1 The first defendant is the Trustee of the Club Plus Superannuation Scheme, constituted by a Deed of Trust dated 27 February 1987, as amended from time to time. The first defendant procured the issue by the second defendant of a policy of Group Life Insurance. The plaintiff became a Member, as defined in the Trust Deed and claimed to be entitled to be paid $49,500 on the basis that he was suffering from a Total and Permanent Disablement. The parties agree that the combined effect of the Trust Deed and the Insurance Policy is that the definition of that condition that is now relevant is the definition contained in the Insurance Policy, which reads:
"Total and Permanent Disablement (TPD)
Total and Permanent Disablement shall mean:-
a) Suffering the loss of two limbs or the sight of both eyes or the loss of one limb and the sight of one eye (where limb is defined as the whole hand of the whole foot), or
b) Having been absent from employment with the Company for six consecutive months and having provided proof to our satisfaction that the member has become incapacitated to such an extent as to render the member unlikely ever to engage in or work for reward in any occupation or work for which the member is or may become reasonably qualified by education training or experience).
'We Our or Us' means Citicorp Life Insurance Limited."
2 Each of the defendants rejected the plaintiff's claim, and also rejected requests for reconsideration of those rejections, and the plaintiff now seeks orders setting aside those decisions, and consequential relief.
The Early 1997 Decisions
3 The plaintiff completed a "Statement of Claim" form and a statutory declaration, both dated 30 December 1996. It seems that these were provided by the plaintiff to the first defendant, and that the first defendant sent them on to the second defendant. In those forms, he said that he had been injured on 19 April 1996, whilst working as a bar steward for Riverwood Legion Club. In those documents he described his injury as "L4/L5 disc injury", said that he had not worked since being injured and said that he was not expected to return to work. He said that he was entitled to workers compensation benefits, and identified the workers compensation insurer in question, and he listed the doctors who had seen him: Drs Patrick, Blake, Evans, Hocker, and Wong. He described his duties as "working behind a bar, TAB, Keno, setting up function rooms, carrying tables up and down stairs". He had not been employed in a supervisory capacity, and he answered a question about the level of education required for his job: "Bar and cocktail course, Skillshare Auburn Nov 1995". He was a shift worker. Asked questions about the extent to which his work involved lifting, carrying and reaching above his shoulder, where the question defined "occasional" as one third of the time or less, "frequent" as one third to two thirds of the time, and "continuous" as more than two thirds of the time, he said that the job required lifting of weights of under seven kilograms and of seven to nineteen kilograms occasionally, and twenty kilograms or more frequently. The job required carrying weights of seven kilograms occasionally, and weights of twenty kilograms and over frequently; and it required reaching above his shoulders occasionally. He also said that the job required him to be walking or standing 100 percent of the time. Asked to list all of the jobs he had held in the preceding ten years he said: "carpenter 1971 to 1993", and bar steward from 22/12/95 to 25/12/96.
4 A letter from Riverwood Legion & Community Club Ltd to the plaintiff dated 20 December 1996, which evidently accompanied these documents, informed the plaintiff that the Club's workers compensation insurer had notified the Club that he was unable to work, and that his claim could take up to twelve months to finalise. The Club could not hold his position indefinitely, and it had decided to terminate his employment as at 25 December 1996.
5 Another document provided to the defendants at this time was a form of "Employer's Statement" completed on behalf of the Club, dated 9 January 1997. This form described the plaintiff's job title as casual steward, and his duties as "serving drinks, processing TAB & Keno tickets, setting up for functions". It said that the plaintiff was not employed in a supervisory capacity. The form asked the same general questions as did the "Statement of Claim" form about lifting, carrying and reaching above shoulders, and walking and standing. It appears (the copy in evidence may not be perfect) that the only activity ticked in respect of lifting, carrying and reaching was that he lifted weights of seven to nineteen kilograms occasionally; and he spent 20 percent of his time walking and 80 percent standing.
6 Asked if the Club had any alternative job openings for the plaintiff, if he was unable to do his regular work, it said "No". Asked what similar types of work the plaintiff's skills "could" qualify for, it said "TAB agency".
