Supreme Court New South Wales Medium Neutral Citation: Erzurumlu v Kellogg Superannuation Pty Limited [2013] NSWSC 1115 Hearing dates: 30 to 31 July 2013 and 1 August 2013 Decision date: 16 August 2013 Jurisdiction: Equity Division Before: Ball J Decision: Proceeding dismissed with costs. Catchwords: CONTRACT - superannuation - insurance - claim for benefit - whether plaintiff totally and permanently disabled within the meaning of the relevant superannuation trust deed and insurance policy - duty on a trustee of a superannuation fund in determining a claim for a benefit - duty on an insurer in determining a claim for a benefit Legislation Cited: Superannuation Industry (Supervision) Regulations 1994 Worker's Compensation Act 1987 (NSW) Cases Cited: Finch v Telstra Super Pty Ltd [2010] HCA 36; (2010) 242 CLR 254 Halloran v Harwood Nominees Pty Ltd [2007] NSWSC 913 Manglicmot v Commonwealth Bank Officers Superannuation Corporation Pty Ltd [2011] NSWCA 204 Re Hannover Life of Australasia Ltd v Sayseng [2005] NSWCA 214; (2005) 13 ANZ Ins Cas 90-213 Sayseng v Kellogg Superannuation Pty Ltd [2003] NSWSC 945 Sayseng v Kellogg Superannuation Pty Ltd [2007] NSWSC 583 Category: Principal judgment Parties: Huseyin Erzurumlu (Plaintiff) Kellogg Superannuation Pty Limited (ABN 89 008 426 131) (First Defendant) Hannover Life Re of Australasia Limited (ACN 062 395 484) (Second Defendant) Representation: M J Bleasel / G B Beauchamp (Plaintiff) M B J Lee SC / C J S Purdy (First Defendant) M V McManus (Second Defendant) Firths - The Compensation Lawyers (Plaintiff) Kennedys (First Defendant) TurksLegal (Second Defendant) File Number(s): 2011/272912 Publication restriction: Nil Judgment Introduction 1The plaintiff, Mr Erzurumlu, was employed by Kellogg (Aust) Pty Ltd (Kellogg) between 17 October 1988 and 20 April 2005. During the time he was employed, he was a contributing member of the Kellogg Retirement Fund (the Fund). The Fund was established by a trust deed dated 1 October 1976 (the Trust Deed). The first defendant, Kellogg Superannuation Pty Limited (the Trustee), is the trustee of the Fund. Under the terms of the Trust Deed a member is entitled to the payment of a benefit on becoming totally and permanently disabled whilst employed by Kellogg. Under cl 25.1(n) of the Trust Deed the Trustee has power to take out and maintain insurance in respect of its liability to make payments in accordance with the Trust Deed. In exercise of that power, the Trustee has insured its liability to pay total and permanent disability benefits with the second defendant, Hannover Life Re of Australasia Limited (the Insurer), under a Group Life Contract No VGL 8034 (the Policy). 2Mr Erzurumlu suffered a number of injuries in connection with his employment with Kellogg, the most serious of which was an injury to his lower back on 5 April 2003. The issue in this proceeding is whether, as a result of those injuries, Mr Erzurumlu suffered from total and permanent disablement within the meaning of the Trust Deed and the Policy. The Trust Deed and the Policy 3It is agreed between the parties that Mr Erzurumlu's right to be paid a total and permanent disablement benefit is governed by r 9 of the rules which form schedule 1 to the Trust Deed. That rule relevantly provides: 9. TOTAL & PERMANENT DISABLEMENT (1) Where, in the opinion of the Trustee, a Member becomes totally and permanently disabled while in service and where the Trustee has effected a policy of insurance to secure part or all of the benefits payable in accordance with this Rule 9 and the Member becomes totally and permanently disabled within the meaning of the definition of such disablement in that policy, a benefit of the amount specified in sub-rule (3) of this Rule shall be payable in accordance with sub-rule (4) of this Rule. (2) If part or all of the benefit referred to in sub-rule (1) of this Rule is arranged by means of policies of insurance pursuant to Clause 25.1 and the insurer refuses to insure at standard premium rates or for any reason refuses to insure or to pay any part of the required sum the Trustee in its discretion may reduce the benefit payable pursuant to sub-rule (1) of this Rule by part or all of the sum insured refused. (3) The amount of the benefit payable pursuant to sub-rule (1) of this Rule to or in respect of a Member shall be equal to the benefit which would have been payable had the Member died on the day which is deemed by the Trustee to have been the day on which the Member became totally and permanently disabled. ... The death benefit payable to a member is determined in accordance with r 7(1). It is agreed between the parties that, if Mr Erzurumlu is entitled to a permanent disablement benefit, then the amount to which he is entitled (having regard to the payment to him of a leaving service benefit of $150,329.09 on termination of his employment with Kellogg) is $382.607.22. 4The Policy provides: If an Insured Person dies or suffers Total and Permanent Disablement during any period for which Premium has been paid for that Insured Person, we shall pay the Agreed Benefits. 5"Total and Permanent Disablement" is defined to mean: (a) suffering the loss of two limbs or the sight of both eyes or the loss of one limb and the sight of one eye (where limb means the whole hand or the whole foot); or (b) having been absent from work through injury or illness for an initial period of six (6) consecutive months and in our opinion being incapacitated to such an extent as to render the Insured Person unable ever to engage in or work for reward in any occupation or work which he or she is reasonably capable of performing by reason of education, training or experience. 6Again, it is not disputed that the Agreed Benefit payable by the Insurer on the assumption that Mr Erzurumlu suffers from total and permanent disablement is $382.607.22. 7It is apparent from these provisions that the Trustee was required to consider two questions. One was whether Mr Erzurumlu became totally and permanently disabled while in service. The meaning of "totally and permanently disabled" is not defined in the Trust Deed and must be given its ordinary and natural meaning. The other question is whether Mr Erzurumlu suffered from total and permanent disablement within the meaning of the Policy. Both conditions have to be satisfied before a benefit is payable. 8The definition of "Total and Permanent Disablement" in the Policy requires that Mr Erzurumlu be unable ever to engage in any work for reward or occupation which he is reasonably capable of performing by reason of his education, training or experience. The requirement of the clause is, to use the words of the Giles JA in Manglicmot v Commonwealth Bank Officers Superannuation Corporation Pty Ltd [2011] NSWCA 204 at [88] when describing a clause in similar terms, "quite emphatic". Background facts 9Mr Erzurumlu was born in December 1964 in Turkey. He arrived in Australia in 1971. He left school in 1983 and worked in a retail furniture shop for six months before successfully undertaking a two-year surveying course. He obtained work with John White Surveyors and then worked for the next two years as a survey technician and surveyor's assistant. Following that, he worked for Kellogg on a part-time basis for about nine months and travelled overseas for about eight months. He commenced full time employment with Kellogg as a tank room operator on 17 October 1988 and he became a member of the Fund on 20 October 1988. In April 1989, he became a machine operator. 10Mr Erzurumlu suffered a number of injuries in connection with his employment with Kellogg. In 1991, he slipped on the floor at work and fractured his right elbow. As a result he had an operation to remove small fragments from the fractured radial head. He was off work for two to three weeks and was able to return to his pre-injury duties. On 29 November 1992, Mr Erzurumlu injured his knee while playing soccer at the Kellogg company picnic. He had arthroscopic surgery on his knee in March 1993 and subsequently had a knee reconstruction in November 2001, and further arthroscopic surgery in May 2002. In late 1996, he injured his left shoulder and neck when an up-sliding door of a lift fell and hit him. In August 1997, Mr Erzurumlu suffered from lower back pain while shovelling wheat flakes. He also suffered problems with his lower back in February 1998 following a motorcycle accident while riding home from work and he suffered further problems with his back at various times throughout 2001. 