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Baker v Local Government Superannuation Scheme Pty Ltd

Baker v Local Government Superannuation Scheme Pty Ltd

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CITATION: Jeffrey Guy Baker v Local Government Superannuation Scheme Pty Ltd [2007] NSWSC 1173

HEARING DATE(S): 11 and 12 October 2007

JUDGMENT DATE :
12 October 2007

JURISDICTION: Equity Division

JUDGMENT OF: McDougall J at 1

DECISION: See paragraph [68] of the judgment.

CATCHWORDS: SUPERANNUATION – Total and permanent invalidity benefit – Claim for benefit under superannuation scheme – Review of trustee’s decision – Whether decision was one that reasonable person could reach on information available to trustee - Whether trustee’s decision void - Whether court should exercise discretion itself or send back to trustee.

LEGISLATION CITED: Civil Procedure Act 2005
Supreme Court Act 1970

CASES CITED: Chammas v Harwood Nominees Pty Ltd (1993) 7 ANZ Insurance Cases 61-175
Charlton v Members of the Teachers Tribunal [1981] V.R. 831
Halloran v Harwood Nominees Pty Ltd [2007] NSWSC 913
Karger v Paul [1984] VR 161
Maciejewski v Telstra Super Pty Ltd [1999] NSWSC 341
Maciejewski v Telstra Super Pty Ltd (1998) 44 NSWLR 601
McPhail v Doulton (1971) AC 424
Nile v Club Plus Superannuation Pty Ltd [2005] NSWSC 55
Rapa v Patience (4 April 1985, unreported, BC 8500888)
Sayseng v Kellogg Superannuation Pty Limited [2007] NSWSC 583
Sayseng v Kellogg Superannuation Pty Ltd [2003] NSWSC 945
Telstra Super Pty Ltd v Flegeltaub (2000) 45 ATR 470
Tonkin v Western Mining Corporation Ltd [1998] 10 ANZ

PARTIES: Jeffrey Guy Baker (Plaintiff)
Local Government Superannuation Scheme Pty Ltd (Defendant)

FILE NUMBER(S): SC 6994/04

COUNSEL: G Barry Hall QC (Plaintiff)
R D Marshall (Defendant)

SOLICITORS: P.K. Simpson & Co Solicitors (Plaintiff)
DLA Phillips Fox Lawyers (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

McDOUGALL J

12 October 2007 (ex tempore – revised 15 October 2007)

6994/04 JEFFREY GUY BAKER v LOCAL GOVERNMENT SUPERANNUATION SCHEME PTY LTD

JUDGMENT

1 HIS HONOUR: The plaintiff (Mr Baker) was employed by Baulkham Hills Council (the Council) from 15 May 1999 until 27 September 2002. He became, and as at 27 September 2002 was, a member of the superannuation scheme administered by the defendant (the Trustee). Mr Baker claims that as at 27 September 2002, he was totally and permanently incapable of working, and was thus entitled to what is called a "total and permanent invalidity", or TPI, benefit under the deed governing the superannuation scheme. The Trustee decided that Mr Baker was not so entitled. The question for decision is whether this Court should review that decision of the Trustee.

Basis on which the Court may intervene

2 It was common ground that the Trustee's powers under the relevant provisions of the deed - clause 5.4 of schedule 2 to the consolidated trust deed as at 30 June 2004 - were of a discretionary character. In a different context, but nonetheless speaking of a trustee's exercise of discretion, McGarvie J in Karger v Paul [1984] VR 161 at 163-164 spelled out the extremely limited basis on which a court might review a trustee's exercise of discretion. His Honour said that, with one exception, the…

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: [2007] NSWSC 1173
Decision Date: 12 October 2007

CaseChat Overview and Summary

The case of Baker v Local Government Superannuation Scheme Pty Ltd involved the plaintiff, Baker, seeking a total and permanent invalidity benefit under the superannuation scheme operated by the defendant, Local Government Superannuation Scheme Pty Ltd. The primary dispute centred on the denial of Baker's claim for the benefit by the trustee of the scheme and Baker's subsequent application for judicial review of that decision. The matter was heard in the Federal Court of Australia.

The central legal issues in the case were whether the trustee's decision to deny the benefit was one that a reasonable person could reach based on the information available to the trustee, and whether the trustee's decision was void. Additionally, the court needed to determine whether it should exercise its discretion to grant the benefit itself or remit the matter back to the trustee for reconsideration. The court was required to balance the principles of judicial review, the scope of its discretion, and the appropriate standard of review for decisions made by trustees under superannuation schemes.

In delivering the judgment, the court found that the trustee's decision was indeed one that a reasonable person could reach based on the available information. The court held that the decision was not void and therefore not subject to being set aside. The court also held that, while it had the discretion to exercise its own judgment on the matter, it was more appropriate to remit the decision back to the trustee for reconsideration. This was to allow the trustee to re-evaluate the decision with a fresh perspective and any additional information that might be available. The court considered this approach to be consistent with the principles of judicial review and the proper role of the court in such matters.

The final orders of the court were that the trustee's decision to deny the total and permanent invalidity benefit was not to be set aside, and the matter was to be remitted back to the trustee for reconsideration in light of the court's judgment. The court's decision underscored the importance of the proper application of judicial review principles in cases involving superannuation scheme decisions and the appropriate exercise of judicial discretion.

Orders