Clayton v Alcoa of Australia Retirement

[2011] VCC 673

IN THE COUNTY COURT OF VICTORIA Revised

Not Restricted

AT WARRNAMBOOL
DAMAGES LIST

MISCELLANEOUS DIVISION

Case No. CI-10-01831

MALCOLM JOHN CLAYTON	Plaintiff
v
ALCOA OF AUSTRALIA RETIREMENT	Defendant
PLAN PTY LTD (ACN 065 702 454)

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JUDGE:	HER HONOUR JUDGE KENNEDY
WHERE HELD:	Melbourne
DATE OF HEARING:	26 and 27 May 2011
DATE OF JUDGMENT:	8 June 2011
CASE MAY BE CITED AS:	Clayton v Alcoa of Australia Retirement
MEDIUM NEUTRAL CITATION:	[2011] VCC 673

REASONS FOR JUDGMENT

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Catchwords: SUPERANNUATION - Determination of trustee declining claim for Total and Permanent Disablement - whether trustee gave genuine consideration - whether trustee should have made further inquiry - Determination void

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M W Thompson SC with	Stringer Clark
Mr I R Fehring
For the Defendant	Mr D J Christie	Mallesons Stephen Jaques
HER HONOUR:

1          This is an application to review a decision of the trustee of the Alcoa of Australia Retirement Plan dated 18 February 2010 to reject the plaintiff’s claim for a Total and Permanent Disablement (TPD) benefit.

2          The issue is whether the trustee’s decision should be declared void and the question of whether the plaintiff is entitled to a TPD benefit should be remitted to the defendant for determination. In particular, the issue is whether such orders should be made on the ground that the trustee failed to undertake a properly informed consideration by making appropriate inquiries.

Terms of the definition of the Trust deed

3          Clause 3.3.2 of the trust deed provides that if a Class 2 Member leaves employment by reason of Total and Permanent Disablement (TPD)…the Trustee shall…pay to the Member a particular Benefit. It was common ground that the plaintiff was a Class 2 Member.

4          Clause 1.1.1 then provides that TPD means if:

“having, in the opinion of the Trustee after consideration of medical evidence, become incapacitated by reason of any physical or mental sickness injury or infirmity to such an extent as to render the Member unlikely ever to engage or work for reward in any occupation or work for which the Member is reasonably suited by education, training or experience.”

5          Clause 1.5.4 of the trust deed also provides that:

“The Trustee in the exercise of the powers, authorities and discretions vested in it by the Deed shall have an absolute and uncontrolled discretion and may exercise or enforce all or any of those powers, authorities and discretions at any time and from time to time or may refrain from exercising all or any of them from time to time or at all.”

Factual background

6          The case largely proceeded on the basis of documentary evidence, although the defendant called Mr Noonan, a member of the Board of trustees, who provided a short description of the processes adopted in the making of the decision. He was not cross examined and no credit issues arose.

7          By correspondence of 5 August 2009, the plaintiff’s solicitors, Stringer Clark, enclosed an application for TPD together with medical reports of Dr Johnson and Dr Hogg. The correspondence noted that an employer report had also been forwarded for completion.

8          It was agreed that the completed employer report together with the application and the reports of Dr Hogg and Dr Johnson were before the trustee.

9          The completed employer report dated 11 November 2009, recites that the plaintiff was aged 44 and completed year 11 at Hamilton Technical School and obtained an electronics certificate at RMIT. He worked as a communications technician from 1984 to 1988, and then from 1988 until his termination on 30 April 2009, he worked at Alcoa Portland Aluminium as an operator. The report further recites that he suffered:

“an Acute brain injury whilst riding his bicycle when he was involved in an accident on the 16/12/2007. Following this accident Mr Clayton remained in hospital for an extended period of time and did not return [to work] following his accident. He still suffers severe neurological problems.”

10        The member application stated that the plaintiff had sustained injuries in a bicycle accident. In response to a request for the details of all the doctors that had been consulted in respect of the injury, the plaintiff gave the names of Dr Hogg and Dr Johnson. He also completed a statutory declaration wherein he said that the information he provided in his application and to his medical practitioners was “fulsome and truthful.”

Plaintiff’s treating doctors’ reports

11        The report of Dr Johnson, general practitioner, dated 1 July 2009 states that the plaintiff suffered a “severe head injury” sustaining a complex fractured base of skull when he collided into the rear of a pacing vehicle in the bicycle accident.

12        He further notes that the plaintiff had been the subject of “many reports”, including psychometric testing which did demonstrate some cognitive impairment. Counsel for the defendant criticised the plaintiff for failing to adduce such reports. However, it is not clear that such other material as exists was relevant to the question of TPD. Moreover, it was agreed that the plaintiff had downloaded a document containing pro forma instructions which specifically stated that the trustee does not encourage the submission of medical reports previously obtained for workers compensation or personal accident as these types of reports do not address the definition of TPD.

13        In any event, paragraph 4 of Dr Johnson’s report reads:

“With regard to the definition of total impairment disability, that being unlikely ever to engage or work for reward in any occupation or work for which he is reasonably suited, I do believe this gentleman may satisfy that definition. There are at least four problems facing this gentleman in terms of returning to any form of work:

• That he suffers from chronic pain. This of course impairs his endurance and necessitates him changing posture frequently.

• He has suffered a required (sic) brain injury with cognitive impairment, which would reduce his capacity to learn new skills.

• The medication which he takes to try and deal with the chronic pain can also cause cognitive impairment and increase his risk of accidental injury whilst operating power tools or motor vehicles.

• That his sensory impairment in terms of hearing loss and decreased visual acuity would also hamper his performance and indeed increase his risk of accident. Therefore I believe it is reasonable to say that he fulfils the definition.” (emphasis added)

14        The report therefore concludes that it was reasonable to say that the plaintiff fulfils the TPD definition.

15        There were also three reports of Dr Hogg, consultant in rehabilitation medicine, before the trustee: one of 11 July 2008 and two of 15 July 2009.

16        The earlier report of 11 July 2008 details the obtaining of neuropsychological assessments; the first showing some typical changes characteristic of traumatic brain injuries (including difficulties in learning); the second showing that some of the plaintiff’s performances were worse, although it was also found that he had been inappropriately using his medication so that a plan was formulated to withdraw some of his medication.

17        The report concludes that: “At this stage his situation has not yet stabilised and it is too early to predict however, given the distance between home and his workplace, i.e. Hamilton to Portland, his cognitive inefficiencies, some of which are likely to be ongoing, and his hearing loss and tinnitus, it is highly unlikely that he would return to previous duties in the pot room at Alcoa. It is likely that he would be more suited to part-time return to duties preferably closer to home.”

18        There were two other reports of Dr Hogg of 15 July 2009, although it was accepted by Counsel that one was prepared for a claim against the Transport Accident Commission (TAC).

19        The report prepared for the TAC notes that the plaintiff’s mental state had deteriorated with the development of an exacerbation of severe depression for which he had been seen by a psychiatrist. He had also been offered clinical psychology and counselling which had been declined. This report concludes:

“He still fatigues quite readily and is only able to stick to any task for a couple of hours at the most and all aspects of his life have been impacted by his injuries. He is not fit to return to his previous occupation in the pot room at Alcoa and is never likely to be fit for that occupation or any other work. I believe that he requires more treatment for both his mood disturbance, pain and his tinnitus and I would not regard his situation as being fully stabilised at this stage.”

20        The most recent report of 15 July 2009 directed to the TPD claim gives an overview of the plaintiff’s injuries being a “closed head injury with a fractured

base of skull resulting in hearing loss, tinnitus, reduced balance, facial and head pain and secondary severe depression. He also has resultant hip and

low back pain for which he is taking narcotic analgesia.” The report continues: “His injuries make it unsafe for him to be in a dangerous and

stimulating environment and I believe he is unfit for all work.

