Sharma and Commissioner for Superannuation
[2007] AATA 1129
•14 March 2007
CATCHWORDS – SUPERANNUATION – election to transfer from CSS to PSS – desire to revoke election – whether election can be revoked – whether Commissioner for Superannuation can cancel election – whether principles based on doctrine of non est factum or on mistake and misrepresentation in the law of contract can be read into the legislation – whether those principles would be relevant if they could be read into the legislation – decision affirmed.
Administrative Appeals Tribunal Act 1975 ss 3(1), 3(3), 37
Administrative Decisions (Judicial Review) Act 1977 s 3(2), 3(2)(a) and (g), 3(2), 3(5), 6
Freedom of Information Act 1982
Justices Act 1902 (NSW) ss 41(2), 41(6)
Public Service Act 1922
Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 37(7), 60(1)
Superannuation Act 1922
Superannuation Act 1976 ss 3, 17(2), 27A, 40, 115, 154, 157, 237, 243, 244, 245, 247, 248(1)(a)
Superannuation Act 1990 ss 2(2), 3, 4, 6, 6A, 16
Superannuation Legislation Amendment Act 1990 ss 2(3), 92
Superannuation Legislation Amendment Act 1991 ss 68, 69
Alati v Kruger (1955) 94 CLR 216
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321; (1990) 94 ALR 11
Australian National University v Burns (1982) 64 FLR 166; 43 ALR 25
Australian Postal Corporation v Forgie [2003] FCAFC 223; (2003) 202 ALR 63
Child v Commonwealth Development Bank [2000] NSWCA 256
Derry v Peek (1989) 14 AC 337
Director-General of Social Services v Hales (1983) 47 ALR 281; (1983) 3 ALD 113
Duncan v Defence Force Retirement and Death Benefits Authority and Commonwealth of Australia (1980) 30 ALR 165 at 169-70
Electricity Supply Association of Australia Ltd v Australian Competition and Consumer Commission (2001) 113 FCR 230; (2001) 189 ALR 109
Grassby v R (1989) 168 CLR 1; (1989) 87 ALR 618
Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465; [1963] 2 All ER 575
Mutual Life & Citizens’ Assurance Co Ltd v Evatt (1968) 122 CLR 556; [1969]
ALR 3
Hill (trading as RF Hill & Associates) v Van Erp (1997) 188 CLR 159; (1997) 142 ALR 687
Hutchins v Commissioner of Taxation (1996) 65 FCR 269; (1996) 136 ALR 153
John McGrath Motors (Canberra) Pty Ltd v Applebee (1964) 110 CLR 656
Johns v Connor (1992) 35 FCR 1; (1992) 107 ALR 465
Lamb v Moss (1983) 49 ALR 533
Minister for Immigration and Ethnic Affairs v Mayer (1985) 157 CLR 290; (1985) 61 ALR 609
Muskham Finance Ltd v Howard [1963] 1 QB 904; [1963] 1 All ER 81
Pelechowski v Registrar, Court of Appeal (1999) 198 CLR 435; (1999) 162 ALR 336
Petelin v Cullen (1975) 132 CLR 355; (1975) 6 ALR 129
Psaltis v Schulz (1948) 76 CLR 547; [1948] 2 ALR 502
Re Greenwood and Commissioner for Superannuation (1995) 21 AAR 215
Saunders v Anglia Building Society [1971] AC 1004
Smith v Hughes (1871) LR 6 QB 597
State Drug Crime Commission of NSW v Chapman (1987) 12 NSWLR 447
Taylor v Johnson (1983) 151 CLR 422; (1983) 45 ALR 265
DECISION AND REASONS FOR DECISION [2007] AATA 1129
ADMINISTRATIVE APPEALS TRIBUNAL )
) V2006/205
GENERAL ADMINISTRATIVE DIVISION )
Re RUDRA DUTT SHARMA
Applicant
AndCOMMISSIONER OF SUPERANNUATION
Respondent
DECISION
Tribunal: Deputy President S A Forgie
Date: 14 March 2007
Place: Melbourne
Decision:The Tribunal has decided that the decision under review is affirmed.
S A FORGIE
Deputy President
REASONS FOR DECISION
After the Public Sector Superannuation Scheme (PSS) had been established by the Superannuation Act 1990 (1990 Act), members of the Commonwealth Superannuation Scheme (CSS) were able to elect to transfer from the CSS to the PSS. On 6 March 1991, the applicant, Mr Rudra Dutt Sharma, elected to transfer from the CSS to the PSS. The issue in this case is whether Mr Sharma could cancel his election or elect to transfer from the PSS back to the CSS either on the basis of his believing that he had made his election on the basis of false information or at all. I have decided that Mr Sharma has no express or implied right to withdraw his declaration and election and the Commissioner for Superannuation (Commissioner) has no express or implied power to cancel them.
BACKGROUND
Mr Sharma made an affirmation on 25 August 2006 setting out a careful chronology of events that had occurred before and after he made his election. I have taken that into account as well as the documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (AAT Act) (T documents) in making the findings of fact in the following paragraphs.
On the morning of 17 July 1990, Mr Sharma attended a seminar conducted by officers of the Retirement Benefits Office (RBO). It was held at the CSIRO Laboratory Auditorium. At the time, Mr Sharma was working for the Australian Taxation Office (ATO) and was a member of the CSS. Mr Sharma understood one of the presenters at the seminar to say that productivity benefits would not be taken into account in determining the Government’s contribution under the PSS. He understood the presenter to say that the productivity benefit was an additional benefit under the PSS.
Mr Sharma completed the election form to transfer from the CSS to the PSS on 6 March 2001. He handed it to an officer in the Personnel section of the ATO. At the time of completing the election, Mr Sharma acknowledged that he had received sufficient information to enable him to make an informed decision.
Two days after making the election, Mr Sharma met another officer in the ATO. He told the other officer about his decision to transfer to the PSS and about the advice he understood the RBO officer to have given at the seminar. The other officer told him that the advice was wrong. That afternoon, Mr Sharma went to the ATO’s Personnel section and asked the officer to return his election. She told him that the election had been processed the moment he had handed it to her.
On 15 March 1991, Mr Sharma wrote to the Commissioner stating that he wished to withdraw the election he had made a week earlier.[1] He did so on the basis that he had made his decision on what he believed to be incorrect information given by officers of the RBO at a seminar. That information had concerned productivity benefits in the lump sum calculation and Mr Sharma wished to review it.
[1]
The Commissioner advised Mr Sharma that the relevant legislation governing transfers to the PSS did not allow eligible employees to cancel their election. He did so in a letter dated 15 April 1991[2] and confirmed his advice in a further letter dated 14 May 1991.[3] In the latter letter, the Commissioner explained that he had not made a decision in his earlier letter but had only informed Mr Sharma of the effect of the Superannuation Act 1976 (1976 Act) on his election.
