Bailey & BT Funds Management Limited & Anor (Ruling)
[2016] VCC 352
•7 April 2016
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-14-06360
| JODIE CATHERINE BAILEY | Plaintiff |
| v | |
| BT FUNDS MANAGEMENT LIMITED (ACN 002 916 458) | First Defendant |
| and | |
| WESTPAC BANKING CORPORATION (ACN 007 457 141) | Second Defendant |
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JUDGE: | HIS HONOUR JUDGE O'NEILL | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 5 and 6 April 2016 | |
DATE OF RULING: | 7 April 2016 | |
CASE MAY BE CITED AS: | Bailey & BT Funds Management Limited & Anor (Ruling) | |
MEDIUM NEUTRAL CITATION: | [2016] VCC 352 | |
RULING
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Subject: LIMITATION OF ACTIONS
Catchwords: Claim for Total and Permanent Disability Benefit under second defendant’s Staff Superannuation Plan as prescribed by Superannuation Trust Deed – claim to Trustee of the Plan as a result of psychological condition – date cause of action arose – whether cause of action statute barred pursuant to Limitation Act 1969 (NSW)
Legislation Cited: Limitation Act 1969 (NSW); Limitation of Actions Act 1958 (Vic)
Cases Cited:Tuftevski v Total Risks Management Pty Ltd [2009] NSWSC 315; Beck v Colonial Staff Super Pty Ltd [2015] NSWSC 723; Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; Finch v Telstra Super Pty Ltd [2010] HCA 36
Ruling: The date of accrual of the cause of action is the date upon which the first defendant determined to reject the plaintiff’s claim. The Writ does not offend any limitation period prescribed by the Act.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr G J Maloney | Maurice Blackburn |
| For the Defendants | Mr C Hanson | Thomson Geer |
HIS HONOUR:
1 The plaintiff, Ms Bailey, commenced employment with the second defendant, Westpac Banking Corporation (“Westpac”), in 1987 or 1988. She became a member of the Westpac Staff Superannuation Plan (“the Plan”), which had been established by a Superannuation Trust Deed (“the original Deed”) in September 1981.
2 In April 2001, Ms Bailey’s employment with Westpac was terminated because she had stolen approximately $18,000 from Westpac. At the time, and subsequently, it is alleged she was suffering from a significant psychological condition which gave rise to symptoms, including psychotic symptoms and Chronic Depression. In 2011, she made a claim to the first defendant, BT Funds Management Limited (“BT Funds”), as Trustee of the Plan, alleging an entitlement to a Total and Permanent Disability (“TPD”) Benefit. The claim was subsequently declined.
3 The trial commenced before me on 5 April 2016. I deemed it appropriate to first determine the question of whether the claim is barred by reason of various provisions of the Limitation Act 1969 (NSW) (“the Act”).[1]
[1]The defendants’ original Defence pleaded the claim was barred by reason of the Limitation of Actions Act 1958 (Vic). However, the parties agreed the relevant legislation was the Limitation Act 1969 (NSW) by reason of Clause 46 of the original Deed which provided that it be construed and interpreted according to the law of New South Wales.
4 It is unnecessary for me to set out in detail the allegations made in the Statement of Claim, save to say the prayer for relief seeks declarations that the decision of the defendants to refuse the claim was void and of no effect and, further, that Ms Bailey be entitled to the relevant benefit under the Deed.
5 By their Amended Defence, the defendants plead:
“… pursuant to Limitation Act 1969 (NSW) s.47(1)(c) and (e) alternatively s.16 alternatively s23, the Plaintiff is not able to bring this proceeding.”[2]
[2]Court Book (“CB”) 7
Relevant chronology
6 A chronology of the dates relevant to this Ruling is as follows:
·September 1981 – date of the establishment of the Plan
·1987-1988 – Ms Bailey commences employment with Westpac
·8 December 1998 – execution of amended Superannuation Deed (“the amended Deed”)
·10 April 2001 – Ms Bailey’s employment terminated
·20 October 2009 – Ms Bailey approaches solicitors for advice as to entitlement to benefits under the Plan
·2 November 2010 – BT Funds advises it would “consider her claim for TPD Benefit”[3]
·13 September 2011 – Ms Bailey, through her solicitors, lodges a claim for TPD Benefit
·26 September 2011 to 8 September 2012 – request made by BT Funds for further information
·18 September 2013 – BT Funds notified plaintiff’s solicitors of refusal of the claim
·17 December 2014 – Proceeding commenced by issue of Writ.
[3]CB 1859
Relevant legislation
7 Section 16 of the Act provides:
“Deed
An action on a cause of action founded on a deed is not maintainable if brought after the expiration of a limitation period of twelve years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims.”
8 Section 23 of the Act provides:
“Equitable relief
Sections 14, 16, 17, 18, 20 and 21 do not apply, except so far as they may be applied by analogy, to a cause of action for specific performance of a contract or for an injunction or for other equitable relief.”
9 Section 47(1) of the Act provides:
“Fraud and conversion; trust property
(1) An action on a cause of action:
…
(c) to recover trust property, or property into which trust property can be traced, against a trustee or against any other person, or
…
is not maintainable by a trustee of the trust or by a beneficiary under the trust … if brought after the expiration of the only or later to expire of such of the following limitation periods as are applicable:
(e) a limitation period of twelve years running from the date on which the plaintiff … first discovers or may with reasonable diligence discover the facts giving rise to the cause of action and that the cause of action has accrued, and
(f) the limitation period for the cause of action fixed by or under any provision of this Act other than this section.
… .”
10 For the reasons which follow, I do not find it necessary to determine which of these sections and, therefore, which period of limitation, has application. However, in my view, s47 does not have application as the claim by Ms Bailey is not one to recover trust property but, rather, an application for a declaration that she is entitled to a specific benefit under the Deed. There is no particular property which is the subject of a trust. I accept the submission of Mr Maloney that that proposition is enforced by the phrase “or property into which trust property can be traced”, referred to in the section.
11 In my view, the appropriate provision is s16. There is little doubt the original and amended deeds are “deeds” within the definition of s11. Ms Bailey’s claim is for enforcement of a benefit provided by the Deed. In such circumstances, she has twelve years from the date on which the cause of action first accrues to bring her claim.
Date of accrual of the cause of action
12 Mr Hanson, for the defendants, contended the date of accrual of the cause of action was the date Ms Bailey’s employment was terminated, that is, 10 April 2001. Given proceedings were not issued until 2014, the proceeding was issued outside the limitation of period, regardless of whether s47, or s16, is enlivened.
13 Mr Maloney, for Ms Bailey, submits the cause of action did not accrue until the claim was declined by BT Funds in September 2013. If that is the case, then the Writ was issued within time.
14 Central to Mr Hanson’s contention is the definition of “Total and Permanent Disablement Benefit” set forth in the “Accumulation Rules” appended to the Deed and forming part thereof. Rule A10.2 defines “Total and Permanent Disablement Benefit” as:
“If, after obtaining medical evidence, the Trustee is of the opinion and the Bank agrees, that a member, who is an employee of an employer, is totally and permanently disabled[4] and has been totally and permanently disabled for at least 6 consecutive months … that member shall, on ceasing to be in employment, be entitled to a total and permanent disablement benefit … .”
[4]See definition of “Total and Permanent Disablement” referred to in Rule A1.1
15 In particular, Mr Hanson noted the use of the present tense in the definition and, the phrase “on ceasing to be in employment”. He submitted that it was at the date an employer ceases to be in employment that the entitlement under the Plan crystallised. The “six consecutive months” period referred to, in respect of which the employee had been totally and permanently disabled, was a reference to six consecutive months prior to the date of termination.
16 The issue received consideration in the Supreme Court of New South Wales.
17 In Tuftevski v Total Risks Management Pty Ltd,[5] Smart AJ said:
“I am of the opinion that the plaintiff’s cause of action does not accrue until a decision is made (and possibly notice given of it to the applicant) or the Trustee declines or fails to make a decision within a reasonable period after its investigations and procuring specialist advice are completed. The latter is an unusual scenario which is unlikely to arise in practice and does not arise in this case.”[6]
[5][2009] NSWSC 315
[6]Tuftevski v Total Risks Management Pty Ltd (supra) at paragraph [152]
18 That statement was accepted and followed in Beck v Colonial Staff Super Pty Ltd.[7]
[7][2015] NSWSC 723 at paragraph [203]
19 Mr Hanson submitted Tuftevski ought not be followed as:
(a) the relevant passage was obiter dictum;
(b)the passage was not the subject of a considered and reasoned analysis of the issue;
(c) in any event, it was not an authority binding on this Court.
20 In my view, the passage referred to is not obiter. That is made clear by the previous paragraph.[8] While it is not binding, it is, nonetheless, persuasive.
[8]Paragraph [151]
21 Mr Hanson further submitted that there was good sense in the proposition that the cause of action arose on the date of determination of employment. Were it otherwise, a worker could wait twenty, thirty or more years, before making an application under the Plan. There was a good reason why limitation periods were established, including to enable relevant evidence to be assembled and to enable insurers, and those in a similar positions, to be able to determine and regulate their affairs.[9]
[9]See Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541
22 In my view, the cause of action did not arise until rejection of the claim made to BT Funds on behalf of Ms Bailey. True it is she may, subject to complying with the various provisions of the Deed, have an entitlement to a TPD Benefit as at the date of termination of her employment; however, an entitlement to a benefit does not necessarily found a cause of action. The Deed makes provision for a member under the Plan to make a claim within a fixed period of time.[10] In order to determine whether a member of the Plan has a disablement benefit, such as to be precluded from employment, it is necessary for medical opinion to be obtained in order to determine that question. Once relevant material, including medical reports, have been obtained, BT Funds, as Trustee, must make a determination and obtain the agreement of Westpac[11] in order to make a determination as to the extent of the disablement. The entitlement to a benefit does not occur until that process has taken place. If, for instance, the Trustee were to accept the claim after the review process has been completed, there is no cause of action.
[10]Rule A10.2
[11]Rule A10.2
23 As to Mr Hanson’s contention that a member of the Plan could wait a considerable period before bringing an application, that proposition is remote. In order to be determined as totally and permanently disabled, a member of the Plan must prove that he or she was not able to perform any suitable employment for the employer and further, that inability persists for a period of at least six consecutive months. While a member may not be aware of his or her rights (as I am told is the situation in Ms Bailey’s case) and, therefore, there may be some delay in making the application, however, it is difficult to understand how a person so disabled as not to be able to work for six months or more could wait such a period in order to make a claim.[12]
[12]See Finch v Telstra Super Pty Ltd [2010] HCA 36 at paragraph [22]
Conclusion
24 In my view, for the reasons set forth above, the date of accrual of the cause of action is the date upon which BT Funds determined to reject Ms Bailey’s claim, that is, 30 September 2013. As the Writ was issued in December 2014, any limitation period prescribed by the Act is not offended.
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