MetLife Insurance Ltd v Hart

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FEDERAL COURT OF AUSTRALIA

MetLife Insurance Ltd v Hart [2021] FCA 410

File number: NSD 1260 of 2020
Judgment of: DERRINGTON J
Date of judgment: 30 April 2021
Catchwords: SUPERANNUATION – decision of Superannuation Complaints Tribunal setting aside “constructive rejection” of claim – where Tribunal failed to address the correct questions as to whether a rejection had occurred – where Tribunal failed to apply deed of cessation of cover in relation to historic TPD claim – where Tribunal failed to correctly apply definition of TPD in context of cessation of policy cover – matter remitted to Tribunal for further consideration
Legislation: Superannuation (Resolution of Complaints) Act 1993 (Cth) ss 4, 14, 18, 33, 37
Cases cited:

Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321

Finch v Telstra Super Pty Ltd (2010) 242 CLR 254

Haritos v Federal Commissioner of Taxation (2015) 233 FCR 315

Hellessey v MetLife Insurance Ltd [2017] NSWSC 1284

MetLife Insurance Ltd v FSS Trustee Corporation [2014] NSWCA 281

Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259

Sargeant v FSS Trustee Corporation [2018] NSWSC 1997

Sharp Corporation of Australia Pty Ltd v Collector of Customs [1995] 59 FCR 6

Shuetrim v FSS Trustee Corporation [2015] NSWSC 464

TAL Life Ltd v Shuetrim (2016) 91 NSWLR 439
Division: General Division
Registry: New South Wales
National Practice Area: Commercial and Corporations
Sub-area: Commercial Contracts, Banking, Finance and Insurance
Number of paragraphs: 142
Date of hearing: 29 March 2021
Counsel for the Applicant: Mr N Williams SC with Mr J Harrison
Solicitor for the Applicant: Moray & Agnew Lawyers
Counsel for the First Respondent: Mr T Ower
Solicitor for the First Respondent: Cardillo Gray Partners
Counsel for the Second Respondent: Dr R Austin
Solicitor for the Second Respondent: Thomson Geer
Counsel for the Third Respondent: The third respondent filed a submitting notice save as to costs

ORDERS

NSD 1260 of 2020
BETWEEN:

METLIFE INSURANCE LTD

Applicant
AND:

MARIE HART

First Respondent

AWARE SUPER PTY LTD (FORMERLY FSS TRUSTEE CORPORATION)

Second Respondent

SUPERANNUATION COMPLAINTS TRIBUNAL

Third Respondent

ORDER MADE BY:

DERRINGTON J

DATE OF ORDER:

30 APRIL 2021

THE COURT ORDERS THAT:

1.The determination of the Superannuation Complaints Tribunal is set aside.

2.It is declared that the Superannuation Complaints Tribunal erred in determining that MetLife Insurance Ltd had “constructively rejected” the claim of the first respondent.

3.The matter is remitted to the Superannuation Complaints Tribunal or such other body lawfully authorised to undertake the responsibilities of that Tribunal, as the case may be, to be determined according to law and these reasons.

4.There be no order for costs.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

DERRINGTON J:

INTRODUCTION

  1. This is an appeal brought by MetLife Insurance Ltd (MetLife) from a decision of the Superannuation Complaints Tribunal (the Tribunal) that set aside a purported “constructive rejection” of a claim by the first respondent, Ms Marie Hart, for a total and permanent disability…

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Details
Case
[2021] FCA 410
Decision Date

CaseChat Overview and Summary

MetLife Insurance Ltd v Hart was an appeal by MetLife against a decision of the Superannuation Complaints Tribunal (SCT) which had set aside a decision to reject a claim for total and permanent disability (TPD) benefits by Ms Hart. The SCT had concluded that the insurer had "constructively rejected" Ms Hart's claim and had ordered the insurer to pay her the amount she claimed. The insurer argued that the SCT had made a number of errors in its determination of the matter, including failing to address the correct questions as to whether a rejection had occurred and failing to correctly apply the definition of TPD in the context of the cessation of policy cover.

The court found that the SCT had erred in setting aside the insurer's decision to reject Ms Hart's claim. The court held that the SCT had failed to address the correct questions in relation to whether a rejection had occurred and had failed to apply the correct legal principles in relation to the definition of TPD in the context of the cessation of policy cover. The court found that the SCT had not considered all of the relevant evidence and had not given proper weight to the evidence that was before it. The court also found that the SCT had not properly considered the effect of the cessation of cover on the claim. The court held that the SCT had erred in law and that the matter should be remitted to the SCT for further consideration.

The court set aside the decision of the SCT and remitted the matter back to the SCT for further consideration. The court declared that the SCT had erred in determining that MetLife Insurance Ltd had "constructively rejected" the claim of the first respondent. The matter was remitted to the SCT or such other body lawfully authorised to undertake the responsibilities of that Tribunal, as the case may be, to be determined according to law and these reasons. There was no order for costs.

Orders

Orders of the court

1. The determination of the Superannuation Complaints Tribunal is set aside.

2. It is declared that the Superannuation Complaints Tribunal erred in determining that MetLife Insurance Ltd had “constructively rejected” the claim of the first respondent.

3. The matter is remitted to the Superannuation Complaints Tribunal or such other body lawfully authorised to undertake the responsibilities of that Tribunal, as the case may be, to be determined according to law and these reasons.

4. There be no order for costs.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

It ought to be acknowledged that this result will be a great disappointment for Ms Hart who has not only suffered significant personal distress through injury and illness, but has also endured an extended period during which her entitlements have not been recognised or determined. As is discussed in greater detail in these reasons, the causes of that delay are varied, but they do not include the conduct of MetLife which has dealt with her claim in an expeditious and professional manner. What appears to have happened is that, prior to Ms Hart turning her attention to MetLife’s potential liability, there had been a significant delay by the trustee of her superannuation fund in dealing with her claim as well as a further delay by the current insurer to the fund in considering it. Unfortunately, in expressing her understandable frustration arising from that situation, Ms Hart appears to have failed to differentiate between the respective insurers and has tended to attribute the delay of others to MetLife. In the light of that lamentable delay, the decision of the Court in this appeal has been expedited and it is hoped that these reasons will assist in the resolution of the relevant issues. BACKGROUND FACTS Ms Hart was a member of the New South Wales Police Force (NSWPF) from 29 August 2003 until her official discharge on 3 July 2016. At all relevant times, the First State Superannuation Scheme provided superannuation benefits to members of the NSWPF and the second respondent, formerly known as FSS Trustee Corporation (FSS), was the trustee of that scheme (the FSS Scheme). With effect until 30 September 2011, MetLife, pursuant to the PBR Policy, provided death and TPD cover for scheme members who were New South Wales police officers. In the material before the Court, the PBR Policy was occasionally referred to as the “Enhanced Policy”. The benefits under that policy were greater than those provided under MetLife’s standard cover (“the Basic Policy”) which were available to members of the scheme until 30 November 2010. It is important to appreciate that the cessation of MetLife’s cover under the respective policies corresponded with the assumption of liability by TAL Life Limited (TAL Life) for any new claims arising under them from the date of such cessation, except for certain claims in respect of which MetLife remained “on risk”. In effect, TAL Life was substituted for MetLife as the provider of insurance to the fund members pursuant to those policies. Unfortunately, Ms Hart’s time in the police force was somewhat problematic. On 19 February 2007, she made a claim for workers’ compensation pursuant to an unrelated policy in respect of a back injury. The material suggests that the onset of this injury commenced not long after she had joined the police force and was the consequence of her wearing a gun belt in the course of her general duties. It would seem that the sequelae of her injuries worsened over time and it is uncontroversial that, from 6 October 2010, she was placed on permanently restricted duties in the role of an exhibits officer. In that position, she worked three, eight hour days per week.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Section 14 provides for complaints to be made to the Tribunal about decisions made by a trustee:14Complaints about decisions of trustees other than decisions to admit persons to life policy funds(1)This section applies if the trustee of a fund has made a decision (whether before or after the commencement of this Act) in relation to:(a)a particular member or a particular former member of a regulated superannuation fund; or (b)a particular beneficiary or a particular former beneficiary of an approved deposit fund.…(2) Subject to subsection (3) and section 15, a person may make a complaint (other than an excluded complaint) to the Tribunal, that the decision is or was unfair or unreasonable.Note: Although a complaint is about the decision of a trustee, the Tribunal may join an insurer or other person as a party to the complaint (see subsection 18(1)). The Tribunal may then review any decision of a person joined as a party that may be relevant to the complaint. The Tribunal may join an insurer to a complaint under s 14 if the subject matter of the complaint relates to a “disability benefit” under a contract of insurance between the trustee and the insurer, and the Tribunal decides that the insurer should be a party to the complaint: s 18(1)(c). The consequence of such joinder is that, in reviewing the trustee’s decision, the Tribunal must also review any decision of the insurer relevant to the complaint: s 37(2)(a). Where a complaint is made, the Tribunal must inquire into it and attempt to settle the complaint by conciliation: s 27. If conciliation is unsuccessful, the Tribunal must undertake a review of the complaint at a “review meeting”: s 32. A party to a complaint may make written submissions to the Tribunal for the purposes of a review meeting: s 33. If the Tribunal thinks it necessary, it may also permit the parties to make oral submissions at the review meeting: s 34(1)-(2). As is not uncommon in administrative review schemes of this nature, the Tribunal is “not bound by technicalities, legal forms or rules of evidence”, is required to act as speedily as proper consideration of the reviews allows, and may inform itself of any matter relevant to the review in any way it thinks appropriate: s 36. The powers of the Tribunal relevant to the review of complaints made pursuant to s 14 are set out in s 37 which relevantly provides:37 Tribunal powers—complaints under section 14…(2) If an insurer or other decision-maker has been joined as a party to a complaint under section 14:(a) the Tribunal must, when reviewing the trustee’s decision, also review any decision of the insurer or other decision-maker that is relevant to the complaint; and(b) for that purpose, has all the powers, obligations and discretions that are conferred on the insurer or other decision-maker; and(c) subject to subsection (6), must make a determination in accordance with subsection (3).(3) On reviewing the decision of a trustee, insurer or other decision-maker that is the subject of, or relevant to, a complaint under section 14, the Tribunal must make a determination in writing:(a) affirming the decision; or(b) remitting the matter to which the decision relates to the trustee, insurer or other decision-maker for reconsideration in accordance with the directions of the Tribunal; or(c) varying the decision; or(d) setting aside the decision and substituting a decision for the decision so set aside.(4) The Tribunal may only exercise its determination-making power under subsection (3) for the purpose of placing the complainant as nearly as practicable in such a position that the unfairness, unreasonableness, or both, that the Tribunal has determined to exist in relation to the trustee’s decision that is the subject of the complaint no longer exists.(5) The Tribunal must not do anything under subsection (3) that would be contrary to law, to the governing rules of the fund concerned and, if a contract of insurance between an insurer and trustee is involved, to the terms of the contract.(6) The Tribunal must affirm a decision referred to under subsection (3) if it is satisfied that the decision, in its operation in relation to:(a) the complainant; and(b) …was fair and reasonable in the circumstances.

Ratio Decidendi

Legal Principle Established

It may also be observed that, despite the generality of the scope of powers conferred on the Tribunal to review complaints, the SRCA does impose some restraints on the Tribunal’s exercise of those powers and the discharge of its review function. The entitlement of parties to a complaint to make written submissions must necessarily give rise to an obligation on the Tribunal to consider such submissions in the performance of its statutory task. The same may be said of any oral submissions the Tribunal permits to be made. This is consistent with the Tribunal being obliged to undertake “proper consideration” of a review of a complaint (s 36) and it being obliged to pursue the objective of providing review mechanisms that are, inter alia, “fair”: s 11. More generally, it might also be thought that the legislature did not intend to empower a body to negatively affect parties’ rights without affording them an opportunity to be heard and to have their contentions taken into consideration.CONSIDERATION Appeal on a question of law Appeals to this Court from decisions of the Tribunal may only be made “on a question of law”: SRCA, s 46(1). Although the respondents submitted there was no such appeal in this case, little assistance was given with respect to the nature of the concept of “an appeal on a question of law” or as to how the issues on appeal did or did not satisfy that characterisation. Admittedly, the concept of “an appeal on a question of law” is elusive and one which numerous judges have attempted to comprehensively define without substantial success. Whilst the application of the concept may be difficult enough in relation to purely administrative bodies dealing with statutory rights, an additional dimension arises when the concept concerns appeals from administrative bodies which must apply statutory rules, taking into account the legal rights of private parties pursuant to contractual arrangements. The submissions of FSS to this Court did helpfully refer to the Full Court’s decision in Haritos v Federal Commissioner of Taxation (2015) 233 FCR 315. There, it was observed that no judicial exegesis should be given to the expression “appeal on a question of law”, although it was identified (at 384 [194]) that the mere fact that an appeal raises a question of law is not sufficient. The Court adopted the observations of Hill J in Sharp Corporation of Australia Pty Ltd v Collector of Customs [1995] 59 FCR 6 (at 16) that, where the question is whether facts found fall within or without the description used in a statute, the decision on where they fall is a question of fact and not law. However, the Court also accepted that a finding of fact may be vitiated by an error of law where the finding is based on a misdirection of law: at 384 [197]: and that cases involving mixed questions of law and fact may give rise to an appeal on a question of law where the error involved is one of law. It was also submitted by FSS that an appeal on a question of law will fail unless it is established that, but for the error of law, the decision below would, or may have been, different: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 353.