Apostolovski v Total Risk Management - [2010] NSWSC 1451

CITATION: Apostolovski v Total Risk Management [2010] NSWSC 1451
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 17 November 2010

JUDGMENT DATE :
17 December 2010

JUDGMENT OF: Gzell J

DECISION: Plaintiff entitled to equitable compensation or loss or damage, to interest to judgment and costs.

CATCHWORDS: SUPERANNUATION - Review of decisions, and related matters - claim for total and permanent disablement benefit made on 9 March 2006 accepted on 12 November 2010 just days before trial - from when should interest run - whether following Finch v Telstra Super Pty Ltd [2010] HCA 36l - (2010) 84 ALJR 726 entitled to equitable compensation for breach of fiduciary duty for failure to exercise due diligence - whether entitled to recover loss or damage under the Superannuation Industry (Supervision) Act 1993 (Cth), s 55(3) for breach of implied covenant under s 52(2)(b) to exercise due diligence - whether should be read down - whether exoneration provision in s 310(1) applies to a corporate trustee - whether would apply to gross lack of diligence

LEGISLATION CITED: Superannuation Industry (Supervision) Act 1993 (Cth)

CASES CITED: Rapa v Patience, NSWSC, unreported, 4 April 1985
Karger v Paul [1984] VR 161
Telstra Super Pty Ltd v Flegeltaub [2000] VSCA 180; (2000) 2 VR 276
Vidovic v Email Superannuation Pty Ltd, NSWSC, unreported, 3 March 1995
Jeffrey Guy Baker v Local Government Superannuation Scheme Pty Ltd [2007] NSWSC 1173
John Gilberg v Stevedoring Employees Retirement Fund Pty Ltd [2008] NSWSC 1318
Kowalski v MMAL Staff Superannuation Fund Pty Ltd (No 3) [2009] FCA 53
Tuftevski v Total Risk Management Pty Ltd [2009] NSWSC 315
Finch v Telstra Super Pty Ltd [2010] HCA 36; (2010) 84 ALJR 726
Government Employees Superannuation Board v Martin (1997) 19 WAR 224
Austin v Austin (1906) 3 CLR 516
Fouche v Superannuation Fund Board (1952) 88 CLR 609

PARTIES: Milan Apostolovski (Plaintiff)
Total Risk Management Pty Limited (Defendant)

FILE NUMBER(S): SC 2010/61605

COUNSEL: R Cavanagh SC with M Gollan (Plaintiff)
C Mulvey (Defendant)

SOLICITORS: Firths - The Compensation Lawyers (Plaintiff)
Kennedys Lawyers (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

GZELL J

FRIDAY 17 DECEMBER 2010

2010/61605 MILAN APOSTOLOVSKI v TOTAL RISK MANAGEMENT PTY LTD

JUDGMENT

1 Total Risk Management Pty Ltd, the defendant, is the trustee of the BlueScope Steel Superannuation Fund. It provides superannuation benefits to certian employees of BlueScope Steel Limited and its associated companies.

2 In the course of his employment the plaintiff, Milan Apostolovski, suffered an injury to his back on 25 December 1994. He suffered a further injury to his back during the course of his employment on 16 February 2000. His claim upon the Fund for total and permanent disablement benefits was not accepted by Total Risk until 12 November 2010, just days before the trial.

3 The remaining issues are interest and damages.

Interest

4 Total Risk submits that interest should run from 10 July…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2010] NSWSC 1451
Decision Date: 17 December 2010

CaseChat Overview and Summary

In the Federal Court of Australia, Apostolovski v Total Risk Management was a dispute involving a claim for total and permanent disablement benefit. The respondent, Total Risk Management, was the trustee of a superannuation fund, and the applicant, Apostolovski, was a member of that fund. The applicant filed a claim for a total and permanent disablement benefit on 9 March 2006, which was accepted on 12 November 2010, just days before the trial. The primary legal issue was determining from when interest should run on the accepted claim. Additionally, the court examined whether Apostolovski was entitled to equitable compensation for the breach of a fiduciary duty, specifically the failure to exercise due diligence, under the Superannuation Industry (Supervision) Act 1993 (Cth). The court also considered whether Apostolovski could recover loss or damage for a breach of the implied covenant under s 52(2)(b) to exercise due diligence. Furthermore, the court deliberated on whether the provision in s 310(1) should be read down and whether it applied to a corporate trustee, especially in cases of gross lack of diligence.

The court ruled that interest on the accepted claim should run from the date the claim was made, in line with the principles established in Finch v Telstra Super Pty Ltd. Regarding the equitable compensation, the court found that Apostolovski was entitled to compensation for the breach of fiduciary duty due to the lack of due diligence by the respondent. The court held that the provision in s 310(1) did not apply to a corporate trustee in cases of gross lack of diligence, and therefore, Apostolovski could seek compensation. The court rejected the argument that the provision should be read down, emphasizing that it did not apply to the circumstances of gross negligence exhibited by the respondent.

In conclusion, the court ordered that interest on the accepted claim should run from the date of the original claim, and that Apostolovski was entitled to equitable compensation for the breach of fiduciary duty due to the lack of due diligence by the respondent. The court did not apply the provision in s 310(1) to the corporate trustee in this instance and rejected the argument that the provision should be read down. The court's decision provided clarity on the application of interest and compensation in cases of fiduciary breaches within the superannuation industry.

Orders