Finch v Telstra Super Pty Ltd - [2008] VSC 481

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 6232 of 2006

ALAN MICHAEL FINCH	Plaintiff
v
TELSTRA SUPER PTY LTD (ACN 007 422 522)	Defendant

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JUDGE:	BYRNE J
WHERE HELD:	Melbourne
DATES OF HEARING:	8, 9 October 2008
DATE OF JUDGMENT:	13 November 2008
CASE MAY BE CITED AS:	Finch v Telstra Super Pty Ltd
MEDIUM NEUTRAL CITATION:	[2008] VSC 481

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Superannuation – Total and permanent invalidity – Determination of trustee that claimant not “unlikely ever to engage in gainful work” – Whether the correct question asked – Whether reasons given unsound – Whether determination is one that no reasonable trustee could have made – Whether trustee gave genuine consideration to the question – Whether trustee should have made further inquiry – Determinations void.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J Brett and Ms M Wall	Arnold Thomas & Becker
For the Defendant	Mr J Gleeson SC and Mr RJ Harris	Freehills

HIS HONOUR:

The plaintiff, Alan Michael Finch, was employed by Telstra Corporation Ltd from 1 October 1992 until 23 January 1998 and was, during that time, a member of the Telstra Superannuation Scheme. Some time after he ceased employment he applied, in April 2000, to the defendant, Telstra Super Pty Ltd, the trustee of the Telstra Superannuation Scheme, for a benefit under the scheme payable for total and permanent invalidity (“TPI”). In order to qualify for such a benefit he was obliged to satisfy the trustee in effect[1] that he suffered from a disability and that, as a consequence, he was absent from work for six months and, further, that he was unlikely ever to engage in any gainful work for which he was qualified.
[1]The precise terms of the definition of TPI are set out at paras [4] and [57] below.

The application for the TPI benefit took some time to resolve, for reasons which will appear and for which no criticism was directed to the trustee. Eventually, on 21 March 2002 the trustee determined to reject the claim and Mr Finch’s solicitors were advised of this by letter dated 28 March 2002. This letter sets out the trustee’s reasons for the rejection of the claim.

Mr Finch, then, through his solicitors, renewed his application, providing the trustee with more material in support, but the trustee on 20 March 2003, rejected this second claim too. Again, Mr Finch was notified of this determination by letter dated 4 April 2003 in which the trustee stated that the reasons were the same as those given for its 2002 determination. In brief, the trustee was of opinion that he was not unlikely ever to engage in gainful work within the terms of the trust deed.

It is convenient at this stage that I set out the terms of the definition of TPI:

“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…

Grounds of appeal

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

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

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

Consideration

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

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

Continue reading Finch v Telstra Super Pty Ltd

Details

AGLC: Finch v Telstra Super Pty Ltd [2008] VSC 481
Case: [2008] VSC 481
Decision Date: 13 November 2008

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Finch v Telstra Super Pty Ltd involved a dispute concerning the validity of a decision made by a trustee of a superannuation fund. The claimant, Finch, sought a determination that he was totally and permanently incapacitated from engaging in gainful employment, which would entitle him to certain superannuation benefits. The trustee of Telstra Super Pty Ltd had determined that Finch was not totally and permanently incapacitated, thereby denying him the benefits. Finch challenged this decision, arguing that it was flawed in various respects.

The court was required to decide several legal issues, including whether the trustee had asked the correct question when determining Finch's eligibility for benefits, whether the reasons provided for the trustee's decision were sound, and whether the trustee's decision was one that no reasonable trustee could have made. Additionally, the court needed to determine whether the trustee had genuinely considered the question of Finch's incapacity, whether the trustee should have made further inquiries, and if the trustee's determinations were void.

The court found that the trustee had not asked the correct question when determining Finch's eligibility for benefits, as the relevant question should have been whether Finch was unlikely ever to engage in gainful work, not whether he was totally and permanently incapacitated. The reasons provided by the trustee were also found to be unsound. Furthermore, the court held that the trustee's decision was one that no reasonable trustee could have made, and that the trustee had not genuinely considered the question of Finch's incapacity. The court also found that the trustee should have made further inquiries before making the determination. As a result, the trustee's determinations were declared void.

The court ordered that the trustee reconsider Finch's application for benefits, taking into account the correct question, sound reasoning, and genuine consideration of Finch's incapacity. The court also directed that the trustee make any further inquiries necessary to properly determine Finch's eligibility for the benefits in question.

Orders