Garreffa v Super SA Board

[2013] SADC 93

DISTRICT COURT OF SOUTH AUSTRALIA

(District Court Administrative and Disciplinary Division)

GARREFFA v SUPER SA BOARD

[2013] SADC 93

Judgment of Her Honour Judge Cole

10 July 2013

SUPERANNUATION - BENEFITS - MATTERS AFFECTING ENTITLEMENT TO AND PAYMENT OF - EMPLOYEE DISCLOSURE

Appellant applied for additional insurance cover with her superannuation policy - application was approved by SuperSA - total and permanent disablement claim lodged by appellant - claim denied on the grounds that the appellant withheld information when applying for additional insurance cover - appeal lodged - appeal dismissed.

Southern State Superannuation Act 2009 (SA); Southern State Superannuation Regulations 2009 (SA); District Court Act 1991 (SA), referred to.

GARREFFA v SUPER SA BOARD
[2013] SADC 93

1. This matter concerns an appeal by Mrs Garreffa against the decision of the South Australian Superannuation Board (“the Board”), pursuant to s 22(7) of the Southern State Superannuation Act 2009 (“the 2009 Act”), to decline her claim for payment in respect of twelve units of insurance cover relating to her total and permanent incapacity for work.  The Board has a role in the management of the scheme conducted under the Act (“the Triple S Scheme”).  Correspondence is conducted by the Board using the letterhead “Super SA”.  “Super SA” seems to be a shorthand way of referring to the Board and its staff.

   Background

2. Mrs Garreffa was a registered nurse, employed at the Flinders Medical Centre.  She was a member of the Triple S Scheme, with the standard one unit of insurance cover in addition to her superannuation entitlement. 

3. By application dated 25 March 2007, using a printed form entitled “Changes to Insurance form”, Mrs Garreffa applied to change her arrangements with the Triple S scheme.[1]  She applied for an additional twelve units of insurance cover, bringing her total number of units to thirteen.  The application completed by Mrs Garreffa, and dated 25 March 2007, included a section entitled “Personal Statement”, which posed nine questions.  Question number three was:

   Do you have any existing medical condition(s)?

   There was a box for “Yes” and a box for “No”.  Mrs Garreffa ticked the box for “No”.  She therefore did not address question four, which asked the nature of the medical condition(s), question five, which asked when the medical condition(s) was/were first suffered from, whether the symptoms have recurred and whether the condition(s) was/were getting worse, question 6, which asked about the treatment for the condition(s) and question 7, which asked for the name of the doctors attended for the most recent consultation due to the condition(s).

   [1]    Exhibit A1 p 12

4. Question number eight was:

   Have you ever had any operations or other procedures related to a medical condition?

   Mrs Garreffa ticked the “No” box.

5. Question number nine was:

   Are you aware of any circumstance(s) or prior medical condition(s) that might cause you to become disabled or have a shortened life span?

   Again, Mrs Garreffa ticked the box for “No”. 

6. Immediately under these questions on the form, there was a “Member Declaration” which said:

   -      I understand that I am required to disclose every matter that could reasonably be expected to be known by me, which may be relevant in Super SA’s decision whether to accept the risk of insuring me.

   -    I understand that an insurance entitlement may be reduced or withheld if the cause of my death or disability is due to any physical or mental disorder, symptom or condition that is caused by or arises from or is connected to any activity or medical condition(s) that exist at the time of this application.

   -    I understand that non-disclosure will result in my insurance entitlement being withheld or reduced.

   -    I authorise any hospital, doctor or other person who has treated or examined me to provide Super SA with any further information or medical reports on my illness or injury, medical history, consultations, prescriptions or treatment.  A photocopy of this authorisation is as valid as the original.

   -    I understand that Super SA and its medical adviser(s) will use this information for the purpose of considering my application for insurance.

7. Mrs Garreffa signed the form immediately under the Member Declaration.

8. The Southern State Superannuation Act 1994 provided, at the relevant time, in s 22(4):

   Subject to subsection (8), the applicant must provide the Board with prescribed information as to the applicant’s state of health and the Board may require an applicant to provide satisfactory evidence of the state of the applicant’s health.

