Clark and Commonwealth Superannuation Corporation - [2018] AATA 681

Clark and Commonwealth Superannuation Corporation [2018] AATA 681 (22 March 2018)
Division:GENERAL DIVISION
File Number(s): 2017/1199 and 2017/5110
Re:Ian Clark
APPLICANT

Commonwealth Superannuation CorporationAnd
RESPONDENT

DECISION
Tribunal:Deputy President J Sosso
Date:22 March 2018
Place:Brisbane

The Tribunal:
(a)varies the decision under review dated 14 February 2014 (2017/1199); and
(b)affirms the decision under review dated 11 August 2017 (2017/5110)

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Deputy President J Sosso
CATCHWORDS
SUPERANNUATION – Defence Force Retirement and Death Benefits Scheme – member resumed continuous full time service – member required to elect whether or not to become member of the Military Superannuation Scheme - whether member made a valid election to remain in DFRDB scheme prior to re-commencing service – requirements to make election – where member completed and sent D 100 form after re-commencing service – decision under review varied (2017/1199) - decision under review affirmed (2017/5110)
LEGISLATION
Defence Force and Death Benefits Act 1973 (Cth)
Military Superannuation and Benefits Act 1991 (Cth)
CASES
Chapman v Defence Force Retirement and Death Benefits Authority (2001) 108 FCR 537
Defence Force Retirement and Death Benefits Authority v Gregory (2009) 179 FCR 535
Defence Force Retirement and Death Benefits Authority v Mathews (2011) 192 FCR 197
Howie and Commonwealth Superannuation Corporation [2013] AATA 114
Marston and Defence Force Retirement and Death Benefits Authority (2011) 121 ALD 232
McDonald and Commonwealth Superannuation Corporation [2015] AATA 237
Strutt and Defence Force Retirement and Death Benefits Authority [2007] AATA 1614
Whitfield and Commonwealth Superannuation Corporation [2012] AATA 613
REASONS FOR DECISION
Deputy President J Sosso
22 March 2018
INTRODUCTION

Mr Ian Clark (the Applicant) served in the Australian Defence Force from September 1979 until March 2010 (the first period of continuous full-time service (CFTS)). The Applicant subsequently undertook two periods of CFTS in the Army Reserves:
(a)23 March 2015 – 17 January 2016 – the second period of CFTS; and
(b)6 May 2016 – 20 January 2017 – the third period of CFTS.
Whilst enlisted during his first period of CFTS, the Applicant joined the Defence Forces Retirement and Death Benefits Scheme (the DFRDBS). The DFRDBS is established by the Defence Force Retirement and Death Benefits Act 1973 (the Act) and provides a range of benefits, including retirement benefits for “eligible members of the Defence Force”.
The DFRDBS was replaced in 1991 by the Military Superannuation and Benefits Scheme (MSBS), and thereafter the DFRDBS was closed to new members. Further, an existing member of the DFRDBS who resumed CFTS after 1991 automatically became a member of the MSBS unless they made an election in writing to continue to contribute to the DFRDBS.
When the Applicant commenced his second and third periods of CFTS, s 5A of the Act (which has since been repealed) provided as follows:
“5A Persons excluded from the definition of eligible member of the Defence Force
(1) Subject to subsection (2) a person who:
(a) becomes, on or after 1 October 1991, a member of the Defence Force; or
(b) being a member of the Reserve, commences on or after that day to render continuous full-time service for a period of not less than 12 months;
is excluded from the definition of eligible member of the Defence Force in subsection 3(1).
(2) Subsection (1) does not apply to:
(b) a person to whom section 61B applies and who has elected under that section to become a contributory member…”
The exception in s 5A(2)(b) is linked to the terms of s 61B which provided for an election by a recipient member intending to resume full-time service. The key provision for this matter is s 61B(3) which provides:
“(3) A recipient member who:
(a) Intends to resume full-time service as a member of a Reserve for a continuous period of less than 12 months; and
(b) has not previously made, under this section, an election to become a member of the MSB scheme;
must, before resuming service, in writing addressed to CSC, elect whether or not to become a member of that scheme.”
Subsection 61B(3) required a person who intended to resume full-time service as a member of the Reserves for less than 12 months, and who had not earlier made an election, to elect whether or not they wished to become a member of the MSBS before resuming. If no election was made by the time a person had resumed service, they were excluded from the MFRDBS and automatically became a member of the MSBS - s 6 Military Superannuation and Benefits Act 1991 (the MSB Act); Defence Force Retirement and Death Benefits Authority v Gregory (2009) 179 FCR 535 at [9].
The version of section 6 of the MSB Act that operated when the Applicant commenced his second period of CFTS was replaced by a differently worded version by the time he commenced his third period of CFTS. However, both had the same effect, and provided that a person had to make an election in writing before resuming service that they did not wish to become a member of the MSBS.
During the course of the hearing, the Applicant, under oath, testified that he did not make an election before he commenced his third period of CFTS. It was therefore agreed that, irrespective of the disposition of the issues pertaining to his second period of CFTS, there was no longer any live issue about his membership of the MSBS upon commencing CFTS on 6 May 2016.
The Tribunal has before it two applications:
(a) the first (No 5110/2017) relates to a decision of the Defence Force Case Assessment Panel (DFCAP) that affirmed a determination that the Applicant had become a member of the MSBS and ceased to be a member of the DFRDBS as at 23 March 2015 due to his non-compliance with s 61B of the Act; and
(b) the second (No 1199/2017) relates to a decision of the DFCAP that affirmed a determination that the Applicant had become a member of the MSBS and ceased to be a member of the DFRDBS as at 6 May 2016 due to his non-compliance with s 61B of the Act.
Accordingly, the first application relates to the Applicant’s second period of CFTS and the second application relates to his third period of CFTS.
The matter was heard in Brisbane on 6 March 2018. The Applicant appeared in person and gave evidence. He was self-represented. The Commonwealth Superannuation Corporation (the Respondent) was represented by Ms K McGree of Counsel. No witnesses were called to give evidence.
ISSUE
The sole issue to be determined by the Tribunal was whether the Applicant complied with s 61B of the Act by giving written notice to the Respondent before he commenced his second period of CFTS on 23 March 2015.
FACTS
On 2 March 2016, the Applicant signed an AD 600 form: “Personal Particulars – Undertaking by a Member of the Army Reserve to Render Continuous Full-time Service” – Exhibit 2 T7 pp. 35 – 37.
At the end of Part 1 of the form are the following words – Exhibit 2 T7 p. 35:
“I voluntarily undertake to render continuous full-time military service with the Australian Regular Army (ARA) for the period commencing on 23 Mar 2015 and ending on the 17 Jan 2016 for the period of 301 days.”
Immediately above the signature block where the Applicant signed his name are two key paragraphs – Exhibit 2 T7 p. 35:
“7. I acknowledge that it is my responsibility to elect a superannuation fund prior to undertaking the period of CFTS and I am aware that if an election is not made, I will become a member of MSBS.
8. I acknowledge that I have been informed that I should seek financial advice before making a superannuation decision.”
The Applicant’s signing of the form was witnessed by Major Foster, and was endorsed by the Unit Commander, Major Pointon, on 5 March 2015. Subsequently, it was “signed off” by Colonel Fegan on 9 March 2015 and finally by Colonel Winter on 19 March 2015 – Exhibit 2 T7 pp. 35 – 36.
Major Pointon also prepared on 5 March 2015 a Minute providing reasons for employing the Applicant on a full-time basis. The two page document comprehensively summed up the Applicant’s qualifications, the proposed service to be rendered, justification for employing him, risks and tenure. Amongst the other matters also dealt with was his pension. Major Pointon noted – Exhibit 2 T8 p. 39:
“DFRDB pension: WO1 Clark is in receipt of a DFRDB pension and has been directed to contact CommSuper for specific advice and lodge a D 100 pension stoppage for the duration of CFTS.”
On 23 March 2015, the Applicant resumed CFTS. On 25 March 2015, the Applicant contacted the Respondent. At 3:10 pm on the same day, Geri Waddleton, Customer Information Representative, sent the following email to the Applicant – Exhibit 2 T9 p. 40:
“Dear Mr Clark,
Thank you for your enquiry.
Please find enclosed the D100 form as requested….
Yours sincerely…”
The Applicant completed and submitted the D 100 form which was forwarded with the above email from the Respondent. At the hearing, the Applicant confirmed that the handwriting on the form was his. Question 6 of the form asks – Exhibit 2 p. 47: “Intended date you will resume service in the Defence Force”. The Applicant’s answer was: “26 03 2015” instead of his actual starting date of 23 March 2015. Also, in Part C of the form the Applicant elected not to join the MSBS.
On 30 March 2015, the Applicant resubmitted his D 100 form by email – Exhibit 2 T13 pp. 56 – 57:
“Please find attached my D100 & Signed. I did fwd this last week by Email & Fax.
Commence Date 26 Mar 15
End Date 17 Jan 16
WO1 Ian Clark”
The attached D 100 form has a “TX RESULT REPORT” on the first page which indicates that the Applicant faxed the D 100 form to the Respondent between 14:25 and 14:29 on 25 March 2015 – Exhibit 2 T13.1 p. 58.
The evidence also discloses that the Department of Defence provided information to the Respondent on 27 March 2015 and 1 April 2015 that the Applicant’s service start date was 23 March 2015 – Exhibit 2 T12 p. 53, T17 p. 66. For reasons not advanced at the hearing, this information was not acted upon and the Applicant continued to be treated as an ongoing member of the DFRDBS.
It was only after the Applicant took proceedings in relation to his third period of CFTS that the Respondent undertook further investigations and made a determination regarding the Applicant’s second period of CFTS. Consequently, it was not until 14 June 2017 that the Respondent wrote to the Applicant informing him that his D 100 form dated 25 March 2015 was invalid – Exhibit 2 T19 pp. 95 – 97.
The Applicant contends that he met the necessary statutory requirements because he forwarded his election to the Respondent on 20 March 2015. In a statutory declaration deposed on 3 November 2017, the Applicant outlined his version of events – Exhibit 4:
“In 2015/16 I undertook CFTS at HQ 1 DIV, it was initially for a 12 months period however, due to a number of departments and It systems it was reduced to 9 months with a number of start/finish dates.
My initial CFTS service was to commence on 17 Jan 15 and end 17 Jan 16 however, the application did not get actioned by DOCM./SCMA and HQ Administrative and Personnel staff differing IT systems that do not interact with each other. From the 17 Jan 15 till 23-26 Mar 15. I had been given a number of CFTS start/end dates that did not happen. During this time I was undertaken Part Time Army Res Days form (sic) the 17 Jan 15 working at HQ 1 DIV in my WHS role. My CFTS finally came through on 23-25 Mar 15. I acknowledged the 23 CFTS and then Faxed of (sic) a D 100 form to CSC from HQ 1 DIV top floor fax/printer that afternoon. On Mon 23 Mar I commenced CFTS in the belief all was good with my CFTS/D 100 form in the same job in the same location. On the 25 Mar 15 I received a phone call from a lady (can’t remember her name) CSC stating they had not received a D 100 form, I explained I had sent one through on the afternoon of the 20 Mar 15, following that comment she said you need to get one in ASAP. On the 25 Mar 2015 I faxed a D 1000 form to CSC and dated it 25 Mar 15 which was the next day believing this the right thing to do. On the 31 Mar 15 I received an email from a Mr Paul Thompson CSC Quote RE:20150326 Clark I 8224645 RBF member has provided an amended End date of Re-Entry 26/03/2015 to 17/01/2016, from that email I was of the understanding that my CFTS and D100 faxed form as well as phone call for a lady at CSC was all good and CFTS treated as a DFRDB member for the remainder of my 9 months service till discharge 17 Jan 16 where once again, I did note that the 26 Mar 15 was mentioned however, given the email it lead [sic] to me to think all was fine…”
The Applicant testified that he had completed and faxed his D 100 form on 20 March 2015. He denied that he emailed the form, and insisted that he had faxed it. Further, he said that he did not keep a copy of the D 100 form he faxed on that day, and re-iterated that he only completed the D 100 form on 25 March because he was contacted by a representative of the Respondent. He was unable to give a plausible explanation as to why he stated in the D 100 form completed on 25 March that he would be resuming service on 26 March.
LEGISLATIVE FRAMEWORK
The Respondent drew the Tribunal’s attention to two Federal Court decisions and one Full Court decision: Chapman v Defence Force Retirement and Death Benefits Authority (2001) 108 FCR 537, Defence Force Retirement and Death Benefits Authority v Gregory (2009) 179 FCR 535 and Defence Force Retirement and Death Benefits Authority v Mathews (2011) 192 FCR 197.
Those decisions are authority for the self-evident proposition that a person who is required to make an election pursuant to s 61B before resuming service, and fails to do so, will be excluded from the DFRDBS. Further, where a person has made an election but subsequently resumes further full-time Reserve service for a continuous period of less than 12 months, he or she must make another election. The latter proposition would have been of significance if the Applicant had not made the concession outlined above.
The Respondent also drew the Tribunal’s attention to a number of decisions of this Tribunal on s 61B.
It is clear, firstly, that the election must be in writing. An election communicated orally cannot satisfy the clear requirements of s 61B – Strutt and Defence Force Retirement and Death Benefits Authority [2007] AATA 1614.
Second, even if a person makes an election by completing the D 100 form prior to commencing CFTS, it is ineffective if it the Respondent receives it after the person has commenced CFTS – e.g. Whitfield and Commonwealth Superannuation Corporation [2012] AATA 613 at [32] – [39].
Third, if a person makes an election prior to resuming service and gives instructions for it to be forwarded to the Respondent, but through no fault of the person it is not forwarded until after the resumption of service, the requirement of s 61B is not met – e.g. Howie and Commonwealth Superannuation Corporation [2013] AATA 114.
Fourth, a person can satisfy s 61B even though the D 100 is sent after he or she has resumed service, if the Respondent is notified by some other means prior to the resumption of service and the form is executed by the person prior to the resumption of service. Thus in Marston and Defence Force Retirement and Death Benefits Authority (Marston) (2011) 121 ALD 232, the person, prior to resuming service, completed the D 100 form and communicated his election by telephone. Subsequently, he resumed service and faxed his D 100 form to the Respondent.
In Marston, Member Webb made the following observations (at [13]):
“It is clear enough that a written election must be made prior to the resumption of service: between the time the undertaking to serve is given by a person and the time that person actually resumes service. But this does not mean in all cases that the election must be received by the authority prior to that point in time. The section does not expressly require it; the requirement is for the election to be effectively made prior to the resumption of service.”
CONSIDERATION
As Member Webb observed in Marston (at [13]):
“for an election to be effective it must be properly made in writing and telegraphed or communicated to the authority. These are matters for proof in the face of uncertainty.”
The sole issue to be determined is whether the Tribunal accepts the Applicant’s account that he faxed his duly completed D 100 form in which he made an election to rejoin the DFRDBS on 20 March 2015.
The Tribunal, having considered all of the written evidence and listened to the Applicant give evidence, does not accept that he faxed his election to the Respondent on 20 March 2015.
On 11 October 2017, the Applicant emailed Major Pointon seeking his assistance with these proceedings. In the body of the email, the Applicant made this statement – Exhibit 7:
“My CFTS had a start date of 23 Mar 15 however, I did not sign a D100 and fax in [sic] until the 25 Mar 15…”
When this was put to the Applicant by Ms McGree, he could not give a plausible explanation as to why he stated unequivocally to Major Pointon that he had only sent one D 100 form to the Respondent and this was not effected until 25 March 2015.
Further, in the email sent on 25 March 2015 by Geri Waddleton to the Respondent, the opening sentence is: “Thank you for your enquiry”. In other words, unlike the Applicant’s version of events where he claims he was contacted by the Respondent, this email suggests that it was the other way around.
Finally, the Applicant denied that he had emailed his D 100 form to the Respondent. Yet in his email message of 30 March 2015 to the Respondent he states (Exhibit 2 T13 p. 56): “Please find attached my D100 & Signed. I did fwd this last week by Email & Fax”.
Again, the Applicant was unable to provide a plausible explanation for his own statement that he had, in fact, emailed his election to the Respondent.
Where the Tribunal is confronted with two plausible scenarios relating to the communication of an election under s 61B, it generally approaches the matter in a generous way for an Applicant. It does so with the knowledge that the legislative schemes in question are inflexible, the consequences for minor non-compliance disproportionately harsh and the obvious difficulties experienced by persons in assembling evidence sometime after the event – see, as an example, McDonald and Commonwealth Superannuation Corporation [2015] AATA 237 at [26] – [34].
In this matter, the evidence leads inexorably to the conclusion that the Applicant, for whatever reason, did not make his s 61B election until after he resumed service on 23 March 2015. The evidence suggests that he made contact with the Respondent on 25 March 2015 and only completed his D 100 form on that day. He put his date for resumption of service as 26 March 2015, no doubt to ensure that the Respondent would form the belief that he had made a valid election. The inconsistencies in the Applicant’s evidence, the absence of any documentary evidence by the Applicant of his purported 20 March 2015 election and, finally, the absence of any evidence that the Respondent ever received such an election, all weigh against the Applicant.
However, the Applicant’s own words in his email to Major Pointon are the clearest and most damaging evidence that weighs against accepting his version of events.
It is unfortunate, nonetheless, that the Respondent did not act upon the advice received by the Department of Defence in March and April 2015 that the Applicant resumed service on 23 March and not 26 March 2015. If it had taken action then much of the hardship subsequently experienced by the Applicant would have been avoided.
It flows from the above finding that the Applicant became a member of the MSBS on 23 March 2015 as a result of his failure to make an election in accordance with s 61B(3).

Although the Applicant conceded that he did not make an election prior to commencing his third period of CFTS, he could not have made one in any event as he was not eligible to elect under s 61B(3).
Accordingly, I find that the Applicant did not make a valid election pursuant to s 61(B)(3) of the Act prior to resuming service on 23 March 2015.
DECISION
The Tribunal:
(a) varies the decision under review dated 14 February 2017 (2017/1199) to provide that:
“The Applicant failed to complete an election not to become a member of the MSB Scheme prior to his re-commencing service with the ADF on 23 March 2015 and as a consequence he became a member of the MSB Scheme as at that date”;
(b) affirms the decision under review dated 11 August 2017 (2017/5110).

I certify that the preceding 49 (forty-nine) paragraphs are a true copy of the reasons for the decision herein of Deputy President J Sosso

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Associate
Dated: 22 March 2018

Date of hearing: 6 March 2018

Applicant: In Person

Advocate for the Respondent: Katherine McGree

Solicitors for the Respondent: Australian Government Solicitor

Date of hearing:	6 March 2018
Applicant:	In Person
Advocate for the Respondent:	Katherine McGree
Solicitors for the Respondent:	Australian Government Solicitor