Jeffrey Guy Baker v Local Government Superannuation Scheme Pty Ltd

Chammas v Harwood Nominees Pty Ltd (1993) 7 ANZ Insurance Cases 61-175 Charlton v Members of the Teachers Tribunal [1981] V.R. 831 Halloran v Harwood Nominees Pty Ltd [2007] NSWSC 913 Karger v Paul [1984] VR 161 Maciejewski v Telstra Super Pty Ltd [1999] NSWSC 341 Maciejewski v Telstra Super Pty Ltd (1998) 44 NSWLR 601 CASES CITED : McPhail v Doulton (1971) AC 424 Nile v Club Plus Superannuation Pty Ltd [2005] NSWSC 55 Rapa v Patience (4 April 1985, unreported, BC 8500888) Sayseng v Kellogg Superannuation Pty Limited [2007] NSWSC 583 Sayseng v Kellogg Superannuation Pty Ltd [2003] NSWSC 945 Telstra Super Pty Ltd v Flegeltaub (2000) 45 ATR 470 Tonkin v Western Mining Corporation Ltd [1998] 10 ANZ

PARTIES : Jeffrey Guy Baker (Plaintiff) Local Government Superannuation Scheme Pty Ltd (Defendant)

COUNSEL : G Barry Hall QC (Plaintiff) R D Marshall (Defendant)

SOLICITORS : P.K. Simpson & Co Solicitors (Plaintiff) DLA Phillips Fox Lawyers (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

12 October 2007 (ex tempore - revised 15 October 2007)

6994/04 JEFFREY GUY BAKER v LOCAL GOVERNMENT SUPERANNUATION SCHEME PTY LTD JUDGMENT 1 HIS HONOUR: The plaintiff (Mr Baker) was employed by Baulkham Hills Council (the Council) from 15 May 1999 until 27 September 2002. He became, and as at 27 September 2002 was, a member of the superannuation scheme administered by the defendant (the Trustee). Mr Baker claims that as at 27 September 2002, he was totally and permanently incapable of working, and was thus entitled to what is called a "total and permanent invalidity", or TPI, benefit under the deed governing the superannuation scheme. The Trustee decided that Mr Baker was not so entitled. The question for decision is whether this Court should review that decision of the Trustee.

