FSS Trustee Corporation v Eastaugh - [2017] VSCA 218

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2016 0162

FSS TRUSTEE CORPORATION (ACN 118 202 672)	Applicant
v
GARRY ROBERT EASTAUGH	First Respondent
ALFRED HEALTH	Second Respondent

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JUDGES:	TATE and SANTAMARIA JJA and KEOGH AJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	16 May 2017
DATE OF JUDGMENT:	29 August 2017
MEDIUM NEUTRAL CITATION:	[2017] VSCA 218
JUDGMENT APPEALED FROM:	[2016] VSC 636 (McDonald J)

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SUPERANNUATION – Appeal – Construction of superannuation trust deed and rules – Benefit entitlements – Whether recall payments made to members of defined benefit scheme are salary for the purpose of determining superannuation entitlements – Hospitals Superannuation Act 1988 – First Superannuation Act 1992 (NSW) – Practical and purposive approach to interpretation of superannuation schemes – Ansett Australia Ground Staff Superannuation Plan Pty Ltd v Ansett Australia Ltd (2002) 174 FLR 1; Stevens v Bell [2002] EWCA Civ 672, considered – Leave to appeal granted – Appeal dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr C M Caleo QC with Mr H Redd	Greenfields
For the First Respondent	Mr D G Collins QC with Mr P Bingham and Dr M P Barrett	Maurice Blackburn Lawyers
For the Second Respondent	No appearance	Lander & Rogers

TATE JA:

I have had the benefit of reading, in draft form, the reasons of Keogh AJA. I agree, for the reasons his Honour gives, that leave to appeal should be granted but the appeal dismissed.

SANTAMARIA JA:

I agree with the reasons of Keogh AJA.

KEOGH AJA:

Between 1986 and 2011, Dr Eastaugh was employed as an anaesthetist in various public hospitals. In 1986 Dr Eastaugh applied and became a member of a defined benefits superannuation scheme called the Hospitals Superannuation Fund. In 2011 the Hospitals Superannuation Fund became part of the First State Superannuation Scheme (‘the Fund’). The applicant, FSS Trustee Corporation (‘FSS’), is trustee of the Fund. The Fund is governed by the First State Superannuation Trust Deed and by the Rules made thereunder (‘the Rules’).

In 2011 Dr Eastaugh retired from the Fund and applied to have the lump sum defined benefit in the Fund to which he was entitled rolled over into his self-managed superannuation fund. The entitlement of defined benefit members fell to be determined pursuant to Section 3 of the Rules. Calculation of the lump sum defined benefit to which a member was entitled depended on the member’s ‘salary’, a term defined by r 3B.11.1 of the Rules.

Based on statements provided to him from time to time by the trustee, Dr Eastaugh expected to receive a defined benefit lump sum of over $1.4 million. When, after a delay of some 18 months, FSS responded to Dr Eastaugh’s application, the amount of the benefit paid was just over $900,000. FSS has since sought to recover part of that amount as an overpayment. The reduction in Dr Eastaugh’s

defined benefit lump sum is in part explained by the different approach taken by the parties to the construction of the definition…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] VSCA 218
Decision Date: 29 August 2017

CaseChat Overview and Summary

The case of FSS Trustee Corporation v Eastaugh was heard in the court, which involved a dispute concerning the interpretation of a superannuation trust deed and rules. The primary issue at hand was whether recall payments made to members of a defined benefit scheme constituted salary for the purpose of determining their superannuation entitlements. The case hinged on the interpretation of the Hospitals Superannuation Act 1988 and the First Superannuation Act 1992 (NSW), and it required the court to adopt a practical and purposive approach in interpreting the superannuation schemes.

The legal issues the court was required to decide included the interpretation of the superannuation trust deed and rules, the applicability of recall payments as salary for determining superannuation entitlements, and the appropriate approach to interpreting superannuation schemes. The court had to consider relevant legislation and previous cases, including Ansett Australia Ground Staff Superannuation Plan Pty Ltd v Ansett Australia Ltd (2002) 174 FLR 1 and Stevens v Bell [2002] EWCA Civ 672, to reach its decision. The court's task was to determine the correct interpretation of the trust deed and rules while considering the purpose and context of the superannuation schemes.

The court adopted a practical and purposive approach in interpreting the superannuation trust deed and rules, considering the context and purpose of the schemes. It found that recall payments did not constitute salary for the purpose of determining superannuation entitlements. The court's reasoning was based on the language of the legislation, the purpose of the superannuation schemes, and the precedent set by previous cases. As a result, the appeal was dismissed, and leave to appeal was granted. The court's decision clarified the interpretation of superannuation trust deeds and rules and provided guidance on the approach to be taken in similar cases.

The final orders of the court were that the appeal was dismissed, and leave to appeal was granted. The decision provided clarity on the interpretation of superannuation trust deeds and rules, specifically regarding the characterisation of recall payments as salary. The court's reasoning and the purposive approach it adopted in interpreting the superannuation schemes will be of significant importance to practitioners dealing with similar cases in the future.

Orders