Finch vTelstra Super Pty Ltd [2010] HCATrans 111 (23 April 2010)

Last Updated: 29 April 2010

[2010] HCATrans 111

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Melbourne No M5 of 2010

B e t w e e n -

ALAN MICHAEL FINCH

Applicant

and

TELSTRA SUPER PTY LTD (ACN 007 422 522)

Respondent

Application for special leave to appeal

GUMMOW J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 23 APRIL 2010, AT 12.07 PM

Copyright in the High Court of Australia

MR J.P. BRETT: If the Court pleases, I appear with my learned friend, MS M.C. WALL, for the applicant. (instructed by Arnold, Thomas & Becker)

MR A.G. UREN, QC: If the Court pleases, I appear with my learned friend, MR R.J. HARRIS for the respondent. (instructed by Freehills – Melbourne)

GUMMOW J: Yes, Mr Brett. We have received a supplementary argument dated 21 April.

MR BRETT: Yes, your Honour. I apologise for the fact that that was late. Of course, my learned friend was given that as well and had been previously advised of it. Your Honours, since at least Rapa v Patience courts have held that they were constrained to apply Karger v Paul in superannuation TPD cases, although there have been numerous judicial comments on the anomaly of doing so.

GUMMOW J: What does Karger v Paul relevantly establish?

MR BRETT: It establishes a very limited amount of grounds for review of a decision of a discretionary trustee in the administration of a discretionary trust. It was a case which was decided in the context of a testamentary trust and it applied principles which had always been established in the context of trusts of bounty and that is that if the trustee was acting in good faith and directing its mind to the proper question then no attack could be made upon the decision of the trustee.

To some extent that has been ameliorated slightly by decisions such as Telstra Super v Flegeltaub where it is suggested that a decision can be attacked on the grounds that no reasonable trustee could have arrived at such a decision and that is the test which was described in the present case by the trial judge as a very severe test.

GUMMOW J: But before we get to Karger v Paul we would have to deal with construction questions, would we not?

MR BRETT: Yes, yes. Now, we would submit that it is established in the supplementary submissions that the Court of Appeal fell into clear error in its decision. The trial judge had not found that the applicant was debarred from his claim on the basis of the construction proposed by the trustee. The Court of Appeal at application book page 72, paragraph 58, Acting Appeal Judge Hansen, said:

In my view, the learned judge erred in this conclusion. The error sprang from his earlier conclusion that the period of at least six months absence from ‘active Work’, referred to in cl 2.1.2(a), was not limited to work at Telstra.

In other words, the decision of the Court of Appeal was very firmly founded on the concept that the expression “all active work” is limited to work at Telstra and that is apparent from the following passages in the judgment.

Now, in our respectful submission, when one finds in the trust deed other references to absence from employment with the employer, which clearly does restrict it to absence from employment at Telstra, the expression “all active work” has to have a different meaning. “Work” is defined in the trust deed extremely broadly and, in our respectful submission, it is quite plain that the expression “all active work” must, therefore, have a meaning which is broader than employment with Telstra.

GUMMOW J: Where do we see the relevant clauses? Are they at page 25 or elsewhere - - -

MR BRETT: Clause 2.3.3 is at page 178. I am sorry, that is the definition of “Total and Permanent Invalidity”.

GUMMOW J: Yes.

MR BRETT: Clause 2.1.2(a) - - -

GUMMOW J: They are all on page 25, are they not?

MR BRETT: Yes, I think so. Except that I am not sure that that actually contains the definition of “work” which is very broadly defined, if your Honours would excuse me, at page 136, right towards the bottom of the page.

GUMMOW J: Thank you.

MR BRETT: You will see that it is defined as:

engagement in any business, trade, profession, vocation, calling, occupation or employment.

Thus, we would submit that the expression “all active work” is a very broad one, an intentionally broad one and contrasts with the expression “employment with the employer” to make it quite plain that it is not limited to work at Telstra.

GUMMOW J: How would your construction make the deed work in practical terms?

MR BRETT: In practical terms, we would submit that there has to be a cessation of employment because of disablement and that disablement has to have two consequences. First of all, that the member is absent from all employment for six months and secondly, that the member has the requisite incapacity or unlikelihood of future employment.

CRENNAN J: When you talk about employment there, irrespective of whether it is at Telstra?

MR BRETT: Irrespective of whether it is at Telstra. I am sorry, your Honour, actually I would accept that in both of those constructions, that the absence from employment has to be employment anywhere and the incapacity or unlikelihood that is more limited because it is to any suitable occupation but, otherwise yes, with any other employer.

GUMMOW J: Thank you.

MR BRETT: It is our submission that that is a practical and a purposive construction and ought to be adopted as it was by the learned trial judge and had been originally by the trustee. Now, we would submit that the Court of Appeal also in its method of approach to construction raises questions which attract the grant of special leave and that is that there is dicta from Chief Justice Warren in the Ansett Superannuation Case to the effect that the proper approach to construction of a trust deed is to adopt a practical and purposive construction. That was not a phrase or technique which was used by the Court of Appeal. Rather the Court of Appeal examined the deed and for the reasons expressed by Acting Justice Hansen found that the expression was confined to “work at Telstra” which we would submit is simply not open.

GUMMOW J: Now, assume you overcome the construction hurdle, what is your necessary path to success on discretion - Karger v Paul line of territory?

MR BRETT: Yes, we first of all would submit that even applying the Karger v Paul test very strictly that the decision was not one which any reasonable trustee could have come to and we submitted that very firmly at trial and very firmly in the Court of Appeal. The weight of the evidence was overwhelmingly in support of this application. That is our submission, but in any event we would also submit - and this is where the courts have been seeking guidance throughout Australia - that the application of Karger v Paul and how it is to be applied, if it is to be applied, has to be very carefully considered by a court of considerable authority. The courts have referred time and again to the anomaly of applying that type of test in a case such as this.

GUMMOW J: What would one do instead? It is easy to criticise Karger v Paul, perhaps, but what is this guidance going to say?

MR BRETT: In Breckler, it seems to have been accepted that such a decision would not be set aside simply because it was unreasonable. In other words, a person who may well be disabled, who has contributed to a superannuation scheme and seeks very important benefits, can be bound by an unreasonable decision and the courts will not intervene. In our respectful submission, that is an unjust principle if that applies in this context.

We would submit that the test at the very least ought to be whether the decision was one which a reasonable trustee should have come to, or alternatively, simply whether the decision is reasonable which was, of course, the view that Parliament took when it established the Superannuation Complaints Tribunal and allowed decisions to be reviewed if they were unfair or unreasonable but there are limits on the access to that Tribunal. For example, it was simply not open to the applicant in this case because his attempts to rehabilitate himself took him more than two years after cessation with his employment and, therefore, under the limitation periods applying to the tribunal, he could not apply to it for review of this decision.

It is anomalous, we would submit, that there should be one test available in certain circumstances for review of these decisions but in the cases where, for whatever reason, the applicant cannot go to the Superannuation Complaints Tribunal he should meet a quite different and much more stringent test and that is again demonstrated by the fact that although the Tribunal has been established since the mid 1990s the courts as recently as 2008 are still confronting this problem and in the case of, I think it is tab 9 of our materials, Gilberg, it was said to be a real question as to whether Karger v Paul should be applied. The law has not been settled. The law is anomalous and this is, in our respectful submission, a perfect case for consideration of these questions.

CRENNAN J: You say, I suppose, as part of this that efforts of rehabilitation can encompass working somewhere other than at Telstra on a part- time basis and so forth, as the facts - - -

MR BRETT: In this case, the trustee had before it, and of course there is not a considerable examination of the material in the brief summaries of argument in this Court, but the trustee had before it very strong medical material as well as the applicant’s own statement to suggest that yes, it was a rehabilitative attempt. I know, for example, that the Court of Appeal, said that those two attempts of part-time employment show his apparent competence and that was one of the things that was relied upon when the Court of Appeal conducted its overall obiter review of the trustee’s decision. In the passage relied upon by our learned friends, Justice Hansen - I think this is at paragraph 83 – said:

On the materials before the trustee, including the respondent’s employment history, his apparent competence in the jobs he did after leaving Telstra –

Well, the first of those jobs lasted for four weeks of which two weeks was spent on sick leave and he retired on the grounds of personal reasons. His second job lasted a bit longer but again he resigned on the grounds of health and there was very strong material before the trustee to show that what he was trying to do against medical advice was to get himself back into the workforce and that his efforts were wholly unsuccessful. I would also submit - it is interesting again in the Court of Appeal’s review that the judgment then goes on:

and the inference that the respondent’s psychological distress might be ameliorated over time, or be less severe in a different work environment, especially given that he was relatively young and thus had more time to adapt and rehabilitate himself –

There was no material giving rise to such an inference. There was none whatsoever. That, in our respectful submission was absolute speculation. In this case, one of the striking features was that there was very strong and totally supportive medical material supplied by the applicant to the trustee and no medical material at all which contradicted it in any way - no other medical material at all. Nor did the trustee seek to obtain a further assessment.

Now, we would submit that in this case it absolutely throws into relief the difficulties that a claimant has in seeking to overturn a trustee’s decision because the trial judge referred to the trustee’s reasons as surprising. He referred to a feeling of profound discomfort. That is one of the determinations of the trustee to reject. Those were his terms and despite that, he still felt constrained by existing authority to reject the argument that the decision was so unreasonable as to be set aside because the test was very severe.

GUMMOW J: This may be one of those instances where there is a fairly carefully thought out and detailed statutory scheme that the common law, as it were, has to react in sympathy with the statute, if I can put it that way.

MR BRETT: That would be our submission, yes, your Honour. It certainly is an anomaly which we - - -

GUMMOW J: At any event, that is a situation that was not existing at the time of Karger v Paul in relation to that sort of - - -

MR BRETT: Well, Karger v Paul was decided in relation to a testamentary disposition. It was a disposition to volunteer, so it was a question as to how that disposition should be attacked. It was totally different and that is what the courts continually refer to as the anomaly of applying that type of discretionary review principle to a case where you are dealing with very important economic benefits usually substantially contributed to by the worker themself.

GUMMOW J: Superannuation in a way has become a public law matter, is one way of looking at it.

MR BRETT: Superannuation is of absolutely critical importance in the lives of the workforce of Australia.

GUMMOW J: Is there any discussion of this problem in the United Kingdom, do you know?

MR BRETT: I do not know, your Honour. I cannot assist your Honour.

GUMMOW J: Thank you. Yes, Mr Uren.

MR UREN: If the Court pleases, in order to succeed on any appeal, the applicant would have to succeed on three separate points. The first point is the construction point. The second point is the not reasonably open point. The third point is the legal offence of the decision not being reasonably open if, in fact, the court came to that conclusion.

As to the construction point, in our submission that is not a special leave point because it is a simple point of construction of a portion of a deed which is basically a compilation of benefits given to Telstra employees and employees of persons pre-Telstra which have been wrapped up into Telstra and Telstra associated employment.

CRENNAN J: How does that wide definition of “work” operate?

MR UREN: The case has nothing to do with the definition of “work”. It has to do with the - - -

CRENNAN J: No, but that has been an element in the argument in relation to the construction point.

MR UREN: Yes, it has been an element in the argument, but it is not an element in the case. In other words, our learned friend puts it as a relevant point, but in fact it is not. The court’s conclusion with respect to the relevance of Telstra employment in the – I am sorry, the limitation of benefits to termination whilst in Telstra employment comes from two parts of the deed. It comes from clause 2.3.3 on page 180, which is the clause relating to the benefits, and it also comes from the definition of “total and permanent invalidity” at page 178 of the appeal book. A person is entitled to benefits under clause 2.3.3 if he ceases to be an employee during a period of Division 2 membership because of total and permanent - - -

GUMMOW J: Sorry, where are you reading from, Mr Uren?

MR UREN: I am reading at page 180 at paragraph 2.3.3.

GUMMOW J: Yes.

MR UREN: The benefit entitlement is that the:

Member ceases to be an Employee –

which is a defined term –

during a period of Division 2 Membership –

which is again a defined term –

because of Total and Permanent Invalidity –

which is also a defined term –

there is payable to the Member from the Fund a lump sum benefit of an amount equal to the benefit which would have been payable . . . if the Member had died on the date on which the Member ceased to be an Employee -

So in other words you have to satisfy the definition of “total and permanent invalidity” at the time at which you cease to be an employee. Going to the definition of “Total and Permanent Invalidity” at 178, without reading the entirety of that provision, the Court of Appeal’s conclusion was that the only real meaning you could give to it would be that the employment which was referred to is an employment with Telstra as the employer.

CRENNAN J: So that all active work is - - -

MR UREN: Yes, nothing to do with it.

CRENNAN J: Nothing to do with it?

MR UREN: Nothing to do with the case at all.

GUMMOW J: Why?

MR UREN: The limitation with respect to Telstra and Telstra associated employment comes from - - -

CRENNAN J: Does not the Court of Appeal construe all active work as referable to the period of employment?

MR UREN: They do, but because of the benefits. The benefits clause is limited to a benefit given if the member ceases to be an employee during a period of Division 2 membership because he satisfied the definition of “total and permanent invalidity”, which itself has in it ingredients relating to employment by the particular employer concerned. Now, that is the reason why the Court of Appeal considered that the employment was limited to Telstra.

Now, to take up a matter that I think Justice Gummow mentioned, the alternative would be that this superannuation deed would be converted into basically a policy of employment accident compensation insurance which would last during the entire lifetime of the – or employment lifetime of the beneficiary without further reference to Telstra. In other words, there are no requirements in it that any activity of Telstra has caused the problem.

The way the deed would be interpreted by the applicant is that if in 20 years time he ceases to be employed by an employer he receives the benefit which this deed gives, but it only gives it, in our respectful submission, to people who are ceasing employment because of the condition of TPI. This is not an uncommon feature of deeds of this sort, and in fact, in our submission, it is universal.

The deeds which have – examples are given in the authorities which the Court has been supplied with I think are all ones where the benefit is dependent upon a situation at the time of termination of employment with what I might call the principal employer, and some of them, indeed, have a qualifying period of absence from work attached to them as well. So the view which the Court of Appeal took with respect to the construction point is one which is not uncommon, and it is justified by the terms of the deed and by the views which the court took.

The fact that a later benefit provision in this total compilation, which has been compiled of the benefits over a number of years, has wording which makes the point even clearer is not to the point because the one that we are concerned with now is one which was done with respect to people in 1996. When the various benefits were all put together there was no change made to the terms of entitlement of successive superannuation provisions. They were just all put into the one document and that is it, so it is not compiled as a unitary document.

In our submission, the views which the Court of Appeal expressed as to the requirement that the TPI condition exist at the time of cessation of employment with the principal employer are clearly correct. It would clearly be most unlikely that the principal employer would be agreeing to contribute to superannuation benefits to an employee who becomes TPI as a result of employment with somebody else 20 years down the track, which is the effect of the conclusion that the applicant submits. In any event, it is only a matter of construction and it is nothing to do with the question of work, it is to do with the construction of the definition of “TPI” and the construction of the benefit clause.

So there was nothing that the Court of Appeal missed out on. They took into account the relevant ingredients and came to a conclusion which, in our submission, was not only correct on the face of the document but also in accordance with commonsense. So, in our submission, the construction point is one on which there is not sufficient likelihood of success to justify an appeal and, in any event, it is only a point of construction with respect to a document which although it has presumably an extant operation, nonetheless is not one which has any operation apart from the circumstances in respect of which it applies and any interpretation given of the meaning of it would not have any other effect either.

If we can reiterate, this is not a document which gives disability insurance benefits. It is a document which gives benefits if people become totally and permanently invalided during the term of the employment by the employer who is providing the superannuation benefit.

Now, on the second point, which was the not reasonably open point, what we have here is findings of two courts on something which ultimately depends on an assessment of the facts; that is to say that the decision of the trustee was reasonably open to it on the facts which it had.

Now, the trial judge felt some unhappiness about coming to that conclusion, but the Court of Appeal did not. The Court of Appeal at appeal book page 82, and looking also at 77 to 82, analysed the facts for itself and came to the conclusion that the trustee was entitled to take the view that a man who was comparatively young at the time of cessation of employment – that is to say, only 31 – who was not physically incapable of doing his work, and who was not mentally incapable of doing it either, and as to whom his line managers have said that he was capable of employment, was a person who it could not be said that the trustee should be satisfied that they would never work again, and that is the extant point.

Now, my learned friend mentioned some of the factual issues in the case relating to this, and as to the reasons why the applicant ceased employment at the two places at which he tried to be employed. At the first place I think the only reason given was personal reasons that the trustee was aware of, not incapacity but personal reasons, and that appears in the facts of the – found by the trial judge – but also in respect of the second period of employment which lasted for five and a half months.

The reason why he ceased employment there, as the trial judge found, was not that he was incapable of doing the work but he had an unfortunate contact with a person with whom he had been associated prior to his change of life, and this was a matter which caused him to cease employment with Foxtel – Qantas. It was not that he could not do the work or that he was psychologically incapable of doing it, but he had an unfortunate personal contact which was peculiar to that particular employment.

The Court of Appeal mentioned this issue and said that they could not draw an inference from that that the person would never work again. So all we have here is a wish by the applicant to have the facts of the case redone and of conclusion to be reached contrary to the findings of the two courts below on this particular issue, and that, in our submission, would not be a special leave point.

Now, the last point which is if the court did come to the conclusion that it was not reasonably open what is the effect of that, and the effect which was put to the courts below and which the courts looked at was whether, if that was the case, it would show that the decision which had been made would allow an inference to be drawn that the decision which was made was one which could not stand because it was not made in good faith and was not made on a genuine consideration, and we lay emphasis here on questions of good faith and genuineness. The court mentioned – at least the courts both mentioned – a number of considerations which were germane in this area, which is that it is not the task of the court to decide whether the trustee should have come to a different conclusion or whether it was negligent or so forth, but whether you could infer from the fact that it should have – the decision was not reasonable, that it had a particular - - -

GUMMOW J: Well, Justice Byrne made orders at page 37 which had the effect of remitting the matter to the trustee to redetermine.

MR UREN: Yes, which shows that the trustee was certainly not actuated by these personal considerations. But the view which is put in the argument, but not in the Court of Appeal, and not before Justice Byrne, was that there is a freestanding basis of challenge going beyond Karger v Paul and outside it, that is to say that if the decision is one which was not reasonably open, that that is a separate basis for challenging the decision of the trustee, not merely.....to the inference task which Karger v Paul referred to, but a freestanding matter of itself.

Now, that was something that which was not put in the Court of Appeal. In the Court of Appeal that point was deliberately not made because counsel eschewed making it. It was not put before the trial judge, and in order to succeed on the basis that the decision was not reasonably open without what I call the Karger v Paul requirements, presumably the case would have had to have been put differently, and the Court of Appeal would have had to have been asked to come to the conclusion that the legal effect of a decision not being reasonably open was that it should be set aside whether Karger v Paul was the law or not.

That was not the way the case was put, and what was put though was that following Karger v Paul you could come to an inference of bad faith or lack of genuine consideration, if, as a matter of evidence, you also found that the legal effect – so that the decision itself was not reasonably open.

There is no authority which establishes the freestanding, a matter which our learned friends seem to rely on in argument, although not in the notice of appeal itself, and we think it is likely that, as Justice Kirby observed in Breckler’s Case, the reason for the passing of the superannuation supervision legislation was that there were restrictions which the law imposed on challenging the decisions of trustees and those restrictions were the restrictions which are found in Karger v Paul and in other cases. So the legislature has, it seems, dealt with this issue as to how far it is - - -

GUMMOW J: That is the point. The question then is to what extent does the common law now respond to the legislation?

MR UREN: The common law is common law and the legislation presumably ameliorates what was thought to be the difficulties of the common law. The common law is not thereby changed. The legislation gives certain rights in certain time periods. The time period is two years after cessation of employment, which is gone by in the present case some time ago.

GUMMOW J: We dealt with this in a case of Esso a couple of years ago. There was a lot of law on this.

MR UREN: Yes, but in the present case - - -

GUMMOW J: On the relationship between statutory regimes and the common law after the regime.

MR UREN: But none of this was put below, and this was not - - -

GUMMOW J: You may be right about that.

MR UREN: This was not the subject of the decision of the Court of Appeal, and it was not the subject of the decision of Justice Byrne either. The case proceeded on the basis that Karger v Paul provided the ambit of challenge, but if I was to respond specifically to what your Honour Justice Gummow said, it seems to us that if the legislature consider that the common law was deficient and provided a remedy for that deficiency, then that is where the totality of the law stands.

There is the common law, and there is what the statute provides instead. But that does not provide any basis for saying that the common law is now changed because the statute provided a remedy with the limitations which the statute thought were appropriate, and it cannot be said that the common law is now the same as the statute, because that would basically be to give a right of challenge beyond the two-year period which is allowed for in the statute.

It seemed to us that the greater likelihood is that there would be no basis for accepting a proposition that what is said in Karger v Paul is now different because the legislature decided that whatever deficiencies that situation exposed should be met with by the limited entitlements which the superannuation supervision legislation provides for. Our answer, if it became relevant, would be that there is no effect on the common law by the operation of the statute, except that the statute has responded to concerns, and that is all one can say in a limited manner.

But primarily Karger v Paul was not challenged in either court below and nothing was said about it by the judges, and that means, in our respectful submission, on an ordinary basis that this is not a case in which that point should be allowed to be raised as a ground for challenging the decision below apart from which it is perfectly clear that there is no challenge to Karger v Paul’s principles in the draft notice of appeal itself. If the Court pleases.

GUMMOW J: Yes, Mr Brett. Perhaps three matters - the first one is it is said against you that you were trying to translate the superannuation scheme into a disability insurance scheme.

MR BRETT: With the greatest respect, that is very much overstating the case. There is no doubt that the trust deed requires examination. The construction that my learned friend puts – the Court of Appeal decided on the basis of its interpretation of the phrase “all active work”. The trustee has all along contended on a different basis, and that is that they have effectively said you have to cease because of total and permanent invalidity. Total and permanent invalidity is defined. Until you meet the definition you cannot have ceased – you have to meet the definition before you cease employment. But the definition includes the trustee forming an opinion, so clearly you cannot meet the definition before you cease employment, because one of the opinions that the trustee has to form is about the circumstances in which you ceased employment.

So it is circular but that definition, we would submit, cannot be supported – that construction. There are also extraordinary anomalies that arise on that construction and we have adverted to those in the summary of argument and also they appear in the judgments below, particularly and very simply, a person who is employed on say a six month short-term contract and after three months suffers a catastrophic injury, ceases employment after three months because his contract has ended, therefore cannot qualify for benefits unless later on there is a discretion exercise to reduce the period. There is such a discretion, but there is no reason why the trustee should exercise it. The trustee may chose not to, and again that is a matter which would have to be attacked on the grounds of discretionary trustees. In other words, it is a very unsatisfactory situation.

GUMMOW J: The second point is related to the first, I think, and you maybe have already dealt with it, namely that the definition of “work” is not really critical here.

MR BRETT: With the greatest resect, it has to be. It is incorporated in the definition of “total and permanent invalidity”. It is capitalised; the word “Work”, so it clearly refers back to the definition, and it was at the heart of Justice Hansen’s judgment in the passage I read to you earlier where he identified the problem with Justice Byrne’s reasoning as being that he had not adopted that narrow interpretation of “all active work”. With respect, it is at the heart of the Court of Appeal’s decision and the definition of “Work” in the trust deed is of vital importance.

GUMMOW J: Whereabouts in Justice Hansen?

MR BRETT: That is the passage I took you to at application book 72 at paragraph 58.

CRENNAN J: Also the top of 73.

MR BRETT: Yes. So he identifies that very specifically as being the problem with the primary judge’s reasoning, and then, over the next four or five paragraphs, goes to interpret the expression “narrowly” as referring to work at Telstra, which we say is simply not open to him. My learned friend says the trustee has been compiled over years and amalgamated. I do not know about that. It is not in any of the material before the courts, but even so, the trust deed has to be construed as it stands.

GUMMOW J: The third matter is the absence of submissions in the Court of Appeal as to what Mr Uren says is the freestanding ground of review.

MR BRETT: As to whether it is a freestanding ground of review, I put that in response to a question that your Honour asked me, although I would certainly urge it. In the Court of Appeal there was challenge to the manner in which Karger v Paul should be applied, and particularly whether it is applied to the fact-finding exercise of the trustee prior to the decision-making exercise of the trustee. That arose in argument and basically was slapped down and did not go any further, and was not referred to in the judgment of the Court of Appeal.

The Court of Appeal judgment is obviously ultimately based on the construction point. The Court of Appeal does not thoroughly go into the question of reasonableness and in our summary of argument we have – in our reply, not the supplementary summary of argument, but the reply - we pointed to a very serious internal inconsistency in the Court of Appeal’s review which invalidates its review, in our respectful submission.

In any event, even if it were a new point, this is a case which is run on agreed facts, that it was simply a review of the documents which were before the trustee. There is agreement about those. There is no prejudice whatsoever in it being raised here and this is an appropriate forum in which these very important questions should be agitated.

GUMMOW J: I see on page 98 of the application book you seem dissatisfied with the relief you got in order 2 of Justice Byrne, which was referral back. What you now want is a declaration by the Court?

MR BRETT: Yes. We submitted very strongly that the matter should not be remitted to the trustee when we originally succeeded before Justice Byrne, that also his rejection of our application formed part of a cross-appeal to the Court of Appeal, but of course once the Court of Appeal reached the decision it did it became unnecessary to consider that point.

It is not fundamental to whether our appeal succeeds, but it certainly would arise if our appeal did succeed because the question would then be should the matter be remitted to the trustee and we have strongly submitted

that it is bizarre following heavily contested litigation such as this to have the matter remitted to the opposing party for them to rethink. But that is a matter which follows from the success of the appeal and not otherwise.

GUMMOW J: Thank you.

The course that the Court will follow in this case is to refer the application for special leave in for argument before an enlarged Bench of the Court as a one-day case. The parties should be prepared to argue it on a final basis. We are not, at the moment, sufficiently clearly of the view one way or the other as to the construction point. This is a gateway and, if on further examination by an enlarged Bench, you come to grief there, Mr Brett, you will come to grief.

MR BRETT: I am aware of that, your Honour.

GUMMOW J: Very well. We will adjourn to 2.15.

AT 12.49 PM THE MATTER WAS CONCLUDED