His injuries as outlined have left him with balance disturbance, dynamic visual acuity disturbance, tinnitus, hearing loss, mood disturbance, cognitive deficits, reduced strength and endurance, chronic pain and he requires ongoing medications for his condition. He has reduced endurance and fatigue and I do not believe that he is fit for any occupation. I believe him to be totally and permanently disabled, that is, that he is unlikely ever to engage or work for reward in any occupational work for which he is suited by his educational training and experience.”

21        Counsel for the defendant criticised this report as being inconsistent with the other report of 15 July suggesting the plaintiff had not been fully stabilised. However, in my view it is perfectly possible for a doctor to say that a person is unlikely ever to engage or work for reward in any occupation or work for which the Member is reasonably suited by education, training or experience, notwithstanding that there may be some variance in his condition.

22        Overall then, the plaintiff’s reports strongly supported a finding that the plaintiff was TPD.

Obtaining of further reports

23        The plaintiff’s claim was considered by the Board at a meeting of 27 August 2009. The evidence of Mr Noonan was that the members of the Board would have received the relevant documents (being the employer report/employee report and medical reports) about a week before the meeting.

24        The minutes of this meeting report that a neurological assessment was requested. The evidence of Mr Noonan was that this would be done through the Secretary contacting Medico-Legal to nominate the particular doctor.

25        By correspondence of 20 October 2009, the Secretary of the Board requested a report from an Associate Professor Chambers. The evidence of Mr Noonan was that the doctor would receive the same paperwork as the trustee had received.

26        Associate Professor Chambers, neurologist, then produced a report dated 27 October 2009.

27        He describes the plaintiff “in essence” complaining of chronic pain although in his opinion, the plaintiff does not have a significant acquired brain injury.

28        He concludes that the plaintiff’s “main problem” appears to be depression. He also suggests there might well be treatment options that had not been explored, and recommended referral to a psychiatrist. He also suggested that there may be further treatment options for management of the chronic pain and suggested referral to a rheumatologist.

29        He concludes that “At this stage, I am not satisfied that the Plan’s definition of Total and Permanent Disablement has been satisfied.”

30        The plaintiff’s claim was again put before the Board on 19 November 2009. The evidence of Mr Noonan was that the members would again receive the same “pack” with the extra report of Associate Professor Chambers. The minutes reveal that the trustee requested a psychiatric report.

31        By correspondence of 12 January 2010, the Secretary of the Board thereupon requested such a report from a Dr White, who completed a report on 28 January 2010.

32        Dr White reports the plaintiff saying he was depressed constantly, had difficulties sleeping, felt worthless and hopeless, with difficulties concentrating and thoughts that he was better off dead but “I can’t think of a painless way (to kill myself).”

33        He further reported that the plaintiff had seen a psychiatrist in 2009 and was taking antidepressant medication.

34        In terms of work he reported the plaintiff saying that he missed being able to work and of future work that he said: ”Only if the situation improves...it’s been over two years… probably not.”

35        He concludes that the plaintiff is suffering from a “Major Depressive Disorder.” He is currently taking antidepressant medications and had reportedly refused psychological counselling. He is “demoralised, with hopelessness and helplessness.”

36        Dr White further cited cognitive deficits, although he suggested that it was not clear as to their progress since being last tested in 2008 (the report earlier cites the reports of Dr Hogg which referred to this testing), nor as to whether they are primarily caused by organic brain injury versus depression.

