Consideration
92 As I have already mentioned, Ms Wright did not participate at all in this proceeding. She took no action whatsoever to oppose the making of the orders claimed by Hannover Life. USL adopted a position of neutrality, although it did provide a Written Submission to the Court by which it sought to defend the decisions which it took in relation to Ms Wright's application for additional cover.
93 Hannover Life filed two sets of Written Submissions and made available Senior Counsel's speaking notes (MFI-1).
94 Effectively, the orders sought by Hannover Life were not opposed by any interested party.
95 In those circumstances, I do not intend to recount in detail the submissions made on behalf of Hannover Life. I propose to grant the relief sought by it. I will shortly state my reasons for doing so. To a large extent those reasons are based upon or influenced by submissions made on behalf of Hannover Life.
96 The Tribunal held that USL had acted in accordance with the Trust Deed with the consequence that its decision to impose the total spine exclusion as a condition of Ms Wright's cover was not unfair or unreasonable (par 42 of the Tribunal's Decision).
97 In addition, the Tribunal considered the fairness and reasonableness of the terms of the total spine exclusion when looking at the position of Hannover Life. Essentially, the Tribunal took the view that the scope of the exclusion went much further than was reasonably necessary.
98 The Tribunal did not consider whether s 37(5) of the Complaints Act prevented it from approaching the matter in the way that it did.
99 Section 37 of the Complaints Act provides:
37 Tribunal powers - complaints under section 14
(1) For the purpose of reviewing a decision of the trustee of a fund that is the subject of a complaint under section 14:
(a) the Tribunal has all the powers, obligations and discretions that are conferred on the trustee; and
(b) subject to subsection (6), must make a determination in accordance with subsection (3).
(2) If an insurer or other decision maker has been joined as a party to a complaint under section 14:
(a) the Tribunal must, when reviewing the trustee's decision, also review any decision of the insurer or other decision maker that is relevant to the complaint; and
(b) for that purpose, has all the powers, obligations and discretions that are conferred on the insurer or other decision maker; and
(c) subject to subsection (6), must make a determination in accordance with subsection (3).
(3) On reviewing the decision of a trustee, insurer or other decision maker that is the subject of, or relevant to, a complaint under section 14, the Tribunal must make a determination in writing:
(a) affirming the decision; or
(b) remitting the matter to which the decision relates to the trustee, insurer or other decision maker for reconsideration in accordance with the directions of the Tribunal; or
(c) varying the decision; or
(d) setting aside the decision and substituting a decision for the decision so set aside.
(4) The Tribunal may only exercise its determination making power under subsection (3) for the purpose of placing the complainant as nearly as practicable in such a position that the unfairness, unreasonableness, or both, that the Tribunal has determined to exist in relation to the trustee's decision that is the subject of the complaint no longer exists.
(5) The Tribunal must not do anything under subsection (3) that would be contrary to law, to the governing rules of the fund concerned and, if a contract of insurance between an insurer and trustee is involved, to the terms of the contract.
(6) The Tribunal must affirm a decision referred to under subsection (3) if it is satisfied that the decision, in its operation in relation to:
(a) the complainant; and
(b) so far as concerns a complaint regarding the payment of a death benefit - any person (other than the complainant, a trustee, insurer or decision maker) who:
(i) has become a party to the complaint; and
(ii) has an interest in the death benefit or claims to be, or to be entitled to benefits through, a person having an interest in the death benefit;
was fair and reasonable in the circumstances.
100 The decisions about which Ms Wright complained to the Tribunal were the decision by USL to include in the additional death and disablement cover offered to Ms Wright a total spine exclusion clause and the decision to reduce the level of cover which she sought from nine additional units to five additional units. Both of those decisions were decisions made by USL, not by Hannover Life although, of course, they necessarily followed Hannover Life's underwriting decisions.
