Robert James Harmer v Caltex Petroleum Pty Ltd & Ors

HARRY GREGORY BABBAGE Second Respondent

PARTIES : DON C BUCKNALL Third Respondent

ROBERT JOHN McTAGGART Fourth Respondent

BARRY KEVIN MURPHY Fifth Respondent

CALTEX AUSTRALIA NOMINEES PTY LTD Sixth Respondent FILE NUMBER: IRC 6845 of 1998 CORAM: Schmidt J CATCHWORDS : Unfair contract - superannuation - 100% commutation pension - claim for excess benefit flowing from application of reasonable benefit limits in fund rules - employer contribution holiday - no unfairness found - delay in initiation of proceedings - application dismissed - costs as agreed or assessed Income Tax Assessment Act 1936 (Cth) Income Tax Assessment Act 1997 (Cth) Industrial Arbitration Act 1940 LEGISLATION CITED : Industrial Relations Act 1991 Industrial Relations Act 1996 Occupational Superannuation Standards Act 1987 (Cth) Occupational Superannuation Standards Regulations Application Act 1992 (Cth) Sporting Injuries Insurance Act 1979 Ace Business Brokers Pty Ltd v Phillips-Treby (2000) 100 IR 420 Brown v Rezitis (1970) 127 CLR 157 CASES CITED : Gosper v Sawyer (1984) 160 CLR 548 New South Wales Rugby League Limited & Anor v Allen & Anor (1998) 83 IR 397 O'Brien v Australian Native Landscapes Pty Ltd & Ors (2001) 105 IR 409 Smith v Craig Mostyn & Co. Pty Ltd (1984) 8 IR 344 HEARING DATES: 05/08/2001; 05/09/2001; 12/10/2001; 12/11/2001; 12/12/2001 DATE OF JUDGMENT: 03/19/2002

APPLICANT: Mr J Fernon, counsel SOLICITORS: Haywards Solicitors

FIRST AND SIXTH RESPONDENTS: Mr G Hatcher, counsel LEGAL REPRESENTATIVES: SOLICITORS: Middleton Moore & Bevins

SECOND, THIRD, FIFTH RESPONDENTS Mr J Murphy, counsel SOLICITORS: Middleton Moore & Bevins

JUDGMENT: - 57 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Schmidt J

MATTER NUMBER IRC 6845 OF 1998 ROBERT JAMES HARMER v CALTEX PETROLEUM PTY LTD & ORS Application under s106 of the Industrial Relations Act 1996

1 This application was brought under s106 of the Industrial Relations Act 1996 ('the Act'), many years after the events in question. The issue of delay was dealt with in an interlocutory judgment of 5 April 2000. I there concluded that the respondent's application that the proceedings should be struck out or stayed generally, having regard to the delay in bringing the proceedings, should not be determined at that stage as a preliminary point, but should be dealt with as a part of the substantive case. 2 The claims advanced in the amended summons were: 1. A declaration that the contract of employment between the applicant and the first respondent and the condition or arrangement collateral thereto between the applicant and the respondents whereby the applicant entered into a release dated 18 September 1987 (hereafter called "the Modified Release") are unfair.

An order that the contract of employment between the applicant and the first respondent and the Modified Release (hereafter together called "the Contract") be varied from their commencement or from some other time be the addition of the following obligations. a) That the respondents will use their best endeavours to ensure that the applicant receives all benefits due or which may be due to the applicant as a result of the applicant's employment or membership of the Caltex Oil (Australia) Pty Limited Pensions Plan and will not conduct themselves in such a way as to deprive the applicant of any such benefits.

b) That the respondents keep the applicant informed at all times as to what steps are being taken by them in relation to the forfeited component of the applicant's lump sum benefit from the Caltex Oil (Australia) Pty Limited Pensions Plan (hereafter called "the Residual Benefit") in order to accommodate the exception created by the applicant's arrangement set out in the Modified Release. That the respondents take such steps as are necessary in order to accommodate the exception created by the applicant's arrangement set out in the Modified Release.

c) That the respondents inform the applicant of any attempt by either of them to transfer the Residual Benefit to any other entity and obtain the applicant's consent to same.

d) That upon any transfer of the Residual Benefit to another entity, the respondents inform the other entity of the nature and circumstances of the Residual Benefit and the exception created by the applicant's arrangement set out in the Modified Release.

e) That the respondents ensure that the other entity takes such steps as are necessary in order to accommodate the exception created by the applicant's arrangement set out in the Modified Release.

f) That immediately upon the event of circumstances prevailing which allow the respondents to make such payment, the respondents pay or cause the other entity to pay to the applicant the Residual Benefit plus interest accrued.