37        He concludes:

“With regard to whether his (psychiatric) condition would satisfy the Plan’s definition of Total and Permanent Disablement, I cannot say that he is totally and permanently disabled because of a psychiatric condition. I say this because:

(a)	It is not exactly clear what his conditions are. Specifically, he requires assessment by a neuropsychiatrist or neuropsychologist to help delineate the psychological and physical components of his symptoms (although in practical terms, there may be not much point in doing this until he has had robust psychiatric treatment which I will refer to later).
(b)	His condition is not stable.
(c)	He has not had robust psychiatric treatment. In particular, he requires expert cognitive behaviour therapy from a psychiatrist or psychologist, aimed at his depressive symptoms, pain management and in particular, his demoralisation/grief/adjustment issues.” (emphasis added)

38        The report is unsatisfactory in a number of ways. In particular:

• despite a finding of a “Major Depressive Disorder” the doctor “cannot say” the plaintiff is TPD unless further assessment and treatment is undertaken and given the plaintiff’s condition is not stable. The opinion is thus not expressed as a straightforward denial, but rather as an inability to express an opinion pending the taking of further steps;

• the report places much emphasis on the proposal of “robust psychiatric treatment” although it is unclear precisely what this term involves and whether or not it would have been appropriate for the plaintiff to undertake it.

39        The reference to “robust psychiatric treatment,” in particular, appears highly significant, given Dr White accepts that there may be no point in the neuropsychiatric assessments without such treatment. The defendant highlighted the reports of the plaintiff’s alleged refusal of psychological counselling which might suggest the plaintiff would also refuse “robust psychiatric treatment.” However, it is not clear on the material whether this was true and, if it was, what was the reason for any such refusal. The evidence suggested, for example, that the plaintiff was responsible for transporting his adult daughter, who has Downs syndrome, to her placement each day which might well make it difficult for him to receive “robust treatment.”

40        There is nothing to suggest that the plaintiff should have anticipated that Dr White would raise the matters set out above as preventing him from coming to the view that the plaintiff was TPD. Given the qualified and preliminary tenor of Dr White’s report, a properly informed trustee would be expected to at least put the suggestions of Dr White to the plaintiff’s lawyers for their consideration and comment upon consultation with the plaintiff’s doctors (which included a psychiatrist).

41        No further inquiry was in fact made by the trustee. Rather, the Board met again on 18 February 2010 to consider the plaintiff’s claim with the additional report of Dr White. The minutes of this meeting simply record “TPD Declined” in respect of the plaintiff.

42        By correspondence from the Secretary of the Board to the plaintiff/plaintiff’s solicitors of 18 February 2010 the Secretary confirmed that the Trustee had declined the claim.

43        Both parties accepted that the trustee had not given reasons in these circumstances.

44        By correspondence of 12 March 2010, the plaintiff’s lawyers confirmed the denial and noted that their client had been examined by Associate Professor Chambers and Dr White. The letter requested copies of the reports of Associate Professor Chambers and Dr White.

45        The reports of Associate Professor Chambers and Dr White were subsequently forwarded to the plaintiff’s lawyers under correspondence of 17 March 2010, being only after the date of the decision of 18 February 2010.

Basis for review

46        In his statement of claim of April 2010, the plaintiff claims that the trustee breached its duties in that it “did not act in good faith or upon real and genuine considerations, or on relevant considerations and/or in accordance with the purposes conferred upon them by the Trust Deed.” As stated the grounds generally reflect those set out in Karger v Paul.[1]

[1] [1984] VR 161

47        However, in submissions to the court the plaintiff placed primary emphasis on what he said was a failure to give a properly informed consideration by making appropriate inquiries prior to the actual formation of the opinion. In so doing, reliance was particularly placed on the recent decision of the High Court in Finch v Telstra Super Pty Ltd.[2]

[2] [2010] HCA 36

48        I will therefore consider this complaint first.

Failure to make inquiries

49        The complaint of failure to inquire was generally reflected in the plaintiff’s further particulars dated 9 May 2011 which Senior Counsel for the plaintiff suggested were directed at the “breach of process” claim. These included: a failure to obtain medical evidence of the type suggested by Associate Professor Chambers and Dr White; a failure to obtain opinions of the plaintiff’s medical practitioners as to the opinions expressed by Associate Professor Chambers and Dr White; and a failure to inform the plaintiff of the suggestion that he have robust psychiatric treatment and provide him with an opportunity to reply (see in particular (m), (o) and (p)).