101 In those circumstances, Ms Wright's complaint, properly understood, was a complaint made under s 14 of the Complaints Act. Her complaint was made within time as required by s 14(3) and s 14(4). Section 14(2) provides that a person may make a complaint (other than an excluded complaint) to the Tribunal that the decision is or was unfair or unreasonable.
102 Ms Wright may also have been entitled to complain about Hannover Life's corresponding decisions under s 15J of the Complaints Act. However, she did not make a direct complaint about Hannover Life's decisions. Because Hannover Life was joined as a party to the review proceeding initiated by Ms Wright's complaint, nothing turns on the fact that her complaint was made about decisions of USL rather than decisions of Hannover Life.
103 Hannover Life placed considerable emphasis upon s 37(5) of the Complaints Act. It submitted that the variation to the total spine exclusion clause which the Tribunal ordered in the present case was contrary to law, contrary to the governing rules of UniSuper and contrary to the terms of the policy.
104 It relied upon two decisions of single Judges of this Court: Retail Employees Superannuation Pty Ltd v Crocker (2001) 48 ATR 359 (Crocker), a decision of Allsop J (as his Honour then was); and Colonial Mutual Life Assurance Society Limited v Brayley [2002] FCA 1333 (Brayley), a decision of Branson J and observations made by Kirby J in Attorney-General v Breckler (1999) 197 CLR 83 (Breckler).
105 At 363 [15]-[16] in Crocker, Allsop J said:
15 In the context of a trustee acting as the trustee of a superannuation fund pursuant to a trust deed and an insurer issuing a policy to the trustee on behalf of the members of a fund, allegations of the kind just mentioned might throw up for consideration a number of matters if one were concerned with analysing or determining all the legal rights and obligations of the three parties (member, trustee and insurer) inter se: questions as to whether the member was entitled under the terms of the trust or the terms of the insurance policy to disability cover; questions as to whether, irrespective of the terms of the policy, the trustee had bound itself in some fashion to the member to provide disability cover; questions as to whether any such obligation had been created in contract, by estoppel or in some other legal or equitable framework; and questions as to whether, if the trustee had so bound itself and was not entitled to have the insurer pay the claim, it was entitled to indemnify itself out of the trust fund to meet such obligation.
16 However, the Tribunal's task was not to determine all such rights and obligations of the parties. To do so would, in all likelihood, see it purport to engage in the exercise of judicial power. Rather, the Tribunal's task was confined to the role given to it by the Superannuation (Resolution of Complaints) Act 1993 (Cth). At this point I gratefully adopt the description of the legislative scheme set out by the Full Court in National Mutual Life Association of Australia Limited v Campbell (2000) 99 FCR 562 at 565-68 [10] to [20]. This relieves me of refering to the Superannuation (Resolution of Complaints) Act 1993 (Cth), other than to the provisions essential to these reasons.
106 His Honour then described the functions of the Tribunal by reference to s 12 and s 14 of the Complaints Act and then set out s 37. At 364-367 [21]-[32], his Honour said:
21 The central task of the Tribunal was to review the decision of the Trustee and, since the Insurer had been joined under s 17A and s 18, to review any decision of the Insurer: para 37(2)(a). In carrying out this task the Tribunal had all the powers, obligations and discretions conferred on the Trustee and the Insurer: paras 37(1)(a) and 37(2)(b). In carrying out this task the Tribunal was required to make a determination in accordance with subs 37(3). The Tribunal's task was to decide for itself whether the Trustee's decision and any decision of the Insurer was and is unfair or unreasonable. This flows from, first, the nature of the subject matter of review - a complaint under subs 14(2) as to the unfairness or unreasonableness of the Trustee's decision, secondly, the exhaustive universe of possible determinations in subs 37(3), thirdly, the nature of the limitations on the exercise of the powers in subs 37(3) set out in subs 37(4) and, fourthly, the requirement under subs 37(6) to affirm the decision under subs 37(3) if the Tribunal is satisfied that the decision in its operation in relation to the complainant was fair and reasonable in the circumstances.
