint under this section abut a decision of a trustee relating to the payment of a disability benefit because of total and permanent disability if:
(a) before the making of the decision, the person permanently ceased particular employment (whether before or after commencement of this subsection) because of the physical or mental condition that gave rise to the claim for disability benefit; and
(b) the claim was not lodged, or is not lodged, with the trustee, within one year after the person permanently ceased that employment.
(6C) Without limiting the meaning of a decision of a trustee relating to the payment of a disability benefit in any other provision of this Act, that expression means, for the purposes of subsections (6A) and (6B), the original decision of the trustee in relation to the matter."
(6D) For the purposes of subsection (6C), if, as a result of a complaint about the original decision of the trustee under arrangements made under section 101 of the Supervision Act, the original decision was confirmed or varied, or another decision was substituted for the original decision:
(a) the decision as so confirmed or varied, or the substituted decision, is taken to be the original decision; and
(b) the decision as so confirmed or varied, or the substituted decision, is taken to have been made at the time when the original decision was made."
107 Section 37 provided:
"Tribunal powers - complaints under section 14(1) For the purpose of reviewing a decision of the trustee of a fund that is the subject of a complaint under section 14:
(a) the Tribunal has all the powers, obligations and discretions that are conferred on the trustee; and
(b) subject to subsection (6), must make a determination in accordance with subsection (3).
(2) If an insurer or other decision-maker has been joined as a party to a complaint under section 14:
(a) the Tribunal must, when reviewing the trustee's decision, also review any decision of the insurer or other decision-maker that is relevant to the complaint; and
(b) for that purpose, has all the powers, obligations and discretions that are conferred on the insurer or other decision-maker; and
(c) subject to subsection (6), must make a determination in accordance with subsection (3).
(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."
108 Section 14AA also relevantly provided:
"(1) To avoid doubt, a complaint may be made under this Part about a decision whether or not the decision involved the exercise of a discretion.(2) However, a decision that did not involve the exercise of a discretion is taken to have been unfair and unreasonable if the decision was contrary to law."
109 Pursuant to s 14AA a decision was amenable to the complaints process whether or not it involved a discretion. A decision not involving a discretion was to be taken to be unfair and unreasonable if it was contrary to law. The section made no express reference to non-discretionary, non-legal questions, for example errors of fact. Presumably it was for the tribunal to determine whether such error rendered the decision unfair or unreasonable. It seems to follow from subs 14(2) that the tribunal could only have set aside or varied a decision if it was unfair or unreasonable. Pursuant to subss 37(3), (4) and (6) the tribunal might only make an order if it would place the complainant, as nearly as practicable, in such a position that any unfairness or unreasonableness no longer existed. If the tribunal were satisfied that the decision was fair and reasonable, it was to be affirmed.
110 Sections 14 and 37 both contemplated the existence of an identifiable decision of the relevant trustee. For the purposes of s 14, the date upon which the relevant decision was made was of some importance in that it triggered various time limits, particularly pursuant to subs 14(6A) and 14(6B). The effect of those subsections was that subsequent decisions by a trustee confirming, varying or substituting another decision for the original decision were to be, in effect, "backdated" to the date of the original decision. That did not mean that for all purposes, any such subsequent decision was to be taken as being made on the date of the original decision. In particular, those provisions do not resolve the present question as to whether or not the trust deed is to be applied in its pre-1997 or post-1997 form. The original decision was made on 20 May 1997, confirmed on 13 October 1997 and again confirmed on 25 May 1998 (according to the tribunal's reasons). Clause B.13 was amended with effect from 1 July 1997 and again with effect from 6 April 1998. The effect of the 1997 amendment is set out above. The 1998 amendment varied the amount payable but not the circumstances in which such amount was to be payable.
THE TRIBUNAL'S REASONS
111 At p 4 the tribunal recognized that the deed had been amended between the time when the appellant applied to join the fund (10 April 1996) and the date when he ceased employment (5 June 1998). At p 6 the form of cl B.13 (pre-1997) is set out. The medical evidence is then summarized. The tribunal observed at p 9:
"The complainant submitted that the Trustee has improperly determined that he was suffering from a `condition which existed at the time of joining the scheme' as referred to in Clause B.13 of the Deed. The conditions are entirely separate and this is supported by medical evidence."
112 In summarizing the trustee's argument the tribunal observed:
"The trustee submitted that the complainant made a false statement about his state of health (Clause 6(3)) and that his benefit is restricted in accordance with Clause B.13 of the Deed."
