Nowicka v Superannuation Complaints Tribunal - [2008] FCAFC 191

FEDERAL COURT OF AUSTRALIA
Nowicka v Superannuation Complaints Tribunal [2008] FCAFC 191
SUPERANNUATION – death of army officer – claim by spouse – date from which benefit is payable – delay – interest
Military Superannuation and Benefits Act 1991 (Cth)
Military Superannuation and Benefits Rules, Rule 69
Superannuation (Resolution of Complaints) Act 1993 (Cth), s 41(3)(b)
Ansett Australia Ground Staff Superannuation Plan Pty Ltd v Ansett Australia Ltd (2002) 174 FLR 1 followed
Anstis v Secretary, Department of Social Security (1999) 94 FCR 421 applied
Collector of Customs v Gaylor Pty Ltd (1995) 35 NSWLR 649 considered
Glass v Defence Force Retirement and Death Benefits Authority (1992) 38 FCR 534 applied
Godwin v Repatriation Commission (2008) 166 FCR 471 cited
HEST Australia Ltd v Sykley (2005) 147 FCR 248 followed
Leonard Thomas Hinde [2007] NSWSC 640 applied
Lesi v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 134 FCR 27 cited
Military Superannuation and Benefits Board of Trustees No 1 v Batt (2005) 149 FCR 448 disapproved
Nowicka v Superannuation Complaints Tribunal [2008] FCA 939 cited
Secretary, Department of Health and Ageing v Marnotta Pty Ltd (2005) 88 ALD 720 considered
Woozley v Woodall Smith [1950] 1 KB 325 cited
ANETA NOWICKA v SUPERANNUATION COMPLAINTS TRIBUNAL, MARGARET MCDONALD AND MILITARY SUPERANNUATION AND BENEFITS BOARD OF TRUSTEES NO 1
VID 535 of 2008
MOORE, GILMOUR AND FLICK JJ
19 DECEMBER 2008
SYDNEY (BY VIDEO LINK TO MELBOURNE)

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 535 of 2008

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:
ANETA NOWICKA
Appellant

AND:
SUPERANNUATION COMPLAINTS TRIBUNAL
First Respondent

MARGARET MCDONALD
Second Respondent

MILITARY SUPERANNUATION AND BENEFITS BOARD OF TRUSTEES NO 1
Third Respondent

JUDGES:

MOORE, GILMOUR AND FLICK JJ

DATE OF ORDER:

19 DECEMBER 2008

WHERE MADE:

SYDNEY (BY VIDEO LINK TO MELBOURNE)

THE COURT DECLARES THAT:
1.The appellant is entitled to interest on the sum of $207,438.54 paid to her on 18 November 2005 under Rule 69 of the Military Superannuation and Benefits Rules.

THE COURT ORDERS THAT:
1.The appeal be allowed.
2.Orders 1 and 2 of the orders of Sundberg J of 20 June 2008 be set aside, and in their place, there be an order that the decision of the Superannuation Complaints Tribunal of 27 July 2007 be set aside.
3.The decision of the first and second respondents to treat the appellant’s complaint to the Superannuation Complaints Tribunal as withdrawn pursuant to s 22(3)(b) of the Superannuation (Resolution of Complaints) Act 1993 (Cth) be set aside.
4.The matter be remitted to the Superannuation Complaints Tribunal to deal with the appellant’s complaint and proceed to review the third respondent’s decision in accordance with law.
5.The third respondent is to pay the appellant’s costs of the appeal.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA

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: [2008] FCAFC 191
Decision Date: 19 December 2008

CaseChat Overview and Summary

In the case of Nowicka v Superannuation Complaints Tribunal, the court was asked to determine the correct interpretation and application of specific provisions of the Military Superannuation and Benefits Rules, particularly Rules 38, 40, and 69. The dispute primarily focused on whether interest should be payable on benefits from a date earlier than when the Tribunal's determination was made. The appellant, Ms Nowicka, contended that interest should accrue from either the date of the deceased member's death in April 1999 or the date when the Board originally made its decision on 17 December 2003. The court was tasked with deciding whether Section 41(3)(b) of the Superannuation (Resolution of Complaints) Act 1993 (Cth) required interest to be paid from an earlier date than the Tribunal's determination in October 2005.

The court meticulously examined the language of Section 41 of the Act, noting that it does not mandate a different conclusion from the one reached by Her Honour Justice Kenny in the earlier case of Batt. It was held that the decision of the Tribunal, once made, takes effect from the date of the determination, and there was no delay in the commencement of the pension payment for the purposes of Rule 69(2). The court emphasized that the reclassification decision and the subsequent payment of the pension at the reclassified rate occur only from the date of the Tribunal's decision. Therefore, the pension at the reclassified rate is payable only from the date of the Tribunal's decision.

Consequently, the appeal was allowed. The orders included setting aside certain previous orders, setting aside the decision of the Superannuation Complaints Tribunal, and remitting the matter back to the Tribunal to review the third respondent’s decision in accordance with the law. Additionally, the third respondent was ordered to pay the appellant’s costs of the appeal.

Orders

Orders of the court

1. The appeal be allowed.

2. Orders 1 and 2 of the orders of Sundberg J of 20 June 2008 be set aside, and in their place, there be an order that the decision of the Superannuation Complaints Tribunal of 27 July 2007 be set aside.

3. The decision of the first and second respondents to treat the appellant’s complaint to the Superannuation Complaints Tribunal as withdrawn pursuant to s 22(3)(b) of the Superannuation (Resolution of Complaints) Act 1993 (Cth) be set aside.

4. The matter be remitted to the Superannuation Complaints Tribunal to deal with the appellant’s complaint and proceed to review the third respondent’s decision in accordance with law.

5. The third respondent is to pay the appellant’s costs of the appeal.

Note:

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

MOORE, GILMOUR AND FLICK JJ

A number of Grounds of Appeal have been advanced. The Grounds of Appeal put in issue the correct construction and application of provisions of the Scheme and, in particular, Rules 38, 40 and 69 of the Military Superannuation and Benefits Rules.THE DECISIONS AS TO BENEFITS PAID The entitlement of the present appellant to be paid both benefits and interest depends upon the terms of the Scheme itself. The Scheme was established by a Trust Deed and is regulated by the Military Superannuation and Benefits Act1991 (Cth). The Scheme is a regulated superannuation fund for the purposes of the Superannuation (Resolution of Complaints) Act. Rule 38 provides for the circumstances in which benefits “are payable” and Rule 39 identifies those persons to whom the benefit “is payable”. Those Rules relevantly provide as follows:Applicability of benefits38.Where a member dies and is survived by a spouse or spouses or an eligible child or children, benefits are payable in accordance with this Division.Payment of deceased member’s member benefit39.A deceased member’s member benefit is payable as a lump sum as follows:(a) if the deceased member is survived by a spouse, the benefit is payable to the spouse;…In the present proceeding, it was the application of those Rules which initially led to the rejection of Ms Nowicka’s claim as a “spouse”. The application of Rule 40 was also the source of an initial decision made by the Board on 17 December 2003 adversely to Ms Nowicka — but again that issue was ultimately resolved in her favour. Rule 40 relevantly provides as follows: Payment of deceased member’s employer benefit40.(1) A deceased member’s employer benefit or a pension is payable as follows:(a)if the deceased member is survived by a spouse with or without an eligible child or children, the employer benefit is payable to the spouse as a lump sum……(3) An employer benefit payable under subrule (1) is calculated as if, on the date of the death of the deceased member, he or she had become entitled to invalidity benefits under Division 2 of Part 3 and had been classified as Class A under rule 22.(4) Subrules (2) and (3) do not apply where:(a)a member dies and, at the time of his or her death, he or she was absent without leave and had been so absent for a period that exceeds 21 consecutive days…unless the Board is satisfied that the absence of the member was due to sufficiently mitigating circumstances.Contrary to the December 2003 decision of the Board, on 27 October 2005 the Tribunal concluded that there were “sufficiently mitigating circumstances” for the absence without leave of Private Przydatek. It was this decision which led to the $207,438.54 being paid in November 2005. None of this administration of the Scheme is presently in issue.RULE 69: A BENEFIT PAYABLE AND DELAY That which is in issue is the application of Rule 69 to these facts as they unfolded. Considerable time had elapsed since Ms Nowicka’s claim was made in October 2000. Her status as a “spouse” was not resolved until May 2004 and the existence of “sufficiently mitigating circumstances” was not resolved until October 2005.

Ratio Decidendi

Legal Principle Established

Established by: MOORE, GILMOUR AND FLICK JJ

But s 41(3)(b) of the 1993 Act does dictate a conclusion that interest is payable as from an earlier date. Section 41 provides as follows:Operation of determination (1)Subject to subsection (2), a determination of the Tribunal comes into operation immediately upon the making of the determination. (2)The Tribunal may specify in a determination that the determination is not to come into operation until a later date specified in the determination and, if a later date is so specified, the determination comes into operation on that date. (3)A decision of a trustee, insurer, RSA provider or other decision-maker as varied by the Tribunal, or a decision made by the Tribunal in substitution for a decision of a trustee, insurer, RSA provider or other decision-maker: (a) is, for all purposes (other than the making of a complaint about the decision) taken to be a decision of a trustee, insurer, RSA provider or other decision-maker concerned; and (b) on the coming into operation of the determination by the Tribunal, unless the Tribunal otherwise orders, has effect, and is taken to have had effect, on and from the day on which the original decision has or had effect. Once the Tribunal made its determination in October 2005 that there were “sufficiently mitigating circumstances” for Private Pryzdatek’s absence without leave, the contention on Ms Nowicka’s behalf was that that determination was taken to have had effect as from an earlier date. The specification by the appellant of that earlier date varied from the date of death, April 1999, to the date upon which the Board originally made its decision, namely 17 December 2003. Whichever be the date, interest — it was contended — was payable as from a date earlier than 2005. An argument as to the effect s 41 of the 1993 Act upon the payment of a pension under Rule 69(2) was advanced before Her Honour Justice Kenny in Batt. Her Honour concluded that the decision of the Tribunal did “not alter the fact that the pension at the reclassified rate is payable only from the date of the decision of the Tribunal”. Her Honour further concluded that there was in any event no “delay” for the purposes of Rule 69(2). Her Honour expressed her reasons for reaching these two conclusions as follows:[53] Section 41 of the SRC Act does not require a different conclusion. Section 41(1) does no more than provide that, subject to s 41(2), a determination of the Tribunal comes into operation immediately upon the making of the determination. Section 41(3) further provides that a decision made by the Tribunal in substitution for a decision of a trustee is taken to be the decision of the trustee (s 41(3)(a)) and unless the Tribunal otherwise orders “has effect, and is taken to have had effect on and from the day on which the original decision has or had effect”. As Kirby J explained in Attorney-General (Cth) v Breckler (1999) 197 CLR 83 at [91], in making a determination under s 37(3), the Tribunal creates new rights, albeit in the form of a decision which is then substituted for the decision of the trustee which is set aside. The fact that pursuant to statute a decision of the Tribunal would ordinarily take effect at a date prior to its decision on classification does not alter the fact that the pension at the reclassified rate is payable only from the date of the decision of the Tribunal.[54] Further, the fact that the reclassification is to take effect from a date prior to a reclassification does not entail the consequence that the commencement of the payment of the pension at the reclassified rate is “delayed” for the purpose of r 69(2). In order for there to be a relevant delay in the commencement of the payment of the pension that is payable, there must be a classification or reclassification decision that makes the pension payable and delay between the date of this decision and the first payment of the pension in accordance with the Rules (and the decision). The period between the date of reclassification and the date on which, in the SRC Act or under the Rules, the reclassification takes effect is not a period of delay in respect of any instalment of the pension within r 69(4). This is because no right to receive the pension at the reclassified rate arises before the decision on classification or reclassification is made.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 535 of 2008

JUDGES:	MOORE, GILMOUR AND FLICK JJ
DATE OF ORDER:	19 DECEMBER 2008
WHERE MADE:	SYDNEY (BY VIDEO LINK TO MELBOURNE)