Samaras v Australian Retirement Fund Pty Ltd - [2007] FCA 1323

FEDERAL COURT OF AUSTRALIA
Samaras v Australian Retirement Fund Pty Ltd [2007] FCA 1323
SUPERANNUATION – appeal from Superannuation Complaints Tribunal – construction of Total and Permanent Disablement under insurance policy – identification of relevant illnesses for purposes of assessment
PROCEDURAL FAIRNESS – whether failure to permit complainant to make oral submissions compromised right to procedural fairness – where entitlement to make oral submissions subject to statutory discretion – where complainant provided written submissions – where complainant invited by Tribunal to provide further written submissions
Superannuation (Resolution of Complaints) Act 1993 (Cth)
Attorney-General (Cth) v Breckler (1999) 197 CLR 83 cited
Auspine Staff Superannuation Pty Ltd v Henderson (2007) 14 ANZ Insurance Cases 90-127 referred to, distinguished
Cameron v Board of Trustees of the State Public Sector Superannuation Scheme (2003) 130 FCR 122 cited
Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 referred to
Davis v Rio Tinto Staff Superannuation Fund Pty Ltd (2002) 118 FCR 170 cited
Guo Wei Rong v Minister for Immigration and Ethnic Affairs (1995) 38 ALD 38 cited
Marks v CSS Board of Trustees [2005] FCA 797 cited
Minister for Immigration & Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 cited
National Mutual Life Association of Australia Ltd v Campbell (2000) 99 FCR 562 cited
Retail Employees Superannuation Pty Ltd v Crocker (2001) 48 ATR 359 cited
JOHN SAMARAS v AUSTRALIAN RETIREMENT FUND PTY LTD, COLONIAL MUTUAL LIFE ASSURANCE SOCIETY LIMITED AND SUPERANNUATION COMPLAINTS TRIBUNAL
VID 980 OF 2006
GORDON J
31 AUGUST 2007
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 980 OF 2006

ON APPEAL FROM THE SUPERANNUATION COMPLAINTS TRIBUNAL

BETWEEN:

JOHN SAMARAS
Applicant

AND:

AUSTRALIAN RETIREMENT FUND PTY LTD
First Respondent

COLONIAL MUTUAL LIFE ASSURANCE SOCIETY LIMITED
Second Respondent

SUPERANNUATION COMPLAINTS TRIBUNAL
Third Respondent

JUDGE:

GORDON J

DATE OF ORDER:

31 AUGUST 2007

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:
1.The application is dismissed.
2.The applicant is to the pay the respondents’ costs of the application.

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

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 980 OF 2006

ON APPEAL FROM THE SUPERANNUATION COMPLAINTS TRIBUNAL

BETWEEN:

JOHN SAMARAS
Applicant

AND:

AUSTRALIAN RETIREMENT FUND PTY LTD
First Respondent

COLONIAL MUTUAL LIFE ASSURANCE SOCIETY LIMITED
Second Respondent

SUPERANNUATION COMPLAINTS TRIBUNAL
Third Respondent

JUDGE:

GORDON J

DATE:

31 AUGUST 2007

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

The Applicant, Mr John Samaras (“Mr Samaras”), appealed pursuant to s 46 of the Superannuation (Resolution of Complaints) Act 1993 (Cth) (“the SCT Act”) from a determination of the Superannuation Complaints Tribunal (“the Tribunal”) of 14 August 2006.
The Tribunal affirmed the decisions of the Second Respondent, Colonial Mutual Life Assurance Society Ltd (“the Insurer”) and the Australian Retirement Fund Pty Ltd (“the Trustee”), rejecting Mr Samaras’ claim for total and permanent disablement (“TPD”) benefit under the terms of an insurance policy between the Trustee and the Insurer.
The insurance policy defined…

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: [2007] FCA 1323
Decision Date: 31 August 2007

CaseChat Overview and Summary

In the case of Samaras v Australian Retirement Fund Pty Ltd, the applicant, Mr. Samaras, sought a review of a decision by the Australian Retirement Fund (the Fund) and the insurer to deny his claim for Total and Permanent Disablement (TPD) benefits. The dispute arose from Mr. Samaras' claim that he was unable to engage in regular remunerative work due to various medical conditions. The Federal Circuit Court was tasked with determining whether the denial of his TPD benefits was fair and reasonable and if the Trustee and Insurer correctly assessed his condition in accordance with the terms of the Policy.

The primary legal issues the court had to address were whether Mr. Samaras' medical conditions at the time of his employment termination warranted a TPD benefit, whether the Trustee and Insurer properly assessed his condition, and the proper interpretation of the TPD definition in the Policy. The court examined the evidence provided, the illnesses present at the cessation of Mr. Samaras' employment, and the impact of these conditions on his ability to work. The court concluded that while Mr. Samaras suffered from multiple medical conditions, the medical evidence did not support the claim that he would be unable to engage in any regular remunerative work for which he was reasonably fitted by education, training, or experience. Consequently, the decisions of the Trustee and Insurer were found to be fair and reasonable.

The court dismissed the application and ordered Mr. Samaras to pay the respondents' costs of the application. The reasoning hinged on the proper construction of the TPD definition in the Policy and the necessity for both a qualifying illness and a determination by the Insurer regarding the likelihood of Mr. Samaras ever being able to engage in regular remunerative work. The court found that both conditions were necessary and were met in this case, leading to the conclusion that the decisions of the Trustee and Insurer were correctly made.

Orders

Orders of the court

1. The application is dismissed.

2. The applicant is to the pay the respondents’ costs of the application.

Background

Background to the litigation

For the reasons that follow, I would dismiss the application.(1) BACKGROUND Mr Samaras was born in Katerini Greece on 6 April 1963. He migrated to Australia with his family in 1971. Mr Samaras married in 1998. He and his wife, Sharon, have no children. He is currently 44 years of age. Mr Samaras was educated at Albert Park High School and completed Form 3 (Level 9). He attended Form 4, but did not complete that year. Mr Samaras is fluent in both Greek and English. His post-secondary qualifications are a Certificate in Management and Industrial Psychology obtained in 1986, a two day training course in sales in real estate and a course in Vocational Studies by correspondence in 1996. Mr Samaras has had a variety of mostly manual jobs. In the 1970’s and 1980’s, he worked in his family’s milk bar business for approximately 8 years. He then worked at a McDonald’s fast food restaurant, in an amusement centre and in real estate. From approximately 1997 until 2001, Mr Samaras worked as a factory machinist/process worker for a company called “Preslite Australia”. From 2001 until 16 October 2002, Mr Samaras worked in various factories doing factory work.Employment with Australian Tie Company Pty Ltd From 16 October 2002 until 17 September 2003, Mr Samaras was employed by the Australian Tie Company Pty Ltd (“the ATC”) as a storeman and packer. He also performed general factory duties. Those duties included lifting boxes, packing ties for customers, organising the dispatch of the ties and other products produced by the ATC, as well as unloading incoming trucks. He was not required to have any formal qualifications for this work.Membership of the Fund and Policy On 16 October 2002, Mr Samaras became a member of a superannuation fund, the Australian Retirement Fund (”the Fund”). At all relevant times, the Trustee was the trustee of the Fund. The Fund was established by Trust Deed and Rules dated 11 July 1986. The Deed and Rules were amended from time to time. At the relevant time, the Fund was governed by and subject to the Supplemental Deed dated 5 March 1997 which was amended by two further supplemental deeds dated 23 March 1998 and 2 October 1998 (collectively “the Deed”). On 16 October 2002, Mr Samaras also became an insured member under a policy of insurance numbered K005885 (“the Policy”) which was provided by the Insurer to the Trustee. Mr Samaras ceased to be covered by the Policy when he ceased to be employed by ATC: cl 8.6 of the Policy.Cessation of Employment with the Australian Tie Company On 17 September 2003, Mr Samaras was “dismissed” or “retrenched” or made “redundant” from his employment with ATC. Prior to being “retrenched”, Mr Samaras was employed by ATC on a full time basis on “light duties”.Claim for Total and Permanent Disablement Benefit On 10 June 2004, Mr Samaras submitted a claim with the Trustee for TPD. The benefit amount was $80,000. On 23 June 2005, the Insurer advised Mr Samaras in writing that his claim for TPD had been denied.

Evidence

Evidence Before The Court

The Tribunal also rejected Mr Samaras’ submissions in relation to the Trustee’s Decision Issue. The Tribunal concluded that there was no evidence to support the claim that the Trustee had failed to make its own assessment about whether Mr Samaras was TPD as defined and no evidence to suggest that it did not act in accordance with its obligations under the Deed. Medical Evidence Issue The Tribunal was satisfied that on 25 July 1991 Mr Samaras suffered a back injury at work, that in March 1995 he was diagnosed with mixed anxiety and depression and in March 1998 he was diagnosed with sarcoidosis affecting his lungs. In addition, the Tribunal was satisfied that he commenced full time employment with ATC and joined the Fund on 16 October 2002, that the last day of employment was 17 September 2003 when he was aged 40 and that his employment was terminated on that day. The Tribunal first determined which illnesses were present in 2003 at the time that Mr Samaras ceased work with the ATC. That enquiry was necessary because Mr Samaras claimed he was suffering from many medical conditions which were not present at the time he stopped work and which therefore could not be considered in determining Mr Samaras’ entitlement to a TPD benefit. Having first determined which illnesses were present at the time Mr Samaras ceased work with the ATC, the Tribunal went on to examine whether or not the medical evidence supported Mr Samaras’ entitlement for a TPD benefit with respect to those conditions and whether the decisions of the Trustee and the Insurer were fair and reasonable in their operation to Mr Samaras in the circumstances. After reviewing the medical evidence, the time of onset and the impact of the medical conditions on his capacity to work, the Tribunal concluded:“While, on the basis of the medical evidence provided, there is no doubt that [Mr Samaras] suffers from several medical conditions, this in itself does not necessarily entitle him to TPD benefits. The medical evidence does not reasonably support the view that it is unlikely that [Mr Samaras] will “ever be able to engage in any regular remunerative work for which he is reasonably fitted by education, training or experience.” Having come to this view, and combined with the inconsistencies noted, the Tribunal is satisfied that the decisions of the Trustee and Insurer that [Mr Samaras] was not TPD are fair and reasonable in their operation to [Mr Samaras] in the circumstances.”(5) PROPER CONSTRUCTION OF THE DEFINITION OF TPD IN THE POLICY Many of the grounds of appeal sought to be agitated by Mr Samaras relied upon a particular construction of the definition of TPD. In general terms, Mr Samaras contended that it was unnecessary for him to identify an illness or illnesses attached to his period of employment with the ATC and that the question for the Insurer and the Trustee was whether, at the time of their respective decisions, there was any illness or illnesses that cumulatively resulted in Mr Samaras being unlikely to ever be able to engage in any regular remunerative work for which he was reasonably fitted by education, training or experience. Mr Samaras sought to support his construction of the definition by reference to the decision of Jessup J in Auspine Staff Superannuation Pty Ltd v Henderson (2007) 14 ANZ Insurance Cases 90-127 at [63] and [64].

Decision

Reasons for decision

GORDON J (dissent)

In relation to the TPD Definition Issue, the Tribunal reviewed the applicable provisions of the Trust Deed and the Policy and noted that:(1) Mr Samaras’ disablement had to result from an illness, accident or injury causing him to be continuously absent from his employment for at least six consecutive months; and(2) the Trustee and Insurer must have “determined after consideration of medical and other evidence that it is unlikely that he … will ever be able to engage in any regular remunerative work for which he … is reasonably fitted by education, training or experience”.The Tribunal rightly noted that both requirements had to be satisfied. Moreover, the Tribunal went on to record (again correctly) that the requirement for there to be a determination by the Insurer did not accord with Mr Samaras’ submission that it was not necessary for the Trustee and the Insurer each separately to assess the claim.Trustee’s Decision Issue The Tribunal also rejected Mr Samaras’ submissions in relation to the Trustee’s Decision Issue. The Tribunal concluded that there was no evidence to support the claim that the Trustee had failed to make its own assessment about whether Mr Samaras was TPD as defined and no evidence to suggest that it did not act in accordance with its obligations under the Deed. Medical Evidence Issue The Tribunal was satisfied that on 25 July 1991 Mr Samaras suffered a back injury at work, that in March 1995 he was diagnosed with mixed anxiety and depression and in March 1998 he was diagnosed with sarcoidosis affecting his lungs. In addition, the Tribunal was satisfied that he commenced full time employment with ATC and joined the Fund on 16 October 2002, that the last day of employment was 17 September 2003 when he was aged 40 and that his employment was terminated on that day. The Tribunal first determined which illnesses were present in 2003 at the time that Mr Samaras ceased work with the ATC. That enquiry was necessary because Mr Samaras claimed he was suffering from many medical conditions which were not present at the time he stopped work and which therefore could not be considered in determining Mr Samaras’ entitlement to a TPD benefit. Having first determined which illnesses were present at the time Mr Samaras ceased work with the ATC, the Tribunal went on to examine whether or not the medical evidence supported Mr Samaras’ entitlement for a TPD benefit with respect to those conditions and whether the decisions of the Trustee and the Insurer were fair and reasonable in their operation to Mr Samaras in the circumstances. After reviewing the medical evidence, the time of onset and the impact of the medical conditions on his capacity to work, the Tribunal concluded:“While, on the basis of the medical evidence provided, there is no doubt that [Mr Samaras] suffers from several medical conditions, this in itself does not necessarily entitle him to TPD benefits. The medical evidence does not reasonably support the view that it is unlikely that [Mr Samaras] will “ever be able to engage in any regular remunerative work for which he is reasonably fitted by education, training or experience.” Having come to this view, and combined with the inconsistencies noted, the Tribunal is satisfied that the decisions of the Trustee and Insurer that [Mr Samaras] was not TPD are fair and reasonable in their operation to [Mr Samaras] in the circumstances.”(5) PROPER CONSTRUCTION OF THE DEFINITION OF TPD IN THE POLICY

Ratio Decidendi

Legal Principle Established

Established by:

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 980 OF 2006

JUDGE:	GORDON J
DATE OF ORDER:	31 AUGUST 2007
WHERE MADE:	MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 980 OF 2006

JUDGE:	GORDON J
DATE:	31 AUGUST 2007
PLACE:	MELBOURNE