Finch v Telstra Super Pty Ltd
[2010] HCATrans 224
[2010] HCATrans 224
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Melbourne No M5 of 2010
B e t w e e n -
ALAN MICHAEL FINCH
Applicant
and
TELSTRA SUPER PTY LTD (ACN 007 422 522)
Respondent
FRENCH CJ
GUMMOW J
HEYDON J
CRENNAN J
BELL J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON THURSDAY, 2 SEPTEMBER 2010, AT 10.00 AM
Copyright in the High Court of Australia
MR J.P. BRETT: May it please the Court, I appear on behalf of the applicant with my learned friend, MS M.C. WALL. (instructed by Arnold Thomas & Becker)
MR A.G. UREN, QC: If the Court pleases, I appear for the respondent with my learned friend, MR R.J. HARRIS. (instructed by Freehills)
FRENCH CJ: Yes, Mr Brett.
MR BRETT: If I can deal first with the construction question, your Honours; that is how it has been dealt with through the written submissions as the first issue. There are alternative constructions proposed. The trustee has put in argument that the reference in clause 2.3.3 that requires ‑ ‑ ‑
GUMMOW J: You had better take us to the actual text, I think; we do not have it all in our heads.
MR BRETT: I am sorry, your Honour.
FRENCH CJ: Page 94 of the application book.
CRENNAN J: Pages 90 onwards contain a lot of relevant sections.
MR BRETT: Yes, your Honour, I apologise. The two significant clauses, your Honours, are clause 2.3.3 which relevantly requires that:
Subject to part 2.4 and division 4, if a Member ceases to be an Employee during a period of Division 2 Membership because of Total and Permanent Invalidity, there is payable to the Member from the Fund a lump sum benefit –
and then the balance of the clause is not relevant to this purpose. At application book 92, “Total and Permanent Invalidity” is defined:
“Total and Permanent Invalidity” means, in relation to a Member, disablement as a result of which –
(a)unless otherwise agreed between the Trustee and the Principal Employer from time to time either generally or in any particular case, the Member has been continuously absent from all active Work for a period of at least six months and has been required by the Employer to participate in a Rehabilitation Programme –
If I could just interpolate, there is no issue in this case that the applicant was required to and did participate in a rehabilitation program –
(b)in the opinion of the Trustee after consideration of any information, evidence and advice provided to the Trustee by the Employer and any other information, evidence and advice the Trustee may consider relevant, the Member has ceased to be an Employee and is unlikely ever to engage in any gainful Work for which the Member is for the time being reasonably qualified by education, training or experience –
There are then two provisos. The first effectively is that if there is deliberate intentional disability for the purpose of obtaining the benefits, that is not qualified as a total and permanent invalidity and the second proviso is that you have to participate in the rehabilitation program to the satisfaction of the trustee, and there is no issue in this case that neither of those provisos has relevance.
CRENNAN J: What about the definition of “member” and what does it mean to be a member during a period of Division 2 membership?
MR BRETT: The respondent, in its submissions, has pointed to a series of definitions about that which we understand to be for the purpose of establishing that the only relevant time of cessation of employment is while you are a Division 2 member, which means, in effect, while you are an employee of Telstra and, accordingly, a contributing member to the fund under Division 2. The various divisions, as I understand it, are different types of members. Division 3, for example, is if you have an accumulation benefit. Division 2 is a defined benefit division.
GUMMOW J: What is the significance of that distinction which is made against you?
MR BRETT: The significance of the distinction that my learned friend makes in his submissions, we do not, with respect, truly understand. We do not argue that in any way there is any other relevant cessation of employment than the cessation of employment with Telstra. We accept that the relevant ‑ ‑ ‑
CRENNAN J: A member is an employee, which I think is an important point put against you.
MR BRETT: Yes, and that is an employee of Telstra. We accept that that operates together with the reference to ceasing to be an employee. We accept that that refers to the time of cessation with Telstra but, as we understand what the Trustee is arguing, it is that at that time one has to be TPI as defined.
GUMMOW J: It is a temporal question, the operation of these definitions in a temporal sense, is it?
MR BRETT: Yes. As I understand the trustee’s argument, it is that because it says you have to cease to be an employee during a period of Division 2 membership. Well, there is no doubt that up until the time Mr Finch ceased to be an employee of Telstra, that is 23 January 1998, I do not understand there to be any issue that he was a Division 2 member up to and until that time. He ceased to be an employee on that date and as I ‑ ‑ ‑
CRENNAN J: So he ceases to be a member on that date, does he?
MR BRETT: Ceases to be a member of Division 2 on that date, yes.
FRENCH CJ: How does the causal connection work? I think there is some emphasis put on that, the words “because” in clause 2.3.3. The total and permanent invalidity is defined by reference to an absence from active work.
MR BRETT: It is defined, with respect, by a series of matters and those are that the member has to be absent from all active work, that the trustee has to form an opinion that he has ceased to be an employee ‑ ‑ ‑
GUMMOW J: Where do we see this?
MR BRETT: That is in the definition part (b), in the opinion of the trustee after consideration of relevant information the member has ceased to be an employee. So the trustee has to form that opinion and the trustee has to form the opinion that he is unlikely ever to engage in any suitable gain for work.
FRENCH CJ: You say that is an opinion not to be formed necessarily at the point of cessation?
MR BRETT: It certainly will not be formed at the time of cessation ‑ ‑ ‑
FRENCH CJ: By reference to the time of cessation.
MR BRETT: The opinion as to the future incapacity for work, we would submit that that is to be formed as at the time that the trustee considers the question. Whether it is essential for this aspect of the argument, I am not so sure about.
FRENCH CJ: Anyway, I took you away from the reference to the casual connection “because of” in clause 2.3.3.
MR BRETT: Well, that is, in effect, what the trustee is relying upon and they are saying, as I understand it, that since you have to cease to be an employee because of total and permanent invalidity and you cannot have total and permanent invalidity until you satisfy the definition of it, then it is necessary that you fulfil that definition as at the time that you cease employment. Our submission in reply to that is that that is absolutely impossible because one of the requirements is that the trustee has to form the opinion that you have ceased to be an employee. That opinion clearly cannot be formed until after the member has ceased to be an employee and we therefore submit that you cannot fulfil the requirements of the definition of total and permanent invalidity until a later time.
FRENCH CJ: Is that causal connection satisfied by, because it is a reference back to a definition in terms of continuous absence plus a requirement to participate in a rehabilitation program, so is the causal connection satisfied by retirement because of that, dismissal because of that, being made redundant – not redundant, I suppose, but how does it work? What sort of things determine cessation of membership in a way that causally connects them to TPI?
MR BRETT: There are a number of cases about that and we refer to them in our submissions.
FRENCH CJ: I am just asking about the construction of this provision.
