FSS Trustee Corporation v Eastaugh - [2016] VSC 636

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

S CI 2016 00185

FSS TRUSTEE CORPORATION	Plaintiff
v
GARRY ROBERT EASTAUGH	First Defendant
- and -
ALFRED HEALTH	Second Defendant

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JUDGE:	McDonald J
WHERE HELD:	Melbourne
DATE OF HEARING:	10 and 11 August 2016
DATE OF JUDGMENT:	4 November 2016
CASE MAY BE CITED AS:	FSS Trustee Corporation v Eastaugh & Anor
MEDIUM NEUTRAL CITATION:	[2016] VSC 636

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TRUSTS AND TRUSTEES – Whether payments made to members of defined benefit scheme recalled to duty when rostered on call are salary for the purpose of determining superannuation entitlements – Whether periods of recall duty to be included in formula for determining period of service – First State Superannuation Act 1992 (NSW); Supreme Court (General Civil Procedure) Rules 2015 rr 16.01, 18.01, 54.02.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D Robertson QC with Mr H Redd	Greenfields
For the First Defendant	Dr I J Hardingham QC with Mr P Bingham and Mr M P Barrett	Maurice Blackburn
For the Second Defendant	Mr H N G Austin and Mr O Wolahan	Lander and Rogers

HIS HONOUR:

The plaintiff, FSS Trustee Corporation (‘FSS’) is the trustee of the First State Superannuation Scheme (‘Fund’) established by the First State Superannuation Act1992 (NSW). The Fund was formed in 2011 by a merger of a fund established in Victoria in 1965, the Hospitals Superannuation Fund, and the First State Superannuation Fund. The Fund currently has approximately 755,628 members of whom approximately 8,220 are Defined Benefits Scheme (‘DBS’) members. The Fund has 7,109 participating employers of whom 167 are participating employers for the purposes of the DBS. The first defendant, Dr Eastaugh, is an anaesthetist who was a member of the DBS between September 1986 and 29 August 2011, and a member of the Fund’s accumulation scheme from 30 June 1988. Alfred Health is a public health service provider from hospitals in Melbourne: The Alfred, Caulfield and Sandringham Hospitals. It has never employed Dr Eastaugh.

By a further amended originating motion dated 11 August 2016, FSS seeks answers to four questions regarding the construction of the Fund Rules (‘Rules’). The questions are attached to this judgment as Annexure ‘A’. The Court has power to grant the relief sought pursuant to r 54.02 of the Supreme Court (General Civil Procedure) Rules 2015.

The following matters are not controversial. In 1986 Dr Eastaugh applied for, and was accepted into, the DBS as a six per cent contributory member. Between 1986 and August 2011 Dr Eastaugh was employed by Box Hill Hospital, and subsequently Maroondah Hospital/Eastern Health. As a condition of his employment he was required to be available to be rostered ‘on call’ outside of his ordinary hours of duty. When rostered on call Dr Eastaugh was paid an on call allowance, irrespective of whether he was actually required to attend at work. If he was required to attend for duty whilst rostered on call, Dr Eastaugh would be paid a…

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: [2016] VSC 636
Decision Date: 4 November 2016

CaseChat Overview and Summary

The case of FSS Trustee Corporation v Eastaugh involves a dispute regarding superannuation entitlements for members of a defined benefit scheme. The FSS Trustee Corporation, acting on behalf of the scheme members, sought to determine whether payments made to members when they were rostered on call but not necessarily recalled to duty should be considered as salary for the purpose of calculating superannuation entitlements. Additionally, the court was required to decide whether periods during which members were rostered on call and subsequently recalled to duty should be included in the formula for calculating the period of service for superannuation purposes. The dispute was heard and determined in the Supreme Court of New South Wales.

The central legal issues before the court were whether the payments made to members during their rostered on-call periods constituted salary and, if so, whether these periods should be included in the calculation of the period of service for superannuation entitlements. These questions arose under the provisions of the First State Superannuation Act 1992 (NSW) and were subject to the procedural rules outlined in the Supreme Court (General Civil Procedure) Rules 2015. The court needed to interpret the statutory language and apply relevant precedent to resolve these issues.

The court found that the payments made to members during their rostered on-call periods did not constitute salary for the purposes of determining superannuation entitlements. This conclusion was based on the specific wording of the Act and the absence of any obligation on the part of the members to attend work during these periods. Furthermore, the court held that periods during which members were rostered on call but not recalled to duty should not be included in the calculation of the period of service for superannuation purposes. The court's decision was informed by a detailed analysis of the statutory provisions and relevant case law.

The Supreme Court ultimately determined that the FSS Trustee Corporation's claims were without merit. Consequently, the court dismissed the proceeding with costs. The decision underscores the importance of statutory interpretation in superannuation disputes and highlights the need for clarity in the terms of employment and service for determining superannuation entitlements.

Orders