Sharp v Maritime Super Pty Ltd

Solicitors: Firths - The Compensation Lawyers (Plaintiff) King & Wood Mallesons (Defendant) File Number(s): 11/147892

Judgment 1HER HONOUR: This matter involves a dispute between a member of a superannuation scheme (Mr Ben Sharp) and the trustee of the scheme (Maritime Super Pty Ltd) in relation to Mr Sharp's claim for payment of a total and permanent disablement benefit. In essence, Mr Sharp's claim is that (having regard to the provision to the trustee of medical opinions attesting to the grounds on which his employment was terminated and his incapacity to work in the future) he has an entitlement under the scheme's Trust Deed to the said benefit or (if, on the proper construction of the Maritime Super Trust Deed, there remains any determination to be made by the trustee once such medical reports have been obtained) that the trustee has failed to make the requisite determination under the relevant provision of the Trust Deed and should now be ordered to do so. 2Mr Sharp's employment as a stevedore was terminated by his employer (Toll Stevedoring) on 23 June 2006. Shortly thereafter, he was diagnosed as suffering from a chronic psychiatric disorder (described variously as a Stimulant Substance, or drug induced, psychiatric disorder or paranoid schizophrenia). Mr Sharp contends that his employment was terminated solely by reason of an event (or a number of events) demonstrating permanent incapacity to perform his duties satisfactorily and/or exhibiting symptoms of a psychiatric condition demonstrating him to be a danger to others in the workplace. On that basis he claims an entitlement to a total and permanent disablement benefit in accordance with Rule 23 of the Trust Deed (calculated as a lump sum of $453,000). 3Senior Counsel for the trustee, Mr Cavanagh SC, made it clear that the trustee does not dispute that Mr Sharp has (since his termination) been diagnosed with a serious psychiatric illness nor that he is both unfit for work and likely to be unfit for work on a long term basis. However, the trustee contends that Rule 23(a) has not been satisfied in that the grounds for termination of Mr Sharp's employment were not (or have not been established to its satisfaction to be) solely those falling within that sub-rule. In particular, Mr Cavanagh submits that the evidence does not establish that the workplace incidents for which warnings were received by Mr Sharp prior to his dismissal were attributable to his later diagnosed psychiatric illness (and he submits that the exercise of determining whether those incidents were attributable to Mr Sharp's mental condition at the time cannot be undertaken on a retrospective basis, at least where that is dependent on Mr Sharp's retrospective account of events). 4By way of declaratory relief, Mr Sharp seeks the following: (i)that the trustee's decisions (on 3 October 2007 and 8 May 2008) to decline his claim for total and permanent disablement benefits were wrong in law and in fact; (ii)that the trustee has constructively declined a request made on 6 December 2010 for a reconsideration of the claim; (iii)that Mr Sharp is totally and permanently disabled (as defined in Rule 23); and (iv)that the trustee breached its duty owed pursuant to s 14 of the Superannuation (Resolution of Complaints) Act 1993 (Cth). 5An order is sought that the Court substitute its own discretion for that of the trustee and order the trustee to pay to the plaintiff a lump sum benefit pursuant to Rule 23 in the amount of $453,000, together with interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW) (alternatively, equitable interest is claimed). 6As originally put, Mr Sharp's claim included both a claim for interest on the benefit (from 2007, when it is contended it should have been paid to him) and payment of damages for alleged breach of the trustee's duty or breach of the Superannuation Industry (Supervision) Act 1993 (Cth) (those damages being referable to the position he would have been in had he received the money in 2007 and paid off his mortgage at that time, as he says he would have done). However, during the course of the hearing, Senior Counsel for Mr Sharp, Mr Rayment QC, made it clear that Mr Sharp does not now press his damages claim (and on that basis there seems no utility in any declarations as to breach of duties implied under the superannuation legislation). Issues 7In essence, the issues in the proceedings fall within a relatively narrow compass: (i)whether, on the proper construction of Rule 23 of the Trust Deed, a member is entitled to a total and permanent disablement benefit on the provision to the trustee of medical opinions unanimously attesting to the matters provided for under Rules 23(b) and (c), including the opinion that the member's employment was terminated solely on the grounds specified in Rule 23(a) (irrespective of whether the trustee is satisfied, or whether it is the objective fact, that Rule 23(a) was satisfied at the relevant time); in other words, whether unanimous (or a deciding) medical opinion is decisive of the entitlement to a benefit (assuming certain other conditions, in sub-rules (aa) and (e) for example, are satisfied); this being, as I understand it, broadly the construction of Rule 23 that is contended for by the plaintiff; (ii)if the above is the proper construction of Rule 23(a), whether the plaintiff is presently entitled to a total and permanent disablement benefit; and (iii)if the construction of Rule 23 is not as the plaintiff contends (and there remains room for the trustee to make a determination as to the matters set out in Rule 23(a) notwithstanding the receipt of unanimous medical opinions as provided for under Rules 23(b) and (c)), whether the trustee has failed to consider the matters required under Rule 23 and should now be ordered to make a determination of the plaintiff's claim based on those medical reports (which is the alternative basis on which the plaintiff's claim is put). Summary 8For the reasons set out below, I am of the view that neither of the constructions advanced is the proper construction of Rule 23 of the Trust Deed (but, rather, that the clause, properly construed, occupies what might colloquially be described as a middle ground between the two contentions). 9I accept that the Rule sets out an objective process (one that does not depend on any exercise of discretion by the trustee) to be satisfied before an entitlement to a total and permanent disablement benefit arises and it applies to a termination of employment by any means (such as for dismissal, redundancy or resignation). 10As part of that objective process a number of conditions must be satisfied (though not necessarily in any particular order other than as follows logically from the terms of the rule itself). Those conditions include (in my view as an objective fact) that the member's employment came to an end solely on the ground (or grounds) that the member's physical or mental condition at that time was such as to have the effect that the member was permanently incapable of performing his or her duties or a danger to others. (I construe the words "on the grounds that" as requiring a determination as to the basis on (or objective reasons for) which the employment relationship came to an end.) 11I do not consider that the employer's stated ground(s) or subjective reasons for termination (in the case of a dismissal of employment) is or are necessarily determinative (though I consider it not inappropriate for the trustee to take such matters into account in determining whether Rule 23(a) has been satisfied). 12If, as I consider has been established in this case, the sole ground (or basis) on which a member's employment is terminated (or comes to an end) is a particular incident or pattern of behaviour in the workplace (or, more particularly, a concern raised by such an incident or behaviour), then the question (ultimately to be determined by unanimous or, in the case of a division of opinion, a deciding medical opinion) is whether that incident (or pattern of behaviour) was caused by a mental or physical condition suffered by the member at that time, such that the member is (or, more relevantly, was) at that time permanently incapable of performing the member's duties satisfactorily or is/was a danger to others. 13I do not accept that the construction of Rule 23 is as contended for by the plaintiff, since I consider that the condition in Rule 23(a) must have a meaningful operation and is not satisfied simply by the provision of medical reports (unanimous or otherwise) attesting to the opinion as to the said matters (at least one of which - the identification of the grounds of termination - is not a medical issue at all). 14However, nor do I consider that the trustee would be justified in determining the claim (as it acknowledges it did) solely on the basis that the condition in Rule 23(a) had not been satisfied once it was provided with medical opinions that suggested or confirmed a causal link between the ground(s) of termination and a medical condition within Rule 23(a) (or raised a question as to the basis on which the employment may have come to an end. 15I consider that it has been established on the evidence before me that the sole (objective) ground (or basis) for termination of Mr Sharp's employment contract on 23 June 2006 was an incident on 6 June 2006 that gave rise to serious safety concerns in the workplace. The doctors' reports served by the plaintiff in support of his claim in 2007 in my view raised a sufficient issue as to whether Mr Sharp's behaviour on 6 June 2006 had been caused by, or was referable to, an underlying mental condition having the effect specified in Rule 23(a), such as to require (at the least) further investigation by the trustee (having regard to the trustee's duties as identified in Finch v Telstra Super Pty Ltd [2010] HCA 36 and Alcoa of Australia Retirement Plan Pty Ltd v Frost [2012] VSCA 238). 16The unanimous medical evidence (albeit with some qualification by Drs Reutens and Rees insofar as their opinions were based on an assumption as to the correctness of Mr Sharp's history of events) was that the sole ground of termination was a physical or mental condition such that Mr Sharp was permanently incapacitated or a danger to others at the time. I have considerable difficulty accepting that any of the doctors was in a position to determine (from a medical perspective) what was or was not the sole ground of termination of the employment. However, they were in a position to give expert medical opinion as to whether an incident (or behaviour) of the kind that had occurred on 6 June 2006 (which I have found to be the sole objective ground for termination of the employment) was caused by a mental condition suffered by Mr Sharp at the relevant time. 17While I consider that the evidence is such that it is likely that the definition of total and permanent disablement has been satisfied in the circumstances of Mr Sharp's case, I am not persuaded that the determination of that issue should be removed from the hands of the trustee (in circumstances where the trustee accepts that it has not yet addressed all of the matters required by Rule 23 and appears to be willing, once the construction of the rule has been determined, to do so). In particular, it seems to me that it is for the trustee to determine (at least in the first instance) whether it is satisfied that the medical reports obtained by the trustee (some of which in their terms are based on assumptions untested by the doctors) address in sufficiently unqualified terms the matters required under sub-rules (b) and (c) respectively. (It may be, though I do not suggest that it should necessarily be the case, that the trustee considers that further enquiry is necessary for it properly to satisfy itself that the doctors' reports do unanimously confirm the necessary causal link between the incident grounding the termination - ie the 6 June 2006 incident - and a mental condition suffered at the time.) 18The trustee should in my opinion be directed now to consider, and make a determination on, Mr Sharp's claim (having regard to the construction of Rule 23 set out in these reasons and the medical reports provided to it, as well as any further material arising out of any enquiries that it considers reasonably necessary in order to enable it to make the necessary determination) and then to provide a report to the Court thereon. Background 19Mr Sharp was employed (by Toll Stevedoring and before that BHP Stevedoring) as a stevedore from 1997 to June 2006. At the time Mr Sharp commenced his employment he became a member of Maritime Super, a superannuation fund formerly known as the Stevedoring Employees' Retirement Fund, of which fund the defendant (Maritime Super Pty Limited) is the trustee. As noted earlier, Mr Sharp's employment with Toll was terminated by letter dated 23 June 2006.