The terms of cl 6(3) are then set out. On p 10, the tribunal observed that the decision on 20 May 1997 was based upon cl B.13 of the trust deed and observed:
"The Board again decided on 13 October 1997 and on 25 May 1998 that the claim was based on a condition which existed at the time the Complainant joined the scheme, being a condition which had not been disclosed when the Application for Membership form was completed and on this basis should be denied."
113 The tribunal's reasons thereafter appear to have been based upon cl B.13 (pre-1997). It described the clause as containing two "limbs" and directed itself to consider whether:
"1. The member became disabled or suffered temporary incapacity within three years of joining the scheme by reason of a condition which existed at the time of joining the scheme which was not disclosed to the trustee at that time; or2. The member did not provide an accurate statement in a form approved by the trustee as to the member's health and such other matters as the trustee may require at the time the member joined the scheme."
114 The tribunal considered that in either case, the appellant's benefit would be limited as prescribed in cl B.13 (pre-1997). It noted that whereas the heading associated with cl B.13 referred to "pre-existing conditions" the text actually referred to "a condition which existed at the time of joining the scheme". It also noted that the application form had enquired: "Have you ever had any of the following (medical conditions)?" The tribunal considered that the term "pre-existing condition" included any prior illness, whether or not the relevant person was still suffering from it at the time of joining the scheme. The better view is that the expressions "pre-existing condition" and "a condition existing at the time of joining the scheme" meant the same thing, namely a medical condition from which the relevant person was suffering at the time of joining, whether or not he or she was exhibiting symptoms at that time. Such a condition was a pre-existing condition because its onset pre-dated the appellant's joining the scheme. Neither expression was apposite to describe a condition from which the relevant person had previously suffered, but from which he or she had effectively recovered at the relevant time. On the other hand, the question asked in the application form required the disclosure of any previous mental or nervous disorder, whether or not the person in question was still suffering from it at the time of application.
115 The tribunal appears to have accepted the evidence of Dr Kornan. It observed that although "Dr K refers to a pre-existing illness from 1994 onwards `in a fluctuating way', but does not conclude that the Complainant had the condition at the time he joined the Fund." It also observed that:
"Dr K, on the other hand, concluded that `an adjustment disorder would basically include increased anxiety and depressive features' and that as these symptoms are common to an adjustment disorder and the generalised anxiety disorder and major depression disorder for which the Complainant made the claim, the adjustment disorder is a pre-existing condition."
116 It is clear from the earlier paragraphs of the tribunal's reasons that it used the expression "pre-existing condition" to describe any condition suffered prior to joining the fund. Having accepted the evidence of Dr Kornan, the tribunal:
"... concluded that even if subtle differences could be determined between the 1994 and the 1997 conditions, the Complainant should have disclosed the existence of the 1994 condition when applying for Membership of the Fund in 1996. It was the Tribunal's view that the 1994 condition of adjustment disorder was in the nature of a mental or nervous disorder which ought to have been disclosed."
117 In accepting Dr Kornan's evidence, the tribunal accepted that the appellant was not suffering from any relevant condition at the time of joining the scheme. If, in concluding that his prior condition ought to have been disclosed, the tribunal meant that the first limb of cl B.13 (pre-1997) was satisfied, then it erred. If the relevant condition did not exist at the time of joining the scheme, then non-disclosure of a similar condition suffered at an earlier time was irrelevant for the purposes of the first limb. However the tribunal then turned to the second limb of cl B.13 (pre-1997) and held:
"For the reasons set out above, the Tribunal is of the view that the Complainant was also in breach of the second limb of cl B.13 in that the Complainant did not provide an accurate statement as to his health when he joined the Fund.Accordingly, the Complainant's Complaint is dismissed. Furthermore, the Tribunal does not find that there are special or exceptional circumstances to justify payment of the benefit under clause B8."
118 Prima facie, the appellant did not provide an accurate statement concerning his health as required by the trustee at the time of joining the scheme. It would follow that the second limb of cl B.13 (pre-1997), if it applied, operated to reduce his benefit, subject only to two arguments advanced by the appellant. The first is that at the time of joining the scheme, the appellant was not aware of the nature of his 1994 condition and so did not deliberately mislead the trustee. This argument was advanced before Branson J who treated it as irrelevant. The second argument, advanced for the first time during the current appeal, is a construction point, namely that the obligation to make disclosure only extended to facts of which the relevant person had actual knowledge.
PROCEEDINGS BEFORE BRANSON J
119 Pursuant to subs 46(1) of the ROS Act:
"A party may appeal to the Federal Court, on a question of law, from the determination of the Tribunal."
