Mercer Superannuation (Australia) Limited v Billinghurst

Unfairness or unreasonableness in process (Grounds 1 and 2) 16 Notwithstanding that the Fund Actuary had advised the Trustee that the funding objective of the Trust Deed, as specified by the Participation Agreement, was as quoted at [6] above; when Grosvenor wrote to the Trustee to advise of its intention to cease business in Australia it appears uncontentious that each of the Trustee and the Plan Actuary proceeded on the premise that the transfer value for Pensioners (of whom Mr Billinghurst was one) was to be determined by reference to the cost of his purchasing an equivalent annuity without allowance being made for future pension increase as Grosvenor had requested (cl 3(b) of Grosvenor's letter of 15 November 2011, see at [9] above). Grounds 3 and 4 of the appeal are premised on the strength of that assumption. 17 Whether the Fund Actuary and the Trustee were correct to accept the validity of that and the other constraints imposed and/or requested by Grosvenor was central to the decision of the Tribunal and the reasons of the judge at first instance. 18 Mr Billinghurst's case in the Tribunal, inter-alia, was that a fair valuation of the lump sum required to commute his pension to a lump sum required the Trustee to have regard to the fact that Grosvenor had to, on an annual basis, determine whether or not to increase the pension having regard to cost of living increases recommended by the Actuary. A chronology submitted by the Applicant, not put in dispute, shows that Mr Billinghurst had received the following increases in his pension: (1) Pension at retirement: $84,913.36 (Appeal Book Part B, tabs 7, 9) (2) 1 January 2001 increase of 2.3% pa (Appeal Book Part B, tab 10) (3) 1 January 2002 increase 1.9% pa (Appeal Book Part B, tab 12) (4) 1 January 2003 increase 2.4% pa (Appeal Book Part B, tab 13) (5) 1 January 2004 increase 2% pa (Appeal Book Part B, tab 14) (6) 1 January 2005 increase 1.75% pa (Appeal Book Part B, tab 16) (7) 1 January 2006 increase 2.3% pa (Appeal Book Part B, tab 17) (8) 1 January 2007 increase 2.9% pa (Appeal Book Part B, tabs 21, 22) (9) 1 January 2008 increase 1.4% pa (Appeal Book Part B, tabs 24, 27) 19 It will be noted that Mr Billinghurst continued to receive increases in his pension for the first two years after the transfer of the fund to the Trustee. 20 A central aspect of Mr Billinghurst's complaint to the Tribunal was that the Trustee and the Plan Actuary, by accepting the directions that had been given to them by the "fund participant" to not make any allowance for future pension increases had displayed a want of independence from the interests of Grosvenor. The outcome arrived at was less than his entitlement and is for that reason, neither fair nor reasonable. 21 Before the Tribunal the Trustee submitted that it had not been unreasonable for the Trustee and the Plan Actuary to have taken into account Grosvenor's preferences and its not unlimited commitment to make additional contributions to meet its desired outcomes (Tribunal at [48]). 22 The Trustee submitted that it was fair and reasonable for it to have adopted an assumption that pensions would not increase because Grosvenor, which had the power under the rules to authorise discretionary pension increases, had specifically requested the Trustee assume that pensions would not be subject to further increases (Tribunal at [63]). The Trustee was not required to do everything within its power to maximise or optimise Mr Billinghurst's benefits (Tribunal at [65]). 23 However the Tribunal took a different view. It concluded that it was the obligation of the Trustee by reason of the covenant imposed by s 52(2)(c) of the Superannuation Industry (Supervision Act) 1993 (Cth) (the Supervision Act) to perform its duty and exercise its power to calculate the lump sum amounts in the best interests of the beneficiaries. That duty extended to Mr Billinghurst (Tribunal at [78]). 24 The Trustee had the duty to exercise the same degree of care, skill and diligence as a prudent trustee would exercise - and if there was any conflict between its duties to the beneficiaries and anyone else, including itself, to give priority to the former (Tribunal at [79]). 25 The Tribunal noted that the Plan Actuary in his letter to the Trustee of 9 December 2011 in which the Plan Actuary had given advice regarding the sum required to commute Mr Billinghurst's pension entitlements to a lump sum, had said that the Trustee had requested that he provide advice "taking into account the wishes of [Grosvenor] and the top-up contribution it is prepared to make" (Tribunal at [83]). 26 The Tribunal stated that in its view the Designated Rules did not permit the Trustee to take those factors into account in making its calculation (Tribunal at [87]). 27 The Tribunal reasoned (at [90]-[91]) 90. Having regard to the history of pension increases in many of the years in which the Complainant's pension had been paid, the Trustee's function, in properly calculating the lump sum equivalent of the Complainant's pension, was to determine whether, in acting in the best interests of the beneficiaries, it was appropriate to adopt the assumption of no pension increases. In making that decision, which was an important factor in calculating the Complainant's lump sum, it is the Tribunal's view that the Trustee was not entitled to be influenced by the Employer and, given the history of pension increases, it was not reasonable for the Trustee to assume that there would be no pension increases in the future. 91. A further submission of the Trustee was that it properly took into account the preferences and objectives of the Employer, including the objective to provide the Complainant with a lump sum that was a fair and reasonable valuation of his pension and which was also sufficient to purchase an equivalent annuity. The cost of purchasing an equivalent annuity was a factor that, in the Tribunal's opinion, Rules 16.5 and 16.6 did not permit to be taken into account in valuing the lump sum equivalent of the Complainant's pension. The Employer's objectives were also not factors that could be taken into account by the Trustee in properly calculating the lump sum commutation value of the Complainant's pension. 28 The Tribunal concluded that the Plan Actuary had had a conflict of interest in advising the Trustee because he had already advised Grosvenor in relation to the calculations and termination of the Plan. 29 The Tribunal reasoned (at [99]-[105]) as follows: 99. Under the general law, a conflict of interest can arise where a person who is giving advice advises two or more people, each of which has an interest in the outcome of the advice. 100. The Employer had an interest in the outcome of the Plan Actuary's deliberations and recommendations on the lump sum equivalent of the Complainant's pension because, amongst other things, that could determine the amount that the Employer paid into the Plan if the Trustee accepted the Plan Actuary's recommendations. The Trustee, in acting in the best interests of the members, also had an interest, on behalf of the members, in the outcome of the Plan Actuary's deliberations and recommendations in carrying out the Trustee's function under the Designated Rules of determining what the Complainant's lump sum equivalent of his pension was. 101. That the advice given by an adviser may affect the nature or quality of the advice given where there is a conflict of interest is referred to in the Prudential Practice Guide issued by the Australian Prudential Regulation Authority on conflicts of interest where it is said that a person or firm undertaking a material business activity for, or otherwise advising, a registerable superannuation entity licensee may have a conflict that could affect the nature or quality of the advice given. 102. The Tribunal acknowledges the force of the arguments put by the Trustee as to why it was appropriate for it to act on the Plan Actuary's advice even though he had also advised the Employer. The Trustee submitted that there was nothing unusual about the Plan Actuary advising both the Trustee and the Employer and that it is common industry practice. 103. However, in the view of the Tribunal, the fact that there is nothing unusual about it and that it is common industry practice is not determinative of whether it is correct practice. It is a matter of public record that practitioners in other professions apply the legal principles in relation to conflicts of interest in determining who they can advise and those same principles apply to actuaries. 104. In the view of the Tribunal, there was a conflict between the financial interest that the Employer had in the outcome of the Plan Actuary's recommendations and the financial interest that the Trustee had in acting in the best interests of its members, including the Complainant, in the outcome of those recommendations. 105. There was, therefore, in the view of the Tribunal, a conflict of interest in the Plan Actuary advising both the Employer and the Trustee in relation to what was the lump sum equivalent of the Complainant's pension and, because of that conflict of interest, it was not appropriate for the Trustee, because of its fiduciary duties to the Complainant, to act on the advice and recommendations of an actuary who was also advising the Employer. Furthermore, there is no evidence before the Tribunal that clearly demonstrates that the Trustee gave priority to the interests of the beneficiaries, as a result of the conflict of interest. 30 The Tribunal was not satisfied that the Trustee's decision regarding the calculation of the lump sum payable to Mr Billinghurst was fair and reasonable within the meaning of s 37(6) of the Superannuation (Resolution of Complaints) Act 1993 (the Complaints Act). The Tribunal concluded that it had been unreasonable for the Trustee to rely on the recommendations of the Plan Actuary, because the Plan Actuary was advising both the Trustee and Grosvenor regarding the calculation of the lump sum, and there was no evidence that the Plan Actuary correctly determined the value of the lump sum or prioritised Mr Billinghurst's interests in the light of such a conflict of interest. 31 The Tribunal set the Trustee's decision aside and directed that it obtain independent actuarial advice. That was the decision upheld by the primary judge. 32 Grounds 1 and 2 of this appeal assert that the primary judge fell into error by not finding that the Tribunal had misunderstood its statutory task. It is not contentious that a "hearing before the Tribunal [is] de novo and its task [is] to determine whether the trustee's decision was fair and reasonable in the circumstances, rather than whether the Trustee had committed error": Edwards v Commonwealth Superannuation Corporation [2017] FCAFC 173 (Griffiths, Pagone and Davies JJ at [7]). 33 The Appellant submits that his Honour should have found that the Tribunal had misconceived its duty as that of reviewing the process adopted by the Trustee rather than performing its legal task of considering whether there had been any unfairness or unreasonableness in the decision itself. 34 That is a difficult proposition to sustain. The primary judge was expressly mindful that the words in the Complaints Act "the…decision was fair and reasonable" were directed to whether the actual decision, rather than the process which led to it was fair and reasonable (at [81(c)]). His Honour did not ignore that much of the Tribunal proceedings and its reasons dealt with the process adopted by the Trustee and the Plan Actuary. However, his Honour concluded, the Tribunal had in substance addressed the correct question. The primary judge summarised his conclusion in that respect at [19]: … [A]lthough it is true that the Reasons are in some respects expressed in language that is familiar in the context of judicial review, in substance the Tribunal addressed the correct question, namely whether the decision of the Trustee was fair and reasonable in the circumstances. The circumstances which may make a decision of a trustee unfair or unreasonable are many and varied and a narrow approach should not be adopted as to what may constitute unfairness or unreasonableness in decision. Unfairness or unreasonableness in process may, in an appropriate case, lead to unfairness or unreasonableness in decision. In the present case, it was open to the Tribunal to conclude that the Trustee's decision was not fair and reasonable because of the process adopted by the Trustee (including the adoption of a basis of valuation which it understood to be required or preferred by the Employer) and therefore to set aside the decision and remit the matter to the Trustee for reconsideration. 35 In our opinion no error has been demonstrated. 36 In Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 Brennan CJ, Toohey, McHugh and Gummow JJ stated at [30] - [31]: 30. …in [Collector of Customs v Pressure Tankers Pty Ltd and Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280] a Full Court of the Federal Court (Neaves, French and Cooper JJ) collected authorities for various propositions as to the practical restraints on judicial review. It was said that a court should not be "concerned with looseness in the language ... nor with unhappy phrasing" of the reasons of an administrative decision-maker. The Court continued: "The reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error". 31. These propositions are well settled. They recognise the reality that the reasons of an administrative decision-maker are meant to inform and not to be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed. 37 A Tribunal's decision otherwise comprehensible and legally sound is not to be set aside on the basis of infelicities in the manner of its expression. 38 The Tribunal's and his Honour's findings that the Trustee had acted on the basis of a flawed process that had taken no account of the potential value of subsequent increases in Mr Billinghurst's pension that was to be commuted to a lump sum logically were capable of supporting a conclusion that the outcome had been unfair. That was the Tribunal's conclusion. There is, and can be, no hermetically sealed boundary between process and outcome. As Wilcox, Gyles and Downes JJ in Citicorp Life Insurance Ltd v Smith [2005] FCAFC 102 held (at [19]): 19. The actual question for the Tribunal was whether the decision under review was 'unfair or unreasonable' (s 14). If the Tribunal was satisfied that the decision was 'fair and reasonable, it was required to affirm the decision (s 37 (6)). It has been said that the role of the Tribunal is to consider 'whether the actual decision, as opposed to the process by which the decision was reached, was fair and reasonable in the circumstances' (Colonial Mutual Life Assurance Society Limited v Brayley [2002] FCA 1333 at [31] per Branson J; see also National Mutual Life Association of Australia Limited v Scollary [2002] FCA 695 per Ryan J). However, depending upon the circumstances, unfairness in process may lead to unfairness in decision. 39 In our opinion (subject to the dispositions of Grounds 3 and 4) his Honour was correct to find (at [84]) that the Tribunal had applied that analysis. To the extent the Appellant submits otherwise it would involve impermissible merits review. 40 On the materials before it, the conclusion it reached was open to the Tribunal.

