FEDERAL COURT OF AUSTRALIA
Brewer v AAL Aviation Limited [2016] FCA 93
File number(s): ACD 87 of 2012
ACD 119 of 2013
ACD 17 of 2015Judge(s): BUCHANAN J Date of judgment: 17 February 2016 Catchwords: SUPERANNUATION – Commonwealth statutory arrangements for superannuation – applicants found to be temporary employees entitled to take up Commonwealth superannuation – applicants claimed to have been wrongfully denied entry to Commonwealth Superannuation scheme(s) – applicants’ claims not established on the facts
NEGLIGENCE – claims for negligent misrepresentation and negligence generally arising from representations about operation of superannuation schemes – claims not made out
LIMITATION OF ACTIONS – consideration of when claimed loss may have arisen – The Commonwealth of Australia v Cornwell (2007) 229 CLR 519 applied – Innes v Commonwealth [2015] ACTCA 33 distinguished on its facts
Legislation: Australian Airlines (Conversion to Public Company) Act 1988 (Cth)
Australian National Airlines Act 1945-1973 (Cth), ss 6, 17, 18, 31A, 42, 43, 63
Competition and Consumer Act 2010 (Cth), Sch 2—Australian Consumer Law, s 18
Superannuation Act 1922 (Cth)
Superannuation Act 1922-1973 (Cth), s 4
Superannuation Act 1976 (Cth), ss 3, 11, 12, 13, 16, 80, 137
Superannuation (Former Eligible Employees) Regulations (Amendment) (Cth), SR 1995 No. 236, reg 15B
Superannuation (Former Eligible Employees) Regulations (Amendment) (Cth), SR 1993 No. 262, reg 15, Sch 11
Superannuation (Eligible Employees) Regulations (Amendment) (Cth), SR 1980 No. 181
Trade Practices Act 1974 (Cth), s 52
Limitation Act 1935 (WA)
Limitation Act 2005 (WA), s 38
Limitation Act 1969 (NSW), s 55
Limitation of Actions Act 1958 (Vic), s 27
Cases cited: Alcan Gove Pty Ltd v Zabic [2015] HCA 33; (2015) 89 ALJR 845
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266
Briginshaw v Briginshaw (1938) 60 CLR 336
Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 (2014) 254 CLR 185
Byrne v Australian Airlines Ltd (1995) 185 CLR 410
Commonwealth Bank of Australia v Barker (2014) 253 CLR 169
Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594
Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1
Eljazzar v BHP Iron Ore Pty Ltd [1996] IRCA 134; (1996) 65 IR 40
Henry v Commonwealth of Australia [2012] ACTSC 94; (2012) 264 FLR 381
Innes v Commonwealth [2015] ACTCA 33
Martin v Tasmania Development & Resources [1999] FCA 593; (1999) 163 ALR 79
Meredith v Commonwealth of Australia (No 2) [2013] ACTSC 221; (2013) 280 FLR 385
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24
Mulcahy v Hydro-Electric Commission (1998) 85 FCR 170
Murphy v Westpac Banking Corporation [2014] FCA 1104
Mutual Life & Citizens’ Assurance Co Ltd v Evatt (1968) 122 CLR 556
R v Dunlop Rubber Australia Ltd; Ex parte Federated Miscellaneous Workers Union (1957) 97 CLR 71
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- AGLC
- Brewer v AAL Aviation Limited [2016] FCA 93
- Case
- [2016] FCA 93
- Decision Date
CaseChat Overview and Summary
The primary legal issues the court had to resolve were whether the applicants were indeed entitled to join the Commonwealth superannuation schemes and if there were any wrongful denials in this regard. Another significant issue was whether there were any negligent misrepresentations or general negligence in the operation of these schemes. Furthermore, the court needed to determine the applicable limitation periods for the claims and whether any of the applicants’ claims were statute-barred.
The court found that the applicants were not entitled to join the Commonwealth superannuation schemes as they were considered temporary employees, and their claims for wrongful denial were therefore not established. The applicants' claims for negligent misrepresentation and general negligence were also dismissed as there was insufficient evidence to support these claims. Regarding the limitation periods, the court applied the principles from The Commonwealth of Australia v Cornwell (2007) 229 CLR 519 and distinguished Innes v Commonwealth [2015] ACTCA 33 based on the facts. Ultimately, the court ruled that the applicants’ claims were statute-barred, and the application was dismissed with costs.
The final orders of the court were that the application be dismissed with costs. This decision was in line with Rule 39.32 of the Federal Court Rules 2011, which governs the entry of orders in such cases.
Orders
Orders of the court
1. The application be dismissed with costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
In 1973, two important changes were made, described by the General Manager as follows: b)Operation from 1973–76. In 1973 there were two significant changes made i)TAA was required to divest its employer’s fund and this fund was passed to the Commonwealth Trading Bank as Investment Manager. TAA continued all administrative work connected with the Fund. ii)The Superannuation Act was amended to provide for annual updating of pensions whereby the employer’s share of the pension (5–7ths) was raised at the 1st July each year by a factor 1.4 times the percentage increase in the C.P.I. or once times the rise in Average Weekly earnings, whichever is less. To meet this new liability, the Actuary determined that TAA should increase its contributions to 3.5 times employees’ contributions and make an annual payment of $1.5m until the past liability (then $15m) was extinguished. The Actuary’s advice has not been followed and we have continued to pay into our Fund 1.9 times the employees’ contributions. The introduction of the CSS, with the 1976 Act, made things worse. The General Manager said: Part 2. New Commonwealth Superannuation Scheme from 1st July, 1976: … TAA’s contributions have been estimated by the Actuary to be 20% of salaries, if annual updating is not to be provided for or 30% of salary to provide for updating, i.e. 6 times the employees’ contributions. So far TAA has decided to contribute the 20% only. The General Manager provided a contrast with TAA’s direct competitor, Ansett: Part 3. Comparative Cost with Ansett Airlines of Australia: It is not possible to determine accurately the annual cost of the superannuation scheme applying to ground staff in Ansett Airlines of Australia. It is known that the AAA scheme consists of an employee contribution of 5% of salary for a lump sum benefit of 13⅓% of average final salary (last five years) for each year of service. Actuarial advice is that the employer’s contribution would approximate 6.5% of salaries of contributors. Of the total ATI staff in all its different enterprises 61% are members of the company’s scheme. For Ansett Airlines of Australia this figure is reported to be 70% of eligible staff. Using these figures and TAA’s average salary per airline employee, the cost to Ansett of maintaining a fund for 70% of its eligible ground staff and flight engineers of Ansett Airlines of Australia for the year 1976–77 is estimated to be no more than $4m. By contrast, only 45% of TAA’s eligible employees are members of TAA’s ground staff Superannuation Fund, because entry to the scheme has been restricted on the grounds of cost. The new Commonwealth Scheme, by permitting employees to join at a cost of no more than 5% of salary and eliminating the medical requirement, will be considerably more attractive and should TAA allow a freer entry to the scheme, some 70% of staff would most likely join. The cost of $4m for Ansett Airlines of Australia for 1976–77 should therefore be compared with a TAA cost as follows:–a)With 45% of staff contributing –