Henderson and Commissioner for Superannuation

[2009] AATA 160

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009]AATA 160

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2008/5990

GENERAL ADMINISTRATIVE  DIVISION		)
Re		DIANNE HENDERSON

Applicant

And COMMISSIONER FOR SUPERANNUATION

Respondent

DECISION

Tribunal Mr S. Webb, Member

Date13 March 2009

PlaceCanberra

Decision The application for an extension of time in which to lodge an application is rejected.

.............[Signed].................................

Mr S. Webb, Member

CATCHWORDS

PRACTICE AND PROCEDURE - extension of time - 13 year delay - no good reason - no effort to agitate rights of review - prejudice to the Commonwealth - merit of application does not outweigh factors against extension of time - application rejected

Administrative Appeals Tribunal Act 1975 s 29

Superannuation Act 1976 ss 137, 157

Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344

Comcare v A’Hearn (1993) 45 FCR 441

Budd v Secretary, Department of Education, Employment and Workplace Relations [2008] FCA 1540

Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541

Castellano v Inspector-General in Bankruptcy (1998) 51 ALD 254

Zizza v Commissioner of Taxation [1999] FCA 848

Commissioner for Superannuation v Boardman (1994) 50 FCR 236

Kuljic v Secretary, Department of Social Security (1994) 33 ALD 121

Riverside Nursing Care Pty Ltd v Secretary, Department of Health and Aged Care [2003] FCA 1065

REASONS FOR DECISION

13 March 2009 Mr S. Webb, Member         

1.      Dianne Henderson commenced Commonwealth employment in 1977. She made contributions to the Commonwealth Superannuation Scheme (CSS). In August 1986 she left her employment in the Department of Finance. She elected not to preserve her superannuation benefits and rights in the CSS, opting instead to roll over her accumulated contributions into a self managed fund. In 1991 Ms Henderson requested a late election to preserve her benefits and rights in the CSS. Her request was denied. In January 1995 the Commissioner reconsidered and affirmed that decision. Ms Henderson has applied for an extension of time in which to lodge an application for review of the Commissioner’s decision.

2.      Documents were tendered during the hearing, to which I have had careful regard. It is clear that Ms Henderson has a number of concerns about her superannuation arrangements, particularly concerning the information she was provided prior to 1995.[1] Ms Henderson asserts that there are reasonable grounds warranting the grant of an extension of time in the particular circumstances. She asserts that she was not properly advised about the effects of rolling over her superannuation contributions in 1986 and not preserving her benefits and rights in the CSS. She says that she was not advised about the employer component of benefits she otherwise could have preserved in the CSS by election. Ms Henderson asserts that in 1991, when she became aware of the effect of roll-over of the employer component, she applied to make a retrospective election to preserve benefits in the CSS. This application was rejected. She applied for review but the decision to reject her request for late election was affirmed. Ms Henderson says that she was treated unfairly by the Commissioner: her personnel file could not be found and the decision to reject the application was made in a cursory and dismissive manner, without all the relevant information.

[1] See Exhibit E.

3.      Ms Henderson accepts that she was provided with information about her right to apply to the Administrative Appeals Tribunal for review of the Commissioner’s decision, including the applicable 28 day time limit. She asserts, however, that she received that information in January 1995 on returning from a family holiday and, with only part of the 28 day period remaining, she felt that she was not able to marshal sufficient information to make an application in the allotted time. She says that she felt very unhappy about this state of affairs but she did not know how to progress the matter. Ms Henderson asserts that she was informed, years later, about options to advance her case and, as a result, she approached the Superannuation Complaints Tribunal. That Tribunal, however, decided it had no jurisdiction to deal with her case. Thus, finally, Ms Henderson says that she was left with no option but to apply to the Administrative Appeals Tribunal for an extension of time in which to lodge an application for review of the Commissioner’s 1995 decision. I note in passing that, contrary to her stated reasons for the application at Exhibit B, Ms Henderson’s case is not directed to the decision she obtained from the Superannuation Complaints Tribunal.[2]

[2] Exhibit C.

4.      In all of the circumstances, Ms Henderson says that justice has not been administered in her case and, even though many years have passed, justice can only be served by granting an extension of time and reviewing the Commissioner’s 1995 decision, which she maintains is manifestly wrong. She asserts that there is little or no prejudice to the Commonwealth if the extension of time is allowed; her personnel file could not be found in 1991 and there is no evidence that it has been found since. In Ms Henderson’s submission, in 1986 very little information was provided to employees about superannuation and the quantum effects, in relation to the employer component, of not preserving rights and benefits in the CSS on resignation from Commonwealth employment. She asserts that other cases, similar to hers, have been decided in favour of employees. Ms Henderson says that her accountant did not give her any information concerning the employer component of her accumulated superannuation benefits in August 1986 and she remained ignorant of that aspect of her superannuation until 1991. In her submission, if information had been provided, and clearly explained at the time, about the effects of rolling over her accumulated superannuation contributions into a self-managed fund, she would have made a different decision and would have elected to preserve her benefits and rights in the CSS. Furthermore, Ms Henderson says that the only reason she resigned from Commonwealth employment in 1986 was because her employing Department would not accept her application to reduce her hours of work in order to care for her children; she resigned and took up contract work with the Tax Office, later rejoining the Australian Public Service as an ongoing employee. Ms Henderson says that these circumstances were unfair and caused her to act in ignorance, effectively reducing the value of her superannuation. For these reasons Ms Henderson says that an extension of time should be granted.

5.      As will appear I do not agree.

6.      Principles concerning the exercise of the discretion to extend time have been discussed in the oft cited cases of Hunter Valley Developments Pty Ltd v Cohen[3], Comcare v A’Hearn[4], and more recently in Budd v Secretary, Department of Education, Employment and Workplace Relations.[5] In Budd’s case, Cowdroy J set out the principles to be considered when deciding whether to grant an extension of time in which to make an application for review:[6]

“1. There is no onus of proof upon an applicant for extension of time though an application has to be made. Special circumstances need not be shown, but the court will not grant the application unless positively satisfied it is proper to do so. The "prescribed period" of 28 days is not to be ignored.

2. It is a prima facie rule that the proceedings commenced outside the prescribed period will not be entertained. It is not a pre-condition for success in an application for extension of time that an acceptable explanation for delay must be given. It is to be expected that such an explanation will normally be given as a relevant matter to be considered, even though there is no rule that such an explanation is an essential pre-condition.

3. Action taken by the applicant other than by making an application to the court is relevant in assessing the adequacy of the explanation for the delay. It is relevant to consider whether the applicant has rested on his rights and whether the respondent was entitled to regard the claim as being finalised.

4. Any prejudice to the respondent, including any prejudice in defending the proceeding occasioned by the delay, is a material factor militating against the grant of an extension.

5. The mere absence of prejudice is not enough to justify the grant of an extension.

6. The merits of the substantial application are properly to be taken into account in considering whether an extension of time should be granted.

7. Considerations of fairness as between the applicant and other persons otherwise in a like position are relevant to the manner of exercise of the court’s discretion.” (Citations removed)

[3] (1984) 3 FCR 344.

[4] (1993) 45 FCR 441.

[5] [2008] FCA 1540.

[6] [2008] FCA 1540 at [18]

7.      It is plain enough from the cases that such principles should not be applied rigidly. Consideration must be given to the legislative context. What is required is the careful consideration of all relevant factors, weighing the related evidence, to determine whether it is fair and equitable in the particular circumstances to grant an extension of time. In that consideration prescribed limitation periods must be taken into account as the general rule, with any extension of time being an exception to the general rule.[7]

[7] Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541.

8.      The present issue to be determined arises in relation to the Administrative Appeals Tribunal Act 1975 (AAT Act), and it is in that context that the discretion to extend time must be considered. Generally, the time for making an application for review of a decision under the AAT Act is limited to 28 days following the date on which the decision was given to the person.[8] There is discretion to extend the time if it is reasonable to do so in the circumstances.[9] The time limit and the discretion are not modified by operation of the Superannuation Act 1976 (Superannuation Act). I note that provision is made in the Superannuation Act for an election to preserve superannuation rights and benefits outside the 21 day period that is generally applied, if it is desirable to do so.[10] It appears that in 1992 and 1995 the Commissioner decided not to exercise this discretion in Ms Henderson’s case. Those decisions are the subject of Ms Henderson’s substantive application for review and are not presently for determination, although the prospective merits of the substantive application is a relevant matter to have regard to.

[8] Administrative Appeals Tribunal Act 1975, s 29(2).

[9] Administrative Appeals Tribunal Act 1975, s 29(7).

[10] Superannuation Act 1976, s 157(1) with reference to subs 137(1).

9.      Ms Henderson has given an explanation why she did not lodge an application to the AAT within the prescribed 28 day period in 1995. One can understand the circumstances she describes but she has not given any explanation as to why she did not contact the Tribunal at the time to explore her options. One may reasonably expect that a person such as Ms Henderson, with tertiary qualifications and almost 10 years experience as a Commonwealth employee, would have explored her options within the prescribed time if she intended to pursue the matter as she now asserts. She did not. Ms Henderson’s explanation for the ensuing 13 year delay is not one that is compelling or that propels me to the result for which she contends.  Nor is it consistent with her present assertion that she did not rest on her rights and wanted to pursue the matter. But that is not the end of the matter; as can be seen from A’Hearn’s case, the want of a reasonable explanation is not necessarily determinative.

10.     It appears that Ms Henderson did nothing to alert the Commissioner or the Tribunal or anyone else about her purported intention to pursue the matter. By Ms Henderson’s own account, family life and other events intervened, forcing her interest in the dispute about her superannuation “onto the back burner”. This state of affairs persisted until 2008, when Ms Henderson came across papers concerning her previous dispute with the Commissioner when moving house. In Ms Henderson’s own words “I had not looked at these papers since 1995…”.[11] It appears to me that even if Ms Henderson remained unhappy about the Commissioner’s 1995 decision, she did nothing to advance her purported interest in challenging that decision for 13 years, during which period it can reasonably be said that she rested on her rights. Ms Henderson, I am satisfied, took no action to make the Commissioner aware of her purported desire or intention to contest the decision in question.  I accept that it was open to the Commissioner to conclude that Ms Henderson’s matter had come to an end and was closed. There was no application for review lodged within the prescribed time nor was there any communication from Ms Henderson to the contrary for over 13 years.  Foster J observed in Castellano v Inspector-General in Bankruptcy:[12]

“It is important, therefore, to bear in mind in an extension of time application that when regard is paid to activities by the applicant, which have been undertaken instead of making the appropriate application, those activities are of significance only if they are such as to have brought to the attention of the respondent to the application that the applicant has it in mind, even though he is becoming out of time, to take some steps to assert the rights which would be given effect by his making the relevant application.  Conversely, he will have it count against him in the application if he has taken steps which might allow the respondent to think that the matter has come to an end.”

[11] Exhibit A, p 4.

[12] (1998) 51 ALD 254 at 259.

Such is the case in the present application.

11. The Commissioner asserts that the matter has been considered closed for more than 13 years. I accept that it was. Not only had the 21 day limit imposed by s137 of the Superannuation Act elapsed at first instance, the discretion conferred by s157 had been duly considered, without exercise in Ms Henderson’s case, and the 28 day limit imposed by s29 of the AAT Act also elapsed without Ms Henderson taking any steps to that further her purported interest. These factors weigh heavy against the grant of an extension of time.

12.     The Commissioner asserts that there will be significant prejudice to the Commonwealth if the matter is allowed to proceed. The prejudice asserted pertains to the difficulty of investigating Ms Henderson’s request and disputed facts more than 22 years after the fact. Even though there is no evidence to contradict what Ms Henderson says about her personnel file, that is not the sole consideration. It can readily be accepted that the Commonwealth may encounter difficulty obtaining evidence about events in 1986 to which Ms Henderson has alluded, concerning the advice she obtained from her accountant and from her employer and the CSS at the time, for example. Even if those concerned could be identified and located, it is reasonable to assume that the quality of their evidence concerning Ms Henderson’s case and the information and advice that was provided to her in August 1986 would have been eroded by the passage of more than 22 years. Similarly, while it is possible that records of conversations between Ms Henderson and her accountant or her employer or the CSS in August 1986 concerning superannuation arrangements may exist in archive records, the possibility is remote and the likelihood of obtaining such documents after 22 years is low, although documents of a more general policy character may exist. Such material evidence goes to the heart of Ms Henderson’s complaints. Plainly enough there is prejudice to the Commonwealth in relation to investigating the substantive issues Ms Henderson is attempting to agitate as a result of the substantial delay.

13.     Prejudice in this matter, however, does not flow from delay alone.  Prejudice lies in the re-opening of a matter previously closed, which is not of necessity purely a function of delay.  It arises because Ms Henderson failed to indicate any intention to pursue the matter and, effectively, rested on her rights.  The Commissioner asserts further prejudice in the form of the additional cost of resources necessitated by such investigations at this late stage, not least in relation to legal representation.  Being mindful of the comments of the Full Federal Court in Zizza v Commissioner of Taxation[13]  at paragraph 18 concerning the risk of double counting delay,[14]  I accept that there will be an additional burden placed upon the Commissioner in relation to re-opening Ms Henderson’s case, especially in view of the lengthy delay. These considerations weigh against the grant of an extension of time.

[13] [1999] FCA 848.

[14] See also von Doussa J in Commissioner for Superannuation v Boardman (1994) 50 FCR 236 at 249.

14.     Turning to consider the prospective merits of Ms Henderson’s application, there is some evidence to support her application, on which basis it cannot be said that the application is so lacking in merit that permitting it to proceed would be an exercise in futility.[15] Ms Henderson’s case, however, on the present evidence is not strong, although it must be said that if the matter proceeds it will turn on evidence that is not before me.  The evidence that is before me does not suggest that the decision in question was improperly made or infected with legal error.[16]

[15] See Kuljic v Secretary, Department of Social Security (1994) 33 ALD 121 at 122.

[16] Riverside Nursing Care Pty Ltd v Secretary, Department of Health and Aged Care [2003] FCA 1065 at [20]).

15. I do not accept Ms Henderson’s contention that her case is one that is so compelling or manifestly unfair that justice can only be served by granting the extension of time. The matter of the late election was open for her to agitate and ventilate in the proper course 13 years ago. Ms Henderson was aware of her review rights in the AAT in January 1995. There is nothing in the evidence before me to suggest that she was prevented from exercising those rights at the time by ill health or other serious circumstances, although I note her evidence concerning her family circumstances from time to time thereafter. Ms Henderson says that she did not have the resources to do so; she was working part-time and caring for her two children. Those were matters that she could have taken up with the AAT, but there is no evidence that she did. Ms Henderson’s assertions concerning unfairness have not been properly tested and are not presently supported by probative evidence. On the present evidence her case does not raise serious issues of public importance concerning the application or maladministration of the Superannuation Act, and no clear public interest prejudice is likely to arise if the extension of time is not granted. These matters weigh against exercising the discretion to grant an extension of time.

16.     I do not accept the ‘floodgate’ argument that was put, but only tentatively, by the Commissioner. As von Doussa J said in Boardman’s case, “Great care must be exercised in treating this argument as one against the exercise of the discretion”.[17] While it can be accepted that there may be cases, perhaps even many cases, in which Commonwealth employees in the 1970s and 1980s were not provided with detailed or adequate information about aspects of their superannuation preservation rights and benefits on ceasing that employment, in relation to the employer component for example, Ms Henderson’s case emerges from that background. By her own account she obtained advice from an accountant, Mr Stephen Bates of SA Bates and Company, before making any election in relation to her CSS account and, accepting that advice, rolling her accumulated CSS contributions into a private fund.[18] Thus it can be seen that her case is not one in which she simply relied on what she was told by her employer; she obtained independent advice from a suitably qualified person and acted upon it. The precise details of the advice Mr Bates gave Ms Henderson cannot properly be assessed on the present evidence. Ms Henderson asserts that Mr Bates did not inform her about the employer component of her accumulated rights and benefits in the CSS at the time. On the other hand, Ms Henderson’s request for payment of her superannuation on 1 September 1986 clearly states her intention: “I plan to deposit my superannuation immediately into an Approved Deposit Fund, and understand that in this case no tax is immediately payable”.[19]

[17] Commissioner for Superannuation v Boardman (1994) 50 FCR 236.

[18] Exhibit D.

[19] Exhibit D.

17. The quantum of disadvantage Ms Henderson asserts is not clear on the evidence. Nor is it possible to discern with any accuracy whether she would have made a different decision in 1986 if different information and advice had been provided. The Commissioner’s discretion pursuant to s157 of the Superannuation Act to recognise a late election as being within time (for the purposes of s137 of that Act) requires consideration of all of the circumstances. Determining whether it is desirable to exercise the discretion is an exercise of fairness in doing justice to Ms Henderson and the CSS. On the evidence before me it is difficult to properly assess the merits of Ms Henderson’s case; it is neither futile nor overwhelming nor compelling.

18.     As it appears to me granting an extension of time in this case may be unfair to other applicants for review who have pursued their rights within the allotted time and to others who have not pursued their right of review beyond the prescribed period, perhaps being mindful of the need to do so within the specific time limit.  The Parliament prescribed an appropriate period in which a person may apply for review of a decision in this Tribunal and conferred discretion to extend the time in worthy cases, thereby allowing flexibility to address unfairness that may flow from the rigid imposition of a time limit. Subject to merit worthy exceptions, achieving the certainty of closure on completion of the prescribed period is important not only in the context of this Tribunal, but also in the context of the orderly operation and administration of the CSS.

19.     Justice is not served simply by granting an extension of time to suit the personal circumstances of a prospective applicant, such as Ms Henderson, who has rested on her rights for a long period of time in the full knowledge of the particular time limit. In this case I am satisfied on balance that Ms Henderson’s interest in re-opening her case against the Commissioner’s decision in January 1995 does not outweigh the counter-veiling interests and factors that militate against exercising the discretion.

20.     For these reasons Ms Henderson is not granted an extension of time in which to make an application.

I certify that the 20 preceding paragraphs are a true copy of the reasons for the decision herein of Mr S Webb, Member.

Signed: ............[Signed]....................................
  Demelza-Rose Gale           
  Associate

Date of Hearing:  27 February 2009

Date of Decision:  13 March 2009

Representative for the Applicant: Unrepresented

Counsel for the Respondent:      Mr A. Dillon

Solicitor for Respondent:             Australian Government Solicitor