MR BRETT: Yes. Effectively, in my respectful submission, the case has amounted to that a member does not have to retire directly on the grounds of ill health in order to meet that causal connection. If there is a genuine causal connection, that is sufficient to satisfy that type of requirement. For example, if a person suffers a physical injury to his back, we will say, and is put on light duties and then those light duties are no longer available and the person is therefore retrenched because there is no available work for that person, then that is considered to meet the causal connection required by this type of term.
FRENCH CJ: I suppose going back to the definition of total and permanent invalidity, a causal connection is – it is because of disablement as a result of which, in other words, disablement which has certain characteristics?
MR BRETT: Yes. The trustee’s submission is that you have to satisfy the definition of total and permanent invalidity as at the time which you cease employment. Our submission in reply is, you cannot do so, so therefore that cannot be correct. So what the trustee then seeks to do is to say, well, it would be sufficient to satisfy part (a) of the definition of TPI, but, in our submission, the trustee at no time points to why at this stage part (a) should be hived off and looked at in isolation other than because they started with the point of a premise which we submit is a false premise. I notice, your Honours, in the trustee’s submissions, the respondent’s submissions, at paragraph 29(f) there is a telling phrase. Paragraph 29 reads:
That the Trust Deed requires an applicant to have been continuously absent from work for six months prior to ceasing employment with Telstra is supported by the following contextual considerations –
and a number are set out and part (f) says:
use of the expression “as a result of” in the definition of “Total and Permanent Invalidity” evinces the intention of the settlor that “disablement” does not reach the level of total and permanent invalidity unless and until the requirements of (inter alia) paragraph (a) are satisfied ‑
Now, there is no good reason why those words – the only thing “inter alia” can refer to is parts (a) and (b) and part (b) clearly cannot be satisfied.
GUMMOW J: Because?
MR BRETT: Because it requires the formation of an opinion that you have ceased to be an employee. As a matter of practice, it also ‑ ‑ ‑
GUMMOW J: You are saying in effect that (b) in that way throws light on (a).
MR BRETT: Yes. We are saying that what it is making very clear, we are saying that that subparagraph (f) inadvertently highlights the fact that their argument is based on the concept that you have to be totally and permanently invalid within the meaning of the definition at the time you ceased to be an employee, which we point out clearly cannot occur. That is the weakness in their argument there. We say that the proper construction can be very simply located by inserting the definition of “total and permanent invalidity” into clause 2.3.3 word for word. We have put that in our submissions, the result of that, at paragraph 25, and that is, that you come to the reading, that:
if a Member ceases to be an Employee during a period of Division II Membership because of disablement –
We submit Finch ceased to be an employee ultimately because of his disability, and I will come back to that and discuss in the actual claim itself, if I may –
as a result of which –
(a)unless otherwise agreed . . . the Member has been continuously absent from all active Work for a period of at least 6 months –
There is no doubt that he was absent for a period of at least six months –
and has been required by the Employer to participate in a Rehabilitation Program –
which he was and did, and –
(b)in the opinion of the Trustee . . . the Member ceased to be an Employee –
The trustee has no grounds to not form that opinion –
and is unlikely ever to engage in any gainful work -
We submit that that is a construction which requires first of all disability which causes you to stop work. Secondly, you have to be absent for six months. That is a provision which is commonly found in insurance policies and in fact, in one of the cases that is set out - yes, I think it is Edwards v Hunter Valley, it is in our list of authorities – the actual insurance clause in itself described that six‑month period as “the waiting period”, and that is in fact what this type of six‑months absence commonly is. It establishes that a person is genuinely seriously disabled. We say that if you have disability which causes you to cease work, you are then absent from employment for six ‑ ‑ ‑
GUMMOW J: That is the decision of Justice McClelland in ‑ ‑ ‑
MR BRETT: Yes, and you will see in the headnote, it has the relevant clause, your Honour.
GUMMOW J: (1997) 7 ANZ Insurance Cases.
MR BRETT: I simply refer to it in this context for the purpose of pointing out that you will see in the headnote that they actually refer to the six‑month period “(the waiting period)”, which from the judgment itself, is a correct rendering of the insurance clause. My point is that the purpose of that six‑months period is actually reasonably simple, and that is that it establishes that you have a genuine serious incapacity. Then the third thing that is required is that the trustee forms the necessary two opinions.
FRENCH CJ: Yes.
MR BRETT: In our submission, at the time that you cease to be an employee you have to be certainly disabled, but you do not have to complete the definition as it is impossible to do. This accords in, with respect, with commonsense and experience, and that is that often people have an injury which at the time – say, a back injury or something like that for a labourer – which can cause them to stop work, but at the time they stop work it is not clear how serious and how long‑term that injury is going to be, and often the course of that injury and the success or failure of treatment can determine the long‑term consequences of that injury.
Now, as your Honours would be aware, our submissions asked this Court to confirm that the concept of adopting a practical and purposive construction of trust deeds be accepted in Australia, and there is a query of that in the trustee’s submissions. We would submit that there is authority that suggests it should be adopted in Australia, and it is also a matter of reasonable sense that it should be adopted in Australia.
GUMMOW J: Where does the respondent ‑ ‑ ‑
MR BRETT: There is a little hint that it is queried ‑ ‑ ‑
FRENCH CJ: Well, he says this is effectively a replacement for a whole of life wage and needs to be construed strictly, does he not?
MR BRETT: That is a different point. I am just at this moment speaking of the respondent’s submission that queries whether the question of practical and purposive construction is the law in Australia, and that is at paragraph 31 where it said:
the construction contended for by the Respondent does not fail to give the Trust Deed a construction that is “practical and purposive”, if indeed Australian law has adopted such a principle of construction for superannuation deeds.
We have responded to that in our submissions in reply. There is authority in several courts adopting the passages from the Mettoy Pension Case which spell out that principle.
BELL J: Just coming back to paragraph (a) of the definition, it is on your interpretation open to read the requirement that:
the Member has been continuously absent from all active Work for a period of at least six months –
disjunctively from the consideration of the requirement of the employer, in this case, Telstra, that the employee –
participate in a Rehabilitation Programme.
I mean, clearly, the latter part of the definition is a requirement during the course of employment, is that so?
MR BRETT: Yes.
BELL J: So you read them disjunctively?
MR BRETT: I certainly read them disjunctively. I would prefer not to commit myself to an answer as to whether it has to be a requirement in the course of employment. The decision of the primary judge in this case, Justice Byrne, made the point that the definition rather oddly says that the employer has to require it, but it does not then require that the member perform the rehab program, although this proviso, sub‑proviso (b), says that you have to participate “in that Programme to the satisfaction of the Trustee”. It is an odd lack of correspondence between those two things. In the present case, there is no doubt that whilst he was an employee he participated in a rehabilitation program, which was temporarily successful.
