1 This is an appeal from a judgment given in the County Court at Warrnambool. The judge set aside the decision of the directors of the appellant ('the trustee') to refuse the respondent's ('Mr Frost's') application for total and permanent disablement benefit ('TPD benefit') under the Alcoa of Australia Retirement Plan. His Honour ordered that the application for TPD benefit be remitted to the trustee for determination upon appropriate material. Essentially, the question for determination is whether the judge was correct in holding that the directors of the trustee were under a duty to seek relevant information sufficient to enable them to undertake a properly informed consideration of the application.

2 The facts as found by the judge were as follows. The appellant was born on 13 September 1967 and, on 14 June 1988 at the age of 20, he began work at the Alcoa smelter at Portland ('Alcoa'). Thereafter, he worked at the smelter for eighteen years until 22 December 2006. On that day his employment was terminated due to a back condition and he has not worked since then.

3 There was no direct evidence as to Mr Frost's duties at the smelter but there were references in the medical reports to the nature of Mr Frost's work and, according to the evidence of Mr Thomas, who was an employee of Alcoa and a director of the trustee, Mr Frost worked in the anode and the green mill areas. Mr Thomas gave a description of the work performed in those areas although without going into precise detail of the tasks undertaken by Mr Frost.

4 The judge found that Mr Frost's work was largely manual and his Honour noted that, according to a medical report of 24 February 2009 of orthopaedic surgeon, Mr John O'Brien, Mr Frost was involved in labouring duties, including driving a forklift.

5 In late 2001, Mr Frost injured his lower back when he jumped from a forklift and suffered severe pain, mainly to the right side. He received medical treatment, including physiotherapy, and was off work for approximately six weeks. Then he returned to work on light and subsequently modified duties, although some mild lower back pain persisted.

6 In February 2004, he was at home and, while lifting his disabled daughter out of a bath, he slipped on the floor and jarred his lower back. Once more, he suffered acute right-sided lower back pain and, on that occasion, with pain radiating into his right buttock and thigh. Again, he sought medical treatment and received physiotherapy and, after treatment, once more returned to work on light and subsequently modified duties.

7 In May 2005, Mr Frost attempted to lift a duct cover in the course of his employment and suffered a recurrence of back pain, including pain radiating into the buttock and thigh. He received physiotherapy treatment. The pain persisted, however, and, as a result, in March 2006, he was put off work. He remained off work until his employment was terminated on 22 December 2006.

8 Mr Frost was treated by his general practitioner, Dr Das, and on a number of occasions by an orthopædic surgeon, Mr Paul Kierce.

9 By 'Claim for Total and Permanent Disablement Benefit Member Application Form' ('the application form'), dated 8 July 2009, Mr Frost applied to the trustee for TPD benefit.

10 Under the heading 'Nature of Disability', Mr Frost stated:

Previous episodes of back pain since 2001. In 2004 while lifting my daughter and in 2005 while at work. Ceased work in March 2006 due to pain. Employment terminated in December 2006.

11 Under the heading 'Attending Medical Doctors and Specialists', Mr Frost wrote:

• Mr Das, general practitioner - consultations: 29 December 2001 and 'regularly since then';
• Mr Kierce, orthopaedic surgeon - consultations: 9 June 2004, 3 August 2005, 13 April 2006, 27 April 2006 and 30 May 2006;
• Mr O'Brien, orthopaedic surgeon - consultation: 19 December 2007.

12 The application form authorised medical practitioners to provide the trustee with medical reports and information relevant to the claim and authorised Alcoa to provide the trustee with any medical reports in its possession. The form stated:

I understand that in making this application, it is my contention that I can no longer perform any work for which I am reasonably suited for at Alcoa, nor indeed in any other external workplace.

13 The form was supported by a statutory declaration that the contents of the form were true and correct and, annexed to that, were the reports of Mr O'Brien of 24 February 2009 and of Dr Das of 7 June 2009.

14 The application was considered at a meeting of the directors of the trustee held on 27 August 2009. Those present were Mr John Phillips AO;[1] four elected member representatives, generally union members; and three employer representatives, generally from Alcoa management. According to the minutes of the meeting, a number of TPD claims were considered, including Mr Frost's claim, as follows:

New claim - request medical evidence at time of resignation.

15 The directors had before them a report dated 12 August 2009 entitled 'Claim for Total and Permanent Disablement Benefit Employer Report' ('the employer report') which, under the heading 'Employee's Employment and Education History', stated:

Education/Qualification - not available.

Work Experience - not available.

Under the heading of 'Nature of Disability', the report recorded that:

Jamie reported an injury to his back on 29 December 2001 after slipping on coke dust when getting off a forklift. Jamie had a further incident on 13 May 2005 when he experienced pain in his back after lifting a side main cover weighting approximately 15 kilograms. Following this incident Jamie was absent from work from 7 June 2005 when he returned to work on restricted duties until October 2005, when he returned to normal duties, which he continued until 15 March 2005 (this should be 2006). From 16 March until his termination on 22 December 2006 Jamie remained off work as a result of his condition.

16 Presumably, the directors also had the medical reports of Mr O'Brien and Dr Das before them. The judge summarised the contents of those reports as follows:

A report of Mr John O'Brien, orthopaedic surgeon, of 24 February 2009 was before the directors.13 He saw the plaintiff on 19 December 2007 and had, at the time of examination, reports of Mr Kierce and Mr Das. He received a history similar to that received by Mr Kierce. At the time of his examination, the plaintiff complained of constant low-back pain extending to the right buttock, which was aggravated by prolonged sitting or standing or use of mechanical equipment jarring the spine. The plaintiff said that he was capable of all activities of daily living and his treatment at that time was confined to medication only. Mr O'Brien noted that he was in discomfort in the course of examination. There was no evidence of nerve root compromise. He examined x-rays of December 2001 and CT scans of 4 January 2002 and 15 June 2005. He said the latter confirmed the presence of Grade 1 spondylitic spondylolisthesis at L5-S1, with some degenerative change and disc bulging at L4-5.

