FEDERAL COURT OF AUSTRALIA

Smith v Superannuation Complaints Tribunal [2008] FCA 1528

SUPERANNUATION – appeal from decision of Superannuation Complaints Tribunal – Tribunal denied jurisdiction to hear complaint – procedural fairness

Held: appeal allowed – Tribunal failed to act in accordance with procedural fairness by failing to give applicant opportunity to make submissions regarding jurisdiction – case upon remission to Tribunal not hopeless

Superannuation (Resolution of Complaints) Act 1993 (Cth) s 14(6B), s 46

Auspine Staff Superannuation Pty Ltd v Henderson [2006] FCA 1281 cited

Clements v Independent Advisory Committee [2003] FCAFC 143 followed

Cole v Cunningham (1983) 49 ALR 123 cited

Cullinane v Mercer Benefit Nominees Ltd (2006) 152 FCR 1 cited

Employers First v Tolhurst Capital Ltd (2005) 143 FCR 356 followed

Kioa v West (1985) 159 CLR 550 cited

Nguyen v Minister for Immigration and Multicultural Affairs (1998) 88 FCR 206 cited

Santa Sabina College v Minister for Education (1985) 58 ALR 527 cited

SHAUN SMITH v SUPERANNUATION COMPLAINTS TRIBUNAL and LOCAL GOVERNMENT SUPERANNUATION SCHEME (NSW)

QUD 5 of 2008

COLLIER J

15 OCTOBER 2008

BRISBANE

THE COURT ORDERS THAT:

1.                  The decision of the first respondent be set aside.

2.                  The complaint be referred to the Tribunal for hearing and determination according to law.

3.                  The second respondent pay the applicant’s costs on and incidental to this application.

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

REASONS FOR JUDGMENT

Introduction

1                     This is an appeal from a decision of the Superannuation Complaints Tribunal (“the Tribunal”) given on 7 December 2007. The Tribunal found that it did not have jurisdiction to deal with the applicant’s complaint pursuant to s 14(6B) of the Superannuation (Resolution of Complaints) Act 1993 (Cth) (“the Act”) and it is from this decision that the applicant appeals.

2                     A party may appeal to the Federal Court, on a question of law, from a determination of the Tribunal: s 46 of the Act. Such proceedings come before the Court for hearing and determination in the exercise of its original, rather than appellate, jurisdiction: Cullinane v Mercer Benefit Nominees Ltd (2006) 152 FCR 1.

3                     The applicant, through its Further Amended Application for an Order of Review, seeks the following orders:

1.                  the decision of the first respondent be set aside.

2.                  the Complaint be referred to the Tribunal for hearing and determination according to law.

3.                  the respondents pay the applicant’s costs on and incidental to this application.

Background facts

4                     The background facts to this matter can be found in the Tribunal’s “Review Determination and Reasons” (the Determination and Reasons) and the applicant’s Chronology of Events. They may be summarised as follows:

·                    in May 1994 the applicant was employed by Penrith City Council (employer) as a labourer and became a member of the First State Superannuation Scheme (the former fund);

·                    in January 1995 the applicant was injured at work;

·                    in early 1996 the applicant returned to work on light duties;

·                    in July 1996 the applicant injured his back at work;

·                    in October 1996 the applicant received a letter from his employer stating that his employment would be terminated on 1 November 1996 due to a lack of medical evidence as to when he could return to his pre-injury employment;

·                    in early 1997 the applicant purportedly telephoned an officer of the former fund enquiring about payment of benefit application;

·                    on 1 July 1997 liability for the applicant was transferred from the former fund to the second respondent;

·                    in late 1999 the applicant settled a workers’ compensation claim;

·                    on 6 November 2003 the applicant applied to the former fund for payment of a benefit on the basis that he was permanently incapacitated. The application was accompanied by two incapacity certificates by medical practitioners;

·                    on 18 November 2003 the applicant’s payment of his account balance was approved by the former fund on the basis the applicant was totally and permanently incapacitated. The balance was paid on 21 November 2003;

·                    on 20 January 2005 the applicant was informed by the former fund that the second respondent should be contacted regarding total and permanent disability insurance;

·                    in February 2005 the applicant received and completed a statement of claim from the second respondent;

·                    in April 2005 the second respondent drew the applicant’s attention to time limits in making a claim and invited him to provide the second respondent with information why the statement of claim was outside the proscribed time. The applicant provided information;

·                    in July 2005 the applicant completed a statement of claim;

·                    on 1 May 2006 the applicant was informed by the second respondent that his application for benefit was refused;

·                    on 10 December 2006 the applicant lodged a complaint with the first respondent;

·                    on 15 February 2007 the first respondent wrote to the applicant stating that it had “established its jurisdiction to deal with your complaint”;

·                    in its determination and reasons handed down on 7 December 2007 the Tribunal found that it did not have jurisdiction to deal with the applicant’s complaint because the complaint was out of time;

·                    the applicant appealed the Tribunal’s decision by application to the Federal Court filed on 7 January 2008.