An order that the respondents pay to the applicant a sum of money equivalent to the Residual Benefit.

An order that the respondents pay to the applicant such sum of money as the Commission considers just in the circumstances of the case.

An order that the respondents pay the applicant interest on all monies ordered to be paid by the respondents from 10 September 1987 to the date of payment.

An order that the respondents pay the costs of the applicant for these proceedings.

Such further or other order or orders as to the Commission seems just in the circumstances of the case.

3 The money sums claimed were: 1. The Residual Benefit being $108,438.20. 2. Interest on the above amount from 10 September 1987. 3. Costs. 4. Such other orders as the Commission considers reasonable.

4 Evidence was called from Donald Bucknall, retired company director; Shayne Carter, tax consultant and director of Greenwoods and Freehills Pty Ltd; Harry Babbage, retired company director; Victoria Waters, corporate solicitor, Caltex Petroleum Pty Ltd; Derek Hentze, retired solicitor; Barry Murphy, chairman of the Australian Rail Tack Corporation; and Phillip Palangas, former General Manager, Administration for Howard Smith Ltd. Mr Palangas was not required for cross examination.

5 The claim concerned the superannuation paid to the applicant on his retirement in September 1987 from employment with the first respondent, Caltex Petroleum Pty Ltd ('Caltex'), after some 40 years service. The claim was also brought against Mr Bucknall, Mr Babbage, Mr McTaggart and Mr Murphy, who at the time of some of the events in question, were directors of Caltex, and also trustees of the superannuation fund of which the applicant was a member, known as the Caltex Oil (Australia) Pty Limited Pensions Plan ('the Plan'). It does not seem as if either all of the directors of Caltex or all of the trustees of the Plan have been pursued in these proceedings. 6 The Plan was a pension plan, operated for many years by Caltex, before it was wound up in March 1991. At that time the assets of the Plan were transferred to another superannuation fund, the Caltex Superannuation Plan ('the new fund'). The sixth respondent, Caltex Australia Nominees Pty Ltd, is the trustee of that new fund. In an interlocutory judgment of 16 June 2000, it was also joined as a respondent to these proceedings. 7 The money claim advanced by the applicant, $103,438.20, represents the difference between what Mr Harmer was paid out of the Plan upon his retirement at age 55 in 1987 when he elected to commute 100% of his pension ($310,265.30) and what would have been payable to him then, ($418,703.50), had not the rules of the Plan limited payments which could be made to a member, by reference to Income Tax Ruling IT2201 of the Commissioner of Taxation. That ruling, introduced in 1985, imposed a 'reasonable benefit limit' ('RBL'), on lump sum payments made to members of superannuation funds upon their retirement.

8 There was no issue between the parties that it was important for the Plan to comply with such tax rulings. Without such compliance, the Plan would not have satisfied various requirements of the Income Tax Assessment Act 1997 (Cth) and would thus have been deprived of various desirable consequences, including the beneficial tax treatment of the earnings generated by the investment of its assets. There would also have been negative consequences for Caltex, which would have lost the benefit of tax deductions in respect of contributions which it made to the Plan in respect of its employees and also for members of the Plan such as Mr Harmer, who would have lost the favourable tax treatment which payments to them from the Plan received. 9 That Mr Harmer was, nevertheless, concerned that after 40 years of service, his superannuation payout was over $100,000 less than if the ruling in question had not been reflected in the Plan rules, was understandable. This was particularly so as he understood at the time, that other employers who had senior and longstanding employees in their service who were facing similar circumstances, were taking steps to ameliorate the impact of these circumstances for such employees.

10 Mr Harmer initially raised the possibility that Caltex could likewise take such steps with Mr McTaggart. He received no positive response and then organised a petition signed by 59 other employees, in which Caltex and the trustees were asked to assist them in overcoming the effect of the RBL guidelines, which it was believed were unfairly penalizing long serving employees. The petition asked a number of questions and raised various possibilities, including the introduction of indexation of pensions. In October 1986, Mr McTaggart wrote a detailed response on behalf of the board, explaining Caltex's appreciation of the concerns and the effect the RBL guidelines would have on long serving employees, if they elected 100% commutation of their pensions. He explained that the issue of the impact of RBL limits upon long serving employees had been recognised by the Directors before the changes were introduced to the Plan and had been discussed with the 'Superannuation Review Committee". He also advised that there was no prospect of any relief from the RBL ruling from the Tax Commissioner. He said in part: 'At this time we can offer no solution to the limitation of lump sum payouts. However, those of us affected should not lose sight of the fact that we are not being put in a position of being forced to forfeit our entitled benefits. We can still take the 50% commutation/50% pension option which actuarially gives us our full entitlement from the Fund. To the extent that members in electing to take the 100% commutation option may leave monies in the Fund such monies will not work to the benefit of other members. Over a period of time they would work to the benefit of the company in lessening its funding liabilities. However because a member does not have to declare his or her commutation option until the point of retirement, company funding must at all times be sufficient to meet the full actuarial liability - normally the 50% commutation/50% pension option - for each member.'

11 Mr McTaggart concluded with the assurance that: 'The circumstances may change however, and you can be assured that the Directors will not lose sight of the problem and will take advantage of any opportunity that presents itself to improve on the current situation.'

12 A meeting then took place between the trustees, Caltex representatives and about 40 employees, in which their concerns were explored. The employees sought Caltex's support in lobbying the Government in relation to RBL guidelines. Mr Harmer recollected that Mr Bucknall was reluctant to pursue the matter further, because it might put at risk the favourable treatment which the Plan was otherwise receiving from the Tax Commissioner. Mr Harmer later had further discussions with Mr McTaggart, because he was concerned that the effect of the RBL guidelines would be of practical benefit to Caltex and not to members of the Plan and that the trustees were not prepared to pursue this for members.

13 Mr Harmer then pursued his concerns direct, by writing to Mr Hoctor, First Assistant Tax Commissioner, in February 1987. In May 1987 he received a detailed response from RP Jean, Assistant Tax Commissioner. Mr Jean confirmed that other employers had established 'excess benefit funds' to deal with this type of situation, saying: 'In many cases it is agreed between the employer, the trustee and the employees that excess moneys in a fund at the end of the day will be transferred into an excess benefits fund. Exemption from tax does not apply to these funds and they currently pay tax at 44.25%.

14 The advice included: 'In practice it is normal for a superannuation trust deed to restrict a member's benefits to the maximum benefits permitted by the Commissioner. It is not true to say, therefore, that a member of a superannuation fund has at any time an entitlement to benefits in excess of the maximum permitted under the trust deed. The excess belongs to the trustee.'

15 Caltex was provided with a copy of this correspondence and in July 1987 wrote to the Tax Commissioner about this advice, saying: 'The Company continues to be under pressure from Trade Unions and other employee groups in relation to superannuation benefits. The paragraph referred to in your letter to Mr. Harmer implies that an acceptable approach to excess benefits in a fund such as ours is to transfer such monies into an excess benefits fund immediately prior to retirement. We would appreciate your clarification and comment on this aspect. Additionally we would seek your view on the tax status of distributions from an excess benefits fund in the hands of members.'

16 There was no written response, but there was then a meeting between Mr Bucknall and Mr Hoctor in Canberra. Mr Bucknall's account of this discussion in his affidavit evidence was: 'I do not recall ever speaking to Mr Harmer personally or directly about issues he was raising just prior to my retirement. I recall that I attended a meeting in Mr McTaggart's office, where Mr Harmer was present, to discuss the issues. Mr McTaggart had substantially the carriage of the matter. As a result of Mr Harmer's agitation and at the request of Mr McTaggart, I visited the Tax Commissioner's office in Canberra accompanied by Mr Bruce. I recall the person that we spoke to was an officer from the interpretations Division of the Australian Taxation Office. Other than to broadly confirm the Office's response to Mr Harmer's submission, I recall his confirmation that my previous understanding that the seven times rule was not negotiable to be correct. I recall that the officer also gave me a further copy of Ruling IT2201. At no stage was I presented with any sensible proposition to deal with 'excess benefits' in the Pensions Plan, particularly as it was not possible to consider transferring funds to which a member was not, according to the rules, entitled. I was concerned that such a proposal would be viewed as a back door way of taking money out of the Pensions Plan with the potential to alter the Commissioner's attitude towards taxation of the plan. I was aware that the Commissioner could sanction the establishment of a separate fund to which exemption would apply. Deductions for contributions to such a fund could be doubtful.'

17 At the hearing, Mr Bucknall was given leave to give oral evidence of this conversation. He had recollected that the officer with whom he had met was Mr Hoctor. While directions had been given that the evidence be put in affidavit form, given all the circumstances, including the time at which these proceedings were launched, justice required that Mr Bucknall, who had retired as a trustee even before Mr Harmer's own retirement, be granted the leave sought.

