FEDERAL COURT OF AUSTRALIA

Collins v AMP Superannuation Limited [2000] FCA 1110

PRACTICE AND PROCEDURE – application for extension of time to file and serve notice of appeal – whether any prospects of success.

COURTS AND JUDGES – disqualification – judges owning shares in parent company of respondent trustee – whether reasonable apprehension of bias.

Superannuation (Resolution of Complaints) Act 1993 (Cth), ss 14, 46.

Federal Court Rules, O 52, r 15.

Collins v AMP Superannuation Ltd [2000] FCA 290, cited.

Collins v AMP Superannuation Ltd (1997) 75 FCR 565, cited.

Jess v Scott (1986) 12 FCR 187, followed.

Blair v Curran (1939) 62 CLR 464, cited.

Rogers v The Queen (1994) 181 CLR 251, cited.

Webb v The Queen (1994) 181 CLR 41, cited.

Mobil Oil Australia Ltd v Wellcome International Pty Ltd (1998) 81 FCR 475, cited.

Ebner v Official Trustee in Bankruptcy (1999) 91 FCR 353, cited.

Clenae Pty Ltd v Australia & New Zealand Banking Group Ltd [1999] VSCA 35, followed.

Re Jury; Ashton v Prentice (1999) 92 FCR 68, cited.

KIMBERLEY ELLEN COLLINS & ANOR v AMP SUPERANNUATION LIMITED & ORS

A 26 of 2000

SACKVILLE, KATZ & KENNY JJ

7 AUGUST 2000

CANBERRA

THE COURT ORDERS THAT:

1.                  The application for an extension of time be dismissed.

2.                  The applicants pay the costs of the first and second respondents.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

THE COURT:

THE APPLICATION FOR EXTENSION OF TIME

1                     This is an application for an extension of time in which to file and serve a notice of appeal from a judgment of Finn J, given on 8 March 2000: Collins v AMP Superannuation Ltd [2000] FCA 290. His Honour granted the present applicants an extension of time in which to file and serve an appeal against a decision of the Superannuation Complaints Tribunal (“the Tribunal”), given on 27 October 1997. Nonetheless, Finn J dismissed the appeal.

2                     The effect of Finn J's orders was to leave in place the determination of the Tribunal.  By that determination, the Tribunal dismissed complaints made by the applicants concerning a decision made by the first respondent (“the Trustee”) as trustee of the Maritime Officers Superannuation Fund. The Tribunal took this course on the ground that the applicants lacked standing under the Superannuation (Resolution of Complaints) Act 1993 (Cth) (“the Complaints Act”) to make a complaint to it.

3                     To understand the current application for an extension of time, some background information is necessary. Rodney Collins (“the deceased”) died on 19 June 1994. At the date of his death, the deceased had four children. Two were adult sons from a marriage which had been dissolved. They are the second respondents to the current application. The other two children were infant daughters who were born at a time when the deceased was in a de facto relationship. The daughters are the applicants, who proceed by their next friend, their mother.

4                     The deceased was a member of a plan established under the AMP Master Plan Group Deed (“the Deed”) made on 1 February 1990. On the deceased's death, a benefit of approximately $181,000 was payable by the Trustee under the plan. Each of the deceased’s four children was a “Dependant” for the purposes of the plan.

5                     Prior to his death, the deceased nominated his two adult sons as beneficiaries in respect of any benefit payable upon his death. The Trustee decided that, under the Deed, as amended, the two nominated beneficiaries were entitled to the death benefit to the exclusion of the two other children.

6                     The applicants lodged a complaint with the Tribunal, pursuant to s 14 of the Complaints Act.  The substance of the complaint was that the Trustee had acted unfairly and unreasonably in excluding the two infant daughters of the deceased from any entitlement to the death benefit: Complaints Act,  s 14(2).

7                     On 13 November 1996, the Tribunal upheld the complaint and determined that:

·        the nomination by the deceased of his two sons as the beneficiaries entitled to his death benefit was invalid, and;

·        accordingly, the death benefit was payable under the plan to the legal personal representative of the deceased, being his former wife. 