22 While the determination of the Tribunal was required to be predicated upon its view as to whether the relevant decision was unfair or unreasonable, the Tribunal was enjoined by subs 37(5) from doing anything under subs 37(3) that would be contrary to law, or to the governing rules of the fund or to the terms of the relevant insurance policy, here the Prudential policy.
23 The phrase "governing rules of the fund" means the terms governing the conduct of the superannuation fund, which was a regulated superannuation fund under the Superannuation Industry (Supervision) Act 1993 (Cth) (the SIS Act). It is not limited to the schedule to the trust deed which set out the "rules for the management" of the fund. It means the terms of the trust under which the fund is carried on, which includes the "rules for the management" of the fund: cl 1.2 of the annexure to the deed of amendment dated 13 December 1988.
24 In short, the task of the Tribunal was to review the decisions of the Trustee and Insurer as to whether they were (or either was) unfair or unreasonable and to make a determination under subs 37(3) in the light of that consideration. This task was one to be undertaken, to use the language of Merkel J in Briffa v Hay (1997) 75 FCR 428 at 443-4 and Seafarers' Retirement Fund Pty Ltd v Oppenhuis (1999) 94 FCR 594 at 598-99 [19] to [23], "in the shoes of" the Trustee and the Insurer: see also paras 37(1)(a) and 37(2)(b). The directions for reconsideration of the decision (under para 37(3)(b)) or the variation of the decision (under para 37(3)(c)) or the substituted decision (under para 37(3)(c)) either affect or become the original decision of the Trustee and the Insurer. Thus the strictures of subs 37(5) can be seen not only to prevent, at the point of remedy, something unlawful being ordered to be done, but as an essential reflection of the task being undertaken: a consideration of a decision of the Trustee, qua trustee, that is of the Trustee acting in accordance with law and the terms of its governing trust and making a determination, as if the Tribunal were the Trustee, to affect, vary or substitute a decision. The same applies to the task in relation to the Insurer and its decision.
25 It is important to appreciate what I have just said, because in my view it affects the meaning of "unfair or unreasonable". The words "fair" and "reasonable" have been discussed in this Court by Nicholson J in Pope v Lawler (1996) 41 ALD 127 at 135 where his Honour had recourse to the New Shorter Oxford Dictionary (4th Ed) 1993 in ascribing, for the purposes of s 14 and s 37 of the Superannuation Industry (Supervision) Act 1993 (Cth), to the word "fair" the meaning "just, unbiased, equitable, impartial" and to the word "reasonable" the meaning "within the limits of reason; not greatly less or more than might be thought likely or appropriate"; by Sundberg J in National Mutual Life Association v Jevtovic (unreported, Federal Court, Sundberg J, No VG656 of 1996) at pp 9-10; and by Merkel J in Briffa v Hay, supra at 436 and in Collins v AMP Superannuation (1997) 75 FCR 565 at 578 (referring, without disapproval, to Pope and Jevtovic).
26 While I do not disagree with these expressions of view as to the meaning of these words, it must be the case (and I do not read anything said by their Honours to be to the contrary) that the words must take their meaning from the place and context which they occupy in the statute. Further, I note the comments of the Full Court in National Mutual v Campbell, supra at 571, concerning the dangers of paraphrasing, even through the use of a dictionary.
27 The task of the Tribunal and the meaning of the phrase "unfair or unreasonable" are inextricably intertwined and both are governed by the Superannuation Industry (Supervision) Act 1993 (Cth), and, especially, by s 37. It is the decision of the Trustee, recognising its obligation to act in conformity with the governing rules of the fund, and the decision of the Insurer, recognising its obligation (and entitlement) to act in conformity with the terms of the relevant policy, which must be reviewed for unfairness or unreasonableness. The unfairness or unreasonableness must be of the decision (as expanded by s 4) under, and in conformity with, the governing rules or the terms of the policy. It is not some other perceived (rightly or wrongly) unfairness or unreasonableness in and about the conduct of the fund.
