Smith v Club Plus Superannuation Pty Limited

REASONS FOR JUDGMENT Introduction: 1 This is an appeal on a question of law under s 46 of the Superannuation (Resolution of Complaints) Act 1993 (Cth) ("the Act") from a decision of the Superannuation Complaints Tribunal ("the Tribunal") given on 27 July 2004. 2 The Tribunal affirmed a decision of the second respondent ("the insurer") rejecting a claim made by the applicant for a total and permanent disablement ("TPD") benefit under the terms of an insurance policy made between the first respondent ("the Trustee") and the insurer. 3 The insurance policy provided, relevantly, that a TPD benefit was payable to a member of the Fund where the member was:- "… unlikely ever to engage in any gainful profession, trade or occupation for which the member is reasonably qualified by reason of education, training or experience." 4 Section 14 of the Act gave the applicant standing to make a complaint to the Tribunal that the decisions of the insurer and the Trustee were unfair or unreasonable. Section 37(6) required the Tribunal to affirm the decision if the Tribunal was satisfied that the decision in its operation in relation to the applicant was fair and reasonable in the circumstances. 5 The Tribunal found that the applicant had suffered a work related injury in 1998 while working as a bar steward in a bowling club. The Tribunal also found that the applicant was permanently unfit for her previous work in the hospitality industry. 6 However, the Tribunal went on to find that the medical evidence before it indicated that the applicant could carry out part-time sedentary work. The Tribunal then asked itself the question whether the applicant was fit for part-time work in a sedentary occupation for which she had the relevant education, training or experience. 7 The Tribunal found, upon the basis of a vocational assessment made by a psychologist in 1999, that the applicant had the experience for, and a liking for, employment as a liaison officer working with Aboriginal people. 8 The Tribunal therefore found that the decision of the insurer that the applicant was not entitled to a TPD benefit was fair and reasonable. Accordingly, the Tribunal affirmed the decision of the insurer (and a related decision of the Trustee) pursuant to s 37(6) of the Act. 9 The essence of the applicant's argument in this appeal is that two questions of law arise. The first question is said to be that the Tribunal wrongly understood its role under the Act by considering that it had to determine whether the decision under review was fair and reasonable by reference to the processes following by the decision maker rather than by determining whether the actual decision was fair and reasonable. 10 The second question of law was said to be a "no evidence" ground, which was reduced to the contention that there was no evidence before the Tribunal to support its finding in three respects. 11 The three "no evidence" points were: first that there was no evidence that the applicant had any education, training or experience to undertake work as an Aboriginal liaison officer; second, that there was no evidence as to what work an Aboriginal liaison officer did; and third, that there was no evidence that part time work was available in this field. The Decision under review by the Tribunal 12 On 8 November 2001, the insurer wrote to the applicant declining her claim. The letter set out the relevant definition in the policy and stated that, having considered all the evidence available, the insurer did not have any liability in respect of the claim. 13 On 6 March 2002, the insurer wrote to the applicant referring to her request to review the decision and stating that the decision to decline the claim was maintained. 14 On 2 August 2002, the insurer handed down the decision which was the subject of the complaint to the Tribunal. 15 The letter referred to the psychologist's Vocational Assessment Report ("the Vocational Assessment") mentioned in [7] above. I will refer to the Vocational Assessment in more detail below. 16 The letter stated:- "The Functional Capacity Evaluation reported that Ms Smith appeared to be focused on her pain and unable to discuss future plans. Ms Smith appeared to be suited for light work of a sedentary nature with an ability to regularly change posture, and it is likely that she would benefit from a graded return to work. She would also benefit from pain management counselling. A previous Vocational Assessment was completed 16 July 1999 as a part of the Workers' Compensation claim lodged through CGU. This report also outlined her occupational history, which included work as a receptionist with Lands Council. Her duties included answering phones, doing wages and working on computers. It was also noted that Ms Smith 'thoroughly' enjoyed this work as she loves working with the local Aboriginal people. Ms Smith also indicted in this report her preference to work with Aboriginal people in any capacity, and there were openings within the Dubbo community for her to obtain a worktrial and seek long-term employment in a role liaising with Aboriginal people, or in Aboriginal health and welfare. A skills upgrade in computer training was noted as a requirement. We comment that Ms Smith's previous experience included work as a receptionist, and the role required her to perform duties included answering phones, doing wages and working on computers. With this previous experience in reception type work, we are of the view that the skill upgrade suggested would be an enhancement to already existing skills, which would then be sufficient for her to obtain employment in this field. Therefore, having considered this evidence, and the other medical evidence which has been outlined in our decline letters of 6 March 2002 and 8 November 2001, we remain of the view that it has not been established that Ms Smith has suffered a Total and Permanent Disability as defined, and accordingly the claim remains denied." The Vocational Assessment 17 The Vocational Assessment was prepared by Ms Natalie Green on or about 16 July 1999. It set out the applicant's employment history, the majority of which was in the hospitality industry as a cook, waitress and barmaid. She had worked at the Railway Bowling Club as a barmaid/cleaner for four years until the date of her injury. 