Hay v Total Risk Management Pty Ltd - [2004] NSWSC 94

CITATION: Hay v Total Risk Management Pty Limited [2004] NSWSC 94

HEARING DATE(S): 7/10/03, 8/10/03

JUDGMENT DATE:
26 February 2004

JUDGMENT OF: Burchett AJ at 1

DECISION: Refusal of disability benefit by trustee of Superannuation Fund to be set aside as relevantly unreasonable and trustee to be directed to consider the plaintiff's application properly and present a report to the court as to that consideration by a date to be fixed.

CATCHWORDS: EQUITY - superannuation trust for employees - contributory fund - discretion of trustee - duties of trustee - duty "to give properly informed consideration" to an application - permanent incapacity for suitable employment - whether part time work in a partnership with the worker's wife was suitable employment - decision such as no reasonable trustee could have reached - whether court could execute the trust - trustee ordered to consider afresh and report to the court - discussion of principles - CONSTRUCTION OF RULES - whether the expression "services are terminated" required termination unilaterally by employer or includes an acceptance of a redundancy offer by the employee - effect of nature of contributory superannuation scheme on construction of the Rules.

CASES CITED: Blaikie v SA Superannuation Board (1995) 65 SASR 85
Chammas v Harwood Nominees Pty Ltd (1993) 7 ANZ Insurance Cases 77,995
Electrolux Home Products Pty Ltd v Australian Workers Union [2001] FCA 1600
Flegeltaub v Telstra Super Pty Ltd (3 April 2000, BC 200001407)
Knudsen v Kara Kar [2000] NSWSC 715
Lock v Westpac Banking Corporation (1991) 25 NSWLR 593
L. Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235
Maciejewski v Telstra Super Pty Ltd (1998) 44 NSWLR 601
Maciejewski v Telstra Super Pty Ltd [1999] NSWSC 341
McPhail v Doulton; In re Baden's Deed Trusts [1971] AC 424
Mettoy Pension Trustees Ltd v Evans (1990) 1 WLR 1587
Minehan v AGL Employees Superannuation Pty Ltd (1998) 134 ACTR 1
R v Secretary of State for Social Services, ex parte Khan [1973] 1 WLR 187
Rapa v Patience (4 April 1985, BC 8500888)
Sayseng v Kellogg Superannuation P/L [2003] NSWSC 945
Teachers' Pensions Agency v Hill [1984] 4 All ER 865
Telstra Super Pty Ltd v Flegeltaub (2000) 2 VR 276
Tonkin v Western Mining Corporation Ltd (BC 9801346, 20 April 1998),
Vidovic v Email Superannuation Pty Ltd (3 March 1995, BC 9504297 at 11)
Wilson v Law Debenture Trust Corp plc [1995] 2 All ER 337
Wyllie v National Mutual Life Association of Australasia Ltd (18 April 1997, BC 9703063)

PARTIES :
Christopher Hay (Plaintiff)
Total Risk Management Pty Limited (ACN 008 644 353) (Defendant)

FILE NUMBER(S): SC 3974/01

COUNSEL: M.J. Bleasel (Plaintiff)
J.W.J. Stevenson S.C. / L.P. Menzies (Defendant)

SOLICITORS: Firths (Plaintiff)
Allens Arthur Robinson (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BURCHETT AJ

26 FEBRUARY 2004

3974/01 CRISTOPHER HAY v TOTAL RISK MANAGEMENT PTY LIMITED

JUDGMENT

1 HIS HONOUR: The plaintiff seeks relief against the defendant as the current trustee of the BHP Billiton Superannuation…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2004] NSWSC 94
Decision Date: 26 February 2004

CaseChat Overview and Summary

The case before the court involved a dispute between the trustee of a superannuation fund, Total Risk Management Pty Ltd, and the applicant, Hay, concerning the proper interpretation and application of the rules of the superannuation trust. The central issue was whether the trustee had correctly exercised its discretion in denying Hay’s application for superannuation benefits on the basis of his claim of permanent incapacity for suitable employment. Hay argued that his part-time work in a partnership with his wife constituted suitable employment, and that the trustee's decision was unreasonable.

The legal issues before the court centred on the duties of the trustee in the administration of the superannuation fund, particularly the duty to give properly informed consideration to an application for benefits. The court was required to determine whether the trustee’s decision not to grant Hay's application was such that no reasonable trustee could have reached it, and whether the court could intervene to execute the trust in light of the trustee's unreasonable decision. Additionally, the court needed to consider the construction of the rules of the superannuation scheme, specifically whether the phrase "services are terminated" required unilateral termination by the employer or could include an acceptance of a redundancy offer by the employee.

The court found that the trustee's decision not to grant Hay's application was unreasonable and that the trustee had not properly considered whether Hay's part-time work with his wife constituted suitable employment. The court held that the trustee's duty to give properly informed consideration to an application required more than a cursory examination of the facts and circumstances. The court also noted that the nature of the contributory superannuation scheme influenced the construction of the rules. Given these findings, the court ordered the trustee to reconsider Hay's application and report back to the court. The court’s decision underscored the importance of the trustee's duty to properly consider applications for benefits and the need for the court to intervene when the trustee's decision is unreasonable.

Orders