Kowalski v MMAL Staff Superannuation Fund Pty Ltd (ACN 064 829 616) (No 2)

• Jurisdiction: Australia Federal only
• Court: Federal Court
• Judgment Date: 20 May 2008
• Neutral Citation: [2008] FCA 691

FEDERAL COURT OF AUSTRALIA

Kowalski v MMAL Staff Superannuation Fund Pty Ltd (ACN 064 829 616)

(No 2) [2008] FCA 691

PRACTICE AND PROCEDURE – motion to dismiss under s 31A Federal Court of Australia Act 1976 (Cth) and O 11 r 16 Federal Court Rules – leave to file further amended application and statement of claim

TRUSTS AND TRUSTEE – superannuation – alleged entitlement to total and permanent disablement pension – principles of judicial review of trustee’s discretion – significance of failure to give reasons for decision

Federal Court of Australia Act 1976 (Cth) s 31A

Federal Court Rules O 11 r 16

Misrepresentation Act 1972 (SA)

Fair Trading Act 1987 (SA)

Corporations Act 2001 (Cth)

Kowalski v MMAL Staff Superannuation Fund Pty Ltd (2007) 242 ALR 370 cited

Minehan v AGL Employees Superannuation Pty Ltd (1998) 134 ACTR 1 cited

Neil v Nott (1994) 121 ALR 148 cited

Jeffrey Guy Baker v Local Government Superannuation Scheme Pty Ltd [2007] NSWSC 1173 cited

Hay v Total Risk Management Pty Ltd [2004] NSWSC 94 cited

Sayseng v Kellogg Superannuation Pty Ltd [2003] NSWSC 945 cited

Flegeltaub v Telstra Super Pty Ltd [2000] VSC 107 cited

Vidovic v Email Superannuation Pty Ltd (unreported, Supreme Court of New South Wales, Bryson J, 3 March 1995) cited

Maciejewski v Telstra Super Pty Ltd (1998) 44 NSWLR 601 cited

Alcoa of Australia Retirement Plan Pty Ltd v Thompson (2002) 116 FCR 139 cited

Karger v Paul [1984] VR 161 cited

Ford and Lee, Principles of the Law of Trusts

Butler LM, “Reviewing Trustees’ Decisions: The Right to Reasons”(1999) 7 Aust Property LJ 251

KAZIMIR KOWALSKI v MMAL STAFF SUPERANNUATION FUND PTY LTD (ACN 064 829 616) AND AMP SUPERANNUATION LIMITED (ACN 008 414 104)

SAD 11 of 2007

FINN J

20 MAY 2008

ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SAD 11 of 2007

BETWEEN: KAZIMIR KOWALSKI Applicant

AND: MMAL STAFF SUPERANNUATION FUND PTY LTD (ACN 064 829 616) First Respondent AMP SUPERANNUATION LIMITED (ACN 008 414 104) Second Respondent

JUDGE:	FINN J
DATE OF ORDER:	20 MAY 2008
WHERE MADE:	ADELAIDE

THE COURT ORDERS THAT:

1. The amended statement of claim be struck out.

2. Leave be granted to the applicant to file and serve a further amended application and further amended statement of claim.

3. The costs of this motion be the respondents’ costs in the cause.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SAD 11 of 2007

BETWEEN: KAZIMIR KOWALSKI Applicant

AND: MMAL STAFF SUPERANNUATION FUND PTY LTD (ACN 064 829 616) First Respondent AMP SUPERANNUATION LIMITED (ACN 008 414 104) Second Respondent

JUDGE:	FINN J
DATE:	20 MAY 2008
PLACE:	ADELAIDE

REASONS FOR JUDGMENT

1 The motion before me is a predictable sequel to the circumscribed leave I gave Mr Kowalski in Kowalski v MMAL Staff Superannuation Fund Pty Ltd (2007) 242 ALR 370 to file and serve an amended application and statement of claim. That leave was exercised but the respondents (MMA Super and AMP Super) now seek orders either that the proceedings be summarily dismissed pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth), or that the statement of claim be struck out under O 11 r 16 of the Federal Court Rules as disclosing no reasonable cause of action. I intend taking the latter course for the reason that, while the pleading is misguided in its thrust, it cannot be said that the underlying complaint that appears to inform it may not suggest a reasonable cause of action. In their submissions the respondents, while not admitting this to be the case, have come close to identifying that cause of action, though without conceding that it is reasonably arguable or that they do not have a good defence to it.