7 The plaintiff had made a claim for worker's compensation benefits, and had retained solicitors for that purpose. It appears that there were provided to the defendants (probably to the first defendant, that forwarded them on to the second defendant) three medical reports, one dated 2 May 1996 from Dr Lim, a radiologist, addressed to Dr Wong who was the plaintiff's general practitioner; and two from Drs Patrick and Blake, orthopaedic specialists, addressed to the plaintiff's solicitors, dated 30 September 1996 and 7 November 1996 respectively. A report of Dr Kirsh, another orthopaedic specialist, addressed to the workers compensation insurer of the Club and dated 14 January 1997 may have been provided by the plaintiff, but in any event it came to the attention of the defendants. The second defendant arranged for the plaintiff to be seen again by Dr Kirsh, and also for him to be seen by Dr Innes-Brown, another orthopaedic specialist, and in due course it received from those two doctors reports dated 10 February 1997 and 12 March 1997 respectively.
8 The second defendant declined the claim on 9 April 1997 and the first defendant declined it on 12 May 1997, essentially because of the last two mentioned reports, so that it is necessary to go into some detail about the medical evidence available to the defendants at the time these decisions were made.
9 Dr Lim's report spoke only of radiological findings: in brief, mild circumferential bulging of the L3/4 and L5/S1, and a disc protrusion at the L4/5 level, causing significant compression of the thecal sac. Neither he, nor Dr Patrick, Dr Blake or Dr Kirsh addressed the question whether the plaintiff suffered from a total and permanent disability, as defined, presumably because none of them had been asked to do so.
10 Drs Patrick, Blake and Kirsh addressed themselves to questions that were no doubt relevant for workers compensation purposes. They recorded the histories given to them, their findings upon examination, and their observations about the radiological investigations, and they expressed opinions generally about the plaintiff's capacity for work, the extent of his disability, and his future prognosis. For the moment, it is probably sufficient to note that Dr Patrick reported that the plaintiff had a disc injury, that he needed to be careful with his back indefinitely, particularly when bending and twisting, that he remained incapacitated for physical work involving heavy lifting, frequent bending or prolonged stooping, and that whilst he would be left with permanent impairment at the back, then assessed at 20 percent, it was possible that there would be some improvement. However, it was also possible that there could be some deterioration with time.
11 Dr Blake reported that the plaintiff was fit for light and semi-sedentary types of work only, that he was not fit for work as a bar steward, and not fit for work placing significant stress on his lower back, in the form of heaving lifting or carrying, or repeated or prolonged bending. This was likely to be permanent although some improvement was likely with time.
12 Dr Kirsh's report of 14 January 1997 said that the plaintiff was essentially unchanged, but the doctor's earlier report seems not to have been available to the defendants at this stage. He did not comment specifically on the plaintiff's capacity for work except to quote the history given to him. However, this was remedied, to a degree, by the report of 10 February 1997, when the doctor said the plaintiff was not fit for work then, but expected that in the long term he would be able to do work that did not involved heavy lifting or bending.
13 The second defendant asked Dr Innes-Brown to report, saying of the plaintiff's claim:
"For the purposes of assessing this claim under the terms of our policy, we need to form a view whether the condition they are suffering from has rendered them unable to perform their occupation and whether they are unlikely ever to engage in or work for reward in any other occupation or work for which they are qualified by education, training or experience.
We would be grateful if you could set out in your report whether, as a result of your examination, you were able to form a view regarding the capacity of Mr Nile to work for reward in their own occupation or any other occupation as relevantly defined and if so, could you set out your conclusions in this regard.
If you feel Mr Nile would be able to work for reward in some occupation, could you please indicate to us the job for which you consider them to be fit."
14 This is not quite the correct question, but nothing turns upon that now. Dr Innes-Brown reported, generally adversely to the plaintiff, concluding:
"Some of his responses during the examination were inconsistent and clearly contrived, indicating that he is seeking to exaggerate the level of his claimed disabilities.
The prognosis from an orthopaedic point of view is for slow progression of his spondylosis but not at such a rate that it would prevent him from continuing to work until normal retiring age.
Because of his lumbar spondylosis he should exercise due back care during any heaving lifting or arduous bending and twisting. He would therefore in my view be fit to work as a barman but not as a cellarman. He presents as an intelligent man and is well versed in carpentering and has experience in the hospitality industry, and would therefore be qualified to engage in a wide variety of occupations where he does not have to engage in repeated heavy lifting or arduous bending and twisting activities. In general, he is fit to carry out any work where he could sit or stand at will, such as supervising the console in a petrol station, or manning a weighbridge or as an invoice clerk, or as a storeman handling lighter components, and so on.