9. The Southern State Superannuation Regulations 1995 provided, in reg 4:

   (1)Information of the following kinds is prescribed for the purposes of section 22(4) of the Act:-

   (a)     information relating to medical advice, examination or treatment received by the applicant;

   (b)     information as to any other treatment received by the applicant for any illness, condition or disability suffered by the applicant;

   (c)     information as to any illness, condition or disability suffered by the applicant or any symptoms suffered by the applicant that may indicate an illness, condition or disability;

   (d)     information as to any drugs or other substances (whether legal or illegal and whether medicinal or not)taken by the applicant or to which the applicant has been exposed.

   (2)A member who has applied to be accepted as a supplementary future service benefit member must provide the Board with such information relating to his or her application as is relevant and required by the Board.

10. A “fact sheet”[2] provided with the Changes to Insurance form said:

    [2]    Exhibit A1 p 8 at p 10

    Pre-existing medical conditions

    If you have a pre-existing medical condition at the time you apply for additional units of Standard or Fixed Cover, a limitation may be placed on these units, which may affect your final entitlement.

    If you apply for additional units and complete the “Changes to Insurance” form, you will be asked questions about your medical history.  You will need to provide details of any medical conditions.

11. By letter dated 2 April 2007, Mrs Garreffa was informed that her application for additional fixed insurance cover had been approved, effective from 30 March 2007.[3]  It was set out in the letter that the total value of the 13 units was $975,000, and that the total cost per week was $40.30.  It was common ground that the weekly payment of $40.30 was made by Mrs Garreffa’s employer on account of the extra insurance, whereas, prior to the extra insurance being taken out, that amount would have formed part of the employer’s superannuation contribution on account of Mrs Garreffa.

    [3]    Exhibit A1 p 14

12. On 3 April 2008, Mrs Garreffa completed a Super SA form entitled “Claim for Disablement Entitlements”.[4]  Mrs Garreffa applied for “permanent disablement” entitlements.  In relation to the question on the form “Did your condition(s) result from an accident”, Mrs Garreffa ticked the box for “No”.  In response to the question:

    What is the exact nature of your medical condition(s)?

    Mrs Garreffa wrote:

    Muscle damage to R/shoulder, tingling in legs, extreme fatigue

    [4]    Exhibit A1 p 16-19

13. In response to the question:

    When did you first suffer from the above condition(s)?

    Mrs Garreffa wrote:

    August 07 – dropped to part-time.

14. On the form, Mrs Garreffa gave the name of Dr Kosmas, of the Trinity Medical Centre, in relation to the conditions “Fatigue, muscle pain, shoulder pain, tingling”.  She gave the date of first consultation as 7 January 2008, and the date of the last consultation as 25 March 2008.  Mrs Garreffa also gave the name of Dr True, rheumatologist, for the condition “Muscle pain”, and said that the first consultation she had with Dr True was on 5 February 2008, and the last consultation was 27 March 2008.  Part of the form was entitled “Medical Report”.  Dr Kosmas completed this section of the form.  Dr Kosmas said that he had been Mrs Garreffa’s treating doctor since 4 March 2001, and that he first saw her in relation to “her condition(s)” on 20 September 2007.  On the form, under “Diagnosis”, Dr Kosmas wrote “Fibromyalgia” with functional consequences of “upper limb, lower limb pain and reduced movement”.  Dr Kosmas also wrote, under “Diagnosis”, “Osteoarthritis” with the functional consequence of “spinal pain”.  Dr Kosmas said that Mrs Garreffa’s overall level of capacity for work was 30%.

15. In response to receipt of the “Claim for Disablement Entitlements” form, Super SA sought further information from Mrs Garreffa and, ultimately, from other sources. 

16. On 28 July 2008, Super SA notified Mrs Garreffa that her “Total & Permanent Disablement (TPD) entitlement excluding insurance” had been approved “subject to your employment terminating on the grounds of invalidity”.  In that same letter, Mrs Garreffa was told that Super SA was in the process of obtaining further medical information in relation to her insurance claim.

17. Ultimately, a considerable volume of information was obtained by the Board concerning Mrs Garreffa’s medical history.  On 29 September 2009, the Presiding Member of the Board wrote to Mrs Garreffa’s solicitors in these terms:[5]

    The Board acknowledges the receipt of your submission dated 29 June 2009 regarding Mrs Garreffa’s total and permanent disablement claim.

    The Board has taken into account the information previously available as well as information provided in your submission and has declined Mrs Garreffa’s claim for an additional 12 units of insurance cover under Section 22(7) of the Southern State Superannuation Act 1994.

    As previously advised, Section 22(7) states:

    “If it appears to the Board that an applicant withheld information required in relation to his or her application under this section, the Board may withhold or reduce voluntary invalidity/death insurance benefits that the applicant would otherwise have been entitled to.”

    If Mrs Garreffa is dissatisfied with this decision of the Board, she may appeal to the Administrative and Disciplinary Division of the District Court or to the Board against this decision.  On an appeal to the Board, the Board may substitute another decision for its original decision or confirm its original decision.

    Should you have any further queries, or require clarification of any of the information provided, please do not hesitate to contact Sally Karosoulos on [number provided].

    [5]    Exhibit A1 p 36

18. The decision set out in that letter is the decision from which Mrs Garreffa appeals to this Court.

19. Among the information that the Board had before it when it made its decision in respect of Mrs Garreffa’s insurance claim was a series of letters obtained for the Board’s consideration from Ron Smith, Consultant, of MLCOA, which is described in a minute from the Board to the Crown Solicitor as “the Board’s medical advisor”.  In a minute from the General Manager, Super SA, to the Crown Solicitor, the advice from MLCOA was set out.  This is an extract from that advice:[6]

    [6]    Exhibit R3 Tab 2 p 5

    2.7The claim and medical information was subsequently forwarded to MLCOA, the Board’s medical advisor, to assess for TPD entitlement and whether there were any non-disclosure issues. This report was provided on 14 April 2008 (see Attachment E).  In summary, MLCOA’s opinion was that the following conditions posed a material risk and thus should have been disclosed on the Personal Statement, in which case insurance limitations would have been placed on them:

    2.7.1Hysterectomy for cervical dysplasia

    2.7.2Peptic ulcer

    2.7.3Malaise/Lethargy

    2.7.4Depression and related illness

    2.7.5Tendonitis left thumb and forearm

    2.7.6Viral illness (Feb and March 2007) given temporal relationship with application for insurance, leading to limitation for Post Viral Syndrome and related disorders.

    2.7.7Shoulder, back and neck pain given temporal relationship with application for insurance and risk of developing Fibromyalgia.

    2.7.8Migraine headaches.

    2.7.9Insomnia associated with depression, stress and hip pain.

    2.7.10Right hip pain.

    2.7.11Positive blood test for previous (Glandular Fever) Epstein-Barr Virus Infection (22/3/06) – risk of developing Post Viral Syndrome.

    2.8MLCOA also advised that some of the high risk factors for developing Chronic Pain Disorder, Fibromyalgia or Fatigue Syndrome are being female and having a history of the following symptoms/conditions prior to formal diagnosis:

    2.8.1Depression

    2.8.2Malaise

    2.8.3Lethargy

    2.8.4Fatigue

    2.8.5Insomnia due to work stresses

    2.8.6Post Viral Syndromes

    2.8.7Myalgia

    2.8.3Multiple painful joints despite benign radiological findings

    2.8.4Shoulder, back and neck pain.

    2.10The collective records show that Ms Garreffa had many single symptoms at various times prior to the completion of the Personal Statement that could have led to being diagnosed as one single condition  -  Fibromyalgia.

