Rauchle v Q-Super Board (No 2)

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FEDERAL COURT OF AUSTRALIA

Rauchle v Q-Super Board (No 2) [2024] FCA 42

Appeal from: Australian Financial Complaints Authority, Superannuation determination, case number 666349, Financial firm QSuper Board (trustee), 22 October 2021
File number: QUD 391 of 2021
Judgment of: THOMAS J
Date of judgment: 31 January 2024
Catchwords: AUSTRALIAN FINANCIAL COMPLAINTS AUTHORITY – appeal from the Australian Financial Complaints Authority (AFCA) – whether decision fair and reasonable – procedural fairness – where AFCA determination contains no direct reference to or analysis of the issue of procedural fairness – HELD: error of law identified – decision set aside and remitted to the AFCA for determination according to law  
Legislation:

Corporations Act 2001 (Cth)

Superannuation (Resolution of Complaints) Act 1993 (Cth)
Cases cited:

Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321

Australian Reward Investment Alliance v Superannuation Complaints Tribunal (2008) 173 FCR 335; [2008] FCA 1548

Board of Trustees of the State Public Sector Superannuation Scheme v Edington (2011) 119 ALD 472; [2011] FCAFC 8

Edwards v Postsuper Pty Ltd [2007] FCAFC 83

Finch v Telstra Super Pty Ltd (2010) 242 CLR 254; [2010] HCA 36

QSuper Board v Australian Financial Complaints Authority (2020) 276 FCR 97; [2020 FCAFC 55

Rauchle v Q-Super Board [2022] FCA 1537
Division: General Division
Registry: Queensland
National Practice Area: Administrative and Constitutional Law and Human Rights
Number of paragraphs: 152
Date of hearing: 4 April 2023
Counsel for the Applicant: Mr S Grant
Solicitor for the Applicant: Aylward Game Solicitors
Counsel for the First Respondent: Mr K Holyoak
Solicitor for the First Respondent: Mills Oakley

ORDERS

QUD 391 of 2021
BETWEEN:

GUY RAUCHLE

Applicant
AND:

Q-SUPER BOARD

First Respondent

AUSTRALIAN FINANCIAL COMPLAINTS AUTHORITY

Second Respondent

ORDER MADE BY:

THOMAS J

DATE OF ORDER:

31 JANUARY 2024

THE COURT ORDERS THAT:

1.The decision of the second respondent in case number 666349 be set aside.

2.The matter be remitted to the second respondent for determination in accordance with the law.

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


REASONS FOR JUDGMENT

THOMAS J:

  1. The applicant, Mr Guy Rauchle, appeals the decision of the second respondent (Australian Financial Complaints Authority (AFCA)) in Case Number 666349 concerning a complaint by Mr Rauchle to the AFCA against the first respondent (Q-Super Board (QSuper)).

  2. Mr Rauchle appeals on the basis that the AFCA has failed to comply with its statutory obligations under Chapter 7 Part 7.10A Division 3 (Division 3) of the Corporations Act 2001 (Cth) (the Act) to determine all superannuation complaints made by Mr Rauchle to the AFCA.

  3. The failure is asserted to be an error of law infecting the decision with error such that it should be set aside and returned to the AFCA to consider the complaints according to law.

    BACKGROUND

  4. In or around 1994, Mr Rauchle commenced employment as a full-time leading vocational teacher in wastewater management with TAFE.

  5. On 26 November 1994, Mr Rauchle became…

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Details
Case
[2024] FCA 42
Decision Date

CaseChat Overview and Summary

In the Federal Court of Australia, Mr. Rauchle, a former member of QSuper Superannuation Fund, appealed a decision of the Australian Financial Complaints Authority (AFCA) regarding the validity of QSuper's determination that he was permanently and partially disabled (PPD) rather than totally and permanently disabled (TPD). The appeal questioned whether the AFCA's decision was fair and reasonable, particularly focusing on procedural fairness and the adherence to natural justice principles in QSuper's handling of his superannuation claim.

The central legal issues involved whether the AFCA correctly interpreted and applied the law in considering Mr. Rauchle's complaints. Specifically, the court had to determine if the AFCA was required to address all aspects of Mr. Rauchle's complaints as a single process and whether the AFCA's failure to explicitly address procedural fairness in its decision constituted a legal error. Additionally, the court examined if the AFCA should have simultaneously resolved each complaint raised by Mr. Rauchle.

The Federal Court found that the AFCA's decision contained an error of law as it failed to directly reference or analyze the issue of procedural fairness in its determination. This omission led to an unfair and unreasonable decision, as it did not adequately address a key aspect of Mr. Rauchle's complaints. Consequently, the court concluded that the AFCA's decision was flawed and set it aside. The matter was then remitted to the AFCA for reconsideration according to law, ensuring that all aspects of Mr. Rauchle's complaints, including procedural fairness, were properly addressed.

Orders

Orders of the court

1. The decision of the second respondent in case number 666349 be set aside.

2. The matter be remitted to the second respondent for determination in accordance with the law.

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

Background

Background to the litigation

The failure is asserted to be an error of law infecting the decision with error such that it should be set aside and returned to the AFCA to consider the complaints according to law.BACKGROUND In or around 1994, Mr Rauchle commenced employment as a full-time leading vocational teacher in wastewater management with TAFE. On 26 November 1994, Mr Rauchle became a defined benefit member of the QSuper Superannuation Fund (Fund) by reason of his employment. On 29 November 2006, Mr Rauchle made a claim to the Board of Trustees of the State Public Sector Superannuation Scheme for QSuper income protection benefits (IP benefits) claiming depression and anxiety caused by workplace issues. On 8 May 2008, the Trustee wrote to Mr Rauchle indicating his IP benefits were payable for temporary medical conditions only for a maximum of two years. From 16 July 2006 until 16 July 2008, Mr Rauchle received IP benefits for the maximum two year period. On 3 July 2008:(a)the Board’s delegate determined that Mr Rauchle did not have a total and permanent disablement (TPD) within the meaning of s 4 of the Trust Deed; and(b)the Board’s delegate instead determined that Mr Rauchle was permanently and partially disabled (PPD) within the terms of the Trust Deed. On 16 July 2008:(a)Mr Rauchle’s IP benefits ceased; and(b)the Trustee credited Mr Rauchle’s accumulation account with the amounts specified in s 49 of the Trust Deed and closed his defined benefit membership as at 16 July 2008. On 11 January 2010, Mr Rauchle retired on the grounds of ill health. On 19 November 2013, Mr Rauchle appealed the decision of the Board’s delegate. On 3 September 2014, Mr Rauchle provided submissions to the Trustee. On 25 September 2014, the Board of Trustees made a decision (the review decision) to affirm a decision of the delegate for the Board made in July 2008 (the initial decision) that Mr Rauchle was PPD within the terms of the QSuper Trust Deed and that Mr Rauchle was not totally and permanently disabled. On or about 11 September 2019, Mr Rauchle made a verbal complaint to the AFCA by telephone, which was allocated Case No. 666349. On 11 September 2019, QSuper received a copy of the complaint submitted by Mr Rauchle to the AFCA. On 18 September 2019, in response to the AFCA providing a complaint summary, Mr Rauchle, in an email to the AFCA, provided further details on the extent of Mr Rauchle’s complaint. Specifically, Mr Rauchle stated his complaints concerned the following:(a)that QSuper had determined him to be PPD and not TPD;(b)the conduct by which QSuper commenced making the initial decision of 3 July 2008 which had determined him to be PPD;(c)the adequacy of the process by which QSuper made the initial decision in 2008;(d)the adequacy of the process by which the Board of Trustees of QSuper made the review decision on 25 September 2014;(e)the non-compliance of QSuper with the principles of natural justice and procedural fairness in making each of the initial decision and the review decision;(f)whether QSuper had reasonably complied with its own claims handling philosophy and codes of practice in making the initial decision and the review decision.(together, the complaints).

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

On 25 September 2014, the Board of Trustees made a decision (the review decision) to affirm a decision of the delegate for the Board made in July 2008 (the initial decision) that Mr Rauchle was PPD within the terms of the QSuper Trust Deed and that Mr Rauchle was not totally and permanently disabled. On or about 11 September 2019, Mr Rauchle made a verbal complaint to the AFCA by telephone, which was allocated Case No. 666349. On 11 September 2019, QSuper received a copy of the complaint submitted by Mr Rauchle to the AFCA. On 18 September 2019, in response to the AFCA providing a complaint summary, Mr Rauchle, in an email to the AFCA, provided further details on the extent of Mr Rauchle’s complaint. Specifically, Mr Rauchle stated his complaints concerned the following:(a)that QSuper had determined him to be PPD and not TPD;(b)the conduct by which QSuper commenced making the initial decision of 3 July 2008 which had determined him to be PPD;(c)the adequacy of the process by which QSuper made the initial decision in 2008;(d)the adequacy of the process by which the Board of Trustees of QSuper made the review decision on 25 September 2014;(e)the non-compliance of QSuper with the principles of natural justice and procedural fairness in making each of the initial decision and the review decision;(f)whether QSuper had reasonably complied with its own claims handling philosophy and codes of practice in making the initial decision and the review decision.(together, the complaints). Between 18 September 2019 and 21 September 2020, Mr Rauchle and QSuper, at the request of the AFCA, provided further information to the AFCA. On or about 21 September 2020, the AFCA issued a Recommendation (the Recommendation) in relation to the Complaints, which included a Recommendation in favour of the QSuper. On 25 September 2020, QSuper sent an email to the AFCA advising it was agreeable to the Recommendation. On or about 5 October 2020, Mr Rauchle advised the AFCA he was not accepting the Recommendation. In the period between January to August 2021, Mr Rauchle and QSuper provided further submissions to the AFCA in relation to the Recommendation. On 22 October 2021, the AFCA provided Mr Rauchle with written reasons on its determination in Case No. 666349.THE AMENDED NOTICE OF APPEAL The queries posed by Mr Rauchle in the amended notice of appeal were as follows:1.Were any or all of the complaints identified in sub-paragraphs [2(b)-(f)] of the Grounds below a “superannuation complaint” pursuant to s1053(3) of the Corporations Act 2001 (Cth) (the Act), having regard to s1053(5) of the Act?2.If the answer to Question 1 is yes (to some or all), was AFCA required to determine all the superannuation complaints identified in sub-paragraphs [2(a)-(f)] as part of the same process under s1055 of the Act?3.If the answer to Question 2 is yes (to some or all), was AFCA required by s1055 of the Act to make a determination in relation to each superannuation complaint identified in sub-paragraphs [2(a)-(f)] at the same time?

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.