Flanagan and Australian Prudential Regulation Authority

[2004] AATA 764

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 764

ADMINISTRATIVE APPEALS TRIBUNAL

GENERAL ADMINISTRATIVE DIVISION            N2004/795

Re: John Edward FLANAGAN

Applicant

And: AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Respondent

DECISION

Tribunal:       P.J. Lindsay, Senior Member

Date:             19 July 2004

Place:            Sydney

Decision:      For the reasons given orally at the hearing, the Tribunal dismisses the                  application for want of jurisdiction.

(sgd) P. J. Lindsay, Senior Member

©        Commonwealth of Australia          (2004)

CATCHWORDS

JURISDICTION HEARING – charge over applicant’s real property in respect of debt owed to Commonwealth for child support - application for review of decision of Australian Prudential Regulation Authority not to release preserved benefits for payment of debt - regs 13.25(1) and 13.26 Superannuation Industry (Supervision) Regulations 1994 considered – ss 10 and 344 Superannuation Industry (Supervision) Act 1993 considered - Tribunal does not have jurisdiction – application dismissed for want of jurisdiction

Administrative Appeals Tribunal Act 1975 s.25

Superannuation Industry (Supervision) Act 1993 ss. 10(1), 344

Superannuation Industry (Supervision) Regulations 1994 regs 6.19A(1), 13.25(1), 13.26

Lees v Comcare (1999) 29 AAR 350

REASONS FOR DECISION

P.J. Lindsay, Senior Member

1.      John Edward Flanagan has applied to the Administrative Appeals Tribunal for review of a decision made by the Australian Prudential Regulation Authority on 9 June 2004. The Authority had confirmed its decision of 5 May 2004 not to approve an early release to Mr Flanagan of preserved entitlements he held in a superannuation fund.  The hearing before the tribunal was concerned with jurisdiction since the Authority submitted that the tribunal does not have jurisdiction to review such a decision. Mr Flanagan was self-represented at the hearing and Mr D Sullivan appeared for the Authority.

background

2.      On 5 May 2004 the Local Court (Family Matters) in Sydney found that Mr Flanagan owed the sum of $10,243.55 to the Commonwealth under registered maintenance liabilities. The Local Court ordered Mr Flanagan to pay that amount to the Child Support Registrar by 2 July 2004.  Further, the Local Court ordered that Mr Flanagan’s interest in three parcels of real property be charged with the debt until he has paid the debt in full.  Caveats claiming an equitable interest in the land by reason of the court order were lodged against the title to the properties on 24 May 2004. A letter from the Registrar-General, Department of Lands to the applicant dated 24 May 2004 advised that the caveats do not enable the caveator to deal with the land.  The letter stated “ … the legal effect is to prohibit the Registrar-General from recording certain dealings with the land while the caveat is in force”.

3.      Mr Flanagan is 52. On 29 April 2004 he applied to the Authority on compassionate grounds for the early release of part of his preserved superannuation benefit in the Lifetrack Superannuation Fund so that he could pay the amount owed to the Child Support Agency. As at 31 December 2003 he had a preserved withdrawal balance of $19,826.86 in that fund. 

4.      The Authority notified him by letter dated 5 May 2004 that his application for early release of funds had been refused. 

5.      He asked for the decision to be reconsidered and pointed out to the Authority in his letter of 1 June 2004 that the compassionate ground on which he relied was ‘Funding to buy time for a member where a mortgagee has threatened foreclosure on the member’s home’. He acknowledged that it was the Child Support Agency and not his mortgagee, the Commonwealth Bank, that threatened foreclosure, but he argued that the threat, in the form of the Local Court orders of 5 May 2004 and subsequent lodgment of caveats, was similar to that of action by a mortgagee.

6.      Mr Flanagan submitted a personal income and expenditure statement to the Authority on 1 June 2004 showing that, on a monthly basis, he had a deficit of $143.  He informed the Authority that he did not have funds available to pay the amount ordered by the Local Court, although he stated that he could borrow up to $10,005 on a credit card.  However, he feared that if he drew down on the credit card he would be unable to repay such a borrowing and would then get into difficulty with his other obligations including an instalment arrangement for payment of land tax.  He already owed the Commonwealth Bank a total of $189,711.22, which required an aggregate monthly repayment of $1,799. The bank debts relate to the three properties, one co-owned with his brother, the others being solely owned.  Rent from the properties is the applicant’s only source of income.

7.      In response to the applicant’s request, the Authority on 9 June 2004 confirmed its earlier decision not to make a determination that an amount be released from the Lifetrack Superannuation Fund. The Authority’s response noted that the request for the release was not covered by the relevant regulation in the Superannuation Industry (Supervision) Regulations 1994 (reg 6.19A(1)) dealing with approval of release of funds on compassionate grounds.  In addition the Authority advised the applicant that the SIS Regulations require applications for release on financial hardship grounds to be addressed to the trustee of the relevant superannuation fund and not to the Authority.  Mr Flanagan was informed that if he was dissatisfied with the decision, he could consider making representations to the Ombudsman.

8.      Mr Flanagan applied to the tribunal for review of the Authority’s decision of 9 June 2004 on the basis that the Authority, in confirming the decision of 5 May 2004, had taken a narrow approach to the interpretation of sub-reg 6.19A(1)(f) in the SIS Regulations. The Authority submitted, however, that the SIS Regulations do not provide for the tribunal to review a decision that confirms a refusal to make a determination under reg 6.19A, because such a refusal is not a ‘reviewable decision’ as defined in reg 1.03.

consideration and findings

9. When considering a question of jurisdiction, reference should first be made to s.25 of the Administrative Appeals Tribunal Act 1975 (the AAT Act) which reads:

Tribunal may review certain decisions

(1) An enactment may provide that applications may be made to the Tribunal:

(a) for review of decisions made in the exercise of powers conferred                    by that enactment; or

(b) for the review of decisions made in the exercise of powers                     conferred, or   that may be conferred, by another enactment having   effect under that enactment.

…

(4)  The Tribunal has power to review any decision in respect of which application is made to it under any enactment.

The Full Federal Court has stated that the tribunal’s power to review decisions is based wholly on statute (see, for example Lees v Comcare (1999) 29 AAR 350 at 353).

10.     Division 13.5 in the SIS Regulations is concerned with reconsideration and review of decisions.  Reg 13.25(1) reads:

(1) If a person is dissatisfied with a reviewable decision (other than a decision made by the Regulator under this regulation), the person may give notice in writing to the Regulator within:

(a) the period of 21 days after the day on which the person first receives    notice of the decision; or

(b) such further period as the Regulator reasonably allows;

requesting the Regulator to reconsider the decision.

On reconsideration, the Regulator must confirm the reviewable decision, or vary or revoke the decision: reg 13.25(3). 

The definition of reviewable decision is found in reg 1.03(1):

reviewable decision means a decision of the Regulator:

(a) not to approve an application under subregulation 1.04 (2A) or to approve       such an application subject to conditions; or

(b) to revoke an approval under subregulation 1.04 (2C); or

(ba) to determine consent for subregulation 4.12 (2), paragraph 6.27B (b) or         paragraph 7A.16 (8) (b); or

(bb) to specify a day under regulation 12.08; or

(c) not to approve an application under regulation 12.12 or 12.13; or

(d) to revoke an approval under regulation 12.14; or

(e) after reconsideration under regulation 13.25, to confirm or vary a decision       referred to in any of the preceding paragraphs of this definition.

11.     Review by the tribunal is dealt with in reg 13.26 as follows:

13.26 Application may be made to the Administrative Appeals Tribunal for review of a decision of the Regulator to confirm or vary a decision under subregulation 13.25 (3), including a decision that is taken under subregulation 13.25 (4) to have been confirmed.

12.     We are concerned here with a decision dated 5 May 2004 by the Authority refusing to make a determination under SIS Regulation 6.19A that an amount of Mr Flanagan’s preserved benefits in the Lifetrack Superannuation Fund may be released on compassionate grounds. That decision was subsequently confirmed by the Authority on 9 June 2004.  I will set out relevant parts of reg 6.19A:

REG 6.19A Release of benefits on compassionate grounds

(1)  A person may apply to the Regulator for a determination that an amount of the person's preserved benefits, or restricted non-preserved benefits, in a superannuation entity may be released on the ground that it is required:

(a)  to pay for medical treatment or medical transport for the person or a    dependant; or

(b)  to enable the person to make a payment on a loan, to prevent:

(i)  foreclosure of a mortgage on the person's principal place of   residence; or

(ii)  exercise by the mortgagee of an express, or statutory, power of   sale over the person's principal place of residence; or

(c)  to modify the person's principal place of residence, or vehicle, to         accommodate the special needs of the person, or a dependant, arising from    severe disability; or

(d)  to pay for expenses associated with the person's palliative care, in the          case of impending death; or

(e)  to pay for expenses associated with a dependant's:

(i)  palliative care, in the case of impending death; or

(ii) death; or

(iii) funeral; or

(iv)  burial; or

(f)  to meet expenses in other cases where the release is consistent with a          ground mentioned in paragraphs (a) to (e), as the Regulator determines.

(2)  The Regulator must determine, in writing, that the person has satisfied, for the purposes of subregulation 6.18 (1) or 6.19 (1), a condition of release on a compassionate ground if the Regulator is satisfied that:

(a)  the release is required on a ground mentioned in subregulation (1); and

(b)  the person does not have the financial capacity to meet an expense    arising from that ground.

…

(5) The Regulator cannot be satisfied that money is required on the ground mentioned in paragraph (1) (b) unless the person gives to the Regulator a written statement from the mortgagee that:

(a) payment of an amount is overdue; and

(b) if the person fails to pay the amount, the mortgagee will:

(i) foreclose the mortgage on the person's principal place of residence;                or

(ii) exercise its express, or statutory, power of sale over the person's                   principal place of residence.

(6) A statement under subregulation (5) must include the following information:

(a) the amount that is equal to 3 months' repayments under the mortgage;           and

(b) the amount that is 12 months' interest on the outstanding balance of the         loan at the time the statement is made.

…

13.     I find that the Authority’s decision of 9 June 2004 confirming its earlier decision not to make a determination that an amount of Mr Flanagan’s preserved funds in the Lifetrack Superannuation Fund be released, is not reviewable by the tribunal. This is because the Authority’s earlier decision made on 5 May 2004 is not covered by the definition of reviewable decision in reg 1.03(1). Thus it is not a decision that an enactment of the Parliament has empowered the tribunal to review.

14. Mr Flanagan’s covering letter with the application lodged with the tribunal stated that he wanted the Authority’s decision dated 9 June 2004 reviewed under s.344 of the Superannuation Industry (Supervision) Act 1993.  That section enables a person to request review by the tribunal of a reviewable decision as defined in s.10(1) of the SIS Act. Perusal of that definition of reviewable decision reveals that all the decisions referred to are decisions made under the SIS Act, but not decisions made under the SIS Regulations. The definition does not refer to decisions under reg 6.19A. 

15.     It follows that I do not have jurisdiction to review the merits of the respondent’s decision made on 5 May 2004 and confirmed on 9 June 2004. The application, therefore, should be dismissed for want of jurisdiction.

I certify that the preceding 15 paragraphs are a true copy of the decision and reasons for decision of P.J. Lindsay, Senior Member:

Signed:         
          ..................................................................................……………………………….

Associate

Hearing  19 July 2004

Date of Decision  19 July 2004

Applicant  Self-represented

Respondent  D Sullivan