Basis on which the Court may intervene 2 It was common ground that the Trustee's powers under the relevant provisions of the deed - clause 5.4 of schedule 2 to the consolidated trust deed as at 30 June 2004 - were of a discretionary character. In a different context, but nonetheless speaking of a trustee's exercise of discretion, McGarvie J in Karger v Paul [1984] VR 161 at 163-164 spelled out the extremely limited basis on which a court might review a trustee's exercise of discretion. His Honour said that, with one exception, the court would not do so where the decision was exercised in good faith, on a real consideration of the issue and in accordance with the purposes for which the discretion was conferred. However, his Honour said, if the trustee chose to give reasons, the court could review them: The discretionary power given to the trustees by cl.3, was a power, upon the request of Mr. Smith, in their absolute and unfettered discretion to pay or transfer the whole or part of the capital of the estate to him. In my opinion the effect of the authorities is that, with one exception, the exercise of a discretion in these terms will not be examined or reviewed by the courts so long as the essential component parts of the exercise of the particular discretion are present. Those essential component parts are present if the discretion is exercised by the trustees in good faith, upon real and genuine consideration and in accordance with the purposes for which the discretion was conferred. The exception is that the validity of the trustees' reasons will be examined and reviewed if the trustees choose to state their reasons for their exercise of discretion. 3 That approach has been applied on many occasions, in cases such as the present. See McLelland J in Rapa v Patience (4 April 1985, unreported, BC 8500888) at BC 11-12, and Bryson J in Sayseng v Kellogg Superannuation Pty Ltd [2003] NSWSC 945 at [55] to [57], to name but two. 4 McGarvie J said in Karger at 166 that the exception relating to reasons did not apply to reasons given in evidence. His Honour said that to apply the exception to reasons that a trustee was in effect compelled, by reason of forensic considerations, to give would defeat the underlying policy: It was argued for the plaintiff that the exception applied here, because the trustees' reasons had been given by Mr Paul in evidence. I do not accept that. It would defeat the policy which underlies the principle if beneficiaries could, by alleging lack of good faith against the trustees in an action and for practical purposes thus virtually obliging them to disclose in evidence the way they went about exercising the discretion, obtain a right to examination and review of the discretion which they would otherwise not have. The exception to the principle seems to proceed on the basis that if trustees of their own volition disclose their reasons they are treated as waiving their immunity and inviting examination and review of the reasons. 5 It is, however, well recognised that even if a trustee does not give reasons, the court may intervene if the trustee's decision were one that no reasonable person could have reached on the information available to the trustee. Windeyer J said as much in Maciejewski v Telstra Super Pty Ltd [1999] NSWSC 341 at [15]: [15] The question then for consideration is whether or not the Trustee fulfilled its obligation under the Scheme or, more properly, whether it has been shown that it did not. In my opinion that has not been shown. First, I do not think it has been shown that the Trustee addressed the wrong question or that it asked its medical advisers the wrong questions. Second, I do not think it has been shown that the decision to reject the plaintiff's claim was a decision which no reasonable person on a proper consideration of the materials could have come to. 6 Bryson J referred to this with approval in Sayseng at [62]; and his Honour added at [63]: [63] In a case like the present where the evidence allows the information placed before the Trustee to be identified, if the Trustee came to a conclusion which no reasonable person could have come to one of the first three grounds of challenge referred in Rapa v. Patience must be available; an unreasonable conclusion cannot be reached without either a failure to exercise power in good faith, or a failure to exercise the power upon real and genuine consideration, or a failure to exercise the power in accordance with the purposes for which it was conferred. See Maciejewski at [21]. Necessarily the consideration of the challenge to these opinions is restricted to consideration of material which was available for the Trustee and the insurer to consider: Tonkin v. Western Mining Corporation Ltd [1998] 10 ANZ Ins Cas 61-397. 7 In an earlier hearing involving Ms Maciejewski (Maciejewski v Telstra Super Pty Ltd (1998) 44 NSWLR 601), Young J observed at 604 that a trustee could not render its decisions proof against review by failing to give reasons. On the contrary, his Honour said, where a trustee does not give reasons and where there is a prima facie case of error, the absence of reasons "will tend to make that prima facie case a virtual certainty". 8 I should note that there has been some question raised as to the extent to which the principles in Karger can be transposed without adaptation to the context of superannuation and disability benefit schemes. See Telstra Super Pty Ltd v Flegeltaub (2000) 45 ATR 470. Although Callaway JA, who gave the leading judgment, appeared to accept that the principles could be applied (see at 476-477 [25]), Ormiston and Batt JJA reserved that point for further consideration. See Ormiston JA at 471-472 [4] to [6] and Batt JA at 478-479 [33]. 9 In the circumstances, since there is no authority (at least, as cited to me) contrary to the first instance decisions to which I have referred (and many others to the same effect) and since the point, although raised, was not decided in Flegeltaub, I think that I should follow the approach taken in those first instance decisions. The accident 10 Mr Baker's accident occurred on 9 February 2001. He was then employed as a labourer by the Council. His duties apparently included those of a "turf maintenance assistant". Mr Baker and a colleague were utilising ride-on mowers. The colleague's mower threw up a stone which struck Mr Baker in the face, and broke his jaw. It was necessary for operative repair to be performed to his jaw. The impact of the stone also caused problems in his cervical spine, and it was necessary for operative treatment to be performed to alleviate the disabilities caused thereby. 11 There is no doubt that, as a result of the accident, Mr Baker has suffered, suffers and will continue to suffer severe physical disabilities. It was common ground at this hearing that the disabilities that Mr Baker now endures make it impossible for him to return to his pre injury employment.