[2] T documents at 7
[3] T documents at 10-12
Mr Sharma responded to the Commissioner’s letter on 24 May 1991 by asking for the names of each of the session leaders representing the RBO at the seminar he had attended and whether a recording had been made of the proceedings.[4] The Commissioner responded on 7 June 1991[5] and 16 August 1991.[6]
[4] T documents at 13
[5] T documents at 15-16
[6] T documents at 30
Mr Sharma renewed his efforts in 2000 when he contacted the Commissioner’s office asking, among other matters, how to challenge the decision that his election to the PSS was irrevocable.[7] He followed this with a request under the Freedom of Information Act 1982 (FOI Act) for documents relating to his situation and for statistical information relating to others who might have asked to cancel their election.[8] The Commissioner responded and there was further correspondence between Mr Sharma and the Commissioner between 3 July 2000 and 12 January 2001.[9]
[7] T documents at 32
[8] T documents at 33
[9] T documents at 35-40
On 22 July 2005, Mr Sharma made an application to the Commissioner for an extension of time to reconsider whether it was possible for him to cancel his election to join the PSS.[10] The Commissioner responded, in summary, that there was no discretion to grant Mr Sharma’s request to cancel his election. Therefore, nothing would be gained by proceeding with the reconsideration that Mr Sharma had requested.[11] Mr Sharma questioned the response in his letter of 12 September 2005.[12] In reply, the Commissioner advised Mr Sharma that there had been no decision rejecting his request for review of a decision and responded to points he had made in relation to a decision by a differently constituted Tribunal in Re Greenwood and Commissioner for Superannuation.[13]
[10] T documents at 45-46
[11] T documents at 47-49
[12] T documents at 50-51
[13] (1995) 21 AAR 215; T documents at 71-72
Again, there were various letters exchanged between Mr Sharma and the Commissioner. Mr Sharma’s letter of 12 September 2005 was ultimately treated as a request for review of advice that the 1976 Act did not provide for revocation. On 25 January 2006, the Commissioner, “… under subsection 154(4) of the Superannuation Act 1976 …, CONFIRM(ED) the advice provided to Mr Sharma in a letter dated 15 April 19912 that there is no provision whereby his election to transfer from the CSS scheme to the PSS scheme might be revoked.”[14]
LEGISLATIVE BACKGROUND
[14] T documents at 81
Establishment of the CSS
What is colloquially known as the CSS is the Commonwealth Superannuation Fund No 2 established by the 1976 Act.[15] Contributions to the Fund were made by eligible employees. The term “eligible employee” included those who were permanent and temporary employees as well as those who had been employees for the purposes of the superseded Superannuation Act 1922.[16] A “permanent employee” meant an officer for the Public Service Act 1922 or any other person employed by the Commonwealth or by an approved authority in a permanent capacity.[17] Contributions were governed by Part IV of the 1976 Act. Benefits payable to an eligible employee in various circumstances such as invalidity, resignation and retirement, as well as to a dependant in the case of the death of an eligible employee, were also set out in the 1976 Act.
[15] 1976 Act, s 40
[16] 1976 Act, s 3
[17] 1976 Act, s 3
Establishment of the PSS
By means of a trust deed, the Minister established the Superannuation (1990) Scheme, which is generally known as the PSS.[18] Its members included permanent and temporary employees of the Commonwealth after the 1990 Act came into operation on 1 July 1990[19] but did not include a person who was an eligible employee for the purposes of the 1976 Act. The expression “permanent employee” encompassed the same group of people as it had under the 1976 Act.[20] Those members paid contributions as required by Part 4 and benefits were payable in certain circumstances similar to those under the 1976 Act. Those circumstances are set out in the Rules set out in the Schedule to the Trust Deed.[21]
[18] 1990 Act, ss 3 and 4
[19] 1990 Act, s 6 and 2(2)
[20] 1990 Act, s 3
[21] 1990 Act, ss 3 and 16
Provisions relevant to transfer from CSS to PSS
The relevant provisions are found in the 1976 Act. The first is found in s 244(1). In general terms, it provides:
“… an eligible employee, who is not precluded by or under the Superannuation Act 1990 (other than by paragraph 6(2)(a) of that Act) from being a member of the Superannuation (1990) Scheme may, in writing addressed to the Commissioner:
(a)declare that he or she wishes to become a member of that scheme; and
(b) elect to cease to be an eligible employee.”
The reference to s 6(2)(a) of the 1990 Act in s 244(1) is a reference to a person’s not being a member of the PSS if the person is an eligible employee for the purposes of the 1976 Act.
There are various qualifications to the right to make an election. The only qualification that is relevant in this case is that in s 244(3)(d):
“An eligible employee may not make an election and declaration under subsection (1):
(a)…
(b)…
(c)…
(d)in any other case – after 30 June 1991.”
Section 245 provides:
“A person who makes a declaration and an election under s 244 is taken to have ceased to be an eligible employee at the end of the day on which the declaration and the election are made.”
On ceasing to be an eligible employee in those circumstances, a person is not entitled to be paid benefits under the 1976 Act other than those under Part VI, s 110S(2) or s 11.[22]
[22] 1976 Act, s 246
The Commonwealth Superannuation Board of Trustees (No 2) established under s 27A of the 1976 Act[23] must transfer assets to the Commonwealth Superannuation Board of Trustees (No 1) established under Part 6 of the 1990 Act.[24] Those assets must represent the accumulated contributions and employer contributions of those persons who ceased to be eligible employees under s 245.[25]
[23] 1976 Act, s 3
[24] 1976 Act, ss 237 and 243
[25] 1976 Act, s 248(1)(a)
Revocation of an election in certain cases: 1976 Act
Revocation of an election is permitted by s 247 of the 1976 Act:
“Where, for the purposes of rule 1.3.30 of the Rules for the administration of the Superannuation (1990) Scheme in its application to a person who has ceased to be an eligible employee under section 245, the CSS average salary of the person has been ascertained by reference to an amount other than the amount referred to in paragraph (a) or (b) of the definition of “CSS average salary” in that rule:
(a)the person may, within 3 months after the person has been informed that his or her CSS average salary has been so ascertained, by writing addressed to the Commissioner, revoke the declaration and election by virtue of which the person had so ceased to be an eligible employee; and
(b)on the making of the revocation, this Act has effect as if the declaration and election had not been made.”
Section 247 was inserted in the 1976 Act by the Superannuation Legislation Amendment Act 1990[26] with effect from 1 June 1990.[27] At the time, rule 1.3.30 of the Rules for the administration of the Superannuation (1990) Scheme set out the formula to calculate the CSS transfer multiple. The CSS transfer multiple applied to a person who had elected to cease to be an eligible employee for the purposes of the 1976 Act and in relation to whom the Superannuation Board of Trustees (No 1) had received a transfer value.[28]
[26] Superannuation Legislation Amendment Act 1990, s 92
[27] Superannuation Legislation Amendment Act 1990, s 2(3)
[28] 1990 Act, Trust Deed, Schedule, Rule 1.3.29
Cancellation of an election: 1976 Act
Section 157 of the 1976 Act sets out general provisions applicable to elections made under it. The 1976 Act provides for elections in a number of circumstances and they are not restricted to those made under s 244. The Commissioner may cancel an election in certain circumstances. Those circumstances arise when a person has made an election under one of the sections listed in s 157(3)(a). That list does not include s 244. Section 157 goes on to provide that, where a person makes an election under one of those sections:
“(b) the person who made the election, or another person (being a person who is prescribed or included in a prescribed class of persons), makes an application to the Commissioner not later than 3 months after the day on which the election is made or the day on which this subsection comes into operation, whichever is the later, or within such further period as the Commissioner, in special circumstances, allows, requesting that the Commissioner cancel the election; and
(c)the Commissioner, having regard to such matters (if any) as are prescribed and such other matters as he considers relevant, is satisfied that the election should be cancelled ...”
Revocation of an election in certain cases: 1990 Act
Section 6A of the 1990 Act is also relevant. It was inserted by s 69 of the Superannuation Legislation Amendment Act 1991 with effect from 2 September 1991 and provides:
“(1) This section applies to a person who:
(a)is a member of the [Public Sector] Superannuation Scheme; and
(b)became such a member before the commencement of section 68 of the Superannuation Legislation Amendment Act 1991; and
(c)is a person, other than a casual employee within the meaning of the Rules, mentioned in subparagraphs 6(2)(ba)(i), (ii), (iii), (iv) and (v).
(2)A person to whom this section applies may in writing addressed to the Board before 1 October 1991 or such later date as the Board allows having regard to all the circumstances of the particular case:
(a)declare that he or she wishes to become an eligible employee for the purposes of the Superannuation Act 1976; and
(b)elect to cease to be a member of the Public Sector Superannuation Scheme.
(3)A person who makes an election under subsection (2) is taken to have ceased to be a member of the Public Sector Superannuation Scheme at the end of the day on which the election is made.
