Stephen Dilley and Commonwealth Superannuation Corporation

[2012] AATA 509

[2012] AATA 509  

Division	GENERAL ADMINISTRATIVE DIVISION
File Number	2011/4491
Re	Stephen Dilley
APPLICANT
And	Commonwealth Superannuation Corporation
RESPONDENT

DECISION

Tribunal	Deputy President P E Hack SC
Date	3 August 2012
Place	Brisbane (heard in Townsville)

The decision under review is affirmed.

………………..[SGD]………………….
Deputy President P E Hack SC

CATCHWORDS

VETERANS AFFAIRS – Veterans’ entitlements – applicant retired from service – received pension – returned to service – form not received by authority – consequently became a member of MSB scheme – pension overpaid – inconsistent evidence from applicant – decision affirmed.  

LEGISLATION

Defence Force Retirement and Death Benefits Act 1973 (Cth) ss 61B(3), 107, 126(4)
Military Superannuation and Benefits Act 1991 (Cth) s 6(1)(c)

REASONS FOR DECISION

Deputy President P E Hack SC

3 August 2012

1. The applicant, Mr Stephen Dilley, was a member of the Australian Regular Army between March 1978 and March 2006.  On his retirement, he received benefits by way of a pension.  He subsequently returned to service in the Army.  The question that arises in this case is whether that later service has had the consequence that he has been overpaid.

2. At the outset it is necessary to notice that there are two schemes for members of the Armed Forces to receive retirement benefits.  The first is the Defence Force Retirement and Death Benefits Scheme (the DFRDB scheme), established by the Defence Force Retirement and Death Benefits Act 1973 (Cth) (the DFRDB Act). Mr Dilley’s pension is payable under the DFRDB Act. More recently, the Military Superannuation and Benefits Act 1991 (Cth) (the MSB Act) established what I shall call the MSB scheme.

3. When Mr Dilley retired from the Regular Army in March 2006, he elected to receive benefits under the DFRDB scheme, partly by way of pension and partly by way of rollover. He was, at that time, in the language of the DFRDB Act, a "recipient member". In February 2009, Mr Dilley accepted an offer to re-join the Army for a short period of time, a period of less than 12 months. In connection with that offer he downloaded from the Internet and completed a form available to members of the DFRDB scheme who were re-entering the Australian Defence Force on continuous full-time service. The form, known as a D100, was signed by him on 27 February 2009 and on the same day forwarded by facsimile and by registered mail to the Defence Force Retirement and Death Benefits Authority. Whilst Mr Dilley could not recall making subsequent contact with the Authority, there is a document in the material[1] from which I infer that on 11 March 2009 he contacted the Authority to ensure that the form D100 had been received.

   [1]           Exhibit 1, page 18.

4. It is common ground that the Authority received that form from Mr Dilley and acted upon it.  Its effect was that Mr Dilley elected not to join the MSB scheme and thus remained entitled to receive the benefits under the DFRBD scheme despite his renewed service.

5. Between March 2009 and December 2009 Mr Dilley was attached to 2 Health Support Battalion (2HSB) at the Enoggera Army Barracks.  He was interested in a further period of engagement however 2HSB was unable to continue his engagement.  In October 2009 he gained approval for a short engagement with 2/14 Light Horse Regiment (Queensland Mounted Infantry), also based at Enoggera, to start in January 2010 and anticipated to continue until November 2010.   

6. Mr Dilley says that as a consequence of that approval he downloaded a fresh D100 form from the internet, completed it and signed it on 29 November 2009 by which he again elected not to become a member of the MSB scheme. Mr Dilley says that he posted the new D100 to the Authority the following day from the Enoggera Base Post Office.  Mr Shane Lusk, a Lance Corporal who worked in the same office as Mr Dilley, gives some support to that claim.

7. The Authority says that it did not receive a D100 from Mr Dilley at that time; no D100 was received in relation to the 2010 period of service until September 2010.

8. Mr Dilley commenced his second period of continuous full-time service in January 2010.  He continued to receive his retirement payments under the DFRDB scheme until late July 2010.  Then, and without warning to him, payments were stopped.  They were stopped because the Authority said that it had not received his form D100 referable to this period of engagement.

9. Mr Dilley sent a letter to the authority on 15 September 2010 complaining about the cessation of his pension payments and of the consequences to him of that cessation.  Some two days later Mr Dilley forwarded to the Authority what was said to be a copy of the form D100 which, he said, “was located with my CF TS paperwork and had been incorrectly filed".  The document, on its face, was an election not to join the MSB scheme.  It was dated 29 October 2009.

10. In October 2010 the Authority determined that Mr Dilley had been overpaid pension in the amount of $12,917.56, representing retirement pay under the DFRDB scheme between 18 January 2010 and 29 July 2010.  Mr Dilley sought a reconsideration of the decision to raise and recover that debt.  By the time that reconsideration took place the role of the Authority had been assumed by the present respondent, the Commonwealth Superannuation Corporation.  On 12 September 2011 the Corporation, by its delegate, the Defence Force Case Assessment Panel, determined to affirm the earlier decision to raise and recover the debt.

11. Mr Dilley seeks a review of that decision. It is reviewable by the Tribunal by virtue of s 107 of the DFRDB Act.

12. It is now necessary to make some reference to the legislation.  At all material times Mr Dilley was a "recipient member" of the DFRDB scheme.  He answered that description because he was a member of the DFRDB scheme who was entitled to retirement pay[2]. Section 61B(3) of the DFRDB Act is presently relevant. It provides,

    [2] See the definition of “recipient member” in s 3 of the DFRDB Act.

    (3)A recipient member who:

    (a)intends to resume full‑time service as a member of a Reserve for a continuous period of less than 12 months; and

    (b)  has not previously made, under this section, an election to become a member of the MSB scheme;

    must, before resuming service, in writing addressed to the Authority, elect whether or not to become a member of that scheme.

    As I have said, Mr Dilley was a recipient member who, in January 2010, intended to resume full-time service for a continuous period of less than 12 months. He had not previously made an election to become a member of the MSB scheme, his earlier election was one not to become a member of that scheme. If, as the Corporation says, Mr Dilley did not, before resuming service, elect whether or not to become a member of the MSB scheme (by completing and sending to the Authority a new form D100) he automatically became a member of the MSB scheme.

13. The consequences of a recipient member of the DFRBD scheme becoming a member of the MSB scheme are dealt with by s 61C of the DFRDB Act. It provides that payment of the member’s retirement pay is suspended until the member ceases to be a member of the MSB scheme.

14. When Mr Dilley commenced his service in January 2010 the position was governed by s 6(1)(c) of the MSB Act. It is in these terms,

    (1)Subject to subsection (2), each of the following persons is, by force of this section, a member of the Scheme:

    (a)…;

    …

    (c)a member of the Reserves who is rendering continuous full‑time service under an undertaking to serve for a period of less than 12 months unless that member has elected not to become a member of the Scheme under section 61B of the DFRDB Act.

    Thus, unless Mr Dilley had elected not to become a member of the MSB scheme by completing and returning the Form D100 appropriately and prior to re-commencing service, he became a member of the MSB scheme. Moreover, his entitlement to retirement pay under the DFRDB scheme was suspended.

15. Finally reference should be made to s 126(4) of the DFRDB Act which makes recoverable, as a debt due and payable to the Commonwealth, an amount of benefit paid but, for any reason, not payable.

16. Resolution of these proceedings depends on whether I am satisfied that Mr Dilley made, and communicated to the Authority, an election not to become a member of the MSB scheme prior to resuming continuous full-time service in January 2010.  For the reasons that follow, I am not satisfied that he did so.

17. There is considerable reason to doubt the accuracy of Mr Dilley's stated recollection.  First, there is the contrast between the way in which he forwarded the form D100 in February 2009 – by facsimile, by registered mail and with a follow-up telephone call to ensure its arrival – and the far more casual method of treatment on this occasion.  Next, it is notable that when Mr Dilley first became aware in September 2010 that the Authority was alleging non-receipt of the form D100 his response was that the document "had been incorrectly filed", rather than asserting, as he now does, that it had been forwarded by post the previous year. 

18. Next it is impossible to reconcile the date on which Mr Dilley asserts he forwarded the document.  The document bears the date 29 October 2009.  In his letter of 1 October 2010 Mr Dilley said,

    I completed a form D100 and signed it on 29 November 2009, in which I elected NOT to become a member of Military Super.  I sent this form to the DFRDB Authority around 30 November 2009.

    29 October 2009 was a Sunday.  Both Mr Dilley and Mr Lusk, who was said to be working on the day the form was completed, agreed that it was highly unlikely that they would have been at work on a Sunday. Yet Mr Dilley explained the date of 29 October 2009 appearing on the document in this way[3],

    The D 100 that was faxed was the one I saved on to my work computer.  At the time I filled it in, in 2009, I more than likely miss-typed the date, putting in 29 – 10 – 09 instead of 29 – 11 – 09.

    That explanation does not sit well with the balance of the evidence of Mr Dilley.  If it was highly unlikely that Mr Dilley was at work on a Sunday it was also highly unlikely that he inserted the date which the document bears on Sunday, 29 November 2009.

    [3]           Exhibit 1, page 70.

19. Finally, I note that in his statutory declaration of 1 July 2011 Mr Dilley says,

    Cpl Lusk did witness me filling in the D 100, he saw me filling in the D 100, printing it off and signing it and signed the original as a witness which was then mailed to Comsuper.

    Mr Lusk, similarly, claimed that that he had witnessed Mr Dilley print and sign the form "as I also witnessed this form for SGT Dilley".  Yet the member's signature on the form D100 is not required to be witnessed. Mr Lusk claimed a recollection of these events and, in particular, a recollection of Mr Dilley going off to post the envelope with the form D100 because he asked Mr Dilley to post an item of mail for him.  One of the curiosities of the case is that the item posted on behalf of Mr Lusk did not arrive at its intended destination and, according to Mr Lusk, was posted again the following week.

20. These matters caused me considerable concern about the reliability of the evidence of both Mr Dilley and Mr Lusk.  However even if I had been satisfied, and I am not, that Mr Lusk's evidence could be relied upon, his evidence of the non-arrival of his own item of mail would have satisfied me that Mr Dilley did not post the document as he may have intended.

21. In circumstances where I am well short of being satisfied that Mr Dilley communicated an election not to become a member of the MSB scheme I am satisfied that the decision made was correct and ought be affirmed.

I certify that the preceding 21 (twenty-one) paragraphs are a true copy of the reasons for the decision herein of Deputy President P E Hack SC.

............................[Sgd]..................................

Associate

Dated 3 August 2012

Date(s) of hearing	12 June 2012; 25 July 2012
Applicant	In person
Solicitors for the Respondent	Australian Government Solicitor