Wolstencroft and Commissioner of Superannuation
[2001] AATA 1011
•12 December 2001
DECISION AND REASONS FOR DECISION [2001] AATA 1011
ADMINISTRATIVE APPEALS TRIBUNAL )
) No V00/887
GENERAL ADMINISTRATIVE DIVISION )
Re NOEL WILLIAM WOLSTENCROFT
Applicant
And COMMISSIONER FOR SUPERANNUATION
Respondent
DECISION
Tribunal Mrs Joan Dwyer, Senior Member Mr G Friedman Member Mr W G McLean Member
Date12 December 2001
PlaceMelbourne
Decision The Tribunal sets aside the decision under review and remits the matter to the Commissioner for reconsideration in accordance with the direction that the election made by Mr Wolstencroft on 17 May 1990 be treated as if it had been made within the period allowed by s 137(1) of the Act.
(sgd) Joan Dwyer
Senior Member
SUPERANNUATION - Commonwealth Superannuation Scheme - preservation of superannuation rights - election to preserve benefits more than 21 days after resigning - discretion to recognise late election - incorrect information given to applicant regarding options available - whether in the interests of justice that time be extended - consideration of Commonwealth Superannuation Scheme Board approved guidelines – decision set aside
Superannuation Act 1976 s 137 (1), 157 (1)
Re Lander and Commissioner for Superannuation (1993) 29 ALD 870
Re Liddle and Commissioner for Superannuation (1991) 14 AAR 456
Re Boardman and Commissioner for Superannuation (1993) 30 ALD 619
Re Chalk and Commissioner for Superannuation (1993) 30 ALD 537
Re Secourable and Commissioner for Superannuation (unreported W92/117, 19 March 1993)
Re Schofield and Commissioner for Superannuation (AAT 10006, 14 February 1995)
Chalk v Commissioner for Superannuation (1994) 33 ALD 420
Commissioner for Superannuation v Boardman (1994) 33 ALD 569
Comcare v A'Hearn (1993) 45 FCR 441
Bond Corporation Holdings Limited v Australian Broadcasting Tribunal (1988) 84 ALR 669
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Re Boardman and Commissioner of Superannuation (1993) 30 ALD 619
Re Lamb and Commissioner for Superannuation (AAT 11014, 17 June 1996)
Re Charles and Commissioner for Superannuation (1993) 18 AAR 61
Re McKnight and Commissioner for Superannuation (1998) 49 ALD 84
Re Morgan and Commissioner for Superannuation (unreported W92/200, 12 March 1993
Re Schwarze and Commissioner for Superannuation (unreported A94/123, 3 February 1995
REASONS FOR DECISION
12 November 2001 Mrs Joan Dwyer, Senior Member Mr G Friedman Member Mr W McLean, Member
This is an application under ss 154(6) of the Superannuation Act 1976 ("the Act") for review of a reviewable decision made on 8 November 1991. A delegate of the Commissioner for Superannuation decided not to direct, under s 157(1) of the Act, that the election made by Mr Wolstencroft on 17 May 1990 (T14 p28) be treated as if it had been made within the period allowed by s 137(1) of the Act. That decision was confirmed on I9 July 1994.
Mr G Moore of Counsel appeared for Mr Wolstencroft. Mr B Dubé, in-house Counsel with the Australian Government Solicitor, appeared for the respondent. Mr Wolstencroft gave evidence. Evidence on his behalf was also given by his wife and by Mr Sexton. The respondent did not call any evidence. The Tribunal received into evidence the documents ("the T documents") lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 and the other exhibits tendered during the hearing. After the hearing concluded the applicant, at the request of the Tribunal, lodged a further affidavit from Mrs Wolstencroft sworn 11 September 2001. The Tribunal has marked that exhibit A8. The applicant also lodged on 11 September 2001 further contentions as to matters raised in the further affidavit. The respondent lodged a letter advising that it did not intend to call further evidence or to further cross-examine Mrs Wolstencroft. The respondent also made a submission dated 18 September 2001 as to the effect of Mrs Wolstencroft's affidavit (A8). The applicant lodged a short submission in reply dated 26 September 2001.
The relevant provisions of the Act are in Division 3 of Part IX of the Act. Part IX deals with "Preservation of Rights of Certain Eligible Employees". Division 3 is headed "Preservation of Rights of persons ceasing to be Eligible Employees". The relevant sections read as follows:
137. (1) A person who:
(a) ceases to be an eligible employee in circumstances to which paragraph (b) does not apply and, upon so ceasing, is not entitled to pension under this Act or invalidity benefit in accordance with section 69, 72 or 73; or
(b) ceases to be an eligible employee in circumstances by virtue of which the person is to be deemed, under subsection 58 (3), or under section 58A or 58B, to have retired involuntarily;
may, not later than 21 days after the person so ceases to be an eligible employee, elect, by notice in writing to the Board, that this Division apply in relation to the person.
General provisions applicable to elections under Act157. (1) Notwithstanding anything contained in this Act, where an election under this Act is made by a person after the expiration of the period allowed by or under this Act for the making of the election, and the Board is satisfied that in all the circumstances of the case it is desirable that the election should be recognized, the Board may direct that the election be treated as if it had been made within the period allowed and the election shall have effect accordingly.
the facts
Mr Wolstencroft, who was born on 16 September 1943, started work with the then Postmaster-General's Department in 1959. Later his employer became Telecom. He became a member of the Commonwealth Superannuation Scheme ("the CSS") established under the Superannuation Act 1922 ("the 1922 Act") on 2 September 1959.
On 1 July 1976, by virtue of the commencement of the Act, Mr Wolstencroft became an "eligible employee" for the purposes of the Act and commenced to contribute to the scheme established under the Act.
On 7 August 1980, Mr Wolstencroft resigned from his employment with Telecom, thereby ceasing to be an "eligible employee" for the purposes of the Act. The reason he resigned was so that he could work with his wife in the running of a youth camp on a property they had purchased near Taggerty. They had run the camp business since approximately 1979. At the time of his resignation Mr Wolstencroft had worked full time at the camp for approximately six months on long service leave and then returned to work for three months before taking six months of leave without pay. He resigned from Telecom rather than resume work at the expiry of his leave without pay, as it was too much work for his wife to run the camp when he was working. Mr Wolstencroft said he resigned because he had run out of leave without pay and they would not grant him any more. But he said he felt apprehensive about leaving Telecom as he had worked there for 20 years.
Mr Wolstencroft said that before he left Telecom he had a conversation with a director who gave him some indication that if he wanted to, he would be able to return to Telecom in the future. He said he maintained his membership of the union, which is now the Communications, Electrical and Plumbing Union to keep his options open if he needed to get back into Telecom.
Sometime before 1 September 1980 Mr Wolstencroft completed a form known as a Form S2A (T18 p13). The form bears the heading (T8 p13):
APPLICATION FOR REFUND OF ACCUMULATED CONTRIBUTIONS/
LUMP SUM BENEFIT ORELECTION FOR PRESERVATION OF SUPERANNUATION RIGHTS
It states:
Note:This application form should be completed by a contributor who resigns or a contributor who retires and who elects to exercise an option to take a Lump Sum Benefit in lieu of a pension entitlement.
This form should not be completed by a contributor who is applying for a pension and a refund of accumulated contributions.
I . . .
apply for a refund of accumulated contributions )
hereby * apply for payment of a lump sum benefit )under the provisions of the elect for preservation of superannuation rights )Superannuation Act
* Delete whichever inapplicable
Mr Wolstencroft left "apply for a refund of accumulated contributions" and struck out the other two options.
In about February 1983, Mr Wolstencroft applied to rejoin Telecom. He and his wife had decided to cut back the bookings at the camp as it was very demanding work. Mr Wolstencroft was offered a position at Telecom by letter dated 28 February 1983 (T11 p17). He accepted the offer prior to 18 March 1983 (T12 p18).
By letter received on or about 17 May 1990, Mr Wolstencroft wrote to the Commissioner for Superannuation advising that he wished to apply to make a late election to preserve his superannuation benefits under the Act. He wrote (T14 p28):
I wish to apply for a late Election for Preservation of Superannuation.
After 20 years with Telecom I resigned, and was not advised nor could I find any mention in the Conditions of Employment booklet, that I was able to roll over my contributions in the Commonwealth Scheme.
I rejoined Telecom 3 years later and only recently when information showing comparisons between the new Telecom Scheme and the C.S.S. Scheme became available have I become aware that my contributions could have been left in the fund when I resigned.
I am therefore requesting a late Election for Preservation of my Superannuation.On 4 July 1990, Mr Wolstencroft's letter was acknowledged (T15 p29). He was told that his letter was being treated as a late election under s 137(1) of the Act, but that it was necessary for a delegate of the Commissioner of Superannuation to make a decision "that it is desirable that the late election be recognised". Mr Wolstencroft was asked to provide certain information and in particular to comment on paragraph 6 of the letter which read (T15 p30):
The mention of 'preservation of superannuation rights' in two places on the application form you completed would, at the very least, have put you on notice that preservation of superannuation rights was a feature of the CSS. To ensure that the delegate has the opportunity to consider all matters of relevance, you are invited to elaborate on this aspect of your case if you wish. You may, of course, also provide any further material which you would like the delegate to consider.
Mr Wolstencroft replied to the Commissioner (T17 p33):
With reference to your letter dated 4th July, 1990, although it is clear now what "Preservation of Superannuation Rights" means, at the time I made that election I was under the understanding that all a contributor was entitled to was a refund of all contributions plus interest, and the words Preservation of Superannuation Rights, without any other explanation, didn't mean anything at the time.
The first I new [sic] that this was an option under the CSS scheme was when information comparing the CSS and the new Telecom scheme was sent out to all staff. Prior to this, I have not been able to find where this option is mentioned. I have enclosed a copy of the Conditions of Employment booklet which everyone receives, which is supposed to inform you of your entitlements, and as you can see on page 26 under Superannuation Resignation, there is no mention of being able to elect to preserve your superannuation. Further, in the books which our clerks use to advise staff of their entitlements (see enclosed documentation – section B10/3/12) again no mention of the ability to preserve your super, so even if I had asked for advice I probably would have been given the same advice.
At the time of making the election, I had been absent from Telecom for over 12 months (6 months furlough, 6 months LWP), and had shifted to the country and therefore I didn't have access to the normal advice which could have changed the election I subsequently made.
Finally the contribution refunded was not an amount which would have enticed me to withdraw it, if I had known that by leaving it in the fund, I would have been able to receive the Employers contribution, which would have amounted to a considerable sum after 21 years in Telecom.
Whilst I admit ignorance is no excuse, at no time would it have occurred to me to consider the possibility of being able to preserve my superannuation with the information I had at the time.
Trusting that this application will receive your favourable consideration.That letter sets out the substance of the applicant's case. It says:
(i)He did not know he could preserve his superannuation entitlements at the time he resigned in 1980.
(ii)His "knowledge", or more accurately lack of knowledge, was based on the booklet "Conditions of Employment" which was distributed to all Telecom employees and which did not mention the option of preserving entitlements after resignation.
(iii)The reference to "preservation of superannuation rights" in the form he signed in August or September 1980 meant nothing to him.
(iv)He was not at work when he signed the form and had been away from the workplace for over 12 months, so did not have ready access to advice, but in any event he did not perceive the need for such advice.
(v)Even if he had sought advice, it would probably have been consistent with the Telecom clerk's manual which did not mention the preservation option
(vi)The amount of the superannuation was not such as to "have enticed" him to withdraw his entitlement, if he had known that by leaving his contribution in the fund, he would have been able to retain the employers' contribution.
A delegate of the Commissioner, on 8 November 199, decided that he was not satisfied that "in all the circumstances of the case it is desirable that the [late] election under s 137(1) . . . be recognised" (T21 p39).
On 19 July 1994 a delegate confirmed the decision that Mr Wolstencroft's late election not be treated as if it had been made within time. The delegate concluded:
As the lump sum benefit option is specified as applying to a person who retires and who elects to take that option, it is unambiguous that the remaining two forms of statement provided by the form apply to the other class of person referred to in the "note", a contributor who resigns. Therefore I am unable to understand why Mr Wolstencroft states, "there is no reference that the purpose of this form can also be applied to preservation". As to his statement, "this form DID NOT alert me at the time I signed it … that preservation was an option", even accepting his word that it did not, I should only have to conclude that he cannot have read it with due attention. I consider it relevant as indicating the frame of mind in which he approached the making of his benefit application that he states that at the time he made his application he had the following understanding of the rights of a person who resigns:
". . . at the time I made that election I was under the understanding that all a contributor was entitled to was a refund of all contributions plus interest, and the words Preservation of Superannuation Rights, without any other explanation, didn't mean anything at the time."
The reconsideration delegate gave little weight to the absence of reference to preservation of rights in the Telecom "Conditions of Employment" booklets published in 1979 and 1983. Thus he imposed a higher standard of knowledge of the superannuation scheme on a Telecom employee with 20 years of technical expertise, than that demonstrated by those with the responsibility of writing booklets advising Telecom employees of their employment rights, including their entitlements under the CSS. That seems unreasonable.
The delegate concluded that Mr Wolstencroft made his election "careless of [his] entitlements", adopting those words from Re Lander and Commissioner of Superannuation (1993) 29 ALD 870 and from Re Liddle and Commissioner for Superannuation (1991) 14 AAR 456 at p473. The delegate further expressed doubt as to whether Mr Wolstencroft would have elected to preserve his superannuation benefits had he been fully aware of them.
The delegate acknowledged there would be benefit to Mr Wolstencroft if his late election were recognised, but said this was not the only or the most important consideration.
the evidence for the applicant
knowledge of the preservation option at time of resignation
One relevant issue is Mr Wolstencroft's knowledge and understanding of the preservation option when he signed T8. Mr Wolstencroft said that his belief, and that of those with whom he worked at Telecom, prior to 1980, was that if you resigned all you were entitled to in respect of superannuation was a refund of contributions. As an example, he recounted a conversation he had had with one of his workmates, a senior technical person. He did not enjoy working at Telecom but had a lovely tenor voice and sang in opera in his spare time. Mr Wolstencroft said he had asked him why he did not leave and do what he enjoyed and his response was (trans. p23):
Well I'd lose all the contributions of my superannuation.
Mr Wolstencroft produced the Telecom booklet "Conditions of Employment" which was current at the time of his resignation (A7). It states:
6. Resignation
On resignation a contributor is refunded all contributions, plus interest which has accumulated since 1 July 1976.
Mr Wolstencroft said that booklet was referred to by people in Telecom quite often. He said people did not know much about superannuation. It was compulsory to join the scheme and you were told what you had to pay, "you were told what you received at the end of it and you didn't really understand much what was going on" (trans. p21).
Mr Wolstencroft's evidence is supported not only by the 1979 booklet (A7), but also by its successor (A3), issued in 1983. It states:
6. Resignation
On resignation a contributor is refunded all contributions, plus interest which has accumulated since 1 July 1976. P&IR Guidelines Section B10/3/11.
Even the P&IR [Personnel and Industrial Relations] Guidelines (A4), referred to in the 1983 booklet, repeat the misinformation contained in the two booklets:
RESIGNATION BENEFIT
B10/3/11 On resignation a contributor is entitled to a refund of contributions with interest accumulated at the earning rate of the Fund from time to time.
It is significant that on the same page of the Guidelines there is a list of forms available from the Personnel Officer which "are to be used in applying for . . . benefits". The form Mr Wolstencroft signed is specified under its full heading
c. Application for Refund of accumulated contributions/ ) Lump Sum Benefit or Election for Preservation of ) Form S2A Superannuation Rights. )
Apparently that heading did not alert those responsible for preparing the Personnel Guidelines to the option of an employee electing to preserve superannuation rights. It is therefore difficult to see why it should have alerted Mr Wolstencroft. He should not be expected to have any more skill in writing or interpreting personnel documents or understanding the superannuation scheme than those whose responsibility it is to perform those tasks.
Mr Wolstencroft produced the letter dated 18 March 1983 (A1) which he received advising him of his obligatory superannuation contributions on his rejoining Telecom. He also produced (A2) a circular enclosed with that letter as to which the letter (A1) stated:
Details of benefits under the scheme are explained in the attached circular.
The document (A2/16) states as follows:
RESIGNATION BENEFIT
29. On resignation a contributor is entitled to a refund of contributions accumulated at interest at the earning rate of the Fund from time to time.
Mr Moore asked Mr Wolstencroft what he thought about the reference to preservation in the form (T8), which he received in the mail with a covering letter asking him to complete the form. Mr Wolstencroft replied (trans. pp23-24):
Well, I thought it was a common form such as we have with our leave forms and so on which has sick leave and long service leave and all that sort of thing on it and you usually tick the appropriate box or the particular leave that you wish and this form was a similar sort of thing and I thought, well, the only thing that applies to me was apply for a refund of accumulated contributions which is the only knowledge I had at that time.
That is why you struck out the other two options in the middle of the first boxed part?---That's why I struck out the other – that was the only thing I considered applicable.
Yes. So - - -?---The words preservation of superannuation rights never meant anything to me. It's gobbledegook as far as - - -
When the Tribunal asked Mr Wolstencroft whether the two sections he crossed out in the form did not trigger him to ask someone what they meant, he said they did not (trans. p49):
Well I thought that was applicable to something else, that the form could be used for
What else did you think they were applicable to?---Well, I didn't know. I thought it was a common form which you could use for other things and you crossed out which was applicable to what you were applying for.
But what I am asking you is if you didn't know, why didn't you ask?---I wish I had have.
Yes?---But I thought that I did know and I didn't ask because I thought I did know.
Even though you just said you didn't know what they were for?---Well I didn't know what those words meant but I thought that I knew what my entitlements were, that the only option I had was to take what I was given and that was it. I didn't know that I could roll it over.
what Mr Wolstencroft would have done had he known of the preservation option
Mr Wolstencroft said that had he been aware that he could have preserved his contributions, together with the employer's contributions he would have done so. He said, (trans. p24):
I would've preserved it. I'd been working there for over 20 and there was quite a sum, I should imagine, that Telstra had contributed and certainly $6000 was not a great enticement to give up 20 years contribution by my employer and – so if I'd known that, I would've rolled it over or let it in the fund.
way of dealing with the money received as refund of contributions
The decided cases suggest that another relevant matter may be how Mr Wolstencroft dealt with the $6,700.88 he received as his refund of accumulated contributions plus interest. In his letter of 28 July 1993 (T32 p58), Mr Wolstencroft wrote that he had used the money to pay off a family loan which had been borrowed to purchase the property. There was no pressure to repay that loan. Mr Wolstencroft attached to that letter a photocopy of bank statements for the month of October 1980 showing two debits of $3,500.00 and $2,000.00 on 9 October 1980 (T10 p16).
In evidence Mr Wolstencroft was rather vague on figures and banking details. He could not explain the relevance of the bank statement and had no precise details as to the loan from his parents-in-law, or as to how or when it was repaid. Mr and Mrs Wolstencroft both said that Mrs Wolstencroft looked after family financial matters. She said she had earlier worked as a bursar at a school. Mr Wolstencroft said that he and his wife had not had any problems funding their business. Mrs Wolstencroft confirmed that evidence.
At the request of the Tribunal Mrs Wolstencroft, after the hearing, swore a further affidavit (A8) as to financial matters, following a search for further financial records relating to the holiday camp business. Mrs Wolstencroft in her affidavit referred to and exhibited relevant statements and cheque butts. She explained that the total loan received from her parents as bridging finance for the business was $25,500 paid as to $13,500 by Mrs Wolstencroft's mother and as to the balance by her father. The sum of $20,000 had already been repaid by two cheques on 5 December 1979, before Mr Wolstencroft resigned from Telecom.
Mrs Wolstencroft explained in her affidavit that after Mr Wolstencroft received his refund of accumulated superannuation contributions, she deposited the cheque for $6700.88 in their NBA account on 22 September 1980. Mr Wolstencroft then decided to use that money to pay the balance owing to his parents-in-law. The two cheques for $3,500 and $2,000 were drawn on 3 October 1980.
Mrs Wolstencroft in her affidavit repeated the evidence she had given, that the repayment of the loans was entirely at the discretion of Mr and Mrs Wolstencroft. She said, "but for my husband's pride my parents would have been happy to gift rather than lend the amounts to my husband and me". The material exhibited to Mrs Wolstencroft's affidavit and her explanation of the repayment of the loan to her parents clarified the evidence, which had been left vague at the hearing.
The documents exhibited as JW1 and JW2 to Mrs Wolstencroft's affidavit confirmed the evidence of Mr and Mrs Wolstencroft that they had not relied on Mr Wolstencroft's superannuation refund as part of the finance to purchase or start the holiday camp business. Mr and Mrs Wolstenscroft both said they had not discussed the amount he would receive as a refund and they had not relied on it in their plans for the holiday camp. They had no need for the money when it arrived and that is why they used it to pay the last $5,500 owing to Mrs Wolstencroft's parents, although there was no need to pay that sum then or at any time. The financial records found by Mrs Wolstencroft supported the evidence she and her husband had given. They show that the refund of contributions was not included in the amounts earmarked to be spent in the purchase and upgrading of the property.
Mr Wolstencroft said he has kept his documents relating to his rejoining the CSS (A1 and A2). The circular A2 as set out in paragraph 21 above repeats the incorrect information set out in the Telecom Conditions of Employment booklets. There is no evidence that Mr Wolstencroft ever received anything providing him with accurate information prior to 1990, when he learnt of his preservation entitlements, as he explained, by going to seminars about the introduction of the new Telecom Superannuation Scheme.
Mr Wolstencroft's evidence as to the widely held belief within Telecom that on resignation you could only get a refund of contributions plus interest, was supported by Mr Sexton who is now a Manager, Planning Resources with the Telstra Research Laboratories, Clayton. He swore an affidavit (A6) in which he said that he commenced work as an employee of a predecessor of Telstra in February 1973 as a clerk, and has been with Telstra or a predecessor ever since. He said he was appointed Assistant Branch Administrative Officer in April 1980. He said it was not until the late 1980's that he became aware that employees leaving Telecom could elect to preserve their superannuation rights after the termination of their eligible employment, and that until that time he believed that on resignation an employee was entitled only to a refund of their superannuation contributions. He also said that if he had been asked about superannuation entitlements while he was Assistant Branch Administrative Officer he would have referred the person to a Staff Clerk and that Staff Clerks in his experience would consult the Personnel and Industrial Relations Department Guidelines and Procedures (A4) for information.
Mr Sexton, in evidence, said that it was the general understanding within Telecom up to the late 1980's, that if you left you got your superannuation contributions with interest and that was it.
the respondent's evidenceThe respondent called no evidence but relied on affidavits of Ms Gibson (R1) and Mr Rule (R2).
Ms Gibson is an administrative officer with Comsuper. She has been in the position for 8 years. One of her duties is to maintain records of manuals and information papers regarding the CSS since its inception on 1 July 1976. Ms Gibson stated that circulars and manuals containing correct information were distributed to all departments and approved agencies.
Attachment A to Ms Gibson's affidavit is a "Superannuation Manual FOR OFFICIAL USE ONLY Issue No.4 May 1979". It includes a copy of the Act and instructions. Those lengthy instructions at 9.19 and 11.18 do mention election for preservation of superannuation rights, but they are not easy to understand and not informative. Attachment B is an explanatory paper on the new scheme, circular 1976/8. Under the heading "Resignation", paragraph 15, it does mention the possibility "if the contributor is eligible and so elects" of:
(i) a preservation pension fully due on death or invalidity or at retiring age.
The circular gives no explanation. It says nothing about the desirability of such a preservation as it allows the member to preserve employer contributions. Nor does it refer to the desirability of preservation for members who may rejoin the CSS, because of the increase preservation would have on the superannuation pension ultimately payable on retirement. The Tribunal has not found and was not taken to anything relevant in Attachments C or D, both issued in 1976, save that the cover sheet to Attachment D states:
The remaining paper No 7, which will cover preservation, will not be available for some time.
Attachment E to Ms Gibson's affidavit is paper No. 7 on preservation, which was issued in August 1978. It gives an explanation of the preservation election, but would be difficult for a person without superannuation expertise to follow. There is no simple statement that this could be the most desirable option for people resigning and leaving the scheme at a relatively young age to try alternative employment, but who may one day return to public employment and rejoin the scheme. Nor is there any Table comparing the pension payable on retirement, if a person does or does not elect for preservation on resignation and later rejoins the CSS. Such a Table was suggested by The Tribunal in Re Boardman and Commissioner for Superannuation (1993) 30 ALD 619. A comparative table was prepared in this matter, but only by the reconsideration delegate in July 1994 (T33 p84).
Attachment F to Ms Gibson's affidavit is a circular 1978/S4 advising of the establishment of a superannuation advisory service "on a limited basis in each State Capital City and Darwin." The circular states in paragraph 4:
The advisory officers will not be able to undertake any individual superannuation counselling at present. The major responsibility for such counselling other than by the AGRBO itself remains with the Personnel Sections of Departments and Authorities.
Paragraph 5 refers to a proposal that during the next 12 months there would be seminars on superannuation in each state for Staff Clerks and Personnel Officers.
Ms Gibson's affidavit does not prove that Mr Wolstencroft should have been aware of the preservation option. Nor does it establish that any staff within Telecom were aware of the information contained in Manuals and Staff Circulars, even if they had been circulated by Comsuper.
Mr Rule's affidavit (R2) simply stated that he had been unable to locate the authors of letters T18/34, T20/36 and T12/18 on whose information the delegates had relied in making the decisions in this matter. He did speak to Mr Wright, the author of T30/55 who had said he "strongly doubted" that Mr Wolstencroft would have received a "New Contributors" superannuation leaflet at the time of his reappointment in 1983. Mr Wright said that he did not work in the personnel section at the Clayton Laboratory in 1993. However there is no evidence suggesting that Mr Wolstencroft did receive a new and correct Superannuation Booklet in 1983, and there is evidence that in 1983 he did receive incorrect superannuation advice in the circular (A2).
submissions on the evidenceMr Dubé referred to Mr Wolstencroft's evidence that he shared the general view of those working with Telecom, that the only superannuation entitlement on resignation was to a refund of accumulated contributions plus interest. Mr Dubé pointed to the decision in Re Chalk and Commissioner of Superannuation (1993) 30 ALD 537 at 544 where the Tribunal said at paragraphs 45 and 46:
(45) Certainly it is probable, if the applicant had made inquiries in the Human Resources Branch of Telecom or from his union, that he would have received inadequate or incorrect advice. The evidence shows that the union was content to rely on the inadequate manual supplied by Telecom and that the staff of the Human Resources Branch were also likely to rely upon the same manual.
(46) However, it has not been suggested to us that the applicant was given inadequate or incorrect advice. He was not given any advice other than that of his immediate colleagues and supervisors. Accepting that advice is akin to accepting advice given in the public bar of an hotel at 7 pm on a Friday night. No reasonable person would rely on that advice and if they do they must bear the consequences.We cannot agree with those comments. We find that the publications produced to advise employees of their conditions of employment were misleading and that there was a culture within Telecom which believed the information in those booklets, namely that the only option on resignation was to obtain a refund of accumulated contributions. In that situation we find there was no trigger to alert an employee to the fact that he should make enquiries as to his rights. The form S2A is quite ambiguous. It is equally consistent with Mr Wolstencroft's belief that it was intended to also cover circumstances other than his own, to which the other options were applicable. The language of the instruction "Delete whichever inapplicable" is perfectly consistent with Mr Wolstencroft's understanding.
Mr Dubé referred to Re Secourable and Commissioner for Superannuation (unreported W92/117, 19 March 1993). He said that there the Tribunal accepted that if a person had simply read the book it would be quite reasonable for them to take no further action to enquire about preservation rights. Mr Dubé pointed to Mr Wolstencroft's evidence that he had not looked at the book specifically to check his superannuation entitlements before resignation. On other hand Mr Wolstencroft said he and others looked at the book frequently during their employment. He said, "it was a reference book that people kept in their top drawer and if they wanted to know what leave entitlements they had and all the other things, then that was where you went initially to look at and that was common knowledge at the time" (trans. p33).
Mr Dubé relied on the affidavit of Ms Gibson (R1) as establishing that there was a considerable amount of correct information distributed to Departments and agencies and that there was no evidence to indicate that it did not go to Telecom. In fact Ms Gibson's affidavit establishes that apart from the Manual there was only limited information as to the election for preservation until Paper No. 7 was distributed in 1978. There is no evidence that the substance of that paper was absorbed and understood by Telecom staff clerks and personnel officers. There is evidence, namely the circular A2, the booklet A3 and the Guidelines A4 and R4, which were all published after exhibit E was distributed, that the preservation option was not understood by those in the Personnel and Industrial Relations Department of Telecom, even in 1983. Exhibit A7 shows a similar lack of knowledge in 1979. The evidence of Mr Wolstencroft and Mr Sexton is that the preservation option was not known by the technical and administrative staff of Telecom at the relevant time.
Mr Dubé sought to distinguish Boardman. In that matter Mr Boardman gave evidence that when he was handed the form S2A, he asked what the three options meant and was told (by a Telecom employee in May 1979) that the form was used for several purposes, and that he should strike out two options so as to make application for a refund of contributions. He also distinguished Charles, where, according to the evidence, the Form S2A was sent to Mr Charles with a covering letter, which stated "enclosed is an application for your refund of accumulated contributions".
Mr Wolstencroft was also sent his form by mail. He says there was a covering letter, but he has not kept it. He does not recall what it said and Mr Dubé has been unable to find any copy of it. It may well be that the letter used to send out a Form S2A, was in standard form. The evidence in Re Schofield and Commissioner for Superannuation (AAT 10006, 14 February 1995) was that Mr Schofield's letter of 8 February 1978 was a standard form letter. He worked for Telecom in Queensland and when he resigned the standard form letter referred only to an application for refund of superannuation contributions. Mr Charles was in Western Australia when he resigned from Telecom in the late 1970's. His letter was not in the same form as that sent to Mr Schofield but it did specifically describe the form S2A as "an application for refund of accumulated contributions". The fact that the Telecom booklets stated that there was only one option on resignation does explain why some covering letters such as those sent to Mr Schofield and Mr Charles contained misleading information. There has been no evidence to establish that any Telecom staff as at August 1980 were aware of the preservation option. It is quite possible that the letter to Mr Wolstencroft also contained misleading information, but we can make no finding on that issue. However we do find that it did not alert Mr Wolstencroft to the fact that he had a choice of options.
Mr Mehmet, who was with the Telecom Research Laboratories Human Resources Section in July 1990, wrote to the Commissioner for Superannuation, (T18/34):
Question 5a: In 1980 the personel [sic] function was performed in one central location, when members of the CSS resigned from Telecom they were sent all the relevant forms to complete and onforwarding to AGRBO. If there were any queries regarding benefits these were handled by the central unit in the first instance, if they could not satisfy the query then the member would be advised to contact your office.
Question 5b: Form S2A/S2R have headings that refer to "preservation", however it is impossible for me to say whether Mr Wolstencroft understood the full meaning. Each Staff Area has a copy of Part 12 of the Superannuation Manual, but again I cannot comment on Mr Wolstencrofts [sic] knowledge of it. If he had queried "preservation" I am sure that the Central Personel [sic] Unit would have answered the question.
Question 6: This is difficult to say, however I suggest that if Mr Wolstencroft had read Form S2A/S2R (which I presume he did) he would have seen "preservation" quite clearly, and if he had asked the question, then he would have been given the answer.However Mr Mehmet could not be located and so did not give evidence. It is not clear from his letter whether or not he was with Telecom in 1980. But the significant matter which his letter fails to explain is, if the personnel function was performed in one central location by informed people, how did incorrect and misleading staff booklets (A3 and A7) and a circular (A2) and Guidelines (A4 and R4) come to be published in 1979 and 1983?
We find:
(i)When Mr Wolstencroft resigned from Telecom in August 1980 and completed the form S2A, he believed he had no other option than to obtain a refund of his accumulated superannuation contributions with interest. He was totally unaware that the preservation option applied to him.
(ii)His misconception of his entitlements and his lack of knowledge of the preservation option was common among Telecom employees at that time. That was Mr Wolstencroft's evidence and also the evidence of Mr Sexton. It is supported by the publications received in evidence (A2, A3, A4 and A7). Our finding to that effect is consistent with those in many other Tribunal decisions concerning Telecom employees seeking to make a late election under the Act.
(iii)Mr Wolstencroft's lack of appreciation of his rights was shared by those within Telecom who were responsible for the production of the following publications:
Conditions of Employment
All you need to know or where to find out - Telecom Australia Edition 2 March 1979 (A7)
· Conditions of Employment
All you need to know or where to find out - Edition No 3 1983 Telecom Australia (A3)
Personnel and Industrial Relations Section Guidelines B10/3/1f and B10/3/11 (A4).
Superannuation Circular (A2).
Personnel and Industrial Relations Section Guidelines B10/3/1f and B10/3/12 (R4).
(iv)Mr Wolstencroft was aware that by resigning he was losing the benefit of the employer contributions to his superannuation, but he believed he could not preserve that benefit.
(v)When Mr Wolstencroft signed his form S2A he did not "choose" the option "apply for a refund of accumulated contributions". He believed he had no choice and that the other options on the form did not apply to him.
(vi)Whatever the covering letter said, it did not alert Mr Wolstencroft to the fact that he could make a choice of different options.
(vii)The form S2A signed by Mr Wolstencroft was perfectly consistent with his understanding of his rights, and therefore did not trigger any request by him for further information.
(viii)In relying on his knowledge and that of his workmates and those responsible for publishing Telecom personnel booklets, Mr Wolstencroft was acting quite reasonably. We do not share the view of the Tribunal in Re Chalk that it was negligent or equivalent to taking advice in a bar.
(ix)Mr and Mrs Wolstencroft did not include the expected refund in their set up costs or financial projections for their new venture.
(x)Mr and Mrs Wolstencroft had no need of the money when it was received and within a month had paid out $5,500 of the $6700 to Mrs Wolstencroft's parents as final repayment of an open ended, interest free loan, which was not required to be repaid.
(xi)If Mr Wolstencroft had known that he could elect to preserve his superannuation within the CSS, and that by doing so he would retain the benefit of the employer contributions made during his 21 years of service, which would increase the pension payable on retirement, he would have chosen that option.
is it desirable that the late election be recognised?
The last issue is whether it is desirable that Mr Wolstencroft's late election in 1990 should be recognised under s 157(1) of the Act. The law on that issue is explained in the Federal Court decisions of Chalk v Commissioner of Superannuation (1994) 33 ALD 420 and Commissioner v Superannuation and Boardman (1994) 33 ALD 569.
In Chalk, the Full Court dismissed an appeal by Mr Chalk who resigned from Telecom because of serious health problems in his family. He had received a refund of his contributions after he resigned in 1976. In 1978 he rejoined Telecom. Like many Telecom employees whose matters have subsequently been to the AAT or the Federal Court, it was not until 1990 that, "he became aware of the right to make a late election to preserve benefits, subject to the favourable exercise of the s 157 discretion by the Commissioner" (p423). He wrote requesting permission to make a late election. That was refused. He applied to the AAT and the decision was affirmed.
The AAT in Chalk had found that Telecom employees in the late 1970's were not advised of their right to preserve their benefits, and that the administration of Telecom in the late 1970's (p423):
seems to have proceeded on the incorrect assumption that a resigning contributor to the Superannuation Fund was only entitled to a refund of contributions, plus interest.
Mr Chalk was unsuccessful because the Tribunal rejected his evidence that if he had known of his right he would have elected the preservation option. The Full Court quoted the Tribunal's finding (p423):
We are not satisfied that if the applicant had been given adequate advice about preservation of benefits on the day he resigned that he would have done any differently than accept a refund of his interest in the Superannuation Scheme.
The Full Court said (p424):
The Tribunal came to this conclusion primarily because Mr Chalk had in 1975 and 1976 shown no interest in continuing in the Scheme. He did not continue his contributions whilst he was on leave and, before retirement, he made no enquiry of any person who would have been in a position to give him informed advice as to his rights in relation to the Scheme. Moreover, he had a use for the Superannuation moneys for he had borrowed to purchase the farm.
No question of law arises out of this finding of fact by the Tribunal, which made its finding after hearing the evidence of Mr Chalk. Counsel for Mr Chalk has submitted that the Tribunal's conclusion was unreasonable in the Wednesbury sense, (Wednesbury Corporation v. Ministry of Housing and Local Government (1965) 1 WLR 261). However, neither the finding nor the decision of the Tribunal based upon the finding was perverse, irrational or unreasonable. The Tribunal was the decision-maker of fact. See Australian Broadcasting Tribunal v. Bond (1990) 170 CLR 321 at 355-360. As s.44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) limits an appeal to a question of law, the challenge to the decision on this ground must fail.
We find it difficult to see how there can be any expectation that an employee will show interest in continuing in the CSS, when he works in an organisation where the administration and personnel staff incorrectly assume "that a resigning contributor to the Superannuation Fund [is] only entitled to a refund of contributions plus interest". The expectation to show interest in remaining in the scheme seems unrealistic when incorrect statements of superannuation entitlements on resignation are publicised in booklets which purport to advise Telecom employees of their employment rights.
The Full Court in Chalk made it clear that Mr Chalk failed because of the Tribunal's findings of fact, which it could not disturb, as there was no error of law in those findings. But Davies J, with whom Black CJ and Cooper J agreed, went on to explain the operation of s 157(1) of the Act. He made the following points:
(i)Most provisions which authorise an extension of time are instances of beneficial legislation which, accordingly, should be applied beneficially (p425).
(ii)It is important to form a view whether it is in the interests of justice that time be extended (p425).
(iii)As explained in Comcare v A'Hearn (1993) 45 FCR 441, it is not a precondition for success that an acceptable explanation of delay be given (p425).
(iv)In the exercise of the discretion it may be more important to consider the consequences of extending or refusing time than to debate the reasons why the act was not done in time (p425).
(v)It may be of little consequence that the employee did not enquire as to his or her right to elect under s 137 or even that the employee decided positively not to elect. Section 157 confers a discretion which operates in either case (p426).
(vi)One of the objects of s 157 is to alleviate the consequences of a change of circumstances (p426).
(vii)In Mr Chalk's case, the change in circumstance was that he resigned from Telecom intending to establish himself in an entirely new career as a farmer but was unsuccessful in doing so. And so he again took up employment with Telecom, after a lapse of two years (p426).
Davies J, then commented on the operation of the superannuation scheme (p426):
The Superannuation Scheme operates in the context of Commonwealth employment. The rights which the Act confers are statutory rights. But the entitlement to participate in the Scheme and to receive the benefits of the Scheme do not merely have a statutory base. They form an incident of the employment. Thus, a decision-maker exercising the s.157 discretion could think it fair to the employer, to the employee, and to the Scheme that the benefit should be calculated by reference to the totality of the employee's service and to the totality of his contributions, including any sums which must be refunded.
Davies J explained how the Act takes into account the employee's years of contributing service in calculating the benefit to which an employee is entitled. He said (pp426-427):
"Mr Chalk has in fact served approximately 35 years going back to 1957. If his service between 1957 and 1976 were not recognised, the employer could have an undue gain. The late return of the contributions may not be a matter of concern. In his reasons for decision, the Commissioner's delegate, Mr R.C. Whithear, who has had long experience in these matters, explained:-
"If a late election is allowed, Mr Chalk will have had the use of his refunded contributions (or, at least, the net amount if any tax was paid on them) from 1976, and the Superannuation Fund will have been deprived of their use; and to that extent there is an element of advantage to him and of disadvantage to the fund in such a course. On the other hand, he will not have the advantage of receiving interest on his contributions over the period during which they were not in the fund."
Thus, because the moneys which would have to be repaid under s.138(11)(b) would not commence to accrue interest until repaid, it may be that no unfair advantage would result from a late election."
Unfortunately for Mr Chalk, as those matters had not been raised in the original hearing or in the amended notice of appeal, the Court decided that they provided no ground for allowing the appeal.
Commissioner for Superannuation v Boardman concerned a similar fact situation to Chalk. Mr Boardman had also left his public service employment, because of a child's health problem. Mr Boardman gave evidence that although he was asked to sign the a form which contained three options, he was told that the only option available to him was to apply for a refund of accumulated contributions. Mr Boardman gave evidence that his father had been a Commonwealth Public Servant and that he knew of the good benefits available to him on retirement, and thus would have elected to preserve his entitlement had he known that it was an option open to him. The Tribunal found that preservation of superannuation benefits on resignation was virtually unknown among personnel officers in the Adelaide headquarters of the Department of Transport in 1979. The Tribunal found that the correct and preferable decision was that Mr Boardman's election, which was over 10 years late, should be recognised.
The Federal Court dismissed the Commissioner's appeal. Von Doussa J stated that the discretion in s 157(1) is unconfined in its terms. He quoted (at p576) from Gummow J's observations in Bond Corporation Holdings Limited v Australian Broadcasting Tribunal (1988) 84 ALR 669 at 680:
"Where a statute confers a discretion which is in its terms unconfined, the factors that may be taken into account in the exercise of the discretion are similarly unconfined, except insofar as there may be found in the subject matter, scope and purpose of the statute some implied limitation on the factors to which the decision-maker may legitimately have regard."
His Honour then explained that the purpose of the Act, as its long title indicates, is to make provision for and in relation to an occupational superannuation scheme for eligible persons. He continued at p576:
"The benefits payable under that scheme reflect, among many considerations, the length of service of, and contributions by, the eligible employee. On the one hand an election recognised under s.137(1) will extend to a person who has periods of broken service, benefits which fully reflect the total period of service as an eligible employee. That would be in accordance with the general policy of the Act. On the other hand the orderly administration of the superannuation scheme requires that time limits be applied, generally speaking, so that decisions which impinge on investment and accounting procedures are made soon after an event such as resignation occurs. Matters of this kind set the context within which the discretion under s.157(1) is conferred, and the context in which the discretion must be exercised, but in the abstract they do not elucidate the meaning of "desirable" or dictate criteria by which the Commissioner is to be "satisfied that in all the circumstances of the case it is desirable that the election should be recognised"."
Von Doussa J, at p576, held that the word "desirable" in the context of s 157(1) means "fair in order to do justice between the person who seeks to make the late election and the requirements of the administration of the fund". He added at p577 that whether a late election is "desirable" is to be judged objectively having regard to all the circumstances of the case.
Mr Dubé placed some emphasis on one passage in the reasons of Von Doussa J. At p579 his Honour said:
This is not a case where the accumulated contributions were immediately invested in a business enterprise, the pursuit of which was a reason for the resignation. In such a case the use of the money would in itself often indicate that a deliberate decision had been made to reject the option of preservation in favour of receiving the immediate benefit of the accumulated contributions. In this case the respondent placed the accumulated contributions in a savings bank account.
In the circumstances of the present case, it was necessary to consider whether the alleged misinformation was the cause of the respondent not making an election under s.137(1) when he resigned, as his whole case was based on the assertion that the "election" recorded in the Form S2A was not an election at all, but the product of misinformation that directed that he fill out the form in one way only. It was necessary for the respondent to establish that the Form S2A did not record a deliberate and informed decision by him at the time to take accumulated contributions, not preservation. However in other cases whether there was a deliberate and informed decision to take accumulated contributions may not be critical in the exercise of the discretion under s.157(1). This was recognised in Chalk v Commissioner for Superannuation . . .In this matter Mr Wolstencroft, like Mr Boardman asserted that the apparent "election" in the Form S2A, "was not an election at all" and "did not record a deliberate and informed decision by him at the time to take accumulated contributions not preservation". We have already found that Mr Wolstencroft did not make an election in 1980, because he never knew he could make a choice for preservation. Nor did he need the money he received by way of refund of contributions for his new business enterprise. He paid most of the money to his parents-in-law very soon after receipt.
It is clearly desirable from Mr Wolstencroft's point of view that his late election be recognised. If the election is recognised he will have to refund $6,700.88 and will receive an enhanced pension on retirement. An indication of the amount of enhancement, had he remained with the CSS, is contained in T33/84 as follows:
Pension % of Salary on retirement Age 55 60 65
with preservation: 38.438 47.25 52.50
without preservation: 22.50 36.00 45.00
As Mr Wolstencroft has now joined the TSS it is not so clear what the enhancement effect will be. The delegate in making the reviewable decision (T33) on 9 July 1994 wrote:
If he chooses to join the Telecom Superannuation Scheme (TSS), if his application to make a late election to preserve his rights is successful his "benefit multiple" on transferring will increase with a consequent significant enhancement of his benefits under that scheme (the exact amount only being able to be determined by the TSS).
The Act is beneficial legislation and should be applied beneficially (Chalk p425).
It is necessary to form a view as to whether it is in the interests of justice that time be extended (Chalk p425). It is not necessary that an acceptable explanation of the delay be given (Chalk p425), but Mr Wolstencroft's evidence is that he did not learn of the preservation option until 1990 when he attended seminars on the new TSS scheme where it was explained. He then made his request in May 1990 (T14/20).
The Full Court in Chalk expressly stated that it is more important to consider the consequences of extending or refusing to extend time than to debate the reasons why the act was not done in time (Chalk p425). The Full Court said that it may be of little consequence that the employee did not inquire as to his right to elect under s 137 (Chalk p426). In this matter Mr Wolstencroft has in any event explained why he did not inquire as to his right to elect. It was because he did not know he had any right to elect. In the circumstances we find that was a reasonable misapprehension of his rights. It does not indicate any negligence or carelessness or lack of interest in his entitlements. There is however a question whether even such a lack of interest should disqualify an applicant from a favourable exercise of the discretion.
The Full Court in Chalk said the discretion operates even if the employee had decided positively not to elect (p426). Mr Dubé relied on Guidelines on the exercise of the discretion (T5 pp8 and 9) prepared by the Superannuation Board. Mr Moore acknowledged that the Tribunal should consider the Guidelines, but he challenged their correctness.
Mr Moore referred to Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 at pp69-70 where Bowen CJ and Deane J explained:
In a matter such as the present where it was permissible for the decision-maker to take relevant government policy into account in making his decision, but where the Tribunal is not under a statutory duty to regard itself as being bound by that policy, the Tribunal is entitled to treat such government policy as a relevant factor in the determination of an application for review of that decision. It would be contrary to common sense to preclude the Tribunal, in its review of a decision, from paying any regard to what was a relevant and proper factor in the making of the decision itself. If the original decision-maker has properly paid regard to some general government policy in reaching his decision, the existence of that policy will plainly be a relevant factor for the Tribunal to take into account in reviewing the decision. On the other hand, the Tribunal is not, in the absence of specific statutory provision, entitled to abdicate its function of determining whether the decision made was, on the material before the Tribunal, the correct or preferable one in favour of a function of merely determining whether the decision made conformed with whatever the relevant general government policy might be.
Similarly, at p80, Smithers J said:
In the performance of the Tribunal's function it is essential that a policy adopted by an administrator should be under review to the same extent as his evaluation of relevant matters and his general process of reasoning, not for the purpose of deciding whether it was reasonable for the administrator to make the decision he did, but for the purpose of deciding whether, by the objective standard of good government it was the right decision to make.
Mr Moore challenged the correctness of Guideline 1 which states:
"1. The Board is of the view that, notwithstanding any current views about the adequacy of forms S2A and S2R, it is not desirable for a late application to be granted solely or largely on the grounds that the applicant now claims not to have properly understood the form at the relevant time;
· in the absence of contrary evidence, completion of form S2A/S2R will be taken to signify an informed decision to select a refund and forgo preservation.
· the expectation is that an applicant who may not have understood the choices available should have made inquiries prior to completing the form S2A/S2R. Failure to have made such inquiries without good reason will be taken as signifying an informed choice unless, had they sought advice on the options available from the appropriate official source relevant to their workplace or circumstances, they would have received materially erroneous or misleading advice that would have caused them to misunderstand their options."
The last paragraph of that Guideline seems to have no basis in the decisions of Chalk and Boardman.
Mr Moore referred the Tribunal to Re Lamb v Commissioner for Superannuation (AAT 11014, 17 June 1996). The Tribunal in Re Lamb, at paragraph 17, questioned the statement in Re Liddle and Commissioner for Superannuation (1991) 14 AAR 456 where Deputy President Forgie, in her minority reasons, held that the wording of the form was sufficient to put an applicant "on notice" as to the existence of the preservation option. The Tribunal in Lamb quoted with approval from the reasoning in Re Boardman and Commissioner of Superannuation (1993) 30 ALD 619 at paragraphs 48 and 49, p635:
(48) This tribunal is of the view that the nature of the superannuation legislation, and the poor level of knowledge amongst personnel staff as to superannuation rights, in particular as to preservation, which was clearly evidenced throughout these entire proceedings, is such that it is far too onerous to place any sort of "duty of enquiry" upon an applicant who has not been adequately informed or who, as in this case, has been misinformed as to their rights. Even when Mr Boardman became aware of preservation in 1987, we are of the view that the circumstances of this case are such that there was no duty on him to make further enquiries such as could have led him to the further discovery of late election. From the evidence presented to this tribunal, it is very likely that any efforts to obtain further information would have been thwarted by the severe lack of knowledge, even by the "experts" on this issue. We find that the applicant did not at any stage "sleep on his rights".
(49) We are of the view that employees who resign and are contributors to the CSS, should be given adequate information by personnel officers and that nothing less than an estimate of the benefits available at age 55 calculated in accordance with the example in Attachment A to ex R2, and placed in front of the resigning employee would satisfy the criteria that a person be properly informed as to his or her rights.