    2.11In addition, the office is also aware that Ms Garreffa saw her doctor on 7 March 2007 for back and neck pain and was referred at this time to a Rheumatologist.  This was 2 weeks prior to the completion of the Personal Statement, and suggests that Ms Garreffa was aware of her symptoms at the relevant time.

    Appeal

20. The Southern State Superannuation Act 1994 (“the 1994 Act”) was repealed and replaced by the 2009 Act, which came into operation on 1 August 2009.  Mrs Garreffa applied for and was granted the additional twelve units of insurance pursuant to the 1994 Act.  The decision, on or just before 29 September 2009, to decline her insurance claim, and her appeal against that decision on 21 October 2009, were made under the 2009 Act.[7]  The 2009 Act, in s 25, provides:

    (1)A person who is dissatisfied with a decision of the Board under this Act may appeal to the Administrative and Disciplinary Division of the District Court or to the Board against the decision.

    (2)On an appeal to the Board, the Board may substitute another decision for its original decision or confirm its original decision.

    [7]    See the 2009 Act, Schedule 1, clause 16

21. The District Court Act 1991 provides, in s 42F, in relation to an appeal in the Administrative and Disciplinary Division of the District Court:

    The Court may, on an appeal –

    (a)     affirm the decision appealed against;

    (b)     rescind the decision and substitute a decision that the Court considers appropriate;

    (c)remit matters to the original decision-maker for consideration or further consideration in accordance with any directions or recommendations of the Court.

22. In relation to the conduct of the appeal, the District Court Act 1991 provides, in s 42E:

    (1)The Court must, on an appeal, examine the decision of the original decision-maker on the evidence or material before the original decision-maker but the Court may, as it thinks fit, allow further evidence or material to be presented to it.

    (2)The Court, on an appeal –

    (a)     is not bound by the rules of evidence but may inform itself as it thinks fit; and

    (b)     must act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms.

    (3)The Court must, on an appeal, give due weight to the decision being appealed against and the reasons for it and not depart from the decision except for cogent reasons.

23. Three books of documents were tendered by consent.  Among other documents, the medical records which underpinned the advice given to the Board by Ron Smith of MLCOA were provided in the books.  The conditions diagnosed and the medications prescribed, which are set out in the correspondence from MLCOA, are all readily apparent from the medical records. 

24. In evidence, Mrs Garreffa explained her omission to provide the relevant information in response to questions 3 and 8 of the “Changes to Insurance” form which she completed on 25 March 2007.  She said that she did not believe that she had any medical condition at the time that she completed the form. [8]  It seems that Mrs Garreffa’s interpretation of questions 3 and 8 was that they were asking whether she had, at the time of completing the form, any medical condition which prevented her from working at that time.  This is clearly an untenable interpretation.  Mrs Garreffa also said that she believed that none of the matters in her medical history came within the description of a “condition” as that word was used in the form.[9]  This is also an untenable interpretation.  At first, in evidence, Mrs Garreffa denied filling the prescriptions provided to her for anti-depressants.[10]  However, later in her evidence, she agreed that it was possible that she was taking Zoloft, an anti-depressant, in 2007 and 2008.  Ultimately, in evidence, she agreed that she was suffering from depression at the time that she applied for the extra units of insurance.  She was taking Zoloft at the time.[11]

    [8]    Transcript p 5

    [9]    Transcript p 10

    [10]   Transcript p 17

    [11]   Transcript p 44

25. On the claim form completed by Mrs Garreffa on 3 April 2008, all of the medical consultations that she mentioned in relation to the medical condition forming the basis for her claim were in early 2008.  She omitted to mention her consultation with Dr Nitchingham, a general practitioner, on 7 March 2007.  This consultation was particularly significant because it occurred just before Mrs Garreffa applied for the twelve extra units of insurance on 25 March 2007.  The computer record of Mrs Garreffa’s appointment with Dr Nitchingham, kept by the medical practice, Trinity Medical Centre, and entered in the system by Dr Nitchingham at the time of the appointment,[12] says:[13]

    [12]   Transcript p 64

    [13]   Exhibit A1 p 86

    Wednesday March 7 2007 12:54:41
    Dr Anura Nitchingham
    throat – pharyngitis
    chest bs vesicular nil added
    air netry r=l

    Reason for visit:
    Viral illness – Non specific

    Actions:
    Letter Created – re shoulder, back and neck pain to rheumatology opd.
    Letter Printed - re shoulder, back and neck pain to rheumatology opd.
    Letter Created - re CERTIFICATE.
    Letter Printed - re CERTIFICATE.