120 Upon determining such an appeal the Court may make such order as it thinks appropriate (subs 46(3)). Such an order may include an order affirming or setting aside the determination of the tribunal or an order remitting the matter to be determined again by the tribunal in accordance with directions of the Court (subs 46(4)). The appellant appealed to this Court, which appeal was heard by Branson J; [2001] FCA 1599. His amended notice of appeal appears at AB 319 - 325. Unfortunately, it is of the kind which seeks to convert questions of fact into questions of law in a vain attempt to expand the limited rights of appeal conferred by sections such as subs 46(1). In the course of argument, counsel for the appellant seemed to suggest that once an error of law was demonstrated, the Court could deal with the matter afresh. Clearly, however, the power of the Court is limited to dealing with the consequences of a demonstrated error of law. In the present appeal, the appellant has sought to raise matters not raised before Branson J. Such a course is not generally viewed favourably. For that reason, it is necessary to consider the course of proceedings before her Honour. That can best be done by reference to the grounds of appeal argued in those proceedings and her Honour's consideration of them.
121 Grounds 1 to 2.5 are no longer relevant. Ground 2.6 is as follows:
"The applicable version of the Trust Deed of the Superannuation Scheme for Australian Universities (the Scheme) was the version current as at the date of the Applicant's claim. The Tribunal erred in determining that the applicable version of the Trust Deed governing the Scheme was the one in force at the University of Sydney. Accordingly the Tribunal considered the wrong version of date when the Applicant ceased employment with the Trust Deed and erred in so doing."
122 Clearly, this was an assertion that the trust deed (pre-1997), was the relevant instrument for the purposes of the appeal. Branson J dealt with the matter on that basis, as had the tribunal. However counsel for the appellant now seeks to argue that the relevant version was that in force as at the date upon which the appellant's employment was formally terminated, namely 5 June 1998, in other words the trust deed (post-1997). For reasons set out above, it is probable that the trustee's "decision" on 13 October 1997 was based upon that trust deed. Further, it is likely that the trustee's written submissions to the tribunal were also made on that basis. As was pointed out in argument, some aspects of the appellant's submissions to the tribunal were also arguably consistent with reliance upon the trust deed (post-1997). However the fact remains that the tribunal applied the trust deed (pre-1997), and the notice of appeal from that decision did not challenge that aspect of the decision. In the circumstances it is understandable that the matter proceeded before Branson J on that same basis. Ground 2.7 seems also to have related to this question.
123 Ground 2.8 is of no relevance for present purposes. Ground 2.9 asserted that the tribunal erred in construing cl B.13 by taking into account the heading, contrary to the provisions of cl 1.2 of the deed. As explained above, there was no inconsistency between the heading and the relevant substance of cl B.13. Clause 2.9.1 dealt with the same point. Clause 2.10 asserted that the tribunal erred in law in determining that the trustee's conduct was fair and reasonable because of four identified matters, namely:
® The tribunal failed to consider the appellant's evidence as to his knowledge and understanding of his condition when he filled in his application and erred in assuming that his knowledge as at 17 April 1997 (when he filled in the form) was the same as at the date on which he joined the fund.
® The tribunal failed to consider adequately the statement as to health made at the time of application.
® The tribunal failed to assess the conduct of the trustee towards the appellant in that it did not consider whether its interpretation of the deed was unfair or unreasonable "against (the appellant)".
® The tribunal failed to apply the principle that the onus of proving non-disclosure lay upon the trustee.
124 Ground 2.11 raised a factual matter which is not now relevant. Some of the grounds of appeal were repeated in par 4 of the notice of appeal, but no new ground was there advanced.
125 Branson J was justifiably concerned by the lack of precision in the so-called grounds of appeal. At [4] her Honour identified the following grounds as having been argued:
"(a) that the Tribunal erred in law by failing to conduct an oral hearing before reaching its decision;(b) that the Tribunal erred in law in failing to try to settle the complaint by conciliation;
(c) that the Tribunal erred in law in failing to join certain medical practitioners as parties to the complaint;
(d) that the Tribunal erred in law by failing to consider whether there were special or exceptional circumstances to justify the payment of a benefit to the Applicant;
(e) that the Tribunal misconstrued cl B.13 of the SSAU Consolidated Trust Deed in that it found that cl B.13 deals with disclosure of pre-existing conditions rather than disclosure of "a condition which existed at the time of joining the Scheme";
(f) that the Tribunal erred in law in that it wrongly acted on the basis that the Applicant bore an onus of proving that he had not failed to make proper disclosure at the time that he joined the SSAU;
(g) that the Tribunal erred in law in failing to take into account evidence that it was bound to take into account, namely evidence that the Applicant was not, at the relevant time, aware of the condition which was not disclosed by him;
(h) that the Tribunal erred in law in failing to "apply" the Act and the "principles of fiduciary duties" in considering the Applicant's complaint; and
(i) that the Tribunal erred in law in taking an adverse view of the Applicant's credit."
