John Gilberg v Stevedoring Employees Retirement Fund Pty Ltd

LEGISLATION CITED : Superannuation Industry (Supervision) Act 1995 (Cth) Superannuation (Resolution of Complaints) Act 1993 (Cth)

Baker v Local Government Superannuation Scheme [2007] NSWSC 1173 King v Goussettis (1986) 5 NSWLR 89 CASES CITED : Muinos v Johnson and Johnson Retirement Benefits Ltd Stevedoring Employees Retirement Fund Pty Ltd v Gilberg [2006] FCA 1590 Tonkin v Western Mining Corporation Ltd (1998) 10 ANZ Insurance Cases Telstra Super Pty Ltd v Flegeltaub (2000) 2 VR 276

PARTIES : John Gilberg (Plaintiff) Stevedoring Employees Retirement Fund Pty Ltd (Defendant)

COUNSEL : B W Rayment QC / M J Gollan (Plaintiff) V M Heath (Defendant)

SOLICITORS : Firths - The Compensation Lawyers (Plaintiff) Mallesons Stephen Jaques (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST

25 November 2008 ex tempore (revised 25 November 2008)

50121/08 JOHN GILBERG v STEVEDORING EMPLOYEES RETIREMENT FUND PTY LTD JUDGMENT 1 HIS HONOUR: The ultimate question for decision is whether the plaintiff (Mr Gilberg) is entitled to be paid a total and permanent disability benefit (TPD benefit) by the defendant (SERF) in its capacity as trustee of the Stevedoring Employees Retirement Fund (the fund), or damages equivalent to the value of that benefit. Background 2 For some years prior to 12 May 2001, Mr Gilberg was a waterside worker. On that date, he sustained an injury. It is common ground that, as a result of the injury and its consequences, he was unable to continue in his employment. 3 Mr Gilberg had been a member of the fund since 1982. On 4 April 2003, he made a claim for TPD benefit. SERF rejected that claim. Proceedings before the Superannuation Complaints Tribunal (the Tribunal) and, on appeal, the Federal Court of Australia (Buchanan J) resulted, ultimately, in SERF's rejection of the claim being upheld. 4 On 17 July 2007, Mr Gilberg, through his solicitors, Firths, sought a reconsideration of his claim. Firths provided, in support of that application, a statement by Mr Gilberg dated 5 July 2007, and what was called a "Pain Management Report", dated 4 October 2002. The report was prepared by Dr Lucia Rodrigues of the Pain Management and Research Centre of the University of Sydney. 5 SERF contends that it has no power to reconsider the earlier decision. It relies on, among other things, the somewhat unusual wording of the relevant rule. 6 In these proceedings, Mr Gilberg asks the Court to order that he receive the amount of his TPD benefit and interest. He says that SERF's failure to reconsider his application:

(1) amounts to a breach of trust, and that the Court can and should exercise the power in SERF's place; and (2) amounts, alternatively, to a breach of the duties implied into the rules by section 52 of the Superannuation Industry (Supervision) Act 1995 (Cth) (the SIS Act) and thus, gives him a right to damages equivalent to the amount of the benefit pursuant to section 55(3).

The issues 7 Against that background, the parties stated the following issues for decision: 1. Did the proper administration of the trust require the defendant to reconsider the plaintiff's claim for total and permanent disability benefits in the light of the communication to the defendant's solicitors from 17 July 2007 to 8 May 2008? 2. Did the failure of the defendant to reconsider the plaintiff's claim constitute a breach of the covenants implicit by s 52(2)(b) and (c) of the Superannuation Industries (Supervision) Act? 3. If so did the plaintiff suffer loss or damages within the meaning of s 55(3) of that Act? What is the amount thereof? 4. If not what relief should be granted against the defendant in respect to this administration of the trust? 5. Is the plaintiff precluded from asserting either a case for administration of the trust or a claim under s 55(3) of the Act by reason of any issue estoppel or raise Judi carter arising from: (a) the earlier decision of the trustee to decline the plaintiffs claim and/or (b) the judgment of Buchannan J. 6. In the circumstances does the defendant have:- (a) a duty to exercise a discretion to consider whether it should reconsider the plaintiff's claim and/or (b) a duty to reconsider the plaintiff's claim. Relevant Provisions of the Fund's Rules

8 The fund's rules are contained in the schedule to a deed made on 16 October 1967, although the rules have been amended on a number of occasions since then. 9 The rules contain no definition of "total and permanent disability", or any cognate expression. The right to a TPD benefit is given by clause 17:

Total and Permanent Disablement 17. As from 29 August 2002, a Contributing Member or a Non-Contributing Member is entitled to a total and permanent disablement benefit if: (a) the Member's employment as an Employee or a Permanent Employee is terminated solely on the grounds that the Member's physical or mental condition at that time is such that the Member is permanently incapable of performing the Member's duties satisfactorily or is a danger to others; (b) the Trustee has received a report from each of at least two medical practitioners which satisfies the guidelines established by the Trustee from time to time and which expressly states that in the medical practitioner's view, the Member is by virtue of the Member's physical or mental condition: (i) incapable of performing the Member's duties or may be a danger to others because of his or her physical or mental condition; and (ii) unable ever to work again in a job for which the Member is qualified by education, training or experience; and (c) the Trustee has received a report from each of at least two medical practitioners which have been appointed by the Trustee which satisfies the guidelines established by the Trustee from time to time and which expressly states that in the medical practitioner's view: (i) Member's employment as an Employee or a Permanent Employee was terminated solely on the grounds that the Member's physical or mental condition at that time is such that the Member is permanently incapable of performing the Members' duties satisfactorily or is a danger to others; and (ii) by virtue of the physical or mental condition referred to in paragraph (i), the Member remains: (A) permanently incapable of performing the Member's duties or may be a danger to others because of his or her physical or mental condition; and (B) unable ever to work again in a job for which the Member is qualified by education, training or experience; and (d) after receiving the reports referred to in paragraph (b) and (c) of this Rule, the Trustee determines that the Member is entitled to a benefit under this Rule PROVIDED THAT in the event of a division of medical opinion expressed in the medical reports referred to in paragraph (b) and (c), the Trustee shall appoint (at the election of the Trustee) an additional medical practitioner and the Trustee shall base its determination solely on the medical opinion of the additional medical practitioner so appointed; and (e) the Member has not received or is not due to receive a benefit under Rules 13, 14, 15 or 16 and the Member has not received or is not due to receive a payment as part of a redundancy or early retirement scheme. 10 I have omitted the provision for calculation of the amount of the benefit, since the amount (in Mr Gilberg's case) is not in issue. 11 I should perhaps note that, although clause 17 in terms applies, "as from 29 August 2002", and Mr Gilberg ceased work on 12 May 2001, it is common ground that the question of entitlement is governed by the rule in the form that I have set out. 12 Clause 2 makes SERF's decision, on an "issue of fact, or question of fact", final and binding in certain circumstances: 2. Except where otherwise expressly provided, where any issue of fact or question of fact arises under of in the application of these Rules, a decision of the Trustee hereon shall be final and binding upon all Members, and the Union as hereinafter defined. 13 Rule 2 can be put to one side. As will be seen, the execution of the process for which clause 17 provides involves no relevant question of fact, or decision of fact on the part of SERF. Basis on which the courts intervene 14 Where, under a trust instrument, the powers of a trustee are discretionary, the basis on which the courts may review a trustee's exercise of discretion are limited. I summarised the position in Baker v Local Government Superannuation Scheme [2007] NSWSC 1173 at [2] to [8] as being that there are four recognised grounds of intervention:

(1) the trustee does not exercise the discretion in good faith; (2) the trustee does not give real and genuine consideration to the exercise of the discretion. (3) the trustee does not exercise the discretion in accordance with the purpose for which it was conferred; and (4) if the decision was one to which no reasonable trustee could have come in the circumstances, taking into account the material available to the trustee. 15 It is clear that these grounds may, and in the usual case will, overlap to some extent. 16 There is sometimes identified a further ground for intervention. Where a trustee gives reasons, the Court may examine those reasons (unless the reasons were given in or for the purpose of proceedings in which the exercise of discretion is challenged). If, upon examination, the reasons are found to be unsound, then the Court may intervene. It may do so if (by way of example only) the reasons show that the trustee took into account irrelevant matters, or failed to take into account relevant matters. 17 The principles that I have stated find their source in cases dealing with discretionary trusts, other than superannuation or pension fund trusts. They have, however, been extended to, and applied in, cases dealing with such funds. 18 There is a real question as to whether those principles should be so applied, without modification; or whether some more specific principles should be evolved. In the case of an "ordinary" discretionary trust, the beneficiaries - or the members of the classes of beneficiaries - do not give value for their "rights". They are the objects of the settlor's bounty. But, in the usual case, members of a superannuation or pension fund do give value. They make contributions to the fund. Membership of a fund, and the benefits under it, are customarily part of a package of rights that attend contracts of employment. Further, the benefits are designed not to provide some windfall, but to secure the future of the members upon the occurrence of the events that give rise to the exercise of a relevant discretion. 19 The concerns that I have just raised were referred to, but not resolved, in Telstra Super Pty Ltd v Flegeltaub (2000) 2 VR 276. Callaway JA (who gave the leading judgment), proceeded on the basis that the duties were the same in the two situations that I have identified. See his Honour's reasons at 283 [25]. Ormiston JA, who agreed with Callaway JA, expressed some doubt: see at 278 [6]. 20 Batt JA, who also agreed with Callaway JA, noted that the exercise of discretion by a trustee of a superannuation fund was different in kind to an exercise of discretion by a trustee of a discretionary trust, "for bounty or charity". However, his Honour put the point aside: see at 285-286 [33]. 21 Another factor that may bear upon the question is the availability, in many cases, of what might be called an "all grounds review" under the Superannuation (Resolution of Complaints) Act 1993 (Cth). Such a review is undertaken by the Tribunal upon complaint being made to it. In addition, there is a right of review, from decisions of the Tribunal, in the Federal Court of Australia on questions of law. 22 Any detailed re-examination or reformulation of the Court's approach to review of discretionary decisions of trustees of superannuation or pension funds should take account of those processes. 23 Since there is a substantial body of first instance decisions that treats the inquiry as being governed by the approach that I have described above (based on my summary in Baker), and since there is no appellate decision (at least, to which I was referred), indicating some different approach, I think that I should proceed accordingly. 24 However, before I move to the first group of issues, I should note that, in reality, clause 17 of the fund's rules does not fit well within the concept of a discretionary power. As I have noted, there is no definition of "total and permanent disability", nor does the establishment of the "entitlement" to a TPD benefit under clause 17 involve much (if anything) by way of discretion. Indeed, if the matter goes as far as to require SERF to obtain a medical opinion from an additional medical practitioner (because there is a division of medical opinion between the other, or paragraphs (b) and (c), medical practitioners), there is no discretion at all. Even if the paragraphs (b) and (c) medical practitioners are in agreement, the reality is that the "discretion" of SERF is no more a duty, in those circumstances, to make a determination in accordance with that medical consensus. Issues 1, 2 and 6: duty to reconsider 25 It is convenient to consider these issues together because, in substance, they involve the same point. Basis of the application for reconsideration 26 Mr Gilberg's solicitors, Firths, wrote to SERF on 17 July 2007. As I have said, they enclosed a statement signed by Mr Gilberg and a report of Dr Rodrigues. The letter said that Mr Gilberg, "now seeks reconsideration of his claim based on [that] evidence". Firths asserted that SERF's duty required it to, "consider all information and evidence including that of a non-medical nature, including information provided in our client's statement". The letter expressed an understanding of the proposition that, as far as a medical opinion was relevant, SERF was, "confined to the opinions expressed by Dr Oates". (Doctor Chris Oates was the medical practitioner called in by SERF under rule 17(d), there having been a difference of opinion between Mr Gilberg's paragraph (b) medical practitioners and SERF's paragraph (c) medical practitioners.) 27 The letter made reference to various points raised in Mr Gilberg's statement, and in Dr Rodrigues' report, and referred, for reasons that are not entirely clear, to the decision of McClelland CJ in Eq in Muinos v Johnson and Johnson Retirement Benefits Ltd (5 December 1996, unreported; BC 9605916) and other authorities. It has to be said that the cases to which references were made were not concerned with an entitlement to TPD benefit, in terms anything resembling the terms of clause 17. 28 Mr Gilberg's statement set out his educational and employment history. It referred to his injury on 12 May 2001, and gave copious details of his disabilities and the reasons why, he said, those disabilities made it impossible for him to return to work. The statement also responded, in a somewhat argumentative way, to points made by SERF's paragraph (c) doctors and other material that had been put before SERF in relation to his application. It referred also to, and made argumentative comments as to, Dr Oates' report. 29 Later (after the first request for reconsideration had been rejected), Firths put further material before SERF. That included, once again, Mr Gilberg's statement, this time verified by statutory declaration. It included also a further reports from his treating general practitioner, Dr Melinda Griffiths, and two reports of Dr Newman Harris, a psychiatrist and specialist in pain management, who had also treated Mr Gilberg. 30 Dr Griffiths' report briefly reviewed Mr Gilberg's medical history, as far as she knew it, since the date of her last report (19 February 2003). It commented on Mr Gilberg's statement and said that the disabilities and complaints set out in that statement were, "consistent with my treatment and findings on examination". Dr Griffiths said, in substance, that she remained of the opinion expressed in her prior statements, and that she considered Mr Gilberg's prognosis to be "unchanged" and, in her view, very poor. She noted that there had been no improvement in his condition, and that, in fact, the depression that resulted from his injury had deteriorated (as, she thought, his physical condition had also done). 31 Dr Harris' principal report was to similar effect. He said that Mr Gilberg's condition had remained unchanged since the last of the reports furnished by Dr Harris. This indicated to Dr Harris, "a more substantial entrenchment in the sick role and associated illness behaviour from which it would be even more difficult to assist him than in the past". Dr Harris too thought that Mr Gilberg's comments in his statement were consistent with his observations and conclusions. In short, Dr Harris adhered to the opinion that he had expressed earlier. 32 In substance, the material given to SERF under cover of the letter of 17 July 2007, made it plain that, as far as Mr Gilberg and his doctors were concerned, Mr Gilberg's situation and prognosis had not changed since late 2002, or early 2003. 33 Mr Rayment QC, who appeared with Mr Gollan of counsel for Mr Gilberg, accepted this. I set out the following passage from his oral submissions There is nothing surprising in the fact that the plaintiff is now making the same complaints as he made in 2002 and 2003. Indeed, that is exactly what one would expect if the pessimistic view which was adopted by his own medical practitioners turns out to have been, as it does, correct.

I think the burden of the medical material which we have sought to put before your Honour suggests that if anything his position has worsened. But it is indeed to the effect that it has not improved since they last saw him. Indeed, they suggest that what has happened in effect is in accordance with their own anticipation as to the position which we would find ourselves in at a later point of time, such as now.

With respect, it does not advance the matter to find out that the same complaints are being made today as were made years ago. That is the very thing that the defendant's doctors did not expect to happen but which the plaintiff's doctors did expect to happen. That is why, in our respectful submission, that on the current state of the material before your Honour the evidence actually is all one way about the entitlement which the plaintiff has had and has always had pursuant to the clause. 34 However, Mr Rayment submitted, what the 2007 material showed was that it was now clear that the pessimistic view (as to Mr Gilberg's prospect of ever working again) expressed by Drs Griffiths and Harris in 2002 and 2003, had been shown to have been justified, and that the more optimistic view then expressed by SERF's paragraph (c) doctors had been shown not to have been justified. 35 Ms Heath of counsel, who appeared for SERF, disputed this analysis. In any event, she submitted, it was irrelevant for two reasons:

(1) the relevant medical opinion was that of Dr Oates; and (2) the material did not address and, indeed, diverted attention from, the real question, which was one of capacity for work, not likelihood of working. SERF's decision 36 SERF rejected the claim. It gave reasons. Those reasons are set out in a letter dated 13 September 2007 from its solicitors, Mallesons Stephen Jaques, to Firths. In substance, SERF said, having regard, among other things, to the wording of the rules and the decision of Buchanan J (Stevedoring Employees Retirement Fund Pty Ltd v Gilberg [2006] FCA 1590), the trustee had no power to reconsider its earlier decision. SERF's view was that, "the TPD determination process has been exhausted in so far as [Mr Gilberg] is concerned". 37 That short reason was elaborated on. However, the conclusion was expressed that "the review and reconsideration process requested in your letter is simply not permitted by the Fund's trust deed, a conclusion demonstrably supported by the decision of Buchanan J". 38 After Firths submitted further material, including the further reports of Drs Griffiths and Harris, SERF again rejected the claim with reasons. Those reasons are set out in a letter dated 4 April 2008, from Mallesons Stephen Jaques to Firths. In substance, that letter reiterated, with further reasons, the view that the rule 17 power had been exhausted. In addition, it stated that the material relied upon was insufficient to trigger the rule 17 process a second time. The second point was based, at least, in part, on what might be called technical or formal deficiencies in the report of Dr Harris. Those deficiencies (if they existed) were corrected in a further report, which was submitted to SERF. SERF did not change its mind. The competing submissions 39 Mr Rayment submitted that:

(1) a trustee in the position of SERF was bound, by reason of its fiduciary obligations, to reconsider a decision on a discretionary matter when asked to do so; (2) alternatively, the duties implied into the fund's rules by s 52(2)(b),(c) of the SIS Act led to the same conclusion; and (3) the material that Mr Gilberg, through Firths, had put before SERF was more than sufficient to enliven the duty to reconsider. 40 Ms Heath submitted that:

(1) there was no power to reconsider; (2) alternatively, there was, at most, an obligation to consider whether to reconsider; and (3) the material put before SERF contained nothing new and did not require SERF to reopen its consideration of his claim.

The decision in Tonkin's case 41 Mr Rayment relied on the decision of the Full Court of the Supreme Court of WA in Tonkin v Western Mining Corporation Ltd (1998) 10 ANZ Insurance Cases 61-397. That case concerned a claim for a TPD benefit. The relevant deed contained a definition of total and permanent disability. That definition did require the trustee (the respondent) to form an opinion. I set the definition out from the judgment of Franklyn J (with whom Malcolm CJ and, in substance, Pidgeon J agreed) at 74-260 - 74-261: "Total and Permanent disablement' or 'Totally and Permanently Disabled' in relation to a Member means - (i) … (ii) having been absent from employment with the Company through an illness or injury for a period of six consecutive months and in the opinion of the months and in the opinion of the Company after consideration of medical evidence having become incapacitated to such an extent as to be unlikely ever to resume work in or attend to any gainful profession or occupation." 42 As is clear from the judgment of Franklyn J at 74-263 - 74-265, none of the material submitted to the respondent in support of Mr Tonkin's claim addressed the definition of total and permanent disability. In those circumstances, it is hardly surprising that the trial judge had dismissed Mr Tonkin's challenge to the decision to refuse the benefit. Nor is it surprising that the appeal to the Full Court failed. 43 In the course of his reasons, Franklyn J said at 74-270, that it had always been open to Mr Tonkin to put further medical evidence before the respondent in support of that claim. Had that been done, Franklyn J said, the respondent would have been bound to consider it. I set out the relevant paragraph of his Honour's reasons: In my opinion, it has at all times been open to the appellant to submit further medical evidence, including the reports relied on in para 17.2A to the respondent for its consideration pursuant to the Deed definition in respect of the claim for the TPD Benefit. In such case the respondent is bound to give them proper consideration. No time limit is fixed or imposed by the Deed for making application for the Benefit or for the required consideration of medical evidence. Whether any statutory limitation might apply is not relevant to our consideration as no issue in that respect has been raised. In the event of the respondent, having considered medical evidence before it, failing to form the necessary opinion there is nothing in the Deed or rules to inhibit the appellant from providing, for its further consideration, further medical evidence relevant to the formation of that opinion. There is nothing in the Deed to lead to the conclusion that, once having failed or refused to form the necessary opinion after consideration of the medical evidence then before it, the respondent is under no obligation to consider further medical evidence relevant to the formation of that opinion. Indeed, in my opinion, on the proper construction of the Deed and having regard to the fiduciary nature of the trustee's obligations, the respondent, if requested to do so, is bound to consider such evidence relevant to formation of the opinion as may from time to time be put before it. Consequently, medical evidence, whether coming into existence prior or subsequent to any particular failure or refusal to form the necessary opinion will necessarily have to be considered if made available by or on behalf of the applicant for that purpose. 44 Mr Rayment submitted that the obligation identified by Franklyn J was of general application, and bound SERF in this case. Ms Heath submitted that it did not.

Decision 45 There is a relatively clear path to a decision on these issues. That path does not traverse all the byways and diversions to be found in the parties' submissions. In what follows, I deal with the essential points by reference to which these issues should be decided. 46 The decision in Tonkin can be distinguished. In that case, the entitlement to the benefit - more accurately, the "entitlement" to have the discretion exercised in favour of the worker - depended on the formation of an opinion by the respondent. The opinion was to be formed at the time the claim was made, and on the basis of the medical evidence put forward in support of it. A decision one way, on the basis of evidence available at the time the decision was made, would not preclude the submission of further evidence. As Franklyn J said, if further evidence were submitted, the respondent, as trustee, would be bound to consider it. 47 In this case, entitlement to a TPD benefit depends, not on the formation of an opinion by SERF, but on the satisfaction of an objective process. A worker must go through the clause 17 process, and that process must result in a medical opinion (either by consensus, or of a single medical practitioner appointed in the case of a division of opinion) that the requirements set out in paragraphs (b) and (c) of clause 17 have been satisfied. As I have said already, in reality there is no element of discretion reposed in SERF. Nor is there any real element of judgment. To the extent that there is an element of judgment, that is left to the medical practitioners. 48 There is much to be said for the proposition that, in this case, once the clause 17 process has been followed and has produced a result, that is determinative of what the clause makes clear is a question of entitlement. There is a real interest in the final resolution of questions of entitlement. SERF owes obligations to all members of the fund, not just to Mr Gilberg. It is not in the interests of the other members of the fund that claims properly dealt with (and the decision of Buchanan J makes it clear that Mr Gilberg's claim was properly dealt with) should be open to endless reagitation. 49 If there were some right to have the matter reconsidered, or some duty on SERF to reconsider, the matters to which I have just referred indicate that an applicant for reconsideration would need to put substantial grounds before SERF to enliven that right or duty. There is no basis for thinking that SERF would be obliged to reconsider whenever and so often as it pleases a dissatisfied applicant to request it. If there is such a right or duty, the applicant must show sufficient grounds - some new material or relevant change in circumstances - that bear (or are rationally capable of bearing) on the questions of medical opinion to which, by clause 17, attention is directed. 50 In this case, the material on which Mr Gilberg relied is insufficient to enliven any such right or duty. In substance, that material was no more than a resubmission of the medical opinions already provided (updated, but to no different effect), with corroborative material from Mr Gilberg (supplemented by argumentative observations as to the reports of the other medical practitioners involved, including Dr Oates). In 2002 and 2003, the opinions of Drs Griffiths and Harris had been relied upon. The medical practitioners retained by SERF had reached a different view. The division of opinion thus revealed had been resolved, adversely to Mr Gilberg, by Dr Oates.

51 No truly new material was put before SERF in support of the application for reconsideration. In substance, all that Mr Gilberg said in his statement had been said to Dr Oates, and was summarised in Dr Oates' report. Drs Griffiths and Harris said nothing new; indeed, they asserted that there had been no relevant change in Mr Gilberg's position or prognosis. Thus, there was no relevant change in circumstances, or no fresh material, that might require SERF (or a reasonable trustee in its place, acting on the basis of an understanding of the clause 17 process and with knowledge of relevant circumstances known to SERF) to think again about the decision to which it had come. 52 In this context, it is necessary to bear in mind that the relevant and dispositive opinion was that of Dr Oates. There was nothing put before SERF in July 2007 to require it (or a reasonable trustee in its place) to exercise any obligation or discretion that may exist to ask Dr Oates to revisit his opinion. 53 Nor, in my view, was there anything in the material relied upon that SERF (or a reasonable trustee in its place) ought to have regarded as having any likelihood of causing Dr Oates to revisit his opinion. 54 Had I thought that the material put before SERF was sufficient to enliven the right or discretion relied upon (i.e., that it could have persuaded a reasonable trustee in SERF's place to reconsider the question of entitlement) , I would not accept SERF's indication that, having reviewed the material, it did not propose to reopen the matter. Thus, I would not accept SERF's alternative (and fairly briefly put) alternative basis for rejection set out in the second letter of refusal. Accepting the hypothesis with which this paragraph commenced, it could nonetheless be that a reasonable trustee in SERF's position, knowing what SERF knew, could have decided not to reopen the matter. But, in my view, SERF's attitude was overwhelmingly coloured by its view that it had no power to reopen. If it were required to consider the merits of the application (and if, contrary to my view, sufficient merits had been demonstrated to enliven the obligation), it should do so unblinkered by its view as to lack of power; and the alternative and blinkered consideration (in the events that have happened) should not be given dispositive weight. 55 So far, I have considered the position by reference to the general law. However, as I have said, Mr Rayment relied on s 52 of the SIS Act. That section provides that the governing rules of a "superannuation entity" are to contain certain covenants. It was common ground that SERF was and is a "superannuation entity" for the purposes of s 52. 56 I set out the covenants in question: (b) to exercise, in relation to all matters affecting the entity, the same degree of care, skill and diligence as an ordinary prudent person would exercise in dealing with property of another for whom the person felt morally bound to provide;

(c) to ensure that the trustee's duties and powers are performed and exercised in the best interests of the beneficiaries; 57 Assuming that there was a duty or power to reconsider, those covenants add nothing to the case. If there were no power or duty to reconsider, those covenants are incapable of supporting one. But, on either view, the conclusions to which I have come on the general law position mean that any separate cases based on the statutory covenant must fail. 58 Thus, issues 1, 2 and 6 must be answered adversely to Mr Gilberg.

59 The conclusions that I have expressed mean that Mr Gilberg's claim must fail. It is unnecessary to consider the remaining issues. Nor is there any point in doing so, given that their resolution would not require the resolution of any disputed question of fact. 60 To the extent that those remaining issues involve, or would, in their resolution involve, the exercise of some discretion reposed in the Court, any hypothetical view expressed on those discretionary considerations would not have great significance in the event of appellate review. See King v Goussettis (1986) 5 NSWLR 89. In any event, the exercise of those discretions would require consideration of the factual matrix, including any contrary view that (hypothetically) would be taken in relation to issues 1, 2 and 6 and on the reasons underpinning that hypothetical contrary view. 61 I make the following orders:

(1) Order that the proceedings be dismissed. (2) Order that the exhibits be retained for 28 days and be dealt with thereafter in accordance with the rules. 62 The parties are agreed that, having regard to the conclusions that I have expressed, costs should follow the event. 63 Accordingly, I order the plaintiff to pay the defendant's costs of the proceedings.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.