Telstra Super Pty Ltd v Finch
[2009] VSCA 318
•23 December 2009
SUPREME COURT OF VICTORIA
COURT OF APPEAL
| No 3918 of 2008 |
| TELSTRA SUPER PTY LTD (ACN 007 422 522) |
| v |
| ALAN MICHAEL FINCH |
AND BY CROSS-APPEAL: |
ALAN MICHAEL FINCH |
v |
| TELSTRA SUPER PTY LTD (ACN 007 422 522) |
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JUDGES: | BUCHANAN and REDLICH JJA and HANSEN AJA | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 20 July 2009 | |
DATE OF JUDGMENT: | 23 December 2009 | |
MEDIUM NEUTRAL CITATION: | [2009] VSCA 318 | |
JUDGMENT APPEALED FROM: | Byrne J, 28 November 2008, VSC 527 | |
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Superannuation – Total and permanent invalidity (‘TPI’) – Trust deed provided that member eligible for TPI benefit if ceased to be an employee because of TPI - Trustee made determinations that claimant not eligible for TPI benefit – Primary judge found determinations open to trustee on materials before it and trustee’s reasons not unsound nevertheless determinations set aside on basis that trustee failed to give matter real and genuine consideration – Errors of law – Appeal allowed – Construction of deed – Claimant not eligible for benefit as definition of TPI not satisfied at date of cessation – Trustee gave matter real and genuine consideration – Determinations open to trustee.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellant/Cross-Respondent | Mr A G Uren QC with Mr R J Harris | Freehills |
| For the Respondent/Cross-Appellant | Dr I J Hardingham QC with Mr J P Brett and Ms M C Wall | Arnold, Thomas and Becker |
BUCHANAN JA:
I would allow the appeal and dismiss the cross-appeal for the reasons stated by Hansen AJA. I would make the orders which his Honour proposes.
REDLICH JA:
For the reasons given by Hansen AJA I would allow the appeal and make the orders he proposes.
HANSEN AJA:
Introduction
Telstra Super Pty Ltd (‘the appellant’ or ‘the trustee’) appeals from orders made by a judge of the Trial Division on 28 November 2008 which relevantly (a) declared ‘void and of no effect’ two determinations[1] made by the appellant (in its capacity as trustee of the Telstra Superannuation Scheme) rejecting the claim of Alan Michael Finch (‘the respondent’) for Total and Permanent Invalidity (‘TPI’) benefit, and (b) ordered that the question of the respondent’s entitlement to TPI benefit be remitted to the trustee for its determination in accordance with law.
[1]Dated 21 March 2002 and 20 March 2003 respectively.
The respondent filed an Amended Notice of Cross-appeal and a Notice of Contention, however it is convenient to defer discussion of this aspect until the section describing the parties’ submissions.
Background
As mentioned, the appellant/cross-respondent is the trustee of the Telstra Superannuation Scheme, and may conveniently be referred to as ‘the trustee’. Alan Michael Finch, the respondent/cross-appellant, may conveniently be referred
to as ‘the respondent’.
The respondent was employed by Telstra Corporation Ltd from 1 October 1992 until 23 January 1998. At all relevant times, he was a member of the Telstra Superannuation Scheme (‘the Scheme’).
The trust deed governing the Scheme relevantly provides (in cl 2.3.3) that:
… if a Member ceases to be an Employee… because of Total and Permanent Invalidity, there is payable to the Member from the Fund a lump sum benefit … [details of the benefit are specified].
The expression Total and Permanent Invalidity is defined (in cl 2.1.2) as follows:
“Total and Permanent Invalidity” means, in relation to a Member, disablement as a result of which –
(a)unless otherwise agreed between the Trustee and the Principal Employer from time to time either generally or in any particular case, the Member has been continuously absent from all active Work for a period of at least six months and has been required by the Employer to participate in a Rehabilitation Program; and
(b)in the opinion of the Trustee after consideration of any information, evidence and advice provided to the Trustee by the Employer and any other information, evidence and advice the Trustee may consider relevant, the Member has ceased to be an Employee and is unlikely ever to engage in any gainful Work for which the Member is for the time being reasonably qualified by education, training or experience,
but –
(1)Total and Permanent Invalidity does not include disablement the existence or continuation of which, in the opinion of the Trustee after consideration of any information, evidence and advice provided to the Trustee by the Employer and any other information, evidence and advice as the Trustee may consider relevant, is attributable to a material extent to deliberate action or inaction by any person for the purpose of causing a benefit to become or to continue to be payable from the Fund including without limitation what the Trustee considers to be an unreasonable refusal to submit to treatment; and
(2)a Member who is required by the Employer to participate in a Rehabilitation Programme will not be considered to have suffered Total and Permanent Invalidity unless the Member participates in the Programme to the satisfaction of the Trustee. [emphasis added]
It is to be noted that cl 1.1.1 defines Employer to mean ‘the Principal Employer’ which in turn is relevantly defined as ‘Telstra Corporation Limited’.
In 2000 the respondent applied to the trustee for TPI benefit. The trustee rejected the claim, in essence because it concluded that the respondent did not satisfy the definition of TPI in the Scheme. I refer below to the trustee’s reasons for its determinations.
It is convenient at this point to recount the circumstances leading up to the TPI claim. I gratefully adopt the detailed chronology of facts set out by the learned judge[2], however it is not necessary to repeat everything therein stated. For present purposes, the relevant facts are as follows.
[2][2008] VSC 481, [10].
The respondent was born in England in 1967 as a male named Alan Michael Finch. He migrated to Australia with his family in 1986 and at that time was living as a female under the name of Helen Finch. In 1988 he underwent gender reassignment surgery.
In 1992 he commenced employment with Telstra as a female under the name of Helen Finch. By September/October 1996 the respondent was experiencing dissatisfaction with his female sexuality and in October had reassumed a male personality, name and dress. He became severely depressed and, in that context, received counselling from Dr Julie Doswell, a general practitioner who apparently had care of him for many years, and also from a psychiatrist, Dr Krystyna Syrota. At about this time he was also referred to a consultant psychiatrist, Dr Byron P Rigby.
On 30 September 1996 the respondent commenced sick leave from Telstra. In February 1997 he underwent a rehabilitation assessment provided by Telstra with a program of working from home, at first for two hours a day with a view to returning to work. On 24 March 1997 he returned to work at Telstra as a male under the name of Alan Finch. On 25 March 1997 Dr Syrota certified him ready to resume fulltime work. On 1 April 1997 plastic surgeon Mr Simon Ceber observed that the respondent seemed more settled after an earlier impression that he was a suicide risk. On about 1 May 1997 the rehabilitation program was finalised as the respondent’s case manager considered that the respondent was stable at work and capable of performing normal duties without restriction.
It is to be noted that the respondent’s absence from work at Telstra (between 30 September 1996 and 24 March 1997) was for a period of less than six months.
In May 1997 the respondent underwent surgery on two occasions, first to reduce his breasts, and secondly to masculinise his nose. The respondent also planned to have further surgery in November 1997 to remove his reconstructed vagina, but that surgery was ultimately deferred due to lack of funds, in light of his apprehension that his Team Leader position at Telstra would be made redundant. As to that, on 6 August 1997 the respondent had been offered voluntary redundancy, or redeployment within Telstra. In September 1997 a Mr Warren McAleese became the respondent’s senior manager. At about this time, the respondent was successful in obtaining another position within Telstra at Mobilenet, Collingwood, which was to commence on 1 December 1997. As events turned out, however, the respondent did not take up the position. Rather, on 23 January 1998 he accepted the redundancy offer and thereby ceased employment with Telstra.
On 5 March 1998 the respondent commenced receiving a Commonwealth Disability Support Pension.
On 22 February 1999 the respondent commenced work (as a male) with Foxtel as a team leader in its call centre operations on a fulltime basis. From 12 to 24 March 1999 he was absent from work at Foxtel on sick leave. On 26 March 1999, he resigned from Foxtel for ‘personal reasons’.
On 29 November 1999 the respondent commenced work (as a male) with Qantas as a domestic sales consultant working 20 hours per week, which increased to 24 hours per week from 16 February 2000. On 16 May 2000, he terminated his employment ‘for personal health reasons’. During his period of employment at Qantas (which was nearly six months) he was absent on sick leave for a total of 11 days, including 5, 6, 13, 14 and 15 May 2000, followed by an unexplained absence on his last day, 16 May 2000. According to Dr Rigby, the circumstances in which the respondent ceased employment with Qantas were that he coincidentally came into contact with a male Qantas employee with whom he had had an intimate relationship when he (the respondent) was living as a female and working at Telstra. The revelation of this was a traumatic experience for both people involved, and death threats were apparently conveyed to the respondent. The respondent finished his shift and never returned to work at Qantas.
It was common ground that the respondent has not been employed since leaving Qantas.
Shortly after leaving Qantas, the respondent lodged an application for TPI benefit. The application was supported by a certificate from Dr Doswell, who expressed the opinion that the respondent was unlikely ever to be able to work by reason of his illness. Dr Syrota provided a similar certificate. Dr Rigby provided a report in April 2001 expressing his opinion that the respondent was unable to do work of any kind. In June 2001 Dr Doswell provided a report expressing her opinion that the respondent had a total and permanent invalidity, primarily related to a significant depression anxiety and post-traumatic stress disorder. These conditions, she said, were directly related to his gender reassignment issues and maltreatment allegedly suffered by the respondent whilst employed by Telstra. The respondent’s solicitors also provided the trustee with a letter which included, among other things, a statement by the respondent that since leaving Telstra, he had not been able to work in any capacity. I interpolate that the learned judge described this latter statement as false insofar as the respondent was able to work at Foxtel and Qantas. The solicitors later provided a statutory declaration made by the respondent on 29 August 2001 stating that ‘I did attempt to return to work’ after ceasing employment with Telstra, but that ‘during this period of attempting to return to work I had much time off due to stress and sick leave, so effectively this was not a return to work’.
In addition to the material provided by and on behalf of the respondent, the trustee received a letter from Telstra management (written by McAleese and Darrell Dell, who was the respondent’s project manager) dated 30 May 2001 which outlined the respondent’s duties at Telstra and expressed the writers’ view that at the time of separation, the respondent was ‘fit for duty and not a TPI candidate’. They stated that they had no knowledge of the respondent’s current medical status and therefore did not have a recommendation as to his TPI claim. The trustee also received a letter from the respondent’s manager at Qantas dated 13 November 2001, stating that the respondent ‘performed his duties adequately; he had good command of skills and expertise required for the role’.
On 21 March 2002 the trustee rejected the respondent’s TPI claim. This was the first determination. The respondent’s solicitors were advised of this by letter dated 28 March 2002 which set out the trustee’s reasons for rejecting the claim. I refer to those reasons below.
On 12 August 2002 Dr Rigby provided the respondent’s solicitors with a second report in which he argued that the respondent had not worked since leaving Telstra, as the jobs at Foxtel and Qantas were ‘failed attempts at rehabilitation’, which ‘proved conclusively that he cannot work’. The report referred to the trauma experienced by the respondent at both Foxtel and Qantas, in essence as a result of his anxiety over whether people who had formerly worked at Telstra recognised him and knew of his gender identity. The report referred to the incident on the respondent’s last day at Qantas and stated:
The intense fear generated by this experience has remained a chronic problem, and compounds to a high degree the anxiety, depression, generated by the original traumatic experiences at Telstra.
These experiences have resulted in mental health difficulties that are totally prohibitive of employment.
These efforts at rehabilitation cannot be [sic] on the wildest flight of imagination be regarded as evidence that Mr Finch “has been successfully employed”. As the previous letter shows, he has been and remained permanently incapable of employment since redundancy at Telstra.
I would make the strongest possible representation that Mr Finch be accepted as having had no further employment since his time at Telstra, and never will have.
On 10 September 2002 the respondent’s solicitors wrote to the trustee requesting a review of the first determination, and to that end enclosed Dr Rigby’s second report and further material from Foxtel and Qantas. The solicitors’ letter referred, among other things, to the doctors’ opinions that the respondent did satisfy the definition of TPI as at the date he left Telstra, and further contended that the respondent’s employment with Foxtel and Qantas ‘merely constituted our client’s attempt to rehabilitate himself. His failure in this regard only goes to further demonstrate his ongoing incapacity for employment since he ceased work with Telstra on 23 January 1998’. Dr Rigby provided a third report on 18 September 2002, the contents of which it is not necessary to set out. On 13 December 2002 the respondent’s solicitors forwarded authorities permitting the trustee to obtain information from Foxtel and Qantas regarding the respondent’s employment. On 19 December 2002 the trustee wrote to Foxtel and Qantas, not seeking details of the respondent’s employment and the circumstances of its termination, but rather details of his superannuation entitlements. As the learned judge noted, it was not clear what relevance that information had to the question the trustee was required to address, but no point was taken of this, and nothing turns on it.
On 27 February 2003 one of the members of the trustee, Mr McCredden spoke by telephone to the respondent. According to McCredden, in that conversation the respondent ‘volunteered the statement that his employment with Qantas had been a real job’.
