Fletcher v Australian Super Pty Ltd
[2016] QDC 359
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- Unreported Judgment
- Fletcher v Australian Super Pty Ltd[2016] QDC 359
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Fletcher v Australian Super Pty Ltd[2016] QDC 359
Fletcher v Australian Super Pty Ltd[2016] QDC 359
DISTRICT COURT OF QUEENSLAND
CITATION: | Fletcher v Australian Super Pty Ltd & Anor [2016] QDC 359 |
PARTIES: | KAREN ANNE FLETCHER (plaintiff/applicant) v AUSTRALIAN SUPER PTY LTD (ACN: 006 457 987) (first defendant/respondent) & TAL LIFE LIMITED (FORMERLY TOWER AUSTRALIA LIMITED) (ACN: 050 109 450) (second defendant/respondent) |
FILE NO/S: | 4208/2015 |
DIVISION: | Civil |
PROCEEDING: | Application |
ORIGINATING COURT: | District Court |
DELIVERED ON: | 24 November 2016 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 4 March 2016 |
JUDGE: | Richards DCJ |
ORDER: | Application dismissed. The applicant is ordered to pay the respondents’ costs of and incidental to the application as assessed unless otherwise agreed. |
CATCHWORDS: | APPLICATION – LEGAL PROFESSIONAL PRIVILEGE – where the trustee obtained legal advice relating to the plaintiff’s claim – whether legal privilege relating to that advice was waived – whether joint privilege existed in relation to that advice Bennett v Chief Executive Officer of Australian Customs Service [2004] 140 FCR 101 Commissioner of Taxation v Rio Tinto Limited [2006] FCAFC 86 Lynda Allen v The Queensland Local Government Superannuation Board [2015] QDC 237 Schreuder v Murray No. 2 (2009) 41 WAR 169 |
COUNSEL: | Mr P Bingham for the plaintiff Mr G Handran for the for the first defendant |
SOLICITORS: | Maurice Blackburn for the plaintiff Turks Legal for the first defendant |
- [1]The plaintiff became a member of Australian Super on 31 December 2005. The last employer contribution paid on her account occurred around 28 October 2010. On 29 October 2013 she made a claim for total and permanent disablement benefit under the policy. She had been injured at work and underwent surgery on 10 June 2011 before returning to work on light duties on 19 September 2011. She then worked normal duties from 3 October 2011 until 11 January 2012 when she ceased work altogether. By email to the trustee on 20 October 2014 the second defendant accepted the plaintiff’s claim and transferred to the trustee a sum of $89,700, representing the benefit payable under the policy for a total permanent disability claim. That sum was deposited into the accumulation account membership number: 710060957 on 5 November 2014. The plaintiff’s solicitors were contacted on the same day by the trustee verbally advising them that the claim had been approved.
- [2]On 11 November 2014 the insurer advised the trustee that it had further examined the matter and was declining the total permanent disability claim and requested the trustee to return the funds as they had been paid under a mistake. On 21 November 2014 the plaintiff’s solicitors contacted the trustee indicating that the monies should not be returned to the second defendant and reserving rights to sue the trustee if the monies were refunded. Following the receipt of demands for the money by both parties the trustee decided to obtain legal advice and advised the parties that it would be doing so. The trustee then proceeded to engage an external firm of solicitors to provide advice about the conflicting requests. That advice was received on 11 December 2014.
- [3]It seems the claim was denied on the basis that the plaintiff was not entitled to a benefit at the relevant time. This was because the terms of the policy it is said had the effect of removing total permanent disability cover for the plaintiff by no later than 30 November 2011, being 13 months following the end of the month in which Equipment Hire last made an employer contribution to her accumulation account.
- [4]The trustee claims that as no employee contributions had been paid on account of the plaintiff for more than 18 months before the claim, then payment for that legal advice was not made from any money contributed on behalf of the plaintiff to the fund and the trustee maintains the legal advice received is privileged. The plaintiff submits that the determination, which was made after the receipt of the legal advice must have taken into account the legal advice and therefore privilege is waived or alternatively the privilege is a joint privilege. The ultimate decision of the trustee was that the claim should go through procedural fairness and denial prior to the monies being refunded to TAL and the final determination was that Ms Fletcher was not totally and permanently disabled within the meaning of the policy on 11 January 2012 because she did not have cover as at that date.