The Tribunal in Lamb pointed out that the appeal from the Tribunal decision in Boardman was dismissed, and that Von Doussa J said the Tribunal had made no error of law (50 FCR 236 at 251).
Mr Dubé acknowledged that Guideline 1 is contentious. First he referred to "the expectation . . ." that an applicant who may not have understood the choices available should have made enquiries prior to completing the form S2A. Mr Dubé explained that some Tribunal decisions have held that the mention in the form's heading, and in the body of the form of the option to "elect for preservation of superannuation rights", is sufficient to put a contributor on notice that there is or may be a preservation option. (See Re Schwarze and Commissioner for Superannuation (unreported A94/123, 3 February 1995). However other decisions such as Re Charles and Commissioner for Superannuation (1993) 18 AAR 61, Re Morgan and Commissioner for Superannuation (unreported W92/200, 12 March 1993), Re McKnight and Commissioner for Superannuation (1998) 49 ALD 84 and Lamb have rejected the submission that the form is sufficient to put a contributor on notice of that option.
There are problems with Guideline 1. First there is the issue of whether or not an informed decision was made. That should be decided on the evidence rather than according to any Guideline. But more significantly, as Mr Moore submitted, there is no basis in the Federal Court decisions for imposing any expectation or obligation on employees who did not understand either that they had a choice, or what their choice was. It is difficult to suggest circumstances where it would be appropriate to take failure to make inquiries as signifying an informed choice. Certainly this is not such a situation.
On the issue of the weight to be given to the fact that the preservation option was not mentioned in the Telecom Conditions of Employment booklets, Mr Dubé pointed out that A3 and A7 state that the description of Superannuation "is intended mainly for new contributors to the scheme introduced on 1 July 1976", and state that contributors to the superseded scheme "should refer to more detailed documents for carry-over conditions".But there was no evidence that there was any significant difference in the preservation option for contributors to the new scheme and those who had transferred from the superseded scheme.
the justice of recognising a late electionMr Dubé explained that in weighing the benefits to Mr Wolstencroft of exercising the discretion to recognise his late election against the disadvantage of doing so, the disadvantage is not to Comsuper or to an employer but to consolidated revenue. He said it would only be consolidated revenue that "might be seen as making some sort of benefit out of Mr Wolstencroft's misfortune. The moneys only get paid out of consolidated revenue when a benefit becomes payable" (trans. p92).
The superannuation scheme operates in the context of Commonwealth employment. The rights under the scheme are an incident of employment. It was suggested by the Federal Court in Chalk at p426, that a decision-maker could think it fair to the employer and to the employee that the employee's benefit under the scheme should be calculated by reference to the totality of his service and the totality of his contributions including any sums which must be refunded. We do think that is fair. Like Mr Chalk, Mr Wolstencroft has been a Telecom employee for a very long time, in fact even longer than Mr Chalk's 35 years. Mr Wolstencroft has been with Telecom or its predecessor and successor for almost 40 years, from February 1959 to August 1980 (21 years) and February 1983 to date (18 years).
We do not see any injustice to consolidated revenue in the recognition of a late election. Mr Wolstencroft has paid superannuation contributions throughout those 39 years. Although the contributions for the first years were refunded to him he will have to refund them if his late election is recognised. He has been trying to do so for over 10 years.
There is no significant disadvantage to consolidated revenue. As the Federal Court explained in Chalk (see pp426-427), Mr Whithear, the Commissioner's delegate with long experience in these matters had acknowledged that a member whose late election is recognised does not receive interest on contributions during the period the contributions were not in the fund. Davies J said (at p427), "Because the monies which would have to be repaid do not accrue interest until repaid it may be, and we find it is the case, that no unfair advantage would result from a late election". We find that is the situation here. On the other hand an unfair disadvantage, or as Mr Dubé said, "a misfortune" would accrue to Mr Wolstencroft, if his late election were not recognised so as to allow him to receive recognition of all his years of employment and contribution to the superannuation scheme.
Both Mr Moore and Mr Dubé recognised that there were similarities between this matter and Re Schofield. As well as also being a Telecom employee, Mr Schofield relied on the Telecom booklets which contained incomplete and misleading information to Telecom employees about their superannuation entitlements. He did not make any further enquiries. The Tribunal said at paragraphs 43 and 45:
43. It is quite clear to us that the advice given by the Commissioner himself at this time was accurate. He correctly states the position in his pamphlet. The difficulty for the Commissioner was that the information, for some reason, was not known to the personnel section of Telecom or to Telecom generally. This leads us to conclude that even if Mr Schofield had decided to approach the personnel section for advice, he would never have been told that he had an option to preserve his superannuation benefits. We are supported in this finding by Telecom's letter to Mr Schofield on 8 February, 1978. That letter clearly contemplates that a person who resigned had only the option of applying for a refund of contributions and accumulated interest. Indeed, the letter told those who had not done so that it was in their "own interests to complete and return at an early date the application form for refund of superannuation contributions" (emphasis added, . . .). Furthermore, even had Mr Schofield approached the personnel section in 1982 when he resumed employment with Telecom, it is apparent that he would have been fortified in his incorrect view. This is apparent from Telecom's letter dated 3 October, 1982 and offering employment to a person other than Mr Schofield . . .
. . .45. Taking all of the circumstances into account, we are satisfied that it is desirable that Mr Schofield's late election should be recognised. Had he known of his right to elect to preserve his superannuation rights he would have done so. While he did not make any enquiries as to his rights, it would not have made any difference if he had for his own opinion would merely have been confirmed as Telecom itself (or at least in its Brisbane office) was not, at the time, aware that such rights existed. Mr Schofield's understanding of his rights, although incorrect, was reasonably based on sources he should have been able to rely upon – his employer's personnel section and his employer's statement of the conditions of his employment.
There are differences between that matter and this. Mr Wolstencroft does not have a copy of the letter sent to him. The reason for his resignation was not to gain experience relevant to his Telecom duties. He gave no evidence that he had been to any talk about superannuation. But there are also a number of common facts most importantly the evidence as to a common (mistaken) understanding among Telecom employees as to their superannuation rights on resignation. There is also evidence of a desire to retain contacts with Telecom even after resignation. In Mr Wolstencroft's case that was by maintaining his union membership even when it was not relevant to his work after resignation. Further both Mr Schofield and Mr Wolstencroft knew that if they wanted to at a later date, they may well be able to return to Telecom. Similarly they were both aware of the fact that by resigning they lost the benefit of approximately 20 years of employer contributions, but they believed that there was no alternative.
We are of the view that it is in the interests of justice and desirable that Mr Wolstencroft's late election be recognised.
The decision under review will be set aside. The matter will be remitted to the Commissioner for Superannuation with the direction that the election, made by Mr Wolstencroft on 17 May 1990 (T14/28) be treated as if it had been made within the period allowed by s 137(1) of the Act.
I certify that the 81 preceding paragraphs are a true copy of the reasons for the decision herein of Mrs Joan Dwyer, Senior Member, Mr W McLean, Member and Mr G Friedman, Member
Signed: Grace Carney
Personal AssistantDate/s of Hearing 29 August 2001
Date of Decision 12 December 2001
Counsel for the Applicant Mr G Moore
Solicitor for the Applicant Ryan Carlisle Thomas
Counsel for the Respondent Mr B Dube
Solicitor for the Respondent AGS
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