37 Tribunal powers - complaints under section 14
(1) For the purpose of reviewing a decision of the trustee of a fund that is the subject of a complaint under section 14:
(a) the Tribunal has all the powers, obligations and discretions that are conferred on the trustee; and
(b) subject to subsection (6), must make a determination in accordance with subsection (3).
(2) If an insurer or other decision‑maker has been joined as a party to a complaint under section 14:
(a) the Tribunal must, when reviewing the trustee's decision, also review any decision of the insurer or other decision‑maker that is relevant to the complaint; and
(b) for that purpose, has all the powers, obligations and discretions that are conferred on the insurer or other decision‑maker; and
(c) subject to subsection (6), must make a determination in accordance with subsection (3).
(3) 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.
(4) The Tribunal may only exercise its determination‑making power under subsection (3) for the purpose of placing the complainant as nearly as practicable in such a position that the unfairness, unreasonableness, or both, that the Tribunal has determined to exist in relation to the trustee's decision that is the subject of the complaint no longer exists.
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How the determination operates is addressed by s 41:
41 Operation of determination
(1) Subject to subsection (2), a determination of the Tribunal comes into operation immediately upon the making of the determination.
(2) The Tribunal may specify in a determination that the determination is not to come into operation until a later date specified in the determination and, if a later date is so specified, the determination comes into operation on that date.
(3) A decision of a trustee, insurer, RSA provider or other decision‑maker as varied by the Tribunal, or a decision made by the Tribunal in substitution for a decision of a trustee, insurer, RSA provider or other decision‑maker:
(a) is, for all purposes (other than the making of a complaint about the decision) taken to be a decision of a trustee, insurer, RSA provider or other decision‑maker concerned; and
(b) on the coming into operation of the determination by the Tribunal, 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.
9 It is convenient, at this stage, to consider the judgment of Kenny J in Batt. The facts can be stated briefly. Mr Batt retired on the grounds of invalidity in July 1994 and was paid a Class B pension from 31 July 1994. In a classification review, the ICC determined that Mr Batt was being paid the appropriate pension. This decision was affirmed by the Board on 28 August 1999. A complaint was made to the Tribunal which, on 31 October 2001, set aside the decision of the ICC and substituted a decision that Mr Batt was entitled to payment of a class A pension with effect from 12 June 1997 (being the date of the original determination of the ICC). In a further decision of 26 June 2003 the Tribunal determined that interest was payable on the difference between the two pensions for a period which commenced on 12 June 1997. This decision concerning interest was successfully challenged by the Board in the proceedings before Kenny J. Her Honour concluded that the Tribunal had fallen into error on two bases. Only the second is relevant in these proceedings.
10 The focus of Her Honour's analysis was on the expression "[w]here a pension is payable to ... a person and the commencement of the payment of that pension is delayed" at the beginning of rule 69(2). Kenny J concluded that the words "where a pension is payable" fixes a point of time and delay, for the purposes of the rule, was elapsed time from that fixed point. Her Honour also concluded that the pension at the reclassified rate was payable only on and from the time the Tribunal made the decision to substitute a decision that Mr Batt should be paid a class A pension.
11 Her Honour's reasoning was as follows (at [51]-[54]):
... 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.
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.
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.
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.
(Emphasis original)
12 For our part we would respectfully adopt a different approach. Batt, in our opinion, was wrongly decided and, in any event, is distinguishable. The starting point has to be, in our respectful opinion, the purpose of rule 69. Various classes of individuals are entitled to benefits under the Deed. Quite obviously decisions have to be made by reference to the Deed in any given case about whether the claimed entitlement truly arises under the Deed. Doubtless in many cases that decision can be made very quickly and the affirmative answer that there is an entitlement is obvious. In other cases the position will be less clear and in some cases the position will probably be quite obscure. This case is probably of the last mentioned category. However, the purpose of rule 69 is to provide a mechanism for the payment of interest where, for whatever reason, a person with a particular entitlement has been denied the entitlement for a material period of time that can reasonably be characterised as "delay". The delay may arise from the workload of the Board, difficulties in assessing relevant information or as a result of the effluxion of time while processes of review are successfully pursued. While the Deed has to be construed objectively, it represents a scheme designed to benefit ex-serviceman, their spouses and their children. It should not, in our opinion, be construed narrowly.
13 The word "where" has a variety of meanings. As the Court of Appeal said in Woozley v Woodall Smith [1950] 1 KB 325 at 331:
... [t]he opening word "where" - does this mean "in cases in which" (a meaning which, as the Master of the Rolls pointed out during the argument, it is capable of bearing); or does it mean "if and so long as," as suggested in a dictum of Lord Uththwatt in J & F Stone Lighting & Radio Ltd v Levitt [1947] AC 209 or has it perhaps yet some other meaning? That is the first problem of construction.
14 At the heart of what we consider was the erroneous approach of Kenny J was treating the words "where a pension is payable to" in rule 69(2) as fixing a point in time. While arguably it does, it also arguably, read together with rule 40, simply identifies the nature of the benefit as a lump sum or a pension, in respect of which interest is payable if the payment of the pension is delayed. On that approach, the opening words of the sub-rule simply identify the subject matter on which the sub-rule operates. That is, in our opinion, made clear (and this is a point of distinction from the present case in any event) from the opening words of rule 69(1). The expression "where a benefit is payable as a lump sum" does not obviously fix a point in time. In our opinion, the better view is that the expression simply identifies the circumstances in which the sub-rule operates in contradistinction to the circumstances in which sub-rule (2) operates. The only temporal element in each sub-rule is that "the payment of the [lump sum/ pension] is delayed". That involves consideration of when the lump sum or pension should have been paid and when it was paid (a lump sum) or first paid (a pension). In the case of Mr Batt, it should have been first paid when the reclassification decision was made on the basis that, had it been made correctly, Mr Batt would have been reclassified as being entitled to a class A pension. In the present case, it should have been paid immediately following the death of the appellant's spouse. It was not paid then, and indeed for some considerable time, because of a series of erroneous decisions about whether the appellant was the deceased serviceman's spouse and whether, notwithstanding that he had been absent without leave, his absence was due to sufficiently mitigating circumstances.
15 It is true that before rule 40(3) operates, a state of satisfaction is required to be reached by the Board under rule 40(4) that there were sufficiently mitigating circumstances for the absence of the member. On one view, it cannot be said that the appellant should have been paid a lump sum immediately following the death of her spouse until, at the earliest, the Board arrived at this positive state of satisfaction. However, this approach overlooks how, in our opinion, rule 40 is intended to operate. Sub-rule 40 (1) creates the entitlement in a spouse to a member's employer benefit if two conditions are met. The first is that the member has died and the second is that the person is a spouse of that member. Absent the disentitling operation of sub-rule (4), the calculation of the entitlement is to be made as directed by sub-rule (3).
16 Sub-rule (4) contains three elements. The first two are conditions that enliven its operation (absence without leave for more than 21 consecutive days and forfeiture of salary which was not repaid or repayable) and the third is a proviso of sorts (the existence, in the Board's opinion, of sufficiently mitigating circumstances), which renders the sub-rule inapplicable. There is no reason to doubt, in our opinion, that the scheme of the rule is that, in the ordinary course, sub-rule (3) should be treated as effective unless and until the Board addressed all aspects of the operation of sub-rule (4) and that that would be done at the one time. That is, the Board would consider whether the member had been absent without leave and the salary was dealt with in the specified way and also whether there were sufficiently mitigating circumstances. Approached that way, sub-rule (3) would operate unless and until the Board determined that sub-rule (4) had been engaged because it was not satisfied there were mitigating circumstances. In the present case, the Board's original decision was displaced by the decision of the Tribunal. The Board never determined, as a matter of law, that sub-rule (3) should not operate in terms.
17 We doubt that it can seriously be argued that, as a matter of fact, there has not been considerable delay between the time the lump sum should have been paid to the appellant and the time it was actually paid. However, whether there has been delay is, for present purposes, a matter to be determined by the Board under rule 69. We should add, parenthetically, that we entertain real doubts that the Board was authorised to make the 2004 Determination by rule 3 (1)(c). That provision only authorises the Board to determine interest rates. It does not appear to authorise the promulgation of a scheme for determining whether there has been delay, which appears to be the effect of section 5 of the Determination. The Determination might be thought to fetter the discretionary power conferred by rule 69 to determine whether there has been delay. However, this issue was not argued in the appeal. In any event, the "processing period" under clause 5(2) and (3) of the Delayed Payment of Benefits Determination was much longer than 15 days.