Swift v SAS Trustee Corporation

[2010] NSWCA 182

New South Wales

Court of Appeal

CITATION:	Swift v SAS Trustee Corporation [2010] NSWCA 182
HEARING DATE(S):	15 April 2010
JUDGMENT DATE:	3 August 2010
JUDGMENT OF:	Allsop P at [1]; Basten JA at [2]; Young JA at [51]
DECISION:	The appeal is dismissed with costs.
CATCHWORDS:	APPEAL- statutory appeal to District Court- role of judge on merit review of decision of trustee- whether primary judge failed to take into account relevant consideration of "the best interests of appellant" and the absence of prejudice to other beneficiaries- whether duty of trustee to exercise discretion favourably to applicant- District Court Act 1973, s 142J- consideration of "the best interests of appellant" and the absence of prejudice to other beneficiaries- whether duty of trustee to exercise discretion favourably to applicant. SUPERANNUATION- police superannuation- Police Regulation (Superannuation) Act 1906 s 9A(4)- backdating of superannuation allowance to date of retirement-application made some 20 years after date of resignation- whether primary judge took into account irrelevant considerations or disregarded relevant considerations. WORDS AND PHRASES- "proper, genuine and realistic consideration"- "real merits and justice of the case".
LEGISLATION CITED:	Compensation Court Repeal Act 2002 District Court Act 1973, ss 142G, 142J, 142M, 142N Migration Act 1958 (Cth) Police Act 1990, s 14(1) Police Regulation (Superannuation) Act 1906, ss 9A, 10, 10B, 21 Police Regulation (Superannuation) Amendment Act 1974, s 9(g)(i) Superannuation Administration Act 1996, ss 49, 51 Superannuaation Legislation Amendment Act 2006, Sch 1.2 Trustee Act 1925
CATEGORY:	Principal judgment
CASES CITED:	Broussard v Minister for Immigration and Ethnic Affairs (1987) 21 FCR 472 Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd [1976] HCA 62; 135 CLR 616 Day v SAS Trustee Corporation [2009] NSWCA 222 Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; 77 ALJR 1088 Karger v Paul [1984] VR 161 Khan v Minister for Immigration, Local Government and Ethnic Affairs (1987) 14 ALD 291 Kindimindi Investments Pty Ltd v Lane Cove Council [2006] NSWCA 23; 143 LGERA 277 Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; 162 CLR 24 Minister for Immigration and Citizenship v SZIAI [2009] HCA 39; 83 ALJR 1123 Minister for Immigration and Multicultural Affairs v Wang [2003] HCA 11; 215 CLR 518 NAIS v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 77; 228 CLR 470 Qantas Airways Ltd v Gubbins (1992) 28 NSWLR 26 Rapa v Patience (M H McLelland J, 4.4.1985, unreported) Re Whitehouse [1982] Qd R 196 SAS Trustee Corporation v Pearce [2009] NSWCA 302 Spanos v Lazaris [2008] NSWCA 74 Watson v Qantas Airways Ltd [2009] NSWCA 322 Workers Compensation (Dust Diseases) Board v Smith [2010] NSWCA 19
PARTIES:	Terry George Swift (Appellant) SAS Trustee Corporation (Respondent)
FILE NUMBER(S):	CA 2009/298454
COUNSEL:	P Dodson and N Broadbent (Appellant) T Ower (Respondent)
SOLICITORS:	Oates & Smith Solicitors (Appellant) Rod Blume - SAS Trustee Corporation (Respondent)
LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	RJ00243/08
LOWER COURT JUDICIAL OFFICER:	C Armitage DCJ
LOWER COURT DATE OF DECISION:	5 June 2009
LOWER COURT MEDIUM NEUTRAL CITATION:	Terry Swift v SAS Trustee Corporation [2009] NSWDC 149

2009/298454

ALLSOP P
BASTEN JA
YOUNG JA

Tuesday 3 August 2010

SWIFT v SAS TRUSTEE CORPORATION

Headnote

Mr Swift, the appellant, was a former police officer. In 1981 he resigned due to an injury and was certified by a police medical officer as unfit to work. Mr Smith did not seek to be discharged on medical grounds, a process which would have informed him about of his right to claim a superannuation allowance. He did not actually become aware that he was entitled to the allowance until shortly before he made an application to the SAS Trustee Corporation (“the STC), the respondent, in 2004. On 10 December 2007 a disputes officer within the STC made a recommendation that “in terms of section 9A(4)(a) of the Police Regulation (Superannuation) Act 1906 that Mr Swift’s HOD pension be payable from 1 March 2004, the date he lodged his application for the pension, as there are no exceptional circumstances that merit payment from an earlier date.” The recommendation was approved by the Chief Executive, as delegate of the STC.

On appeal to the District Court, Armitage DCJ held that the STC had erred in applying the 2006 amendment to s 9A(4) to the appellant’s application. Armitage DCJ redetermined the application, applying the provisions in force at the date of the appellant’s application. However, his Honour affirmed that by reason of the plaintiff’s knowing choice not to apply for medical discharge when resigning, which caused the long delay in applying for benefits, there was no reason to backdate payment before the date of application, and no exceptional circumstances. He rejected a submission that the STC’s delay in processing the application would justify backdating.

In the Court of Appeal, Mr Swift’s arguments that the proper determination would have been the date of his resignation raised three issues. First, whether the primary judge failed to consider relevant considerations to the exercise of the discretion by failing to take into account “the best interests of” the appellant as a beneficiary of a statutory trust; failing to consider the absence of prejudice to other beneficiaries; or failing to consider “the real merits and justice of the case”. Secondly, whether the primary judge considered irrelevant matters by “penalising” the appellant for delay in making the application given his partial knowledge of his rights, or by asking if the application was “extraordinary”.

Thirdly, whether the primary judge did not exercise the discretion “upon a real and genuine consideration, or in accordance with the purposes for which the discretion was conferred”. The appellant argued that the primary judge did not consider the “correct question” of whether, in a contributory superannuation scheme, there was any reason why a contributor should not receive a pension for the entire period of his disability. Mr Swift put that in the circumstances, where the statute provided for him to receive a pension from the time of his discharge, to backdate the pension to any other date would be capricious.

(1) As to relevant considerations:

Basten JA (Allsop P, agreeing)

: (A) The submission that the statute required the decision maker to take into account the absence of prejudice to other members of the STC scheme, which might, if established, have militated against the exercise of the discretion, was untenable. An expectation of a benefit arising from the fact that the appellant had contributed to the superannuation scheme and the terms of s 10(1B) that the length of service was irrelevant were underlying facets of the scheme which had no bearing on the exercise of the discretion and the statute did not require their express consideration in this context. The reference in District Court Act s 142J(1)(a) to “the real merits and justice of the case” does not impose any specific mandatory consideration, but primarily removes certain procedural constraints.

Qantas Airways Ltd v Gubbins (1992) 28 NSWLR 26 referred to.

(2) As to irrelevant considerations:

Basten JA, Young JA (Allsop P, agreeing):

It was clear that the time between the appellant’s resignation from the police and the date of his application for a pension was a relevant consideration.

(3) As to whether the primary judge exercised his discretion “upon proper, genuine and realistic consideration”:

Basten JA, Young JA (Allsop P, agreeing):

It would be inconsistent with the language of the general discretion in s9A(4) Police Regulation (Superannuation) Act to hold that because of a trustee’s duty to act in “the best interests of” the appellant as a beneficiary of a statutory trust, the STC had a duty to exercise that discretion favourably to the applicant in backdating the pension. The specific form of the section is not to be fettered by some general direction to the STC to exercise its functions in accordance with the obligations of a trustee.

2009/298454

ALLSOP P
BASTEN JA
YOUNG JA

Tuesday 3 August 2010

SWIFT v SAS TRUSTEE CORPORATION

Judgment

1 ALLSOP P: I agree with Basten JA. I have also read the reasons of Young JA. The precise status of the District Court in the exercise of its residual jurisdiction in an application such as this (to the extent not already dealt with by decisions of this Court) can await an occasion when it is determinative. The reasons of Young JA reveal, as do those of Basten JA, that the learned primary judge dealt with the issues placed before him without legal error. In these circumstances, it is to be recalled that the right of appeal under the District Court Act 1973 (NSW), s 142N is in respect of “an award of the Court in point of law”, with the restrictions that flow from that phrase: cf Day v SAS Trustee Corporation [2009] NSWCA 222 [72], [86] and [94]; Workers Compensation (Dust Diseases) Board v Smith [2010] NSWCA 19 at [2] and [135] ff; and Watson v Qantas Airways Ltd [2009] NSWCA 322 at [13].

2 BASTEN JA: The appellant, Terry George Swift, had been a police officer from 26 March 1970 until he resigned on 5 November 1981. Eleven months prior to his resignation, whilst on his way to work, he injured his back. The Police Commissioner was advised of the injury and the appellant was directed to see a police medical officer who certified him as unfit to work. However, he did not seek to be, nor was he, discharged on medical grounds.

3 It is now accepted that the appellant would have qualified for a superannuation allowance under s 10 of the Police Regulation (Superannuation) Act 1906 (NSW) (“the Police Superannuation Act”) had he at that time applied to the respondent corporation (referred to in various Acts, and below, as the “STC”). The appellant did not apply for payment of such an allowance until 1 March 2004. His application was not determined by the STC until 13 December 2007; on that date a decision was made to pay the allowance from the date of his application, namely 1 March 2004. The appellant considered himself aggrieved by the decision because the STC had not backdated his entitlement to the date of his resignation in 1981. He applied to the District Court for a determination “in relation to” the decision of the STC, seeking to have the payment backdated to the date of his resignation: Police Superannuation Act, s 21.

4 On 5 June 2009 the District Court, constituted by Armitage DCJ, acting in accordance with s 21(4)(a), confirmed the decision of the STC: Terry Swift v SAS Trustee Corporation [2009] NSWDC 149.

5 Judge Armitage was exercising the “residual jurisdiction” of the Court: District Court Act 1973 (NSW), s 142G. As a party to proceedings before the District Court in its residual jurisdiction, the appellant claimed he was “aggrieved by an award of the Court in point of law” and entitled to appeal to this Court: District Court Act, s 142N(1). The term “award” is relevantly defined to include an “order, decision, determination, ruling and direction”: s 142M(1).

6 The appellant encountered some difficulty in attempting to identify an erroneous decision of the District Court in point of law. In substance his argument was that, because he satisfied (and had satisfied at the date of resignation) the statutory criteria entitling him to an allowance, that allowance should have been granted from the date of resignation, absent a valid basis for concluding that his delay in making an application had in some way prejudiced the proper consideration of his claim, the position of other beneficiaries of the superannuation fund or the administration of the fund. As no such prejudice was demonstrated (or relied upon by the STC) it was erroneous in law for the STC (and the Court on appeal) to grant the allowance only from the date of his application.

7 Legal support for this presumptive position was sought from the function of the STC as a “trustee” of certain funds which were to be held on trust “for the persons who are or will be entitled to benefits under the STC schemes”: Superannuation Administration Act 1996 (NSW) (“the Administration Act”), s 49(1). Further, the STC was required, in exercising its functions as trustee, to act in the best interests of “persons entitled to receive benefits under the STC schemes”: s 51(1)(c). One of the “STC schemes” was the superannuation scheme established under the Police Superannuation Act.

8 It was, however, unclear how the provisions of the Administration Act imposed specific obligations, or qualified the statutory language of, the Police Superannuation Act. It is to the terms of the latter Act that attention must first be paid.

