Brandy v Human Rights and Equal Opportunity Commission [1998] FCA 51 | Case summary

REASONS FOR JUDGMENT SUNDBERG J THE SUPERANNUATION PLAN (a) The Rules The Clerical Administrative and Related Employees Superannuation Plan ("the Plan") was established by deed made on 18 December 1986 by the first respondent, the trustee named therein ("the trustee"). Rule 8.1 of the Plan's Rules provides for the payment of a death benefit where a member dies "whilst ... in the Service of the Employer prior to the Normal Retirement Date". The benefit has two components. The first is the amount in the member's retirement account at the date of payment of the benefit. The second is "the Member's Insured Benefit (if any)". The word "Service" is defined as continuous service with an Employer and for the purposes of this definition an Employee's service shall not cease to be continuous by reason only of ... (b) the Employee's temporary absence from the service of the Employer (i) while the Employee is engaged in compulsory military service in the armed forces of Australia or its allies in time of war; or (ii) in any other circumstances which for the purposes of this Plan the Employer regards as not resulting in a break in the continuity of the Employee's service. and "Service of the Employee" shall have a corresponding meaning. (b) The Insurance Policy The trustee's liabilities under the Plan are covered by a reinsurance agreement ("the Policy") dated 8 December 1989 between the trustee and the second respondent ("the insurer"). Clause 6(c) of the Policy provides that death benefits "shall cease in respect of a Member ... at the expiry of a period of 60 days after leaving the service of a Participating Employer". The word "Member" is defined as "an employee of a Participating Employer who is accepted by [the insurer] for a benefit". The word "Employee" includes a "Part‑time Employee", which in turn means "an Employee who works for a Participating Employer for a certain number of hours each and every week". MRS BISHOP Katrina Joy Bishop commenced employment with Axiom Advertising Pty Ltd ("the employer") in July 1992. She joined the Plan in August 1993, describing her employment as "casual", a type of employment for which the application form made provision. She made contributions each pay period until March 1994 by which time she had become ill and was unable to work. She died on 13 September 1994. Her husband, the third respondent ("Mr Bishop"), is her personal representative. Mr Bishop claimed to be entitled to the death benefit under the Plan in respect of his wife's death. The trustee paid him the first component of the benefit (the amount in the retirement account) but not the second (the insured benefit). The second component was not paid because the trustee accepted the insurer's position that Mrs Bishop had last worked on 31 January 1994, and that since she had died more than sixty days after that date, no benefit was payable because of clause 6(c) of the Policy. Pursuant to s 14 of the Superannuation (Resolution of Complaints) Act 1993 ("the Act") Mr Bishop made a complaint to the Superannuation Complaints Tribunal about the trustee's refusal to pay the second component. THE TRIBUNAL'S DECISION (a) Under the Rules Since the first component of the benefit had been paid without demur, and the refusal to pay the second component was because the view had been taken that Mrs Bishop had died outside the sixty day period, one would have expected that the only issue before the Tribunal would have been whether Mrs Bishop in fact left the service on the last day she worked, as the insurer and the trustee contended, or when she died, as Mr Bishop contended. However both that question (clause 6(c)) and whether she died whilst in continuous service (rule 8.1) were agitated before the Tribunal. The Tribunal had before it a statutory declaration made by a director of the employer stating that Mrs Bishop continued in its employment until the date of her death, though from 3 February 1994 until her death she was on leave for medical reasons. The employer had made clear to Mrs Bishop that she could return to work when she had recovered from her illness. The Tribunal rejected the trustee's contention that because Mrs Bishop was not engaged in regular remunerative employment at the date of her death, she had not died in service. It also rejected the trustee's contention that par (b)(ii) of the definition of "Service" in the Rules did not apply to members engaged on a casual basis. The Tribunal appears to have concluded that Mrs Bishop fell within par (b)(ii) (which applies only to a "temporary absence" from service), even though it accepted the trustee's contention that her absence was in fact permanent. It said: However, the Tribunal accepts the evidence of both the Employer and the Complainant that it was intended that the Deceased's absence be only temporary and that she would return to work when she had fully recovered, as was expected .... Sub‑rule (b)(ii) ... is the section which governs the impact on "Service" of leave without pay, such as parental leave. The Employer gave clear evidence that it regarded the Deceased's absence as not resulting in a break in the continuity of her service. The Trustee submitted that it did not accept the Employer's assertions and that the sub‑rule required an objective assessment of the employment relationship. However, the Tribunal is of the opinion that the Employer's view was reasonably formed in the circumstances and was the clear point of reference under the terms of the Trust Deed. The Tribunal then found that Mrs Bishop had died in service, that rule 8.1 applied, and that Mrs Bishop's "accumulated benefit and the 'Insured Benefit (if any)' is payable". (b) Under the Policy The Tribunal noted that the expression "leaving the service" in clause 6(c) of the Policy is not defined. However it regarded as "pertinent" the definitions of "Member", "Employee" and "Part‑time Employee" which I have set out under the sub‑heading The Insurance Policy. The Tribunal was of the view that Mrs Bishop fell within the definition of "Part‑time Employee", and was accordingly "still a Member and did not leave the Employer's service on her last day at work", with the result that clause 6(c) did not apply. (c) Tribunal's conclusion The Tribunal's conclusion was that the insured benefit was payable in respect of Mrs Bishop under both the Rules and the Policy. It set aside the decisions of the trustee and the insurer and substituted a decision that the insured benefit be paid without further delay. THE ACT Section 14 of the Act applies if the trustee of a regulated superannuation fund has made a decision in relation to a particular member or former member of the fund: sub‑s (1). Sub‑section (2) provides that a person may make a complaint to the Tribunal that the decision "is or was unfair or unreasonable". For the purposes of the Act a trustee makes a decision if it makes or fails to make a decision or engages in any conduct, or fails to engage in any conduct, in relation to making a decision: s 4. The parties to a complaint are the complainant, the trustee and, where the complaint relates to a death benefit or a disability benefit under a contract of insurance between the trustee and an insurer and the Tribunal decides that the insurer should be a party, the insurer: s 18. (The Tribunal ruled that the insurer should be a party to Mr Bishop's complaint). Section 37(1) provides that for the purposes of reviewing a decision of a trustee under s 14 the Tribunal has all "the powers, obligations and discretions that are conferred on the trustee". Sub‑section (2) provides that where an insurer has been joined as a party, the Tribunal must also review the insurer's decision, and for that purpose has all "the powers, obligations and discretions that are conferred on the insurer". Sub‑section (3) provides that on reviewing a decision the Tribunal must make a determination in writing affirming the decision, remitting the matter to the decision‑maker for reconsideration, varying the decision, or setting it aside and substituting its own decision. The remaining sub‑sections are as follows: (4) The Tribunal may only exercise its determination‑making power under subsection (3) for the purpose of placing the complainant as nearly as practicable in such a position that the unfairness, unreasonableness, or both, that the Tribunal has determined to exist in relation to the trustee's decision that is the subject of the complaint no longer exists. (5) The Tribunal must not do anything under subsection (3) that would be contrary to law, to the governing rules of the fund concerned and, if a contract of insurance between an insurer and trustee is involved, to the terms of the contract. (6) The Tribunal must affirm a decision referred to under subsection (3) if it is satisfied that the decision in its operation in relation to: (a) the complainant ... ... was fair and reasonable in the circumstances. Section 41(3) provides that a determination of a trustee or insurer as varied by the Tribunal, or a decision of the Tribunal in substitution for a decision of a trustee or insurer, is to be taken to be a decision of the trustee or insurer, and has effect on and from the day on which the original decision had effect. A party to a review by the Tribunal may appeal to the Federal Court on a question of law: s 46. An appeal does not affect the operation of the determination or prevent the taking of action to implement the determination, but the Court may grant a stay: s 47. PRIMARY JUDGE'S DECISION Although before the Tribunal the case was contested under both rule 8.1 and clause 6(c), only the former was in issue before the primary judge. His Honour was told that the insurer and the trustee would not be taking any point based on the definition of "Part‑time Employee", and that no issue under the Policy would arise. The primary judge held that · the decisions of trustees susceptible of complaint under s 14 are limited to those of a discretionary character, and the decision in question was not of that character · Section 37 purports to confer on the Tribunal the judicial power of the Commonwealth · The Tribunal had made an error of law in holding that Mrs Bishop was a part‑time employee because there was no material before it to support such a finding. His Honour set aside the determination "on the basis that it was the result of the exercise of a judicial power", and on the basis that the Tribunal had made the error of law referred to above. He remitted the matter to the Tribunal for determination according to law after receiving such further evidence as it considered appropriate. His Honour made no finding as to whether at the time of her death Mrs Bishop was in the continuous service of the employer. He noted that the issue before the Tribunal was whether Mrs Bishop was entitled to an insured benefit, which he said depended on whether she had died whilst in the service of the employer. He observed that the Tribunal appeared to have accepted that par (b)(ii) of the definition of "Service" resulted in there being no break in Mrs Bishop's service. He then noted that the essential question of law raised was whether on the proper construction of rule 8.1 and on the material before it, it was open to the Tribunal to reach the conclusion it did. He said: The question was stated in a number of different ways but all the formulations come down to this question as to whether there was material before the Tribunal to support the conclusion that Mrs Bishop was a part‑time employee. Clause 6 of the relevant insurance policy provided that the insured benefit payable on death ceased to be payable at the expiry of 60 days after leaving the service of a participating employer. His Honour then recorded the Tribunal's conclusion that Mrs Bishop fell within the definition of "Part‑time Employee" in the Policy and thus within the definition of "Member", and said that there was no material before the Tribunal relating to the number of hours each and every week that Mrs Bishop had worked. THE APPEAL Five questions were argued on the appeal. The first is whether the Tribunal's determination that Mr Bishop is entitled to be paid the "insured benefit" under rule 8.1 was made in accordance with the requirements of s 37 of the Act. The second is whether Mrs Bishop died whilst in the continuous service of the employer. The third concerns the propriety of the primary judge's conclusion that the Tribunal had wrongly held that Mrs Bishop was a part‑time employee when there was no material before it to support that finding. The fourth is whether the jurisdiction of the Tribunal under s 37 is limited to the review of trustee's decisions which are of a discretionary character, or whether it extends to all decisions made by trustees. The fifth is whether s 37 purports to confer on the Tribunal the judicial power of the Commonwealth. NON‑DISCRETIONARY DECISIONS (a) The original s 14(2) As originally enacted s 14(2) enabled a person to complain to the Tribunal that a trustee's decision (a) was in excess of the powers of the trustee; or (b) was an improper exercise of the powers of the trustee; or (c) is unfair or unreasonable. For the purposes of reviewing a trustee's decision the Tribunal had all the powers, obligations and discretions of the trustee, and was required to make a determination in writing affirming the decision under review, varying the decision, substituting a decision for the one under review, or remitting the matter for reconsideration by the trustee: s 37(1). The obligation to make a determination was expressed to be subject to sub‑s (2), which required the Tribunal to affirm the trustee's decision if it was satisfied that the decision, in its operation in relation to the complainant, was fair and reasonable in all the circumstances. Sub‑section (3) precluded the Tribunal from doing anything under sub‑s (1) that would be contrary to law or to the governing rules of the fund. If on reviewing a complaint that a trustee's decision was in excess of power the Tribunal was of the view that the complaint was made out, it would have been obliged to set aside the decision, vary it or remit the matter for reconsideration. It could not have affirmed the decision, because that would have been contrary to law or to the governing rules of the fund: sub‑s (3). Because of sub‑s (3) the issue of fairness and reasonableness under sub‑s (2) would not have arisen. Thus under the original form of ss 14(2) and 37, the Tribunal plainly had power to review decisions of a non‑discretionary character. (b) The amended s 14(2) Amendments effected by the Superannuation Industry (Supervision) Legislation Amendment Act 1995 removed the excess of power and improper exercise of power grounds from s 14(2), so that the only ground of complaint is that the trustee's decision "is or was unfair or unreasonable", and inserted the new s 37. This, it was submitted for the trustee and the insurer, had the result that the Tribunal's power under s 37 was limited to the review of discretionary decisions. In my view ss 14(2) and 37 require the conclusion that the Tribunal's jurisdiction is limited to the review of discretionary decisions. A non‑discretionary decision of a trustee, for example that a person is not entitled to a benefit because he is not totally and permanently disabled, is either correct or incorrect in law. If the Tribunal is of the view that the decision is correct, it cannot set it aside and make a different decision, vary the decision, or remit the matter to the trustee for reconsideration: cf pars (b), (c) and (d) of s 37(3). To do any of those things would be contrary to law and to the governing rules of the fund. All the Tribunal can do under sub‑s (3) is to affirm the decision. There is no occasion for it to consider whether the decision is fair and reasonable. In any event, given that the Tribunal regards the trustee's decision as correct, it could hardly hold that it is unfair or unreasonable. If it did so hold, sub‑s (5) would preclude it from doing anything under sub‑s (3) other than to affirm the trustee's decision. It is to be noted that while sub‑s (4) refers generally to the Tribunal's determination‑making power under sub‑s (3), sub‑s (6), if nothing else, shows that it is the power to make determinations under pars (b) to (d) alone of sub‑s (3) to which sub‑s (4) intends to refer. If the Tribunal concludes that the trustee's decision is incorrect, it can, if it determines that the decision is unfair or unreasonable, set it aside and make a different decision, vary the decision, or remit the matter to the trustee for reconsideration. Given that the Tribunal regards the decision as incorrect, it could not decide that it is nevertheless fair and reasonable because, if it did, it would be obliged by sub‑s (6) to affirm the decision, and that course is precluded by sub‑s (5). I am accordingly unable to agree with the view expressed in Collins v Australian Mutual Provident Society (1997) 147 ALR 243 at 255 that having concluded that a trustee's decision is incorrect in law, the Tribunal can nevertheless find that it is fair and reasonable. Thus the only scope for the fair and reasonable standard to apply in the case of a non‑discretionary decision is where it is superfluous ‑ ie where the Tribunal has concluded that the trustee's decision is wrong, in which case it is inevitable that it will also find it to be unfair or unreasonable or both. A power to determine whether or not a decision is unfair or unreasonable contemplates an ability in the decision‑maker to decide that it is fair and reasonable, fair but unreasonable, reasonable but unfair, or unfair and unreasonable. In the case of non‑discretionary decisions the Tribunal is denied that ability by s 37(5). In conferring jurisdiction on the Tribunal by reference to what is fair and reasonable or unfair and unreasonable, while directing the Tribunal that it cannot do anything that would be contrary to law or to the rules of the fund, the draftsman must have been directing attention to situations in which it is open to the trustee properly to decide to do one thing or another, but not to situations in which there is only one thing it can lawfully do. It follows that I agree with the primary judge that the Tribunal's power under s 37 is limited to review of discretionary decisions of trustees. In Briffa v Hay (1997) 147 ALR 226 at 236 Merkel J gave a number of reasons for not reading down the word "decision" in ss 14 and 37 to mean "discretionary decision". One was that there is no textual or contextual reason for doing so. It will be apparent from what I have said that s 37, especially sub‑s (5), provides a contextual reason for limiting reviewable decisions of trustees to discretionary decisions. His Honour also relied, as did the appellants, on the fact that s 37(1) confers on the Tribunal "all the powers, obligations and discretions that are conferred on the trustee". His Honour said that imposing obligations on the Tribunal "suggests that the tribunal might also be exercising power in non‑discretionary matters". That seems to me to overlook the fact that even in the exercise of powers and discretions a trustee has obligations ‑ for example, to consider whether the power or discretion should be exercised, and to consider and take into account all the possible beneficiaries before exercising it. (c) Section 14(6A) to 6(D) The appellants submitted that sub‑ss (6A) to (6D) of s 14 are inconsistent with the view that the Tribunal's powers are limited to the review of trustees' decisions which are of a discretionary nature. Those sub‑sections were inserted at the same time as grounds of review (a) and (b) were removed from s 14(2) and s 37 assumed its present form. It is sufficient to set out sub‑s (6A): 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 unless: (a) the decision is made on or after 1 November 1994; and (b) the complaint is made within a period of one year after the making of the decision to which the complaint relates. It was submitted that a decision referred to in this sub‑section will typically be that a member is not entitled to a benefit because he does not suffer from total and permanent disability. The member either is or is not relevantly disabled. No element of discretion arises. It was said by the appellants that at the same time as Parliament was supposedly restricting reviewable decisions to those of a discretionary nature, it was underlining that decisions that had always been reviewable under s 14 included those relating to payment of a benefit because of total and permanent disability, which typically are not decisions of a discretionary character. Sub‑secton (6A) is expressed in the most general language ‑ "complaint about ... a decision ... relating to the payment of a disability benefit because of total and permanent disability". The language is not restricted to the narrow non‑discretionary issue of whether a person is totally and permanently disabled, but is wide enough to encompass discretionary issues. For example, under a particular scheme a trustee may have a discretion to pay a benefit or part of it to someone other than the disabled person. Or there may be a discretion as to the manner in which a benefit is to be paid. It will all depend on the terms of the rules governing the particular scheme. But for the context provided by s 37, s 14(2) would apply to all decisions of trustees and sub‑ss (6A) to (6D) would apply to all decisions relating to the payment of total and permanent disability benefits. However, that context limits those sub‑sections to decisions of a discretionary nature. None of the sub‑sections is left without an area of operation by the restriction required by s 37. Accordingly I do not consider that sub‑ss (6A) to (6D) are inconsistent with the view that the Tribunal's decision‑making powers under s 37 do not extend to non‑discretionary decisions. If, contrary to my view, there is a collision, inconsistency or repugnancy between sub‑ss (6A) to (6D) on the one hand and s 37 operating on s 14(2) on the other (in the sense that the former have no work to do if the Tribunal's powers are limited to the review of discretionary decisions), the later provision prevails in accordance with the rule of last resort to that effect. See Pearce and Geddes, Statutory Interpretation 4th ed (1996) at 111 and the cases there cited. Although ss 14(2) and 37 together produce the result I favour, the crucial provision is of course s 37, the later provision. (d) Conclusion For the reasons I have given, I am of the view that the only decisions of trustees that are reviewable under ss 14(2) and 37 are those of a discretionary nature. JUDICIAL POWER (a) New rights? It was contended for the trustee that the Tribunal exercises judicial power because it makes its determinations by applying the law found in ss 14 and 37 of the Act to a trustee's decision. The distinction which Palles CB drew in Reg v Local Government Board [1902] 2 IR 349 between a determination of existing rights and the creation of new rights remains central to the identification of judicial power for Ch III purposes. In Precision Data Holdings Ltd v Wills (1991) 173 CLR 157 at 188‑189 the High Court said: True it is that the making of binding declarations of right by way of adjudication of disputes about rights and obligations arising from the operation of the law upon past events or conduct is a classical instance of the exercise of judicial power. ... ... if the object of the adjudication is not to resolve a dispute about the existing rights and obligations of the parties by determining what those rights and obligations are but to determine what legal rights should be created, then the function stands outside the realm of judicial power. The Act creates a new substantive right for members of superannuation funds to which the Act applies. The right is not to be adversely affected by discretionary decisions of trustees which are unfair or unreasonable. It is a right not previously known to trust law: Dundee General Hospital Board of Management v Walker [1952] 1 All ER 896 at 901; Karger v Paul [1984] VR 161 at 165‑166; Jacobs' Law of Trusts in Australia 6th ed (1997) at 411. In the conduct of its review the Tribunal considers the trustee's decision (a past event) and asks whether in its operation to the complainant it is unfair or unreasonable (the statutory criterion). I respectfully differ from Merkel J's conclusion in Briffa v Hay (1997) 147 ALR at 238 that a determination of the Tribunal "creates new rights and obligations as between the trustee and the beneficiary" and "does not determine rights and duties based on existing facts and the law". The rights and obligations are created by the Act. What the Tribunal does is apply them to the facts of the particular case, namely the decision of the trustee in its application to the complainant. The determination of the Tribunal is the manner in which the right and the correlative obligation created by the Act are enforced. (b) Broad subjective criteria For the Attorney‑General it was submitted that the Tribunal's determinations are made by reference to broad considerations of fairness rather than legal principle or objective standards, and are thus not judicial in nature. In my view the inquiry as to whether the decision of a trustee is or was unfair or unreasonable in its operation in relation to the complainant does involve the application of objective standards. In Reg v Commonwealth Industrial Court; Ex parte Amalgamated Engineering Union (1960) 103 CLR 368 the question was whether the power conferred on the Industrial Court to declare that a rule of an organisation was "oppressive, unreasonable or unjust" was part of the judicial power of the Commonwealth. It was held that it was. Kitto J, with whom Dixon CJ agreed, said at 383: Emphasis has been placed by the prosecutors upon the scope which there is in some of the provisions of sub‑s (1) for uncertainty of opinion. It must be conceded that the words "oppressive", "unreasonable" and "unjust", in relation to conditions, obligations or restrictions imposed by a rule upon applicants for membership or upon members, describe attributes which are not demonstrable with mathematical precision, and are to be recognised only by means of moral judgments according to generally acknowledged standards. There is a degree of vagueness about them which, in the context of the former section, assisted the conclusion that the intention was to confer on the Court a general administrative discretion for the amelioration of rules. But the notions which the words convey, more readily to be associated with administrative than with judicial decisions though they be, must be conceded, having regard to the nature of criteria with which courts are familiar in other fields, to be not so indefinite as to be insusceptible of strictly judicial application .... In Precision Data at 191 the Court distinguished between a discretionary authority to be exercised by reference to policy considerations or other matters not specified by the legislature and such an authority to be exercised "according to legal principle or by reference to a standard or test prescribed by the legislature". In Reg v Spicer; Ex parte Waterside Workers Federation (1957) 100 CLR 312 at 317 the distinction was drawn between a discretion of an arbitrary kind and one governed or bounded by some ascertainable tests or standards. See also Reg v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 377 and Steele v Defence Forces Retirement Benefit Board (1955) 92 CLR 177 at 187‑188. Although the words "fair" and "reasonable" describe attributes that are "to be recognised only by means of moral judgments according to generally acknowledged standards", they do constitute an objective standard. Because in the present context fairness and reasonableness are firmly tied to the effect of the trustee's decision in its operation in relation to the complainant (s 37(4) and (6)), they are less ample and open‑ended than other concepts regularly applied by courts, such as whether a restriction is reasonable in the public interest or whether someone has exercised reasonable care. (c) The AAT analogy It was argued for the Attorney that the powers of the Tribunal are "completely analogous" to those of the Administrative Appeals Tribunal ("the AAT") established by the Administrative Appeals Tribunal Act 1975 ("the AAT Act"). The AAT's functions are administrative in nature: Drake v The Minister (1979) 24 ALR 577 at 584. Like the AAT the Tribunal stands in the shoes of the primary decision‑maker (ss 37(1) and 41 of the Act and s 43(1) and (6) of the AAT Act), and may affirm or vary the decision under review, set aside the decision and substitute its own, or remit the matter to the primary decision‑maker (s 37(3) of the Act and s 43(1) of the AAT Act). Like the AAT the Tribunal must determine issues of law for the purpose of reaching its decisions, but this does not mean that in performing its administrative functions it is exercising judicial power: Drake at 584‑585. And like the AAT the Tribunal's determinations are subject to appeal on questions of law (s 46 of the Act and s 44 of the AAT Act). As Burchett J pointed out in Walker v Department of Social Security (1997) 147 ALR 263 at 268, s 43 of the AAT Act reflects the provisions that governed the Boards of Review set up some seventy years ago to provide administrative review of taxation decisions. These provisions were held not to confer judicial power on the Boards: Shell Co of Australia Ltd v Federal Commissioner of Taxation [1931] AC 275. The essence of the reasoning of both the High Court and the Privy Council in that case was that the Boards were assimilated to the Commissioner. They were given the powers and functions of the Commissioner. They had no other powers or functions: at 541. The essential feature of the revised scheme established by the Income Tax Assessment Act 1925 (upheld in Shell) was that the Boards of Review were part of the executive continuum. Thus in Federal Commissioner of Taxation v Munro (1926) 38 CLR 153 (Shell in the High Court) Isaacs J said at 177 that he could see no reason why Parliament could not entrust "successive administrative functionaries to consider and review assessments". And at 178, when considering the hypothetical case where the Treasurer, rather than the Court, was the ultimate official to settle the accuracy of the Board's assessments, his Honour said that the Treasurer's function would be "departmental and administrative". According to Higgins J at 201 the Board was "auxiliary to the Commissioner in his administrative functions" ‑ the Board was "to assist him as to law or facts". It was a "mere piece of administrative machinery". Starke J at 212 said that the Commissioner's function was "administrative". The Board's decision stood "precisely in the same position". Its functions are "in aid of the administrative functions of government". It was on this point that Knox CJ dissented. He was unable to regard the Board as "a mere administrative body or as a mere adjunct to, or agent or instrument of, the Executive Government, exercising portion of the executive power of the Commonwealth": at 165. On appeal the Privy Council endorsed the language of Starke J quoted above: [1930] AC at 295. Putting the matter in their own words their Lordships at 298 said that the Boards of Review are "another administrative tribunal which is reviewing the determination of the Commissioner who admittedly is not judicial but executive". Those were the passages relied on in Drake for the conclusion that the AAT, in reviewing decisions of the Minister, was making determinations which were "plainly administrative": (1979) 124 ALR at 584‑585. Whereas the Boards of Review, the AAT and comparable tribunals such as the Social Security Appeals Tribunal considered in Walker provide a mechanism for review of the decisions of an executive officer within the executive framework, and for that purpose are given all the executive and administrative powers of the officer, the Tribunal is given the power to review the decisions of a trustee: a private corporate citizen which is not part of the structure of government and does not exercise executive power. The trustee is not part of any executive continuum. The trustee and the Tribunal are not "successive administrative functionaries". The Tribunal's functions are not "in aid of the administrative functions of government", for the trustee is not part of the structure of government. Section 19(5) of SIS enables a trustee to elect that the trust fund become a regulated fund and thus subject to the regime in SIS. But the trust fund remains a private fund with private assets. The trust assets do not become assets of the Commonwealth. The trustee, and the Tribunal when it stands in the shoes of the trustee, is not exercising power in relation to the administration of government assets. For the above reasons I do not accept that the Tribunal's powers are completely analogous to those of the AAT. (d) Power of enforcement (i) General The Tribunal has no power to enforce its determinations. In Rola Co (Australia) Pty Ltd v The Commonwealth (1944) 69 CLR 185 the absence of any power in the Committee of Reference to enforce its determinations led Latham CJ at 200 to conclude that it did not exercise judicial power. Other justices have said only that where a body has the power to enforce its binding decisions, it undoubtedly exercises judicial power. Thus in Waterside Workers' Federation v J W Alexander Ltd (1918) 25 CLR 434 at 451 Barton J expressed the view that where a body has power to carry its judgment into effect "the judicial power is undeniably complete". But his Honour left open whether such a power of enforcement is an essential characteristic of judicial power. Even Latham CJ in Rola at 199 said only that when a body with power to give a binding and authoritative decision is able to enforce its decision "all the attributes of judicial power are plainly present". In Reg v Davison (1954) 90 CLR 353 Dixon CJ and McTiernan J reviewed a number of definitions and descriptions of judicial power, some of which emphasised different features said to identify a power as judicial ‑ a controversy between parties, the determination of existing rights as distinguished from the creation of new rights, and the submission of a case by the parties for adjudication and enforcement of the judgment. Their Honours pointed out that each of these features is lacking from many proceedings falling within the jurisdiction of various courts of justice in English law. As to the enforcement element, they said at 368: Again the enforcement of a judgment or judicial decree by the court itself cannot be a necessary attribute of a court exercising judicial power. The power to award execution might not belong to a tribunal, and yet its determinations might clearly amount to an exercise of the judicial power. Indeed it may be said that an order of a court of petty sessions for the payment of money is an example. For warrants for the execution of such an order are granted by a justice of the peace as an independent administrative act. In Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245 the Commission's determinations under the Racial Discrimination Act 1975 were "not binding or conclusive" between the parties: s 25Z(2) of that Act. The Commission, however, was required to lodge a determination in the Federal Court and the Registrar was required to register it: s 25ZAA. Upon registration the determination had effect as if it were an order made by the Federal Court: s 25ZAB. It was held that ss 25ZAA and 25ZAB and associated sections purported to invest judicial power in the Commission. Mason CJ, Brennan and Toohey JJ, after referring to Rola and Davison, said at 257: The fact that the Commission cannot enforce its own determinations is a strong factor weighing against the characterisation of its powers as judicial; though it must be recognised that this is not an exclusive test of the exercise of judicial power. It is necessary, however, in order that a tribunal's powers be judicial, that some mechanism exist for the enforcement of the tribunal's determinations. Thus their Honours said at 260 that an order which takes effect as an exercise of judicial power cannot be made except after the making of a "judicial determination", which they had earlier defined (at 258) as an "enforceable decision reached by applying the relevant principles of law to the facts as found". Their Honours went on to hold that in providing for registration of a determination of the Commission and its enforcement as if it were an order of the Federal Court, the Act purported to provide for an exercise of judicial power by the Commission. Deane, Dawson, Gaudron and McHugh JJ said at 268‑269: ... there is one aspect of judicial power which may serve to characterise a function as judicial when it is otherwise equivocal. That is the enforceability of decisions given in the exercise of judicial power. ... However ... it is not essential to the exercise of judicial power that the tribunal should be called upon to execute its own decision. As Dixon CJ and McTiernan J observed in R v Davison, an order of a court of petty sessions for the payment of money is made in the exercise of judicial power, but the execution of such an order is by means of a warrant granted by a justice of the peace as an independent administrative act. Their Honours also made it clear that if a tribunal's determinations cannot be enforced at all, it does not exercise judicial power: at 269. Their Honours then said that were it not for the registration and enforcement provisions it would be clear that the Commission did not exercise judicial power, because under s 25Z(2) its determinations were not binding on the parties. That situation was, they said, reversed by the registration provisions. For the Attorney‑General it was contended that the absence of any power of enforcement of the Tribunal's decisions denied to them the character of judicial power. The primary judge's statement that "inquiry into and determination of matters in issue is a judicial function if its object is the ascertainment of legal rights and obligations" was criticised on the ground that the crucial factor is not the ascertainment of rights and obligations but the ability to enforce them. It was said that all that happens when the Tribunal makes a determination is that its determination replaces that of the trustee. There are no special enforcement or registration provisions, unlike the position in Brandy. (ii) SIS Section 31(1) of the Superannuation Industry (Supervision) Act ("SIS") provides that the regulations may prescribe standards applicable to the operation of regulated superannuation funds. Section 34(1) requires the trustee of a superannuation entity to ensure that the applicable prescribed standards are complied with. Under sub‑s (2) the intentional or reckless contravention of sub‑s (1) is an offence. Regulation 13.17B of the Superannuation Industry (Supervision) Regulations prescribes a standard applicable to the operation of regulated superannuation funds that the trustee "must not fail, without lawful excuse, to comply with an order, direction or determination" of the Tribunal. Thus it is an offence under s 34(2) for a trustee, without lawful excuse, intentionally or recklessly to fail to comply with a determination of the Tribunal. Section 315(1) of SIS provides that if a person has engaged or is engaging in conduct that constituted or constitutes a contravention of the Act, the Federal Court or the Supreme Court of a State or Territory may grant an injunction in accordance with sub‑s (2). Under sub‑s (2) the injunction may restrain the person from engaging in the conduct or require him to do any act or thing. The injunction may only be granted on the application of the Insurance and Superannuation Commissioner, who has the general administration of SIS, or of a person whose interests have been, are, or would be affected by the conduct. Sub‑section (3) provides that if a person has refused or failed or is refusing or failing to do an act or thing that he is required by the Act to do, the Court may grant an injunction requiring him to do that act or thing. Sub‑section (11) empowers the Court to award damages either in addition to or in substitution for an injunction. The expression "do an act or thing" includes "give effect to a determination made by the Superannuation Complaints Tribunal": sub‑s (12). SIS requires a trustee to comply with orders, directions or determinations of the Tribunal: s 34(1) and reg 13.17B. Accordingly, a trustee who, without lawful excuse, fails to comply with a determination of the Tribunal engages in conduct that constitutes a contravention of SIS for the purposes of s 315. Section 65 of the Act requires the Tribunal to report to the Commissioner any refusal or failure of a trustee to give effect to a determination made by the Tribunal. The significance of a contravention coming to the Commissioner's attention is that he may conduct an investigation of the trustee's affairs: s 263. For the purposes of an investigation the Commissioner may require the trustee to provide information, direct the trustee not to dispose of assets, and examine on oath persons having relevant information. By s 285 it is an offence for a person, without reasonable excuse, intentionally or recklessly to refuse or fail to comply with a requirement of the Commissioner under SIS. Under s 289 the Commissioner may, if satisfied that a person has, without reasonable excuse, failed to comply with a requirement made under the Act, certify the failure to the Federal Court or a Supreme Court, and the Court may order the person to comply with the requirement as specified in the order. Under s 313(1A), where an investigation is being carried out in relation to an act or omission by a person that constitutes or may constitute a contravention of SIS, the Commissioner may apply to the Court for a range of orders, including the appointment of a receiver or trustee of the property of a contravening individual or, if the contravener is a body corporate, a receiver or receiver and manager of its property. A person who intentionally or recklessly contravenes an order under the section is guilty of an offence and liable on conviction to imprisonment: s 313(12). Nothing in SIS that provides that a person must not contravene an order of the Court or that a person who contravenes such an order contravenes a provision of SIS or is guilty of an offence, affects the power of the Court in relation to the punishment of contempts of the Court: s 317. (iii) Mandatory injunction On an application under s 315(3) of SIS for an injunction requiring the trustee to give effect to a determination of the Tribunal, the claimant will have to prove the determination (as to which see s 43) and the trustee's failure to give effect to it. If the claimant establishes the failure, the Court is empowered to require the trustee to give effect to the determination. This is to be contrasted with the position of the Court under the Sex Discrimination Act 1984 considered in Aldridge v Booth (1988) 80 ALR 1. Determinations of the Human Rights Commission were "not binding or conclusive" between the parties. The Commission or a complainant could institute a proceeding in the Federal Court for an order enforcing the Commission's determination. Where the Court was satisfied that the respondent had engaged in unlawful conduct, it could make such order as it thought fit, including an order giving effect to the Commission's determination. Spender J held that since the proceeding in the Court was to "enforce" a non‑binding and non‑conclusive determination, the complainant would have to establish the unlawful conduct by evidence, and any findings by the Commission were of no assistance to the Court in its task. The situation was similar under the 1986 amendments to the Racial Discrimination Act. The Commission or a complainant was empowered to institute a proceeding in the Federal Court to enforce a non‑binding and non‑conclusive determination. Where the Court was satisfied that the respondent had engaged in conduct that was unlawful under the Act, it was empowered to make such orders as it thought fit. As Mason CJ, Brennan and Toohey JJ said in Brandy at 261, "an independent exercise of judicial power by the Federal Court was required to give effect to a determination". And at 270 Deane, Dawson, Gaudron and McHugh JJ contrasted the position in Brandy with that obtaining under the 1986 legislation where "the Federal Court had to be satisfied of a breach of the Act before making an order for itself". In Brandy, the automatic effect of compulsory registration of the Commission's determination was that it became binding on the parties and enforceable as an order of the Federal Court. As Deane, Dawson, Gaudron and McHugh JJ said at 270: Nothing that the Federal Court does gives the determination the effect of an order. That is done by the legislation operating upon registration. The result is that a determination of the Commission is enforceable by execution under s 53 of the Federal Court Act. It is the determination of the Commission which is enforceable and it is not significant that the mechanism for enforcement is provided by the Federal Court. Unlike the position under the Sex Discrimination Act and the Racial Discrimination Act, the Act does not provide that the Tribunal's determinations are not binding and conclusive. Under s 41(1) the Tribunal's determination comes into operation when it is made. Under sub‑s (3) a decision of the Tribunal in substitution for that of the trustee is for all purposes ... taken to be a decision of the trustee and, upon coming into operation of the determination of the Tribunal ... has effect, or is taken to have had effect, on and from the day on which the decision under review has or had effect. Section 47(1) provides that the institution of an appeal to the Federal Court from a determination of the Tribunal "does not affect the operation of the determination or prevent the taking of action to implement the determination". Sub‑section (2) empowers the Court to stay the operation or implementation of the Tribunal's determination so as to secure the effectiveness of the hearing and determination of the appeal. Although the words "binding and conclusive" are not used, that is the effect of ss 41 and 47. So in that respect the Act differs from the legislation considered in Aldridge v Booth and in Brandy. The SIS enforcement provisions also differ from the enforcement provisions in the Sex Discrimination Act and the 1986 amendments to the Racial Discrimination Act. Under the former the court does not engage in the same inquiry as that already carried out by the Tribunal. Under the Sex Discrimination Act the Federal Court had to be satisfied that the respondent had engaged in discriminatory conduct before it could make an order, including an order giving effect to the Commission's determination. Under the 1986 amendments to the Racial Discrimination Act the Federal Court had to be satisfied that the respondent had engaged in discriminatory conduct before it could make such order as it thought fit, including an order giving effect to a determination of the Commission. Under s 315 of SIS the court does not revisit the matters canvassed before the Tribunal. It merely asks whether the trustee has failed to give effect to the Tribunal's determination. If it is satisfied that the trustee has so failed, it may grant an injunction, on such terms as it thinks appropriate, requiring the trustee to give effect to the Tribunal's determination. A body with power to decide controversies between parties by the determination of rights and duties based upon existing facts and the law does not without more exercise judicial power. In my view Brandy establishes that the body must as well have power to enforce its determinations, or there must be provided some other enforcement mechanism which does not involve an independent exercise of judicial power by some other body. The enforcement machinery in the Sex Discrimination Act and the 1986 amendments to the Racial Discrimination Act involved a full inquiry by the Federal Court into the allegations of discrimination and a determination of contravention by the Court itself before an enforcement order could be made. No such full enquiry is involved under SIS. But before the court can order the trustee to give effect to the Tribunal's determination, it must satisfy itself that the trustee has failed to give effect to it, and then decide whether, on the material before it, it is appropriate to make a mandatory order. It will also consider whether the order should be made upon terms. Although the task for the court under s 315 of SIS is more confined than that performed by the Federal Court under the 1986 amendments to the Racial Discrimination Act, it is still "an independent exercise of judicial power" involving the exercise of a discretion as to whether a mandatory order should be made, and if so on what terms: cf Brandy at 261. Under s 25ZAB of the Racial Discrimination Act nothing the Federal Court did gave the Commission's determination the effect of an order. That was done by the legislation operating upon registration of the determination. Under s 315 of SIS a court's intervention is necessary before a mandatory order can be made: cf Brandy at 270. What I have said about s 315 applies to proceedings under ss 289 and 313(1A). (iv) "Enforcement" by prosecution A trustee which has contravened s 34(1) of SIS by failing to comply with a determination of the Tribunal may be fined up to 100 penalty units: sub‑s(2). On the assumption that prosecution for an offence under s 34 can be described as a mode of enforcing the determination, the mechanism involves the court hearing the charge being satisfied, beyond reasonable doubt, that the trustee has, without lawful excuse, intentionally or recklessly failed to comply with the Tribunal's determination. Again, there is an independent exercise of judicial power involved in the enforcement process. What I have said about s 34 applies to prosecutions under ss 285 and 313(12).

Brandy v Human Rights and Equal Opportunity Commission

At a glance

Court

Decision date

Before

Source

Judgment (18 paragraphs)

Parties

Legislation Cited (6)

Cases Cited (21)

Cited By (5)