8                     The Trustee then appealed to the Federal Court against the determination of the Tribunal on a question of law, pursuant to s 46 of the Complaints Act.  The Trustee contended that the Tribunal had erred in law in concluding that the nomination was invalid and, in any event, challenged the standing of the daughters to make a complaint under the Complaints Act.

9                     Merkel J upheld the Trustee's appeal: Collins v AMP Superannuation Ltd (1997) 75 FCR 565. His Honour held that the Tribunal had erred in law in a number of respects. The errors included taking into account amendments to the Deed that had come into force only after the deceased's death and in failing to consider the question of the standing of the two daughters to make a complaint to the Tribunal.

10                  Significantly for the purposes of the present application, Merkel J held that the Tribunal had erred in law by failing to give effect to the nomination form executed by the deceased. According to his Honour, the Deed, as a matter of construction, gave the Trustee no discretion as to the distribution of the death benefit unless the nominations were revoked or were otherwise ineffective. Since the nomination form had not been revoked and was not otherwise ineffective, the decision of the Trustee to pay the death benefit to the two sons of the deceased was the only decision open to it. In these circumstances, as a matter of construction of the Complaints Act, the Tribunal was obliged to affirm the decision as fair and reasonable. In the result, Merkel J set aside the decision and remitted the matter to the Tribunal to be determined in accordance with law.  His Honour's reasons made it clear that it was to be open to the Tribunal to consider the standing of the daughters to lodge their complaint. 

11                  In the course of argument on this application, there was some discussion about the purpose of Merkel J’s order remitting the matter to the Tribunal, having regard to the conclusions of law reached by his Honour. Mr Crowe, who appeared on behalf of the Trustee, suggested that one reason was to give the applicants an opportunity to adduce further material relevant to the validity of the nomination made by the deceased. In the event, the applicants adduced no further material before the Tribunal bearing on this question.

12                  The Tribunal, on the remittal of the proceedings, concluded (consistently with Merkel J’s judgment) that the deceased’s nomination of his two sons as beneficiaries had been valid. It followed that the Trustee's decision to pay the death benefit to the two sons was the only decision open to it as a matter of law.

13                  The Tribunal also found that the complainant, acting on behalf of the deceased's two daughters, lacked standing to lodge a complaint under s 14 of the Complaints Act.  It therefore dismissed the complaint for want of standing. The Tribunal pointed out in its reasons that, even if it had found that the daughters had standing to lodge a complaint, it would have been obliged to affirm the decision of the Trustee as fair and reasonable, since that decision was the only one open.

14                  As we have already noted, Finn J granted the applicants an extension of time in which to file and serve an appeal against the Tribunal's decision, but his Honour dismissed the appeal. His Honour observed that it was “astonishing” that the applicants, by their next friend, had challenged Merkel J’s view as to the construction of the Deed (at [8]-[9]). He thought that Merkel J’s view was clearly right. He also thought that Merkel J’s opinion that the applicants lacked standing was clearly right.

15                  Notwithstanding these views, Finn J considered that the Tribunal had failed to accord procedural fairness to the applicants because it had not taken into account certain submissions made by them. Those submissions, however, had not gone to any issue properly before the Court and his Honour concluded that they amounted merely to criticisms of the Trustee. Since a further remittal to the Tribunal would have been futile, his Honour dismissed the appeal.

16                  Federal Court Rules, O 52 r 15(2) empowers the Court “for special reasons” to grant leave at any time to file and serve a notice of appeal.  The well known principles governing the exercise of this power were stated by the Full Court in Jess v Scott (1986) 12 FCR 187, at 195. There is no need to repeat the principles here.

17                  The fundamental difficulty facing the applicants, in our view, is that there is no reasonable prospect of any appeal from Finn J succeeding. The proposed notice of appeal does not identify with any clarity the errors said to have been made by Finn J. In any event, an appeal could not achieve any result of practical benefit to the applicants unless they were able to show that Merkel J had been wrong in his construction of the Deed or of the Complaints Act. Finn J thought that Merkel J’s construction was plainly correct and we share that view. Any appeal would therefore be futile.

18                  We should add that, in the course of oral submissions, Ms Piscioneri (who appeared as the next friend of the applicants) referred to the written submissions which Finn J said the Tribunal had not taken into account. In our opinion, those written submissions do not take the matter any further. As we have noted, Finn J characterised those submissions as mere criticisms of the Trustee and expressed the opinion that they were not relevant to any of the issues that the Tribunal had to decide.  Nothing has been said that suggests that Finn J was incorrect in so characterising the submissions.

19                  It is perhaps understandable that the applicants should wish to criticise the manner in which the Trustee discharged its responsibilities under the Deed, in particular the use of a nomination form that, in certain respects, was misleading. That issue was, however, addressed fully by Merkel J in his reasons and provided the basis for the costs order against the Trustee.  The criticisms made by the applicants in their written submissions simply do not address the issues that the Tribunal had to determine in dealing with the matter conformably with the orders made by Merkel J.

20                  We should add one further observation. Although the point was not taken before Finn J, even if the applicants had an arguable case on the issue of construction of the Deed and of the Act, they would appear to be precluded from relying on it in these proceedings by reason of the principle of issue estoppel.  It must be remembered that the applicants did not appeal from the judgment of Merkel J.  His Honour decided that the Trustee had no choice but to give effect to the deceased's nomination of beneficiaries and that the Tribunal had been wrong in overturning the Trustee's decision.  These holdings would seem to have been the legal foundation for the orders made by his Honour. 

21                  In Blair v Curran (1939) 62 CLR 464, at 532, Dixon J stated that issue estoppel arises where:

“for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied, the existence of which is a matter necessarily decided by the prior judgment, decree or order.”

See also Rogers v The Queen (1994) 181 CLR 251, at 261-262, per Brennan J.  In the circumstances identified in Blair v Curran, the person adversely affected by the decision is prevented from reagitating the same legal issues in later proceedings between the same parties. It is not easy to see why those principles would not apply in the present case.

22                  In our opinion, the application for an extension of time should be dismissed. 

THE DISQUALIFICATION APPLICATION

23                  We should record that at the outset of the hearing Ms Piscioneri made an application that two members of the Bench, Sackville and Kenny JJ, disqualify themselves from participating in the hearing of the application for an extension of time.  The application was prompted by a letter sent by Sackville J to the parties on 1 August 2000.  The letter advised of two matters.  The first was that his Honour held shares in a publicly listed company, AMP Ltd which, as Mr Crowe confirmed, is the parent company of the Trustee.  The second was that his Honour held a policy with AMP Life Ltd, which, like the Trustee, is a subsidiary of AMP Ltd.  Kenny J subsequently advised the parties by letter that she was in a similar position. 

24                  Ms Piscioneri did not advance any detailed submissions in support of her application.  She indicated, however, that her objection to the participation of Sackville and Kenny JJ was on the ground that there could be a reasonable apprehension of bias by reason of their respective shareholding and policies.

25                  In Australia, the High Court has held that the proper test for governing the disqualification of judges is whether fair-minded people might reasonably apprehend or suspect that the judge has prejudged or might prejudge the case: Webb v The Queen (1994) 181 CLR 41, at 47, n 36, and the authorities cited there; Mobil Oil Australia Ltd v Wellcome International Pty Ltd (1998) 81 FCR 475, at 493.

26                  It is to be borne in mind that neither Sackville J nor Kenny J holds any shares in the Trustee.  Nor do they hold any policies with the Trustee.  But even if they held shares in the Trustee, or were policyholders with the Trustee, it is difficult to see how their interests could create a reasonable apprehension in fair-minded people that they might have prejudged the outcome of the present application.

