Lykogiannis v Retail Employees Superannuation Pty Ltd

Federal Court of Australia|1997-05-08|Before: Sundberg J, Heerey J, Mansfield J

1 This is an appeal under s 46 of the Superannuation (Resolution of Complaints) Act 1993 (Cth) ("the Act") from a decision of the Superannuation Complaints Tribunal ("the Tribunal") established under Pt 2 of the Act. The appeal is restricted to questions of law. 2 The decision of the Tribunal was given on 3 September 1999. It affirmed a decision of Colonial Portfolio Services Limited (formerly Prudential Corporation Australia Limited) ("the insurer") made on 20 June 1996 that the claim by John Lykogiannis ("the appellant") for a total and permanent disablement insurance benefit be declined on the basis that he was not "at work" in "active employment" at material times. It also affirmed the decision of Retail Employees Superannuation Pty Ltd ("the trustee"), as trustee of the Retail Employees Superannuation Trust ("the fund"), to decline the appellant's claim for the payment of a total and permanent disability insured benefit under the fund. 3 The fund is a regulated superannuation fund under the Superannuation Industry (Supervision) Act 1993 (Cth) ("the Superannuation Act"). The appellant, following the decision of the trustee, made a complaint to the trustee about its decision in accordance with s 101 of the Superannuation Act. As that complaint was not dealt with to the appellant's satisfaction within the provided time, he made his complaint to the Tribunal pursuant to s 14 of the Act. Section 14(2) provides:

"(1) For the purpose of reviewing a decision of the trustee of a fund that is the subject of a complaint under section 14: (a) the Tribunal has all the powers, obligations and discretions that are conferred on the trustee; and (b) subject to subsection (6), must make a determination in accordance with subsection (3). (2) If an insurer or other decision-maker has been joined as a party to a complaint under section 14: (a) the Tribunal must, when reviewing the trustee's decision, also review any decision of the insurer or other decision-maker that is relevant to the complaint; and (b) for that purpose, has all the powers, obligations and discretions that are conferred on the insurer or other decision-maker; and (c) subject to subsection (6), must make a determination in accordance with subsection (3). (3) On reviewing the decision of a trustee, insurer or other decision-maker that is the subject of, or relevant to, a complaint under section 14, the Tribunal must make a determination in writing: (a) affirming the decision; or (b) remitting the matter to which the decision relates to the trustee, insurer or other decision-maker for reconsideration in accordance with the directions of the Tribunal; or (c) varying the decision; or (d) setting aside the decision and substituting a decision for the decision so set aside. (4) The Tribunal may only exercise its determination-making power under subsection (3) for the purpose of placing the complainant as nearly as practicable in such a position that the unfairness, unreasonableness, or both that the Tribunal has determined to exist in relation to the trustee's decision that is the subject of the complaint no longer exists. (5) The Tribunal must not do anything under subsection (3) that would be contrary to law, to the governing rules of the fund concerned and, if a contract of insurance between an insurer and trustee is involved, to the terms of the contract. (6) The Tribunal must affirm a decision referred to under subsection (3) if it is satisfied that the decision, in its operation in relation to: (a) the complainant; and (b) … was fair and reasonable in the circumstances." 5 I note that s 37 in its original form was repealed on 12 December 1995, and substituted by s 5 and Item 5 of Sch 5 of the Superannuation Industry (Supervision) Legislation Amendment Act 1995 (Cth). The parties submitted that, so far as it is relevant to the determination of this appeal, I should have regard to s 37 as it is presently expressed.

Background 6 On 6 May 1992, the appellant first joined the fund and at that time was insured for the standard amount of death and total and permanent disablement cover. He was also working in a menswear store as a sales assistant. On 20 January 1993, the appellant claimed a total and permanent disablement benefit from the fund on the grounds of mental illness. After investigation, that claim was met. On 30 July 1993, the appellant was paid a total and permanent disablement benefit under the fund on the grounds of his mental illness. 7 From 1 August 1994, a different insurer provided insurance support in respect of the fund, in accordance with arrangements negotiated with the insurer by the trustee. 8 In January 1995 the appellant commenced work as a sales assistant until March 1995. He did not rejoin the fund at that time. For much of the balance of 1995, he undertook and completed a year of an industrial relations course at a university. 9 Towards the end of 1995, the appellant decided to seek employment again as a sales assistant. He obtained that employment with Myer Stores Limited ("Myers") at Tea Tree Plaza. He commenced that employment on 23 October 1995. He undertook a four day period of orientation training from 23 October to 28 October 1995. His ordinary employment commenced, as a sales assistant, on 30 October 1995. His employment came to an end on 17 November 1995. 10 On 16 October 1995, the appellant completed a membership application form to rejoin the fund and became a member on 23 October 1995. 11 On 5 March 1996 the appellant for a second time claimed a total and permanent disablement benefit from the fund on the grounds of mental illness. The insurer denied that it was liable for this claim. On 20 June 1996, the insurer wrote to the trustee in the following terms:

"Mr Lykogiannis, by his own admission was not actively at work when he commenced with Myers in October 1995. On a statutory declaration signed by him on 15 March 1996 he stated that "I have tremendous problems performing my work duties, as a sales assistant, because I was suffering from Schizophrenia, which resulted in me having major thought disorders, and made it totally impossible to carry out the tasks that were asked of me." We also note that this member has claimed a Total and Permanent Disablement benefit in July 1993 from the Retail Employees Superannuation Trust for the same condition. The Total and Permanent Disablement claim certificate signed by [the doctor] states that Mr Lykogiannis first became ill with Schizophrenia in 1989 and has had regular psychiatric treatment since. Mr Lykogiannis had a relapse after a few days of working in April 1995. This Doctor has also confirmed the date of incapacitation as being October 1995, when he was unable to complete a second work trial. In light of the above information we do not believe that Mr Lykogiannis was "at work" in "active employment" on the day he completed his membership application form or on the date that he commenced employment with Myers and therefore decline liability." 12 The trustee on 2 August 1996 resolved that the claim for total and permanent disablement insurance in respect of the appellant be declined. 13 He was informed of that decision by letter of 9 August 1996. The reasons for that decision were given to him by the trustee on 22 August 1996. Those reasons were expressed as follows:

"In order for a member to elect insurance cover you must be in "active employment" and eligible to receive mandatory superannuation contributions from your employer at the time you complete your Application for Membership Form. "Active employment" means being employed (including being on fully paid leave not caused by sickness or injury) to carry out identifiable duties and, in the Insurer's opinion, being able to perform those duties on a full time basis. If you were not in "active employment" then insurance cover may be limited or may not apply. In view of the above and the information provided on your Statutory Declaration, the insurer has declined your claim on the basis that you were not "at work" in "active employment" on the day you completed your Membership Application form (16/10/95) or on the date you commenced employment with Myers." Provisions of the trust deed of the fund and the insurance policy 14 Under the Rules of the fund "the Insured Benefit" in respect of a member means the amount (if any) payable to the fund by the insurer in the event of that member's death, disability or total and permanent disablement. "Total and Permanent Disablement" is defined to mean physical or mental ill-health, where the trustee is reasonably satisfied that the member is unlikely, because of the ill-health, ever again to engage in gainful employment for which the member is reasonably qualified by education, training or experience. 15 The starting point is eligibility for membership. It is accepted by the trustee that the appellant was eligible to become a member of the fund. An ordinary member is a member in respect of whom a contribution has been paid to the fund and from whom the trustee has accepted a valid member application. It is accepted by the trustee that the appellant became an ordinary member on 23 October 1995. 16 Under the Rules of the fund, insurance cover is to be procured by the trustee. A member is not entitled to insurance cover, except as specified in the contract of insurance procured by the trustee. The insurance benefit becomes available for an ordinary member, if an insured event occurs, commencing:

"… on acceptance by the Plan of a valid Member Application or acceptance by the Plan's Insurer of a valid Application to Vary Insurance, whichever is applicable."