26. The first letter referred to was a referral to the Rheumatology Department of the Flinders Medical Centre.[14]  The text of the referral said:

    Thank you for seeing Karen Garreffa, age 44 yrs, for an opinion and management of her joint pains that are mainly related to the neck and the shoulder and the back.

    [14]   Exhibit A1 p 167

27. Pursuant to the referral, Mrs Garreffa saw Dr William Hill, a specialist in rheumatology, at the Flinders Medical Centre.  Dr Hill wrote a report to Dr Nitchingham dated 21 May 2007.[15]  It said:

    This 44 year old lady has developed widespread aching and stiffness of a generalised nature since severe pharyngitis in March.  Essentially the flu-like symptoms have not settled.  There is no abnormality on examination.  She is managing to continue with night shift nursing here at Flinders and it would seem that she has developed fibromyalgia syndrome.  She will contact the Arthritis Foundation for their advice and education.  They have a very active fibromyalgia support group.  I will get her back again in 2 months’ time to re-check the examination and confirm that it remains normal and I understand the blood tests that you did a couple of months ago all came back with normal findings.

    [15]   Exhibit A1 p 174

28. In evidence, Mrs Garreffa indicated that she did not understand why Dr Nitchingham had referred her to the rheumatology department of the Flinders Medical Centre, and she disputed Dr Hill’s findings.[16]  She said that she thought that she had complained to Dr Nitchingham only of a clicking in her fingers, in addition to pharyngitis.[17]  This evidence was not believable.  Clearly, Mrs Garreffa must have complained to both Dr Nitchingham and Dr Hill of shoulder, back and neck pain.  Under cross examination, Mrs Garreffa said that she did not mention her visit to Dr Nitchingham or Dr Hill in her insurance claim because she forgot about them.[18]  Again, this is not believable.  Her claim involved the very symptoms of which Dr Nitchingham and Dr Hill had made a record, and the diagnosis of fibromyalgia, which was made by Dr Hill. 

    [16]   Transcript p 5

    [17]   Transcript p 17

    [18]   Transcript p 41

    Conclusion

1. The Board had the power under the 1994 Act,[19] and under the regulations passed under the 2009 Act,[20] to require that information be provided in relation to the health of an applicant for insurance, to impose conditions upon the grant of insurance consistent with that information, and to withhold or reduce insurance benefits where it appeared that an applicant withheld information required by his or her application. In Mrs Garreffa’s case, it is clear from the material before me that required information was withheld by Mrs Garreffa at the time that she applied for the additional twelve units of insurance. That information was the information set out in the reports of Ron Smith of MLCOA to the Board. That information related directly to the medical conditions which eventually formed the basis of Mrs Garreffa’s total and permanent disability and her claim for an insurance payment. It is clear that, had Mrs Garreffa disclosed on her application for insurance on 25 March 2007 the symptoms she described to Dr Nitchingham on 7 March 2007 and then again to Dr Hill on 21 May 2007, the additional insurance, if it had been granted at all, would have been granted subject to conditions. The same applies to the other medical conditions and procedures identified by Ron Smith for the Board. Those conditions would have been such as to have precluded the payment of the insurance claim the subject of the decision of the Board appealed from. Mrs Garreffa did not put forward any medical evidence contrary to the records submitted or the opinion of Ron Smith.

   [19]   see s 22(6) and (7)

   [20] see Southern State Superannuation Regulations 2009 reg 49(4) - (8)

2. The appeal is dismissed.  The decision of the Board is affirmed.