Sadick v Superannuation Complaints Tribunal

[2007] FCA 1268

FEDERAL COURT OF AUSTRALIA

Sadick v Superannuation Complaints Tribunal [2007] FCA 1268

MOHAMED KASSIM JAFAR SADICK v SUPERANNUATION COMPLAINTS TRIBUNAL, CARE SUPER PTY LTD AND ABDUL RAHMAN
VID 1052 OF 2006

NORTH  J
18 JULY 2007
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA  DISTRICT REGISTRY	VID 1052 OF 2006

BETWEEN:

MOHAMED KASSIM JAFAR SADICK
Applicant

AND:

SUPERANNUATION COMPLAINTS TRIBUNAL
First Respondent

CARE SUPER PTY LTD
Second Respondent

ABDUL RAHMAN
Third Respondent

JUDGE:	NORTH  J
DATE OF ORDER:	18 JULY 2007
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1.Leave is granted to the appellant to amend the notice of appeal by deleting the questions of law presently appearing and substituting therefore the question, ‘Whether the first respondent erred in holding that the third respondent was a dependent of the deceased?’

2.The appeal is dismissed.

3.The appellant pay the second and third respondents’ costs of the appeal.

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

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA  DISTRICT REGISTRY	VID 1052 OF 2006

BETWEEN:

MOHAMED KASSIM JAFAR SADICK
Applicant

AND:

SUPERANNUATION COMPLAINTS TRIBUNAL
First Respondent

CARE SUPER PTY LTD
Second Respondent

ABDUL RAHMAN
Third Respondent

JUDGE:	NORTH  J
DATE:	18 JULY 2007
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1. Before the court is an appeal against a determination of the Superannuation Complaints Tribunal made on 22 August 2007. The appeal is brought under s 46 of the Superannuation (Resolution of Complaints) Act 1993 (the Complaints Act) which provides that a party may appeal to the Federal Court on a question of law from a determination of the Tribunal.

2. The Tribunal exercised its jurisdiction under s 37(6) of the Complaints Act to determine whether the decision of Care Super Pty Ltd (the trustee), the second respondent, was fair and reasonable. Section 37(6) provides as follows:

   (6)The Tribunal must affirm a decision referred to under subsection (3) if it is satisfied that the decision, in its operation in relation to:

   (a)       the complainant; and

   (b)so far as concerns a complaint regarding the payment of a death benefit—any person (other than the complainant, a trustee, insurer or decision‑maker) who:

   (i)has become a party to the complaint; and

   (ii)has an interest in the death benefit or claims to be, or to be entitled to benefits through, a person having an interest in the death benefit;

   was fair and reasonable in the circumstances.

3. The Tribunal affirmed the trustee’s decision to pay to the third respondent, Abdul Rahman (the father), death benefits amounting to $55,337 as at 18 August 2005.  The death benefit arose under a policy held by Muna Rahman who died by her own hand on 22 May 2003.  Abdul Rahman is the father of the deceased and was appointed her legal personal representative. 

4. At the time of her death, Muna Rahman was married to Mohamed Sadick, the appellant (the husband).  However, on the previous day, she obtained a decree nisi for the dissolution of her marriage.  The decree had not become absolute at the time of her death.      

   THE DECISION OF THE TRIBUNAL

5. After setting out the complaint and the background, the Tribunal referred to the relevant provisions of the Care Super Consolidated Trust Deed, namely, the definition of ‘dependant’ and ‘spouse’: 

   “Dependant” in relation to a Member means:

   (a)the spouse, widow, widower and any Child of the Member; and

   (b)any other person who, in the opinion of the Trustee and in accordance with the Relevant Law, is or was at the relevant date substantially dependent on the Member.

   “Spouse”, in relation to a Member or former Member, means:

   (a)a person legally married to the Member or former Member at the time of the Member’s death or of any other event in respect of which an entitlement to benefit may arise;

   …

6. The Tribunal then set out the relevant law, namely, the Superannuation Industry (Supervision) Act 1993 (the SIS Act). Section 10(1) of the SIS Act defined dependant as including the spouse of a person.