18 The Vocational Assessment also included, as part of the applicant's employment history, a statement that she had worked as a receptionist for the Aboriginal Lands Council at Dubbo. The statement did not identify the dates of the applicant's employment, but provided as follows: "Ms Smith worked as a receptionist with the Lands Council and was employed through a grant over an 8 month period. Her duties included answering phones, doing wages and working on computers. She stated that she thoroughly enjoyed this work as she loves working with local Aboriginal people." 19 The Vocational Assessment referred to a number of psychological tests administered to the applicant to help explore her interests and abilities. Vocational interests were categorised under a series of headings, and the applicant scored highest in "helping", "persuasive" and "organising" skills. 20 Other psychological and personality tests were also administered. The personality profile indicated that the applicant would be highly suited to work as a teacher's aide or a liaison officer. 21 The Vocational Assessment stated that the applicant's injury appeared to have impacted on her ability to work in the hospitality industry as a barmaid. However, it observed she had numerous "transferable skills" which were set out in a lengthy list. These included literacy, numeracy and administering skills. 22 The Vocational Assessment stated:- "The potential barriers to employment are that Ms Smith is unable to participate in any activity involving heavy lifting and she will require a job that will enable her to alternate her postural position on a regular basis, to ensure minimal aggravation to her back, and leg pain. She would need to re-commence suitable employment on a graduated return to work programme, increasing her hours as tolerated. It would seem that Ms Smith would benefit most likely from a worktrial, which will enable her to gradually increase her hours of work and her duties, and enable her to acquire new skills with minimal retraining." 23 Reference was then made to the applicant having a number of leads to pursue within the local Aboriginal community and a contact who may be aware of potential jobs. The Vocational Assessment stated that:- "There are many suitable positions requiring no minimum education or qualification and training is generally on-the-job." 24 The Vocational Assessment concluded with the following recommendations:- "1. Ms Smith will benefit from some initial rehabilitation counselling sessions to identify the most appropriate vocational goal for her, before settling on one specific option. 2. Ms Smith will require some assistance with job-seeking in order to pursue any of the aforementioned alternatives. 3. Ms Smith should be encouraged to pursue a work trial through her contact networks as this will enable her to gradually increase her work hours as tolerated, whilst gaining skills and on-the-job experience." The Decision of the Tribunal 25 The Tribunal stated that the decision under review was the decision of the insurer dated 2 August 2002 and the decision of the Trustee of 13 August 2002. The Tribunal decided to reject the claim in respect of both decisions. 26 The Tribunal was satisfied of the following facts:- · The applicant was born on 24 May 1961. · The applicant commenced part time employment, 25 hours per week on average, with her employer on 22 August 1996 and joined the fund on 17 September 1997. · The applicant suffered her injury on 1 August 1998. She returned to work, temporarily and unsuccessfully, on light duties in February/March 1999. · The applicant ceased employment with her employer on 1 April 1999. · The amount of the TPD benefit in dispute was $49,500. 27 The Tribunal described the applicant's injury in some detail and referred to her unsuccessful attempt at rehabilitation. 28 The Tribunal noted that the applicant had made a workers' compensation claim which was commuted in August 2001 by a payment of $130,000. 29 The definition of TPD was set out. The relevant paragraph was taken from the insurance policy and was as follows:- "(a) The Member suffering the loss of use of two limbs or the sight of both eyes or the loss of use of one limb and sight of one eye (where limb is defined as the whole hand or the whole foot), or (b) The Member having been absent from their Occupation with the Employer through Injury or Illness for six consecutive months and having provided proof to our satisfaction that the Member has become incapacitated to such an extent, as to render the Member unlikely ever to engage in any gainful profession, trade or occupation for which the Member is reasonably qualified by reason of education, training or experience." (emphasis added) 30 The Tribunal set out the applicant's employment history which included sunflower clipping and bar work. Reference was made to the fact that the applicant had, for a time, been a full-time mother. The Tribunal also stated that it appeared that the applicant had eight months experience as a receptionist in the Aboriginal Lands Council. 