The issue and the application to amend 12 As Mr Baker's case was pleaded, the fundamental issue was whether there was material before the Trustee at the relevant time (21 February 2007, as I shall explain later) that was capable of supporting its decision. To put it somewhat more forcefully the issue was: could any reasonable person in the position of the Trustee at that time have reached the same decision on the same material? It has to be said that the way in which the case for Mr Baker was put went well beyond the issue so stated. 13 Mr GB Hall QC, who appeared with Ms CA Goodman of counsel for Mr Baker, sought leave to amend the statement of claim to allege three further and alternative flaws in the Trustee's decision:

(1) That it had failed to accord Mr Baker natural justice, because it had relied on reports that had not been given to him for comment. (2) That it had erred in relying on reports by Ms Joanne Oates, an occupational therapist, because she was not qualified to express the opinions that she did. (3) That it had applied the wrong test, because it had failed to consider the question of incapacity as at the date of assessment, had therefore wrongly had regard to certain specified reports, and had had regard to other reports that did not address the correct test. 14 Mr RD Marshall of counsel, who appeared for the Trustee, opposed the grant of leave. He submitted that the first and third points were misconceived in law and futile, and that the second raised a factual issue with which he could not deal. He acknowledged that he could deal with the first and third points. 15 I granted leave to amend as to the first and third points. I refused leave to amend as to the second. There was no basis in the evidence on which the Court could properly explore Ms Oates' qualifications and experience; it would have been unjust to permit the point to be raised at this late stage; and it would have been an inordinate waste of time and costs to adjourn the hearing to permit it to be investigated. I note in this context that, as was common ground, Ms Oates' report had been provided to Mr Baker's legal advisers a year ago. 16 In the result, the first and third points do not require detailed consideration having regard to the view to which I have come. Since they involve no disputed question of fact, I will say little more about them. 17 I do, however, note that I do not regard the statement of McGarvie J in Karger at 166, relating to natural justice, as capable of direct and automatic translation to a case such as the present. His Honour said, in substance, that trustees undertaking the exercise of a discretionary power were not bound by rules of natural justice, and therefore had no obligation to explain to the prospective objects of the exercise the basis upon which they might exercise (or decline to exercise) the power: I see no good reason for importing rules of natural justice into the exercise of discretion by the trustees of the will. Such an implication is not necessary. The trustees of the will did not exercise their power in a type of situation where a right to make representations upon its exercise is normally afforded: cf. Charlton v. Members of the Teachers Tribunal [1981] V.R. 831, at pp. 844-5. 18 That passage has been cited with approval in the 7th edition of Jacobs' Law of Trusts in Australia (Heydon & Leeming, 2006) at 358 [1608]. 19 To my mind, if the question of natural justice becomes relevant in a context such as the present case, it will require closer examination. For example, as will be apparent from the passage that I have quoted, McGarvie J expressly limited his observations to "trustees under a will". Further, it is at least arguable that superannuation and disability benefits are of such importance to most in the work force that there may be some room for the application of some measure of natural justice. The importance of such benefits was recognised by Bryson J in Sayseng at [59] and by Young J in Maciejewski at 602. It should also be noted that in Chammas v Harwood Nominees Pty Ltd (1993) 7 ANZ Insurance Cases ¶61-175, Hodgson J said at 78,000 that "some attention to the requirements of natural justice is part of fairness and reasonableness." Although his Honour was speaking in the context of a dispute between a worker and an insurer, rather than a dispute between a worker and a trustee, his remarks are instructive.

The test 20 The relevant provision of the consolidated trust deed is, as I have said, clause 5.4.1 of schedule 2. I set it out: 5.4.1 The Benefit provided by this rule 5.4 is payable by the Trustee to a Contributor where, before attaining the Early Retirement Age, the Contributor ceases to be employed by an Employer and the Trustee is satisfied: (a) that the Contributor's cessation of employment was due, directly or indirectly, to the permanent physical or mental incapacity of the Contributor (not caused by any act or default of the Contributor intended to produce that incapacity); and