Mr O'Brien noted that the plaintiff's low-back pain remained severe and incapacitating following the May 2005 incident. He thought the plaintiff's injury was discogenic in origin and that he was suffering quite severe, chronic discogenic pain without evidence of nerve root compromise. He said the plaintiff's prognosis was poor. He concluded:

'At the time of my examination I considered that this patient was significantly disabled and considered that the situation would be ongoing. I certainly considered that the patient was not capable of his pre-injury occupation and I did consider that he would certainly be incapable of any form of manual labour. Indeed I considered that the patient was totally and permanently disabled and considered that he was unlikely ever to engage or work for reward in any occupation or work for which the member is reasonably suited by his education, training or experience. In addition, I considered this patient's lumbar pathology would have a major impact on his general, domestic, social and recreational activities and I felt that this would be a permanent situation.'

Finally, a report of the plaintiff's general practitioner, Mr Das, of 7 June 2009, was provided to the directors. That report simply adopted the opinion of Mr O'Brien and concluded the plaintiff was:

'... unlikely ever to engage or work for reward in any occupation or work for which he is reasonably suitable by his education, training or experience.'

17 As the judge noted, there was no detail in the agenda or minutes of the meeting of 27 August 2009 as to what the directors of the trustee discussed or considered concerning Mr Frost's application. All that appeared was, from Mr Thomas' evidence, the non-union and management directors toured Alcoa's plants on a regular basis; Mr Thomas knew the appellant, because they had been to school together; Mr Thomas was aware of the duties undertaken by the appellant at Alcoa; and, in discussion among the directors, it was Mr Thomas' usual practice to give the background of a person making an application for a benefit and to provide other information which may not have been known to the other directors. Mr Thomas said that the directors were aware of the work carried out in both the anode and green mill areas.

18 By letter dated 31 August 2009, the trustee wrote to Mr Frost's solicitors (who had lodged the original application on his behalf), stating:

I confirm that your TPD claim was presented to the Trustee at its last regular meeting, held on 27th August 2009. Unfortunately the Trustee was unable to form a judgment of your claim with the medical evidence provided, as these medical reports outline your present condition.

The Trustee's task is to assess your condition at the point in time when your service with Alcoa ended (i.e. 22 December 2006).

In order for the Trustee to determine if your claim satisfies the definition of Total and Permanent Disablement, it requires evidence that demonstrates your condition at the time of termination.

I confirm that further reports from these doctors (if provided), along with the rest of your claim documents will be re-considered by the Trustee as soon as practicable ...

19 In response, Mr Frost's solicitors sent back a letter dated 12 October 2009, enclosing a medical report of Mr Kierce, dated 5 June 2006, in which Mr Kierce reported that:

I first saw Jamie Frost on 9 June 2004, at the referral of his general practitioner...

Then, on 25 February 2004, he was lifting his 10 year old daughter, who suffers with cerebral palsy, out of the bath. He slipped on the wet floor and again hurt his back ...

It was my opinion that Jamie Frost's occupation was a significant contributory factor to his back pain, aggravating a pre-existing degenerative condition. He was advised to undertake the following:-

1. Cease smoking cigarettes.

2. Get fit with walking, swimming or bike riding;

1. Avoid work which involved prolonged or frequent bending, lifting greater than 15 kilograms, using implements such as picks, shovels, sledgehammers and crowbars; and

4. Avoid driving machinery over rough terrain.

I believed that he was fit to return to work, providing it did not involve the abovementioned activities.

I then did not see Jamie Frost until 3 August 2005...

When I saw him on 3 August 2005 he stated that he was 'not too bad'. However, prolonged sitting and standing was still worrying his back, as was lifting.... As before, his employment had involved him using crowbars and sledgehammers and wearing heavy boots. I had recommended, 12 months previously, that he not be involved I this type of work and had informed Portland Aluminium of my opinion but, unfortunately, he had continued to be involved in this type of work. He had still not stopped smoking and I recommended that he seek help from [Dr] Jesse Das in this regard. I believed Mr Frost should have submitted a WorkCover claim. I felt that he would need to be relocated within the Smelter.

I then did not see him until 13 April 2006, when he attended as he had not been able to manage at work. It turned out that his employer was providing him with the same work as before. I advised Portland Aluminium that Mr Frost had to be away from this work, however, no notice had been taken. I therefore advised Mr Frost to submit a WorkCover claim. He was suffering with recurrent backache. He had still not give up smoking so I referred him to Quamby House for assistance with that and I put him off work, asking him to exercise.

When I saw him again on 27 April 2006, he told me that his back pain was continuing...

When I was him on 30 may 2006 ... His back was continuing to worry him with tenderness in the right posterior iliac crest region... I recommended that he return to see me in 4 weeks, when I planned to get him back to work on limited duties.

CONCLUSION

In my opinion Jamie Frost is not fit to return to work involving prolonged or frequent bending, the lifting of weights greater than 15 kilograms, the use of heavy, jarring implements such as picks, shovels, crowbars and sledgehammers and the driving of machinery over rough terrain. He is likely to suffer from recurrent backache for the rest of his life, but it will be less severe if he gives up smoking, gets himself fits and undertakes an occupation which places less stress on his back.

20 The directors of the trustee next met on 19 November 2009. The agenda which was circulated a week or so before the meeting referred to Mr Frost's application for TPD benefits (and also to the possibility of awarding him an alternative lesser resignation or ill-health benefit), as follows:

Apart from that, as the judge said, there was no detail in the agenda or minutes of meeting as to what the directors of the trustee discussed or considered concerning Mr Frost's application. All that appeared from the minutes was that Mr Frost's application for TPD benefit was declined but that he was granted an Ill-health Benefit.

21 By letter dated 20 November 2009, the trustee wrote to Mr Frost's solicitors, stating:

I confirm that the Trustee gave careful consideration to your claim at its last regular meeting held on the 19th November 2009, and wish to advise that the Trustee determined as follows:

• Total and Permanent Disablement - Claim declined
• Ill Health - Claim accepted

You will be contacted shortly by the Plan's administrators, Mercer Human Resources Consulting, seeking instructions regarding payment of your Ill Health entitlement.

Should you wish to appeal the Trustee's decision, you may do so by forwarding additional new medical evidence to the undersigned at the address above. I confirm that the next Trustee meeting will be held in February 2010.

Should you wish to contact me you can do so on [telephone number supplied] or email [email address supplied].

22 The Alcoa of Australia Retirement Plan was constituted by deed dated 15 December 2006 between Alcoa of Australia Limited as principal employer and Alcoa of Australia Retirement Plan Pty Ltd as trustee. The judge identified the following provisions of the Deed as relevant:

(1) Clause 1.1.1: Definitions

...

'Total and Permanent Disablement': In relation to a Member means:

... having, in the opinion of the Trustee after consideration of medical evidence, become incapacitated by reason of any physical injury ... to such as an extent as to render the Member unlikely ever to engage or work for reward in any occupation or work for which the member is reasonably suited by education, training or experience.

(2) Clause 2.3.4: Total and Permanent Disablement Benefit

If a Member leaves employment with the Employer by reason of Total and Permanent Disablement prior to the Retiring Age, the Trustee shall subject to the Deed and to the terms and conditions of any relevant insurance policy (if any) pay to the member in such manner as may be provided for in the policy (if any) a Benefit equal to the death Benefit which would have been payable pursuant to Clause 2.3.1 if the Member had died at the time of leaving employment by reason of his or her Total and Permanent Disablement.

(3) Clause 2.3.5: Ill-Health Benefit

Notwithstanding any other provision of the Deed, if a Member prior to the Retiring Age resigns from employment with the Employer's consent or the Employer terminates the Member's employment, in either case because in the opinion of the Trustee the Member has become medically unfit to continue in the employment of the Employer, although not entitled to benefits pursuant to Clause 2.3.4, such Member shall ... be entitled to a Benefit equal to the amount of his or her Accrued Retirement Benefit ... .

Clause 1.5.4: Absolute Discretion

The Trustee, in the exercise of the powers, authorities and the discretions vested in it by the Deed shall have an absolute and uncontrolled discretion and may exercise or enforce all or any of those powers, authorities and discretions at any time and from time to time or may refrain from exercising all or any of them from time to time or at all.

23 It is also to be noted that Clauses 1.5.1(k) and (q) conferred power on the trustee:

(k) to take and act upon the advice or opinion of any legal practitioner whether in relation to the interpretation of the Deed or any other document or statue or as to the administration of the trusts hereof or upon the advice or opinion of any medical practitioner or any investment or financial advisor or any other professional person (whether or not such advice or opinion shall be or have been obtained by it); and

(q) generally to do all acts and things as the Trustee may consider necessary or expedient for the administration, maintenance and preservation of the Fund and in performance of their obligations under the Deed.

24 Before the judge below, Mr Frost put his case on two alternative bases:

a) First, that on the material which was before the trustee, no reasonable trustee could have declined his application for TPD benefit.

b) Secondly, if that were not so, the trustee failed to give 'real and genuine consideration' to his claim for TPD benefit, because there was insufficient material to make a properly informed determination as to the nature and extent of his disability and as to the work for which he was suited by reason of his education, training and experience.

25 The judge found it unnecessary to deal with the first contention, because of the conclusions to which he came concerning the second.

26 As to the second, the judge held that, in light of the High Court's decision in Finch,[2] the trustee was under a duty to undertake a proper and informed consideration of the claim and, if the materials before the trustee were insufficient to undertake a properly informed consideration, it was incumbent on the trustee to make further inquiries.

27 His Honour found that the information before the directors at the time of the meeting of 19 November 2009 was insufficient to enable proper and informed consideration of the issues, because:

a) The material as to Mr Frost's education, training and experience was inadequate and there was no explanation given as to why it was not available. As his Honour observed, one might have thought that an important source of such information was Alcoa.

b) The medical information was deficient as to Mr Frost's condition at the time of termination of his employment and as to the treatment which he received.

28 The judge held that the directors should have asked Mr O'Brien whether the opinion he provided in his report of December 2007 applied as at December 2006 and whether his opinion as to Mr Frost's disablement extended to part-time work and modified duties.

29 The judge was also of the view that Mr Kierce's opinion of 5 June 2006 (although provided pursuant to the trustee's request of 21 August 2009 for evidence demonstrating Mr Frost's condition at the time of termination of his employment with Alcoa) did not address the question of whether Mr Frost was TPD at the termination date, and his Honour said that Mr Kierce ought to have been asked to provide an opinion on that point.