BELL J: Yes, I am looking at the construction.
MR BRETT: Yes, I understand.
GUMMOW J: You have to construe the definition of TPI, to use that, in the particular provision which it is put to work, do we not, and that is 2.3.3. Is that right?
MR BRETT: Yes.
GUMMOW J: So what the Chief Justice is putting to you, we have got this expression “because of” in 2.3.3.
MR BRETT: That would, I accept, point to the concept that you have to be TPI as at the time of ceasing to be an employee, but that pointer is negated, in our submission, entirely by the fact that it is simply impossible to be TPI as defined at the time you cease to be an employee, whereas, if, as I have suggested, one simply interpolates the definition, you have a person ceasing to be an employee because of disablement which then has certain consequences.
GUMMOW J: Yes. I suppose if one is in doubt as to which construction to prefer, is there any inclination to favour the member rather than employer?
MR BRETT: Well, yes, we would submit that this is a case for the application of the doctrine of contra proferentem, but before I come to that can I perhaps put ‑ ‑ ‑
FRENCH CJ: That comes back to the point I was just putting to you, I think, about the respondent’s approach to the construction, having regard to the nature of the benefit being conferred.
MR BRETT: Yes. We put the argument that the clause should be construed contra proferentem in our submissions and the respondent’s reply to that was twofold; firstly, that it was a new point and, secondly, that there was no ambiguity, but other than that the respondent did not challenge the proposition itself, nor that it should be applied in the circumstances against the trustee, rather, they challenge whether there was ambiguity, and if I could come back to that in a moment. In my respectful submission, if there ambiguity, if our construction is not acceptable, then there is clearly ambiguity. Can I just address your Honours regarding practical and purposive.
CRENNAN J: Can I just take you up for a minute on (b) of the definition of total and permanent invalidity and your proposition, as I understand it, that you cannot satisfy the requirements whilst employed with Telstra. That is the way you are putting it, is it not?
MR BRETT: Yes.
CRENNAN J: But is not (b) really dealing with the trustee’s consideration of events at some subsequent point in time in any event, so that one could read “the Member has ceased to be an Employee” as just being part of the factual circumstances which the trustee has under consideration?
MR BRETT: Yes.
CRENNAN J: I cannot fully appreciate the force in your submission that it is incapable of being satisfied.
MR BRETT: No. Our submission is that it is incapable of being satisfied in a sense of being completed as at the time of cessation of employment and a person is not TPI until all elements of the definition are satisfied, and that is the trustee’s contention.
GUMMOW J: The trouble is that the opinion of the trustee has to be formed under (b) before you can say there is a total and permanent invalidity.
MR BRETT: Yes.
GUMMOW J: Therefore, the opinion of the trustee has to be formed before the member ceases to be an employee.
MR BRETT: That is the trustee’s contention, yes. That follows from the trustee’s contention and since one of those opinions is that he has ceased to be an employee, it simply cannot be. That is what we perceive as the absolute conundrum in the trustee’s position.
GUMMOW J: The factum of (b) is the opinion of the trustee, not the cessation of employment.
MR BRETT: No, it is their formation of the opinion.
GUMMOW J: But the formation of the opinion is conditioned upon, or is an opinion as to something that has happened.
MR BRETT: Yes.
FRENCH CJ: And a causal connection to disablement?
MR BRETT: Actually, in (b) it is very odd. It is a very odd provision that it says that the trustee has to form ‑ ‑ ‑
FRENCH CJ: Disablement as a result of which “in the opinion of the Trustee”, et cetera.
MR BRETT: I see. I can see how that – yes, I follow. I never quite understood that provision about has ceased to be, but yes, I follow that. That sits with the arguments that we are making. Yes, with respect, that is what we perceive to be the entire inherent flaw in the trustee’s argument which otherwise would have some force, the reference to total and permanent invalidity in clause 2.3.3. We say it fails because it simply cannot work that way.
So if we have alternative constructions then if I can put to you the practical and purposive considerations, we have tried to highlight in our submissions that there are at least three outcomes which the trustees contend at construction would lead to, which are totally unsatisfactory. The first is if we assume that the purpose of the deed is to provide benefits to significantly disabled employees who are members of the scheme, and I cannot see that that would be argued against, if a person is on a fixed‑term contract and becomes seriously disabled, let us say two months prior to the cessation of employment, on the trustee’s construction the member is never going to be entitled to benefits because he has not satisfied the six‑months absence prior to ceasing to be an employee.
If a person becomes, let us say, catastrophically disabled and as is commonplace, wants to access their accrued sick leave, holiday pay, long‑service leave, or whatever, the person will frequently seek to leave their employment and access those benefits but if they do so within the six‑month period, on the trustee’s construction they will no longer be entitled to TPI benefits. They will be automatically ineligible.
BELL J: Well, that is not so, is it, because the definition contemplates that there may be an agreement otherwise by the trustee and the employer?
MR BRETT: And that is the trustee’s response to this submission. Our response to that is that it provides that there may be an agreement; it does not provide that there has to be an agreement. In other words, the employer at that stage, as well as the trustee, has effectively a complete and utter discretion as to whether or not to reach such an agreement. There is no reason why an employer should necessarily reach such an agreement. If they chose not to, for whatever reason, that exercise of their discretion to not so agree would be extraordinarily difficult to challenge.
Now, the employer certainly has pursuant to the trust deed an absolute and uncontrolled discretion in determining whether to so agree and if I could just point your Honours to clause 1.24.2 which is at application book page 81. Your Honours will see that that provides that:
in the exercise, non-exercise, or partial exercise of each Power exercisable by it under this Deed, the Principal Employer or an Associated Employer has an absolute and uncontrolled discretion and is not subject to any fiduciary or like duty, obligation or standard.
There may be some minimum duties imposed by the common ‑ ‑ ‑
GUMMOW J: I am sorry, where are you reading from?
MR BRETT: I was reading from clause 1.24.2 at page 81. So, in our submission, the trustee says there is always the option that there can be an agreement between the employer and the trustee to reduce the period ‑ ‑ ‑
GUMMOW J: The presence of a provision like 1.24.2 may be a very good pointer towards the application of a contra proferentem rule here.
MR BRETT: Yes, your Honour. So the fact that there is such a discretion, I invite your Honours to just mentally contemplate how difficult it would be for someone like Mr Finch if the employer and the trustee chose not to waive the period, and I mention they, in our case, have never chosen to waive that period, despite the fact that at one stage there was an absence of six days short of the six‑month period.
BELL J: But the trustee did not in fact rely on the six‑month period, so I suppose that becomes a somewhat moot consideration.