(b) that the Contributor, is when the Contributor ceases to be employed by the Employer, permanently unable, by reason of that incapacity, to be engaged, or to be employed, in any remunerative occupation in which, in the opinion of the Trustee, it would otherwise be reasonable to expect the Contributor to engage. Analysis of the test 21 Many cases were cited to me. None of them dealt with a test in the precise terms just set out. Thus, whilst the cases offer general, although valuable guidance, they provide no complete analysis applicable to clause 5.4.1. 22 There are two principal elements to the test. The first is that set out in paragraph (a). The Trustee must be satisfied that the cessation of employment was due to permanent physical or mental incapacity (the parenthetical qualification to paragraph (a) may be disregarded). It was not submitted that the test did not extend to cessation of employment due to a combination of physical and mental incapacity. 23 The second element is that set out in paragraph (b). The Trustee must be satisfied that, at the time of cessation of work and by reason of the paragraph (a) incapacity, the employee is permanently unable to engage in employment. 24 In the present case, much of the debate focused on paragraph (b). However, both paragraphs were in issue and each requires consideration. 25 Hodgson J in Chammas considered a test that inquired whether an employee was "incapacitated for further employment". His Honour said at 77,999 that the test was not confined to employment with the same employer, but that it should be limited to full-time employment reasonably open to the employee: The first matter I need to consider is whether the defendant considered the wrong question. The crucial words in both cl. 18.1 and 18.2 are the words "incapacitated for further employment". I do not think the existence in the rules of definitions of employer and employee do have the result that "employment" here should be construed to mean the particular employment of the defined employer and employee. I think the whole context of cl. 18 makes it clear that employment there is to be given a wider construction. However, I do think that employment must be given a reasonable construction; and I think employment should be limited to full-time employment, and to employment which is reasonably open to the member. That is, I think, the employment must be employment which the member is capable of undertaking, having regard to his education, experience and training, or at least employment which he could become capable of undertaking with further training which it would be reasonable for him to undertake. 26 That approach is one that is plainly available on the words of clause 5.4.1(b). 27 In Nile v Club Plus Superannuation Pty Ltd [2005] NSWSC 55 at [64), Brownie AJ adopted, paraphrased and applied the approach of Hodgson J in Chammas: [64] As Hodgson J pointed out in Chammas , a decision that has been followed from time to time, without anyone ever apparently expressing a doubt about its correctness, and the correctness of which is not challenged now, one must consider not just the theory that someone is physically fit to do particular work, but also the actual likelihood of that person obtaining employment, meaning full time employment (or, I take it, substantially full time employment, generally comparable with the plaintiff's employment before his 1996 injury) that was reasonably open to the plaintiff. Given the plaintiff's education, training and experience, the prospects of his actually obtaining employment in any of the jobs suggested by Dr Innes-Brown were remote, and perhaps non-existent. 28 His Honour's views were in turn adopted by Nicholas J in a further hearing involving Mr Sayseng, Sayseng v Kellogg Superannuation Pty Limited [2007] NSWSC 583 at [64], where his Honour referred to the need "to take a realistic and common sense approach". 29 In Halloran v Harwood Nominees Pty Ltd [2007] NSWSC 913, Brereton J said at [76] that a reference to "occupation or work" meant "a recognised occupation, not a special light duties job for injured workers" and must be taken to refer to work which the worker "is likely to obtain". In my view, his Honour's observations are capable of application to the reference to "remunerative occupation" in clause 5.4.1(b). Application of the principles in this case 30 The Trustee twice refused to accept Mr Baker's TPI application. The first refusal occurred on (or by letter dated) 21 May 2004. It is unnecessary to go to the detail of that (although Mr Hall devoted some time to attacking it). That is because the Trustee agreed to reconsider, and did reconsider, its decision. 31 The reconsideration occurred on 21 February 2007. It was undertaken by the board of directors of the Trustee. Each director had been given two folders of medical and paramedical reports and other material (including other material on which Mr Baker relied). 32 Mr Harris, a director of the Trustee who participated in the decision and who gave evidence, said that he spent some five hours on 20 February 2007 reviewing the material given to him. He said that it was discussed for at least half an hour at the meeting the following day. This latter aspect of his evidence was confirmed by Mr Lambert, the secretary of the Trustee, who was responsible for sending material to directors and who attended the board meeting on 21 February 2007.

