Phillips v Commissioner for Superannuation

Case [2004] FCA 28

FEDERAL COURT OF AUSTRALIA

Phillips v Commissioner for Superannuation [2004] FCA 28

SUPERANNUATION – determination of retirement benefits – issuing of a benefit classification certificate based on answers to questions put in pre-employment medical examination – failure to properly answer questions – Administrative Appeals Tribunal re-issuing benefit classification certificate to record medical history accurately – application of ss 25(1) and (4) Administrative Appeals Tribunal Act 1976 (Cth) and s 154(4) of the Superannuation Act 1976 (Cth) – issue of determining whether link exists between conditions specified on the benefit classification certificate and the condition that caused retirement sufficient to satisfy s 66(2)(c) – whether causal connection required – meaning of ‘connected with’ for purposes of s 66(2)

PRACTICE AND PROCEDURE – application of s 44(1) of the Administrative Appeals Tribunal Act 1976 (Cth) – jurisdiction of the Federal Court – jurisdiction limited to questions of law

Administrative Appeals Tribunal Act1975 (Cth) ss 25(1), 25(4), 44(1)
Superannuation Act 1976 (Cth) ss 16(2), 16(4), 16(11), 16AC, 16AC(9), 66(2), 154(4)
Superannuation Legislation Amendment Act 1994 (Cth)

Commissioner for Superannuation v Benham (1989) 22 FCR 413 referred to
Fry v Commissioner for Superannuation (1984) 2 FCR 472 referred to
Harris v Repatriation Commission (2002) 62 ALD 174 cited
Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 referred to
Perrett v Commissioner for Superannuation (1991) 29 FCR 581 referred to

GAIL ROSLYNNE PHILLIPS v COMMISSIONER FOR SUPERANNUATION
Q20 OF 2003

STONE J
30 JANUARY 2004
SYDNEY (Heard in Brisbane)

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY DISTRICT REGISTRY

Q20 OF 2003

ON APPEAL FORM THE ADMINISTRATIVE APPEALS TRIBUNAL CONSTITUTED BY A PRESIDENTIAL MEMBER

BETWEEN:

GAIL ROSLYNNE PHILLIPS
APPLICANT

AND:

COMMISSIONER FOR SUPERANNUATION
RESPONDENT

JUDGE:

STONE J

DATE OF ORDER:

30 JANUARY 2004

WHERE MADE:

SYDNEY (Heard in Brisbane)

THE COURT ORDERS THAT:

1.        The appeal be dismissed.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY DISTRICT REGISTRY

Q20 OF 2003

ON APPEAL FORM THE ADMINISTRATIVE APPEALS TRIBUNAL CONSTITUTED BY A PRESIDENTIAL MEMBER

BETWEEN:

GAIL ROSLYNNE PHILLIPS
APPLICANT

AND:

COMMISSIONER FOR SUPERANNUATION
RESPONDENT

JUDGE:

STONE J

DATE:

30 JANUARY 2004

PLACE:

SYDNEY (Heard in Brisbane)

REASONS FOR JUDGMENT

INTRODUCTION

  1. On 24 June 1988 the applicant retired from the Commonwealth Public Service (‘CPS’) on invalidity grounds. As the applicant had been with the CPS for less than twenty years an investigation was undertaken to determine if her invalidity was related to any condition from which she had suffered prior to joining the CPS. As a result of this investigation a delegate of the Commissioner for Superannuation, the respondent in this proceeding, determined that when the applicant joined the CPS she had not disclosed all required information or she had given false or misleading information about her health at that time. Consequently her superannuation entitlement was reduced. After another delegate of the Commissioner confirmed that decision on 29…

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Phillips v Commissioner for Superannuation [2004] FCA 28
Case
[2004] FCA 28
Decision Date

CaseChat Overview and Summary

The case of Phillips v Commissioner for Superannuation involves an applicant who retired from the Commonwealth Public Service on invalidity grounds. After retiring, a delegate of the Commissioner for Superannuation determined that the applicant had not disclosed all required information about her health at the time of joining the service, leading to a reduction in her superannuation entitlement. The applicant sought a review of this decision by the Administrative Appeals Tribunal (AAT), which upheld the delegate's decision, resulting in the applicant now appealing to the court.

The primary legal issues in this case revolve around the applicant's obligation to disclose her health history accurately when joining the Commonwealth Public Service and the implications of any misrepresentation on her superannuation entitlements. Specifically, the court needed to determine whether the applicant failed to answer properly a question asked of her or gave false or misleading information, what conditions would have been specified in a substitute Benefit Classification Certificate (BCC) had the applicant answered properly, and whether her retirement incapacity was substantially contributed to by any condition that would have been specified in a substitute BCC.