50        In considering these complaints it is important to consider the recent decision of the High Court in Finch which was the subject of address by both parties.

Decision in Finch

51        In Finch v Telstra Super Pty Ltd[3], the trial judge, Byrne J, applied the principles cited in Karger v Paul [4] (as explained in the Court of Appeal decision in Telstra Super Pty Ltd v Flegeltaub[5]). He noted that the determination of a trustee may be impugned for want of good faith, for failure to give real and genuine consideration and for failure to act for a proper purpose. He held that the trustee failed to decide the question in good faith and to give genuine consideration, in that it had failed to pursue sufficient inquiries (in three ways) so that its decision was void.

[3] [2008] VSC 481

[4] [1984] VR 161

[5] (2000) 2 VR 276

52        Those three ways were matters related to Mr Finch’s experience in the workplace with Telstra and thereafter being: firstly matters relating to his last months with Telstra including what led him to decide not to continue working with Telstra; secondly, matters concerning his subsequent employment with Foxtel and Qantas; and thirdly, matters related to a “real job” conversation between the plaintiff and the Chief Executive Officer wherein the plaintiff had allegedly volunteered that his subsequent employment with Qantas was in fact a “real job.” Byrne J suggested that the trustee should have at least invited comment from Mr Finch as to this alleged conversation.

53        The High Court (French CJ, Gummow, Heydon, Crennan and Bell JJ) held that Byrne J’s reasoning in favour of the applicant was sound.[6] Accordingly, it set aside a decision of the Court of Appeal which had allowed an appeal from the orders of Byrne J.

[6] [2010] HCA 36 at [65]

54        In considering the decision of Byrne J, the High Court stated that the formation of an opinion by a trustee (in similar circumstances to that pertaining here) was “not a matter of discretionary power to think one thing or the other; it was an ingredient in the performance of a trust duty.”[7] The joint judgment further suggests that it was wrong to approach the principles in the Karger v Paul case as if they were applicable “without any qualification.”[8]

[7] [2010] HCA 36 at [30]

[8] [2010] HCA 36 at [37]

55        However, “save in one respect” it was not necessary further to evaluate the merits of the competing considerations about how far Karger v Paul principles were applicable and whether other principles should be adopted. This was because it was sufficient for the resolution of the Finch case to uphold the reasoning of Byrne J.[9] The joint judgment then continues[10]:

“Byrne J’s reasoning is, however, reinforced by one qualification to Karger v Paul principles in the present context. There is no doubt that under Karger v Paul principles, particularly as they have been applied to superannuation funds, the decision of a trustee may be reviewable for want of ‘properly informed consideration.’ If the consideration is not properly informed, it is not genuine. The duty of trustees properly to inform themselves is more intense in superannuation trusts in the form of the Deed than in trusts of the Karger v Paul type. It is extremely important to the beneficiaries of superannuation trusts that where they are entitled to benefits, those benefits be paid. Here, for example, the applicant was claiming a Total and Permanent Invalidity benefit to support himself for the rest of his life. His claim depended on the formation of an opinion by the Trustee about the likelihood that he would ever engage in ‘gainful Work’: that was not a mere discretionary decision. In the Deed there was a power to take into account ‘information, evidence and advice the Trustee may consider relevant’, and that power was coupled with a duty to do so. It would be bizarre if knowingly to exclude relevant information from consideration were not a breach of duty. And failure to seek relevant information in order to resolve conflicting bodies of material, as here, is also a breach of duty. The Scheme is a strict trust. A beneficiary is entitled as of right to a benefit provided the beneficiary satisfies any necessary condition of the benefit. Whether or not it will be decided hereafter that, consistently with s.14 of the Complaints Act, the duty of a trustee in forming an opinion of the present type is a duty to form a fair and reasonable opinion, or even a duty to form a correct opinion, there is because of the importance of the opinion and its place in the Scheme a high duty on the Trustee to make inquiries for ‘information, evidence and advice’ which the Trustee may consider relevant. The existence of that duty in a more intense form than exists under Karger v Paul principles in their standard application is further support for the correctness of Byrne J’s decision.”