30 The judge stated that he accepted that the duty of the directors of the trustee to make inquiries did not extend to 'seeking more and more information... so that [Mr Frost] eventually achieved the level necessary to attain a TPD benefit'. But his Honour concluded that, consistently with the High Court's decision in Finch, the trustee's duty should be taken to extend to seeking relevant information to resolve conflicting bodies of opinion; and that here there was an apparent conflict of opinion between Mr O'Brien and Mr Kierce which needed to be resolved by making such further inquiries.

31 In the result, his Honour set aside the trustee's decision to reject Mr Frost's claim for TPD benefit and remitted the claim for further consideration.

32 The trustee contends that the judge was wrong. In the trustee's submission the 'onus' was on Mr Frost to establish his right to payment and thus to put before the directors of the trustee sufficient evidence to satisfy them that he was totally disabled at the time of termination of his employment, and to negate the possibility that he might cease to be totally disabled at some time in the future.

33 Contrary to the judge's reasoning, the trustee contends, there were no bodies of conflicting opinion for the directors to resolve in accordance with Finch. Mr Kierce's report was directed to a different point in time to Mr O'Brien's report and, in the trustee's submission, there is nothing necessarily inconsistent between different states of disability experienced at different times.

34 Alternatively, the trustee says, if it were incumbent on the directors of the trustee to seek further information about Mr Frost's medical condition, they discharged that obligation by their letter of 20 November 2009 (in which they invited Mr Frost to submit further medical reports in support of his claim); and especially so since Mr Frost was then represented by the same solicitors as had earlier lodged the claim for TPD benefit on his behalf.

35 It follows, the trustee says, that, although it may not have had sufficient information to say one way or the other whether Mr Frost was entitled to TPD benefit, the directors of the trustee did not act improperly in rejecting the claim. The correct view of the matter is that Mr Frost failed to discharge the onus of putting before the director's sufficient evidence to establish his claim.

36 On the same basis, the trustee contends, there was no need or warrant for the directors of the trustee to make any inquiries of Alcoa as to the respondent's education, training and experience; and especially so given that Mr Frost's solicitors organised for Alcoa to provide the employer report. According to the trustee, Mr Frost's solicitors must be taken to have known that the report stated that details of Mr Frost's education, training and experience were not available and, since Mr Frost's solicitors did not condescend to supplement that deficiency, even after the directors invited Mr Frost to submit further medical reports in support of his application, it is not the fault of the trustee that the details were absent.

37 In any event, the trustee says, in the absence of sufficient medical evidence to establish the nature and extent of Mr Frost's disability, the absence of evidence of Mr Frost's education, training and experience was essentially irrelevant.

38 In the course of oral argument, counsel for the trustee also advanced a further alternative contention[3] that the contents of the trustee's letter of 20 November 2009 should be taken to mean that the trustee has not yet determined to decline Mr Frost's claim for TPD benefit but rather has decided no more than that, until and unless Mr Frost provides the trustee with adequate information, it is not in a position to make a properly informed determination.

39 I do not accept any of those contentions. In Finch, the High Court held that:

... There is no doubt that under Karger v Paul[4] principles, particularly as they have been applied to superannuation funds, the decision of a trustee may be reviewable for want of 'properly informed consideration'.[5] If the consideration is not properly informed, it is not genuine. The duty of trustees properly to inform themselves is more intense in superannuation trusts in the form of the Deed than in trusts of the Karger v Paul type. It is extremely important to the beneficiaries of superannuation trusts that where they are entitled to benefits, those benefits be paid. Here, for example, the applicant was claiming a Total and Permanent Invalidity benefit to support himself for the rest of his life. His claim depended on the formation of an opinion by the Trustee about the likelihood that he would ever engage in 'gainful Work': that was not a mere discretionary decision. In the Deed there was a power to take into account 'information, evidence and advice the Trustee may consider relevant', and that power was coupled with a duty to do so. It would be bizarre if knowingly to exclude relevant information from consideration were not a breach of duty. And failure to seek relevant information in order to resolve conflicting bodies of material, as here, is also a breach of duty. The Scheme is a strict trust. A beneficiary is entitled as of right to a benefit provided the beneficiary satisfies any necessary condition of the benefit. Whether or not it will be decided hereafter that, consistently with s 14 of the Complaints Act,[6] the duty of a trustee in forming an opinion of the present type is a duty to form a fair and reasonable opinion, or even a duty to form a correct opinion, there is because of the importance of the opinion and its place in the Scheme a high duty on the Trustee to make inquiries for 'information, evidence and advice' which the Trustee may consider relevant...[7]

40 I agree with the judge that Finch applies to the facts of this case. Here, Mr Frost applied for a TPD benefit. Perforce of the definition of TPD benefit in clause 1.1.1 of the Deed, the outcome of the claim depended on the formation of an opinion by the trustee, after consideration of medical and other evidence, about the likelihood that by reason of Mr Frost's infirmity he would never again be able to engage or work for reward in any occupation or work for which he is reasonably suited by education, training or experience. The trustee's determination of that question was not a mere discretionary decision. The trustee had power under clause 1.5.1(k) 'to take and act upon the advice or ... opinion of any medical practitioner ... or any other professional person (whether or not such advice or opinion shall be or have been obtained by it') and, under clause 1.5.1(q), 'generally to do all acts and things as the Trustee may consider necessary or expedient for the administration, maintenance and preservation of the Fund and in performance of their obligations under the Deed'. In view of the importance of the trustee's opinion and its place in the scheme of the Fund, the availability of those powers imported a duty on the part of the trustee to exercise them to the extent reasonably considered necessary or expedient in order to reach a properly informed decision.

41 I allow that, on one possible view of Finch, it decided no more than that the trustee there was under a duty to seek relevant information in order to resolve conflicting bodies of opinion. If so, however, I agree with the judge that, in this case, the trustee was faced with conflicting bodies of opinion and so, in accordance with Finch, was under a duty to make the inquiries necessary to resolve the conflict.

42 According to Mr Kierce's report, Mr Frost was able to return to work in the smelter so long as he was relocated to a role which did not involve prolonged or frequent standing, lifting greater than 15 kilograms, using implements such as picks, shovels, sledgehammers and crowbars or driving machinery over rough terrain. In contrast, according to Mr O'Brien's report, Mr Frost was incapable of any form of manual labour and was totally and permanently disabled from engaging or working for reward in any occupation or work for which he was reasonably suited by his education, training or experience. Prima facie, those opinions were conflicting.

43 I do not overlook that Mr Kierce's opinion was directed to his assessment of Mr Frost's condition as at 5 June 2006, and that Mr O'Brien's opinion was based on his examination of Mr Frost on 19 December 2007. But logically that is not determinative. Given that Mr O'Brien referred in his report to Mr Kierce's report of 5 June 2006, and to the 'poor response to conservative treatment' since then, Mr O'Brien might well have meant that there had been no relevant change in condition between 5 June 2006 and 19 December 2007 and, hence that, in his opinion, Mr Frost was totally and permanently disabled as at each date and throughout the period between them.

44 Further, as counsel for the trustee asserted in argument in support of his submission that the trustee had not acted unreasonably in declining the claim, there is a prima facie inconsistency between the statement in Mr Kierce's report of 5 June 2006 that, when he saw Mr Frost on 3 August 2005, Mr Frost said he was 'not too bad', and the statement of Mr O'Brien in his report that Mr Frost told him that the back pain which he had suffered in May 2005 remained severe and incapacitating. Perhaps, as counsel for the trustee submitted, the point is just a difference in detail rather than the sort of conflict of opinion which was spoken of in Finch. Nonetheless, it adds to the perception of inconsistency.

45 At all event, I consider that, since the trustee was not satisfied the claim was made out, the prima facie inconsistencies between Mr Kierce's and Mr O'Brien's reports required investigation, at least by way of further inquiries of those two experts if not by taking advice from further medical and other experts, in order to establish whether Mr Kierce and Mr O'Brien were or were not agreed as to the nature and extent of Mr Frost's disability; and, if they were agreed that he was totally and permanently disabled, whether they were agreed that he had reached that stage by the time his employment was terminated.

46 For the trustee to slough off responsibility for making those inquiries on the basis that Mr Frost failed to adduce sufficient evidence to satisfy the trustee that he was totally and permanently disabled is, in my view, to do the very thing which the High Court said in Finch was unacceptable.

The duty to make inquiries for reasons other than conflicting opinions

47 So to conclude is sufficient to determine the outcome of this appeal. In case it matters, however, I add that I do not regard it as essential to the disposition of the appeal that it be possible to characterise the material before the trustee as comprised of conflicting bodies of opinion. Arguably, Finch may not have decided more than that a trustee faced with bodies of conflicting material is under duty to seek relevant information sufficient to resolve the conflict. But I do not regard that as setting the limit on a superannuation fund trustee's obligations to make inquiries. The better view of the cases seems to me to be that Mr Frost did not bear any onus of proof and that it was productive of error that the trustee proceeded as if he did.

48 Perhaps it was incumbent on Mr Frost to put forward some material in support of his claim. Counsel for the trustee submitted that there was support for that proposition in the judgment of the New South Wales Court of Appeal in Manglicmot v Commonwealth Bank Officers Superannuation Corporation Pty Ltd.[8] But assuming without deciding that it was incumbent on Mr Frost to put forward material in support of his claim, it is plain that he did just that. On any reasonable view of the matter, the material which he provided to the trustee in support of his application was capable of yielding an inference that he was TPD at the time of termination. Thereupon at least, if not before, the trustee came under a duty to give properly informed consideration to the application. Assuming, as the trustee says, it reached the view that Mr Frost's material was insufficient to found a properly informed decision (whether because of competing bodies of material or simply because of a dearth of material), the trustee was thereupon bound to make further inquiries.

49 Counsel for the trustee referred to two Western Australian judgments which he submitted were to the opposite effect. The first was Heitman v Guardian Assurance Company[9] in which Franklyn J rejected a complaint by an air conditioning contractor concerning the rejection of his claim under a group insurance scheme for total and permanent disability benefit. The policy defined 'Total and Permanent Disablement' as including:

... having been absent from employment with the Employer through injury or illness for six consecutive months and in the opinion of Guardian, after consideration of medical evidence, having become incapacitated to such an extent as to render the Life Insured unlikely ever to resume his occupation or to engage in any occupation or work for which he is then reasonably qualified by education, training or experience.

In my opinion the onus is on the plaintiff to establish his right to payment in terms of the policy and consequently the onus is on him to provide to the first defendant as insurer the evidence necessary for the opinion to be formed. That requires the provision of both medical evidence as to the incapacity and its extent and evidence to negate, because of the extent of the incapacity, the likelihood of him ever engaging in any occupation or work for which he 'is then reasonably qualified by education, training or experience'. This latter obligation requires, in my opinion, the provision of evidence as to his education, training or experience, as otherwise there would generally be no basis on which the second limb of the opinion could be formed by the insurer and without its formation there can be no total or permanent disablement within the meaning of the policy.

...

In my opinion on [the information supplied by the plaintiff to the insurer] it was not unreasonable for the [insurer] to refuse to form the necessary opinion, none of the reports leading to an affirmative conclusion as to either limb of the definition. It was of course open to the first [insurer] to obtain further medical evidence but there is no evidence that it in fact did so and, having had reports from Mr Vaughan, the neurologist of the plaintiff's choice, and Mr Thrum on its own behalf which showed no relevant or substantial divergence of opinion, it would be unreasonable to expect it to do so...

51 The second case was Tonkin v Western Mining Corporation Ltd,[10] in which the Supreme Court of Western Australia Full Court was concerned with a complaint by a member of a superannuation trust fund concerning the rejection of his claim for total and permanent disability benefit. The rules of the fund defined 'Total and Permanent Disablement' in similar terms to the policy in Heitman. The claimant supplied the trustee with a number of medical reports in support of the application. They were to the effect that he was suffering from anginal chest pain which was unlikely to improve and that, as a result, the only work which he could possibly cope with would be sedentary and without responsibility. The fund insurer later had the claimant medically examined by a cardiologist of the insurer's choice, who reported that there was no evidence to suggest that the chest pain was related in any way to the performance of the claimant's duty and that he could see no reason why the claimant should not now be considered 'fit to resume his previous employment'. Ultimately, the trustee rejected the claim.

52 At first instance, the trial judge held that the trustee was entitled to reject the claim and, on appeal, Franklyn J (with whom Malcolm CJ and Pidgeon J agreed) held that the trial judge was 'entirely justified', because:

• 'the entitlement to a TPD Benefit [came] into existence only when the respondent, on a consideration of medical evidence, forms the opinion that ...the member ... has become totally and permanently incapacitated as defined in the Deed...';
• 'None of the medical reports then before the respondent or the Insurer went so far as to address the fact or even express an opinion that the incapacity from which the appellant was suffering on 3 January 1987 (on which the statement of claim relied) or on the date of his retirement (27 June 1987) or 12 December 1988 when the rejection was made, was such that the appellant was unlikely "ever to resume work in or attend to any gainful profession or occupation"'; and
• 'there [was] no obligation on the trustee, on an application for the TPD Benefit supported by evidence inadequate to give rise to the necessary opinion, to seek out, on its own initiative, evidence for its consideration and so strain to obtain evidence relevant to the formation of the necessary opinion... '

53 Evidently, the reasoning in those two cases is opposed to the idea that the trustee in this case owed a duty to make inquires. But in my view there are several reasons why those two cases should not now be followed.

54 First, each of them was based on the notion that, when a member of a superannuation fund makes a claim on the fund trustee for payment of a total and permanent disability benefit, the member bears an onus of providing the trustee with sufficient evidence to prove the claim. In my view that is not so. As Bryson J explained in Vidovic v Email Superannuation Pty Ltd:[11]

The formation by the trustee of an opinion is not analogous to judicial or arbitral decision of a disputed question....There is no onus of proof on any person; there are no adversaries.

55 Secondly, in Heitman, Franklyn J said that the idea that the trustee was only required to consider the evidence which the claimant put before it was supported by the approach adopted by Cosgrove J in Riley v National Mutual Life Association of Australasia Ltd[12] and by Wickham J in Alessi v National Mutual Life Association of Australasia Ltd.[13] That is not so either. In Riley, it was common ground that the insurer of the superannuation fund was not required to consider any evidence other than was placed before it, and it was on that basis that Cosgrove J said that he had to judge the efficacy of the insurer's refusal of the claim by reference only to the evidence which was before it. In Alessi, there was no superannuation fund and no question of any claim to be considered by a trustee. The plaintiff was insured with the defendant against total and permanent disablement and, after the insurer refused the plaintiff's claim for total and permanent disablement benefit, he sued the insurer for a declaration that he was totally and permanently disabled within the meaning of the policy and for an order for payment of the benefit due. Obviously, the plaintiff bore the burden of proof in that proceeding. But that says nothing about whether a member of a superannuation fund making a claim on the trustee of the fund bears an onus of providing the trustee of the fund with sufficient evidence to prove the claimant's entitlement.

56 Thirdly, Heitman and Tonkin were decided before Finch, and on the basis that :

The court will not control a trustee in the exercise of its purely discretionary powers unless it is acting mala fide or has misconceived the nature of its discretion and acted upon that misconception.[14]

57 As has been seen, in Finch the High Court held that the duty of a trustee properly to inform itself is 'more intense in superannuation trusts in the form of the Deed than in trusts of the Karger v Paul type'. It follows that, where a member of a superannuation trust fund claims to be entitled to a total and permanent disability benefit, and the claim depends on the formation by the trustee of an opinion by the trustee as to the likelihood of the member ever again engaging in work for which he is reasonably suited by education, training or experience, the formation of the opinion is not a 'mere discretionary decision'. The trustee is under a duty to give 'properly informed consideration' to the application and, because 'it is extremely important to the beneficiaries of superannuation trusts that where they are entitled to benefits, those benefits be paid', there is a 'high duty' on trustees to make such inquiries as they may reasonably consider relevant in order properly to determine the application.

The invitation to Mr Frost to provide further material

58 For the same reasons, I reject the trustee's alternative contention that, if it had a duty to make further inquiries, it discharged the duty by inviting Mr Frost to submit further material. As Young J (as his Honour then was) said in Maciejewski v Telstra Super Pty Ltd:[15]

Very often if a trustee and its officers have acted fairly and conscientiously they will have ensured that sufficient material is before them, so that they can make a decision. However, it is just a complete 'cop out' to act on material which ... is inadequate, and then say that the plaintiff has not supplied sufficient material. If the plaintiff has not supplied sufficient material then, if that is necessary to make a proper decision, it has to be obtained somehow or other. One cannot merely dismiss the plaintiff's claim out of hand.