Clause 5.4.1(a) 33 The Trustee must be satisfied that the cessation of Mr Baker's employment was due directly or indirectly to his then permanent physical or mental incapacity (as I have indicated, the parenthesised qualification to paragraph (a) is irrelevant in this case and can be disregarded). 34 The evidence on this topic was somewhat sparse. The Council had furnished a "statement" which included the following details (the bold print indicates a printed question; the balance indicates the handwritten response): " 2. Reason for termination. Worker unable to assume full pre-accident duties in the long-term and no permanent light duties available. 7. Was member fully engaged in those duties prior to termination? If not, what duties were being performed? Transitional sedentary duties whilst participating in retraining to Mr Baker's preferred vocational goal in clerical/admin data entry. Poor attendance prevented completion of course. 10. Has any rehabilitation attempt been made? If yes please provide details... Every effort was provided to Mr Baker to seek permanent alternate employment. Refer attached notes."

35 The "attached notes" to which reference was made provided details of what was said to be "a comprehensive rehabilitation programme" commencing on 28 June 2001. 36 Mr Baker's evidence on this topic is contained in paragraphs 18 to 22 of his affidavit sworn 30 March 2005. That affidavit was before the board on 21 February 2007. I set out those paragraphs: [18] Since 20 May 2002 I returned to suitable modified duties gradually on a full-time basis. This involved office type work including using a computer and keying/scanning data. Due to my persisting symptoms while performing light duties, I needed to alternate positioning and take frequent rest breaks in order to continue working. [19] As a result of my injuries and disabilities, I was not able to return to my pre-accident employment duties. I also had various periods of time off work by reason of my continuing symptoms. [20] As I was unable return to my normal pre-injury duties, and no further alternative light duties were made available to me, my employment was formally terminated on 27 September 2002 by Baulkham Hills Shire Council due to my inability to return to my pre-accident employment duties, my ongoing difficulty in working and my disabilities. [21] I have not been able to obtain alternate suitable employment since that time. I have participated in various rehabilitation programs, retraining and vocational assessments, in an attempt at returning to the workforce in some capacity, all of which have been unsuccessful. [22] I do not believe that I will be able to return to my pre-accident employment duties as a labourer. In fact I believe that I would have significant problems in being able to carry out any employment duties, particularly those of a physical nature which also require repetitive bending, lifting, twisting, pushing and pulling. 37 As I have said, there is no doubt that as at 27 September 2002, Mr Baker was incapable of performing his pre-injury duties. The question is whether his employment was terminated on 27 September 2002 because of the disabilities that he then suffered. 38 Much of the submissions on this point appeared to be directed not so much to the question of whether there was material before the Trustee that would justify its decision, but to the question of whether in fact Mr Baker's employment was terminated because of his disabilities. As I have tried to explain, that is not the correct question. 39 Mr Marshall relied on material that, he submitted, permitted a conclusion on this issue adverse to Mr Baker. That material, he submitted, was material on which a reasonable person in the position of the Trustee on 21 February 2007 could have concluded that the test under paragraph (a) should be answered adversely to Mr Baker. 40 The material that Mr Marshall relied upon included the Council's "statement" to which I have already referred. That statement says in plain terms that Mr Baker's employment was terminated because of the unavailability of permanent light duties. It does not indicate that Mr Baker was not performing in a satisfactory way such light duties as had been made available to him up to 27 September 2002. Indeed, Mr Marshall submitted, there was other material before the Trustee that indicated that Mr Baker was able to perform those duties. 