MR BRETT: In fact, it is actually clear that the trustee adopted the construction that we put on the deed. The trustee first adopted the present construction it puts in the interlocutory steps of this proceeding. In the respondent’s submissions there is an attempt to imply that the trustee did not consider the discretion because it was not satisfied on other grounds, but in fact it is quite clear that the trustee did not believe that my client was ineligible in the strict sense of application. That appears from the report which was prepared by Mr Deague‑Hall, clearly on which the trustee relies, where he discusses eligibility and does not point to the fact that my client was not eligible. We refer to that in our submissions in application book page 281 at lines 15 to 30.
You will see that there is a section entitled “Satisfaction of the Trust Deed Requirements” and if the trustee was then adopting the construction it now contends for, it would certainly refer in there to the fact that we were ineligible. So we say that plainly the trustee was happy at that time to adopt this construction which suggests that there are no seriously adverse practical consequences. Insofar as the trustee contends that the clause should be applied strictly before we get generous benefits, we would submit that fundamentally the trustee requires that you have a significant incapacity and there is no difference between the trustee’s contended construction and our contended construction in relation to the severity of the incapacity that is required.
BELL J: How do you deal with the respondent’s submission at paragraph 26 as to the suggested absurd results of your construction, namely, that the benefit would potentially be available, notwithstanding employment with a subsequent employer presumably some years after?
MR BRETT: That is predicated on the proposition:
If it was possible for a person to remain a member of Division 2 after ceasing employment with a Principal Employer or an Associated Employer –
which we say it is not so possible. We accept that my client ceased to be a member of Division 2 at the time he ceased employment with Telstra, so that disastrous consequences they point to do not apply on their construction or on our construction.
GUMMOW J: Sorry, I am not sure I understand that.
BELL J: No.
MR BRETT: The paragraph that your Honour refers to commences:
If it was possible for a person to remain a member of Division 2 after ceasing employment with a Principal Employer ‑ ‑ ‑
The consequences that they are pointing to are consequences from that proposition, which we accept cannot be the case. We accept you cannot remain a member of Division 2 after ceasing to be employed by Telstra. The necessary nexus to entitle a person to benefits also arises from the fact that the disablement must be the cause of ceasing to be employed. It is not as though it is providing lengthy insurance in a vacuum and as I have already submitted it was the basis that the trustee was clearly operating on at the time and cannot obviously, and one would assume, obviously did not have extensive unacceptable practical consequences.
Finally, if I can come back to the point of contra proferentem, we would submit that that is a concept which has a role to play here. The trust deed was clearly made by the trustee and the employer. A narrow construction of this clause would operate in their favour. As for the suggestion that there is no ambiguity, in our respectful submission, that is a point to the fact that Justice Byrne accepted our construction. The Court of Appeal acted on reasoning which the trustee now specifically argues against ‑ ‑ ‑
GUMMOW J: Can you explain that?
MR BRETT: The Court of Appeal’s decision on this point was entirely based on the proposition that the reference to six‑months absence from all active work was in fact confined to employment at Telstra. That is apparent from the leading judgment of his Honour Justice of Appeal Hansen.
CRENNAN J: I think 483, paragraph 58.
MR BRETT: Thank you, your Honour. I am most grateful. Yes, paragraph 58:
the learned judge erred in this conclusion. The error sprang from his earlier conclusion that the period of at least six months absence from ‘active Work’, referred to in cl 2.1.2(a), was not limited to work at Telstra.
The following paragraphs expand on that. His Honour is clearly basing his reasoning on the concept that all active work means employment with the employer. In our submissions, we have, I hope, dealt with that and pointed to other expressions in the trust deed which refer specifically to employment with the employer, and we have relied upon Scott v Commercial Hotel and a number of other cases ‑ ‑ ‑
BELL J: Is not the point that Justice Hansen is making in paragraph 58 that the absence from work for the six‑months period is prior to ceasing to be an employee of Telstra. The point that the respondent is making is that it would embrace not only not working for Telstra but that during that period not having a second job with some other employer. I think that is the point that the respondent is making.
MR BRETT: I understood that the respondent was making a broader point and with respect, a point which is correct, and certainly it is the point we would seek to make. First of all, if I can deal with Justice Hansen’s reasoning. As I understand what he is saying, he is taking the words “all active Work” to mean employment with Telstra and he then reasons that because it has to be employment with Telstra it has to be absence during a period of employment with Telstra and therefore must predate the cessation of employment. I think that is his Honour’s reasoning.
BELL J: It is linked to the matter I took up with you earlier which is, on one view of paragraph (a) the question of requiring a member to participate in a rehabilitation program might be thought to be a pointer to reading the provision as referring to absence from work during a period prior to ceasing employment with Telstra.
MR BRETT: Yes, your Honour. I accept that it might be such a pointer but, in my respectful submission, the other matters I have pointed to mean that it cannot sit that way. That was his Honour’s reasoning.
BELL J: Yes.
GUMMOW J: Is there a definition of capital “w” – “Work”?
MR BRETT: Yes, there is a definition of capital “w” – “Work”, and it is exceptionally broad. It is found in the trust deed at application book 51, at the bottom of the page:
“Work” means engagement in any business, trade, profession, vocational, calling, occupation or employment.
It is exceptionally broad. We have also sought to make the point in our primary submissions ‑ ‑ ‑
GUMMOW J: But it is directed to nature of activity rather than the existence of a particular employer.
MR BRETT: Yes, but there are several points to be made. The first point is that the trust deed does – and I have set out the references in our primary submissions – refer on several occasions to “employment with the employer”, which is clearly employment with Telstra. The use of that expression to mean employment with Telstra is a strong indication that the use of a different expression has a different meaning. On its face the concept of “all active Work” has a very broad meaning. Our learned friends certainly say that it has to be, at least in one aspect, broader than simple employment with Telstra.
So, in our submission, to confine that reference to employment with Telstra was an error by the Court of Appeal and to reason from that premise to then holding the construction that the trustee contends for – I was making the point about whether the clause is ambiguous. I am trying to say that the primary trial judge adopted our construction, the Court of Appeal adopted reasoning which they are arguing against and which we submit cannot stand. Therefore we would submit our construction is not ambiguous, but if you are in doubt about it then in our submission the clause is clearly ambiguous and should be construed contra proferentem.
GUMMOW J: What is the operation here of the Commonwealth regulatory system for superannuation?
MR BRETT: I do not rely on any particular regulatory system in terms of the construction point that we are discussing. We certainly rely on it in relation to the question of Karger v Paul and whether it is appropriately applied.
GUMMOW J: I see.
MR BRETT: My learned junior makes the point, and it is there to be made, of course, that clearly the whole purpose of superannuation is to provide benefits for employees in appropriate circumstances and in our submissions I think we referred to Re Baden’s Deed Trusts, and that is another reason why that clause should not be construed strictly against a member claiming benefits.
