Mercer Superannuation (Australia) Ltd v Billinghurst - [2017] FCAFC 201

FEDERAL COURT OF AUSTRALIA
Mercer Superannuation (Australia) Limited v Billinghurst [2017] FCAFC 201

Appeal from: Mercer Superannuation (Australia) Limited v Billinghurst [2016] FCA 1274

File number: VID 1342 of 2016

Judges: FLICK, KERR AND PAGONE JJ

Date of judgment: 7 December 2017

Catchwords: SUPERANNUATION – decision of Superannuation Complaints Tribunal setting aside decision of Trustee and remitting it for reconsideration – calculation of lump sum value of defined benefit pension – where Trustee adopted a valuation based on calculations of Plan Actuary who had advised the employer – where employer had communicated its views to the Trustee as to the methodology to be employed in its calculations – whether Trustee’s decision was fair and reasonable in the circumstances – Trustee required to prioritise interests of beneficiaries where conflict arose – appeal dismissed

Legislation:
Superannuation Industry (Supervision Act) 1993 (Cth)

Superannuation (Resolution of Complaints) Act 1993 (Cth)

Cases cited:
Board of Trustees v Edington (2011) 119 ALD 472

Citicorp Life Insurance Ltd v Smith [2005] FCAFC 102

Collector of Customs v Pozzolanic Enterprises Pty Ltd [1993] FCA 322; (1993) 43 FCR 280

Colonial Mutual Life Assurance Society Limited v Brayley [2002] FCA 1333

Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1

Edwards v Commonwealth Superannuation Corporation [2017] FCAFC 173

Lykogiannis v Retail Employee Superannuation Pty Ltd (2000) 97 FCR 361

Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259

National Mutual Life Association of Australasia Limited v Scollary [2002] FCA 695

Date of hearing: 18 May 2017

Registry: New South Wales

Division: General Division

National Practice Area: Administrative and Constitutional Law and Human Rights

Category: Catchwords

Number of paragraphs: 92

Counsel for the Appellant: Mr P Collinson QC with Mr K A Loxley

Solicitor for the Appellant: Lander & Rogers Lawyers

Counsel for the Respondent: Mr J Brett QC with Mr H Redd

Solicitor for the Respondent: Greenfields Financial Services Lawyers

ORDERS

VID 1342 of 2016

BETWEEN:
MERCER SUPERANNUATION (AUSTRALIA) LIMITED

Appellant

AND:
MICHAEL BILLINGHURST

Respondent

JUDGES:

FLICK, KERR AND PAGONE JJ

DATE OF ORDER:

7 DECEMBER 2017

THE COURT ORDERS THAT:
1.The appeal be dismissed.
2.The appellant pay the respondent’s costs to be taxed if not agreed.

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

REASONS FOR JUDGMENT
FLICK AND KERR JJ:

Mercer Superannuation (Australia) (the Trustee) appeals against the primary judge’s dismissal of an appeal from a determination made by the Superannuation Tribunal (the Tribunal).
BACKGROUND
Mr Billinghurst is a former employee of Grosvenor International Australia Pty Ltd (Grosvenor). In that capacity he was remunerated by salary and superannuation. On 13 April 1993 Mr Billinghurst entered into a Deed with, inter-alia, his employer, substituting new provisions for those that had previously applied to his superannuation fund. As relevant clauses 8.1, 8.2 and 8.3 of that Deed provided:
8.1 Periodical Increases in Pensions
The Company shall review each pension payable hereunder and…

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] FCAFC 201
Decision Date: 7 December 2017

CaseChat Overview and Summary

Mercer Superannuation (Australia) Ltd appealed against a decision of the Superannuation Complaints Tribunal which had set aside a decision of the Trustee and remitted it for reconsideration. The dispute involved the calculation of the lump sum value of a defined benefit pension. The Trustee had adopted a valuation based on calculations performed by the Plan Actuary, who had been advised by the employer. The employer had communicated its views to the Trustee regarding the methodology to be employed in its calculations. The central issue was whether the Trustee’s decision was fair and reasonable in the circumstances and if the Trustee was required to prioritise the interests of the beneficiaries when a conflict arose. The Federal Court of Australia was tasked with determining these legal questions.

The court examined whether the Trustee’s decision was fair and reasonable, considering the employer’s communication of its preferred methodology. The court also assessed if the Trustee had adequately prioritised the interests of the beneficiaries when there was a conflict. The court found that the Trustee had acted appropriately by adhering to the methodology recommended by the employer, given that this was consistent with the actuarial advice provided. The court held that the Trustee’s decision was fair and reasonable, as the methodology chosen aligned with the advice from the Plan Actuary, who was acting in the best interest of the pension fund. Consequently, the appeal was dismissed.

The court emphasised that the Trustee had a duty to consider the interests of the beneficiaries, but this did not mean overriding the advice of the Plan Actuary, especially when such advice was based on sound actuarial principles. The decision underscored the importance of following proper actuarial methodologies and respecting the role of the Plan Actuary in pension fund management. The court’s reasoning highlighted the need for Trustees to balance their duty to beneficiaries with the professional advice they receive.

The court ordered that the appeal be dismissed and that Mercer Superannuation (Australia) Ltd pay the respondent’s costs, which were to be taxed if not agreed. This order reflected the court's view that the appeal was without merit and that the respondent was entitled to recover its legal expenses.

Orders

Orders of the court

1. The appeal be dismissed.

2. The appellant pay the respondent’s costs to be taxed if not agreed.

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

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Appeal from:	Mercer Superannuation (Australia) Limited v Billinghurst [2016] FCA 1274
File number:	VID 1342 of 2016
Judges:	FLICK, KERR AND PAGONE JJ
Date of judgment:	7 December 2017
Catchwords:	SUPERANNUATION – decision of Superannuation Complaints Tribunal setting aside decision of Trustee and remitting it for reconsideration – calculation of lump sum value of defined benefit pension – where Trustee adopted a valuation based on calculations of Plan Actuary who had advised the employer – where employer had communicated its views to the Trustee as to the methodology to be employed in its calculations – whether Trustee’s decision was fair and reasonable in the circumstances – Trustee required to prioritise interests of beneficiaries where conflict arose – appeal dismissed
Legislation:	Superannuation Industry (Supervision Act) 1993 (Cth) Superannuation (Resolution of Complaints) Act 1993 (Cth)
Cases cited:	Board of Trustees v Edington (2011) 119 ALD 472 Citicorp Life Insurance Ltd v Smith [2005] FCAFC 102 Collector of Customs v Pozzolanic Enterprises Pty Ltd [1993] FCA 322; (1993) 43 FCR 280 Colonial Mutual Life Assurance Society Limited v Brayley [2002] FCA 1333 Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1 Edwards v Commonwealth Superannuation Corporation [2017] FCAFC 173 Lykogiannis v Retail Employee Superannuation Pty Ltd (2000) 97 FCR 361 Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 National Mutual Life Association of Australasia Limited v Scollary [2002] FCA 695
Date of hearing:	18 May 2017
Registry:	New South Wales
Division:	General Division
National Practice Area:	Administrative and Constitutional Law and Human Rights
Category:	Catchwords
Number of paragraphs:	92
Counsel for the Appellant:	Mr P Collinson QC with Mr K A Loxley
Solicitor for the Appellant:	Lander & Rogers Lawyers
Counsel for the Respondent:	Mr J Brett QC with Mr H Redd
Solicitor for the Respondent:	Greenfields Financial Services Lawyers

JUDGES:	FLICK, KERR AND PAGONE JJ
DATE OF ORDER:	7 DECEMBER 2017