The court reviewed the evidence presented by the applicant, medical experts, and a colleague, and found that the Tribunal's findings were largely adverse to the applicant. The court agreed with the Tribunal's conclusion that the applicant was aware of her psychiatric condition when she answered the questionnaire but failed to disclose it properly, leading to the issuance of a BCC that did not reflect her true health status. The court also found that had the questionnaire been answered properly, a BCC would have been issued specifying conditions such as personality disorder and recurrent major depression. Finally, the court determined that the applicant's retirement incapacity due to OCD was substantially contributed to by these conditions, thereby upholding the Tribunal's decision.

The court dismissed the appeal, affirming the Tribunal's decision that the applicant's superannuation entitlement reduction was justified based on her failure to disclose her health history accurately.

Orders

Orders of the court

1. The appeal be dismissed.

Background

Background to the litigation

On 24 June 1988 the applicant retired from the Commonwealth Public Service (‘CPS’) on invalidity grounds. As the applicant had been with the CPS for less than twenty years an investigation was undertaken to determine if her invalidity was related to any condition from which she had suffered prior to joining the CPS. As a result of this investigation a delegate of the Commissioner for Superannuation, the respondent in this proceeding, determined that when the applicant joined the CPS she had not disclosed all required information or she had given false or misleading information about her health at that time. Consequently her superannuation entitlement was reduced. After another delegate of the Commissioner confirmed that decision on 29 March 2000, the applicant sought review of the decision in the Administrative Appeals Tribunal (‘Tribunal’). Although the Tribunal made some changes to the decision of the delegate (discussed below) the outcome for the applicant in terms of the reduction to her superannuation entitlement was unchanged. The applicant now applies under s 44(1) of the Administrative Appeals Tribunal Act1975 (Cth) (‘AAT Act’) for review of the Tribunal’s decision. BACKGROUND AND LEGISLATIVE FRAMEWORK The applicant was born on 2 December 1949. She commenced employment with the CPS on 14 February 1983. Pursuant to s 16(2) of the Superannuation Act 1976 (Cth) (‘Superannuation Act’) the applicant was required to undergo a medical examination as a pre-condition to permanent employment with the CPS and admission to the relevant superannuation fund. On 14 July 1983, in the course of that medical examination, the applicant was required to complete a questionnaire entitled ‘Statement of Personal Medical History’. In answering the questionnaire the applicant indicated that the only disability from which she had suffered or was suffering from was hay fever or allergic rhinitis. Relevantly, the applicant responded ‘NO’ to each of the six questions in Part 1 of the questionnaire and ‘NO’ to Part 12. The applicant also signed a declaration specifying that this statement was ‘true and correct to the best of my knowledge’. The questions in Parts 1 and 12 were: ‘Are you now suffering or have you ever suffered from any of the following disabilities – 1(a) Nervous fatigue or neurasthenia(b) Mental or nervous conditions(c) Anxiety state(d) Depression or difficulty in sleeping(e) Epilepsy or fits(f) Persistent headaches12(b) Have you had any complaints, illness or injury not mentioned above?’ Based on the physical examination and the applicant’s responses to the questionnaire the Commonwealth Medical Officer reported to the Commissioner that while the applicant was fit for employment, she did not meet the general medical standard because of her allergic rhinitis. Pursuant to s 16(4) of the Superannuation Act, the Commissioner issued a Benefit Classification Certificate (‘BCC’) on 4 January 1984 specifying allergic rhinitis as a condition by reason of which the applicant might not continue to be an eligible employee of the CPS until she attained maximum retirement age. The purpose of the BCC is to identify conditions affecting an employee at the time of entry to the superannuation scheme. If, in the event of death or medical retirement, those conditions are related to the reason for the death or retirement the superannuation entitlement of an employee may be reduced or limited.

Evidence

Evidence Before The Court

In paragraph 10 of its reasons the Tribunal identified three questions which it needed to address in reviewing the second delegate’s decision: ‘whether [the applicant] failed to answer properly a question asked of her or gave false or misleading information;whether, if she had answered the questions properly or had not given false or misleading information, a substitute BCC would have issued and, if so, what condition(s) would have been specified in that BCC; andwhether s 66(2) of the Act applies to the applicant’s entitlements because her 1988 retirement incapacity was caused or substantially contributed to by any condition specified in a substitute BCC or a condition connected with such condition(s).’The applicant does not challenge the Tribunal’s identification of the issues it had to decide. The evidence before the Tribunal The Tribunal summarised evidence given by the applicant, a number of medical experts and Ms Jennifer Jensen, a librarian with whom the applicant worked in 1977-8. The following brief summary of the evidence of these witnesses is based on the Tribunal’s summary. The applicant has not challenged the factual elements of the evidence although she takes issue with aspects of the medical opinions. The applicant worked as a high school teacher from 1969 until 1977 when she resigned from her teaching position for reasons that are not relevant here. After leaving teaching she worked as a library assistant until April 1979, although she had 5-6 months sick leave from August 1978. For most of this period of sick leave she lived with her parents and worked as a volunteer at the Brisbane Youth Service. After leaving the library she was employed as a teachers’ aide from July 1979 to December 1980. In 1981 she moved to Ormiston in the Redlands Shire and attended a commercial college as part of the NEAT scheme, a Commonwealth retraining scheme, and in 1982 and 1983 she did some part-time teaching at a TAFE college. The applicant was initially employed in the CPS by the Australian Taxation Office but, after about six months she transferred to the Commonwealth Employment Service (‘CES’) in August 1983. The applicant said she began to have symptoms of OCD in late 1983 and that the symptoms worsened over the next few years. She was on sick leave from December 1986 until she was retired on invalidity grounds in March 1988. The applicant mentioned a number of factors that led to her taking the period of sick leave that commenced in 1978. These factors included an incident involving a violent neighbour, a difficult relationship with a young man, some tensions with a co-worker at the library and physical debility resulting from a long and strict diet. She went to see her general medical practitioner who immediately referred her to a psychiatrist, Dr Maria Weekes. The applicant saw Dr Weekes frequently over a period of four months and attended some group therapy sessions. She was given antidepressant medication but said she could not remember why it was prescribed. The applicant said that she did not think that she was depressed at this time but was feeling ‘run down’.

Decision

Reasons for decision

STONE J
The applicant further contended that even if she had responded affirmatively to questions 1(b) and 1(d) in the questionnaire, the only additional condition that may have been included on the substitute BCC was ‘schizo affective disorder’ which, for the purposes of s 66(2), has no connection with her retirement condition, OCD. She also submitted that there is no connection between depression and/or obsessive compulsive personality and OCD and therefore it would have made no difference if those conditions had been specified in a substitute BCC. The Tribunal’s decision The written reasons of the Tribunal show that it carefully considered the evidence before it and the submissions made by both parties. Having done so it made findings of fact largely adverse to the applicant’s claims. The Tribunal did not accept the applicant’s evidence that she was not aware of the reason for her being given antidepressant medication and was satisfied that she was aware she was suffering from a psychiatric condition while she was seeing Dr Weekes. The Tribunal carefully identified the aspects of the evidence that led it to this conclusion. The Tribunal determined that at the time of completing the questionnaire, while the applicant may have lacked insight as to the nature and extent of her conditions, she was aware that she was suffering from or had suffered from a psychiatric condition and that by answering ‘NO’ to questions 1(b) and 1(d), she failed properly to answer a question asked and that she had provided false information. Given these findings it was not necessary for the Tribunal to consider arguments that had been put to it as to whether it was possible to fail to answer a question properly if one had a genuine belief in the truth of the answer given. The second issue that the Tribunal addressed was if the applicant had answered the questions properly, would a different BCC have been issued and, if so, what conditions would have been specified in the BCC. The Tribunal accepted Dr Bendeich’s evidence and found that a reference on the questionnaire to depression or psychiatric illness would have resulted in a request for a further psychiatric report and that any such report would have resulted in the diagnosis of personality disorder and recurrent major depression. It accepted the applicant’s submission that such report would not have provided a diagnosis of schizo affective disorder. The Tribunal attached considerable weight to Dr O’Brien’s opinion that the applicant’s psychiatric problems placed her at greater than normal risk of premature retirement and held that had the questionnaire been answered properly a BCC would have been issued specifying those conditions. The Tribunal then considered the relationship between the applicant’s retirement condition, which was accepted on all sides as being OCD, and the conditions that would have been specified in a BCC had the questionnaire been answered properly. The Tribunal considered the evidence given by Dr Varghese and Dr O’Brien on this point and concluded: ‘The Tribunal is satisfied that the evidence of Dr O’Brien is sufficient to establish that the applicant’s OCD was substantially contributed to by her personality disorder and depressive disorder. Further, the Tribunal prefers her evidence to that of Dr Varghese on the basis of her association with the applicant over 10 months in contrast to the single consultation that Dr Varghese had with the applicant.The Tribunal is satisfied, in accordance with sub-section 66(2) of the [Superannuation Act], the applicant’s incapacity from OCD which brought about her retirement in 1988 was substantially contributed to by personality disorder and/or major depressive disorder, conditions which would have been specified in a substitute BCC.’ This Appeal

Ratio Decidendi

Legal Principle Established

Established by: STONE J

Full text does not contain this section.