Plaintiff v Defendant

2 The application for the TPI benefit took some time to resolve, for reasons which will appear and for which no criticism was directed to the trustee. Eventually, on 21 March 2002 the trustee determined to reject the claim and Mr Finch's solicitors were advised of this by letter dated 28 March 2002. This letter sets out the trustee's reasons for the rejection of the claim.

3 Mr Finch, then, through his solicitors, renewed his application, providing the trustee with more material in support, but the trustee on 20 March 2003, rejected this second claim too. Again, Mr Finch was notified of this determination by letter dated 4 April 2003 in which the trustee stated that the reasons were the same as those given for its 2002 determination. In brief, the trustee was of opinion that he was not unlikely ever to engage in gainful work within the terms of the trust deed.

4 It is convenient at this stage that I set out the terms of the definition of TPI:**

"Total and Permanent Invalidity" means, in relation to a Member, disablement as a result of which -

(a) unless otherwise agreed between the Trustee and the Principal Employer from time to time either generally or in any particular case, the Member has been continuously absent from all active Work for a period of at least six months and has been required by the Employer to participate in a Rehabilitation Program; and

(b) in the opinion of the Trustee after consideration of any information, evidence and advice provided to the Trustee by the Employer and any other information, evidence and advice the Trustee may consider relevant, the Member has ceased to be an Employee and is unlikely ever to engage in any gainful Work for which the Member is for the time being reasonably qualified by education, training or experience,

(1) Total and Permanent Invalidity does not include disablement the existence or continuation of which, in the opinion of the Trustee after consideration of any information, evidence and advice provided to the Trustee by the Employer and any other information, evidence and advice as the Trustee may consider relevant, is attributable to a material extent to deliberate action or inaction by any person for the purpose of causing a benefit to become or to continue to be payable from the Fund, including without limitation what the Trustee considers to be an unreasonable refusal to submit to treatment; and

(2) a Member who is required by the Employer to participate in a Rehabilitation Programme will not be considered to have suffered Total and Permanent Invalidity unless the Member participates in that Programme to the satisfaction of the Trustee.

5 Some three years later, on 9 May 2006, Mr Finch commenced this proceeding. In the statement of claim as amended in October 2007 he seeks the following relief:

(a) a declaration that the decision of the Defendant to reject the Plaintiff's claim is void and of no effect;

(aa) a declaration that the decision of the Defendant to reject the second claim is void and of no effect;

(b) a declaration that the Plaintiff was entitled to benefits pursuant to the Trust Deed in respect of total and permanent invalidity;

By order of the master made on 20 May 2008 the questions the subject of claims A and AA only are to be determined at this trial.

6 At trial, it was contended on behalf of Mr Finch -

(1) that the trustee's decisions were not open to a trustee acting reasonably, so that I can infer error from the determinations themselves;

(2) that the reasons given for the determinations were not sound and cannot support the determinations;

(3) that the determinations, or at least the second determination, were arrived at following a breach of process inasmuch as the trustee received and acted upon information which was not disclosed to Mr Finch and to which he was not given the opportunity to respond.

**7 Counsel for the trustee resisted these contentions and argued, further, that, in any event, Mr Finch was not, on any view, suffering total and permanent invalidity because he had not satisfied one of the requirements of the definition of that term in the trust deed. This contention depended upon the proper construction of that part of the definition which concerned the claimant's absence from work for six months.

8 Notwithstanding that all of these questions may not have been raised in the pleadings, it was agreed that these were the questions for my determination and that any others arising from the pleadings were not pressed. I proceed on this basis.

9 The trial before me was conducted upon the material which was agreed to have been before the trustee at the time of each determination. No oral or other evidence was led.**

10 The material before the trustee show that Mr Finch had suffered from psychological, if not psychiatric, difficulties for many years as a consequence of or perhaps leading to his gender dysphoria. It is sufficient for my purposes that I set out the most significant events as a chronology:

He came to Australia with his family. At that time he was living as a female under the name Helen Finch. He had received psychiatric assistance in England for his gender problem and was, in 1986, taking hormone tablets to promote his female characteristics.

He received professional advice regarding a gender reassignment. The medical reports during this period show that he was satisfied to live as a female and did not suffer significant stress or conflict. He also sought surgery for a birthmark in the skin of his larynx and for reduction of the larynx itself which, he said, detracted from his feminine appearance. He was assessed as a suitable candidate for gender reassignment.

He underwent surgery to his genitalia for gender reassignment.

He wrote a long letter to Dr Trudy Kennedy of the Monash Gender Dysphoria Unit and a letter in which he spoke of having employment difficulties all of which, he said, were the product of his anxiety about his over-large larynx.

He commenced employment with Telstra as a female under the name Helen Finch.

He was experiencing dissatisfaction with his female sexuality and in October had reassumed a male personality, name and dress. He became severely depressed and received counselling from Dr Julie Doswell who appears to be a general practitioner who had had care of him for many years and also from psychiatrist Dr Krystyna Syrota. At this time, too, he was referred to consultant psychiatrist, Dr Byron P Rigby.

He underwent a rehabilitation assessment provided by Telstra with a program of working from home, at first, for two hours a day with a view to returning to work.

He returned to work at Telstra as a male under the name Alan Finch.

Dr Syrota certifies him ready to resume fulltime work.

Plastic surgeon Mr Simon Ceber observed that he seemed more settled after an earlier impression that he was possibly a suicidal risk.

Rehabilitation program completed and he appeared to be working at Telstra without problem.

He underwent surgery on two occasions: first, to reduce his breasts, an operation which he referred to as a double mastectomy and, second, to masculinise his nose.

Since the position of team leader with Telstra, which he had held had been made redundant he was offered the option of voluntary redundancy or of redeployment within Telstra.

Warren McAleese became his senior manager. Mr Finch was successful in obtaining another position within Telstra to commence 1 December 1997. This was the Mobilenet position.

Surgery planned for 14 November 1997 to remove the colon loop and his reconstructed vagina.

The surgery planned for November was deferred due to lack of funds and to the fact that he apprehended that he was likely to be retrenched.

It is apparent from these events and from his own account of them in his superannuation benefit application of 24 May 2000 that Mr Finch was, during this period from March 1997 to the end of 1997, very depressed as a consequence of the situation in which he found himself. He appears to have been very conscious of his genital mutilation and sensitive of his appearance in the eyes of others. This mirrors the concerns about his appearance which he had at the time leading up to and following the surgery he underwent in April 1988.

I note at this point that Dr Rigby in his reports describes discriminatory conduct by Telstra employees towards Mr Finch which humiliated him and was very damaging to his self-esteem. Mr Finch himself makes no mention of this. Nevertheless, it appears that this was the subject of an application by Mr Finch to the Equal Opportunity Commission which claim was settled on confidential terms.

Mr Finch commenced receiving Commonwealth Disability Support Pension.

He commenced work as a male with Foxtel as a team leader in its call centre operations on a fulltime basis (38 hours per week).

Mr Finch resigned from Foxtel for "personal reasons".

He applied for release of his preserved benefit under the Telstra Superannuation Scheme on the basis of permanent incapacity supported by a report to that effect from Dr Rigby and two short reports from Dr Doswell to the same effect.

He commenced work as a male with Qantas as a domestic sales consultant working 20 hours per week.

Letter from the trustee to Mr Finch speaking of his recent contact with the trustee's office in respect of a TPI benefit claim. This appears to have been his first contact with the trustee regarding a TPI claim

Mr Finch absent from work at Qantas on 5, 6, 13, 14, 15 May for sick leave and on 16 May for an unexplained absence.

His employment with Qantas terminated "for personal health reasons".

According to Mr Rigby his treating psychiatrist, the circumstances which led to the termination of Mr Finch's employment with Qantas were fortuitous, but not at all fortunate. There, he came into contact with a male employee who had had an intimate relationship with him during the time he was living as a female. Needless, to say, the revelation of this, given Mr Finch's psychiatric history and the circumstances, was a traumatic experience for both men. Death threats were addressed to Mr Finch. He, for his part, was psychologically devastated.

Mr Finch's solicitors lodged his claim for TPI benefits and offering an explanation for the delay in making the claim. The claim was in due course supported by a certificate dated 23 May from Dr Doswell in short form expressing the opinion that Mr Finch was unlikely ever to be able to work by reason of his illness, and a similar certificate from Dr Syrota dated 31 May 2000, and a four page letter from Mr Finch himself setting out the circumstances of his illness and its effect upon him.

Mr Finch by his solicitors responded to the trustee's requests, first made in July 2000 for the names of his managers at Telstra at the time of his cessation of employment. The names he provided were Darren Dell, Charles Slidders and Mr McAleese.

Dr Rigby provided his report expressing the opinion that Mr Finch was unable to do work for employment of any kind. This report, to which I shall return, was provided in response to many requests by the trustee commencing on 4 September 2000.

The trustees receive a report from Telstra Management outlining Mr Finch's duties at Telstra and an assessment that at the time of his redundancy he was fit for duty and not a TPI candidate. The report was signed by Mr Dell his Project Manager and Mr McAleese.

Dr Doswell provided her report expressing the opinion that Mr Finch had a total and permanent invalidity, primarily related to a significant depression anxiety and post-traumatic stress disorder. These, she said, were directly related to his gender reassignment issues and his alleged maltreatment and mishandling whilst employed by Telstra. This report, too, was provided in response to many requests by the trustee commencing on 4 September 2000.

Mr Finch's solicitors provided the trustee with a statement from CentreLink that Mr Finch was still receiving a disability support pension. The solicitors' letter included, too, a statement from Mr Finch dated 25 July 2001 that "since leaving Telstra... I have not been able to work in any capacity". The above chronology shows this to be a false statement inasfar as he was able to work at Foxtel and Qantas.

Mr Finch's solicitors provided the trustee with a statutory declaration made on 29 August 2001 which included the following:

"1. That I did attempt to return to work after my employment with Telstra. Firstly for three (3) weeks with Foxtel and then for about 3 months with Qantas.

I attempted to work part-time for Qantas twenty (20) hours per week.

1. 2. That during this period of attempting to return to work I had much time off due to stress and sick leave, so effectively - this was not a return to work."

This statement, too, is said to be false inasmuch as his employment with Qantas was for over five months, that he was working for Qantas 24 hours per week at the time he left and that his time off work was only for 12 days and that, of these, 10 days were in the last six weeks.

Qantas provided the trustee with a statement that Mr Finch "performed his duties adequately; he had good command of skills and expertise required for the role".

The trustee determined to reject the first claim for TPI benefit.

Dr Rigby provided Mr Finch's solicitors with a second report in which he characterised Mr Finch's work at Foxtel and Qantas as failed attempts at rehabilitation and renewed his opinion of his patient's incapacity to return to work and the unlikelihood of his ever obtaining employment.

Qantas provided details of Mr Finch's employment and leave.

Foxtel provided details of Mr Finch's employment and leave.

Mr Finch's solicitors formally made a second claim for TPI benefit. In this letter mention is made of the Equal Opportunity Commission claim against Telstra and its outcome and it was submitted that his work at Foxtel and Qantas should be seen as an attempt to rehabilitate himself.

In response to inquiries from the trustee Mr Finch's solicitors stated that no further material would be submitted and they asked for a determination.

In response to the trustee's request of 20 November 2002 Mr Finch's solicitors forwarded authorities to permit the trustee to obtain information from Telstra and Qantas regarding his employment.

The trustee wrote to Qantas and Foxtel seeking, not details of Mr Finch's employment or the circumstances of its termination, but details of his superannuation entitlements under their superannuation schemes and,

"copies of any superannuation benefit statements or other literature regarding superannuation which Mr Finch would have been provided with during the course of his employment with Qantas [or Foxtel]".

It is not altogether clear what was the relevance of this information to the question which the trustee was required to address, but no point was taken of this.

The trustee received a response on behalf of Foxtel that his entitlement for TPI benefit would be $120,000. His benefit of $305.85, it seems, had been transferred to a rollover fund, presumably on the basis that no claim for it had been lodged.

Following some delay in Qantas, the trustee received a response from Qantas to the effect that his benefit entitlement for TPI would be $105,704.43 but that his entitlement of $834.08 had been transferred to a rollover fund.

Mr McCredden spoke by telephone to Mr Finch in which he, Finch, "volunteered the statement that his employment with Qantas had been a real job".

The trustee rejected Mr Finch's second claim for TPI benefit.

**11 Although the evidence as to the unlikelihood of employment is not an entirely medical one, the medical assessment of a claimant for TPI benefit is of great importance and much attention was directed to this at the trial before me. There were opinions of three medical doctors before the trustee on each occasion that he determined Mr Finch's claim: Dr Doswell, Dr Syrota and Dr Rigby. The trustee neither sought nor obtained a report from its own or an independent doctor. I was much pressed on behalf of Mr Finch with this fact in support of the submission that the trustee would be acting unreasonably to reject the unanimous view of all the medical experts to the effect that he was unlikely ever to secure employment. In response, it was argued on behalf of the trustee that, in essence, the psychiatric assessments by the doctors were largely dependent upon the accuracy of the patient's account of events and their impact upon him, and that this was a case where the patient was not altogether forthcoming or candid about his post-termination work history. There was a suggestion, too, that the reliability of Dr Rigby's prognosis was adversely affected by the intemperate terms in which he expressed himself. Counsel spoke of his three reports - each one "slightly more hysterical". I am, of course, mindful that, at the time of the first determination, the trustee did not have Dr Rigby's second or third reports but, since the second determination is the more important one, for my purposes, nothing turns on this.

12 I turn now to examine the medical evidence. I observe at the outset that the chronology of events leading to the cessation of his employment with Telstra shows a history of a very troubled person, a person who is very insecure with his gender and a person who is very sensitive about his appearance in terms of his gender.

13 Dr Doswell's report is dated 1 June 2001. She speaks of the symptoms which she observed in a longstanding patient. He has indicated to her a condition which she diagnosed as significant depression, anxiety and post-traumatic stress disorder. She observed, as appears to have been the case, that he was successful in his work with Telstra prior to 1996 but that he had become severely depressed in that year and in 1997 "as the result of confusion and escalating dissatisfaction with his gender reassignment". Thereafter, he underwent medical, psychological, surgical and pharmacological treatment with consequent side-effects. She spoke, too, of the impact upon him of his return to work following the gender reassignment reversal in 1997.

14 In this case, neither I nor the trustee is concerned with any maltreatment of Mr Finch at the hands of his fellow employees at Telstra nor with any shortcomings of the management with respect to these matters, except insofar as they lend support for a conclusion as to his incapacity in terms of the definition of TPI in the trust deed. Dr Doswell, however, does deal with this aspect in her report which I venture to quote:**

On his return to work, Alan felt strongly that he had been assigned meaningless work tasks with no support from the employer, and in fact, was isolated from certain work stations, because of fellow workers religious and other convictions. Unfortunately, because of alleged discriminatory attitudes and breaches of confidentiality it was decided by management that it was not proper that Alan be re-employed in the same position as it would induce uncomfortable feelings and a disrupted general work place.

**15 Dr Syrota was not asked to provide a detailed report. She did, of course, participate in Mr Finch's rehabilitation program in early 1997.

16 It is apparent from the tone of Dr Rigby's reports that he felt strongly that his patient was seriously ill and that this was, in part, due to the mismanagement by Telstra of the aftermath of his gender change from female back to male. He, too, diagnosed Mr Finch's condition as major depression and post-traumatic stress.

17 As I have mentioned, the question for the trustee was not the cause of Mr Finch's mental condition or whether Telstra was at fault; it was as to the consequence of the condition and, in particular, as to whether, as a consequence, he was unlikely to obtain employment in terms of the definition of TPI in the trust deed. The matters raised by Dr Rigby, however, do bear upon the trustee's question in two very significant respects. First, the conduct of Telstra and Mr Finch's co-employees to which Dr Rigby refers, appears to be their conduct in the latter part of 1997. The actions which Dr Rigby characterises as "discriminatory, sadistic and intentionally harassing" appear to concern his work at the time of his pending retrenchment and at a time when he was recovering from chest surgery. Second, the allegation, if true, concerned conduct for which his managers, including Mr McAleese and Mr Dell, might have to accept some responsibility as actors or as supervisors - a fact which might cause an impartial trustee to view with caution their account of the events in the workplace at that time.

18 The trustee, by letter to Telstra dated 12 December 2000, sought a report from Mr Finch's line manager "stating the manner in which Mr Finch's disability (if it was in effect at that time) affected his ability to perform his usual duties in the time leading up to his cessation of employment with Telstra". The names of the managers, which had been provided by Mr Finch on 22 November 2000, were not mentioned nor was there mention in the letter of the nature of his disability.

19 Five months later, on 30 May 2001, Mr McAleese and Mr Dell responded, so far as is relevant, in these terms:**

From May 1995, Mr Finch was a Team Leader on the Help Desk of a computer system at Telstra known as BISTEL. Darrell Dell was the Project Manager of BISTEL from April 1996 to September 1997. On 30 September 1996, Mr Finch commenced a period of long-term leave until 24 March 1997.

Mr Finch returned to work on 24 March 1997, with medical clearance, performing the following duties:

• Asset certification stock take of all PC related equipment;
• Systems testing;
• Security profile reconciliation.

On or around 30 April 1997, Mr Finch's rehabilitation program was closed by his case manager on the basis that he was stable at work and capable of performing normal duties without restriction.

On 6 August 1997, Mr Finch was offered voluntary redundancy or redeployment within Telstra because of his Team Leader position was redundant. In September 1997, following a re-organisation, Warren McAleese became Mr Finch's senior manager. Mr Finch was successful in obtaining another position within Telstra at Mobilenet, Collingwood and was to commence there on 1 December 1997. However, Mr Finch subsequently accepted an offer of redundancy on 23 January 1998.

2. It is our opinion that at the time of separation Mr Finch was fit for duty and not a TPI candidate. We do not have knowledge of Mr Finch's current medical status and therefore do not have a recommendation in relation to Mr Finch's claim for a total and permanent invalidity benefit.

The trustee, doubtless, noted that its question was not answered by these managers. Nor is there any mention made of the difficulties which caused concern to Mr Finch's doctors.

**20 Following the determination of the first claim in March 2002, Dr Rigby provided two further reports, the first of which was dated 12 August 2002 and forwarded to the trustee on 10 September 2002. In this he said that he understood that the basis for the determination of the trustee was that Mr Finch had worked since his employment with Telstra ceased. On this basis, Dr Rigby castigated the determination as "an appalling travesty of the truth and of sincere medical and psychiatric attempts to secure his [Mr Finch's] rehabilitation." He then explained how he saw Mr Finch's work at Foxtel and Qantas each as a failed rehabilitation effort.

21 On 18 September 2002 Dr Rigby wrote his third report which was forwarded to the trustee on 8 October. In this report Dr Rigby discussed in a little detail Mr Finch's work at Qantas. He explained how his patient's disability impacted on his ability to work in this way:**

With respect to the period of work at Qantas, it must be emphasised that Mr Finch's difficulties were considerably in excess of those experienced at Foxtel, and from the first week of employment were incapacitating. Anxiety was extreme, in particular with respect to attempts to use toilets, and with regard to the fear of being recognised, which had long before been occasioned by the actions of Telstra employees in publicising socially Mr Finch's reversal of sex change. This fear continues to haunt Mr Finch and limits his social capabilities to a degree that makes employment unfeasible.

The doctor said that, at an early stage, he advised his patient to cease employment with Qantas for fear it would result in further permanent disability. Mr Finch, however, persisted, as it was seen by him as perhaps his last opportunity to sustain employment. Dr Rigby observed that the ultimate abandonment of this employment bore out his prediction. It confirmed his opinion that the work at Foxtel and Qantas were efforts at rehabilitation and that the patient was unlikely ever to obtain employment.

22 And so, the medical evidence before the trustee was unanimously to the effect that he was suffering from a severe psychological condition and that this had the consequence that he would, from a medical point of view at least, be unlikely ever to work again. In these circumstances, including their association with their patient over some years, and including the matters which they rely upon in support of their opinions, I would not consider it reasonable to dismiss them as opinions the product of an untruthful or exaggerating patient. This is particularly the case where none of the doctors was asked to consider this possibility.

**23 There are, of course two determinations. Argument was directed to the second since this involved a reconsideration of the same claim but upon further material. I approach the matter on the basis that the first determination was replaced by the second, so that, if a successful attack on the second is mounted, both must be set aside.

24 The principles which I apply are those discussed recently by the Court of Appeal in Telstra Super Pty Ltd v Flegeltaub.[2] There, Callaway JA referred to the leading cases and concluded that the determination of a trustee in a case such as the present may be impugned for want of good faith, for failure to give real and genuine consideration to the right question and for failure to act for a proper (as opposed to an extraneous purpose). Where the trustee is to form an opinion about some matter, the court may infer a breach "if the decision is one which no reasonable trustee could make on the material which was before it".[3] Moreover, these principles must be applied in the context that the trust is administering a superannuation trust.[4]

25 I accept, too, that where reasons are given for the trustee's determination, these reasons may be examined and the determination set aside if they are found not to be sound.[5]

26 Finally, as Callaway JA pointed out[6] the duty of a trustee to decide a question in good faith and to give it genuine consideration may, in the appropriate circumstances, require the trustee to make enquiry as to certain matters and to offer the claimant the opportunity to respond to the information received.

27 Counsel for Mr Finch relied upon many of these grounds. They submitted that the reasons given for each determination were not sound; that the determinations themselves were such that no reasonable trustee could have made them on the material before it; and that, in some respects, the trustee had not made proper enquiry or given Mr Finch the opportunity to address material which was seen to be significant.

28 Another question which was raised was that the trustee addressed the wrong question. It was said that it addressed the question whether Mr Finch was "incapable of" rather than "unlikely to" engage in gainful work in the future and that this was a more severe test for the applicant than that prescribed in the trust deed.[7] Against this, it was contended that trustee was at pains to refer to the correct definition in the trust deed and, in any event, the focus of the trustee's attention was not directed to extraneous factors which might render a person unlikely to obtain gainful employment notwithstanding that he had the capacity to work. Accepting the force of this submission, it remains, nonetheless, a factor which causes me to be uneasy with the determination which was in fact made. It appears from the material before the trustee and from its reasons that it placed considerable emphasis upon the information received from the line managers and from Qantas as to his fitness and ability to perform his duties as employee. This is, of course, only one aspect as to the likelihood that he would ever engage in gainful work. This is particularly important where the invalidity affected, not his ability to perform the work but as to whether he could hold down a job.

29 Finally, there was another point faintly pressed on behalf of Mr Finch, but not abandoned. It was that the trustee in January 2000 had released his preserved benefit on a basis very similar to that in the definition of TPI in the superannuation trust deed. It was suggested that such a finding was inconsistent with the rejection of his TPI claim in 2002 and 2003. I do not place much weight on this. The material before the trustee in 2000 was different from that which it had two years later.**

30 In its letter of 28 March 2002 advising of its first determination to reject the claim, the trustee noted that it had considered "all of the information provided" and that this included the medical reports requested by the Telstra Superannuation Scheme and the information provided by Telstra along with that provided by Mr Finch. It then made essentially three observations which appear to be the reasons for its determination.

1. Mr Finch had completed a rehabilitation program and was considered capable of performing his normal duties without restriction.
2. Mr Finch had been the successful applicant for a position with Telstra Mobilenet but accepted an offer of redundancy instead of taking up the position. This showed that he had a capacity for gainful work as at the date he ceased employment with Telstra.
3. Mr Finch had worked since the cessation of his employment with Telstra and this showed that he was qualified and had the capacity to engage in gainful work both at the time he ceased employment with Telstra and thereafter. I take this to be a reference to his work at Foxtel and at Qantas.

It was contended that these reasons were not sound.

**31 With respect to the first reason, it is correct that Mr Finch undertook a rehabilitation program following his return to work in March 1997 and that this was completed on 30 April 1997. The opinions of those involved were to the effect that the program had been successful. Mr Matthew Perry, the rehabilitation manager, wrote on 1 May 1997 that the program was completed and that he understood that Mr Finch was "currently working full-time without problem". He so reported to Dr Syrota who was Mr Finch's treating psychiatrist. Dr Syrota, herself, certified on 28 March 1997 that he was ready for work and able to do so in a full-time capacity. In their report of 30 May 2001 Mr Finch's managers Mr McAleese and Mr Dell observed that Mr Finch returned to work on 24 March 1997 with medical clearance. I have already summarised their assessment of his position at that time.[8]

32 This material was before the trustee and its content was not in issue. What was said was that it was not a basis in the present case for a determination as to his likelihood, as at January 1998, to engage in employment seen in the context of the countervailing material. Furthermore, it was observed that these assessments were made in the first half of 1997, prior to the difficulties that Mr Finch reported later in the year and which led to his retrenchment.

33 It was agreed before me that the documents which were identified in argument represented the whole of the material before the trustee when it made its first determination. In none of them is there any indication of Mr Finch's work history with Telstra or of the circumstance of his retrenchment or the offer of employment by Mobilenet and his rejection of it, other than the statements of Mr Dell and Mr McAleese. There was nothing to dispute the account of his difficulties at work in the latter months of 1997 which appear in the material placed by him and on his behalf before the trustee. It was, of course, open to the trustee to express the conclusion which I have summarised as being the first reason for its determination. This referred to the situation with respect to his capacity to work in March 1997. Indeed, the terminology in the reasons appears to have been taken verbatim from the report of his managers, or perhaps of Mr Dell.[9] But it would be necessary for the trustee to take a further step to the effect that the situation did not change after May 1997.

34 The basis for the first reason must therefore be the bald statement in the managers' report that he "was fit for duty and was not a TPI candidate".

35 The second reason concerns the offer of employment made by Mobilenet. Again, the basis for this is the observation of the managers in their report.[10] It was submitted that the employment offered to Mr Finch by Mobilenet was not substantially equivalent to his position with Telstra. I am not persuaded that it is such that a finding that his acceptance and performance of that work would be not consistent with a finding that he met the criteria for TPI. But, of course, he did not perform that work. At the time of the first determination, the fact of this offer of employment and the statement of his managers and the fact that he accepted redundancy in January 1998 were all the trustee had before it.

36 The third reason appears to have been the most compelling for the trustee. At the time of the first determination it had little information about Mr Finch's employment with Foxtel or Qantas other than the dates and that he performed his duties at Qantas adequately. But this work was only on a part-time basis so that it cannot provide the basis for a finding that he did in fact secure gainful employment with those companies.[11] It might, however, provide the basis for a conclusion that he was not unlikely to secure such employment in the future.

37 It follows from what I have written that, on the material then before the trustee, the assertions of fact contained in the reasons provided a logical and rational basis for its conclusion in 2002 that the claim had not been made out.

38 Over the succeeding 12 months further material was received by the trustee. Most, if not all, of it was directed to the work experience of Mr Finch after he left Telstra. There were the further medical reports to which I have referred and a letter from Mr Finch's solicitors in which his case was pressed. This material developed the contention put on behalf of Mr Finch that his work with those organisations was a failed rehabilitation effort. There was also the further information from Foxtel and Qantas to which I have referred in the chronology. What is surprising is that, having received this, the trustee did not make further inquiry to determine the accuracy of Mr Finch's contention. It seems likely that this subsequent employment was the principal consideration leading to the rejection of the second claim.

39 A very significant piece of information about this is mentioned in the minutes of the meeting at which the second determination was made. The minutes record the following:**

The Chief Executive Office of Telstra Super, Mr Terry McCredden, informed the Committee that he had a telephone conversation on 27 February 2003 at the instigation of Mr Finch. Mr McCredden informed the Committee that, during the conversation, Mr Finch volunteered the statement that his employment with Qantas had been a real job.

**40 In its formal response to the second claim the trustee's letter of 4 April 2003 confirms its rejection for the same reasons as those given in March 2002. No mention is made of Mr McCredden's conversation.

41 I confess to a feeling of profound discomfort about this determination of the trustee. The minutes of the meeting, insofar as they deal with the reasons, repeat verbatim those in the minute of 12 months previously. They refer in general terms to the additional information with respect to Mr Finch's work after leaving Telstra and to the further medical reports received. They set out the conversation with Mr McCredden which I have mentioned. There is nothing to suggest that the trustee undertook any consideration of the contention made by Mr Finch that the work at Foxtel and Qantas was a failed rehabilitation effort. There is no reason to reject these uncontradicted assertions made by and on behalf of Mr Finch. Nothing, that is, except the fact of his employment with Foxtel and Qantas and the volunteered statement to Mr McCredden that the Qantas employment was a real job.

42 My role, however, is not to conduct a general review of the decision-making process; it is to determine whether the reasons given were unsound. Surprising they may be, but they are all conclusions of fact which, if accepted, support the determination. They are not unsound in the sense that must be shown by the plaintiff in a case such as the present.**

**43 The test which I must apply in considering this submission is whether each of the determinations was one which a reasonable trustee could have made on the material before it. I emphasise the word "could"; it is not sufficient that I, putting myself in the place of a reasonable trustee, would not myself have made the determinations on this material. The requirement that the suppositious trustee be reasonable introduces a little flexibility into the test but it is primarily directed to the issue whether the trustee was acting rationally and in accordance with its fiduciary duty.

44 Applying this severe test, I find myself unable to conclude that a reasonable trustee could not have rejected each of Mr Finch's claims. It was open to the trustee to conclude that Mr Finch's ability to obtain employment with Foxtel and to work there for a little over a month, and to obtain employment with Qantas for some five months, demonstrated that the prognosis of the doctors was not borne out by experience.**

**45 It is apparent from the judgments in the Flegeltaub case[12] that this attack upon the determination should best be seen as an allegation that the trustee failed to decide the question in good faith and to give genuine consideration to it.

46 It is on this basis that the determinations in this case are vulnerable. I have already summarised the evidence so that I can state my views on this matter shortly. It is clear from the trustee's reasons that it viewed the question as, in effect, a contest between the opinions of the doctors and the actual observed experience of Mr Finch in the workplace with Telstra and thereafter. The difficulty which I have with the determinations is that the trustee appeared to be very ready to accept the evidence as to the claimant's work experience without any or very much inquiry as to its true nature and to reject the very strong evidence of the doctors to the contrary.

47 The trustee appears to have made no inquiry as to the circumstances of Mr Finch's last months of employment with Telstra. He did not even have a record of his absences from work or the reasons for them - information which it had sought and obtained from Foxtel and Qantas. Against the bald statements of the managers, the trustee might have weighed the harrowing account of the insecure man in an environment which he may well have seen as hostile, in a work situation where his secure and relatively prestigious job had been downgraded and had become insecure. It may be difficult to suggest that a corporate trustee should bring to bear in evaluating this material its humanity and experience of the world, but it ought, in my view, have made some further inquiry of these matters which Mr Finch said led him to decide not to continue working within the Telstra organisation.

48 It is true that, on its face, the ability of Mr Finch to hold a job for a month with Foxtel and for five months with Qantas was powerful evidence against his being unlikely ever to engage in gainful work. But in this case, Mr Finch had marshalled a body of material to suggest that his work was merely a rehabilitative effort on his part to return to the workforce. If this was accepted, this requirement of the definition of TPI would be satisfied. The evaluation of this material is, of course, for the trustee. But what troubles me, again, is the readiness of the trustee to put it aside and to prefer a conclusion that this employment, which in each case had failed, demonstrated that Mr Finch was not unlikely to engage in employment in the future. The trustee had before it the "real job" statement volunteered to Mr McCredden and the information from Qantas that Mr Finch performed his duties adequately and had a good command of the skills and expertise required. It may be that such information was not inconsistent with the views of the doctors that he did have the ability to perform his work but that his psychological fragility rendered him unable to exercise these abilities in the workplace. It seems to me that a trustee, acting in good faith and approaching its task with an open mind so that a genuine consideration should be given to the claim, would have made further inquiry to determine the accuracy of the assessments of this work experience offered on behalf of Mr Finch.

49 It seems that the trustee placed some weight on the "real job" statement of Mr Finch in conversation with Mr McCredden. This is a very remarkable conversation. It is said to have occurred on 27 February 2003 when there was a telephone conversation "at the instigation of Mr Finch".

50 In mid to late February 2003 the solicitors for Mr Finch were pressing the trustee for a determination. They had been told that the matter was to be considered at a meeting on 19 December 2002. But there had been a delay in receiving information from Qantas and Foxtel regarding his superannuation entitlements which they had sought on 19 December. Qantas did not provide a response until 17 February 2003. On 24 January 2003 and again on 25 February 2003 the solicitors for Mr Finch wrote that, if no decision was made by 28 February, they would commence court proceedings. On 27 February the trustee wrote to the solicitors advising that the information had been received and that the application would come before the trustee's meeting of 20 March 2003. Notwithstanding this, the solicitors on 4 March wrote to the trustee seeking the sort of information which suggested that a court proceeding was still under consideration.

51 Against this background Mr Finch made the telephone call to Mr McCredden which is reported in the minutes. It is a little surprising that he did so; it is more surprising that Mr McCredden would have spoken to him. But it seems he did. In the course of this conversation Mr Finch volunteered that his employment with Qantas was "a real job". Why he should have volunteered this is unclear. It was a question which Mr MCredden would have been very interested in because the principal matter at issue at that time was whether this employment was a rehabilitation attempt or a real job. Nothing is known as to what, if anything, Mr McCredden told his co-directors about the circumstances of this conversation, the context of the volunteered statement or his interpretation of it.

52 The information provided to the board by Mr McCredden has a another dimension which causes me further disquiet. As recorded, it seemed to be the only material before the trustee which directly impugns Mr Finch's case that his employment should be seen as rehabilitation. I express no view, of course, as to the accuracy of this remarkable conversation as reported in the minutes. I know nothing of the context in which the information was volunteered. I do not know what is to be understood by the expression "a real job". It appears to have been a significant factor in determining whether Mr Finch's work at Qantas should be seen as an indication that he had secured gainful employment in the sense required by the definition of TPI. In these circumstances, Mr McCredden played the role of witness and that of participant in the evaluation and interpretation of his own evidence. I am, of course, aware that the trustee and its directors are not required to act like judges. This important piece of information, however, was not communicated to Mr Finch or his legal advisors for their response. If this had been done and he denied making the statement, the position of the directors would have been very delicate indeed. How would Mr McCredden be expected to cast his vote in the circumstances? Would his co-directors be expected to reject his account of the conversation or his interpretation of it? It is not for me to enter into this arena. It is sufficient that I say, as I do, that a fair-minded trustee seeking to give genuine consideration to a TPI benefit claim ought to have investigated this information further, at least by inviting comment from Mr Finch.

53 For these reasons I conclude that the second determination was void for want of compliance by the trustee with its obligations of good faith and genuine consideration. Since this determination replaced the first determination of 2002, both of the determinations are void and will be set aside.**

**54 I come now to the construction point. It was submitted that, if it is a good point, this proceeding must fail notwithstanding any deficiency in the determination: the relief sought is discretionary and the trustee cannot be obliged to pay a claim which is not authorised by the trust deed.

55 The operative provision of the deed is cl 2.3.3 which provides as follows, omitting those parts which are not here relevant:**

... if a Member ceases to be an Employee... because of Total and Permanent Invalidity, there is payable to the Member from the Fund a lump sum benefit of an amount equal to the benefit which would have been payable under clause 2.3.2 if the Member had died on the date on which the Member ceased to be an Employee or any other date agreed between the Trustee and the Principal Employer from time to time either generally or in any particular case.

**56 Mr Finch, a member within the meaning of this expression in the deed, ceased to be an employee, within the meaning of that expression in the deed, on 23 January 1998. The question, then, was whether he ceased to be an employee "because of Total and Permanent Invalidity".

57 I will set out again the definition of TPI which is found in cl 2.1.2 is in these terms:**

"Total and Permanent Invalidity" means, in relation to a Member, disablement as a result of which -

(a) unless otherwise agreed between the Trustee and the Principal Employer from time to time either generally or in any particular case, the Member has been continuously absent from all active Work for a period of at least six months and has been required by the Employer to participate in a Rehabilitation Program; and

(b) in the opinion of the Trustee after consideration of any information, evidence and advice provided to the trustee by the Employer and any other information, evidence and advice the Trustee may consider relevant, the Member has ceased to be an Employee and is unlikely ever to engage in any gainful Work for which the Member is for the time being reasonably qualified by education, training or experience,

(1) Total and Permanent Invalidity does not include disablement the existence or continuation of which, in the opinion of the Trustee after consideration of any information, evidence and advice provided to the Trustee by the Employer and any other information, evidence and advice as the trustee may consider relevant, is attributable to a material extent to deliberate action or inaction by any person for the purpose of causing a benefit to become or to continue to be payable from the Fund, including without limitation what the Trustee considers to be an unreasonable refusal to submit to treatment; and

(2) a Member who is required by the Employer to participate in a Rehabilitation Programme will not be considered to have suffered Total and Permanent Invalidity unless the Member participates in that Programme to the satisfaction of the Trustee.

**58 The point taken on behalf of the trustee was that Mr Finch had not, prior to the cessation of his employment, been continuously absent from work for six months. It was common ground that he commenced sick leave on 30 September 1996 and that he returned to work on 24 March 1997, that is a period of six months less six days. While it is correct that he was later absent from all active work for a further continuous period of six months or more, this occurred after the cessation of his employment with Telstra. Mr Finch satisfied the further requirement that he be required to participate in a rehabilitation program, and this program was completed on 30 April 1997.

59 The construction point was not relied upon by the trustee when making its determinations. This may have been because it was not aware of it until it had had legal advice or it may have been that the trustee did not consider the point had sufficient respectability in the circumstances. Whatever be the reason, counsel submitted that the point was open to be argued and this was not challenged.

60 The entitlement of the employee under cl 2.3.3 arises because he has ceased to be an employee because of TPI. It follows from this that the incapacity must exist at the time of the cessation. Since the relevant incapacity is that defined in cl 2.1.2, the requirements of that definition must be satisfied as at the date of cessation.[13] Counsel also pointed to parts of the deed which indicated that this was the proper construction. These included the word "has" which twice appears in paragraph (a) of the definition which, it was said, indicated that both the events referred to in that paragraph must have occurred as a pre-condition to the existence of TPI. These words relate both to the six months continuous absence from work and to the employer having required the employee to participate in a rehabilitation program. Such a program is defined in cl 2.1.2 to mean a program "for sick, injured or infirm Employees". And so, it was said, the fact that the employer could require the claimant to participate in such a program showed that the relationship of employer/employee must then exist.

61 The contention put on behalf of Mr Finch was that the disablement must exist at the cessation of employment but that its characteristics may depend upon events subsequent to the cessation, although occurring prior to the trustee's determination of the benefits claim.

62 I start with the words of the trust deed, reminding myself that cases upon the construction of documents are of limited value unless the terms of the document there considered are identical with those before the court.

63 The first important point is that the definition of TPI is a true definition; the expression means disablement which is then qualified in various ways. It cannot be doubted that the disablement must exist at the date of cessation. What, then, are the qualifications which attach to this disablement? The disablement must have two consequences causally related to it, which are set out in paragraphs (a) and (b). The first has itself two limbs which must both be satisfied.**

(i) The claimant has been continually absent from all active work for a period of six months. I note in passing that work is itself defined in general terms to mean "engagement in any business, trade, profession, vocation, calling, occupation or employment".[14] The requirement is that, as a result of disablement, the claimant "has been continuously absent" from this work. It is not limited to work as an employee of Telstra.

(ii) The claimant has been required to participate in a rehabilitation program. As I have mentioned, it may be supposed that Telstra arranges or participates in such a program for the benefit of persons then in its employ; not its ex-employees. It is curious, however, that the second limb of this first consequence of the disablement is not that the employee has participated in the rehabilitation program; it is that the employer has required him or her to participate. Proviso (2) to the definition provides that the claimant must participate in the program to the satisfaction of the trustee and, if he or she has not, then "the Member... will not be considered to have suffered" TPI. I note the tense of the word "participates" in this proviso: the verb is not "has participated" or "had participated". It would seem that there is no requirement in the definition that, before the cessation of employment, the claimant has participated in the program and, obviously enough, no requirement that the trustee be satisfied before cessation as to the claimant's participation in the program.

64 The second consequence is that, as a result of the disablement, the trustee has formed an opinion about two matters. It was accepted that the definition did not require the trustee to form the opinions prior to cessation of employment. The two matters are the following:

(i) The claimant has ceased to be an employee as a result of the disablement.

(ii) The claimant is, as a result of the disablement, "unlikely ever to engage in any gainful Work" for which he or she is fitted. In respect of provisions such as this, it is established that the unlikelihood must be assessed as at the time of cessation, but that the assessment may have regard to events subsequent.[15]

**65 I have mentioned proviso (2). Proviso (1) removes from the definition of TPI, disablement "the existence or continuation of which... is attributable to a material extent to deliberate action or inaction by any person for the purpose of causing a benefit to become or to continue to be payable from the Fund, including without limitation what the Trustee considers to be an unreasonable refusal to submit to treatment..." No argument was addressed to me as to whether this, too, was limited to action or inaction occurring prior to cessation. My tentative impression, however, is that it would not be so limited.[16]

66 What was said, then, was that if a Telstra employee had a catastrophic accident which caused serious disablement and which meant that the employee ceased immediately to be employed, the employee had no entitlement to a TPI benefit unless Telstra and the trustee agreed to abridge or waive the requirements of paragraph (a) of the definition. It should be noted that, although the SIS Act[17] requires that there be equal employee representation on the board of the trustee, the injured employee has no entitlement to participate in the negotiations leading to an agreement under paragraph (a) or even to request that such an agreement be made. And since agreement presupposes Telstra's concurrence, the decision, effectively, might be that of the employer. In argument, counsel for Mr Finch advanced a more mischievous scenario - that, after an injury to an employee and during the employee's absence as a consequence, the employer might terminate the employment before the six month period expires and thereby save the fund the cost of paying the benefit. I do not think it necessary to conjecture that Telstra would act in this way.

67 Counsel for the trustee offered a number of contextual considerations which, they said, pointed to the construction for which they contended. They referred to the leading case of Rapa v Patience[18] where McLelland J was confronted with a scheme which defined total and permanent disablement as being "absence from the service of the Employer through illness or injury for six consecutive months..." His Honour observed that, since the period of absence was a necessary and substantial element in the concept of total and permanent disability as defined, it must exist at the date of the asserted entitlement, that is, the date of cessation of employment.[19] This is, of course, a definition which is rather different from that in the Telstra Super scheme: the Telstra Super definition is primarily directed to the disability rather than to the consequent absence from work. A further difference is that the absence from work in the Telstra Super scheme is not limited to absence from employment with the Employer.

68 Although the question is not free of difficulty, I conclude that the interpretation put on behalf of Mr Finch is to be preferred. It is sufficient to satisfy the definition of total and permanent invalidity that the continuous absence from all active work should exist at the date of the trustee's determination. Mr Finch's claim will not fail on that ground.**

69 I have concluded that the determinations made by the trustee and, particularly that in 2003, are void and of no effect for want of good faith and genuine consideration. It would follow from this that the plaintiff is entitled to the declarations which he seeks in para A and AA of his amended statement of claim. I would propose therefore declarations in the following terms:

(i) That the determination of the defendant made on 21 March 2002 to reject the plaintiff's claim for a total and permanent invalidity benefit under the Telstra Superannuation Scheme is void and of no effect.

(ii) That the determination of the defendant made on 20 March 2003 to reject the plaintiff's claim for a total and permanent invalidity benefit under the Telstra Superannuation Scheme is void and of no effect.

I will hear counsel as to the precise terms of the orders to be made to give effect to these conclusions, as to costs and as to the further disposition of this proceeding.

[1] The precise terms of the definition of TPI are set out at paras [4] and [57] below.

[2] [2000] VSCA 180; (2000) 2 VR 276.

[3] [2000] VSCA 180; (2000) 2 VR 276 at 284 [26]- [27], per Callaway JA and at 279 [7], per Ormiston JA.

[4] See [2000] VSCA 180; (2000) 2 VR 276 at 278 [6], per Ormiston JA; and at 284 [29], per Callaway JA.

[5] Rapa v Patience (unreported, SC (NSW), McLelland J, 4 April 1985, BC8500888) at p12

[6] [2000] VSCA 180; (2000) 2 VR 276 at 284 [30].

[7] Davis v Rio Tinto Staff Superannuation Fund Pty Ltd (2002) 118 FCR 170 at 174 [19], per Heerey J.

[9] Although Mr McAleese signed the report he was not Mr Finch's manager until September 1997.

[10] See para [20] above.

[11] See Chammas v Harwood Nominees Pty Ltd (No. 1) (1993) 7 ANZ Insurance Cases 61-175 at 77,999 and Halloran v Harwood Nominees Pty Ltd [2007] NSWSC 913 at [76].

[12] [2000] VSCA 180; (2000) 2 VR 276.

[13] Maciejewski v Telstra Super Fund (No 2) [1999] NSWSC 341 at [10], per Windeyer J; Halloran v Harwood Nominees Pty Ltd [2007] NSWSC 913 at [48], per Brereton J.

[15] See Maciejewski v Telstra Super Fund (No 2) [1999] NSWSC 341 at [10], per Windeyer J; Heitman v Guardian Assurance Co Ltd (unreported, SC (WA), 12 February 1992, Franklyn J, BC9201339) at p 30.

[16] As may have been the case in Flageltaub v Telstra Super Pty Ltd [2000] VSC 107 and, on appeal [2000] VSCA 180; (2000) 2 VR 276.

[17] Superannuation Industry (Supervision) Act 1993 (Cth) s 89.

[18] Unreported, SC (NSW), 4 April 1985, BC8500888.

[19] Rapa v Patience at p 10. See also Heitman v Guardian Assurance Co Ltd (unreported, SC (WA), 12 February 1992, Franklyn J, BC9201339) at p 34.