GUMMOW J: Was Telstra required by its statute – all of this used to be done by the Commonwealth. What is now Telstra was the Department of the Postmaster‑General. As we have seen in some cases, it has been transmuted by statute into this corporation here, so the public responsibilities of the postmaster‑general have been privatised into Telstra. Does the legislation that brought about the privatisation require Telstra to maintain particular superannuation arrangements, do we know?
MR BRETT: I do not know, your Honour. Telstra would certainly be bound by the normal requirements of superannuation which by 1997 were well and truly in place. I am sorry, your Honour, I am not familiar with the privatising – and this was 1997, 1998. I am not sure if Telstra had been privatised ‑ ‑ ‑
GUMMOW J: Well, it took place over some years.
CRENNAN J: The definition of “Principal Employer” at the bottom of application book 49 gives you some indication of the changes that took place.
MR BRETT: Yes, thank you, your Honour. If I could just go back to your Honour Justice Bell’s point about the rehabilitation program, and I am not quite sure where it goes, but my learned junior points me to the fact that I should bring it to your Honours’ attention. Insofar as there is a reference to a rehabilitation program, it is a rehabilitation program which Telstra must – well, it is defined at application book 91. It means:
a rehabilitation or retraining programme which an Employer maintains or in which an Employer participates –
So I accept that it goes with the pointer that your Honour was referring to, that the requirement for rehabilitation must involve Telstra actively.
BELL J: I was taking up with you really what I understood to be the thrust of Justice Hansen’s reasoning, so that, notwithstanding that the respondent accepts that a broader definition of “Work” is contemplated by the definition, the force of his Honour’s reasoning with respect to the temporal connection would seem to remain.
GUMMOW J: I think recitals A, B, C and D supplement what Justice Crennan pointed you to - on page 37.
MR BRETT: Yes.
GUMMOW J: It was established in 1990 and there was public ownership.
MR BRETT: Yes.
GUMMOW J: I mean government ownership.
MR BRETT: Yes. I am still thinking about your Honour’s point. We accept that Telstra has a role to play, certainly insofar as the rehabilitation program is concerned. That is consistent again with the fact that the disablement has to have certain consequences, including the cessation of employment ‑ ‑ ‑
GUMMOW J: Yes.
MR BRETT: ‑ ‑ ‑ whilst the person remains an employee with Telstra. But our submission remains that it is impossible for all of the consequences to be fulfilled while he remains an employee with Telstra and that there is no good reason to hive off one, or as they would have, two of the qualifications and say “We want those to be fulfilled before he ceases employment” but the others, there is just no reason to hive them off if you take their fundamental argument that you have to fulfil the definition. It cannot stand and so, in our submission, you therefore put it to one side and start afresh rather than trying to resuscitate it by contorting the two relevant sections of the deed so as to try and make them fit together.
Your Honours, I did not have anything further to put to you in relation to the construction point. So if I could turn to the next section of our submissions which deals with the correct approach to be adopted by courts to review of a trustee’s decision in a case such as this.
GUMMOW J: There is a definition of “Supervision Act” I see on page 51, and then in recital D at the top of page 38 there is a reference to “Requirements of Supervision Act” as to amendments.
FRENCH CJ: This is the amending deed, is it not?
MR BRETT: Yes. I see that, your Honour, although it is probably an unnecessary recital but, yes, the Supervision Act certainly applies.
GUMMOW J: When this deed was set up in 1990 there was not a Supervision Act. That came in in 1993.
MR BRETT: Presumably at some stage this deed was amended, as it clearly was from time to time. So if I could turn your Honours to the question of the application – well, whether Karger v Paul should be the benchmark for review of this type of decision.
There are two parts to the matter I wish to address; first is whether Karger v Paul should be the benchmark for reviewing this type of decision and, secondly, importantly for this particular case, whether we should have succeeded in the Court below, whether Mr Finch should have been entitled to benefits having established the necessary incapacity and the other requirements. It is quite clear that there is a vast series of decisions of single judges which apply the doctrine of Karger v Paul, or the principles described in Karger v Paul, to superannuation trust and deeds and particularly to applications of this type for disability benefits. There is very little appellate authority on the issue.
FRENCH CJ: Justice Finn raised a question about its applicability, I think, did he not, in Kowalski last year?
MR BRETT: Yes, your Honour. In fact, there have been right from the start – probably the case that is regarded as the seminal case is the unreported decision of Rapa v Patience, and even in that Justice McLelland referred to the fact that he was not sure that it was not inapt to apply those provisions but, nevertheless, proceeded on that basis and it has been adopted from time to time. In Telstra v Flegeltaub ‑ ‑ ‑
GUMMOW J: We had better have these citations on the script, Mr Brett.
MR BRETT: Yes, your Honour.
FRENCH CJ: When you mention a case orally, give us the citation. It appears in the transcript then.
MR BRETT: I am sorry, your Honour. Rapa v Patience was a decision of Justice McLelland New South Wales Supreme Court of the 4 April 1985 reference BC8500888. I am sorry, your Honour.
GUMMOW J: This is before the superannuation statute of 1993?
MR BRETT: Yes, it was.
GUMMOW J: Is it not the idea that the commissioner of taxation has a close interest in the Supervision Act? I am looking at the objects in section 3 of the Supervision Act?
HEYDON J: Huge amounts of wealth are taken outside the taxation system by superannuation.
MR BRETT: Yes. It is a matter of obvious enormous public importance that the superannuation industry be properly regulated, controlled and conducted. It is of importance to the revenue ‑ ‑ ‑
HEYDON J: I just raise an anterior point. Are we concerned with the so‑called discretion that arises from paragraph (b) of the definition of total and permanent invalidity? What is the precise discretionary question that Karger v Paul is or is not being properly applied to?
MR BRETT: Your Honours ask the question which probably highlights one of the aspects of the matters I was proposing to put. The definition section does not refer, of course, in terms to the word “discretion”, it refers to the formation of an opinion and there is doubt as to whether that is properly described as a discretion.
HEYDON J: Grave doubt.
MR BRETT: Justice of Appeal Ormiston particularly made that point in Telstra v Flegeltaub.
HEYDON J: Yes, I mean, the expression “in the opinion of the trustee the member has ceased to be an employee” is a bit like “in the opinion of the court someone has ceased to be an employee”. The word “discretion”, of course, can have many applications and mean many different things, but does it not really sound like a decision on a matter of fact? It is either right or it is wrong. It is not something that reasonable minds can differ about.
GUMMOW J: In administrative law, you would say it was a jurisdictional fact which is the opinion and the court investigates it, investigates the formation of the opinion.
MR BRETT: Yes.
GUMMOW J: The Commissioner of Taxation forms a number of opinions and they are certainly justiciable.
MR BRETT: I refer in our submissions to the case of Avon Downs regarding ‑ ‑ ‑
GUMMOW J: Exactly.
MR BRETT: ‑ ‑ ‑ specifically the question as to when a decision of the Commissioner of Taxation can be reviewed. What we are arguing for in the present case is for an approach whereby, not that there be a straight merits review whereby the rightness or wrongness of the opinion be directly litigated, but rather an examination of whether it is a reasonable opinion as opposed to the present situation which has been widely interpreted at primary level to mean that it can only be challenged if there is one of the various breaches of a trustee’s duties – failure to consider the right question, failure to give ‑ ‑ ‑
FRENCH CJ: Is that in the context of the primary level that you are talking about of discretion or opinion, which is the distinction, I think, that Justice Heydon is putting to you.
MR BRETT: As I understand it, where an opinion is challenged, my understanding of the case is that the opinion can only be challenged if it is shown to be simply unreasonable, not that it is wrong, as such, on a merits assessment, but rather that it is unreasonable in the sense that is commonly applied in insurance cases and which has very close analogies, in our submission, with the Avon Downs system of review and the House v The King system of review.
I am sorry, should I give the full names? I am not familiar with the practice here. Avon Downs is, of course, Avon Downs PtyLtd v Federal Commissioner of Taxation (1949) 78 CLR 353 and Telstra Super Pty Ltd v Flegeltaub (2000) 2 VR 276. House v The King is at 1936, I think. I am sorry, your Honour, as I understand it the challenge to an opinion is usually that it is not reasonable, but not that it is plainly wrong - not that it is wrong as a simple merits review.
FRENCH CJ: It depends what the opinion is about, I suppose. The opinion if you are looking to the opinion in paragraph (b) of the definition of “total and permanent invalidity” then the first thing about which the trustee is to form an opinion is whether the member has ceased to be an employee.
MR BRETT: Yes.
FRENCH CJ: Subject to constructional issues there is not much ‑ ‑ ‑
MR BRETT: Actually, I think it was your Honour Justice Bell made sense of that for the first time. I have never understood why they had that. I think your Honour Justice Bell pointed to the fact that that should be disablement as which he ceased to be an employee as a result of it. So it does point to the connection between the disablement and the cessation.
FRENCH CJ: Yes, and then unlikely ever to engage in any gainful work. So there is that and the connection between that and disablement. So there is perhaps a qualitative judgment, but it is not a normative judgment of any kind.
MR BRETT: But certainly the approach that has been adopted has been the assumption that this is a discretion exercised by a discretionary trustee of a discretionary trust and, therefore, can only be challenged on extremely narrow limits.
FRENCH CJ: Well, if you have formed, for example, an opinion that in all the circumstances it was reasonable, then you might say that has the character of a discretion, whereas an opinion about facts and likely outcomes perhaps has a different character.
MR BRETT: Yes, not wanting to argue against any propositions that would assist our case, but I think that there has to be some role to play in the fact that the trustee is entitled to form an opinion and that is why we would not argue that there is necessarily a direct merits review where you can simply say, well, the opinion is wrong. I think we would have to say that the trustee has formed an opinion but that opinion was unreasonable on the material before it and therefore should be set aside. That is not the test that has been commonly applied in the courts and that is what we wish to challenge in this part of our argument.
HEYDON J: The context is important. We are talking about assets here which are often the greatest asset a person has in life except for their house; sometimes more valuable than their house. It is just not appropriate for it to be – unless the words are very strong – a matter of whim or mere opinion on the part of a trustee. There is a strong argument that it has got to be right and can be challenged if it is not right. The Chief Justice pointed out that cessation of being an employee perhaps is a fairly black or white sort of question. Unlikelihood ever to engage in any gainful work, of course, looks to the future and introduces more elements of estimation, but even so you would think the objective criteria irrelevant.
MR BRETT: Your Honour, that is not a position that we have put in our submissions but I would not argue against it.
GUMMOW J: I mean, this phrase “after consideration” is important too. There must be some quality in the consideration. The opinion has to be formed after the consideration. Then there is a further twist to it that the material considered includes “information, evidence and advice as the Trustee may consider relevant”.
MR BRETT: Well, that goes back very clearly to the case of Braunstein. It is not in our list of authorities, although it is referred to in our submissions. The citation for that, your Honour, is Braunstein v Accidental Death Insurance Co (1861) 121 ER 904 where the court implied exactly that type of clause, a requirement of reasonable, the trustee reasonably considers.
FRENCH CJ: So, in summary, the opinion must focus on the cessation of the member to be an employee, the unlikelihood of the member ever to engage in any gainful work for which the person is reasonably qualified and the causal connection between those two things and disablement?
MR BRETT: That being the disablement which caused him to cease employment.
FRENCH CJ: Yes, or the trustee’s opinion has to focus on the causal connection and the outcomes?
MR BRETT: Yes.
CRENNAN J: If the trustee did not have enough information and evidence upon which to form an opinion, would he or she be under a duty to make further inquiries?
MR BRETT: That would be our submission, yes. Again, there does not seem to be room for discretion in that. The trustee, once an application is made, is clearly under a duty to consider and determine the application. In our respectful submission, it is not a power – the uncontrolled discretion conferred by the trust deed relates to the powers of the trustee. It is a duty, in our submission. The trustee has a duty properly to consider the claim and that would include a duty to collect necessary information. Again I would interpolate that that is probably reasonably necessary information under the Braunstein principle. Yes, we would submit that that is a duty which the trustee has which again is outside any Karger v Paul application relating to discretions.
FRENCH CJ: Karger v Paul was addressing an entirely different question – absolute and unfettered discretion.
MR BRETT: That is correct, your Honour. That is what courts have complained about on multiple occasions, but as the weight of primary decisions has accumulated courts have found themselves less and less capable of getting away from Karger v Paul, although there have been bitter complaints by a number of judges about the inappropriateness of that occurring. We have collected a series of cases at footnote 41 in our primary submissions. I will not refer your Honours to all of them but we have set out a number of significant complaints by various judges about the inappropriateness of applying principles which were derived in a totally different context, a context where benefits were being conferred by a particular person upon someone who had done nothing to call for those benefits.
That is where the Karger v Paul principles are developed. Here we have a totally different thing. The settlor of the trust deed has no effective role to play. The benefits are contributed by the employer as part of the employee’s total remuneration package and often by the employee themselves. There is, as your Honour Justice Heydon has referred to, an enormous public context to this situation.
FRENCH CJ: Are there any examples in the trust deed where the trustee exercises a discretion so described?
MR BRETT: I have not looked to do so, your Honour.
