Kristoffersen v Superannuation Complaints Tribunal

Background and claims history 4 The appellant joined the Colonial Select Corporate Superannuation Fund when he commenced his employment in 2003. The second respondent is the trustee of the fund. The third respondent is an insurer which provided income protection and TPD insurance to members of the fund. 5 The appellant injured his left knee when he fell while pushing a motorbike on 19 October 2003. He injured his knee again and also injured his back when he fell down a flight of stairs at work on 4 December 2003. 6 In May 2005, the appellant made a claim to the insurer for income protection benefits. His claim was initially approved for the period from 3 January 2004 to 24 April 2004. Eventually, on 17 November 2009, the insurer decided to pay the appellant's income protection claim for a period of two years ending on 2 January 2006. 7 In April 2007, the appellant submitted a claim form for a TPD benefit to the insurer (he claimed to have also made a claim for a TPD benefit in May 2005, but the Tribunal found that he had not done so). The insurer notified the complainant on 1 February 2010 that it had declined its claim for a TPD benefit. 8 In May 2011, the trustee wrote to the appellant notifying him that it had affirmed the decisions of the insurer to pay his income protection claim only until 2 January 2006 and to decline his TPD claim.

Proceedings before the Tribunal 9 On 19 February 2009, the appellant lodged a complaint with the Tribunal under s 14 of the Superannuation (Resolution of Complaints) Act 1993 (Cth) ("the Act") that the decisions of the trustee and the insurer to reject his claim for payment of an additional income protection benefit and to reject his claim for a TPD benefit were unfair or unreasonable. 10 The substantive powers of the Tribunal are set out in s 37 of the Act. That section provides, relevantly: (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. … (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. 11 The appellant's principal submissions to the Tribunal were: (a) He had been left with severe injuries to his back and left knee and he came within the definition of "totally and permanently disabled" under the insurance policy. (b) The terms of the insurance policy required that he be paid income protection benefits until his 65th birthday, and not merely for the two years the insurer had allowed. (c) The insurance policy entitled him to a lump sum TPD benefit of $250,000, and not merely to the $41,667 that the insurer considered was the maximum that he could be entitled to. 12 The Tribunal identified a number of other issues raised by the appellant, but these were each related to his principal submissions. 13 The appellant contended that he had been insured under an income protection policy, called a "Corporate 1 Managers Policy", which provided for the payment of income protection payments until he reached the age of 65. The trustee's and the insurer's position was the employer had elected to take out insurance coverage for all its managers and other staff which provided an income protection benefit period of a maximum of two years. 14 The Tribunal commenced by identifying the applicable income protection insurance policy. The Tribunal decided that the relevant insurance policy was that in force when the appellant ceased active work, being a policy executed by the trustee and the insurer commencing on 15 March 1995. The Tribunal noted that the income protection provided for a maximum period for payment of two years. 15 The Tribunal considered that the trustee and the insurer were correct to decide that the maximum period for income protection benefits was two years. The Tribunal stated that the appellant had not identified any "Corporate 1 Managers Policy" and that there was no evidence that any such policy exists. The Tribunal rejected the appellant's submission that the level of premiums he paid demonstrated that he had paid for coverage to the age of 65, holding that the premiums were consistent with a two year benefit period. 16 The Tribunal found that the TPD insurance policy that was applicable was that in force on the date when the appellant ceased active work, being a policy executed by the trustee and insurer commencing on 15 March 1995 and amended on 25 June 2003 ("the TPD Policy"). 17 Under the TPD Policy, the expression "totally and permanently disabled" was defined, relevantly, as follows: If a person becomes an insured member on or after 10 May 1999 then, despite the above, total and permanent disablement/totally and permanently disabled means disablement where we are satisfied on medical or other evidence that as a result of sickness or injury: (a) (i) the insured member has been absent from active employment for a period of 6 consecutive months; and (ii) the insured member has throughout that time been unable to engage in (whether or not for reward) any occupation for which he or she is reasonably suited by education, training or experience; and (iii) the insured member will be so disabled for life. 18 The Tribunal summarised the medical, physiotherapy and radiological reports that were before it. The appellant vehemently disagrees with many of the statements of fact and opinion contained in those reports. One example, is that he states that a report provided by Dr Halliday contains numerous factual errors. The Tribunal noted that Dr Halliday had corrected many minor errors, but had maintained his medical opinion regarding the appellant's injuries and his capacity for work. The appellant also asserts that the Tribunal's summary of the medical reports contains a number of factual errors. 19 The Tribunal rejected the appellant's argument that he had an automatic entitlement to be paid a TPD benefit commencing two years after his cessation of work. The Tribunal found that the definition of "totally and permanently disabled" was inconsistent with such a proposition. 20 The Tribunal rejected the appellant's argument that the TPD benefit to which he was entitled was an amount of $250,000, rather than the $41,667 specified by the insurer and the trustee. The appellant's argument was based on a letter dated 1 March 2007 from the trustee which referred to "TPD $250,000.00". The Tribunal noted that the insurer and the trustee had since stated that the figure of $250,000 was an error. The Tribunal considered that, having regard to a statement sent to the complainant in 2006 showing the TPD benefit at $25,876, the appellant could not have been misled by the erroneous information in the trustee's letter, and even if he had been misled, there could have been no reliance on this information which led to any detriment to him. 21 The Tribunal identified the remaining issue as being whether under the definition of total and permanent disablement contained in the TPD Policy, the trustee and the insurer fairly and reasonably decided that the appellant was not totally and permanently disabled at the relevant date, being six months after he last ceased work. The Tribunal noted that the appellant had two medical conditions impacting on his health and capacity for work, namely the injuries to his knee and the injury to his back. 22 The Tribunal noted the appellant's submission that evidence of four doctors supported his claim to be totally and permanently disabled and considered that evidence. However, it regarded the evidence of Dr Halliday and Dr Keays as more persuasive. Dr Halliday assessed the appellant as partially disabled, but not totally and permanently disabled, and considered that he could undertake sedentary duties at least part time. Dr Keays had expressed the view that the appellant would be fit for work and that his prognosis was good. The Tribunal noted that in 2011 the insurer had offered to review the appellant's claim and had sought to obtain and consider an up to date medical opinion, but that he had refused that offer. The Tribunal took into account that the appellant had chosen to stand for election as a municipal councillor, a role which it considered was inconsistent with total and permanent disablement. The Tribunal concluded that in the absence of any persuasive evidence supporting the appellant's claim to have been totally and permanently disabled at and from the relevant date, the insurer and trustee were entitled to take the view that the appellant was not totally and permanently disabled under the policy. The Tribunal considered that the decisions of the trustee and the insurer were fair and reasonable in their operation in relation to the appellant in the circumstances.