DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
STEER v AMP LIFE LIMITED & AMP SUPERANNUATION LTD
[2021] SADC 109
Judgment of his Honour Judge Burnett
8 October 2021
INSURANCE - LIFE INSURANCE - CLAIMS AND PAYMENT
INSURANCE - LIFE INSURANCE - SURRENDER
SUPERANNUATION - INDUSTRY SUPERVISION - GOVERNING RULES
SUPERANNUATION - PRIVATE SECTOR FUNDS - TRUSTEES - POWERS AND DUTIES
The applicant is the executor of the estate of the late Carolyn Christina Burns (the Deceased). The Deceased was a member of the superannuation fund known as the AMP Retirement Trust. The second respondent, AMP Superannuation Limited (AMP Super) was the trustee of that Fund. AMP Super, as trustee of the Fund, entered into various group insurance policies, including a group life insurance policy with the first respondent, AMP Life Limited (AMP Life). Under the life insurance policy, the Deceased was entitled to certain life insurance benefits. As at 30 June 2019, the value of the life insurance benefits of the Deceased was in the sum of $259,720.90.
The Deceased was a member of the Fund through her previous employment at the Workers Employment Association of South Australia (WEA). Part of the benefits she received as a member of the Fund were the life insurance benefits. The Deceased ceased working with the WEA in 2014.
In the period between 2014 to 2019, the Deceased’s life insurance benefits were maintained and premiums were deducted from her superannuation account by AMP Super and paid to AMP Life. The Deceased ceased making contributions to her superannuation account.
In March 2019, new legislation was introduced, the Treasury Laws Amendment Act (Protecting Your Superannuation Package) 2019 (TLAA). The TLAA introduced a new s 68AAA of the Superannuation Industry (Supervision) Act (the SIS Act) which provided under subsection (1) that a trustee of a regulated superannuation fund must ensure that a benefit is not provided by the fund to a member by taking out or maintaining insurance if the member’s account had been inactive for 16 months and the member had not elected for the benefit to be maintained. Section 68AAA(2) provided that the trustee must ensure that the inactive member may elect in writing that the benefit is to be provided.
A further requirement was imposed by part of the TLAA which did not become part of the SIS Act. Item 3, sub-item 4, of Part 2 of Schedule 2 of the TLAA required the trustee, in respect of inactive accounts, to send a notice in writing to such members before 1 May 2019 stating that on and after 1 July 2019 a benefit will not be provided to the member by the taking out or maintaining insurance if the account was inactive and the member had not elected that the benefit will be provided, even though the account was inactive.
The Deceased’s account with AMP Super was inactive at all relevant times in 2019 within the meaning of s 68AAA of the SIS Act and the TLAA as it had been inactive since 2014 (and…
Keep reading for free
Create a free CaseChat account to read Steer v AMP Life Limited & AMP Superannuation Ltd and more:
- Read every judgment in full
- Ask AI and get answers linked to paragraphs
- See how each paragraph was cited in later cases
- Download judgments as PDF or Word
One click creates your free account or signs you in.
By continuing you agree to the Terms and Privacy Policy.
- Case
- [2021] SADC 109
- Decision Date
CaseChat Overview and Summary
The court's decision was based on the interpretation of statutory provisions and common law principles, with particular attention to the duties owed by the respondents to the deceased. The court found that AMP Super failed to act in the best interests of the deceased by not providing notice of the proposed cancellation of the life insurance benefits, which was a breach of its duties under the SIS Act. The court also held that AMP Life did not breach its duty of utmost good faith as it did not cancel the life insurance benefits. The court further found that there was no unconscionable conduct by AMP Life or AMP Super. The deceased lost the opportunity to elect to maintain the life insurance benefits by agreeing to the continued payment of the life insurance premiums from her superannuation account with AMP Super to AMP Life. If she had been given notice of the election, the deceased would have elected to maintain the life insurance benefits by the payment of the premiums. The court's decision was based on a careful analysis of the relevant statutory provisions and the evidence presented in the case. The court held that AMP Super breached its duties under the SIS Act by not providing notice to the deceased of the proposed cancellation of the life insurance benefits, which deprived the deceased of the right to elect to maintain the payments. The court found that AMP Life did not breach its duty of utmost good faith as it did not cancel the life insurance benefits. The court also held that there was no unconscionable conduct by AMP Life or AMP Super. The applicant was entitled to judgment against AMP Super in the sum of $259,720.97 before costs and interest, while the claim against AMP Life was dismissed.
Orders
Orders of the court
Held:
(1) AMP Life and AMP Super did not engage in misleading or deceptive conduct contrary to ss 1041E and 1041H of the Corporations Act or ss 12DA and12DB of the Australian Securities and Investments Commission Act (ASIC Act) in relation to the sending of the letter on 10 October 2019 as that letter did not come to the attention of the Deceased and therefore was not relied upon by the Deceased. The sending of the letter, although misleading, did not cause any loss to the Deceased.
(2) AMP Life was not required to respond to the claim by the applicant under the Life Insurance Policy as AMP Super had cancelled or surrendered the life insurance benefits of the Deceased.
(3) AMP Life was therefore not required to comply with the requirements of s 210(5) of the Life Insurance Act or s 59 of the Insurance Contracts Act as it did not cancel the life insurance benefit for non-payment of a premium or for any other reason. It was AMP Super who cancelled the life insurance benefits.
(4) AMP Super was not a life insurer within the meaning of Life Insurance Act or the insurer within the meaning of the Insurance Contracts Act. There was no evidence of a contract of insurance between the AMP Super, as trustee of the Fund and the Deceased. The only relevant evidence was the Amending Deed and that did not provide any evidence of AMP Super undertaking the role of an insurer. In fact, it evidenced AMP Life as undertaking the role of life insurer: United Super Pty Ltd v Built Environs Pty Ltd [2001] SASC 339 distinguished; Edington v Board of Trustees of the State Public Sector Superannuation Scheme [2015] QSC 245 followed.
(5) AMP Super therefore did not owe a duty of the utmost good faith to the Deceased.
(6) AMP Super had mistakenly paid premiums to AMP Life in respect of the other insurance benefits for Temporary and Permanent Disability and Temporary Salary Continuance that had previously been held by the Deceased but had been terminated some years previously. These mistaken payments gave rise to claim in restitution by AMP Super to recover, on behalf of the superannuation account of the Deceased, the amounts of these payments. The mistaken payments could not be allocated against the premiums due under the life insurance benefits such that they represented an overpayment of those premiums.
(7) AMP Life owed a duty of the utmost good faith towards the applicant pursuant to ss 11(1) and 13(3) the Insurance Contracts Act and at common law. AMP Life did not breach that duty as it did not cancel the life insurance benefits of the Deceased. It was AMP Super who cancelled those benefits. Further, it was AMP Super who was under a duty to notify the Deceased of its right to elect under s 68AAA of the SIS Act and the TLAA. It was the actions of AMP Super which deprived the Deceased of that right. The contract of insurance had been cancelled by AMP Super and therefore there could not be any breach of duty by AMP Life in not accepting the claim of the applicant.
(8) AMP Super breached its duties to act in the best interests of the Deceased contrary to s 52(2)(c) of the SIS Act in that it did not give notice to the Deceased of the proposed cancellation of the life insurance benefits. The WEA email address was not used by the Deceased and emails sent to that address did not come to the attention of the Deceased. Under s 68AAA of the SIS Act, AMP Super was required to ensure that Deceased was given the right to elect for the insurance benefits to continue to be paid. By not providing the Deceased with notice, AMP Super did not ensure that the Deceased was given the right to elect to maintain the payments and the Deceased lost the right of election. Further, AMP Super did not pursuant to item 3 of Part 2 of schedule 2 of the TLAA give the required notice of election to the Deceased. The Deceased did not give express or inferred consent pursuant to s 9(1) of the Electronic Transactions Act for the receipt of communications from AMP Super by email: Beni v Minister for Immigration and Border Protection [2018] FCAFC 228 and Hossam v Minister for Immigration and Border Protection [2016] FCA 1161 distinguished. By not giving notice and thereby not giving the Deceased the right to elect and then cancelling or surrendering the life insurance benefits, AMP Super did not act in the best interests of the Deceased.
(9) AMP Life and AMP Super did not engage in unconscionable conduct within the meaning of s 991 of the Corporations Act or s 12CB of the ASIC Act. There was no conduct of AMP Life or AMP Super that was so far outside the societal norms of acceptable commercial behaviour as to warrant condemnation as conduct that was offensive to conscience: Pitt v Commissioner for Consumer Affairs [2021] SASCA 24 applied.
(10) The Deceased lost the opportunity to elect to maintain the life insurance benefits by agreeing to the continued payment of the life insurance premiums from her superannuation account with AMP Super to AMP Life. If she had been given notice of the election, the Deceased would have elected to maintain the life insurance benefits by the payment of the premiums.
(11) The applicant is entitled to judgment against AMP Super in the sum of $259,720.97 before costs and interest.
(12) The claim by the applicant against the AMP Life is dismissed.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Full text does not contain this section.