31 The Tribunal stated that its role was:- "… to determine administratively whether the decisions of the Trustee and the Insurer were fair and reasonable in their operation in relation to the Complainant in the circumstances." 32 The Tribunal stated that it was bound by the operation of the law under which it operates, that is to say the Act, to review the decision and not to interfere with it unless the decision is not fair and reasonable. 33 The Tribunal was satisfied that the applicant suffered a work related back injury on 1 August 1998. 34 Reference was made to the medical evidence and the Tribunal observed:- "Both the Trustee and Insurer had regard to the medical evidence and the vocational assessment reports dated 16 July 1999 (which was undertaken for Workers' Compensation purposes…" 35 The Tribunal said that the weight of medical evidence was that the applicant was unfit to return to her pre-injury work as a bar steward or any work that involved heavy lifting or repetitive bending. 36 The Tribunal continued as follows:- "Most of the medical opinions and the two vocational assessments considered the Complainant had capacity for sedentary work and duties. Moreover in the vocational assessment undertaken in 1999 identified she had previously worked for 8 months as a receptionist for an Aboriginal organisation and that she had thoroughly enjoyed this job, although it was not stated when this had occurred." 37 The Tribunal said that the evidence indicated that the applicant had employment potential as a receptionist or clerk. It referred to the Vocational Assessment's suggestion that some on-the-job training could occur, especially for work with the Aboriginal people. It noted the following:- "However, the Tribunal concurs that it is the Complainant's existing skills and experience which are relevant to the definition of TPD, not what she might subsequently be retrained for." 38 The Tribunal was satisfied that the applicant was permanently unfit for work in the hospitality industry. It continued as follows:- "As the weight of the medical evidence indicates that she should carry out sedentary duties part-time, the question therefore becomes whether the Complainant is fit for part-time (about 25 per week) work in other occupations for which she has relevant education, training or experience. Her education level is low. It appears to the Tribunal that the only relevant prior training and/or experience is her 8 months experience in reception work with an Aboriginal organisation. There is insufficient detail available to the Tribunal for it to be able to determine whether that experience would qualify the Complainant for reception work generally, or whether she would require retraining and new skills (as distinct from mere updating) for that work." 39 The Tribunal then turned to the Vocational Assessment and quoted the following two paragraphs:- "The Complainant has indicated her preference to work with Aboriginal people in any capacity. There are numerous openings with the [relevant city] community through [the Complainant's] current contacts that may enable her to obtain a work trial and seek long-term employment in a role liaising with Aboriginal people, or in Aboriginal health and welfare. [The Complainant] has a number of leads to pursue within the local aboriginal community, and a further suitable contact is .. [name] at Family Support in … [relevant city], who may be aware of potential positions coming up." 40 It appeared to the Tribunal that the applicant had "relevant experience for this kind of work", that is, a role liaising with Aboriginal people or in Aboriginal health and welfare. It also appeared to the Tribunal that this type of work was available on a part time basis in the Dubbo area. 41 The Tribunal concluded by stating that it had the powers and obligations of the insurer and that it must affirm the decision if it was satisfied that in its operation the decision was fair and reasonable; see s 37(1)(a), s 37(2)(a) and (b) and s 37(6) of the Act. 42 The Tribunal was so satisfied and affirmed the decisions of both the insurer and the Trustee. The Legislation 43 The Tribunal is established by s 6 of the Act. Its functions are set out in s 12 and include the obligation to review the decision if it cannot resolve the complaint by conciliation. 44 Section 14AA provides that complaints to the Tribunal may be about discretionary or non-discretionary decisions. It was common ground in the present case that the complaint was about a non-discretionary decision. 45 Section 14 gives a member of a regulated superannuation fund standing to make a complaint to a Tribunal that a decision of a trustee was "unfair or "unreasonable". It was not suggested that the Fund was not a regulated superannuation fund. 46 Section 37 of the Act sets out the Tribunal's powers when reviewing a decision of a trustee of a fund that is the subject of a complaint under s 14. Section 37 provides:- "(1) For the purpose of reviewing a decision of the trustee of a fund that is the subject of a complaint under section 14: (a) the Tribunal has all the powers, obligations and discretions that are conferred on the trustee; and (b) subject to subsection (6), must make a determination in accordance with subsection (3). (2) If an insurer or other decision-maker has been joined as a party to a complaint under section 14: (a) the Tribunal must, when reviewing the trustee's decision, also review any decision of the insurer or other decision-maker that is relevant to the complaint; and (b) for that purpose, has all the powers, obligations and discretions that are conferred on the insurer or other decision-maker; and (c) subject to subsection (6), must make a determination in accordance with subsection (3). (3) On reviewing the decision of a trustee, insurer or other decision-maker that is the subject of, or relevant to, a complaint under section 14, the Tribunal must make a determination in writing: (a) affirming the decision; or (b) remitting the matter to which the decision relates to the trustee, insurer or other decision-maker for reconsideration in accordance with the directions of the Tribunal; or (c) varying the decision; or (d) setting aside the decision and substituting a decision for the decision so set aside. (4) The Tribunal may only exercise its determination-making power under subsection (3) for the purpose of placing the complainant as nearly as practicable in such a position that the unfairness, unreasonableness, or both, that the Tribunal has determined to exist in relation to the trustee's decision that is the subject of the complaint no longer exists. (5) The Tribunal must not do anything under subsection (3) that would be contrary to law, to the governing rules of the fund concerned and, if a contract of insurance between an insurer and trustee is involved, to the terms of the contract. (6) The Tribunal must affirm a decision referred to under subsection (3) if it is satisfied that the decision, in its operation in relation to: (a) the complainant; and (b) so far as concerns a complaint regarding the payment of a death benefit - any person (other than the complainant, a trustee, insurer or decision-maker) who: (i) has become a party to the complaint; and (ii) has an interest in the death benefit or claims to be, or to be entitled to benefits through, a person having an interest in the death benefit; was fair and reasonable in the circumstances." The relevant legal principles 47 In Colonial Mutual Life Assurance Society Limited v Brayley [2002] FCA 1333 ("Brayley") Branson J observed at [27] that the Tribunal is vested with administrative, not judicial, powers and functions. 48 Thus, as her Honour said, the Tribunal lacks the capacity to make authoritative and binding determinations of right. A decision of the Tribunal to vary or substitute the decision of a decision-maker is taken to be the decision of the decision-maker concerned; see s 41(3) of the Act. 49 Where the decision under review does not involve the exercise of discretion, the decision is intended to be one where, inter alia, the terms of the contract of insurance mandated a particular result; see Brayley at [28]. 50 The role of the Tribunal is to consider "whether the actual decision, as opposed to the process by which the decision was reached, was fair and reasonable in the circumstances"; see Brayley at [31]; see also National Mutual Life Association of Australia v Jevtovic, unreported, Sundberg J, 8 May 1997 at 10; and see National Mutual Life Association of Australasia Limited v Scollary [2002] FCA 695 ("Scollary") at [24] per Ryan J. 51 If the Tribunal forms the view that the decision was fair and reasonable in the circumstances it must affirm it; Brayley at [31]; Scollary at [25] and [37]. 52 The words "unfair" and "unreasonable" are difficult to define with precision; Brayley at [31]; Scollary at [36]. However, it would seem that there is no real difficulty in applying the test where the question does not involve the exercise of discretion, turning instead upon the rules of the fund or the terms of an insurance policy. 53 Branson J summed up the Tribunal's role as follows at [34] of Brayley:- "The above analysis reveals that although all complaints made to the Tribunal under s 14 of the Act are, in a formal sense, complaints that a decision is unfair or unreasonable (s 14(2)), the Tribunal is not empowered to remedy all unfairness or unreasonableness that it may perceive. In particular, the Tribunal lacks power to remedy any perceived unfairness or unreasonableness that is a necessary consequence of the application in the particular case of the governing rules of the fund concerned or the terms of a contract of insurance between an insurer and the trustee." Whether the Tribunal wrongly construed its role 54 The applicant submits that the Tribunal approached its task upon the footing that it was to review the processes followed by the insurer rather than to consider whether the actual decision was fair and reasonable in the circumstances. 55 The applicant's counsel pointed in particular to the passage which I have set out at [31] above in which the Tribunal said its role was to determine administratively whether the decision was fair and reasonable in its operation. 56 Counsel for the applicant also relied on the passage which I have set out at [35] in which the Tribunal said that the insurer had regard to the medical evidence. 57 I reject the applicant's submission. It seems to me that the use of the words "in their operation" and "in relation to" the applicant indicate a precise reflection of the terms of the Act; see s 37(6). In my opinion, the Tribunal's written reasons reflect a correct understanding of its role. This suggests that the Tribunal did approach its task in the manner required by the Act. 58 In my view, it is clear that the Tribunal embarked upon and carried out a review and analysis of the evidence which was before the insurer and the Trustee. This is illustrated by the reasoning set out at page 12 of the decision to which I have referred as set out at [34] to [40] above. 59 These passages show that the Tribunal considered the medical evidence and asked itself the question whether the applicant was fit for part time work in a sedentary occupation for which she had the relevant education, training or experience. 