[9] [2010] HCA 36 at [65]

[10] [2010] HCA 36 at [66]

Application of Finch

56        It is therefore necessary to consider the question of properly informed consideration, consistent with the principles in Finch, above.

57        In closing, Senior Counsel for the plaintiff suggested that the “minimum” was to have at least referred the further reports back to the plaintiff for his consideration.

58        However, in relation to Associate Professor Chambers, he submitted that the further inquiry should in fact extend to:

• Making an inquiry of Associate Professor Chambers as to the extent of Mr Clayton’s physical disability; and

• Inviting the plaintiff to be examined by a rheumatologist for assessment.

59        Although there are unsatisfactory elements in the report of Associate Professor Chambers, he does opine that the plaintiff does not have a significant acquired brain injury and suggests that his “main problem” appears to be depression. The question of further treatment would also generally be a matter for the plaintiff. In these circumstances I do not consider that further inquiry of the doctor was necessary as alleged.

60        However, Associate Professor Chambers appears to be suggesting that the plaintiff might improve with further treatment, which is not a matter which the plaintiff could reasonably foresee would be raised. In these circumstances, it would be appropriate, at least, to refer the Associate Professor’s report to the plaintiff’s lawyers for comment and consultation with the plaintiff’s doctors in accordance with the “minimum” suggested by Counsel.

61        In terms of Dr White, a stronger attack was made. Thus Counsel suggested that, given the unsatisfactory nature of this report, the following inquiries were necessary:

• Making inquiries of Dr White as to what was entailed by the “robust” treatment;

• Making inquiries of the plaintiff and his GP as to whether it was realistically open for the plaintiff to undertake such treatment, when properly understood;

• Making inquiries as to the likelihood of such treatment being successful;

• To arrange to obtain the neurological assessments.

62        As indicated already, rather than a straightforward rejection, Dr White states that he “cannot” give the opinion in the absence of further steps including the “robust psychiatric treatment.” However, this important new piece of information was not communicated to the plaintiff’s lawyers or his treaters. In such circumstances, a trustee giving genuine consideration to a TPD claim should have clarified what this meant with the doctor. The report (with the clarification) should also have then been forwarded to the plaintiff’s lawyers for their comment and consideration upon consultation with the plaintiff’s doctors. In particular, they should have been given an opportunity to consider whether the plaintiff wished to avail himself of the further treatment and assessment proposed and, if not, then why not. The plaintiff might also have wished to seek a deferral of the decision-making in the light of this report.

63        The defendant suggested that the plaintiff was advised of an opportunity to “appeal” in the correspondence of 18 February. No legal foundation was suggested for the existence of any such appeal right. It was also not suggested that the proceeding was unnecessary, nor that the defendant would agree to reconsider the application absent a court order. In these circumstances, the possibility of an “appeal” is irrelevant to the question before this court, namely, whether the decision of 18 February - which remained effective - should be declared void.

64        The defendant also submitted that the decision in Finch “does not inform the consideration for the Court in this case” and submitted, in particular:[11]

[11]           Defendant’s written outline of submissions at para 31

• that there were no reasons given in this case;

• that the court is being asked in this case to infer a breach of duty because the decision is one no reasonable trustee could make. However, Byrne J found in favour of the trustee on this point;

• the terms of definition in the trust deed were different;

• the suggested inquiries are directed to future events not past facts as in Finch. The defendant also highlighted that the trustee is making a determination later as to whether, as at an earlier point in time, the plaintiff was TPD given, pursuant to clause 3.3.2, the plaintiff must leave employment “by reason of” TPD.

