Case: Cullinane v Mercer Benefit Nominees Ltd [2006] FCAFC 82 ; (2006) 152 FCR 1
Outcome: cited
A party may appeal to the Federal Court, on a question of law, from a determination of the Tribunal: s 46 Superannuation (Resolution of Complaints) Act 1993 (Cth) ("the Act "). Such proceedings come before the Court for hearing and determination in the exercise of its original, rather than appellate, jurisdiction: Cullinane v Mercer Benefit Nominees Ltd [2006] FCAFC 82 ; (2006) 152 FCR 1. 4 The background facts to this matter can be found in the Tribunal's Record of Decision, and the Statements of Facts, Issues and Contentions of the parties. They may be summarised as follows: &#8226; in 1994 the applicant was diagnosed with schizophrenia and commenced ongoing treatment &#8226; in September 2001, the applicant commenced employment with the Department of Primary Industries in Queensland as a field assistant in the Department's Fire Ant Eradication Program &#8226; on 10 September 2001 the applicant joined the QSuper Accumulation Account (the Fund). The Fund automatically provided him with 4 units of death and Total and Permanent Disablement ("TPD") insurance cover &#8226; in December 2001 the applicant applied to the Fund to increase his insurance cover to 17 units of death and TPD cover. This was approved effective 10 December 2001 &#8226; so far as relevant, cl 6.2 of the QSuper Trust Deed's Insurance Terms provides as follows: "No insurance benefit will be paid for a claim unless: ... (b) (i) the member has been an insured member for fewer than 10 continuous years; and (ii) the member lodged a personal medical statement at or about the date on which the member became an insured member; and (iii) the board is of the opinion that the total and permanent disablement ... was not related to a condition that was disclosed on the personal medical statement or which in the opinion of the board should reasonably have been disclosed on the personal medical statement; or (c) (i) the member has been an insured member for fewer than 10 continuous years; and (ii) the member did not lodge a personal medical statement at or about the date on which the member became an insured member, and (iii) it is established to the satisfaction of the board that the total and permanent disablement ... was not related to a condition that ought reasonably to have been disclosed had a personal medical statement been submitted at or about the date on which the member became an insured member." &#8226; there is some lack of clarity as to whether the applicant had disclosed his schizophrenia to the Fund prior to joining. The applicant claims he did so orally over the telephone and in a personal medical statement which was posted to QSuper, however it appears that this medical statement was not received. In any event this is not a relevant issue in this case as no insurance benefit is payable for TPD relating to a pre-existing medical condition irrespective whether it was disclosed &#8226; on 2 January 2002, while inspecting a property for fire ants, the applicant injured his right foot after running away from two dogs he thought were chasing him &#8226; the applicant ceased work on 8 July 2002 after anticipation of a repeat experience left him anxious and stressed to such a degree that he was unable to cope with his work &#8226; the applicant applied for a TPD benefit on 12 February 2003 &#8226; a delegate of the Trustee of the Fund determined that the TPD was because of his pre-existing schizophrenia and declined to pay the benefit in accordance with its rules relating to pre-existing illnesses &#8226; by letter dated 26 May 2003 the applicant was informed of the Trustee's decision &#8226; the applicant sought to appeal this decision on 17 June 2003 and then subsequently withdrew his appeal on 17 July 2003. However, by letter dated 19 May 2004 he renewed his appeal and provided various reports in support of the appeal &#8226; on 23 June 2003 the applicant was retired on ill health grounds &#8226; on 31 August 2004 the Trustee reviewed its decision at the applicant's request, and advised the applicant that the previous decision of the delegate of the Trustee was affirmed &#8226; the applicant appealed the Trustee's decision to the Tribunal on 5 November 2004 pursuant to s 14 of the Act , on the basis that the decision of the Trustee was unfair or unreasonable &#8226; the Tribunal affirmed the Trustee's decision in its decision of 2 October 2006 &#8226; the amount in dispute is the insured TPD benefit of $991,200. 5 The Tribunal identified its role as to determine whether the decision of the Trustee was fair and reasonable in its operation in relation to the applicant in the circumstances. The Tribunal noted that the issue was not whether the Tribunal would have made the same decision. The Tribunal considered that the issue before it was whether the decision of the Trustee that the condition rendering the applicant totally and permanently disabled was related to a pre-existing condition (as that term appeared in subcll 6.2 and 6.5 in the Fund's insurance terms) operated fairly and reasonably in relation to the applicant in these circumstances. 6 In its review determination and reasons the Tribunal considered in summary: &#8226; the Trust Deed and Insurance Terms &#8226; the medical reports of one psychologist, three psychiatrists, two general practitioners, two orthopaedic surgeons, one occupational health physician and a podiatrist and &#8226; the submissions of the parties. I note that the applicant was given leave to be legally represented at the hearing before the Tribunal. 7 The Tribunal found: "Based on the Tribunal's analysis of the medical reports, the Tribunal is satisfied that the Trustee's decision to decline payment of the TPD benefit to the Complainant on the grounds that, on the balance of probabilities, his medical condition, be it PTSD or an anxiety disorder, was related to the pre-existing, long-standing paranoid schizophrenia was fair and reasonable, given the conflicting psychiatric opinions. In the opinion of the Tribunal after reviewing all of the available medical evidence, the Complainant's PTSD or anxiety disorder is sufficiently related to his schizophrenia such as to render the decision of the Trustee fair and reasonable in relation to the Complainant in the circumstances."