QSuper Board v Australian Financial Complaints Authority Limited

Introduction 1 On 26 January 2019, Dr Lam complained to the Australian Financial Complaints Authority Limited (AFCA), alleging that he was entitled to a refund from QSuper because, from 1 July 2016 to 11 December 2018, he had overpaid premiums for death and total and permanent impairment cover which he had acquired through his superannuation fund. This complaint was precipitated by his discovery that he was - and had been - eligible to pay a lower premium during that period, on the basis that he fell within the new "professional" occupational rating introduced on 1 July 2016. On 17 January 2019, QSuper had refused to refund any money to Dr Lam alleging that on 27 May 2016, he had been given sufficient information to allow him to apply for changes to his insurance cover and qualify for a reduced premium. On 1 August 2019, AFCA decided the complaint in favour of Dr Lam. 2 The central issue in this appeal initially appeared to be whether AFCA's decision was invalid because the powers purportedly exercised by it under s 1055 of the Corporations Act 2001 (Cth) (CA) contravened Ch III of the Commonwealth of Australia Constitution Act 1901 (Cth) (the Constitution) by conferring the judicial power of the Commonwealth on a non-judicial body. However, QSuper clarified its primary position in its written submissions in reply to those of the intervener, the Attorney-General (Cth), saying that it did not assert CA s 1055 was invalid, but merely that, in this case, AFCA impermissibly exercised the judicial power of the Commonwealth. That response tended to obscure more than it revealed, and it was unclear whether the applicant's position was that AFCA's decision was or was not within the scope of CA s 1055. If the former, the Constitutional issue would necessarily be raised. If the latter, the question was merely one of the construction of the scope of that section. 3 QSuper also advanced an alternative argument that if AFCA was authorised to make the decision which it did, that decision involved an error of law - namely that in making a determination about the adequacy of disclosure under CA s 1017B(4), it applied an incorrect test - which this Court is entitled to, and should, review. 4 However, an essential foundation of QSuper's initial two grounds of appeal is that AFCA made a decision which determined that the notice issued by QSuper did not comply with CA s 1017B(4), which required it to provide Dr Lam with information that was reasonably necessary for him to understand the nature and effect of any proposed changes to his insurance cover. As appears from the discussion below, that foundational premise was not established and, for that reason, those two grounds of appeal must fail. Even if the necessary premise had been established, the appeal would otherwise fail. 5 During the appeal QSuper sought to raise an additional ground which was factually inconsistent with the first two grounds, namely that if AFCA did not in fact consider CA s 1017B(4), it erred in so doing. As the following discussion reveals, there was no merit in that ground either.

The establishment of the AFCA scheme and QSuper's membership of it 6 For the purposes of this appeal, it is necessary to identify the manner in which the AFCA scheme was established and how QSuper came to be a member of it.

The relevant history of QSuper 7 QSuper is a body corporate continued in existence under s 3 of the Superannuation (State Public Sector) Act 1990 (Qld) (QSuper Act). Pursuant to s 4 of that Act it administers the QSuper Superannuation Fund (the Fund) as its trustee. 8 QSuper or its progenitor organisations were the trustees of the Fund providing superannuation benefits exclusively to members of the Queensland public service. In that sense it was a closed fund and persons who were not relevantly "employed" by the State were not entitled to participate in it. In its original form it was not subject to Commonwealth regulation. That changed on 9 July 2009, when the Australian Prudential Regulatory Authority (APRA) issued it with a registrable superannuation entity (RSE) licence and registered the Fund as an RSE fund pursuant to the Superannuation Industry (Supervision) Act 1993 (Cth) (Supervision Act). An RSE was relevantly defined in s 10(1) of the Supervision Act to mean a 'regulated superannuation fund'. A fund qualified as an RSE fund if it had relevantly complied with the requirements of s 19 of the Supervision Act. One such requirement was that the trustee had given to APRA a written notice electing that the Supervision Act applied to the fund. That had the consequence that the fund was subject to supervision by APRA, the Australian Securities and Investments Commission (ASIC) and the Commissioner of Taxation. The major benefit derived from making such an election was that the fund became entitled to concessional taxation treatment which would not otherwise have been available. In an economic sense the obtaining of that concessional treatment rendered making the election a practical necessity. Once the election was made it was irrevocable: s 19(5) of the Supervision Act. 9 The regulation of QSuper and the Fund by Commonwealth authorities was completed on 3 November 2009 when the Fund ceased to have the status of an 'exempt public sector superannuation scheme' for the purposes of the Supervision Act: Superannuation Industry (Supervision) Amendment Regulations 2009 (No 5) (Cth) (Supervision Regulations). That alteration in status had the consequence that QSuper was obliged to comply with any order, direction or determination of the Superannuation Complaints Tribunal (the SCT): s 31 of the Supervision Act and reg 13.17B of the Supervision Regulations. In this way the elections made by QSuper had the effect that it was subject to the scheme for the resolution of superannuation complaints between members and fund trustees over which the SCT presided.

QSuper opens to the public and obtains an AFSL 10 Prior to 2017, QSuper was not required to hold an Australian Financial Services Licence (AFSL) as it came within an exemption in the CA; namely that it was a trustee of a superannuation entity "other than a trustee of a public offer entity": CA s 911A(2)(k); Corporations Regulations 2001 (Cth) reg 7.6.01(1)(a). As the class of persons who might become members of the QSuper fund was limited to state government employees it could not be a "public offer entity". 11 In or around 2017, QSuper and the Queensland State government determined that the Fund should be opened to the public. This was, seemingly, a response to changes which entitled state public servants to transfer their superannuation accounts to external funds. Relevantly, s 12(4) of the QSuper Act provided that the Queensland Governor in Council may not amend the QSuper Deed by regulation without QSuper's consent. On 26 May 2017, QSuper consented to the making of certain amendments to its deed so as to allow members of the general public to join the fund. Subsequently, the Superannuation (State Public Sector) Deed 1990 (Qld) (QSuper Deed) was amended effective on 30 June 2017, to make the necessary alterations: Superannuation (State Public Sector) (Scheme Membership) Amendment of Deed Regulation 2017 (Qld). 12 A consequence of opening the Fund to the public was that QSuper was no longer exempt from holding an AFSL on the basis that it was a trustee other than a trustee of a "public offer entity". Opening the Fund to the general public caused QSuper to become a "public offer superannuation fund" (s 18(1)(a)(ii) of the Supervision Act), such that it came within the definition of "public offer entity" (s 10(1) of the Supervision Act). It applied for and obtained an AFSL which was operative from 1 July 2017 and which authorised it to provide financial services to retail clients.

Establishment of the AFCA scheme 13 By the Treasury Laws Amendment (Putting Consumers First - Establishment of the Australian Financial Complaints Authority) Act 2018 (Cth), amendments were made to the CA, the Supervision Act and to the Superannuation (Resolution of Complaints) Act 1993 (Cth) (Complaints Act) for the stated purpose of rationalising the external dispute resolution processes for superannuation funds. In broad terms, the object of the amendments was to replace the SCT and other external dispute resolution schemes with the AFCA scheme. The implementation of the new system was mostly effected by the introduction of Part 7.10A into the CA which came into force on 6 March 2018. By it, the Minister administering the CA was authorised to establish an external dispute resolution scheme for superannuation complaints (CA s 1050(1)). The Minister exercised that power and the AFCA scheme was established. At the same time the Supervision Act was amended to require each trustee of certain regulated superannuation funds to be members of the AFCA scheme (s 101 of the Supervision Act). However, the Supervision Act requirements which applied to trustees of regulated superannuation funds, including the requirement to be a member of AFCA, did not apply in certain cases and, relevantly, in relation to trustees of superannuation funds which held an AFSL: s 101(1A) of the Supervision Act. As mentioned above, at that time QSuper held an AFSL. 14 By the same suite of amendments which took effect on 6 March 2018, CA ss 912A(1)(g) and 912A(2) were also amended to the effect that in order for a person who provides financial services to retail clients to comply with the requirement to hold an AFSL, they must have membership of the AFCA scheme. Therefore, in order to continue to offer membership of the Fund to the general public, QSuper was required to continue to hold an AFSL and, to do that, it needed to be a member of AFCA (CA ss 912A(1)(g) and 912A(2)(c)). 15 AFCA's constitution provided that an entity may apply to become a member of the AFCA scheme by delivering to it a completed signed application form (cl 3.2(b) and (c)). The applying entity became a member once it was accepted by AFCA's directors and its name was registered in the register of members (cl 1.1). 16 By cl 3.2(g) of the AFCA constitution and its rules, a member agreed to be bound by all the rules applicable to a member in respect of a complaint from time to time. Additionally, by cl 12.1(d) of AFCA's constitution, the provisions of AFCA's constitution and the rules 'form a binding contract between' the member and AFCA. 17 The effect of the above is that, if an entity is both a regulated superannuation fund under the Supervision Act and the holder of an AFSL, the determination of superannuation complaints made by members of the funds which have joined AFCA is provided for and conducted pursuant to the CA and AFCA's complaint resolution scheme rules. 18 It was accepted that QSuper made the necessary application to become a member of the AFCA scheme.

The circumstances leading to Dr Lam's complaint 19 Dr Lam was first employed by the Queensland government on 17 January 2011. His membership of the Fund was required by law (s 72(1) of the QSuper Deed), with the result that he was not obliged to make an application to join. On joining he also automatically received four units of default death and total and permanent disablement (TPD) cover, as well as salary-based income protection. Prior to 1 July 2016 that cover was provided directly by QSuper under certain self-insurance arrangements. 20 On 1 July 2014, Dr Lam applied, via his Member Online account, for an additional 12 units of death and TPD insurance, which were granted. 21 From the date on which he originally obtained cover, Dr Lam paid the premiums at the rate charged to him by QSuper. The manner in which the rate was calculated was not clear on the material before the Court, but it was likely that the premiums were of a generic nature for all members. That changed in 2016, when QSuper determined to alter the insurance cover arrangements provided to members by entering into a policy with QInsure Limited (the Policy) (which took effect from 1 July 2016). The QInsure policy offered QSuper members different forms of cover which could be tailored to suit each member's particular circumstances. Differential rates of premium were introduced such that the amount payable depended to some extent on the individual member's circumstances. However, under cl 8.1.1(f) of the policy, a person who was insured under the previous insurance arrangements would be subject to the default premium rates unless they personalised their cover prior to the commencement date. If they failed to personalise their cover, the standard occupational rate would apply in respect of their premiums. 22 Under cover of a letter dated 27 May 2016, QSuper sent to its members, including Dr Lam, a document entitled "An important notice from the QSuper Board of Trustees", which announced on its cover sheet, "Introducing changes to your insurance". The document, referred to in these reasons as "the Notice", indicated that it was issued on 17 May 2016. 23 The covering letter notified in positive terms the existence of pending changes to the death and TPD cover available to Fund members and advised that they might tailor cover to suit their personal circumstances or needs. Under the heading "Understanding the changes" the following appeared: You don't have to do anything - the changes we've outlined to your insurance cover will happen automatically on 1 July. We want you to have a clear understanding of the changes, and what they mean for you, so it's important that you read all the information in this letter in conjunction with the Important notice from QSuper Board of Trustees. You'll find information on our website that highlights how our insurance cover can be personalised to suit different individual circumstances. 24 On page 2 of the Notice, the following was identified in large font: On 1 July 2016, QSuper will be making some big changes to the insurance cover we offer you. We know every one of you is unique. That's why these enhancements are designed to give you more opportunity to personalise your cover to meet your individual needs. It's just another way you can feel confident we're looking out for you, whatever stage of life you're at. 25 There followed an indication of how the document was structured and how a reader might identify important terms: Insurance can be complex - we get that. We want you to understand what you're entitled to, so we've tried to make this document as clear and straightforward as possible. However there are some terms that do have very specific meanings, and where they appear we've bolded (sic) them. In some cases we've provided a high level overview of what this term means where it appears, but you'll find the definitions of all these terms on pages 21-24. 26 A summary of the changes which were to occur was also provided. Relevantly, for present purposes the following appeared: What's happening on 1 July 2016? The insurance cover you'll have on 1 July, and the insurance you'll be entitled to receive will vary depending on your age, current level of cover and employment situation. However some of the key things to understand are: … Your premiums may change, and we are introducing occupational ratings for premiums. More detailed information about these and other changes can be found on the following pages. … 27 On the succeeding page, a description was given as to the contents of the document, which included the following: Contents The table below outlines the main changes that will happen on 1 July 2016 and where in this document you can find out more. More detail will be in the Accumulation Account Insurance Guide dated 1 July 2016, which will be available on our website from 1 July 2016. Can't get to a computer? Just give us a call and we'll send you a copy. 28 Under that heading there appeared a table which included this entry: Premiums and occupational rating Premiums may change on 1 July 2016. We'll be introducing a new premium rating system too, and some members will find their premiums have moved from default rate to standard rate. Page 14

29 On page 14 under the heading "What will cover cost?" the following appeared: We're also introducing occupational ratings from 1 July 2016, and for some members, choosing to be occupationally rated may reduce your premiums. There will be more information on occupational rating and premiums in the Accumulation Account Insurance Guide dated 1 July 2016. 30 The reference to an Accumulation Account Insurance Guide dated 1 July 2016 assumes some importance in this case. A copy of that document, which will be referred to as the "Guide", was included in the appeal book and it indicates that it was "issued 1 July 2016". 31 Page 12 of the Guide contained a discussion and information on the new occupational rates for death cover and/or TPD cover for Fund members. The occupational ratings were identified as being of four categories: standard, professional, white collar or high risk and that the premium rate for a professional was 60% of the standard rate. Prominently appearing on page 12 was the following: If you aren't sure how changing your cover will affect your premiums or what occupational rating you fall in to, simply log in to Member Online. If you head to the insurance section you can enter different combinations and see how much you would pay. 32 Schedule 4 of the QInsure Policy, identified the criteria which a member needed to satisfy in order to fall within one of the differential premium categories. These criteria included: Professional Rate Professionals i.e. university qualified relevant to their occupation or a senior manager. (e.g. surgeons, doctors, executives) with a salary of $120,000+ working in office based environments. Standard Rate Nurses, health care workers/carers, manual light positions. Any worker who does not meet the criteria for any of the other ratings. 33 It was not in contention that Dr Lam received the letter of 27 May 2016 together with the Notice. It also does not appear to be in doubt that he had access to the Guide once it became available on 1 July 2016. It is further clear that, had he chosen to do so, he could have identified himself to QSuper as a person who met the occupational rating such that on 1 July 2016, or thereafter, his premiums for death and TPD cover would be 60% of the standard rate. However, he did not do so and, consequently, he continued to pay the premiums at the standard rate.

Dr Lam's complaint 34 At some time prior to 12 December 2018, Dr Lam realised, or at least believed, that he could have taken advantage of the professional rate for death and TPD cover under the QInsure policy from 1 July 2016. He demanded that QSuper refund him the difference between the standard premiums which he had paid and the professional rate which he claims he could have paid. On 17 January 2019, QSuper declined to refund any of the amounts which Dr Lam had paid as premiums. 35 On 26 January 2019, Dr Lam lodged his complaint with AFCA. It is apparent that he did so under the misapprehension that QSuper had somehow altered his professional status in its records for the purposes of his death and TPD cover, with the result that he was being charged the standard rather than the professional rate. He asserted that when he applied for and obtained death and TPD cover he had informed QSuper that he was a doctor. He said, therefore, that he was entitled to retain that professional status and that his premiums ought to have been calculated on that basis. He believed that his status had been changed without his express authority. He further asserted that QSuper owed him a duty of care such that if there was doubt about his occupation it was required to act promptly to seek clarification. On this basis he asserted that he was entitled to a refund of the allegedly overpaid premiums from 1 July 2016 to 11 December 2018. 36 The foundation of Dr Lam's complaint was largely misguided. In order to secure the lower professional premiums, once the new arrangements came into effect from 1 July 2016, he was required to make an application and establish that he came within the definition of "professional" as that term is defined in the governing rules of the Fund. His application for a change of status would also have to be approved by the trustee or, at least, the trustee would have to be satisfied that he met the criteria for that category. Contrary to Dr Lam's opinion, merely being a medical practitioner did not qualify him as a "professional" for insurance purposes. 37 Upon receiving Dr Lam's complaint, AFCA, by an email of 29 January 2019, invited QSuper to respond to it. QSuper did so by a letter of 18 February 2019, in which it focused on the mistaken basis on which Dr Lam had advanced his complaint and it submitted that the complaint was misconceived and lacking in substance. It also claimed that it had acted fairly and reasonably in the circumstances.

The preliminary assessment by AFCA 38 By a letter dated 18 April 2019 sent to the parties, AFCA made a preliminary assessment of Dr Lam's complaint and identified the outcome. It decided that QSuper had adequately disclosed the introduction of occupational ratings, that it had no reason to consider Dr Lam's occupation was in doubt, and it was unaware of his eligibility to be reclassified. As a result it determined, on a provisional basis, that the refusal to refund Dr Lam's premium was fair and reasonable. 39 Dr Lam was obviously not satisfied with that decision and, so it seems, provided further information to AFCA. 40 On 2 July 2019, AFCA sent an email to QSuper in which it referred to certain correspondence which is not reproduced on this appeal. It indicated that QSuper's previous correspondence "did not specifically address the obligations in 1017B of the Corporations Act", and that issue was not specifically dealt with in the preliminary assessment. QSuper was invited to provide submissions in relation to that issue if it wished to do so. 41 Attached to some additional written submissions filed by QSuper on the day prior to the hearing of this appeal was a further document relating to the chronology. It was a copy of an email, dated 4 July 2019, containing QSuper's response to AFCA's email of 2 July. In it, QSuper advised that Dr Lam's complaint was not one about the adequacy of the disclosure of information by QSuper, but about its power to withhold premiums which he says he had wrongly paid. The letter went on to state: Therefore, whilst the Trustee acknowledges that the response dated 6 June 2019 didn't specifically address the requirements of 1017B of the Corporations Act, the Trustee is not of a view that the complaint relates to the manner in which relevant disclosures meet those requirements. Nevertheless, the Trustee's position remains that adequate disclosure was provided to the Complainant regarding the changes to the Fund's insurance arrangements, including the introduction of Occupational Ratings. The disclosures comply with all regulatory requirements, being: • The change, being a material change to a matter, was notified to members of the Fund; • The notification was provided in writing and / or electronically; • The notification provided information that was reasonably necessary to understand the nature and effect of the change; • The notification was provided before the change occurred. 42 If there was any further correspondence between QSuper and AFCA it is not part of the appeal record.

The final determination by AFCA 43 AFCA made a final determination with respect to Dr Lam's complaint on 1 August 2019 and provided written reasons for its decision. In summary, it upheld the complaint and, in substitution for QSuper's decision, decided that Dr Lam should be refunded the difference between the amount of the premiums which he had paid and the amount he would have paid had he been classified as a "professional" for the purposes of the QInsure policy. 44 The nature of QSuper's submissions on appeal necessitates a careful analysis of AFCA's reasons. In essence, QSuper submitted that on a "close reading" of the reasons it can be discerned that AFCA decided that, because the Notice did not comply with CA s 1017B(4) QSuper was required to repay Dr Lam and its refusal to do so was unfair and unreasonable. Support for that was said to lie in the use by AFCA in its reasons of the words "requirement" and "disclosure". The first is alleged to refer to the "requirement" in s 1017B(4) and the latter being a word used in the heading to the section or the general obligation arising under it. 45 In outlining the complaint in its reasons AFCA identified that Dr Lam's concern was that he should have been classified as a "professional" or that he should have been given information which made it apparent to him that he could apply to change his details to "professional". QSuper's submissions were summarized as asserting that it had no authority to unilaterally alter Dr Lam's status, it did not hold any occupational classification for members at the time, and that it had provided adequate information but Dr Lam did not read it. 46 In the "Overview" section of its reasons, AFCA expressed its agreement that QSuper was not able to unilaterally classify Dr Lam at the professional insurance rate under its policy and the governing rules. It also agreed that QSuper did not hold information about Dr Lam's occupational status and that he had needed to make an election to change his status which was accepted by the trustee before he could be charged at the professional rate. However, under the heading, "Did the trustee provide adequate disclosure to the complainant about the occupational ratings?", it concluded that the information provided: …lacked clarity, was difficult to access and did not easily convey or signpost the steps to enable the complainant to identify and apply to change his occupational rating to the professional rating with lower premiums. 47 Still at that part of the reasons under the heading "Overview", there appeared the further sub-heading, "Is the trustee's decision fair and reasonable to the complainant in the circumstances?". The use of the words "fair and reasonable" being referable to the decision required to be made under CA s 1055. It was said: The trustee's decision not to refund the difference in the premiums is not fair and reasonable in its operation in relation to the complainant in the circumstances because he was not provided with adequate information to enable him to make a fully informed decision to change his occupational status to the professional rating before 6 January 2018. The reference to Dr Lam being "fully informed" is a concern which AFCA repeatedly expressed in its reasons. 48 Immediately following that, AFCA provided its formal determination in the following terms: 1.3 Determination The determination sets aside the trustee's decision. AFCA's substituted decision is for the trustee to credit the complainant's account with: • the difference in the insurance premiums paid at the standard rate from the insurance premiums payable at the professional rate, from 1 July 2016 to 6 January 2018, and • earnings on the premium difference at the rates that applied to his account for that period. 49 Following the heading "Reasons for Determination", AFCA set out in detail its consideration of Dr Lam's complaint about QSuper altering his occupational status and thereby charging him premiums higher than he might otherwise have paid. It identified that it was required to comply with its rules and the CA, consider whether QSuper's decision was fair and reasonable in its operation in relation to the complainant, and to make a determination that was not contrary to law, the trust deed or the insurance policy. A significant part of the reasons concerned Dr Lam's complaint that his occupational status was improperly altered by QSuper. As mentioned, this was rejected, it being determined that it was the responsibility of the member to alter their status. 50 However, at section 2.3 of the reasons, AFCA identified that, whilst Dr Lam had the responsibility for changing his status, in order to do that he required information which clearly identified that he was classified at the "standard rating", that he may have been able to change to a professional rating at which lower premiums would be paid, and how to apply for the change. He also needed to know that the change might be beneficial to him. AFCA found that the information provided to Dr Lam lacked clarity in these respects. It said: Occupational ratings were not explained with clarity Occupational ratings were not explained with clarity in the Letter nor the Notice. The Letter did not refer to occupational ratings and while this expression was introduced in the Notice there was no reference to professional or white-collar ratings. A member could have concluded the only two categories of occupational ratings were standard and high risk from the Notice. This information acted to obscure, rather than signpost, that the complainant could apply for a professional rating. Only in the Guide did members get a clearer picture and examples of how occupational ratings worked and the applicable premiums. However, the Guide was not available with the Letter and the Notice which were emailed on 30 May 2016. The complainant could not have been fully informed until after the insurance changed on 1 July 2016 when the Guide became available on the website. (Emphasis added.) 51 AFCA also found that the information about eligibility for a professional rating was difficult to access. It identified the information which had been made available including that found in the Guide and the reference to QSuper's website and said: Incorporating material by reference is a useful, and legislatively approved, method of disclosure. It does not, however remove the requirement to adequately disclose the reasonable information the complainant needed. The full information jigsaw could not be pieced together until after the insurance changes had commenced. The trustee has said the complainant could change his occupational rating. The information did not provide him with a clear signposted means of doing so. 52 It then determined that the material provided did not give information about the purpose of the "occupational ratings", the impact of the change, and nor did it specify a professional rating with lower premiums. It again indicated its concern about the need to "signpost" the way for a member to secure the benefits of the change (at page 9): While the complainant was encouraged in the Letter to turn to the website for highlights about personalised cover, there was no information to signpost that personalising cover included changing occupational ratings. The information set out on page 18 of the Notice was for members on the default rate who applied to change cover and was not specifically directed to a standard rate member. I find that the disclosure material identified by the trustee, and the information in the Letter and the Notice which I separately reviewed, did not provide sufficient information to enable the complainant to reasonably identify his eligibility to apply for a professional rating. 53 Subsequently, at section 2.4 of its reasons under the heading, "Was the trustee's decision not to refund the premiums fair and reasonable in the circumstances?", AFCA expressed its conclusions as to the questions to be answered under CA s 1055. After the subheading, "The disclosure provided was not adequate for the complainant to identify he could apply for the professional rating", it said: The disclosure provided to the complainant on the introduction to occupation ratings, including the option of selecting a professional rating, lacked clarity, did not signpost or highlight important information and was difficult to access. Therefore, he did not have sufficient information to make a fully informed decision to change his occupational status to professional. The complainant accessed information on the insurance section of the website on 6 January 2018. I accept this was the first time the complainant had readily available and complete access to all the information to make an informed decision. For the reasons set out above, I find that it was not fair and reasonable for the trustee to decline the refund of the complainant's premiums for the period from 1 July 2016 until 6 January 2018. 54 It found that it was not until 6 January 2018, when Dr Lam accessed QSuper's website, that he obtained sufficient information to be fully informed of the opportunity available to him. 55 After the conclusion of its reasons for decision, AFCA set out on a number of pages what it referred to as "Supporting information". That included a brief chronology, references to clauses in the QSuper trust deed, extracts from the documents given to Dr Lam including the Notice and the Guide. At the very end the heading "Relevant Law", appeared. Under it was a table with two columns, headed "Obligation" and "Legislation". Beneath the former were general statements of the effect of ss 1017B(1), 1017B(1A) and 1017B(4). The statement corresponding to s 1017B(4) read: Requirement to give information that is reasonably necessary to understand the nature and effect of the change or event 56 The use of the word "requirement" in relation to the obligations under s 1017B(4) is important and heavily relied upon by QSuper in its submissions.

Application to this Court 57 On 6 December 2019, QSuper appealed the decision of the tribunal to this Court pursuant to CA s 1057. By the notice of appeal it asserted two questions of law arose: 1. Did AFCA exercise judicial power of the Commonwealth, contrary to Chapter III of the Commonwealth of Australia Constitution Act 1901 (Cth)? 2. Did AFCA err in determining, in effect, that the Applicant had not given the Second Respondent a notice in accordance with subsection 1017B(4) of the Corporations Act 2001 (Cth)? 58 During the course of the hearing QSuper sought leave to amend its application to raise a third ground which was to be in the alternative to the above. As articulated it was: In making superannuation determination number 617599 AFCA erred in law by determining that the notice given to the Second Respondent did not make adequate disclosure, without considering whether the test for adequate disclosure prescribed by s 1017B(4) of the Corporations Act 2001 (Cth) had been complied with. 59 As will appear from the following discussion, this proposed new ground was based upon arguments which were factually inconsistent with those urged in support of the existing grounds and, in particular, Ground 2. This created something of a challenge for the applicant.

What are the issues on appeal? 60 The grounds in the notice of appeal as articulated in the submissions are founded upon the proposition that, in making a decision under CA s 1055, AFCA determined that the Notice did not comply with the requirements of CA s 1017B(4) such that QSuper contravened CA s 1017B(4). Initially, AFCA seemed to adopt that position as did the Commonwealth. However, prior to the hearing of the appeal the parties were notified that the Court may not accept it and they were invited to make submissions (in writing or orally) as to how AFCA's decision that QSuper's refusal to refund premiums to Dr Lam was unfair and unreasonable amounted to or was founded upon a decision that the Notice did not satisfy the requirements of s 1017B(4). Subsequently, AFCA submitted that there was no determination by it that the Notice did not comply with the requirements of s 1017B(4). The Commonwealth adopted a somewhat neutral position. 61 The grounds in the Notice of Appeal, the proposed new ground and the submissions made during the course of the hearing give rise to four issues requiring consideration. They are:

1. Did AFCA make a decision that s 1017B was contravened?
2. If so, did AFCA exercise judicial power in so doing?
3. Did AFCA err in concluding that a breach of s 1017B had occurred?
4. Did AFCA err by failing to make a decision about s 1017B?

Did AFCA determine that s 1017B had been contravened? 62 A consideration of the first question requires an understanding of the powers accorded to AFCA under the CA and the nature of the decisions which it may be called on to make.

The nature of the power conferred by s 1055 63 For the purposes of understanding AFCA's reasons for its final determination and the nature of the determination which it made, it is necessary to set out the following parts of CA s 1055: 1055 Making a determination (1) In making a determination of a superannuation complaint, AFCA has, subject to this section, all the powers, obligations and discretions that are conferred on the trustee, insurer, RSA provider or other person who: (a) made a decision to which the complaint relates; or (b) engaged in conduct (including any act, omission or representation) to which the complaint relates. … Affirming decisions or conduct (2) AFCA must affirm a decision or conduct (except a decision relating to the payment of a death benefit) if AFCA is satisfied that: (a) the decision, in its operation in relation to the complainant; or (b) the conduct; was fair and reasonable in all the circumstances. … Varying etc. decisions or conduct (4) If AFCA is satisfied that: (a) a decision (except a decision relating to the payment of a death benefit), in its operation in relation to the complainant; or (b) conduct; is unfair or unreasonable, or both, AFCA may take any one or more of the actions mentioned in subsection (6), but only for the purpose of placing the complainant, as nearly as practicable, in such a position that the unfairness, unreasonableness, or both, no longer exists. … (6) AFCA may, under subsection (4) or (5), do any of the following: (a) vary the decision; (b) set aside the decision and: (i) substitute a decision for the decision so set aside; or (ii) remit the decision to the person who made it for reconsideration in accordance with any directions or recommendations of AFCA; … Limitations on determinations (7) AFCA must not make a determination of a superannuation complaint that would be contrary to: (a) law; or (b) subject to paragraph (6)(c), the governing rules of a regulated superannuation fund or an approved deposit fund to which the complaint relates; or (c) subject to paragraph (6)(d), the terms and conditions of an annuity policy, contract of insurance or RSA to which the complaint relates.. 64 The powers conferred by CA s 1055 permit AFCA to set aside or vary a decision made by a trustee in relation to a fund member even where the decision was authorised by the trust deed and any regulating statute. The determining factor is not the lawfulness of the decision, but its fairness or reasonableness "in its operation in relation to the complainant". Such a power is more aptly applied in relation to discretionary powers which, by their nature, confer wide decisional freedom on the repository such that a broad range of decisions might legitimately be made from a single set of facts. In any event, under the scheme where a complainant is aggrieved by a trustee's decision, AFCA can consider the relevant circumstances and exercise the power or discretion of the trustee afresh so as to correct any perceived unfairness or unreasonableness arising from the original decision's operation. 65 Despite the width of AFCA's remedial powers, subsection (7) requires that it exercise the powers of the trustee or other authorised person within legal confines. It is not entitled to make a decision which is contrary to the terms of the trust or beyond the limits of any relevant statutory regulation. For instance, AFCA could not, standing in the shoes of a trustee, exercise a power in a manner which breached the trustee duty to observe the terms of the trust. 66 It should be observed that it was not explained in this case how the decision to refund some of Dr Lam's premiums conformed to the terms of the fund. The policy required a member to make an application for a change of rating, including for a change to a member's occupational rating, and here QInsure would be entitled to receive from QSuper the correct premium calculated in accordance with the terms of the policy. Therefore, in order to give effect to AFCA's decision it is apparent that QSuper would be required to pay the refund out of the trust funds money, which would otherwise form the corpus of the fund. Neither AFCA nor QSuper identified any provision which authorised the making of ex gratia payments to some members at the expense of others. Mr Wise QC for AFCA submitted that QSuper had the authority to compound any lawful claim made against it and that this supported the determination which was made. As this point was not taken by QSuper there is no need to consider it further. 67 In any consideration of whether a power is judicial or non-judicial some attention is necessarily given to the ultimate result of the exercise of the power. In that respect a determination by AFCA under CA s 1055 has the following characteristics: (a) it comes into operation immediately upon its making (CA s 1055B(1)); (b) where it varies or substitutes a decision of the trustee, it is, for all purposes, taken to be a decision of the trustee and is taken to have had effect on the day on which the original decision had effect (CA s 1055B(3)(b)); (c) it is binding on members of the scheme, although not binding on complainants (CA s 1051(4)(e)). A complainant who is dissatisfied with AFCA's decision may ignore it and, unaffected by its terms or findings, may pursue the trustee in the courts or in any other manner they see fit; (d) it is subject to an appeal to the Federal Court on questions of law (CA s 1057); (e) it may be stayed by the Federal Court when an appeal has been instituted if the Court thinks it is appropriate to do so to secure the effectiveness of the hearing and determination of the appeal (CA s 1057A(2)); (f) otherwise, it remains effective despite the institution of an appeal and, prior to the appeal being determined, a complainant is entitled to implement the determination (CA s 1057A(1)).

The obligations imposed on trustees and others under s 1017B 68 Sections 1017B(1) and (1A) require that the issuer of a financial product notify the holder of the product of "any material change to a matter, or significant event that affects a matter, being a matter that would have been required to be specified in a Product Disclosure Statement for the financial product prepared on the day before the change or event occurs". In industry terms, the issuer of the product is to advise of "Significant Events" in relation to financial products which it has issued. The notification to the holder must be in writing, electronically or as specified in the regulations. 69 Relevantly for the purposes of this case, CA s 1017B(4) identifies, albeit in general terms, the nature of the information which must be provided: (4) The notice must give the holder the information that is reasonably necessary for the holder to understand the nature and effect of the change or event. A notice under CA s 1017B(4) is often referred to as a "Significant Event Notice" or "SEN". In this case QSuper's Notice accompanying the letter of 27 May 2016 was said to constitute the Significant Event Notice in relation to the changes which commenced on 1 July 2016. 70 Where the change or event involves an increase in fees or charges, the notification of the holder must take place 30 days before the change takes effect: CA s 1017B(5). 71 A failure to comply with CA s 1017B(1) is an offence carrying a significant penalty including possible imprisonment. Further, CA subsections 1022B(1)(e) and (2)(e) provide that any person who has suffered loss or damage because of a contravention of, inter alia, CA s 1017B, may recover the amount of loss or damage by an action against the party giving the Notice. The court has a wide power to make orders as it considers necessary or desirable in addition to the awarding of loss or damage: CA s 1022C.

QSuper's submissions as to the nature of AFCA's determination 72 As previously mentioned, QSuper's appeal was founded on the assumption that, in making its determination that it was unfair and unreasonable for QSuper not to refund an amount of premiums to Dr Lam, AFCA determined that QSuper's Notice of May 2016, was invalid because it failed to comply with the requirements of CA s 1017B(4). It was not submitted that AFCA made any such express determination but that this was "the effect" of its decision. At [28] of the applicant's written submissions it was said: In effect, under the guise of making a determination, AFCA gave to Dr Lam the same relief as a court is entitled to do for contravention of s 1017B. 73 Mr Sullivan QC for QSuper submitted that a finding by AFCA that the Notice did not comply with CA s 1017B(4) was a determination of "existing rights" as between the parties. He also submitted that, whilst it would not be the exercise of judicial power for a body such as AFCA to make such a determination along the way to or in the course of making some other decision, that was not the position here. It was submitted that the only basis on which it was determined that the refusal to refund an amount of the premiums was unreasonable was that the Notice did not comply with CA s 1017B. In support it was argued that if there had been compliance with CA s 1017B(4) then QSuper's refusal to refund could not have been "unfair and unreasonable". It was submitted that, in substance, what AFCA did was determined there had been a breach of CA s 1017B(4) and therefore a contravention of CA s 1017B(1), assessed the loss and damage suffered as a result by Dr Lam, and made an award of damages under CA s 1022B(2). 74 In the absence of any actual indication in AFCA's reasons that this is what it did, Mr Sullivan QC submitted that the order made by AFCA put Dr Lam in the same position as if it had undertaken that task. He submitted that the decision was "in effect" or "in substance" an award of damages. In other words, the equivalence in the result between the decision actually made and that which, hypothetically, might have happened had an action for damages been commenced under s 1022B in the Federal Court against QSuper for a breach of s 1017B(4), was said to bespeak of the occurrence of the latter. He further submitted on behalf of QSuper that when the substance of what AFCA did was considered, it could be seen as an adjudication as to the existence of private rights and an impermissible exercise of judicial power. In support of this he relied upon the decisions in Retail Employees Superannuation Pty Ltd v Crocker [2001] FCA 1330; 48 ATR 359 (Crocker) and Perpetual Trustees Australia Ltd v Wallace [2007] FCA 527 (Wallace) and, to some extent, the decision in Attorney-General (Cth) v Breckler [1999] HCA 28; 197 CLR 83 (Breckler).

AFCA's submissions as to the effect of its reasons 75 AFCA initially appeared to accept that it was open for it to find QSuper's disclosure to Dr Lam was inadequate and failed to comply with s 1017B(4). It submitted (at [41] of its written submissions): …the "notice" given on 27 May 2016 plainly did not give the information that was reasonably necessary for Dr Lam to understand the nature and effect of the relevant change. 76 Despite that, in oral submissions Mr Wise QC for AFCA submitted that AFCA made no determination under CA s 1017B(4) even though it was entitled to reach conclusions as to any legal questions which arose in the course of, or as a step in, the decision-making process. It was submitted that all AFCA did was to determine that the operation of QSuper's decision not to refund to Dr Lam any part of the premiums he had paid was unfair or unreasonable within the meaning of CA s 1055 and that a substitutive decision refunding an amount should be made. Even if the ultimate result was to put Dr Lam into the position he would be in if he had taken proceedings for a breach of CA s 1017B(1), that did not translate to a determination under that section. It was further submitted that the appearance in AFCA's reasons of particular words - such as "requirement" and "disclosure" - which had some relationship to some words used in CA s 1017B(4) did not render it a decision about that section.

What did AFCA actually decide? 77 With respect to the submissions made on behalf of QSuper, AFCA's decision did no more than determine the question in issue before it; namely whether, in its operation in relation to Dr Lam, QSuper's decision not to refund him any premiums was unfair or unreasonable or both within the meaning of CA s 1055. It may well have been that the result of its decision on the relationship between Dr Lam and QSuper was similar to, substantially the same as, or even the equivalent of, that which would have occurred had Dr Lam taken action under s 1055B, however, that does not alter the nature of the decision actually made. AFCA did not determine that the refusal to refund Dr Lam the amounts he claimed was unfair and unreasonable because QSuper's Notice did not comply with s 1017B(4). 78 As was submitted by Mr Wise QC, AFCA's reasons for decision included both direct and indirect references to the issue of whether QSuper's refusal to refund any part of the premiums was "unfair and unreasonable". It expressly posed that question as being the object of its exercise and expressly determined the issue using those descriptors. On that express basis it set aside QSuper's decision and substituted its own. The references in the reasons as to that issue leave little doubt that it embarked upon the correct analysis. 79 Conversely, there was little in AFCA's reasons to suggest that it reached its conclusion that the refusal to refund money was unfair and unreasonable because the Notice did not comply with the requirements of CA s 1017B(4). Its concern was not whether Dr Lam had been notified of the nature and effect of the changes, as is the subject of CA s 1017B(4), but rather whether he had been given sufficient information to take advantage of them by applying for and securing the professional rating. It was the lack of information about how to secure the benefit of the changes rather than what they were which was the foundation of the conclusion that QSuper's refusal to refund Dr Lam's premiums was unfair and unreasonable. 80 Nor is there support in the reasons for the submissions that AFCA "in effect" determined that the Notice of May 2016 did not meet those requirements. To begin with, there is no reference in AFCA's reasons to CA s 1017B(4), nor any reference to its wording, even though it is mentioned in the "Supporting References" section attached to the reasons. In the course of his submissions Mr Sullivan QC referred to AFCA's use of the words "obligation", "required" and "requirement" in connection with QSuper's disclosure as evidencing that a determination had been made about s 1017B(4). He submitted that the only "requirement" or "obligation" relevant to AFCA's consideration was in that section. In particular he referred to the passage identified above where AFCA spoke of the "requirement to adequately disclose the reasonable information the complainant needed". However, in the context of the discussion it is far from self-evident that the use of the word "requirement" was a reference to CA s 1017B(4). The substance of AFCA's inquiry was whether QSuper gave to Dr Lam the information he required to take advantage of the changes made rather than to understand their nature and effect. Whilst QSuper referred to the use by AFCA of the word "requirement" in relation to the duties imposed by CA s 1017B in the "Supporting Information" section after the conclusion of its reasons, there is no necessary or even apparent connection between the use of that word there and its earlier use in the reasons for decision. The use by AFCA in its reasons of words of common parlance which might conceptually relate to the obligations in CA s 1017B(4) is an insufficient foundation on which to conclude that a breach of that section was found or was even contemplated. 81 QSuper also relied upon a passage from page 9 of AFCA's reasons which read: I find that the disclosure material identified by the trustee, and the information in the Letter and the Notice which I separately reviewed, did not provide sufficient information to enable the complainant to reasonably identify his eligibility to apply for a professional rating. Whilst it can be accepted that contains some references which might appear to have a connection with CA s 1017B(4) and the trustee's obligation to disclose information about significant events, the concern there expressed by AFCA was, again, the lack of information which would have enabled Dr Lam to ascertain his eligibility to apply for the new professional rating. It did not address the essential question in CA s 1017B(4) of whether the information adequately explained the nature and effect of the relevant change. 82 It is not irrelevant that, in its reasons, AFCA made no attempt to identify the constituent elements of a contravention of s 1017B(1) following from the failure of a notice to satisfy the terms of CA s 1017B(4). Nor did it purport to ascertain whether those elements were satisfied on the material before it. It did not seek to identify the precise change or changes to the financial product which were relevant to Dr Lam's ability to know how to alter his status. It made no attempt to ascertain whether CA s 1017B(1A) required any such changes to be notified by QSuper to its members. It did not consider whether the information actually provided in the Notice was reasonably necessary for Dr Lam to understand the "nature and effect of the change": CA s 1017B(4). Indeed, it did not ascertain what was the "nature and effect" of the relevant change. Further, it made no attempt to identify the dates before which notification of the change was to occur under CA s 1017B(5). These are essential considerations in ascertaining whether any breach of CA s 1017B(1) occurred and the absence of any mention or discussion of them tends to suggest that AFCA did not find that issue relevant to its determination. 83 The substance of AFCA's decision was that QSuper's refusal to refund the premiums was unfair and unreasonable because the information provided did not enable Dr Lam "to make a fully informed decision to change his occupational status to the professional rating before 6 January 2018" and "did not provide sufficient information to enable [him] to reasonably identify his eligibility to apply for a professional rating". This was emphasised by AFCA's constant references to QSuper's lack of "signposting" the method by which an occupational status as a professional might be acquired or changed. These requirements are different in nature to a requirement to provide information that will enable the recipient to understand "the nature and effect" of changes to the financial product. In this light AFCA's findings was focused on whether Dr Lam was made sufficiently aware of the manner in which he might take advantage of the changes being made. Support for this is found in the third paragraph of section 2.4 of AFCA's reasons, which is set out above, where it was identified that the refusal to refund the premiums was unfair or unreasonable because until 6 January 2018, Dr Lam did not have complete access to all of the relevant information to allow him to make an informed decision. 84 If AFCA had intended to make a finding about the Notice's compliance with CA s 1017B(4), it is likely that it would have done so in an open and explicit manner. The "change" which QSuper submitted was, according to AFCA, not adequately disclosed was the potential benefit to the members of obtaining a lower rate of premium for death or TPD cover by changing their status. As AFCA did not analyse the issue through the prism of CA s 1017B(4) there is no consideration of the time in which QSuper was to give notice of the change. If it had, it is quite possible that the "change" identified would only need to be notified to Dr Lam within three months after it occurred: CA s 1017B(5); it not being change which increased fees or charges, at least as far as Dr Lam was concerned. As its reasons identify, it was not convinced that a member such as Dr Lam would have been in possession of sufficient information until 1 July 2016 when the Guide became available. On that basis, had it considered it relevant to determine to whether CA s 1017B(1) had been contravened it is quite possible that it would have determined that no such contravention occurred. QSuper's response was that while AFCA may not have approached the question of contravention correctly, it nevertheless concluded that the section had been breached. That submission invited the Court to infer a finding of a breach of CA s 1017B(1) and, in doing so, infer that the finding was incorrectly founded. The reasons do not support the first proposition, let alone the second. 85 The procedural history of the matter suggests that AFCA did not find it necessary to determine whether the Notice had complied with CA s 1017B(4). QSuper submitted that AFCA's preliminary determination had found that its Notice had complied with CA s 1017B(4) and, although that might be a doubtful proposition, it can be accepted for present purposes. AFCA then wrote to QSuper and observed that no submission had been received by it in relation to CA s 1017B and inquired whether any would be made. QSuper responded by submitting that CA s 1017B was irrelevant to AFCA's deliberations but that, if it were thought that it was, there had been compliance with it. It made four submissions in dot-point form in support of that latter contention. It is not immaterial that, in its reasons, AFCA neither referred to QSuper's submission about the irrelevance of CA s 1017B nor to the alternative submission that it had been satisfied. One might expect that, had AFCA intended to make findings about s 1017B, given the background circumstances, it is likely that it would have expressly referred to QSuper's submissions. That view might be thought to be strengthened by the fact that it referenced the parties' other submissions in relation to matters which it expressly determined. 86 QSuper further submitted that as there was a reference to CA s 1017B(4) in the schedule of supporting information it must have been "taken into account". Whilst that conclusion might properly be drawn AFCA's reasons for the decision disclose it was not considered to be material to the determination which it made. Pursuant to CA s 1055A, AFCA was required to give written reasons for its decision. That being so it was required to satisfy the obligations in s 25D of the Acts Interpretation Act 1901 (Cth) (AIA) when giving those reasons. That section provides: 25D Content of statements of reasons for decisions Where an Act requires a tribunal, body or person making a decision to give written reasons for the decision, whether the expression "reasons", "grounds" or any other expression is used, the instrument giving the reasons shall also set out the findings on material questions of fact and refer to the evidence or other material on which those findings were based. 87 It was not suggested by QSuper that AFCA's reasons were deficient in any way or did not comply with the requirements of s 25D. On the assumption that the reasons did so comply, they could only be taken as a determination under CA s 1055. There were no findings of the material questions of fact which would be necessary to conclude that CA s 1017B(4) had been contravened. That being so AFCA can be taken to have thought that issue to be immaterial to its conclusion.

Conclusion as to whether AFCA determined CA s 1017B had been breached 88 In light of the above, QSuper's submission that AFCA made a determination that s 1017B(1) had been breached because the Notice did not comply with CA s 1017B(4) must be rejected. Although the nature of the information provided to Dr Lam as to the changes which were to occur in relation to death and TPD cover was material, contextual evidence relating to the question which AFCA was required to answer under CA s 1055 demonstrates that QSuper's decision was not analysed for its compliance with CA s 1017B and there were no findings or conclusions as to those matters. No finding of any breach was made and AFCA did not found its conclusion that QSuper's refusal to repay part of Dr Lam's premiums was unfair and unreasonable on the basis that the Notice did not satisfy CA s 1017B(4). 89 It should also be observed that, whatever might be ascertained from a "close reading" of the reasons and the detection here and there of some of the words used in CA s 1017B(4), that is not the usual manner in which the reasons of tribunals or other statutory decision-makers are considered. Such reasons are not intended to resemble curial decisions. They are to be read "fairly and broadly" and should not be scrutinised "minutely and finely with an eye keenly attuned to the perception of error": Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272. Here, when the reasons are read as a whole, it is apparent that AFCA's concern was as to the extent to which QSuper disclosed to Dr Lam how he might have secured an occupational rating. It concluded that the information was inadequate although it did not conclude that the lack of information meant that Dr Lam could not understand the nature and effect of the relevant change. As he was not informed as to how he might take advantage of the occupational rating, it concluded that the decision not to refund the premiums was unfair and unreasonable. 90 The necessary consequence is that AFCA made no determination as to whether QSuper's Notice satisfied CA s 1017B(4). That matter was neither a focal point of the decision nor incidental to the final determination. 91 Both grounds of this appeal were predicated upon the assumption that AFCA's decision, in effect, determined the Notice did not comply with the requirements of CA s 1017B(4) and that there was a contravention of CA s 1017B(1). That being incorrect, it necessarily follows that there was no determination of any existing legal rights and therefore the first ground of appeal must fail. Similarly, the second ground of appeal to the effect that AFCA erred in concluding that there was a breach of s 1017B(4) must also fail.

Making a decision about existing legal rights as a step leading to a decision 92 In any event, even if AFCA had reached some conclusions as to the adequacy of the notice under CA s 1017B(4) or as to the existence of a contravention of CA s 1017B(1), as a step leading to its ultimate determination, and therefore made a decision about the legal rights of QSuper and Dr Lam inter se, this would not have amounted to an exercise of judicial power, as the reasons which follow establish. 93 The parties made extensive submissions as to the legitimacy of AFCA deciding or reaching conclusions as to the legal rights of parties with respect to CA s 1017B(4) as a step in the process of it making its ultimate determination. Initially, Mr Sullivan QC submitted that it would be an impermissible exercise of judicial power if AFCA was to make a determination of legal rights as a step along the way to making a determination under CA s 1055. Subsequently, however, he conceded that reaching conclusions or making decisions about legal rights as steps taken in the course of making an administrative decision, do not involve the exercise of judicial power. 94 That concession was rightly made and accords with, inter alia, observations made by Hayne J in Attorney-General (Cth) v Alinta Limited [2008] HCA 2; 233 CLR 542 (Alinta) at 565 [53]. In that case Alinta claimed that the Takeovers Panel's exercise of certain powers given to it under the CA were invalid as being the exercise of judicial power. Relevantly, under CA s 657A(2)(b) the Panel might make a declaration of "unacceptable circumstances" where the identified circumstances "constitute, or give rise to, a contravention of a provision of [Chapter 6] or of Chapter 6A, 6B or 6C". The issue before the High Court was the constitutional validity of s 657A(2)(b). The Court held the section did not invalidly confer judicial power. The power exercised by the Panel was based on policy, not law, and created new rights and obligations which were only enforceable by a court on the independent exercise of judicial power. Hayne J (with whom Gleeson CJ and Gummow J agreed) added that the fact that an order of the Panel was open to challenge in judicial review proceedings and by collateral attack in other proceedings, further pointed away from the conclusion that it exercised judicial power. Relevantly for the present purposes, it was observed that the Panel's determination was not merely about the rights of the parties under Chapters 6, 6A, 6B or 6C and whether a contravention had occurred. The issues which arose on any determination were much wider and extended to commercial questions that emerged in relation to takeover bids. As Hayne J said at 576 [90]: It follows that to describe the Panel as quelling a controversy about contravention is inaccurate. Even if it were right to describe the Panel's task as quelling a controversy, the controversy or dispute with which the Panel deals, when s 657A(2)(b) is engaged, is wider than a controversy or dispute about contravention of the Corporations Act. 95 In other words, the mere conclusion made by the Panel as to whether a contravention of Chapter 6 occurred, did not quell any controversy between the parties on that issue and nor was that the purpose or object of the Panel's exercise of power. For that reason, in part, there was no exercise of judicial power. To similar effect are the observations of Crennan and Kiefel JJ at 595 [161]: …The adjudication of a dispute is itself, however, neither conclusive, nor even a strong indicator, of a judicial function. It is commonplace in administrative law. A non-judicial function, such as arbitration, does not cease to be so because the decision-maker forms an opinion as to existing legal rights and obligations. A controversy of the kind dealt with by the courts requires more than an adjudication of some dispute. A controversy has as its subject matter the existence of a legal right or obligation. (footnotes omitted) 96 The above propositions were, at least for the purposes of the present case, succinctly stated in Australian Communications and Media Authority v Today FM (Sydney) Pty Ltd [2015] HCA 7; 255 CLR 352 (Today FM). In that case a commercial radio broadcasting licensee, Today FM, had recorded and broadcasted a telephone call between two presenters of a program and a member of staff at a hospital where the Duchess of Cambridge was an inpatient. In the course of the conversation the broadcasters obtained information under false pretences and published the same by airing the recording. It was a condition of Today FM's licence that it would not use the radio broadcasting service in the commission of an offence. A breach of the licence condition could be prosecuted as an offence, made the subject of civil penalty proceedings or found administrative action including the suspension or cancellation of the licence. The authority initiated a preliminary investigation and concluded that the broadcaster had committed an offence under New South Wales laws which prohibited a person from publishing a private conversation that had come to their attention by the use of a listening device. Today FM sought injunctive relief against the authority to restrain it from taking any action based upon its conclusions made on the preliminary inquiry. Prior to the hearing of an appeal from an initial refusal to grant the injunction, the authority handed to Today FM a final report which contained the same findings as appeared in the preliminary report. Before the High Court, Today FM submitted that the provisions authorising the authority to make determinations as to whether the licensee had committed an offence purported to impermissibly confer the judicial power of the Commonwealth on it. 97 In his reasons for judgment, Gageler J held that the authority's determination, made for the purpose of taking disciplinary proceedings, that the licensee had used the broadcasting service to commit an offence, did not in involve an impermissible exercise of judicial power. At 380-381 [64] his Honour said: This Court has repeatedly held that a power of inquiry and determination takes its legal character from the purpose for which it is undertaken, and that a power of inquiry and determination undertaken for a non-curial purpose (be it arbitral, administrative, executive or legislative) can encompass formation and expression of an opinion about an existing legal right or obligation. No distinction has been drawn in that respect between an opinion about an existing legal obligation sounding only in civil liability and an opinion about an existing legal obligation sounding only, or also, in criminal liability. It has been held, for example, that a commission of inquiry established under Commonwealth legislation can be authorised to inquire into and report on whether or not a person has committed an offence, for the purpose of informing the exercise or performance of a power or function of the Commonwealth Parliament or of the Commonwealth Executive. (footnotes omitted) 98 The plurality (French CJ, Hayne, Kiefel, Bell and Keane JJ) expressed a similar view at 371-372 [33]: More generally, and contrary to the "normal expectation" stated by the Full Court, it is not offensive to principle that an administrative body is empowered to determine whether a person has engaged in conduct that constitutes a criminal offence as a step in the decision to take disciplinary or other action. The decisions of this Court in Attorney-General (Cth) v Alinta Ltd and Albarran v Companies Auditors and Liquidators Disciplinary Board accept so much. There is no reason to suppose that a Commonwealth public housing authority might lack the capacity to terminate a lease on the ground of the tenant's use of the premises for an unlawful purpose notwithstanding that the tenant has not been convicted of an offence arising out of that unlawful use. (footnotes omitted) 99 The principle referred to in the above authorities substantially undermined QSuper's submissions that AFCA impermissibly exercised judicial power by determining that CA s 1017B(1) had been breached and relying upon that as part of the process of determining QSuper's refusal to refund any part of Dr Lam's premiums was unfair and unreasonable. If contrary to the previous conclusions, AFCA had taken that course, the authorities referred to establish that no impermissible exercise of judicial power would have occurred. 100 It was submitted on behalf of the Attorney-General by Mr del Villar QC, even if AFCA had solely relied upon its conclusion that QSuper's Notice contravened CA s 1017B(1) in making its determination, no exercise of judicial power would have occurred. That submission should be accepted and it follows from the decision in Alinta. There, s 657A(2)(b) authorised the Takeovers Panel to make the finding of unacceptable circumstances based solely upon its conclusion that the CA had been relevantly contravened. In upholding the section's validity, the High Court's decision necessitates the conclusion that it is not an impermissible exercise of judicial power for an administrative body to make a broader determination founded only upon an antecedent conclusion as to existing legal rights. 101 Mr Sullivan QC sought to distinguish Alinta on the basis that s 657A(2)(b) expressly authorised the Panel to act in that way. However, that point of difference has no relevance in the present circumstances. If it were impermissible for a body other than a Chapter III court to determine rights as between parties as the foundation of a broader decision, it does not matter whether such a power is expressly conferred or not. If it has been expressly conferred, the conferral would be invalid as being contrary to the prohibition in s 75(v) of the Constitution. In this respect the decision in Alinta is not distinguishable. 102 It follows that even if AFCA had determined that QSuper's refusal to refund money to Dr Lam was unreasonable only because the Notice did not comply with CA s 1017B(4), no impermissible exercise of judicial power would have occurred. The power under CA s 1055 is to decide if, inter alia, a decision is, in its operation in relation to a member, unfair or unreasonable. If in reaching a conclusion on that broad inquiry an assessment is made about the legal rights of the parties, no exercise of judicial power will have occurred. The broader question being resolved is not about legal rights or obligations, and forming a conclusion as to legal rights as a step along the way to a determination does not invalidate the exercise of power.

Assuming AFCA made a decision in respect of s 1017B, did it exercise judicial power? 103 It is next appropriate to consider QSuper's submissions that invalidity arose because AFCA's decision was, in effect, a decision that s 1017B(1) had been contravened such that it was an exercise of judicial power. Difficulty is encountered here due to the opacity of the submission that AFCA "in effect" made a determination of the legal rights arising under s 1017B, and that is especially so in circumstances where both the form of AFCA's determination and the relief granted were self-evidently exercises of power under CA s 1055. 104 Nevertheless, even if it were accepted that AFCA's decision was, in effect, that s 1017B(1) had been contravened because the Notice had not complied with CA s 1017B(4), it would still not involve an exercise of judicial power. As the reasons which follow establish, that conclusion follows from three features of AFCA's decision:

1. It lacked conclusiveness as AFCA could not enforce it and it was open to collateral attack;
2. It created new rights rather than determining existing ones; and
3. It did not involve an exercise of sovereign power but was a result of a voluntary submission to the AFCA scheme.

Ground one - did AFCA exercise the judicial power of the Commonwealth?

The nature of judicial power 105 By s 71 of the Constitution, the judicial power of the Commonwealth is only exercisable by the High Court, the Federal Court and such other courts as are invested with its jurisdiction. That section provides: 71 Judicial power and Courts The judicial power of the Commonwealth shall be vested in a Federal Supreme Court, to be called the High Court of Australia, and in such other federal courts as the Parliament creates, and in such other courts as it invests with federal jurisdiction. The High Court shall consist of a Chief Justice, and so many other Justices, not less than two, as the Parliament prescribes. 106 All parties agreed that the leading statement identifying the nature of judicial power under the Constitution is that of Griffiths CJ in Huddart, Parker & Co Pty Limited v Moorehead (1909) 8 CLR 330( at 357 where the Chief Justice said: … the words 'judicial power' as used in section 71 of the Constitution mean that power which every sovereign authority must of necessity have to decide controversies between its subjects, or between itself and its subjects, whether the rights relate to life, liberty or property. The exercise of this power does not begin until some tribunal which has power to give a binding and authoritative decision (whether subject to appeal or not) is called upon to take action. 107 The High Court has repeatedly observed that it is not possible to frame a definition of judicial power that is at once exclusive and exhaustive because a number of its features are also common to legislative or administrative power: Precision Data Holdings Ltd v Wills (1991) 173 CLR 167 (Precision Data) at 188−189 (per curiam), applied in Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245 (Brandy) at 267 (per Deane, Dawson, Gaudron and McHugh JJ); Alinta at 577 [93]−[94] (Hayne J), 592 [151] (Crennan and Kiefel JJ); Palmer v Ayres [2017] HCA 5; 259 CLR 478 at 496 [43] (Gageler J). 108 Nonetheless, it has been recognised that judicial power has some distinctive characteristics. Firstly, it is concerned with the determination of the existence of rights and liabilities by the application of law rather than by formulation of policy or discretion: Waterside Workers' Federation of Australia v JW Alexander Ltd (1918) 25 CLR 434 (Waterside Workers' Case) at 463; Precision Data at 189; Brandy at 268; Albarran v Companies Auditors and Liquidators Disciplinary Board [2007] HCA 23; 231 CLR 350 at 358 [16], 360-362 [25]-[29]; Alinta at 592-593 [152]-[153]; R v Gallagher; Ex parte Aberdare Collieries Pty Ltd (1963) 37 ALJR 40 at 43; R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 (Tasmanian Breweries) at 374-375. 109 Second, judicial power results in a binding and conclusive or authoritative determination of rights and liabilities which is immediately enforceable and is not dependent upon any further independent exercise of judicial power: Brandy at 259, 268-269; Alinta at 579 [97]−[98], 580 [105] (per Heydon J, agreeing with the reasons of Finkelstein J in the Full Federal Court); Waterside Workers' Case at 451. 110 Whilst the exercise of judicial power might only be applied to the determination and punishment of criminal guilt or the determination of common law rights and remedies, the determination of other rights or obligations might be legitimately conferred upon courts or other bodies. In ascertaining whether the determination of such other rights is the exercise of judicial or administrative power, the character of the body on which the power is conferred may well prove decisive: R v Quinn; Ex parte Consolidated Foods Corporation (1977) 138 CLR 1 at 18; Sue v Hill [1999] HCA 30; 199 CLR 462 at 481-482 [32]-[33], 515-517 [132]-[135]; Luton v Lessels [2002] HCA 13; 210 CLR 333 at 387-388 [188]; White v Director of Military Prosecutions [2007] HCA 29; 231 CLR 570 at 595 [48]. Some functions or powers have a chameleon-like quality and take their character from their legislative surroundings or the nature of the recipient of the power.

The decision in Breckler 111 All parties made extensive submissions as to the effect of the seminal decision in Breckler. Its unquestionable relevance lies in the fact that it dealt with a superannuation complaints scheme which was the progenitor of, and substantially similar to, the AFCA scheme and did so in the context of a submission that judicial power had been conferred on the SCT, contrary to Ch III of the Constitution. It is therefore necessary to consider in detail this decision which upheld the validity of the scheme. 112 Mr Breckler, who died on 1 August 1994, had been a member of the Cecil Brothers Superannuation Plan, which had been constituted by a trust deed. The plan's trustee made a determination that the resulting death benefit would be paid as between the deceased member's personal representative and his daughter, a Mrs Leshem, in the proportions of 83 percent and 17 percent respectively. The trustees were of the opinion that Mrs Leshem was not in circumstances of any "special need". Under Mr Breckler's will the beneficiaries of his estate were his grandchildren. Mrs Leshem was dissatisfied with the determination and made a complaint to the SCT under the Complaints Act. The tribunal varied the determination and directed the benefit be paid equally as between the parties. 113 The trustee appealed to the Federal Court seeking orders that its original determination be reinstated. The Full Court, by majority, held that the provisions of the Complaints Act were inconsistent with Chapter III of the Constitution, as they purported to confer the judicial power of the Commonwealth on the tribunal. An appeal to the High Court from the Full Court's decision was successful. The majority, Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ, held that the tribunal did not purport to exercise the judicial power of the Commonwealth, most particularly, because its determination was of an arbitral nature being a proceeding agreed upon by the parties to the trust deed of the superannuation fund. The application of the Complaints Act occurred only because the trustees had elected that the scheme should be a regulated superannuation fund. That election had the consequence that the fund would obtain the benefit of the operation of Part IX of the Income Tax Assessment Act 1936 (Cth). It was further held that no purported exercise of judicial power occurred as the existence of the tribunal's determination was merely a criterion pursuant to which legal norms were imposed and remedies provided for their enforcement. In that sense it was merely a factum by reference to which legislation operated to confer curially enforceable rights and liabilities. These grounds are more fully explained below. First, however, it is necessary to consider the nature of the superannuation fund considered in Breckler, as well as the legislative scheme in which it operated. 114 Relevantly, the payment of death benefits by the trustee under the trust deed to the dependents or personal representatives of members was to be in such shares and proportions and in such manner as the Trustees in their discretion determined. The "dependents" of a member included any child of a member who was, in the opinion of the trustees, wholly or partially dependent upon the member. It did not appear to be in contention that Mrs Leshem was a dependent of Mr Breckler for the purposes of the plan. 115 Initially the trust deed provided that in exercising its powers under the trust deed the trustee had an absolute and uncontrolled discretion and was not obliged to exercise those powers in any way. Of course, any exercise of any power or the failure to exercise it would have been subject to review by the court where the trustee acted in bad faith, arbitrarily or capriciously, wantonly, irresponsibly, mischievously or irrelevantly to any sensible expectation of the settlor or without giving a real or genuine consideration to the exercise of the discretion: Wilkinson v Clerical Administrative and Related Employees Superannuation Pty Ltd (1998) 79 FCR 469 (Wilkinson) at 480. 116 In December 1989, the trust deed was amended to the effect that in the exercise of the trustee's powers it was required to act in a manner which complied with the requirements of the Supervision Act, the regulations made under it, and any other legislation which was in force from time to time with which the plan was to comply in order to gain the most favourable tax treatment. The consequence was that the plan became a "regulated superannuation fund" under the Supervision Act by meeting the requirements of s 19 of that Act. 117 One of those requirements was that the trustee had given to the Commissioner appointed under the Insurance and Superannuation Commissioner Act 1987 (Cth) (ISC Act), a notice electing that the Supervision Act was to apply in relation to the fund. Such an election, which was irrevocable, made the fund subject to the investigative and monitoring regime in the ISC Act and, therefore, subject to supervision by the Commissioner. As the High Court noted, the Supervision Act identified that an election by the trustee that the fund become a regulated superannuation fund had the benefit that it was entitled to concessional taxation treatment so long as it continued to comply with the requirements of that Act. One of those requirements was compliance with the orders, directions or determinations of the tribunal. Further, the Supervision Act gave to the court powers, on the application of the Commissioner or any person whose interests have been, would be or are affected by a failure by a trustee to comply with a determination of the tribunal, to make orders requiring the trustee to so comply. In this respect the majority observed at 103 [19]: The point of immediate significance is that, by reason of the amendments to the trust deed to which we have referred, the trustees were obliged by the trust instrument itself to comply with an order, direction or determination of the Tribunal in the manner specified in reg 13.17B of the Supervision Regulations. Non-compliance could also attract the operation of ss 263 and 315 of the Supervision Act. This obligation was a matter of what might be called private law and in addition to the statutory requirements imposed by or under the Supervision Act. 118 Under the provisions of the Complaints Act, the functions of the tribunal included inquiring into a complaint by a member of a fund, attempting to resolve it by conciliation and, failing that, reviewing it. At the relevant time the only ground on which it could review a trustee's decision was on the basis that it was unfair or unreasonable. As the majority observed, this suggested that the trustee's role was one confined to the review of the exercise of discretion rather than consideration of whether a trustee had acted in accordance with their duties. The powers conferred on the tribunal qualified the unconfined discretion of the trustees in the sense that the exercise of that discretion was then amenable to review. Kirby J (at 129 [88]) adopted a slightly more expansive view and held that the SCT could review any exercise of a trustee's power which involved an element of discretion, opinion or judgement. 119 Central to the issues before the High Court was the validity of s 37 of the Complaints Act which relevantly granted the SCT power to review a trustee's decision and, for that purpose, vested it with all the rights, powers and privileges of the trustee. The scope of the power of the tribunal to alter or vary a trustee's decision was confined by s 37(4) and (5) in the following terms: (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. (5) The Tribunal must not do anything under subsection (3) that would be contrary to law, [or] to the governing rules of the fund concerned …

The Court's conclusion that the SCT did not exercise judicial power 120 For several reasons the Court held that the exercise of the "determination-making power" by the tribunal under the Complaints Act did not involve an exercise of judicial power. 121 Firstly, the plurality observed that the SCT's decision was the product of an election by the trustee and not the imperative commands of the legislation (at 108-109 [38]). The SCT was only able to exercise power over the fund and trustee as a result of the election by the trustee that the Supervision Act would apply. The power of the trustee to make that election was found in private law, being the terms of the trust deed as supplemented by statute. The exercise of that election had the consequence that the trust was entitled to concessional taxation treatment, but brought with it the imposition of the regulatory regime which subjected the trustee powers to constraints which would not otherwise have existed. In particular, an unjust or unreasonable exercise of power by the trustee of a discretion may attract the complaints procedure even in the absence of any breach of trust (at 109 [39]). This conclusion that the tribunal was exercising arbitral power was significant to the Court's conclusion as it negated the suggestion that the power conferred was the curial power exercisable by the sovereign to quell disputes. 122 Second, the SCT's determination could not be characterised as "a binding, authoritative and curially enforceable determination" (Tasmanian Breweries at 374 per Kitto J) because: (a) The determination and its binding effect arose as a matter of private law consequent upon the variations made to the trust deed which, inter alia, required the trustee to comply with the tribunal's determinations. In that respect the power exercised by the tribunal was not sovereign curial power, but arbitral power which utilised the procedures in the trust deed to which the trustee and members, as a matter of private law, had become bound (at 100) [43]). (b) Further, and alternatively, even in the absence of the agreement contained in the terms of the trust deed, the trustee made an election that the fund become subject to the Supervision Act and the SCT's authority. Even though the making of the election was a matter of pragmatic necessity, the majority held that the fact that the trustee had voluntarily submitted itself to the authority of the regime was, in the circumstances, a decisive pointer in favour of validity (at 111 [44]). (c) "[T]he Complaints Act and the Supervision Act take the existence of a determination by the Tribunal as a criterion by reference to which legal norms are imposed and remedies provided for their enforcement" (at 111 [45]) and, as such, the determination did not necessarily involve the exercise of judicial power. This was largely because the enforcement of the rights and liabilities which arose upon the making of the tribunal's determination necessarily involved "an independent exercise of judicial power": per Mason CJ, Brennan and Toohey JJ in Brandy at 261. In this respect the SCT's decision was not enforceable in its own right. It did, however, create a factum - being its determination - which could be used for the purposes of obtaining an order of a court through which the determination was given efficacy. (d) In addition, the Complaints Act did not purport to accord the determinations of the tribunal the conclusive character which was necessary to prevent collateral challenge in proceeding to compel observance of the determinations (at 111-12 [46]). The mere fact that the tribunal's decision was given the status of a decision of the trustee did not preclude it from attack in curial proceedings. 123 The necessary conclusion of the plurality was that the SCT did not exercise judicial power when determining complaints under the Complaints Act or the Supervision Act. 124 The same conclusion was reached by Kirby J albeit by a slightly different route. His Honour reasoned that the determinations of the SCT did not declare or enforce the existing rights of the parties but created new rights consequential upon the determination. He recognised that the power of the SCT was to make a decision that was not unfair or unreasonable rather than to make a decision which was solely within the lawful boundaries of the decision-making power. The characteristics of fairness or reasonableness were not hallmarks of legality of the exercise of power by the trustee: at 130 [91]. His Honour also recognised that the legislation did not seek to immunise the SCT's determinations from collateral challenge (at 130-132 [93]-[96]) and those decisions could not be enforced without an independent exercise of judicial power.

A procedural issue - the correct question to be determined 125 In framing its appeal in this case, QSuper relied upon the High Court's conclusion in Breckler that the SCT's decision was not invalid rather than that the provisions granting the power to make the decision were valid. 126 In Breckler an appeal from the SCT was lodged in the Federal Court in the ordinary way, however, pursuant to s 25(6) of the Federal Court of Australia Act 1976 (Cth) French J reserved a question for the consideration of the Full Court in the following terms: Is s 37 of the Superannuation (Resolution of Complaints) Act 1993, or any part thereof, invalid in that it purports to confer the judicial power of the Commonwealth on the Superannuation Complaints Tribunal and is therefore inconsistent with Chapter III of the Constitution? 127 The Full Court of this Court ultimately answered the question in the affirmative. 128 The question so stated was criticised by the High Court on the basis that it was divorced from a consideration of the private rights on which the SCT's decision operated. Further, the trustees had asserted that the SCT had committed several errors of law in reaching its decision, but these could not be resolved because the question reserved only dealt with the issue of the validity of the Complaints Act and, then, only on the basis that it was inconsistent with Chapter III of the Constitution. 129 At the conclusion of their reasons the plurality observed that the orders of the Full Court should be set aside and the matter should be returned to that Court for the making of an order stating a question to the effect: In making the determination identified in par (1) of the notice of appeal dated 30 May 1997, was the Superannuation Complaints Tribunal purporting to exercise the judicial power of the Commonwealth, contrary to Ch III of the Constitution? 130 It was held that the question should be answered in the negative. The plurality further observed that there may then still remain for the Federal Court a number of the questions raised in the notice of appeal which had not yet been considered by it. 131 These matters were relied upon by Mr Sullivan QC for QSuper for the submission that the High Court revised the case from a challenge to legislation to a challenge to the particular determination. Whilst that may have been so, that was only to give context to the challenge to the validity of the determination made. The underlying basis for the assertion of invalidity remained the same; namely that in making the decision which it did the SCT invalidly exercised the judicial power of the Commonwealth. If it had been determined that judicial power had been exercised, it would necessarily have followed that the provisions granting such power to the SCT to do that were invalid. That appears to be clear from the reasons for judgment which determined the question of constitutional validity through an analysis of the arrangements put in place which enabled the SCT to make decisions affecting the interests of the parties as well as of the provisions of the Complaints Act conferring power on the SCT and the nature and effect of that power.

Was AFCA's exercise of power under s 1055 the exercise of judicial power? 132 It is now appropriate to consider whether the making of the decision imputed to AFCA, being that QSuper contravened CA s 1017B(1) because its Notice failed to meet the requirements of s 1017B(4), involved the exercise of judicial power.

Conclusiveness of AFCA's determination 133 QSuper submitted (at [32] of its written submissions) that AFCA's determination, once made, was a binding, authoritative and juridically enforceable determination that its Notice did not comply with s 1017B(4). It further submitted that, as it was not able to obtain a de novo determination of the factual finding of non-compliance with s 1017B from this Court, the determination was binding and authoritative. In the result, so it said, the determination imposed an immediately enforceable liability on QSuper and that could only have been the consequence of the exercise of judicial power

AFCA's determinations are not binding 134 In considering the conclusiveness of AFCA's decisions it is necessary to keep in mind that they do not bind the complainant (CA s 1051(4)(e)) but they do bind the member. Necessarily, if a complainant is not satisfied with AFCA's determination they may ignore it and proceed as if it were not made. The determination is "in the wind" and does not alter or affect the complainant's rights or entitlements without the complainant's agreement. Neither AFCA nor the member is able to enforce the determination against the complainant. 135 The concept of a determination being "binding and conclusive" as between the parties to a dispute connotes the concept of the parties being mutually and reciprocally bound by the one determination. That mutuality and reciprocity is essential to the decision being enforceable. In Waterside Workers' Case at 451, Barton J observed: It is important to observe that the judicial power includes with the decision and the pronouncement of judgment the power to carry that judgment into effect between the contending parties. Whether the power of enforcement is essential to be conferred or not, when it is conferred as part of the whole the judicial power is undeniably complete. 136 To similar effect are the observations of Kitto J in Tasmanian Breweries at 374-375 where his Honour said: Thus a judicial power involves, as a general rule, a decision settling for the future, as between defined persons or classes of persons, a question as to the existence of a right or obligation, so that an exercise of the power creates a new charter by reference to which that question is in future to be decided as between those persons or classes of persons. In other words, the process to be followed must generally be an inquiry concerning the law as it is and the facts as they are, followed by an application of the law as determined to the facts as determined; and the end to be reached must be an act which, so long as it stands, entitles and obliges the persons between whom it intervenes, to observance of the rights and obligations that the application of law to facts has shown to exist. It is right, I think, to conclude from the cases on the subject that a power which does not involve such a process and lead to such an end needs to possess some special compelling feature if its inclusion in the category of judicial power is to be justified. 137 This passage has subsequently been frequently quoted and relied upon in the authorities concerning judicial power: see for example Palmer v Ayres at 505 [72] per Gageler J. The reference to the determination of the existence of rights which creates a charter by reference to which that question in the future between those parties is to be decided is not unimportant in this case, as is the reference to the requirement that the end product of the exercise of judicial power be an act which the parties are obliged to observe. Neither of those characteristics are present in a determination which only purportedly binds one party. If one of them may ignore it and proceed unaffected, it is difficult to describe the decision as having any binding effect. A decision cannot determine existing legal rights as between litigants if one is free to ignore the decision and any putative consequences. 138 It follows that there is a very real possibility that AFCA's determinations do not have the characteristic of being binding as between the parties. However, it is not appropriate to reach any final conclusion on this point because it was not fully ventilated before the Court. Initially, the Attorney-General suggested that there was considerable doubt as to whether AFCA's decisions were, in fact, binding. However, during the course of the appeal, counsel on his behalf indicated that this submission was no longer being pressed.

