The reasons of the Tribunal
19 The Tribunal said that once he turned 55, it was open for Mr Dunstan to request payment of his superannuation entitlements in the Commonwealth Superannuation Scheme. Evidence was adduced confirming that Mr Dunstan was eligible for a pension and a lump sum benefit on reaching the applicable preservation age of 55.
20 Unless he did so, release of the benefits could not occur and the benefits would not be payable to him prior to other specified events, such as turning 65. But he did not make a written request for payment. Mr Dunstan's inaction at that time did not cause any change in the deferred status of his superannuation benefits. The fact of him attaining preservation age did not render any benefits payable to him. None were paid to him, and none were paid on his behalf or were otherwise made available to him.
21 The Tribunal said the word "receives" was not given a special statutory meaning. In Archer v Comcare (2000) 101 FCR 30; [2000] FCA 1296 the Full Court of the Federal Court considered the meaning of the word "receives" in s 21, and said at [13]:
… an incapacitated employee "receives a lump sum benefit under a superannuation scheme" when a benefit that is payable to the employee has been paid to him, or has been paid at his direction or when the trustee in some other way has dealt with the benefit at the request or with the consent of the employee. In each of these cases the obligation to pay the benefit to the incapacitated employee will have been discharged or deferred.
22 The Tribunal considered the legislative framework and said Div 3 of Pt II of the SRC Act set out provisions governing the payment of weekly compensation to an employee who suffers an incapacity for work as a result of an injury. Under s 4(9), "an incapacity for work" refers to an incapacity to engage in any work, or to an incapacity to engage in work at the same level. Quite clearly, it said, one of the purposes of the SRC Act was to provide weekly income support to an incapacitated employee whose ability to earn income in employment has been reduced by injury.
23 The Tribunal referred to the definition of "superannuation amount" in s 4(1) of the SRC Act and to the terms of the s 21A(3) calculation. Plainly enough, the Tribunal said, these provisions were intended to ensure that account is taken of the payments an injured employee receives from a superannuation scheme, by way of a pension or a lump sum benefit, when calculating the weekly amount that he or she is entitled to be paid by way of compensation for incapacity.
24 The Tribunal referred to s 114B of the SRC Act enabling Comcare to recover overpayment amounts from the administrator of a superannuation scheme in certain circumstances, including where the retired employee has received no payment in respect of his or her entitlement to a benefit under the scheme. But the recovery provisions expressly did not apply if all of the retired employee's benefits in the superannuation scheme have been deferred, as in the present case.
25 The Tribunal said the delineation drawn between a superannuation benefit the retired employee receives, whether it is paid or not, and the deferral of superannuation benefits under s 114B(4) was germane for three reasons. Firstly, the delineation meant that recovery from a superannuation scheme is only permitted in cases where the employee actually receives or rolls over a superannuation benefit, or where such a benefit is payable to the employee. Secondly, it avoided the difficulty that otherwise would arise in determining the rate of pension and the lump sum on the retirement day that is payable to the employee, and calculating any resulting overpayment, week by week, when the employee's benefits have been deferred and are not payable. It was difficult to see how an overpayment could arise, and how s 21A could apply, in circumstances where a superannuation benefit was not payable to and had not been received by a retired employee who receives weekly compensation for incapacity. Thirdly, ComSuper's s 114B Notice referred to preserved benefits, but it did not refer to deferred benefits.
26 Comcare said that Mr Dunstan was entitled to payment of his superannuation benefits on reaching his preservation age. But, the Tribunal said, this was not correct. Mr Dunstan elected to defer his superannuation entitlements under s 137 of the Superannuation Act 1976 on cessation of his previous Commonwealth employment. Consequently, payment of Mr Dunstan's deferred superannuation benefits was governed by s 138 of the Superannuation Act 1976:
138 Circumstances in which person entitled to deferred benefits
(1) Subject to this Division, if a person makes an election under section 137, deferred benefits are applicable in respect of the person.
(2) Deferred benefits that are applicable in respect of a person become payable on the day immediately after the earliest of the following dates:
(a) if CSC is satisfied that the person has, because of invalidity or physical or mental incapacity, become totally and permanently incapacitated within the meaning of Part IVA - the date that CSC considers to have been the date on which the person became so incapacitated;
(b) the date of the person's death;
(c) subject to subsection (3), if the person, by written notice given to CSC, selects a date (not earlier than the date on which the notice is given) for the start of the payment of the deferred benefits - the date so selected;
(d) the 65th anniversary of the person's birth.
(3) Paragraph (2)(c) does not apply unless the person will have, by the date selected, reached the age that would have been his or her minimum retiring age for the purposes of this Act if he or she had not ceased to be an eligible employee and had continued to occupy the position held by him or her immediately before so ceasing.
(4) Deferred benefits are not payable unless:
(a) a written application has been made to CSC requesting payment of the benefits; and
(b) the applicant has given CSC any information that is necessary to enable CSC to determine whether the benefits are payable.
CSC is short for Commonwealth Superannuation Corporation.
27 The Tribunal said that on 27 September 2010 and presently, Mr Dunstan was not within the terms of s 138(2)(a), (b) or (d), and he had not given notice of a date for the start of payments under s 138(2)(c). It was not established that the preserved EFC superannuation amounts nominated by ComSuper in its s 114B Notice were payable to Mr Dunstan when he reached his preservation age.
28 The Tribunal then referred to s 31(2)(g) of the Superannuation Industry (Supervision) Act 1993 (Cth) under which superannuation funds are required to comply with preservation standards that are prescribed in the Superannuation Industry (Supervision) Regulations 1994 (Cth) (the SIS Regulations). Divisions 6.2 and 6.3, and Schedule 1 of the SIS Regulations govern the release and payment of preserved benefits. Under item 110 of Part 1 of Schedule 1 of the SIS Regulations, one condition of release applying to a preserved superannuation benefit is the retired employee achieving preservation age - in this case, 55. Action was required to trigger the release. In this case, the requisite action was a written notice under s 138(2)(c) or a written application under s 138(4)(a) of the Superannuation Act 1976 providing sufficient information to enable the trustee to determine whether benefits are payable. But no such action had been taken.
29 Thus, the Tribunal said, merely attaining preservation age did not render any preserved benefits payable to Mr Dunstan on 27 September 2010.
30 The Tribunal considered Comcare's submission that Mr Dunstan should be taken to have received his superannuation benefits on attaining his preservation age. At this age, so the argument went, he was entitled to draw down his superannuation in the form of a pension and a lump sum benefit. Even though superannuation benefits were not paid to Mr Dunstan on this date, he was entitled to request payment. On this basis, Comcare said that s 21A of the SRC Act should be construed to apply and Mr Dunstan should be taken to have received the benefits on 27 September 2010. The Tribunal said that Comcare's formulation was, effectively, one of constructive receipt.
31 The Tribunal said that constructive receipt arose, for example, in circumstances where a person may be taken to receive income, or in this case a superannuation benefit, when he or she applies or directs it, even though the income or benefit is not paid directly to the person. This was not a novel conception. Constructive receipt was well understood, in tax law for example. Part 3-30 of the Income Tax Assessment Act 1997 (Cth) dealt with superannuation and defines "superannuation benefit" in terms of various kinds of payments. The test to be applied under this Part when determining whether a superannuation benefit has been paid to or received by a person was set out in s 307.15 which applied for the purposes of determining whether a payment is a superannuation benefit; and determining whether a superannuation benefit was made to or received by the relevant person. The provision stated that a payment is treated as being made to you, or received by you, if it is made "for your benefit; or to another person or to an entity at your direction or request." The Tribunal said that even though the purposes of the Income Tax Assessment Act 1997 were different to those of the SRC Act, it saw no good reason to apply a different and broader conception of constructive receipt for the purposes of s 21A of the SRC Act.
32 In the present case, the Tribunal said, Mr Dunstan took no action whatsoever in respect of his superannuation on reaching his preservation age. This inaction did not authorise or require a payment of any kind to anybody. His earlier election to defer his superannuation entitlements remained in force, and no change was made. When he reached his preservation age, there was no obligation on the trustee of the Commonwealth Superannuation Scheme to pay him a pension or a lump sum. In these circumstances, the tests of constructive receipt were not satisfied.
33 The Tribunal then applied what the Full Court had said in Archer v Comcare at [11]:
… a benefit has not been received merely because the benefit is payable to the incapacitated employee. In order for an employee to receive a benefit, there must be something more than simply the existence of an obligation at law or in equity to pay the incapacitated employee a pension or lump sum benefit. How much more may be a matter of controversy.
34 Even if Mr Dunstan's inaction was sufficient to establish his tacit consent to continue the deferral (and the Tribunal said it made no such finding), the continuing effect of the deferral precluded a present obligation on the Commonwealth Superannuation Scheme trustee to crystalize and pay out his superannuation benefits. Without a present obligation to pay, there could be no constructive receipt.
35 The Tribunal rejected Comcare's proposition that an employee's entitlement to request or direct payment of a benefit, and thereby exercise control over it, should be construed as receipt of the benefit by the employee for the purposes of s 21A of the SRC Act. This was a step too far when control had not been exercised and there was no present obligation on the scheme trustee to pay the benefit.
36 The Tribunal then turned to the submission by Comcare that taking no action to request or direct payment of a superannuation benefit on reaching preservation age was sufficient to establish tacit consent to continuation of the status quo, requiring or directing the Commonwealth Superannuation Scheme trustee to make no change to an earlier election. In Comcare's submission, the "tacit acceptance" referred to in Archer v Comcare was analogous to Mr Dunstan taking no action on reaching preservation age and, thereby, tacitly consenting to his superannuation benefits remaining, undisturbed, in the Commonwealth Superannuation Scheme. In deciding to take no action, he effectively directed or at the very least tacitly consented to the manner in which his superannuation benefit was to be dealt with thereafter. Comcare asserted that this satisfied the test set out by the Full Court in Archer v Comcare. The Tribunal said this was not correct.
37 Archer v Comcare was distinguished on the facts. Mr Archer had requested the trustee of the relevant superannuation scheme to preserve all his benefits in the scheme, including non-preserved withdrawal benefits that were due and payable to him. The trustee informed Mr Archer that his request could not be complied with under the terms of the scheme and provided options. Mr Archer did not respond. Ultimately, the trustee transferred all of Mr Archer's benefits, including preserved and non-preserved benefits, into the scheme's eligible roll-over fund, of which AMP was the trustee. Mr Archer gave no instructions as to the disposition of the non-preserved withdrawal benefits (other than that these were not to be paid to him) and the Court said at [7]:
… in the circumstances of this case, Mr Archer appears to have accepted that the communications between the parties involved a tacit acceptance that the money paid to AMP is being held for his benefit with his concurrence.
38 While the factual basis of Mr Archer's apparent tacit acceptance, whether agreed or found, was not entirely clear, the relevant communications between Mr Archer and the scheme trustee were clearly identified in the Statement of Agreed Facts that was accepted into evidence in the anterior Tribunal proceedings. In the present case, there were no such communications or comparable circumstances.
39 The Tribunal said that if Comcare was suggesting that inaction or omission on the part of an employee was consistent with the provision of "tacit consent", sufficient to form a direction or request under the terms of the superannuation legislation it would reject the suggestion. For consent to be given tacitly, at the minimum, it must be established that the person had knowingly, voluntarily and deliberately chosen to remain silent, or to take no action, in the knowledge that a choice was being made, with real alternatives available. While intention may be inferred by conduct, ALH Group Property Holdings Pty Limited v Chief Commissioner of State Revenue (2012) 245 CLR 338; [2012] HCA 6 at [31]-[32], the evidence must be sufficient to support the drawing of the inference. The Tribunal said the existence of tacit consent must be assessed on the available evidence in the particular circumstances of each case. If an inference of an employee's intention, or his or her state of mind, is to be drawn, there must be sufficient evidence to support it. An inference of this kind cannot properly be drawn on the basis of conjecture or mere possibilities. The Tribunal found that the evidence was not sufficient to establish that Mr Dunstan provided tacit consent to action of any kind by the trustee of the Commonwealth Superannuation Scheme in respect of his deferred superannuation entitlements. Tacitly or otherwise, he did not request or direct or consent to action of any kind; and none was taken.
40 As to the submission by Comcare that the purposes of ss 20, 21 and 21A of the SRC Act included preventing "double dipping", the Tribunal said that in circumstances where an incapacitated employee actually receives a superannuation benefit, the off-setting operation of ss 20, 21 and 21A is clear and uncontroversial. It was accepted that where a superannuation benefit is payable to and received by an incapacitated employee, the Commonwealth may be said to pay twice and the employee may obtain a benefit in excess of his or her pre-injury earnings in employment if the "superannuation amount" of the benefit is not offset against the weekly compensation payments to the employee. Plainly enough, this would be contrary to the operation of ss 20, 21 or 21A and it may result in overpayment that may be recovered under the mechanisms set out in s 114B. It did not follow, however, that the same result was obtained in the circumstances of an incapacitated employee with a deferred superannuation benefit that was not presently payable and that had not been received by the employee.
41 The Tribunal said that in Mr Dunstan's case, subject to the superannuation legislation, the Commonwealth was liable to fund growth in the productivity component of his deferred superannuation benefit at some point in the future, when payment of the benefit was triggered and due to Mr Dunstan - when he turned 65, or he died, or he suffered permanent invalidity, or he requested payment of benefits, whichever occurred first. And, subject to calculations under s 19, the Commonwealth was liable to pay him compensation for incapacity as a result of an injury in Commonwealth employment until he turned 65. If his deferred superannuation benefits became due and payable to him before he turned 65, his weekly compensation would be reduced.
42 As to the submission by Comcare that, ultimately, Mr Dunstan would be better off to some degree than an equivalent employee to whom superannuation benefits were due and payable under the terms of a superannuation scheme on reaching the applicable preservation age, the Tribunal said that even if Comcare was correct, variance of this kind may result from divergent terms of different superannuation schemes without any "double dipping" by the employee. The elections a person might make under the terms of a superannuation scheme, such as the rate of contributions, or when benefits are deferred, preserved or paid, may result in one person being better or worse off than others in the same scheme. Furthermore, the elections that an employee may make under a superannuation scheme are matters of right, governed by the terms of the scheme and the relevant superannuation legislation. The Tribunal said it did not think that the SRC Act could properly be construed to require the exercise of rights conferred on an employee by other legislation without express provision. It said it had found no such express provision in the SRC Act. The Tribunal noted that issues concerning the interoperability of the SRC Act and the Superannuation Act 1976 were squarely addressed by the legislature in s 114B, where s 114B(14) expressly disapplied the bar on the assignment and attachment of benefits under ss 118 and 119 of the Superannuation Act 1976.
43 The Tribunal said that if it was the intention of the drafters to require an incapacitated employee to draw down his or her superannuation benefits on reaching the minimum compulsory preservation age, as Comcare contended, the terms of the SRC Act could have been drafted or expressly amended to achieve that result. Relying on the word "receives" to achieve this result stretched meaning too far.
44 Comcare submitted that s 21A should be construed in a manner that delivers a consistent result for employees who are eligible for superannuation benefits under various schemes, having reached the applicable preservation age, despite differing terms of operation under those schemes. Certainly, consistency of application was a desirable object. But, the Tribunal said, consistency could not be obtained by a construction that strained the limits of meaning to an untenable degree - there was a point at which interpretation of a statute must give way, even in the face of inconsistency or unfairness, leaving those effects of the legislation to the Parliament to address.
45 The Tribunal said that the language and purposes of s 21A were quite clear and there was no need to depart from a natural and grammatical reading.
46 The Tribunal said that the meaning of "receives" for which Comcare contended was very broad indeed. Comcare said that it was sufficient for an employee to have power or an entitlement to exercise discretion or control in respect of his or her superannuation benefits, albeit at a remove, including taking no action at all when the option exists to act, for the employee to be taken to receive a superannuation pension and a lump sum benefit for the purposes of the SRC Act. The Tribunal said it did not accept the construction Comcare contended for. The Tribunal did not think that the meaning of the word "receives" in s 21A of the SRC Act could stretch so far as to include something that was not payable at the relevant time and that had not been actually paid or constructively received. It would be necessary to strain the plain meaning of the statutory text in a tortuous manner to achieve that result.
47 The Tribunal said that in the context of s 21A, the word "receives" was cast in the present tense - it referred to a pension and a lump sum the employee receives from a superannuation scheme. It did not refer to eligibility for or an entitlement to a superannuation benefit that is retained in a superannuation scheme, under its terms, without payment at the direction or request of an employee.
48 The construction applied by the Full Court in Archer v Comcare was that an employee may be taken to receive a superannuation benefit if it is paid, or paid at his or her direction, or otherwise dealt with by the superannuation trustee at his or her request or with his or her consent.
49 The Tribunal referred to Commission for the Safety, Rehabilitation and Compensation of Commonwealth Employees v Neil (1993) 41 FCR 517.
50 The Tribunal referred to Commissioner for Railways (NSW) v Agalianos (1955) 92 CLR 390 where the High Court decided that the term "receives compensation" was sufficiently broad to encompass a right to be paid compensation even though no payment had been made, it having been established in the circumstances of that case that an injury giving rise to an entitlement to compensation had occurred. The Tribunal said it was well established that the liability of an employer (or an insurer such as Comcare) and the right to compensation of an injured employee arise concurrently at the point in time when the injury occurred, unless the governing legislation provides otherwise. It might have been analogous to say that Mr Dunstan's eligibility for or his entitlement to a superannuation benefit arose when he reached the compulsory minimum preservation age, but his right to be paid such a benefit did not arise on the mere passing of that anniversary. The Tribunal said that more was required under s 138 of the Superannuation Act 1976. On this point, Agalianos' case was distinguished.
51 The Tribunal held that Mr Dunstan did not receive superannuation benefits on reaching his preservation age. The deferral election he made meant that superannuation benefits were not payable to him on 27 September 2010 and they would not become payable to him unless and until the terms of s 138(2) of the Superannuation Act 1976 were satisfied.
52 The absence of any action on his part on reaching preservation age could not be construed to satisfy the requirements of s 138(2)(c) and (4) of the Superannuation Act 1976. On the present evidence, the Tribunal said, when Mr Dunstan reached his preservation age, nothing happened in respect of his deferred superannuation benefits. It appeared that Mr Dunstan and the scheme trustee did not communicate about his deferred benefits at that time. He did not tacitly consent to anything in respect of his deferred superannuation entitlements. Mr Dunstan's superannuation benefits remained undisturbed, subject to the deferral election he made in 2001. And there they would remain until he turned 65, or he died, or he became totally and permanently incapacitated, or he gave notice of a date selected for the start of payment of the deferred benefits, having ceased to be an eligible employee.
53 In these circumstances, the Tribunal said, it could not properly be said that Mr Dunstan received his superannuation benefits as a pension and a lump sum, when in fact he did not.
54 The Tribunal said that in the present circumstances of Mr Dunstan's case, there was no reason to depart from or to extend what the Full Court said in Archer v Comcare at [13]. Wherever the outer limits of the meaning of the word "receives" may lie, the Tribunal was satisfied that the term "the employee receives" in s 21A of the SRC Act did not stretch so far as to include superannuation benefits that have been deferred and are not presently payable to the employee, and that have not, actually or constructively, been received by the employee. In order to obtain that result, it would be necessary to do violence to the plain words of the statute and to torture the ordinary meaning of the word "receives"; and that, the Tribunal said, it could not accept.