41 It cannot be said that Mr Baker's affidavit, insofar as it deals with this point, is clear. However, in saying that, I mean to indicate that it is not clear either way. 42 Mr Marshall submitted that support for the Trustee's decision was found in the medical evidence that was before the board on 21 February 2007. He referred to a number of reports, including some by Dr Elias Matalani who is a specialist occupational physician who had been retained for Mr Baker. On 16 August 2002 (some six weeks prior to the termination of Mr Baker's employment) Dr Matalani furnished a report in which he noted that although Mr Baker was unfit for his pre-injury work, "his current job role is appropriate." The reference to "current job role" is apparently, from the same report, a reference to the light duties that Mr Baker was then performing in the employ of the Council. 43 Similar references were made in other medical and paramedical reports before the Trustee, including reports from a clinical psychologist, Ms Marie Bertuch; a psychiatrist, Dr Maxine Walden; and an occupational health physician, Dr C Costa. 44 Mr Marshall relied also on the evidence of Ms Oates, to whom I have referred already. Ms Oates expressed an opinion in substance that as at the date of termination of his employment, Mr Baker was capable of performing the duties then associated with that employment. 45 The material to which I have referred, and other material to the same effect on which Mr Marshall relied, must be considered against the specific requirements of clause 5.4.1(a). At the risk of repetition, I note that the test imposed by that clause requires that the cessation of employment be "due, directly or indirectly, to the permanent physical or mental incapacity of the contributor". 46 The relevant facts include the following: (1) On any view, Mr Baker was unable to return to, or to perform the duties of, his pre-accident employment; and (2) On its own account, as contained in the statement, the Council could not continue to provide Mr Baker with alternative light work for which, having regard to his physical and intellectual limitations, he was suited. 47 It seems to me to follow almost inevitably that the Council terminated Mr Baker's employment because it had no work for him - taking into account those limitations - to perform. To put it another way: the Council terminated Mr Baker's employment because it had no job that he could perform. It had no job that he could perform because his physical and intellectual limitations meant that he could not do any job that, so far as the evidence goes, the Council could offer him. 48 The test involves direct or indirect causation. It does not specify that the relevant disabilities must be the sole cause of termination (or that termination must be solely due to those disabilities). In my view, paragraph (a) should be construed so that, as long as the relevant disabilities are a real and substantial, and not merely incidental, cause (direct or indirect) of the termination, then the pre-condition in the paragraph is satisfied. 49 Once that is recognised, it seems to me to be clear that Mr Baker's disabilities did have that real and substantial causal relationship to the termination of his employment. As I have said, that occurred because the Council had no work for him, once allowance be made for his disabilities. In this context, it matters not that his intellectual disability was pre-existing, and was not caused by the accident. I note that Mr Marshall did not submit to the contrary. 50 It follows that if and to the extent that the board members decided the paragraph (a) point (and the strong inference from Mr Harris's evidence is that they were more concerned with paragraph (b)), the decision which at least by inference must be taken to have been adverse to Mr Baker was one to which a reasonable person in their place and on the information available to them could not have come.

