Seymour and Commissioner for Superannuation
[2003] AATA 532
•6 June 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 532
ADMINISTRATIVE APPEALS TRIBUNAL )
) No V02/265
GENERAL ADMINISTRATIVE DIVISION ) Re ARTHUR SEYMOUR Applicant
And
COMMISSIONER FOR SUPERANNUATION
Respondent
DECISION
Tribunal Mrs Joan Dwyer, Senior Member
Mr C Ermert, Member
Dr P Fricker, MemberDate6 June 2003
PlaceMelbourne
Decision The Tribunal sets aside the decision under review and in substitution decides to extend the time allowed, under s 154(2) of the Superannuation Act 1976, to seek reconsideration of the decision made on 5 November 1992 to 9 October 2000.
(Sgd) Joan Dwyer
Senior Member
SUPERANNUATION – Commonwealth Superannuation Scheme – application for review of decision refusing an extension of time under s 154(2) of the Act to seek reconsideration of a decision of the Commissioner made 5 November 1992 refusing to recognise a late election under s 157(1) of the Act - application to change election so as to preserve benefits more than 4 years after resigning – application refused – no request for reconsideration within time allowed – request made almost eight years late ‑ whether in the interests of justice that time to seek reconsideration be extended
Superannuation Act 1976 s 137(1) and ss 154(1), (2), (3), (4) and (6), s 157(1)
Re Moorhouse and Commissioner for Superannuation (AAT 12001, 2 July 1997)
Hunter Valley Developments Pty Ltd and Ors v Minister for Home Affairs and Environment (1984) 58 ALR 305
Comcare v A’Hearn (1993) 119 ALR 85
Chalk v Commissioner for Superannuation (1994) 33 ALD 420
Commissioner for Superannuation v Ashmore [2001] FCA 666
Commissioner for Superannuation v Boardman (1994) 50 FCR 236
Wolstencroft and Commissioner for Superannuation (2001) 34 AAR 71
Comcare v A’Hearn (1993) 45 FCR 441
Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541
Commissioner for Superannuation v Boardman (1994) 123 ALR 239
Brisbane South Regional Health Authority v Taylor (1996) 139 ALR 1
Re Stege and Commissioner for Superannuation [2001] AATA 1022
Commissioner for Superannuation v Boardman (1994) 33 ALD 569
Lucic v Nolan (1982) 45 ALR 411
Re Charles and Commissioner for Superannuation, (1993) 18 AAR 61
Re McKnight and Commissioner for Superannuation (1998) 49 ALD 84
Re Morgan and Commissioner for Superannuation (unreported W92/200, 12 March 1993)
Re Schofield and Commissioner for Superannuation (AAT 10006, 14 February 1995)
REASONS FOR DECISION
6 June 2003 Mrs Joan Dwyer, Senior Member
Mr C Ermert, Member
Dr P Fricker, MemberBACKGROUND
1. This is an application under s 154(6) of the Superannuation Act 1976 (“the Act”), for review of a decision of the Commissioner for Superannuation ("the Commissioner") made 9 April 2001 and confirmed on reconsideration on 10 February 2002. The reviewable decision refused Mr Seymour an extension of time, under s 154(2) of the Act, in which to seek reconsideration of a decision of the Commissioner made under s 157(1) of the Act on 5 November 1992, refusing Mr Seymour’s application to make a late election to preserve superannuation rights under s 137(1) of the Act.
2. Mr P. Pascoe of Counsel appeared for Mr Seymour. Mr A. Dillon, a solicitor with the Australian Government Solicitor, appeared for the Commissioner for Superannuation (“the Commissioner”). The Tribunal had before it the documents (“the T documents”) lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 and the exhibits tendered during the hearing. Mr Seymour gave evidence. Evidence on his behalf was also given by Mrs Seymour.
3. This matter, which arises under s 154 of the Act, also concerns ss 137(1) and 157(1) of the Act. Those provisions relate to the election to preserve superannuation rights which is available to a member of the Commonwealth Superannuation Scheme (“CSS”). Under Part IX, Division 3 of the Act, a person who ceases to be an eligible employee may, in certain circumstances, elect that the division apply so that the person's superannuation rights are preserved. Section 137(1) provides that such an election should be made within 21 days, but a member may seek to have a late election recognised under s 157(1). Where such an application has been refused, it is possible to apply to the Commissioner under s 154 of the Act for reconsideration of the decision refusing to recognise a late election for preservation of superannuation rights. Such an election has considerable advantages in terms of the rate of superannuation pension payable on retirement at age 55 or over, particularly where a member returns to Commonwealth employment after the resignation.
4. Under s 154 of the Act an application for reconsideration is required to be made within 30 days or within such further period as the Commission allows. The matter for decision is whether an extension of time under s 154(2) should be allowed.
LEGISLATIVE PROVISIONS
5. In order to understand the issues it is necessary to set out the relevant legislative provisions. Sections 137(1), and 157(1) provide as follows:
137. (1) A person who:
(a) ceases to be an eligible employee in circumstances to which paragraph (b) does not apply and, upon so ceasing, is not entitled to pension under this Act or invalidity benefit in accordance with section 69, 72 or 73; or
(b) ceases to be an eligible employee in circumstances by virtue of which the person is to be deemed, under subsection 58 (3), or under section 58A or 58B, to have retired involuntarily;
may, not later than 21 days after the person so ceases to be an eligible employee, elect, by notice in writing to the Board, that this Division apply in relation to the person.
157. (1) Notwithstanding anything contained in this Act, where an election under this Act is made by a person after the expiration of the period allowed by or under this Act for the making of the election, and the Board is satisfied that in all the circumstances of the case it is desirable that the election should be recognized, the Board may direct that the election be treated as if it had been made within the period allowed and the election shall have effect accordingly.
6. A decision refusing to recognise a late election under s 157 of the Act is a reviewable decision under s 154 of the Act. Under that section a person affected by such a decision may request reconsideration of the decision within 30 days or such further period as the Commissioner allows. Section 154 of the Act provides:
154. (1) In this section:
"decision" has the same meaning as in the Administrative Appeals Tribunal Act 1975;
"reviewable decision" means a decision of the Commissioner, or a delegate of the Commissioner, under this Act, under the superseded Act or under the regulations made under either of those Acts, and includes a decision of the Superannuation Board, or a delegate of the Superannuation Board (other than a decision under section 141 of the superseded Act);
"Superannuation Board" means the Superannuation Board established by the superseded Act.
(2) A person affected by a reviewable decision who is dissatisfied with the decision may, by notice in writing given to the Commissioner within the period of 30 days after the day on which the decision first comes to the notice of the person, or within such further period as the Commissioner allows, request the Commissioner to reconsider the decision.
(3)There shall be set out in the request the reasons for making the request.
(4) Upon receipt of the request, the Commissioner shall reconsider the decision and may confirm or revoke the decision or vary the decision in such manner as the Commissioner thinks fit.
. .. .