- [5]The first defendant in its submissions asserts that it has not been proved that legal advice obtained was before the trustee when it made its decision and further that there is no joint privilege because the advice was sought by the trustee in contemplation of potential litigation arising from the dispute over the refund of the money.
- [6]The plaintiff relies heavily on a case of Allen,[1] a decision of Judge Smith DCJA in this Court, and the principle as outlined in that case as follows:
“I consider the decision of Telstra Corporation Ltd and Anor v BT Australasia Pty Ltd and Anor also to be relevant. In that case it was there where a party’s state of mind is in issue in an action and where the matter cannot be fairly assessed without examination of relevant legal advice then the party is taken to having waived reliance of privilege. In my view the Board’s “state of mind” is a very relevant issue in this case.”[2]
Waiver of privilege
- [7]The cases show that in order for privilege to be waived either expressly or impliedly, there must have been some assertion about the contents of privileged communication for the purpose of mounting a defence.[3]
- [8]In its defence the first defendant admits that the first defendant was seeking legal advice as at 25 November 2014 but otherwise claims privilege[4]. Its defence also pleads that the duty of the trustee is to do everything that is reasonable to pursue an insurance claim for the benefit of the beneficiary if the claim has a reasonable prospect of success[5] and that it is required to act in relation to all matters affecting the fund with the same degree of care, skill and diligence as a prudent superannuation trustee would exercise in relation to an entity of which it is a trustee on behalf of the beneficiaries of which it makes investments[6]. It claims at all times it exercised any discretion in good faith and adhered to the terms of the trust deeds and the trustee exercised care and diligence and acted fairly and reasonably in considering the plaintiff’s TPD claim[7]. The plaintiff maintains that this brings into consideration the legal advice that was obtained and effectively impliedly waives privilege. Of course it is relevant to the claim what was considered in rejecting the claim and what was before the trustees.
- [9]There is no dispute that the material that was before the Board in reaching its determination is relevant to the defence claim that they were acting in good faith and exercised care and diligence. In Allen (supra) upon which the applicant/ plaintiff relies, the defendant in coming to its decision relied on advice from King & Co which was disclosed in the incapacity claim submission for consideration by the board namely that King & Co had advised them to reconsider the claim based on the fact that new medical evidence was supplied.
- [10]His Honour in Allen’s case noted in Bennett v Chief Executive Officer of Australian Customs Service,[8] that Gyles J held that the voluntary disclosure of the conclusion of the legal advice amounts to waiver. Ultimately whether there is an implied waiver depends on whether an inconsistency is apparent between the claim of privilege and the case presented by the party claiming privilege. His Honour noted in Commissioner of Taxation v Rio Tinto Limited that the principle that is relevant is whether the privilege holder had directly or indirectly put the contents of the communication into issue. Ultimately His Honour decided that the claim submission was critical to the decision of the board and integral in that submission was reference to the conclusions expressed in the legal advice. It was clear that the submission was relied on by the Board in reaching its determination.
- [11]In this case, by letter dated 22 June 2015[9] the trustee indicated the documents that they had considered in rejecting the claim. Those documents were as follows:
“The insurer’s decision letter dated 5 June 2015, the member’s statement, the employer statement and the medical advice from Dr Oo, Dr Cameron, Dr Likely, Dr Steadman and Dr Gibberb. The trustee also reviewed the psychologist report, the clinical notes, the MLC report and the medical certificates.” [10]
- [12]There is no mention of the legal advice received. It appears they also had regard to the TAL determination. In my view this is a fundamental difference with the case of Allen and it falls within the comments made in Commissioner of Taxation v Rio Tinto where it is noted:
“That the situation might be otherwise if the decision maker puts the contents of the legal advice in issue by specifically relying on the contents of the advice (and not merely the fact of the advice) to indicate his claimed state of satisfaction or exercised discretion.”[11]
- [13]In my view, privilege has not been waived by the mere fact of indicating that the first defendant would seek legal advice and advising the applicant of that fact.
Joint privilege
- [14]In relation to joint privilege, by letter dated 21 November 2014, the applicant’s solicitor indicated in the second last paragraph of that letter:
“Our client expressly instructs the fund that no benefit is paid from her account to the insurer. Should any benefit from our client’s account be paid to the insurer, our client reserves all of her rights to sue the trustee for damages/compensation in respect of any loss she suffers.”
- [15]As a result of that letter, there was a conversation between Damian Pace on behalf of the first defendant and the applicant’s solicitors wherein they were advised that they would seek legal advice and they would let them know the position in due course. That legal advice was received in December and in the meantime one of the fund’s employees was instructed to review the date of disability which the relevance of which is at the heart of this action.
- [16]In Schreuder v Murray No. 2[12] Buss JA outlined the relevant principles in relation to joint privilege between a trustee and a beneficiary with a vested interest in the trust fund:
“A legal advice privilege will exist in relation to information and documents that would reveal confidential communications between a trustee client and his or her lawyer made for the dominant purpose of giving or receiving legal advice, whether or not litigation is subsisting or within the reasonable contemplation of the trustee client. The litigation privilege will exist where litigation is subsisting or within the reasonable contemplation of the trustee client, and applies to confidential communications passing between a lawyer and his or her trustee client or between the lawyer and third parties, and confidential information or documents brought into existence, for the dominant purpose of preparing for the litigation. See the legal advice privilege or litigation privilege referred to in paras (a) and (b) above may not be invoked by the trustee client against a beneficiary of a trust if a trustee and the beneficiary have a joint privilege in relation to the confidential communications, information or documents in question.
- (d)There will be a joint privilege if:
- (i)the confidential communications, information or documents relate to legal services in connection with the management or administration of the trust; and
- (ii)the trustee (in his or her capacity as trustee) and the beneficiary (in his or her capacity as a beneficiary, and either alone or as a member of a class of beneficiaries) have a joint interest in the subject matter of those confidential communications, information or documents when they occur or come into existence.
- (e)the joint interest of the trustee will derive from his or her duties to the beneficiaries or in respect of the trust fund, and the joint interests of the beneficiary will derive from his or her vested interest in the trust fund, in combination with the nature and character of the relevant communications, information or documents;
- (f)the beneficiary will not be entitled to a joint privilege with the trustee if the confidential communications, information or documents relate to legal services obtained for the benefit of the trustee personally (for example, if the trustee seeks legal advice as to his or her personal rights all liabilities in connection with an alleged breach of trust or threatened legal proceedings) against him or her personally.”[13]
- [17]The point of difference between the parties is whether the documents amount to legal services obtained in connection with the management or administration of the trust. The applicant concedes that a distinction is made between the case where the trustee has been sued and the trustee seeks advice on their legal position and how they should defend themselves and where the advice is going to guide them in the execution of a trust. In the applicant/ plaintiff’s submissions the decision was made in the administration of a trust, however the respondent/ first defendant relies on the statement made by the applicant that they reserve their rights to sue should the money be returned to the insurer and that this statement generated the desire to seek legal advice.
- [18]In this case the advice was sought and received in contemplation of legal proceedings against the trustee, the proceedings having been threatened by the plaintiff and in those circumstances, in my view, joint privilege does not apply.
- [19]It follows that the respondent is entitled to claim privilege in respect of the legal advice. The application is dismissed.
ORDER
Application dismissed. The applicant is ordered to pay the respondents costs of and incidental to the application to be assessed unless otherwise agreed.
Footnotes
[1] Lynda Allen v The Queensland Local Government Superannuation Board [2015] QDC 237
[2] Above n 1, [60]
[3] Commissioner of Taxation v Rio Tinto Limited (2006) 151 FCR 341
[4] Defence para 20(e)
[5] Defence para 30(e)
[6] Defence para 30(f)
[7] Defence para 31(b)
[8] [2004] 140 FCR 101, [65]
[9] LJM8 exhibited to the affidavit of Lachlan Main
[10] Para 2 of LJM 8
[11] [2006] FCAFC 86, [67]
[12] (2009) 41 WAR 169
[13] Ibid, 193