Clause 5.4.1(b) 51 Mr Hall's principal attack on this aspect of the decision was aimed at what he said was a total lack of evidence or material to support it. Mr Marshall responded by identifying the material given to the Trustee that, he said, supported (or rationally was capable of supporting) the decision made. 52 The material on which Mr Marshall relied can be divided into at least two categories. The first category consists of reports and other material which note that, as at the date of termination of Mr Baker's employment, he was performing effectively full-time light duties provided for him by the Council, and that those duties were within his powers. I have referred to some of that evidence already; it includes the reports of Dr Matalani and Ms Oates, and other medical and paramedical reports. 53 The next category of material consists of reports that suggest that Mr Baker could undertake some other kind of work. For example:

(1) On 22 May 2005, Dr Tim Anderson, a consultant occupational physician retained for the Trustee, reported that there was work that Mr Baker could perform. He said, by way of example, that Mr Baker might have "at least some gift for minor assembly work" which "could also include assembly work of some detail". Thus, Dr Anderson said, "rather than trying to shunt him off into a laundry, or working in some clerical position (which he would probably never be able to do in any case) I would suggest that Mr Baker's forte would be in lightweight assembly work." Dr Anderson also suggested that "there would be other occupations that he would be able to pursue, possibly even in retail, as long as he was well supervised". Although Dr Anderson conceded that "Mr Baker may not have the arithmetical capacity to do a lot of this work", he hypothesised that "there would still be other tasks that he would be able to perform in this field." Dr Anderson speculated further that perhaps Mr Baker could drive "small buses with residents from Nursing Homes or possibly Day Hospitals". (2) That report was supplementary to one which Dr Anderson had given earlier. The opinions in it were revisited by Dr Anderson (although not after a further examination of Mr Baker) in a report of 6 December 2006. That last report stated that "strictly speaking Mr Baker has not reached the criteria of the specific definition" under the policy, although it did not specify in detail anything that Mr Baker might be able to do. Dr Anderson did say "that Mr Baker is able to carry out a modest occupation" and referred back to his earlier report, including to the examples that I have given.

(3) On 17 May 2005, Dr Peter Blum, a neurosurgeon retained for the Trustee, reported on Mr Baker. He noted that Mr Baker's "incapacity for anything but the lightest of work is likely to be permanent". He noted further that Mr Baker "was looking at work as a courier running his own business" which "would allow him to work at his own pace and providing the parcels etc were not too heavy". Dr Blum reiterated that Mr Baker's "education training and experience would not really allow him to do anything but the lightest of casual work." It does not appear that Dr Blum actually agreed with Mr Baker's expressed desire to run his own courier business; and I think that his report read overall can hardly be regarded as offering much support for that proposal.

(4) Dr Blum returned to this topic in a further report of 29 November 2006. That report was prepared without any further consultation with Mr Baker. It purported to reiterate what had been said in the earlier report including that it was "possible" that Mr Baker could work as a courier in his own business. Apparently for that reason (at least, no other reason is given), Dr Blum expressed the opinion Mr Baker "is not permanently unable to be engaged or be employed in a remunerative occupation." 54 There was other evidence to the same effect to which Mr Marshall pointed as having been before the Trustee on 21 February 2007. It included the evidence of Ms Oates to which I have referred already. 55 There is no suggestion in the evidence that the Trustee, or its board members, considered the "real world" availability of any of the positions or jobs to which the various doctors and other experts referred. 56 As to the light work that had been offered to Mr Baker by the Council, the Trustee's evidence (from Mr Harris) was that it understood that the Council had terminated Mr Baker's employment because it could not continue to offer him that sort of work. As I have said, I think that is the proper inference to be drawn from the Council's statement to which I have referred. There was no other evidence of the availability as at the relevant date - 27 September 2002 - or indeed at any other time, either at the Council or elsewhere, of such light work for a person of Mr Baker's physical and intellectual limitations. (I have referred more than once to Mr Baker's intellectual limitations. It is clear that he is a person of lower than average intelligence, and that even before his injury he had had difficulty, prior to his employment by the Council, in finding suitable work.) 57 Mr Harris gave some evidence, of a general nature, that from time to time in his experience councils had in effect manufactured light work for injured employees - seemingly, on some sort of grace and favour basis. There was no evidence that any such work would or could be made available to Mr Baker. Indeed, insofar as the attitude of the Council can be determined from what has happened, I would infer that it was not prepared to do so. I do not think that such evidence as there was before the board of the Trustee on 21 February 2007 would have enabled it (or any reasonable person in its place) to conclude that there was any reasonable likelihood that Mr Baker would find such light work. 58 I have set out already the approach that has to be taken in assessing the availability of alternative work. The Court is required to take a realistic and commonsense approach. There must be a real prospect, and not merely some theoretical possibility, that the work will be available. It should not be work in some special light duties job created for the injured worker. In my view, the evidence on which the Trustee relied falls far short of discharging that onus. I have the very strong impression that the Trustee grasped at the possibility or theory of availability of work, and refrained from turning its mind to the real question which is whether, in the real world, Mr Baker was ever likely to obtain such work. 59 Adapting the words of clause 5.4.1(b), there was nothing before the board of the Trustee on 21 February 2007 to enable it (or any reasonable person in its place) to form the opinion that there was the likelihood of appropriate light or other duties in which it would be reasonable to expect Mr Baker to engage. The very fact that his previous employer - the Council - had terminated his employment (as was the Trustee's case) because there was no such work is the only real evidence as to the availability of such work at the date of cessation; and it does not support the Trustee's case. 60 Thus, I do not regard the evidence in the first of the categories to which I have referred as capable of sustaining the Trustee's decision. 61 Similar reasoning applies, indeed with greater force, to the second category of evidence. In truth, it was theory; or, more accurately, speculation. There was no consideration of the actual likelihood that as at 27 September 2002 (or, again, at any time since) Mr Baker might have any real prospect of engaging in such work as the various experts hypothesised might be open to him . 62 Thus, I conclude, the Trustee's decision on paragraph (b) is one that no reasonable person could have reached having regard to the TPI test (properly understood) set out in the trust deed and the material that was put before the board of the Trustee.

