Sharp v Maritime Super Pty Ltd

Judgment 1HER HONOUR: On 7 November 2012, I handed down reasons for judgment ([2012] NSWSC 1350) in proceedings involving a dispute between a member of a superannuation scheme (Mr Ben Sharp) and the trustee of that scheme (Maritime Super Pty Ltd) in relation to Mr Sharp's claim for payment of a total and permanent disablement benefit (calculated as a lump sum of $453,000). The trustee had maintained that Mr Sharp was not entitled to such a benefit on the basis that his employment had not come to an end solely on the ground (or grounds) that his physical or mental condition at that time was such as to have the effect that he was permanently incapable of performing his duties or a danger to others. 2The factual background to the dispute is set out in my principal reasons. The dispute raised a question as to the proper construction of the relevant provision of the Trust Deed under which an entitlement to total and permanent disablement benefit was claimed (Rule 23 of the Trust Deed). The Rule in question was not a model of clear draftsmanship. Ultimately, I concluded that neither of the constructions that had been advanced by the opposing parties was the proper construction of the relevant Rule. 3I construed the Rule as setting out an objective process (not dependent on any exercise of discretion by the trustee) to be satisfied before an entitlement to a total and permanent disablement benefit would arise. As part of that objective process, a number of conditions were required to be satisfied including (under Rule 23(a)), as an objective fact, whether the member's employment had come to an end solely on the ground(s) there stated. I construed the words "on the grounds that" in Rule 23(a) as requiring a determination as to the basis on (or objective reasons for) which the employment relationship had come to an end. 4In Mr Sharp's case, the employer had issued a "standard" dismissal form on termination of his employment (following an incident during the course of his employment in which he had behaved in a manner dangerous to himself and others). I did not consider that the trustee was justified in determining the claim (as it acknowledged it had done) solely on the basis that the condition in Rule 23(a) had not been satisfied once the trustee had been 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 that raised a question as to whether the basis on which the employment had come to an end was one falling within Rule 23(a). 5On the evidence before me, I considered that Mr Sharp had established that the sole (objective) ground (or basis) for termination of his employment contract on 23 June 2006 was the incident on 6 June 2006 that had given rise to serious safety concerns in the workplace. (There had been various performance issues leading up to that incident but those were not in my opinion the objective basis for the termination of Mr Sharp's employment.) 6At [15] of my principal reasons, I found that the April 2007 doctors' reports served by Mr Sharp in support of his claim raised a sufficient issue as to whether his 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)) so 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; (2010) 242 CLR 254 and Alcoa of Australia Retirement Plan Pty Ltd v Frost [2012] VSCA 238). 7At [95], I accepted the submission by Mr Rayment QC (appearing, with Mr Gollan, for Mr Sharp) that, at least by the time the 2007 medical reports were received by the trustee, there was a duty on the part of the trustee to investigate the question as to whether there was an underlying medical condition which lay behind the causes of the termination of Mr Sharp's employment. (The trustee did not obtain its own medical reports until 2011 in the context of the litigation. The opinions in those reports were broadly the same in the reports that the plaintiff had provided in support of his claim.) 8Pausing there, although I made no express finding (for reasons I will come to shortly) of breach of the duty identified at [15] and [95], the logical conclusion from the finding that there was a duty (from the time the April 2007 medical reports were served) to investigate the potential link between the plaintiff's mental condition at the time of termination of his employment and the objective ground(s) for termination of his employment is that, if the trustee failed to do so, then it was in breach of that duty. 9I remitted the matter to the trustee for further determination, having regard to what I had determined to be the proper construction of Rule 23, and directed the trustee to report back to the Court as to its determination of the claim within a specified period. 10The trustee considered the material then before it (including a note from Mr Sharp's general practitioner that indicated that Mr Sharp had been referred to a psychiatrist prior to the termination of his employment, which note the trustee said had not been received prior to the litigation) and determined that Mr Sharp was eligible for the claimed benefit. That benefit was paid in December 2012. 11The matter then came back before me late last year on the claim by Mr Sharp to interest (under s 100 of the Civil Procedure Act 2005 (NSW) or by way of equitable compensation) and in relation to costs. 12In the principal proceedings, Mr Sharp had sought a declaration that the trustee had breached its duty owed pursuant to s 14 of the Superannuation (Resolution of Complaints) Act 1993 (Cth) and had claimed damages pursuant to s 55(3) of the Superannuation Industry (Supervision) Act 1993 (Cth) as a person who has suffered loss and damage as a result of breach of covenants implied by s 52 of that Act. Mr Sharp also sought interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW) and, in the alternative, equitable interest. 13In the course of the hearing before me, I was informed that Mr Sharp's claim for damages pursuant to s 55(3) was not pressed. Further, as indicated at the time I published my principal reasons, I had understood the position of the trustee at the hearing to be that, if I were to be satisfied that there was a total and permanent disablement claim established as at 2007, then interest would run from that time. I did not, therefore, address in my principal reasons the underlying basis on which equitable interest was claimed in the alternative to the interest claim pursuant to s 100 of the Civil Procedure Act. My understanding as to the trustee's position in relation to the interest proved to be incorrect. Hence there was (and remains) a need to address the issue as to whether there was a breach of duty and at what time any such breach occurred. 14Both written and oral submissions were received on the question of Mr Sharp's claim to interest/equitable compensation and I deal with those before turning to the only other outstanding question (of costs).