65        It is true that the High Court stated that “the problems that arise in cases where trustees do not give reasons for a conclusion…are not present here.”[12] The problems are not specified but may well have been directed to the difficulties in obtaining reasons where they are not otherwise given[13] and/or to the fact that no review of the soundness of the reasons would be available in such circumstances.[14] The defendant submitted that the giving of reasons meant that the court could readily discern that Mr Finch’s work experience was a relevant matter. This is no doubt true. However, there was a relatively small amount of material in this case before the trustee, which material strongly supported the claim with the exception of the reports of Associate Professor Chambers and Dr White. In these circumstances, it can be readily inferred that the reports of Associate Professor Chambers and Dr White were viewed as relevant in justifying the decision to decline.

[12] [2010] HCA 36 at [39]

[13]           And see discussion of authorities in the previous ruling in this case: Clayton v Alcoa of Australia Retirement Plan Pty Ltd [2011] VCC 454

[14]           See Karger v Paul [1984] VR 161 at 165

66        The question of unreasonableness will be separately considered and does not assist the defendant in terms of the plaintiff’s complaint that there was a failure to inquire.

67        The terms of the definition are different, but this also does not assist the defendant in my view. Thus, in Finch, notwithstanding that there was a power to take into account “information, evidence and advice the Trustee may consider relevant” the Court considered that this power was coupled with a duty to do so and that a beneficiary was entitled as of right to a benefit provided the beneficiary satisfied the necessary condition.

68        In this case, the beneficiary was also entitled as of right to a TPD if the trustee was of the requisite opinion since, pursuant to clause 3.3.2, the trustee “shall pay” the TPD benefit if the member leaves employment by reason of TPD. I also do not regard the general terms of clause 1.5.4 as overturning this specific entitlement and note that in Finch, the Court rejected a submission that a similar clause immunised the trustee from judicial control.[15] In any event, the trustee accepted that it had a duty to distribute to those members who fall within the definition of TPD as well as a parallel duty not to distribute to those members who do not fall within the definition.[16]

[15] [2010] HCA 36 at [36] at footnote 24

[16]           Def subs at para 25 citing Finch [2010] HCA 36 at [30]

69        In considering whether to reach the requisite opinion, the trustee is also specifically directed to have undertaken “consideration of medical evidence.” The trustee is therefore obliged to genuinely consider the medical evidence, which must, of necessity, incorporate consideration of obvious lines of inquiry raised by such medical evidence.

70        The fact that the inquiries are into future rather than past matters is also not consequential. The trustee itself appeared to accept that some “future inquiries” were appropriate given it sought the opinions of Associate Professor Chambers and Dr White. It clearly believed such material to be relevant to whether the plaintiff was TPD at the relevant time (being 30 April 2009). However, having chosen to obtain this material it was wrong for it to rely on that material without further inquiry given its form.

71        Overall, then the decision in Finch does assist the plaintiff. The remarks in the passage extracted at paragraph 55, above (even if dicta as suggested by the defendant) also suggest that there is a high duty on a trustee to make inquiries.

72        I accept that there is authority which suggests that the onus is on the claimant to establish his right to payment[17] and that there is generally no obligation on a trustee to “strain” to obtain evidence relevant to the formation of the necessary opinion.[18] I further accept that the Deed commits the ultimate question of TPD to the trustee not this Court.

[17]           see Heitman v Guardian Assurance Company Limited [1992] 7 ANZ Ins Cases ¶61-107 per Franklyn J at 77,487- an insurance case. The principle however was said by Franklyn J in Tonkin v Western Mining Corporation Ltd [1998] 10 ANZ Ins Cases ¶61-397 at 74,271 to also apply to a claim against a trustee.

[18]           see Tonkin v Western Mining Corporation Ltd [1998] 10 ANZ Ins Cases ¶61-397 per Franklyn J (with whom Malcolm CJ and Pidgeon J concurred) at 74,270; Sayseng v Kellogg Superannuation P/L and Anor (2003) NSWSC 945 per Byson J at [57]

73        Nevertheless, as the decision in Finch makes clear, a decision may be reviewable for want of properly informed consideration. In Testra Super Pty Ltd v Flegeltaub Callaway JA also says[19]:

“…one cannot ordinarily decide a question of fact in good faith and give it real and genuine consideration without conducting some investigation and in some cases that will entail making an inquiry of a person who is willing to provide information and is in the best position to do so. It is not a matter of natural justice but bona fide inquiry and genuine decision making.”