On 20 March 2003 the trustee again rejected the TPI claim. This was the second determination. Following verbal advice of the decision the following day, the respondent’s solicitors were formally notified of the second determination by letter dated 4 April 2003 in which the trustee stated that, having considered all the information provided, the claim was denied for the same reasons given for the first determination.
Trustee’s reasons for decision
The trustee’s reasons for the first determination were, in essence, as follows. First, as at the date he ceased employment with Telstra, the respondent had completed a rehabilitation program and was considered capable of performing his normal duties without restriction. Secondly, the respondent had been the successful applicant for a position with Telstra Mobilenet but instead of taking up the position had accepted an offer of redundancy. The trustee was therefore of the opinion that the respondent had the capacity for gainful work as at the date he ceased employment with Telstra. Thirdly, the respondent had worked since ceasing employment with Telstra. That work was gainful work for which he was qualified, and thus demonstrated that he had the capacity to engage in gainful work both at the date he ceased employment and thereafter. The trustee stated that, having reviewed all information provided in respect of the claim and having regard to the relevant clauses in the deed, it was of the opinion that at the date the respondent ceased employment with Telstra, he did not satisfy the trust deed definition of TPI and was therefore ineligible for TPI benefit.
The proceeding below
The respondent commenced the present proceeding seeking, in essence, declarations (a) that both determinations of the trustee were void and of no effect, and (b) that he was entitled to TPI benefit under the trust deed. By order of a Master pursuant to r 47.04, the first issue was to be determined as a preliminary question. Following a hearing on 8 and 9 October 2008, the learned judge published written reasons on 13 November 2008[3] in which he concluded that the trustee’s determinations should be set aside.
[3][2008] VSC 481 (‘the first judgment’).
Reasons of the learned judge
As the learned judge noted, notwithstanding the pleadings (which were effectively overtaken by the way counsel ran the case), the respondent’s case consisted, in essence, of the following three contentions. First, that the trustee’s decisions were not open to a trustee acting reasonably, so that error can be inferred from the determinations themselves. Secondly, that the reasons given for the determinations were not sound and could not support the determinations. Thirdly, that the determinations, or at least the second determination, were arrived at following a breach of process inasmuch as the trustee received and acted upon information which was not disclosed to the respondent and to which he was not given the opportunity to respond. This was a reference to the respondent’s statement volunteered to McCredden to the effect that his employment with Qantas had been a ‘real job’.
As the learned judge noted, counsel for the trustee resisted these contentions and submitted further that on any view the respondent did not satisfy the relevant definition of TPI because, at the date of ceasing employment with Telstra, he had not been continually absent from work for six months, which was, counsel submitted, required by the deed. The learned judge called this latter point the ‘construction point’.
It is convenient to set out at some length particular passages from the first judgment, beginning with the medical evidence. The learned judge said:
22 … [T]he medical evidence before the trustee was unanimously to the effect that he [the respondent] was suffering from a severe psychological condition and that this had the consequence that he would, from a medical point of view at least, be unlikely ever to work again. In these circumstances, including their association with their patient over some years, and including the matters which they rely upon in support of their opinions, I would not consider it reasonable to dismiss them as opinions the product of an untruthful or exaggerating patient. This is particularly the case where none of the doctors was asked to consider this possibility.
The last sentence in the above passage is a reference to the fact that no witnesses were called in the hearing before the learned judge, which was conducted on the material which was agreed to be before the trustee at the time of each determination.[4]
[4]At [9] of the first judgment.
As to the respondent’s three contentions referred to above, the learned judge said the following.
As to the first contention – that is whether the trustee’s decisions were not open to it acting reasonably - the learned judge said:
43 The test which I must apply in considering this submission is whether each of the determinations was one which a reasonable trustee could have made on the material before it. I emphasise the word “could”; it is not sufficient that I, putting myself in the place of a reasonable trustee, would not myself have made the determinations on this material. The requirement that the suppositious trustee be reasonable introduces a little flexibility into the test but it is primarily directed to the issue whether the trustee was acting rationally and in accordance with its fiduciary duty.
44 Applying this severe test, I find myself unable to conclude that a reasonable trustee could not have rejected each of Mr Finch’s claims. It was open to the trustee to conclude that Mr Finch’s ability to obtain employment with Foxtel and to work there for a little over a month, and to obtain employment with Qantas for some five months, demonstrated that the prognosis of the doctors was not borne out by experience. (emphasis added)
As to the second contention – that is whether the trustee’s reasons were unsound and could not support the determinations - the learned judge said:
41 There is nothing to suggest that the trustee undertook any consideration of the contention made by Mr Finch that the work at Foxtel and Qantas was a failed rehabilitation effort. There is no reason to reject these uncontradicted assertions made by and on behalf of Mr Finch. Nothing, that is, except the fact of his employment with Foxtel and Qantas and the volunteered statement to Mr McCredden that the Qantas employment was a real job.
42 My role, however, is not to conduct a general review of the decision-making process; it is to determine whether the reasons given were unsound. Surprising they may be, but they are all conclusions of fact which, if accepted, support the determination. They are not unsound in the sense that must be shown by the plaintiff in a case such as the present. [emphasis added]
As to the third contention - that is whether there was a breach of process in that the trustee received and acted upon information to which the respondent was not given the opportunity to respond - the learned judge said that:
45 It is apparent from the judgments in the Flegeltaub[5] case that this attack upon the determination should best be seen as an allegation that the trustee failed to decide the question in good faith and to give genuine consideration to it.
46 It is on this basis that the determinations in this case are vulnerable. I have already summarised the evidence so that I can state my views on this matter shortly. It is clear from the trustee’s reasons that it viewed the question as, in effect, a contest between the opinions of the doctors and the actual observed experience of Mr Finch in the workplace with Telstra and thereafter. The difficulty which I have with the determinations is that the trustee appeared to be very ready to accept the evidence as to the claimant’s work experience without any or very much inquiry as to its true nature and to reject the very strong evidence of the doctors to the contrary.
47 The trustee appears to have made no inquiry as to the circumstances of Mr Finch’s last months of employment with Telstra. He did not even have a record of his absences from work or the reasons for them – information which it had sought and obtained from Foxtel and Qantas. Against the bald statements of the managers, the trustee might have weighed the harrowing account of the insecure man in an environment which he may well have seen as hostile, in a work situation where his secure and relatively prestigious job had been downgraded and had become insecure. It may be difficult to suggest that a corporate trustee should bring to bear in evaluating this material its humanity and experience of the world, but it ought, in my view, have made some further inquiry of these matters which Mr Finch said led him to decide not to continue working within the Telstra organisation.
48 It is true that, on its face, the ability of Mr Finch to hold a job for a month with Foxtel and for five months with Qantas was powerful evidence against his being unlikely ever to engage in gainful work. But in this case, Mr Finch had marshalled a body of material to suggest that his work was merely a rehabilitative effort on his part to return to the workforce. If this was accepted, this requirement of the definition of TPI would be satisfied. The evaluation of this material is, of course, for the trustee. But what troubles me, again, is the readiness of the trustee to put it aside and to prefer a conclusion that this employment, which in each case had failed, demonstrated that Mr Finch was not unlikely to engage in employment in the future. The trustee had before it the “real job” statement volunteered to Mr McCredden and the information from Qantas that Mr Finch performed his duties adequately and had a good command of the skills and expertise required. It may be that such information was not inconsistent with the views of the doctors that he did have the ability to perform his work but that his psychological fragility rendered him unable to exercise these abilities in the workplace. It seems to me that a trustee, acting in good faith and approaching its task with an open mind so that a genuine consideration should be given to the claim, would have made further inquiry to determine the accuracy of the assessments of this work experience offered on behalf of Mr Finch.
49 It seems that the trustee placed some weight on the “real job” statement of Mr Finch in conversation with Mr McCredden. …
…
51 It was a question which Mr McCredden would have been very interested in because the principal matter at issue at that time was whether this employment was a rehabilitation attempt or a real job. Nothing is known as to what, if anything, Mr McCredden told his co-directors about the circumstances of this conversation, the context of the volunteered statement or his interpretation of it.
52 The information provided to the board by Mr McCredden has a [sic] another dimension which causes me further disquiet. As recorded, it seemed to be the only material before the trustee which directly impugns Mr Finch’s case that his employment should be seen as rehabilitation. … This important piece of information, however, was not communicated to Mr Finch or his legal advisors for their response. … a fair-minded trustee seeking to give genuine consideration to a TPI benefit claim ought to have investigated this information further, at least by inviting comment from Mr Finch.
53 For these reasons I conclude that the second determination was void for want of compliance by the trustee with its obligations of good faith and genuine consideration. Since this determination replaced the first determination of 2002, both of the determinations are void and will be set aside.
[5]Telstra Super Pty Ltd v Flegeltaub (2000) 2 VR 276.
Having set aside the determinations, on 20 November 2008 the learned judge heard counsel on the question of whether the matter should be remitted to the trustee or whether the Court should make its own determination standing in the shoes of the trustee. As the learned judge noted in his reasons published on 28 November 2008[6], the respondent’s counsel argued against remitting the matter, in essence because, as his Honour described the submission, ‘the Court should not be confident that the trustee would fairly and objectively assess Mr Finch’s claim on its merits, given both the history of this proceeding and my conclusion that the trustee had not complied with its obligations of good faith and genuine consideration’.[7] The learned judge referred to relevant authority, and observed that the Court will decline to remit ‘where the trustee has deliberately acted improperly or with mala fides so as to lead to an apprehension that a proper reconsideration will not be given to the claim’.[8] He referred to the trustee’s submissions, including the fact that if the matter was remitted, it would be decided by a committee of two members which would not include Mr McCredden. Ultimately, the learned judge decided that it was appropriate to remit the matter to the trustee. He said that[9]:
I am confident that the trustee will perform its functions in the light of the observations which I have made in my earlier judgment and in accordance with the law. Nor do I fear that the trustee approaching the task will not do so in a fair and impartial way, paying due regard to the material presented by the claimant.
With respect to my finding that the trustee in making the second determination failed to comply with its obligations of good faith and genuine consideration, I say this. The conclusion was reached in the context of my consideration of an argument that the trustee had failed to observe “due process”. I referred to the passage in Flegeltaub’s case[10] where Callaway JA preferred to approach such a matter as one raising the question of good faith.[11] It was in this context that I concluded that this requirement was lacking. There is here no finding of mala fides.
[6][2008] VSC 527 (‘the second judgment’).
[7]At [3] of the second judgment.
[8]At [5] of the second judgment.
[9]At [8]-[9] of the second judgment.
[10](2000) 2 VR 276, 284 [30].
[11]At [26] of the first judgment.
The appeal
Trustee’s submissions
The trustee’s Notice of Appeal lists 11 grounds of appeal, but it is not necessary to set out each ground. Counsel’s written and oral submissions did not address each ground specifically, but rather made contentions under three main headings, which can be summarised as follows.
First, as to the construction point (ground 11), counsel submitted that an employee can only cease to be employed because of TPI if he ‘is TPI’ on cessation of employment. TPI was not any disablement, but rather a disablement with the two consequences specified in the definition of TPI, so that if one (of the consequences) is not present, there is no TPI. In this case, the six month absence requirement was not satisfied at the time the respondent ceased to be an employee, hence the definition of TPI was not satisfied at that time, with the consequence that the respondent could not have ceased to be an employee because of TPI. It followed that the respondent was not eligible for TPI benefit.
Secondly, counsel submitted that the learned judge erred in finding that the trustee had not complied with its obligations of good faith and genuine consideration in that the second determination was made following a ‘breach of process’. The relevant ‘breach of process’ identified by the learned judge was the trustee not investigating the circumstances in which the respondent ceased employment at Telstra, and not investigating further and at least inviting comment from the respondent as to the conversation in which the respondent told McCredden that his work at Qantas had been a ‘real job’. Counsel pointed out that the learned judge’s findings (as to lack of good faith and genuine consideration) were made only in the context of the ‘due process’ findings, and that the judge expressly stated (in the second judgment) that there was no finding of mala fides. Counsel submitted that the finding of a lack of good faith was not open given that there was no finding of mala fides. As to the question of real and genuine consideration, counsel submitted that the learned judge did not examine what the obligation meant. Rather, he wrongly equated the trustee’s failure to take the ‘due process’ steps with a failure to act in good faith and give the matter genuine consideration. That approach, counsel submitted, did not accord with the authorities; see in particular Karger v Paul.[12] It was submitted that a lack of real and genuine consideration is present where trustees have not exercised their discretion at all, but not where they have genuinely considered a matter and have come to a conclusion which a judge considers to be founded on inadequate material. So even if the trustee had omitted to take a particular step or made some error, it did not follow that the trustee failed to give the matter genuine consideration. Counsel accepted that there might be cases where the extent of errors or omissions was such as to lead to the conclusion that the trustee did not give a matter genuine consideration, but the present was not such a case.
[12][1984] VR 161.
Thirdly, counsel submitted that the learned judge wrongly denied the trustee the opportunity to be heard on the issues underlying the ‘breach of process’ findings. Counsel submitted that because the respondent had not taken the point before the learned judge (namely that in order to give the matter genuine consideration the trustee should have further investigated the ‘real job’ statement and the reasons why the respondent decided not to continue working at Telstra), the trustee did not address that point at the hearing, yet the learned judge decided the case on the very issues on which the trustee was not heard. It followed, counsel submitted, that the trustee had been denied natural justice. In this context, the trustee sought leave to adduce further evidence on the appeal, in effect to demonstrate the nature of the evidence and submissions that it might have called in the hearing before the learned judge had it known that the ‘breach of process’ issues needed to be met.