Statutory scheme

9 In 1955 the Police Superannuation Act enjoyed a relatively simple and straightforward structure, providing for the payment of pensions to retired and injured members of the police force. Section 10 then read, in outline:

“10(1) Where any member of the police force has been disabled –
[by any injury received whilst on duty or travelling to or from work]
there may be granted to him such gratuity or annual superannuation allowance, not exceeding the salary of his office at the time of his disablement, as, in the opinion of the Governor, is commensurate with the nature of the wound or injury received, and such grant may be made whatever the length of his service.”

10 Section 10(1) was replaced in 1974 by legislation which made substantial changes to the Police Superannuation Act: Police Regulation (Superannuation) Amendment Act 1974 (NSW), s 9(g)(i). Nevertheless, the section maintained its form as an operative provision pursuant to which a disabled member of the force “may be granted” a relevant gratuity or allowance. By 1981, when the appellant resigned, s 10(1) had been radically transformed so that it no longer had an operative effect, but merely contained a set of definitions. It remains in that form. Further, although other provisions refer to an allowance “granted under section 10”, s 10 contains no unequivocal conferral of power to make such a grant.

11 By March 2004, when the appellant applied for an allowance, sub-s (1) remained a definition section and sub-ss (1A), (1AA) and (1C) dealt with the calculation of an allowance, once granted. Subsection (1D) dealt with a variation of an existing decision. The closest to an express power is to be found subs (1B), which provided:

“An annual superannuation allowance may be granted under this section to a disabled member of the police force whatever the member’s length of service.”

Although the primary purpose of s 10(1B) appears to be to remove a qualification for other forms of pension, which depend upon length of service, it may be inferred that this provision serves the additional function of conferring power to grant an allowance.

12 The term “disabled member of the police force” is defined in s 10(1) as follows:

“ disabled member of the police force means:
(a) a member of the police force who is discharged after being certified, pursuant to section 10B(1), to be incapable, from a specified infirmity of body or mind, of discharging the duties of the member’s office, or
(b) a former member of the police force who resigned or retired and who, according to a certificate given pursuant to section 10B(2) at any time after the member’s resignation or retirement, would have been incapable, from an infirmity of body or mind, of discharging the duties of the member’s office at the time of the member’s resignation or retirement,
that infirmity being determined, pursuant to section 10B(3) or on appeal, to have been caused by the member being hurt on duty or the former member having been hurt on duty when he or she was a member of the police force, as the case may be.”

13 The form of the definition remained the same at the date of the decision by the STC and, on appeal, by the District Court, with two variations. The significant amendments were that in both paragraphs (a) and (b), the reference to “discharging the duties of the member’s office” was replaced by “personally exercising the functions of a police officer referred to in section 14(1) of the Police Act 1990”. (In paragraph (b), the words “would have been incapable” were reformulated as “was incapable”, although nothing turns on that linguistic variation.) The significant amendments, which took place in 2006, require a different assessment of the effect of the infirmity of body or mind, removing the focus from the office held by the member at the time of his or her resignation or retirement, to the functions of a police officer, generically, identified in the Police Act, s 14(1).

14 As appears from the definition set out above, the principal criteria governing the grant of an allowance are to be found, worded negatively, in s 10B. That section has two operative provisions, reflecting the distinction between an officer who is discharged after being certified as having the relevant incapacity (s 10(1)(a)) and a “former member” who resigns or retires, prior to certification (s 10(1)(b)). The appellant fell into the latter category. The relevant parts of s 10B applicable in his circumstances, as in force at the date of the decision of the STC and of the District Court read as follows:

“ 10B Medical examination of disabled member and determination of whether hurt on duty
…
(2) An annual superannuation allowance or gratuity must not be granted under section 10 to a former member of the police force who resigned or retired unless:
(a) the former member notified the Commissioner of Police before the member’s resignation or retirement and within 6 months of receiving the injury which has caused the member’s infirmity of body or mind, of that injury, and
(b) if the regulations so require, the notification was in the prescribed form, and
(c) STC (having regard to medical advice on the condition and fitness for employment of the member) has certified that the former member was incapable, from that infirmity of body or mind, of personally exercising the functions of a police officer referred to in section 14(1) of the Police Act 1990 at the time of the member’s resignation or retirement.
(2A) For the purposes of determining a member’s or former member’s incapacity under this section:
(a) STC is not to have regard to the member’s or former member’s actual rank or position or any functions (other than the functions referred to in subsection (2)(c)) of the member or former member at the time to which the certification relates, and
(b) the capacity to exercise a function by delegation is not taken to be a capacity to personally exercise the function.
…
(2C) In this section:
medical advice means the advice of:
(a) 2 members of the Police Medical Board, or
(b) any one or more medical practitioners nominated by the STC.
(3) Where a member or former member of the police force is duly certified under subsection (1) or (2), the Commissioner of Police shall:
(a) decide whether or not the infirmity to which the certificate relates was caused by the member being hurt on duty or the former member having been hurt on duty when he or she was a member of the police force, as the case may be, and the date or dates on which the member or former member was hurt on duty, and
(b) give the member or former member written notification of the decision.”

15 The variations in the statutory provisions over time may well require that, in a particular case, where there is a period of years between the date of application and the date of decision by the STC, together with a further period between the decision of the STC and the decision of the District Court on appeal, it may be important to identify which statutory provision is operative. In the present case, that is particularly so in relation to the key provision relating to the date from which an allowance is payable. At the time of the appellant’s application to the STC, s 9A(4) read as follows:

“ 9A Commencement of pension
…
(4) Where an annual superannuation allowance is granted under section 10 to a former member of the police force who resigned or retired, the allowance is payable as from the day determined by STC for that purpose.”