Finite Amount available for Distribution: Grounds 3 and 4. 41 Grounds 3 and 4 concern a matter not advanced by the Trustee to the Tribunal. Nor were the Appellant's contentions, as now articulated, put to the primary judge. However, because the issues agitated involve a pure question of law we would grant leave for those grounds to be raised for the first time on the hearing of an appeal (cf. Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1). 42 Grounds 3 and 4 are premised on Grosvenor's letter of 15 November 2011 being construed, although not therein expressly stated, as Grosvenor having exercised on that day its termination rights under the Plan as provided for in Designated Rule 16.5. 43 On the exercise of that right, it is submitted, it became the duty of the Trustee to "redeem all of the Units attributable to the Plan and apply the Plan's assets" in the order of priority specified by the rule [13]. 44 The Trustee was not entitled to demand or required to seek any further funds from Grosvenor. 45 On that premise Grosvenor's request that the Trustee prepare calculations of the final transfer value for each member as it had proposed did not constrain the Trustee's duty to the beneficiaries. Rather it was an offer of a voluntary gift on terms that enabled the Trustee to increase the value of the lump sums over that legally due to the beneficiaries. 46 That submission involves accepting that it would have been open to Grosvenor when it had exercised its termination right to have left the Trustee substantially short of funds even to meet the limited obligations to the beneficiaries it had accepted on advice from the Plan Actuary, and that that would be "fair and reasonable". 47 However, his Honour did not construe Grosvenor's letter as immediately terminating the Plan. Instead he concluded at [94]-[97]: 94 It is significant to note that the November 2011 Letter gave notice of cessation of operating a business with effect from 31 December 2011 pursuant to rule 3.3(a)(i)(B). The effect of this notice was that the Employer ceased to participate in the Plan from that date. The giving of this notice did not immediately terminate the Plan. As the letter correctly pointed out, the Termination Date was to be determined by the Trustee under rule 16.3(b). In these circumstances, it would seem to have been open to the Trustee to have required the Employer to make additional contributions to the Plan pursuant to rule 9.1(a) in the period between the November 2011 Letter and 31 December 2011 (when the Employer ceased to participate) or perhaps even the date of termination of the Plan (assuming this was later). I note that paragraph 5 of the November 2011 Letter stated that, "[f]or ease of calculations, with the exception of the additional contribution required to make up any funding shortfall, [the Employer] will cease to make employer superannuation contributions to the Plan with immediate effect". Given the qualifications, and in the absence of specific reference to rule 9.5 of the Designated Rules, it is unclear whether this constituted notice of termination of the Employer's obligation to contribute under rule 9.5 of the Designated Rules. In the circumstances, it may have been open to the Trustee to require contributions to make good any shortfall. 95 Secondly, the Trustee interpreted the November 2011 Letter as a confined commitment by the Employer only to make good a shortfall if the lump sum amounts were calculated on the basis outlined in paragraph 3(b) of the letter. But I think the letter is open to being read as a commitment by the Employer to make good any shortfall arising after determination of the lump sum amounts on a fair value basis by the Trustee. The context in which to read the November 2011 Letter is the August 2011 Advice and the September 2011 Options Paper. The August 2011 Advice set out indicative valuations of lump sum amounts for each of the five current pensioners (at page 7). A table set out values on two alternative bases (the first was the actuarial valuation basis; the alternative basis used a discount rate in line with the yield on 10 year government bonds together with nil pension increases). The commentary below the table referred to the cost of purchasing an annuity with the same characteristics as the pension (including the reversionary pension) from CommInsure. As an example, the cost of purchasing the pension of pensioner "D" (which, it is to be inferred from the amounts set out in the table, is Mr Billinghurst) with CommInsure (without escalation) was stated to be approximately $1.55 million, which was some 18% more than the alternative valuation basis. In the September 2011 Options Paper, figures were provided for the "wind up" option. In relation to current pensioners, the total funding cost was provided on three alternative bases: (a) the actuarial valuation basis ($4.05 million); (b) a "more conservative" basis (which I infer is the same as the alternative valuation basis in the August 2011 Advice) ($4.83 million); and (c) a figure for the purchase of annuities for pensioners ($5.80 million). The notes under the table indicated that the annuities in the third option would not increase in future years and that CPI linked pensions were available but would be significantly more expensive. 96 In the context of the August 2011 Advice and the September 2011 Options Paper, the statement in paragraph 3(b) of the November 2011 Letter that the transfer values in relation to current pensioners should be determined by reference to the cost to each pensioner of purchasing an equivalent annuity (and that such an annuity should be valued on the basis that it would not increase in future years and should not be linked to CPI) reflects the most generous basis of valuation put forward in the August 2011 Advice and the September 2011 Options Paper. This puts a rather different complexion on the statement in paragraph 3(b) of the letter. Of the three different options presented, the Employer indicated its preference for, and willingness to fund, the basis which was most generous to the beneficiaries. 97 Further, the overarching message conveyed by the Employer in the November 2011 Letter was that the Employer was committed to "reaching a fair and equitable resolution for each member of the Plan, including current pensioners" (paragraph 1). The Employer also stated that it "[i]ntends to provide to each pensioner a lump sum arrived [at] on the basis of a fair and reasonable valuation of their current entitlement, to allow, should the pensioner wish, the purchase of an annuity, which would maintain their current stream of income" (paragraph 1(b)). In the context of the overarching message, paragraph 3(b) of the letter is open to being read as a suggested basis of valuation which is subsidiary to the overarching message. On this reading of the letter, it was open to the Trustee to determine, for example, that a fair value basis required the utilisation of a discount rate based on the yield on 10 year government bonds at 31 December 2011 (the date as at which the pension was to be valued) rather than 29 August 2011 (the date of the Plan Actuary's earlier advice to the Employer). If the letter is read in this way, the Employer's commitment to fund any shortfall was commensurate with the overarching message. 48 His Honour also doubted the premise that the Designated Rules would not have enabled the Trustee to require an additional contribution from Grosvenor (at [93]): 93 First, it is not clear that the Designated Rules would not have enabled the Trustee to require an additional contribution from the Employer if there were a shortfall (based on calculations of lump sum amounts at fair value, if this were greater than the amounts calculated by the Plan Actuary). The November 2011 Letter stated that the Employer would cease to operate as a business with effect from 31 December 2011 and that it was understood that the Employer would therefore automatically cease to participate in the Plan in accordance with rule 3.3(a)(i)(B) of the Designated Rules…The letter also stated, in the penultimate paragraph, that the Employer understood that, in accordance with rule 16.3(b) of the Designated Rules, the Termination Date would be determined by the Trustee, and that the Employer understood that, in practice, this date would be the date when all transfer values had been paid from the Plan. It was requested that the Trustee take into account the Employer's desire to have these matters concluded by 31 December 2011. In the event, the payment to Mr Billinghurst took place in March 2012. 49 In any event, his Honour concluded (at [98]), it had always been open to the Trustee to seek an additional voluntary contribution from Grosvenor - which the Trustee had not considered doing. 50 Finally, his Honour reasoned that the Trustee's contentions gave no regard to the priority accorded to current pensions under the Designated Rules. 51 In our opinion no error has been demonstrated in respect of any of those conclusions. 52 We share his Honour's doubts that Grosvenor would not have been obliged to put the Trustee in funds sufficient to meet any shortfall for an objectively fair valuation of the beneficiaries' entitlements on termination of the Plan. 53 The primary judge, it is respectfully concluded, was correct in reaching the following conclusion at [94]: The effect of [the November 2011] notice was that the Employer ceased to participate in the Plan from that date. The giving of this notice did not immediately terminate the Plan. As the letter correctly pointed out, the Termination Date was to be determined by the Trustee under rule 16.3(b). Notwithstanding the contrary conclusion of Pagone J, we see no reason to doubt that conclusion. 54 However, even assuming that Grosvenor's letter must be construed as the immediate exercise of its termination rights under Designated Rule 16.5 is far from self-evident that the consequence is that Grosvenor would have had no legal liability to make any additional contribution assuming the redemption of units attributable to the Fund proved insufficient to fund a fair commutation of Mr Billinghurst's pension payments to a lump sum. 55 The Appellant's submission assumes that Grosvenor could have walked away as at 15 November 2017 leaving the Trustee significantly short of the funds it required to make a fair commutation to a lump sum of the pensions otherwise recurrently payable to Mr Billinghurst, and to the other pensioners. 56 It is a most unattractive proposition that Grosvenor would have had no responsibility to ensure that the Trustee was provided with sufficient funds for that purpose. 57 Mr Billinghurst had entered into a Deed in April of 1993 with Grosvenor as his employer for the payment of a defined benefit pension. There is no evidence that Grosvenor's obligations as expressed in that Deed had been reduced by the later arrangements Grosvenor entered into with the Trustee for the administration of its superannuation liabilities. There is no evidence that Mr Billinghurst was a party to any instrument that would have had the effect of diminishing his existing entitlements. 58 Nor is there any reason to impute an intention on Grosvenor's part to secure such an outcome. 59 The document referred to at [6] was not produced by the Trustee. In its absence the better view is that that the provisions of the Designated Rules must be read as being impressed with and subject to the pre-existing superannuation liabilities Grosvenor had entered into by the Deed in respect of Mr Billinghurst. That circumstance was known both to Grosvenor and the Trustee as at the time the Trustee became responsible for the administration of the fund. On that assumption it remained the Trustee's duty to give priority to Mr Billinghurst's full entitlements by reason of the operation of the covenants imposed by s 52(2)(d) of the Supervision Act. 60 Even if that is a flawed analysis, the reasons given by the primary judge at [93] to doubt that the Designated Rules would not have enabled the Trustee to require an additional contribution from Grosvenor, in our opinion, were sound. Those involved the capacity of the Trustee to determine the date in which the Plan would terminate. 61 We see no reason to differ from the primary judge in respect of his Honour's conclusions at [94] and [97] (quoted above) in that regard. 62 And even if all of that is wrong, we see no reason to apprehend why a Trustee of a superannuation fund subject to the covenants imported by s 52(2) of the Supervision Act would not, at least, have been obliged to ask Grosvenor to make an additional voluntary contribution to allow it to commute Mr Billinghurst's pension entitlements to a lump sum if the funds available both from the redemption of units attributable to the plan and the additional contribution Grosvenor had committed to make in November 2011 were insufficient for that purpose. 63 The Appellant advanced the proposition that the Trustee necessarily would have had available to him only a fixed fund from which the Trustee might meet its obligations to Mr Billinghurst constituted by two amounts: (a) That obtained from the redemption of units attributable to the plan; and (b) A further contribution by Grosvenor incapable of exceeding the amount to be calculated by applying the methodology set out in paragraph 3(c) of its letter of 15 September. If that proposition is rejected, so too must be Grounds 3 and 4. 64 The facts stand against this Court accepting the Appellant's submission that Grosvenor's letter of 15 November irrevocably defined the upper limit of any additional contribution Grosvenor would be prepared to make. It is not in dispute that, on advice from the Plan Actuary, the Trustee sought, and obtained, a (modestly) greater additional contribution from Grosvenor than that which was referrable to the methodology Grosvenor had set out in that correspondence. Grounds 3 and 4 therefore cannot be accepted. 65 Finally, even if all that is wrong, the Appellant still fails to demonstrate that the Trustee could not have made additional payments to Mr Billinghurst from any amount so capped having regard to the express priority accorded to current pensioners over other beneficiaries as provided for by the Designated Rules. The submissions made on the Trustee's behalf in oral argument in this Court in support of the Trustee's contention that the primary judge had been incorrect at [99] in that regard were supported by assertions from the bar table rather than by reference to evidence from which that conclusion was compelled before the Tribunal or the Court below. Leave to adduce new evidence was neither sought nor granted. There is therefore no sound basis, even on the assumption that the fund was capped, for the Tribunal to have accepted, or this Court to conclude, that a fair distribution of the funds available to the Trustee as between the preferred beneficiaries and those not so preferred would have exhausted the funds available to it so as to prevent Mr Billinghurst receiving a better outcome if the Trustee had received such advice from an independent actuary. 66 We do not apprehend that Grounds 5 and 6 were advanced otherwise than rearticulating, in different form, the issues summarised by the Appellant as set out at [15] above. 67 Section 37(3) of the Complaints Act provides: On reviewing the decision of a trustee, insurer or other decision-maker that is the subject of, or relevant to, a complaint under section 14, the Tribunal must make a determination in writing: (a) affirming the decision; or (b) remitting the matter to which the decision relates to the trustee, insurer or other decision-maker for reconsideration in accordance with the directions of the Tribunal; or (c) varying the decision; or (d) setting aside the decision and substituting a decision for the decision so set aside. 68 The primary judge's observations at [102(d)] to [105] that acceptance of the Trustee's contention would undermine the scheme established under the Complaints Act for expert independent review of decisions of superannuation trustees are compelling. 69 The Tribunal was not satisfied that the Trustee's decision in its operation in relation to Mr Billinghurst was "fair and reasonable in the circumstances". For that reason the Tribunal was not required by s 37(6) to affirm the Trustee's decision. 70 The Tribunal exercised a power explicitly conferred on it by s 37(3)(b) of the Complaints Act so as to require the Trustee's decision be reconsidered in accordance with its directions. It was entitled to have done so. 71 For the above reasons the appeal must be dismissed. I certify that the preceding seventy-one (71) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Flick and Kerr.

PAGONE J: 72 The facts and issues in this appeal are set out in the reasons of Flick and Kerr JJ, which I have had the benefit of reading in draft, and need not be repeated, except for context and to explain these reasons. Mercer Superannuation (Australia) Limited ("the Trustee") complains that the primary judge in this appeal erred in upholding a determination previously made by the Superannuation Complaints Tribunal ("the Tribunal"). The Trustee had entered into a participation agreement with Grosvenor Australia Asset Management Pty Ltd (which for convenience has, and may, be referred to as "the Employer") to establish an employer-sponsored superannuation plan ("the Plan") within the corporate division of a superannuation fund known as the Mercer Superannuation Fund ("the Fund"). 73 Mr Billinghurst had retired from employment in September 2000 from his position as Managing Director of Grosvenor International Australia Pty Ltd after holding that position for over 16 years. The employer of Mr Billinghurst had been a company in the Grosvenor group of companies, which included the appellant. Mr Billinghurst commenced receiving a lifetime pension from a corporate superannuation fund ("the former fund") upon his retirement in September 2000. In May 2006 the assets and members of the former fund, including Mr Billinghurst, were transferred to the Fund established pursuant to the Plan between the Trustee and the Employer. The terms of the Plan provided that increases in the pensions payable, including for cost of living, were at the discretion of the employer. 74 On 15 November 2011 the Employer wrote to the Trustee to the effect that it would be ceasing to operate as a business with effect from 31 December 2011. The Employer noted in the letter to the Trustee that it would automatically cease to participate in the Plan in accordance with r 3.3(a)(i)(B) of the Designated Rules ("the Designated Rules") upon ceasing to carry on business. The Employer went on in the letter to request the Trustee to prepare calculations of the "transfer value" for each member on the basis (a) that the transfer value for current pensioners should be determined by reference to the cost of each pensioner purchasing an equivalent annuity and (b) that the equivalent annuity should be valued "consistently with the current pension arrangements, namely, the annuities will not increase in future years and should not be linked to CPI". 75 In July 2011 the Employer had sought advice from the Plan Actuary about the funding level of the Plan as at 30 July 2011 and the possible termination of the Plan. Advice was provided to the Employer on 29 August 2011 by the Plan Actuary, and on 7 September 2011 the Employer had been provided with a table setting out a summary of options for the defined benefit part of the Plan, including indicative values, on alternative bases, for the conversion of the pensions of current pensioners, including Mr Billinghurst, to lump sum amounts. On 9 December 2011 the Plan Actuary provided a letter to the Trustee setting out his opinion as to the appropriate basis for determining the transfer value for the current pensioners on alternative values for each pensioner. The first of the alternatives was based on the assumptions which had been used in preparing the actuarial valuations of the Plan at a discount rate of 7.8% per annum and an assumption that there would be future pension increases. The alternative valuation basis was on a discount rate of 4.3% per annum based on the yield on 10 year government bonds at the time of preparing the August 2011 advice and an assumption that there would be no future pension increases. The figures produced on the alternative valuation basis were slightly higher than on the first basis and, in the case of Mr Billinghurst, produced a transfer value of $1,432,824. 76 In December 2011 the Trustee wrote to Mr Billinghurst indicating that one of the options it was considering was the payment to him of a lump sum pension. That required the approval of the Australian Prudential Regulation Authority ("APRA"). The Trustee's estimate of the lump sum was equivalent to the transfer value of $1,432,824 and APRA approval was obtained for the use of pension valuation factors that would produce that sum for the payment to Mr Billinghurst. 77 In March 2012 Mr Billinghurst complained to the Trustee about the basis used in calculating the lump sum payable to him. His main complaints were (a) that the discount rate had been based on the yield of 10 year government bonds at 29 August 2011 (being the date of the August 2011 advice) rather than as at 31 December 2011 (being the date at which the pension was to be valued), (b) that no allowance had been made for future pension increases, and (c) that no provision had been made for expenses that would be incurred by Mr Billinghurst in administering the lump sum. 78 Mr Billinghurst received a lump sum payment from the Trustee of $1,432,824 as a rollover amount in March 2012. In April 2012 the Trustee maintained that the lump sum paid to Mr Billinghurst was fair and reasonable having received further advice from the Plan Actuary. Mr Billinghurst then requested that his complaint be referred to the Trustee's Claims and Complaints Committee for reconsideration, and subsequently provided to the Trustee advice from another Actuary which valued the lump sum equivalent of the pension at $1,921,000 based on a discount rate of 3.7% (based on the yield of 10 year government bonds as at 31 December 2011), an allowance for future pension increases of 2% and an allowance for expenses of administering the assets of $10,000 per year. The Trustee's Claims and Complaints Committee, however, affirmed the Trustee's original decision, and in February 2013 Mr Billinghurst complained to the Tribunal pursuant to the Superannuation (Resolution of Complaints) Act 1993 (Cth) ("the Complaints Act") in relation to the Trustee's determination of the lump sum payout to him. On 29 December 2015 the Tribunal determined that it was not satisfied that the Trustee's decision in relation to the calculation of the amount of the lump sum payable to Mr Billinghurst was fair and reasonable in the circumstances. The Tribunal determined to set aside the Trustee's decision and to remit the matter to the Trustee for reconsideration on a particular basis. That decision was the subject of an appeal to this Court pursuant to s 46 of the Complaints Act which was dismissed by the learned primary judge. 79 The Trustee contended on appeal that the Tribunal, and subsequently the learned primary judge in upholding the decision of the Tribunal, had misapplied the relevant test in determining whether to affirm a decision of the Trustee and in determining whether the lump sum paid to Mr Billinghurst was fair and reasonable. The Trustee contended that the Tribunal was required to stand in the shoes of the Trustee and to take into account that the Trustee had a finite amount of money available for distribution comprised of the redemption of units attributable to the Plan according to the Designated Rules and any additional contribution which the Employer had committed to make in the November 2011 letter. 80 Section 14 of the Complaints Act permits a complaint to the Tribunal that a decision by the Trustee is or was unfair or unreasonable where a Trustee of a fund has made a decision in relation to a particular member or a particular former member of a regulated superannuation fund or a particular beneficiary or a particular former beneficiary of an approved deposit fund. Section 37(1) of the Complaints Act provides that the Tribunal has all of the powers, obligations and discretions that are conferred on the Trustee for the purpose of reviewing a decision of the Trustee and that the Tribunal must make a determination in accordance with s 37(3) subject to s 37(6). Section 37(3) requires the Tribunal to make a determination in writing by affirming, remitting, varying or setting aside the decision and substituting a decision for the decision so set aside. 81 Section 37(6) provides that the Tribunal must affirm a decision under subs (3) if it is satisfied that the decision was fair and reasonable in the circumstances. The Tribunal was required in applying that provision to make its own assessment of the evidence and to determine whether the decision under review was fair and reasonable in the circumstances. Its task was not to determine whether the process which led to the decision was fair and reasonable but to evaluate for itself whether the decision itself was fair and reasonable in the circumstances. The focus of the Tribunal under s 37(6) is upon the consequence or outcome of the decision by the Trustee in its practical operation rather than upon the process by which the decision under review came to be made: see Lykogiannis v Retail Employee Superannuation Pty Ltd (2000) 97 FCR 361 at [48]. In Board of Trustees v Edington (2011) 119 ALD 472 Kenny and Lander JJ said at [53] (Logan J agreeing generally): Plainly enough, the Tribunal correctly identified the fundamental question that it was to answer: see [21] above. As we have seen, the critical question for the Tribunal was whether or not it was satisfied that the decision of the trustees - being the decision under review - was, in its operation in relation to Mr Edington, fair and reasonable in the circumstances: see s 37(6). Nothing in the Complaints Act expressly required the Tribunal to consider whether or not the reasoning process adopted by a trustee in reaching the impugned decision was fair and reasonable; and no such obligation should be implied. In so far as the reasons of the primary judge conveyed a different view, we consider that his Honour erred. This is because, in the context of s 37(6), the tribunal is required to make its own assessment of the evidence and other information before it, in order to determine whether or not it is satisfied that the decision under review was, in its operation in relation to the complainant, fair and reasonable in the circumstances. The tribunal may make its own findings of fact for this purpose after a de novo hearing. After this new hearing, nothing may turn on the reasoning process of the previous decision-maker, because the tribunal may or may not, for its own reasons having regard to the evidence before it, be satisfied that the decision under review was fair and reasonable in its operation in relation to the complainant in the circumstances as it has found them. Thus, even if the tribunal's factual findings differed from those of the previous decision-maker, the tribunal might nonetheless be satisfied that, in the circumstances, the decision under review was in fact fair and reasonable in the relevant way. Plainly enough, in this event, the process of reasoning adopted by the tribunal in determining whether or not the decision under review was relevantly fair and reasonable would be likely to differ from the reasoning that led to the decision under review. The fact that it did would not necessarily bear on the tribunal's satisfaction as to the reasonableness or fairness of the decision under review. The hearing before the Tribunal was de novo and the Tribunal was called upon to determine whether the actual decision was fair and reasonable: see Edington at [45]-[46]. The Tribunal had no power to substitute its view of an alternative "fair and reasonable" decision "in the circumstances" if the decision of the Trustee was itself "fair and reasonable in the circumstances". The Tribunal's power to make a decision that was fair and reasonable in substitution for the decision of the Trustee was only enlivened, in other words, if the Tribunal was satisfied that the decision of the Trustee was not fair and reasonable. If so satisfied, however, the Tribunal could not substitute the decision of the trustee with one that was contrary to law, the rules of the Fund, or the terms of insurance: see Edington at [47]. 82 The central issue before the Tribunal was described on behalf of the Trustee in the appeal as being "straightforward", namely, whether the Trustee's decision to pay Mr Billinghurst $1,432,824 as an estimate of the lump sum value of his pension was fair and reasonable in the circumstances. In considering the circumstances of the decision a subsidiary issue arose as to whether the Trustee could take into account a voluntary offer from the Employer as set out in the 15 November 2011 letter in order to calculate the lump sum entitlements of Mr Billinghurst and the other pensioners. In that context the parties disagreed about whether the Trustee had power, in the circumstances, to require the Employer to make additional payments to the fund under the terms of the Designated Rules after receipt of the Employer's letter of 15 November 2011. 83 The Designated Rules required the Employer to make contributions to the Fund and contemplated contributions by the Employer to be made at a rate "determined by the trustee" on the advice of the actuary to the Plan. Clause 9.1(a) provided: 9.1 Employer Contributions (a) Each Employer: (i) must contribute: (A) in the case of a DB Plan, at the rate determined by the Trustee, after consulting the Participant, on the advice of the Actuary to the Plan; or (B) in the case of an Accumulation Plan, the amount set out in the relevant Schedule. unless contributions are varied under another rule (for example rule 9.5 or rule 14.5); (ii) may make extra contributions to the Employer's Plan: (A) in respect of some or all Members; (B) for crediting to the Member Protection Account; or (C) to be used for the general purposes, of that Plan; (iii) may direct how any extra employer contributions (which are not made to satisfy a requirement under another rule, for example rule 13.4 or rule 13.5) are to be applied; and (iv) must pay its contributions in the manner and at the times agreed between the Trustee and the Participant. The Rules also permitted an employer to terminate, reduce or suspend its obligation or agreement to contribute pursuant to clause 9.5 as follows: 9.5 Notice to Terminate, Reduce or Suspend Employer Contributions An Employer may terminate, reduce or suspend its obligation (or agreement) to contribute in respect of some or all Members by giving notice to the Trustee. The termination, reduction or suspension takes effect: (a) even if the Employer is then on a contribution holiday; and (b) from the date of receipt of the notice or any later date specified in the notice. The Participant may give a notice in respect of any Employer which is binding on every person including the Employer in respect of whom it is given. Clause 9.5 of the Designated Rules required an employer to give "notice to the Trustee" of termination, reduction or suspension of its obligations to take effect from the date of receipt of the notice "or any later date specified in the notice". On 15 November 2011 the Employer wrote to the Trustee in the terms set out in the reasons for judgment of Flick and Kerr JJ. The letter of 15 November 2011 from the Employer to the Trustee gave notice in paragraph numbered 5 in the letter of the Employer ceasing "to make employer superannuation contributions to the Plan with immediate effect" and requested the Trustee to determine the termination date in accordance with r 16.3(b) with a view to the matters being concluded by 31 December 2011. The Trustee prepared a document in December 2011, addressed to Mr Billinghurst, stating that his potential lump sum was $1,432,824 calculated as at 31 December 2011 subject to APRA approval. On 2 February 2012 the Trustee informed Mr Billinghurst that APRA had approved the payment to him of a lump sum of $1,432,824. The events and correspondence which then occurred was set out in the reasons of the primary judge at [46] to [56] as follows: 46 On 20 February 2012, the Plan Actuary sent an email to an actuary engaged by Mr Billinghurst in response to some queries. The Plan Actuary stated, in part, that he had prepared results "on the valuation basis and a 'risk free' basis using a 4.3% pa discount rate to value the pensions (based on [the] 10 year Government bond rate at the time of preparing the calculations). The risk free basis made no allowance for future pension increases as instructed by [the Employer]". 47 On 2 March 2012, Mr Billinghurst wrote to the Trustee complaining about the basis used to calculate the lump sum of $1,432,824, including in relation to the discount rate used of 4.3% instead of a discount rate based on the yield on 10 year government bonds at 31 December 2011 of 3.67%, and in relation to no allowance being made for pension increases or indexation in the future. Mr Billinghurst referred to the accounts of the Employer at 31 December 2010 which noted that the Employer expected to increase pensions at 2% per annum. Mr Billinghurst also said that no provision had been made as an allowance for expenses to be incurred by him in administering his lump sum. 48 On 13 March 2012, the Plan Actuary wrote to the Trustee expressing the view the lump sum amount that had been calculated for Mr Billinghurst was "both fair and reasonable and arguably relatively generous" in that, amongst other things, it provided an amount sufficient to purchase an equivalent annuity (without future pension increases) from an annuity provider regulated by APRA. The letter noted that the basis used to produce the lump sum "required the [Employer] to make a top-up payment to the Fund of approximately $1.5m to cover all Plan members' entitlements". The Plan Actuary stated that "[o]nce the [Employer] had terminated its contributions to the Plan, the Trustee was not in a position to continue to operate the Plan" (page 1). The letter stated that the Employer had "reviewed a number of possible bases that could be used for the determination of the lump sum value of the pensions on wind up" and all of these options required additional contributions from the Employer (page 2). It was stated that the Employer "presumably had the option to terminate its contributions without making any additional contributions" (page 2). The letter contained further discussion and explanation of the valuation approach adopted. 49 On 5 April 2012, the Trustee wrote to Mr Billinghurst in response to his complaint stating that the basis used to determine his lump sum was that recommended by the Plan Actuary and adopted by the Trustee and stating that the calculation of the benefit entitlement would not be altered. The letter included the statement that the Employer had given the Trustee "formal notice of its termination of contributions to the Plan" (page 1; see also page 2). 50 On 30 July 2012, Mr Billinghurst wrote to the Trustee stating that the Trustee had not addressed the issues raised by him in relation to the factors used to calculate his lump sum and expressing his concern that the Trustee (having the power to act to ensure that the Plan was fully funded) had failed to do so. 51 On 5 September 2012, Mr Billinghurst's actuary wrote a letter setting out his advice as to the fair value of a lump sum equivalent to Mr Billinghurst's pension. Using different alternative bases, the actuary's calculations of the lump sum equivalent to the pension ranged from $1,921,000 to $2,065,000. Although there is a reference at the foot of page 3 of the letter to "31 December 2012", it is clear from an email from Mr Billinghurst to the Trustee dated 15 September 2012 that the valuation was as at 31 December 2011. 52 On 20 September 2012, the Trustee's Claims and Complaints Committee considered Mr Billinghurst's complaint. The minutes of the meeting record that the Committee members considered all the background material on the complaint, in conjunction with technical assistance provided by the Plan Actuary. The minutes record that the Committee relevantly determined: • They were satisfied that the basis adopted by the trustee in its determination of the value of the lump sum payments from the Plan for all Plan members including Mr Billinghurst in the circumstances that the Participant had notified that contributions would cease, was fair and reasonable in the circumstances and was made in accordance with the trustee's obligations at law. They re-affirmed the Complaints Officer's original decision as set out in his letter dated 5 April 2012. • They noted that Plan assets at the date of determination of amounts to apply to members were sufficient, after additional funding agreed to be provided by GAAMPL, to provide payments to pensioner members on the basis adopted, and for members who had not yet ceased employment with GAAMPL prior to 31 December 2011 on the basis as recommended by the Plan Actuary, and that no additional funds were available at that time or afterwards from GAAMPL to provide higher payments to any Plan member. 53 On 10 October 2012, the Trustee wrote to Mr Billinghurst advising him of the outcome of the Claims and Complaints Committee meeting. 54 On 8 November 2012, the Trustee wrote to the Employer advising it of the complaint by Mr Billinghurst and by other pensioners and advising the Employer of the outcome of the Claims and Complaints Committee meeting. 55 On 14 December 2012, Mr Billinghurst sent an email to the Employer referring to an offer of payment of $120,000 by the Employer (which Mr Billinghurst did not accept) in response to his complaint and setting out Mr Billinghurst's argument as to why future possible increases in his pension should be taken into account in determining the lump sum equivalent. 56 On 9 January 2013, the Employer sent an email to Mr Billinghurst in response to his email. On 1 February 2013 Mr Billinghurst complained to the Tribunal that the Trustee's decision was unfair and unreasonable. 84 The Tribunal concluded that the Trustee and the Committee had erred in applying a fair and reasonable test in making the calculation and in reviewing whether the calculation had been correctly made. At [78]-[79] the Tribunal said: 78. The Tribunal is of the view that the evidence referred to immediately above indicates that the Trustee and the Committee have both applied the wrong test in the Trustee making its decision and in the Committee reviewing the decision as a result of the Complainant's complaint. In determining the lump sum equivalent of the Complainant's pension, the Trustee was required by the covenant imposed by s52(2)(c) of the Superannuation Industry (Supervision) Act 1993 (Cth) to perform its duty and exercise its power to calculate the lump sum amounts in the best interests of the beneficiaries, which includes the Complainant. It appears from the evidence referred to above that the Trustee was of the view that it had to apply a fair and reasonable test in making the calculation rather than act in the best interests of the beneficiaries, including the Complainant, in making the calculation. 79. In the view of the Tribunal it was not appropriate for the Trustee to apply a fair and reasonable test in making the calculation and in reviewing whether the calculation had been correctly made. The Trustee was required to apply the covenant in s52(2)(c) as well as the other covenants in s52(2) and meet its prudential and fiduciary obligations under both legislation and principles of trust law. It was, therefore, required to act in the best interests of the beneficiaries in making the calculations, exercise the same degree of care, skill and diligence as a prudent trustee would exercise in the circumstances and, if there was any conflict between its duties to the beneficiaries and to anyone else, including itself, to give priority to the interests of the beneficiaries over the interests of others and to ensure that the interests of the beneficiaries were not adversely affected by any conflict of interest. The Tribunal was also of the view that the Trustee had been inappropriately influenced by the Employer and had assumed that there would be no pension increases in the future. At [90] the Tribunal said: 90. Having regard to the history of pension increases in many of the years in which the Complainant's pension had been paid, the Trustee's function, in properly calculating the lump sum equivalent of the Complainant's pension, was to determine whether, in acting in the best interests of the beneficiaries, it was appropriate to adopt the assumption of no pension increases. In making that decision, which was an important factor in calculating the Complainant's lump sum, it is the Tribunal's view that the Trustee was not entitled to be influenced by the Employer and, given the history of pension increases, it was not reasonable for the Trustee to assume that there would be no pension increases in the future. His Honour upheld the decision of the Tribunal accepting that the Employer's letter of 15 November 2011 was not to be construed as an immediate termination but to have left open to the Trustee the ability to require the Employer to make additional contributions at least until 31 December 2011: see reasons at [93]-[97]. His Honour was also of the view that it was open to the Tribunal to find that the Trustee's having regard to what it understood to be the preference and funding objectives of the Employer led to unfairness or unreasonableness in the Trustee's decision: see reasons at [115]. 85 Six grounds of appeal were contained in the notice of appeal, although they have a substantial degree of inter-relationship and may conveniently be considered in groups. The first two grounds of appeal are directed to the content of the statutory test in s 37(6) for the Tribunal to determine whether the decision of the Trustee was fair and reasonable in the circumstances. Grounds 3 and 4 were concerned with the permissibility or otherwise of taking into account the amount offered by the Employer when the Tribunal was called upon to determine whether the Trustee's decision was fair and reasonable in the circumstances. Grounds 5 and 6 were not the subject of separate submissions and were essentially different articulations of the previous grounds. Central to the outcome of the appeal is the effect of the letter by the Employer of 15 November 2011 and whether it was impermissible for the Trustee to take into account the Employer's position that it would not provide further funds beyond the additional $1.5 million offered in the letter. 86 His Honour rejected for a number of reasons the Trustee's submission that its decision had concerned the distribution of the Plan's assets on termination and that there was a limited amount available to be distributed between the members: see reasons at [91]-[101]. His Honour did not think correct the premise of the Trustee's submissions that the funds available to pay pensioners, including Mr Billinghurst, were limited to the units attributable to the Plan and the additional contribution which the Employer continued to make in the November 2011 letter: see reasons at [92]. In his Honour's view it was not clear that the Designated Rules would have prevented the Trustee from requiring an additional contribution from the Employer if there were a shortfall, and in his Honour's view it was always open to the Trustee to seek additional funds from the Employer: see reasons at [93]-[99]. The correctness of these views depend upon the proper construction of the relevant provisions of the Designated Rules and of the effect of the letter from the Employer dated 15 November 2011. 87 The Designated Rules provided for the continuing operation of a pension plan but provided also for its termination, as well as for the unilateral termination, reduction or suspension by the Employer of the contributions which the Employer would make. That did not mean that the Employer could walk away from its responsibilities but that it had the power unilaterally to terminate, reduce or suspend additional responsibilities. The ability of an employer to terminate, reduce or suspend its obligations or agreement to contribute for the future was governed by clause 9.5 of the Designated Rules and was, no doubt, an important commercial pillar for assuming the obligations to provide benefits. Clause 9.5 of the Designated Rules permitted an employer to terminate, reduce or suspend its obligation or agreement "by giving notice to" the Trustee. The effect and consequences of such a notice was governed by clause 9.6 but a notice once given could be revoked pursuant to clause 9.7. What a trustee could do after receipt of a notice, however, unless revoked, was limited by the terms of clause 9.6 to the things provided for by the Designated Rules including, amongst other things, to adjust contributions and benefits by taking into account the Employer's termination, reduction or suspension to contribute. The Trustee could adjust those adjustments if the notice had been revoked but there was no provision to act other than in accordance with clause 9.6 once notice had been given pursuant to clause 9.5. 88 It is important to the operation of the provisions of the Designated Rules that it was provided by clause 9.5 that the "termination, reduction or suspension" took effect either from the date of receipt of the notice or "any later date specified in the notice". The effect of the notice, therefore, was governed by, and took effect pursuant to, the terms of clause 9.5 by the notice having specified a date later than the receipt of the notice from which the effect of the termination, reduction or suspension would take effect. In this case the Employer's letter to the Trustee of 15 November 2011 was expressed as a cessation to make employer superannuation contributions to the Plan "with immediate effect". It may be assumed that the date thus specified was the date of receipt of the notice and that it was received at or about 15 November 2011. A consequence of sending the letter of 15 November 2011 was, therefore, that the Employer had effectively terminated, reduced or suspended its obligation or agreement to contribute in respect of some or all members upon it having given notice by letter to the Trustee dated 15 November 2011. 89 It follows from this that there was no basis upon which the Trustee could require any further contribution to be made by the Trustee pursuant to clause 9.1 or otherwise. It is true that the Trustee had the obligations imposed upon it by s 52(2) of the Superannuation Industry (Supervision) Act 1993 (Cth) ("the Supervision Act") and was obliged to meet its prudential and fiduciary obligations both under that legislation and principles of trust law, but it was required to do so in accordance with the terms of the Designated Rules. It was, indeed, for that reason that the Trustee was obliged to take into account the position of the beneficiaries upon termination, reduction or suspension and to proceed to adjust contributions and benefits in accordance with clause 9.6. 90 The letter to the Trustee of 15 November 2011 was clear in its effect. A decision had previously been taken that the Employer would cease its business operations with effect from 31 December 2011 with no other entity succeeding that business. Clause 3.3(a)(i)(A) expressly provided that an employer "automatically ceases to participate in a plan" in the circumstances which the letter of 15 November 2011 referred to. Clause 3.3(a)(i)(A) provided: a) An Employer: (i) automatically ceases to participate in a plan if: (A) not being the Participant, none of the Members are Employees of that Employer and the Trustee does not determine that it is likely that in the future there will be Members who are Employees of that Employer. […] There was no suggestion that the Trustee determined, or had any basis upon which it could determine, that it was likely in the future that there would be members who would be employees of the employer or that clause 3.3(a)(i)(A) would not apply according to its terms as contemplated in the 15 November 2011 letter. The Employer was able to give notice of termination pursuant to clause 9.5 and did so by paragraph numbered 5 in the letter in the following terms: For ease of calculations, with the exception of the additional contribution required to make up any funding shortfall, GAAMPL will cease to make employer superannuation contributions to the Plan with immediate effect. When the quantum of any shortfall in funding is known, all appropriate actions will be taken by GAAMPL to make the additional payment, to enable the Trustee to make the transfer payments to each member's chosen fund. The decision to cease to make employer superannuation contributions to the Plan was expressly, and clearly, conveyed and was expressed to have immediate effect. A decision to cease to make employer contributions with immediate effect was conveyed to the Trustee, as is clear from the opening words of the paragraph, to assist the Trustee in making calculations. The Employer, in other words, fixed and brought forward the terminating effect of the decision to facilitate the tasks required of the Trustee, including the obligations and calculations required by clause 9.6. 91 The Tribunal was in error to conclude that the Trustee had been inappropriately influenced by the Employer in determining what was fair and reasonable. The Trustee was required to meet its obligations upon termination of the Plan which had been effected by the letter of 15 November 2011 and the operation of the Designated Rules upon receipt of notice of termination, reduction or suspension of the Employer's contributions or agreement to contribute. It was thereafter required to adjust contributions and to apply the assets available to the Trustee pursuant to clause 16.5. The Trustee was required to redeem all of the units attributable to the Plan and to apply the Plan's assets in the order of priorities provided for in clause 16.5. The Trustee was not impermissibly influenced by the fact that the Employer had offered to pay an additional $1.5 million when discharging its duty to apply the assets pursuant to the terms of the Designated Rules. The fact of termination, reduction or suspension pursuant to the Employer's letter of 15 November 2011, and the terms upon which that occurred, was one of the circumstances required by s 37(6) to be taken into account in determining whether the Trustee's decision was fair and reasonable. 92 Accordingly the appeal should be allowed, the decision of the Tribunal set aside and the matter be referred back to the Tribunal for reconsideration and determination. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Pagone.