(6) Applications may be made to the Administrative Appeals Tribunal for review of reviewable decisions that have been confirmed or varied under subsection (4) and for review of decisions of the Superannuation Board, or delegates of the Superannuation Board, made under section 141 of the superseded Act.
THE FACTS
7. Mr Seymour joined the Post-Master General’s Department (“PMG”), in Tasmania on 6 December 1965. His employer later became the Australian Telecommunications Commission (“Telecom”). He resigned after more than 20 years service, with effect from 14 February 1986. On 29 January 1986 he completed a form S2A in which he elected to apply for a refund of accumulated contributions under the Act (T4 p21). On 26 March 1986 he was paid $17,647.10 by way of refund of accumulated contributions (T14 p32 and T27 p62).
8. Less than six months after his resignation, Mr Seymour rejoined Telecom. On 8 January 1987 he wrote to the Chief Manager of Human Resources at Telecom as follows (T5 p22):
Could you please advise me of my entitlements on reinstatement with Telecom Australia. I commenced on the 11 August 1986.
9. Mr Seymour received a reply dated 3 March 1987 as follows (T6 p23):
In regard to your letter dated 8 January 1987 and our telephone conversation, the following details are provided.
Previous service counts towards long service leave date. Your seniority date will now be your new commencement date.
In regard to your sick leave, because your service was broken previous sick leave credits do not count.
Previous service does not count for telephone concessions.
That letter did not mention the option of applying, under s 157(1) of the Act, to have a late election for preservation of superannuation rights treated as if it had been made within time. Mr Seymour said that, in the telephone conversation referred to in the letter from Telecom of 3 March 1987 (T6), he had asked what he could do about his superannuation entitlements, and had been advised that there was nothing he could do.
10. On 13 September 1990, Mr Seymour wrote to the Commissioner for Superannuation seeking to make a late election. He explained that at the time he made the election for refund of accumulated contributions he had been unaware that he could have preserved his benefits in the CSS (T7 p24).
11. On 16 May 1991 the Commissioner wrote to the State Manager of Telecom seeking advice as to the practice concerning advice as to the preservation option given to members of the CSS on resignation in 1986. The Commissioner also asked about the information given to new members at the time Mr Seymour had rejoined the CSS. The Commissioner requested copies of any superannuation information provided to new members (T8 pp25-26).
12. Mr Wade, the Telecom General Manager for Tasmania and Country Region, replied on 22 May 1991 as follows (T9 p27):
Further to your request of 16 May regarding Mr Seymour’s application for recredit of prior service the following information is provided in response to your question.
5(a) Yes, where possible staff submitting resignations were informed of the preservation options. However most refused to listen to this advice as they were only interested in obtaining the cash refund of their contribution.
5(b) If queries concerning the preservation option were received, staff were generally advised to contact the Superannuation Commission Office to obtain correct information.
6(a) Yes, staff were advised of their superannuation rights on appointment.
6(b) The new contribution booklet was forwarded to newly appointed staff in association with other appointment documents.
6(c) Staff enquiring about transfer of entitlements from other superannuation schemes were advised to contact the preservation Section in the Commonwealth Superannuation Scheme Office.
In response to question (7) it was quite clear at the time of Mr. Seymour’s resignation in 1986 that he was leaving to purchase a small business (see attached copy of advice from his Superintending Engineer) and it was understood that he was intending to use his refund of contributions to purchase the business. The preservation option was explained to him but he was not interested.
13. The respondent did not call Mr Wade to give evidence. Mr Seymour said that he knows that Mr Wade is still available. The respondent relied on Mr Wade’s letter to Mr Seymour. That letter, which was given great weight by the decision-maker, and which was preferred to Mr Seymour’s statements, states in paragraph 5(a) that staff were informed of the preservation options “where possible”.. In paragraph 6(a) it states that staff were advised of their superannuation rights on appointment, but this is not supported by the correspondence set out in paragraphs 6 and 7 of these reasons. Further, the copy advice from the Superintending Engineer relied on as making it “quite clear” that Mr Seymour was leaving to purchase a small business, does not seem to be attached. Mr Seymour agreed that he was intending to buy a small business. Mr Wade’s letter does not explain by whom and on what basis “it was understood that he was intending to use his refund . . . to purchase the business”. On Mr Seymour’s evidence, any such understanding was mistaken. Mr Seymour further denied that the preservation option was explained to him.
14. It seems that Mr Seymour must also have received a letter dated 16 May 1991 from the Commissioner, but unfortunately it is not in the T documents. In his reply of 6 June 1991 (T10 p28) Mr Seymour wrote:
Thank you for your letter of 16 May 1991.
If my election is accepted I will pay the refund of accumulated contributions within 14 days of receiving advice of acceptance.
As pointed out in your letter of 16 May 1991 I did delete the option to “elect for preservation of superannuation rights” on form S2A.
My understanding at the time of resignation was that I could only preserve my own contributions and I was not aware that the funds would stay in the Commonwealth Superannuation Fund. I believed that I would have had to roll over my funds into an Investment/Insurance company.
I was not aware that by preserving my own contributions I would be at a future date entitled to my Employers Contribution.
The form S2A does not mention the contributions made by the employer and that even by resigning you could preserve the employer contribution.
On my re-instatement to Telecom I requested from my staff clerk information on gaining recognition for previous service with the Government. I asked at that time if it was possible to adjust my Superannuation and was told there was nothing I could do. It is only through reading the ACOA journal in 1990 that I discovered that I could at least apply for a late election.
My intention now that I have been re-employed by Telecom is to stay to retirement and take a pension on retirement, rather than a lump sum. In doing this my understanding is that if granted a Late Election my previous years of service will count in calculating the employer sponsored pension entitlement.
At the time of my resignation I was not given any verbal or more importantly written advice on the meaning of the options available and therefore feel I have been disadvantaged and request that you view my case sympathetically and grant me a late election.
15. On 4 September 1992, Mr Seymour wrote (T11 p29) pointing out that he was still waiting for a response to the request to have a late election recognised which he had made two years earlier on 13 September 1990. Mr Seymour in that letter challenged Mr Wade’s letter saying it was a generalisation. Further, he said that the assumption Mr Wade had made, that he had needed the refund to purchase a small business, was not correct. He explained that the business was paid for in full with other funds on 21 February 1986. Mr Seymour enclosed copies of his letter of 8 January 1987 (T5) and Telecom’s reply of 3 March 1987 (T6) and added that he had “verbally requested details on superannuation and been advised that prior service did not count”.
16. On 5 November 1992 Mr Seymour was sent a copy of a delegate’s decision of 5 November 1992 not to accept his late election to preserve his superannuation rights (T14 pp31-40).
17. The delegate in the reasons for decision, at paragraphs 15 and 16, acknowledged the conflict between Mr Wade’s letter and Mr Seymour’s correspondence, but stated that those issues remained unresolved. The delegate’s reasoning assumed that Mr Seymour would have acted in a certain way, had he wanted to preserve his contributions. The delegate seems to have overlooked the issue as to whether or not Mr Seymour knew that he could have preserved 20 years of employer’s contributions, had he elected the preservation option.
18. Mr Seymour did not seek reconsideration of the delegate’s decision of 5 November 1992, even though he was sent a copy of s 154 of the Act, together with the copy decision. As set out in paragraph 4 of these reasons, s 154(2) of the Act provides that a request for reconsideration shall be made within 30 days, or within such further period as the Commissioner allows.
19. Mr Seymour took no further action in the matter until 9 October 2000, when he wrote to the Commissioner (T17 p47) seeking that his case be reopened. He explained that that action was a result of being told about, and then obtaining a copy of, the Guidelines applicable to late elections which appear at T49 pp142-143. Mr Dillon said that those Guidelines had only been published in 1996.
20. On 25 October 2000, Mr Seymour was advised that he would have to apply for an extension of time beyond the specified 30 days, in which to apply for a reconsideration of the decision of 5 November 1992 (T19 p50). He made that request on 28 December 2000 (T21 p52). He stated in that letter (T21 p52):
I did not request a reconsideration of the Delegate’s decision within 30 days of receiving it because, at that time, I believed that I had told the Commissioner everything that I could that was relevant. I did not believe that I could provide any additional information.
That situation has now changed. If granted an extension of time, I believe I can successfully demonstrate that my refunded contributions were and remain invested long term in real estate. They were not used for immediate consumption, nor were they used in the purchase of a small business which I operated until June 1986. In passing, however, I note that Guidelines applicable to late elections or preservation of superannuation rights under section 157 (1) of the Superannuation Act 1976 refer to investment of refunds of contributions in real estate or business ventures as being appropriate avenues through which to make provision for retirement.
As to other aspects of the Guidelines, I can and will, if granted an extension of time, provide a detailed statement as to the factual circumstances which existed at the time when I signed Form s2A.
In summary therefore, I ask that you accept the explanation, which I have offered above for my inaction in 1992 and provide me an opportunity to demonstrate the merits of my application for a late election for preservation of superannuation rights. (emphasis added)
21. By letter dated 15 January 2001 (T22 p54), Mr Seymour was sent a copy of the Guidelines applicable to late elections and invited to submit further material. On 6 March 2001, Mills Oakley Lawyers, acting for Mr Seymour, submitted a chronology and two statements by Mr Seymour and a submission as to the Guidelines (T27 pp60-76). As to the reason why he did not seek a reconsideration within the 30 days allowed in s 154(2) of the Act, Mr Seymour stated (T27 p68):
2.As explained in my letter to the Commissioner dated 13 December 2000, I believed that the Commissioner’s Delegate had made that decision on the basis of all of the relevant information that I could then provide. My understanding was that the reconsideration would be done by the same Delegate who granted the original decision. The task of persuading that Delegate to change his mind without further information being provided seemed to me to be remote. I did not take legal advice in relation that decision.
3.The decision took two years to be handed down. During that period of time, I had continued to set aside monies to repay any refund of accumulated contributions arising on the making of a successful late election. After receiving the Delegate’s decision to reject my application, I took the view that the money which I had set aside should be invested in the long term. To that end, on or about 25 November 1992, my wife and I purchased an investment property at No. 11 Bilinga Street, Mornington, Tasmania. We effected this purchase by utilising some $17,500 of savings and borrowing the balance from the ANZ Bank secured by a mortgagee over the Bilinga Street property. We continue to hold this investment to this date.
THE EVIDENCE
22. Mr Seymour’s evidence can be summarised as follows:
(i)When he signed the Form S2A on 29 January 1986, he did not know what was meant by the option he struck out, “apply for preservation of superannuation rights”. He believed it meant preserve his contributions in some fund. He did not realise that he had the option of also preserving his employer’s contributions. Mr Wade had not explained the preservation option to him.
(ii)Had he understood the true position he believes he would have selected the preservation option.
(iii)He did not need or use his refunded contribution for the purchase of the small business which was the reason for his retirement.
(iv)He maintained the refunded contributions in an Island State Bank account from 26 March 1986, when he received them, until he transferred them to a deposit in his wife’s name which as at 6 October 1992 had $25,000 deposited at 5.5% interest (T12 p30).
(v)He was always concerned to provide for his retirement and for that reason became a subscriber to a private superannuation fund from the time of his resignation in 1986. Mr Seymour said that policy was with the Colonial Superannuation Retirement Fund, but he did not produce any documentary proof that he joined that fund in 1986 (A6).
(vi)On rejoining Telecom he enquired about reinstating his superannuation but was told he could not do so. He could not recall whether he spoke to a staff clerk or to Mr Jensen, the Manager of Human Resources.
(vii)When he applied to have his late election recognised he did not know what information was required in support of the application.
(viii)He believed he had responded adequately in his reply of 6 June 1991 to the requests made by the Commissioner in the letter of 16 May 1991 (T10 p28).
(ix)By the time he received the decision refusing his request of 5 November 1992, he was frustrated by the long wait of two years for a response and decided not to request a reconsideration:
(a)because he did not know what further information he could provide;
(b)because he thought it was time to do something to provide for his retirement with the $17,500 (approx.) refund of contributions. He had been keeping that sum aside so as to be ready to refund it at short notice if his request to have a late election recognised had been successful.
(x)He had not paid particular attention to paragraphs 15 and 16 (T14 37) decision of 5 November 1992 which read as follows:
Mr Seymour’s employer says that “The preservation option was explained to him but he was not interested” – “it was understood that he was intending to use the refund of his contributions to purchase. . . [a] business”. Mr Seymour said in 1990 that at the time of his resignation he “was not given any verbal or more importantly written advice on the meaning of the options available” and in 1992 that the assumption that he “needed the refund to purchase a small business. . .was incorrect as the business…was paid for in full…from funds not associated with the…refund.” On the issue of whether he was given advice, the two accounts conflict and cannot be reconciled. It may be that he was advised about preservation but because he was “not interested” did not recall this in 1990, although he may now recall it – I note that in his 1992 letter he does not deny Telecom’s claim. On the issue of his intentions regarding the refund, I note that he does not deny that he intended to use the refund to buy a business; he states only that he did not need to – when he bought the business he used other money. Thus the two accounts of this matter could be reconciled on the basis that he intended to use the refund to buy the business, but in the end did not need to do so. However, he may deny this interpretation. Therefore until more information is received, if that is possible, the two issues will have to be left unresolved.
Whatever the truth about the two issues, Mr Seymour certainly displayed no interest at the time in preserving his contributions for his retirement. He did not invest his refund long-term for that purpose, although he admits knowing he had the opportunity to do so through the form. He says he thought that choosing preservation meant rolling over his contributions into a private company; he was not aware that they would stay in the CSS fund and he did not know that by choosing the option he would obtain entitlement to an employer benefit – he notes that the form does not mention the employer contribution to preservation. Yet if he wanted to preserve his contributions, not obtaining any return other than interest/capital gain from them should not have prevented his choosing the option, unless he thought he would get a better return from investing them in another way, e.g. in a business, and he may deny planning to do that. I do not see why he did not choose the option if he wished to preserve his money rather than invest it in a business. I can only conclude that for some reason he did not wish to preserve it; i.e., he wanted it for a purpose which he thought was more important than saving for his retirement.
(xi)Because of his frustration with the delay, he did not consider asking for a reconsideration and providing his answer to those issues.
(xii)He had calculated that his transfer sum on transferring from the CSS to the Telecom Superannuation Scheme (TSS) would have been $320,000 greater, had his first 20 years service been recognised.
(xiii)The investment he made after receiving the decision on 5 November 1992, by purchasing a residential property for $74,000 in 1992 had not been a good investment. He had sold it about 10 years later for $68,000.
23. Mr Pascoe rejected the Tribunal’s suggestion that Mr Seymour’s reason for not making a request for reconsideration within the 30 days provided for in s 154(2), was similar to that of Mrs Moorhouse in Re Moorhouse and Commissioner for Superannuation (AAT 12001, 2 July 1997).. The Tribunal there said, at paragraph 9 of its reasons for decision, that her explanation for the delay in seeking to initiate proceedings was “I more or less gave it up as a bad job”. Mr Seymour did not use that language, but we find that because of his frustration that was his attitude to the idea of seeking a reconsideration. There was however, also another factor operating. That was his desire to make an investment with the refund of his contributions rather than continuing to hold it on deposit, so as to be able to make a refund, if that was allowed.
24. We accept Mr Seymour’s evidence. Where there is conflict between his evidence and the letter of Mr Wade (T9 p27), we prefer Mr Seymour’s account as Mr Wade was not called to give evidence. We are puzzled that Mr Seymour never produced the Island State Bank Book in which he said he deposited the $17,647.10 he received as his refund, particularly as he said he may still have that bank book among piles of papers at home. Bearing in mind that this proceeding has been current since 19 March 2002, there would have been plenty of time for him to search for that bank book, although of course it would have been more to the point to have done so in the 30 days after receipt of the decision of 5 November 1992, which was the time specified in s 154(2) of the Act for seeking reconsideration of that decision. We have no reason to doubt Mr Seymour’s evidence as to how he dealt with the refund of contributions he received on 26 March 1986, but his case on the substantive issue would be stronger if he could produce documentary evidence on the issue.
THE ISSUE BEFORE THE TRIBUNAL
25. This matter raises for consideration the significance of the 30 day time limit in s 154(2) of the Act which provides:
154 (2) A person affected by a reviewable decision who is dissatisfied with the decision may, by notice in writing given to the Commissioner within the period of 30 days after the day on which the decision first comes to the notice of the person, or within such further period as the Commissioner allows, request the Commissioner to reconsider the decision.
It is clear that the time limit in s 154(2) of the Act may be extended, if the Commissioner or the Tribunal decide in their discretion that it should be extended. What are the relevant factors in exercising that discretion and how should they be balanced?
26. It is generally accepted that the starting point in considering an application for an extension of time is Hunter Valley Developments Pty Ltd and Ors v Minister for Home Affairs and Environment (1984) 58 ALR 305.. In that matter Wilcox J set out six relevant factors. They are summarised in the headnote to the case as follows:
(a)the fact that the applicant bears the onus of rebutting the prima facie rule that no . . . proceedings commenced outside the prescribed period will be entertained by the court by showing an “acceptable explanation of the delay” and that it would be “fair and equitable in the circumstances” to extend the time;
(b)any action taken by the applicant, apart from the actual making of an application for review . . . which continues to make the decision-maker aware that the finality of his decision is being contested;
(c)any prejudice to the respondent which may have resulted from the delay;
(d)any unsettling of people, other than the respondent, or of established practices;
(e)the merits of the substantial . . . application;
(f)considerations of fairness as between applicants and other persons in like positions: it is not only prejudice vis-á-vis the parties but against the wider public interest which must also be taken into consideration.
The Federal Court has clarified, in Comcare v A’Hearn (1993) 119 ALR 85, that an acceptable explanation of the delay is not a pre-requisite to success in these matters. However it is still a relevant factor.
27. Mr Pascoe submitted that in a matter arising under the Act, while the decision in Hunter Valley is relevant, it is also important to pay attention to factors emphasised by the Federal Court as relevant in such matters. He relied on Ashmore v Commissioner for Superannuation (2000) 32 AAR 231 at pp250-251 and the passages extracted there by Moore J from Chalk v Commissioner for Superannuation (1994) 33 ALD 420 and from Commissioner for Superannuation v Boardman (1994) 50 FCR 236. The main factor to which he referred was the financial prejudice to Mr Seymour of not allowing the extension.
28. In Ashmore, Moore J set aside a decision of the Tribunal rejecting an applicant’s request to have a late election for preservation of benefits recognised. His Honour first pointed out that the only issue properly before the Tribunal had been the review of a refusal to extend time under s 154(2) of the Act. Secondly, Moore J found a denial of procedural fairness. The hearing had commenced before a Senior Member sitting alone. When the hearing was resumed with a three Member Tribunal, as required by s 154(7) of the Act, the three members relied on a transcript of the applicant’s evidence when the Tribunal had not been correctly constituted. Thirdly, Moore J held that the Tribunal had erred in law by failing to refer to potential prejudice to an applicant as a relevant factor in deciding whether to grant or refuse an extension of time.
29. There was an appeal from the decision of Moore J in Ashmore. The Full Court allowed the appeal in Commissioner for Superannuation v Ashmore [2001] FCA 666.. The Full Court agreed that the issue of financial prejudice is relevant. It said in paragraph 41 of its reasons:
41 The Tribunal's reference to "investment benefits" is a little obscure. However, it must be considered in the light of the contentions in Ms Ashmore's statement of facts and contentions, the evidence that was before the Tribunal and the submissions made to the Tribunal by her counsel. Paragraph 34 of the Tribunal's reasons must be read as a conclusion by the Tribunal that the possible financial prejudice that Ms Ashmore would suffer, if the discretion were not exercised in her favour, was insufficient to tip the scales in her favour, having regard to her informed decision in 1988 to reject the option to preserve her benefits in the Scheme. Thus, the merits of any application pursuant to s 157(1) were considered by the Tribunal. It took account of financial prejudice but concluded that it was not decisive. In the circumstances, no error on the part of the Tribunal in that regard has been demonstrated.
30. There is a helpful discussion of the issue by the Full Court of the Federal Court in Chalk v Commissioner for Superannuation (1994) 33 ALD 420. Mr Chalk had also been a Telecom employee. He resigned in the late 1970’s and elected to take a refund of contributions. The Tribunal said it was not satisfied that he would have done any differently even if he had been given adequate advice before making his election.
31. The Full Court in Chalk made it clear that Mr Chalk failed because of the Tribunal’s findings of fact, which it could not disturb, as there was no error of law in those findings. But Davies J, with whom Black CJ and Cooper J agreed, went on to explain the operation of s 157(1) of the Act. He made the following points:
(i)Most provisions which authorise an extension of time are instances of beneficial legislation which, accordingly, should be applied beneficially (p425).
(ii)It is important to form a view whether it is in the interests of justice that time be extended (p425).
(iii)As explained in Comcare v A’Hearn (1993) 45 FCR 441, it is not a precondition for success that an acceptable explanation of delay be given (p425).
(iv)In the exercise of the discretion it may be more important to consider the consequences of extending or refusing time than to debate the reasons why the act was not done in time (p425).
(v)It may be of little consequence that the employee did not enquire as to his or her right to elect under s 137 or even that the employee decided positively not to elect. Section 157 confers a discretion which operates in either case (p426).
(vi)One of the objects of s 157 is to alleviate the consequences of a change of circumstances (p426). In Mr Chalk’s case, the change in circumstance was that he resigned from Telecom intending to establish himself in an entirely new career as a farmer but was unsuccessful in doing so. And so he again took up employment with Telecom, after a lapse of two years (p426).
Davies J commented on the operation of the superannuation scheme (p426):
(vii)The Superannuation Scheme operates in the context of Commonwealth employment. The rights which the Act confers are statutory rights. But the entitlement to participate in the Scheme and to receive the benefits of the Scheme do not merely have a statutory base. They form an incident of the employment. Thus, a decision-maker exercising the s.157 discretion could think it fair to the employer, to the employee, and to the Scheme that the benefit should be calculated by reference to the totality of the employee's service and to the totality of his contributions, including any sums which must be refunded.
Davies J explained how the Act takes into account the employee’s years of contributing service in calculating the benefit to which an employee is entitled. He said (pp426-427):
“Mr Chalk has in fact served approximately 35 years going back to 1957. If his service between 1957 and 1976 were not recognised, the employer could have an undue gain. The late return of the contributions may not be a matter of concern. In his reasons for decision, the Commissioner's delegate, Mr R.C. Whithear, who has had long experience in these matters, explained:-
"If a late election is allowed, Mr Chalk will have had the use of his refunded contributions (or, at least, the net amount if any tax was paid on them) from 1976, and the Superannuation Fund will have been deprived of their use; and to that extent there is an element of advantage to him and of disadvantage to the fund in such a course. On the other hand, he will not have the advantage of receiving interest on his contributions over the period during which they were not in the fund."
Thus, because the moneys which would have to be repaid under s.138(11)(b) would not commence to accrue interest until repaid, it may be that no unfair advantage would result from a late election.”
Unfortunately for Mr Chalk, as those matters had not been raised in the original hearing or in the amended notice of appeal, the Court decided that they provided no ground for allowing the appeal.
32. Although Mr Pascoe did not take the Tribunal to Chalk, other than to refer to the reference made to that decision by Moore J in Ashmore, it is helpful to his client as to the merits of the substantial application, which is factor (e) of the list derived from Hunter Valley.. It should be noted that the comments of Davies J, with whom Black CJ and Cooper agreed, are in fact obiter dicta and therefore not strictly binding on the Tribunal. But they are a considered passage which was clearly intended by the Full Court to give guidance to the Court and to the Tribunal as to how they should deal with applications for late elections under the Act in the future. Of course it must be understood that in this matter Mr Seymour is seeking an 8 year extension of time in which to seek reconsideration of a decision refusing to recognise a late election.
33. Mr Dillon relied on a passage in Commissioner for Superannuation v Boardman (1994) 123 ALR 239 at p248, where Von Doussa J explained that before an exercise of discretion to allow a late election can occur, it must be made to appear that it is fair and just in all the circumstances to extend time. He then pointed out that a relevant, but not a conclusive consideration, will be whether there was a reasonable explanation for the delay, and there is an evidentiary burden on the applicant to place information before the decision-maker sufficient to establish that, in all the circumstances of the case, it is desirable that the late election should be recognised. His Honour pointed to the problems arising with the lapse of time and the effect on memories.
(a) whether there is an acceptable explanation for the delay
34. As already set out in paragraph 20 above, Mr Seymour’s two reasons for not seeking a reconsideration of the decision of 5 November 1992 within 30 days, or prior to 9 October 2000 (T17 p47), were that he was frustrated by the delays he had already experienced, in particular the period of more than two years he had waited for the decision of 5 November 1992, and he did not know what he could do to obtain a more favourable decision, especially as he thought the reconsideration would be by the same delegate who had made the original decision. He wrote “the task of persuading that Delegate to change his mind without further information being provided seemed to me to be remote. I did not take legal advice in relation to that decision” (T27 p68). He added, in his evidence, that he did not know what information to provide, but as we pointed out during the hearing, paragraphs 15 and 16 of the primary decision, if read carefully, did raise matters as to which further information would have been relevant.. But Mr Seymour said he did not know what else he could contribute, because the Guidelines were not in existence, and he had not been sent anything explaining the factors seen as relevant by the Commissioner. Another factor raised by Mr Seymour was his desire to invest money he had kept aside for repayment to the CSS, if the late election were recognised.
35. On the other hand, Mr Seymour acknowledged that he did know about the 30 day time limit in s 154(2) of the Act and further, that he had received the reasons for decision which do make it clear that whether or not he had used the refund of contributions to buy a business was seen by the decision-maker as a relevant matter.
36. The delegate seems to have taken an unduly literal approach to the issue of how Mr Seymour had used the refund of contributions. He wrote:
On the issue of his intentions regarding the refund, I note that he does not deny that he intended to use the refund to buy a business. He states only that he did not need to – when he bought the business he used other money.
He added:
Therefore until more information is received, if that is possible, the two issues will have to be left unresolved.
It is unfortunate that the delegate did not write to Mr Seymour explaining what information would have satisfied him on that issue and asking Mr Seymour if he could provide that information.
37. A more straightforward reading of Mr Seymour’s letter of 4 September 1992 (T11 p29) would have simply taken that letter at face value, namely that, the purchase price of the business was paid in full, prior to Mr Seymour receiving the refund of accumulated contributions, and that it had been paid from funds not associated with that refund. It would have been clear to a lawyer that it was worthwhile resolving that issue with documentary proof. However perhaps it was not unreasonable for Mr Seymour to simply be disheartened by the delegate’s approach to his application.
38. The delegate also chose to doubt Mr Seymour’s statement that he was not advised about preservation. He suggested, without putting it to Mr Seymour, that perhaps, the preservation option was raised, but because Mr Seymour was not interested, he does not remember that. That is another matter which the delegate suggested could be resolved with more information, but once again, he did not seek that further information. Similarly, in paragraph 16, the delegate concluded that for some reason Mr Seymour did not wish to preserve his accumulated contributions. If he had asked Mr Seymour about that matter, he could, on his evidence, have produced a copy bank statement showing that they had been preserved from the date of his effective resignation, first, in the Island State Credit Union and then in the Trust Bank of Tasmania. Mr Seymour could also probably have produced documentary proof of the superannuation policy, which he stated he had taken out with the Colonial Superannuation Retirement Fund in February 1986. Thus, if the delegate had explained the issues he saw as relevant in a letter to Mr Seymour, he may have been able to provide sufficient information to obtain a favourable reconsideration decision.
39. We find that Mr Seymour’s explanation for delay was that he was frustrated and disheartened by the time it took to get a decision on his application for recognition of a late election, and by what he saw as the difficulty of persuading the delegate to change his mind and by his lack of understanding as to what information would be required to achieve a favourable decision. We accept that the tone and conclusions of the delegate would have been disheartening to Mr Seymour.
40. Mr Seymour did explain that the reason why he finally, on 9 October 2000, lodged a request for reconsideration was that the matter became much clearer to him once he saw the Guidelines.. We find Mr Seymour did provide an acceptable explanation of delay. While it should have been clear to him that it was worth seeking a reconsideration and providing more information as to the matters raised in paragraphs 15 and 16 of the reasons for decision, it is understandable that because of his frustration at the time he did not appreciate that fact.
(b)action taken by Mr Seymour to make the Commissioner aware that the finality of his decision was being contested
41. There was no action taken by Mr Seymour between 5 November 1992, and October 2000 to show that the finality of the decision of 5 November 1992 was being contested.
(c)prejudice to the CSS or the Commissioner
42. We have already, in paragraph 31, discussed the issue as to whether there is prejudice as a result of the delay, by reference to the comments of Davies J in Chalk at pp426-7. The solicitors for Mr Seymour submitted at paragraph 4 of their submissions to the Commissioner (T27 pp70-71):
Our understanding is that copies of relevant documentation have been made available to you following an earlier request to our client. To further assist, relevant documentation has been annexed to the Chronology. On the basis of our present knowledge, therefore, we are of the view that there are no relevant administrative difficulties involved in reconsidering the decision. Moreover, on the material in our possession and having regard to relevant reported decisions, we submit that there is no prejudice to the Commonwealth Superannuation Scheme by way of any relevant costs or administrative difficulties that would result if our client’s request was granted.
43. In the High Court decision in Brisbane South Regional Health Authority v Taylor (1996) 139 ALR 1 at pp6 and 7, Toohey and Gummow JJ considered the issue of prejudice in an application for an extension of time. Their Honours said:
In one obvious sense the prejudice to the present respondent is absolute if her application is refused. She can never litigate her claim. But that cannot be enough of itself to warrant an extension of time; in truth there would be no discretion to be exercised.
Their Honours then went on to say:
The real question is whether the delay has made the chances of a fair trial unlikely. If it has not there is no reason why the discretion should not be exercised . . .
We have not formed the view that in this matter the delay has made the chances of a fair trial unlikely.
44. The respondent conceded in the reconsideration decision of 10 February 2002 (T47 at p134), “there should be no undue cost or administrative difficulties for the Commonwealth in the event that Mr Seymour were to be granted a late election to preserve his rights”.
45. Ms Gazzard, in her affidavit (R1 paragraph 11), deposed that Mr Seymour’s file had been destroyed on 3 February 2001. When the Tribunal expressed concern that it had been destroyed after 9 October 2000, when Mr Seymour lodged his request for an extension of time in which to seek a reconsideration, Mr Dillon obtained instructions that the date 3 February 2001 was an error and should have read 3 February 2000. He lodged (R2) an electronic print out of a data record which indicated that to be correct. However there was no evidence pointing to any prejudice as a result of the file being destroyed.
46. Attachment “C” to Ms Gazzard’s affidavit suggests that there is no prejudice. That document is headed “Culling of CSS Refund Files” and is a memorandum from “the delegate for late elections for preservation”. It recommends:
. . . in relation to cases where the date of exit is prior to 1990:
·very few files are still in existence, many would never have had a file;
·the agency nearly always has a copy of the benefit application, which must be retained until the former employee is 75 years old;
·rarely is any document other than the benefit application of any relevance;
·I do not recall any pre 1990 late election case that I have dealt with in the last 18 months (there would have been dozens, if not hundreds) where ComSuper was in sole possession of the benefit application.
I therefore believe that we may dispose of the pre 1990 CSS refund cases without prejudice to the future claims of former CSS members for a late election for preservation. There is no other reason for wanting to keep old CSS files.
47. It seems unfortunate that the delegate for late elections did not suggest that where a person rejoined the CSS after 1990, the file should be retained. But that is another issue. The significance of the document is the statement “rarely is any document other than the benefit application of any relevance”. In this matter, the benefit application, document T4 page 21, is still available. There is no suggestion of any other relevant documents which would have been on the CSS file not being available, except perhaps, the possible attachment to Mr Wade’s letter of 22 May 1991, (T9 p27). But it is not clear whether there was in fact any attachment or whether it was overlooked when the letter was sent. Even from Mr Seymour’s perspective, there is no suggestion that there should have been any notes or records included in the T documents which are not so included. The documents which he may be able to locate, and which could be of relevance, would be the letter sent to him by the Commissioner on 16 May 1991 and his passbook with the Island State Credit Union, showing his deposit between the years 1986 and the time when he transferred that deposit, on his evidence, to the Trust Bank of Tasmania, and also any documentation as to the private superannuation fund which he said he joined in 1986.
48. Mr Dillon, in his Statement of Facts and Contentions, contended that the respondent would face both actual and presumptive prejudice in an attempt to now ascertain the merits of the applicant’s substantive case for late election under s 157(1) of the Act. As to actual prejudice, the respondent relies on the destruction of the file and the fact that so far there has not been any contemporaneous documentation produced showing where Mr Seymour kept the sum of $17,647.10 from February 1986. As we have already indicated there is no reason to doubt Mr Seymour’s evidence on this issue, particularly as there is proof that as at 5 October 1992 there was $25,000 deposited in his wife’s name with the Trust Bank of Tasmania at 5.50% (T12 p30). The money could have come from some other source, such as the sale at a loss of the business, but there has never been any specific request to Mr Seymour to clarify that issue. Justice requires that he should at least be given the opportunity to clarify the matter.
49. The respondent also alleged that there would be presumptive prejudice and wider prejudice in allowing the matter to be litigated now, rather than at the time it would have been litigated if the reconsideration request had been lodged at the appropriate time.
50. The respondent relied on Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541.. In that matter Dawson J, at p544, expressed agreement with the views of McHugh J, that once the legislature has selected a limitation period, the commencement of an action outside that period is prima facie prejudicial to the defendant who would otherwise have the benefit of the limitation. In that matter McHugh J, said at p551:
With great respect to their Honours, s 31 should not be read as giving an applicant a presumptive right to an order once he or she satisfies the two conditions laid down in s 31(2) of the Act. An applicant for an extension of time who satisfies those conditions is entitled to ask the court to exercise its discretion in his or her favour. But the applicant still bears the onus of showing that the justice of the case requires the exercise of the discretion in his or her favour.
The discretion to extend time must be exercised in the context of the rationales for the existence of limitation periods. For nearly 400 years, the policy of the law has been to fix definite time limits (usually six but often three years) for prosecuting civil claims. The enactment of time limitations has been driven by the general perception that "[w]here there is delay the whole quality of justice deteriorates". . . . Sometimes the deterioration in quality is palpable, as in the case where a crucial witness is dead or an important document has been destroyed. But sometimes, perhaps more often than we realise, the deterioration in quality is not recognisable even by the parties. Prejudice may exist without the parties or anybody else realising that it exists. As the United States Supreme Court pointed out in Barker v Wingo . . . , "what has been forgotten can rarely be shown". So, it must often happen that important, perhaps decisive, evidence has disappeared without anybody now "knowing" that it ever existed. Similarly, it must often happen that time will diminish the significance of a known fact or circumstance because its relationship to the cause of action is no longer as apparent as it was when the cause of action arose. A verdict may appear well based on the evidence given in the proceedings, but, if the tribunal of fact had all the evidence concerning the matter, an opposite result may have ensued. The longer the delay in commencing proceedings, the more likely it is that the case will be decided on less evidence than was available to the parties at the time that the cause of action arose.
At p553 his Honour added:
In enacting limitation periods, legislatures have regard to all these rationales. A limitation period should not be seen therefore as an arbitrary cut off point unrelated to the demands of justice or the general welfare of society. It represents the legislature's judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated.
51. Mr Pascoe submitted that that case was distinguishable in that it was a case seeking damages for negligence and quite different from a matter under the Act. As the Full Court pointed out in Chalk, in the exercise of discretions under the Act, it must be borne in mind that the entitlement to participate in the scheme and to receive the benefits of the scheme do not merely have a statutory base but also form an incident of employment. That is why Davies J, pointed out at p426:
Thus, a decision-maker exercising the s.157 discretion could think it fair to the employer, to the employee, and to the scheme that the benefit should be calculated by reference to the totality of the employee's service and to the totality of his contributions, including any sums which must be refunded.
Davies J also said at p426, as set out in paragraph 31 above:
Mr Chalk has in fact served approximately 35 years going back to 1957. If his service between 1957 and 1976 were not recognised, the employer could have an undue gain.
After quoting from the evidence of Mr Whithear, Davies J added at p427:
Thus, because the moneys which would have to be repaid under s.138(11)(b) would not commence to accrue interest until repaid, it may be that no unfair advantage would result from a late election.
Those passages seem to contradict the respondent’s contentions, paragraphs 60 to 67.
(d)unsettling of people other than the respondent or of established practices
52. Mr Dillon submitted that the administration of the CSS is made more complex or difficult, if late applications for reconsideration are recognised. He conceded that sometimes that administrative inconvenience, and the unsettling of other former members of the scheme who have abided by the time limits in the Act, is required in the interests of justice. But he submitted this was not such a matter. We agree that there are no special facts pointing to any particular injustice in this matter if the extension is not granted, beyond the injustice that must be common to all matters where an extension of time is sought under s 154(2) or a late election is sought under s 157(1) of the Act, namely that otherwise the employee misses out on the benefit of the totality of his years of service.
53. In Boardman, Von Doussa J considered the argument that it would be a prejudice to the respondent if the recognition of a late election were seen as encouraging other people to make applications to have late elections recognised. His Honour said as to that submission, at p252:
Great care must be exercised in treating this argument as one against the exercise of the discretion. The object of the 21 day time limit in s 137(1) is to avoid risks of this kind. There is in the argument a risk of ‘‘double counting” the administrative disruption to the orderly running of the fund caused by late elections first in requiring reasons why the prima facie time limit should be extended, and then in adding as a separate hurdle the risk of administrative disruption from too many applications. The time limit has its purpose, but the Act recognises that there will be deserving cases where fairness to the applicant requires that the time limit be relaxed. In such cases it is the policy of the Act, and the legal right of the applicant, to a favourable exercise of discretion under s 157(1). If the proper application of s 157(1) to individual cases results in many people obtaining recognition of late elections, so be it, that is the law.
54. The same considerations apply to the extension of time under s154(2). The issue which his Honour does not explain is what is required for a case to be characterised as a “deserving cases where fairness to the applicant requires that the time limit [whether it be under s 157(1) or s 154(2)] be relaxed”.. In the following paragraph, his Honour did explain that if there had been misinformation given to an applicant which explained the delay in acting within time, that would be a very strong reason why it would be desirable to recognise the late election. In this matter there is no suggestion of wrong information being given to the applicant at any stage, other than perhaps in a telephone conversation in February or March 1987. By the time the applicant made his request to have a late election recognised on 13 September 1990, he knew that that information was incorrect. There is therefore no relevant misinformation as to the s 154(2) extension of time, although Mr Seymour claimed there was a lack of information as to what factors were relevant to establishing a case for recognition of a late election. It is more accurate to say that it was difficult to extract that information from the dense and unduly literal reasoning of the delegate. Further, by not requesting the relevant information, the delegate did not clarify for Mr Seymour what issues were seen as relevant, and did not give Mr Seymour the opportunity to satisfy him as to those issues.
(e) the merits of the substantial application
55. The substantial application seeks recognition of a late election for preservation. On one hand it is always desirable to recognise a late election in that there are financial benefits to the applicant in preservation. The consequences for Mr Seymour could be very beneficial if he succeeds on the substantive issue. If he does not obtain the extension of time there will be no means of knowing whether or not he would have succeeded on the substantive issue. Mr Seymour estimated that if the discretion in s 157(1) of the Act were exercised in his favour he would have had an additional $320,000 by way of a lump sum paid into the TSS on his transfer from the CSS to that fund. Mr Dillon did not challenge that estimate. But clearly the legislation does not intend that every late election for preservation will be recognised. There is some balancing required between the reasons why a late election is sought and the disruption to the superannuation scheme caused by recognising late elections. The legislative scheme sets a time limit for elections with power to recognise a late election.
56. On the other hand, Davies J in the Full Court in Chalk explained that a beneficial provision such as s157(1) of the Act should be applied beneficially. His Honour’s comments at p.425-6 are relevant to s157(1) and also to the aspect of s154(2) which provides for an extension of time. His Honour, in reasons with which Black CJ and Cooper J agreed said at p.425:
Most provisions which authorise an extension of time are instances of beneficial legislation which, accordingly, should be applied beneficially. With respect to such discretions in rules of court, Reynolds, Hutley and Bowen JJA said, in Outboard Marine Australia Pty Ltd v. Byrnes: Bauknecht (1974) 1 NSWLR 27 at 30:-
"We appreciate that the Rules of Court, particularly those relating to time, should never be allowed to be an instrument of tyranny. They do, however, have purposes, one of which is that the parties may know where they stand and regulate their affairs accordingly. It is also appreciated that where genuine issues ought to be litigated, if such can be done with fairness to all concerned, it is appropriate to take a benign view of applications to extend time."
Those remarks indicate the importance of forming a view as to whether it is in the interests of justice that time be extended. A recent decision to like effect is that of Black CJ, Gray and Burchett JJ in Comcare v. A'Hearn (1993) 119 ALR 85 in which their Honours held, in the context of the lodgment out of time of an application to review a decision under the Commonwealth Employees Rehabilitation and Compensation Act 1988 (Cth), that it was not a precondition for success that an acceptable explanation for the delay be given.
It is in the interests of justice that Mr Seymour be able to litigate the substantive issue in this matter, particularly in view of the unduly literal approach taken by the delegate in his decision-making, and in view of the fact that he acknowledged that there were gaps in the material before him, but failed to ask for material to clarify those issues.
57. Another factor relevant to the merits of the substantive case is the correspondence at T5 and T6. Mr Seymour said that he asked about the possibility of refunding his superannuation contributions when he returned to Telecom’s employment in January 1987. But, even if he had not done so, it could be argued that a comprehensive reply to his letter of 8 January 1987 should have alerted him to that matter, which was not referred to in the reply of 3 March 1987.
58. Mr Dillon relied on Re Stege and Commissioner for Superannuation [2001] AATA 1022 where the Tribunal held that the available evidence was so inadequate that the Commissioner would not be able to make the necessary findings of fact on which to reach a conclusion as to the desirability of recognising a late election. The Tribunal there pointed out that the gaps and inconsistencies in the evidence would make it impossible for a decision-maker deciding the substantive issue to form a view as to the interests of justice. In this matter those considerations do not arise. Mr Seymour has not changed his evidence. He does not seem confused. If it is important to trace the whereabouts of his accumulated contributions from 1986 to 1990, he will either succeed in producing bank statements or he will not. Similarly he should be able to prove how he purchased his business. He should also endeavour to produce evidence as to when he joined the Colonial Superannuation Retirement Fund. If the conflict between Mr Seymour and Mr Wade is relevant, Mr Wade can be called as a witness.
59. Mr Seymour gave evidence that he did not know of the preservation option when he signed the Form S2A (T4 p21) on 29 January 1986. He was only 16 when he started with the PMG. In an application for an extension of time no full investigation can be made of the merits of the substantial application. But an applicant’s case will be stronger where it is clear that there is a prima facie case on the substantive issue. In Lucic v Nolan (1982) 45 ALR 411 at p417, Fitzgerald J said:
Whilst there are obvious reasons why there should be no attempt at a full investigation of the merits of the application for review on an application for an extension of time, I would not exclude from consideration in an appropriate case some obvious strength or weakness in an applicant’s case or matters which might justify the refusal of relief, if the court has a discretion to do so where a ground for relief is made out.
The respondent conceded, at paragraph 70 of the Statement of Facts and Contentions, that there is at least a prima facie case for late election.
60. At paragraph 74 of the respondent’s Facts and Contentions a number of factors are raised as suggesting that the s157(1) discretion should not be exercised on a substantive application. There would need to be evidence from Mr Seymour and Mr Wade before findings as to matters (a), (b) and (c) could be made. The respondent seems to have not given weight to Mr Seymour’s evidence as to his lack of awareness of the preservation option. More significantly the respondent seems to have repeated the assumption in the decision of November 1992 in stating in paragraph (e):
“there is some evidence that the applicant had a pressing need for his refund of contributions at the time when he resigned from Telecom. This would tend to indicate that the applicant made a deliberate decision to reject the option of preservation in favour of receiving the immediate benefit of the accumulated contributions.”
Document T9/27 does not provide a basis for the assertion that there is evidence that Mr Seymour had a pressing need for his refund of contributions. That assertion was denied by Mr Seymour at this hearing.
(f)Considerations of fairness between applicants and other persons in like positions – prejudice against the wider public interest
61. The respondent submitted that Mr Seymour had waited until he considered his prospects of success to be greater than they would have been in 1992 and that this was unfair to those who sought a reconsideration in time. It is not the position that there has been any amendment to the Act. There has rather been a growing body of decisions in which the Federal Court has adopted a more beneficial approach to extensions of time under the Act than had been adopted in internal decision-making and sometimes by the Tribunal.
62. We must exercise our discretion consistently with the approach indicated by the Federal Court in decisions such as Chalk and Boardman, but we must also consider whether in doing so there is unfairness to others who, due to applying within time limits, had their decisions made at a time when there was less understanding of the beneficial nature of the decision-making process under the Act.
63. That is a difficult issue. On the one hand Mr Seymour should not benefit by his own delay. On the other hand, if there is now a greater understanding of the beneficial nature of the legislation, it would be wrong to say this matter should be decided without giving Mr Seymour the benefit of that approach. The fact that other applicants may have failed in applications for extensions of time which would have been granted today, is not a reason for depriving Mr Seymour of the chance to have a reconsideration of the substantive merits of his application for recognition of a late election.
CONCLUSION
64. We must balance the benefit of granting the extension of time and thus allowing a person who has periods of broken service the chance to obtain benefits which fully reflect the total period of service as an eligible employee with, on the other hand, the orderly administration of the superannuation scheme which requires that in general time limits be applied.
65. If an extension of the time within which Mr Seymour may request reconsideration of the decision of 5 November 1992 is not allowed, he will lose any chance of obtaining substantial financial benefits. Any reconsideration would turn on factual issues which should not be difficult to resolve, but which were left unresolved in the decision under review.
66. Mr Seymour may be able to produce further documentation as to what he did with the refund of contributions, and as to his state of mind in 1986. The issues as to whether the preservation option was explained to Mr Seymour, whether he was not interested, and whether he made an informed decision in 1986 should be able to be fully considered and determined one way or the other. It is the unsatisfactory way in which such factual issues were dealt with in the 1992 decision, which suggests that Mr Seymour may have been unfairly deprived of superannuation benefits which reflect his total period of service, and that he should not be shut out from having the decision reconsidered.
67. The outcome of that reconsideration would of course depend on the material before the decision maker. We note however that the finding in the 1992 decision that Mr Seymour certainly displayed no interest in preserving his contributions for his retirement, may be undermined by Mr Seymour having become a subscriber to a private superannuation fund from the time of his resignation in 1986. This is another matter that should be able to be resolved on a reconsideration.
68. These matters suggest that in fairness to Mr Seymour the discretion to allow an extension of time within which to request reconsideration should be exercised in his favour, unless the prejudice the respondent would suffer would outweigh considerations of justice to Mr Seymour. As discussed in paragraphs 42 to 54, there is no evidence of such prejudice.
69. The decision under review will be set aside and in substitution the Tribunal will decide that the time allowed, under s 154(2) of the Superannuation Act 1976, to seek reconsideration of the decision made on 5 November 1992, be extended to 9 October 2000.
I certify that the 69 preceding paragraphs are a true copy of the reasons for the decision herein of
Mrs Joan Dwyer, Senior Member,
Mr C Ermert, Member and
Dr P Fricker, MemberSigned: Grace Carney
Personal AssistantDate/s of Hearing 16 December 2002
Date of Decision 6 June 2003
Counsel for the Applicant Mr P Pascoe
Solicitor for the Applicant Mills Oakley
Counsel for the Respondent Nil
Solicitor for the Respondent Mr A Dillon, Australian Government Solicitor
0
11
0