60 The Tribunal then proceeded to consider for itself whether, in terms of the definition of TPD in the policy, the applicant had the experience for work as an Aboriginal liaison officer. This was precisely what it was required to do under s 37 of the Act in accordance with the decisions in Brayley, Jevtovic and Scollary. The first "no evidence" ground: Experience to undertake work as an Aboriginal Legal Officer 61 Whether there is a "no evidence" to support a finding is a question of law; see Military Superannuation and Benefits Board No 1 v Stanger (2002) 68 ALD 2002 per Keifel J at [20]; see also Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 356 per Mason CJ. 62 The Tribunal correctly approached its task by stating that it was the applicant's existing experience which was relevant and that the question was whether the applicant was fit for part time work in a sedentary occupation for which she had the relevant experience. 63 It is true that "experience" is a word of wide import and may include non-work related experience. But there is no escape from the proposition, as the Tribunal recognised, that the applicant's only relevant prior experience to undertake work as an Aboriginal liason officer was her eight months work with the Lands Council. 64 Having found that there was insufficient detail to enable the Tribunal to determine whether that experience would qualify the applicant for reception work, the Tribunal proceeded to make its determination upon the basis of the content of the Vocational Assessment. 65 I accept the submission of Ms Guilfoyle, who appeared for the insurer, that the Tribunal was required to put itself in the position of the insurer and review the decision for fairness and reasonableness, and that this task involved a process of speculation as to the likelihood of whether the applicant would engage in an occupation by reason of her education, training or experience. 66 However, as Ms Guilfoyle accepted, the process of speculation was as to whether the applicant would gain employment in an occupation for which she was "reasonably qualified" by reason of one of the three criteria, ie "education, training or experience". The Tribunal, which stood in the shoes of the insurer, was required to reach a state of satisfaction as to the establishment of this nexus. 67 I also accept Ms Guilfoyle's submission that there was evidence in the Vocational Assessment that the applicant had some prior experience from which it was open to the Tribunal to reach a state of satisfaction that she was likely to gain employment in a sedentary occupation. 68 But what was entirely lacking was any evidence before the Tribunal of the applicant's capacity to work as a liaison officer with Aboriginal people. 69 All that the Vocational Assessment established was that the applicant had an aptitude for work as a liaison officer and that she had contacts and leads which may enable her to obtain such a position. What is missing from this is the necessary link between likelihood of employment and qualification for the job by reason of education, training or experience. 70 Without a job description stating precisely what is involved in the role of liaison officer, there was no evidence, and no reasonable basis, for the Tribunal to conclude that the applicant had any education, training or experience in such an occupation. 71 Accordingly, there was no basis for the Tribunal to engage in the process of speculation and arrive at the state of satisfaction required by the definition. 72 It may be accepted that the officer who prepared the Vocational Assessment was qualified to make it. But aptitude for a possible occupation does not provide evidence of the nature of the occupation in which it was said to be likely that the applicant would engage in employment by reason of her education, training or experience. 73 The Tribunal's analysis of the likelihood of the applicant gaining employment as a liaison officer stands in stark contrast to its finding that there was insufficient detail to enable the Tribunal to determine whether her experience would qualify her for work as a receptionist. 74 Ms Guilfoyle submitted that it was for the applicant to challenge the existence of the relevant connection. That is, it was for the applicant to assert that she did not have the experience to carry out the job as an Aboriginal liason officer. However, in my opinion, that does not provide an answer to the complete absence of evidence to support the Tribunal's finding. The second "no evidence" ground: the work of the Aboriginal Liaison Officer 75 This is related to the first ground. Accordingly, the same result follows. The third "no evidence" ground: that part time work was available 76 The passages quoted by the Tribunal from the Vocational Assessment provided an evidentiary basis for a finding that it was likely that work may be available. 77 However, those passages are silent as to the question of whether the work was part-time in the sense referred to by the Tribunal, ie about 25 hours per week. 78 Nor is there anything in the Vocational Assessment which provided any evidence that part-time work was available in the nominated field. 79 Accordingly, this "no evidence" ground must also succeed. Conclusion and Orders 80 I was much assisted by Ms Guilfoyle's submissions. 81 However, I find that the second ground of appeal, which is reduced to three "no evidence" contentions, succeeds. 82 A determination, based upon an application of the insurance policy which depended upon the existence of evidence that brought the applicant within the definition, was not fair and reasonable where there was no evidence to support the finding. 83 It follows that the orders I will make are that: