Gale v Australian Financial Complaints Authority

National Mutual Staff Superannuation Plan 11 Upon commencing employment with National Mutual in 1986 the applicant also became a member of the National Mutual Staff Superannuation Plan (the NM Staff Plan). The trustee of the NM Staff Plan was National Mutual Staff Superannuation Pty Ltd (the NM Trustee).

NM Staff Plan transferred to the AXA Australia Superannuation Plan 12 Sometime between 1998 to 2000, following the demutualisation of National Mutual and subsequent acquisition by AXA, the applicant's benefits in the NM Staff Plan were transferred to the AXA Australia Superannuation Plan (the AXA Plan). 13 The trustee of the AXA Plan was originally AXA Australia Staff Superannuation Plan Pty Ltd, before Mercer Investment Nominees Limited was appointed trustee (the AXA Trustee).

Applicant resigns but elects to leave his benefit in the AXA Plan 14 In November 2000, when the applicant was 36 years old, and after more than 14 years of "Membership" of the NM Staff Plan, he resigned from employment with National Mutual and elected to retain his benefit in the AXA Plan as a "Deferred Benefit" in accordance with cl 3A.5.18 of the AXA Plan rules. Clause 3A.5.18 of the AXA Plan rules was apparently in the following terms: Leaving benefits in the Plan If an AXA Defined Benefit Member…: (a) leaves Service or his or her Service is terminated (whether or not by reason of Retrenchment); and (b) the Member has at least 10 years of Membership, the Member may elect to leave all or part of his or her benefit in the Plan (Deferred Benefit). 15 It appears to be uncontroversial that the purpose of the applicant electing to retain his benefit as a Deferred Benefit was so that upon reaching age 55 he would become entitled to an "early retirement [life] pension" (Early Retirement Pension Option). The Early Retirement Pension Option had been communicated to the applicant in 2000 by the NM Trustee, in the following written terms: When you leave service your benefit consists of a Basic Leaving Service Benefit and Additional Accumulations … You may leave all or part of your benefit in the Plan and be entitled to an Early Retirement Pension from age 55. … Once you reach age 55, but before age 65, you will be able to convert the accumulation of your Basic Leaving Service Benefit to a pension based on the conversion rates applicable to your age at the time of conversion. … Commutation of pension Once you have converted your accumulated benefit to a pension, the Trustee will not allow the pension to be commuted back to a lump sum, except in accordance with legislative requirements. (Emphasis added)

AXA Plan transferred to the AMP Superannuation Savings Trust 16 In December 2011, following the acquisition of AXA Australia by AMP, the AXA Plan, which at that time was a stand-alone corporate superannuation plan, was transferred to a new superannuation plan called the AMP Signature Super Employees' Superannuation Plan (the AMP Plan), being a plan (effectively a division or sub-fund) within the larger superannuation "master fund" known as the AMP Superannuation Savings Trust (the AMP Fund). The trustee of the AMP Fund was AMP Trustee. 17 The transfer of the AXA Plan to the AMP Fund was effected by way of a "successor fund transfer" under a transfer deed between the AMP Trustee and the AXA Trustee dated 30 November 2011. 18 The AMP Plan (as part of the larger AMP Fund) was governed by: (a) the AMP Fund trust deed dated 10 September 2018 (in particular Schedule F which governed "corporate plans" including the AMP Plan) (AMP Fund Trust Deed); and (b) the AMP Plan Rules, being the rules set out in the Signature Super Deed of Amendment to Plan Rules No. 2 dated 9 December 2011, made under r 2A.6 of the AMP Fund Trust Deed, which purported to replicate the AXA Plan rules so as to provide equivalent rights in respect of benefits for members transferred for the purposes of the definition of "successor fund" in the SIS Regulations.

AMP Plan Rules 19 The AMP Plan Rules are divided into seven parts which relevantly include Pt 1, which applies to all members of the AMP Plan; and Pt 3A, which applies to AXA Defined Benefit Members. Importantly, the applicant is an AXA Defined Benefit Member and classified as a Category AXA-A member. 20 Part 1 of the AMP Plan Rules includes cl 1.5.1 which provides, amongst other things, that the benefits payable to, or in respect of "AXA Defined Benefit Members" are set out in Pt 3A of the AMP Plan Rules. Clause 3A.5.10 also provides for the Trustee to, amongst other things, enter into any other special arrangements with members regarding their benefits, subject to cl 3A.5.11, which provides for actuarial certification that the proposed special arrangement "is equitable and not prejudicial to the interests of any other Member or Beneficiary in the Plan". 21 Clause 3A.5.18 of the AMP Plan Rules is in virtually identical terms to cl 3A.5.18 of the AXA Plan Rules (as set out in paragraph 14 above) dealing with the applicant's entitlement to a "Deferred Benefit". 22 Clause 3A.5.23 of the AMP Plan Rules provided for the Early Retirement Benefit Option at age 55 in the following terms: If any part of the Deferred Benefit (as adjusted for interest) remains in the Plan when the Member attains age 55, a Member who elected to defer his or her benefits before the Effective Date has the right at any time until age 65 to apply part or all of his or her remaining Deferred Benefit (as adjusted for interest) towards the early retirement pension option (whether or not named as such) in accordance with the terms and conditions of either the Schedule to the Previous AXA Fund Deed or this Part 3A which was appropriate to the Member's category of membership immediately before the leaving [sic] the Service (as modified by this clause 3A.5.23). (Emphasis added) 23 Clause 3A.6.11 of the AMP Plan Rules provided for the calculation of the lifetime pension benefit payable as an Early Retirement Benefit Option and expressly envisaged the pension being able to commence from the member's 55th birthday (with different conversion factors applying depending upon the age at which the pension commenced on and from age 55). 24 Clauses 3A.5.30 and 3A.5.31 of the AMP Plan Rules (the Commutation Provisions) set out the terms upon which commutations could be made as follows: Commutation of pensions and conversions of lump sums 3A.5.30 Subject to clause 3A.5.31, if a pension annuity or other periodical payment or allowance is payable to any person pursuant to this Part 3A and the right to commute all or any portion of that benefit to a lump sum is not specifically conferred on that person by virtue of the provisions of this Part 3A, that person may with the approval of the Trustee commute any portion of that benefit to a lump sum. 3A.5.31 A person referred to in clause 3A.5.30 may in writing request the Trustee to commute so much of that benefit as he or she shall state and upon the Trustee approving the same: (a) such commutation shall be made on such terms be subject to such health evidence and be of such amount as the Actuary may advise; and (b) the remainder of the benefit not so commuted shall be of such amount and payable on such terms as the Actuary may advise. (Emphasis added) 25 It is to be emphasised that the right to commute all or any portion of a pension to a lump sum was not specifically conferred on the applicant by virtue of the provisions of Part 3A of the AMP Plan Rules, and so any commutation of the applicant's pension to a lump sum pursuant to the Commutation Provisions could only occur with the approval of the Trustee.

AMP Fund Trust Deed 26 The AMP Fund Trust Deed, also governing the AMP Plan, includes: (a) a provision for Plan Rules (as defined in the AMP Fund Trust Deed) to prevail if there was any inconsistency with the AMP Fund Trust Deed, unless a contrary intention appears or the Plan Rules are inconsistent with Superannuation Law (as defined in the AMP Fund Trust Deed) (r 2A.6); (b) a definition of Superannuation Law which includes the Superannuation Industry (Supervision) Act 1993 (Cth) and the SIS Regulations (r 1.1); (c) a provision confirming that members are entitled to the benefits calculated in accordance with the schedule for their category (r 5.1); (d) a general compliance provision that required the Trustee to act or refrain from acting in order to comply with Superannuation Law notwithstanding anything to the contrary contained in the trust deed and Plan Rules (r 14.1); (e) a provision requiring the Trustee to pay all benefits in a form consistent with Superannuation Law (r 7.7); (f) a provision allowing the Trustee to "defer" payment of all or part of a benefit if the member requests (r 5.2); (g) a provision requiring the Trustee to retain benefits in the applicant's superannuation fund (including by transferring a member to a different category) or otherwise retaining benefits within the superannuation system (including by transferring them to another superannuation fund) as the Trustee considers necessary under Superannuation Law to preserve the benefits (r 5.3); (h) a provision giving the Trustee broad powers to do anything it considers appropriate, including compromising any claim (r 10.6); and (i) a provision confirming that benefits are payable when a member requests a benefit payment, if permitted in accordance with arrangements determined by the Trustee and subject to any applicable Plan Rules to the contrary (r F2.1 of Sch F).

Applicant applies for early retirement life pension in anticipation of turning 55 27 On 3 September 2019, shortly before his 55th birthday, the applicant wrote to the AMP Trustee advising that he intended to exercise his Early Retirement Pension Option on his 55th birthday, in accordance with his entitlement (as he understood it) under cl 3A.5.23 of the AMP Plan Rules. 28 On 16 September 2019 the AMP Trustee responded to the applicant, informing him that it could not commence paying an early retirement life pension from his 55th birthday because he had not satisfied an applicable condition of release.

Applicant's complaint to the AMP Trustee 29 After further correspondence between the applicant and the AMP Trustee the applicant sent a formal complaint to the AMP Trustee dated 30 April 2020 concerning his claim to an early retirement life pension. 30 The AMP Trustee responded to the applicant's complaint by letter dated 1 July 2020 refusing his claim to an early retirement life pension commencing on his 55th birthday. Following further correspondence between the applicant and the AMP Trustee (including a letter to the AMP Trustee dated 25 September 2020), the AMP Trustee confirmed its decision on 9 December 2020 (the Trustee's final decision). 31 For the purposes of the determination the final decision of the AMP Trustee was taken to be a decision of NM Super (as to which see paragraph 2, above).

Trustee's decision not to pay the early retirement life pension to the applicant 32 It would seem that the decision of the AMP Trustee to refuse to pay an early retirement life pension to the applicant was explained in the Trustee's final decision, and also by reference to previous correspondence from the AMP Trustee (not all of which seems to be before the Court), on the following bases: (a) the benefit rights under the AMP Plan were subject to the compliance with Superannuation Law clauses under the AMP Trust Deed, and the Superannuation Law included the cashing restrictions in respect of preserved benefits contained in Divs 6.2 (payment of benefits) and 6.3 (cashing of benefits) of Pt 6 of the SIS Regulations; (b) most of the applicant's benefits in the AMP Plan were "preserved benefits" for the purposes of the SIS Regulations; (c) the applicant's "preservation age" for the purposes of the SIS Regulations was 60; (d) preserved benefits in a superannuation fund cannot be cashed until a condition of release is met (with reference to benefits only being available to be paid before preservation age in the form of a non-commutable lifetime pension pursuant to Sch 1, item 108 of the SIS Regulations); (e) the form in which preserved benefits may be cashed is a form specified in Sch 1 of the SIS Regulations as a cashing restriction relating to the condition of release (with reference to reg 6.18(3) of the SIS Regulations); (f) by the applicant's 55th birthday he satisfied the condition of release specified in item 108 of the table in Sch 1 of the SIS Regulations ("Termination of gainful employment with an employer who had … at any time, contributed to the regulated superannuation fund in relation to the member") (Condition of Release 108); (g) however, the only forms in which preserved benefits could be cashed under Condition of Release 108 were a "non-commutable life pension" or a "non- commutable life annuity"; (h) the early retirement life pension was not a non-commutable life pension or a non- commutable life annuity, because the rules governing the AMP Plan allowed for commutations; and (i) therefore, the AMP Trustee was unable to commence the applicant's early retirement life pension from age 55, but could commence the pension upon his satisfying a condition of release with a "nil" cashing restriction in the future; for example, retirement (see condition of release at item 101 of the table in Sch 1 of the SIS Regulations); noting that for the applicant, retirement for the purposes of the condition of release at item 101 could not occur until he reached the age of 60, given his preservation age was 60 (see reg 6.01(7) of the SIS Regulations). 33 The applicant had suggested to the AMP Trustee that it could, notwithstanding the alleged operation of the Commutation Provisions in the AMP Plan Rules, exercise a power or discretion under one or more provisions of the governing rules to impose special commutation restrictions to his early retirement life pension essentially prohibiting any commutation of the pension to a lump sum. The AMP Trustee did not accept that the applicant giving up or waiving his right to commutation would make the pension non-commutable.

Trustee's decision not to retain pension entitlements in the fund pending his attaining preservation age 34 The applicant had also suggested to the AMP Trustee that it could exercise a power or discretion under the fund's governing rules to defer the commencement of the pension payments that would have otherwise been payable from age 55 (that is, by calculating them, but not immediately paying them out of the fund, and retaining them in an "accumulation account" in the fund) until the applicant satisfied a condition of release with a "nil cashing restriction" (for example, retirement at age 60). Under this scenario the applicant could accrue the benefit of his pension entitlements from age 55 and they would be paid on him reaching age 60 and retiring, as an additional lump sum amount. 35 The applicant provided the AMP Trustee (and the Authority in his complaint submissions) with examples of other superannuation funds with similar benefit designs to the AMP Plan (i.e., life pensions from age 55) that offered to "defer" the commencement of the pensions in the way described in paragraph 34 above, in order that members were not deprived of their benefit entitlements. 36 The AMP Trustee refused the applicant's request for such deferred pension arrangements to apply and explained briefly at page 5 of the Trustee's final decision: [A] pension cannot be paid (regardless of whether the payments are retained and accumulated) until you meet a condition of release and, I think fairly, the Trustee considers a condition of release has not been met.

Transfer of AMP Plan to Super Directions Fund 37 On 15 May 2020 (during the period of the applicant's complaint being processed) the AMP Plan was transferred to a superannuation plan within the Super Directions Fund (the Current Plan). NM Super is the trustee of the Super Directions Fund. 38 The Current Plan (which was a part of the Super Directions Fund) is governed by: (a) the Super Directions Fund trust deed dated 6 March 2020 (Super Directions Fund Trust Deed), in particular Sch D, which governs "corporate plans" including the Current Plan; and (b) the rules of the Current Plan, which, it may reasonably be inferred (and has not been disputed), replicate in substance the AMP Plan Rules. 39 The transfer of the applicant's benefits without his consent from the AMP Plan to the Super Directions Fund was undertaken in accordance with the successor fund transfer provisions of the SIS Regulations, which, amongst other things, required the AMP Trustee and NM Super to agree that the Current Plan conferred rights in respect of benefits that were equivalent to the rights in respect of benefits conferred in the AMP Plan in respect of the applicant and other transferring members: regs 1.03 (definition of "successor fund") and 6.29(1)(c) of the SIS Regulations. 40 The Super Directions Fund Trust Deed contains provisions that either replicate or are equivalent in substance to the relevant provisions of the AMP Fund Trust Deed (for example, cl D3.1 of Sch D of the Super Directions Fund Trust Deed is identical in all relevant respects to r F2.1 of Sch F of the AMP Fund Trust Deed).

The complaint to the Authority 41 On or around 20 May 2021 the applicant lodged a complaint about the Trustee's decisions with the Authority. 42 The Authority issued a "recommendation" in relation to the complaint on 25 January 2022 in favour of the Trustee. The applicant rejected the this recommendation and requested that the Authority issue a final determination having regard to some final submissions the applicant made to the Authority dated 27 April 2022. 43 As has been mentioned, on 8 August 2022 the Authority issued its final determination, which affirmed the Trustee's decision.

THE APPEAL TO THIS COURT 44 It is well established that the hearing by the Authority is a hearing de novo: Mercer Superannuation (Australia) Ltd v Billinghurst (2017) 255 FCR 144 at 155 [32] (Flick and Kerr JJ) and 164 [81] (Pagone J) and Rushton v Commonwealth Superannuation Corporation (No 3) [2021] FCA 358 at [50] (Rares J); and, in relation to the Authority's predecessor, the Superannuation Complaints Tribunal, see Attorney-General (Cth) v Breckler (1999) 197 CLR 83 at 128 [87] (Kirby J) and Lykogiannis v Retail Employees Superannuation Pty Limited (2000) 97 FCR 361 at 372 [48] (Mansfield J), referring to Seafarers' Retirement Fund Pty Ltd v Oppenhuis (1999) 94 FCR 594 at 598-599 [18]-[22] (Merkel J). 45 The Authority must give written reasons for its decision: s 1055A of the Corporations Act. Section 25D of the Acts Interpretation Act 1901 (Cth) provides that the instrument giving those reasons shall also set out the findings on material questions of fact and refer to the evidence or other material on which those findings were based: Edser v QSuper Board [2021] FCA 1437 at [25] (Perram J). Where a finding is not expressed in the reasons an inference may be drawn that the Authority (as the decision-maker) did not regard the fact as material to its deliberations: Edser at [25], applying the principle in Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 330-331 [5] (Gleeson CJ). However, the totality of the Authority's reasons must be considered, and not with an eye clearly focused or an ear keenly attuned to the perception of error: Wan v BT Funds Management Limited [2022] FCFCA 189 at [1] (Markovic J), [2] (McElwaine J), [40] and [52] (McEvoy J), citing Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 287, Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272 and Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611 at 634 [85]. 46 The Authority's jurisdiction and powers, which are conferred under s 1055 of the Corporations Act, are focused on the fairness and reasonableness of a decision "in its operation in relation to the complainant", not its lawfulness: QSuper Board v Australian Financial Complaints Authority (2000) 276 FCR 97 at 113 [64] (Moshinsky, Bromwich and Derrington JJ); Wan at [1], [2] and [20]. However, the Authority is prohibited from making a determination that is contrary to law or to the governing rules of the fund: s 1055(7) of the Corporations Act. In QSuper at [65] the Full Court noted: Despite the width of AFCA's remedial powers, subsection (7) requires that it exercise the powers of the trustee or other authorised person within legal confines. It is not entitled to make a decision which is contrary to the terms of the trust or beyond the limits of any relevant statutory regulation. For instance, AFCA could not, standing in the shoes of a trustee, exercise a power in a manner which breached the trustee duty to observe the terms of the trust. 47 Section 1057(1) of the Corporations Act provides that a party to a superannuation complaint may appeal to this Court, on a question of law, from the Authority's determination of the complaint. If the question is whether the Authority in answering questions of fact failed to take into account a relevant consideration, had regard to an irrelevant consideration, adopted a wrong approach, or reached a decision so unreasonable that no reasonable decision-maker could have come to it, then such a question is a question of law: Board of Trustees of the State Public Sector Superannuation Scheme v Edington (2011) 119 ALD 472 at [36] (Kenny and Lander JJ) and [70] (Logan J), referring to Sharp Corporation of Australia Pty Ltd v Collector of Customs (1995) 59 FCR 6 at 12 (Davies and Beazley JJ) and 12-13 (Hill J). Questions of construction are questions of law: Edser at [69]. Whether or not the Authority (as the decision-maker) exercised its powers in accordance with s 1055 of the Corporations Act is also a question of law: Edington at [43] and [70]. 48 Whether the appeal raises a question of law is a matter that must be addressed as a matter of substance. If there is doubt, the Court should consider the notice of appeal, the alleged question or questions of law, the grounds raised, the statutory context, and the Authority's (the decision-maker's) reasons for its decision. Having considered all these matters, the Court must satisfy itself that there is in fact a question of law: Haritos v Federal Commissioner of Taxation (2015) 233 FCR 315 at 350 [94] (Allsop CJ, Kenny, Besanko, Robertson and Mortimer JJ); Sharp at 12-13; and Reeves v Nulis Nominees (Australia) Limited (Trustee) [2022] FCA 627 at [34] (Nicholas J). 49 As the applicant submits, the existence of a question of law is not merely a qualifying condition to ground an appeal from a decision of the Authority. Rather, it and it alone is the subject matter of the appeal, and the ambit of the appeal is confined to it: Reeves at [32], citing Brown v Repatriation Commission (1985) 7 FCR 302 at 304 (Bowen CJ, Fisher and Lockhart JJ). The purpose of limiting an appeal to a question of law is to ensure that the merits of the case are dealt with not by Court but by the administrative decision-maker: Reeves at [33], citing Repatriation Commission v Owens (1996) 70 ALJR 904 at 904 (Brennan CJ, Gaudron and Gummow JJ). 50 Against the background of these statutory provisions and the relevant principles developed in the authorities it is necessary to consider the questions of law which are raised by the Authority's determination.

QUESTION 1: COMMUTABLE PENSION DECISION 51 Question 1 concerns what has been referred to as the Commutable Pension Decision. Question 1(a) is directed to whether or not the applicant's pension was properly construed by the Authority to be "commutable" having regard to the governing rules of the fund. Question 1(b) concerns whether or not the Authority correctly construed the meaning of "non-commutable life pension" under Condition of Release 108. 52 The Authority correctly identified that pursuant to Condition of Release 108 the Trustee is permitted to cash preserved benefits of a member before the member reaches their preservation age if they are paid as a "non-commutable life pension or non-commutable life annuity". As such, if the Authority had determined the early retirement life pension payable to the applicant was a "non-commutable life pension" under Condition of Release 108, it is uncontroversial that the Trustee could have commenced paying it to the applicant from age 55 without any need for him to have satisfied any other condition of release. There was no dispute about whether the applicant had ceased service with an employer (National Mutual) who had contributed to his fund (the conditions of release), and so the key issue became the cashing restrictions under column 3 of the table in Sch 1 of the SIS Regulations. 53 The Authority made a finding that even though the early retirement life pension "is a pension for the purposes of regulation 1.06, the [T]rustee must still comply with the cashing restrictions [for Condition of Release 108]. That is, the [T]rustee cannot commence payment of the pension under the preservation rules because it is commutable". 54 The applicant submits that this finding was incorrect because the Authority failed to take into account the Commutation Provisions that applied to his pension pursuant to which he had no right to commute his pension without the approval of the Trustee. That is to say, the applicant contends that a right to request commutation of a pension which is subject to approval by the Trustee does not constitute a "commutable pension", all the more so given that the Trustee is bound to comply with the Superannuation Law. 55 I accept the applicant's submissions on this aspect of the Authority's determination. It was an error to find that the early retirement life pension available to the applicant was commutable for relevant purposes. The Authority's error is apparent from the statement it made, likely based on s B6 of the AMP Fund Trust Deed, that "[t]he fund rules permit the early retirement pension to be commuted". This conclusion fails to take into account the Commutation Provisions which do not give the applicant any right, as such, to commutation. Rather, they give the applicant a right to request that the Trustee approve a commutation request. 56 It would seem that the Authority incorrectly identified the provisions governing the commutation of the applicant's early retirement pension entitlement as being set out in Sch B, s B6 of the AMP Fund Trust Deed (see page 3 and section 3.3 of the determination). Although Sch B of the AMP Fund Trust Deed purported to apply generally to pensions payable from the fund, s B6 governing the commutation did not apply to the applicant's pension because: (a) the applicant was an AXA Defined Benefit Member and a Category AXA-A member to whom the AMP Plan Rules applied pursuant to the AMP Plan being a corporate plan under the AMP Fund; (b) the applicant's benefits were governed by r 2A and Sch F of the AMP Fund Trust Deed (which applied only to members of the Corporate Category, and to members of the AMP Plan, including the applicant, who were Corporate Category members under the AMP Fund Trust Deed); and (c) to the extent that s B6 of Sch B of the AMP Fund Trust Deed did apply to the applicant's pension benefit entitlements, these commutation provisions are inconsistent with the Commutation Provisions of the AMP Plan Rules, and so the Commutation Provisions of the AMP Plan Rules prevail: r 2A.6 of the AMP Fund Trust Deed (therefore the approval of the Trustee is required for any commutation by operation of cl 3A.5.30 of the Commutation Provisions). 57 It is for these reasons that I accept that the Authority erred in determining that the applicant's early retirement life pension was "commutable" and it ought to have applied the Commutation Provisions in determining whether his pension could be treated as "commutable". As has been mentioned, the Commutation Provisions applicable to the applicant's pension require that, amongst other things, any commutation can only be made with the approval of the Trustee. In this respect counsel for the applicant submitted orally, referring to Thomas on Powers (2nd ed, Oxford University Press, 2012) at [7.111], that "[w]here the giving of consent is regarded as a condition precedent, then clearly unless and until the consent is given, any exercise of the power is to all intents and purposes void." See also, in this regard, Carter v Commissioner of Taxation (2020) 279 FCR 83 at 96 [53] (Jagot, Davies and Thawley JJ). I accept that because the Trustee's consent is required for the commutation of the applicant's early retirement life pension, unless and until that consent is given there can be no commutation of the pension. Therefore, the applicant's early retirement life pension should properly be regarded as a "non-commutable life pension" until such time as the Trustee consents to, and thus approves, any commutation. 58 The applicant notes also that once the pension has commenced being paid, the Trustee would not thereafter "approve" any commutation pursuant to the Commutation Provisions that would cause the pension to then cease to be a "non-commutable life pension." By operation of rr 7.7 and 14.1 of the AMP Fund Trust Deed (Compliance Rules) the Trustee cannot approve any commutation that fails to comply with the pension standards or Superannuation Law. Such approval would have the result that: (a) the Trustee would be in breach of reg 6.17 of the SIS Regulations, which provides that a member's benefits in a fund must not be cashed except as allowed under Div 6.3 of the SIS Regulations (Div 6.3 only allows preserved benefits to be cashed upon a condition of release being met) - if the Trustee were to permit commutations after a lifetime pension commenced, which were not otherwise consistent with reg 1.06(2) (as further restricted by the operation of the definition of "non-commutable pension" under reg 6.01(2) (see paragraph 59 below)), the Trustee would contravene reg 6.17 (see also reg 6.17C of the SIS Regulations); and (b) the benefit being paid to the applicant would no longer qualify as a "pension" (for the purpose of the SIS Regulations (see reg 1.06(1)) and would fail to satisfy the standards for lifetime pensions set out under reg 1.06(2)) if the commutation would be inconsistent with the standard set out in reg 1.06(2)(e) of the SIS Regulations, which limits commutations other than in prescribed circumstances. 59 The applicant submits also that the Authority erred by incorrectly interpreting the meaning of "non-commutable life pension" under Condition of Release 108. It is said that the Authority appeared to give the words "non-commutable" their ordinary meaning without having regard to the statutory provisions governing the construction of those words. The applicant says that the error is apparent for the following reasons: (a) the chapeau to reg 6.01(2) provides for the definitions under that regulation to apply to Pt 6 (payment standards) and to Sch 1 of the SIS Regulations "unless the contrary intention appears"; (b) the Authority did not apply, but ought to have applied, the definition of "non- commutable pension" under reg 6.01(2) of the SIS Regulations to determine the meaning of "non-commutable life pension" under item 108 of Sch 1 of the SIS Regulations; (c) "non-commutable pension" is relevantly defined in reg 6.01(2) of the SIS Regulations as follows: non-commutable pension means a pension provided under rules of a superannuation fund that: (a) meet the standards of sub-regulation 1.06(2) [this sub-regulation relates to life pensions, and the relevant standards include that the pension cannot be commuted except in certain specified circumstances]…; and (b) ensure that, if the pension is commuted under subparagraph 1.06(2)(e)(i) [i.e., commutation made within 6 months after the commencement day of the pension]…, the resulting superannuation lump sum cannot be cashed unless: (i) the purpose of the commutation is to cash an unrestricted non- preserved benefit [not relevant here as no part of the applicant's benefit was unrestricted non-preserved];or (ii) before commutation, the pensioner has satisfied a condition of release in respect of which the cashing restriction for preserved benefits and restricted non-preserved benefits is 'Nil'. (d) the Authority ought to have recognised, which it did not, that a "non-commutable life pension" for the purposes of Condition of Release 108 referred to a life pension under reg 1.06(2) that met the additional limitations on commutation set out in the definition of "non-commutable pension" under reg 6.01(2) of the SIS Regulations; (e) the Authority did not find that the early retirement life pension otherwise payable to the applicant would not satisfy the pension standards under reg 1.06(2) for the payment of a life pension (set out at section 3.3 of the determination), and so the only issue for determination by the Authority ought to have been whether the early retirement life pension also satisfied paragraph (b) of the definition of "non-commutable pension", which operated to further limit the "cashing" of any commuted lump sum that occurred pursuant to subparagraph 1.06(2)(e)(i) of the SIS Regulations (which allows for commutations to occur within the first six months of commencing a lifetime pension); (f) the Authority ought to have found that to the extent commutations of the early retirement life pension would be permissible under subparagraph 1.06(2)(e) of the SIS Regulations, subject to the further restriction imposed by paragraph (b) of the definition of "non-commutable pension", those kinds of commutations would not exclude the pension from being defined as a "non-commutable life pension" for the purposes of Condition of Release 108; (g) were the Trustee to commence to pay the early retirement life pension to the applicant from age 55 as a lifetime pension under reg 1.06(2) of the SIS Regulations, the Trustee would not then be permitted to "approve" any commutation of the pension in circumstances proscribed by the definition of "non-commutable pension" under reg 6.01(2) of the SIS Regulations because of the operation of the Compliance Rules in the AMP Fund Trust Deed; (h) the Compliance Rules required the Trustee to pay benefits consistently with Superannuation Law and, to the extent that there was any inconsistency between provisions of the trust deed and Plan Rules with Superannuation Law, to act or refrain from acting in order to comply with Superannuation Law such that the early retirement life pension payable to the applicant would satisfy the definition of "non-commutable pension" under reg 6.01(2) of the SIS Regulations and therefore fall within the meaning of "non-commutable life pension" under item 108 of Sch 1 of the SIS Regulations; (i) the Commutation Provisions were therefore effective to limit commutations of the early retirement life pension to conform with the definition of "non-commutable pension" under reg 6.01(2) of the SIS Regulations because all commutations would have to be approved by the Trustee and the Trustee was bound by the Compliance Rules. 60 Whether or not the Authority incorrectly interpreted the meaning of "non-commutable life pension" under Condition of Release 108, it may at least be accepted that the Authority erred by not engaging meaningfully with the interpretation of that phrase. On the basis of the determination I accept that the Authority failed to give proper, genuine and realistic consideration to the possible interpretation of "non-commutable life pension" under Condition of Release 108, pursuant to reg 6.01(2) of the SIS Regulations. 61 If the Authority had not erred by failing to give proper consideration to the meaning of "non-commutable life pension" under item 108 of Sch 1 of the SIS Regulations it may be that the Authority would have determined, pursuant to s 1055(4) of the Corporations Act, that the Trustee's decision to refuse to pay the early retirement life pension commencing from the applicant's 55th birthday was unfair or unreasonable, for the reasons set out in paragraphs 53 to 57 above, in its operation in relation to the applicant. The Authority may then have taken one or more of the actions mentioned in s 1055(6) of the Corporations Act for the purpose of placing the applicant, as nearly as practicable, in such position that the unfairness, unreasonableness, or both no longer existed.

QUESTION 2: NO WAIVER OF RIGHTS DECISION 62 Question 2 concerns what has been referred to by the applicant as the No Waiver of Rights Decision by the Authority in rejecting the applicant's suggestion that he could waive any so-called rights to commute his pension. Question 2(a), whether the Authority misconstrued the terms of the trust deed in finding that the applicant had "commutation rights", is essentially question 1(a) and, as such, has been dealt with above. Question 2(b), whether the wrong approach was adopted by the Authority to the issue of waiver, falls away in light of the success of question 1. Question 2(c), concerning the finding that all members of the fund were required to be treated "fairly and equally" such that individual rules could not be applied to the applicant, becomes irrelevant in these circumstances. Accordingly it is unnecessary to deal with the matters which are the subject of questions 2(b) and 2(c): see Boensch v Pascoe (2019) 268 CLR 593 at 600-601 [7]-[8] (Kiefel CJ, Gageler and Keane JJ) and 629-630 [101] (Bell, Nettle, Gordon and Edelman JJ).

QUESTION 3: NO RETENTION OF PENSION ENTITLEMENTS DECISION 63 Question 3 is concerned with what is submitted to be three separate, but related, errors at law in relation to the Authority's decision that the applicant could not be provided with an early retirement pension entitlement that could commence to accrue from his 55th birthday. As with the second and third aspects of question 2, however, given the applicant's success on question 1 it is also unnecessary to deal with the asserted errors of law which are the subject of question 3.

QUESTION 4: NO COMPROMISE OF CLAIM DECISION 64 Question 4 is concerned with whether or not the Authority misconstrued the Trustee's power to compromise claims and erred in determining that in order for the Trustee to compromise a claim the Trustee must be satisfied that it had committed an error. Although, strictly, for the reasons given in relation to questions 2 and 3, it is also unnecessary to determine this question, it is submitted that the Authority's error is so glaring that the Court should correct it, both for the purposes of the resolution of this particular controversy but also more generally. In all the circumstances I accept that it is desirable to deal with question 4. 65 It is clear that the applicant had sought to settle his complaint with the Trustee by offering a compromise in terms described in the determination as follows: In his letter to AFCA, the complainant also proposed the trustee could compromise his claim, saying: If AFCA disagrees with me, and agrees with [the trustee] that [the trustee] cannot implement either of the 2 options requested (as described in paragraph 2 above), I submit that AFCA should determine that [the trustee] compromise my claim with payment to me of an amount commensurate with the benefit I should have received as promised under the Plan rules, which I estimate to be around $240,000 to $280,000 plus interest, based on the assumption that I will satisfy a condition of release by ceasing an employment arrangement at age 60. The trustee has power under sub-clause 12(5)(d) of the 2020 trust deed to compromise any claim. However, I am not satisfied the trustee has made any error. 66 The AMP Trustee has a broad power to compromise claims pursuant to r 10.6(d) of the AMP Fund Trust Deed. 67 It is submitted that the error the Authority made here is that it wrongly considered that the Trustee was not empowered to compromise the claim unless the Trustee was satisfied that it had made an error. The applicant points to Retail Employees Superannuation Pty Ltd v Crocker (2001) 48 ATR 359 at 387-388 [132]-[133] (Allsop J) where his Honour warned about the narrow view of how the trustee in that case had determined that it would deal with the controversy before it without consideration of whether it should compromise the claim. 68 The applicant submits, and in all the circumstances I accept, that it ought to have been sufficient to enliven consideration of whether to compromise his claim that the Trustee had formed a view that "there can be and, in this case, there are differences in interpretation of the trust deed and legislation and their interaction" and that the Trustee's decision was based only on its "reasonable interpretation of the trust deed and legislation". From these statements I accept that it is evident that the Trustee had contemplated the possibility that the applicant was correct in his assertions about the terms of the governing rules and law, and there was therefore a corresponding risk that the Trustee was wrong about those matters. In those circumstances I accept that there was scope for the Trustee to have agreed to compromise the applicant's claim. Insofar as the Trustee considered it was precluded from doing so because it was not satisfied that it had made any error, this was not the correct approach. 69 Referring to QSuper at 113 [64]-[66], counsel for the applicant contended that the Authority erred by not reviewing the Trustee's decision not to compromise the claim having regard to its obligation to consider whether the decision, in its operation in relation to the applicant, was fair and reasonable in all the circumstances. I accept that in this sense the determination does not engage meaningfully with the question of whether the Trustee's decision was fair and reasonable in the circumstances.

CONCLUSION 70 In light of my conclusion in relation to questions 1 and 4, the appeal will be allowed. The Authority's determination will be set aside, and the matter will be remitted to the Authority to be determined according to law and the governing rules of the fund. 71 The Authority and the Trustee having indicated that they wish to be heard on the question of costs, there will also be orders that the parties' file short written submissions on costs, and that the question of costs be determined on the papers. I certify that the preceding seventy-one (71) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McEvoy.