FRENCH CJ: If you cannot put your hand on it immediately ‑ ‑ ‑
MR BRETT: I think there are certainly some discretions about paying additional amounts to members. My learned junior reminds me that where a person dies the trustee certainly has discretions as to which dependants are to receive the death benefits. Then of course there are the numerous discretions that the trustee has as to investment and so on.
BELL J: In Rapa v Patience Justice McLelland noted that in the context of a superannuation deed and a TPI claim the performance by the trustees of the functions may be successfully challenged on the grounds with respect to discretionary powers discussed in Karger v Paul, but of course his Honour said that the resolution of the case in Rapa was relevantly easy, it being clear that the trustee had misapprehended the nature of the powers. So it was not necessary for his Honour to consider the issue.
MR BRETT: No, and his Honour did, as I have mentioned, make the specific point that it might be inapt to do that. I do not know if your Honour has the same copy. Being an unreported decision, they might not all be identical, but right towards the end of his judgment, I have it at the bottom of paragraph 14 and particularly at the top of page 15, where it says:
In one sense it may be inapt to describe as a discretionary trust power a duty to consider and form an opinion as to whether a particular state of facts exist –
But the fact remains that I cannot escape that that has been seen thereafter as authority for the proposition that Karger v Paul is the benchmark for considering this type of decision and we submit that that is wrong. The grounds that Karger v Paul describes for attack of a trustee’s decision about failure to consider the correct question and failure to give real and genuine consideration are perfectly valid grounds and would be, effectively, in any circumstances, but it is quite clear that the Karger v Paul formulation does not permit a decision which is unreasonable to be set aside simply because it is unreasonable, and that is what we focus on as saying that is an unacceptable position.
In that context, can we point also to a number of factors just to reinforce what we are saying. If a fund is insured, as many funds are, then the insurer’s decision in forming an opinion can certainly be challenged on the basis that it is unreasonable. In the case of Dillon v Burns Philp, which is not on our list of authorities and I apologise for that, but I will give your Honours the citation. It is an unreported decision, and I have copies if it is of any assistance.
HEYDON J: We seem to have it.
MR BRETT: The point I wanted to make is very limited.
GUMMOW J: Justice Bryson’s decision?
MR BRETT: Yes. Of 20 July 1988 and its reference is BC8801719. In that case, the opinion as to incapacity was not to be formed by the trustee but was to be formed by the employer and, again, his Honour Justice Bryson made it quite plain that that could be attacked on the grounds that it was unreasonable and, yet, the person in the position of Mr Finch, who has a fund which does not have insurance behind it and is considered to be a discretionary trust, or has in the past been considered to be a discretionary trust, has to face the enormous hurdles, effectively, the Wednesbury unreasonableness type of hurdle, before he can challenge the decision.
It is very plain from the decision of the primary judge that he was extremely uncomfortable with the trustee’s decision. He refers to a feeling of profound discomfort and refers to some of the conclusions as being surprising, but he then described the test as a severe test which he felt that Mr Finch had not met. It is our submission that that is not an appropriate situation to continue.
FRENCH CJ: Your proposed test, which I think you mention at page 11 of your submissions, is directed to all classes of trustee decision?
MR BRETT: I am, with respect, the minimalist, your Honour, and I am arguing a ‑ ‑ ‑
FRENCH CJ: I am just looking at the generality of expression of your submissions.
MR BRETT: Yes. I am arguing a case for a person who has made a claim on a total and permanent disability. The total and permanent disability benefits and – I am sorry, your Honour, which was the paragraph that I unfortunately put that in?
FRENCH CJ: I think paragraph 47 and following and then 51:
if a beneficiary can show that a trustee has arrived at a decision that is unfair or unreasonable ‑ ‑ ‑
MR BRETT: We are starting in my submissions - I did try to keep them a bit narrower - at paragraph 47, a person seeking such important financial benefits ought to be entitled to a decision which is reasonable, so, I am confining it, not to all decisions of the trustees - decisions about investment and so on are governed by the Superannuation Industry (Supervision) Act.
GUMMOW J: Yes, what is the significance of section 37 of the Superannuation (Resolution of Complaints) Act?
MR BRETT: If I could just turn to that, your Honour.
GUMMOW J: You cannot escape the statutory structure. It confers these enormous privileges.
MR BRETT: I am sorry, your Honour.
GUMMOW J: You are at footnote 61 on page 12. In answer to the Chief Justice – 51(b) you pick up section 37. What does it do?
MR BRETT: Section 37(6) provides in combination with, I think, section 14 of that Act that a person can complain about a decision of the trustee on the – could I take your Honour back to section 14(6A). I am sorry, your Honour, but I am trying to find the precise section that I want. Section 14 provides, in effect, that a person can complain about a decision which is unfair and unreasonable. Time limits are provided to that by section 14(6A). Then, as your Honour has taken me to section 37(6) ‑ ‑ ‑
CRENNAN J: Do you want to refer to section 14(2)?
MR BRETT: Thank you, your Honour. I was greatly under pressure to find it. Thank you, your Honour. Yes, that is the section I want. Subsection (6A) does then provide the time limits which excluded Mr Finch in the present case from going to the SCT.
GUMMOW J: Where are the time limits?
MR BRETT: Section 14(6A).
GUMMOW J: Yes, thank you. One year.
MR BRETT: And (6B) actually was the one that prevented Mr Finch from making application to the SCT because (6B)(b) provides that you have to lodge your claim:
with the trustee within 2 years after the person permanently ceased that employment.
In the present case, Mr Finch was still engaged in attempting to get back into the workforce unsuccessfully and so did not make his application within that period and, thus, was permanently prevented from ever having access to the SCT. Yes, the SCT does, but a combination of that and section 37 have the power to deal with ‑ ‑ ‑
GUMMOW J: If your client had got into this statutory structure, what remedy could he have got?
MR BRETT: He could have gone to the SCT and asked for the decision to be review on the basis that it was unfair or unreasonable and had the decision set aside.
GUMMOW J: Where do we see the setting aside?
MR BRETT: I think section 37(3) provides that the tribunal must make a determination affirming the decision or remitting it to the trustee or varying it or setting aside and substituting its own decision.
GUMMOW J: And the grounds for the application?
MR BRETT: That it is unfair or unreasonable.
GUMMOW J: Where do we see that precisely?
MR BRETT: That was in section 14(2).
GUMMOW J: Yes, unfair or unreasonable. So the position seems to be that if your client can bring himself within the time constraints, which in a particular circumstance may be difficult the way things run in life, but if the complainant can bring himself or herself within section 14, they can get this remedy on these grounds. If they are late, they cannot avail themselves as the statutory system with the tribunal, they have to go to court and if they go to court, they are met with Karger v Paul.
MR BRETT: Yes.
GUMMOW J: The question then is, why is not the general law informed by the statutory policy?
MR BRETT: Yes, your Honour. When I applied for special leave initially and your Honour heard that application, you adverted to that and we have dealt with that, to some extent, in our primary submissions. We would submit that this is now a law which is applied throughout Australia and has been successfully applied since 1995 and should inform the common law.
FRENCH CJ: Incidentally, just on that time limit issue. When did the two‑year time limit come in because it used to be one year, I think, did it not? I notice the reprint ‑ ‑ ‑
GUMMOW J: We have got 2002.
FRENCH CJ: The 2002 reprint is one year, but the 2010 compilation has two years.
MR BRETT: I am informed by my learned junior, who I might mention was a member of the tribunal for a long time, that it was increased to two years on 28 November 2003 by the Superannuation (Government Co‑contribution for Low Income Earners) (Consequential Amendments) Act 2003.
GUMMOW J: Act No 116 of 2003, I think.
MR BRETT: Yes. So at the time Mr Finch ought to have been considering these matters, he was well and truly involved in trying to get back into the workforce and then it was too late and once the time limit is gone, it is gone. But as I think your Honour Justice Gummow was adverting to, it is not just him. It is common experience that person can be disabled and can hope that that disability is not permanent and expect that the disability is not permanent until such time as extensive treatment has either failed or, in some cases, worsened the condition and in that period of time access to the SCT can be destroyed. So, again, we have the anomaly that one small but important class of claimant has to operate under a set of principles at the present time which are extremely severe.
GUMMOW J: Now, this tribunal operates fairly informally, does it?
MR BRETT: I have not actually attended there, your Honour.
GUMMOW J: Does the Act provide ‑ ‑ ‑
MR BRETT: I am told that under section 11 it is ‑ ‑ ‑
MR BRETT: Yes. I apologise that I cannot be of more assistance. In answer to a question raised by your Honour Justice Gummow about Scott and Ascher on Trusts, extraordinarily there does not seem to be any reference, in the index at least, to superannuation or pension trusts and that is one thing that has concerned us in the preparation of this case. Overseas law appears to be extremely limited, probably because it seems to be the case, and certainly is in England and as far as we can gather Canada, that pension funds are usually for payments of a continuing pension as opposed to, in Australia, lump sum benefits and that is possibly why this does not arise, but there is a real dearth of law on the topic, and that is our examination of the index in Scott and Ascher which I had looked at precisely for that reason.
FRENCH CJ: Insofar as the remitter question is concerned, in a sense there is only one decision‑maker available to make a decision and that is the trustee. That is not unusual in a public law context when you have a decision made by a minister or a delegate it is overturned and remitted for reconsideration, there is nowhere else to go. We are not dealing with a review tribunal which might be differently constituted, are we?
MR BRETT: No. It is a real concern. I do not know whether your Honour is making that point for me or against me, but it is a matter of real ‑ ‑ ‑
FRENCH CJ: It is adverse to you, really. It is a challenge because I am saying where else does one go, and we do not have difficulty with that in the administrative law context, why should we find a difficulty here?
MR BRETT: The trustee appears, at least on the outside, as a body corporate to be a single entity. That entity, and let us talk about this case, has argued vehemently and to this level ‑ ‑ ‑
FRENCH CJ: They have argued.
MR BRETT: No, vehemently, and to this level against Mr Finch’s claim. For the case then to be remitted to him to that same trustee for consideration ‑ ‑ ‑
FRENCH CJ: We have public officials who argue vehemently on occasions through their counsel, and they are told they have got it wrong and they have got to do it again.
MR BRETT: We also have tribunals constituted by people ‑ ‑ ‑
FRENCH CJ: Yes, that is a different situation because it is possible to have a reconstitution, although even then it is a fairly rare situation where one will direct that a tribunal differently constituted deal with the matter.
MR BRETT: I do not know that I would, with respect, adopt that it is rare.
FRENCH CJ: It has happened, I am saying, but one does not likely take over the job of the head of the tribunal.
MR BRETT: The problem is that from the point of view of the litigant it seems to be an extraordinarily unfair outcome that having contested and established fault on the part of the adversary that you are then put back into the hands of that very adversary in the hope that they will say “We got that wrong and we will take our medicine and do it right”. Human nature is that, for a start, one has to then ask what happens if they reject it again? Is the litigant going to feel that he has been given justice?
GUMMOW J: Your client will not be able to go off to the complaints procedure because of the time factor.
MR BRETT: No, he cannot.
CRENNAN J: Barred by time.
MR BRETT: That is correct.
FRENCH CJ: If the Minister for Immigration cancels someone’s visa and then is told to look at it again because there has been a failure of natural justice or some other question of jurisdictional error has occurred, then the Minister has to look at it again.
GUMMOW J: The Minister is publicly accountable.
MR BRETT: Yes, your Honour takes much better words than I was going to put, but effectively, yes. The Minister is a public official.
GUMMOW J: Telstra has succeeded to public responsibilities of the Postmaster‑General, but it is no longer publicly accountable in the same sense.
MR BRETT: No, and this is not even Telstra. This is Telstra Super Pty Ltd.
GUMMOW J: That is right.
MR BRETT: It is a body of people who, in this case, acted as witnesses in their own cause in the original decision.
FRENCH CJ: The only other place you invite us to go is the Court itself, in a sense.
MR BRETT: Yes. We believe that our submission is that the Court should, having set aside a decision, an appropriate course is then for the Court to determine it itself, and that raises several questions.
GUMMOW J: Can it do so without, in a sense, assuming the administration of the trust.
MR BRETT: It is not the administration of the trust though. It is the formation of the necessary, or at least, it is determining that an opinion was wrong and then substituting the correct one just as it does day in day out with insurer decisions which require the opinion of the insurer.
GUMMOW J: But make a declaration to the effect that the only opinion open to the trustee on the materials was this opinion.
MR BRETT: If it were of that view, then there is certainly precedent to say that the Court just simply declares that the person is entitled to benefits without putting it in that formula. If the Court was of the view that on the materials presently there, then there was only one reasonable decision open. There are several possibilities because the next one is that the materials are not sufficient to enable the Court to decide on those materials. If it is remitted to the trustee, presumably the trustee would receive further information. So a court, if it thought it was necessary, could receive further information or it could then go and simply decide for itself on an examination of the materials. It is a difficult question. The superannuation tribunal though, finds little difficulty in practice in dealing with that. I do not know that I can assist you further, and I regret that, but it is a vexed question. I think those are the only matters that I wished to put.
FRENCH CJ: Thank you, Mr Brett. The Court will reserve its decision. The Court adjourns to 9.30 tomorrow morning in Melbourne and 9.30 tomorrow morning in Sydney.
AT 3.25 PM THE MATTER WAS ADJOURNED
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