16 From 30 June 2006, the subsection took a different form as the result of the operation of the Superannuation Legislation Amendment Act 2006 (NSW), Sch 1.2, item [4]. As at the date of the STC’s decision and of the decision in the District Court, s 9A(4) read as follows:

“(4) An annual superannuation allowance granted under section 10 to a former member of the police force who resigned or retired is, subject to this Act, payable as from:
(a) the date the former member lodged the application for the allowance that was determined by STC certifying the matters referred to in section 10B(2)(b), or
(b) such earlier date as STC may determine if STC is satisfied that there are exceptional circumstances that merit STC doing so.”

17 Before considering the consequences of the legislative changes in the present case, it is convenient to identify the basis of the decision made by the STC and the manner in which the appeal was dealt with in the District Court.

18 On 10 December 2007 a disputes officer within the STC made a recommendation to the Chief Executive, that the latter determine “in terms of section 9A(4)(a) of the Police Regulation (Superannuation) Act, 1906 that Mr Swift’s HOD pension be payable from 1 March 2004, the date he lodged his application for the pension, as there are no exceptional circumstances that merit payment from an earlier date”. That recommendation was approved by the Chief Executive, as delegate of the STC.

Judgment in District Court

19 The first matter discussed in the judgment of Armitage DCJ was the relevant legislative provision under which an order was sought. His Honour held, contrary to the view of the STC expressed in its earlier decision, that the 2006 amendment to s 9A(4) did not apply to the appellant’s application, which had predated the amendment. The amendment diminished the appellant’s entitlements, by restricting the discretion of the STC to backdate the commencement date of the allowance, and should not be held to affect an existing application, not yet determined, in the absence of a clear statutory intention to that effect. No such intention being expressed, and there being indications of a contrary intention in the transitional provisions, the provision as in force at the date of the appellant’s application was operative. In this Court, that conclusion was accepted by the STC.

20 In considering whether it was appropriate to backdate the allowance to the date of the appellant’s retirement, the primary judge referred to a submission for the appellant (the plaintiff in the District Court) that the STC was under a duty, which it failed to discharge, “to inform the plaintiff in a timely and careful manner of his superannuation rights at the time when he resigned from the police force”: Judgment, at [29]. That breach would presumably have taken place in 1981, at or about the time of his retirement. The submission was rejected by the primary judge (at [37]) and his Honour’s conclusion in that regard is not challenged on appeal. However, in assessing the submission, his Honour accepted, as a matter of fact, that the appellant “was unaware, after the date when he resigned from the police force in 1981, that he had any right to claim a superannuation allowance on the basis of being hurt on duty until he met a fellow former policeman in a hotel, he thought at the end of 2003”: at [29].

21 His Honour held, at [33]:

“The plaintiff did not at any stage give evidence that when he resigned he told anyone in the police service that he was resigning because of his back injury. In fact he said that he resigned because he wished to pursue a new opportunity in the form of a joint venture with his brother to run a transport truck, in which in fact he engaged after he left the police service.”

22 His Honour further held, at [35]:

“The plaintiff himself said that he was aware of the option to be medically retired from the police service. He said he did not exercise this option, as a result of a decision on his part not to do so because of the culture of the police service at the time, which was that younger police officers did not exercise this option for fear of being thought weak or something similar …. [H]ad the plaintiff decided differently and elected to do what he knew he could do, that is, to apply for a medical discharge from the police service, he would then have found out about the mechanism involved in receiving a superannuation allowance, [as a result of?] first being certified to have an infirmity, and then having that infirmity certified to be the result of being hurt on duty.”

23 His Honour’s conclusion that the backdating sought by the appellant should be refused appears in the following passage, at [41]:

“… firstly I think the fact that the infirmity caused by the plaintiff being hurt on duty rendered [rendering?] him incapable of performing his duties as a police officer as at the date of resignation is nothing in point if the plaintiff did not, for more than twenty years after the date of resignation, apply for benefits. It is true that the plaintiff believed during most of that period of time that he could not do so because he had resigned, but he did know, I think, for reasons already set out, that he had the right to be medically retired from the police force as at the day of his resignation, and yet chose to resign, because of the culture of the police force at the time.”

24 In a slightly confused passage (the judgment being delivered ex tempore) his Honour then stated that the matters set out above were an adequate reply to the suggestion that there was an “exceptional circumstance” (being the test which his Honour held not to apply) and “by implication a reason why his benefit should be backdated to the date of his resignation, if exceptional circumstances are not required if I do not think they are”. The online judgment, which was not in the appeal papers before this Court, stated more clearly but to no different effect, at [42]:

That I think is the answer to the plaintiff’s suggestion that the above is an “exceptional circumstance”, and by implication a reason why in my discretion I should order that his benefit should be backdated to the date of his resignation, if ‘exceptional circumstances’ are required, as I do not think they are.” At [42].

25 The primary judge then turned to the question whether the STC had processed the appellant’s application “in a timely manner”. He rejected the submission that it had acted contrary to its duties as a trustee and concluded, in a passage which was challenged by the appellant, at [44]:

“My assessment of the situation is that there was some degree of delay on the part of both the plaintiff’s solicitors and the defendant, even if it can be said that a greater portion of the delay occurs as a result of the defendant’s dilatory assessment of the plaintiff’s claim, rather than as a result of the plaintiff’s solicitor’s difficulty in obtaining evidence sought by the defendant, predominantly of a medical kind. I do not think that delay, although as I have said I think it lies partly at the feet of the defendant, should justify the extraordinary consequence that the plaintiff’s payments be backdated to the date of his resignation. That delay may have been a very good reason to order that the plaintiff’s pension be backdated to the date of his application, a period over three years before the date of the defendant’s determination, but in fact the determination provides for this in any event.”

26 The reference to “the extraordinary consequence” was identified by the appellant as demonstrating error, because it unjustifiably fettered the exercise of the statutory discretion. However, that submission was misconceived. That which is Honour identified as “extraordinary” was the suggestion that because of a delay in processing the application, once made, the payment should be backdated to a date more than 20 years prior to the date of the application. His Honour’s characterisation of that submission was apposite; it involved no explicit or implicit fetter on the discretionary power.

27 The reasoning of the primary judge was, in substance, that demonstration of an infirmity or disability of a kind permitting the grant of a superannuation allowance did not carry with it any necessary implication as to the date from which the allowance should be paid. It merely involved the fulfilment of a necessary condition for grant of the allowance.

Challenges on appeal
(a) scope of grounds

28 As already noted, it is not easy to identify the precise terms in which the decision of the primary judge was challenged. Ten grounds were identified in the notice of appeal, including one which had four sub-grounds. In the written submissions, some 14 separate grounds were identified, which did not readily correlate with the notice of appeal. There was a further reformulation in the course of oral argument. Nevertheless, the grounds may adequately be characterised as asserting:

(i) failure to consider matters relevant to the exercise of the discretion;
(ii) consideration of irrelevant matters, and
(iii) failing to exercise the statutory discretion “upon a real and genuine consideration, or in accordance with the purposes for which the discretion was conferred”.

29 The first two categories, at least, fall within the conventional grounds of judicial review as articulated, for example, by Mason J in Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; 162 CLR 24 at 39-42. It may be assumed for present purposes that, whether expressly or implicitly identified as a point of law to be decided, such an error may reveal a decision of the primary judge on a point of law.

(b) relevant considerations

30 Dealing first with the failure to take account of relevant considerations, the substance of the complaint was that his Honour failed to take into account “the best interests of” the appellant as a beneficiary of a statutory trust, or consider the absence of prejudice to other beneficiaries of the trust. In respect of the benefit to the appellant, it could hardly have been in doubt that his Honour appreciated that the appellant was seeking an exercise of discretion beneficial to him. If the submission was intended to imply that the duty of a trustee was to exercise the discretion favourably to the applicant, because it had a duty to act in his interest, that would be to impose a fetter on the statutory power which is inconsistent with the language of the Police Superannuation Act. Section 9A(1) provides that where an officer retires, the allowance is payable from the day following retirement: s 9A(1). Similarly, where an allowance is payable in consequence of the death of a member, it is payable from the day succeeding his or her death: s 9A(3). The open discretion conferred under s 9A(4) in respect of former members is in stark contrast to the other provisions of s 9A. The specific form of the section is not be fettered by some general direction to the STC to exercise its functions in accordance with the obligations of a trustee.

31 So far as the interests of other members were concerned, there was no evidence of prejudice to them. Had there been, that might have been a matter which the Court would take into account adverse to the appellant’s interests, although it is arguable that the entitlement of an individual is not to be diminished by the financial consequences for the fund and, possibly, other beneficiaries. The submission that the statute required the decision-maker to take into account the absence of a consideration which might, if established, have militated against the exercise of the discretion, is untenable. In fact, the submission demonstrates the implausible consequences which can flow from superimposing the obligations of a private trustee on the exercise of a specific statutory power.

32 Other submissions suggested that a “relevant consideration” might be found in the terms of s 10(1B) that the length of service was irrelevant, or as an expectation of a benefit arising from the fact that the appellant had contributed to the scheme. These were underlying facets of the scheme which had no bearing one way or the other on the exercise of the discretion and the statute did not require their express consideration in this context.

33 Under the same heading, the appellant asserted that his Honour had focussed attention upon the appellant’s “partial knowledge” of his rights at the date of retirement and drew an inference about what he might have been told had he sought a medical discharge. This, in its terms, was a factor which the trial judge did consider. It is not necessary to pause to consider whether it was a mandatory consideration; it was certainly not an impermissible consideration.

34 Finally, it was said that his Honour failed to consider “the real merits and justice of the case” which, it was said, supported a decision to pay the allowance “throughout the period of infirmity”. Reference to “the real merits and justice of the case” picks up the language of s 142J(1)(a) of the District Court Act. The effect of this and similar provisions has been discussed in other judgments of the Court and need not be repeated here: see Qantas Airways Ltd v Gubbins (1992) 28 NSWLR 26 and its progeny. It does not impose any specific mandatory consideration, which needs to be taken into account in a particular case: it primarily removes procedural constraints which might otherwise constrain this particular exercise of the Court’s jurisdiction.

(c) irrelevant considerations

35 Secondly, the appellant claimed that his Honour took into account irrelevant matters. The focus of this complaint was the characterisation of the application as “extraordinary”, a matter which has been addressed and dismissed at [26] above.

36 It was also said that his Honour effectively penalised the appellant for the delay in making the application. This challenge is hard to understand. The fact that there was a lapse of time between retirement and application is not only relevant, it is the factual premise on which rested the request to specify the day from which the payment was to be made. The fact that it was a day prior to, and many years prior to, the date of the application cannot possibly be a matter the decision-maker was obliged to disregard.

37 If the use of the word “penalise” were intended to be more than colourful language and to suggest some improper purpose on the part of the Court, the submission is entirely without substance and must be rejected.

(d) “proper, genuine and realistic consideration”

38 The conclusion reached in the written submissions for the appellant was that his Honour failed to exercise his discretion “upon a real and genuine consideration, or in accordance with the purposes for which the discretion was conferred, and that the reasons he gave were not sound in the sense described in Karger v Paul”. Whether this ground was intended to give rise to some additional challenge, beyond those which had been addressed above, was unclear. However, during the course of the hearing it became apparent that the substance of the appellant’s complaint was that the trial judge had either addressed the ‘wrong question’ or failed to give real consideration to the ‘correct question’.

39 Beyond identifying the relevant power and the material placed before it by the appellant, it is not clear that the District Court was otherwise required to identify any ‘question’, so as to give rise to a complaint that it identified a ‘wrong question’. In Minister for Immigration and Multicultural Affairs v Wang [2003] HCA 11; 215 CLR 518 at [71], Gummow and Hayne JJ noted that a review by the Refugee Review Tribunal under the Migration Act 1958 (Cth) was a very different kind of process from adversarial litigation. Their Honours continued:

“It is not adversarial; there are no opposing parties; there are no issues joined. The person who has sought the review seeks a particular administrative decision … and puts to the Tribunal whatever material or submission that person considers will assist that claim. The findings of fact that the Tribunal makes are those that it, rather than the claimant, let alone adversarial parties, considers to be necessary for it to make its decision. Those findings, therefore, cannot be treated as a determination of some question identified in any way that is distinct from the particular process of reasoning which the Tribunal adopts in reaching its decision.”

40 These principles were recently affirmed in a joint judgment of six members of the Court in Minister for Immigration and Citizenship v SZIAI [2009] HCA 39; 83 ALJR 1123 at [18] (French CJ, Gummow, Heydon, Crennan, Kiefel and Bell JJ). If the appellant is right, and the District Court is required to act as a trustee would, that may suggest that the Court is indeed not engaged in adversarial litigation. In that sense, its function may be seen to be inquisitorial, although that label should not be understood to involve some homogenous characterisation of functions, just as the commonly opposed epithets of ‘adversarial’ and ‘inquisitorial’ do not usefully provide a comprehensive description of the field of decision-making. Nor is it necessary to determine for present purposes the precise role of the STC as a ‘contradictor’ in the District Court: see SAS Trustee Corporation v Pearce [2009] NSWCA 302 at [129]-[130].

41 In the District Court the matter proceeded by way of statement of claim and defence. Whether the use of pleadings in such a matter is appropriate in order to identify issues is doubtful. Indeed, it is even doubtful if the STC is properly described as a ‘defendant’. What the STC “admitted” or said that it had “no knowledge of” was largely beside the point. The only paragraph which the STC “denied” was that in which the appellant alleged “that his superannuation allowance ought to be payable on and from the date of his discharge [sic], being 5 November 1981”. The only relevance of these matters for present purposes is to cast doubt upon the language of the submission which alleged that the primary judge had identified “the wrong question”. Apart from providing a statement of largely agreed facts, the pleadings in this case do not involve the identification by the parties of “issues” to be determined.

42 Further, the formulation of the question presented by the appellant did not reflect the language of the statute, but the circumstances of the case, or some of them. Counsel stated (Tcpt, 15/04/10, p 20(20)):

“He has not directed his mind to the question of whether the benefit should be paid to this person who had in effect an accrued right to a pension, who had been injured on a fixed date and in respect of whom there was uncontested evidence that his condition had not changed in the intervening period.”

43 As noted above, the appellant sought support in Karger v Paul [1984] VR 161. That case involved a claim by a residuary beneficiary under a will against the trustees, who had exercised a discretionary power against her interests. McGarvie J stated (at 163-164):

“In my opinion the effect of the authorities is that, with one exception, the exercise of a discretion in these terms will not be examined or reviewed by the courts so long as the essential component parts of the exercise of the particular discretion are present. Those essential component parts are present if the discretion is exercised by the trustees in good faith, upon real and genuine consideration and in accordance with the purposes for which the discretion was conferred. The exception is that the validity of the trustees’ reasons will be examined and reviewed if the trustees choose to state their reasons for their exercise of discretion.”

44 The appellant contended that both the STC and the District Court on appeal exercised powers as the trustee of the fund from which the allowance was to be paid. The reference in the submission to the appellant’s “entitlement” implied that, whatever powers the STC exercised in determining whether a person was eligible for an allowance, once eligibility had been established the question from what date the allowance was to be paid became an exercise of a discretion similar to that conferred on a private trustee. Assuming (without accepting) that that is an appropriate exercise, the primary judge did not decide any point of law in a manner adverse to the appellant. There is no suggestion that the primary judge failed to identify the power correctly in terms of the statute, nor that he failed to give bona fide consideration to whether or not to exercise it. Applying principles governing the review of trustees’ consideration of a discretionary power, the appeal must fail.

45 The language of “proper, genuine and realistic consideration” was introduced into administrative law in Khan v Minister for Immigration, Local Government and Ethic Affairs (1987) 14 ALD 291 and Broussard v Minister for Immigration and Ethnic Affairs (1987) 21 FCR 472 at 483 (Gummow J). That which had to be properly considered was “the merits of the case”. Taken out of context and without understanding their original provenance, these epithets are apt to encourage a slide into impermissible merit review: Kindimindi Investments Pty Ltd v Lane Cove Council [2006] NSWCA 23; 143 LGERA 277 at [79]. If it is demonstrated in a particular case that an administrative decision-maker has failed to address a claim properly made, or has failed to identify the statutory power under which the claim should properly be disposed of, there will be a constructive failure to exercise jurisdiction. Relief will be available accordingly. Thus, “to fail to respond to a substantial, clearly articulated argument relying on established facts was at least to fail to accord [the applicant] natural justice”: Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; 77 ALJR 1088 at [24] (Gummow and Callinan JJ, Hayne J agreeing) and [86]-[88] Kirby J), applied by this Court in Spanos v Lazaris [2008] NSWCA 74 at [19], in my judgment, Beazley and Bell JJA agreeing. Where a decision-maker does address the claim, by reference to the correct power, asking whether he or she did so “properly” or “genuinely”, or “realistically” may be taken, inappropriately, as an invitation to assess the correctness of the result, rather than the legality of the process.

46 The language was used again in the context of a statutory provision requiring a tribunal to give an applicant an opportunity to appear before it and give evidence. In NAIS v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 77; 228 CLR 470 at [171], Callinan and Heydon JJ noted the Minister’s acceptance that such a provision “by implication, refers to a hearing where the evidence given is to be given proper, genuine and realistic consideration in the decision subsequently to be made”. Their Honours noted that “unfairness can spring not only from a denial of an opportunity to present a case, but from a denial of an opportunity to consider it”: at [172].

