National Mutual Life Assoc Ltd v Campbell

[2001] HCATrans 34

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M80 of 2000

B e t w e e n -

NATIONAL MUTUAL LIFE ASSOCIATION OF AUSTRALASIA LTD

Applicant

and

RONALD ALBERT CAMPBELL

Respondent

Application for special leave to appeal

GLEESON CJ
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 16 FEBRUARY 2001, AT 3.02 PM

Copyright in the High Court of Australia

MR J.E. MIDDLETON, QC:   If the Court pleases, I appear with my learned friends, MR G.P. HARRIS and MR J.J. GLEESON, on behalf of the applicant.  (instructed by Kevin D.Le Plastrier, General Counsel, AXA Asia Pacific Holdings Limited)

MR P.J. HANKS, QC:   If the Court pleases, I appear with my friend, MR P.J. COISH, for the respondent.  (instructed by Ryan Carlisle Thomas)

GLEESON CJ:   Yes, Mr Middleton.

MR MIDDLETON:   If your Honours please, the matter which is sought to be agitated in this application is, in our submission, a matter of some significance, dealing, as it does, with the nature of the hearing of the Superannuation Complaints Tribunal.  It probably needs no rehearsal about the importance of that Tribunal in the administration of superannuation schemes because it has a supervisory role over insurers and trustees in how they administer and determine the rights and obligations of claimants.

One thing that is not in dispute between my learned friend and myself is that the Tribunal cannot simply impose its own decision because it disagrees simpliciter with a decision of the person its reviewing.  So if, for instance, there was a decision of the Tribunal saying, “I disagree with the insured or the trustee and for that reason we will overturn it”, that would be beyond the power of the Tribunal.

GLEESON CJ:   Am I right in thinking that the kind of decision that might be reviewed, if I can use that expression, by the Tribunal is various?

MR MIDDLETON:   Yes.

GLEESON CJ:   And that expression “decision not fair or reasonable” is a compendious expression that applies to a whole range of discretionary or factual or other decisions?

MR MIDDLETON:   Put aside “discretionary”.  There may be some issue about that.  That has not been raised in this application.  But your Honour is correct when your Honour says that those words are to apply to a myriad of situations and a myriad of applications.  We do not press in this case any useful attempt to perhaps define “fair and reasonable” other than what the Full Court did.  In a sense, one can determine what is fair and reasonable having regard to what is before one.

GLEESON CJ:   But can you not say the decision that you happen to disagree with, “I just think that is not reasonable”?

HAYNE J:   And have we not got to start at the statute and see where this “fair and reasonable” expression cuts in?

MR MIDDLETON:   Yes, and can I take your Honours to section 37(6).  Do your Honours have that?

GLEESON CJ:   I just have not got it at the moment, Mr Middleton.

MR MIDDLETON:   I am sorry, your Honour.  My learned friend reminds me it is in the application book ‑ ‑ ‑

HAYNE J:   Well, you cannot look at 37(6) in isolation.  You have to start at 37(3), have you not?

MR MIDDLETON:   Yes.  Section 37(3) gives the powers of the Tribunal.

HAYNE J:   No.  It tells it what it must do.  It is not powers.  That is the statement of its obligation.

MR MIDDLETON:   And it “must make a determination in writing:

(a)  affirming . . . 

(b)  remitting . . . 

(c)  varying . . . or

(d)  setting aside –

Now, that is the various things it can do.

HAYNE J:   Well, it must do one of them.

MR MIDDLETON:   It must do one of them and it does not have to do any one of those (a), (b), (c), (d), depending, of course, upon what the law requires what is before it, but the limiting matter which we rely upon comes in subsection (6).

HAYNE J:   Which obliges it to “affirm . . . if it is satisfied”, that is to say it reaches a positive degree of persuasion, “that the decision . . . was fair and reasonable”.

MR MIDDLETON:   Yes, your Honour.

HAYNE J:   Now, how do you say that we should – where lies the error in what the Tribunal has done?

MR MIDDLETON:   In this particular case they, firstly, relied upon a purported reason for coming to the conclusion that the insurer and trustee decision was wrong, but there was no basis for otherwise saying that the decision was “fair and reasonable”.

HAYNE J:   That is to say they were not satisfied, they did not reach the degree of persuasion, that the decision of National Mutual was “fair and reasonable”.  Is that what actually happened?

MR MIDDLETON:   No, your Honour.  No, in our respectful submission, not because the way in which the Tribunal looked at the matter was to do very simply this.  It said that, “We have a treating psychiatrist and we have psychiatrists, two of them, who came in later on to look at the position of the claimant”.  Can I go to page 10 of the application book, because I think the wording of the Tribunal is important because it analyses the – we can analyse the reasoning of the Tribunal.

GLEESON CJ:   Does your argument produce the consequence in a case like this that as long as there is some evidence on which the Tribunal could have found in favour of the trustee there is no capacity for the Tribunal – I am sorry.  If there is some evidence on which the trustee could have found against an applicant - if I can use that expression - there is no basis on which the Tribunal can substitute its opinion on the facts?

MR MIDDLETON:   No, I go further.  If the Tribunal finds no error, then it can, as Justice Hayne has raised with me, rely upon section 37(3), but if in its analysis you come to the conclusion – because you have to give some semblance of working to subsection (6) ‑ ‑ ‑

HAYNE J:   Yes, and (3).

MR MIDDLETON:   ‑ ‑ ‑ and (3).  If it comes to the conclusion that looking at the material it is “fair and reasonable”, then it must affirm.  What the legislation is seeking to do is not to give open slather - if I may use that expression - to the Tribunal.  The Tribunal is to be constrained in not having a complete de novo hearing, otherwise ‑ ‑ ‑

HAYNE J:   Why?  Where do you get that from?

MR MIDDLETON:   Subsection (6).

HAYNE J:   Let us go back.  What is the section – it is 14, is it ‑ ‑ ‑

MR MIDDLETON:   Section 14, your Honour.

HAYNE J:   ‑ ‑ ‑ that authorises a review?

MR MIDDLETON:   Section 14 gives the opportunity for a complainant to seek a review and that sets out the basis of the complaint, being that the decision was not “fair or reasonable”.

GLEESON CJ:   Reviews are sometimes divided, perhaps by way of oversimplification, into merits reviews and reviews on the law.  What better way could you provide for a merits review than by requiring the reviewing tribunal to consider whether the decision was “fair and reasonable”?

MR MIDDLETON:   Your Honour, I am not suggesting that there is not an element of de novo hearing before the Tribunal.  What I am suggesting, however, it is not complete.  In other words, they cannot simply implement their own decision over that of the insured or trustee.  It would be a waste time, the way in which this legislation works, for there to be a dry run before the insured and trustee, put your material, and then have a situation where the Tribunal just rehears it as if nothing happened before you went to the Tribunal – that is our submission – because otherwise the legislation as it works would not operate in a sensible way.

If we can just think about from a matter of principle.  The insured and trustees have obligations.  They have obligations, the trustee under the trustee deed, and it must act appropriately to determine whether or not a claimant is entitled to a benefit or not.  Now, if there is a complaint that that decision was unfair or unreasonable, then the matter goes to the Tribunal.  Now, when it goes to the Tribunal, under section 37(3) the Tribunal must make a determination of some sort, and all the legislation does is give all the options.

GLEESON CJ:   But what it has to be satisfied before it is bound to affirm is that the decision was reasonable, not that the decision was not unreasonable.

MR MIDDLETON:   Yes, exactly, your Honour, exactly.  So application can be made because you are asserting in section 14 that the decision is “unfair or unreasonable”.  You then enliven the Tribunal’s power.  It then can make a determination in accordance with subsection (3), but subsection (6), if you like, is the limiting restraint upon the Tribunal as to what it must do where it comes to the view it is “fair and reasonable”, that is, the decision, in its operation below.

HAYNE J:   That is, must the Tribunal arrive at a degree of positive persuasion that the decision is “fair and reasonable”, leave aside what the content of that may be?

MR MIDDLETON:   Yes, your Honour.  If on the evidence that is the decision of the Tribunal, then you have no option but to confirm the decision below.

HAYNE J:   And if it does not reach the degree of positive persuasion, “That we are satisfied it was fair and reasonable”, what can it do except allow the complaint and substitute its own view?

MR MIDDLETON:   Or it can still affirm the decision.  It does not have to affirm the decision, but it may affirm the decision.  It is not mutually exclusive, subsection (7), the operation of subsection (3).  What subsection (6) says is you “must”, whereas in subsection (3) you “must make a determination in writing”.  There may be many reasons why you may affirm the decision.  Let us say there is new evidence that the person is incapacitated.

GLEESON CJ:   But both (3) and (6) are mandatory, are they not?

MR MIDDLETON:   Well, (3) is mandatory in the sense that you “must make a determination in writing”, doing one of those four things.

GLEESON CJ:   Well, (3) tells you the available courses.

MR MIDDLETON:   Yes.

GLEESON CJ:   And then (6) tells you the circumstances in which you must take the first of those available courses.

MR MIDDLETON:   Yes.

GLEESON CJ:   And your submission appears to be, as I understand it, that the Tribunal must take the first of those available courses, even if it disagrees with the factual merits of the decision.

MR MIDDLETON:   No, your Honour, I am not saying that.  What I am saying is that if you read a decision – the first proposition, your Honours, is this, that this Tribunal cannot just impose its own decision because it disagrees with a decision of the trustee or insured.

GLEESON CJ:   Can it impose its own decision if it thinks that the factual judgment of the insurer was unreasonable?

MR MIDDLETON:   If it thinks it was unreasonable, yes, it may, on the evidence.

GLEESON CJ:   And did not the Tribunal in the present case conclude that the factual judgment of the insurer was unreasonable?

MR MIDDLETON:   No, in our submission, not and that is why I would like to take your Honours to what they found, because that is the essential element of this case.  Could I take your Honours to page 10 of the application book and line 9:

The Tribunal has set out above why it prefers Dr LL’s opinion.  Dr LL is RC’s treating psychiatrist and has diagnosed him as suffering from post traumatic stress order . . . The Tribunal has concluded that the Insurer and the Trustee did not give sufficient weight to Dr LL’s opinion, given –

and that is important –

that Dr LL was RC’s treating psychiatrist.

Then going down to line 23 in the next paragraph:

In the Tribunal’s opinion, the Insurer and the Trustee did not give sufficient weight to Dr LL’s opinion, and therefore the decisions of the Trustee and Insurer were not fair and reasonable.

GLEESON CJ:   Now, pausing there, to say that a fact‑finding tribunal has not given sufficient weight to certain evidence is to say, is it not, that the fact‑finding tribunal has not behaved reasonably?

MR MIDDLETON:   Not in the circumstances of here.  Can I say why?  Because here the only basis of that fact‑finding was the basis that they prefer, that is, the Tribunal, the treating doctor over the fact of two other psychiatrists who were not the treating doctor.  So what they did was impermissibly to use a reason which was not available to distinguish between two bits of evidence.  Can I say why it is more of a vice in this case?  Because the Tribunal does not criticise any of the doctors.  It does not say, “The criteria used by the other psychiatrists is wrong.”  Nor is this a case where the Tribunal sees the psychiatrists, because this is all done on the papers before the Tribunal.

So what it is saying is that there a class of doctor out there, which is the treating doctor, “And we are going to prefer the treating doctor and it doesn’t matter how many psychiatrists you have that come in objectively, they are going to be discounted”.  That is all that happened in this case.  Now, that is too easy to do.

HAYNE J:   Is that the core of the complaint?  If the core of your complaint is about the way in which the Tribunal went about the particular task, that is a thoroughly unlikely candidate for leave.  The complaint has to be, it seems to me, a complaint about the approach adopted according to the statute, not whether they were in this case entitled to prefer the treating doctor because he had seen him more often and longer, which seem to be the nub of what they said.

MR MIDDLETON:   It is, your Honour.  I accept exactly what your Honour says, but unless I persuade your Honours that this is a case whereby they have done something impermissible, I do not get to the second step.  I mean, if your Honours say to me, “Well, I accept that as being a valid reason”, then that is the end of my case.  The first step I have to persuade your Honours is that what they did here was simply no more than saying, “Look, we are going to make our own decision.  We will give you some reason for why, but it is not a reason that can be justified on any rational ground.”

It is nearly as bad as saying, “Well, that doctor had blue eyes and I’m going to classify that doctor as having blue eyes and I’m not going to listen to him” – this is the Tribunal saying – “whereas I think that a person who has brown eyes I’ll think they are good”.  Justice Heerey gave the example – he was the justice at first instance.  If we just have a look at the example he gave.  If I may look at page 26, which raises the issue – page 26 of the application book, line 35:

To illustrate the point by a hypothetical example discussed in argument, if a trustee had rejected a claim by preferring a general practitioner of twelve months’ experience against the opinions of five professors from the Royal Melbourne Hospital, the Tribunal might understandably conclude that the decision was unfair in the sense of being unjust.

Now, with the greatest respect to his Honour, one asks rhetorically, “Why?”.  One has to go further than just looking at the numbers.  One has to look to see what is the criteria.  The first‑year general practitioner may well be, if one analyses his research and his observations and his criteria, to be well preferred, with the greatest respect, to five professors.

GLEESON CJ:   Just remind us who constitute this Tribunal.  I am not asking for their names, only their qualifications.

MR MIDDLETON:   No.  They are not doctors I gather.  One is a doctor?  I think not a medical doctor.  If the relevance is a medical doctor, there is no medical doctor, as I understand it, on the Tribunal.  So they are not bringing their own speciality to impose.  They are looking at the papers.  There is no

criticism about the individual doctors.  It is merely a statement at the end of the day saying, “Well, I prefer a treating doctor”.  Now, why is a treating doctor to be preferred over two people who come in later, who may be more objective?

GLEESON CJ:   Are you saying the decision of the Tribunal was unreasonable?

MR MIDDLETON:   Is wrong.

GLEESON CJ:   The same thing?

MR MIDDLETON:   Is wrong, but more importantly ‑ ‑ ‑

HAYNE J:   Do you take issue with what Justice Heerey says at page 26, line 29, “The Tribunal makes its own decision”?

MR MIDDLETON:   It makes its own decision subject to the operation of subsection (6).  Unless the Tribunal comes up with some reason why it is not – unless there is something, you will always have the situation where the Tribunal will be thinking it is “fair and reasonable”.  Could we put it in a practical context?  You have a situation here where you will have a number of insurers or trustees looking at the position and the applicant will always have a treating doctor, so that doctor will come before the Tribunal, will be before the Tribunal.  You always have a treating doctor.

If you take this as being the way in which you do not impose your own decision, the treating doctor will always come up trumps.  You cannot fight it.  That cannot be the way in which the operation of the Act is to work.  If, as in some of the material we have shown you with later decisions, the Tribunal said, “We disagree with the insured, therefore, we find in your favour”, that would be impermissible.  Now, this decision is exactly the same as that.  All they are doing is trying to reason, but impermissibly, some basis for overturning the decision and there is no logic or reason with that distinction, in our respectful submission.  If your Honours please.

GLEESON CJ:   We do not need to hear you, Mr Hanks.

The Court is of the view that there are insufficient prospects of success of an appeal to warrant a grant of special leave in this matter and the application is refused with costs.

We will adjourn for a short time to reconstitute.

AT 3.22 PM THE MATTER WAS CONCLUDED