BACKGROUND

2 As I indicated in Kowalski (No 1), the actual dispute between Mr Kowalski and his past employer, Mitsubishi Motors Australia Ltd (MMAL), has a long history dating to before 16 March 1994 when his employment with that company ceased. MMA Super, a subsidiary of MMAL, was the trustee of the MMA Staff Superannuation Fund and was brought into that dispute because of claims Mr Kowalski has asserted as to his superannuation entitlements consequent upon the cessation of his employment with MMAL. It is unnecessary for present purposes to outline the many proceedings he has brought against MMAL and MMA Super.

3 Though his complaints in substance relate to defaults of MMA Super, AMP Super has been joined in this proceeding because by a deed of 15 June 2006 the trust fund was transferred to it as trustee and MMA Super was then wound up as a superannuation entity. The relief Mr Kowalski seeks includes an order for payment of a sum of money out of the fund, hence the joinder of AMP Super.

4 The trust rules of the fund that was administered by MMA Super and on which Mr Kowalski seeks to rely as they relate to his alleged “entitlements” provide (Rule C.7) that in the event of his retirement “from the employ of [MMAL] before his Normal Retirement due to his Total and Permanent Disablement”, he is to be paid a lump sum from the Fund in accordance with the relevant rules (“a TPD Benefit”) which lump sum, it is claimed in his pleading, represented an entitlement of $181,195.00 as at 1 July 1991. Clause 1(6) of the fund’s Trust Deed defined “Total and Permanent Disablement” as follows:

Total and Permanent Disablement” means in relation to a Member disablement due to illness accident or injury as a result of which –

(a) he has been continuously absent from employment with the Employer for a period of at least six months (or such lesser period as the Trustee may determine in any particular case); and

(b) he is, in the opinion of the Trustee after consideration of medical evidence satisfactory to them, incapacitated to such an extent as to render him unlikely ever to engage or work for reward in any occupation for which he is reasonably suited by education, training or experience.

5 It is the above alleged entitlement to a TPD Benefit that Mr Kowalski seeks to have enforced, or else to be compensated for not receiving, in this proceeding. For the sake of completeness I would add that the Rules provided separately for payment from the Fund on resignation otherwise than as provided for specifically in the Rules: Rule C.9. Additionally cl 3(1) of the trust deed provides (inter alia) that:

Except to the extent otherwise provided in the Deed or the Rules the Trustee have in the exercise or non-exercise or partial exercise of each and every power exercisable by the Trustee an absolute and uncontrolled discretion and are not bound to give to any person any reason for or explanation of their exercise, non-exercise or partial exercise of any such power.

6 The applicant commenced employment with MMAL in January 1964. According to his amended statement of claim he suffered a psychological injury/mental breakdown at work on 16 August 1991. Apparently he did not thereafter go to work. Again according to his pleading, in April 1993 a psychiatrist informed MMAL that, in his opinion, “as a consequence of [Mr Kowalski’s] psychological medical condition and the fact that his employer had failed to provide any rehabilitation to [him], [he] would never be able to work again”. On 16 March 1994, MMAL notified him in writing that it considered his employment contract frustrated. The notice stated:

As you continue to be unfit for your normal duties with us, your contract of employment with the company is frustrated. On that ground, your contract of employment with the company is now at an end, and accordingly you are no longer required to report for work.

7 In his pleading Mr Kowalski acknowledged that MMAL informed MMA Super’s actuaries “that the applicant had resigned [from] his employment” and that in August 1994 MMA Super paid him a resignation benefit in the sum of $27,664.54. Though this sum has not been explained in the material before me it seems likely to have been a lump sum payment on resignation under Rule C.9 noted above.

8 The essence of his complaint is that given the context of his termination, he was entitled to be paid, but has not been paid, a TPD Benefit under Rule C7.

9 The manner in which this entitlement is put is various: an absolute entitlement is asserted in the events which occurred; alternatively a culpable failure to exercise powers in light of the evidence and particularly the medical evidence that was available to MMA Super; and a failure by MMA Super to consider the available evidence consequent upon a formal application for his entitlement on 3 November 2005 as well as upon earlier alleged requests.

10 The legal wrongs alleged are pleaded as being for breach of fiduciary duty and negligence in MMA Super’s not performing its duty to him. Patently inapposite claims which it is not necessary to discuss in detail here, are made as well under the Misrepresentation Act 1972 (SA), the Fair Trading Act 1987 (SA) and the Corporations Act 2001 (Cth) in respect of the conduct said to give rise to the breaches of fiduciary duty and the claims of negligence. I would simply note that none of these additional claims have any reasonable prospects of success.

The evidentiary morass

11 Mr Kowalski has filed a growing mosaic of pieces of evidence covering, in the main, a 15 year period. The documents filed (often as annexures to submissions) are for the most part unexplained; their context is often lacking; if they refer to annexures those annexures are often missing; and a deal of it relates to matters occurring subsequent...