[19] (2000) 2 VR 276 at 285

74        The plaintiff had retained lawyers and medical treaters, including a psychiatrist. He was ideally placed to address the matters raised in the reports of Associate Professor Chambers and Dr White had he been aware of them. Dr White could also have readily explained what he meant by “robust psychiatric treatment.”

75        In my view the trustee failed to engage in genuine consideration by failing to investigate further the concept of “robust psychiatric treatment” with Dr White. The reports of Associate Professor Chambers and Dr White constituted significant fresh material and suggested that further treatment and assessment should be obtained. Given it was not suggested that the plaintiff should have foreseen the matters contained in these reports, in my view both Dr White’s report (with the clarification), and Dr Chamber’s report should have been forwarded to the plaintiff’s lawyers for their comment and consideration. In particular, the plaintiff should have been given an opportunity to consider whether he wished to avail himself of the further treatments and assessments proposed (and, if not, then why not). The plaintiff may also have wished to ask for a deferral of the decision-making process pending his condition becoming more stable.

76        In the absence of such inquires, in my view the decision is reviewable for want of properly informed consideration. There is no mala fides but there is a failure to observe due process.

77        It follows that the decision of the trustee of 18 February 2010 should be declared void.

78        Both parties accepted that it was appropriate to remit the application to the trustee in these circumstances.

Other grounds

79        It is unnecessary to consider the further grounds raised by the plaintiff so I will record some brief observations only.

80        The primary way in which the plaintiff put his case in the alternative was that the decision was so unreasonable that no trustee could make it.[20]

[20]           see ground 11(e) of the Plaintiff’s Statement of Claim

81        As was said by Callaway JA in Testra Super Pty Ltd v Flegeltaub, [21] a court may infer a breach of duty if the decision is one which no reasonable trustee could make on the material before it.

[21] (2000) 2 VR 276 at 284

82        In Finch, Byrne J described this test as a “severe” test.[22] There is also authority which suggests that it is not the function of the court to decide whether a particular decision might or might not have been “more reasonable” in its view than the decision made by the trustee.[23]

[22] [2008] VSC 481 at [44]

[23]           See Maciejewski v Telstra Super Pty Ltd (No. 2) [1999] NSWSC per Windeyer J at[13] to [14]

83        The trustee was faced with the reports of two doctors which strongly favoured the plaintiff’s case. Against this, were the report of Associate Professor Chambers and Dr White. Although they were somewhat unsatisfactory, they might be considered to weigh against a finding of TPD.

84        In these circumstances, I am unable to determine that the decision was not open to the trustee, nor that it would meet the severe test of being so unreasonable, no reasonable trustee could make it.

85        However, given the High Court’s statements in Finch, this may not finally resolve the question as to whether the relevant opinion can be impugned. Rather, as indicated in the passage cited above, a trustee’s duty might extend to forming a fair and reasonable opinion or even to forming a correct opinion.

86        The decision before this court may be incorrect and/or unfair and unreasonable within these principles given the preliminary and qualified form of the reports of Associate Professor Chambers and Dr White. However, it is unnecessary to consider this question further given I am satisfied that it is appropriate to remit the application on the basis of the failures I have already identified.

Conclusion

87        I am satisfied that the decision of 18 February 2010 is void and of no effect.

88        The appropriate order is therefore that the determination of the defendant made on 18 February 2010 to reject the plaintiff’s claim for a total permanent disablement benefit under the Alcoa of Australia Retirement Plan is void and of no effect.

89        The question whether the plaintiff is entitled to a total and permanent disablement benefit pursuant to the Alcoa of Australia Retirement Plan should be remitted to the defendant for determination in accordance with the Trust deed and these reasons.

90        I will hear from the parties as to the question of costs.