3. In January/February 1992, whilst engaged in a recreational pursuit unrelated to his work, the plaintiff fell from a horse. Initially his complaints and consequent treatment related to a head injury he suffered in that fall. The effect on him was described by his supervisors as follows: -

"In early February, 1992 Geoff had a riding accident in which he was thrown from his horse and hit his head on the ground. After a short spell of recuperation he returned to work but it was evident that he was far from well. He was not in touch with what was going on and often adopted a totally vacant look. He was advised to seek further medical assistance and as a result of this had an extended period of sick leave.

Geoff returned to work in mid June, 1992 and was given some project work to do with a view of rehabilitating him back into the workforce. Unfortunately, after a period of 4 to 5 weeks it was evident, not only to his colleagues, but also to Geoff himself that he was not capable of returning to work on the mine." [1]

4. On 23 August, 1992 the plaintiff resigned from his employment. Before doing so, he had, on 3 August, 1992, made an application to the MIM Coal Staff Superannuation Fund by Form 1 which is headed -

Serious Illness Resignation Benefit Application

5. His application for serious illness resignation benefit ("SIR") was allowed but his total and permanent disablement application ("TPD") was not. The plaintiff has pursued his application for this latter benefit.

6. The plaintiff's eligibility for TPD depends on the terms of the MIM Coal Staff Superannuation Fund Trust Deed ("the Scheme") which is exhibit "MDP2" to the affidavit of Mark Duncan Peters filed on 28 September, 1998. This scheme, as varied by 5 subsequent Deeds provides for the trustees to hold on trust contributions made by MIM Holdings Ltd - the principal employer - and members of the scheme (of which the plaintiff was one) to ensure that the fund remains "a fund satisfying superannuation fund conditions".

7. On 23 June, 1993 because of persistent back pain which the plaintiff said commenced at the time of the horse fall, he undertook a CT scan of his lumbar spine. This investigation revealed a large left side invertebral disc prolapse at the L5/S1 level. Later medical reports appear to accept the relationship of this injury to the fall from the horse [2].

8. The plaintiff's entitlement (if any) under the scheme is not limited to work-related injuries but depends upon a simple assessment of his capacity to work, about which mention will hereafter be made. A later report from the plaintiff's supervisors advised the trustees of the scheme that the plaintiff's back complaints occurred subsequent to his ceasing to be an employee of the second defendant and therefore when he was no longer a member of the scheme. [3] Such an assessment by the supervisors was outside their competence and should probably have been ignored by the trustees. Whether this is so cannot be gauged because the trustees have refused to give reasons for their decision or even to advise the plaintiff of what matters it has taken into account.

9. The material read before me on this application reveals that since the plaintiff's resignation and the rejection of his initial application, the following events have occurred:-

1994 12 January - plaintiff requests re-opening

30 May - trustees reject claim but decline to give reasons or to detail the medical reports considered.

27 September - plaintiff's claim to Mercantile Mutual Limited is accepted on his having "become completely unable to perform all the normal duties of his occupation".

1995 5 June - request to trustees for reconsideration

15 August - trustees defer decision to examine Mercantile Mutual documents

26 October - trustees' letter advising "the directors do not provide reasons nor discuss the basis of their decisions in relation to disablement claims. However, you can be assured that they have considered all the relevant medical information including the reports disclosed in your letter of 9 August, 1995."

12 December - plaintiff seeks copy of Dr. Rigano's report

1996 4 January - trustees refuse to supply copy of Dr. Rigano's report.

13 February - trustees advise "after consideration of all medical and other information, the trustee decided not to change its previous determination not to allow (plaintiff's) claim".

4 March - trustees refuse "to provide copies of reports used in making their determination".

10. The plaintiff alleges that at no time have the trustees considered a number of medical reports which were material to their decision making. These reports are tabulated in the affidavit of Robert Neil Anderson filed by leave on 28 October 1998. The reports are identified as -

a. Report Dr. Jon E. Reimers to Dr. B. Hodges dated the 21 May, 1992;

b. Report Dr. John E. Reimers to Dr. B. Hodges dated the 16th March, 19992;

c. Report Mackay Sans & X-Ray Centre dated the 29th January, 1992

d. Report Dr. Robert Lanskey dated the 29th July, 1996;

e. Report Dr. Muscio to Dr. R. Lanskey dated the 30th March, 1995 (unsigned);

f. Report Dr. Muscio addressed to To Whom it May Concern dated the 11th April, 1995;

g. Report Dr. Martinez to Dr. Rossato dated the 6th May, 1993 (unsigned);

h. Report Dr. Waterhouse to Dr. Martinez dated the 27th April 1993 (unsigned).

11. It is not clear from the material whether these reports were able to be accessed by the trustees upon their request. In their decision making, the trustees appear to have proceeded on the basis of reports lodged by the plaintiff to support his application together with other reports which they directly obtained. The last supply of reports to the trustees occurred on 9 August, 1995, by which date all of the undisclosed reports were under the applicant's control if not in his possession. The suggestion seems to be that he was not aware of them at that time. But in any event it raises a question of whether the trustees' discretion ought to be reviewed. Unfortunately this question is not identified in the Statement of Claim.

12. In Rapa v Patience [4] McLelland J in considering a similar question as to the circumstances in which a decision of the trustees of a superannuation fund would be reviewed said:-

"The grounds on which the performance by trustees of functions such as these may be successfully challenged are those applicable generally to the exercise by trustees of discretionary powers, helpfully discussed by McGarvie J. in Karger v Paul [1984] VicRp 13; (1984) VR 161. As encapsulated by His Honour in that case there are three such grounds and in some circumstances a fourth. They are, first, that the discretion was not exercised by the trustees in good faith, second, that the discretion was not exercised upon real and genuine consideration (which includes consideration of the wrong question - see Scott on Trusts 3rd Ed. Vol. 3, para 187.3), third, that the discretion was not exercised in accordance with the purposes for which it was conferred and, fourth, where the trustees have disclosed (otherwise than in the course of the proceedings in which the discretion is challenged) the reasons for the exercise of their discretion that those reasons are not sound."

Karger v Paul was concerned with the exercise by 2 trustees who had absolute and unfettered discretion to deal with property left by the late wife of one of them. The husband trustee made a written request to himself and the co-trustee for the whole of the estate to be transferred to him. The question was whether the exercise of such a broad discretion could be reviewed by the court. In his consideration of the matter McGarvie J (as he then was) said (at p.164):-

"In my view, in this case it is open to the Court to examine the evidence to decide whether there has been a failure by the trustees to exercise the discretion in good faith, upon real and genuine consideration and in accordance with the purposes for which the discretion was conferred. As part of the process of, and solely for the purpose of, ascertaining whether there has been any such failure, it is relevant to look at evidence of the inquiries which were made by the trustees, the information they had and the reasons for, and the manner of, their exercising their discretion. However, it is not open to the Court to look at those things for the independent purpose of impugning the exercise of discretion on the grounds that their inquiries, information or reasons or the manner of exercise of the discretion, fell short of what was appropriate and sufficient. Nor is it open to the Court to look at the factual situation established by the evidence, for the independent purpose of impugning the exercise of the discretion on the grounds the trustees were wrong in their appreciation of the facts or made an unwise or unjustified exercise of discretion in the circumstances. The issues which are examinable by the Court are limited to whether there has been a failure to exercise the discretion in good faith, upon real and genuine consideration and in accordance with the purposes for which the discretion was conferred. In short, the Court examines whether the discretion was exercised but does not examine how it was exercised."

McGarvie J also considered what was meant by the requirement for a trustee to give "fair" or "genuine" consideration to the exercise of their discretion. This was done in the context of a submission that a potential beneficiary should have been given an opportunity to make representations to the trustees. Rejecting this argument his Honour said (at p.166):-

"I see no good reason for importing rules of natural justice into the exercise of discretion by the trustees of the will. Such an implication is not necessary. The trustees of the will did not exercise their power in a type of situation where a right to make representations upon its exercise is normally afforded: cf. Charlton v Members of the Teachers Tribunal [1981] VicRp 79; [1981] V.R. 831, at pp. 844-5. In any event the insufficiency of inquiries by the trustees is not a ground on which the exercise of discretion by the trustees can be examined and reviewed. As the expression "fair consideration" correctly describes the ground on which the trustees' exercise of discretion can be examined and reviewed, only if it is used with the meaning equivalent to "real and genuine consideration" there is no advantage in using it."

The situation here is somewhat different. The claimant's application for benefit is founded on information submitted by the claimant. This information may be checked and supplemented by information from the trustees own inquiries but the foundation for the exercise of the discretion remains the information supplied by the claimant. I should have thought that the trustees were bound to consider that information.

13. In the present case there is no suggestion that the trustees of the scheme failed to consider what was put before them. The raising now of a complaint that there was more material which was available for their consideration only gives rise to a question of whether the trustees should now look at that information. Such a question is outside the scope of this application but could arise if the Court did, pursuant to s.8, undertake a review and give directions if questions of fact were to be determined.

14. Power of the Court to review Acts and decisions of trustees pursuant to s.8 of the Trusts Act is, in its terms, quite broad. Relevantly this section provides:-

"8.(1) Any person who has, directly or indirectly, an interest, whether vested or contingent, in any trust property or who has a right of due administration in respect of any trust, and who is aggrieved by any act, omission or decision of a trustee or other person in the exercise of any power conferred by this Act or by law or by the instrument (if any) creating the trust, ... may apply to the Court to review the act, omission or decision, or to give directions in respect of the apprehended act, omission or decision; and the court may require the trustee or other person to appear before it and to substantiate and uphold the grounds of the act, omission or decision which is being reviewed and may make such order in the premises (including such order as to costs) as the circumstances require."

Of this particular section Macrossan J (as he then was) observed in Re Whitehouse [5] :-

"It seems to me that the power of the Court under s.8 to review a trustee's act and decisions is one which should not be narrowly construed. By this I mean that the jurisdiction should not be read down or unduly confined. On the other hand, I think it would be wrong to suggest that although the jurisdiction to undertake a review is wide, the Court would lightly interfere with a discretionary decision made by a trustee. The Courts will continue to bear in mind that discretionary trust powers are vested in trustees for the purpose of the decision by them and the traditional reluctance to interfere with their decisions will, for good reason, continue. If, notwithstanding this reluctance, a proper case is made out, then I do not doubt that the Court has wide power. Speaking for myself, I am not persuaded that it is possible or advisable to attempt to limit in advance the ambit of the cases in which the Court will move under its new statutory power of review."

15. The practical limitation on the use of this section arises from "the traditional reluctance of the Courts to interfere with the discretionary acts of private trustees". The Full Court in Tierney v King [6], a case which was argued soon after Re Whitehouse was decided, approved of the above expression.

16. Notwithstanding the heavy onus which the applicant bears if his case is simply to reverse a discretionary decision of trustees (as opposed to identifying some error in the question which the trustees set for themselves or in their failure to consider material which was properly before them) I believe the plaintiff ought to be allowed to pursue his claim. To do so, however, it will be necessary for the plaintiff specifically to plead his reliance upon s.8 of the Trusts Act and to identify the circumstances upon which he relies for a review under that section. In coming to this decision I have regard to the remarks of Dixon J (as he then was) in Dey v Victorian Railway Commissioner [7] as follows:-

"A case must be very clear indeed to justify the summary intervention of the Court to prevent a plaintiff submitting his case for determination in the appointed manner by the Court with or without a jury. The fact that a transaction is intricate may not disentitle the Court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the Court to dismiss the action as frivolous and vexatious and an abuse of process."

17. By the plaintiff's reliance on s.8 of the Trusts Act, there does seem to me to be a real question to be determined and it is not appropriate in these proceedings to pass judgment on its likelihood of success.

18. Given that the decision sought to be impugned was made by the trustees on 27 September 1995, when they did not have before them the further material referred to above, some consideration ought to be given as to the utility of the current proceedings. On my perusal of the trust deed there does not appear to be any time limit for the making of the TPD application nor any limitation on the number of applications which might be made. Consideration ought to be given now as to whether a better course might be for the trustees to consider the plaintiff's present condition in the light of the previously undisclosed material and his present condition.

(i) The application to strike out the plaintiff's Statement of Claim is

(ii) The plaintiff shall have liberty to deliver within 28 days an amended

Statement of Claim to plead his reliance on s.8 of the Trusts Act 1973 and the circumstances which give rise to the operation of that section.

20. I reserve the question of costs of and incidental to this application to the trial judge.

[1] See exhibits "SKC3" the affidavit of Stewart Coates filed 28 September 1998

[2] Report of Dr. Dugdale - ex "SKC12" to affidavit of Stewart Coutts filed on 28 September 1998

[3] Memorandum from G.R. Davidson, General Manager - ex "SKC8" to affidavit of Stewart Coutts filed on 28 September, 1998.

[4] Unreported decision McLelland J 4.485 - Eq 2112/1981

[5] (1982) QdR 196 at p.203

[6] (1983) 2 QdR 580

[7] (1948-9) 78 CLR 62 at p.91