The review
12 The Trustee submitted that the Tribunal failed to consider and decide whether the decision under review, in its operation, was fair and reasonable as required pursuant to s 37(6) of the Act, rather the Tribunal substituted its view of the evidence and the law for that of the Trustee. The Trustee said that a consideration of the structure and content of the Tribunal's decision revealed that the Tribunal did not have any regard to s 37(6) of the Act until the second last paragraph of the decision in which the Tribunal stated "In the face of all of the evidence supporting the claim, it is unfair and unreasonable for the Trustee to deny the claim". The Tribunal's reasons showed that it was primarily concerned with determining whether the evidence enabled it to be satisfied that the respondent was suffering from a disablement within the meaning of the rules annexed to the trust deed.
13 The respondent accepted that the Tribunal was obliged to consider whether or not the decision of the Trustee was fair and reasonable in its operation in all the circumstances rather than whether it was of the opinion that the Trustee's decision was correct, but submitted that the Tribunal reviewed the medical and factual evidence as a means of determining whether the Trustee's decision was fair and reasonable. The Tribunal, in substance, considered whether the Trustee's decision was fair and reasonable, although it did not specifically state this until towards the end of its decision. The respondent said that, in substance, the Tribunal's consideration of whether or not the respondent satisfied the definition of disablement was central to the requirement under s 37(6) of the Act. The absence of discussion of the meaning of the concepts of "fairness" and "reasonableness" did not lead to a conclusion that the Tribunal had no regard to the meaning or content of the concepts used in s 37(6), or that it did not properly understand its function.
14 The manner in which the Tribunal should approach its review of a trustee's decision under the Act and, in particular, its obligations under s 37(6) of the Act have been considered by the Court on a number of occasions: National Mutual Life Association of Australia v Campbell (2000) 99 FCR 562 at 566‑571; Briffa v Hay (Merkel J, 20 June 1997, unreported) at 12‑13; Adkins v The Health Employees Superannuation Trust Australia Ltd (Heerey J, 15 August 1997, unreported) at 7‑8; National Mutual Life Association of Australia Ltd v Jevtovic (Sundberg J, 8 May 1997, unreported) at 10‑11.
15 In Lykogiannis v Retail Employees Superannuation Pty Ltd (2000) 97 FCR 361, Mansfield J explained the Tribunal's function on a review of a trustee's decision in the following terms, at 372:
"Upon hearing a complaint, the Tribunal must make its own decision. In the course of doing so, it must make findings of fact relevant to its deliberations. The hearing by the Tribunal is a hearing de novo (see in particular the discussion by Merkel J in Oppenhuis at 598‑599 [18]‑[22]. Ultimately, whatever findings the Tribunal must make standing in the shoes of the trustee (see the observations of Merkel J in Briffa and in Oppenhuis) s 37(6) requires the Tribunal to decide whether the decision under review, in its operation, was fair and reasonable in the circumstances. The focus of s 37(6) is upon the consequence or outcome of the decision in its practical operation, rather than upon the process by which the decision under review came to be made."
16 In National Mutual Life Association of Australia v Campbell (supra), the Full Court said at 566:
"When exercising its powers under s 37(3), the Tribunal is engaged in a task that results from a complaint that the decision being reviewed is or was unfair or unreasonable, or both. The claimed unfairness or unreasonableness, which was the subject of the complaint, is the central object of the review. The terms of s 37(4) confirm that this is so.
The exercise of the s 37(3) power is subject to a number of constraints:
· first, the Tribunal must not do anything under s 37(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 trustees is involved, to the terms of the contract (s 37(5));
· secondly, the Tribunal must affirm the decision if it is satisfied that the decision, in its operation in relation to the complainant, was fair and reasonable in the circumstances (s 37(6));
· the Tribunal may only exercise its s 37(3) powers for the purpose of placing the complainant as nearly as practicable in such a position that the unfairness, unreasonableness, or both, that the Tribunal has determined to exist in relation to the trustee's decision that is the subject of the complaint no longer exists (s 37(4))."
The Full Court went on to say at 570:
"… the issue under s 37 is not whether the insurer's decision is impeachable under the general law. The issue is whether the s 14(2) complaint has been made out and whether, for the purposes of s 37(6) the Tribunal is satisfied that the decision, in its operation in relation to the respondent, was fair and reasonable in the circumstances. (We note that the present is not a case in which s 37(6)(b) is relevant.) The Tribunal, under s 37(2) stands in the shoes of the insurer subject only to the constraints to which we have earlier referred."
17 The Full Court decided that the Tribunal did not fail to have regard to s 37(6) of the Act. The Full Court said at 571:
"It remains to consider the submission that the Tribunal misdirected itself about the task it had to perform. In National Mutual Life Association of Australia Ltd v Jevtovic,Sundberg J concluded that it was clear from the Tribunal's own statement of its understanding of its task and from the process of its reasoning, that it had not asked itself whether the decisions complained of were fair and reasonable in the circumstances (the s 37(6) inquiry) but whether in its opinion the respondent was totally and permanently disabled. Thus, the Tribunal in that case had failed to appreciate the role assigned to it by s 37(6) and had erred in law. In the present case, no such misapprehension is evident from the Tribunal's reasons. A fair reading of the Tribunal's reasons as a whole shows that it was fully aware of the nature of its task. It directed its mind to the task imposed upon it by s 37(6) as well as to its function under s 37(3). There is no basis, in the present circumstances, for saying that it exceeded the limitation imposed upon it by s 37(4)."
18 The circumstances of the present case can be distinguished from Campbell. In Campbell the Full Court noted that the Tribunal stated the issue arising for its determination as being "whether the decisions of the Trustee and insurer were fair and reasonable in all the circumstances in their operation to (the respondent)", and found that the Tribunal's reasons showed that it was fully aware of the nature of its task under s 37(6) of the Act. In the present case, unlike Campbell, the structure of the Tribunal's reasons shows that it failed to direct its attention to s 37(6) of the Act and whether the Trustee's decision was fair and reasonable in the circumstances. Rather, the Tribunal approached its task as being to determine on the evidence whether it was satisfied that the respondent was disabled when his services were terminated. So much appears from the Tribunal's finding:
"Taking all the evidence into consideration, the Tribunal is satisfied that the Complainant meets the definition of Disabled as set out in the Trust Deed and that in essence he was disabled when his services were terminated."
19 This was not the issue which the Tribunal was to determine. It did not state the issue for determination in terms of determining whether the Trustee's decision to refuse the claim was fair and reasonable. As described earlier in these reasons, the whole structure and chain of reasoning was aimed at determining whether the evidence was such as to satisfy the Tribunal that the respondent came within the definition of "Disablement" in the trust deed. The Tribunal undertook this task without any consideration that it should be working and reasoning within the framework of asking and determining whether the Trustee's decision was fair and reasonable. The Tribunal's finding (in the previous paragraph) was in substance that the Trustee's decision was not correct - a different finding from one that the decision was not fair and reasonable.
20 The Tribunal did not refer to s 37(6) before reaching this conclusion and while the Tribunal thereafter referred to the terms "unfair" and "unreasonable" in its determination, towards the end of its reasons, this reference was in the context of the requirement under s 37(4) of the Act and is expressed, in effect, as an afterthought. The Tribunal did not properly address whether or not it was satisfied that the Trustee's decision was fair and reasonable before reaching the conclusion which dictated the outcome of its review of the Trustee's decision. It is clear from the structure and process of the Tribunal's reasoning that its inquiry was concerned with whether, in its opinion, the respondent was disabled, and not with the requirement under s 37(6) of the Act.
21 The present case is not unlike the appeals from decisions of the Tribunal in National Mutual Life Association of Australia Ltd v Jevtovic (supra) and Adkins v The Health Employees Superannuation Trust Australia Ltd (supra). In Jevtovic the Tribunal initially identified the correct issue before it but then showed that it misunderstood how it was to resolve that issue. Sunberg J explained the error in the process of reasoning in the following passage, at 10:
"In my view the Tribunal did not address itself to the question posed by sub‑s(6). It initially asked itself the right question - 'whether or not the decision of the Trustee was fair and reasonable in its operation to' the respondent. But then the Tribunal showed that it misunderstood what that question involved it doing, by saying that this 'will involve the Tribunal considering whether the evidence before it enables the Tribunal to conclude that [the respondent] satisfies the requirements to be classified as totally and permanently disabled…'. The emphasis is mine. The sub‑s(6) inquiry is not whether the Tribunal is of the opinion that the respondent is totally and permanently disabled, but whether it is satisfied that the trustee's and the insurer's decisions that he was not so disabled were fair and reasonable in the circumstances.
The Tribunal repeated what in my view is the erroneous understanding of its task when it said 'the role of a tribunal is to decide whether or not the correct or preferable decision has been made'."
22 In Adkins (supra) the applicant claimed that the Tribunal determined whether in its opinion the applicant was totally and permanently disabled, rather than determining whether the decision of the Trustee was fair and reasonable in the circumstances. Heerey J agreed with Sunberg J's explanation of the legislation in Jevtovic and continued at 7‑8:
"While conscious of course of the warning in Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 against over‑zealous or pedantic scrutiny of the reasons of administrative tribunals, I am satisfied that a fair reading of the Tribunal's reasons shows that it misunderstood its task. This is made particularly clear by the passages at the outset and in the second last paragraph where it defines the issue which it saw as being before it. But the issue in truth was not whether the applicant was entitled to be paid a total and permanent disablement benefit, or whether she was unable to return to any occupation for which she was reasonably qualified by education, training or experience. The issue was, in terms of s 37(6), whether the decision appealed against was 'fair and reasonable in the circumstances'."
23 I am satisfied that, on a fair reading of the Tribunal's decision, the Tribunal misunderstood its task. It fell into error by failing to identify and address the issue required by s 37(6) of the Act, namely whether the Trustee's decision was fair and reasonable. The whole thrust of the Tribunal's consideration of, and reasoning, on the matter before it was directed to whether it was satisfied, on the evidence before it, that the respondent came within the definition of "Disablement" and was so disabled when his services were terminated. That was not the task required of the Tribunal under s 37(6) of the Act.
24 It is therefore not necessary to consider the Trustee's submission that the Tribunal misapprehended or ignored the evidence concerning the respondent's ability and capacity to perform light duties, as I have decided this appeal on the ground that the Tribunal did not undertake a s 37(6) inquiry, but rather misunderstood the question involved by considering whether, in its view, the respondent satisfied the definition in the trust deed of "Disablement".
25 The appeal will, therefore, be allowed. The decision of the Tribunal should be set aside and the matter remitted to the Tribunal, differently constituted, for re‑consideration according to law. The respondent should pay the Trustee's costs of the appeal.
I certify that the preceding twenty‑five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg.