Wraight v Tasplan Limited & Anor

LEGISLATION CITED : Jurisdiction of Courts Cross-vesting Act 1987 (NSW) Superannuation Industry (Supervision) Act 1993 (Cth)

CASES CITED : Finch v Telstra Super Pty Ltd [2010] HCA 36 BHP Billiton Ltd v Schultz (2004) 221 CLR 400

Plaintiff: Peter Wraight PARTIES : 1st Defendant: Tasplan Ltd 2nd Defendant: The National Mutual Life Association of Australasia Limited

Plaintiff: M Gollan COUNSEL : 1st Defendant: J Hunt 2nd Defendant: R Cavanagh SC

Plaintiff: Firths - The Compensation Lawyers SOLICITORS : 1st Defendant: Lander & Rogers 2nd Defendant: Turks Legal

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

2010/237935 Peter Wraight v Tasplan Limited & Anor JUDGMENT 1 HIS HONOUR: This is an application under s 5(2) of the Jurisdiction of Courts Cross-vesting Act 1987 (NSW) for these proceedings to be transferred to the Supreme Court of Tasmania. 2 The plaintiff lives in Devonport in Tasmania. He was employed in about March 2005 by Austech Industries in Tasmania. He then became a member of a superannuation fund called Tasplan. The first defendant is the trustee of that fund. 3 In December 2005 the plaintiff obtained employment as a contracts manager with DCM Services Pty Ltd ("DCM Services") at the Australian Paper Mills at Wesley Vale and Burnie in Tasmania. 4 The second defendant (the National Mutual Life Association of Australasia Limited) issued a total and permanent disablement policy to the first defendant to provide benefits to members of the Tasplan superannuation fund, where, to put it very generally, a member was unable to work in his or her usual occupation by reason of injury or sickness, so as not to be able, in the opinion of the insurer, to work in any business, occupation or regular duties for which he or she was reasonably qualified. 5 The plaintiff ceased his employment with DCM Services on or about 16 April 2006. He alleges that this was due to the deterioration of his physical and mental condition. He alleges that he has been unable to return to any form of employment since. 6 In May 2007 the plaintiff lodged a claim for total and permanent disability benefits with the first defendant. The plaintiff alleges that he is entitled to a payment of a lump sum benefit totalling $75,000. 7 The plaintiff alleges that by letter dated 20 October 2009 the first defendant advised him that the second defendant had declined his claim, and that they had referred his claim back to the second defendant for reconsideration. 8 He alleges that by a later letter dated 17 December 2008 (a mistake for 17 December 2009) the first defendant advised him that his claim had again been declined by the second defendant, and that the first defendant had upheld that decision. He alleges that by letters dated 19 May 2010 he submitted further evidence in support of his claim and requested a reconsideration. He alleges that the defendants have not made a decision to either accept or decline that claim, and in the circumstances there has been a constructive denial of the claim. He instituted these proceedings on 16 July 2010. The relief sought includes a declaration that both the first and second defendants have wrongfully declined his claim. 9 The plaintiff seeks a declaration that he is totally and permanently disabled within the meaning of the Tasplan trust deed and policy. He seeks an order that the second defendant pay to the first defendant $75,000 to be held in trust for him. He seeks an order that the first defendant pay to him that benefit, together with interest. 10 There is an additional claim for damages against the first defendant pursuant to s 55(3) of the Superannuation Industry (Supervision) Act 1993 (Cth). 11 The plaintiff alleges that the first defendant failed to exercise its duties as trustee, as required by law. He alleges that the first defendant failed to exercise its discretion with the utmost good faith or based on a real and genuine consideration of the evidence supplied to it. 12 A further claim is made against the second defendant that it breached its duty of utmost good faith when considering whether the insurance policy should respond to the claim. 13 The first defendant is registered and carries on business in Tasmania. It also has an office in Sydney. However, any witnesses to be called by the first defendant in relation to how it dealt with the plaintiff's claim for benefits under the trust deed are based in Tasmania. 14 The plaintiff's claim submitted to the first defendant was supported by medical evidence in the form of doctors' reports. The second defendant obtained medical evidence itself. The claims assessor of the second defendant considered the medical reports of five doctors in reaching his final assessment. Of those doctors whose reports were considered, four practise in Tasmania. The fifth, being a doctor to whom the plaintiff was referred for assessment by the second defendant, has his rooms in Sydney, although he visited Tasmania for the purpose of examining the plaintiff. 15 The second defendant is a company which, I take it, has offices throughout Australia. It certainly has offices in Sydney and is based with its head office in Melbourne. 16 Prime facie there is an overwhelming case for saying that Tasmania is the natural, and more appropriate, forum for these proceedings. The only real connection with New South Wales is that one of the doctors who has examined the plaintiff practises here, and more significantly on the present application, that this is the place where the plaintiff's solicitor has his office. 17 The plaintiff's solicitor, Mr Carl Mickels, is a member of the firm known as Firths - The Compensation Lawyers. He has very considerable experience in dealing with claims such as the present, appearing for persons claiming total and permanent disablement benefits, or income protection or life benefits, including claims against trustees of superannuation funds. 18 He was instructed to act for the plaintiff in January 2009. In his affidavit of 8 September 2010 Mr Mickels deposes. " 11. At the time that the Second Defendant raised its intention to seek to transfer this matter to Tasmania I made enquiries with my client regarding whether he consented to the transfer. 12. I am instructed by my client that he does not consent to the transfer to Tasmania. I am instructed that the reason the Plaintiff instructs Firths - The Compensation Lawyers is because he intended to instruct solicitors who [sic] he considered to be experts in this field. 13. I confirm that I am instructed by the Plaintiff and verily believe that at the time of instructing Firths - The Compensation Lawyers there was no firm in Tasmania of which he was aware that are considered specialists in this field. I am instructed by my client and verily believe that this is the reason why he chose to instruct Firths - The Compensation Lawyers. 14. I am instructed by my client and verily believe that he does not desire the matter to be transferred to Tasmania because of the substantial increase in costs by reason of having to engage agents in Tasmania and then for myself and counsel to travel to Tasmania for the actual hearing. 15. The insured benefit being approximately $75,000, the Plaintiff is concerned that the costs will substantially exceed this amount if the proceedings are transferred to Tasmania. " 19 Moreover, Mr Mickels is acting for the plaintiff on the basis that he will not charge the plaintiff unless the plaintiff's claim is successful or there is a settlement. He deposes that he has accepted instructions to act on that basis due to the plaintiff's poor health and financial circumstances. 20 I accept that were the matter to be transferred to the Supreme Court of Tasmania, the likelihood is that the plaintiff would continue to instruct Mr Mickels, and that this would entail additional costs. Mr Mickels would need to retain an agent to act for the plaintiff in Tasmania, and there would be additional costs to the plaintiff in Mr Mickels travelling to Tasmania for the hearing. Likewise, I accept that it is probable that, rather than briefing local counsel, Mr Mickels would instruct New South Wales counsel, and there would be additional legal costs incurred as a result of counsel also having to travel to Tasmania for the hearing. 21 It is not suggested for the defendants that they would incur additional legal costs if the matter remains in this court than would be incurred if the matter were transferred. Counsel for the second defendant accepted that the assessment of whether it is in the interests of justice that the proceedings be transferred to Tasmania should be made at the time the application for transfer is made. 22 However, the additional legal costs that the plaintiff would incur if the proceedings are transferred is not the only relevant consideration. The solicitor for the second defendant with the day to day conduct of the matter, Ms Rosamund Wicks, deposes that in her view a final determination of the proceedings is likely to require that evidence be given by the plaintiff, by Mr Chan (who was the claims assessor for the second defendant who made the final assessment of the plaintiff's claim), by one or more of the five doctors whose reports were considered by Mr Chan in the course of his making his determination, and by the managing director of DCM Services, being the plaintiff's last employer. In addition, I think it likely that as the plaintiff's claim is that the first defendant breached its duties as trustee in the consideration it gave to the plaintiff's claim, evidence may be called by one or more officers of the first defendant who dealt with that claim. 23 The need to call parties and witnesses from interstate is a highly relevant matter in determining where the interests of justice lie. In some respects the consideration of those witnesses is neutral. For example, Mr Chan, the assessor with the second defendant, is based in Melbourne. 24 As to the medical practitioners, one of them, and it would seem a critical one, is based in Sydney. It seems that most of the other medical practitioners are based in Tasmania, but insofar as they may be required to appear to be examined or cross-examined, it is likely that their evidence could be taken by video link. That may have some costs, but would minimise disruption to their practices. 25 It is argued for the plaintiff that on applications of this kind it is unusual for any evidence to be called that would require the attendance of witnesses other than very limited evidence. Mr Mickels and counsel for the plaintiff submit that the essence of the plaintiff's claim involves consideration of how the material submitted by the plaintiff in support of his claim for benefits was assessed by the trustee and by the insurer. That is said to be an enquiry which essentially involves a review of the documents and the reasons for decision. However, given the relief claimed by the plaintiff, I see no basis for rejecting the evidence of the solicitor for the second defendant as to her views as to what evidence is likely to be given. 26 The plaintiff does not seek merely an order that his claim be remitted to the trustee for further consideration. As I have said, he claims the first defendant breached its duty in the way in which it considered his claim. I see no reason why the first defendant would not be expected to call evidence to seek to rebut that allegation. The plaintiff claims that the insurance policy responds to his claim. I see no reason why the insurer would not be entitled to defend that claim, not simply on the papers which were before it when it rejected the claim in 2009, but on the evidence which might be called in these proceedings. 27 In these proceedings the insurer would have the opportunity to cross-examine the plaintiff and the doctors on whose opinions the plaintiff relies. It could call evidence itself (such as from the employer) to seek to rebut the plaintiff's claim that he was totally and permanently disabled and that was the reason for his ceasing employment. 28 As to the last matter, counsel for the plaintiff submits that such evidence would be unnecessary or otiose. He says the insurer in any event relies upon the plaintiff's letter of resignation as showing the basis upon which the plaintiff resigned. He says that the plaintiff will have to deal with that matter. I take counsel to say that if there is a satisfactory explanation then any other evidence that might be called from the employer on the same topic would be otiose or answered by the plaintiff's evidence to be given in respect of his letter of resignation. I do not assume that that is so. 29 It is not in the plaintiff's control to determine what witnesses the defendants will call in response to the plaintiff's claim. 30 I give weight to Mr Mickels' evidence, based upon his experience in similar cases, as to what types of evidence are usually called in cases of this character. However, as the second defendant's counsel submits, the way in which cases of this kind are approached by the legal representatives of the parties may well be affected by the High Court's decision in October of this year in Finch v Telstra Super Pty Ltd [2010] HCA 36, which, as counsel said, has changed the landscape in this class of case. 31 As I have said, there will be additional costs to the plaintiff if the proceedings are transferred to Tasmania. There would also be disruption to the lives of those persons who may have to travel to Sydney if the proceedings remain here. That disruption will be considerable because of the distance to be travelled. 32 Although it is impossible to weigh these matters definitively, it seems to me probable that there would be a greater overall additional cost, in the form of expenses of witnesses required to be called, if the matter remains in this Court than would be incurred to the plaintiff if the matter were transferred. Moreover, there will be significantly greater disruption to people's lives if the proceedings remain in this Court and witnesses are required to come here to give evidence. 33 Mr Mickels in his affidavit, and counsel in submissions, points to the small size of the claim. Counsel submits that the additional costs to the plaintiff, who already suffers financial hardship, would be disproportionate to the size of the claim. He puts this forward as a reason for the proceedings not to be transferred. I think that consideration is outweighed by the probable additional costs involved in the proceedings remaining here. It is, I think, a matter that ought to have been considered when the decision was made to accept the plaintiff's instructions to retain a solicitor in Sydney and to file proceedings in Sydney rather than to proceed with local lawyers in Tasmania. 34 Mr Mickels deposes that the plaintiff chose to instruct Sydney lawyers because he was unaware of any firm in Tasmania whom he considered to be specialists in the field. There is no evidence of what inquiries the plaintiff made to come to that view. 35 In BHP Billiton Ltd v Schultz (2004) 221 CLR 400, Gleeson CJ, McHugh and Heydon JJ observed (at [15]) that the reason why a plaintiff commences proceedings in a particular court might or might not concern a matter related to the interests of justice. Their Honours gave as an example of a matter which apparently would prima facie not be considered related to the interests of justice, that the plaintiff's lawyers had their offices in the locality in which the proceedings were commenced. The inquiry is not what is in the interests of the party, but what is in the interests of justice. 36 Mr Mickels also referred in his third affidavit to the fact that there had been no response to the plaintiff's request of 19 May 2010 that his claim be reconsidered in the light of further evidence said to have been supplied in support of that claim. He suggested that the second defendant was adopting a generally obstructive approach evidenced by its failure to respond to that request. He submitted that that allegedly obstructive approach would be facilitated if the proceedings were transferred to the Supreme Court of Tasmania because, as I apprehend it, he says that the proceedings would take a more dilatory course in that court. 37 I do not consider that Mr Mickel's evidence of the progress of another matter in which he is engaged in the Supreme Court of Tasmania, or his evidence as to what he has been told by a lawyer from that State, provides any sufficient reason to think that if the matter is transferred to the Supreme Court of Tasmania it will not proceed with due expedition. 38 I accept the submission of counsel for the second defendant that the apparent failure of the second respondent to respond to the plaintiff's submission of 19 May 2010 is a discrete matter that is not relevant to the present application. It is not a basis for concluding, and I do not conclude, that the present application is not brought bona fide. 39 In my view, the more appropriate forum for these proceedings, having regard to the natural connecting factors of the parties, the events giving rise to the proceedings, and the position of witnesses, is the Supreme Court of Tasmania. 40 For these reasons, I make order 1 in the notice of motion filed on 27 August 2010.

[Parties addressed on costs.] 41 To a large extent my decision has been based upon the prognostication by the second defendant's solicitor as to how the matter will progress. That prognostication may or may not prove to be true. I have not found that the proceedings were improperly brought in this court. 42 I think the appropriate order is that the costs of the second defendant's notice of motion of 27 August 2010 be the second defendant's costs in the proceedings. 43 So that it is clear, I order that there be no order as to the first defendant's costs.

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