Relief 63 The general rule is that when a trustee's decision is fundamentally flawed, it is in law no decision at all. In normal circumstances the court will not itself exercise the discretion, but will remit the matter to the trustee to be considered on a proper basis. See Bryson J in Sayseng at [73]. However, I think, that cannot be the case where (as I have found) no reasonable person, applying the correct test to the material before the Trustee, could have reached the conclusion that the Trustee did. In those circumstances, reconsideration would be futile. McLelland J seems to have recognised this in Rapa at BC 14-15 where his Honour said:

I accept that, in the case of at least some kinds of discretionary trust powers, the Court may in a proper case execute the trust by substituting its own discretion for that of trustees (see McPhail v Doulton (1971) AC 424 at 451 and cases there cited, and also at 457). In one sense it may be inapt to describe as a discretionary trust power a duty to consider and form an opinion as to whether a particular state or facts exist, but I see no reason why similar relief should not, again in a proper case, be available where there has been a breach of such a duty. What then is a proper case for granting of relief of this nature? In my opinion it can only be right to take such a course where at the very least it is established that the existing trustees are unlikely to fulfil the relevant duty in a proper manner. It must be remembered that the relevant functions are conferred by the trust instrument not on the Court but on the trustees, and the Court can have no authority to usurp the functions so conferred on the trustees except where such a course is shown to be necessary in order to give effect to the intention evidenced by the terms of the trust instrument. 64 Bryson J endorsed this, although not I think with complete enthusiasm, in Sayseng at [74] - [75]: to the extent, at least, of recognising that the court could substitute its discretion for that of the trustee where it is "obvious what the only possible decision was". 65 In my view, that is the course to take in this case. As to each component of the Trustee's decision, I have concluded that, on the material before the board on 21 February 2007, no reasonable person could have reached it. It follows that any reconsideration of those issues that did not lead to a finding in favour of Mr Baker would be liable to be set aside. 66 Mr Marshall did submit that it was incumbent on Mr Baker to show that there was material before the board that could convince them, acting reasonably, that he was unfit for work. On any view, there was such material. The preference for the contrary material was misguided for the reasons that I have indicated. Mr Marshall did not submit that, in those circumstances, the Trustee could nonetheless decide simply to reject the body of evidence in favour of Mr Baker. Nor do I think that a trustee, acting reasonably, could do so when the contrary material is flawed for the reasons that I have given. 67 I therefore conclude that the Trustee's determination of 21 February 2007 should be set aside, and that there should be a determination in Mr Baker's favour in its place.

Orders 68 I make the following orders: 1. Declare that the determination of the plaintiff's application for benefit under clause 5.4 of the Local Government Superannuation Scheme Trust Deed consolidated as at 30 June 2004 made by the board of directors of the defendant on 21 February 2007 is void and of no effect. 2. Declare instead that the plaintiff is entitled to be paid the said benefit. 3. Order that the amount of the said benefit, together with interest thereon from 21 May 2004 at the rate from time to time applicable under section 94 of the Supreme Court Act 1970 or section 100 of the Civil Procedure Act 2005, be paid forthwith. 4. Order the defendant to pay the plaintiff's costs. 5. Order that the exhibits be retained for 28 days and that thereafter they be retained or disposed of in accordance with the rules.

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