59 With respect, I entirely agree with his Honour. As the decision in Finch has enabled us better to understand, trustees of superannuation funds are no longer to be conceived of in the same way as custodians of charitable or family settlements through the exercise of whose absolute discretion settlors have chosen to channel their beneficence. The economic, industrial and ultimately social imperatives which inform the advent of the superannuation industry, not to mention that beneficiaries of the kind with which we are concerned in one way or the other invariably purchase their entitlements, are productive of legitimate expectations which the law will enforce. Superannuation fund trustees are bound to give properly informed consideration to applications for entitlements and, if that necessitates further inquiries, then they must make them.[16]

60 So to say does not mean that a trustee is required to do the impossible. Nor is it to suggest that a trustee is expected to go on endlessly in pursuit of perfect information in order to make a perfect decision. The reality of finite resources and the trustee's responsibility to preserve the fund for the benefit of all beneficiaries according to the terms of the deed means that there must be a limit. Like the judge below, I accept that a trustee is not under an obligation to go on endlessly seeking more and more information. It may also be that a trustee is not required to undertake any inquiries until and unless a claimant puts forward sufficient material to show that there is a case to be investigated.[17] But, in this case, the trustee's failure in neglecting to make further inquiries is palpable. As I have said, the material which Mr Frost put forward in support of his claim went at least as far as establishing that he had a strong prima facie case of entitlement. If the trustee regarded that as insufficient, it was bound to make further inquiries sufficient to confirm or allay its concerns. On the evidence, it could easily have made appropriate further inquiries of Mr Kierce and Mr O'Brien and Alcoa, or perhaps asked Mr Frost in precise terms for exactly what it wanted. Yet it chose to do nothing at all.

61 In that respect, the facts of this case are similar to those in Vidovic v Email Superannuation Pty Ltd.[18] There, the minutes of directors of the superannuation fund trustee showed that, after considering the medical reports supplied by the claimant, the directors of the trustee resolved that the claimant was not permanently disabled within the meaning of the rules. It was also noted in the minutes that 'no recent medical report was available hence it was requested that [the claimant] be invited to submit another medical report for consideration'. As Bryson J observed, however, the leading characteristic of the medical observations and opinions was pre-finality

and there was a lack of any direct address in them to the central subject of 'total and permanent disablement' as defined:

... There is no address to whether the exaggeration and inconsistencies which in Dr Johnston's observation existed were related to illness, or to the nature of any illness. There is no address to how serious any such illness might be and to its relation to the likelihood of resuming work. There is no address by Dr Johnston to the characterisation or availability of work within the limitations contemplated by Dr Johnston, that is excluding repeated bending and lifting of weights greater than 5 kilograms.

In the material before the trustee there are only the slightest indications of what gainful profession or occupation the plaintiff was reasonably fitted for by education, training or experience. The history material in the medical reports showed that he was reasonably fitted for the work which he had been doing before his injury, and the material before the trustee provided no basis on which a reasonable person could be of opinion that there was any other profession or occupation for which he was fitted.

Dr Johnston shows the pre-finality of his views in his final sentence, yet there was no indication in the material before the trustees whether any medical reports or other information from the treating orthopaedic surgeon had been or could be made available to Dr Johnston...

62 It followed, Bryson J held, that it was not possible on that material for the directors properly to have come to the conclusion that the claimant was not entitled to total and permanent disability benefit and hence that their resolution was not an effectual exercise of their power to determine the claim.

63 In the same way here, if the material which Mr Frost provided in support of his application were insufficient, it could only be because the leading characteristic of Mr Kierce's report was pre-finality and because, on one possible view of that material, neither Mr Kierce's report nor Mr O'Brien's report directly addressed the central question of whether Mr Frost's illness or injury was sufficiently serious to render him unlikely ever to resume work in an occupation to which he was reasonably fitted by knowledge, education or experience as at the date of termination. Assuming for the sake of argument that the trustee addressed itself to that question, as it alleges it did, the only conclusion to which it could reasonably have come was that further inquiries were required. It failed to make those inquires and it follows that its determination to decline Mr Frost's application was not an effective exercise of its power to determine the claim.

64 I also reject the trustee's further alternative contention that, in view of the invitation to 'appeal' and provide 'new medical evidence', it should be concluded that the trustee had not by then determined to decline the claim. Plainly, the trustee had determined to decline the claim, because that is what is recorded in the minutes of meeting of 19 November 2009; and because, in view of the definitions of TPD benefit and Ill-health benefit earlier set out, the trustee could not have determined to grant Ill-health benefit if it had not first determined that Mr Frost was not entitled to TPD benefit. The fact, if it be the fact, that the trustee stood ready to reconsider its determination does not gainsay that it made its determination without adequate information and therefore that it was not an effective exercise of its power to determine the claim.

65 It remains to deal with the appellant's submission that it would have been pointless for the directors of the trustee to make further inquiries concerning Mr Frost's disability, because of the absence of evidence as to work for which Mr Frost might reasonably have been suited by education, training or experience.

66 There are three answers to that. First, if there were an absence of evidence as to the work for which Mr Frost was suited by reason of his education, training and experience then, for the reasons already given, it was incumbent on the directors of the trustee to make reasonable inquiries in order to ascertain just what was the sort of work of which he was reasonably capable and whether it was available. They failed to do so. They should have at least made further inquiries of Mr Frost or Alcoa.

67 Secondly, given what was recorded in the medical reports about Mr Frost's working history and so, as it appeared, that the only work which he had ever known was the 20 years of labouring and forklift driving he had served with Alcoa after leaving school during Year 11, it is at least likely, if not the only reasonable view

open, that the range of occupations for which he is fitted by education, training and experience is limited to labouring and forklift driving.

68 Thirdly, to put it at the lowest, it is difficult to conceive of too many labouring or forklift driving positions, in or outside Alcoa, which do not involve prolonged or frequent bending, lifting greater than 15 kilograms, using implements such as picks, shovels, sledgehammers and crowbars or driving machinery over rough terrain. The fact that the trustee granted Mr Frost Ill-health benefit tends to confirm that. So, unless his condition had significantly improved since he was seen by Mr Kierce on 5 June 2006, it strikes me as highly likely that he has not since then been reasonably suited to any work or occupation by reason of his education, training or experience.

69 Of course, in the first instance, that will be a decision for the trustee to make on the basis of adequate inquiries. But, as I say, as the evidence stands, it is hard to see how the trustee could properly come to any other view.

71 The respondent was a beneficiary of a defined benefit superannuation trust. He had a beneficial interest the precise quantum and form of which was contingent on particular events. The trustee of the superannuation fund had a duty to distribute to those who fell within the definition of 'Total and Permanent Invalidity'. Forming an opinion as to the identification and evaluation of such a fact was not a matter of discretionary power but was an ingredient in the performance of the trustee's duty.[19] The fiduciary duty requires the trustee to act reasonably in forming an opinion.[20] For these and the contextual reasons stated by the High Court in Finch v Telstra Super

Pty Ltd[21] the legitimate expectations of the respondent were high that the decision of the trustee would be soundly taken.

72 The nature and content of the material lodged in support of an application to the trustee of such funds informs the manner in which the duty is to be discharged and in particular whether it should make further inquiries and to whom they should be directed. Accordingly, where material of substance is lodged which tends to indicate that the application may have merit, or where there is an inconsistency of importance in that material, the trustee will ordinarily be under a duty to make further reasonable inquiries, in order to discharge that duty. The present appeal concerned such a case.

73 The material lodged with the trustee showed that the respondent had a chronic back condition which disabled him from performing his normal labouring duties when assessed six months before his employ was terminated. When further examined 12 months after his termination it was found that he was totally and permanently disabled. Although such evidence fell short of establishing that he was so disabled at the time of the termination of his employment as required under the relevant condition of the trust deed, the cumulative effect of the material before the trustee made it likely that further inquiry would establish that he was so disabled at the time of termination of his employ.

74 For these and the reasons given by Nettle JA, I agree that further inquiry should have been undertaken by the trustee and that the invitation extended by the trustee was not a sufficient discharge of its duty.

76 I agree with Nettle JA and Redlich JA for the reasons given.

[2] Finch v Telstra Super Pty Ltd [2010] HCA 36; (2010) 242 CLR 254.

[3] Not advanced before the judge below or in the trustee's notice of appeal or written outline of argument.

[4] [1984] VicRp 13; [1984] VR 161.

[5] Kerr v British Leyland (Staff) Trustees Ltd [2001] WTLR 1071, 1079; Stannard v Fisons Pension Trust Ltd [1992] IRLR 27, 31.

[6] Superannuation (Resolution of Complaints) Act 1993 (C'th).

[8] [2011] NSWCA 204; (2011) 282 ALR 167, [127]-[151].

[11] Unreported, NSWSC, 23 February 1995; BC9504297.

[12] (1986) 4 ANZ Ins Cas 60-684.

[13] (1982) 2 ANZ Ins Cas 60-481.

[14] Tonkin v Western Mining Corporation Ltd (1998) 10 ANZ Ins Cas 61-397, 74,270 (Franklyn J).

[15] (1998) 44 NSWLR 601, 605.

[16] Kerr v British Leyland (Staff) Trustees Ltd [2001] WTLR 1071, 1079 (Fox LJ); Stannard v Fisons Pension Trust Ltd [1992] IRLR 27 [1991], 1992 WL 895102, 7; Vidovic v Email Superannuation Pty Ltd (Unreported, NSWSC, 3 March 1995, BC9504297, Bryson J, 15-20); Uncle v Parker (1994) 55 IR 120, 123 (Santow J); Sayseng v Kellogg Superannuation Pty Ltd [2003] NSWSC 945, [59]-[60] (Bryson J); Lock v Westpac Banking Corporation (1991) 25 NSWLR 593, 601-2 (Waddell CJ in Eq); cf Tuftevski v Total Risk Management Pty Ltd [2009] NSWSC 315, [128] (Smart J); and see Campbell JC, Exercise by superannuation trustees of discretionary powers (2009) 83 ALJ 159, 167.

[17] Gilberg v Stevedoring Employees Retirement Fund Pty Ltd [2008] NSWSC 1318, [42] (McDougall J).

[18] Unreported, NSWSC, 3 March 1995; BC9504297.

[19] Finch v Telstra Super Pty Ltd [2010] HCA 36; (2010) 242 CLR 254, [30]

[20] Telstra Super Pty Ltd v Flegeltaub [2000] VSCA 180; (2000) 2 VR 276, 283-4 (Callaway JA), 286 (Batt JA).

[21] [2010] HCA 36; (2010) 242 CLR 254, [32]-[35].