Rushton v Commonwealth Superannuation Corporation (No 3)

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FEDERAL COURT OF AUSTRALIA

Rushton v Commonwealth Superannuation Corporation (No 3) [2021] FCA 358

File number(s): ACD 1 of 2020
Judgment of: RARES J
Date of judgment: 16 April 2021
Catchwords: SUPERANNUATION – financial services – superannuation complaints – Australian Financial Complaints Authority (AFCA) given powers to determine superannuation complaints under s 1055 Corporations Act 2001 (Cth) – where AFCA required to decide whether superannuation trustee’s decision operated unreasonably or unfairly – where applicant married to, but had separated from, member (now deceased) of the Public Sector Superannuation Scheme – where applicant sought to qualify for a reversionary pension under scheme rules – where applicant and deceased had children – where applicant lived in separate premises from, but provided daily care to, deceased and children during final stages of her illness – whether applicant and deceased were living together as husband and wife – where applicant granted carer’s pension to enable him to care for deceased – whether applicant wholly or partly dependent on deceased at the time of her death – where trustee determined applicant did not qualify for reversionary pension – where AFCA affirmed the decision of trustee – whether AFCA made jurisdictional or other error in affirming decision of trustee – held: AFCA did not make any error in determining complaint.
Legislation:

Acts Interpretation Act 1901 (Cth) s 2CA

Corporations Act 2001 (Cth) ss 761, 1053, 1055, 1055A, 1056A, 1057

Superannuation Act 1990 (Cth) s 4
Cases cited:

Ball v Newey (1988) 13 NSWLR 489

Cole v Minister for Immigration and Border Protection (2018) 261 FCR 537

Commissioner for Superannuation v Scott (1987) 13 FCR 404

Fitzpatrick v Sterling Housing Association Ltd [2001] 1 AC 27

Gubay v Kingston (Inspector of Taxes) [1984] 1 WLR 163

Huynh v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 152 FCR 576

Main v Main (1949) 78 CLR 636

Mercer Superannuation (Australia) Ltd v Billinghurst (2017) 255 FCR 144

Minister for Immigration and Multicultural Affairs v Graovac [1999] FCA 1690

QSuper Board v Australian Financial Complaints Authority (2020) 276 FCR 97

Rex v Creamer [1919] 1 KB 564

Roy v Sturgeon (1986) 11 NSWLR 454

Telstra Corporation Ltd v Australian Competition and Consumer Commission (2008) 176 FCR 153

Toohey v Hollier (1995) 92 CLR 618
Division: General Division
Registry: Australian Capital Territory
National Practice Area: Administrative and Constitutional Law and Human Rights
Number of paragraphs: 78
Date of last submission/s: 10 December 2020
Date of hearing: 3 December 2020
Counsel for the applicant: The applicant appeared for himself
Counsel for the first respondent: Ms S. Palaniappan
Solicitor for the first respondent: Ashurst Australia
Counsel for the second respondent: Mr W. Sharwood
Solicitor for the second respondent: Mr Sinclair Whitbourne
Counsel for the third respondent: Mr P. Clay
Solicitor for the third respondent: Clarendon Lawyers

ORDERS

ACD 1 of 2020
BETWEEN:

BEN ANTHONY RUSHTON

Applicant
AND:

COMMONWEALTH SUPERANNUATION CORPORATION, ABN 48 882 817 243

First Respondent

MARK DESMOND KANEY AS LITIGATION GUARDIAN FOR KANE ANTHONY RUSHTON, JYE LUKE…

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Details
Case
[2021] FCA 358
Decision Date

CaseChat Overview and Summary

The case of Rushton v Commonwealth Superannuation Corporation (No 3) involved Mr Rushton appealing a decision made by the Australian Financial Complaints Authority (AFAC) regarding his eligibility for a spouse pension under the Superannuation Industry (Supervision) Act 1993 (Cth). Mr Rushton sought a spouse pension after the death of his wife, who was a member of the Commonwealth Superannuation Scheme. The primary issue was whether Mr Rushton and his late wife were in a "marital or couple relationship" at the time of her death, which would make him eligible for the pension. The secondary issue was whether Mr Rushton was wholly or substantially dependent on his wife at the time of her death.

The AFAC had determined that Mr Rushton and his late wife were not in a marital or couple relationship at the time of her death. They found that while Mr Rushton had provided care for his wife in the months leading up to her death, he was not her exclusive carer and that they had been separated, living in separate residences. The AFAC concluded that there was no evidence that they had any shared financial assets or commitments or had a commitment to a shared life together. The AFAC also found that there was no evidence that the deceased provided any financial support to Mr Rushton or that he was wholly or substantially dependent on her at the time of her death. The AFAC did not accept that the provision of care by Mr Rushton brought him within the definition of a "spouse".

The court upheld the AFAC's decision, agreeing with their reasoning and findings. The court found that the AFAC's decision was fair and reasonable in its operation in relation to Mr Rushton and the children. The court emphasized that the AFAC had the power to make its own determinations and was not bound by the trustee's decision. However, the AFAC must exercise its powers within legal confines and in accordance with the terms of the trust deed and any applicable statutory provisions. The court concluded that the AFAC had correctly applied the relevant statutory provisions and rules in making its decision.

The final orders of the court were that the appeal be dismissed with costs.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

The Authority has power under s 1055(6) to vary, set aside and substitute a decision or remit the matter to the decision-makers, but must not make a determination that would be contrary to law (s 1055 (7)). The Authority must give reasons for its decision (s 1055A)Background The deceased was a person who was still a member of the scheme when she died on 11 April 2015 and, accordingly met the definition of a “deceased member”. Importantly, as I have noted above, the definition of “spouse” expressly applied “in relation to a deceased member”. Mr Rushton and his late wife married in February 2005. In 2011, the deceased was diagnosed with breast cancer. In February 2012 Mrs Rushton applied for and was granted a carer allowance. In the application for that allowance she stated that she was separated. On 28 February 2014, Mr Rushton was removed from the deceased’s home at Scarborough, Queensland. On 6 March 2014, the Queensland Magistrates Court granted, on the deceased’s application, an intervention order against Mr Rushton. In that application, the deceased said that the relationship was over and that she feared for the lives of herself and her children. On 6 March 2014, she applied for a domestic violence crisis payment to meet costs of securing the home due to the family violence incident and again stated, in that application, that she was separated. On 28 March 2014, the deceased retired from her employment on medical grounds. The trustee paid her a part pension and a part lump sum under the scheme. On 22 May 2014, the deceased telephoned the trustee helpline and enquired about the distribution of her death benefit. On the call, she said that her marital status was single and she wished the death benefit to be paid to her children. The helpline told her that it would note her marital status but she could not nominate a beneficiary because that would be determined after she had tied. During the call she also told the helpline that she was separated and owned her property. She said that Mr Rushton had made no contributions to the property, that he had been out of work for 4 years and that “I’ve been supporting him”. The Magistrates Court varied the intervention order on 10 June 2014 and on 22 July 2014 granted the deceased a protection order to prevent Mr Rushton approaching her home or work. On 25 July 2014, the deceased executed her last will under which she appointed as executors her mother and brother, the second respondent, Mark Kaney. She devised to Mr Rushton the right to live in the Queensland home until he formed a domestic relationship. She expressed the wish that any superannuation entitlement would be paid into her estate and be dealt with in the same way as her other bequests that left her net estate to the children. On 13 October 2014, Mr Rushton commenced proceedings in the Federal Circuit Court in which he stated that 28 February 2014 was the date of final separation of parties to the marriage. In December 2014, the deceased and her children moved to a house in Canberra, having sold the Scarborough home. Mr Rushton appears to have moved to Canberra at about the same time and resided with his parents. Until she died, Mr Rushton appears to have provided full time care for the deceased and the children at her home.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

On 6 December 2018, Mr Rushton made a complaint to the Authority which is the subject of this appeal. The Authority’s decision On 4 December 2019, the Authority determined, relevantly, that the second trustee decision was fair and reasonable in its operation in relation to Mr Rushton and the three children in all the circumstances. The Authority had joined the children as parties to the complaint in accordance with s 1056A of the Corporations Act. The Authority stated that, under the Act, the issue for it was not what decision it would have made but whether the decision under review was fair and reasonable, based on the information that it had. The Authority found that there was no dispute that Mr Rushton has provided care to his late wife, but he was not her exclusive carer. It found, referring to the evidence before it, that the deceased had agreed to Mr Rushton caring for her in the last months of her life to enable the children to build relationships with him because she understood that he would be given custody of them when she died. It found that Mr Rushton and the deceased had been separated and lived in separate residences in both Queensland and Canberra. The Authority referred to the formal separation on 28 February 2014 and the deceased obtaining the intervention order soon after. It noted that the deceased had completed government forms stating that she was separated and had changed her will in July 2014 to bequeath her estate only to the children. It found that, after Mr Rushton discovered that his wife had changed her will, he had filed an application in the Family Court in which he also stated that the couple had separated on 28 February 2014. The Authority found that on his return to Canberra in December 2014, Mr Rushton lived with his parents and not with the deceased. It concluded that there was no evidence that they had any shared financial assets or commitments or had a commitment to a shared life together. It found that their family, friends and the palliative care staff supporting the deceased all accepted that Mr Rushton and the deceased were separated. The Authority said that it was necessary to assess the relationship as a whole. It found that the fact that the parties were legally married and that Mr Rushton provided care was not sufficient. It was not satisfied that, at the date of her death, he and the deceased were living in a marital or couple relationship and that, accordingly, Mr Rushton did not satisfy the first limb of the definition of “spouse”. Next, the Authority found that there was no evidence that, after the separation, the deceased provided any financial support to Mr Rushton or that he was wholly or substantially dependent on her at the date of her death. Indeed, it said that the only evidence of dependence supported a conclusion that the deceased may have been partly dependent on Mr Rushton, who was paying her a small amount as child support. The Authority did not accept that the provision of care by, or the payment of a carer’s allowance to, Mr Rushton brought him within the second limb of the definition of a “spouse”.

Ratio Decidendi

Legal Principle Established

The trustee and the brother (as guardian of the children) opposed the appeal. The brother largely adopted the trustee’s submissions. Consideration The hearing by the Authority is de novo: Mercer Superannuation (Australia) Ltd v Billinghurst (2017) 255 FCR 144 at 155 [32] per Flick, Kerr and Pagone JJ. The determining factor for the exercise of the Authority’s powers under s 1055(3) is not the lawfulness of the trustee’s decision, but its fairness and reasonableness in its operation in relation to the complainant and any joined person: QSuper Board v Australian Financial Complaints Authority (2020) 276 FCR 97 at 113 [64] per Moshinsky, Bromwich and Derrington JJ. However, s 1055(7) requires that, if it grants a remedy under s 1055(5), the Authority must exercise the powers of the trustee within legal confines and does so in accordance with the terms of the trust deed and any applicable statutory provisions: QSuper 276 FCR at 113 [65]. The Authority had to determine whether the second trustee decision was fair and reasonable in its operation in relation to Mr Rushton and the children, in respect of its resolution of, first, the existing relationship issue and, secondly, the dependency issue, in accordance with the first and second limbs of the definition of “spouse”. The existing relationship issue The existing relationship issue required attention to the definition in r 1.2.1 of “marital or couple relationship”. In order for Mr Rushton to be eligible for a spouse pension under the second alternative in that definition, the deceased and Mr Rushton, who were legally married to each other, had to be, at the time of her death, in a relationship under which they had been living with each other “as husband and wife… on a permanent and bona fide domestic basis at that time, having regard to any evidence relevant in that respect”. The amendments to s 2CA of the Acts Interpretation Act had no relevance to the construction of the rules as they applied to the relationship between Mr Rushton and the deceased. That is because they were legally married at all times up to her death. Therefore, they were always “spouses” as defined in s 2CA and in the natural and ordinary English meaning of “spouse”, but that was not determinative of whether they were spouses within the definition of “spouse” in r 1.2.1. At common law, a conclusion that a husband and wife are “living together” or living with each other involves a consideration of whether consortium continues between them: Rex v Creamer [1919] 1 KB 564 at 569. There, Darling, Avory, Lush, Shearman and Sankey JJ said: A husband and wife are living together, not only when they are residing together in the same house, but also when they are living in different places, even if they are separated by the high seas, provided the consortium has not been determined. In this case it cannot be said that at the time the wife took the money the consortium had been determined, because the wife had not at that time committed adultery, and therefore it is little to the purpose to point to the fact that the wife was living at Folkestone and the husband was in France on service with the Army. In the legal sense they were still living together.(emphasis added)