THE HUMAN SIDE OF THE SUPERANNUATION COMPLAINTS TRIBUNAL DECISION
The decision of the Full Federal Court of Australia delivered
on February 13, 1998 in the case of Wilkinson Tuohey and Wall
and the Clerical Administrative and Related Employees Superannuation
Pty Ltd and Daryll Bishop (VG 459 of 1997) is a devastating blow
to the thousands of people who have disputes with their superannuation
funds and insurers in the Superannuation Complaints Tribunal.
The two cases in which I have been involved are stark examples
of the refusal of a trustee/insurer to deal compassionately with
each widower's claim in tragic circumstances.
The Superannuation Complaints Tribunal had been intended to be
a simple, effective and compassionate appeals process available
to aggrieved complainants when a trustee had made a decision which
had been considered to be unfair or unreasonable. The function
of the Tribunal was to redress the imbalance between the economically
powerful trustee/insurer and an individual claimant.
In the case involving Mr Daryll Bishop, the Full Federal Court
has held by a majority (Justice Heerey and Justice Lockhart) that
the legislation establishing the Tribunal had invested an administrative
body with judicial powers and that therefore the Tribunal was
unconstitutional as there is no power in the Commonwealth to invest
a Tribunal with judicial powers. Therefore the Tribunal which
has been established to deal with thousands of complaints against
the decisions of superannuation funds and insurers who are regulated
funds under the appropriate superannuation legislation effectively
has no power or purpose. Justice Sundberg did not rule the Tribunal
as being constitutionally invalid but read the legislation to
mean that the Tribunal could only determine complaints which were
seeking a review of a discretionary decision of a trustee. However,
the majority of complaints relate to a review of non-discretionary
decisions and therefore the Tribunal is left with virtually no
powers.
All of the members of the Court were sympathetic to the position
of Mr Bishop and indicated that they believed that he had a good
enforceable claim in a Court of Law.
It is our intention to continue to represent Mr Bishop whether
it be by way of Appeal to the High Court or by commencement of
separate legal proceedings to recover the death benefit payable
as a result of the death of his wife.
Unfortunately there will be many claimants who cannot afford legal
advice or who have complaints that deal with important issues
but insignificant amounts of money who would not be able to justify
Court action against insurers who have virtually unlimited resources
to fight claims.
This is particularly the case with the enormous expansion of funds
under the control of the superannuation trustees and insurers
as a result of the Government policy which mandates that 6% of
wages be paid by employers to compulsory superannuation funds.
The growth of the superannuation industry was a catalyst in the
establishment by the Government of the Superannuation Complaints
Tribunal in an endeavour to achieve an effective balance between
the interests of fund members and trustees when a complaint arose.
The Government required that funds which wish to be regulated
by the superannuation industry legislation and therefore attract
compulsory deposits and favourable taxation treatment legislation
should submit to the complaint process established with the Superannuation
Complaints Tribunal.
Mr Bishop's Claim
Katrina Joy Bishop died on September 13, 1994 at the age of 37.
She had been a member of the Care Superannuation Plan, a Fund
administered by Clerical Administrative & Related Employees
Superannuation Pty Ltd. The late Mrs Bishop was survived by her
husband Daryll Bishop and her young son Michael. Mr Bishop made
a claim for a death benefit under the policy and in March 1995
the insurer and the trustee refused the claim arguing that as
Mrs Bishop died more than 60 days after her last day of work and
despite her absence being due to her illness. she was no longer
considered to be covered by the policy. The insurer/trustee also
argued that as a casual employee Mrs Bishop's employment ceased
on the last day which she was able to work and therefore she was
not entitled to the benefit of the Fund.
Daryll Bishop who was grief stricken by the loss of his wife eventually
complained to the Superannuation Complaints Tribunal about the
treatment of his late wife's claim. The Tribunal determined that
he had been treated unfairly and ordered that the trustee pay
a death cover benefit of $38,585. Rather than accepting the Tribunal's
decision the trustee appealed to the Federal Court and argued
successfully that the Tribunal was constitutionally invalid.
In the meantime Mr Bishop and his son have resided in a caravan
park in Queensland in very poor circumstances.
The ongoing legal process has made it impossible
for Mr Bishop and his son to get on with their lives.
Clearly the Government had intended that the trauma of this situation
should be avoided by having a simple and effective review process
in place to avoid such distress.
The insurer seriously argued that a casual worker could not make
a claim when a 60 day period "in service" time limit
had expired. The Full Court whilst ruling the Tribunal unconstitutional
dismissed this argument as being unfair and inappropriate to casual
employees in an employment environment where all employees are
entitled to compulsory superannuation benefits.
Mr Bishop and his son are now faced with a situation where their
claim as beneficiaries of their late wife and mother will not
be resolved for a considerable period of time as the constitutional
issues in this case will probably end up in the High Court and
a separate Court case will probably be commenced to recover the
insurance benefit of $38,685 under the policy.
An application for leave to appeal has been filed in the High
Court of Australia and it is likely that the court will permit
the appeal to be heard as the case has raised important constitutional
issues .
We shall continue to support Mr Bishop in this process, and proceed
with an appeal to the High Court of Australia if necessary.
Mr Humphery's Claim
Mark Humphery's case is very similar to Mr Bishop's. Barbara
Humphery was also a member of the CARE Superannuation Plan. Mrs
Humphery had selected a "death only cover" under the
CARE Superannuation Plan and made payments to the insurer out
of each week's wages. She believed that she was covered by a
death benefit insurance policy which when she became ill gave
her great comfort to think that her husband Mark and her three
young children Adrian, Donna and Guy would receive some benefit
to assist them in their time of tragedy.
Barbara Humphery was 41 when she died on July 24, 1994.
After considerable correspondence the trustees of the CARE Superannuation
Plan rejected the claim. Mr Humphery referred a complaint to
the Superannuation Complaints Tribunal and on March 20, 1996 the
Tribunal determined that a death benefit of $32,950 be paid to
Mr Humphery as his entitlement as his late wife's beneficiary
from the Fund. The entire process caused Mr Humphery much distress,
particularly the Fund's arguments in rejecting the claim.
Once again the trustee appealed to the Federal Court of Australia
arguing that the Tribunal acted beyond its legal powers and Mr
Humphery's claim was tied to the result of Mr Bishop's case.
Once again Mr Humphery and his three children have been caused
great distress by the whole process, particularly the trustee's
refusal to accept the Tribunal's determination.
Once again we shall support Mr Humphery until the ultimate conclusion
of his and his children's claim. Mr Humphery is a plumber and
has found it impossible to move on with his life whilst his late
wife's claim remains unresolved.
These individuals and many other complainants are now faced with
great uncertainty until the imbalance of power between insurers
and members of regulated funds is redressed satisfactorily.
Queries, comments and feedback to Trumble Szanto Lawyers
THE TRAGIC CIRCUMSTANCES OF MR BISHOP AND MR HUMPHERY
JOHN VINCENT SINISGALLI
Accredited Commercial Litigation Specialist
A partner of Trumble Szanto Lawyers