28 The question as to whether a decision was unfair or unreasonable cannot be judged otherwise than by having regard to the conformity of the decision with the governing rules of the fund and the terms of the policy. The conformity of the decision with those matters is therefore a relevant consideration in the sense discussed in Minister for Aboriginal Affairs v Peko-Wallsend (1986) 162 CLR 24 at 39-40 and see Telstra Corporation Ltd v Seven Cable Television Pty Ltd (2000) 102 FCR 517 (special leave refused on 20 August 2001). If conformity with the governing rules or the terms of the policy required the very decision, which was made, to be made, the strictures of subs 37(5), the universe of possible conduct under subs 37(3) and the balance of the Superannuation Industry (Supervision) Act 1993 (Cth), including subs 37(6), would require a conclusion of the Tribunal that the decision was not unfair or unreasonable. It could not be otherwise, as it would, on this hypothesis, be the only decision capable of being reached by the Trustee or the Insurer in the light of the governing rules or terms of the policy; or, put another way, any determination under paras 37(3)(b),(c) or (d) would involve the Tribunal doing an act contrary to the governing rules or the terms of the policy.
29 It may be that a decision of a trustee or an insurer is in conformity with, but not required by, the governing rules of the fund or the terms of the policy. This may be because the decision could be described as one of a discretionary character: see s 14AA of the Superannuation Industry (Supervision) Act 1993 (Cth) and Merkel J in Collins v AMP, supra at 578-79. For myself, I would prefer not to use any dichotomy between discretionary and non-discretionary decisions as a tool in this analysis. I do not think that the presence of s 14AA mandates it. The presence of s 14AA is to be understood for reasons other than any which make the terminology used within it a compulsory tool for analysis of the understanding by the Tribunal of its task: see National Mutual v Campbell, supra at 568-70 [21] to [30] and Seafarers' Retirement Fund v Oppenhuis, supra at 596-98. It may be that the decision of a trustee or an insurer is in conformity with, but not required by, the governing rules or policy terms not because there was involved any exercise of discretion, properly so-called, but because the decision was one which so involves elements of fact, degree, opinion or value judgment that different minds can legitimately differ in reaching a decision or because one aspect of the rules or policy terms, but not another, has been the foundation of the decision. A decision of a trustee or an insurer about a matter of judgment, for instance one involving weighing competing expert or lay opinion about a state of affairs, might be lawful and in conformity with the governing rules and policy terms. It might be described as "correct" in that it was the product of an inquiry directed to the right question and in that there was material available to support it. In this, perhaps limited, sense the decision was correct and was open to be made. However, the Tribunal is not engaged in a form of judicial review. It reviews the decision (as expanded by s4) complained of from the position of the trustee or insurer (paras 37(1)(a) and 37(2)(b)). The Tribunal may find, in its opinion, in some degree (see subs 37(4)), the decision to be unfair or unreasonable and may act under subs 37(3) to give effect to its view of the merits as long as subs 37(5) is not infringed. It seems to me that this analysis accords with the approach described by the Full Court in National Mutual v Campbell, supra at 570-71 [32] and [33] and see also Kirby J in Attorney-General v Breckler (1999) 197 CLR 83 at 129 [88]. It seems to me that the very use of the words "unfair" and "unreasonable" in their breadth, individually and in the composite phrase "unfair or unreasonable", supports this view: see, in other contexts, George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd [1983] 2 AC 803 at 815-16, and Samuels JA in Antonovic v Volker (1986) 7 NSWLR 150 at 154-55.
