Purcell v APS Chemicals Superannuation Pty Ltd

Federal Court of Australia|2009-08-31|Before: Gordon J, Heerey J, Marshall J

REASONS FOR JUDGMENT 1 Ms Susan Purcell claims an entitlement to a total and permanent disablement benefit pursuant to an insurance policy between the trustee of her superannuation fund and an insurer. The trustee is the second respondent, APS Chemical Superannuation Pty Ltd. The insurer is The National Mutual Life Association of Australia. The insurer refused Ms Purcell's total and permanent disablement benefit claim, as did the trustee. 2 On 10 October 2008, the Superannuation Complaints Tribunal ("the Tribunal") affirmed the decisions of the trustee and the insurer. Ms Purcell now appeals to the Court pursuant to s 46 of the Superannuation (Resolution of Complaints) Act 1993 (Cth) ("the Act") to review the decision of the Tribunal based on alleged errors of law. 3 The issue for determination in the appeal is whether the Tribunal erred in law in deciding that the decisions of the trustee and the insurer should be affirmed. The determination of that issue requires a consideration of whether the Tribunal had material before it to justify a conclusion that Ms Purcell was capable of a return to full‑time work. Ms Purcell also claims that the Tribunal failed to give proper reasons for its decision.

WORK HISTORY SUMMARY 4 Ms Purcell was born on 18 March 1946. She completed Year 10 at secondary school and performed hospital secretarial work from 1962 to 1968. In 1976, she commenced work for APS Chemicals where she worked in sales, ultimately rising to the position of Sales/Marketing Manager. 5 In April 2001, Ms Purcell incurred an injury to her back in the course of her employment. She last performed work on 26 April 2002 and, on that day, resigned from her employment with APS Chemicals. At the time of her resignation, Ms Purcell was working reduced hours, but her position remained a full-time one.

THE DATUM POINT 6 The relevant date for consideration of the operation of the total and permanent disablement definition in the policy is the date of the decision of the trustee; see Samaras v Australian Retirement Fund Pty Ltd [2007] FCA 1323 at [18] per Gordon J and Davis v Rio Tinto Staff Superannuation Fund Pty Ltd (2002) 118 FCR 170 at [15] per Heerey J. 7 The trustee made its decision on 31 May 2006.

THE POLICY 8 An entitlement to a total and permanent disablement payment arises under the insurance policy which applied to Ms Purcell if two criteria are satisfied as at 31 May 2006. The relevant criteria are: 1. whether an injury has stopped Ms Purcell from working in her usual occupation continuously for six months; and 2. whether Ms Purcell is "unable ever again to work in any business, occupation or regular duties for which…she is reasonably qualified by education, training or experience". 9 The criteria are explained further by the relevant definitions such that: · usual business, occupation or regular duties means full‑time, casual or part‑time duties where the person insured is defined as a full‑time, casual or part‑time employee (as applicable) under the policy; and · it is immaterial whether a business, occupation or regular duty is paid or unpaid. 10 It is not disputed that Ms Purcell satisfied the first criterion. The application of the second criterion to Ms Purcell is in dispute.

THE ISSUE FOR THE TRUSTEE 11 The trustee had to determine, on the medical evidence available to it, whether Ms Purcell's back injury was such that she was unable to ever again work in any business, occupation or regular duties for which she was reasonably qualified by education training and experience in a full-time capacity. That is because, as treated by the decision makers below, Ms Purcell occupied a full-time position on resigning her employment.

THE ISSUE FOR THE TRIBUNAL 12 The Tribunal was required by s 37(6) of the Act to affirm the decision of the trustee if the decision was a fair and reasonable one in the circumstances. A consideration of whether the trustee's decision was fair and reasonable necessarily required the Tribunal to consider the medical evidence available to the trustee as at 31 May 2006.

THE MEDICAL EVIDENCE 13 Ms Purcell's chiropractor, referred to by the Tribunal as "Dr JH", reported in June 2002 that she found it "very difficult to believe that Ms Purcell would be able to work whether it is a part-time or a full-time position" because of the severity of Ms Purcell's injury and her poor progression. 14 In December 2002, the chiropractor agreed with the assessment of Ms Purcell's general practitioner, Dr MG, that Ms Purcell would only be able to work a maximum of one hour per day. Dr MG later confirmed this limitation in a medical report dated 17 February 2005. 15 Dr MW, an occupational physician produced a report for Ms Purcell's workers compensation insurer dated 16 December 2002. Dr MW reported to the effect that due to ongoing pain Ms Purcell would struggle to work a full day and that "perhaps reduced hours would be reasonable if she is not able to manage". 16 In a report provided by Dr JL for Centrelink on 20 January 2003, it was noted that Ms Purcell was "unfit [for] any work for award wages for more than two years, probably permanently". 17 However, in August 2005, Dr BD, an orthopaedic surgeon engaged by the insurer reported that: There are psychological factors involved in the physical injury and I think that [Ms Purcell] would be capable of lighter sedentary work in the administrative and office type fields. 18 On 17 August 2005, a Medical Panel established for workers' compensation purposes, said that it: accepted the worker's description of the benefits obtained from chiropractic and massage treatment in relieving her pain and stiffness and noted that the worker had improved significantly since the original injury. 19 A report by an occupational physician, Dr CB, dated 29 September 2009 concluded: she notes that she is precluded from undertaking any voluntary work by nature of the ongoing WorkCover claim. However, I would anticipate that if she was not signing this document on a monthly basis she would undertake some voluntary work. Dr CB went on to further say: I would consider [Ms Purcell] is currently able to undertake "suitable employment". She is skilled in telephone work and computers and could undertake administrative tasks provided she is not require to undertake repeated bending, heavy lifting, prolonged standing or repeated ascending or descending of stairs. I would consider that a position which would be suitable for her would be one which is reception‑based where she has the ability to move about and change her position frequently. ...I would consider in the first place that she should work reduced hours. (emphasis added) 20 The above are the reports referred to by the Tribunal which address the ability of Ms Purcell to return to some form of employment. However the Tribunal omitted from its quote of the report the key words emphasised in the preceding paragraph.

THE TRIBUNAL'S REASONING 21 The Tribunal was satisfied that the decisions of the insurer and the trustee were fair and reasonable in the circumstances. It specifically observed that it was not required to find what it would have determined had it stood in the shoes of the decision makers. 22 At [51] of its reasons for decision, the Tribunal said: The medical reports almost universally conclude that [Ms Purcell] has a permanent impairment of her spine. [Ms Purcell's] GP has at all relevant times assessed [Ms Purcell] as being TPD. However, none of the medical reports obtained for workers' compensation purposes or for the insurer conclude that [Ms Purcell] is TPD. The reports from Dr CB and Dr BD referred to motivational and other issues that were considered to be factors in preventing [Ms Purcell] from returning to work. Many medical reports referred to [Ms Purcell's] dissatisfaction with the Employer. 23 The Tribunal noted that the insurer assessed the claim based on light sedentary administrative work as the relevant occupation; at [52]. The Tribunal then said that based on the medical reports, Ms Purcell's work history and skills, the decision was fair and reasonable. 24 The Tribunal did not grapple with the important issue as to whether, on the basis of the medical reports, Ms Purcell was likely as at 31 May 2006 to resume full‑time employment in light, sedentary, administrative work, especially in circumstances where such full-time work would require long periods of sitting.

THE COURT'S ROLE 25 An appeal lies to the Court on a question of law from a determination of the Tribunal; see s 46 of the Act. The Court is not free to interfere with a determination of the Tribunal because it has reservations about or disagrees with the merits of its determination. The Court's role is to consider whether the Tribunal fulfilled its duty under s 37 of the Act; see Constantinides v Du Pont Superannuation Fund Pty Ltd [2002] FCA 534 at [34].

Absence of evidence about return to full time work 26 Counsel for Ms Purcell contends that the Tribunal had no material upon which it could find that Ms Purcell was ever able to work full-time. More properly expressed, the Court considers the point raised by this contention is that the Tribunal could not find that the decisions of the insurer and the trustee were fair and reasonable in the absence of material which showed that Ms Purcell was capable of returning to full-time employment, in the context of there being material which showed she could not so return. 27 In response, counsel for the insurer, contends that the Tribunal analysed the relevant medical evidence and the weight of that evidence was a matter for the Tribunal. 28 Ms Purcell claimed an entitlement to a benefit under the deed for which she qualified if she could demonstrate that, amongst other factors, she could not return to full-time work. In so doing Ms Purcell relied on the evidence of her general practitioner, Dr MG, dated 17 February 2005. A report to similar effect was provided to Centrelink by Dr JL in January 2003. The 16 December 2002 report from Dr MW referred to Ms Purcell "struggling to work a full day". While other reports address the issue of a return to work, none of them address whether that return would be capable of being made to full-time duties. 29 Questions about Ms Purcell's motivation to work, possible psychological attitude to returning to work and attitude to her employer are irrelevant considerations when one focuses on whether a return to work is possible on a full-time basis as distinct from a part-time or casual basis. 30 The only medical evidence before the insurer and the trustee which dealt with a return to full-time work, being the evidence of Dr MG and Dr JL, were inconsistent with such a return; at [27] and [28] of the Tribunal's reasons. Dr MG assessed Ms Purcell as unlikely to return to the workforce in the foreseeable future and Dr JL referred to Ms Purcell's unfitness for "any work". 31 The evidence which referred to a fitness for work of a kind consisting of light sedentary duties did not find that a return to full-time work was possible. Dr MW in her report for the workers compensation insurer referred to "reduced hours"; at [30] of the Tribunal's reasons. Dr CB considered a return to "suitable employment" was possible but that "in the first place she should have reduced hours"; at [39]. Dr BD's report is to similar effect; at [40]. 32 Given that a central issue in assessing the claim before the insurer and the trustee was whether Ms Purcell could return to full-time work, and given that there was no evidence which dealt with whether Ms Purcell was capable of returning to full-time work, it was not fair and reasonable for the insurer and the trustee to consider that she was so capable and deny her an entitlement to a total and permanent disablement benefit on that basis. However, that was a matter for the Tribunal to determine on the merits. Nevertheless, its decision, in that regard, is not immune from judicial review because the Tribunal erred in law in affirming the decisions of the insurer and the trustee because there was no evidence to support a crucial aspect of them. There was no evidence of Ms Purcell's ability to return to full-time work of any kind. 33 Counsel for the respondents submitted that Ms Purcell's fitness for "some" work was evidence of fitness for full time work. That submission is fanciful. It is equivalent to saying that a sportsman who is being assessed for playing a full game of hard competitive sport can do so when assessed medically to play "some" of that sport. The same counsel also submitted that Ms Purcell bore the onus of showing she was not capable of a return to full time duties. Ms Purcell attempted to show, by medical reports from her medical practitioners and from Drs MW and JL that she was incapable of such a return. That material was not contradicted by other medical evidence. To the extent that onus is relevant, as distinct from an assessment whether the claimant meets the qualifications for the relevant payment on all the material, Ms Purcell satisfied any such onus. 34 When assessing the fairness and reasonableness of a decision of a trustee, the Tribunal cannot, if it is fulfilling its function properly, ignore material evidence which supports a claim by a claimant under a policy when the contrary evidence relied on by the insurer does not, in a real and practical sense address that issue. 35 I am not satisfied that the Tribunal fulfilled its duty under s 37 of the Act. That is because the Tribunal erred in law by finding the decision of the trustee and insurer to be fair and reasonable in the circumstances when no evidence existed to support the decisions in so far as they assessed Ms Purcell as capable of returning to full time duties and the only evidence on that topic suggested the contrary. This is especially so when the review before the Tribunal was conducted on the basis that Ms Purcell was a full-time employee when she ceased to be employed in April 2002.

Absence of evidence about lighter sedentary administrative work being an occupation for which Ms Purcell was qualified 36 This point may be briefly dismissed. There was evidence that Ms Purcell performed administrative work in a hospital setting before her job with APS Chemicals. There also was evidence that she performed administrative duties in the later employment. The allegation of any absence of such evidence is erroneous. The material before the Tribunal disclosed that Ms Purcell is reasonably qualified by her experience to perform lighter sedentary administrative work. Once that assessment is open, the second limb of the second criterion of the relevant definition is not made out.

Wrongful acceptance of psychological evidence 37 This ground is also without merit. The medical practitioners who expressed a view about Ms Purcell's reluctance to return to work were not expressing a psychological opinion but a possible explanation for her attitude to returning to work when they considered that a return to work, albeit on a reduced hours or unstated basis, was possible.

PROPER REASONS 38 Counsel for Ms Purcell submits that the Tribunal gave no proper reasons for its decision. The reasons of the Tribunal disclose a reasoning process, albeit flawed in the failure to examine the consequences of an absence of medical evidence which suggested that a return to full-time work was possible. Generally, as long as a tribunal produces reasons which disclose a reasoning process, it cannot be said to have erred in law by failing to provide proper reasons; see Edwards v Giudice (1999) 94 FCR 561 at [44]-[48]. 39 Under s 40 of the Act, the Tribunal is required to give written reasons for its decision. As the Full Court said in Edwards v Postsuper Pty Ltd [2007] FCAFC 83 at [20]: Under s 25D of the Acts Interpretation Act 1901 (Cth), reasons contemplated by s 40 of the Complaints Act must include findings on material questions of fact and refer to the evidence or other material on which those findings are based. 40 Here the Tribunal referred to material questions of fact, albeit with the exception of the critical return to full-time work issue, and to the evidence upon which those findings of fact were made by the insurer and trustee so that it could assess the reasonableness and fairness of the decisions before it. 41 The Tribunal complied with its obligation to give written reasons for its decision by setting out findings on material questions of fact and referring to the evidence on which these findings were based, in the context of the findings being those of the trustee and the insurer for the purpose of the Tribunal's assessment of the reasonableness and fairness of those decisions.

REMITTAL 42 Having regard to the views expressed above concerning the error of law made by the Tribunal failing to consider the significance of the lack of evidence before it going to the ability of Ms Purcell to return to full-time duties, the Court will order pursuant to s 46(4) that the matter be remitted to the Tribunal to be determined again. The Court directs that any such determination consider the fairness and reasonableness of the decisions of the trustee and the insurer in light of the absence of evidence before them, as at 31 May 2006, of Mr Purcell's ability to return to work on a full-time basis, together with the evidence, including that of Drs MW and JL, which suggests the contrary.

ORDERS 43 The Court orders as follows: 1. The appeal is allowed. 2. The decision of the Superannuation Complaints Tribunal of 10 October 2008 is set aside. 3. The matter is remitted to the Superannuation Complaints Tribunal to be determined again in accordance with the direction contained in [42] of the reasons for judgment. 4. The respondents pay the applicant's costs of the appeal. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall.

Associate: Dated: 31 August 2009 Counsel for the Applicant: Mr D G Robertson

Solicitor for the Applicant: Katherine Moorhouse-Perks

Counsel for the Respondents: Mr D Christie

Solicitor for the Second Respondent: AXA Australia

Tribunal Superannuation (Resolution of Complaints) Act 1993(Cth)ss 37, 40, 46

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