Merkel v Superannuation Complaints Tribunal - [2010] FCA 564

FEDERAL COURT OF AUSTRALIA
Merkel v Superannuation Complaints Tribunal [2010] FCA 564

Citation: Merkel v Superannuation Complaints Tribunal [2010] FCA 564

Parties: MARILYN MAY MERKEL v SUPERANNUATION COMPLAINTS TRIBUNAL, FIONA POWERS and TELSTRA SUPER PTY LTD (ACN 007 422 522)

File number(s): VID 534 of 2009

Judge: GRAY J

Date of judgment: 4 June 2010

Catchwords:
ADMINISTRATIVE LAW – procedural fairness – whether denial of fair hearing – failure to make available adverse information that was credible, relevant and significant to the decision to be made and was relied on by decision-maker – decision that complaint outside jurisdiction of Superannuation Complaints Tribunal – decision based on information in documents provided by trustee of superannuation fund – documents not made available to complainant, even after request for them, when initial decision being reviewed by Tribunal’s director

SUPERANNUATION – Superannuation Complaints Tribunal – jurisdiction and powers – whether complaint related to the management of a fund as a whole – decision of trustee of superannuation fund to pay to beneficiary of deceased member a sum less than that standing to the member’s credit, by removing gains accumulated after death and substituting interest – whether decision made in application of rule or policy relates to management of fund as a whole

COSTS – administrative decision-maker – whether order for costs should be made against decision-maker when decision set aside – decision by officer of Superannuation Complaints Tribunal that complaint was outside tribunal’s jurisdiction – decision affirmed by tribunal’s director – denial of procedural fairness – reliance on information supplied by trustee of superannuation fund that was not made available to complainant – failure to make available that information, even when requested by complainant – decision made without regard to authorities on statutory provision under which it was made – no subsequent action to remedy jurisdictional error

Legislation: Acts Interpretation Act 1901 (Cth), s 34AB(d)
Administrative Decisions (Judicial Review) Act 1977 (Cth), s 16(1), 16(1)(a), 16(1)(b)
Constitution, s 75(v)
Federal Court of Australia Act 1976 (Cth), s 43(1), 43(2)
Judiciary Act 1903 (Cth), s 39B
Freedom of Information Act 1982 (Cth)
Superannuation Industry (Supervision) Act 1993 (Cth), s 10(1)
Superannuation (Resolution of Complaints) Act 1993 (Cth), ss 3(1), 3(2), 4, 6, 7(1), 7A(1), 9(1), 10, 12(1), 14AA, 14, 14(1), 14(5), 14(6), 15(1), 17, 17(1), 18(1), 24, 24(1), 27, 27(a), 27(b), 27(c), 32(1), 32(2), 33, 34, 35, 37, 37(1)(b), 40, 46, 46(1), 59(1), 62(2)

Cases cited: Alice Springs Commercial Broadcasters Pty Ltd v Australian Broadcasting Tribunal (unreported, Federal Court of Australia, O’Loughlin J, 14 October 1992) cited
Charter Homes Pty Ltd v Housing Guarantee Fund Ltd (unreported, Supreme Court of Victoria, Chernov J, 10 June 1997) cited
Commonwealth Superannuation Scheme Board v Dexter [2004] FCA 1434 cited
Employers First v Tolhurst Capital Ltd [2005] FCA 616 (2005) 143 FCR 356 affirmed
Kioa v West (1985) 159 CLR 550 followed
Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11 (2002) 209 CLR 597 cited
Muin v Refugee Review Tribunal [2002] HCA 30 (2002)…

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: [2010] FCA 564
Decision Date: 4 June 2010

CaseChat Overview and Summary

The case of Merkel v Superannuation Complaints Tribunal involves the complainant, Mr Merkel, challenging a decision by the Superannuation Complaints Tribunal (SCT) that his complaint was outside the SCT's jurisdiction. The Tribunal had determined that Mr Merkel's complaint related to the management of a fund as a whole and thus was not within the SCT's jurisdiction. The crux of the dispute lies in whether the SCT's decision was legally sound and whether it adhered to the principles of procedural fairness by providing Mr Merkel with all relevant information that influenced the decision-making process.

The central legal issues revolved around the jurisdiction of the SCT, procedural fairness, and the correctness of the decision-making process. Specifically, the court had to determine if the SCT's decision was based on procedurally fair principles, particularly whether it failed to provide Mr Merkel with all relevant and credible information that was considered by the decision-makers. Additionally, the court needed to examine whether the SCT's decision that the complaint was outside its jurisdiction was correct and if the SCT had relied on authorities that were pertinent to the statutory provision under which the decision was made.

The court concluded that the SCT's decision was flawed on several grounds. Firstly, the SCT did not provide Mr Merkel with all the information that was relied upon in making the decision, which breached the principles of procedural fairness. Secondly, the SCT's reliance on documents provided by the trustee of the superannuation fund, which were not made available to Mr Merkel, even after his request, was a significant procedural error. Moreover, the SCT's decision did not consider relevant authorities that would have guided the interpretation of the statutory provision under which the decision was made. Consequently, the court set aside the SCT's decision and referred Mr Merkel's complaint back to the SCT for proper consideration.

The final orders mandated that the SCT and the other respondents pay half of Mr Merkel's costs of the proceeding, reflecting the court's view that the SCT's procedural failings warranted such an order. This decision underscores the importance of procedural fairness and the necessity for administrative tribunals to ensure that all relevant information is made available to complainants to enable a fair and just decision-making process.

Orders

Orders of the court

1. The title to the proceeding be amended by changing the surname of the second respondent from “Powers” to “Power”.

2. The decision of the second respondent on behalf of the first respondent, communicated by letter to the applicant’s solicitors dated 19 June 2009, that the complaint lodged with the first respondent on or about 5 September 2008 related to the management of a fund as a whole, and therefore fell outside the jurisdiction of the first respondent by reason of s 14(6) of the Superannuation (Resolution of Complaints) Act 1993 (Cth), be set aside.

3. The complaint lodged by the applicant with the first respondent on or about 5 September 2008 be referred to the first respondent with a direction that the first respondent exercise its powers and functions with respect to that complaint according to law.

4. The first respondent and the second respondent pay one half of the applicant’s costs of the proceeding.

5. The third respondent pay one half of the applicant’s costs of the proceeding.

Note:

Background

Background to the litigation

Section 62(2) provides that the Australian Securities and Investments Commission (“ASIC”) must make available to the Tribunal such staff and facilities as are necessary or desirable to enable the Tribunal to perform its functions. (For the relevant definition of ASIC, it is necessary to look at s 3(1) of the SRC Act and at s 10(1) of the Superannuation Industry (Supervision) Act 1993 (Cth).)The facts The hearing was conducted on the basis that any necessary facts could be determined from the documents contained in a court book, prepared jointly by the legal representatives of the parties. To some extent, the court book contains the documents supplied to the Tribunal by Telstra Super. The facts were not controversial between the parties, to the extent that it is necessary to make findings of fact for the purposes of resolving the controversy in this proceeding, although the parties may well differ in their characterisations of the events that occurred. Mr Merkel died on 13 January 2007. He was a member of the Telstra Superannuation Scheme, which was governed by a trust deed. In particular, he was a member of a division of that scheme known as Telstra Super Personal Plus, which provides for accumulation benefits, determined by reference to investment earnings, as distinct from defined benefits. At the date of his death, Mr Merkel had an account balance standing to his name in the fund of $400,787.68. To that amount was added the proceeds of a life insurance policy, in the sum of $7,447.00, making a total of $408,234.68. In accordance with Mr Merkel’s exercise of “Member Investment Choice”, slightly more than half of the account balance was invested in a growth option and slightly less than half in a balanced investment option. Mr Merkel made no choice to have any part of the sum standing to his credit invested in a cash (ie interest-bearing) option. Telstra Super learned of Mr Merkel’s death on 22 February 2007. There was some delay in the making of a payment, the reasons for which are not material to this proceeding. On 3 August 2007, a cheque for $418,793.44 was forwarded to Ms Merkel. This amount was calculated by adding to the sum of $408,234.68 the sum of $10,558.76 by way of interest for the period from 13 January 2007 to 30 July 2007. In the meantime, Ms Merkel sought financial advice from Telstra Super Financial Planning Pty Ltd, a company that counsel for Telstra Super told the Court is a subsidiary of Telstra Super. The advice was given in a document dated 28 June 2007. In that document, Ms Merkel was advised that there was $212,554.00 standing to the credit of Mr Merkel’s estate in the balanced investment fund, and $223,618.00 standing to the credit of Mr Merkel’s estate in the growth investment fund. These two amounts totalled $436,172.00. The document also advised Ms Merkel:When John’s Death Benefit is paid, it will be re-calculated with the benefit switched to the Cash Option from John’s date of death to avoid possible negative investment returns. This value will be lower than the amounts used in this advice due to recent strong investment returns. We are unable at this time to provide an estimate of John’s death benefit. Modelling may therefore not be accurate and should be re-visited when final details are known.The figures for Mr Merkel’s entitlement were also accompanied by a note as follows:Note - the above account balance is based on the investment mix of Balanced & Growth. When the benefit is paid, it will be re-calculated with the benefit in the Cash Option from John’s date of death. This will be lower than the amounts above due to recent strong investment returns. We are unable at this time to provide an estimate of John’s death benefit and so advice has been provided on the above figures.

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.

Citation:		Merkel v Superannuation Complaints Tribunal [2010] FCA 564
Parties:		MARILYN MAY MERKEL v SUPERANNUATION COMPLAINTS TRIBUNAL, FIONA POWERS and TELSTRA SUPER PTY LTD (ACN 007 422 522)
File number(s):		VID 534 of 2009
Judge:		GRAY J
Date of judgment:		4 June 2010
Catchwords:		ADMINISTRATIVE LAW – procedural fairness – whether denial of fair hearing – failure to make available adverse information that was credible, relevant and significant to the decision to be made and was relied on by decision-maker – decision that complaint outside jurisdiction of Superannuation Complaints Tribunal – decision based on information in documents provided by trustee of superannuation fund – documents not made available to complainant, even after request for them, when initial decision being reviewed by Tribunal’s director SUPERANNUATION – Superannuation Complaints Tribunal – jurisdiction and powers – whether complaint related to the management of a fund as a whole – decision of trustee of superannuation fund to pay to beneficiary of deceased member a sum less than that standing to the member’s credit, by removing gains accumulated after death and substituting interest – whether decision made in application of rule or policy relates to management of fund as a whole COSTS – administrative decision-maker – whether order for costs should be made against decision-maker when decision set aside – decision by officer of Superannuation Complaints Tribunal that complaint was outside tribunal’s jurisdiction – decision affirmed by tribunal’s director – denial of procedural fairness – reliance on information supplied by trustee of superannuation fund that was not made available to complainant – failure to make available that information, even when requested by complainant – decision made without regard to authorities on statutory provision under which it was made – no subsequent action to remedy jurisdictional error
Legislation:		Acts Interpretation Act 1901 (Cth), s 34AB(d) Administrative Decisions (Judicial Review) Act 1977 (Cth), s 16(1), 16(1)(a), 16(1)(b) Constitution, s 75(v) Federal Court of Australia Act 1976 (Cth), s 43(1), 43(2) Judiciary Act 1903 (Cth), s 39B Freedom of Information Act 1982 (Cth) Superannuation Industry (Supervision) Act 1993 (Cth), s 10(1) Superannuation (Resolution of Complaints) Act 1993 (Cth), ss 3(1), 3(2), 4, 6, 7(1), 7A(1), 9(1), 10, 12(1), 14AA, 14, 14(1), 14(5), 14(6), 15(1), 17, 17(1), 18(1), 24, 24(1), 27, 27(a), 27(b), 27(c), 32(1), 32(2), 33, 34, 35, 37, 37(1)(b), 40, 46, 46(1), 59(1), 62(2)
Cases cited:		Alice Springs Commercial Broadcasters Pty Ltd v Australian Broadcasting Tribunal (unreported, Federal Court of Australia, O’Loughlin J, 14 October 1992) cited Charter Homes Pty Ltd v Housing Guarantee Fund Ltd (unreported, Supreme Court of Victoria, Chernov J, 10 June 1997) cited Commonwealth Superannuation Scheme Board v Dexter [2004] FCA 1434 cited Employers First v Tolhurst Capital Ltd [2005] FCA 616 (2005) 143 FCR 356 affirmed Kioa v West (1985) 159 CLR 550 followed Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11 (2002) 209 CLR 597 cited Muin v Refugee Review Tribunal [2002] HCA 30 (2002)…