FEDERAL COURT OF AUSTRALIA

Mills v Superannuation Complaints Tribunal [2013] FCA 1375

THE COURT ORDERS THAT:

1.    The second respondent pay the applicant’s costs of the appeal, to be taxed if not agreed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    The “appeal” in this matter, which is in the Court’s original jurisdiction, was allowed by consent, by order dated 8 April 2013 and the hearing of the appeal scheduled to commence on the following day was vacated. The matter was remitted to the first respondent (the Tribunal) to be determined in accordance with the law. The question of costs was stood over to be dealt with on the papers. These are the reasons for judgment on the question of costs.

2    The applicant seeks an order that the second respondent (GESB) pay his costs of the appeal. GESB submits that there should be no order as to costs. The Tribunal filed a submitting appearance save as to costs.

Background

3    The Notice of Appeal sought an order that the appeal be allowed and that the Court set aside the determination of the Tribunal and remit the matter back to the Tribunal to determine the applicant’s complaint according to law. As submitted by the applicant, “[r]educed to their essence” the grounds of appeal were that the Tribunal had failed to exercise its jurisdiction by:

(a)    misdirecting itself on the proper construction of reg 12 of the State Superannuation Regulations 2001 (WA) (the SS Regulations) which governs the relevant superannuation fund (among others); and

(b)    reviewing GESB’s decision-making process and not ascertaining for itself the facts and circumstances relevant to whether or not the covert allowance came within the terms of reg 12.

4    However, the questions of law, in full, in the Notice of Appeal, were as follows:

1.    Whether properly interpreted “special allowance” as defined in regulation 12 of the State Superannuation Regulations 2001 (WA) excludes from the meaning of “remuneration” in regulation 5 of the State Superannuation Regulations 2001 (WA) an allowance paid for carrying out higher, different or additional duties for a limited time and providing a temporary increase in a superannuation fund member’s usual remuneration.

2.    Whether contrary to s 37(5) of the Superannuation (Resolution of Complaints) Act 1993 (Cth) the First Respondent failed to exercise its jurisdiction by acting contrary to law and the governing rules of the fund in accepting the covert allowance paid to the Applicant under the Western Australian Police Industrial Agreement is a “special allowance”.

3.    Whether contrary to s 37(6) of the Superannuation (Resolution of Complaints) Act 1993 (Cth) the First Respondent failed to exercise its jurisdiction by not reviewing and considering for itself facts and evidence upon which the decision of the Second Respondent was based and forming its own view about necessary facts and circumstances.

4.    Whether contrary to s 37(6) of the Superannuation (Resolution of Complaints) Act 1993 (Cth) the First Respondent failed to exercise its jurisdiction by reviewing the process that led to the decision of the Second Respondent and not the actual decision and the consequences and practical outcome of the actual decision for the Applicant.

5    Under s 43 of the Federal Court of Australia Act 1976 (Cth) (the FCA Act), the award of costs is in the discretion of the Court in any proceedings before the Court except where any other Act provides that costs should not be awarded. The exception does not arise in this case.

6    The exercise of the Court’s discretion under s 43 is unfettered but must be exercised judicially. Ordinarily, costs follow the event in the absence of special circumstances justifying some other order: Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at [9]-[12].

7    Usually the special circumstances in which a successful party would be denied costs will have to do with the conduct of the proceedings in the Court and the Court must exercise its discretion by reference to all the circumstances of the case: Ruddock v Vadarlis (No 2) at [15] and [25].

8    It will be necessary, in order to understand the respective submissions of the parties as to costs, to consider the terms of s 14AA(2) of the Superannuation (Resolution of Complaints) Act 1993 (Cth) (the Complaints Act). Neither the Notice of Appeal nor the applicant’s outline of submissions in relation to the substantive application refer to s 14AA(2) of Pt 4 of the Complaints Act. That provision provides:

14AA Complaints may be made about discretionary or non-discretionary decisions

(1)    To avoid doubt, a complaint may be made under this Part about a decision whether or not the decision involved the exercise of a discretion.

(2)     However, a decision that did not involve the exercise of a discretion is taken to have been unfair and unreasonable if the decision was contrary to law.

GESB’s submissions

9    GESB has conceded that the Tribunal committed jurisdictional error. It seems that this concession is an acceptance by it that the Tribunal failed to give effect to the provisions of s 14AA(2) of the Complaints Act. In other words, it concedes that the Tribunal failed to exercise its jurisdiction in that it failed to decide, pursuant to s 14AA(2), whether the non-discretionary decision of GESB was contrary to law.

10    I might say that I do not consider it to be self-evident that the Tribunal did not take into account s 14AA(2). However, GESB concedes for the purposes of the appeal that it did not. The Tribunal has no doubt been put on notice as to this concession. Against that background, I was satisfied that the appeal ought be allowed.

11    GESB submits that there should be no order as to costs on four grounds.

12    First, the questions of law posed in the Notice of Appeal were neither:

(a)    capable of answer by the Court; nor

(b)    conceded by GESB or determined by the Court,

and accordingly, the subject matter of the appeal was not determined in favour of the applicant (or at all).

13    Second, GESB only conceded the appeal on the basis of s 14AA(2), a provision that was not raised at any stage by the applicant.

14    Third, the error was not that of GESB.

15    Fourth, GESB’s identification of s 14AA(2) as the determinative provision and its concession obviated the need for the applicant to go to a hearing and the applicant’s omissions have caused GESB to undertake extra work.

16    I will deal with these in turn.

Consideration

Questions of law

17    I cannot determine, where the matter was never argued, whether, as GESB submits, the questions of law posed were capable of answer by the Court although I accept that the questions of law were not conceded by GESB. The questions are directed toward, understandably enough, the provisions of s 37(5)-(6) of the Complaints Act. These provisions are directory as to the Tribunal’s duties.

18    Whilst they could have been more elegantly drafted I consider that the applicant’s questions were directed, in substance, as to whether the Tribunal determined whether the covert allowance was a “special allowance” within the meaning of reg 12 of the SS Regulations.

Section 14AA(2) of the Complaints Act

19    Section 14AA was inserted into the Complaints Act following the decision of the Full Court in Wilkinson v Clerical Administrative and Related Employees Superannuation Pty Ltd (1998) 79 FCR 469 where it was held that the Tribunal’s jurisdiction was confined to reviewing the exercise of a trustee’s discretionary powers.

20    As GESB submits correctly, s 14AA was a critical provision for the purposes of this case because of what it has to say about the Tribunal’s jurisdiction. However, GESB additionally submits that the provision was also an essential provision for the purposes of this case because it is concerned with how the Tribunal should deal with a complaint that a non-discretionary decision was unfair and unreasonable because the provision specifies that the decision will be taken to have been unfair and unreasonable if it was contrary to law. If the decision was not contrary to law, the Tribunal is obliged to affirm the decision: Colonial Mutual Life Assurance Society Limited v Brayley [2002] FCA 1333 at [29]-[30]. A different reasoning process applies to discretionary decisions: Brayley at [31]-[33].

21    It then submits that it is apparent from the Tribunal’s failure to refer to s 14AA, or to determine whether the covert allowance was a “special allowance” within the meaning of reg 12 of the SS Regulations, that the Tribunal did not consider s 14AA in determining the applicant’s complaint. It submits that this must be so, given the importance of s 14AA. Likewise it submits that the provision ought to have been mentioned by the applicant in his Notice of Appeal.

22    I do not agree. It was not necessary for the Tribunal, in my opinion, to expressly mention s 14AA(2). As Allsop J (as he then was) observed in Retail Employees Superannuation Pty Ltd v Crocker (2001) 48 ATR 359 at [29]:

[29]    . . . I would prefer not to use any dichotomy between discretionary and non-discretionary decisions as a tool in this analysis. I do not think that the presence of s 14AA mandates it. The presence of s 14AA is to be understood for reasons other than any which make the terminology used within it a compulsory tool for analysis of the understanding by the Tribunal of its task.

23    I respectfully agree. Section 14AA is declaratory in its effect that the jurisdiction of the Tribunal is not confined to discretionary decisions. Its provisions are required to be observed, but not necessarily mentioned, in its Reasons for Determination, by the Tribunal.

The error was not GESB’s

24    It may be accepted that the need for this appeal did not flow from any conduct of GESB. It was the Tribunal that failed to consider s 14AA in determining the applicant’s complaint. This is no answer to a claim for costs by the applicant.

25    Conversely, there is no conduct of the applicant that justifies some other order whether of the kind referred to in Ruddock v Vadarlis (No 2) at [15] or otherwise. The conduct of the applicant in the litigation has not caused the litigation to take longer than might otherwise be the case or caused GESB to incur more costs than would otherwise be the case.

26    There is no conduct on the part of the Tribunal which would warrant any costs order being made against it: see Merkel v Superannuation Complaints Tribunal [2010] FCA 564. Indeed, the applicant sought no such order.

Obviation of need for hearing

27    It is correct also that the concession by GESB saved a hearing. However, this does not detract from the fact that there was acknowledged jurisdictional error. This concession is warrant enough to make a costs order in favour of the applicant.

Order

28    For these reasons there will be an order that GESB pay the applicant’s costs of the appeal, to be taxed if not agreed.

Associate:

Dated:    16 December 2013