27                  The parties to the application are as follows:

·        The applicants are children of a deceased member of a plan established under the AMP Master Plan Group Deed. Through their next friend, Ms Piscioneri, the applicants seek orders, the effect of which would be to establish their entitlement to a death benefit payable under the Deed in respect of the death of the deceased.

·        The first respondent is the Trustee of the Plan pursuant to the Deed.

·        The second respondents are the adult children of the deceased who claim to be entitled to the death benefit by reason of the nomination executed by the deceased in their favour.

28                  It will be seen that the Trustee has no interest in the outcome of the proceedings, other than the possibility that it might be exposed to an unfavourable costs order or might receive the benefit of a costs order.  Indeed, Mr Crowe pointed out that, even if a costs order were to be made against the Trustee, the likelihood is that, in the absence of express provisions to the contrary, the costs will be paid out of funds held by the Trustee in its capacity as such.  It is true that in the proceedings determined by Merkel J, the Trustee was ordered to pay certain costs out of its own funds and on an indemnity basis.  No issue, however, arises about that order in the present proceedings.  Nor is any similar order sought.

29                  If AMP Ltd were itself the Trustee, the possibility that the Court might make a costs order for or against it could hardly engender in fair-minded people a reasonable apprehension that a Judge holding shares in the company might have prejudged the proceedings.  The hypothetical members of the public would need to take account of the fact that AMP Ltd is a publicly listed company with billions of dollars in assets and many thousands of shareholders.  Its fortunes could hardly be significantly affected by a costs order arising out of a case requiring less than one day of Court time.

30                  Although Ms Piscioneri did not refer to it, it is also necessary to take account of the principle that a judge having a direct pecuniary interest in the outcome of proceedings ought to disqualify himself or herself.  In Ebner v Official Trustee in Bankruptcy (1999) 91 FCR 353, at 366, a Full Court accepted, despite the reservations of a number of learned commentators, that unless and until the High Court decides otherwise, the law requires disqualification where a judge has a direct pecuniary interest in the outcome of the proceedings.  In Clenae Pty Ltd v Australia & New Zealand Banking Group Ltd [1999] VSCA 35, the Victorian Court of Appeal held that the direct pecuniary principle should not be applied to a case where the judge merely holds a small shareholding in one party to the proceedings.  Both Ebner and Clenae have been the subject of grants of special leave to appeal to the High Court, and judgment is reserved.  For the purposes of this case, we take the applicable principles to be those laid down by the Court in Ebner.

31                  In that case, it was held that a judge who owned shares in a company which, although not a party to the proceeding, might have derived some benefit from them, was not disqualified unless it could be shown that there was a reasonable apprehension of bias.  This approach was later followed by a Full Court in Re Jury; Ashton v Prentice (1999) 92 FCR 68.  In the present case, neither Sackville J nor Kenny J holds shares in a party to the proceeding.  The shares are held in a publicly listed company, of which the Trustee is a subsidiary.

32                  It is, perhaps, conceivable that AMP Ltd, the publicly listed company, might obtain some very small indirect advantage from a costs order in favour of the Trustee.  On the reasoning in Ebner and Re Jury, that fact does not convert a shareholding in the publicly listed company into a direct pecuniary interest in the Trustee itself.  There is, therefore, no basis for automatic disqualification by reason of the shareholding in AMP Ltd.

33                  The position is a fortiori with respect to the policies held with AMP Life Ltd.  The outcome of the present proceedings would seem to be entirely irrelevant to policies the performance of which depends upon investment strategies undertaken by the particular manager.

34                  It was for these reasons that the Court took the view that neither Sackville J nor Kenny J was disqualified from participation in the proceedings.  The decision was taken by the Court in conformity with the approach taken in Re Jury:see at [19].

CONCLUSION

35                  The application for an extension of time in which to file and serve a notice of appeal should be dismissed.  The Court is of the view that costs should follow the event.  Accordingly, the applicants must pay the costs of the first and second respondents.

Associate:

Dated:              7 August 2000