126 Grounds (a), (b), (c), (d) and (i) are not relevant to the present appeal. However, as is observed above, some aspects of the current grounds of appeal were not raised before Branson J. Before considering that matter, it is appropriate to examine her Honour's reasons for dismissing the appeal, to the extent that they are now challenged. Branson J dealt with the matter upon the basis that the trust deed (pre-1997) applied for all material purposes. The appellant had asserted as much in his grounds of appeal. Her Honour adopted the tribunal's view that cl B.13 contained two limbs. At [35] her Honour recorded the appellant's submission that it was unfair and unreasonable for the trustee to invoke cl B.13 against him in view of his asserted lack of knowledge of the nature of his previous condition. Branson J also recorded that it had not been argued that a statement which was accurate, to the best of the knowledge of the relevant person, would satisfy the requirements of cl B.13. In other words, there was no argument that cl B.13 should be construed as requiring only disclosure to the best of the relevant person's knowledge.
127 At [36] her Honour recorded that counsel for the appellant had submitted that the trustee had misinterpreted the deed by equating a "pre-existing condition" with "a condition that existed at the time of the application to join" the fund. As previously explained, the real point is whether or not the obligation to disclose imposed by the application form related only to pre-existing conditions (those arising prior to the application and still affecting the relevant person at that time) or whether it related to any prior condition, even if the person in question had fully recovered. Counsel for the trustee conceded before Branson J that the appellant was not suffering from any relevant condition "which existed at the time of joining the scheme which was not disclosed to the trustee at that time ...". Thus it seems that whatever the difference in terminology, the trustee's case was that the appellant should have disclosed his prior condition despite the fact that he was not suffering from it at the time he joined the scheme. As a result of the trustee's concession, Branson J concluded that she had only to consider the correctness of the tribunal's decision to the extent that it relied upon the second limb of cl B.13.
128 The only argument before her Honour as to construction of the second limb appears to have been the appellant's submission that the expression "an accurate statement in a form approved by the trustee as to (his) health ... at the time (he) joined the scheme" described a statement as to his health at that time and did not include his prior history. This argument appears in the notice of appeal to this Court as an assertion that Branson J erred in holding that cl B.13 contained two limbs. It is quite clear, as her Honour held, that the words "at the time the member joined the scheme" described the time at which the relevant statement was provided and did not in any sense limit the ambit of the enquiry as to the appellant's medical history. In those circumstances, and absent any submission as to the correctness of applying cl B.13 (pre-1997), her Honour concluded that the tribunal had correctly upheld the decision of the trustee in so far as it relied upon the second limb of that clause.
129 Branson J then dealt with the question of onus of proof, which issue was not raised in the present appeal. Her Honour next considered the alleged failure by the tribunal to take into account the appellant's evidence that at the time he joined the fund, he was not aware of the nature of the condition from which he suffered in 1994. Branson J was unsure as to the alleged relevance of that evidence, pointing out again that there was no submission that the requirements of cl B.13 would be satisfied by a statement which accurately reflected the appellant's state of knowledge. Her Honour observed that the evidence may have related to arguments under the Insurance Contracts Act 1984 (Cth), which arguments were not raised before her. The appellant's counsel applied to amend to raise those issues, but the application was refused. Alternatively, her Honour considered that the evidence may have gone to the question of whether or not the trustee had acted unfairly or unreasonably. Branson J concluded that the trustee's conduct was to be assessed primarily by reference to the deed and that the expression "unfair or unreasonable" was not to be taken as detracting "from the obligation of a tribunal to act in accordance with the governing rules of a fund." In other words, it was the terms of cl B.13 (pre-1997), and not any decision of the trustee, which resulted in the adverse consequences of which the appellant complained. To the extent that the trustee relied upon cl B.13 (pre-1997), that was the case. However, if the appellant is correct in asserting that the clause in its post-1997 form applied, then the trustee could only have varied the appellant's benefit by exercising the discretion conferred by subcl 6(3). It may be that such evidence would have been relevant to the exercise of that discretion, but that argument was not raised before Branson J. In the end, her Honour was not satisfied that the tribunal had overlooked any evidence which ought to have been taken into account.