30 It may be that what I have said does not differ in substance from the views of Merkel J in Collins v AMP at 578 and Sundberg J in Wilkinson v Clerical Administrative and Related Employees Superannuation Pty Ltd (1997) 77 FCR 469 at 491 about "non-discretionary" decisions if they are "correct" or if they "conform to" or are "made in accordance with" the governing rules of the fund or terms of the policy. In many cases, for non-discretionary questions, the governing rules or policy terms will only yield a single result.
31 The Tribunal's task is not to engage in ascertaining generally the rights of the parties, nor is it to engage in some form of judicial review of the decision of the trustee or insurer. Rather it is to form a view, from the perspective of the trustee or insurer, as to whether the decision of either was (recognising the overriding framework given by the governing rules and policy terms, respectively) unfair or unreasonable.
32 Thus, essential to the task before the Tribunal, as a consideration mandated by the terms of s 37, is an inquiry as to whether the decision by the trustee or insurer was in conformity with the governing rules or the terms of the policy. If the Tribunal finds that the decision is contrary to the governing rules or the terms of the policy it may well be an easy step to conclude that it is unfair or unreasonable. I do not need to decide whether a finding by the Tribunal that the trustee's or insurer's decision was contrary to the governing rules or policy terms required a finding of unfairness or unreasonableness: cf Merkel J in Collins v AMP at 578-79 and Sundberg J in Wilkinson, supra at 492. If the Tribunal finds that the decision of the trustee or the insurer is in conformity, with and required, by the governing rules or policy terms, in the sense which I have discussed above, it cannot other than find or be satisfied that the decision is fair and reasonable. If the Tribunal finds that the decision of the trustee or the insurer is in conformity with, but not required by, the governing rules on policy terms, in the sense which I have discussed above, it may proceed, in effect, to supplant the decision of the trustee or insurer with its view of the merits, bearing in mind the limitations of subs 37(4) and 37(5).
107 In Crocker, Allsop J held that the Tribunal was not entitled to make a determination reflecting its view of the rights of the parties inter se, if that determination was contrary to the terms of the governing rules or policy terms.
108 In Brayley at [28]-[34], Branson J said:
28 The Tribunal is expressly empowered by s 14AA(1) of the Act to review a decision concerning which a complaint is made under s 14 of the Act whether or not the decision involved the exercise of a discretion (see [16] above). The Act does not define the expression 'the exercise of a discretion'. In some contexts the exercise of a discretion may be distinguished from the making of a judgment (see, for example, National Mutual Life Association of Australia Ltd v Campbell [2000] FCA 852; 99 FCR 562 at [30]-[31]; Employment Advocate v Williamson [2001] FCA 1164; 111 FCR 20 per Branson J at [78]; J Edelman, 'Judicial Discretion in Australia', Australian Bar Review, vol. 19, no. 3, June 2001, p. 285). However, it seems relatively plain that in the context of s 14AA of the Act the reference to a decision which did not involve 'the exercise of a discretion' is intended to be a reference to a decision where the law, the rules of the relevant fund or the terms of any relevant contract of insurance mandated a particular result (see Attorney General v Breckler, per Kirby J at [88]). That is, that s 14AA(1) is intended to make it clear that a complaint may be made under Part 4 of the Act that a decision is or was unfair or unreasonable even where the decision was one which did not call for a judgment to be made as to fairness or reasonableness or otherwise.
29 I note incidentally that it is likely that the expression 'contrary to law' is intended to bear a wider meaning in s 14AA(2) than the same expression bears in s 37(5) of the Act. In s 37(5) 'contrary to law' is used in contradistinction to contrary to the governing rules of the fund concerned and contrary to the terms of a contract of insurance. In the context of s 37(5) it would appear that "contrary to law" is intended to mean contrary to the general law. However, the expression 'contrary to law' when used in s 14AA(2), which was only inserted into the Act by s 8 of the Superannuation Legislation Amendment (Resolution of Complaints) Act 1998 (Cth), seems intended to have a broader meaning so as to encompass not only contrary to the general law but also contrary to the governing rules of the fund concerned and contrary to the terms of a contract of insurance. It appears plain that s 14AA(1) was enacted to make it clear that the Tribunal's jurisdiction was not confined to reviewing the exercise of discretionary powers on the part of a trustee (see Wilkinson v Clerical Administrative and Related Employees Superannuation Pty Ltd [1998] FCA 51; 79 FCR 469). Section 14AA(2) is concerned with how the Tribunal should deal with a complaint concerning a decision that did not involve the exercise of a discretion. The subsection will have a narrow field of operation, and thus leave the Tribunal without guidance to a significant degree, unless the subsection reaches not only to non discretionary decisions that are contrary to the general law but also to non discretionary decisions that are contrary to the governing rules of the fund concerned or contrary to the terms of a contract of insurance.
30 Where the Tribunal reviews a decision that did not involve the exercise of a discretion within the meaning of s 14AA its options are limited. If it forms the view that the decision was contrary to law (see [29]), it must proceed on the basis that the decision was unfair and unreasonable (s 14AA(2)). As the Tribunal may not itself make a determination on a complaint under s 14 of the Act that would be contrary to law (s 37(5)), the determination of the Tribunal under s 37(3) will in a case of this kind of necessity reflect the Tribunal's view of the decision that was required by the law. If the Tribunal forms the view that the decision was not contrary law, for the same reason the Tribunal will be obliged to affirm the decision.
31 Where the Tribunal reviews a decision that did involve the exercise of a discretion within the meaning of s 14AA, the appropriate course, in my view, is for it to consider first whether the actual decision, as opposed to the process by which the decision was reached, was fair and reasonable in the circumstances (National Mutual Life Association of Australia Ltd v Jevtovic, unreported, Sundberg J, 8 May 1997). The words "unfair" and "unreasonable" are used in the Act as words of broad content so that difficulty attends any attempt to define them precisely (National Mutual Life Association of Australia Ltd v Campbell at [36]). If the Tribunal forms the view that the decision was fair and reasonable in the circumstances it must affirm the decision (s 37(6)). It must do so even though the Tribunal might not itself have made the same decision (National Mutual Life Association of Australia Limited v Scollary [2002] FCA 695 at [37]).
32 If the Tribunal is not satisfied that the decision was fair and reasonable in the circumstances, ss 37(1) and (2) require the Tribunal put itself in the position of the trustee and, in an appropriate case, the insurer and other relevant decision maker (National Mutual Life Association of Australia Ltd v Campbell at [32]; Briffa v Hay (1997) 75 FCR 428 at 443-445). From that position or positions the Tribunal must determine whether, consistently with:
(a) the general law;
(b) the governing rules of the fund concerned; and
(c) if a contract of insurance between the insurer and a trustee is involved, the terms of the contract,
the unfairness or unreasonableness that the Tribunal has identified in respect of the trustee's decision can be addressed in whole or in part.
33 If the Tribunal concludes that it cannot address, in whole or in part, the unfairness or unreasonableness identified by it without acting in a manner that is contrary to the general law, the governing rules of the fund concerned or the terms of a relevant contract of insurance between an insurer and the trustee, the Tribunal is required to leave the perceived unfairness or unreasonableness unaddressed (s 37(5)). If the Tribunal concludes that the unfairness or unreasonableness identified by it can be addressed consistently with the general law, the governing rules of the fund concerned and the terms of any relevant contract of insurance between an insurer and the trustee, it must exercise its determination-making power for the purpose of placing the complainant as near as practicable in such a position that the unfairness or unreasonableness, or both, that the Tribunal has identified no longer exists (s 37(4)).
34 The above analysis reveals that although all complaints made to the Tribunal under s 14 of the Act are, in a formal sense, complaints that a decision is unfair or unreasonable (s 14(2)), the Tribunal is not empowered to remedy all unfairness or unreasonableness that it may perceive. In particular, the Tribunal lacks power to remedy any perceived unfairness or unreasonableness that is a necessary consequence of the application in the particular case of the governing rules of the fund concerned or the terms of a contract of insurance between an insurer and the trustee.