11On 5 April 2003, Mr Erzurumlu again injured his lower back while pushing a drum of molasses. At that time, his duties were as a level three operator on the corn/brand systems which involved working on the cookers, mills and dryers. His duties included the following: * Standing and overseeing the smooth operation of the machines in those areas; * Loading some ingredients into the machines as required, which would involve lifting weights of up to 25 kgs up to 110 times in a 12 hour shift; * Assisting with the maintenance and cleaning of the machines if they became blocked or broke down; and * Using a forklift and pallet jack and an overhead crane to lift heavy items. 12Following Mr Erzurumlu's injury on 5 April 2003, he consulted Dr Nassar and subsequently his family GP, Dr Rezk. A CT scan was performed on his back on 10 April 2003, which revealed asymmetrical bulging with encroachment on the thecal sac with some left nerve root encroachment at L4/L5 and a small left of centre disc protrusion with encroachment of the thecal sac and left nerve root at L5/S1. He was treated with ultrasound, mobilisation of joints, soft tissue massage and manual traction and, after a period of time, he returned to work for five hours a day, two days per week undertaking office duties. CGU, Kellogg's worker's compensation insurer, appointed Kairros Pty Ltd to oversee his rehabilitation. He was referred to Dr Seex, a neurological and spinal surgeon. 13On 3 July 2003, Mr Erzurumlu reached a settlement with Kellogg in relation to a lump sum compensation claim under s 66 of the Worker's Compensation Act 1987 (NSW) on the basis that he suffered 25 per cent permanent impairment of his back, 25 per cent loss of efficient use of his right leg and eight per cent permanent loss of the efficient use of his right arm. 14The problems with Mr Erzurumlu's back did not resolve. An MRI scan revealed a large disc protrusion at L5/S1 with extrusion of disc material into the canal causing compression of the S1 nerve root. Dr Seex recommended a left L5/S1 microdiscectomy, which was performed on 29 September 2003. Following that procedure, Mr Erzurumlu remained off work for approximately three months. He returned to work in January 2004. He started by working five hours per day three days per week doing clerical work. His workload was gradually increased to include 12 hours per week on mill duties with a lifting restriction of 10 kgs. In addition, he undertook an exercise program that was supervised by Mr Yen, an exercise physiologist with PEAK Conditioning. 15In April 2004, Kairros expressed the view that, given Mr Erzurumlu's seemingly apparent susceptibility to aggravations on standard work tasks, redeployment would be required to allow a safe working future, although they noted that Mr Erzurumlu wished to return to his pre-injury job. Dr Seex expressed the view at the time that Mr Erzurumlu should be able to return to lifting and handling up to 25 kgs, although he would need to consider Mr Erzurumlu's ability to handle awkward postures and heavy pushing and pulling. In fact, at about that time, Mr Erzurumlu was suffering an acute exacerbation of his back pain and was temporarily off work for a short period of rest and physiotherapy. 16On 5 July 2004, Mr Erzurumlu saw Dr Kafataris, an injury management consultant. Dr Kafataris expressed the following opinion: Based on my understanding of his duties, it appears that he will be able to perform his pre-injury duties when things are running well. He is likely to require assistance with breakdowns or with lifting heavier objects. He would need to exercise care if he is to climb onto machines to assist in fixing these breakdowns. He will also need to avoid working in confined spaces particularly if manual handling is required. Aside from these the long-term prognosis is excellent and I can see no reason why he should not return to some form of fulltime employment. ... 17Two weeks later, Dr Seex reported that Mr Erzurumlu was back at work and "working at his pre injury level of duties, the only difference is that when there are blockages in the pipes he is unable to clean these". Dr Seex observed that Mr Erzurumlu had recently had two episodes of back pain and expressed the view that that was likely to be an intermittent chronic problem, but that the progressive deterioration was not inevitable and that hopefully he would be able to continue to manage his back injury effectively. 18Kairros prepared a further progress report on 9 September 2004. The report indicated that Mr Erzurumlu was making steady progress, although it noted that there was still some concerns that he may not be able to perform his duties on the cookers. The report also records the fact that Mr Erzurumlu had expressed concern about his long term employability with Kellogg. The report observed that Mr Erzurumlu "has been further motivated towards his upgrading as he has been anxious about losing his job at Kellogg". 19A later progress report from Kairros, dated 20 December 2004, indicated that Mr Erzurumlu had not been able to upgrade his duties further on the third floor coater and cookers due to reported increased discomfort levels and as he had difficulty with prolonged standing and walking. 20Mr Erzurumlu was again certified unfit for work between 19 January 2005 and 24 January 2005 following reports of increased symptoms. 21Mr Erzurumlu saw Dr Kafataris on 3 February 2005. Following that consultation, Dr Kafataris prepared a report dated 14 February 2005 in which he expressed the following opinion: He is fit for a full shift of his current suitable duties in the tank room. I am not overly optimistic that he will be able to achieve a return to all aspects of pre-injury duties given the progress following the recent upgrade. I have reviewed the rehabilitation progress report and it appears that gradual upgrading on the cookers and the third floor coater would not be practical. It appears that these duties require an ability to keep up with the pace of a machine. It also appears that prolonged static postures are required. Given the worker's history of discectomy and his recent exacerbation. It is my opinion that the likelihood of him achieving these duties and maintaining them in the long term without repeated flare-ups is low. It is more likely that he will achieve a return to permanently modified duties with a lifting restriction of 15 kg and a restriction on prolonged static postures, ie more than an hour at a time without change of position. I do not feel that any further long term restrictions will be required. Although it is likely that he will maintain full time gainful employment within these restrictions, the natural history of work related lower back pain is for exacerbations and remissions and the responsibility of these can never be discounted. 22On 15 February 2005, before receiving Dr Kafataris' report, Kellogg wrote to Mr Erzurumlu notifying him of the temporary withdrawal of suitable duties effective from that date. The letter commented: ... we are concerned about your safety due to recent 'flare-ups" and your reports of pain and discomfort whilst performing suitable duties which also resulted in you requiring 4 days leave from work. 23Following receipt of Dr Kafataris' report, Kairros, in a progress report dated 18 February 2005, observed that Mr Erzurumlu would not be able to return to his full pre-injury duties as a level 3 operator and amended his return to work goal as performing permanently modified duties with restrictions on lifting less than 15 kg and avoiding prolonged static postures. 24Dr Kafataris prepared a further report dated 10 March 2005. In that report, he said: When I saw [Mr Erzurumlu] he had recently had an exacerbation. It was anticipated that his symptoms would settle to their previous background level. I have reviewed the information provided to me and I have not sighted an assessment of the tank room duties. The fact remains however that the worker was coping with these duties previously and I can see no reason why he should not be able to upgrade to them in the near future. As stated in my recent report, it is unlikely that he will return to all aspects of his pre-injury duties and will return to permanently modified duties with a lifting restriction of 15kg. As far as his functional capacity is concerned, I would suggest that he would be fit for the following: 1 Sitting - 1 hour with change of position 2 Climbing - unrestricted 3 Standing - 1 hour with change of position breaks 4 Walking - 1 hour followed by change of position break 5 Forward bending - no more than once every 5 minutes without load 6 Squatting - no restriction 7 Kneeling - no restriction 8 Push/Pull - 25kg 25On the previous day, Kairros had completed a vocational assessment at Mr Erzurumlu's home in Mount Druitt. The results of that assessment were set out in a report dated 23 March 2005. The report stated that Mr Erzurumlu "has reportedly achieved approximately 40% of his full duties". The report said that Mr Erzurumlu described his current functional status as follows: SITTING: Manages "OK". Shifts sitting position as required STANDING: Estimated static standing at 20 minutes maximum. Back pain increases after this time. WALKING: Unaffected LYING: Some broken sleep due to pain / cramps in legs. Manages with pain medication STAIR CLIMBING: Able to manage limited stairs without difficulty, but prolonged stair climbing causes increased pain SQUATTING: Manages "OK" LIFTING AND CARRYING: Manages objects such as grocery shopping bags without difficulty. Avoids lifting of heavier objects. GRIP: Unaffected UPPER LIMB USE: Unaffected SELF CARE: Experiences some difficulties with "flexibility" when dressing feet with shoes and socks. Manages all tasks independently however. HOME MAINTENANCE: Avoids home maintenance tasks such as cleaning house gutters, mowing lawns etc. Pays a friend to mow the lawn for him. DRIVING: Drives an automatic vehicle with power steering. Can drive for 2 hours comfortably. Also rides a motor-bike and reported this is more comfortable for his back than driving his car. The report also observed that Mr Erzurumlu had the following transferable skills: ▪ Wide self-taught knowledge and skills in computers - software, programming and hardware ▪ Well developed English verbal skills ▪ Turkish verbal skills ▪ Driving skills and licencing ▪ Knowledge of factory procedures ▪ Knowledge in use and workings of factory machinery ▪ Forklift driving skills and qualifications (though prolonged driving may aggravate back pain) ▪ Motor-bike driving skills and licencing ▪ Basic surveying knowledge and qualifications 26The report stated that various occupations had been discussed with Mr Erzurumlu, namely surveyor, forklift driver and computer support technician/help desk. The position of surveyor was ruled out because Mr Erzurumlu's qualifications were out of date and Dr Rezk had expressed concern regarding the prolonged standing required. In addition, the award wages for the occupation were approximately half of Mr Erzurumlu's pre-injury earnings. The position of forklift driver was also ruled out, partly because of concerns that it could aggravate his injury and partly because Mr Erzurumlu's earning potential was less than half of his pre-injury earnings. In the light of those conclusions, Kairros made the following recommendation: ... It would appear that based on his continuing functional difficulties and his high pre-injury earnings, he would be best suited to retraining and pursuing work in an IT / Computer Support occupation. Following training, it may then be appropriate for the pre-injury employer to consider any internal IT availabilities. If this is not possible, external redeployment assistance should be considered. 27On 4 April 2005, Mr Yen prepared a final report. The report observed that: According to Mr Erzurumlu the duties that he is currently performing are pretty much his pre-injury duties, as they constituted approximately 95% of pre-injury duties when he was originally injured. He also reported that he will need to be able to lift up to 25kg to be able to perform the remaining 5% of his duties. The report concluded: Judging on his improvements within his program, I believe that Mr Erzurumlu will be able to reach this weight of 25kg. I also believe that Mr Erzurumlu is currently capable of lifting this weight of 25kg safely, providing that it is not done repetitively, but occasionally. (emphasis in original) 28Kellogg gave consideration to the question whether it was able to offer permanent modified duties to Mr Erzurumlu either as a "Flavour Operator" or "Corn Mill Operator" or "Help Desk / Computer Support Technician". It concluded that it was unable to do so. As a result, on 21 April 2005 it wrote to Mr Erzurumlu terminating his employment effective 20 April 2005. 29There were delays in arranging for Mr Erzurumlu to be retrained as an IT/computer support technician. Eventually, CGU gave its approval to the re-training and Mr Erzurumlu commenced a course with Computer Power on 17 October 2005. Mr Erzurumlu performed very well. However, the training was interrupted when Computer Power went into liquidation. There were substantial delays in finding an alternative course. Eventually, Mr Erzurumlu was enrolled in a course at TAFE commencing in February 2007. In the meantime, Mr Erzurumlu's condition deteriorated. An MRI scan conducted on 25 July 2007 revealed disc desiccation demonstrated at L4/5 and L5/S1 level with disc bulges seen at L4/5 and L5/S1 level. As a result Mr Erzurumlu underwent further surgery on his back on 18 February 2008 involving the insertion of Wallis implants. His condition has worsened since that time. He had a spinal fusion of L4/5 and L5/S1 in 2009 and a further operation in 2012. In a report dated 10 December 2012, Dr Seex expressed the following opinion: I believe Mr. Huseyin Erzurumlu has been incapacitated to engage in any kind of work due to his chronic back problem. In my opinion as when I last saw Mr. Erzurumlu he was incapacitated to such an extent as to render him unable to ever engage in or work for reward in any occupational work in which he is reasonably capable of performing by reason of education, training or experience. This is based on the lengthy period of the chronic illness of his back pain and the multiple operations he had to fix up his back problem. As he has good days and bad ones he will need to take lots of sick leave which will be not reasonable and fair for his employer. 30According to Mr Erzurumlu, he applied for over 700 IT jobs but was not successful in obtaining any of them. He had a number of telephone interviews. However, when he explained the circumstances in which his employment with Kellogg was terminated, the interviewer was no longer interested in continuing with the interview. Mr Erzurumlu's claim 31It appears that Mr Erzurumlu was unaware of his rights to claim a permanent disablement benefit. However, at some time in late 2008 he consulted Factual & General Insurance Assessors and, on 4 December 2008, they submitted a permanent disablement claim to the Trustee on his behalf. The claim was supported by a number of medical reports including a number of the early medical reports relating to Mr Erzurumlu's injuries together with a report completed by Dr Rezk in a form supplied by the Insurer. That report was completed on 11 November 2008. The report consisted of answers to a number of questions. Question nine asked whether the claimant could do his/her normal job. In response to that question, Dr Rezk ticked the "No" box. The question then asked if no "which work duties is the claimant unable to do". In response to that question, Dr Rezk responded "clerical duties", although it is difficult to understand that response since clerical duties did not form part of Mr Erzurumlu's normal job and it did appear that he was able to undertake that work as part of his modified duties when he was still working at Kellogg. In response to other questions, Dr Rezk indicated that "IT jobs" would be appropriate for Mr Erzurumlu. Question 11 asked "If you think that the claimant will NEVER return to any type of work, please give detailed reasons for this". In response, Dr Rezk wrote "not normal duties that has bending & standing etc.". 32On 19 December 2008, the Trustee forwarded Mr Erzurumlu's claim to the Insurer. 33On 24 December 2008, the Insurer responded by asking for an employer statement in respect of Mr Erzurumlu and full tax returns and assessments from 2005 onwards. On 2 April 2009, the Insurer also requested copies of all medical and investigation reports and details of any rehabilitation programs that Mr Erzurumlu was involved in. That material was supplied to it. 34On 23 June 2009, the Insurer wrote to Mercer (Australia) Pty Ltd, the Trustee's agent. The letter set out the material that the Insurer had considered and included copies of the additional material it had obtained, including CGU's workers compensation file. In addition, the letter drew Mercer's attention to the definition of permanent disablement in the Policy. The letter concluded: We would appreciate that this letter and the attached documentation is immediately provided to the member for their review, so as to ensure that the member is afforded procedural fairness. If they have any additional comments or information to submit we request that this be furnished to our office by 23 July 2009. We will of course consider any further relevant evidence or submission the member would like to provide. 35The letter and attachments were forwarded to Mr Erzurumlu on 8 July 2009. 36Mr Erzurumlu's adviser asked for an extension in which to reply. That extension was granted until 3 August 2009. However, no additional information was submitted on Mr Erzurumlu's behalf. 37On 26 August 2009, the Insurer wrote to Mercer setting out its decision to decline the claim. The letter set out the material the Insurer had considered. The Insurer gave the following explanation for its decision: Cessation of the member's employment is shown to have been for reasons other than total disablement, namely the withdrawal of suitable duties by the said employer, Kellogg (Aust) Pty Ltd, pending further recommendations of vocational options given that the member would be unable to upgrade to 100% of his usual full pre-injury duties. This is shown to have occurred in spite of the member having been certified fit for suitable or modified duties on a full time basis, and of which the member had been satisfactorily performing over a prolong period following his injury of April 2003 and up until cessation date of employment in 20 April 2005. Rehabilitation provider, Peak Conditioning in their final report which is shown to have been compiled of close proximity to the member's cessation date of employment (April 2005), strongly infer that the member's fitness level was gauged to be of an acceptable level and should not be a limiting factor in the member's return to pre-disability work. According to the member, the duties he was currently performing (April 2005) were "pretty much" his pre-injury duties as they constituted approximately 95% of the pre-injury duties as to that when he was originally injured in 2003. Of relevance in this matter is also the opinion of specialist, Dr Con Kafataris whereby in his report dated 14 February 2005 he was of the view that the member was deemed fit for a full shift of his current suitable duties in the tank room. It was opined that the member is likely to retain a work capacity of permanently modified duties with lifting restriction of 15kg. It is likely that the member will maintain full time gainful employment within these restrictions. Whilst the member is illustrated to have a diagnosable back condition, it is reasonably evident that at the time of the member ceasing work on 20 April 2005 he had a residual capacity to undertake his usual suitable duties on a full time basis. If not for the employer withdrawing their offer of suitable duties, which the member opined consisted of 95% of his usual pre-disability duties and appears to have satisfactorily performed up to and including 20 April 2005, the member most likely could have continued to work in this capacity beyond 20 April 2005, or up until Normal Retirement Age if he had been so permitted to do so by his employer. As such, it is our view that the evidence does not portray the member to have been incapacitated to such an extent as to render the member unable ever to engage in or work for reward in any occupation, or work as at the purported date on which total and permanent disablement is alleged to have begun of 20 April 2005, or within the immediate following six consecutive months. Consequently, the first limb of the Total and Permanent Disablement definition is shown not to have been satisfied. The member is illustrated to be still relatively quite young with potentially a further twenty five (25) life years remaining before Normal Retirement Age of 65 years. Information to hand would depict the member to have elected to retrain into the alternate career path of Information Technology, as opposed to seeking employment of a similar or lighter category to that which he had undertaken with Kellogg, although with a different employer. On this point we draw to your attention Dr Con Kafataris findings as discussed above. The evidence does not persuade Hannover Life Re to reach an opinion that the member is totally and permanently disabled in line with the policy definition. The onus of establishing an entitlement to the total and permanent disablement benefit rests with the member. 38On 20 November 2009, Mercer provided the Trustee with a detailed summary of the material that had been considered by the Insurer. It recommended that the claim should be denied although it stressed that "the Trustee must carefully consider all of the attached material in reaching its own independent decision". The Trustee was also supplied with an advice from Mercer Legal dated 14 December 2009. The advice analysed a number of legal issues concerning the claim. It concluded: On review of the evidence we are of the view that it could be argued that the insurer has not reached a decision that is fair and reasonable on the evidence for the following reasons: The insurer has not obtained any independent medical assessment itself and has only relied on the medical reports supplied for the purposes of the member's Worker's Compensation claim. We note these reports consider different issues to that which is required to be assessed by the insurer under the terms of the Policy. In addition in our view, there are a number of important considerations which were noted in the Sayseng case and equally apply to this matter that have not been fully addressed by the insurer. For example such at the time of the Member's termination by Kellogg, he had a lifting restriction in relation to his employment, and it appears there has been no assessment of this issue on the Member's capacity for work and the permanency of his impairment. 39The directors of the Trustee met on 15 December 2009. The minutes of that meeting record: Ms Hunt [the author of the Mercer Legal advice] advised that the current claim should be returned to the insurer to address the issues raised in the Sayseng matter. In particular an independent medical assessment and a vocational assessment (not for workers compensation) is recommended to be suggested to the insurer to be obtained. Ms Hunt and Ms Durant offered to discuss this issue with Hannover. Mr Spehr offered to be part of these discussions. The Directors RESOLVED to agree to this. 40The request for review was passed on to the Insurer who agreed to it. As part of that review, the Insurer asked for a complete copy of Mr Erzurumlu's personnel file together with a job description of his duties prior to his disablement and a job description of his duties prior to his cessation of work in 2005. 41The requested material was supplied to the Insurer. In addition, the Insurer obtained a report from Dr Peter Slezak, its chief medical officer, on 12 April 2010. That report concluded: On the evidence available to me, I consider that Mr Erzurumlu would be able to perform a range of sedentary duties eg Surveyor Technician or work within the IT Industry particularly were he able to sit and/or stand at will. I therefore consider that Mr Erzurumlu does not satisfy the policy definition as to be totally and permanently disabled. 42On 12 May 2010, the Insurer wrote to Mercer setting out the additional material that it had considered and requesting any additional comments from Mr Erzurumlu by 12 June 2010. No further comments were provided and on 22 June 2010 the Insurer sent Mercer a letter confirming that it denied the claim. The letter set out a number of reasons for doing so. First, it purported to set out an analysis of the work that Mr Erzurumlu was required to perform and it concluded on the basis of that analysis that Mr Erzurumlu had not accurately described his duties to Dr Kafataris and that, in particular, he had overstated the amount of lifting he was required to do. It also concluded that "[i]t is reasonably documented that the member was able to perform suitable duties on a regular basis which consisted of approximately 95% of the member's usual pre-injury duties." The letter continued: As indicated within Dr Con Kafataris' reports dated 14 February 2005 and 10 March 2005, when he ceased work the member was fit for a full shift of his duties in the Tank Room. The member is unlikely to return to all aspects of his pre-injury duties however could return to permanently modified duties with a lifting restriction of 15 kg. Dr Kafataris went on to state that the member was coping with the duties of the Tank Room previously, and he could therefore see no reason why the member would not be able to upgrade in the near future taking into account the member's recent exacerbation when seen in March 2005. Dr Kafataris further indicated that it was likely that the member would maintain full time gainful employment within these restrictions. The evidence therefore indicated that the member was able to continue to perform the duties in the Tank Room, which were duties within his education, training or experience, when he ceased work at the time of his redundancy. The letter then concludes: Hannover Life Re is of the view that the alternative duties the member was performing at the time he ceased work were generally comparable to the member's employment before his injury. The work in the Tank Room was reasonably open to the member having regard to his education, training or experience. As the information stands, the member would appear to have not experienced any significant difficulty in continuing to work despite his 'mild pain' and could have continued to perform his work with the employer of Kellogg (Aust) Pty Ltd, indefinitely but for those duties no longer being available. (footnote omitted) 43Secondly, the letter relies on the report of Dr Slezak. It also refers to Mr Erzurumlu's formal qualification in customer service and surveying and his self taught computer skills. It then concludes: Overall, the consensus of the evidence is that the member is able to perform work as a production operator (or light assembly factory work), or similar suitable work with a 15 kg lifting restriction. This is work within his education, training or experience. 44Lastly, the letter refers to an internet search which revealed Mr Erzurumlu's public webpage. The letter comments: Of interest we noted the member's continued capacity and functional agility to ride and manoeuvre the weight of his motor cycle(s), despite his diagnosed medical condition/s, prior to and following the member's documented surgeries to his right elbow (approx. 1991), right knee (1993 and 2001) and back (2003 and 2008). On the webpage, Mr Erzurumlu had said of a Katana 1100: The bike had to be sold due to the fact that it was too heavy to handle due to a back operation. He also said of a Ducati: This is a magic bike but after the second back operation riding bikes was out of the question. It will be ridden again once I am able. 45On 21 July 2010, Mercer wrote to the Insurer raising a number of concerns with the Insurer's letter dated 22 June 2010. The concerns included the fact that the decision was based largely on WorkCover evidence, that the evidence did not address the question of the permanency of Mr Erzurumlu's condition and that Dr Slezak did not examine Mr Erzurumlu. The letter also comments: Evidence identifying the availability of work for people with the Member's condition and restrictions does not appear to have been obtained by the Insurer. It appears that no analysis in relation to the Member's residual capacity Vs earning capacity in the open labour market has been performed and that the Vocational Assessment Report has been based on Workers Compensation Legislation. It further appears that no labour and market analysis with real employer contacts has been performed to establish the likelihood of the Member being able to secure a position as a Production Operator or similar suitable work, in the open labour market. 46Lastly, the letter refers to the fact that Mr Erzurumlu had no success in obtaining jobs in the IT field, which indicated that his chances of doing so "would appear to be minimal". 47The Insurer replied to that letter on 3 August 2010. It observed that the claim had been made a number of years after Mr Erzurumlu was said to have suffered from permanent disablement and as a consequence the Insurer had been prejudiced in considering the claim and that had made it necessary to rely on historical material. The letter concludes: As the information stands, the member is reported to have not experienced any significant difficulty in continuing to perform his assigned work duties despite his 'mild pain' and would have continued to perform those duties with the said employer indefinitely, but for those duties being withdrawn by Kellog [sic] (Aust) Pty Ltd. In giving the matter our consideration, the availability of any potential job prospect/s with an alternate employer would therefore need to be retrospective. As such, Hannover Life Re is of the view that the earlier vocational assessments conducted on behalf of the workers compensation insurer reasonably illustrate availability and the capacity of the member to undertake such duties. The member by his own volition had chosen to pursue a different career path in Information Technology, as opposed to seeking out the availability of suitable lines of employment within his then demonstrated work capacity and transferable skills matrix eg Tank Room. As the information stands, in all probability the member could have potentially resumed suitable employment within his demonstrated work capacity and transferable skills matrix. To this end, the policy definition requires an assessment of whether a member is unable ever to engage in or work for reward in any occupation. 48Mercer prepared a supplementary report for the Trustee on 9 September 2010 summarising the additional material that it had obtained. It made the following recommendation: In this regard, after considering all available evidence and without pre-empting the Trustee's decision, we believe it is open to the Trustee to resolve that the Member does not satisfy the Fund's definition of Total and Permanent Disablement. (emphasis in original) 49That supplementary report was considered by the directors of the Trustee at a meeting on 14 September 2010. Consideration of Mr Erzurumlu's claim was postponed to give the directors an opportunity to read the additional material that had been supplied to them. The issue was then considered at a meeting of directors on 29 September 2010. The minutes of that meeting record a lengthy list of material considered by the directors. They then record the following decision: The Trustee Directors all agreed that the decision made by Hannover Life Re to deny Mr Erzurumlu's TPD claim was based on a fair review of the evidence, that the insurer had operated with good faith and that the insurer's decision on review of the evidence was fair and reasonable. The Directors further resolved to deny the Total and Permanent Disablement claim by Mr Huseyin Erzurumlu. 50The Trustee notified its decision to Mr Erzurumlu on 5 October 2010. 51On 24 August 2011, Mr Erzurumlu commenced this proceeding. His solicitors then sought a review of his claim. In support of that request, they supplied a medical report of Dr Machart dated 24 December 2012 and medical reports of Dr Patrick dated 14 January 2013 and 18 January 2013. Those reports, however, shed little light on the matter since they were directed to Mr Erzurumlu's medical conditions at the time they were prepared, not his capacity in 2005. It is clear that Mr Erzurumlu's condition has deteriorated substantially over that time. Both the Insurer and Trustee denied the claim. In its letter dated 2 May 2013 to Mercer, the Insurer said: It is submitted that as the member had the capacity to perform suitable duties, which was essentially 95% of his normal duties, up to 12 hour a day as at 21 April 2005, he would have had a higher chance of success in obtaining alternate employment in the field of factory work (or other work within his education, training and experience) had he made an attempt to do so. Instead, the member opted to pursue his interest in computers in spite of being certified fit for work within his education, training and experience by his treating doctor. Relevant legal principles 52The relevant legal principles are not substantially in dispute. 53The Trustee has a duty to apply the trust assets in accordance with the Trust Deed. In performing that duty, it is required to inform itself properly of the relevant facts: Finch v Telstra Super Pty Ltd [2010] HCA 36; (2010) 242 CLR 254 at [30]ff. It is also required to act in good faith, on a real and genuine consideration of the material before it and for sound reasons, although it is not obliged to give reasons for its decision: see Hannover Life Re of Australasia Ltd v Sayseng [2005] NSWCA 214; (2005) 13 ANZ Ins Cas 90-213 at [32]ff per Santow JA (with whom Spigelman CJ and Tobias JA agreed). If, for any reason, the Trustee has failed to discharge its duties in considering the member's claim, the appropriate order is to refer the matter back to the Trustee. The court generally does not itself seek to execute the trust: Hannover Life Re of Australasia Ltd v Sayseng [2005] NSWCA 214; (2005) 13 ANZ Ins Cas 90-213 at [33]. 54Although a member is not a party to the contract with the insurer who provides insurance cover to the trustee of a superannuation fund, the member has standing to enforce the contract as a beneficiary of the trust which holds the insurance policy as one of its assets. The member does not have a personal claim but is entitled to seek an order that the insurer pay to the trustee the amount due to the trustee under the contract: Sayseng v Kellogg Superannuation Pty Ltd [2003] NSWSC 945 at [78]ff. An insurer, when considering a claim, must comply with its obligation of utmost good faith. That obligation requires the Insurer to act reasonably in considering the claim. The obligation to act reasonably includes an obligation to consider and to determine the correct question. It also includes an obligation to give the member an opportunity to answer any material on which the insurer intends to rely: Hannover Life Re of Australasia Ltd v Sayseng [2005] NSWCA 214; (2005) 13 ANZ Ins Cas 90-213 at [35]ff. Although the obligations of the trustee and the insurer are expressed in different terms, from a practical point of view, the grounds on which the decision of each may be challenged are similar: Sayseng (2003) at [77]. The duty of the court is to determine whether the insurer breached its duty of utmost good faith. It is not to substitute its own view for that of the insurer. However, if an insurer refuses a claim in breach of its obligation of good faith, the court itself can determine whether, on the material available to it, the claim fell within the policy: Sayseng (2005) at [36]. 55Although it is an issue that is ultimately to be determined by the terms of the trust deed and policy, generally the question whether a member suffers from total and permanent disablement is to be determined at the time and by reference to the facts that exist at the time the member first suffers from total and permanent disablement in accordance with the policy. It is at that time, and by reference to those facts, that the trustee and insurer are required to consider the question whether the member suffers from total and permanent disablement. There is a question whether that is when the member ceased work or when the qualifying period before any benefit is payable expires: compare Halloran v Harwood Nominees Pty Ltd [2007] NSWSC 913 at [33] per Brereton J (who preferred the latter approach) and Sayseng v Kellogg Superannuation Pty Ltd [2007] NSWSC 583 where Nicholas J appears to have preferred the former approach. The parties accept that nothing turns on which approach is adopted in this case. However, in my opinion, the preferable approach is the one adopted by Brereton J. On the wording of the Policy, Mr Erzurumlu could not have suffered from total and permanent disablement until the expiration of the six month period. It seems logical to assess whether Mr Erzurumlu could ever engage in work at that time. Mr Erzurumlu's claim 56In his submissions, Mr Erzurumlu does not for the most part distinguish between the position of the Trustee and the position of the Insurer. In each case, he submits that their respective decisions are "void and without effect" for a number of reasons. 57First, Mr Erzurumlu submits that the defendants considered the wrong question because they took into account Mr Erzurumlu's IT training from 2005 to 2007 and they took into account Mr Erzurumlu's capacity to perform modified duties rather than his capacity to perform an occupation or work which he was reasonably capable of performing by reason of his education, training or experience. 58Second, Mr Erzurumlu says that the defendants failed to properly inform themselves because they relied on reports obtained for workers compensation purposes and did not obtain an independent medical assessment, they relied on the report of Dr Slezak who did not examine Mr Erzurumlu, they failed to identify the availability of work for someone with Mr Erzurumlu's restrictions and to consider whether it was probable that Mr Erzurumlu would actually obtain work of that description and they failed to consider properly the effect of the vocational report prepared by Kairros. In addition, they failed to draw Mr Erzurumlu's attention to the matters of concern on which they based their decision and the Insurer took into account Mr Erzurumlu's webpage without telling Mr Erzurumlu that that is what it was going to do. 59Third, Mr Erzurumlu submits that the Trustee relied to a substantial degree, if not totally, upon the Insurer's opinion and in doing so abrogated its own responsibility. 60Fourth, Mr Erzurumlu submits that the defendants did not form their opinions for sound reasons. In particular, it is said that the Insurer denied the claim because Kellogg had withdrawn suitable duties. The Insurer did not focus on the question whether Mr Erzurumlu was absent from work through injury or illness. In addition, both the Insurer and the Trustee relied on the vocational report prepared by Kairros, although that report concluded that the only occupation which was suitable for Mr Erzurumlu was one which required re-training and which recorded that he could only perform 40 per cent of his full duties. 61Fifth, Mr Erzurumlu submits that the defendants failed to form a fair and reasonable opinion because they did not obtain an independent medical assessment and they did not obtain a vocational assessment in relation to the question whether he had a capacity to do a job for which he was qualified by his education, training and experience. 62Lastly, in relation to the Trustee, Mr Erzurumlu says that the Trustee must have formed the opinion that he was totally and permanently disabled because it paid the amount of $150,329.09 on termination of his employment and because, on the correct construction of the Superannuation Industry (Supervision) Regulations 1994, Sch 1 Pt 1, it was only entitled to make that payment on the basis that Mr Erzurumlu suffered from a permanent incapacity. Claim against the Insurer 63It is convenient to deal first with the claim against the Insurer; and it is convenient to consider that claim by considering five broad questions: * Did the Insurer act unreasonably by considering material without giving Mr Erzurumlu an adequate opportunity to respond to that material? * Did the Insurer act unreasonably by failing to consider relevant material? * Did the Insurer act unreasonably by failing to obtain additional material? * Did the Insurer act unreasonably by addressing the wrong question? * Did the Insurer act unreasonably in the way in which it analysed the material that it considered? Opportunity to respond 64Mr Erzurumlu appears to make two points in relation to the first question. First, he submits that the Insurer ought to have drawn to his attention the material that it intended to rely on to conclude that he did not suffer from total and permanent disablement so that he could consider whether he wanted to respond to that material. Second, Mr Erzurumlu submits that the Insurer should have told him that it intended to rely on the information contained on Mr Erzurumlu's webpage. 65I do not accept either of those submissions. Leaving aside the webpage for the moment, the Insurer did draw to Mr Erzurumlu's attention the material that it intended to take into account in reaching its decision. It was reasonable for the Insurer to assume that Mr Erzurumlu and his advisors would consider that material and determine whether any further material needed to be placed before the Insurer. That is what happened. There was nothing about the material or the Insurer's approach to it that meant that, acting reasonably, the Insurer ought to have done more. 66As to the webpage, the Insurer relied on it for the conclusion that Mr Erzurumlu was still able to ride a motorcycle. It was not unreasonable for the Insurer to rely on the webpage to reach a conclusion about Mr Erzurumlu's ability to ride a motorcycle without telling him that that is what it was going to do. The webpage contained publicly available information that was supplied by Mr Erzurumlu. It can be inferred from the webpage that Mr Erzurumlu was able to ride his Ducati at least until he had his second back operation in February 2008. That information was consistent with the statement in Kairros' vocational report dated 23 March 2005 that Mr Erzurumlu "[a]lso rides a motor-bike and reported this is more comfortable for his back than driving his car". Consequently, the principal conclusion that the Insurer drew from the webpage simply reflected something that Mr Erzurumlu had told Kairros, which was something that was disclosed in the material provided to Mr Erzurumlu. Consideration of all relevant material 67It is not suggested that there was other material available to the Insurer that it did not consider. Obtaining additional material 68Mr Erzurumlu submits that the Insurer should have obtained an independent medical assessment and an independent vocational assessment. The Insurer did not do so because of the time that had elapsed between when it is said Mr Erzurumlu suffered from total and permanent disablement and the time when the claim was made. Mr Erzurumlu ceased work on 15 February 2005, when Kellogg withdrew suitable duties. Six months after that date was 15 August 2005. It was necessary to assess the question whether Mr Erzurumlu suffered from total and permanent disablement at that date. The claim was not submitted until 19 December 2008. The earliest that the Insurer could reasonably be expected to have considered the question whether it needed additional material was after it had obtained CGU's worker's compensation file, which was supplied on 8 April 2009. The worker's compensation file contained detailed information concerning Mr Erzurumlu's injuries and the functional limitations they, and in particular his back injury, placed on him. There appeared to be little dispute between those treating Mr Erzurumlu concerning that question as at 15 August 2005. Dr Kafataris had expressed an opinion in a report dated 10 March 2005 concerning Mr Erzurumlu's functional limitations. Most significantly, his opinion was that Mr Erzurumlu could carry out the tasks he had been doing before his injury with a weight restriction of 15 kg, a push/pull restriction of 25 kg and a restriction on prolonged (more than an hour) static postures. That opinion was consistent with the opinion that Dr Seex had expressed in July 2004 that progressive deterioration was not inevitable following the surgery Mr Erzurumlu had. 69By the time Mr Erzurumlu submitted his claim, his condition had deteriorated substantially. It is difficult to see how an independent medical report obtained at that time or later could have assisted the Insurer. It could not have come from a new doctor, since that doctor would not have been in any position to determine Mr Erzurumlu's medical condition more than three years earlier. It is difficult to see how one of doctors who treated Mr Erzurumlu from the time he first suffered his injury in April 2003 could have added anything to the information that each had already provided to CGU concerning Mr Erzurumlu's condition in 2005. 70The vocational assessment provided by Kairros was of little assistance to the Insurer. The assessment did not consider the availability of factory or production jobs involving lighter work of the kind that Mr Erzurumlu appeared to be also capable of, or, for that matter, clerical work which Mr Erzurumlu seemed capable of performing. Instead, it considered alternative careers and recommended one that would require re-training. The assessment undertaken by Kairros was driven partly by the desire on the part of both Mr Erzurumlu and CGU to find employment in which Mr Erzurumlu could earn roughly the same income that he had been earning at Kellogg. It can be inferred that lighter production jobs were not even considered for that reason. Normally, in those circumstances, it would have been reasonable for the Insurer to obtain a further labour and market analysis with real employer contacts (as Mercer Legal suggested) to assess the likelihood of Mr Erzurumlu obtaining a job for which he was suited irrespective of the likely income he would earn. After the issue had been raised by Mercer, the Insurer gave consideration to that question. In the particular circumstances of this case, it was not unreasonable for the Insurer to conclude that there would be no utility in seeking to obtain such an analysis. There had been very substantial changes in both Mr Erzurumlu's health and the economy between August 2005 and April 2009. There was no reasonable way of testing by market research whether jobs were available that were suitable for Mr Erzurumlu and which he had a realistic possibility of obtaining having regard to his condition. In those circumstances, the Insurer did not act unreasonably in concluding that it should rely on the material it had. The wrong question? 71Mr Erzurumlu submits that there are three ways in which the Insurer addressed the wrong question. First, it did not consider the occupations that Mr Erzurumlu was reasonably capable of performing by reason of his education, training or experience as at August 2005 but instead considered the occupations he was reasonably capable of performing having regard to the re-training he had. Second, it did not consider the occupations that Mr Erzurumlu was reasonably capable of performing but instead addressed the duties he was capable of performing which formed part of his existing job. Third, it did not focus on the question whether Mr Erzurumlu was absent from work due to his injury. 72In my opinion, Mr Erzurumlu has not made out any of these arguments. 73The Insurer did not consider Mr Erzurumlu's capacity to obtain a job in the IT industry following his training as part of its consideration whether Mr Erzurumlu was unable ever to engage in or work for reward in any occupation or work which he was reasonably capable of performing by reason of his education, training and experience. Dr Slezak took that matter into account in expressing the opinion he did in his report dated 12 April 2010. However, there is nothing in the correspondence from the Insurer to the Trustee to suggest that that was something the Insurer took into account. 74The Insurer made considerable reference to the fact that Mr Erzurumlu had been performing restricted duties and that he stopped performing those duties not because of his injury, but because they were withdrawn by Kellogg. However, a fair reading of what the Insurer said on that topic is not that the occupation that Mr Erzurumlu was capable of engaging in was an occupation consisting of those duties. Rather, the point that the Insurer was making was that Mr Erzurumlu continued to be capable of performing those duties and that was relevant to the question whether there was some occupation that Mr Erzurumlu could engage in having regard to his education, training or experience. In other words, the fact that Mr Erzurumlu continued to be capable of performing his restricted duties demonstrated that Mr Erzurumlu was capable of working within the restrictions that Dr Kafataris had indicated should be imposed. That still left open the question whether there were jobs available to Mr Erzurumlu within those restrictions. I return to that question below. 75The same point applies to the Insurer's references to the fact that Mr Erzurumlu ceased work because suitable duties were withdrawn by Kellogg. A fair reading of the Insurer's reasons for its decision indicates that the Insurer thought that that was relevant because it indicated that Mr Erzurumlu was still capable of performing the relevant tasks. The fact that Mr Erzurumlu ceased work did not indicate that his condition had deteriorated further. That was a relevant matter for the Insurer to take into account. The Insurer's analysis 76Two issues arise in relation to the Insurer's analysis of the claim. The first is whether the Insurer correctly understood the effect of the evidence before it. The second is whether it acted unreasonably in concluding that there were jobs available to Mr Erzurumlu on the basis of the evidence before it. 77It seems clear that in one respect the Insurer and a number of professional advisors engaged by CGU misunderstood the scope of Mr Erzurumlu's suitable duties compared to his pre-injury duties. Mr Erzurumlu's suitable duties were restricted to the tank room. The evidence suggests that he could perform 95 per cent of those duties, but that he needed assistance in clearing blockages in the machines. The job he was employed to do included other tasks on the third floor cookers and coaters. The evidence is that when he attempted to upgrade to that work he reported increased discomfort levels and it is at about that time that Kellogg decided to withdraw suitable duties - presumably because it became apparent at that time that Mr Erzurumlu would not be able to return to his previous job. Mr Erzurumlu told Kairros at the time of his vocational assessment that he was performing approximately 40 per cent of the tasks of the job he was employed to do. There is no evidence to contradict that statement. Nonetheless, a number of those involved with Mr Erzurumlu's claim appear to have misunderstood the position and to have assumed that Mr Erzurumlu was performing 95 per cent of his pre-injury duties. So, for example, Dr Seex reported in July 2004 that Mr Erzurumlu was back at work at his pre-injury level of duties "the only difference is that when there are blockages in the pipes he is unable to clean these". Similarly, Mr Yen reported in April 2005 that Mr Erzurumlu had said that "the duties he is currently performing are pretty much his pre-injury duties". Not surprisingly, the Insurer picked these comments up in some of its letters to the Trustee, apparently without appreciating that they were based on a misunderstanding of the facts. 78However, in my opinion, that information was not critical to the Insurer's conclusions. The Insurer recognised that Mr Erzurumlu could not perform all the tasks of his pre-injury job. It recognised that the limitations on Mr Erzurumlu's capacity were those described by Dr Kafataris. It was not important whether those restrictions meant that Mr Erzurumlu could perform 95 per cent or only 40 per cent of his pre-injury job. The question was whether there were other jobs that Mr Erzurumlu could perform within those restrictions that it was more probable than not that Mr Erzurumlu could obtain in mid 2005. 79There is scant evidence in relation to that question. However, the restrictions themselves do not appear to be particularly limiting. The Insurer placed considerable emphasis on what Dr Kafataris had said. In its letter dated 22 June 2010 it emphasised that "Dr Kafataris further indicated that it was likely that the member would maintain full time gainful employment within these restrictions" and it expressed the view that Mr Erzurumlu was able "to perform work as a production operator (or light assembly factory work), or similar suitable work with a 15 kg lifting restriction". It can be inferred that the Insurer thought that jobs of those types existed in 2005, as seems likely, and that it was likely that Mr Erzurumlu would have been able to obtain such a job if he had applied for jobs of that type in 2005. The Insurer said as much in its letter dated 3 August 2010. I am not satisfied that that was an unreasonable conclusion for the Insurer to reach in the circumstances. Normally, as I have said, it could be expected that the Insurer would make further enquiries about the jobs that were available and whether Mr Erzurumlu was likely to obtain any of them having regard to his history. But here it was not unreasonable for the Insurer not to adopt that course and instead to rely on its own views. 80Mr Erzurumlu submits that it was unreasonable of the Insurer to conclude that lighter jobs were available with other employers when no lighter job was available as an employee of Kellogg. I do not accept that submission. The fact that Kellogg organised its systems of work so that, for example, it did not offer employment only in the tank room or that lighter jobs were not available in the manufacture of products produced by Kellogg does not establish that other employers would not follow other systems of work or offer lighter jobs. There are likely to be a broad range of manufacturing jobs which vary in nature and the physical activity they require. It was not unreasonable for the Insurer to conclude that less strenuous manufacturing jobs than those offered by Kellogg were available. 81Mr Erzurumlu submits that it was unreasonable for the Insurer to conclude that it was more probable than not that Mr Erzurumlu would actually find alternative employment having regard to his subsequent experience in trying to obtain a job in the IT industry. However, in my opinion it was open to the Insurer to discount that evidence on the basis that it was evidence of the reaction of employers in a different industry at a different time and in circumstances where Mr Erzurumlu had not previously worked in the industry. 82It follows that the claim against the Insurer should be dismissed. Claim against the Trustee 83For similar reasons, the claim against the Trustee must also be dismissed. 84The evidence indicates that the Trustee considered all the material before it, including the reasons given by the Insurer. It took its own advice. It did not simply accept what the Insurer said. It raised questions concerning the reasons given by the Insurer and as a result the Insurer obtained additional information. The Trustee considered that information. The conclusion it reached was available to it on the material it had for the reasons I have given in relation to the Insurer. The Trustee did not give reasons for its decision except that, in effect, it was satisfied that the Insurer's decision was fair and reasonable. However, it was not obliged to give reasons. The fact that the directors expressed their view by reference to the conclusions of the Insurer does not demonstrate that they failed to give the claim independent consideration. As I have said, the history of the matter suggests the opposite. 85In my opinion, the payment by the Trustee of the sum of $150,329.09 does not alter the position. The sum was paid before the expiration of the six month qualifying period. The amount that was paid was clearly not the amount to which Mr Erzurumlu was entitled in the event that he suffered from total and permanent disablement. At the time it was paid, nothing was said to suggest that it was intended to be a payment of a total and permanent disablement benefit. For those reasons alone, it could not have been a payment that had that character. Having regard to that conclusion, it is not necessary to consider whether the payment was authorised by the Superannuation Industry (Supervision) Regulations. Orders 86The proceeding should be dismissed with costs. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 16 August 2013