Respondent’s submissions
The respondent’s counsel submitted as follows.
First, as to the construction point, he submitted that the interpretation of the trust deed proposed by counsel for the trustee (namely that the definition of TPI must be satisfied at the time the employee ceases employment at Telstra) leads to an absurdity, in that members would almost never be entitled to TPI benefits, because the definition of TPI will generally not be satisfied at the time an employee ceases employment. That is because the definition requires the trustee to have formed an opinion that the employee a) has ceased to be an employee and b) is unlikely ever to engage in gainful work. The trustee would not be able to form an opinion as to those matters until after the employee has ceased employment, which meant that not all elements of the TPI definition would be satisfied at the date of ceasing employment. Further, an employee who was seriously injured and thereby immediately ceased to be an employee, would never be eligible for TPI benefit, because the six month absence period would not be satisfied at the time of ceasing employment. Counsel submitted that this result was not logical, and could be avoided by adopting a purposive and practical approach to construing the trust deed; see Ansett Australia Ground Staff Superannuation Plan Pty Ltd v Ansett Australia Ltd[13].
[13](2002) 174 FLR 1; [2002] VSC 576; BC200207885, [214]-[244].
Secondly, counsel submitted that that the trustee’s duty of good faith and genuine consideration referred to in Flegeltaub was not a matter of the trustee not acting dishonestly, but rather required a trustee to act fairly, open-mindedly and give real and genuine consideration to the issues before it. Counsel submitted that on the facts in the present case, the learned judge was correct to find that the trustee did not make proper enquiries which would have enabled it to give real and genuine consideration to the problem at hand.
In seeking to make good this proposition, counsel relied broadly on the matters referred to by the learned judge, in particular the trustee’s readiness to reject the unanimous medical opinion, and to act on the basis of the ‘bland statement’ by the respondent’s Telstra managers that the respondent was ‘not a TPI candidate’ in April 1997 (without any investigation of whether the position had changed between that time and the time of the respondent’s decision to cease employment at Telstra and not take up the Mobilenet position), and the ‘bald assertion’ of the Qantas manager that the respondent performed satisfactorily in that job. Further, as to the significance of the ‘real job’ statement, counsel submitted that the learned judge was correct to conclude as he did. That is, that the trustee had regarded the statement as significant in making the second determination, yet had failed to invite comment from the respondent as to what was meant by the statement. Counsel also noted that in the hearing before the learned judge, counsel for the trustee said that the real job statement ‘adds to the proposition that it was reasonably open to the trustee to not accept the characterisation of the Qantas employment as a failed attempt at rehabilitation’.[14] On the appeal, counsel for the respondent submitted that in circumstances where the ‘real job’ statement was mentioned in the trustee’s minutes of meeting, but not in their written reasons for the second determination, and where the trustee’s counsel had continued to argue that the statement was relevant in the way referred to above, the learned judge was correct to conclude that the trustee’s failure to seek the respondent’s comment on the statement constituted a failure to give the matter genuine consideration.
[14] T 174 (hearing on 9 October 2008).
As to the cross-appeal, counsel submitted that the learned judge erred in remitting the question of the respondent’s entitlement to TPI to the trustee, in circumstances where the judge had found that the trustee had failed to comply with its obligations of good faith and genuine consideration. It is to be noted that the Amended Notice of Cross-Appeal also alleged that the learned judge erred a) in failing to hold that the trustee’s decision was one which no reasonable trustee could have reached on the material before it; and/or b) in failing to hold that the trustee’s decision was vitiated by specific errors (identified in paragraph 3 of the Notice of Contention).
That then leads to the Notice of Contention, which essentially makes two contentions. First, that the learned judge erred in finding that the trustee’s reasons for decision were sound, and that the decision was sound. As to this, paragraph 3 listed particular errors said to vitiate the trustee’s decision. Secondly, that the learned judge erred in rejecting the respondent’s contention that that no reasonable trustee could have reached the decision on the material before it. The effect of these contentions was that, even if the Court accepted the trustee’s submission that the learned judge erred in finding that the trustee failed to comply with its obligations of good faith and genuine consideration, the appeal should nevertheless be dismissed because the trustee’s reasons for decision were unsound and no reasonable trustee could have reached the decision on the material before it.
Counsel for the respondent submitted that if the Court accepted that the trustee’s decision was so unreasonable that no reasonable trustee could have reached it, the appropriate relief was that this Court should declare that the respondent was entitled to TPI benefit together with interest calculated thereon from 20 March 2003. Alternatively, if the Court upheld the learned judge’s reasons in the first judgment (in other words, the conclusion that further investigation and hearing was required), the matter should be remitted to the learned judge rather than to the trustee for any further hearing.
The appellant filed lengthy written submissions responding to the cross-appeal and notice of contention, but it is not necessary to set them out here. I have regard to all of the parties’ submissions.
Decision
The construction point
It is convenient to begin with the construction point. The starting point is cl 2.3.3 which relevantly provides that TPI benefit is payable ‘if a member ceases to be an Employee … because of TPI’. The learned judge correctly identified the question before him as being whether the respondent ceased to be an employee ‘because of Total and Permanent Invalidity’. He said that:
60 The entitlement of the employee under cl 2.3.3 arises because he has ceased to be an employee because of TPI. It follows from this that the incapacity must exist at the time of the cessation. Since the relevant incapacity is that defined in cl 2.1.2, the requirements of that definition must be satisfied as at the date of cessation.
He referred to Maciejewski v Telstra Super Pty Ltd[15] and Halloran v Harwood Nominees Pty Ltd[16] as authority for that proposition. I interpolate that those cases held, in the context of a clause relevantly identical to the present, that the relevant disablement must exist at the time of ceasing employment.
[15][1999] NSWSC 341, [10]-[12].
[16][2007] NSWSC 913, [48].
I respectfully agree with the learned judge that in the present case the respondent’s incapacity (which must be TPI as defined) must exist at the time he ceased to be an employee of Telstra.
As to whether the relevant disablement existed at the time of cessation, the learned judge noted that the disablement must have the consequences referred to in cl 2.1.2(a) and cl 2.1.2(b).
As to (a), being the requirement that the claimant ‘has been continuously absent from all active Work for a period of at least six months’, he noted that ‘work’ is defined in the deed as ‘engagement in any business, trade, profession, vocation, calling, occupation or employment’.[17] He concluded that work ‘is not limited to work as an employee of Telstra’.[18] He also noted that (a) does not require that the employee has completed a rehabilitation program at the time of ceasing employment at Telstra, but only that the employer has required the employee to do such a program. The learned judge referred to the second proviso to cl 2.1.2 (see [6] above) and, having noted the use of the present tense of the verb ‘participates’ in that proviso, concluded that ‘It would seem that there is no requirement in the definition that, before the cessation of employment, the claimant has participated in the program and, obviously enough, no requirement that the trustee be satisfied before cessation as to the claimant’s participation in the program.’[19]
[17]Clause 1.1.1.
[18]At [63(i)] of the first judgment.
[19]At [63(ii)] of the first judgment.
As to (b), the learned judge noted that it was accepted that the trustee was not required to form the relevant opinions prior to cessation of employment.[20]
[20]At [63(ii)] of the first judgment.
The learned judge then referred to some scenarios suggested by the respondent, including the employee who ceased employment immediately because of a catastrophic accident and who thereby would have no entitlement to TPI benefit unless the trustee agreed to waive the six month absence requirement in (a).
The learned judge noted that counsel for the trustee had relied on Rapa v Patience[21], which concerned a trust deed which relevantly provided that Total and Permanent Disablement benefit was payable where a member retired from the service of the employer before the age of 60 years as a result of his Total and Permanent Disablement, the latter term being relevantly defined as ‘absence from the service of the Employer through illness or injury for six consecutive months’ or such other period as the trustees decided.[22] McLelland J said:[23]
Since the period of absence is a necessary and substantive element in the concept of Total and Permanent Disablement as defined, of which the member’s retirement must, according to rule 9, be a result, it is difficult to see how any such period could be treated for the purpose of the definition as extending past the date of retirement.
[21]Supreme Court of New South Wales, 4 April 1985, BC8500888.
[22]At 7-8.
[23]At 10.
The learned judge distinguished Rapa on the basis that the definition considered there was ‘rather different from that in the Telstra Super scheme: the Telstra Super definition is primarily directed to the disability rather than to the consequent absence from work. A further difference is that the absence from work in the Telstra Super scheme is not limited to absence from employment with the Employer.’[24] Without further elaboration, the learned judge said:
68 Although the question is not free of difficulty, I conclude that the interpretation put on behalf of Mr Finch is to be preferred. It is sufficient to satisfy the definition of total and permanent invalidity that the continuous absence from all active work should exist at the date of the trustee’s determination.
[24]At [67] of the first judgment.
In my view, the learned judge erred in this conclusion. The error sprang from his earlier conclusion that the period of at least six months absence from ‘active Work’, referred to in cl 2.1.2(a), was not limited to work at Telstra. In my view, notwithstanding the expansive definition of ‘Work’ in the trust deed, and the absence of any express limitation of the term ‘active Work’ to work at Telstra, the operation of cl 2.1.2(a) is predicated on a Member being absent from ‘active Work’ at Telstra. Clause 2.1.2(a) contains two requirements, first that ‘the Member has been continuously absent from all active Work for a period of at least six months’; and secondly, ‘has been required by the Employer to participate in a Rehabilitation Program’. Compliance with these requirements can be dispensed with if the trustee and Telstra agree to that. It is to be noted that the two requirements are cumulative. As to the second requirement, it seems illogical that Telstra would require a Member to participate in a rehabilitation program if the Member had already ceased employment with Telstra, as the very purpose of a rehabilitation program would be to rehabilitate the Member so that he or she could continue to work for Telstra. In most cases of TPI (assuming that compliance with the requirements is not waived) the normal order of events would be that a Member suffers from a disablement resulting in their continuous absence from active work at Telstra for a period (which ultimately turns out to be at least six months), and at some time during that period (whether before or after six months of absence has elapsed), the Member is required by Telstra to participate in a rehabilitation program. In effect, and as a matter of practical reality, the requirement that the Member do a rehabilitation program is an incident of the Member still being an employee of Telstra.
That is not to say that the second requirement only comes into play after the first requirement is satisfied. As to that, there may be cases where a Member is required to do (and does) a rehabilitation program before their absence period reaches six months, and then after the rehabilitation program he or she ceases to be an employee in circumstances where the total absence was less than six months. In these circumstances, the Member would satisfy the second requirement of cl 2.1.2(a) but not the first, as the absence from Telstra was less than six months. That is to say, the second requirement does not depend on fulfilment of the first requirement, but it does presuppose that the Member has been absent from work at Telstra, and in that regard points to the expression ‘active Work’ meaning work at Telstra.
I do not overlook the respondent’s submission that the above construction leads to an illogical or absurd result, but I do not accept that that is so. To take counsel’s example, if an employee is catastrophically injured and thereby immediately ceases employment, cl 2.1.2(a) does not necessarily operate to deny TPI benefit. Rather, it reposes a discretion in the trustee and the employer to waive the six month absence requirement. The discretion is not at large and, as Karger v Paul makes clear, must be exercised in good faith and on a real and genuine consideration of the relevant circumstances, and for proper purposes. The mere fact that the trustee might, in some cases, not agree to waive the absence period, does not mean that the construction proposed by the trustee leads to absurd or illogical results.
In my view, reading cl 2.1.2(a) as a whole, and bearing in mind that the second requirement in that clause arises in the context of a Member being absent from work and still an employee of Telstra, the proper construction of the clause requires the reference to ‘active Work’ to be read as work at Telstra.
I also reject the respondent’s submission that the requirement that the definition of TPI be satisfied at the date of ceasing employment leads to an absurdity with respect to the operation of cl 2.1.2(b). As to that clause, I agree with the learned judge that the trustee was not required to form the two opinions referred to in that clause before the Member ceased to be an employee. Clearly, that would be a logical impossibility, as one of the opinions required to be formed was that the Member had ceased to be an employee. The trustee can only form the opinions about the matters in cl 2.1.2(b) after a claim is submitted to the trustee, as it is only at that point that the trustee addresses its mind to the issues. As to the first opinion, namely whether as a result of disablement the Member has ceased to be an employee, I agree with the learned judge that this opinion looks to the Member’s position at the time he or she ceased to be an employee. As to the second opinion, namely whether the Member ‘is unlikely ever to engage in any gainful Work for which the Member is for the time being reasonably qualified by education, training or experience’, the learned judge said that ‘the unlikelihood must be assessed as at the time of cessation, but that the assessment may have regard to events subsequent’.[25] Although nothing turns on the point, in my view it is artificial to characterise the trustee’s opinion as one assessing the unlikelihood at the time of ceasing employment. In my view, the trustee must consider whether, as a result of the disablement, the Member has ceased to be an employee and is unlikely to engage in gainful work. The trustee’s task is to make an assessment as to what is likely in the future, but taking into account past events for that purpose.
[25]At [64(ii)] of the first judgment.
Turning then to the facts of the present case, the respondent had not been continuously absent from active work at Telstra for a period of at least six months at the time he ceased to be an employee of Telstra. It follows that he did not satisfy cl 2.1.2(a), hence the definition of TPI was not satisfied in respect of the respondent at the time he ceased to be an employee of Telstra. It follows that he did not cease to be an employee because of TPI, as required by cl 2.3.3. Accordingly, the respondent is not eligible for TPI benefit.
In light of this conclusion, the appeal must succeed regardless of any deficiencies in the trustee’s determinations. It is therefore not strictly necessary to consider whether the learned judge erred in setting aside the trustee’s determinations. However, given that the parties addressed submissions on those matters, it is convenient to express my conclusions on them.
Good faith/Real and genuine consideration
The Court has power to set aside the discretionary decision of a trustee if the relevant discretion was not exercised by the trustee in good faith, upon real and genuine consideration, and in accordance with the purposes for which the discretion was conferred.[26] However, the mere fact that a trustee makes an error as to a fact or some other matter or does not make all inquiries that may have been open to be made is not sufficient reason for the Court to set aside a determination that was made in good faith, upon real and genuine consideration, and for a proper purpose. In Karger v Paul, McGarvie J found that the defendant trustee was wrong in some of his beliefs, nevertheless his Honour did not think that the erroneous beliefs played any significant part in leading him to exercise his discretion as he did[27]. His Honour observed that:[28]
If the gaps and errors in [the trustee’s] information and belief upon matters relevant to the exercise of discretion were sufficiently extensive, it could found an inference that he had not been in a position to give real and genuine consideration to his exercise of the discretion. I do not draw that inference from the evidence before me as to [the trustee’s] information and belief.
I respectfully agree with his Honour.
[26]Karger v Paul [1984] VR 161, 164.
[27]At 175.
[28]At 175.
It is both impossible and undesirable to lay down prescriptive rules as to what constitutes a lack of real and genuine consideration by a trustee. As counsel for the respondent accepted, the content of the trustee’s duty will depend on the facts and circumstances of each case. And, as counsel for the trustee accepted, consistently with the observations of McGarvie J, there may be cases where a trustee’s errors or failure to take particular steps are sufficiently extensive as to found an inference that the trustee was not in a position to give real and genuine consideration to the exercise of the discretion.
In the present case, the learned judge concluded that the second determination was void for ‘want of compliance by the trustee with its obligations of good faith and genuine consideration’. The learned judge made clear in his second judgment that there was no finding of mala fides against the trustee. Rather, the conclusion as to lack of good faith/genuine consideration flowed from the learned judge’s ‘breach of process’ findings. In essence, the relevant breaches of process were a) the trustee’s failure to further investigate the ‘real job’ statement, by at least inviting the respondent to comment on the matter; and b) the trustee’s failure to make inquiry as to the circumstances of the respondent’s last months of employment at Telstra, and the reasons he decided not to continue working within the Telstra organisation. I understand this aspect to include the trustee’s failure to weigh against ‘the bald statement of the managers’ (to the effect that the respondent was fit for duty and not a TPI candidate as at March 1997) the respondent’s actual experience at Telstra in the last months of his employment, including the reason why he did not take up the Mobilenet position.
It is convenient to deal with these matters in turn.
As to the ‘real job’ statement, I agree with the learned judge that it was not clear exactly what was meant by the expression ‘real job’, however the transcript indicates that the parties proceeded on the basis that a ‘real job’ could be contrasted with a job of the type involving light duties that was specially designed as part of a rehabilitation program. It is to be noted that it was never suggested, either in the course of the application made to the trustee or at the hearing before the learned judge, that the respondent’s employment with Qantas (or Foxtel for that matter) was anything other than a ‘real job’. As the respondent’s counsel submitted to the learned judge, the respondent’s jobs after leaving Telstra were unsuccessful attempts to rehabilitate himself by returning to the workforce. He also said in his reply before the learned judge that ‘there was in fact no conflict between the statement ‘it was a real job’ and the other material before the trustee.’[29] This statement by counsel reflects the way the respondent’s case was put before the trustee (and the learned judge), namely that after leaving Telstra the respondent had obtained ‘real jobs’, but that he was psychologically unable to remain in those jobs, which demonstrated that he was unlikely to ever engage in gainful work in the future.
[29]T 246 (hearing on 9 October 2008).
At the hearing before the learned judge, counsel for the trustee said that the real job statement ‘adds to the proposition that it was reasonably open to the trustee to not accept the characterisation of the Qantas employment as a failed attempt at rehabilitation.’[30]
[30]T 174 (hearing on 9 October 2008).
The learned judge was evidently concerned about the ‘real job’ statement. He stated that there was nothing to suggest that the trustee considered the respondent’s contention that his work at Foxtel and Qantas was a failed rehabilitation effort, and that there was no reason to reject the ‘uncontradicted assertions’ made by and on behalf of the respondent, “except the fact of his employment with Foxtel and Qantas and the volunteered statement to Mr McCredden that the Qantas employment was a real job” (emphasis added).[31] And later in the judgment, the learned judge said that the respondent had ‘marshalled a body of material to suggest that his work was merely a rehabilitative effort on his part to return to the workforce. If this was accepted, this requirement of the definition of TPI would be satisfied’.[32]
[31]At [41] of the first judgment.
[32]At [48] of the first judgment.
In effect, the learned judge concluded that the ‘real job’ statement was one of the main reasons why the trustee rejected the respondent’s case that his post-Telstra work was a failed rehabilitation effort, and that given the importance of the ‘real job’ statement to the trustee’s conclusion, the trustee should have at least invited the respondent to comment on the matter.
There are two difficulties with this reasoning.
First, the learned judge erred in concluding that acceptance of the respondent’s case about failed rehabilitation meant that a ‘requirement’ of the definition of TPI would be satisfied. The definition of TPI imposed no such requirement. The issue for the trustee was not whether the respondent’s rehabilitation effort had failed, but rather, whether the trustee was of the opinion that the respondent was unlikely ever to engage in any gainful work for which he was reasonably qualified. Of course, the failure of the respondent’s rehabilitation attempt was a matter relevant to the formation of that opinion, but it was not determinative. The fact that the respondent had failed in these particular attempts at rehabilitation did not necessarily lead to the conclusion that he was unlikely ever to engage in gainful work. That was especially so in circumstances where there was evidence to the effect that the respondent had remained in the Qantas job for several months, had performed the job competently, and also bearing in mind that although the respondent was suffering from psychological distress when he left Foxtel and Qantas, a significant aspect of his distress was caused by the relevant personal relationships involved, and the fact that one or more persons he worked with in the later jobs had previously worked with him and known him as a woman, meaning that given the passage of time, the respondent might be able to re-enter the workforce if he were able to work in an environment where other employees did not know him and he could thus make a fresh start. Nevertheless, it may be assumed that rejection of the respondent’s case as to ‘failed rehabilitation’ would not have assisted his argument that he was unlikely to ever engage in gainful work.
The second difficulty, however, is that I do not accept that the trustee rejected the respondent’s contention as to ‘failed rehabilitation’. Nor do I accept that the ‘real job’ statement was a matter of significance in the trustee’s determination. As counsel for the respondent said to the learned judge, there was no conflict between the ‘real job’ statement and the other material before the trustee. As to that material, the effect of the medical evidence was that the respondent’s rehabilitation attempt had failed. In my view, when making its determinations the trustee would have appreciated that the respondent’s employment at Foxtel and Qantas was an attempt to rehabilitate himself, in the sense that he was attempting to get back into the workforce through those jobs. The trustee knew that the respondent’s ‘rehabilitation effort’ had failed, in the sense that he was not able to cope with those jobs and thus was not able to remain in the workforce permanently. But as there had never been any proper basis for the trustee to consider that the post-Telstra employment was not a ‘real job’, and no reason why the trustee would have assumed that it was not a real job, the fact that the respondent volunteered such information to McCredden would not have changed the position as far as the trustee was concerned. In my view, the trustee would have acted on the basis that the respondent had secured ‘real jobs’ at both Foxtel and Qantas, but that neither had worked out as he hoped and, as a result, the respondent’s rehabilitation attempt had failed. In these circumstances, the ‘real job’ statement did not detract from the respondent’s case, hence there was no reason why the trustee should have sought the respondent’s comment on the matter.
As to the learned judge’s conclusion that the trustee should have made further enquiries as to the circumstances of the respondent’s last months of employment at Telstra, I consider that such enquiries would have had limited relevance to the issues for determination. Again, that is because the question for the trustee was whether the respondent was unlikely to ever engage in gainful work in the future, not whether he had left Telstra in circumstances where he was mistreated. And while it may be accepted that if the respondent was mistreated at Telstra and thus psychologically harmed he might be less likely to engage in gainful work in the future, nevertheless the relevance of that matter was minimal in the context of the material overall.
As to the content of that material, I do not accept that the trustee merely adopted the ‘bald assertion’ of the managers that the respondent was not TPI in April 1997. It is true that the trustee’s first reason for decision effectively adopts the language of the managers’ report which referred to that date, but both the report and the trustee’s first reason for decision refer to the respondent being fit for duty at the time of ceasing employment with Telstra. It follows that the trustee did not neglect to consider whether the respondent’s position had changed between, say April 1997 and when he left in January 1998. Further, I do not accept the contention that the trustee’s second reason for decision, namely that the respondent had been the successful applicant for a position with Telstra Mobilenet, was irrelevant. On the contrary, it was relevant as it indicated that Telstra regarded the respondent as being capable of working as at the time he left the company, which was relevant to assessing his future prospects of working.
In my view, having regard to all the circumstances of the case, there was nothing that required the trustee to make the further investigations which the learned judge considered to be necessary. And it is not demonstrated that any gaps or errors in the trustee’s information and belief, upon matters relevant to the exercise of the discretion, were sufficiently extensive such as could found an inference that the trustee did not give real and genuine consideration to the exercise of the discretion. I therefore consider that the learned judge erred in concluding that the trustee failed to give the matter real and genuine consideration.
Natural justice
Finally, I reject the trustee’s submission that it was denied natural justice in relation to the due process findings. It is apparent from the transcript that the learned judge was concerned about the ‘real job’ statement and raised the matter with both counsel at considerable length. Further, at the hearing before the learned judge, counsel for the respondent specifically attacked the trustee’s determinations on the basis of a ‘failure of process’, which included an alleged lack of enquiry by the trustee as to the circumstances in which the respondent left Telstra. In my view, counsel for the trustee, who must be taken as aware that the matters ultimately the subject of the ‘due process’ findings had been raised, made a forensic decision to deal with those matters in the way that he did. It follows that I would refuse the trustee’s application to admit further evidence on this issue.
Cross-Appeal/Notice of Contention
As to the cross-appeal, given that the appeal must succeed and the respondent’s claim for TPI benefit must fail, it is unnecessary to consider whether the learned judge erred in remitting the claim for TPI benefit to the trustee.
As to the Notice of Contention, I reject the respondent’s contention that the judge erred in finding that (a) the trustee’s reasons for decision and the decision itself were sound, and (b) the determinations were not so unreasonable that no reasonable trustee could have reached them. As to the trustee’s written reasons, I do not overlook that the trustee focused on the respondent’s capacity for gainful work, rather than whether he was unlikely ever to engage in gainful work. And the trustee did not expressly state that the respondent was unlikely ever to engage in gainful work. Nevertheless, it was a short and logical step to reason that if the respondent had the capacity for gainful work, he was not unlikely ever to engage in gainful work. So while the trustee’s reasons did not strictly follow the wording of the definition in the deed, they did not obscure the relevant issue. Nor do I overlook the other specific errors alleged in para 3 of the Notice of Contention, however in my view none of them are made out. In my view, the learned judge was correct to conclude that the trustee’s reasons were not unsound in the relevant sense.
For the reasons given by the learned judge, and the reasons at [67]-[76] above, I consider that the learned judge was correct to find that the trustee’s decision was open to it. As the learned judge correctly noted, it was not enough that the Court might have reached a different conclusion on the material before it. And as Windeyer J said in Maciejewski v Telstra Super Pty Limited:[33]
It is not the function of the Court to decide whether a particular decision might or might not have been more reasonable in its view than the decision to which the Trustees have come. If that were the position then the discretion of the Trustees, or the decision of the Trustees, would be of little significance because the Court would always be able to replace that decision with its own decision and that is clearly not the requirement under the rules nor the position in law.
[33]At [13].
On the materials before the trustee, including the respondent’s employment history, his apparent competence in the jobs he did after leaving Telstra, and the inference that the respondent’s psychological distress might be ameliorated over time, or be less severe in a different work environment, especially given that he was relatively young and thus had more time to adapt and rehabilitate himself, it was open to the trustee to form the opinion that the respondent was not unlikely ever to engage in any gainful Work for which he was reasonably qualified by education, training or experience. It followed that it was open to determine that the respondent was not eligible for TPI benefit.
Conclusion
I would allow the appeal, set aside the orders of the learned judge, and order that judgment be entered for the appellant with costs.
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