(4)The Board must, as soon as practicable after a person makes an election under this section, pay to the CSS Board the person’s accumulated contributions. ”
The Superannuation Legislation Amendment Act 1991 also inserted ss 6(2)(ba)(i), (ii), (iii), (iv) and (v) in the 1990 Act.[29] It is referred to in s 6A(1)(c) of the 1990 Act and provides that:
[29] Superannuation Legislation Amendment Act 1991, s 68
“… a person is not a member of the Public Sector Superannuation Scheme if
the person:
…
(ba)is a person:
(i)to whom invalidity pension, or a deferred benefit by way of invalidity pension, is, or but for a suspension of payment would have been, payable to him or her under the Superannuation Act 1976; or
(ii)to whom a pension of a kind mentioned in section 64A or 65 of the Superannuation Act 1922 as in force immediately before the repeal of that section, or a deferred benefit by way of a pension payable for the reason mentioned in subsection 119ZA(1) of that Act, is, or but for a suspension of payment would have been, payable to him or her; or
(iii)to whom deferred benefits are applicable under the Superannuation Act 1976; or
(iv)to whom deferred benefits are applicable under the Superannuation Act 1922 and who has not become an eligible employee for the purposes of the Superannuation Act 1976; or
(v)who is a re-employed former contributor with preserved rights for the purposes of the Superannuation Act 1976 and who has not become an eligible employee for the purposes of that Act;
other than such a person who is a casual employee within the meaning of the Rules or who became a member of the [Public Sector] Superannuation Scheme before the commencement of section 68 of the Superannuation Legislation Amendment Act 1991 and has continued to be such a member; …
…”
Review rights: 1976 Act
Section 154(2) of the 1976 Act provides that:
“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.”
The expression “reviewable decision” means:
“… a decision of the Commissioner, or a delegate of the Commissioner, under this Act, … and includes a decision of the Superannuation Board, or a delegate of the Superannuation Board …”[30]
[30] 1976 Act, s 154
The word “decision” has the same meaning as it has under the AAT Act. Section 3(3) of the AAT Act provides:
“Unless the contrary intention appears, a reference in this Act to a decision includes a reference to:
(a)making, suspending, revoking or refusing to make an order or determination;
(b) giving, suspending, revoking or refusing to give a certificate, direction, approval, consent or permission;
(c)issuing, suspending, revoking or refusing to issue a licence, authority or other instrument;
(d)imposing a condition or restriction;
(e)making a declaration, demand or requirement;
(f)retaining, or refusing to deliver up, an article; or
(g)doing or refusing to do any other act or thing.”
Once the Commissioner received 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.”[31] He must give written notice of his decision to the person who made the request as well as his reasons.[32] An application “may be made to the Tribunal for review of reviewable decisions that have been confirmed or varied under subsection (4) …”.
[31] 1976 Act, s 154(4)
[32] 1976 Act, s 154(5)
THE SUBMISSIONS
In his initial submissions, Mr Sharma said that he completed the election form in good faith based on information provided by the RBO. The information provided had proved to be incorrect. Therefore, he could not be considered to have made the election on the basis of an informed decision. As a consequence, his election could not be regarded as being valid for the purposes of s 244 of the 1976 Act. He relied on the decision of the Tribunal in Re Greenwood and Commissioner for Superannuation.[33]
[33] (1995) 21 AAR 251
At the conclusion of the hearing, I invited Mr Sharma to make further submissions regarding the cases to which Mr Dillon had referred. Those cases were Saunders v Anglia Building Society[34] and Petelin v Cullen[35] and were concerned with the doctrine of non est factum. Mr Sharma rejected any suggestion that the doctrine applied to him as he did not fall within any of the categories of persons to whom the doctrine could apply.
[34] [1971] AC 1004
[35] (1975) 132 CLR 355; (1975) 6 ALR 129
Rather, Mr Sharma said that his decision to make an election had been made on the basis of the Commissioner’s misrepresentation or, in the alternative, on mistake. The Tribunal may consider that the Commissioner breached his duty to ensure that accurate information was provided as the seminar. In his submission, the Commissioner had made a negligent misrepresentation. As a result of his relying on the Commissioner’s misrepresentation, he had suffered economic loss. Mr Sharma referred to Hedley Byrne & Co Ltd v Heller & Partners Ltd,[36] Mutual Life & Citizens’ Assurance Co Ltd v Evatt[37] and Hill (trading as RF Hill & Associates) v Van Erp.[38]
[36] [1964] AC 465; [1963] 2 All ER 575
[37] (1968) 122 CLR 556; [1969] ALR 3
[38] (1997) 188 CLR 159; (1997) 142 ALR 687
In relation to mistake, there had been no meeting of minds between him and the Commissioner. The mistake had been fundamental and related to a piece of information critical to the decision he had to make. Had the representation been true, he would have chosen to remain in the CSS and not transferred to the PSS. Mr Sharma referred to the High Court’s judgment in Psaltis v Schulz.[39]
[39] (1948) 76 CLR 547; [1948] 2 ALR 502
At the time that he made his election, Mr Sharma said that he signed the acknowledgement that he had received sufficient information to make an informed decision because he reasonably believed that he had done so. He believed that he had had received sufficient information. Although the representation on which he had relied had been given in answer to a question from another person in the audience at the seminar, he would have asked the question himself had it not been asked by another.
CONSIDERATION
General principles
I have set out the review provisions in s 154 of the 1976 Act alone as the 1990 Act does not give the Tribunal any jurisdiction to review decisions made under it. If the Tribunal is to have jurisdiction under s 154 of the 1976 Act, it must first find a “reviewable decision” that has been “confirmed or varied under”
s 154(4).[40] That means that it must find something that can be characterised as a “decision” within the meaning of s 3(3) of the AAT Act confirming or varying a “decision of the Commissioner, or a delegate of the Commissioner, under this [1976] Act”.[41][40] 1976 Act, s 154(6)
[41] 1976 Act, s 154(1)
Re Greenwood and Commissioner for Superannuation
Before I consider the issues in this case, I should refer to the Tribunal’s decision in Re Greenwood and Commissioner for Superannuation[42]. Mr Sharma took considerable comfort in that case and, on the basis of its decision, his view of it is understandable. In that case, the Tribunal decided that Ms Greenwood had not received sufficient information on which to make an informed decision whether she should make a declaration and an election. She should have received sufficient information and correct information. The Commissioner had conceded that the information statement that she had received was not correct. The Tribunal also found that Ms Greenwood had not known that she had an additional three months in which to make up her mind. That additional period had been allowed by the Commissioner when he discovered that some of the information statements were incorrect. Without informed decision-making, the Tribunal decided, it could not regard her election as valid for the purposes of s 244 of the 1976 Act.
[42] (1995) 21 AAR 251
Material in the T documents indicated that the Commissioner had appealed to the Federal Court and that the Federal Court had, by consent, allowed the appeal.[43] In his submissions dated and lodged on 25 August 2006, Mr Sharma
observed that:
“The Commissioner’s claim that the decision of the Tribunal had been overturned is not necessarily correct; a confidential agreement was reached prior to the case being heard which resulted in the matter being set aside. I submit the Commissioner’s interpretation is both misleading and unfair in the circumstances.”[44]
[43] T documents at 87 and see also NSD78/1995 on [2.4.3]
On 13 November 2006, Mr Dillon lodged a copy of the Orders made by Wilcox J on 15 December 1995 reading:
“BY CONSENT THE COURT ORDERS THAT:
1.The appeals be allowed.
2.The decisions of the Administrative Appeals Tribunal dated 19 January 1995 and 6 April 1995 be set aside.
3.The decision of the applicant dated 3 March 1993 be affirmed.
4.The applicant pay the respondent’s costs of these proceedings in the agreed sum of $13,500.”
The orders were entered on 19 January 1996 and the photocopy shows the Federal Court seal for its New South Wales Registry over the signature of the Deputy District Registrar and over the handwritten words “BY CONSENT”. It also bears a stamp indicating that it was filed in that Registry. Given all those matters, I accept that this is a copy of the orders made by a single Judge of the Federal Court and that the appeal(s) to the Federal Court against the Tribunal’s decision were successful.
The T documents contain an advice from counsel to the effect that there were two errors of law in the Tribunal’s decision. The first was that it was not properly constituted according to s 154(7) of the 1976 Act, which was then in force. The second was that the Tribunal had made an error of law in concluding that s 244(1)(b) of the 1976 Act was only effective where the person making an election made an “ informed decision” and was fully informed on all of the implications that might flow from that election.[45] As the Judge’s orders do not set his reasons for allowing the appeal(s) and as searches in both the printed reports and the computerised data bases fail to reveal any, it is impossible to know what was in his mind. It is fair to say that he would have been satisfied that the Tribunal had not been properly constituted. Indeed, the Tribunal itself referred to that fact in its reasons and the matter had been heard by a differently and properly constituted Tribunal.[46]
[45] T documents at 31
[46] (1995) 21 AAR 251 at [2]
It is also open to speculation that the Federal Court accepted the second ground of appeal. Had it not, it is more likely that it would have remitted the matter to be decided according to law by a properly constituted Tribunal. Its affirmation of the Commissioner’s decision without remitting the matter to the Tribunal suggests that there was no basis on which Ms Greenwood could have succeeded in the Tribunal. It suggests that there was no power to allow revocation of an election.
The problem is that, in the absence of any note, however brief, of the basis on which an appeal has been allowed, the reasons for the Federal Court’s decision must remain a matter for speculation. This is so for the Tribunal when a matter is remitted to it and it is required to reconsider it without the benefit of the Federal Court’s guidance as to the error it has made. This is so for the parties to the matter when they later cannot agree on their reasons for agreeing that the appeal be allowed. There have been instances in which all that they can agree on is that the Tribunal had made an error of law. This is so for those unconnected with the particular matter who seek to rely upon aspects of a Tribunal’s reasons decision. The fact that an appeal has been allowed against a decision does not necessarily negate all aspects of its reasons. At times, an appeal is allowed in relation to only a small, but necessarily significant, aspect of the decision. It may be allowed because a principle has been wrongly applied to the facts of the particular case or because of an incorrect understanding of that principle. To what extent the Tribunal’s reasoning remains valid and a useful reference point is often a matter of speculation when an appeal has been allowed but on unspecified grounds.
In this case, I think that the safest course is to put the Tribunal’s decision in Re Greenwood and Commissioner for Superannuation to one side. In affirming the Commissioner’s decision and in deciding not to remit the matter to the Tribunal, it is certainly clear that, at least in that case, the Federal Court considered that Ms Greenwood’s election could not be regarded as invalid for that was the decision that the Tribunal had made. I should consider whether Mr Sharma may revoke his election or whether the Commissioner may cancel it from first principles as if Re Greenwood and Commissioner for Superannuation had never been decided.
Was there a decision under the 1976 Act?
There is no question that the Commissioner has made a decision under s 154(4). It is set out in the document he signed and which is dated 25 January 2006. It is headed “Decision of the Commissioner for Superannuation concerning advice conveyed to Mr Sharma that there is no provision whereby his election to transfer from the CSS to the PSS Scheme might be revoked.”[47]
[47] T documents at 81
In this case, the Commissioner has made a decision within the meaning of s 3(3) of the AAT Act and so of the sort contemplated by s 154(4) of the 1976 Act. His decision confirms the advice given to Mr Sharma in a letter dated 15 April 1991. Is the advice a “decision of the Commissioner, or a delegate of the Commissioner, under this [1976] Act”? The answer to that question depends on an analysis of what the Commissioner has done and the context in which he has done it viewed against the meaning of “decision” in s 3(3) of the AAT Act and the meaning of its being “under” the 1976 Act.
The letter that is described as “advice” to Mr Sharma contained a statement that “The relevant legislation governing transfers to the PSS do [sic] not allow eligible employees to cancel their election”.[48] The Commissioner’s letter dated 15 April 1991 can be read as a statement of fact. It was written in response to Mr Sharma’s letter dated 15 March 1991 stating his wish to withdraw his application. When the two are read together, it is clear that the Commissioner has expressed his view that he had no power to with Mr Sharma’s request. Implicit in his letter was a statement that he was not taking any action in relation to the request. Does that amount to a “decision” in the meaning of s 3(3) of the AAT Act?
[48] T documents at 7
The definition of the word “decision” in s 3(3) of the AAT Act is written in inclusive terms. This means that regard should be had to its ordinary meaning as well as to those meanings given in seven paragraphs in the definition. Its ordinary meanings include “… the act of deciding …”.[49] The ordinary meanings of “decide” include “… to settle something; to make final result of something certain. ... to make a formal judgement about something. …”.[50] In its ordinary meanings, a “decision” need not be expressed in any particular form. Rather, regard is had to the essence of what has happened in order to assess whether something has been settled or resolved once and for all.
[49] Chambers 21st Century Dictionary, 1999, reprinted 2004, Chambers
[50] Chambers 21st Century Dictionary, 1999, reprinted 2004, Chambers
In Director-General of Social Services v Hales,[51] Lockhart J, with whom Sheppard J agreed, considered the general issue of the meaning of the word “decision”:
“One cannot therefore look to the definition in s 3(3) [of the AAT Act] to determine definitively the meaning of the word ‘decision’. It must take its colour and content from the enactment which is the source of the decision itself. No narrow or pedantic approach is called for in determining whether a decision falls within the scope of review of the Administrative Appeals Tribunal. The multiplicity of statutes which continue to grow and to confer jurisdiction on the Administrative Appeals Tribunal, and the manifold and diverse circumstances which attract the power of the decision maker, all call for a liberal approach to the word ‘decision’ … It is necessary to examine the Act which confers jurisdiction on the Administrative Appeals Tribunal and the administrative framework in which it operates to determine whether there is a ‘decision’ susceptible to review under the Administrative Appeals Tribunal Act. A pronouncement which alters rights or imposes liabilities is readily classified as a ‘decision’, but the word has a wider scope. It may include a declaration or statement which has a real practical effect although not altering rights or imposing liabilities: Duncan v Defence Force Retirement and Death Benefits Authority and Commonwealth of Australia (1980) 30 ALR 165 at 169-70.”[52]
[51] (1983) 47 ALR 281; (1983) 3 ALD 113
[52] (1983) 47 ALR 281; (1983) 3 ALD 113 at 305-306; 117
The word “decision” was also considered by the High Court in Australian Broadcasting Tribunal v Bond.[53] Their Honours considered the definition of “decision” in s 3(2) of the Administrative Decisions (Judicial Review) Act 1977 (ADJR Act). That definition defines the word, in part and in so far as they are relevant in this case, in terms of “… a decision of an administrative character made … under an enactment …”. A reference to the making of a decision includes such actions as making, suspending, revoking or refusing to make an order, award, or determination or doing or refusing to do any act or thing.[54]
[53] (1990) 170 CLR 321; (1990) 94 ALR 11
[54] ADJR Act, ss 3(2)(a) and (g)
Mason CJ observed, that it was:
“... clear that a ‘decision to which this Act applies’ must be a decision of an administrative character, that it may be made in the exercise of a discretion, and that it must be made under an enactment. But these characteristics provide little guidance as to the meaning of the word ‘decision’ upon which the definition in s3(1) is based.”[55]
[55] (1990) 170 CLR 321; (1990) 94 ALR 11 at 22; 335 per Mason CJ
His Honour, with whom Brennan J and Deane J agreed, considered the competing policy considerations to be taken into account in determining the compass of the word “decision”. These were:
“On the one hand, the purposes of the ADJR Act are to allow persons aggrieved by the administrative decision-making processes of government a convenient and effective means of redress and to enhance those processes. On the other hand, in so far as the ambit of the concept of ‘decision’ is extended, there is a greater risk that the efficient administration of government will be impaired. Although Bowen CJ and Lockhart J appeared to emphasise the first of these considerations in Australian National University v Burns (1982) 64 FLR 166 at 172; 43 ALR 25 at 30, there comes a point when the second must prevail, as their Honours implicitly acknowledged. To interpret ‘decision’ in a way that would involve a departure from the quality of finality would lead to a fragmentation of the processes of administrative decision-making and set at risk the efficiency of the administrative process.”[56]
[56] (1990) 170 CLR 321; (1990) 94 ALR 11 at 23; 336-337
Mason CJ went on to say:
“The policy arguments do not, in my opinion, call for an answer different from that dictated by the textual and contextual considerations. That answer is that a reviewable ‘decision’ is one for which provision is made by or under a statute. That will generally, but not always, entail a decision which is final or operative and determinative, at least in a practical sense, of the issue of fact falling for consideration. A conclusion reached as a step along the way in a course of reasoning leading to an ultimate decision would not ordinarily amount to a reviewable decision, unless the statute provided for the making of a finding or ruling on that point so that the decision, though an intermediate decision, might accurately be described as a decision under an enactment.