THE PRESENT APPEAL
130 Before us seven grounds of appeal were raised and argued to some degree. They can be summarized as follows:
® Branson J erred in construing cl B.13 as providing for the payment of a lump sum benefit when it really restricted the amount of any benefit payable under cl B.3.
® Her Honour ought to have applied the trust deed (post-1997).
® Her Honour erred in concluding that the respondent had made a determination under cl B.13 that the appellant suffered from disablement within the meaning of the trust deed when it had in fact decided that the appellant was not eligible to claim a benefit and that it had not considered his claim.
® Her Honour erred in construing cl B.13 (pre-1997) as having two limbs.
® Her Honour erred in holding that the trustee had been entitled as at 10 April 1997 to require from the appellant a statement as to his health at any point in time prior to the date on which he joined the scheme.
® Her Honour erred in concluding that the appellant's statement was not accurate within the meaning of cl B.13 (pre-1997). This is the construction point which was not argued before Branson J.
® Her Honour erred in concluding "that it was not unfair or unreasonable not to pay the appellant a temporary incapacity benefit because he contended that he had suffered from permanent disablement ...".
Each of these grounds is dealt with below.
EFFECT OF CL B.13
131 It is correct to say that cl B.13 provided a limitation upon an entitlement prescribed elsewhere in the deed, particularly, for present purposes, by cl B.3. However nothing turns upon that point. The case has proceeded upon the basis that the appellant was entitled to a benefit, subject only to any limitation flowing from his failure to disclose his 1994 condition.
SIGNIFICANCE OF THE 1997 AMENDMENT TO THE DEED
132 This was the most substantial point raised on appeal but, as already pointed out, it was not raised before Branson J. The appellant submits that he should be allowed to ventilate the question now, notwithstanding his failure to ventilate it below. It is submitted that it is purely a question of law and that the trustee can have suffered no detriment as a result of its not having been argued below. It is relevant that the trustee seems to have expressly invoked the amended deed after 1 July 1997 and at least hinted at reliance upon it in its submissions to the tribunal. On the other hand, it is not clear that the parties ever addressed the facts of the case, having regard to the significance now said to flow from the amendment.
133 It is also important to note that the jurisdiction of the tribunal depended upon there having been a decision by the trustee. The decision which the appellant sought to challenge by his complaint form dated 3 November 1997 was that of the trustee made on 20 May 1997 and confirmed on 13 October 1997. In each case, the trustee was adjudicating upon his claim dated 10 April 1997. The appellant now submits that he then had no right to any benefit under the scheme as he had not then satisfied the definition of "disablement". He also submits that in any event, he was not entitled to any benefit until his contract of employment was terminated on 5 June 1998. If either argument is correct, then his application was premature and therefore necessarily unsuccessful. His complaint to the tribunal was also doomed to failure. It is possible that he could have made a fresh application once his entitlement to benefit arose according to his arguments, but he has not done so. If the appellant's new submissions are correct, then the tribunal was either without power to intervene because there had been no decision which it could review or it was obliged to dismiss the claim because it had been made prematurely.
134 Both arguments must be assessed in light of the fact that the appellant asserted in his claim dated 10 April 1997 that he was disabled and had been disabled since 11 February 1997. This matter has always proceeded upon that basis. It would be truly exceptional to allow the appellant to depart from that factual basis at this late stage. The definition of disablement is as follows:
"... `disablement' in relation to a member means being absent from employment through injury or illness for three months within a period of twelve consecutive months and in such state of health (not due to or induced by any wilful action on the part of the member designed or intended to bring about a state of health to obtain a benefit under the Scheme) as in the opinion of the Trustee, after consideration of all the facts in evidence before it, renders the member permanently incapable of performing duties or engaging in employment for which the member is or was by reason of training and experience, reasonably qualified; ... ."
135 The appellant argues that as at 10 April 1997 he had not been absent from his employment for three months within a period of twelve consecutive months, nor had the trustee formed an opinion as to whether his state of health was such as to render him permanently incapable of performing duties or engaging in employment. As to the first aspect, it is sufficient answer to observe that although he may not have been absent from his employment for three months at the time that he applied, by the time the decision was made on 20 May 1997 he had been absent for in excess of three months. Turning to the question of the trustee's opinion as to whether the appellant was disabled, it is not correct to treat the trustee's opinion as a condition precedent to the existence of such disablement. The definition assumes a disability and confers upon the trustee the power to determine whether or not it is such as to render the member relevantly incapable of performing appropriate duties in employment. It is not entirely clear whether the trustee formed such an opinion in the present case, but it has never asserted to the contrary. The better view is that the trustee has treated the appellant as disabled and entitled to whatever benefit is applicable, given that cl B.13 applies so as to reduce any such entitlement.
136 The appellant also argues that no entitlement to benefit arose until formal termination of the appellant's employment which is said to have occurred on 5 June 1998. The primary source of the appellant's entitlement to benefit appears to have been cl B.3 which relevantly provided:
"Subject to the Deed other than the provisions of Division A and to any agreement or undertaking entered into or given pursuant to clause 12(2) the Trustee shall pay or cause to be paid out of the fund in the event of a member ceasing to be in the service:(a)
(i) by retirement on or after the member's 55th birthday - at the option of the member a retirement pension calculated in the manner set out in clause B.4 or the lump sum benefit referred to in clause B.7;
(ii) on disablement - the disablement pension calculated in the manner set out in clause B.5;
(iii) on death in service - the benefits referred to in clause B.6; or
(iv) for any reason not coming within any of the previous paragraphs - the lump sum benefit referred to in clause B.7; and
(b) the supplementary benefit referred to in clause B.14.
137 In so far as concerns disablement, construction of this clause depends upon three other provisions. The first is the meaning of the expression "the service". According to cl 1 of the deed the term "service" means:
"... continuous employment with an employer since last becoming a member provided that service shall be deemed to be continuous although performed partly with one such employer and partly with another or others of such employers ... ."
138 The second is the meaning of the term "disablement" which is set out above. Finally, the benefit payable was to be calculated in accordance with cl B.5 which relevantly provided:
"(1) The disablement benefit prior to age 65 shall be an immediate pension payable until the member's 65th birthday or earlier death at an annual rate calculated in accordance with the following formula ... ."
139 The appellant's argument is that the reference in cl B.3 to "a member ceasing to be in the service" refers to the formal termination of a contract of employment and the words "on disablement" describe the reason for the relevant person ceasing to be in the service rather than the event upon which the benefit is payable. However the definition of "service" made no reference to any contract of employment. It rather referred to the fact of "continuous employment". It is somewhat difficult to see how a person could be said to be in continuous employment once he had ceased work and had asserted that he was permanently disabled from resuming it. Further, the definition of "disablement" appears to contemplate a person acquiring that capacity by accumulated periods of absence over a one year period, suggesting that it is disability rather than termination of any contract which is to be the basis of entitlement. Clause B.3 provided that the disablement pension was a pension to be paid "in the event of a member ceasing to be in the service ... on disablement". Clause B.5 provided for the disablement benefit being payable as an "immediate pension". The better view appears to be that the pension was payable upon disablement and not upon the termination of any vestigial contractual relationship which may have survived it.
140 This conclusion is also suggested by certain other provisions of the trust deed. Clause 20 contemplated the possibility that a disabled person might still be capable of earning income, presumably in employment. Any amount received would result in a reduction in the amount of the disablement pension. That such a possibility was contemplated makes it unlikely that existence of ongoing contractual relations between the employer and the relevant employee would operate to suspend or defer commencement of the latter's entitlement to the benefits conferred by the deed. Similarly, par 20(3)(c) contemplated reductions in the amount of the disablement pension to reflect amounts paid to the pensioner "under any legislation dealing with workers' compensation and like payments or under any award or agreement relating to his or her employment with the employer". Once again, it seems to have been contemplated that there might be an ongoing contractual relationship between employer and employee. It may be that in any event, disability would inevitably have resulted in frustration of any contract of employment. See Simmons Ltd v Hay (1964) 81 WN (Part 1) (NSW) 358, Notcutt v Universal Equipment Co (London) Ltd [1986] 1 WLR 641 and Finch v Sayers [1976] 2 NSWLR 540. See also the article by G J McCarry at (1987) 61 ALJ 35. As can be seen from Finch, whether or not a contract of employment is frustrated may depend upon the terms of the contract between the parties. This matter was not investigated in these proceedings. It is not necessary to take it further. The better view is that any entitlement arose at the time of disability. It follows that it should be determined by reference to the trust deed (pre-1997).
141 A further ground for rejecting the appellant's argument arises out of the amendment power itself. Clause 55 provided:
"(1) The Trustee may with the consent of the Consultative Committee at any time and from time to time by deed alter, add to or repeal all or any of the provisions contained in the Deed, including the provisions of this clause other than the provisions of sub-clause (5) hereof.(2) The Trustee may at any time and from time to time by deed alter, add to or repeal all or any of the provisions contained in the Deed other than the provisions of sub-clause (5) hereof in such manner and to such extent as the Trustee considers necessary or desirable to ensure that the Scheme complies with any relevant requirement of the Superannuation Law or the Assessment Act in respect of complying superannuation funds.
(3) Any alteration, addition or repeal:
(a) so made shall come into force on the execution of such deed and shall take effect as from that date or as from such earlier or later date as may be specified for that purpose in such deed;
(b) so made and for the time being in force shall be of the same validity as if it had been originally contained in the Deed and may in like manner be altered, added to or repealed.
(4) The trustee shall notify each member of such alteration, addition or repeal and all members shall be bound thereby. No accidental failure or omission to give any such notification shall prejudice or invalidate the relevant alteration, addition or repeal.
(5) No alteration, addition or repeal as aforesaid shall:
(a) prejudice or affect any pension or other benefit payable under the Scheme or the rights of any member who is then excused from or not liable for contribution;
(b) have the effect of altering the purpose of the Scheme which shall continue to be the provision of benefits for members and their dependants;
(c) result in the return to any of the employers of any part of the Fund but subject to the provisions of clause 56.
(6) Where in the opinion of the Trustee an alteration, addition or repeal requires the consent or approval of any person in order to comply with any relevant requirement of the Superannuation Law relating to deed amendments then the alteration, addition, or repeal shall not be made without the consent or approval of the person or persons concerned."
142 The question for present purposes is whether par 55(5)(a) protected all benefits conferred by the trust deed or only those which were due and payable at the time of the amendment in question. Given the nature of the scheme, it is unlikely that members were to be readily deprived of the benefits prescribed under the deed. The composition of the consultative committee was dealt with in cl 39. Although that clause was somewhat obscure, it is clear that the consultative committee was to comprise only one or two representatives of employees, together with one or two representatives of employers. It seems most unlikely that such a committee was intended to be able to bind finally all of the members of the scheme in so far as concerns such a critical issue as the benefits accruing to them pursuant to it. Amounts are payable under the scheme upon certain occurrences, for example death, disability, retirement or "ceasing to be in the service ... for any other reason". Once a member joins the scheme and makes a contribution, it is virtually certain that he or she will become entitled to a payment at some time in the future. The better view is that the word "payable" is used in par 55(5)(a) to describe any amount to become payable upon the occurrence of such an identified event. It follows that amendment pursuant to s 55 cannot
vary the circumstances in which a benefit is to be paid to a member who has joined prior to such amendment.
143 To some extent the appellant's argument appeared to proceed upon the basis that the 1997 amendment to cl B.13 was designed to create a more generous situation for scheme members. That is simply not so. Although the deletion of the second limb of cl B.13 meant that non-disclosure did not automatically result in a reduced benefit, the matter was, in effect, left within the discretion of the trustee pursuant to subcl 6(3). Further, under the first limb of cl B.13 (pre-1997) a pre-existing condition causing death or disability would only result in a reduced benefit if it had not been disclosed to the trustee. After the amendment death or disability from any pre-existing incapacity was to have that effect, regardless of whether it had been disclosed. Unless subcl 55(5) applied to protect the future entitlements of existing members, a person who had joined the scheme, having disclosed a pre-existing condition would have suffered a reduction in his or her benefit as a result of the amendment. Of course, such a person may only have been admitted to the fund pursuant to special arrangements as to level of contribution or entitlement to benefits but nonetheless, application of the amendment to him or her would have reduced his or her benefits. The better view is that subcl 55(5) prevented the application of the 1997 amendment to entitlements previously conferred, whether or not they had yet become due and payable. It follows that the appellant's entitlement was to be determined by reference to cl B.13 in its pre-1997 form.
144 Finally, it is likely that the appellant would have fared no better if the trust deed (post-1997) had been applied to his case. As has been observed above, the trustee would then have had power pursuant to subcl 6(3) to reduce his benefit. It is hard to see why it would have been unfair or unreasonable to have done so, given his failure to disclose a prior condition which was at least arguably related to the cause of his disablement. The 1994 hospitalization had occurred only eighteen months prior to his application to join the scheme and a little over two years prior to his disablement. In his claim, he volunteered the opinion that the first symptoms of his disabling illness had emerged in November 1994. Although he seems now to assert that he discovered this at some time subsequent to 10 April 1996, it is not clear how that occurred. In any event, even if, in April 1996, he was not aware of the precise nature of his 1994 illness, its apparent severity (evidenced by a week in hospital) ought to have prompted him to make appropriate enquiries prior to completing his application form. Even if the form required something less than absolute accuracy, it is difficult to accept that failure to make appropriate enquiries of one's medical practitioners as to a relatively severe illness quite shortly before the time in question could amount to an appropriate discharge of whatever obligation was placed upon him. Of course these would be matters for the trustee. It is not necessary to decide whether the trustee's purported application of the trust deed (post-1997) after 1 July 1997 was liable to review by the tribunal in view of the conclusion that the trust deed (pre-1997) applied for present purposes.
NATURE OF THE TRIBUNAL'S DETERMINATION
145 It is submitted that the tribunal did not consider whether or not the appellant had suffered a disablement, but only whether he was entitled to claim a benefit. It seems more likely that the trustee accepted that the appellant was disabled, but it does not matter for present purposes. The matter in issue is the correctness of the decision of Branson J. That decision concerned only the tribunal's decision to reduce any benefit for non-disclosure.
CONSTRUCTION OF CLAUSE B.13 (PRE-1997) AS CONTAINING TWO LIMBS
146 For reasons which have been given, her Honour's construction was clearly correct.
TRUSTEE'S ENTITLEMENT TO ENQUIRE AS TO THE APPELLANT'S PRIOR HEALTH
147 It is submitted that the trustee was not entitled to enquire as to the appellant's medical history at any time prior to the date on which he joined the scheme. No justification is advanced for this view. No such point was taken at the time of joining. The appellant accepted the obligation imposed by the trustee and cannot now complain that he was not obliged to do so. In any event, the point is unarguable. The only question is whether, in the circumstances, cl B.13 applied.
DUTY TO DISCLOSE
148 The appellant's argument is that the obligation upon the appellant at the time of joining and for the purpose of cl B.13 was to disclose relevant circumstances of which he was aware. This point was not argued before Branson J, and the factual matters to which it relates were, in her Honour's view, not otherwise relevant to the proceedings before her. Thus it may be unfair to assume that the trustee accepted that the appellant was not aware of the nature of his 1994 illness. In any event, nothing in the application form suggested that the appellant was obliged only to answer to the best of his knowledge or that he was not obliged to make reasonable enquiries as to a condition which he had so recently suffered. The expression "mental or nervous disorder" is very broad and may be somewhat imprecise, but as is pointed out above, the appellant himself, in completing his claim form, thought it appropriate to refer to the prior condition. Apart from that, it is clear that his condition in 1997 was, in his view, attributable to stresses experienced in the workplace. He apparently informed Dr Gilkes, in 1994, that his problems had arisen from his relations with supervisors in his employment and that he was going to leave that job.
149 Clause B.13 applied if "the member did not provide an accurate statement in a form approved by the trustee as to the member's health and such other matters as the trustee may require ...". There can be no doubt that the statement was not accurate. It is impossible to conceive of any construction of either cl B.13 or of the application form which would be sufficiently favourable to the appellant to enable him to succeed in this matter. In those circumstances no good point would be served by allowing him to raise this construction point. It must fail.
UNFAIR OR UNREASONABLE NOT TO PAY A TEMPORARY INCAPACITY BENEFIT
150 There appears never to have been an application for a benefit for temporary incapacity. The appellant submits that no such application was necessary. Branson J did not consider the matter to be in issue before her. See TS 67 ll 21-23. It was certainly not referred to in the notice of appeal which was before her Honour. The appellant points to a number of equivocal references to such a benefit in the material. The references at AB 237, 255, 307 and 308 take the matter no further. It is true that in oral submissions before Branson J (TS 55 ll 32-33 and TS 56 ll 1-6) there is reference to the last paragraph of cl B.13. That clause, prima facie, reduced death, disability and temporary incapacity benefits. However the last paragraph permitted payment of a temporary incapacity benefit if the trustee so determined "by reason of special or exceptional circumstances". However, contrary to the appellant's submission to her Honour, the tribunal had found that there were no special or exceptional circumstances. See p 12 of the tribunal's reasons, at par 2. Clause B.8 dealt with temporary incapacity benefits. No basis has been demonstrated for disturbing this aspect of the tribunal's decision. There is no substance in this ground of appeal.
ORDERS
151 The appeal should be dismissed with costs.
I certify that the preceding seventy-one (71) numbered paragraphs are a true copy of the Reasons for Judgment herein of their Honours Justices Dowsett and Stone. |
Associate:
Dated: 28 August 2002
Counsel for the Appellant: |
Mr P Bingham |
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Solicitor for the Appellant: |
Maurice Blackburn Cashman |
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Counsel for the Respondent: |
Mr TGR Parker |
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Solicitor for the Respondent: |
Allens Arthur Robinson |
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Date of Hearing: |
22 May 2002 |
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Date of Judgment: |
28 August 2002 |
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URL: http://www.austlii.edu.au/au/cases/cth/FCAFC/2002/272.html