7. The Tribunal set out cl 8.2(b) of the trust deed, which defined the persons to whom death benefits were payable as follows:

   The benefit payable under sub-clause 8.2(a) will be paid in such form and to any one or more of the following persons in such proportions as the Trustee shall in its absolute discretion think fit:

   (i)        all or any of the Dependants of the deceased Member; and/or

   (ii)       the Legal Personal Representatives of the deceased Member.

8. Importantly, the Tribunal then set out under the heading, ‘Potential Beneficiaries’, the following:

   The potential beneficiaries are the Complainant and the Legal Personal Representative of the Deceased Member.

9. It is not necessary to refer in detail to the submissions made to the Tribunal as recorded in the decision of the Tribunal.  It is sufficient to note that the husband argued that he should receive all of the death benefit, in part because he was in a perilous financial position and if the money were paid to the legal personal representative, it would pass to the deceased’s parents who were both very well off.  Significantly, he also argued that contrary to the decision of the trustee, he was a financial dependant of the deceased member because:

   ·    in her absence in India he continued to reside rent free in a unit in her name in Footscray and hence he was provided with a place to live, by the deceased; and

   ·    he had the legal right to seek maintenance payments from the deceased even though this right had not been exercised as at the date of her death.

10. The Tribunal also set out the father’s submissions.  Again it is not necessary to refer to them in detail, but it should be noted that he contended that the husband was not financially dependent on the deceased. 

11. The Tribunal then recorded what it described as the reasons for decision of the trustee, and, in particular, that the trustee determined that the husband was not a financial dependant.  Finally, the Tribunal set out the husband’s submissions in response.

12. Next it outlined its deliberations and stated its function as follows:

    The Tribunal must determine whether the decision of the Trustee to pay the death benefit to the Deceased Member’s Estate was fair and reasonable in its operation in relation to the Complainant and the Joined Parties in the circumstances.  The issue is not what decision the Tribunal would have made on the evidence before it.  In reaching its determination, the Tribunal took the whole of the evidence and submissions into account. 

    Relevant to this determination are the wishes of the Deceased Member the nature of the relationship between the Complainant and the Deceased Member; and the financial circumstances and needs of the Complainant.

    The Trustee must pay the benefit to the dependant(s) and/or the Legal Personal Representative of the Deceased Member.  The only possible dependant is the Complainant.
    [emphasis added]

13. A little later the Tribunal summarised the arguments as follows:

    The Complainant argues that he is dependent under the Trust Deed definition both as a spouse (part (a) of the definition) and, if necessary, because he was financially dependent on the Deceased Member (part (b) of the definition) at the time of her death.  The father argues that the complainant was not the spouse and was not financially dependent.  The trustee did not address this issue directly. 

14. The Tribunal found that the husband was the spouse of the deceased and hence a dependant under the deed.  It said:

    The Complainant was clearly the spouse of the Deceased Member.  The granting of a decree nisi does not dissolve a marriage.  The marriage does not dissolve until the decree nisi becomes absolute, which would, in the ordinary course of events, occur one month after the making of the decree nisi.  So the Complainant is a ‘dependant’ of the Deceased Member at the time of her death.  Given that he qualifies as such, it was not necessary for the Trustee to determine whether he also qualified as a financial dependant.

15. The Tribunal continued:

    However, it was necessary for the Trustee to examine the state of the relationship - financial and otherwise - between the Deceased Member and the Complainant in order to properly exercise the discretion granted to it in determining the distribution of the benefits.

    At this point in the decision, the Tribunal examined two arguments which the husband had raised to prove that he was a financial dependant, namely, that he had used a credit card belonging to the deceased and also that he had continued to reside in a unit being purchased in the name of the deceased. 

16. In relation to both of those issues, the Tribunal determined that it was open to the trustee on those facts to conclude that the husband was not financially dependent.  In the course of that discussion, the Tribunal did itself consider some elements of the relationship between the deceased and the husband.  For instance, it said:

    … There is clear evidence that the relationship between the Deceased Member and the Complainant had broken down to such an extent that the Trustee was justified in accepting this conclusion. …

    … [I]t was unlikely the Deceased Member would have agreed to the Complainant using the credit card at her expense. … 

    … The Deceased Member had entered a relationship with the Complainant’s best friend and it was claimed that she returned to Australia in order to undertake divorce proceedings against the Complainant. …

17. Having considered the question of financial dependency, the Tribunal proceeded to consider the circumstances of the potential beneficiaries.  It is this discussion which formed the centre of the husband’s case before this Court.  The Tribunal said:

    It follows from the above that the Complainant was, at the date of death of the Deceased Member, although not a financial dependant, a dependant of hers.  He was accordingly entitled to have his claim considered by the Trustee. The Father as administrator of the Deceased Member’s estate was also a dependant as defined. While the SIS Act categorises who qualifies as a dependant, save in an exception not relevant to these proceedings, it gives no guidance as to how the Trustee is to exercise its discretion in determining how distribution is to occur between qualifying dependants. That will depend on the circumstances.  There is no formula which can be universally applied to obtain a result.  The facts in every case differ.  The absence of a nomination of beneficiary often makes the task of a Trustee more difficult.  In a case like the present, it is the change in circumstances of the relationship between the estranged parties which is of most significance.
    [emphasis added]

18. The Tribunal went on to consider numerous factors which bore on the reasonableness of the conclusion reached by the trustee.  It is not necessary to traverse all these issues, suffice to say that the Tribunal considered in particular the husband’s financial circumstances but contrasted them with the fact that he had travelled abroad, had re-married, was still a young man, and that there were no children of the marriage. 

19. The Tribunal concluded that:

    The discretion of the Trustee of a superannuation fund is subject to the terms of the governing deed and even where there is a qualifying dependant, as here, that dependant may not be the recipient of the benefit when there is another nominated category of recipient. That was the case here. While the Trustee ought to have considered the Complainant as a dependant, its failure to do so does not automatically result in its decision being set aside. The Tribunal must look to the fairness and reasonableness of the operation of the decision to the Complainant and other parties (s 37(6) of the Complaints Act). In this case, for the reasons stated, the Tribunal is not satisfied that the decision operates unfairly to the Complainant and although for different reasons from the Trustee, affirms the decision under review.

    THE ISSUE ON APPEAL

20. When the proceeding was commenced, the husband relied upon a notice of appeal which raised six purported questions of law.  In view of cases such as Comcare v Etheridge (2006) 90 ALD 31; [2006] FCAFC 27, it was clear that the notice of appeal did not comply with the requirements of s 46 of the Complaints Act and O 53 of the Federal Court Rules.  This matter was raised with the husband’s representatives shortly before the hearing date and, as a result, the husband sought leave to file an amended notice of appeal which deleted four of the original grounds but added four additional grounds.  However, the proposed amended notice of appeal suffered from the same deficiencies as the original.  When this problem was raised at the beginning of the hearing, the husband sought leave to amend the notice of appeal by substituting the original questions of law with one question, namely, whether the Tribunal erred in holding that the father was a dependant.  As this amendment was not opposed by the respondents, it was allowed.  Rather than adjourn to allow reformulation of the grounds of appeal, the case was argued as if the oral argument stood as the grounds of appeal. 

21. The issue of law said to be raised by the question centres on the two emphasised sentences in the decision of the Tribunal extracted in [13] of these reasons, namely, that in those two sentences, the Tribunal described the father both as administrator of the deceased member’s estate and as a “dependant as defined”. It then went on to describe the operation of the SIS Act as giving no guidance in relation to a distribution between “qualifying dependants”.

    CONSIDERATION

22. It is common ground that the father was a potential beneficiary of the death benefit under cl 8.2(b)(ii) of the trust deed by reason of his capacity as legal personal representative of the deceased. It is also common ground that he was not a dependant as defined in the trust deed or the SIS Act. Counsel for the husband contended that the Tribunal had misconstrued its task and had erred in law in describing the father as a dependant and treating the case as a contest between dependants rather than as a question of fairness and reasonableness as between a dependant and the legal personal representative of the deceased.

23. In my view, this argument is an attempt to capitalise upon an inconsequential error of expression made by the Tribunal.  The context of the decision read as a whole makes it clear that the Tribunal understood that it was dealing with potential beneficiaries who qualified, in the case of the husband, as a dependant under cl 8.2(b)(i) and the father as the legal personal representative of the deceased under cl 8.2(b)(ii).  So much is clear from the statement of the Tribunal under the heading ‘Potential Beneficiaries’ that the “potential beneficiaries are the Complainant and the Legal Personal Representative of the Deceased Member”, and in the course of its deliberation where it stated:

    The Trustee must pay the benefit to the dependant(s) and/or the Legal Personal Representative of the Deceased Member.  The only possible dependant is the Complainant.

24. Counsel for the husband suggested that it was significant that the misdescription occurred in the Tribunal’s decision at the only point at which there was discussion about the status of the two potential beneficiaries.  As has just been indicated, this argument is without substance.  The way in which each of the potential beneficiaries put their claim had been referred to several times before and once after the error.

25. It was then suggested that the Tribunal’s discussion, particularly in relation to the improper use of the credit card and the making of mortgage payments, could only be explained if the Tribunal had approached the case as a contest between dependants.  This argument is also unsustainable.  The two paragraphs must be considered in context.  It must be remembered that the trustee had determined that the husband was not a financial dependant, and that the husband and the father had made submissions to the Tribunal in relation to this finding.  The Tribunal, in its decision, pointed out, in effect, that this conclusion was not sufficient to dispose of the case because, even though the husband did not qualify as a dependant on the basis of financial dependence, he qualified as a dependant as a spouse.

26. It seems to me that the Tribunal was attempting to explain that there was a basis for the trustee’s decision.  In other words, there was a basis upon which the trustee could legitimately conclude that the use of the credit card and the continued residence in the unit did not establish financial dependency.  It is true that in the course of its discussion, the Tribunal examines some of the relevant issues as to the question of reasonableness and fairness of the decision of the trustee but I see no basis for the submission that the paragraphs demonstrate any error linked to the later misdescription of the father as a dependant.

27. On this view of the case no occasion rises to apply the well-known dictum in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 (Bond), namely, that error of law will not be established unless it can be shown that it played a part in the conclusion reached.  In Bond, Toohey and Gaudron JJ said at 384:

    Thus, to show that an error of law is involved in a decision it is necessary, at the very least, to show that the decision may have been different if the error had not occurred. 

    Mason CJ said at 353:

    A decision does not “involve” an error of law unless the error is material to the decision in the sense that it contributes to it so that, but for the error, the decision would have been, or might have been different.

28. In my view it has not been established that the decision of the Tribunal would have been any different had the description of the father been, as it should have been, beneficiary as distinct from dependant.  Consequently the appeal must be dismissed.

I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice North.

Associate:

Dated:        20 August 2007

Counsel for the Applicant:	Mr A Thapliyal
Solicitor for the Applicant:	Challenge Legal
Counsel for the 2nd Respondent:	Mr J Doherty
Solicitor for the 2nd Respondent:	IFS Legal
Counsel for the 3rd Respondent:	Mr G M Randal
Solicitor for the 3rd Respondent:	Agricola Wunderlich & Associates
Date of Hearing:	18 July 2007
Date of Judgment:	18 July 2007