Another essential quality of a reviewable decision is that it be a substantive determination. With the exception of s 3(2)(g), the instances of decision mentioned in s 3(2) are all substantive in character. Moreover, the provisions in sub-ss (1),(2),(3) and (5) of s 3 point to a substantive determination. In this context the reference in s 3(2)(g) to ‘doing or refusing to do any other act or thing’ (emphasis added) should be read as referring to the exercise or refusal to exercise a substantive power. I do not perceive in s 16(1)(b) or in para (e) of Sch 1 or para (a) of Sch 2 to the ADJR Act any contrary implication. These exclusions from the ADJR Act or from s 13 appear to have been introduced for more abundant caution and it would be unwise to take too much from them.
If ‘decision’ were to embrace procedural determinations, then there would be little scope for review of ‘conduct’, a concept which appears to be essentially procedural in character. To take an example, the refusal by a decision-maker of an application for an adjournment in the course of an administrative hearing would not constitute a reviewable decision, being a procedural matter not resolving a substantive issue and lacking the quality of finality. Then it is the ‘conduct’ of the hearing in refusing an adjournment that is the subject of review. To treat the refusal of the adjournment in this way is more consistent with the concept of ‘conduct’ than with the notion of ‘decision under an enactment’.”[57]
[57] (1990) 170 CLR 321; (1990) 94 ALR 11 at 23-24; 337-338
Mason CJ made it clear that a reviewable decision need not be one which ultimately determined all of the issues when he referred to Lamb v Moss (1983) 49 ALR 533. He said:
“Lest it should be thought otherwise, I should say that, to the extent in Lamb v Moss that the magistrate decided that a prima facie case had been established and that he would proceed with the committal proceedings, a reviewable decision had been made. That decision was one for which s 41(2) of the Justices Act 1902 (NSW) specifically provided. The decision resolved an important substantive issue to be determined before the ultimate decision could be made under s 41(6) of that Act whether to commit the defendant for trial or discharge him from custody.”[58]
[58] (1990) 170 CLR 321; (1990) 94 ALR 11 at 24; 338
Although the definitions of the word “decision” are in similar terms in s 3(1) of the AAT Act and s 3(2) of the ADJR Act, s 3(5) of the ADJR Act refers to “conduct” when it provides that:
“... a reference to the doing of any act or thing preparatory to the making of the decision, including the taking of evidence or the holding of an inquiry or investigation.”
This relates to s 6 of the ADJR Act which provides for applications to be made for review of conduct related to the making of a decision. That is separate from s 5 which provides for applications to be made for review of decisions. There is no similar provision in the AAT Act.
The fact that the ADJR Act made provision for review of conduct related to making decisions was relevant in the consideration of the meaning of “decision” under the ADJR Act. Mason CJ said that its meaning becomes clear once it is accepted that a “decision” is:
“... one that generally is substantive, final and operative ... In its setting in s 6 the word ‘conduct’ points to action taken, rather than a decision made, for the purpose of making a reviewable decision. In other words, the concept of conduct looks to the way in which the proceedings have been conducted, the conduct of the proceedings, rather than decisions made along the way with a view to the making of a final determination. Thus, conduct is essentially procedural and not substantive in character. Accordingly, s 3(5) refers to two examples of conduct which are clearly of that class, namely, ‘the taking of evidence or the holding of an inquiry or investigation’. It would be strange indeed if ‘conduct’ were to extend generally to unreviewable decisions which are in themselves no more than steps in the deliberative or reasoning process.
Accordingly, there is a clear distinction between a ‘decision’ and ‘conduct’ engaged in for the purpose of making a decision. A challenge to conduct is an attack upon the proceedings engaged in before the making of the decision. It is not a challenge to decisions made as part of the decision-making process except in the sense that if the decisions are procedural in character they will precede the conduct which is under challenge. In relation to conduct, the complaint is that the process of decision-making was flawed; in relation to a decision, the complaint is that the actual decision was erroneous. To give an example, the continuation of proceedings in such a way as to involve a denial of natural justice would amount to ‘conduct’. That is not to deny that the final determination of the proceedings would constitute a decision reviewable for denial of natural justice.”[59]
[59] (1990) 170 CLR 321; (1990) 94 ALR 11 at 27; 341-342
Even though the AAT Act makes no reference to “conduct,” it seems to me that the principles adopted by the High Court in considering the word “decision” in the ADJR Act should be applied to the interpretation of the same word in the AAT Act. To do so is consistent with their being defined in the two in similar terms. The fact that the Tribunal does not have power to review conduct, as opposed to a decision, does not detract from the similarity. Indeed, it underlines the fact that the word “decision” as it is used in the AAT Act does not extend to conduct itself. That is not to say that regard may not be had to conduct in deciding whether a decision may be made. Paragraphs (f) and (g) of the definition extend to matters that could, in some circumstances, be regarded as conduct as do the same paragraphs of the definition of “decision” in the ADJR Act. Given the analysis by the High Court, those matters must resolve a substantive issue and have the necessary quality of finality if they are to be regarded as a “decision” within the meaning of the AAT Act. The same conclusion can be reached in relation to other conduct which is not described in those two paragraphs but which shows that a substantive issue has been finally resolved.
In this case, the “advice” given by the Commissioner in his letter of 15 April 1991 is a decision within the meaning of the AAT Act. It is final and operative in the sense that it deals with the request that Mr Sharma made in his letter of 15 March 1991. As far as the Commissioner was concerned and for all practical purposes, the matter had been concluded. There were no other issues to resolve. A description of the Commissioner’s letter of 15 April 1991 as “advice” does not change its proper characterisation as a decision.
Was the Commissioner’s decision made under the 1976 Act? Does the fact that the Commissioner thought that there was no power to allow Mr Sharma to revoke his election mean that his decision was not made under the 1976 Act? In order to be a “reviewable decision,” the Commissioner’s decision must have been made “under” that legislation.
