Burtaleea v AustralianSuper Pty Ltd

The initial points of claim 4 The applicant's initial points of claim (as filed on 9 September 2015) advanced the following argument. 5 The contract in question was an "Australian Super Fund Group Life Insurance Policy" which applied to the applicant from 1 October 2005, as an incident of his employment. Premiums were sent on the applicant's behalf by his employer until 27 October 2006, the month in which the applicant left that employment. The policy was governed by the terms of the Insurance Contracts Act 1984 (Cth). Accordingly, even though no further premiums were paid after 27 October 2006, it could only be cancelled under s 59 of the Insurance Contracts Act by written notice to the applicant from the respondent. As the respondent did not notify the applicant of the proposed cancellation of the policy, it remained on foot after 27 October 2006. 6 The policy provided for benefits for total and permanent disablement ("TPD"). Around 23 December 2009, the applicant became totally and permanently disabled. On 6 March 2014, the applicant made a claim under the policy and the respondent thereupon became liable to the applicant to pay the benefit under the policy.

The amended notice of appeal 7 The initial points of claim made no reference at all to any determination by the Superannuation Complaints Tribunal asserting only that, on the basis of the points of claim, the applicant claimed damages for breach of contract, interest thereon and costs. The amended notice of appeal filed on 9 September 2015, however, did refer to a "decision of the Superannuation Complaints Tribunal made on 20 March 2015", as the subject of the appeal and referred to the points of claim as the questions of law which arose in the appeal. 8 In that amended notice of appeal the orders sought were: 1. Damages for breach of contract. 2. The reinstatement of the applicant's claim with the first respondent. 9 The grounds relied on for those orders were the initial points of claim.

Objection to competency 10 The respondent, at that stage, objected to the competency of the appeal on a number of grounds. 11 First, the respondent contended that neither the amended notice of appeal nor the points of claim supporting it stated the questions of law to be raised on the appeal or the parts of the decision of the Superannuation Complaints Tribunal which should be varied. 12 Secondly, the respondent contended that s 59 of the Insurance Contracts Act had no application because cover under the policy lapsed, in accordance with its terms, 13 months after the last receipt of contributions - i.e. before December 2009. 13 Thirdly, the respondent contended that, in any event, it was not the insurer under the policy and not liable to the applicant as an insurer. 14 Fourthly, the respondent contended that whether the respondent complied with s 59 of the Insurance Contracts Act could not be raised as a question on the appeal because it was "a question of fact" for the Superannuation Complaints Tribunal.

The preliminary question 15 The active parties agreed that the objection to competency should be dealt with at the outset. The second respondent filed a submitting appearance and took no active part in the proceedings. 16 Each of the active parties filed written submissions. Each sought, in those written submissions, to modify the position arising on the documents I have referred to. Neither party objected to the other doing so and, at the hearing, I permitted further amendment of the notice of appeal and amendment of the notice of objection to competency. 17 I refused one further application, towards the end of the hearing, to amend the notice of appeal again to rely on s 58 of the Insurance Contracts Act. I refer to that question later.

The claim and the Tribunal decision 18 After the applicant's claim to TPD benefits, which was made to the respondent as trustee of the fund, he was advised by the respondent that benefits were not payable because his TPD cover had ceased in November 2007. 19 Records of the respondent also indicated that a "system generated" letter had been sent in October 2007 to the applicant at his address then on file, which was not returned, advising him that cover would cease the following month. Member statements sent to the applicant's recorded address from 2008 onwards showed that death and TPD cover was "0". 20 After receipt of the claim, and its initial rejection, the claim was internally reviewed by the respondent but was again refused. 21 A complaint to the Tribunal was then made on 5 June 2014. After considering the complaint, the Tribunal wrote to the applicant on 29 January 2015 informing him that it was considering whether to deal with his complaint under s 22(3)(b) of the Act. 22 Section 21 and s 22(3)(b) of the Act provide: 21 Withdrawal of complaint A complainant may withdraw a complaint at any time. 22 Power to treat a complaint as having been withdrawn … (3) The Tribunal may also decide to treat a complaint as if it had been withdrawn under section 21, in the following cases: … (b) if the complaint has been made to the Tribunal - the Tribunal thinks that the complaint is trivial, vexatious, misconceived or lacking in substance; … 23 In its letter of 29 January 2015, the Tribunal referred to the respondent's "system generated" records of advice to him, although it acknowledged his assertions of non-receipt. The Tribunal also referred to cl 10.20(b) of the policy: End of Cover 10.20 Cover for an insured member will end on the earliest of: … (b) subject to condition 11, thirteen months following the end of the month in respect of which employer contributions were last received by the Employer Sponsored Division of the fund on time (as agreed between you and us) from an employer in respect of the insured member; … (Italics in original.) 24 The Tribunal then drew attention to cl 10.9 of the policy: Recommencement of Cover after 1 November 2006 10.9 If: (a) a member ceases employment with their employer; and (b) insured cover ceased for the person under paragraphs (b), (c) or (g) of condition 10.20; then, cover will recommence after the changeover date once employer contributions for the person to the Employer Sponsored Division are subsequently received by you for that person and will be deemed to take effect again from the commencement of the period for which the employer contribution was received, subject to condition 10.11. (Italics in original.) ["you" is the respondent] and said: In accordance with the policy the insurance cover could only recommence upon receipt of an employer contribution. The evidence available shows that the Fund did not receive any further employer contributions after 27 October 2006, therefore, there was no provision under the Insurance Policy enabling the Trustee to reinstate your insurance cover. I have enclosed a copy of your Member Statements from 2008 to 2012 as evidence that no further employer contributions were received. 25 The Tribunal observed that it had no greater, or independent, power to reinstate cover under the policy because it was prevented by s 37(5) of the Act from acting contrary to the governing rules of the fund or the contract of insurance. 26 On 20 March 2015, the Tribunal informed the respondent that, for the reasons explained in its letter to the applicant of 29 January 2015 it had decided that his complaint was "misconceived" and "lacking in substance" under s 22(3)(b) of the Act and that it had decided to treat it "as withdrawn".

A factual issue 27 On the same date, 20 March 2015, the Tribunal wrote to the applicant. The applicant had made representations to the Tribunal on 11 February 2015, after receiving the Tribunal's letter of 29 January 2015. He had claimed that he did not receive correspondence from the respondent advising of the lapse of insurance. The Tribunal said: In relation to your comments in your letter dated 11 February 2015, the Tribunal acknowledges and does not dispute your claim that you did not receive any correspondence from the Fund advising of the lapse of your insurance. The fact that the Trustee is unable to provide a copy of the letter actually sent to you does not mean the Trustee should reinstate your TPD cover and accept your claim. As noted in our letter dated 29 January 2015 insurance cover could only recommence upon receipt of an employer contribution. 28 On that basis, and for the reasons advised on 29 January 2015, the applicant was told that his complaint was treated as withdrawn.

Amended notice of objection to competency 29 The respondent relied at the hearing on an amended notice of objection to competency whereby, to the matters originally raised, it added the contention that a decision by the Tribunal under s 22(3)(b) of the Act was not a "determination" against which a right of appeal was given by s 46 of the Act. 30 There is considerable force in this argument, as a matter of construction of the Act, as I will explain, although it is clear from the Tribunal's explanation of why it considered the complaint to be misconceived or lacking in substance that it had in mind the way it would inevitably determine the complaint upon a review leading to a determination (and possible appeal). For instance, it referred to the limitation on its powers under s 37(5), which deals with how it may determine a complaint made to it under s 14. 31 I will return to discuss the respondent's new contention further in due course. 32 In written submissions the respondent developed both the new contention and the earlier argument that no question of law had been adequately stated. 33 The amended notice of objection to competency, like the notice of objection to competency originally filed, also advanced alternative contentions which went beyond the limited proposition that the appeal should be dismissed on a summary basis as incompetent for formal defects - e.g. the respondent argued that it was clear that the policy lapsed in accordance with its terms, and no written notice was necessary.

The applicant's response 34 The applicant's written argument, that the decision of the Tribunal under s 22(3)(b) should be regarded as a determination under s 37, initially relied in large part upon the proposition that the Tribunal's decision was based upon an incorrect and unreliable finding of fact, or inference, that the applicant had probably received (or was probably sent) advice in October 2007 that the policy would lapse. Apart from the limits, in any appeal, of reviewing the Tribunal's findings of fact, in my view this seriously understated the foundation for the Tribunal's decision and the contention was not pursued at the hearing. That was a correct course to take because the Tribunal's conclusion that the complaint had no prospect of success, and was misconceived and lacking in substance, was based on a number of articulated matters. 35 Then, the applicant's written submissions sought to identify two particular questions of law. The first was that the Tribunal failed to deal with the substance of the applicant's complaint by treating it as withdrawn. The second suggested error of law was that the Tribunal's finding that the applicant had been sent notice about the lapse of cover was not supported by any evidence. The applicant proposed the following further amendments to its notice of appeal: a. The Tribunal erred in law by dealing with the Appellant's complaint under section 22, rather than determining the substance of the complaint on its merits; b. The Tribunal erred in law by finding that the notice allegedly generated by the First Respondent's systems was, in fact, generated as a matter of inference from the mere fact that the First Respondent had a system that generated documents of that kind; and, c. The Tribunal erred in law by inferring that the notice (even if generated) was in fact sent to the Appellant when there was no evidence upon which such an inference, or finding, could be made. 36 At the hearing, some of the applicant's written arguments fell away because it was correctly conceded that the Tribunal's reasoning did not ultimately depend on any assumption that the applicant in fact was sent or received notice about the lapse in cover. As a replacement contention, the applicant then sought to rely on s 58 of the Insurance Contracts Act. I shall refer to this argument below. 37 I heard submissions on the point from both the applicant and the respondent but I then refused leave to further amend the notice of appeal to rely upon the new argument as I was satisfied that the argument could not affect the outcome of the appeal.

Conclusions 38 None of the applicant's arguments go far enough to save the appeal. 39 The errors of law now suggested for attention depart very substantially from the case elucidated in the points of claim. More importantly, however, they are insufficient to overcome the basic, and incurable, defects in the applicant's case. 40 I do not doubt that if the Tribunal misdirected itself to the task stated by s 22(3)(b) the Court would have power to correct an error of that kind, if it did not arise under s 46 of the Act, in appropriate proceedings and to compel the Tribunal to complete the task of conducting a review and making a determination susceptible of appeal. That is not this case, and the question need not be further pursued, because there is no reason to think that the Tribunal did misdirect itself in that way. 41 I do not accept, more generally, that a decision under s 22(3)(b) may simply be treated as a determination capable of appeal under s 46 of the Act, but before I return to that distinction some more general observations should be made.

Advice of lapsing 42 After receiving representations from the applicant, dated 11 February 2015, the Tribunal was prepared to accept, for the purpose of its further consideration, that no advice of lapse of coverage was actually received by the applicant but considered that this assumed factual circumstance made no material difference. 43 Although the Tribunal did initially conclude that the material before it suggested that appropriate advices had been sent by the respondent (even if the applicant did not receive them) that was far from the whole, or even the essence, of its reasoning that the claim could not possibly succeed. Indeed, reference to that issue in the letter of 29 January 2015 followed an earlier conclusion that the complaint was, for other reasons, misconceived. 44 In the passage in question, in its letter of 29 January 2015, the Tribunal said: Disclosure of lapsing insurance The Tribunal notes that you believe your TPD cover remains on your account on the basis that you did not receive any advice from the Trustee confirming the TPD cover had lapsed. Although the Trustee is unable to reproduce a copy of the letter it sent to you on 29 October 2007 it has provided a screen shot of its records which confirms that an 'Insurance Cover Expiry Letter' was generated and sent on this date (copy enclosed). The Tribunal acknowledges your claim that you did not receive the letter, however, the Trustee has confirmed it did not receive any return mail. I have enclosed a copy of the Trustee's record which confirms your address history with the Fund and the status is affirmed as 'Active' which means that mail has/had not been returned. Further to this the Tribunal notes that your Member Statements from 2008 onwards disclose that no insurance premiums were deducted from your account and under the section 'Your Insurance Cover' it states the Death and TPD cover is '0'. The only deductions made from your account were the administration fees (which are the costs associated with administrating your account) and negative investment returns. Please note that the Superannuation Complaints Tribunal is an administrative Tribunal which must make decisions based on the facts and the evidence available. Although the Tribunal acknowledges your claim that you did not receive the letter issued in October 2007 advising you of the lapsing insurance cover, the evidence available suggests the letter and Member Statements were sent by the Trustee to your registered address and not returned as undeliverable. In addition there is no evidence that your failure to receive correspondence was due to any fault on the part of the Trustee. Further, it is noted you have not provided any evidence demonstrating that you were eligible or had insurance cover on your account after 30 November 2007. Consequently your claim is lacking in substance and not supported by the evidence available. For the purposes of section 22(3)(b) of the SRC Act, the Tribunal is of the opinion that the expression 'misconceived' means that the complaint brought before the Tribunal is based upon a legal misconception and has no foundation and the expression 'lacking in substance' means that the complaint brought before the Tribunal is unsupported by the evidence. Based upon this interpretation, the Tribunal is of the view that this complaint should be withdrawn under section 22(3)(b) of the SRC Act as: Misconceived because the Tribunal cannot make a determination that is contrary to the terms and conditions of the Insurance Policy; and Lacking in substance because you have not provided any evidence which shows you were entitled to TPD cover after November 2007. (Italics added.) 45 The paragraphs I have italicised appear to me to make general points, referring back to earlier matters which had been drawn to the applicant's attention. Those matters included the lapsing provisions in the policy (cl 10.20), the limitations on the policy recommencing (cl 10.9), the absence of any contributions after 27 October 2006 and the limits on the Tribunal's own powers on a review (s 37(5) of the Act). Those matters had caused the Tribunal to say earlier in the letter: The Tribunal notes that you are seeking for the Trustee to reinstate your TPD benefit, however, subsection 37(5) of the SRC Act means that the Tribunal is unable to make a determination in relation to the Trustee's decision to cancel your insurance cover, as to do so, would require the Trustee to disregard the relevant Insurance Policy. In other words, if the Tribunal were to ask the Trustee to reinstate your insurance cover and assess your claim, we would be asking the Trustee to do something that is, on the face of it, contrary to the terms and conditions of its Insurance Policy. The Tribunal is bound by clauses 10.20 and 10.9 of the Insurance Policy and subsection 37(5) of the SRC Act in relation to any possible review of the Trustee's/Insurer's decision and therefore this aspect of your complaint is misconceived. 46 Those considerations were obviously considered by the Tribunal to be potentially fatal to any possibility of a determination in favour of the applicant if his claim proceeded to review and determination. Those conclusions were stated before the Tribunal addressed the question of receipt of notices.

The Insurance Contracts Act 47 In my view, there is no reason to think that the Tribunal made any of the legal errors in its analysis which the applicant wished to attribute to it, or that it failed to understand the legal context which affected the claim. In particular, I see no reason to think that s 58 or s 59 of the Insurance Contracts Act had direct application. 48 The insurance policy in question was a group policy. The insured was the respondent. The insurer was The Colonial Mutual Life Assurance Society Limited. The obligations owed by the insurer to the insured under s 58 and s 59 of the Insurance Contracts Act were owed to the respondent; not by the respondent to the applicant. 49 The relationship between the respondent and the applicant was regulated by a Trust Deed, cl 13 of Schedule 3 of which stated when a TPD benefit would be made to a member, including a sum provided to the trustee (the respondent) under a relevant policy. 50 Furthermore, so far as s 58 of the Insurance Contracts Act is concerned, the relevant policy was not one referred to in s 58(1): it was not for a particular period of time, and renewable as there contemplated; it was (by cl 6.2 of the policy) a continuing one. 51 I have mentioned those matters only to dispel any notion that the matter next to be dealt with might appear to defeat some legitimate claim. These reasons do not prevent some further application, much less govern how it should be decided. However, the present is not a case, in my view, where the Court should explore any alternative formulation of the foundations of the case, or the claims for relief, in the interest of avoiding injustice if possible.

A fatal defect 52 A fatal defect in the present proceeding is that the Tribunal's decision is not open to appeal under s 46 of the Act. 53 The scheme of the Act permits complaints under Part 4. A complaint may, but need not, lead to a review under Part 6. It will not do so if it is withdrawn under s 21. Nor will it, in my view, if it is treated as withdrawn under s 22(3) (or s 22(1), s 22A(2)). 54 Part 5 of the Act deals with conciliation of complaints. Section 27 provides: 27 Inquiries by Tribunal If: (a) a complaint has been made to the Tribunal; and (b) the complaint has not been withdrawn; and (c) the Tribunal is satisfied that the Tribunal can deal with the complaint under this Act; the Tribunal must inquire into the complaint and try to settle it by conciliation. 55 Part 6 commences with s 32: 32 Arrangements for review meetings (1) If the Tribunal has tried to settle a complaint by conciliation under Part 5 but has not been successful, the Tribunal must fix the date, time and place for a review meeting. (2) The Tribunal must write to the parties inviting written submissions by the date specified in the notice. (3) The date specified for the meeting must be such as to allow a reasonable period for the parties to make written submissions. 56 Part 6 goes on to specify procedures for considering a review and then making a determination. It is a determination under s 37 (and succeeding sections) which may be the subject of an appeal under s 46. 57 In my view, Parts 5 and 6 do not concern, or operate upon, a complaint which is withdrawn or taken to be withdrawn. In particular, s 46 does not contemplate, or provide, an appeal against a decision under s 22(3) of the Act. 58 In an appropriate case, it might be appropriate to consider nevertheless the availability of other remedies if it appeared that a clear error had been committed (see e.g. Merkel v Superannuation Complaints Tribunal [2010] FCA 564 at [62]-[63]). However, the present is not such a case for the reasons I have given. 59 Counsel for the respondent, very appropriately, drew my attention to the observations in Ludowyk v Superannuation Complaints Tribunal [2013] FCA 692 at [32] which appear to suggest a right of appeal under s 46 of the Act. The remarks were obiter and were made as a prelude to a later analysis which yielded a result against the moving party. I do not regard the observations as binding on me. They do not alter the opinion I have expressed which, so far as the structure of the Act is concerned, appears to me to be consistent with the reasoning of Goldberg J in Ray v Superannuation Complaints Tribunal (2004) 138 FCR 548 (see especially at [49]); see also Kowalski v Superannuation Complaints Tribunal [2010] FCA 473 per Besanko J at [12].

Orders 60 The result of my conclusion on this point is, as the respondent submits, that the purported appeal is not competent, and must be dismissed. 61 There is no reason why the usual order as to costs in favour of the first respondent should not follow. 62 In its submitting appearance, the second respondent said it wished to be heard on the question of costs. Any application for costs by the second respondent should be made within seven days. I certify that the preceding sixty-two (62) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan.