The Estate of Babich v South Australian Superannuaton Board - [2019] SADC 25

DISTRICT COURT OF SOUTH AUSTRALIA
(District Court Administrative and Disciplinary Division)
THE ESTATE OF BABICH v SOUTH AUSTRALIAN SUPERANNUATON BOARD
[2019] SADC 25
Judgment of His Honour Judge Chivell
6 March 2019
SUPERANNUATION - REVIEW OF DECISIONS
SUPERANNUATION - PUBLIC SERVICE FUNDS - PRESERVATION OF SUPERANNUATION RIGHTS UPON CEASING TO BE ELIGIBLE EMPLOYEE
Former public servant, since deceased, resigned from her job but did not roll over her public-sector superannuation fund balance within the statutory time limit – the death and total and permanent incapacity insurance policy attached to her fund membership thereby lapsed. Her application to the South Australian Superannuation Board for an extension of time was refused and subsequent appeal dismissed. Her estate appealed that decision.
Board empowered by s 29(2) of the Southern State Superannuation Act 2009 to extend the time limit – matters to be taken into consideration set out in s 29(3).
Held: Appeal allowed. Refusal of extension of time set aside.
Southern State Superannuation Act 2009 (SA) s 19(1), s 22, s 25, s 29; Southern State Superannuation Regulations 2009 (SA) reg 48, reg 55; District Court Act 1991 (SA) s 42E; Registrar of Firearms v Marksman Training Systems Pty Ltd (No 2) [2016] SASCFC 72; Commissioner of Consumer Affairs v McMurray (2017) 128 SASR 1; House v The King (1936) 55 CLR 499, referred to.

THE ESTATE OF BABICH v SOUTH AUSTRALIAN SUPERANNUATON BOARD
[2019] SADC 25

This is an appeal from a decision of the South Australian Superannuation Board made on 9 March 2018. On that day, the Board dismissed an appeal by Mrs Babich complaining of an earlier decision of the Board made on 26 September 2017. The Board refused to extend a time limit of 60 days from the date her employment ceased, and her Death and Total and Permanent Incapacity insurance policy lapsed. If an extension had been granted, Mrs Babich could have rolled over her Triple S superannuation account into another fund, and thereby maintained her insurance policy.
Mrs Babich died of cancer on 8 February 2018 at the age of 36. Had the insurance policy not lapsed, her estate would have been entitled to a payment of $138,000.
Mrs Babich was employed by SafeWork SA, a unit of the Attorney-General’s Department of the South Australian Government, between 23 March 2015 and 1 November 2016. When she started work, she automatically became a member of the ‘Triple S’ fund, a superannuation fund operated by Super SA pursuant to the Southern State Superannuation Act 2009. As a member of that fund, Mrs Babich also applied for and was granted an insurance policy which is described as a Death and Total and Permanent Disability policy. This policy is provided by the Board pursuant to s 22 of the Act.
When she ceased employment, Mrs Babich was no longer entitled to make contributions to the Triple S fund. This is the effect of s 19(1) of the Act. That being the case, Mrs Babich no longer had ‘an investment of money with the Superannuation Funds Management Corporation of South Australia’. Regulation 48 of the Southern State Superannuation Regulations 2009[1] provided that only employees with such an investment were entitled to death and invalidity insurance.
[1] The Regulations have since been amended. The relevant provision is now reg 47.
Having resigned from employment, Mrs Babich was entitled to elect to carry over the ‘rollover component’ of her Triple S account to another fund approved by the Board. This is authorised by regulation 55. Thus, it was possible for Mrs Babich to ‘roll over’ her Triple S fund into another fund (one such fund is referred to as a ‘Flexible Rollover Product’ or ‘FRP’). If she did that, she would have had an ‘investment of money’ which would have satisfied regulation 48(1), and her death and invalidity insurance could have continued.
The time within which Mrs Babich could apply to roll over her fund was set out in regulation 48(7), which provided:
(7)The following provisions apply to a public sector superannuation beneficiary who has, within 60 days of ceasing to be engaged in employment to which the Act applies, invested money with the Superannuation Funds Management Corporation of South Australia under regulation 45:
(a) the beneficiary is, on application, covered, and taken to have been covered since ceasing to be engaged in employment to which the Act applies, by the invalidity/death insurance (whether fixed insurance cover or standard insurance cover) that applied to the beneficiary at the time of that cessation, subject to the same terms, conditions and restrictions;
(b) …
Mrs Babich did not elect to roll over her Triple S fund within 60 days of her resignation. The regulation 48(7) time limit expired on 1 January 2017.
In May 2017, Mrs Babich gave birth to a daughter. On the day of the birth, she was informed that she was suffering from what her husband described as ‘advanced metastatic colon cancer’.
In late July 2017, as a result of an inquiry by Mrs Babich’s financial adviser, Super SA advised her that her death and disability policy had been cancelled.
Super SA says it wrote to Mrs Babich on 8 March 2017 advising, among other things, that the insurance cover ceased the day after her resignation.
Mr Tihomir Babich, Mrs Babich’s husband, deposed that Mrs Babich did not receive the 8 March letter.[2] A copy was sent with the advice to the financial adviser in late July 2017. Mr Babich says that he and his wife searched their house but could not find it, and his wife swore a statutory declaration to that effect on 31 January 2018. The Board did not seek to challenge Mr Babich’s assertions on that topic. I accept that Mrs Babich did not receive the letter.
[2] Affidavit of Tihomir Babich affirmed 19.4.18.
Mrs Babich wrote to the Board on 1 September 2017 requesting an extension of the 60-day time limit.[3] The letter is a long one and provides a very compelling account of the events which occurred in 2016-17.
[3] Ibid, Exhibit TB7.
On 27 September 2017, the Board advised Mrs Babich by letter that it had refused her application to extend the time limit on 26 September 2017.[4]
[4] Ibid, Exhibit TB8.
On 1 February 2018, Mrs Babich appealed to the Board pursuant to s 25 of the Act in relation to its decision of 26 September 2017. The Board considered the appeal on 28 February 2018. On 9 March 2018, that is, just over a month after Mrs Babich died, the Board advised by letter[5] that the appeal had been dismissed.
[5] Ibid, Exhibit TB1.
Mrs Babich had appealed on two bases: firstly, challenging the decision to refuse an extension of time and, secondly, making a fresh claim for invalidity cover under the policy. By this time, she was very ill. I will deal with the time limit aspect of the appeal, since that is the only topic before this court. The claim based on invalidity prior to Mrs Babich’s death has not been pursued.
In the 9 March 2018 letter, the Board advised that it ‘was not persuaded by (her) submissions to exercise the discretion in Mrs Babich’s favour’. Later in the letter, it advised that there were ‘no “doubts or difficulties” with the application of the legislation that would enliven the discretion in Section 29(1) of the Act’.
Other than those two comments, the Board did not add to what it said in the 27 September 2017 letter. The parties argued the appeal before me on the basis of the reasons given by the Board in the 27 September 2017 letter, since they were implicitly adopted in the later letter.
This is an appeal, also pursuant to s 25 of the Act,[6] against the 9 March 2018 decision to refuse Mrs Babich’s appeal from the original decision on 26 September 2017.
[6] Section 25 states that a person may appeal to this Court or to the Board. The Board did not argue that the person may not do both. I will treat the appeal on the basis that the section authorises both.
The Power to Extend a Time Limit
Section 29(2) of the Act gives such a power to the Board. It reads:
29—Resolution of difficulties
(1) If, in the opinion of the Board, any doubt or difficulty arises in the application of this Act or the regulations to particular circumstances or the provisions of this Act or the regulations do not address particular circumstances that have arisen, the Board may give such directions as are reasonably necessary to resolve the doubt or difficulty or to address the circumstances (but only insofar as the Board determines it to be fair and reasonable in the circumstances) and any such direction will have effect according to its terms.
(2) If, in the opinion of the Board—
(a) a time limit under this Act or the regulations should be extended in particular circumstances; or
(b) …
the Board may extend the time limit (even if it has already expired) or waive compliance with the procedural step.
Section 29(3) of the Act sets out the matters to be taken into account by the Board in exercising that power:
(3) In determining whether to take action under subsection (2), the Board should have regard to—
(a) in a case under subsection (2)(a)—
(i)      the length of delay that has occurred; and
(ii)      the explanation for the delay; and
(iii)     any hardship that will occur if the time limit is not extended; and
(iv)     the extent to which it will cause any unfairness if the time limit is not extended; and
(v)     any other relevant factor;
(b)…
The Length of the Delay
There is considerable controversy about the length of the delay. The time limit expired on 1 January 2017. The request for the extension of time was made in a letter dated 1 September 2017. That is a delay of eight months. I agree with the submission of the appellant’s counsel, Mr Quinn, that the delay could not be longer than that. The period of 60 days from 1 November 2016 was time allowed by the Act, and cannot be included as part of the delay.
In its letter of 27 September 2017, the Board described the delay as ‘approximately 9 months’. It commented:
… that is in the mid-range compared to similar requests considered by the Board.
There is no evidence of the outcome of any of those other similar requests considered by the Board. The Board appeared to regard a delay of nine months as unexceptional. It did not suggest that the delay was inordinate or unreasonable in the circumstances. It did not cause the Board to refuse the application to extend time.
The appellant, Mrs Babich’s estate, submits that the delay was much shorter than that suggested by the Board. It is the appellant’s case that Mrs Babich only became aware of the power of the Board to extend the time limit in late July 2017, when a copy of the Board’s letter dated 8 March 2017 was sent to her financial adviser, who then provided her with a copy.
If that is accepted, and I have no reason not to since Mr Babich’s evidence about that was not challenged by the Board, then the appellant submits that the delay was for just over a month, from late July 2017 to 1 September 2017. That is quite a short delay and should not have caused the Board to refuse the application to extend time.
The Board argues that even if she was not aware of the 60-day time limit, Mrs Babich should have been aware of it through other means. I will examine this contention when discussing the explanation for the delay, and the issue of unfairness.
The Explanation for the Delay
In her letter to the Board of 1 September 2017, Mrs Babich told the Board that at the time she ceased employment, she did not know about the 60-day time limit. She explained that:
(1)she was ‘stressed and frustrated’ that she had to leave her employment with SafeWork SA without the security of maternity leave;
(2)she felt unwell throughout the pregnancy. She thought this was normal.[7] She said that since her later diagnosis of terminal cancer her ‘state of mind has not been good’;
(3)the Attorney-General’s Department did not notify Super SA that she had ceased employment until February 2017, well after the 60-day period had expired. In its response, the letter dated 27 September 2017, the Board said:
Super SA was able to confirm that there was no administrative error. Your employment ceased on 1 November 2016 and Shared Services notified Super SA on 4 November 2016.
[7] I infer from this that Mrs Babich concluded later, with the benefit of hindsight, that her feeling unwell to that degree was not normal and might have been due to the cancer.
As to the third point, I accept that there was no delay by the Attorney-General’s Department in advising the Board of the termination of Mrs Babich’s employment. As I will discuss shortly, a question remains as to why the Board did not communicate with Mrs Babich until 8 March 2017, well after the 60-day time limit had expired.
As to the explanation for the delay, the reasonableness of Mrs Babich’s lack of knowledge of her right to roll over her Triple S account into an FRP, and of the 60-day time limit which applied to an application to continue her Death and TPD insurance, is a relevant consideration.
I will now deal with the various sources of information available to Mrs Babich in relation to these issues.
Mr Babich deposed in his affidavit affirmed on 19 April 2018 that his wife, whom he described in a later affidavit as ‘meticulous in her record keeping’,[8] had the following documents in her possession:
·       the Death and TPD Insurance Policy;
·       Product Disclosure Statement (PDS) dated 2 February 2015;
·       Death and TPD Insurance Fact Sheet.
[8]    Affidavit affirmed 25.6.18, [4].
Mr Babich also deposed[9] that his wife received Triple S Annual Statements each year – that is, for 2014/15, 2015/16 and 2016/17. A copy of the 2015/16 Annual Statement was exhibited to his affidavit.[10]
Product Disclosure Statement of 2 February 2015
[9] Affidavit affirmed 19.4.18, [7].
[10] Affidavit affirmed 19.4.18, Exhibit TB5.
The PDS[11] opened with the following disclaimer:
This Product Disclosure Statement (PDS) is a summary of significant information and contains a number of references to important information (each of which forms part of the PDS). You should consider this information before making any decisions concerning Triple S.
The information provided in this PDS is general information only and does not take into account your personal financial situation or needs. You should therefore obtain financial advice that is tailored to your personal circumstances.
[11] Affidavit affirmed 19.4.18, Exhibit TB3.
It then described the insurance options available. It did not mention that the insurance lapsed automatically when employment ceased, nor that there was an option to roll over to an FRP and thereby allow the insurance to continue.
The omissions in the PDS are serious. As Mr Ambrose acknowledged in his submissions, a PDS has become part of the ‘lexicon’ in the field of insurance.
PDSs are not confined to the field of insurance, however. They are used whenever the offer or issue of a financial product, as defined in Part 7.9 of the Corporations Act 2001 (Cth), is involved.
It is true that the Board’s products, even if they do constitute insurance, are not covered by the Insurance Contracts Act 1984 (Cth).[12] But whatever their legal status, it is well understood that a PDS is a document with legal significance and if they contain any inaccurate or misleading information, whether by omission or commission, it is likely that there will be significant legal consequences.
[12] Insurance Contracts Act 1984 (Cth), s 5.
The omission of relevant information about how and when the insurance cover lapses, the ability to apply to have it continue after an FRP is established, and the 60-day time limit is complied with, rendered the February 2015 PDS inaccurate and misleading. This is particularly so when the PDS is read in conjunction with the February 2015 Fact Sheet.
Fact Sheet of 2 February 2015
The ‘Fact Sheet’ was entitled ‘Death and TPD & Death Only Insurance’[13] and was also dated 2 February 2015. The Fact Sheet was seven pages long and contained a large amount of densely printed information. On page 3, the document advised that ‘Your cover will cease … when employment is terminated’.
[13] Affidavit of Tihomir Babich affirmed 19.4.18, Exhibit TB4.
Again, there was no mention of the existence of the rollover option, the 60‑day time limit or the power to grant an extension thereof.
Mr Quinn submitted that the statement that cover will cease when employment is terminated is a positive misrepresentation. This submission was based on the effect of regulation 48(1), referred to above, which is that provided the employee has rolled their funds over into the FRP, he or she is ‘on application, covered, and taken to have been covered since ceasing (employment) by the (insurance) that applied to the beneficiary at the time of that cessation …’
There is force in Mr Quinn’s submission. I am not convinced by the submission of Mr Ambrose, counsel for the Board, that the Fact Sheet is accurate and that regulation 48(7) merely creates a retrospective fiction that the insurance has not ceased on termination.
Whatever is the legal position, the Fact Sheet was seriously inadequate and misleading by omission. A reasonable person reading it would conclude that it was not possible to continue insurance after cessation of employment. The fact that the Fact Sheet suggested that the reader should visit the Board’s website does not change that. It is fatuous to suggest, as the Board does, that when someone in Mrs Babich’s position reads such an unambiguous and definite statement, they would be prompted to go to the website in case they might find something there that would contradict the statement.
Even the smallest footnote pointing out that there may be a way to arrange for insurance to continue, and suggesting that someone in Mrs Babich’s position should consult the website, or speak to Super SA, would have been better than nothing.
Triple S Annual Statement to 30 June 2016
In the section dealing with insurance, a footnote reads:[14]
Death and TPD cover ceases when you reach age 65 or cease employment with the public sector. Conditions apply.
[14] Ibid, Exhibit TB5.
This footnote also misleads the reader by omission, for the reasons just outlined.
It is an agreed fact[15] that Mrs Babich received Triple S Annual Statements for the financial years 2014/15,[16] 2015/2016[17] and 2016/2017.[18] The 2016/2017 statement indicates that Mrs Babich had no ‘insured benefit’, and so there was no such footnote.
[15] FDN 13, No. 44.
[16] Affidavit of Patrick Francis McAvaney sworn 1.6.18, Exhibit PFM 5.
[17] Ibid, Exhibit PFM 7.
[18] Ibid, Exhibit PFM 9.
‘Super Insight’ Newsletters
In his affidavit sworn on 1 June 2018, Mr Patrick McAvaney, who is the Director, Policy and Governance of Super SA, asserts[19] that, by reference to Super SA’s ‘administration system’, he can say that a newsletter called ‘Super Insight’ was posted to Mrs Babich, along with her Triple S Annual Statement for the year ending 30 June 2015.[20] At page 8 of the newsletter,[21] the following passage appears:
While Super SA can’t accept contributions from your new employer, staying with Super SA can make long-term sense …
Join Super SA’s Flexible Rollover Product (FRP) – if you join within 60 days of leaving you may be eligible to continue your Triple S Death and TPD Insurance without having to provide further medical information. How: Download the “FRP Product Disclosure Statement” on our website via Forms & Publications, select Flexible Rollover Product and click on Search, or attend a Post-Retirement Products seminar.
[19] At [16].
[20] See also affidavit of Lorna Harrison sworn 30.7.2018 at [9]-[13].
[21] Affidavit of Patrick McAvaney, Exhibit PFM 6.

A similar statement appears at page 8 of the 2016 newsletter[22] and at page 4 of the 2017 newsletter.[23]
[22] Ibid, Exhibit PFM 8.
[23] Ibid, Exhibit PFM 10.
In his affidavit affirmed on 25 June 2018, Mr Babich states that there is no such newsletter among his late wife’s Super SA papers despite her being a ‘meticulous’ record keeper.
I am prepared to infer that these newsletters were sent to Mrs Babich along with the Annual Statements. Mr Babich does not deny they were sent, he merely asserts that they were not among Mrs Babich’s documents. It could be that she discarded them.
The newsletters consist of articles including an ‘update’ from the General Manager, stories about happy Super SA clients, information about how to use the website, invitations to seminars, and articles about the economic outlook.
The passage quoted above appears on the last page of the document under the heading ‘Top Member Questions’.
Mr Quinn described the newsletter as containing ‘puff pieces’ and that the only value of the documents was as a ‘barbecue starter’. He submitted that this was not the context in which to make disclosure of important information. While I accept that the newsletters are light and rather self-congratulatory, they do contain valuable information for members.
Mr Quinn acknowledged that these documents are the high-water mark of the respondent case, and I agree. I accept his submissions that if this information was important enough to be incorporated in the newsletters, there is no reason why it should not have been incorporated in the Annual Statements and, more particularly, in the PDS and Fact Sheets.
Website Information
The affidavit of Mr McAvaney[24] also contains reference to a section of Super SA’s website under the heading ‘Contact Us’. A screenshot of that page is Exhibit PFM 16 to the affidavit.
[24] At [26].
Under a subheading ‘Frequently Asked Questions’, and a further subheading ‘How to keep your Death and TPD insurance with Super SA’, the following passage appears:
Your death and disability cover expires once you cease working in the public sector, however, if you’re working outside of the SA public sector you can:
. Roll your Triple S account into the Flexible Rollover Product within 60 days
. That way you may be able to continue your Death and TPD Insurance without providing extra medical information
It seems anomalous that this information is presented under the heading ‘Contact Us’. A user clicking on this page would probably go to the bottom of the page where relevant phone numbers are presented, and over the page where more detailed contact information appears.
The same observation as the one made in respect of the ‘Super Insight’ pages applies to this document – the information appearing at this rather incongruous location on the website could easily have been incorporated with the PDS and Fact Sheets, the documents which are much more appropriately accessed if important information is being sought.
Phone Call 24 November 2016
Mr Ambrose also pointed to a telephone conversation between Mrs Babich and a Board employee on 24 November 2016 as an indication that Mrs Babich was seeking to make arrangements with respect to her superannuation entitlements under the Triple S scheme during the relevant period, but did not make arrangements with respect to her Death and TPD entitlements.
The recording of the phone call is Exhibit LM-1 to the affidavit of Lorna Harrison sworn 4 June 2018. During the call, Mrs Babich:
·requested her membership number;
·told the employee that she needed to let her new employer know ‘all those (Super SA) details’
·then the following exchange took place:
Employee:Ok, although you can’t nominate this superfund to a private organisation though.
Mrs Babich:Oh you can’t?
Employee:Nah, it’s only super for the South Australian Government.
Mrs Babich:Ahh ok so no point, I’ll just have to get a new one.
Employee:You will have to consider starting a new.. well that’s the only alternative to starting..
Mrs Babich:Ok.
Employee:A new one if you haven’t already got ahh, a private one.
Mrs Babich:Nah I’ve rolled them all into Government, so all good..
Employee:That ok then?
Mrs Babich:Thank you, yea all good thank you.
Employee:That’s ok, ta bye.[25]
[25] Appendix C to Respondent’s Summary of Argument.
Clearly, when Mrs Babich mentioned having ‘rolled them all into Government’, she was referring to having rolled all her private funds (i.e. superannuation funds) into ‘Government’ (i.e. Triple S).
The Board’s employee did not mention the option of rolling her Triple S fund into an FRP. The employee told Mrs Babich that she had no alternative to starting a ‘new one (super fund) if you haven’t already got a private one’. That was advice and it was incorrect and misleading. She did have an alternative – to open an FRP fund. If she had done so then, she could also have applied to continue her insurance since she was still within the 60-day time limit at that point.
Mrs Babich may have been seeking information in the phone call, but in fact she received misinformation.
Letter of 8 March 2017
As I mentioned earlier, the Board wrote to Mrs Babich on 8 March 2017. This is the first time it attempted to communicate with Mrs Babich after it was notified of the termination of her employment. The letter is Exhibit TB6 to the affidavit of Mr Babich affirmed on 19 April 2018. I have already indicated that I accept Mr Babich’s assertions that Mrs Babich did not receive the letter. No fault can be attributed to her for this. There is no evidence as to why she did not receive it.
The letter is described as a ‘Preservation letter’. In the first paragraph, it advised Mrs Babich that:
As three months have passed since the date of your cessation of service and Super SA has not received any payment instructions on your behalf, your account has been preserved.
In fact, the letter was written five months after the Shared Services notification, and more than two months after the 60-day time limit to apply to continue her insurance had expired. The letter advised:
The insurance cover your active Triple S membership … terminated.
…
You also have the option to roll your entitlement over to another complying super fund of your choice at any time, including Super SA’s Flexible Rollover product or Income Stream.
. Super SA Flexible Rollover Product
The Super SA Flexible Rollover Product allows you to keep your money within the tax-effective super environment, while still allowing you access to some or all of your money, subject to Commonwealth preservation rules. You’re able to make after tax contributions and you may also be eligible to apply for Death and TPD Insurance. The Flexible Rollover Product has the same low fees and choice of investment options as Triple S and you only need $1,500 to get started.
The existence of this letter does not add to the Board’s case. It was not received by Mrs Babich. Even if it had been, it would have only reinforced in Mrs Babich’s mind that her insurance cover had ceased. The advice that she ‘may also be eligible to apply for Death and TPD Insurance’ overlooks the fact that the 60-day time limit had already expired, and the letter made no mention of the power of the Board to extend it.
These failures of communication strongly contradict the Board’s assertion in its 27 September 2017 letter that its ‘processes and information are appropriate’, and in its 9 March 2018 letter that it had found ‘no doubts or difficulties’ with the application of the legislation.
Other Fact Sheets
The Statement of Agreed Facts lists a number of other ‘Fact Sheets’ which were available on the Board’s website. The documents are annexed to the affidavit of Mr McAvaney sworn 1 June 2018. The exhibits PFM 22, 23, 24 and 25 are ‘Death and TPD Fact Sheets’ covering the period from November 2014 to June 2016. Annexures A, B, C, D and E to the Statement of Agreed Facts are also ‘Death and TPD Fact Sheets’, covering the period from January 2017 to October 2017.
All these ‘Fact Sheets’ state that death and TPD cover would cease when employment is terminated, but none of them refer to the rollover option or to the 60-day time limit within which the option to roll over to an FRP and apply to continue insurance must be exercised. That being the case, these documents can be criticised on the same basis as those discussed earlier.
Flexible Rollover Product Documents
By way of contrast, documents entitled ‘Product Disclosure Statement’ for the FRP were on the website as well. There are examples for the period February 2015 to September 2017. These are Exhibits PFM 26 and 27 to Mr McAvaney’s affidavit and Annexures F, G and H to the Statement of Agreed Facts.[26] There are also FRP and Insurance Fact Sheets marked PFM 28 and 29, and Annexures I, J, K and L to the Statement of Agreed Facts.
[26] FDN 13.
All of these documents make reference to the 60-day time limit for rolling over into an FRP fund. However, they all appear on the website under the sequence ‘Fact Sheet > Super SA > Flexible Rollover Product > Investors with Triple S Insurance’. In other words, anyone seeking information would need to click on ‘Flexible Rollover Product’ before accessing the information. Mrs Babich did not know of, or receive any advice about, the FRP so there was no reason for her to go to that part of the website.
The answer to the Board’s submissions about the limitations on providing advice, and breaking the ‘ASIC Act’,[27] is that nothing prevented the Board from providing the appropriate information in 2018.
[27] T 105.
On 16 February 2018, the Board published a Triple S PDS.[28] Included in that document, at page 21 thereof, was the following paragraph:
[28] Affidavit of Tihomir Babich affirmed 19.4.18, Exhibit TB13.
Continuation of Triple S insurance when ceasing employment
If you invest in the Flexible Rollover Product within 60 days of ceasing SA public sector employment and you held Triple S insurance cover on the last day you worked, you can elect to continue the same type and level of Death and TPD insurance in the Super SA Flexible Rollover Product without having to provide further medical information, provided you meet the required age and employment conditions.
A ‘Death and TPD & Death Only Insurance’ Fact Sheet, also issued on 16 February 2018, and which is stated to form part of the PDS just referred to, contains a similar statement.[29]
[29] Ibid, Exhibit TB13.
Mr Babich stated in his affidavit that this was, to the best of his knowledge, the first time any such statement appeared in any Super SA PDS or Fact Sheet.[30]
[30] Ibid at [29].
Had a PDS or a Fact Sheet containing the information published in February 2018 been in Mrs Babich’s possession at the time she left her employment with the Attorney-General’s Department, and had the delay been nine months as the Board asserted, then the delay would have been much less excusable.
As it is, the appellant has established that there was a good reason for the delay, being the Board’s failure to adequately communicate to its members the information about the option to roll over to an FRP and the 60-day limitation period within which an application to continue insurance could be made.
Hardship
There is no need to examine this criterion in great detail. Hardship was clearly demonstrated in Mrs Babich’s letter of 1 September 2017. The Board accepted that Mrs Babich would suffer hardship. In its letter to her of 27 September 2017, it writes:
The Board noted that the hardship will be financial hardship to your family and your loss of peace of mind. The Board accepted your submissions on this criterion.
In his affidavit, Mr Babich provided further information as to his financial situation. He is only able to work four days per week, since he is a sole parent. His daughter is in child care, which is expensive. The two grandmothers assist. He has a large mortgage, no doubt from the time before she became ill, when he and his wife were both earning good incomes and sharing the parenting of their child.
It is not necessary that Mr Babich show that he is poverty-stricken. Obviously, there are many single-parent families in the community struggling with similar issues. However, the evidence is clear that Mr Babich has suffered a drastic reduction in his financial position. His wife was earning a good income. This reduction is quite sufficient to constitute hardship.
The Board was correct to accept that hardship existed.
Unfairness
I have already given reasons for my finding that a substantial part of any delay in Mrs Babich’s application was caused by the Board. For the same reasons, a finding that it was unfair to Mr Babich and his daughter (and to Mrs Babich when she was alive) to refuse her application for an extension of time is justified.
In its letter of 27 September 2017, the Board wrote:
Whilst the Board accepted your submissions, and is sympathetic with them, this criterion focusses on unfairness caused by Super SA or the Board. There is no evidence of any such unfairness.
The Board rejected unfairness as a relevant factor because it decided that the unfairness was not caused by Super SA or the Board. In my view, that is clearly what it was saying. I reject Mr Ambrose’s submissions to the contrary. It is not to the point that the Board was sympathetic.
The Board’s interpretation is based on the way s 29(3) of the Act is expressed:
(3) … the Board should have regard to—
(a) …
(iv) the extent to which it will cause any unfairness if the time limit is not extended;
…
Mr Ambrose submitted that the word ‘it’ underlined above refers to the Board, so that it means ‘the extent to which the Board will cause any unfairness’. Mr Quinn, to the contrary, submitted that ‘it’ referred simply to the non-extension of the time limit, so that it means ‘the extent to which a non-extension of the time limit will cause any unfairness …’.
Neither interpretation is particularly satisfactory. Both are rather strained. I hesitatingly prefer the Board’s interpretation. If Parliament’s intention was that the subsection should have the meaning suggested by Mr Quinn, then sub-paragraph (iv) could have been expressed in the same simple way as sub-paragraph (iii) dealing with hardship, namely, ‘any unfairness that will occur if the time limit is not extended’.
It is hard to imagine how any other party could cause unfairness to Mrs Babich in a situation like this anyway. It was only the Board which had power to grant or refuse her application.
In any event, the Board’s view that neither it nor Super SA had caused unfairness to Mrs Babich was erroneous. My reasons above clearly demonstrate that the Board’s sanguine view about its information and processes was misplaced. Its publications on its website misled by omission. Its letter of 8 March 2017 purported to advise Mrs Babich of rights which had already expired. The information she received over the telephone was incorrect. The unfairness was caused by Super SA and/or the Board.
If Mrs Babich was less than vigorous about investigating the extent of her rights, that can be explained by the bluntness of the statements in the PDS that insurance ceased with termination of employment, and the statement in the phone call in November 2016 that she had no alternative than to start a new super fund.
Mr Ambrose submitted that these matters have no consequence because there is no evidence that Mrs Babich would have acted on the information even had it been in the PDS and the Annual Statements.
Mrs Babich is not here to answer that submission. The only evidence before me consists of the documents which Mrs Babich did have in her possession, which were unhelpful, and the telephone call in which she was told that she had no alternative to opening up a new private fund after leaving her employment with SafeWork SA.
That evidence is sufficient to justify an inference that Mrs Babich would, on the balance of probabilities, have rolled her Triple S fund into an FRP if she had received the appropriate information from Super SA. There was no reason not to. The clear inference I take from the telephone call is that she thought she did not have that option.
I conclude that Mrs Babich suffered unfairness, and that it was caused by Super SA and/or the Board.
Any Other Relevant Factor
The Board treated Mrs Babich’s complaints about the inadequacy of Super SA’s administrative procedures under this heading. I have dealt with it under other headings, so there is no need to discuss it further.
Conclusion
I accept Mr Ambrose’s submission that the Act does not prescribe the relative weight to be ascribed to each of the criteria in s 29(3). The Board was at liberty to assign whatever relative weight it considered appropriate.
The Board did not indicate that it gave any particular weight to one criterion relative to another. In its letter of 27 September 2017, it said:
Taking all of the factors into account, the Board decided not to extend the time limit.
It is difficult to discern the reasoning adopted by the Board. After setting out the criteria in s 29(3), the letter states:
·the delay was mid-range;
·there was no administrative error and Super SA was notified of Mrs Babich’s ‘termination’ on 4 November 2016;
·it accepted that there was hardship to Mrs Babich and her family;
·any unfairness must be caused by Super SA or the Board. It denied that this was the case;
·under ‘any other relevant factor’, its ‘processes and information were appropriate’.
It must be inferred that the Board did not consider that the hardship suffered was sufficient by itself to justify an extension. Presumably, it regarded the delay and unfairness criteria as neutral, and the other factors were against granting the application.
For the reasons given, I regard the Board’s attitude to unfairness, and to its processes and information under ‘any other relevant factors’ as erroneous. I find that there was a good reason for the delay.
Section 42E of the District Court Act 1991 (SA) sets out the approach I must take to the appeal:
42E—Conduct of appeal
(1) The Court must, on an appeal, examine the decision of the original decision-maker on the evidence or material before the original decision-maker but the Court may, as it thinks fit, allow further evidence or material to be presented to it.
(2) The Court, on an appeal—
(a) is not bound by the rules of evidence but may inform itself as it thinks fit; and
(b) must act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms.
(3) The Court must, on an appeal, give due weight to the decision being appealed against and the reasons for it and not depart from the decision except for cogent reasons.
‘Cogent’ has been defined to mean ‘compelling, convincing, powerful’.[31] The appellant must not only demonstrate error to succeed, the error must be such that had the original decision-maker proceeded correctly, it would have arrived at a different conclusion.[32]
[31] Registrar of Firearms v Marksman Training Systems Pty Ltd (No 2) [2016] SASCFC 72 at [315] per Stanley J.
[32] Commissioner of Consumer Affairs v McMurray (2017) 128 SASR 1 at [82], [84] per Hinton J and see Blue J at [45]-[46].
In McMurray, Blue J referred to the principles established in House v The King.[33] The principles are that appellable error occurs where the decision maker:
… acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so.
[33] (1936) 55 CLR 499 at 504-506 per Dixon, Evatt and McTiernan JJ.
In the context of this appeal, and keeping in mind s 42E, an error of the type outlined in House v The King will only result in a successful appeal if ‘the appellant … demonstrates that there should have been a different outcome’,[34] except where the error is of the type more recently described as ‘outcome error’, that is, an error which is determinative of the result. Blue J observed[35] that in such a case, ‘No question of deference to the decision of the decision-maker arises’. That follows as a matter of course since, if the error is determinative of the result, a cogent reason must exist to depart from it.
[34] Blue J in McMurray (supra) at [45].
[35] In McMurray at [47].

I conclude that cogent reasons exist for departing from the Board’s decision, on 9 March 2018, to confirm its decision on 26 September 2017 to refuse Mrs Babich’s application for an extension. The combined effect of all the criteria in s 29(3) of the Act is that the extension should have been granted.
I allow the appeal. The Board’s decision of 9 March 2018 is set aside.
I will hear the parties as to any consequential orders.