Corbisieri v NM Superannuation Proprietary Limited

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FEDERAL COURT OF AUSTRALIA

Corbisieri v NM Superannuation Proprietary Limited [2023] FCA 1319  

File number(s): VID 442 of 2023
Judgment of: O’CALLAGHAN J
Date of judgment: 2 November 2023
Catchwords: INSURANCE – appeal on a single question of law pursuant to s 1057 of the Corporations Act 2001 (Cth) against Australian Financial Complaints Authority Limited (AFCA) determination setting aside decision of trustee in relation to death benefits of deceased policy holder – AFCA erred in law – appeal allowed – matter remitted to AFCA to be determined again  
Legislation:

Acts Interpretation Act 1901 (Cth) s 25D

Corporations Act 2001 (Cth) ss 1055, 1057, pt 7.10A

Family Law Act 1975 (Cth)

De Facto Relationships Act 1984 (NSW)
Cases cited:

Hibberson v George (1989) 12 Fam LR 725

In the Marriage of Tye (1976) 9 ALR 529; [1976] 1 Fam LR 11,235

S v B (No 2) [2005] 1 Qd R 537

Sharma v H.E.S.T. Australia Ltd [2022] FCA 536

Tratter v Aware Super [2023] FCA 491
Division: General Division
Registry: Victoria
National Practice Area: Administrative and Constitutional Law and Human Rights
Number of paragraphs: 46
Date of hearing: 24 October 2023
Counsel for the Applicant: Mr B Guzzo
Solicitor for the Applicant: Cavoli & Co
Counsel for the First Respondent: The First Respondent filed a submitting notice save as to costs
Counsel for the Second Respondent: Ms C Sparke KC
Solicitor for the Second Respondent: Kelly Hazell Quill Lawyers
Counsel for the Third Respondent: The Third Respondent filed a submitting notice

ORDERS

VID 442 of 2023
BETWEEN:

ROSARIA CORBISIERI (AS EXECUTRIX OF THE WILL OF PINO CORBISIERO)

Applicant
AND:

NM SUPERANNUATION PROPRIETARY LIMITED

First Respondent

JAMES NGUYEN

Second Respondent

AUSTRALIAN FINANCIAL COMPLAINTS AUTHORITY LIMITED (ACN 620 494 340)

Third Respondent

ORDER MADE BY:

O’CALLAGHAN J

DATE OF ORDER:

2 NOVEMBER 2023

THE COURT ORDERS THAT:

1.The appeal is allowed.

2.Pursuant to s 1057(4)(a) of the Corporations Act 2001 (Cth), the determination of Australian Financial Complaints Authority Limited (AFCA) in case number 871726 is set aside.

3.Pursuant to s 1057(4)(b) of the Corporations Act 2001 (Cth), the complaint made by the second respondent is remitted to AFCA to be determined again in accordance with these reasons.

4.The parties are to file submissions as to costs, not exceeding three pages, within seven days of the publication of these reasons, if the question of costs is not agreed.

5.If there is no agreement, the costs of the appeal will be determined on the papers.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

O’CALLAGHAN J

Introduction

  1. This is an appeal on a question of law pursuant to s 1057 of the Corporations Act 2001 (Cth) brought by Mrs Rosaria Corbisieri, as executrix of the Will of her late son, Pino Corbisiero, against a decision by the second respondent, the Australian Financial Complaints Authority Limited (AFCA), determining that the entire amount of a death benefit of $1.122m…

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Details
Case
[2023] FCA 1319
Decision Date

CaseChat Overview and Summary

In the case of Corbisieri v NM Superannuation Proprietary Limited, the matter involved an appeal on a single question of law concerning the Australian Financial Complaints Authority Limited (AFCA) determination that set aside the decision of the trustee in relation to the death benefits of the deceased policy holder. The deceased had nominated Mr. Nguyen as his partner and non-lapsing beneficiary, but the trustee decided to pay 80% of the death benefit to the deceased's estate and 20% to Mr. Nguyen. Mr. Nguyen objected to this decision, leading to the AFCA review and subsequent setting aside of the trustee's decision. The court was tasked with determining whether the AFCA erred in law when it set aside the trustee's decision.

The central legal issue was whether AFCA was correct in law to set aside the trustee's decision on the distribution of the death benefit. Counsel for Mr. Nguyen argued that the text left by the deceased member did not terminate the de facto relationship, it was not addressed to Mr. Nguyen, and that some objective manifestation of the intention to terminate the relationship was required. The court examined the statutory framework governing AFCA's jurisdiction and powers, particularly under sections 1055 and 1055A of the Corporations Act 2001, and the requirement for AFCA to provide reasons for its determinations. The court found that AFCA did not sufficiently consider the trustee's findings and reasoning, and that the trustee's decision was fair and reasonable in all the circumstances. Therefore, the court concluded that AFCA had erred in law.

The court allowed the appeal and set aside the determination of AFCA in case number 871726. The complaint was remitted to AFCA to be determined again in accordance with the court's reasons. The court also directed the parties to file submissions regarding costs if the issue was not agreed upon. If the parties could not agree on the costs, the court would determine the costs on the papers. This decision underscores the importance of AFCA providing adequate and reasoned determinations in line with statutory requirements.

Orders

Orders of the court

1. The appeal is allowed.

2. Pursuant to s 1057(4)(a) of the Corporations Act 2001 (Cth), the determination of Australian Financial Complaints Authority Limited (AFCA) in case number 871726 is set aside.

3. Pursuant to s 1057(4)(b) of the Corporations Act 2001 (Cth), the complaint made by the second respondent is remitted to AFCA to be determined again in accordance with these reasons.

4. The parties are to file submissions as to costs, not exceeding three pages, within seven days of the publication of these reasons, if the question of costs is not agreed.

5. If there is no agreement, the costs of the appeal will be determined on the papers.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

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

On 9 February 2022, the trustee made a decision to the effect that the death benefit was to be paid as 80% to Mr Corbisiero’s estate and 20% to Mr Nguyen. The trustee’s decision Mr Nguyen subsequently objected to that decision, but the trustee reaffirmed it, including for these reasons:The Trustee further considered the deceased member’s Beneficiary nomination form dated and witnessed on 6 December 2018 where he nominates [Mr Nguyen] as his partner and non lapsing beneficiary (Non-Lapsing nomination) in light of the new information received.Based on the new information, the Trustee has determined that it does not provide any reason to cause the Trustee to either change its decision of 9 February 2022 and/or validate the Non-Lapsing nomination. The new information confirms the information already reviewed by the Trustee up to its decision of 9 February 2022.Therefore, the Trustee reaffirms that whilst the Non-Lapsing nomination includes [Mr Nguyen] as “partner” of the deceased member, the Trustee must be satisfied that a Non-Lapsing nomination is valid as at the date of death in terms of the relevant trust deed and superannuation law. In doing this, the Trustee considers all circumstances as at the date of death. The new information has not provided any reason for the Trustee to change its consideration of the circumstances at the date of the deceased member’s death.…It is argued that the Trustee has placed weight on the [text] left by the deceased member on 1 September 2019 at the time of his death. However, the Trustee reaffirms that this [text], as provided in the information reviewed prior to the objection, reflects the wishes of the deceased member at the time of his death.The Trustee highlights the following trust deed rule in terms of the Non-Lapsing nomination,7.10D A Non-Lapsing Nomination ceases to be valid and effective upon the earlier of the following events:…(d) the date the Member divorces or the Member’s de-facto relationship (including with a person of the same sex) terminates;…On that basis, the Trustee confirms the invalidation of the Non-Lapsing nomination based on the information received and considered to date. Therefore, the Trustee has discretion within the provisions of the trust deed to make a determination regarding the distribution of the deceased member’s death benefit to dependant/s and/or the LPR, and if none to other persons.The Trustee within its discretion remains satisfied that an interdependency relationship did not exist between [Mr Nguyen] and the deceased member as at the date of death within the meaning of superannuation law. The reasons were provided in the letter of 9 February 2022 which the Trustee confirms, and the new information has not provided reason to change the Trustee’s view.However, the Trustee confirms that it remains satisfied that the deceased member was providing some financial support to [Mr Nguyen] in the form of rent for the Richmond property where [Mr Nguyen] was residing, paying for [Mr Nguyen]’s mobile phone expenses and private health insurance.The Trustee, within its discretion, determined that [Mr Nguyen] was a partial financial dependent on the deceased member as at the date of death. The Trustee has therefore reaffirmed to distribute to [Mr Nguyen] a portion of the death benefit proceeds. The portion of the distribution to [Mr Nguyen] is based on the level of financial support provided by the deceased member to [Mr Nguyen] for which [Mr Nguyen] has provided documentary evidence.The new information does not give reason to the Trustee to change the proposed portion of 20% to [Mr Nguyen].

Ratio Decidendi

Legal Principle Established

Counsel for Mr Nguyen submitted that:(1)the text did not in terms terminate the de facto relationship;(2)the text was sent not to Mr Nguyen, but to Mr Corbisiero’s sister;(3)in any event, analogous cases require in addition to a communication of an intention to terminate a relationship some objective manifestation of that intention,and that in those circumstances no error of law was disclosed.Consideration The jurisdiction of AFCA, and its relevant functions, were explained by Wheelahan J in Tratter v Aware Super [2023] FCA 491 at [13]-[21]. As his Honour explained at [15]-[16]:The content of a complaint that may be made to AFCA in relation to a death benefit is constrained by s 1053(1)(j), which provides that a person may make a complaint in relation to a death benefit only if the complaint is that the decision was unfair or unreasonable. The powers of AFCA conferred by s 1055 of the Corporations Act are aligned with the authorised subject-matter of the complaint. In relation to death benefits, s 1055(3) mandates that AFCA must affirm the decision under review if it is satisfied that the decision, in its operation, was fair and reasonable in all the circumstances –(3)AFCA must affirm a decision relating to the payment of a death benefit if AFCA is satisfied that the decision, in its operation in relation to:(a)the complainant; and(b)any other person joined under subsection 1056A(3) as a party to the complaint;was fair and reasonable in all the circumstances.Correspondingly, AFCA’s powers in s 1055(6) to vary, set aside, substitute, or remit a decision are conditioned by s 1055(5) on AFCA finding that the decision under review relating to the payment of a death benefit is, in its operation, unfair, or unreasonable, or both. The formation of this opinion by AFCA is a subjective jurisdictional fact –(5)If AFCA is satisfied that a decision relating to the payment of a death benefit, in its operation in relation to:(a) the complainant; and(b)any other person joined under subsection 1056A(3) as a party to the complaint;is unfair or unreasonable, or both, AFCA may take any one or more of the actions mentioned in subsection (6), but only for the purpose of placing the complainant (and any other person so joined as a party), as nearly as practicable, in such a position that the unfairness, unreasonableness, or both, no longer exists. It is not necessary to rehearse the other matters to which his Honour drew attention, because no particular issue arises on this appeal about the role or jurisdiction of AFCA. It is sufficient to note for present purposes two things. First, under s 1055A of the Corporations Act, AFCA is required to give reasons for its determination. That obligation is subject to the requirement in s 25D of the Acts Interpretation Act 1901 (Cth) that the reasons should set out the findings on material questions of fact and refer to the evidence or other material on which those findings were based. Secondly, AFCA is not a judicial body. Its obligation to give reasons for its determinations is statutory, and is subject to the standard of reasons established by the Acts Interpretation Act. It follows that in evaluating AFCA’s reasons for its determination, the reasons are to be read as a whole, and not in an over-zealous way with an eye keenly attuned to error.