It is accepted by the trustee that the insurance cover effected by the trustee with the insurer applied to the appellant commencing on 23 October 1995. I was informed by counsel for the trustee that the insurer also accepts that the appellant became an ordinary member of the fund, and became eligible to receive benefits under the insurance cover if an insured event occurred and subject to the terms of the fund and its Rules, on 23 October 1995. I was also informed by counsel for the trustee that, there is a common position between the trustee and the insurer, which means that the insurer will abide by the decision on this appeal (or any appeal from this decision). There were no additional matters which the insurer wished to raise relevant to the appellant's claim to be entitled to an insurance payment based upon total and permanent disablement. 17 Rule 5A of the Rules of the fund deals with the level of insurance benefits. The amount and nature of the insured benefits is to be determined by the trustee, and is subject to the terms of the insurance policy or policies taken out by the trustee to provide the relevant insured benefit. 18 Rule 10 of the Rules of the fund provides for eligibility for total and permanent disablement benefit. For present purposes, if a member becomes totally and permanently disabled prior to obtaining the normal retirement date, the benefit payable is an amount equal to the aggregate of the member's retirement account at the date of disablement and the member's insured benefit (if any). There was no amount in the appellant's retirement account at the date of his claimed disablement. The only entitlement he sought was his insured benefit under the insurance policy. 19 The insurance policy is dated 14 December 1994. It includes provisions that the insurer will pay a benefit on the total and permanent disablement of the member if the insurer has agreed to provide this type of cover for a member. Clause 2.1 provides:

"Cover for a member will begin from the date we agree to provide cover. A member who is not at work on the date that cover commences will only receive limited cover until the member returns to active employment for 2 consecutive months." 20 Clause 2.2 provides: "The amount of cover for a member will be the insured cover subject to the following: … 2.2.7 the insured cover will not exceed the automatic acceptance limit; and 2.2.8 to be eligible for automatic acceptance, a member must be in active employment on the later of: (a) the policy commencement date; or (b) the date the person becomes a member of the fund; or (c) for deemed members who complete and sign an application form for insured cover greater than 1 unit, the date the form was received by the fund; …" 21 Clause 10 of the insurance policy contains definitions of terms used in the insurance policy. The following definitions are important for determination of this appeal. 22 "Active employment" means:

"being employed (including being on fully paid leave except leave which is caused by sickness or injury) by an employer to carry out identifiable duties and in our opinion being able to perform those duties on a full time basis. This can include members who are employed on a part time basis for an employer." 23 "At work" means:

"being in active employment or on employer-approved unpaid leave of up to 12 consecutive months except leave which is caused by sickness or injury." 24 "Automatic acceptance" means:

"acceptance of cover by [the insurer] on a member's life without [it] requiring evidence of health or other underwriting requirements." 25 "Limited cover" means: "the member is only covered for claims arising from: * a sickness which became apparent; or * an injury which occurred; on or after the date the member first became eligible for cover." 26 I was told that the relevant level of insurance cover for the appellant for total and permanent disablement is, having regard to his age, $47,000. The Tribunal's reasons 27 The Tribunal referred at some length to medical reports, some of which had also been considered by the trustee and by the insurer. Those medical reports show that the appellant has suffered from schizophrenia or a form of schizophrenic illness since 1989. At least one of those reports records that he responded well to treatment between August 1993 to October 1995. It also records that he successfully completed an eighteen week computer course by December 1994 and obtained employment between January and March 1995 with no sign of paranoid thoughts or thought disorder or other symptoms of schizophrenia, and then successfully completed one year of a university course in 1995. He is also noted as having successfully completed three interviews with employers without showing evidence of paranoia or thought disorder. He successfully completed a four day training course at Myers from 23 October 1995 with no signs of paranoia or thought disorder. One of those medical reports refers to the appellant being totally and permanently disabled due to schizophrenia which "was established before October 1995" so that his relapse after his efforts to return to work in 1995 confirmed his disability. That doctor says that, although his illness first manifested itself in 1989, there is no exact date when the total and permanent disablement commenced. Certain of those medical reports indicate that, by December 1992, the appellant was totally and permanently disabled, but those reports are mainly from the same doctors who provided information about the appellant's improvement, at least symptomatically, during 1994 and 1995. I note that there is no suggestion that the appellant concealed his medical condition from Myers or from the trustee or the insurer. 28 Having regard to the Tribunal's ultimate function under s 37(6) of the Act, it was relevant for the Tribunal's decision to review that medical evidence. It related to the basis upon which, or at least one of the bases upon which, the insurer on 20 June 1996 informed the trustee that the appellant was not entitled to a total and permanent disablement cover payment under the insurance policy. However, as appears below, I do not consider that the Tribunal then proceeded to address s 37(6) in the light of that medical evidence. 29 The Tribunal then referred to the submissions. The insurer made no submissions, apparently being content to adopt those of the trustee. The trustee submitted first that the appellant was not in fact totally and permanently disabled in terms of the trust deed or in terms of the insurance policy. Primarily, the trustee contended that there was evidence that, after November 1995, the appellant was capable of performing work for which he was reasonably qualified by education, training and experience. He did not therefore fall within the relevant definition. The alternative submission on behalf of the trustee was that, even if the appellant was, at the date of ceasing employment, totally and permanently disabled as defined in the trust deed and in the insurance policy, he was not eligible for total and permanently disablement insurance cover under the terms of the insurance policy. That submission was noted by the Tribunal in the following terms:

"… the Trustee submitted that as the complainant was not "at work" within the meaning of the insurance Policy on the date cover commenced (23 October 1995), he was only entitled to "limited cover" (which would exclude cover in relation to his pre-existing mental illness), at the time he ceased employment on 17 November 1995." 30 The Tribunal also referred to the insurer's letter to the trustee of 20 June 1996 in which, incorrectly in my view, it categorised the insurer's advice to the trustee to decline the claim as being based on the following reasons: ". the complainant, by his own admission was not actively at work when he commenced work with his employer in October 1995; and . the medical opinion supplied by Doctor C of 23 January 1997 and 17 February 1997 demonstrated the ongoing nature of his illness." 31 In my judgment, the Tribunal has misapprehended the import of the insurer's letter of 20 June 1996. I consider that the insurer was simply taking the view, based upon the medical evidence, that the appellant at the time he became a member was not "at work" as defined and was not "in active employment" as defined because, in the insurer's opinion, the appellant was not then able to perform duties on a full time basis. The definition of "active employment" involves two elements namely: (i) being employed by an employer to carry out identifiable duties; and (ii) in the insurer's opinion, being able to perform those duties on a full time basis. 32 In my view the insurer's letter of 20 June 1996 was directed only to the second of those two elements. Its terms are set out in par 11 above. Its focus was upon the appellant's medical condition. It is not appropriate on this appeal to indicate whether that view was correct, or whether upon the material before it the Tribunal should have been satisfied that the decision was fair and reasonable in the circumstances, under s 37(6) of the Act. The trustee's letter of 22 August 1996 to the appellant, set out in par 13 above, was not so clearly expressed as being based upon a review of the medical evidence. I consider that the Tribunal was in error in attributing to the insurer, and also apparently to the trustee, this further reason for rejecting the claim. Namely, that the appellant was not "actively at work" when he commenced employment on 23 October 1995. 33 After describing the submissions in that way, the Tribunal considered the provisions of s 37, including the obligation imposed by s 37(6) that it must affirm the trustee's decision if, in its operation in relation to the appellant, it was satisfied that the decision was fair and reasonable in all the circumstances. It is not submitted on this appeal that the Tribunal erred in law on its consideration of s 37. I note that the trustee now submits that the Tribunal had to have reached the decision that the trustee's decision was fair and reasonable in the circumstances, simply because the appellant should not be entitled to a total and permanent disablement payment in 1995 after having received a total and permanent disablement payment in 1992. Consequently, the trustee submits that even if the Tribunal erred in law, the outcome of any further review by the Tribunal would be inevitable, so the appeal should be dismissed in any event. 34 The Tribunal then concluded, in favour of the appellant, that he was totally and permanently disabled on 17 November 1995 when he ceased employment. It rejected the trustee's submissions to the contrary. It referred to the medical evidence, and other material, in support of that conclusion. The appellant does not complain of that conclusion. 35 In relation to the trustee's alternative submission, the Tribunal said:

"The Tribunal does, however, agree with both the Trustee and the Insurer that despite being totally and permanently disabled, the complainant is not eligible for a Total and Permanent Disablement benefit under the Conditions of the Insurance Policy. He was not "at work" as defined in Condition 10 of the Insurance Policy on the day he joined the fund, 23 October 1995. On that day, he commenced a four day training course. His 'active employment' as defined in condition 10, commenced on 30 October 1995 when he commenced his ordinary duties as a sales assistant. The interpretation given by the Trustee and Insurer to the terms 'at work' and 'active employment' is in line with industry practice and in this regard, the Tribunal cannot agree with the interpretation placed on them by the Complainant's solicitors." 36 Consequently the Tribunal determined that the appellant was eligible only for "limited cover" until he returns to active employment for two consecutive months. His pre-existing mental illness was not covered under the limited cover because it was a sickness which was apparent before the date that the appellant first became eligible for cover, that is before 23 October 1995. The Tribunal's earlier extensive reference to the medical reports was considered only in relation to whether the appellant suffered total and permanent disablement, and whether he had a pre-existing sickness which excluded him from eligibility for benefits under the "limited cover" for which it found he was eligible. 37 The Tribunal does not appear to have addressed the particular ground upon which the insurer initially advised the trustee to reject the claim, namely that by reason of the medical evidence in the insurer's opinion the appellant was not able to perform the duties of a sales assistant on a full-time basis on and from 23 October 1995, and so was not in active employment at that time. 38 The Tribunal, on the basis of that reasoning, found that the trustee's decision in its operation in relation to the complainant was fair and reasonable in the circumstances. Did the Tribunal err in law? 39 Clause 2.1 of the insurance policy, as applied by the Tribunal, meant that the appellant was only entitled to limited cover because he was not "at work" on 23 October 1995. As noted, the Tribunal then found that the limited cover did not give rise to any entitlement to benefits under the fund or under the insurance policy in the appellant's particular circumstances. The appellant would have had to have served a two month qualifying period from 30 October 1995, in active employment as a sales assistant, before becoming eligible for the benefits ordinarily available. As the Tribunal's reasons set out in par 34 above indicate, it was the circumstance that Myers first required the appellant to undergo a four day training course before commencing his ordinary duties as a sales assistant which led to that conclusion. 40 On this appeal, the trustee contended that the Tribunal's reasons, in the passage set out in par 35 above, really represented a finding that the appellant was not "at work" on 23 October 1995 because he was unable to perform duties as a sales assistant on a full time basis due to his medical condition. It was argued that the Tribunal's reasons in that passage simply expressed in another way the insurer's reasons as set out in its letter of 20 June 1996 to the trustee. I am satisfied that that is not the case, and that the Tribunal's reasons are based upon its view that the appellant commenced active employment only on 30 October 1995 after his four day training period. 41 Having expressed the view that the appellant was not "at work" on the day insurance cover commenced and the appellant joined the fund, namely on 23 October 1995, the Tribunal gave two reasons for that conclusion. The first was clearly that the four day training course did not constitute "active employment". The Tribunal expressly found that "active employment" as defined commenced on 30 October 1995. If the Tribunal's reasoning reflected that of the insurer, "active employment" did not commence at all because of the pre-existing and ongoing medical condition. The Tribunal's second reason was to rely on "industry practice" to explain its decision. In context, that must refer to the time at which, within the industry, active employment is regarded as having commenced in relation to a training period. It cannot refer to the particular medical circumstances of the appellant. Those individual medical circumstances could not be the subject of any industry practice. In addition, as I noted earlier in these reasons, the Tribunal attributed two reasons to the insurer for rejecting the appellant's claim. In my view, the insurer's letter of 20 June 1996 gave only one reason for its decision that the appellant's claim should be rejected. 42 In my judgment, the Tribunal erred in law in concluding that the appellant was only entitled to "limited cover" because he was not "at work" on 23 October 1995 when he commenced his four day training course. The term "at work" relevantly means in "active employment". As noted earlier, the term "active employment" has two elements: firstly being employed by an employer to carry out identifiable duties, and secondly in the opinion of the insurer being able to perform those duties on a full time basis. The Tribunal did not address the second of those two elements. The expressions "at work" and "active employment" are commonplace. There is no reason to think that the expression which comprises the first element of "active employment", namely being employed by an employer to carry out identifiable duties, had other than its normal and commonplace meaning. The trustee did not proffer any reason why the appellant did not have the character of being employed by Myers to carry out the duties of a sales assistant just because he was undergoing a period of training as part of that employment. It is the fact and nature of the employment, rather than the precise duties being performed at any one time, which indicates whether the first element of the definition of "active employment" is satisfied. If that were not so, persons who are removed from performing the normal duties, perhaps for a period of retraining, might be at risk of losing the protection of the insurance policy for the period of that training and might have to serve the two month re-qualifying period before resuming eligibility for benefits. Clause 2.2.6 of the insurance policy indicates that that is a possible consequence of the Tribunal's views. It provides:

"2.2.6where a member recommences active employment, the amount of insured cover will not exceed the amount that applied when the member was last in active employment by more than one additional unit of cover without providing us with a health declaration; and 2.2.7 the insured cover will not exceed the automatic acceptance limit; and 2.2.8 to be eligible for automatic acceptance, a member must be in active employment on the later of: (a) the policy commencement date; or (b) the date the person becomes a member of the fund; or (c) for deemed members who complete and sign an application form for insured cover greater than 1 unit, the date the form is received by the fund; and …"

43 That consequence cannot have been intended. Difficult questions might also arise where training is done on the job. I do not think that it is intended by the insurance policy, for example, that a sales assistant who is receiving training on the job and whose training progressively becomes less slowly osmoses from having the character of not being in active employment to having that character. At what time is there a sufficient degree of independence of supervisory training to describe that person as in "active employment?" It is also necessary to consider what may be the consequences of the Tribunal's interpretation, and whether there can be any national justification for those consequences, in the face of the construction of "active employment" for which the appellant contended. For example, if during the training period a member of the fund suffered a severe non work related disabling injury, on the Tribunal's view, that person would only be entitled to limited cover. But I am unable to see any reason why, given the nature and purpose of the fund, that person should be categorised as not having been in active employment. 44 The evidence before the Tribunal shows that the appellant was employed by Myers from 23 October 1995 to carry out identifiable duties. His job offer was made by Myers on 11 October 1995. It specified that he was to commence work on 23 October 1995. He was required to attend a one hour pre-employment induction course on 20 October 1995. That letter then indicated that he would undergo an orientation training over a four day period at the Adelaide City store training room prior to going on site to the Tea Tree Plaza store. He was paid from 23 October 1995. His group certificate indicates that he received payment from that date, and had tax deducted from his earnings from that date. 45 Accordingly, in my judgment, the decision by the Tribunal to treat the training period as a period when the appellant was not at work in active employment was erroneous. Counsel for the parties did not identify any material before the Tribunal which indicated industry practice supported its conclusion. The records of Myers in evidence do not support its interpretation. In my judgment the operation of cl 2.1 of the insurance policy, and the definitions, meant in the particular circumstances (but subject to the appellant satisfying what I have described as the second element of the definition of "active employment") that the appellant was "at work" and in "active employment" on and from 23 October 1995. His entitlement to insurance benefits, subject to the other terms of the insurance policy, commenced on 23 October 1995. 46 The appellant also argued that the Tribunal had fallen into error in two additional ways. It was said firstly that the Tribunal had failed to consider whether the trustee had properly exercised its discretion at all, rather than simply operating as a rubber stamp for the insurer. Reliance was placed on the decision of Gallop ACJ in Minehan v AGL Employees Superannuation Pty Ltd (1998) 134 ACTR 1. That case was not a decision under the Act. It involved judicial review of a decision by the trustee of a fund to decline to grant benefits under that fund. The court declared that the plaintiff was entitled to the benefit sought, and that the trustee had failed to exercise its independent judgment about the real issue upon which it had to decide. The insurer had formed an assessment which did not fairly reflect the medical evidence available, and the trustee simply acted on that erroneous assessment without exercising its independent judgment about the real issue which it was called upon to decide. In that case, there was direct evidence from a director of the trustee as to the decision-making process upon which the decision was made. I do not think that that decision is of assistance to the appellant's claim. It was not a decision under the Act. It was a decision made as to the decision-making process of the trustee, based upon oral testimony of a director of the trustee. There is no such evidence here. The material before the Tribunal indicates that the insurer made a decision on 20 June 1996, that an officer of the trustee then made a recommendation in the light of that decision of the insurer which differed from the decision of the insurer and which recommended some additional medical investigation, and that those charged with the decision making on behalf of the trustee did not accept that recommendation but resolved that the claim for total and permanent disablement insurance in respect of the appellant be declined. There is no material upon which it could properly be said that the trustee failed to exercise its own independent discretion in relation to the decision to reject the appellant's claim. The fact that its decision corresponded with the decision of the trustee does not establish that point. The process by which that decision came to be reached, including the making of a recommendation different from the decision of the insurer tends to suggest that the trustee did apply its independent judgment in making the decision. The fact that the reasons for the decision given to the appellant by letter of the trustee of 22 August 1996 are not expressed in terms which simply reflect the expression of the insurer's decision also does not support the assertion of fact upon which the submission is based. 47 In any event, in my judgment, the submission fails to apprehend the obligation of the Tribunal under s 37 of the Act. That obligation has been addressed by judges of this Court in a number of decisions: National Mutual Life Association of Australia Ltd v Jevtovic (Sundberg J, 8 May 1997, unreported), Briffa v Hay (1997) 75 FCR 428 ("Briffa"), Adkins v The Health Employees Superannuation Trust Australia Ltd (Heerey J, 15 August 1997, unreported), Seafarers' Retirement Fund Pty Ltd v Oppenhuis [1999] FCA 1683 ("Oppenhuis"), and National Mutual Life Association of Australasia Ltd v Campbell [1999] FCA 1717. 48 Those decisions are all to the same general effect. Upon hearing a complaint, the Tribunal must make its own decision. In the course of doing so, it must make findings of fact relevant to its deliberations. The hearing by the Tribunal is a hearing de novo (see in particular the discussion by Merkel J in Oppenhuis at pars 18 - 22). Ultimately, whatever findings the Tribunal must make standing in the shoes of the trustee (see the observations of Merkel J in Briffa and in Oppenhuis) s 37(6) requires the Tribunal to decide whether the decision under review, in its operation, was fair and reasonable in the circumstances. The focus of s 37(6) is upon the consequence or outcome of the decision in its practical operation, rather than upon the process by which the decision under review came to be made. 49 In Attorney-General v Breckler (1999) 73 ALJR 981 Kirby J at 1000 pointed out that the views of the judges in Wilkinson (1998) 79 FCR 469 may differ from those in Briffa as to the respective operation of ss 14 and 37 of the Act. His Honour said at 1001:

"The restrictions on the grounds of complaint [under s 14] to present or past unfairness or unreasonableness matches the restrictions in s 37(4) and (6) of the Complaints Act on the Tribunal's powers to interfere with a decision of a trustee. Although the construction of the Complaints Act as it now stands is by no means certain, the better view is therefore that, as s 14(2) provides, each relevant "decision" may be the subject of complaint to the Tribunal on the ground that it "is or was unfair or unreasonable". But only in those cases where such complaint will give rise to relevant powers on the part of the Tribunal to grant relief, will the result be the substitution by the Tribunal of one of the determinations open to it. … The object of the determination is to effect the purpose of removing the unfairness and unreasonableness which the Tribunal has determined to exist." 50 As the High Court in Breckler makes clear, it is because it is the role of the Tribunal under s 37(6) to form a view as to whether the original decision in its operation is fair and reasonable that the Tribunal is not exercising the judicial power of the Commonwealth. Even if the trustee had simply operated as a rubber stamp for the insurer (and I have found that it did not), the Tribunal's function was to determine whether the trustee's decision in its operation was fair and reasonable. It has done so. This ground of appeal must therefore fail. 51 The third matter argued on behalf of the appellant was that the Tribunal, in forming its decision, had failed to accord procedural fairness to the appellant in two respects. Firstly it was said that it had failed to give to the appellant the opportunity of commenting upon the final submissions put before the Tribunal on behalf of the trustee, and secondly that the Tribunal had taken into account "industry practice" without notice to the parties. As I propose to remit this matter to the Tribunal, it is not necessary to deal with those questions. Counsel did not develop full submissions about the content of the Tribunal's obligation to accord procedural fairness in its hearings. Nor were submissions fully developed as to whether the failures alleged could amount to errors of law under s 46 of the Act. In my view, the further consideration of such questions is better addressed when and if they arise in other circumstances. 52 The trustee has given notice of contention that this appeal should be dismissed and the decision of the Tribunal affirmed on the ground that the appellant does not satisfy the definition of total and permanent disablement in the trust deed or in the insurance policy. That question was decided adversely to the trustee and the insurer by the Tribunal. No argument was addressed to sustain the claim that the Tribunal erred in law in making that finding. Rather, it was argued that the medical evidence was clear that the appellant was unable to perform duties as a sales assistant on a full time basis when he commenced active employment. It was thus submitted that the initial decision of the insurer and the trustee was clearly right, or more accurately so firmly based that the Tribunal would inevitably have been satisfied that the initial decision in its operation in relation to the appellant was fair and reasonable in all the circumstances. Accordingly, the trustee contended that there was no point in remitting the matter to the Tribunal, and the appeal should be dismissed. As noted earlier, the trustee put a slightly different argument to the same effect, namely that the decision must be fair and reasonable in its operation if it denies to the appellant insurance benefits for total and permanent disablement when he had already received insurance benefits for total and permanent disablement in respect of the same medical condition in 1992. 53 I do not think that it is appropriate to adopt that course. The matters raised are matters that were for the Tribunal to make findings and a determination under s 37(6) of the Act. The Tribunal has found that "limited cover" did not extend to the appellant's medical condition because it was not a sickness which became apparent on or after 23 October 1995. It has also found that from 17 November 1995 the appellant suffered total and permanent disablement. It is not inevitable, in the light of the medical evidence, that the appellant was totally and permanently disabled at and immediately prior to 23 October 1995. The medical evidence referred to above, and the history of the appellant's employment and study in 1994 and 1995, indicates that that question as now expressed by the trustee is one which the Tribunal may have to address. More specifically, the Tribunal has made no finding whether, at 23 October 1995, the appellant was able to perform duties as a sales assistant on a full-time basis (pertaining to the relevant part of the definition of "active employment"). That same material indicates that it is not inevitable that the Tribunal would make a finding adverse to the appellant on that question. Nor does the fact that the appellant previously qualified for a total and permanent disablement payment benefit under the fund necessarily disqualify him from being eligible for such a benefit in light of what happened in October and November 1995. That is a matter to be decided upon the proper construction of the trust deed for the fund and of the insurance policy. Despite his earlier disablement, the Tribunal might find that he had regained some or all of his capacity to work. The definition of 'total and permanent disablement' in the trust deed of the fund is based upon the trustee's satisfaction at that time that the member is unlikely even to engage in gainful employment for which the member is suited. Circumstances may change, and may have changed in respect of the appellant. The fact that the trustee was so satisfied in 1992 does not necessarily preclude a change in circumstances which may lead to the trustee being later called upon to form such an opinion in respect of the same member, and even in respect of the same underlying illness. The findings of the Tribunal seem to indicate that it did regard the appellant as having a capacity to work at 23 October 1995 and as having become totally and permanently disabled from working on 17 November 1995. It expressly made the latter finding, and as part of its reasons for rejecting the trustee's contention that the appellant had still some remaining capacity to work, it referred to the ground of the insurer's initial rejection of the claim that the appellant was at 23 October 1995 totally and permanently disabled. 54 The decision of the Tribunal as to whether the decision of the trustee, in its operation in relation to the appellant, was fair and reasonable in all the circumstances must be made in the light of the terms of the trust deed of the fund and of the insurance policy. It would not be correct to ignore those terms and proceed simply upon the basis that because the appellant had received a total and permanent disablement benefit payment in 1992, the decision to refuse that entitlement in respect of the events in October and November 1995 must be fair and reasonable in its operation. 55 Accordingly, I allow the appeal. I remit the matter to the Tribunal for hearing and determination in accordance with these reasons. I will hear the parties as to whether the Tribunal should be differently constituted or whether the Tribunal as constituted when the decision under appeal was made should proceed now to further hear and determine the complaint.

I certify that the preceding fifty-five (55) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.

Associate: Dated: 23 March 2000 Counsel for the Applicant: Mr R Mellows

Solicitors for the Applicant: Sanderson & Hodgson

Superannuation Industry (Supervision) Legislation Amendment Act 1995(Cth)s 5, Item

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