Enforcement of AFCA's decisions requires an exercise of independent judicial power 139 It is a factor weighing significantly against the conclusion that AFCA was exercising judicial power that AFCA has no capacity to enforce its own determination. The carrying of a decision into effect is a well-established important indicium of judicial power: Breckler at 132 [98] per Kirby J; Waterside Workers' Case at 451-452; Rola Company (Australia) Pty Ltd v The Commonwealth (1944) 69 CLR 185 at 199-201; R v Davison (1954) 90 CLR 353 at 368. A member is not compelled to do anything by AFCA's determination itself. In the face of non-compliance with a determination, AFCA is to give particulars of the refusal or failure to either APRA, ASIC or the Commissioner of Taxation (CA s 1052E(1)(d)) any of which might take any action it sees fit. However, even action by any of those entities may not be the enforcement of the determination but effectively a sanction for the failure to comply with it. 140 The inability of an entity charged with determining complaints to enforce its own determinations negates the conclusion that it is exercising judicial power. This was explained in Brandy where Deane, Dawson, Gaudron and McHugh JJ observed at 268-269: And in Federal Commissioner of Taxation v Munro Isaacs J pointed out that the concept of judicial power includes enforcement: the capacity to give a decision enforceable by execution. It was this characteristic of judicial power which was emphasised by Latham CJ in Rola Co (Australia) Pty Ltd v Commonwealth. He pointed to the fact that in Huddart, Parker and Co Pty Ltd v Moorehead Griffith CJ referred not only to the giving of a binding and authoritative decision as being indicative of the exercise of judicial power, but also spoke of such a decision being given by a tribunal "called upon to take action". Thus, Latham CJ pointed out, where a tribunal is able to give a binding and authoritative decision and is able to take action so as to enforce that decision, "all the attributes of judicial power are plainly present". 141 In Alinta at 579 [97]−[98] (Hayne J), 580 [105] (Heydon J, agreeing with the reasons of Finkelstein J in the Full Federal Court) it was identified that a key difference between the circumstances in the case before the Court and Brandy was that in the latter, once the Commission's order was registered, it was enforceable by its own effect as an order of the Federal Court. That characteristic of the power conferred on the Commission, combined with others, rendered it judicial power. In Alinta the binding effect of the Panel's decision was to be determined by a court which would be called upon to consider whether orders should be made under the CA to secure compliance with the decision or whether some other order should be made as a result of the contravention. That necessity for a further exercise of curial jurisdiction by another body, amongst other things, had the consequence that the Panel was not exercising judicial power. 142 Under the scheme presently being considered, AFCA's determination cannot be enforced as such. If a member does not comply with it, all AFCA can do is to give particulars of it to APRA, ASIC or the Commissioner of Taxation and one or more of those entities might initiate separate and independent action. For instance, APRA might consider and determine to bring proceedings in the public interest for the recovery of damages and could do so in the complainant's name: s 298 of the Supervision Act. Similarly, ASIC may consider whether the trustee (being a licensee) had failed to comply with its obligations under CA s 912A and therefore be in breach of the requirements to hold its AFSL. If satisfied to the necessary degree, it may take steps to suspend or cancel the fund's AFSL. It may also be the case that the Commissioner of Taxation will take the view that the trustee is in breach of its AFSL and the fund would no longer comply with the requirements to be a complying superannuation fund, with the result that it would lose its entitlement to concessional taxation benefits. However, such steps are not the "enforcement" of AFCA's determination as such even if the threat of them may have that effect. At best they could be described as separate administrative steps by a regulatory authority consequential upon non-compliance with AFCA's determination. 143 A slightly less indirect method of "enforcement" of AFCA's determination was referred to by QSuper (at [32] of its written submissions) as being the commencement of proceedings in a court of proper jurisdiction on a cause of action founded upon the state of affairs created by the determination. That may be a claim for debt or breach of contract or a claim in equity to enforce the complainant's rights against the trustee. In reliance on this it was submitted that the determination was "juridically enforceable" and an exercise of judicial power. 144 However, that submission cannot be accepted. Even if the commencement of proceedings based on AFCA's determination has the effect of enforcing the rights of the parties as created by it, the process necessarily relies upon the independent exercise of judicial power by a separate body. The determination itself is not enforceable as an exercise of power by AFCA and, as such, it lacks that essential characteristic of judicial power. As submitted by AFCA at [32] of its written submissions, the manner in which AFCA's decisions might be enforced is "…apt to describe any arbitral award which could be sued on…". Rather than being a judicial determination, any decision is used as a foundation for an action in the courts. In Breckler at 111 [45] the High Court held that the only method of enforcement of the SCT decision was by "an independent exercise of judicial power" initiated by the commencement of separate proceedings and that negated the conclusion that judicial power was being exercised. The same conclusion arises under the AFCA scheme. 145 Further, in any enforcement proceedings the Court will have to be satisfied of the existence of the determination and that it has not been complied with: Breckler at 133 [100]. As Mr del Villar QC accurately submitted, any determination by AFCA of a superannuation complaint is but a "factum by reference to which" enforceable rights and liabilities are conferred in the sense referred to in Breckler at 111 [45]. In Breckler, the fact that a decision did not give rise to immediately enforceable rights as opposed to the existence of a factum by which rights would be enforced, was a significant matter in the plurality's conclusion. 146 It follows that AFCA's decision was not enforceable of itself and, in order for it to be efficacious, an additional independent exercise of judicial power was required. In the enforcement, AFCA's decision was merely a fact on which an enforceable right would arise. This strongly indicates that its power was not judicial.

AFCA's decisions are open to collateral challenge 147 The Attorney-General and AFCA further submitted that AFCA's determinations are not immune from collateral challenge. QSuper was unable to identify any provision of the CA which might suggest otherwise. In this respect it is noted that a similar position existed in Breckler in that the respondent there was unable to point to any provision in the Supervision Act or the Complaints Act which purported to shield the SCT's decision from collateral challenge. In proceedings by a complainant to enforce a determination or in proceedings founded upon the putative existence of the decision, a trustee would be entitled to contend that AFCA's decision was invalid. The reasons may include that there had been a failure to comply with the rules of procedural fairness or that it was a conclusion which no reasonable tribunal could have reached: Australian Football League v Carlton Football Club Ltd [1998] 2 VR 546 at 550; Mickovski v Financial Ombudsman Service Ltd [2012] VSCA 185; 36 VR 456 at [38]; Breckler at 111-112 [46]. Even in the absence of an appeal to this Court under CA s 1057, in subsequent proceedings the member is entitled to assert its invalidity. In this manner, a decision by AFCA on a superannuation complaint does not settle the rights between the parties and nor is it determinative. It, therefore, does not have the essential quality of finality which is necessarily inherent in the exercise of judicial power.

Statutory mechanisms as to the efficacy of AFTA's decision 148 The applicant submitted that AFCA's decisions were final and conclusive as a consequence of those provisions in the CA which provide that a determination comes into operation immediately upon being made: CA s 1055B(1); it displaces the substituted decision: CA s 1055B(3); a party may appeal to the Federal Court only on a question of law in relation to it: CA s 1057(1); and it is not automatically stayed upon appeal to the Federal Court: CA s 1057A(1). Whilst AFCA's decision may be supported by those legislative protections, those features were also applicable in the regime considered in Breckler, but they did not suggest that the SCT exercised judicial power. 149 The provisions relied upon by QSuper do no more than implement AFCA's arbitral determination and do so in much the same manner as that in which the decisions of the Administrative Appeals Tribunal (AAT) are implemented. Save with limited exceptions, a decision of the tribunal comes into effect forthwith on its making: s 43(5A) of the Administrative Appeals Tribunal Act 1975 (Cth) (AATA); it displaces the decision of the primary decision-maker: AATA s 43(6); an appeal to the Federal Court is only on a question of law: AATA s 44; and the institution of an appeal does not automatically stay the AAT's decision: AATA s 44A(1). It is well established that the AAT does not exercise the judicial power of the Commonwealth despite the type of implementation provisions referred to by QSuper, and the presence of similar provisions in the AFCA scheme is not suggestive of the exercise of judicial power. It follows that those provisions referred to by QSuper do not speak of the conferral of judicial power. However, it ought to be recognised that the question before the Court is not to ascertain whether the AFCA scheme is similar to the model of administrative decision-making in the AATA, but whether the legislative scheme in question impermissibly vests a non-judicial body with judicial power: cf Kirby J in Breckler at 126 [82]. 150 The Commonwealth submitted that AFCA's ability to decline to make a determination, including on the ground that it considers the complaint might more appropriately be dealt with by a court or some other body (AFCA Complaint Resolution Scheme Rules C.2) is indicative that its powers are not judicial: Australian Communications Authority v Viper Communications Pty Ltd [2001] FCA 637; 110 FCR 380 at 406 [105]-[106]. There is force in that submission although this particular indicium is not of great weight.

Creation of new rights 151 In consideration of this indicium of judicial power, the difficulties in dealing with QSuper's vague submission that AFCA's decision was "in effect" something that it was not, become more acute. It seemed to submit that AFCA's decision was that it had contravened s 1017B(1) because its Notice had not complied with s 1017B(4) and that damages were awarded against it under CA s 1022B(2). Whether that accurately assesses what QSuper alleged was the "effect" of the decision is not entirely clear. However, if AFCA had done that or, at least, determined the contravention of s 1017B(1) it might be said that it had made a determination of the existing legal rights between the parties. Whether the decision would amount to an exercise of judicial power would depend on the impact of other indicia and, as has been demonstrated, they all point in the contrary direction. 152 Nevertheless, putting QSuper's submission at its highest, it must be that in reaching its explicit conclusion that the refusal to refund money to Dr Lam was unfair or unreasonable in its operation, it relied solely on its determination of the existence of a contravention of s 1017B(1) and, on that basis, it made a determination as to the existing rights of the parties. 153 Both AFCA and the Attorney-General submitted that AFCA's determinations lacked an essential quality of judicial power - being to make decisions about existing legal rights - and, instead, AFCA's powers had the effect of creating new rights between QSuper and Dr Lam. That submission ought to be accepted. Here, the determination was concerned with the question of whether QSuper's decision was "fair and reasonable in all the circumstances" in its operation in respect of the complainant: CA s 1055. It did not decide whether QSuper had failed to act in a manner that was not unfair and unreasonable and there was no suggestion of any contravention of the CA or provision of the trust deed which required it to act in that manner: see Wilkinson at 480; Dundee General Hospitals Board of Management v Walker [1952] 1 All ER 896 and Gisborne v Gisborne (1877) 2 App Cas 300 at 307 per Lord Cairns. Such questions were irrelevant to the issue under consideration which was solely concerned with the operation of QSuper's decision on Dr Lam. The decision itself may have been fair and reasonable from the point of view of the trustee and the fund members as a whole. However, if it operated in a manner which was unfair or unreasonable in relation to Dr Lam, AFCA's discretion to accord him some relief by creating new rights and obligations was enlivened. AFCA's determination was not, of itself, about existing legal rights and obligations and that proposition remains true even if it reached its conclusion by effectively deciding those legal rights. 154 In Breckler Kirby J observed that the paradigm of judicial decision-making is the determination of existing legal rights and obligations and if that is not the subject of the determination in question, the power to make that decision is not judicial. In that case the issue was whether there existed unfairness or unreasonableness "in relation to" the trustee's decision. His Honour observed (at 130 [91]): The applicable statutory norms are most imprecise. Until applied by the Tribunal in response to the case of a complaint which enlivens its powers, the position of the parties would be as the ordinary law provides. Specifically, no complaint would be open to a beneficiary under that law solely on the basis of any suggested unfairness or unreasonableness of a trustee's decision. The Complaints Act changed all that. But it did so by creating a tribunal with a power to make determinations. Its determinations do not declare or enforce the legal rights of the parties. They create new rights by force of the determination, albeit in the form of a decision which is then substituted for the decision of the trustees which is set aside. The functions of the Tribunal were accordingly those apt to a non-court body created for a limited purpose within the Executive Government. They involved no attempt to confer on that body functions confined to the judicial power of the Commonwealth and thus to a court. The first consideration should therefore be determined in favour of validity. 155 The AFCA scheme was slightly different to that considered in Breckler in that AFCA's power to intervene was not concerned with the making of the trustee's decision. Rather, it was whether there existed any unfairness or unreasonableness in its operation in relation to the complainant. In that way AFCA is not concerned with the legality or veracity of the exercise of power by the trustee (or, in some cases, by the insurer), but only with the manner in which the decision operates. This is even further removed from the determination of existing rights than was the case in Breckler. AFCA's determination did not declare rights or enforce the legal rights of the parties. It created new legal rights by substituting a decision of the trustee which it set aside. The concern was not whether the decision not to refund any premiums was legally correct or validly reached. It was whether it was unfair or unreasonable in the prevailing circumstances. 156 That is not to say that a decision by AFCA may not involve a question of legal rights and liabilities. A trustee's decision which was not in accordance with the terms of a trust deed or the trustee's powers may not be fair or reasonable in its operation. However, AFCA's powers are not confined to such circumstances. The issues involved in the present determination provide a useful exemplar. Here there was no legal right for Dr Lam to receive a refund of the premiums he had paid in excess of the amount he might have paid. Unless and until he had changed his occupational status, and that had been accepted by the trustee, he was only able to acquire the insurance cover offered at the standard rate. Despite that legal context, he sought, but was refused by QSuper, a refund of what he claimed were excess premium payments. Although QSuper may have been legally entitled to retain the claimed excess premiums, AFCA determined it was "unfair and unreasonable" for it to do so and made a new decision to credit Dr Lam's account with an amount of money. It thereby created new rights and obligations (which arose from s 1055B(3) of the CA) which were, at least in its mind, designed to achieve fairness in a broad sense. It follows that, regardless of the legal rights and obligations between a member of the AFCA scheme and a complainant, AFCA's determination is concerned with the application of determinative criteria. It does not determine what the rights of the parties are, but what they ought to be. That is not a characteristic of the exercise of judicial power: Precision Data at 189-190. 157 As has been discussed earlier in these reasons, AFCA may make decisions or form opinions as to the application of various statutory provisions and the rights of the parties arising inter se under the fund's trust deed. But such decisions or opinions are merely steps in the determination of whether the operation of the trustee's decision is fair and reasonable. Alternatively put, AFCA's opinions about those matters are "a step in arriving at the ultimate conclusions…intended to regulate the future rights of the parties": Re Cram; Ex parte Newcastle Wallsend Coal Co Pty Ltd (1987) 163 CLR 140 at 149 per Mason CJ, Brennan, Deane, Dawson and Toohey JJ, cited in Precision Data at 189 (fn 12) per curiam. See also Today FM at 378-379 [58]-[59] per French CJ, Hayne, Kiefel, Bell and Keane JJ, 386-387 [81] per Gageler J. 158 If it is assumed that AFCA reached the conclusion that QSuper had breached s 1017B(1), that would not mean that its decision determined the existing legal rights of the parties. The object and purpose of its power and of its decision was to reverse the functional unfairness or unreasonableness in the operation of QSuper's decision in relation to Dr Lam and to achieve that by creating new rights by making a substitutive decision. The authorities referred to show that it is the effect of the actual exercise of power which has to be considered in determining whether new rights were created or a determination was made as to existing rights. Whatever may be the effect of conclusions or decisions as to the parties' rights made as a step along the way to the exercise of power, is irrelevant to the characterisation of the power actually exercised. Here, the power actually exercised was under s 1055 and it concerned the creation of new rights and was not a decision about existing legal rights. Necessarily, this also negates the suggestion that AFCA exercised judicial power.

The decisions in Crocker and Wallace 159 In the course of both its oral and written submissions QSuper placed reliance on the decisions of Crocker and Wallace in support of its contention that AFCA had exercised the judicial power of the Commonwealth. Although the precise support QSuper sought to draw from these authorities was somewhat nebulous, it is appropriate to consider them at this point in the discussion. 160 Whilst each involved an appeal or review of a decision of the SCT, neither was predominantly or even primarily concerned with the question of whether the tribunal had impermissibly exercised the judicial power of the Commonwealth. That topic was touched upon in each judgment, but it is apparent from the authorities referred to that it was not, in any way, a focal point of the matters on which substantial submissions were received. Each case was more relevantly concerned with the scope of the SCT's power and, concomitantly, the nature of its task in considering a superannuation complaint. 161 Further, to the extent to which QSuper attempted to rely upon them as supporting the conclusion that AFCA had impermissibly engaged in an exercise of judicial power by determining a matter of private rights between QSuper and Dr Lam, Crocker and Wallace are irrelevant. This is so in the circumstances of this case where, as has been identified above, the actual power exercised by AFCA involved no determination of existing private rights.

Crocker 162 In Crocker the respondent had claimed that she was entitled to total and permanent disablement (TPD) cover pursuant to a policy or policies which provided her that type of insurance as part of her superannuation. Although Ms Crocker had been a member of her superannuation fund for a number of years, she had not ever qualified for TPD cover because, either, she had not worked in a full-time capacity when that was a requirement, or, she had not made the correct application for cover. Unfortunately, the trustee of the fund had mistakenly deducted premiums from her account on the basis that she held one unit of TPD cover and, subsequently, she received a letter advising her that she was entitled to cover of that nature. She later made a claim on the TPD cover which she believed she held, but it was rejected on the basis that she did not qualify for it. She sought redress from the SCT which held that the decision to deny her TPD cover was unfair and unreasonable. The matter was remitted to the trustee and insurer with the direction to consider Ms Crocker's claim on the basis that she held basic TPD cover. The SCT also determined that Ms Crocker should be entitled to one additional unit of TPD cover because the trustee had engaged in misleading conduct in relation to the insurance position. The SCT reasoned that it could make that decision using the trustee's power to compound claims made against it. 163 An appeal to the Federal Court was allowed. Allsop J (as the Chief Justice then was) held that the SCT's task under the Complaints Act was to determine whether the trustee's decision was "unfair or unreasonable" and that was to occur having regard to the conformity of the decision with the governing rules of the fund and the terms of the insurance policy. His Honour summarised the obligations of the SCT as follows at [31] and [32]: [31] The tribunal's task is not to engage in ascertaining generally the rights of the parties, nor is it to engage in some form of judicial review of the decision of the trustee or insurer. Rather it is to form a view, from the perspective of the trustee or insurer, as to whether the decision of either was (recognising the overriding framework given by the governing rules and policy terms, respectively) unfair or unreasonable. [32] Thus, essential to the task before the tribunal, as a consideration mandated by the terms of s 37, is an inquiry as to whether the decision by the trustee or insurer was in conformity with the governing rules or the terms of the policy. If the tribunal finds that the decision is contrary to the governing rules or the terms of the policy it may well be an easy step to conclude that it is unfair or unreasonable… If the tribunal finds that the decision of the trustee or the insurer is in conformity, with and required, by the governing rules or policy terms, in the sense which I have discussed above, it cannot other than find or be satisfied that the decision is fair and reasonable. If the tribunal finds that the decision of the trustee or the insurer is in conformity with, but not required by, the governing rules on policy terms, in the sense which I have discussed above, it may proceed, in effect, to supplant the decision of the trustee or insurer with its view of the merits... 164 These observations are consistent with the principles discussed earlier in these reasons as to the nature of the powers of entities determining superannuation complaints under the statutory regimes. 165 Mr Sullivan QC for QSuper specifically relied upon the observations of Allsop J in [16] of his reasons to the effect that if the SCT purported to determine the legal rights and obligations of the parties inter se, it would "in all likelihood" engage in the exercise of judicial power. It was submitted that AFCA had, in the case before this Court, fallen into that type of error by making a determination that the Notice did not comply with s 1017B(1). However, as Allsop J's observations at [31]-[32] make clear, the prohibition is on a non-judicial body quelling controversies between parties as to their legal rights, not on determining non-legal questions between parties, even if they require the formation of an opinion about the parties' legal rights. After all, the SCT could hardly find whether a decision is contrary to the governing rules or policy terms without engaging, to some extent, in a consideration of legal rights. Moreover, Allsop J's observations were by way of obiter only. It is apparent from his Honour's reasons that the court did not receive any substantial submission on whether the SCT was impermissibly exercising the judicial power of the Commonwealth and that he was not required to reach any conclusion in respect of that issue. 166 Mr Sullivan QC also relied on some later observations of Allsop J at [134]: Returning to what the tribunal in fact did, there were a number of further errors of the tribunal. First, insofar as it dealt with the second unit of cover under the headings "Was the Complainant misled by the Trustee?", "Conclusion" and "Determination", the approach was founded on the false assumption that Ms Crocker was entitled to one unit of cover under the policy. Secondly, as can be seen by the first heading mentioned above and what appears under it, the tribunal effectively determined some unspecified body of rights of Ms Crocker based somehow on misrepresentation. On this foundation it gave her an "entitlement" to a second unit of cover. It is not clear what the legal foundation for this was. Some resort was apparently made to the power to compromise and compound: see the last sentence of the determination. However, this part of the reasons is best understood as an impermissible assertion of a power to require the Trustee to pay a further sum based on some unarticulated assessment of the rights of the parties. For these reasons this part of the determination is also flawed. 167 His Honour then observed that Ms Crocker had raised a clear, albeit unarticulated, claim that she had some claim of right arising from the fact that it had been represented to her that she was entitled to TPD cover. However, neither the trustee nor the SCT had actually dealt with that claim. In remitting the matter back to the SCT his Honour remarked at [140]: Whether the tribunal deals with it or the Trustee deals with it, the parties concerned, including Ms Crocker, must appreciate that what is involved is not the determination of the rights of the parties. That is for suit in a court (which may, in the end, be the only appropriate forum in which to vindicate her position). Rather it is a decision whether, despite the lack of entitlement under the policy, it is appropriate for the Trustee to compound Ms Crocker's claim and, if it is, in what amount. 168 The consideration at [134] by his Honour of the SCT's determination that Ms Crocker be given a further unit of TPD cover as a result of the alleged misrepresentations by the trustee did not involve questions of the exercise of judicial power. As was observed, the SCT had no power to make such a determination of the rights of the parties, it being outside the scope of its power which was to ascertain whether a decision made by the trustee or insurer was unfair or unreasonable. That was reiterated in [140]. But that is not to say that the SCT would not be able to consider and reach a conclusion about the respective rights of the parties arising from the alleged misrepresentation when considering whether the trustee's refusal to compound Ms Crocker's claim was unfair or unreasonable. 169 Ms Sullivan QC submitted that, here, AFCA determined the rights of the parties under CA s 1017B(1). That submission could not be maintained on the facts, but even if it had been, it was entitled to reach a conclusion about that matter as a step along the way of ascertaining whether QSuper's refusal to refund money to Dr Lam operated unfairly or unreasonably in relation to him. 170 There is nothing in the decision in Crocker which assists the applicant in this matter.

Wallace 171 QSuper also relied on the decision of Edmonds J in Wallace. There, Mr Wallace claimed that the trustee of his pension plan had invested his funds in high risk speculative shares as a result of which he suffered significant losses. The trustee asserted that Mr Wallace had specified the manner in which he wished his funds to be invested. It would appear that Mr Wallace requested that the trustee refund to him the original amount of the funds he had invested. That request was refused. Mr Wallace lodged a complaint with the SCT and asserted that, in the circumstances, the decision not to refund him the amount of his investment was unfair and unreasonable. The SCT determined that the trustee had acted in breach of its obligations under the Supervision Act and that the decision not to compensate Mr Wallace as a result of the unlawful investment choice was unfair and unreasonable. The SCT determined that it was entitled to exercise the power of the trustee under the rules of the trust deed which permitted it to compound any claim made against it and, therefore, was able to substitute a decision that the trustee should pay to Mr Wallace the amount of the initial investment, less any amounts received by him. 172 On appeal to the Federal Court, the trustee submitted that the SCT was not empowered to determine the rights and liabilities of the parties by the application of the law to determined facts, but rather to exercise afresh the discretionary powers which the trustee had. It also submitted that its power in the trust deed to compound any claim was in respect of claims which were against it in its capacity as trustee or for which it would be indemnified under the trust deed. The decision made by the SCT, so it was submitted, was in respect of a claim against it for which it was not indemnified and for which it was not entitled to indemnity and, therefore, was not a claim over which the SCT had authority. On that basis it was submitted that there was no power of the trustee which the SCT might exercise in order to make a substitutive decision. 173 Edmonds J agreed that the clause in the deed only permitted the compromise of a claim which was, in essence, against the fund rather than against the trustee personally such that the real issue in the matter was to characterise the claim which Mr Wallace had made. If it was made against the fund the trustee would be entitled to exercise its discretionary power to compromise it and that discretion could be exercised by the SCT in its stead. If the claim was against the trustee personally, then the power to compound claims was irrelevant in the sense that there was no power which the SCT might exercise. His Honour concluded that Mr Wallace's claim was for compensation for breach of trust arising from non-compliance by the trustee with the requirements of the Supervision Act and, therefore, was against the trustee personally. The decision by the trustee not to personally pay compensation to Mr Wallace was not a decision exercised by it qua its position as trustee, but a decision made by it in its personal capacity. That being so, it was not a decision in respect of which the trustee had authority to re-determine in the exercise of its power under s 37 of the Complaints Act and thus the SCT had acted beyond its power. 174 In reliance on this case QSuper submitted that AFCA concluded that the Notice did not comply with CA s 1017B(1) with the result that it was making a determination of rights as between Dr Lam and the trustee and not a claim by Dr Lam against the Fund. On that basis it was submitted that AFCA had no power to substitute its own decision. For the reasons which have been discussed above, QSuper mischaracterised the purpose and object of AFCA's decision. Dr Lam's complaint did not relate to a personal claim against QSuper but was in relation to the amount he paid into the Fund for the purposes of obtaining insurance cover as part of the benefits he was to receive. Further, there was no ground of appeal to the effect that there was no power in the QSuper trust deed which AFCA was able to exercise to give the relief which it did. 175 In his reasons Edmonds J considered the scope of Allsop J's decision in Crocker and opined that his Honour had differentiated between claims against the trustee personally and claims which could be said to be "against the fund". Whilst that may have been touched upon by Allsop J it was not the basis of his decision which, as has been said above, was consistent with the authorities referred to in that his Honour distinguished between an exercise of power to determine rights between parties and the exercise of a non-judicial power which may involve a conclusion or opinion as to the state of the legal rights: see in particular the analysis of Allsop J at 389 [140]-[143] and his Honour's earlier discussion at 363 [15]-[16]. 176 There was nothing in the reasons for judgment in Wallace which might have assisted QSuper before this Court. That is particularly so given that AFCA did not make any determination of the private rights of QSuper and Dr Lam in relation to the former's obligations under CA s 1017B.

AFCA's decisions are arbitral and not an exercise of sovereign power 177 In further reliance upon the decision in Breckler, it was submitted by the Attorney-General and AFCA that the latter's power is not a compulsory exercise of sovereign authority: Breckler at 111-112 [43]. AFCA also relied on TCL Air Conditioner (Zhongsham) Co Ltd v Judges of Federal Court of Australia [2013] HCA 5; 251 CLR 533 at 553-554 [28]-[29] per French CJ and Gageler J, 566 [75], 575 [107]-[108] per Hayne, Crennan, Kiefel and Bell JJ, where at [28] French CJ and Gageler J explain: Underlying each of those dimensions of the judicial power of the Commonwealth is its fundamental character as a sovereign or governmental power exercisable, on application, independently of the consent of those whose legal rights or legal obligations are determined by its exercise. … 178 Underpinning this submission is the contention that AFCA's power to determine superannuation complaints is derived from its members' agreement to be bound to and comply with its complaints resolution scheme rules. The Attorney-General submitted that absent QSuper's agreement, AFCA could not have exercised any power over it in relation to the complaint. 179 QSuper's responsive submissions were to the effect that it was effectively compelled as a matter of practical reality to become a member of the regulatory regime with the consequence that submission to the AFCA scheme and the determination was involuntary. So the submission goes, the lack of voluntariness demonstrates that the power being exercised was the compulsory sovereign curial power. 180 The immediate difficulty with that submission is the absence of any evidence of any compulsion. It may very well be that the members of the QSuper Board were overwhelmed by the force of the changes to the superannuation regime implemented by the federal government and they found that they had to succumb to the new regulatory regime, but if that is so there was no evidence of it. No member of the board was prepared to depose that QSuper had no other choice but to elect to join. Indeed, it was not even submitted that the QSuper Board did not regard it as appropriate to join the scheme. There can be no doubt that in order to maintain the concessional taxation benefits available to regulated superannuation funds it was probably necessary for it to become subject to the scheme. Even if there were other options which QSuper might have pursued for the Fund, the loss of concessional taxation treatment would render them somewhat meaningless. As the High Court opined in Breckler (at 111 [44]) cases could be imagined where it would be a breach of trust for the trustee not to take all steps to obtain the revenue benefits, even at the expense of attracting the operation of the regulatory regime. That was most likely the position here, though QSuper, which was in possession of all the evidence in relation to this topic, opted not to produce any. 181 The more general submission was that at the time when the AFCA scheme came into effect on 6 March 2018, the QSuper fund was already a regulated superannuation fund and subject to the complaints scheme under the Supervision Act. As the facts set out previously in these reasons demonstrate, it had elected to assume that status. However, QSuper submitted that the effect of that earlier election was "spent" when it became a member of the previous scheme and there was no election for it to become a member of the AFCA scheme. Whilst it may be correct that the decision by QSuper to become a regulated superannuation fund cannot be taken to be a voluntary submission to whatever new external complaint resolution schemes might be established, there is no need to finally determine that question. 182 Here, by its subsequent conduct QSuper voluntarily submitted to the AFCA scheme. On the establishment of the AFCA scheme the Supervision Act was amended to require each trustee of certain regulated superannuation funds to be members of the AFCA scheme (s 101 of the Supervision Act), however, that did not apply to QSuper because it held an AFSL: s 101(1A) of the Supervision Act. Nevertheless, by the same suite of amendments which took effect on 6 March 2018, s 912A(2) of the CA was also amended with the effect that in order for a person who provides financial services to retail clients to comply with the requirement to hold an AFSL, they must have membership of the AFCA scheme. Therefore, in order to continue to offer membership of the Fund to the general public, QSuper was required to continue to hold an AFSL and, if it wished to do so, it was required to become a member of the AFCA scheme. It was not actually obliged or compelled to join the scheme. It may have determined that it would not do so in which case it would have had to retire as the trustee of the Fund and allow a qualified trustee to assume control. The evidence is, however, that it elected to join the AFCA scheme and did so by completing the application and delivering the same to AFCA. That application was subsequently accepted. 183 To some extent the legal nature of the election made by QSuper is the same as the election made by the trustees of the superannuation fund in Breckler, albeit by a different route. In Breckler the amendments to the trust deed required that the trustees comply with the requirements of the Supervision Act and associated regulations which incorporated the dispute resolution procedures so as to secure concessional taxation treatment. In that way the trustee voluntarily submitted to an arbitral regime for the resolution of disputes between itself and its members. Here, whilst the transition by the QSuper Fund to a regulated superannuation scheme occurred prior to the introduction of the AFCA scheme, in order for the Fund to retain the concessional taxation benefits it had previously secured, it was necessary for it to have a relevantly qualified trustee. That trustee had to hold an AFSL and, in order to do that, be a member of the AFCA scheme. It is apparent that QSuper determined to remain as the Fund's trustee and qualified by joining the scheme and continuing to hold an AFSL. It cannot be said its actions in doing so were other than voluntary with the result that AFCA's decision can properly be regarded, as between QSuper and Dr Lam, as arbitral in nature. It was not the exercise of sovereign curial power and, therefore, not the exercise of judicial power.