47 The use of such language in administrative law is not common, no doubt in large part because of the risks of misapplication. However, understood as a label invoking procedural unfairness or a constructive failure to exercise jurisdiction, its use is unexceptionable. In the present case, it could have been used either to encompass a failure to consider relevant considerations or as describing the result as manifestly unreasonable. The former has been rejected; the appellant did not in terms assay the latter exercise. The additional ground of appeal should be rejected.

Conclusions

48 The appellant’s entitlement to an allowance depended upon satisfying the STC that he qualified in the terms set out in the statutory criteria. He succeeded in that respect. As the primary judge held, the STC had an unfettered discretion in fixing the date from which the allowance should be payable. It erred in addressing that question, the legal error being corrected on appeal.

49 The most likely options were the date of the determination, the date of the application or the date of the appellant’s retirement. The primary judge adopted the second. It was not an arbitrary date, as the allowance could not have been granted absent an application from the appellant. The primary judge gave careful consideration to the question why no application had been made at the date of retirement. That was undoubtedly a permissible consideration. The choice was made on the basis of established fact and taking into account the submissions made on behalf of the appellant. The selection was not attended by legal error. Accordingly, it is not necessary to consider whether error, if identified, would engage the powers of this Court under s 142N of the District Court Act. Nor is it necessary to consider the privative effect of s 142J.

50 The appeal must be dismissed with costs.

51 YOUNG JA: This is an appeal from a decision of His Honour Judge C Armitage of the District Court who dismissed the appellant’s claim in that Court’s Special Statutory Compensation list that his pension as a former police officer should be backdated to 5 November 1981 rather than the date of 1 March 2004 as determined by the respondent.

52 The Police Regulation (Superannuation) Act 1906 (to which I will simply refer as “the Act”) by section 10B, in the events which have happened operates so that if a police officer retires after being injured at work and then, years later, makes application for a benefit under the legislation, if certain conditions are met, the most significant being that two government appointed medical officers give the appropriate certificate, the pension is payable to the officer.

53 It is common ground that the appellant is entitled to a pension. The question at issue is from what date should the pension be paid.

54 The respondent, as trustee of the relevant fund determined that the pension should be payable back dated to the date of application namely 1 March 2004.

55 Section 9A(4) of the Act as at 2004 relevantly provided that the respondent was to determine the date from which the pension was payable. A later amendment restricted the respondent’s discretion so that it could back date the pension to the date of application but could only back date it to operate from an earlier date if it were satisfied that there were exceptional circumstances meriting that approach.

56 The respondent applied the later legislation and found that there were no exceptional circumstances.

57 The primary judge decided that the former legislation should have been applied. There is no appeal from that decision. However, the primary judge also held that in exercising the jurisdiction under the former provision, the trustee should have reached the same result. The decision of the respondent was confirmed. However, in view of the appellant’s success on one of the major points argued, he made no order as to costs.

58 The appellant challenges that determination and again submits before this Court that the proper determination would have been to back date his pension to the date of his resignation, namely 5 November 1981.

59 The primary judge considered the evidence and submissions before him and confirmed the respondent’s determination.

60 The appeal was heard on 15 April 2010, Mr P Dodson of counsel appearing for the appellant and Mt T Ower of counsel for the respondent. Mr Dodson did not appear before the primary judge.

61 Before dealing with the merits of the appeal, it is necessary to spend a little time dealing with the nature of the appeal.

62 These proceedings come before the District Court are under the residual jurisdiction of the District Court as a result of the operation of the Compensation Court Repeal Act 2002.

63 This appeal is pursuant to s 142N of the District Court Act 1973 which gives a right of appeal to a party who is aggrieved by an award of the District Court in point of law to appeal to this Court.

64 The first matter to consider is whether the appellant can properly be said to be a person aggrieved by the award made by the judge in point of law.

65 This formula is different to those used in other pieces of legislation governing appeals. It has been briefly examined in recent cases in this court, but never exhaustively explained; see eg Day v SAS Trustee Corporation [2009] NSWCA 222 and SAS Trustee Corporation v Pearce [2009] NSWCA 302.

66 In order to decide this point, one needs to see what the primary judge was asked to do and what was the ambit of his authority to look at appropriate material to decide the question.

67 Both counsel proceeded with this appeal on the basis that the judge was called upon to make the decision that the respondent as quasi trustee of the relevant fund should have made. The picture was that the judge was to stand in the shoes of the trustee.

68 I am not at all sure that this view is correct, it is artificial to consider that the respondent is a trustee in the pure sense or that the District Court is doing anything more than reviewing the discretion of a statutory authority or redeciding that matter. I will return to this issue.

69 The District Court is primarily a court of common law. However, over the ages, the court has been given some very peculiar grants of jurisdiction probably partly stemming from the days when it was also a Court of Quarter Sessions.

70 The Australian Digest, 3^rd ed, Vol 40 “Procedure” [311] lists the few cases under either the special or residual jurisdiction of the District Court or equivalent courts where the ambit of the jurisdiction has been considered by a superior court. The commentators on the District Court Act usually content themselves by stating that each case depends on the terms of the statute conferring the power. That is a wise course.

71 In the instant case, s 21(4) of the Act confers power on the District Court to substitute its determination for that of the respondent, but does not give any guidance as to when it should so act.

72 The authorities, see particularly Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd [1976] HCA 62; 135 CLR 616 show that the hearing before the District Court in this sort of matter is a hearing de novo. This would seem to suggest that the Court must approach the matter in the same way as the original decision maker, in the present case, as if the judge were a trustee.

73 However, such an approach is contrary to the usual approach that courts have consistently taken to applications to review the decisions of trustees.

