Consideration
67 While Mr Kowalski vigorously disputes the accuracy and often the veracity of much of the documentary evidence before me, his concerns have only slight bearing on the issues I need address. I have little regard for his regular assertions of bad faith, as freely made as they are unsubstantiated. And I treat with considerable reserve his interpretation of the motives of others, his own evidence from the bar table and his general narrative of the events. Moreover, his application and pleading, as will be seen, are as notable for what they leave unchallenged as for what they challenge.
68 Doing the best I can with the underlying material which is said to found the complaints made, and conscious of the opportunities I have given Mr Kowalski to propound a cause of action, albeit in lay terms, I have as I have foreshadowed, concluded that the proceedings should be summarily dismissed. While it will not often be the case that a Court will be required to - or should properly - conduct as detailed an examination of the materials put on by the parties as I have, this is not an ordinary proceeding with an ordinary and uneventful provenance. The evolving manner in which Mr Kowalski has perceived his grievances and has formulated them to secure the relief he has in mind, has necessitated that I conduct in essence a "preliminary trial": Jefferson Ford, at [23].
69 I intend to deal briefly with the factual material chronologically, focussing primarily upon those matters which have led me to my conclusion.
70 It is, I consider, important to acknowledge that in 1992 both the insurer and the Trustee declined Mr Kowalski's formal application for a TPD Benefit. The Trustee's decision has not been challenged in this proceeding. I mention this decision because, as the Trustee later recognised, it did not preclude the further consideration of whether Mr Kowalski may have been entitled to a TPD Benefit when his employment terminated in 1994.
71 Turning now to the 1994 claim in the FASC, several matters seem indisputable. First, no formal application was made of the time of termination for a TPD Benefit. Mr Kowalski does not suggest otherwise. Secondly, the Trustee was unaware that it should consider Mr Kowalski's termination entitlements with such a benefit in mind. It did not inquire into whether there was medical evidence capable of supporting such an entitlement. It had no need, or obligation, to in the circumstances: cf Tonkin, at 74,269. I note that before it could pay a member a TPD Benefit under Rule C7, the Trustee was required to be of the opinion "after consideration of medical evidence satisfactory to them [sic]" that the member is incapacitated to the extent required by the Rule.
72 The Trustee in this matter simply paid a Rule C9 retirement benefit. If the Trustee was later presented with an application for, or medical evidence in support of, a TPD Benefit, the paying of the Rule C9 benefit would not have relieved the Trustee of its obligation to consider that application. This is not to say that the C9 decision was vitiated by some breach of duty on the Trustee's part. Rather, its correctness was examinable because an error may have been made in providing the member with his or her entitlement as a member. Under the Rules of Annex C, the member was entitled to be paid the benefits of the particular Rule which his or her circumstances required. The Trustee may have had to be satisfied that the member met the criteria of a particular rule, but it did not have an unfettered discretion to decide which benefit might be provided to a member. As I will indicate below, the Trustee subsequently considered and rejected Mr Kowalski's claim for a TPD Benefit from the cessation of his employment in 1994.
73 Mr Kowalski's 1994 claim proceeds on two false assumptions. The first, is that the Trustee had, in the circumstances, a duty to consider whether he had an entitlement to a TPD Benefit. I need not repeat what I have said above. The second is that the Trustee was obliged to consider Dr McFarlane's "report" (as the 29 April 1993 interview notes are misdescribed). There is no evidence at all that the Trustee was informed of, or provided with the report, at any time relevant to the determination of Mr Kowalski's 1994 retirement benefit. Mr Kowalski does not contend to the contrary.
74 Mr Kowalski's 1994 claim, in consequence, has no reasonable prospects of success as formulated or at all. This is irrespective of whether the Trustee would otherwise have had a defence to it in any event, a matter referred to later in these reasons.
75 Notwithstanding their complexity, I will deal with the events between 1994 and 1998 relatively shortly. It needs to be emphasised that in 1997 Mr Kowalski made a claim for an ill health benefit. This benefit, as I have emphasised, was payable in circumstances of resignation due to sickness "not constituting Total and Permanent Disablement". That he did so is of no little importance in understanding the events of 1998.
76 I will later indicate my view of the significance to be attributed to the mediation agreement of 27 October 1998. What is clear is that all parties to the mediation understood that one of its purposes was to clarify and settle the amount payable to Mr Kowalski for superannuation. That inquiry was to be made in a context in which Mr Kowalski had made a claim, reiterated in a facsimile to Mr Breugem on 18 April 1998, that he left MMAL "on account of sickness" and was entitled to an ill-health benefit. It may be the case, though it is not evident on the material before me (but has been asserted by Mr Kowalski from the bar table), that he raised the question of a TPD Benefit during the mediation on 26 October 1998. What is clear from his conversation with Mr Smelt on the following day (as revealed in the file note), is that he laboured under significant misunderstandings as to what founded his alleged TPD Benefit, eg he was then asserting he was still employed by MMAL and should "now" be considered for a TPD Benefit. Nonetheless in that conversation he did discuss the amount of his ill-health benefit. When he signed the Heads of Agreement, he must be taken as having done so on the basis that the ill-health benefit to be paid was "in full and final settlement of any superannuation payable" - albeit he had reason to be assured from what Mr Smelt told him on the same day that Colonial would be contacted in respect of his TPD Benefit claim but "it would take some time". Unsurprisingly, and in consequence of MMAL's direction, the Trustee paid the ill-health benefit, formally confirming the decision to admit that claim on 17 November 1998. I would interpolate in passing that the figure in question was, on the material before me, supplied by MMAL's representatives as the appropriate amount for the ill-health benefit.
77 Pausing at this point it is not obvious at all how Mr Kowalski could purport to complain about the Trustee's decision-making on, or prior to, 17 November 1998. The Trustee did not participate in the mediation. It was not a party to the Heads of Agreement. It received and finally confirmed Mr Kowalski's 1997 application for an ill-health benefit. And it foreshadowed that it would - and it did - ask Colonial to consider his TPD Benefit claim. Nonetheless, it is the case that there are a number of instances in correspondence by or on behalf of Mr Kowalski (eg from his union) asserting that he made a "formal claim" for a TPD Benefit on 26 October 1998. There is nothing to suggest that such a claim was more than what Mr Kowalski might have said at the mediation. Nor is there anything to reveal what was the basis of the "claim" as, for example, did it relate to his 1997 heart condition or his then apparent belief he was effectively still employed by MMAL. As the Trustee later made plain (see letter of 8 March 2004), it denied receiving a formal application from Mr Kowalski in October 1998, nor did it consider and reject any application at that time.
78 No precise "claim" has been articulated in respect of the Trustee's supposed wrongdoing in 1998. I do not intend to speculate further on that matter. I can discern no potential basis, let alone one having reasonable prospects, for a claim for breach of trust against the Trustee for its decisions etc in late 1998.
79 It needs to be emphasised that the Trustee did ask Colonial to reconsider its 1992 decision in light of subsequent events. I have set out in detail the exchanges between Mr Smelt and Colonial on this matter. To be emphasised, the Trustee on legal advice considered a full review of Mr Kowalski's case was warranted: "it [was] incumbent upon the insurer and the Trustee to re-assess his TPD claim in its entirety": Smelt letter of 3 July 2001.
80 Mr Kowalski makes no claim in this proceeding in respect of the 2001 decisions of the insurer and the Trustee rejecting his application for a TPD Benefit, although there is a deal of material before me evidencing Mr Kowalski's ongoing complaint about not being supplied with a copy of the "determination". Given the absence of any claim in relation to this matter, the absence of evidence relating to it is entirely understandable. It would be unreasonable to draw any inference adverse to the Trustee from its not providing further illumination in this proceeding of its then decision. All I will note is that the correspondence to which I have referred suggests there may have been some disagreement between the insurer and the Trustee as to the significance of the period of the insurance cover. It also indicates that, unlike the insurer, the Trustee was not limiting its assessment to the situation in 1992. I should further note that by that time both the insurer and the Trustee had copies of Dr McFarlane's note.
81 Turning finally to the 3 November 2005 application for a TPD Benefit, the material here suggests some of the confusion as to the nature and basis of Mr Kowalski's claim that began to emerge in 1997 and then later at the time of the mediation. It is clear from Mr Kowalski's 3 November letter that his claim was related to the time at which he ceased employment with MMAL. To anticipate matters somewhat, it was the claim directed to that time of cessation that the Trustee through its solicitors indicated on 24 February 2006 that they had previously considered and declined. The reasonable inference to draw from this in light of the material before me is that the reference to previous consideration related back to the Trustee's 2001 reconsideration decision. Equally, and despite Mr Kowalski's assertion to the contrary, there is no basis for regarding the statement as other than an honest reflection of what the Trustee had done.
82 It is, nonetheless, clear from Mr Smelt's 21 February 2006 letter to the Trustee Sub-Committee, either that Mr Kowalski may have advanced additional bases for his TPD claim - the letter refers to his 1997 heart attacks and to his belief his employment did not terminate until the Heads of Agreement was signed - or else an error was made by Mr Smelt as to the bases he ascribed to the "fresh claim". Either may explain why the Trustee's decision refers to the claim as not being "relevant to the date of cessation". Be this as it may, the Trustee reiterated that the claim for TPD had previously been considered and declined by the Fund's insurer and Trustee. While the evidence of the 2001 reconsideration is slight and might suggest that the insurer and the Trustee then had different temporal concerns as to the operative date for Mr Kowalski's total and permanent disablement, there can be no doubt after the 24 February 2006 solicitors' letter referred to above either that the Trustee in 2005 asked itself the correct question as to the time to which the claim related, ie 16 March 1994, or that it was that question that had previously been considered and answered. It equally is clear from that letter that the Trustee did consider the annexures attached to the letter of 3 November. It was reasonably open to it properly to take the view of those annexures that they raised no new issues, hence no reconsideration of the previously rejected claim was necessary. Those annexures I would add contained nothing which would be likely to induce a reasonable trustee to take a different view.
83 While it is a trustee's duty to act in the interests of its beneficiaries, absent an express power of dictation, a trustee is not the pawn of a beneficiary. As Tonkinindicates, a beneficiary is entitled to seek the reconsideration of a decision affecting his or her interests unless this is precluded by the nature of the decision itself or by the terms of the trust instrument. But where the decision, as here, requires the Trustee to form a particular opinion and that opinion has previously been formed adversely to the beneficiary, the Trustee is not obliged to reconsider that opinion absent some reason for so doing. Where, as here, what is raised by the beneficiary is matter which the Trustee has previously had raised before it and dealt with, the Trustee is entitled to decline to re-entertain that same matter in the future unless, because of change of circumstances or otherwise, that decision was not one that a reasonable person could then make. Such is not the position here.
84 Accordingly, I am satisfied that having regard to the material underlying Mr Kowalski's 2005 claim, that claim has no reasonable prospects of success.
85 I am conscious that in reaching the conclusions I have, I have made no direct reference to the medical evidence or to issues of causation. As to the medical evidence, I accept that there was material before the Trustee in 2001 which both supported and contradicted Mr Kowalski's position. The Trustee in light of this had to make its own decision. While Mr Kowalski asserts the Trustee's opinion was incorrect, that is not the question with which I am concerned. Not being aware of all of the material that was before the Trustee when it took its decisions in 2001 and 2005, I am left to consider if it can properly be alleged that there was not a real and genuine consideration of the correct question by the Trustee. There is nothing before me reasonably to suggest such was the case and hence should be examined at trial.
86 A distinct matter which I consider to be quite unimportant but to which Mr Kowalski assigns great significance, is the reason given by Mr Beer in his letter of 16 March 1994 notifying Mr Kowalski of the termination of his employment. Mr Beer did not represent the Trustee nor did he make statements binding upon it. Whatever Mr Beer intended to convey by describing the contract as "frustrated," he clearly was not speaking with legal exactitude. It is unnecessary for me to speculate what the letter read as a whole was intending to convey as the actual reason MMAL had for the termination. What is clear is that, when the Trustee was called upon to determine whether the cessation of employment in 1994 was caused by Mr Kowalski's claimed total and permanent disability, that decision was, relevantly for present purposes, for the Trustee when the TPD claim was made. It was neither fettered, nor determined in advance, by MMAL's reason for terminating the employment.
87 I am satisfied there is no basis in the material relied upon by Mr Kowalski that reasonably suggests a breach of trust or of fiduciary duty such as has been alleged in the FASC in relation to the 3 November 2005 claim. The pleaded assertion that the Trustee had deliberately and consciously acted in bad faith lacks any foundation and should never have been made.
88 As I am satisfied that none of the actual or potential breach of trust or, relatedly, breach of fiduciary duty, claims have reasonable prospects of success, not only will I dismiss them, I will also dismiss the negligence claim which is premised upon the conduct said to give rise to the breaches of trust and of fiduciary duty.