The decision of the Tribunal

5                     In its written determination of 7 December 2007 the only substantive issue identified by the Tribunal in its determination and reasons was whether it had jurisdiction to determine the complaint of the applicant. The Tribunal noted that under s 14 of the Act, a person can bring a complaint to the Tribunal that a decision of a Trustee of a regulated superannuation fund is unfair or unreasonable, however the Tribunal also noted s 14(6B) of the Act which provides as follows:

(6B)  The Tribunal cannot deal with a complaint under this section about a decision of a trustee relating to the payment of a disability benefit because of total and permanent disability if:

(a)  before the making of the decision, the person permanently ceased particular employment (whether before or after commencement of this subsection) because of the physical or mental condition that gave rise to the claim for disability benefit; and

(b)  the claim was not lodged, or is not lodged, with the trustee, within 2 years after the person permanently ceased that employment.

6                     In this case, the applicant ceased permanent employment on 1 November 1996. The Tribunal found that the first written claim lodged by the applicant was dated 6 November 2003 and received by the administrator of the former fund on 11 November 2003. This was 7 years after the applicant ceased permanent employment.

7                     The Tribunal considered that if the applicant had made an oral claim to the administrator of the former fund within 2 years after he ceased employment, the Tribunal would have jurisdiction to hear the complaint. The Tribunal noted that it had on file a letter from the applicant dated 26 April 2005 in which the applicant stated he had contacted the former fund upon being discharged from his employment, but was told not to make an application until after his “court case” finished. The Tribunal concluded that the “court case” to which the applicant referred in his letter was a claim for a lump sum workers’ compensation payment which was settled on 10 December 1999. The Tribunal also had a further letter from the applicant sent to the Tribunal and dated 24 November 2006, wherein the applicant reiterated that he had contacted the former fund within 2 years but was told to wait.

8                     In relation to the possibility of oral claim by the applicant the Tribunal concluded that the only evidence supporting the applicant’s assertion of an oral claim for payment of a benefit within 2 years after he ceased employment was the applicant’s own statements. The Tribunal was not persuaded the applicant was advised to wait until after the court case before lodging a claim, because this assertion was inconsistent with the fact that there was no connection between payment of a benefit from a superannuation fund and a workers’ compensation claim. The Tribunal concluded that there was insufficient evidence that the applicant had made an oral claim within 2 years after his employment ceased.

9                     On this basis the Tribunal determined that, in light of s 14(6B) of the Act, it did not have jurisdiction to hear the applicant’s complaint.

Application to the Federal Court

10                  The applicant filed an application for an order of review on 7 January 2008, and subsequently an amended application for an order of review on 3 June 2008.

11                  The first and second respondents in this matter did not appear at any stage of the proceedings. Nor did they file or serve any material in the form of process, evidence or submissions. The second respondent, through its legal representatives, filed a notice of appearance on 22 September 2008 and advised the Court by letter dated the same day that it would “submit to any order of the Court save as to costs”.

12                  In the amended application the applicant raised nine grounds of review of the Tribunal’s decision. However at the hearing Mr Scott-Mackenzie, Counsel for the applicant, made an oral application to further amend the amended application to add an additional ground of review in the following terms:

That the applicant was not accorded procedural fairness by the first respondent:

(a) The question of jurisdiction was raised by the first respondent;

(b) The applicant responded to the question and the first respondent determined that it had jurisdiction to decide the complaint;

(c) The question of jurisdiction was not again raised by the first respondent with the applicant; and

(d) In the premises the applicant was denied procedural fairness in that he was not informed of an issue of concern to the tribunal and afforded an opportunity to make submissions on the question of jurisdiction.

13                  In support of the oral application, Mr Scott-Mackenzie submitted that the respondents would not suffer any prejudice if the amended application for order of review was amended further. I agreed with the applicant and granted leave for two reasons:

·                    First, the applicant’s outline of argument, which had been served on both respondents and filed on 24 September 2008, raised all of the issues contemplated by the further amendment.  Accordingly any prejudice to either respondent was minimised.

·                    Second the respondents had not entered any appearance throughout these proceedings, and the second respondent had in correspondence with the Court submitted itself to the orders of the Court save as to costs.

14                  Following the grant of leave to further amend the amended application, Mr Scott-Mackenzie stated the applicant would only rely upon the ground added at the hearing in support of his claim.

Submissions of the applicant

15                  The submissions of the applicant may be summarised as follows:

·                    there is a common law duty to observe procedural fairness where the exercise of power is liable to affect a person’s rights, status, interests or legitimate expectations (Kioa v West (1985) 159 CLR 550 at 584). The applicant in this case was not afforded procedural fairness in relation to the question of whether the Tribunal had jurisdiction to hear the complaint. This is a question of law and may be appealed to this Court pursuant to s 46 of the Act.

·                    The applicant must be given an opportunity to address issues that are troubling the Tribunal (Cole v Cunningham (1983) 49 ALR 123 at 128). At the time of its hearing the Tribunal failed to inform the applicant that the question of jurisdiction was a live issue. In fact, the Tribunal had conceded in correspondence that it did have jurisdiction as follows:

o                   In a letter from the Tribunal to the applicant on 16 November 2006, the Tribunal raised the question of jurisdiction with the applicant. It was submitted by the applicant that this reference to jurisdiction was clearly referring to s 14(6B) of the Act. Paragraph 3 of the letter stated:

The Act imposes certain time limits on dealing with disability complaints so it is very important that you provide these workers compensation details so that the Tribunal can determine whether or not your complaint is within its jurisdiction.

o                   In his letter to the Tribunal of 24 November 2006 the applicant stated he had tried to claim the benefit from the time his employment was terminated, but was informed by the former fund to wait until after the court case.

o                   In its letter to the applicant of 15 February 2007 the Tribunal stated at para 2:

I wish to confirm that the Tribunal has established its jurisdiction to deal with your complaint and has now sought additional information from the Fund to assist with our inquiry into your complaint.

o                   No issues of jurisdiction of the Tribunal, whether as a result of expiration of time or otherwise, were raised by the Tribunal at the hearing, and the applicant was not invited to make submissions relating to jurisdiction at the Tribunal hearing.

o                   Following the Tribunal’s letter dated 15 February 2007, jurisdiction was not raised by the Tribunal until publication of the Tribunal’s determination and reasons on 7 December 2007.

·                    The applicant submitted that for the Tribunal to have acted fairly in the circumstances in this case, the Tribunal would have been required, at the least, to have notified the applicant that jurisdiction was a live issue and afforded the applicant the opportunity to make submissions on the jurisdiction question.

·                    Finally, the applicant acknowledged that whether relief was granted to the applicant was at the discretion of the Court, and if the return of a matter to the Tribunal would be futile or where the error relied upon by the Tribunal could not have made a difference to the outcome of the case, the court should refuse to grant relief (Nguyen v Minister for Immigration and Multicultural Affairs (1998) 88 FCR 206). In this case however the applicant submitted that the Court should exercise its discretion in favour of the applicant because:

o                   the Tribunal did not make findings of fact beyond those set out at [8] of the determination and reasons (which were only background facts);

o                   there is a significant amount of medical evidence that has not been considered by the Trustee or the Tribunal. This could add weight to the applicant’s case before the Tribunal, making it “possible” the end result might not be the same at a further hearing (Santa Sabina College v Minister for Education (1985) 58 ALR 527 at 540).

Consideration

16                  Appeals from the Tribunal to the Federal Court can only be on questions of law, and the authorities have conflicted as to whether denial of procedural fairness raises a question of law within the ambit of s 46 of the Act. This question has now been settled by the Full Court in Clements v Independent Advisory Committee [2003] FCAFC 143 at [8] where Gray ACJ and North J said:

this Court should accept the principle that a denial of procedural fairness is an error of law and that, therefore, an appeal from a decision of the Tribunal on the ground of such a denial raises a question of law.

17                  If the applicant establishes the Tribunal denied the applicant procedural fairness in making its determination, notwithstanding discretionary decisions to the grant of relief, the denial of procedural fairness will be sufficient to raise a question of law.

18                  The classic articulation of the principle of procedural fairness is that of Mason J in Kio where at 582 his Honour said:

It is a fundamental rule of the common law doctrine of natural justice expressed in traditional terms that, generally speaking, when an order is to be made which will deprive a person of some right or interest or the legitimate expectation of a benefit, he is entitled to know the case sought to be made against him and to be given an opportunity of replying to it: Twist v Randwick Municipal Council   [82]; Salemi [No 2]   [83]; Ratu   [84]; Heatley v Tasmanian Racing and Gaming Commission   [85]; FAI Insurances Ltd v Winneke   [86]; Annamunthodo v Oilfields Workers' Trade Union   [87].

19                  Furthermore it is accepted by this Court that the doctrine of procedural fairness is applicable to decisions made by the Superannuation Complaints Tribunal (cf Employers First v Tolhurst Capital Ltd (2005) 143 FCR 356 and Auspine Staff Superannuation Pty Ltd v Henderson [2006] FCA 1281).  So, for example, in Employers First Branson J said at [69]:

The obligation on the Tribunal to afford procedural fairness to the parties to a review means that it may not make a determination adverse to the interests of a party to that review without giving that party a reasonable opportunity to make written submissions to the Tribunal on the approach that the Tribunal is contemplating.

20                  In this case it is clear that the only issue considered by the Tribunal in relation to the applicant’s claim was whether the applicant had lodged his claim within 2 years after he permanently ceased employment. Furthermore, it is clear the Tribunal determined that it did not have jurisdiction to hear the applicant’s complaint, based entirely on the finding that the applicant did not make an application (oral or written) within 2 years after his employment ceased. There can be no doubt that this is a finding adverse to the interests of the applicant. As such, the Tribunal had an obligation to ensure the applicant:

·                    was aware the question of jurisdiction was a live issue; and

·                    had a reasonable opportunity to make submissions regarding jurisdiction.

21                  In my view the Tribunal failed in its obligation. I accept the applicant’s submissions that the Tribunal denied the applicant procedural fairness by not making him aware the jurisdiction question was a live issue at the hearing, and by not giving him an opportunity to deal with that issue at the hearing. Although the Tribunal raised the question of jurisdiction in its letter dated 16 November 2006 and gave the applicant an opportunity to respond (which he did through the letter dated 24 November 2006), the next correspondence received by the applicant with relation to jurisdiction was the letter from the Tribunal dated 15 February 2007. As mentioned above, the 15 February 2007 letter stated “I wish to confirm that the Tribunal has established its jurisdiction to deal with your complaint…”. While it is possible that this statement could be interpreted as a general observation by the Tribunal that the nature of the applicant’s claim was such that it came within the Tribunals’ overall jurisdiction, as distinct from a confirmation of jurisdiction in terms of s 14(6B) of the Act, in the complete absence of submissions by the respondents I am not prepared to draw that inference.

22                  Subsequent to the letter of 15 February 2007, the Tribunal did not raise the issue of jurisdiction with the applicant again and he was not invited to make submissions as to jurisdiction at the hearing.

23                  Given that the only issue decided by the Tribunal concerned the question of jurisdiction, in my view the facts demonstrate that the Tribunal failed to provide procedural fairness, and accordingly erred in law as claimed by the applicant.

Discretion to grant relief

24                  Mr Scott-McKenzie conceded that the Court has a discretion to refuse to grant relief where the end result of granting the relief would be the same as the original decision of the Tribunal. In this case however I do not consider it to be a foregone conclusion that the Tribunal would be bound in law to make the same decision as that appealed from to this Court (Nguyen v Minister for Immigration Affairs (1998) 88 FCR 206 at 213-214). At a reconstituted Tribunal hearing the applicant would have an opportunity to make submissions to the Tribunal in relation to the timing of the filing of his claim with the Trustee. Further, I accept the submission of Mr Scott-McKenzie that there is additional medical evidence available to the Tribunal which, if accepted, could result in a decision favourable to the applicant. Of course whether the second respondent made a decision that was fair and reasonable within the meaning of the Act is a question for the Tribunal to decide upon the factual evidence before it, not a decision for this Court. However in my view the applicant’s case before the Tribunal is not so hopeless that remitting this matter to the Tribunal could not possibly result in a different outcome.

Conclusion

25                  I have found that the Tribunal has failed in its obligation of procedural fairness to the applicant by not allowing him a reasonable opportunity to make submissions as to the Tribunal’s jurisdiction. Denial of procedural fairness is a question of law pursuant to s 46 of the Act. Accordingly I find that the ground of appeal raised by the applicant is substantiated, and the application should be granted.

26                  The second respondent submitted to any orders of the Court, other than with respect to costs. In this case, however, it is clear that the respondents have been properly served throughout these proceedings, and were aware of the hearing before me. As a general proposition, costs follow the event, and no reasons have been put to me to diverge from the general approach to costs in the circumstances of this case.

Associate:

Dated:         14 October 2008