74 In Rapa v Patience (M H McLelland J, 4.4.1985, unreported) the judge determined that discretionary trustees’ decision was ineffective. He held that he had power to substitute his own determination, but declined to do so ruling:

“the relevant functions are conferred by the trust instrument not on the Court, but on the trustees, and the Court can have no authority to usurp the functions conferred on the trustees except where such a course is shown to be necessary in order to give effect to the intention evidenced by the terms of the trust instrument.”

75 In Queensland, there is legislation conferring jurisdiction on the Supreme Court to review certain decisions of trustees. In considering the ambit of that legislation in Re Whitehouse [1982] Qd R 196, Macrossan J said that whilst the legislation gave a wide power to the court, he must approach the review bearing in mind the traditional reluctance of courts to usurp the functions of trustees, particularly discretionary trustees, in whom the settlor must have had confidence. However, in the appropriate case, the court would do so. Macrossan J also said that it was a false analogy to consider reviews from liquidators or trustees in bankruptcy.

76 Turning now to s 21 of the Act, it can be seen that in sub-section (4) the District Court has power to do one of two things: (a) confirm the decision of the respondent; or (b) replace that decision with a different decision. There is no power to remit the decision to the trustee to reconsider it.

77 This tends to show that the District Court should not show the reluctance referred to in Whitehouse. However, it might consider that it should give due weight to the fact that the respondent is the primary authority to make decisions under the Act.

78 In SAS Trustee Corporation v Pearce [2009] NSWCA 302 [41], Basten JA pointed out that s142J of the District Court Act 1973 required the District Court on this application for review to make its decision on the real merits and justice of the case. That section also permits the judge to take in factual material more freely and with less emphasis on form than would be the case if he or she were sitting in an ordinary common law action.

79 With these matters in mind, I now turn to the merits of the appeal.

80 I have already noted that the primary judge held that the respondent applied the wrong legislation and so committed an error which meant that the primary judge had to redetermine the application. He did so, but confirmed the respondent’s decision.

81 Mr Dodson put that the primary judge made an error of law in that he was in the position of a trustee and failed to give a fair and proper consideration to the real question which was in the case of a contributory superannuation scheme was there any reason why a contributor should not receive a pension for the entire period of his disability?

82 Furthermore the appellant alleges that the primary judge failed to take into account the purposes of the trust as found within the legislative scheme.

83 The appellant also complains that the primary judge distracted himself by considering factors of delay so that, without disclosing reasons, he confirmed the respondent’s decision to back date the pension to the date of application.

84 There was discussion by members of the Court with Mr Dodson as to whether the present case should be approached as a review of a decision made by a quasi trustee or a decision made in administrative law.

85 Although the legislation makes the respondent a trustee, there is not a trust in the traditional sense, for instance, the fund is not vested in the respondent which only has obligations to manage the fund and the “beneficiaries” have legal rights, not just rights in equity against the “trustee”.

86 I do not consider that it much matters how one deals with that question. If the decision is that of an administrator, it is the decision of an administrator who carries some fiduciary duties.

87 Mr Dodson says that the appellant in accordance with the legislation paid 6% of his salary into the fund over many years. The statutory scheme was that he was entitled to be paid his pension from the date of disability if that event occurred.

88 It is not too difficult to see that some of these submissions probably were inspired by Campbell JA’s article, “Exercise by Superannuation Trustees of Discretionary Powers” (2009) 83 ALJ 156. Unfortunately that article does not provide a ready solution to the present problem.

89 However, as Mr Dodson conceded these matters as to a contributory pension scheme were not put directly to the primary judge.

90 Furthermore, it is clear that when the appellant left the police he was paid $7,000 being the amount of his contributions to the fund pursuant to s 17 of the Act.

91 The Black Book at pp 55-6 sets out the main matters which were troubling the primary judge. These were in summary:

(1) at the date of his leaving the police, the appellant knew he had a bad back and could apply to be medically discharged from the force: he did not do so, probably because of then prevailing culture. Had he done so, he would have found out about pension rights. In fact he did not actually know about his rights to a pension;
(2) his pension was backdated from the date of decision to award it to the date of application, three years earlier;
(3) the appellant had been working including running an hotel. Meanwhile 20 years went by.

92 The appellant says that the force of point 3 is diminished by the evidence that the appellant’s condition had persisted and indeed had got worse over the period in question.

93 It should be noted that a considerable amount of time was spent before the primary judge on what is now of no significance, namely, whether there was any obligation on the authorities to inform the appellant of his pension rights.

94 The basal points made by the appellant were:

(1) The statute provided for him to receive a pension from the time of his discharge, as the appellant did not actually know of that right until many years later, his delay, even though it was 20 years did not detrimentally affect anybody, there was power to back date the pension, to back date it to any date other than the date of discharge was capricious.

(2) The respondent had a duty to act in the best interests of the beneficiaries. No other beneficiary would be detrimentally affected by the back-dating of the appellant’s pension. Therefore the respondent was obliged to back date it to the best advantage of the appellant, namely the date of retirement.

95 The respondent says that, once it was determined that the discretion was at large, the primary judge was entitled to take into account the factors he did in exercising his discretion.

96 This approach meant that the 20 year delay from resignation was virtually of no significance.

97 Certainly the primary judge considered that the discretion as to when the pension was payable vested in the respondent and later in the District Court was at large and both parties accepted this on this appeal.

98 The first of the appellant’s basal points was considered by the primary judge. The second is too artificial and is inconsistent with the general discretion to back date. If the second point were correct, there would be no call for any discretion in fixing the date from which the pension would operate. Treating the 20 year delay as of virtually no significance is impossible to sustain.

99 Weighing the submissions of the parties, the judge considered that the lapse of time in making application for the pension was brought about by the appellant’s own conduct and was no reason to back date the pension before the date of application.

100 To my mind, the primary judge was entitled to take the view he did.

101 I have read the reasons of Basten JA. His Honour reaches the same result that I have reached by a more expanded route. I do not disagree with what his Honour has written.

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