Retirement Benefits Fund Board v De Little
[2009] TASSC 64
•13 August 2009
[2009] TASSC 64
COURT: SUPREME COURT OF TASMANIA
CITATION: Retirement Benefits Fund Board v De Little [2009] TASSC 64
PARTIES: RETIREMENT BENEFITS FUND BOARD
v
DE LITTLE, Eva Liisa
FILE NO/S: M79/2006
DELIVERED ON: 13 August 2009
DELIVERED AT: Hobart
HEARING DATE: 3 June 2009
JUDGMENT OF: Tennent J
CATCHWORDS:
Superannuation – Public service funds – Other matters – Retirement Benefits Fund Tasmanian Accumulation Scheme Trust Deed – Impact of cl 4.5.9.
Superannuation – Public service funds – Other matters – Retirement Benefits Fund Tasmanian Accumulation Scheme Trust Deed – Matters to which a Court is to have regard when dealing with application arising pursuant to cl 10.3.
Retirement Benefits Fund Act 1993 (Tas)
Retirement Benefits Regulations 1994 (Tas), reg106
Retirement Benefits Regulations 2005 (Tas)
Public Sector Superannuation Reform Act 1999 (Tas)
Retirement Benefits Fund Board v Hingston (1997) 7 Tas R 134, referred to.
Aust Dig Superannuation [1013]
REPRESENTATION:
Counsel:
Applicant: A J Abbott
Respondent: K B Procter
Solicitors:
Applicant: Dobson Mitchell & Allport
Respondent: Murdoch Clarke
Judgment Number: [2009] TASSC 64
Number of paragraphs: 39
Serial No 64/2009
File No M79/2006
RETIREMENT BENEFITS FUND BOARD v EVA LIISA DE LITTLE
REASONS FOR JUDGMENT TENNENT J
13 August 2009
By an originating application filed 21 April 2006, the Retirement Benefits Fund Board ("the Board"), sought the following:
"A declaration that the determination of the applicant made on 1st March 2006, that the respondent did not meet the necessary criteria to be eligible to receive an ill-health benefit payable under the Tasmanian Accumulation Scheme Trust Deed, is valid."
The application was brought before the Court by the applicant pursuant to clause 10.3.1 of a trust deed entered into by the Board on 17 April 2000 ("the trust deed") as a consequence of the enactment of the Public Sector Superannuation Reform Act 1999 ("the PSSR Act"). Clause 10.3.1 provides:
"10.3.1 If the Board has made a final decision under clause 10.2 adversely to an applicant, he or she may, within 6 months after notification of the final decision, require the Board to apply to the Supreme Court for a declaration in respect of that final decision."
The Board had made a final decision adverse to Eva Liisa De Little ("the respondent") and she required it to seek a declaration in respect of that decision.
On 11 March 2009, a judge of this Court ordered:
"1that there be a trial of issues of fact before any other, namely the issues of fact set out under the heading 'facts' in the statement of facts, issues and contentions annexed to the interlocutory application and marked 'A'; and
2that there be determined points of law before trial, namely the issues of law set out under the heading 'issues of law' in the statement of facts, issues and contentions annexed to the interlocutory application and marked 'A'."
What I have been asked to determine at this point is certain issues of law which are in dispute.
Background
The respondent was employed as a relief teacher with the Department of Education ("the Department") commencing on or about 1 March 1994. From shortly thereafter, superannuation guarantee levy contributions were paid by the Department to the Retirement Benefits Fund ("RBF"), which were then invested in an account in the respondent's name. As at the date those payments began, the Retirement Benefits Fund Act 1993 ("the RBF Act") was in force, and the RBF had continued in existence under that Act. Regulations were made pursuant to the RBF Act. These were the Retirement Benefits Regulations 1994 ("the Regulations").
The respondent asserted in her statement of facts, issues and contentions dated 19 April 2007, that her employment status with the Department changed in 1996, in that she became a permanent/part-time teacher, instead of a relief teacher. The Board, in its statement, asserts this change of status occurred on or about 14 February 2000. Nothing appears to turn on the difference.
The PSSR Act was enacted in 1999. The effect of the legislation was that anybody employed in the Tasmanian public sector after 15 May 1999 would, as and from 25 April 2000, become a member of the Tasmanian Accumulation Scheme ("the TAS") unless they elected to become members of another complying superannuation scheme. The TAS was established by the deed referred to in par2. The Regulations continued to have effect until they were rescinded by the Retirement Benefits Regulations 2005 ("the 2005 Regulations") with effect from 27 July 2005.
As a consequence of the legislative changes set out in the previous paragraph, on 25 April 2000, the balance of the account, which had been held with the RBF for the respondent, and which contained superannuation guarantee levy contributions paid on her behalf by the Department, was transferred to a new account created for the respondent in the TAS ("the new account"). The Department continued to pay superannuation guarantee levy contributions to the respondent's old account up to and including 12 April 2000.
For the pay period ending 26 April 2000, that is the first occasion upon which a superannuation guarantee levy contribution was paid after the creation of the new account, that contribution was paid to the new account. Thereafter, superannuation guarantee levy contributions were paid by the Department for credit to the new account as follows:
(a) fortnightly to 25 September 2002;
(b) fortnightly from 15 January 2003 to 13 August 2003;
(c) on 10 September 2003;
(d)on 17 December 2003;
(e)fortnightly from 11 February 2004 to 21 September 2005;
(f)on 28 December 2005;
(g)on 11 January 2006;
(h)on 25 January 2006;
(i)on 8 February 2006; and
(j)on 22 February 2006.
No contributions were paid:
(a) from 9 October 2002 to 1 January 2003;
(b) for the fortnight ended 27 August 2003;
(c) after that received on 22 February 2006.
In or about June 2002, the respondent began work at the Howrah Primary School. She says that, during the course of her employment at that school, she developed a condition known as Multiple Chemical Sensitivity. As a consequence, in or about the middle of 2004, the respondent commenced unpaid sick leave.
By an application dated 12 December 2004, the respondent applied to the Board for a temporary incapacity pension pursuant to the terms of the trust deed. The Board considered the respondent's application, and determined that the respondent was not eligible for that benefit as she was able to engage in gainful employment for which she was reasonably qualified by education, training or experience. There was no suggestion that the respondent was ineligible to apply for the pension by reason of any lack of eligibility for death and incapacity benefits generally. The Board's decision was made on or about 1 March 2006 and was formally communicated to the respondent by a letter dated 2 March 2006. The respondent has confirmed that her application remains an application for a temporary incapacity pension pursuant to clause 6.8 of the trust deed.
The respondent sought that the Board apply to this Court pursuant to clause 10.3 of the trust deed. The Board did so by an originating application filed on 21 April 2006. The proceedings initiated by that application remain unresolved.
By a letter dated 23 May 2006, the Board advised the respondent that the trust deed provided that, unless a member was in receipt of a temporary incapacity pension or regular workers compensation payments, the member ceased to have death and incapacity cover in certain circumstances. Those circumstances were:
(a)12 months after receipt of the last employer superannuation guarantee contribution for a member on sick leave without pay or parental leave; or
(b)4 months after receipt of the last employer superannuation guarantee contribution when on leave other than sick leave without pay or parental leave.
By a letter dated 24 March 2007, the Board advised the respondent that, as no employer superannuation guarantee contributions had been received for 13 months, the new account maintained for the respondent was considered inactive, and the balance had been transferred to an investment account held for the respondent. At all times from and after 14 February 2006, the respondent has been on sick leave without pay from her employment with the Department.
Issues of law to be determined on this hearing
The parties have identified certain issues to be determined. They are as follows:
1Whether, by virtue of the non-payment by the Department of contributions for the respondent from and after 22 February 2006, the respondent has ceased to be covered for death and incapacity benefits under and pursuant to clause 4.5.9(a) of the trust deed.
2Whether the Court, in hearing and determining the originating application under and pursuant to clause 10.3 of the trust deed, and in making its declaration under and pursuant to clause 10.3.5 of the trust deed, must have regard to facts existing and events that have occurred at the time at which the declaration is made.
3Whether, if coverage has ceased at the time at which the Court is bound to make its declaration, the Court must affirm the Board's decision under and pursuant to clause 10.3.5(a), and accordingly dismiss the application, without embarking upon any hearing as to the merits of the claim sought to be pressed by the respondent founded upon her claimed incapacity to engage in gainful employment for which she is reasonably qualified by education, training or experience within the meaning of the trust deed.
Nature of any ultimate hearing
Counsel for the Board identified another issue which may remain to be argued for the purpose of any ultimate hearing. I am not required to determine it at this stage. That issue is the nature of any ultimate hearing, that is, is it a hearing de novo or is it simply a hearing by way of a rehearing. Counsel for the Board submits, however, that it does not make any difference what the nature of the hearing is because, on a correct interpretation of clause 10.3.2 of the trust deed, the Court's decision must depend on the state of the evidence at the date of the hearing.
Ultimate contention of the Board
For the purpose of determining the issues of law identified as the subject of this hearing, the Board contends that:
-coverage is a condition precedent to the award of a temporary incapacity pension,
-the hearing of this application is a hearing de novo undertaken at the time at which the Court makes its determination,
-the Court must therefore consider the current status of the respondent's coverage in determining her application for a temporary incapacity pension,
-she does not have current coverage, and
-therefore the respondent cannot succeed in these proceedings.
What underpins the Board's position is its contention that the Court's decision must be based on the respondent's current status as far as eligibility to apply for a temporary incapacity pension is concerned, notwithstanding that it is dealing with an application for such a pension which was made in 2004 and relates to the respondent's state of eligibility then. The Board contends in effect that, since the respondent's eligibility status has altered since her initial application to the Board was made, and indeed, since these proceedings were commenced, the respondent has lost her right to pursue a pension, applied for in December 2004, which would have been limited to one for a period of up to two years. The anomaly is that, had these proceedings been dealt with prior to February 2007, the Board would not have been able to mount this particular argument.
Issue 1 — "Coverage"
The Board contends that, on the facts of this case, the respondent, by reference to clause 4.5.9(a) of the trust deed, ceased to have coverage for death and incapacity benefits on or about 22 February 2007.
Counsel for the respondent conceded in his written submissions that the respondent may have ceased to have coverage for incapacity benefits as contended by the applicant. However, he disputed that coverage in relation to any period after 22 February 2007 was a condition precedent to the respondent's capacity to obtain a successful outcome in the proceedings commenced by the originating application.
Clauses 4.4.1, 4.4.2 and 4.5.1 of the trust deed provide:
"4.4.1A Member who is an Eligible Employee and who is under 60 years of age shall be covered for death and Incapacity Benefits as provided by this Deed unless he or she elects not to be so covered by notice in writing, or in a manner approved by the Board, to the Board.
4.4.2A Member may elect not to be covered for death and Incapacity Benefits and the Board may approve such an election if the Member is able to demonstrate to the satisfaction of the Board that he or she has adequate alternative death and Incapacity cover.
4.5.1A Member who is covered for death and Incapacity Benefits under this Deed is automatically covered at the 100% level of cover unless an election is made pursuant to this clause."
The respondent at no stage made any election not to be covered for death and incapacity benefits by reference to clause 4.4.2. The default position was therefore that she was so covered. Clause 4.5 provided for different levels of cover. There was again no election made by the respondent to have anything less than 100 per cent cover. Clause 4.5 also provided for amounts to be deducted from a member's account in the TAS in the nature of "premiums" in respect of a member's cover for death and incapacity benefits.
Clause 4.5.9, however, made provision for circumstances in which a member might cease to be "covered" for death and incapacity. It provided:
"4.5.9Except when in receipt of a Temporary Incapacity pension or regular benefits paid in accordance with the Workers Rehabilitation and Compensation Act 1988, a Member ceases to be covered for death and Incapacity Benefits:
a)12 months after the receipt of the last Agency superannuation contribution when on sick leave without pay or Parental Leave;
b)4 months after the receipt of the last Agency superannuation contribution;
c)from the date of termination of employment with an Agency; or
d)from the date of an election taking effect under section 6 of the Act to become a member of an RSA or another Complying Superannuation Plan,
whichever is the earlier."
Clause 4.5.9 of the trust deed is, in my view, unambiguous. Unless a member is in receipt of a temporary incapacity pension or workers compensation payments, that member will cease to be covered for death and incapacity benefits in four defined circumstances. All of those circumstances involve the cessation of payments of superannuation guarantee levy contributions to a member's TAS account and, by implication, a cessation of deductions from those contributions in the nature of "premiums" to support cover for death and incapacity benefits. In the case of the respondent, the last payment of superannuation guarantee levy contribution by her employer was on 22 February 2006, and she was on sick leave without pay from and after 14 February 2006. In those circumstances, clause 4.5.9(a) applies such as to result in the cessation of her coverage for death and incapacity benefits from February 2007.
The answer to the question posed by issue 1 is therefore "Yes, in respect of any period after coverage ceases by virtue of clause4.5.9(a)".
Issue 2 — The construction of clause 10.3 of the deed
The balance of the relevant parts of clause 10.3 of the trust deed, not set out in par2, is as follows:
"10.3.2Subject to sub-clause 10.3.3, the Supreme Court, on an application under subclause 10.3.1, may make a declaration, having regard to facts existing and events that have occurred at the time the declaration is made, as to the validity or otherwise of the determination in respect of which the application is made.
10.3.3The Supreme Court must not make a declaration under sub-clause 10.3.2 in respect of a determination the validity of which cannot be decided at the time when the Court is asked to make the declaration.
10.3.4For the purpose of reviewing a determination by the Board, the Supreme Court has all the powers and discretions that are conferred on the Board by law or under the Act, the Retirement Benefits Act 1993 or the Retirement Benefits Regulations 2005.
10.3.5The Supreme Court may make a declaration –
a)affirming the Board's decision; or
b)remitting the matter to which the Board's determination relates back to the Board for reconsideration in accordance with the directions of the Supreme Court; or
c)varying the Board's determination; or
d)setting aside the Board's determination and substituting a decision for the determination set aside."
This clause required the respondent, if she wished to have the decision of the Board made on 1 March 2006 reviewed, to require the Board to make application to this Court pursuant to clause 10.3 within six months of the date of the decision. However, clause 10.3 imposed no time frame within which the Board was required to make that application. In this case, the Board, having been required by the respondent to make application, did not delay. It initiated these proceedings on 21 April 2006, that is, within a matter of weeks of the decision complained of. In an extreme case however, had the Board delayed making the application for another 10 months, on the basis of its arguments now, the respondent would have been ineligible to pursue the proceedings.
No precise explanation has been provided as to why, over three years later, the originating application has not been dealt with. It is apparent from the arguments now mounted on behalf of the Board that, had this application been dealt with prior to on or about 22 February 2007, the primary issue now before the Court would not have arisen. There could have been no argument prior to that date that the respondent was not covered for death and incapacity benefits.
Clause 10.3.1 identifies that what the respondent was entitled to require was an application for a declaration "in respect of that final decision". Leaving aside any impact of clause 10.3.3, what clause 10.3.2 permits this Court, in its discretion, to do is:
-make a declaration,
-as to the validity or otherwise of the determination in respect of which the application is made,
-having regard to facts existing and events that have occurred at the time the declaration is made.
Clause 10.3.4 additionally confers on the Court all the powers conferred on the Board by law, the PSSR Act, the Act, and the 2005 Regulations.
As indicated earlier, counsel for the Board contends that, because the hearing of an application such as this is a hearing de novo, the Court must consider the respondent's application for a pension afresh. In doing so, it must have regard to facts existing now, one of which is that the respondent's coverage for death and incapacity benefits has now ceased. If regard is had to that factor, the respondent's application must necessarily fail. Even if the hearing is by way of rehearing upon the basis of the material before the Board, but taking into account the facts now existing, the outcome would be the same.
Counsel's submissions as to the nature of the hearing were made primarily in reliance upon remarks of Underwood J (as he then was) in Retirement Benefits Fund Board v Hingston (1997) 7 Tas R 134 at 143. His Honour was there dealing with an application pursuant to the Regulations, reg106, upon which clause 10.3 of the trust deed was based. His Honour found that reg106 was ultra vires the Act, a problem later corrected, but nevertheless went on to say:
"Regulation 106 is a curious regulation. First, it gives a person aggrieved by a decision of the Board the power to force the Board, upon payment of an application fee of $200, to apply to the Court to review its own decision which presumably it thinks is correct. That is, as counsel for the Board pointed out, an inexpensive way of giving an aggrieved employee the right to test the correctness of the Board's decision. Second, it confers jurisdiction on this Court to make a declaration 'as to the validity or otherwise of the determination', but at the same time requires the Court to have regard to 'facts existing and events that have occurred at the time the declaration is made'. This suggests that the jurisdiction conferred is more in the nature of a rehearing de novo rather than a review of what was done by the Board. This view is reinforced by the provisions of subregs(4) and (5) which give the Court all the powers and discretions conferred upon the Board, and power to make a declaration affirming the decision, power to remit the decision, vary the decision or set it aside and substitute a different decision. The parties before me said that they were agreed that the nature of the proceeding is a hearing de novo but, of course, it is not for the parties to reach agreement about the extent of the jurisdiction of this Court. However, having regard to the conclusion I have reached with respect to the ultimate disposition of this matter, it is unnecessary for me to consider the exact nature of a proceeding pursuant to the Regulations, reg106."
Counsel relies on his Honour's remarks as being a correct statement of the law. Counsel referred to the similarities and differences between reg106 and clause 10.3, and submitted that the views expressed by Underwood J were apposite to clause 10.3. Counsel for the Board also referred to the nature of appeals from various tribunals and boards and decisions of this Court as to the nature of those appeals. He submitted that a number of factors pointed strongly towards the nature of the "appeal" presently before the Court being that of a rehearing de novo. These factors were:
-that the appeal was from a decision of an administrative tribunal,
-the Court was placed in the same position as the Board when determining the appeal which was to be determined at the time the appeal was heard and not at the date upon which the Board made the decision appealed against,
-the respondent is not required to particularise what is wrong with the Board's original decision, and
-the very nature of this type of appeal was that situations of incapacity might change. Therefore, the sensible course was to allow the Court to determine the claim afresh on the basis of the state of incapacity of the respondent at the date the appeal is heard.
There are two significant difficulties with counsel's submissions. Firstly, these proceedings are not an appeal. They involve an application for a declaration as to validity of a decision already made. Secondly, the Court is not dealing with an application for a temporary incapacity pension by reference to the respondent's position now. It is dealing with the validity or otherwise of a decision made in respect of an application for such a pension referable to a discrete period in time in 2004. It is not dealing with an application for a pension referable to the present.
Both counsel appear to agree that the nature of the hearing of this application is irrelevant, because the Court is expressly enjoined by clause 10.3 of the trust deed to have regard to facts existing and events which have occurred at the time it makes its decision. The Court is therefore not simply reviewing the material the Board had before it to determine if the Board's decision was correct or not. The answer to issue 2 must therefore be "Yes". The difference between the parties' positions lies not in whether the Court must have regard to such matters or not, but in what the impact of its doing so is. Counsel for the Board would have that it means the Court must consider the respondent's eligibility status now when dealing with the matter and not that when her application was initially made.
With respect, the nature of the hearing is, in my view, irrelevant to the issues of law which I am now being asked to determine. If, for example, the hearing of an application under clause 10.3 is to be a hearing de novo, the Court would hear the evidence afresh and determine the matter unfettered by the determination of the Board made in March 2006. However, they would be hearing and determining an application for a temporary incapacity pension by the respondent made in December 2004 in relation to the respondent's circumstances then, and not a new application for a pension as at July 2009. The fact that eligibility ceased in February 2007 may very well be a factor, if the Court were minded to grant a pension, as to the duration of it. However, another relevant factor might be that, had the Board granted the respondent's original application, her eligibility would not have ceased when it did.
What clause 10.3.2 requires the Court to do is have regard to facts existing and events that have occurred at the time the Court's declaration is made. In the present case, clearly that will include the fact that the respondent ceased to be eligible for death and incapacity benefits in or about February 2007 and that, as a consequence, she therefore ceased to be eligible to apply anew for a temporary incapacity pension relative to any period after that date.
However, with respect to the submissions made by counsel for the Board, it does not automatically follow that ineligibility to apply for a temporary incapacity pension in relation to a period in time when the respondent had ceased to be eligible to so apply, precludes the respondent from pursuing such a pension in relation to a period of time when she was eligible to apply, particularly where her application for that was made well within time.
The issue in this case is not in my view the proper construction of clause 10.3.2. It is the correctness or otherwise of what the Board submits is the impact on these proceedings of the cessation of the respondent's coverage for death and incapacity benefits in February 2007. I am of the view that, that cessation is a factor to which this Court would be required to have regard, by reference to clause 10.3.2. However, I am also of the view that, since what the Court is dealing with is a review of a decision made in relation to an application for a temporary incapacity pension at a time and in relation to a period when the respondent remained eligible to so apply, and not an application for a pension relating to a period when she was not so eligible, the Court is not precluded from proceeding to deal with these proceedings.
The matters that I have canvassed in relation to issue 2 have provided the answer for issue 3.
Answers to issues of law identified at page 8 of the judge's papers
In the circumstances, the answers to the issues of law which counsel have raised are as follows:
Issue 1Yes, in respect of any period after coverage ceases by virtue of clause4.5.9(a)
Issue 2 Yes
Issue 3 No
0
0
4