Nature of the powers and body on which they are conferred 184 AFCA's powers to make a decision which removes any unfairness or unreasonableness in the operation of a decision in relation to a complainant or in the conduct of the trustee are not judicial in nature. The process required by s 1055 is not to adjudicate upon existing legal rights and make orders to remediate for any breach which is detected. All that the section requires, in cases such as the present, is to consider the operative effect of a trustee's decisions in relation to a member and determine whether it operates "unfairly or unreasonably or both" in relation to the member. If it reaches the conclusion that it does it will create new rights as between the parties for the purpose of removing the unfairness or unreasonableness. That is not a judicial process involving the determination of legal norms and protection of legal rights and is a process more aptly conferred on a non-judicial body: Breckler (at 130 [90] per Kirby J). 185 On this issue AFCA submitted (at [36.2] of its written submissions) that Parliament's decision to entrust the administration of the AFCA scheme to a company limited by guarantee, whose functions are not otherwise exclusively judicial, strongly tends towards the determination not being judicial in character. Whilst it is true that the power is conferred on a non-governmental body and that tends to suggest that it was not intended to confer judicial power, it is not an indicator of great substance.

Conclusion as to alleged conferral of judicial power 186 Even if it could be said that AFCA determined that QSuper's Notice contravened s 1017B(4) and that was the sole and underlying reason for its conclusion that it ought exercise its powers under s 1055, it cannot be said that it was exercising judicial power. Its determination exhibited none of the indicia of judicial power. Moreover, the legally relevant circumstances of this case are indistinguishable from those which pertained in Breckler and the same result necessarily follows. 187 That being so it cannot be said that AFCA's decision of 1 August 2019, was or involved an exercise of the judicial power of the Commonwealth. Nor can it be said that any of the provisions of the CA which establish the AFCA scheme and grant AFCA power to make determinations offend Ch III of the Constitution.

Ground two 188 By this ground QSuper submitted that AFCA committed an error of law by determining, in effect, that the Notice was not in accordance with CA s 1017B(4) and the Court should find that it did comply. To the extent QSuper appeared to invite this Court to make its own findings of fact on this matter, AFCA submitted this ground did not involve a question of law at all. There is no need to reach any conclusion on that submission as the foundation of this ground of appeal is misconceived, as has been indicated earlier in these reasons. AFCA's determination did not extend to deciding whether QSuper's Notice failed to comply with CA s 1017B(4).

Compliance with s 1017B(4) does not negate a conclusion of unfairness or unreasonableness 189 QSuper also submitted that if its Notice complied with s 1017B(4) then, as a matter of law, it was not open to AFCA to determine that QSuper's decision was "unfair or unreasonable" for the purposes of s 1055(4) on the basis that Dr Lam should have been provided with additional information. 190 That submission fails to appreciate the distinction between compliance with s 1017B and AFCA's powers under s 1055. The question under s 1017B(4) involved ascertaining whether the information in the Notice satisfied the statutory requirement of allowing the member to understand the "nature and effect of the change". The issue in s 1055 is different: it is concerned with whether a decision of a trustee, insurer or other relevant person is unfair or unreasonable in its operation in respect of the complainant. That section is structured such that AFCA is required to reach a state of satisfaction as to whether, inter alia, the particular decision in its operation in relation to the complainant is unfair or unreasonable or both. If it reaches the required state of satisfaction, which necessarily it would have to reach reasonably, it is empowered to take any one or more of the actions mentioned in subsection (6). 191 The difficulty is that the "subjective jurisdictional fact", being the state of satisfaction that the decision is unfair or unreasonable in its operation, is vastly different to the objective question raised in s 1017B(4). It may well be that a notice satisfied that section but that, for other reasons, the operation of a decision by a trustee subsequent to the giving of the notice is unfair or unreasonable. That was the position in the present case. There was no finding that the Notice did not satisfy s 1017B(4). The information contained in it may have been and indeed, probably was, sufficient to satisfy that section. However, AFCA was concerned with whether, despite the information provided as to the nature and effect of the change, Dr Lam, in his capacity as a member was given sufficient information which would enable him to take steps to take advantage of the changes. It decided that it was not, with the result that the subsequent decision not to refund money to him operated unfairly or unreasonably. 192 It follows that QSuper's submissions in support of Ground 2 are fundamentally flawed. In the result the attack upon the veracity of the second ground must also be rejected.

Proposed new ground of appeal 193 The proposed new ground of appeal which is set out above is, effectively, the converse of Ground 2. In essence, QSuper submitted that, assuming that AFCA did not consider whether the Notice complied with s 1017B(4) in making its decision, it was in error in failing to do so. As Mr Wise QC for AFCA submitted, this ground is founded upon an entirely inconsistent factual basis to the first two grounds. Although that submission is accurate, it does not necessarily invalidate the ground for that reason. Indeed, the initial grounds of appeal were founded upon the erroneous assumption that AFCA had determined that the Notice did not comply with s 1017B(4). It is technically open for QSuper to advance this new ground. 194 The submission advanced in support of this ground was that the issue of whether the Notice contravened s 1017B(4) was a relevant consideration for the purpose of determining whether QSuper's decision operated unfairly or unreasonably with respect to Dr Lam. It was said that s 1017B(4) imposed a statutory norm in respect of which the Notice was required to comply and, in the circumstances of AFCA's decision, it was an error for it not to ascertain whether there had been compliance. 195 The submission that AFCA failed to take into account a "relevant consideration" appears to imply the existence of a jurisdictional error of the type considered by Mason J in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24. That is somewhat unusual in the circumstance of a decision-maker whose task it is to ascertain whether a trustee's decision is unreasonable in its operation with respect to a member of a fund. Necessarily, that decisional task is factually specific to the circumstances advanced in each particular case and the facts which might be encountered will be infinitely variable. They may or may not concern a question of what information had been made available to a member and they may or may not concern the sufficiency of information provided in a Significant Event Notice. 196 The point to be made here is that the concept of a failure to take into account a "relevant consideration" is not idiosyncratic and is dependent upon the particular factual circumstances surrounding of the decision to be made by use of the relevant power: Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323 at 347-348 [73]-[74] per McHugh, Gummow and Hayne JJ, with whom Gleeson CJ agreed; Abebe v Commonwealth [1999] HCA 14; 197 CLR 510 at 579 [195]; Fastbet Investments Pty Ltd v Deputy Commissioner of Taxation (No 5) [2019] FCA 2073 at [50]. The requirement to take into account a "relevant consideration" is concerned with "legality", being whether the power has been exercised in accordance with the statutory prescriptions which are expressed or implied in the legislation granting it. It cannot be said that AFCA's power under CA s 1055 is encumbered with the obligation in every case to take into account whether any notice which had been delivered by a trustee complied with CA s 1017B(4). In no respect can the fulfilment of CA s 1017B(4) be said to be, per se, a "relevant consideration" in the exercise of power by AFCA under s 1055. 197 No attention was paid in this case to the structure of CA s 1055(4) pursuant to which the relevant decision was made, or the manner in which AFCA exercises its power to make determinations. The structure of subsection (4) is relatively straight-forward in that the discretionary power to take one or more of the actions referred to in subsection (6) is conditioned on the fulfilment of a subjective jurisdictional fact. AFCA must be satisfied that either (a) a decision of a trustee in its operation in relation to the complainant is unfair or unreasonable or both, or (b) conduct of a trustee is unfair or unreasonable or both. The conditioning of a power on the existence of a subjective jurisdictional fact has long been utilised by legislatures for reducing impediments to the power's exercise or limiting review by courts. In Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21; 197 CLR 611 at 651 [130], Gummow J observed: In Bankstown Municipal Council v Fripp ((1919) 26 CLR 385 at 403), Isaacs and Rich JJ pointed out that, with the object of preventing litigation on questions of jurisdictional fact, the legislature may introduce into the criterion elements of opinion or belief by the decision-maker. Section 65 of the [Migration] Act is an example. The prosecutor was entitled to the grant of a visa only if the Minister were "satisfied" that the prosecutor answered the description in s 36(2). 198 In the present case, AFCA considered that it reached the state of satisfaction that QSuper's decision not to refund Dr Lam an amount representing part of the premiums paid was either unfair or unreasonable in its operation in relation to him. It was in that deliberative process that, it would seem, QSuper asserted AFCA was required to take into account whether the Notice complied with CA s 1017B(4), and that a failure to do so constituted an error of law. Other than as is referred to above, no real attempt was made by QSuper to explain why that would be so. It did not refer to any provisions of the CA or to AFCA's rules or other procedures which might support its submission. 199 There is very little in the CA which might identify the manner in which AFCA is to make its determinations. Section 1055(1) of the CA provides that in making a determination it has, inter alia, "all the powers, obligations and discretions that are conferred on the trustee … who made a decision to which the complaint relates". That would seem primarily referable to the power in subsection (6) which authorises AFCA to make some form of substitutive decision or to remit the matter to the original decision-maker. It does not easily relate to the power in subsection (4) which is concerned with ascertaining whether the operational effect of the decision on a member is unfair or unreasonable for the simple reason that the trustee would not usually be considering that question. 200 Putting that to one side, it might be assumed, for the purposes of this case, that in making a determination AFCA would be required to consider the submissions made by the parties between whom the dispute exists. That would require it to "engage in an active intellectual process" in relation to the issues raised by the parties: Carrascalao v Minister for Immigration and Border Protection [2017] FCAFC 107; 252 FCR 352 (Carrascalao) at 364 [46]. No attempt was made to identify where, in the submissions made to AFCA, either of the parties had asserted that QSuper's decision operated unfairly on Dr Lam because of the failure of the Notice to comply with CA s 1017B(4). Certainly nothing appears in the record of Dr Lam's complaint which was largely misdirected. On the other hand, QSuper's submissions were to the effect that Dr Lam's complaint did not relate to the manner in which its Notice met the requirements of CA s 1017B(4) although it did also make submissions, in the alternative, that there was compliance with that section. On that basis it is difficult to discern how it is that the issue had been raised by either party such that it became a matter that had to be considered by AFCA. QSuper has not established that AFCA committed any error in not considering it, if that is in fact what occurred. 201 QSuper also made no substantive submissions in support of this ground to the effect that CA s 1017B(4) had not been considered by AFCA. That is unsurprising given its main ground of appeal was that the only basis of AFCA's final decision was that that the Notice did not comply with the requirements of that section and a great deal of the hearing was taken up by its counsel attempting to convince the Court that such was the case. As mentioned, the two grounds were, in a factual sense, mutually inconsistent. 202 Nevertheless, it can be determined that AFCA did, at least, consider the obligations imposed by s 1017B(4). Although it did not mention the section in its reasons it identified it in the annexed section entitled "Supporting Information". On the basis of its limited obligations in relation to the provision of reasons: AIA s 25D; there is no basis for inferring that the section was not considered. AFCA's omission to mention the section or whether its requirements had been met by the Notice may simply mean that, after giving it real and genuine active consideration, it determined that matter to be immaterial to its decision: Kumar v Minister for Immigration and Border Protection [2020] FCAFC 16 at [85]-[86]; Carrascalao at 363-364 [45]; Minister for Immigration and Border Protection v SZSRS [2014] FCAFC 16; 309 ALR 67 at 75 [33]-[34]. That, it would seem, was entirely the correct approach. The nature and extent of the information made available in the Notice was relevant background material to the issue which AFCA was to decide, but it was in no sense determinative and whether the Notice complied with s 1017B(4) was not material to the ultimate decision. 203 It follows that, to the extent to which it was relevant, it has not been demonstrated that AFCA did not consider s 1017B(4) and whether the Notice complied with it. 204 Although the proposed new ground of appeal was not successful, as it was fully argued by all parties and considered by the Court, it is appropriate to give leave to amend the notice of appeal to include it. The applicant ought to file an amended notice of appeal incorporating that amendment.

Conclusion 205 It follows that QSuper failed to establish either ground of its appeal. The appeal must fail and AFCA ought to have its cost of the appeal. 206 No submissions were made at the hearing of the appeal as to the costs as between the applicant and the intervener. As matters transpired it cannot be said that the involvement of the intervener unduly extended the duration of the appeal or that the submissions made on its behalf were not helpful. Nevertheless, it may be accepted by the Attorney-General that as between himself and the applicant there should be no order as to costs regardless of the outcome of the appeal. In the circumstances it will be provisionally ordered that as between those parties that there be no order as to costs. If the Attorney-General wishes to seek an order as to costs written submissions are to be filed within two weeks in which case the provisional order will not take effect. 207 The orders should be:

1. The applicant have leave to amend the amended notice of appeal by including the additional ground of appeal.
2. The applicant is to file and serve the further amended notice of appeal.
3. The appeal be dismissed.
4. The applicant pay the first respondent's costs of the appeal.
5. As between the applicant and the Attorney-General: (a) unless by 4.00 pm on 27 April 2020 the Attorney-General has filed and served written submissions seeking an order for costs, there shall be no order for costs; (b) if the Attorney-General files and serves written submissions in accordance with order 5(a) hereof: (i) the question of costs will be reserved; (ii) the applicant shall file and serve any written submissions in response by 4.00 pm on 4 May 2020; and (iii) the Attorney-General shall file and serve any written submissions in reply by 4.00 pm on 11 May 2020. I certify that the preceding two hundred and seven (207) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Moshinsky, Bromwich and Derrington.