109 Branson J adhered to the views which she had expressed in Brayley in a subsequent case: Employers First v Tolhurst Capital Ltd (2005) 143 FCR 356 at [77]-[84].
110 These views are consistent with the views of Kirby J in Breckler (at 128-129 [87]-[88]) where his Honour said:
87 Nature of the Tribunal's functions: As the reasons of the judges of the Full Court demonstrate (Compare Briffa v Hay (1997) 75 FCR 428 with the views of all of the judges on this point in Wilkinson (1998) 79 FCR 469), there are strong arguments for both sides as to the reconciliation of ss 14 and 37 of the Complaints Act. In the end, it may not help much, for constitutional purposes, to classify some of the Trustees' decisions as "discretionary" and others as "non-discretionary", as the judges of the Full Court did. A safer course is to recognise that, in terms, s 14(2) of the Complaints Act is not restricted to a "decision" of a particular character whether described as "discretionary" or otherwise. The subsection affords a person the entitlement to make a complaint to the Tribunal about any decision of a trustee. But then, by s 37, the Tribunal is restricted in the response which it may give to such a complaint. Specifically, it must not do anything "that would be contrary to law, to the governing rules of the fund concerned" and, if relevant, to the terms of a contract of insurance. In effect, these restrictions require the Tribunal to form a view (necessarily not conclusive) about the requirements of the applicable law, including the meaning of the rules of the fund and of any relevant contract of insurance. But it is not unusual for statutory tribunals to be obliged, in the performance of their functions, to make findings of fact and to apply rules of law (cf Re Boulton; Ex parte Construction, Forestry, Mining and Engineering Union (1998) 73 ALJR 129). Doing so involves no inherent invasion of the judicial power. It amounts to nothing more than the tribunal's complying, like every other individual and legal entity, with the law of the land.
88 Where an applicable legal rule imposes a duty on a trustee, or confers a right or privilege on a beneficiary, compliance with s 37(5) of the Complaints Act obliges the Tribunal to give effect to its understanding of that law. This is not because it deems a decision in accordance with the applicable law to be "fair" or "reasonable" as the Attorney-General suggested. Nor is it because the decision, which is otherwise within the trustee's jurisdiction, is somehow placed outside that jurisdiction by the limited powers which the Tribunal enjoys to disturb the decision. It is simply because, although the decision is reviewed pursuant to the complaint, the Tribunal is forbidden to do anything that would be contrary to law, to the governing rules of the fund concerned and to any contract of insurance that is relevant. Obviously, the occasions for the intervention of the Tribunal on the grounds of "unfairness, unreasonableness, or both" (Complaints Act, s 37(4)) may, as a practical matter, be confined to cases where the law, the rules of a fund or the terms of the contract of insurance do not yield a single result. The "unfairness" or "unreasonableness" which the Tribunal may address will thus arise where the exercise by a trustee of its powers involves an element of discretion, opinion or judgment. That alone will enliven the "determination-making power" of the Tribunal in a way that can be effective. The restriction of the grounds of complaint to present or past unfairness or unreasonableness matches the restrictions in s 37(4) and (6) of the Complaints Act on the Tribunal's powers to interfere with a decision of a trustee.
111 I propose to apply the reasoning of Kirby J, Branson J and Allsop J to which I have referred.
112 In the present case, Reg 9 of the UniSuper Regulations obliged a member who wished to be eligible to purchase additional death and disablement cover to satisfy the relevant requirements of Hannover Life.
113 The insurance cover provided under the policy is governed by the conditions in the policy (cl 1.3). Cover is subject to USL, and any person for whom cover is provided under the policy, abiding by all of the policy conditions which apply to them (cl 1.3).
114 Under cl 4.1 of the policy, cover is only put into place when Hannover Life has agreed in writing that it will insure the particular member under the policy.
115 Under cl 4.4(d) of the policy, Hannover Life reserves to itself the capacity to refrain from providing additional death and disablement cover to a member of UniSuper other than on such terms as Hannover Life considers appropriate including by imposing premium loadings, restrictions or exclusions. In that context, cl 4.4 includes an express reservation of the right to ask for additional information, particularly directed to the health of the member/applicant.
116 Clause 9.3 of the policy contemplates the imposition of particular terms and conditions in respect of the additional cover offered to particular members of UniSuper.
117 Thus, as between USL and Hannover Life, Hannover Life had a contractual entitlement under the policy to impose terms and conditions on the cover granted to any particular member including exclusion clauses. In addition, a member of UniSuper who seeks additional death and disablement cover does so upon the terms and conditions set out in the policy, including those set out in cl 4.4.
118 Regulation 9 of the UniSuper Regulations is part of the governing rules of UniSuper and thus part of the governing rules of the fund within the meaning of s 37(5) of the Complaints Act. In addition, the capacity to impose terms and conditions on the cover granted to particular members of UniSuper including by imposing exclusions on that cover is exclusively reposed in Hannover Life under the policy.
119 When the Tribunal redrafted the total spine exclusion clause which USL imposed on the cover granted to Ms Wright it did something which was contrary to the governing rules of the fund and to the terms of the policy. Section 37(5) of the Complaints Act prevented it from doing so. For these reasons, it was not entitled to order the variation which it ordered to the total spine exclusion clause imposed by USL and Hannover Life.
120 For the above reasons, the appeal should be allowed, that part of the Tribunal's determination which redrafted the total spine exclusion clause set aside and the total spine exclusion clause reinstated.
121 There will be orders accordingly.
122 Hannover Life also argued that, because Ms Wright formally accepted the special condition offer on 27 October 2011 (albeit subject to the resolution of her complaint to the Tribunal), upon receipt of that acceptance by USL, a contract immediately came into force between USL and Ms Wright which included the total spine exclusion clause. It was then submitted that s 37(5) was also engaged because, for the Tribunal to redraft the total spine exclusion clause, was to interfere with that binding contract, action which, properly understood, was contrary to law within the meaning of s 37(5) of the Complaints Act.
123 Given Ms Wright's attempted qualification on her acceptance, I am not convinced that this argument is correct. However, I do not need to decide this question, given that I consider that s 37(5) is engaged because the actions of the Tribunal were contrary to the governing rules of UniSuper and contrary to the terms of the policy in any event.
124 Hannover Life also contended that the imposition of the total spine exclusion clause was fair and reasonable in all the circumstances. There is considerable force in this submission. The commercial arrangements entered into between USL and Hannover Life involved the provision of relatively inexpensive death and disablement cover to the members of UniSuper upon the basis of either fixed or unitised rates of premium. The essence of those arrangements is that, in order to save individual members from needing to procure insurance on their own account, USL has engaged Hannover Life to provide that cover on a basis which is offered to all members subject to the capacity of Hannover Life to sensibly manage its risk given the particular circumstances of particular members who apply for additional cover. Under those arrangements, Hannover Life has no capacity to alter the premium. In commercial terms, the only way in which it can sensibly manage its risk in respect of members who have particular health issues is by the imposition of restrictions and exclusions.
125 However, the question of whether the relevant decisions were fair and reasonable and thus whether the determination of the Tribunal was authorised by s 14(2) of the Complaints Act (all other things being equal) is not a question of law. Even if it is a question of law, it does not arise in the present proceeding. The evidence of Mr Roozendaal made clear that he advised that the total spine exclusion be made a term of Ms Wright's additional death and disablement cover because, in his opinion, that was what was required by the application of Hannover Life's underwriting guidelines.