Military Superannuation and Benefits Board of Trustees No 1 v Batt

"[e]ach trustee of a regulated superannuation fund … must take all reasonable steps to ensure that there are at all times in force arrangements under which: (a) a person referred to in subsection (1A) has the right to make an inquiry or a complaint of the kind specified in that subsection in relation to that person; and (b) an inquiry or complaint so made will be properly considered and dealt with within 90 days after it was made." Subsection (1A) provides, amongst other things, that, for the purposes of s 101(1)(a), a beneficiary of a regulated superannuation fund may make an inquiry into, or complaint about, the operation or management of the fund in relation to the beneficiary. As Merkel J explained in Drake at [28] and [29], "[t]he purpose of s 19(1) is to ensure that the Tribunal does not deal with the complaint unless the trustee has had an opportunity to consider and settle that complaint". 38 Section 19(1)(a) requires that the complainant satisfy the Tribunal that the subject matter of the complaint under s 14 (i.e., the complaint before the Tribunal) and a complaint previously made to the trustee are the same. That is, the provision requires satisfaction of an identity between the subject matters of the complaints before the Tribunal and previously made to the trustee. In this case, the subject matter of a previous complaint to the trustee was the 12 June 1997 decision of the ICC under rule 23 of the Trust Deed that Mr Batt's "incapacity in relation to civil employment is 50% and that his classification under Rule 22 remain[ed] Class B". In order to satisfy s 19(1), the subject matter of the complaint to the Tribunal under s 14 had to be the decision under rule 23 that Mr Batt's classification under rule 22 remained Class B. I accept, therefore, that, as the Board contended, this circumstance supports its contention that the decision under review by the Tribunal was the decision of the ICC. 39 I accept that s 19(1) does not require that the same relief be sought in the two complaints. I agree with the observations of Merkel J in Drake at [28] that: "It is significant that the statutory requirement in s 19(1)(a) is not that the complaint to the Tribunal and to the trustee be the same complaint or be a complaint that makes the same claim for relief. The two complaints may still be about the same subject matter, notwithstanding that the way in which a complainant may wish to have the complaint resolved might differ in each complaint." In making his application to the Board, Mr Batt sought reconsideration by the Board of the decision of the ICC in accordance with rule 76. Whilst he necessarily sought relief of a different kind before the Tribunal, the subject matter of both complaints was the same, as evidenced by the fact that, in both, he sought a decision that his incapacity entitled him to a Class A classification. 40 As we have seen, however, the effect of s 14 is to limit entitlement to review to a decision of a trustee and the effect of s 37(1) is, for the purposes of reviewing the trustee's decision, to confer on the Tribunal the powers of the trustee. There is a question whether a decision of the ICC under rule 23 can be taken to be a decision of the Board (being the trustee) for the purposes of review by the Tribunal, as well as for the purposes of reconsideration by the Board. 41 Counsel for the Board submitted that the Board was accountable for the decision of the ICC and, for the purposes of the review procedures, the ICC's decision to maintain Mr Batt's classification was to be treated as a decision of the trustee. As counsel put it: "It is the decision of the committee that constitutes the decision of the trustee and no other decision. Wherever one sees in section 37 the reference to a decision of the trustee that is the subject of a complaint, one understands that to mean in the context of this case the decision of the ICC to maintain the classification of Mr Batt as class B; that being the decision which was subject to reconsideration." 42 It seems to me that this submission should be accepted in preference to the alternative submission advanced on Mr Batt's behalf. It is true that the position for which the Board contends might have been more easily reached had the Rules specifically said that, in exercising the powers and functions under rules 22, 22A, 23, 32 and 34, the ICC was a delegate of the Board. In practical terms, rule 79 achieves much the same result, albeit by a more circuitous route, by deeming a decision of the ICC under these rules to be a decision of a delegate of the Board for the purposes of pt 9, which provides for the reconsideration of a decision of a delegate of the Board. In this sense, it is correct to say, as counsel for the Board did, that the Board is accountable for the decision of the ICC under rule 23. The primary decision of the ICC is to be taken to be the decision of a delegate of the Board for the purposes of reconsideration by the Board (rule 79). There is nothing in the Rules or elsewhere that would cause that primary decision to lose that status upon a complainant making a complaint to the Tribunal under s 14 of the SRC Act. 43 There is a further consideration that militates in favour of the Board's contention that the decision under review was that of the primary decision-maker. If the decision that is the subject of complaint under s 14 is treated as the decision of the primary decision-maker (the ICC), then, by virtue of s 37(1), for the purposes of reviewing that decision, the Tribunal has all the powers that were conferred on the primary decision-maker. In this case, these are the powers, obligations and discretions conferred by rule 23. They enable the Tribunal to deal with Mr Batt's complaint that he was entitled to a Class A classification and that this classification should be backdated. 44 On the other hand, if the decision under review is regarded as the decision of the Board under rule 76, then, by virtue of s 37(1), the Tribunal would, for the purposes of reviewing that decision, also have the powers that were conferred on the Board under rule 76 in aid of reconsidering a primary decision. Some of these powers are ill-suited to the review function of the Tribunal since they do not conform to the statutory regime established by the SRC Act. Further, if the decision under review were the decision of the Board under rule 76, s 37(1) would operate to confer powers, the exercise of which might defeat the purpose of s 19(1). 45 The conclusion that, for the purposes of review by the Tribunal, s 37(1) operates to confer on the Tribunal the powers of the primary decision-maker is important in this case, because the ICC, which was primary decision-maker, did not have the power to approve an increase, by way of interest, in the rate of pension payable. Rule 69(2) in terms gave this power to the Board. Neither rule 19 nor any other rule conferred the power contained in rule 69(2) on the ICC. To adapt what the Full Court said in Fletcher v Commissioner of Taxation (1988) 19 FCR 442 (at 452 per Lockhart, Wilcox and Burchett JJ), the powers referred to in s 37(1) are the powers vested in the original decision-maker for the purposes of making the decision under review and do not include any powers that may be vested in the decision-maker for another purpose. A fortiori, the powers conferred by s 37(1) do not include powers that the original decision-maker did not have for the purpose of making the decision under review or at all. Although the power in rule 69(2) is exercisable by the Board when the occasion to use it arises and, subject to s 19(1), by the Tribunal on a review of a decision to exercise this power, the power in rule 69(2) is not relevant to the making of the decision under review in this case: see Secretary, Department of Social Security v Hodgson (1992) 37 FCR 32 at 40 per Hill J. It follows from this that the Tribunal exceeded its power when it made the decision that interest was payable by the trustee in the present case. 46 Section 37(4) pre-supposes that the Tribunal has power that it might otherwise exercise subject to the constraints imposed by this provision. That is, any power that the Tribunal would otherwise have by virtue of s 37(1) can only be exercised for the purpose of removing the unfairness or unreasonableness that the Tribunal perceives in the decision under review. To the extent that the Tribunal treated s 37(4) as an independent source of power, it was in error. Further, the Tribunal was also in error to the extent that it sought to determine all aspects of the relationship between the Board and Mr Batt. 47 The present case differs from the situation that Allsop J considered in Crocker, where his Honour held that the Tribunal did not err in exercising the power to compound a claim, notwithstanding that the trustee had not considered the exercise of the power. In Crocker, it had been open to the trustee to consider compounding the claim as contemplated by cl 7(c) of the Trust Deed (at [130]). In this case, the relevant decision-maker had no power to make a decision under rule 69(2) regarding the payment of interest by the trustee. Allsop J described the trustee's failure to do so as "the source of the unfairness or unreasonableness of the decision" (at [133]). 48 In Crocker, his Honour was of this opinion in part because circumstances prior to the making of the decision under review had raised the possibility of a decision under cl 7(c) (at [129] and [132]). It must also be borne in mind that, in this case in contrast to the position in Crocker, there was nothing in the circumstances prior to the decision by the ICC or prior to the reconsideration decision by the Board that could be said to have raised a claim for interest. Further, I reject the proposition that a claim for interest was implicit in the terms of the complaint made by Mr Batt to the Tribunal: see [29] above. The relief that he sought was the relief that could be given under rule 23. 49 If I am wrong in concluding that s 37(1) did not operate to confer on the Tribunal the power in rule 69(2) and the Tribunal had this power available to it, then there is a further question whether the requirements of rule 69(2) were satisfied in the circumstances of the case. For the reasons I am about to give, I do not think they were. 50 As noted above, pensions are to be paid in fortnightly instalments on pension pay-days. Rule 69(2) permits an approval of an award of interest in the rate of the pension to a pensioner for such period as the decision-maker determines if two conditions are satisfied. The first is that a pension is payable and the second is that the commencement of the payment of that pension is delayed. The amount of interest is calculated in respect of each instalment of the pension delayed and the period of the delay of that instalment (rule 69(4)). 51 Under rule 26, a person who is classified as Class A or Class B under rule 22 (whether on retirement or by reason of reclassification under rule 23) is entitled to invalidity benefits in accordance with subdiv B of div 2 of pt 3 of the Rules. An invalidity pension, as defined in the Rules, is a pension payable under rule 27 or 28 (which appear in subdiv B of div 2 of pt 3). A pension, as defined in the Rules, is a pension payable under the Rules. It is plain enough from this that the pension payable to a person on a Class A classification is not payable to the person until the person is classified as Class A under rule 22. Mr Batt was not classified as Class A until the Tribunal made its decision on 31 October 2001. It follows that, under the Rules, it is only on and from this date that it is possible to say that a pension is payable to Mr Batt on a Class A classification. 52 The fact that, under rule 23(4), the decision-maker must specify the date from which the reclassification is to take effect and that the person is taken to be classified under rule 22 on and after that date does not alter this conclusion. The fact that the decision-maker may determine that a reclassification is to take effect from a date prior to the reclassification decision does not affect the conclusion that, as a matter of fact, the pension at the reclassified rate is payable from the date of the reclassification decision. 53 Section 41 of the SRC Act does not require a different conclusion. Section 41(1) does no more than provide that, subject to s 41(2), a determination of the Tribunal comes into operation immediately upon the making of the determination. Section 41(3) further provides that a decision made by the Tribunal in substitution for a decision of a trustee is taken to be the decision of the trustee (s 41(3)(a)) and unless the Tribunal otherwise orders "has effect, and is taken to have had effect on and from the day on which the original decision has or had effect". As Kirby J explained in Attorney-General (Cth) v Breckler (1999) 197 CLR 83 at 130 [91], in making a determination under s 37(3), the Tribunal creates new rights, albeit in the form of a decision which is then substituted for the decision of the trustee which is set aside. The fact that pursuant to statute a decision of the Tribunal would ordinarily take effect at a date prior to its decision on classification does not alter the fact that the pension at the reclassified rate is payable only from the date of the decision of the Tribunal. 54 Further, the fact that the reclassification is to take effect from a date prior to a reclassification does not entail the consequence that the commencement of the payment of the pension at the reclassified rate is "delayed" for the purpose of rule 69(2). In order for there to be a relevant delay in the commencement of the payment of the pension that is payable, there must be a classification or reclassification decision that makes the pension payable and delay between the date of this decision and the first payment of the pension in accordance with the Rules (and the decision). The period between the date of reclassification and the date on which, in the SRC Act or under the Rules, the reclassification takes effect is not a period of delay in respect of any instalment of the pension within rule 69(4). This is because no right to receive the pension at the reclassified rate arises before the decision on classification or reclassification is made. 55 For the reasons stated, I would set aside the determination of the Tribunal given on 26 June 2003 and declare that there was no power in the Tribunal, in the circumstances of the case, to approve an increase, by an amount of interest, in the rate of pension payable to Mr Batt from 12 June 1997. The Board accepted that there should be no order as to the costs of the appeal. It is to be borne in mind that, although the Board has succeeded on the appeal, the questions that it raised are significant for the discharge of its functions and powers under the Trust Deed. 56 Further, the fact that Mr Batt did not take any part in the proceedings in Military Superannuation and Benefits Board of Trustees No 1 v Batt [2003] FCA 71 occasioned some difficulty for the Court on that occasion because it was not assisted by any argument contradicting that of the Board. The Court was much assisted on this occasion by pro bono counsel, who appeared for Mr Batt. The Court acknowledges the very great service rendered to the Court and to litigants in person by members of the profession who agree to act without fee as counsel (or solicitor) in the presentation of argument or in the preparation of a case. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny.

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