Australian Reward Investment Alliance v Superannuation Complaints Tribunal

Case [2008] FCA 1548

FEDERAL COURT OF AUSTRALIA

Australian Reward Investment Alliance v Superannuation Complaints Tribunal [2008] FCA 1548

SUPERANNUATION – powers of the Superannuation Complaints Tribunal in relation to complaints made with respect to decisions of the trustee of the PSS Fund – what is a reviewable decision – Tribunal acting beyond power – whether the Trustee Act 1925 (ACT) has any application to Australian Reward Investment Alliance

EMPLOYMENT – termination on the ground of inability to perform duties because of physical or mental incapacity – restraint on ‘being retired’ from employment/terminated where employee is under 60 years of age and is a member of the Australian Public Service

Superannuation Act 1922 (Cth) s 4
Superannuation Act 1976 (Cth) s 40
Superannuation Act 1990 (Cth) ss 3, 4, 6, 13(1), 20, 21, 22, 25, 28A and 29
Superannuation Legislation Amendment (Trustee Board and Other Measures) Act 2006 (Cth) s 3
Public Service Act 1999 (Cth) s 29
Superannuation (Resolution of Complaints) Act 1993 (Cth) ss 3(2), 4, 14, 19(1), 36, 37 and 46
Administrative Decisions (Judicial Review) Act 1997 (Cth) ss 5, 6 and 7
Trustee Act 1925 (ACT) s 49(1)(e)
Trustee Act 1925 (NSW) s 49(1)(d)
Trusts Act 1973 (Qld) s 44(f)
Trustee Act 1958 (Vic) s 19(1)(f)
Public Sector Superannuation Scheme Trust Deed dated 21 June 1990 and the Rules thereunder

Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 cited
Retail Employees Superannuation Pty Limited v Crocker (2001) 48 ATR 359 cited
Briffa v Hay (1997) 75 FCR 428 referred to
In re Earl of Strafford, DECD; Royal Bank of Scotland Ltd v Byng [1980] 1 Ch 36 referred to
Re Irismay Holdings Pty Ltd [1996] 1 QdR 172 cited
Dowling v St Vincent De Paul Society of Victoria Inc [2003] VSC 454 cited
National Mutual Life Association of Australia Ltd v Campbell (2000) 99 FCR 562 referred to
Vetter v Lake Macquarie City Council (2001) 202 CLR 439 referred to

Jacobs’ Law of Trusts in Australia (7th edition 2006)

AUSTRALIAN REWARD INVESTMENT ALLIANCE v SUPERANNUATION COMPLAINTS TRIBUNAL and ANNE MAREE MATTHEWS

VID 1196 OF 2007

GRAHAM J
23 OCTOBER 2008
CANBERRA BY VIDEO LINK FROM SYDNEY


IN THE FEDERAL COURT OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY

VID 1196 OF 2007
ON APPEAL FROM THE SUPERANNUATION COMPLAINTS TRIBUNAL

BETWEEN:

AUSTRALIAN REWARD INVESTMENT ALLIANCE
Applicant

AND:

SUPERANNUATION COMPLAINTS TRIBUNAL
First Respondent

ANNE MAREE MATTHEWS
Second Respondent

JUDGE:

GRAHAM J

DATE OF ORDER:

23 OCTOBER 2008

WHERE MADE:

CANBERRA BY VIDEO LINK FROM SYDNEY

THE COURT ORDERS THAT:

1.The appeal be allowed.

2.The determination of the First Respondent dated 21 November 2007 be set aside.

3.In lieu thereof, the decision of the applicant of 1 February 2006 in respect of the second respondent’s complaint made on 20 December 2005 and pressed on 3 February 2006, be affirmed.

4.There be no order as to costs.

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


IN THE FEDERAL COURT OF AUSTRALIA

AUSTRALIAN CAPITAL…

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Australian Reward Investment Alliance v Superannuation Complaints Tribunal [2008] FCA 1548
Case
[2008] FCA 1548
Decision Date

CaseChat Overview and Summary

In the case of Australian Reward Investment Alliance v Superannuation Complaints Tribunal, the appellant, Australian Reward Investment Alliance, sought judicial review of a decision by the Superannuation Complaints Tribunal (the Tribunal). The Tribunal had reviewed a decision made by the Trustee of a superannuation fund, which was the subject of a complaint by the second respondent. The dispute centred on the calculation of the second respondent's invalidity pension benefit and the Trustee's handling of the complaint. The core legal issues before the court involved the interpretation of statutory provisions, the role and powers of the Tribunal, and the correctness of the Tribunal's decision to remit the complaint back to the Trustee. Specifically, the court had to determine whether the Tribunal correctly interpreted the statutory requirement for affirming or varying the Trustee's decision and whether the Tribunal's decision to remit the complaint was justified.

The court examined the statutory framework governing the Superannuation Complaints Tribunal and the role of the Trustee. It noted that the definition of 'trustee' under the Superannuation Reform (Consequential Amendments and Transitional Provisions) Act 1997 (SRC Act) differed from that in the Superannuation Industry (Supervision) Act 1993 (1990 Act). The court found that the Board, as the Trustee, had the authority to make decisions regarding the complaint under the SRC Act. The court also reviewed the Tribunal's decision-making process and the grounds on which it decided to remit the complaint. It determined that the Tribunal had failed to correctly apply the statutory requirement that it affirm the Trustee's decision if it was fair and reasonable. The court held that the Tribunal should have affirmed the Trustee's decision, as it was satisfied that the decision was fair and reasonable in all circumstances. Consequently, the court found that the Tribunal's decision to remit the complaint was incorrect.

The court allowed the appeal, set aside the Tribunal's determination dated 21 November 2007, and affirmed the Trustee's decision of 1 February 2006. The court made no order as to costs. This outcome underscored the importance of correctly interpreting statutory provisions and the limitations of the Tribunal's powers in reviewing decisions made by Trustees of superannuation funds.

Orders

Orders of the court

1. The appeal be allowed.

2. The determination of the First Respondent dated 21 November 2007 be set aside.

3. In lieu thereof, the decision of the applicant of 1 February 2006 in respect of the second respondent’s complaint made on 20 December 2005 and pressed on 3 February 2006, be affirmed.

4. There be no order as to costs.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

GRAHAM J
In its ‘Review Determination and Reasons’ dated 21 November 2007, the ‘DECISION UNDER REVIEW’ was identified by the Tribunal as follows:‘DECISION UNDER REVIEW2.On 14 December 2005 the Trustee advised the Complainant of her Invalidity Benefit.3.The Complainant objected to the amount of the invalidity benefit calculated by the Trustee and to the lack of advice regarding her options.4.On 1 February 2006, the Trustee, having considered the Complainant’s complaint, affirmed its original decision.’ It is important to note that the definition of ‘trustee’ in the SRC Act is different from that contained in the 1990 Act. In s 3(2) of the SRC Act the following definition appears:‘3(2) In this Act, unless the contrary intention appears:…trustee, in relation to a complaint, means, the trustee of the fund to which the complaint relates’In relation to the PSS Fund, the Board was plainly the trustee for the purposes of the SRC Act. In the Tribunal’s Review Determination and Reasons, the second respondent’s complaint, which had been the subject of the Decision under Review, was recorded as follows:‘COMPLAINT11.On 20 December 2005 and 3 February 2006, the Complainant lodged a complaint with the Tribunal that the amount of her invalidity pension benefit paid to her from the Fund was unfair and unreasonable. The complaint is that:●The Trustee has not included the Complainant’s salary at her exit date when calculating her invalidity benefit, even though this is used for other involuntary retirement exits (eg retrenchment benefit);●The Trustee has not used the Complainant’s projected salary (to Retirement Age 60) when calculating her invalidity benefit, even though this is implied in the Trust Deed and member communication material;●At no stage did the Trustee advise the Complainant of the effect on her pension of alternative invalidity retirement dates.12.The Complainant states the Trustee should have used its review power under the Trust Deed to change the calculation of her average salary.13.The Complainant seeks resolution through a recalculation of her benefit by basing the calculation of the salary component of the benefit on:●the method used for calculating the Retrenchment benefit; or●her salary at exit; or●her projected salary at age 60.’ The Review Determination and Reasons of the Tribunal was signed by the Presiding Member. Under the heading ‘DETERMINATION OF THE TRIBUNAL’ the following appeared:‘DETERMINATION OF THE TRIBUNAL78.Under s37(6) of the Complaints Act, the Tribunal is required to affirm the decisions of the Trustee if it is satisfied that those decisions, in their operation in relation to the Complainant, were fair and reasonable in all the circumstances. For this purpose, under s4 of the Complaints Act, a “decision” includes engaging in any conduct or failing to engage in any conduct.79.For the reasons set out above, the Tribunal is not satisfied that the decisions of the Trustee, in their operation in relation to the Complainant, were fair and reasonable in all the circumstances.80.In those circumstances, pursuant to s37(1)(a) of the Complaints Act, the Tribunal has all the powers, obligations and discretions of the Trustee and, by virtue of s37(2), the Tribunal may make a determination:•affirming a decision;•remitting the matter to the Trustee for consideration in accordance with the Tribunal’s directions;•varying the decision; or•setting aside the decision and substituting its own decision81.In accordance with the requirements of sub-ss37(3), (4) and (5) of the Complaints Act, the Tribunal remits the complaint to the Trustee and directs that, in relation to the retirement date of the Complainant:1)Within 21 days of the date of receipt by the Trustee of this determination, the Trustee must advise the Complainant of the amount of her benefit had she retired on 21 March 2006 and provide her with the detailed calculation of the amount including any assumptions made by the Trustee.2)The Trustee must advise the Complainant of the amount of any adjustment it believes applies to underpayment or overpayment of benefits paid to date and the detailed calculation of the amount including any assumptions made by the Trustee within 21 days of the date of receipt by the Trustee of this determination.3)The Trustee is to allow the Complainant up to 30 days after receipt of the information in 1) and 2) above in which to request any other information or calculations that she feels she needs from the Trustee in order to make an informed decision about her options in relation to her retirement date. The Complainant may advise the Trustee of a shorter period if she feels she does not need this amount of time.4)The Complainant will be allowed a further 45 days in which to advise the Trustee of whether she wishes to change her invalidity retirement date to 21 March 2006. If the Complainant does not so advise by the end of this further 45-day period then the current pension will stand.5)If she advises the Trustee that her invalidity retirement date is to be 21 March 2006, the Trustee is to adjust her benefit to the amount calculated in accordance with 1) and any underpayment of pension calculated in accordance with 2) is to be paid by the Trustee to the Complainant and any overpayment of pension calculated in accordance with 2) is to be paid by the Complainant to the Trustee.’

Ratio Decidendi

Legal Principle Established

Established by: GRAHAM J

Notwithstanding the terms of the second respondent’s email of 4 January 2006 and ComSuper’s reply to it of 30 January 2006 it appears that by a letter dated 5 September 2006 the second respondent requested a further review of the average salary used in the calculation of her invalidity benefit. On 24 October 2006 the Board’s Chief Business Operations Officer, who was the Delegate responsible for decisions under Rule B3.5.3, appears to have accepted a recommendation of ComSuper that the Board not exercise its power under Rule B3.5.3.The Superannuation Complaints Tribunal’s consideration of the complaint The first respondent, the Superannuation Complaints Tribunal constituted by Noel Davis, Presiding Member and Jeff Humphreys, Member proceeded to conduct a review of the second respondent’s complaint on the papers. A review meeting was held on 24 April 2007 and a further review meeting on 20 September 2007, but nothing relevantly occurred at those meetings. In its ‘Review Determination and Reasons’ dated 21 November 2007, the ‘DECISION UNDER REVIEW’ was identified by the Tribunal as follows:‘DECISION UNDER REVIEW2.On 14 December 2005 the Trustee advised the Complainant of her Invalidity Benefit.3.The Complainant objected to the amount of the invalidity benefit calculated by the Trustee and to the lack of advice regarding her options.4.On 1 February 2006, the Trustee, having considered the Complainant’s complaint, affirmed its original decision.’ It is important to note that the definition of ‘trustee’ in the SRC Act is different from that contained in the 1990 Act. In s 3(2) of the SRC Act the following definition appears:‘3(2) In this Act, unless the contrary intention appears:…trustee, in relation to a complaint, means, the trustee of the fund to which the complaint relates’In relation to the PSS Fund, the Board was plainly the trustee for the purposes of the SRC Act. In the Tribunal’s Review Determination and Reasons, the second respondent’s complaint, which had been the subject of the Decision under Review, was recorded as follows:‘COMPLAINT11.On 20 December 2005 and 3 February 2006, the Complainant lodged a complaint with the Tribunal that the amount of her invalidity pension benefit paid to her from the Fund was unfair and unreasonable. The complaint is that:●The Trustee has not included the Complainant’s salary at her exit date when calculating her invalidity benefit, even though this is used for other involuntary retirement exits (eg retrenchment benefit);●The Trustee has not used the Complainant’s projected salary (to Retirement Age 60) when calculating her invalidity benefit, even though this is implied in the Trust Deed and member communication material;●At no stage did the Trustee advise the Complainant of the effect on her pension of alternative invalidity retirement dates.12.The Complainant states the Trustee should have used its review power under the Trust Deed to change the calculation of her average salary.13.The Complainant seeks resolution through a recalculation of her benefit by basing the calculation of the salary component of the benefit on:●the method used for calculating the Retrenchment benefit; or●her salary at exit; or●her projected salary at age 60.’