Auffray v Government Employees Superannuation Board (Gesb) - [2018] WASC 263

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   AUFFRAY -v- GOVERNMENT EMPLOYEES SUPERANNUATION BOARD (GESB) [2018] WASC 263
CORAM:   MASTER SANDERSON
HEARD:   2 AUGUST 2018
DELIVERED          :   28 AUGUST 2018
FILE NO/S:   CIV 1689 of 2018
BETWEEN:   JACQUES-FRANCOIS ARMAND AUFFRAY
Plaintiff
AND
GOVERNMENT EMPLOYEES SUPERANNUATION BOARD (GESB)
Defendant

Catchwords:

Superannuation - Whether defendant a 'trustee' - Turns on own facts

Legislation:

State Superannuation Act 2000 (WA)
State Superannuation Regulations 2001 (WA)
Superannuation (Resolution of Complaints) Act 1993 (Cth)
Trustees Act 1962 (WA)

Result:

Summary judgment application dismissed

Category: B

Representation:

Counsel:

Plaintiff	:	Mr G J Pynt
Defendant	:	Mr C M Beetham

Solicitors:

Plaintiff	:	Maurice Blackburn Lawyers
Defendant	:	State Solicitor's Office

Case(s) referred to in decision(s):

Bahr v Nicolay (No 2) (1988) 164 CLR 604
Edington v Board of Trustees of State Public Sector Superannuation Scheme [2015] QSC 245
Kinloch v Secretary of State for India in Council (1882) 7 App Cas 619
Registrar of the Accident Compensation Tribunal v Federal Commissioner of Taxation (1993) 178 CLR 145

MASTER SANDERSON:

This was the defendant's application for summary judgment. The summons issued by the defendant actually sought to have the action dismissed for want of jurisdiction or, alternatively, the claim struck out because the statement of claim disclosed no reasonable cause of action. At the hearing of the matter, both parties agreed that what was sought was really summary judgment. Given that I had determined judgment ought not be entered for the defendant, I will not deal in any detail with the issues raised in the application. Determination of those issues must await trial and it is inappropriate for me to offer a view on any matters to be determined at a later date. However, an appeal against dismissal of a summary judgment application is available to a defendant (in contrast to the position of a plaintiff who fails in a summary judgment application) and therefore these reasons will disclose the process of reasoning which has led me to the conclusion I have reached. Furthermore, the matter was carefully and comprehensively argued and that in itself justifies my explaining why I have reached the conclusion I have.
The facts did not really play a part in determination of this application. They can be summarised as follows. The plaintiff was at all material times a member of the defendant. He claimed he ceased to be a worker because he became permanently incapacitated. He made an application to be paid a benefit. The defendant refused to make the payment. The plaintiff says that the decision was wrong and he seeks a declaration he is entitled to be paid the benefit.
The application raised two issues. First it was said that the defendant was not properly considered a 'trustee' of the relevant superannuation fund. Second, it was said the defendant did not actually hold any property and could not therefore be ordered to make any payment to the plaintiff.
When the defendant lodged its submissions in support of the application on 11 June 2018, those submissions focussed on s 13 of the State Superannuation Act 2000 (WA) (SSA). It was said the section provided a code for the review of all decisions taken by the defendant and as such the plaintiff's claim could not succeed. When the plaintiff filed its submissions on 10 July 2018, it alleged the defendant was a trustee of the fund and therefore its decisions were subject to review by the Supreme Court pursuant to its inherent jurisdiction or s 94 of the Trustees Act 1962 (WA). The claim that the defendant is a trustee of the fund was raised in the statement of claim. But it was not until the plaintiff's submissions were filed that the defendant became aware of the precise ground on which the claim was based. That led to the defendant filing further submissions on 13 July 2018. Those submissions addressed directly the two points which were argued by counsel.
In support of its position, the plaintiff referred to a number of factors. First, it was said that the defendant is a statutory body corporate and Crown agency pursuant to s 5 of the SSA. That being so, it administered the relevant superannuation scheme and managed the Government Employees Superannuation Fund (Fund). Second, it paid permanent incapacity benefits out of the Fund pursuant to regs 68 and 71 of the State Superannuation Regulations 2001 (WA) (Regulations).
In the circumstances, the plaintiff says that the board acted or purported to act as trustee of the Fund. Reference is made to s 13(4) of the SSA and reg 250 of the Regulations. Reference is also made to the Superannuation (Resolution of Complaints) Act 1993 (Cth) and in particular s 14A(1) of that Act. The defendant did not dispute that if the defendant is a trustee its decisions are subject to review by this court either pursuant to its inherent jurisdiction or s 94 of the Trustees Act.
The defendant relied particularly on the decision of Bond J in Edington v Board of Trustees of State Public Sector Superannuation Scheme [2015] QSC 245. His Honour considered whether, given the statutory context, the board of trustees held property as a trustee. His Honour reached the view the board of trustees was a trustee as a matter of law because:
(a)the Act described the Board as a 'board of trustees', used the term 'appointed trustees' to refer to members of the Board and referred to the Board's responsibilities in relation to the fund as 'fiduciary responsibilities';
(b)the operative terms of the deed recorded 'the trustees' as covenanting and agreeing in the manner set out in the body of the deed and the deed itself described as a 'trust deed';
(c)the demonstrated intention of both the Act and the deed was that the Board was to have the custody and administration of the fund on behalf of others, namely the members of the scheme from time to time; and
(d)for that purpose the fund itself was a fund to be kept separate and specifically reported upon and accounted for.
As counsel for the defendant noted, none of these matters describe the defendant nor do they apply to the enabling legislation. The legislation by which the defendant is constituted does not use the language of trust or trustees, there are no references to fiduciary duty and, at least on the defendant's view, there is no demonstrated intention that the defendant is to have the custody and administration of the Fund on behalf of the others. Furthermore, monies in the Fund need not be kept separate. The SSA and the Regulations contemplate the mixing of the Fund as between members and scheme.
The plaintiffs submitted that even though the matters referred to above are missing from the legislation in this state, the intention of the legislation is clear. Money is held by the defendant to enable it to pay members in certain circumstances. The elements of a trustee relationship, including the fiduciary obligations which attach to that position, must arise as a consequence of the very nature of the relationship.
In answer to that submission, counsel for the defendant referred to the decision of Kinloch v Secretary of State for India in Council (1882) 7 App. Cas. 619. The so‑called 'Kinloch principal' which was adopted by the High Court in Registrar of the Accident Compensation Tribunal v Federal Commissioner of Taxation (1993) 178 CLR 145can be summarised in this way. First, Kinloch states a rule of construction to be applied and ascertaining whether an intention to create a trust according to ordinary principles, is to be discerned from the language of the instrument involved. Second, there is no rule of law or equity to prevent the imposition of ordinary trust obligations on a person who is, in other respects, a servant or agent of the Crown. Finally, there can only be a basis for the Kinloch presumption where it appears that some governmental interest or function is involved.
Counsel for the defendant submitted the relevant legislation indicated a significant governmental interest and function. In par 16 of his written submissions he developed that argument. Without going through the matters raised in the submissions, he noted the Crown guaranteed the payment of benefits under the schemes and guaranteed the performance by the board of its obligations under the SSA on terms determined by the Treasurer. Counsel concluded that even if the Kinloch presumption is not applied, the legislation does not reveal a parliamentary intention that the defendant be subject to a trust obligation in the ordinary sense. Counsel further submitted that unless an intention to create a trust is clearly to be ascertained from the language used and the circumstances of the case, a court ought not be astute to discover indications of such an intention. In making this submission counsel relied on a number of decisions including Bahr v Nicolay(No 2) (1988) 164 CLR 604.
In response, counsel for the plaintiff made a number of oral submissions which I will not canvass in detail. However, one particular matter is deserving of mention. Counsel referred to reg 250 of the Regulations. That regulation is in the following terms:
250.Decision by Board on review, referral to tribunal
Subject to the Superannuation (Resolution of Complaints) Act 1993 of the Commonwealth a person aggrieved by a decision of the Board on a review under section 13(1) of the Act may refer the decision to the Superannuation Complaints Tribunal established by that Act by making a complaint in accordance with that Act.
Section 14A(1) of the Superannuation (Resolution of Complaints) Act is in the following terms:
(1)A person who has, or claims to have, an interest in a life policy fund, either as a member of the fund who is covered by a life policy maintained by the trustee or as a person claiming through such a member, may complain that the decision of the trustee to admit the member to the fund was unfair or unreasonable.
Note: Although a complaint is about the decision of a trustee, the Tribunal may join the insurer and any other person as well, as parties to the complaint (see subsection 18(2)).
Counsel for the plaintiff noted the reference in the section is to a 'trustee'. It was counsel's submission that this section could only be used to resolve disputes if the defendant was a trustee. Moreover, the use of the section evinced a clear intention on the part of the parliament that the defendant should be regarded as a trustee.
As I indicated at the outset of these reasons, it is not for me to make a determination one way or other as to the status of the defendant. However it seems to me it is at least arguable that the defendant is a trustee and the plaintiff has grounds for his claim. That being so judgment ought not be entered for the defendant based on this argument.
The second argument put by the defendant was to the effect that it held no property and could therefore not be the subject of an order. The scheme of the SSA does seem to anticipate any contributions made by a member would be held in consolidated revenue. But there is no evidence as to how in practice the defendant operates. It may or may not have accounts in its own name from which investments are made and from which benefits are paid. In due course that will no doubt be the subject of evidence. But at this stage and on the materials available, I could not conclude that the plaintiff's claim was bound to fail on this point. His position is at least arguable.
For these reasons, I will dismiss the defendant's application for summary judgment. The costs of this application, including reserved costs, should be costs in the cause.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
DG
ASSOCIATE TO MASTER SANDERSON
28 AUGUST 2018