15 On 9 April 1997 the second defendant wrote to the first defendant, saying:
"We have now received all the necessary information on the above claim. After careful review of the medical information provided by Dr Kirsh and Dr Innes-Brown, we advise that the TPD claim will be declined.
Dr Kirsh was of the opinion that Mr Nile would be able to return to work in the long term which does not involve heavy lifting or bending.
Dr Innes-Brown's report states the following:-
* There was a good range of active neck and shoulder movements
* There was evidence of longstanding degenerative disease
* Some responses were contrived and exaggerated
* There is evidence of a slow progression of spondylosis but not to an extent that Mr Nile would be unable to work until retirement.
* Mr Nile should, however, exercise due back care
* Fit for work as a barman
* Has experience in the hospitality and carpentry industries and would be fit for a wide range of occupations.
It is our opinion that Mr Nile does not satisfy the definition of Total and Permanent Disablement as contained in the policy contract."
16 It may be that the first defendant did not then have the reports which the second defendant thought it proper to summarise. In any event, the first defendant wrote to the plaintiff on 12 May 1997, saying:
"I refer to your recent claim for a Total and Permanent Disablement benefit from the Club Plus Portable Superannuation Fund.
The Trustee of the Fund has taken out an insurance policy to cover this benefit. In terms of the Deed governing the Fund, the definition of Total and Permanent Disablement in that policy applies for all purposes of the Fund.
Under that insurance policy, Total and Permanent Disablement means:
'(a) The Member suffering the loss of use of two limbs or the sight of both eyes or the loss of use of one limb and the sight of one eye (where limb is defined as the whole hand or the whole foot), or
(b) The member having been absent from their Occupation with the Employer through Injury or Illness for six consecutive months and having provided proof to { the Insurer's} satisfaction that the Member has become incapacitated to such an extent as to render the Member unlikely ever to engage in any gainful profession, trade or occupation for which the Member is reasonably qualified by reason of education, training or experience.'
You will appreciate from the definition that a Member will not necessarily qualify for a benefit even though their injury or illness has resulted in the loss of their current employment, or in partial or temporary disablement.
The Trustee has considered your claim, including the various medical reports obtained by you and the Insurer, and has formed the view that your circumstances do not satisfy the requirements for Total and Permanent Disablement as set out above.
The detailed medical reports do not establish that the illness or injury which you have suffered is such that you are unlikely to ever again obtain work for which you are reasonably qualified by education, training or experience. Hence, the decision to decline the claim still stands."
17 The letter went on the speak of the plaintiff's rights so far as concerned an appeal to the Superannuation Complaints Tribunal, and to terminate his membership of the Superannuation Scheme.
18 In my judgment, these decisions of the defendants cannot be successfully challenged. To the contrary, they were soundly based upon the material then placed before the defendants. No medical practitioner had opined that the plaintiff fell within the policy definition of Total and Permanent Disablement, and the general view expressed by the various medical practitioners fell a good deal short of that definition.
The Late 1997 Decisions
19 On 3 June 1997 the plaintiff wrote to the first defendant, replying to the first defendant's letter of 12 May. He asked that his letter be considered as a complaint under s101 of the Superannuation Industry (Supervision) Act 1993 (Cth), and challenged the proposition that he would be able to return to his usual occupation, because he could not lift, bend or sit for any length of time. Therefore, he said, he would definitively not be able to get any employer to hire him. He forwarded copies of further reports from Dr Blake and Kirsh, and said that he awaited the first defendant's reply so that "we can discuss this complaint at length".
20 These two reports, dated 26 May and 20 June 1997 respectively, were addressed to the plaintiff's solicitors, and were evidently written for the purpose of some workers compensation proceeding, actual or contemplated. Dr Blake reported:
"Mr Nile now appears permanently unfit for any work placing significant stress through his lower back, including work as a bar steward where significant lifting and carrying are part of the duties. In view of his relatively young age, 40 years, vocational assessment, with consideration of retraining and rehabilitation, through his treating doctors, would be supported."
21 Dr Kirsh reported without comment a history from the plaintiff that the plaintiff could not find work, because he could not sit or stand for long, and expressed a view as to the percentage loss of use of the plaintiff's back and legs.
22 The first defendant forwarded these documents on to the second defendant. It arranged for the plaintiff to be examined by Dr Endrey-Walker, described in address as a surgeon. The plaintiff apparently failed to keep the appointment that had been made, and it was then arranged that the plaintiff see Dr Funnell, described in address as a rehabilitation specialist. Dr Funnell reported on the letterhead of Dr Endrey-Walker on 3 October 1997. Dr Funnell set out, at some length, the history he obtained, and his findings on examination. The history reported was that the plaintiff had left school in year 9, and had worked for the next 23 years as a labourer in his father's carpentry business; that he left this employment in 1995 because he was not getting along with his father; that he was unemployed for a time, before commencing the Skillshare programme, which on this occasion resulted in his obtaining work with the Riverwood Legion Club; and he had no other experience or training.
23 The doctor considered that the plaintiff's description of his symptoms was exaggerated, but continued:
"Because of the presence of the disc injury on C.T. scan, I suspect that Mr Nile is unfit for occupations which require heavy lifting and carrying, and in this regard it is prudent that he not undertake his previous work activities as a labourer or bar steward.
At the same time, I believe that there are a wide variety of jobs for which he would be suitable following vocational assessment and [retraining]. Any job of a generally sedentary nature should predictably lie within his work capacity. The only real restriction would be with regard to repetitive or heavy lifting below waist height.
He should be fit to undertake clerical work, perhaps within a factory or warehouse setting, to undertake the duties of a console operator, and possibly outdoor duties such as a parking policeman or patrolman. None of these duties should aggravate his pain or worsen his condition in the long term."
24 The evidence includes documents recording that on 21 October 1997 a claim made by the plaintiff against his employer in the Compensation Court was settled, on terms that he be paid a total of $45,000, representing lump sums for the permanent impairment of his back and legs, and for pain and suffering. It is not clear whether this material was before the defendants at the time when they made their decisions in the latter part of 1997, but it does seem to matter. On 24 October 1997 the second defendant wrote to the first defendant, saying that the second defendant maintained its decision to decline to meet the plaintiff's claim. It did so by reference to the report of Dr Funnell, but adding a reference to "the totality of the evidence obtained and provided", and it said that Dr Funnell had considered that the plaintiff could manage a wide range of occupations, "including clerical work, parking policeman, patrolman, shop assistant or toll collector". This does not correspond accurately with what Dr Funnell actually reported, but in relation to the decision of the second defendant now under consideration, this does not seem to be truly significant.
25 On 4 December 1997 the first defendant wrote to the plaintiff. The letter is in much the same form as its letter of 12 May 1997.
26 Once again, I see no proper basis for thinking that either of these decisions should be overturned. The highest that the plaintiff's case went, to this point, was that the plaintiff said in his letter of 3 June 1997 that by reason of his physical limitations no-one would employ him, a statement generally repeated to the doctors by the plaintiff, and Dr Blake reported that he was physically unfit for some work, but not all work; and Dr Funnell reported that there were jobs, that he identified, that he considered that the plaintiff could do. There is no need to elaborate upon the bald finding that the decisions of the defendants, up to this point in time, cannot be criticised.
The 2001 and 2002 Decisions
27 On 25 February 1998 the plaintiff lodged a complaint with the Superannuation Complaints Tribunal, pursuant to the provisions of the Superannuation (Resolution of Complaints) Act 1993 (Cth). The tribunal, having obtained copies of various documents, referred to the reports of Drs Innes-Brown and Funnell, and of Dr Kirsh dated 10 February 1997, observed that these did not support the plaintiff's claim, and invited the plaintiff to withdraw his complaint. Later, the tribunal treated the complaint as withdrawn.
28 On 26 May 1999 the plaintiff's solicitors wrote to the first defendant, requesting copies of a large number of documents. Until then, it seems, the solicitors had represented the plaintiff in the workers compensation proceedings, but not in respect of his claim against the present defendants, except perhaps that they might have given him some more or less casual advice. There was no reply by the first defendant initially, and the plaintiff's solicitors wrote to it again on 10 September 1999. On 28 September 1999 the first defendant replied, explaining that the administration of the Superannuation Scheme had changed from one administrator to another, and that the plaintiff's file was presently unavailable. There was further correspondence, and the first defendant wrote on 6 January 2000 providing copies of various documents (although there was not provided at this stage copies of the minutes of the meetings at which the early 1997 and late 1997 decisions of the first defendant were made). In response to the plaintiff's solicitors request for information as to whether a vocational guidance assessment had been undertaken by either defendant, the first defendant said: "Vocational Assessment was not considered".
29 On 5 July 2000 the plaintiff's solicitors wrote again, requesting medical reports, and minutes of meetings. The first defendant responded on 31 July 2000, saying that "our Trustee" had been requested to supply the minutes of the meetings, and had not yet done so; and that there were no reports that had not been provided already, except perhaps for some held by the second defendant, not in the possession of the first defendant.
30 On 15 January 2001 the plaintiff's solicitors forwarded to the first defendant copies of drafts of a summons, a notice of motion seeking the production of the outstanding documents, and an affidavit by the plaintiff; and they requested a reply within 21 days. That was not forthcoming, but on 9 February 2001 the first defendant wrote to the plaintiff's solicitors saying that the matter would "be discussed at the upcoming Board meeting".
31 The evidence is silent as to what happened on the occasion of that Board meeting, except that the minutes of a meeting of the first defendant's Claims Committee of 22 February 2000 records this:
"Documentation and draft summons received dated 15/01/01 from Firths. The Secretary contacted Firths and advised that the matter would be referred to Claims Meeting on 22/2/01 and the Directors would review the case.
Upon review the Directors noted that James Nile did not meet the definition of TPD and the matter would be reported to the full Club Plus Board.
The Directors requested the insurer to write directly to the Solicitors and provide a copy to the Board of Club Plus.
IT WAS RESOLVED that the Directors note that the medical evidence considered when reviewing the claim did not establish that James Nile met the definition of TPD and this decision would be recommended to the full Club Plus Board."
32 The evidence includes a copy of a file note of the second defendant dated 19 March 2001 commencing:
"Original file unable to be located. Copy of file provided by Club Plus."
33 There followed a brief summary of the previous medical reports. The evidence does not establish what use, if any, was made of this document, or what if anything happened before 5 December 2001, on which day there was a meeting of the first defendant's Claims Committee. The minutes of that meeting record that on the previous day the plaintiff had telephoned asking that his case be reopened, but that he did not intend to supply any new medical evidence. On the same day, the first defendant wrote to the plaintiff advising that his claim would be reassessed on receipt of further medical evidence.
34 On 12 December 2001 the plaintiff wrote to the first defendant, forwarding a copy of an MRI report by Dr Sachinwalla dated 27 July 1999. It added nothing significant, in that it did not address the question whether the plaintiff fell within the definition of Total and Permanent Disablement contained in the insurance policy. The first defendant forwarded a copy to the second defendant, which replied on 2 February 2002 maintaining its previous position; and on 26 March 2002 the first defendant wrote to the plaintiff in these terms:
"The Trustee has carefully considered your claim for a Total and Permanent Disablement benefit but regrets to advise that the claim has been denied.
The Trustee can only admit claims where it is satisfied that an insured member of the Plan has suffered an accident or illness, which prevents the member from being able to work in any position for which they are suitably qualified by education training or experience.
Based on the evidence that you have provided the Trustee is not satisfied that these conditions have been met.
If you are not satisfied with this response there are procedures in place which assist you to make further enquiries or lodge a complaint. Please refer to the attachment to this letter."
35 Once again, I consider that the decisions under consideration (that is the decision of the first defendant of 19 March 2001 and the decisions of the two defendants in early 2002) cannot properly be challenged now; whilst the plaintiff has pointed to various matters that might be described as in-exactitudes, the material that had been put before the defendants did not justify the view that the plaintiff fell within the policy definition of Total and Permanent Disablement, much less that the decisions of the defendants that the plaintiff did not fall within that definition should be set aside.
The 2003 and 2004 Decisions
36 The plaintiff commenced the present proceeding 18 February 2003. Between May and July 2003 his solicitors served upon the defendants' solicitors a variety of documents that are now said to be significant, and by letter dated 1 July 2003 they asked the defendants to reconsider the earlier decisions that had been made. The defendants accepted that such a request is a proper one (see Tonkin v Western Mining Corporation Ltd (1998) 10 ANZ Ins Cases 61-397 at 74, 268), and they in fact reconsidered the matter.
37 The additional material put before the defendants by the plaintiff included the following: