Macras v Nulis Nominees (Australia) Limited
[2018] FCA 1867
•30 November 2018
FEDERAL COURT OF AUSTRALIA
Macras v Nulis Nominees (Australia) Limited [2018] FCA 1867
Appeal from: D17-18\041 [2017] SCTA 127 File number: VID 1091 of 2017 Judge(s): DAVIES J Date of judgment: 30 November 2018 Catchwords: ADMINISTRATIVE LAW –appeal from a decision of the Superannuation Complaints Tribunal – scope of jurisdiction under s 46(1) of the Superannuation (Resolution of Complaints) Act 1993 (Cth) – where trustee held insurance policy on behalf of applicant – where policy had exclusion for non-disclosed pre-existing conditions – where insurer sought access to further medical information before determining applicant’s entitlement under the policy – where trustee decided not to make payment to applicant until insurer determined applicant’s entitlement – where Tribunal found decisions were “fair and reasonable in the circumstances” – where insurer had the right under the policy to ask for further information – where open to Tribunal to find there was evidence to support insurer’s position that it needed further information – scope of matters relevant to Tribunal’s assessment of fairness and reasonableness – no error of law disclosed in Tribunal’s reasons Legislation: Equal Opportunity Act 2010 (Vic)
Superannuation (Resolution of Complaints) Act 1993 (Cth)
Cases cited: Haritos v Federal Commissioner of Taxation (2015) 233 FCR 315 Date of hearing: 1 November 2018 Registry: Victoria Division: General Division National Practice Area: Administrative and Constitutional Law and Human Rights Category: Catchwords Number of paragraphs: 20 Counsel for the Applicant: The Applicant appeared in person Counsel for the First Respondent: Mr D. Kelsey-Sugg Counsel for the Second Respondent: Ms G. Crafti ORDERS
VID 1091 of 2017 BETWEEN: STEPHEN MACRAS
Applicant
AND: NULIS NOMINEES (AUSTRALIA) LIMITED
First Respondent
MLC LIMITED
Second Respondent
MLC SUPER FUND (and another named in the Schedule)
Third Respondent
JUDGE:
DAVIES J
DATE OF ORDER:
30 NOVEMBER 2018
THE COURT ORDERS THAT:
1.The appeal be dismissed.
2.The applicant pay the costs of the respondents, such costs to be taxed in default of agreement.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
DAVIES J:
The applicant, Mr Macras, is a member of the MLC Fund (“the Fund”). The first respondent (“the Trustee”) is the trustee of the Fund and holds a policy (“Policy”) to provide insured benefits for Mr Macras for income protection and total and permanent disablement. The second respondent is the insurer (“Insurer”). Mr Macras has appealed to this Court under s 46 of the Superannuation (Resolution of Complaints) Act 1993 (Cth) (“the Complaints Act”) from a determination of the Superannuation Complaints Tribunal (“the Tribunal”) which affirmed the following decisions:
(a)the decision of the Insurer that it is unable to determine Mr Macras’ entitlement to be paid total and permanent disablement and/or income protection benefits; and
(b)the decision of the Trustee not to make a decision on the payment of such benefits to Mr Macras until the Insurer has made a decision on his claims.
The Tribunal, in reviewing both decisions, was required by s 37(6) of the Complaints Act to affirm those decisions if the Tribunal was satisfied that the decisions in their operation were “fair and reasonable in the circumstances”. The Tribunal concluded that it was satisfied the decisions in their operation were “fair and reasonable in the circumstances”.
The Policy relevantly contained an exclusion in respect of both income protection and total and permanent disability insurance for any disability or condition that arose from, or was contributed to, by sickness or injury that first appeared, happened or was diagnosed before the insurance started, unless disclosed to the Insurer:
When we will not pay a Benefit
We will not pay a Benefit for any disability, condition or loss arising from or contributed to by:
…
Sickness or Injury that first appeared, happened or was diagnosed before this insurance started or was last reinstated (unless disclosed to, and accepted by, [the Insurer] as a part of the application or reinstatement process).
The Policy also specified that the Insurer will pay a claim when it has “proof satisfactory to [it] that all the events entitling the Trustee to payment of the benefit have happened” and that the Insurer may ask for further proof or information to be satisfied that the Trustee is entitled to the benefit. The Policy stated:
What we need to pay a claim
All types of insurance
The Benefit the Trustee is entitled to for each insurance is shown in the current Schedule. We will pay a Benefit when we have proof satisfactory to us:
· that all the events entitling the Trustee to payment of the Benefit have happened; and
· of the Member’s age.
We may ask for further proof or information to be satisfied that the Trustee is entitled to the Benefit.
Clause 11 of the Trust Deed provided that the component of a member’s benefit that relates to cover provided under an insurance policy held by the Trustee to provide insured benefits for one or more beneficiaries of the Fund is:
(a)subject to the terms of the policy under which it is provided;
(b)limited to the extent that the Member is covered under the policy; and
(c)only payable if and to the extent that the Trustee receives payment from the Insurer under the policy.
Before taking out the insurance, Mr Macras had disclosed to the Insurer that he suffered from anxiety in 2008 for which he had taken some medication and had given the Insurer a copy of some clinical notes he had from the medical practice which he attended for this condition. The Insurer accepted the application and granted him income protection cover and cover for death and total and permanent disablement with a start date of 1 June 2012. In February 2016 Mr Macras was diagnosed with an adjustment disorder, anxiety and Asperger’s syndrome. He ceased work in April 2016 and in February 2017 formally lodged claims forms with the Insurer for payment of benefits under the Policy due to symptoms associated with autism spectrum disorder, anxiety and depression. On reviewing various medical records from Mr Macras’ treating doctors, obtained by the Insurer under an authority given by Mr Macras, the Insurer formed the view that before it could make a decision on the claims it required more information to ascertain whether Mr Macras’ conditions had existed before the Policy was taken out. Mr Macras made a complaint to the Tribunal and in April 2016 revoked his authorisation for the Insurer to access his medical records.
Before the Tribunal, Mr Macras argued that the Insurer did not require any further information to make a favourable decision on his claims as he had made full disclosure of his medical conditions to the Insurer prior to taking out the Policy and the Insurer had satisfactory proof that he was entitled to be paid the benefits. Mr Macras further argued that it was a breach of his privacy rights and the Insurer and the Trustee were acting discriminatorily against him in breach of the Equal Opportunity Act 2010 (Vic) (“EOA”) in requiring further medical evidence to assess his claims. The Insurer’s case was that without the authority from Mr Macras to give access to his medical records, the Insurer could not advance its assessment of Mr Macras’ claims or make a decision on whether or not to pay benefits to him under the Policy as the medical information it had indicated that Mr Macras’ health problems for which he sought pay-outs may be pre-existing conditions that were not disclosed. The Insurer provided that medical evidence to the Tribunal. The position of the Trustee was that it had not received a final recommendation from the Insurer on Mr Macras’ claims and was therefore yet to conduct a formal review in relation to the claims.
The Tribunal reasoned as follows at [42]–[52] in concluding that it was satisfied that the decisions of the Insurer and the Trustee under review were fair and reasonable in the circumstances:
The issue is not what decision the Tribunal would have made on the material before the Trustee and the Insurer but whether the decisions were fair and reasonable.
In reaching its determination, the Tribunal has taken into account all the material provided by the Parties, the provisions of the Trust Deed and the Policy and the relevant law. The Tribunal is satisfied that the material it has relied on has been provided to all Parties.
The Tribunal considered the wording of the Policy. It noted that for both the TPD and IP benefits, the Policy allowed the benefits not to be paid if the Complainant’s disability arose from or was contributed to by a sickness that first appeared or was diagnosed prior to the commencement of the Policy, unless it was disclosed to and accepted by the Insurer at the time of application.
It was clear to the Tribunal that the Complainant is not covered for any condition that pre-existed the time his application for the Policy was accepted by the Insurer in June 2012 unless it was disclosed and accepted by the Insurer. The Tribunal noted that the Complainant has disclosed that he had suffered from both asthma and anxiety prior to his application being accepted by the Insurer.
The Tribunal is of the opinion that the Insurer has the right to request information it considers relevant to its liability under the Policy. The Policy states that it will pay a benefit ‘when we have proof satisfactory to us that all the events entitling the Trustee to payment of the Benefit have happened.’ The Policy also states that the Insurer ‘may ask for further proof or information to be satisfied that the Trustee is entitled to the Benefit.’ The Tribunal considered that this right extends to information required by the Insurer to allow it to ascertain whether a condition was pre-existing at the time of application (whether disclosed or not) as well as information related to assessment of the Complainant’s claims under the TPD and IP definitions.
The Complainant has an obligation under the Policy to provide relevant requested information. The Tribunal noted that the Complainant has revoked his authority and refused to allow the Insurer to access certain of his medical records believing that the Insurer has all the information it requires to assess his claims. The Tribunal is of the opinion that under the Policy the Insurer has the right to determine relevance of medical evidence. It also noted that the Insurer had provided reasons as to why it requires further information.
The Tribunal noted that the Insurer has stated that it has concerns that the Complainant may not have disclosed his full medical history when applying for his insurance cover and therefore may have breached his duty of disclosure. To this end, the Tribunal noted that on his application form for the Policy the Complainant had answered ‘yes’ to the question as to whether he had ever suffered from or sought treatment for ‘stress, anxiety, depression, ... or any other mental health disorder.’ He disclosed that he had suffered from anxiety in 2009 and provided some clinical notes. The Tribunal noted that he changed the date of his anxiety episode to September 2008 prior to the Policy commencing.
The Tribunal further noted that in October 2016, Mr TE, the psychologist who attended the Complainant in 2008, provided a summary of his 2008 notes. He made it clear that the Complainant’s primary presentation at that time was with anxiety and the clinical records of September and November 2008 support this, with reference to stress at work. The GP referral at the time confirmed anxiety including panic attacks and mild depression. The Tribunal also considered the report of ML and her opinion that the Complainant has been suffering from ASD since childhood.
However, the Tribunal is satisfied that the Insurer has the right under the Policy to request further medical evidence in order to determine the Complainant’s entitlement to both the TPD and IP benefits if it is of the opinion that it does not have sufficient evidence to make a decision.
The Insurer has determined that its assessment of the Complainant’s claims cannot progress until the Complainant provides the Insurer his authority for it to obtain further medical evidence. The Tribunal is satisfied that this decision is open to the Insurer and it was fair and reasonable of it to determine so.
The Tribunal noted that under the Trust Deed, insurance is only payable 'if; and to the extent that, the Trustee receives payment from the Insurer under the Policy'. The Insurer has advised the Trustee that it is unable to make a decision on the Complainant's claims until it acquires further medical evidence. The Trustee has determined not to make a decision on the Complainant’s claims until it has received notification that the Insurer has made a decision following the receipt of such further evidence. The Tribunal is satisfied that the Trustee's approach is fair and reasonable in the circumstances.
Mr Macras’ notice of appeal sets out seven questions of law as follows:
1.Did the Tribunal make an error of law in finding that the Insurer could refuse to pay Benefits under the Policy to the Applicant by reason of his failure to disclose not certain medical conditions?
2.Did the Tribunal make an error of law in finding that the Insurer was empowered by the Policy to seek further information from the Applicant in order to be satisfied that the Trustee is entitled to the benefit, in circumstances where the Applicant has already provided such information?
3.Did the Tribunal make an error of law in not taking into account a relevant consideration, being that the Applicant complied with the duty of disclosure under s 21 of the Insurance [Contracts] Act (Cth) (‘the Act’)?
4.Alternatively to (3), did the Tribunal make an error of law in not taking into account a relevant consideration, being that the Applicant did not have to comply with the duty of disclosure under s 21 of the Act?
5.Did the Tribunal make an error of law in failing to make an order that the Insurer pay the benefit to the Trustee?
6.Did the Tribunal make an error of law in failing to take account a relevant consideration, or failing to make a decision by authorising a breach of the [EOA]?
7.Did the Tribunal act outside of its powers and make an error of law by breaching, or failing to consider, section 38(5) of the [Complaints Act] by acting contrary to law when reaching a decision that authorised or assisted the Insurer to contravene a provision of Part 4, 6 or 7 of the EOA under s 105?
Mr Macras relied on six grounds in support as follows:
1.The Tribunal erred in law in finding that the Insurer could refuse to pay Benefits under the Policy to the Applicant by reason of his failure to disclose certain medical conditions, where the Applicant was not aware of certain conditions and thus did not have a duty to disclose them under the Act.
2.The Tribunal erred in law in finding that the Insurer had grounds upon which to seek further information from the Applicant, despite the Applicant complying with his duty of disclosure under the Act.
3.Alternatively to Ground 2, the Tribunal erred in law in finding that the Insurer had grounds upon which to seek further information from the Applicant, despite the Applicant not having to comply with the duty of disclosure under the Act, as the Insurer had his complete medical file at the time the Policy was issued and had authorisation to access the Applicant’s medical files.
4.The Tribunal erred in failing to find that the Insurer pay the benefit to the Trustee, as the Applicant has shown that he is entitled to the Benefit under the Policy, being Total and Permanent Disability and Income Protection.
5.The Tribunal erred in law by authorising the Insurer to breach the [EOA], as the Tribunal had before it in the materials supplied by the Insurer when reaching a decision, that the Victorian Equal Opportunity and Human Rights Commission (VEOHRC) had contacted the Insurer on complaint by the Applicant and that VEOHRC had found the claims process to be discriminatory. Furthermore, the Tribunal had noted that the Applicant had raised this in paragraph 37 of their decision but had failed to consider it in reaching their decision, and thereby authorised the Insurer to commit unlawful discrimination.
6.In addition to ground 5, the Tribunal acted outside of their power and erred in law when reaching their decision by themselves acting contrary to law as their decision assisted or authorised the Insurer to commit unlawful discrimination.
Mr Macras also filed detailed and extensive written submissions in support of his appeal.
Central to the contentions advanced by Mr Macras in support of his appeal was his claim that he had made full disclosure of pre-existing conditions and the Insurer had all the information it required to be satisfied of his entitlement to be paid benefits under the Policy. The Tribunal correctly stated, however, that the issue was not what decision the Tribunal would have made on the material which the Trustee and the Insurer had but whether the decisions were fair and reasonable. To answer that question, the Tribunal correctly examined whether the Insurer had the right under the terms of the Policy to ask for further proof or information it considered relevant to its liability under the Policy. The Tribunal also correctly examined whether there was evidence to support the position of the Insurer that it required further information before it could make a determination on whether the exclusion for pre-existing conditions applies. That evidence included: (1) a report from Dr SW, a general practitioner, who advised that Mr Macras had a long history of depression; (2) a report from Ms ML, a psychologist, who expressed the opinion that Mr Macras may have suffered from Asperger’s syndrome since childhood, and had symptoms of depression and anxiety since 2006 for which he sought counselling; (3) Ms ML also reported that Mr Macras was diagnosed with depression in his early 20s for which he sought psychological treatment; and (4) Medicare records which indicated that Mr Macras had numerous consultations for psychological treatment and mental health reviews prior to the commencement of the Policy. The Tribunal drew on that evidence to decide that the Insurer’s decision that it could not progress its assessment of Mr Macras’ claims until Mr Macras had provided his authority for it to obtain further medical evidence was fair and reasonable in the circumstances. This conclusion was open to the Tribunal having regard to the medical evidence before it and the provisions of the Policy extracted above. Furthermore, in view of that evidence, the Tribunal was not bound to accept Mr Macras’ claim that there was full disclosure of his pre-existing conditions or that the Insurer had all the information it required to be satisfied of his entitlement to be paid benefits under the Policy.
The Tribunal also correctly considered whether the Trustee had the right under the terms of the Trust Deed not to make a decision until the Insurer made a decision. Having regard to the terms of cl 11 of the Trust Deed, pursuant to which the component of a member’s benefit that relates to cover under an insurance policy is governed by and subject to the terms of the insurance policy under which the benefit is payable, it was also open to the Tribunal to be satisfied that it was fair and reasonable for the Trustee not to make a decision on whether to make a payment to Mr Macras from the Fund until it received notification from the Insurer about Mr Macras’ entitlement to be paid benefits. The Tribunal addressed the correct questions and no legal error is discernible in the Tribunal’s reasoning, which had an evident and logical evidentiary basis for the conclusion reached.
Mr Macras also challenged the “finding” of the Tribunal that he had failed to make full disclosure of his pre-existing conditions prior to taking out the Policy and the Insurer could refuse to pay him benefits under the Policy. However, the Tribunal did not make any such finding. To the contrary, it expressed no view at all on whether Mr Macras had made full disclosure or whether the Insurer has the right to refuse to pay benefits to him. To the extent that Mr Macras’ appeal relies on the premise there was such findings made, the appeal is brought on a misconceived basis. To the extent that these submissions were an invitation to the Court to engage in merits review and decide for itself whether Mr Macras is entitled to be paid benefits under the Policy, the Court does not have that jurisdiction under s 46(1) of the Complaints Act. By s 46, a party can only appeal on a question of law from a determination of the Tribunal and it is settled law that in appeals of this kind, the subject matter of the Court’s jurisdiction is confined to the question or questions of law which arise on the decision of the Tribunal: Haritos v Federal Commissioner of Taxation (2015) 233 FCR 315 at [62] (“Haritos”). By reason of the limited nature and scope of an appeal under s 46, the Court cannot engage in fact finding for itself or review the merits to substitute its own findings on factual matters.
Grounds 5 and 6 also have no merit. They are premised on the claim that the Victorian Equal Opportunity and Human Rights Commissioner found the claims process to be discriminatory and that the Tribunal acceded to, or enabled, the contravention of the EOA in holding that it was satisfied that decisions under review were fair and reasonable. Although Mr Macras did file a complaint about the conduct of the Insurer and the Trustee with the Victorian Equal Opportunity and Human Rights Commission, the Commissioner ultimately closed its file without determining his complaint. The Tribunal’s reasons record that one of Mr Macras’ submissions was that “the actions of the Trustee and the Insurer qualify as discrimination under the Equal Opportunity Act”. The Tribunal did not making any finding as to whether or not he was being discriminated against in breach of the EOA and there was also no legal error on the part of the Tribunal in failing to do so. The question for the Tribunal was whether the Insurer’s decision that it could not assess Mr Macras’ entitlement to benefits without further information was fair and reasonable. Whether it was fair and reasonable depended on the terms of the Policy and the Tribunal correctly considered whether the Insurer had the right under the Policy to seek further information to enable assessment of whether the exclusion provision was engaged. As the Tribunal determined, under the terms of the Policy the Insurer had a right to request information it considered relevant to its liability under the Policy, which extended to information required by the Insurer to allow it to ascertain whether a condition was pre‑existing at the time of the application (whether disclosed or not) as well as information related to the assessment of the applicant’s claims under the total and permanent disability and income protection definitions of the Policy. Whether the Insurer was engaging in discriminatory conduct in seeking to obtain Mr Macras’ medical information or further medical information about his conditions did not arise for determination on the question of the fairness or reasonableness of the decision of the Insurer that it required more information before it could assess Mr Macras’ claims. Critically and significantly, the Insurer has not yet made a decision as to whether to accept or reject Mr Macras’ claim for benefits but, as permitted by the Policy, has sought further information in order properly to assess the claims. In that regard, as I have held, the evidence before the Tribunal was capable of supporting the position of the Insurer that it requires more information before it can make a decision on the claims.
Mr Macras’ written submissions raised numerous other arguments and claims which, broadly stated (as best can be understood):
(a)challenged the right of the Insurer to access his medical reports;
(b)made claims of breach of consumer protection law;
(c)made claims of fraud and misconduct by the Insurer and the Trustee and breaches of fiduciary duty against the Trustee;
(d)sought findings that the Insurer cannot rely on terms of the Policy;
(e)sought an increase to his insurance coverage; and
(f)made claims for damages against the Insurer, Trustee, the Tribunal and the Commonwealth.
These other arguments and claims do not arise for consideration in this appeal as they are beyond the subject matter and scope of the appeal and this Court’s jurisdiction under s 46 of the Complaints Act, which is confined to an appeal on questions of law arising from the decision of the Tribunal: s 46 of the Complaints Act; Haritos.
Finally, it should be mentioned that for the purposes of the hearing of the appeal, Mr Macras served notices to admit on the respondents. By that notice to admit, Mr Macras sought to obtain the admissions, broadly stated, that:
(a)false and misleading representations were made by a financial planner affiliated with the National Australia Bank (“NAB”) in a statement of advice prepared for Mr Macras in 2012 concerning the Fund;
(b) the advice was negligent;
(c)NAB is liable for such false and misleading representations and negligent advice; and
(d)NAB received commissions for the insurance policies taken out by him.
The notices to admit have no relevance at all to the issues arising in this appeal and the respondents successfully applied to have it set aside. Any claim which Mr Macras may have against NAB in relation to the advice he was given is not a claim that is within the subject matter of this appeal. The notice to admit could not be used in this appeal to agitate such a claim as part of the appeal, nor used as a means by which to contest either the factual basis of the Tribunal’s decision or to put new facts before the Court by way of challenge to the Tribunal’s decision. As I have explained, the Court’s task is to consider whether there is an error of law on the part of the Tribunal in reaching its decision: Haritos at [62]. The Court does not have the power as part of this appeal to determine any other claims sought to be raised by the notice to admit which do not come within the scope of the Court’s jurisdiction conferred by s 46 of the Complaints Act.
For these reasons, the appeal must be dismissed.
I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Davies. Associate:
Dated: 30 November 2018
SCHEDULE OF PARTIES
VID 1091 of 2017 Respondents
Fourth Respondent:
SUPERANNUATION COMPLAINTS TRIBUNAL
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