Consideration has been given to the meaning of the related expression “under an enactment” in various contexts. It was considered in the context of the ADJR Act by Black CJ in Hutchins v Commissioner of Taxation:[60]
“It is clear that there may be a decision ‘under an enactment’ within the meaning of that expression in the ADJR Act notwithstanding that the enactment concerned does not expressly require or authorise the decision in question but does so impliedly.”[61]
In Electricity Supply Association of Australia Ltd v Australian Competition and Consumer Commission, [62] Finn J said in the same context:
“The second quality required of a ‘reviewable decision’ is that it be a decision ‘made under’ an enactment … This test requires there to be a ‘sufficient connection’ between the text of the statute in question and the decision sought to be reviewed … This ‘sufficient connection’ requirement itself effects a balance between the policy, on the one hand, of allowing effective redress to persons aggrieved by administrative decision making processes (so enhancing those processes), and that, on the other hand, of protecting the efficient administration of government from impairment by an extended conception of a reviewable decision ...”[63]
[60] (1996) 65 FCR 269; (1996) 136 ALR 153
[61] (1996) 65 FCR 269; (1996) 136 ALR 153 at 271; 155
[62] (2001) 113 FCR 230; (2001) 189 ALR 109
[63] (2001) 113 FCR 230; (2001) 189 ALR 109 at 250-251; 127
The notions of a “sufficient connection” and of an implicit authorisation are illustrated by the conclusion reached by Mason, Deane and Dawson JJ (Gibbs CJ and Brennan J dissenting) in Minister for Immigration and Ethnic Affairs v Mayer.[64] This is a case to which the Full Court referred in Australian Postal Corporation v Forgie:[65]
“… That case involved the interpretation of s 6A(1)(c) of the Migration Act 1958 (Cth). Section 6A(1)(c) was to the effect that an entry permit was not to be granted unless one or more of a number of conditions were met, one of them being that ‘the Minister has determined … that he has the status of a refugee.’ Mason, Deane and Dawson JJ … held that the Minister’s decision that the respondent did not have refugee status was made in performance of a function impliedly conferred upon him by s 6A(1)(c) of the Migration Act. It was therefore a decision made ‘under an enactment’ as required by s 3(1) of the ADJR Act.”[66]
[64] (1985) 157 CLR 290; (1985) 61 ALR 609
[65] [2003] FCAFC 223; (2003) 202 ALR 63
[66] [2003] FCAFC 223; (2003) 202 ALR 63 at 76; [62]
Applying that logic to s 37(7) of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act), the Full Court concluded:
“ Likewise under s 37(7), when an employee has refused or failed to undertake a rehabilitation program, rights are to be suspended, unless one element is present, namely a reasonable excuse. There is a direct connection between the text of the statute ‘without reasonable excuse’ and the decision, which the respondent seeks to have reviewed ‘that there is no reasonable excuse’. Since the connection is both direct and explicit, it must easily fall within the notion of sufficient connection for the purposes of ‘made under’ in the context of the ADJR Act. It follows that it would also be a decision ‘made under s 37’ for the purposes of s 60(1) of the SRC Act.”[67]
[67] [2003] FCAFC 223; (2003) 202 ALR 63 at 76; [63]
In the case of the 1976 Act, the Commissioner “… is to have the general administration of this Act …” unless otherwise provided.[68] He is given a wide range of specific powers under various sections. I have referred to only some of them. Mr Sharma has asked for something that the Commissioner believes he cannot grant. It is a decision of a type made regularly in the course of administering a piece of legislation such as the 1976 Act. Ascertaining what is and is not authorised by a piece of legislation is an integral part of administering it. It must be regarded as falling within the Commissioner’s express power to administer the 1976 Act. If it does not do so, it comes within the implied power he is given to perform or execute his functions in relation to it.[69] The decision of 15 April 1991 concerns a matter that is a subject with which the 1976 Act deals even though it is a decision that the Commissioner can do nothing about it. There is a sufficient connection between the decision and the subject matter of the 1976 Act to say that it is made under it.
[68] 1976 Act, s 17(2)
[69] Johns v Connor (1992) 35 FCR 1; (1992) 107 ALR 465 at 10; 473 per Lockhart J
In view of that, the decision made by the Commissioner on 15 April 1991 was a reviewable decision. As the Commissioner’s decision of 25 January 2006 confirmed that decision, it is reviewable by the Tribunal.
May Mr Sharma revoke his election under the statutory provisions?
There is no question in this case that the document that Mr Sharma gave his Personnel section in March 1991 was in the form of a declaration that he wished to become a member of the PSS and an election to cease to be a member of the CSS. Having done that, s 245 has all the hallmarks of a self-executing provision. On its face, once Mr Sharma had made the declaration and an election, the outcome was automatic and prescribed by the 1976 Act without the intervention of any factor or the exercise of anybody’s discretion. He was automatically taken to be an eligible employee at the end of the day on which he made them.
Given the provisions in s 244, however, the two factors of the declaration and the election cannot be taken to be the only two that trigger the outcome specified in s 245 to take effect. The others are found in the requirements in s 244 that Mr Sharma be, at the time he made the declaration and election, an eligible employee, who was not precluded by or under the 1990 Act (other than by s 6(2)(a) of that Act) from being a member of the PSS, that he made it by 30 June 1991 and that he was not a person who was prohibited from making an election. Only if those factors are also present will the outcome in s 245 come to pass.
There are no express provisions in either the 1976 Act or the 1990 permitting Mr Sharma to revoke his election. May I read them to imply that a person such as Mr Sharma has a right to revoke an election? I think not. Express provision is made for revocation of an election in s 247 of the 1976 Act and in s 6A of the 1990 Act. Neither is relevant in this case. Given that Parliament has made provision for revocation in two quite precise sets of circumstances, there can be no room to imply that a person has a right to revoke an election once made.
May the Commissioner cancel Mr Sharma’s election?
The only express provision made for cancellation of an election is found in s 157 of the 1976. That section does not permit the Commissioner to cancel an election made under s 244 even though it permits him to do so when an election has been made under a number of other sections specified in s 157(3)(a). That list does not include s 244. In the absence of an express provision, does the Commissioner have an implied power to cancel an election?
Legislation may be interpreted to include implied powers in addition to any powers that it expressly gives:
“… whenever they are required for the effective exercise of a jurisdiction which is expressly conferred but will be confined to so much as can be ‘derived by implication from statutory provisions conferring particular jurisdiction.”
This passage appears in the judgment of Dawson J in R v Grassby.[70] In their joint judgment in Pelechowski v Registrar, Court of Appeal,[71] Gaudron, Gummow and Callinan JJ explained what Dawson J had meant by “necessary” in that passage:
“The term ‘necessary’ in such a setting as this it to be understood in the sense given it by Pollock CB in Attorney-General v Walker (1849) 3 Ex 242 at 255-256, namely as identifying a power to make order which are reasonably required or legally ancillary to the accomplishment of the specific remedies for enforcement provided in Division 4 of Part 3 of the District Court Act. In this setting, the term ‘necesssary’ does not have the meaning of ‘essential’; rather it is to be ‘subjected to the touchstone of reasonableness’: State Drug Crime Commission of NSW v Chapman (1987) 12 NSWLR 447 at 452.’”[72]
[70] (1989) 168 CLR 1; (1989) 87 ALR 618 at 17; 628
[71] (1999) 198 CLR 435; (1999) 162 ALR 336
[72] (1999) 198 CLR 435; (1999) 162 ALR 336 at 452; 348
The context of the 1976 Act and the establishment of the PSS by the 1990 Act, is not conducive to the implication of a power enabling the Commissioner to cancel an election made under s 244. In the first place, the existence of an express power to cancel an election under other specified sections weighs against the implication. It weighs against it because it indicates that Parliament has turned its mind to the cancellation of elections and has consciously decided against giving the Commissioner power to cancel an election under s 244. In the second place, s 245 provides that a person who makes a declaration and election under s 244 is taken to have ceased to be an eligible employee at the end of the day on which they are made. Once the person is no longer an eligible employee that person is not entitled to be paid most benefits under the 1976 Act. That person’s benefits then become payable under the 1990 Act. In practical terms, this is effected by the obligation placed on the Commonwealth Superannuation Board of Trustees (No 2) established under s 27A of the 1976 Act to transfer assets to the Commonwealth Superannuation Board of Trustees (No 1) established under Part 6 of the 1990 Act.[73] Those assets must represent the accumulated contributions and employer contributions of those persons who ceased to be eligible employees under s 245.[74] The upshot is that not only have the person’s declaration and election changed the person’s rights under the law, there has been a change in practical circumstances. If the Commissioner were permitted to cancel an election under s 244 of the 1976 Act, there would need to be a commensurate provision requiring the transfer from the Commonwealth Superannuation Board of Trustees (No 1) to the Superannuation Board of Trustees (No 2). There is none. To imply such an obligation would be contrary both to the express provisions of the 1976 Act. It is also contrary to the fact that the CSS and the PSS are different funds holding different amounts of money and giving different benefits. It is reasonable to expect that a cancellation of an election of those circumstances would cause administrative difficulties and to artificial calculations of benefits.
Has Mr Sharma made an election: should principles based on the doctrine of non est factum, mistake and misrepresentation be read into the 1976 Act or the 1990 Act
[73] 1976 Act, ss 237 and 243
[74] 1976 Act, s 248(1)(a)
There is no question that, in form, Mr Sharma has made a declaration and an election. In his submission filed on 22 November 2006, he said that it would be irresponsible for him to rely upon an argument of non est factum i.e. a doctrine that would enable him to say that his election was not an election at all. I have summarised his submissions already but, in essence, his reason was that he did not fall within the class of persons described in the judgment of the High Court in Petelin v Cullen[75] or in the earlier case of Saunders v Anglia Building Society.[76]Instead, he relied on the Commissioner’s having made a mistake in the advice that he was given before he made his election and declaration or on mistake. It may be that, in a policy sense at least in this context, aspects of non est factum and mistake and misrepresentation cross over each other.
[75] (1975) 132 CLR 355; (1975) 6 ALR 129
[76] [1971] AC 1004
The doctrine of non est factum and mistake both have their foundations in the law of contract. Misrepresentation has its in the law of torts. They do not have their foundations in rights and duties and powers and liabilities created by legislation. I have already found that neither the 1976 Act nor the 1990 Act permits me to imply a right to revoke an election or a power for the Commissioner to cancel an election. The same line of reasoning leads me to conclude that I cannot read into the legislation a provision that an election made in circumstances that would permit a contract to be rescinded on the basis of the doctrine of non est factum or a mistake or in circumstances that would permit an action to be brought for misrepresentation. Parliament made specific provision in s 247 of the 1976 Act for the situation in which a person who had elected to transfer from the CSS to the PSS could revoke the declaration and election. It provided for revocation of a declaration and an election by a person when told that the CSS average salary had been calculated by reference to an amount other than an amount referred to in paragraph (a) or (b) of the definition of CSS average salary. In other words, Parliament provided for revocation in circumstances in which the declaration and election had been made on a basis different, at least in part, from that which actually applies. The person does not make the declaration and election on the basis of a mistake or a misrepresentation but on a basis that later proves to be incorrect. For all that, s 247 is a clear indication that Parliament has considered similar, even though not identical circumstances.
It is also clear from s 6A of the 1990 Act that Parliament considered a second set of circumstances in which it would permit a person to elect to transfer back to the CSS from the PSS. It has omitted from those circumstances, a person who has made the declaration and election on the basis of some mistaken understanding of the relative advantages and disadvantages or who has made the declaration and election on the basis of some misrepresentation. Parliament also omitted an election under s 244 from the list of elections that could be revoked under s 157 of the 1976 Act.
Parliament’s careful specification of the circumstances in which it permitted revocation or cancellation strongly suggests that there is no room to read into the provisions of the 1976 Act or the 1990 Act principles drawn on the notions of the doctrine of non est factum, mistake or misrepresentation.
The notions themselves also point to the same conclusion. I will begin with the doctrine of non est factum. In Petelin v Cullen, the High Court said that the doctrine was not capable of easy formulation and was available only as a defence to a limited group of persons:
“… It is available to those who are unable to read owing to blindness or illiteracy and who must rely on others for advice as to what they are signing; it is also available to those who through no fault of their own are unable to have any understanding of the purport of a particular document. To make out the defence a defendant must show that he signed the document in the belief that it was radically different from what it was in fact and that, at least as against innocent persons, his failure to read and understand it was not due to carelessness on his part. Finally, it is accepted that there is a heavy onus on a defendant who seeks to establish the defence. All this is made clear by the recent decision of the House of Lords in Saunders v Anglia Building Society (Gallie v Lee) …”[77]
[77] (1975) 132 CLR 355; (1975) 6 ALR 129 at 359-360; 133
The “heavy onus” to which the High Court referred includes a requirement that the person claiming the defence of non est factum not have been careless. Carelessness in that context is a reference:
“… to a mere failure to take reasonable precautions in ascertaining the character of a document before signing it. The insistence that such precautions should be taken as a condition of making out the defence is of fundamental importance when the defence is asserted against an innocent person, whether a third party to the transaction or not, who relies on the document and the signature which it bears and who is unaware of the circumstances in which it came to be executed. It is otherwise when the defence is asserted against the other party to the transaction who is aware of the circumstances in which it came to be executed and who knows (because the document was signed on his representation) or has reason to suspect that it was executed under some misapprehension as to its character. In such a case the law must give effect to the policy which requires that a person should not be held to a bargain to which he has not brought a consenting mind for there is no conflicting or countervailing consideration to be accommodated – no innocent person has placed reliance on the signature without reason to doubt its validity.”[78]
[78] (1975) 132 CLR 355; (1975) 6 ALR 129 at 360; 130
The policy considerations behind these principles:
“… pull in opposite directions: first, the injustice of holding a person to a bargain to which he has not brought a consenting mind; and, secondly, the necessity of holding a person who signs a document to that document, more particularly so as to protect innocent persons who rely on that signature when there is no reason to doubt its validity. The importance which the law assigns to the act of signing and to the protection of innocent persons who rely upon a signature is readily discerned in the statement that the plea is one ‘which must necessarily be kept within narrow limits’ (Muskham Finance Ltd v Howard [1963] 1 QB 904 at 912; [1963] 1 All ER 81 at 83] and in the qualifications attaching to the defence which are designed to achieve this objective.”[79]
[79] (1975) 132 CLR 355; (1975) 6 ALR 129 at 359; 133
It is clear that the doctrine of non est factum is directed to contractual arrangements between two parties. It is used as a defence, to an action brought by the other party to enforce the contract. It is not used as a basis for avoiding duties and obligations. It is underpinned by the notions that a person should consent to entering contractual arrangements and that a person cannot properly consent if under a misapprehension as to what is going on. At the same time, it is underpinned by notions that a person must take responsibility for that person’s own actions and that the status quo should generally be retained. These are different notions from those underpinning the 1976 Act and the 1990 Act. Those Acts are directed to the establishment of superannuation schemes potentially involving large numbers of members whose liabilities to contribute and whose benefits are defined by the legislation itself. An election is the exercise of a statutory right to make it rather than the result of a choice to enter a contract with another.
One of the essential features of the doctrine is that the document signed by the person must be “radically different” from the document that the person thought he or she was signing. The High Court in Petelin v Cullen did not give any guidance as to what is meant by “radically different”. In that case, though, Mr Petelin thought that he was signing a receipt when he was actually signing a six month extension of a lapsed option for Mr Cullen to purchase his land. The High Court held that the defence succeeded in that case. Commenting upon the case, Handley JA, with whom Stein and Heydon JJA agreed in Child v Commonwealth Development Bank,[80] described the difference between the two documents as “radical on any view”.[81] He did not give any guidance either but concluded that:
“… In my judgment a sentimental preference, however strong, for one grazing property to be mortgaged rather than another to secure the same debt did not, in the circumstances of this case, make the mortgage over ‘Sneaths’ essentially different in substance or in kind from the mortgage over ‘Ewandon’. Accordingly I would reject the defence of non est factum …”[82]
[80] [2000] NSWCA 256
[81] [2000] NSWCA 256 at [26]
[82] [2000] NSWCA 256 at [27]
This aspect of the doctrine could never be satisfied in the case of an election or a declaration. Even if the person making an election misunderstands the relative benefits of the CSS and the PSS, once an election is made it cannot be said that the person has made an election that is radically different or essentially different in substance or in kind from an election made if the person had a different understanding of those relative benefits. An election is an election and there is no radical difference between the two. The misunderstanding that the person labours under in signing an election is not as to the nature of the document he or she signs but as to the consequences of the document. A misunderstanding of that sort falls outside the doctrine.
Taking all of these matters into account, I have concluded that the doctrine of non est factum can have no place in the interpretation and application of the 1976 Act or the 1990 Act.
Similar reasons lead me to conclude that the law relating to mistake in the law of contract cannot be relied upon to permit Mr Sharma to revoke his election. The Australian authorities on mistake are more sparse than the English and the principles on which they are based are sometimes difficult to distil. They are, however, clear that a mistake by one party to a contract, and so a unilateral mistake, may render a contract void or where certain mistakes are made as to the identity or existence of the other party to the contract and as to the terms of the contract. They are discussed in Contract Law in Australia by JW Carter, Elisabeth Peden and GJ Tolhurst.[83] In relation to a mistake as to the terms of a contract, it is clear that not all mistakes will render a contract void. A mistake as to the quality of goods that a person is buying, as opposed to the character of the goods, is not necessarily sufficient and that is illustrated by a case such as Smith v Hughes.[84]
[83] 5th edition, 2007, Butterworths, Chapter 20
[84] (1871) LR 6 QB 597
Mr Sharma was not under any mistake as to the character of what he was doing in making an election. He was not under any mistake as to the terms of the declaration and election he made. His declaration was that he wished to become a member of the PSS and his election was to cease to be an eligible employee of the CSS. His mistake related to the benefits that he would receive under the PSS and not as to the effect of what he was doing. It did not relate to his transferring from one fund to the other. His mistake lay in his reasons for making the declaration and election but not in actually making them.
There are circumstances in which a mistake renders a contract neither void nor voidable but a court will set a contract aside. In general terms, they will arise if it would be unconscionable to enforce the contract according to its terms.
“Knowledge of the mistake, contribution to the mistaken party’s belief (falling short of misrepresentation), or steps by which the party with knowledge deprives the mistaken party of the opportunity to discover the true facts may, depending on the circumstances, be sufficient grounds to set aside the contract.”[85]
[85] Contract Law in Australia at [1254]
These were touched upon by Mason ACJ, Murphy and Deane JJ in the majority judgment in Taylor v Johnson[86] when they canvassed a number of English and North American authorities. They formulated the following proposition that disposed of the appeal:
“… It is that a party who has entered a written contract under a serious mistake about its contents in relation to a fundamental term will be entitled in equity to an order rescinding the contract if the other party is aware that circumstances exist which indicate that the first party is entering the contract under some serious mistake or misapprehension about either the content or subject matter of that term and deliberately sets out to ensure that the first party does not become aware of the existence of his mistake or misapprehension. … In such a situation, it is unfair that the mistaken party should be held to the written contract by the other party whose lack of precise knowledge of the first party’s actual mistake proceeds from wilful ignorance because, knowing or having reason to know that there is some mistake or misapprehension, he engages deliberately in a course of conduct which is designed to inhibit discovery of it. Our comment can, for present purposes, be limited in its application to the case where the second party has not materially altered his position and the rights of strangers have not intervened.”[87]
[86] (1983) 151 CLR 422; (1983) 45 ALR 265
[87] (1983) 151 CLR 422; (1983) 45 ALR 265 at 432-433; 271-272
Assuming that Mr Sharma’s mistake relates to the declaration and election he made (rather than simply to his reasons for making them), I am not satisfied on all of the material that the Commissioner was, or should have been, aware of his mistake. Even if the information given at the seminar was incorrect, and I make no finding about that, the Commissioner was not in a position to know of the basis on which Mr Sharma made his declaration. There are many matters that a person will take into account in deciding whether to change from one superannuation fund to another and different people will pay varying regard to each of them in reaching a final decision. The Commissioner made information available both in written form and in the form of information seminars. He did not wilfully keep information from Mr Sharma. Therefore, even if the principles of contract can be in some way incorporated in the 1976 Act or the 1990 Act, they would not relieve Mr Sharma from the declaration and election he has made.
The cases to which Mr Sharma referred in advancing his submissions regarding misrepresentation relate to the law of tort and so to the recovery of damages for a wrongdoing. Application of their principles would not lead to the outcome that Mr Sharma seeks. Misrepresentation is also relevant in the law of contract where it may lead to a rescission of the contract in certain circumstances. Those circumstances may include fraudulent misrepresentation. That arises when a representation is made by a party to a contract who knows it to be untrue or who makes it recklessly not caring whether it is true or not and who intends that the other party should act upon it.[88] What is intended by the person making the representation is determined by reference to a subjective, and not objective, test.[89]
[88] Derry v Peek (1989) 14 AC 337
[89] John McGrath Motors (Canberra) Pty Ltd v Applebee (1964) 110 CLR 656 at 659-660 per Kitto, Taylor and Owen JJ
In this case, the Commissioner has advised Mr Sharma in a letter dated 16 August 1991, that his office did not record the seminar he attended or any other seminars.[90] In an earlier letter dated 7 June 1991, the Commissioner had sent Mr Sharma a copy of two overhead projections used during the presentations and showing that the productivity benefit was incorporated in the PSS. Presentation of the seminars was standardised throughout Australia and the Commissioner thought it extremely unlikely that the presenters had given incorrect information.[91] The presenters themselves denied giving incorrect information.[92] The Commissioner wrote that, apart from Mr Sharma, none of the other 130,000 members who attended the seminars raised any suggestion that the information regarding the productivity benefit was incorrect.
[90] T documents at 30
[91] T documents at 15
[92] T documents at 28 and 29
While I accept that Mr Sharma believes that he heard what he heard, I am not satisfied that incorrect information was given. If it was given, it was certainly not given deliberately or recklessly careless of its truth. The grounds for fraudulent misrepresentation would not be made out if they were relevant. I am also not satisfied on the evidence that any incorrect information was given negligently. I am satisfied that, if there was a misrepresentation as to the productivity benefit, it would have been made innocently.
Even if I am incorrect in any of these findings and if the principles of contract were to have any relevance in the interpretation of the 1976 Act and the 1990 Act, rescission would not be available to Mr Sharma. Rescission is not permissible if it is impossible to restore the parties to their pre-contract positions. It is now over 14 years since Mr Sharma transferred to the PSS. His contributions have been part of that scheme and his earnings have been determined by reference to the investment regimen adopted for that scheme. He has not been part of the CSS. Actuarial calculations could be made and an amount of money transferred from the PSS to the CSS to represent what would have been the position but this would only restore Mr Sharma to his former position. It would not restore the Commissioner or the funds to their former positions because the contributions were not held in the correct fund during the course of the past 14 or more years.
Delay is also another issue that would be relevant in refusing rescission.[93] Mr Sharma has been seeking a remedy for the Commissioner’s alleged misrepresentation at various times over the past 14 years. He first pursued the matter with the Commissioner in 1991 but did not seek review of his decision at that time. He reopened the matter in 2000. It was already too late. The nine year delay suggested that Mr Sharma had accepted the Commissioner’s answer that he could not revoke his election. The funds had been administered throughout that period on the basis that he was a member of the PSS and not of the CSS. Rescission would not be permitted.
[93] See generally Alati v Kruger (1955) 94 CLR 216 at 223 and the discussion of the principles in Contract Law in Australia at [18-50].
It follows from what I have said that I consider that none of the principles that Mr Sharma drew from the law of contract or of negligence would be applicable. This is quite apart from my earlier finding that the legislation does not permit them to be implied or incorporated in some way into their terms. Mr Sharma made a declaration and an election conforming with s 244 of the 1976 Act. He now has no express or implied right to withdraw his declaration and election and the Commissioner has no express or implied power to cancel them. Therefore, the Commissioner’s decision dated 15 April 1991 and confirmed on 25 January 2006 was correct and I affirm it.
I certify that the eight-six preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie,
Signed: ...............................................................
Jayne Rathjen Associate
Date of Hearing 15 November 2006
Date of Decision 14 March 2007
Solicitor for the Applicant Self representedSolicitor for the Respondent Mr A. Dillon,
Australian Government Solicitor
Documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (AAT Act)
(T documents) at 5
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