Case: Vidovic v Email Superannuation Pty Ltd (unreported, Supreme Court of New South Wales, Bryson J, 3 March 1995)
Outcome: cited
There is now a significant body of Australian case law dealing with challenges to the decisions of superannuation trustees not to provide a particular benefit to a member because the trustee has determined that the member did not fall within the relevant trust definition for that benefit. Many of these cases have involved claims for total and permanent disability benefits having criteria similar to those embodied in cl 1(6): see eg Jeffrey Guy Baker v Local Government Superannuation Scheme Pty Ltd [2007] NSWSC 1173 ; Hay v Total Risk Management Pty Ltd [2004] NSWSC 94 ; Sayseng v Kellogg Superannuation Pty Ltd [2003] NSWSC 945 ; Flegeltaub v Telstra Super Pty Ltd [2000] VSC 107 ; Minehan v AGL Employees Superannuation Pty Ltd ; Vidovic v Email Superannuation Pty Ltd (unreported, Supreme Court of New South Wales, Bryson J, 3 March 1995). 26 In applying these grounds it is important to have regard to the superannuation context in which the trustee's decision is to be made. As Bryson J commented in Vidovic v Email Superannuation Pty Ltd : It is a marked anomaly to use mechanisms drawn from fields of law remote from employment and relating to trusts for bounty or charity to administer important entitlements in an employment relationship. I find it difficult to understand why the entrenchment of such important rights against review is so usual, and why this kind of arrangement is so commonly found acceptable to employees in view of the economic significance of such decisions and the economic function of superannuation, not well represented in the terms of the documents, as a contracted employment benefit for which value is given. These anomalies appear particularly clearly where, as in this case, the fund out of which benefits are paid is contributory and an employee claiming benefits is claiming to be paid, at least in part, in his own coin. In an arrangement with a contractual character in which value is given in the expectation that a benefit will be available in stated circumstances, a construction in which one party has an entire and unreviewable power to determine whether that party will pay a sum of money to the other or retain it in its own funds has an element of absurdity. Language which appears to produce such a result serves to demonstrate the strength of the expectation of all concerned that the exercise of the power will be honest and reasonable. It is only on that expectation that the transaction could, as a practical matter, be expected to take place at all, and there would have to be an entirely explicit exclusion of such an expectation before language literally capable of excluding it should be given that construction. The context of the employment relationship has an influence which it is impossible to exclude from judicial scrutiny and perceptions of reasonableness of decisions under superannuation deeds. 27 I have dealt with judicial review of discretionary decisions at some length. It probably provides the appropriate rubric which Mr Kowalski has been seeking to divine to have the propriety of his denial of a TPD Benefit tested. I do not necessarily suggest that he will be able to plead a reasonably arguable case that the MMA Super's decision miscarried, let alone that he will succeed in establishing such a case. Nor do I suggest that MMA Super and AMP Super would have no defence to such a claim were it to be made. Nonetheless, in light of the material before me, I do think that the interests of justice require that Mr Kowalski be given one last opportunity I emphasise this to file and serve a further amended application and statement of claim. 28 For the sake of completeness, I should note that, at best, the claim for negligence Mr Kowalski has made hangs off the breach of trust he has alleged. In striking out that claim I necessarily will order that this claim be struck out. I express no view on the viability of any further negligence claim.