18 Mr Bucknall's oral evidence as to this conversation was: 'In fact, we went there at the request of Mr Harmer, through Mr McTaggart and I believe it was Mr Hoctor referred me to his response to Mr Harmer, his letter in response which surprised me somewhat because of the vary narrow interpretation of the agreed provisions of section 16 of the Act - that is, the Income Tax Assessment Act … He said at somewhat, almost at the end of our discussion, "The Commissioner has been known to approve excess benefit plans in certain circumstances to which excess benefits might be transferred." I am sorry - correction: "excess benefit entitlements may be transferred. However, in Harmer's case no entitlement arises. Q. Did you say anything after that? A. No.'

19 In cross examination, he said: 'Q. When you gave that evidence on the last occasion you were asked, after giving the evidence that in Mr Harmer's case no entitlement arises:- "Q. Did you say anything about that?"

And your answer was:- "NO.".

Why not, why did you not say anything further? A. I am sorry I didn't elaborate on that, I apologise for that. If I might say this, my colleague who was an administrative assistant to Mr McTaggart, sought to raise how would an excess benefits fund be established and how might it operate? Before Mr Hoctor could respond, I said at that stage words to the effect that, "In my view of what has been said," in my language, "an excess benefits fund is simply not on", to which Mr Hoctor agreed, in words of his own. Q. What do you say occurred? A. Oh well, after Mr Hoctor made his statement that ending up with no entitlement exits or arises my colleague then chose to introduce another subject which was how was such a fund created, and if so how did it work? How did it function? I interrupted by saying that I can't see that that is appropriate because or words to that effect because obviously in view of what had been said in my language an excess benefit fund was simply not on and Mr Hoctor agreed.'

20 Mr Bucknall retired shortly after this meeting with Mr Hoctor.

21 Mr Harmer had also informed Caltex about the approach which he understood was being taken by other employers to this issue. He had advised Mr McTaggart that Mr Palangas was happy to discuss such an approach with him and Mr McTaggart agreed to investigate. Mr Palangas was not approached.

22 Mr Bucknall's discussions with Mr Hoctor did not lead to any alteration in the rules of the Plan, or the establishment of an excess benefits fund by Caltex. When Mr Harmer later elected to commute his pension by 100%, no additional payment was made to him by Caltex itself, or by the Plan, in excess of what flowed from the rules of the Plan, in compliance with the RBL requirements. On his evidence, when Mr Harmer came to retire in September 1987, he was not aware of what had transpired in Mr Bucknall's discussions with Mr Hoctor. He understood that Caltex had not concluded its consideration of the matters he had raised with it. He was nevertheless asked to sign the usual form of release required by the Plan, when retiring members elected to take 100% commutation of their pensions. The terms of this release would have precluded him from later pursuing any claim against the Plan in respect of his 'excess benefit'. Mr Harmer declined to give the release and proposed alternative words, which led to some unfortunate unpleasantness upon his retirement, including a delay in the payment of his superannuation by the Plan. 23 The difficulty became the subject of discussion between Mr Harmer's solicitor Mr Colvin and Mr Hentze, then Caltex's Company Secretary and Chief Corporate Solicitor. A form of words for a release was agreed in those discussions and the commuted superannuation was paid by the Plan. The release agreed provided relevantly: '1. I Robert James Harmer hereby apply for 100% commutation of my pension. In accordance with the Pensions Plan lump sum commutation formula, the commutation of my pension as at August 31 1987 amounts to $418,703.50. However, I acknowledge that the Australian Taxation Commissioner limits lump sum benefits payable from Superannuation Funds. The maximum amount that the Trustees are entitled to pay in accordance with the Trust Deed is $310,265.30.

Subject to any entitlement that may at any time exist to the further benefits referred to in clause 3 below, I clearly understand that by making this election to receive $310,265.30 I irrevocably surrendering my pension in favour of this lump sum.

I clearly understand in signing this application that no further benefits will be payable to me or my spouse except such benefits as I may be eligible to receive as a result of amendments to the Trust Deed and Rules and the Australian Taxation Commissioner's reasonable benefits guidelines which permit retrospective adjustments to commuted pensions or unless other circumstances prevail which allow the trustees to make such additional payments. I clearly understand that in the event of amendments being made which would permit a further lump sum being paid it is unlikely that the amount would exceed the difference between my entitlement of $310,265.30 and the commutation amount calculated in accordance with the Plan formula of $418,703.50.

I Maureen Emily Harmer being the spouse of Robert James Harmer hereby request you to consent to the above application for 100% commutation of the pension of my spouse and I acknowledge that in consequence of such commutation I will cease to be entitled to any present or future benefits under the Pension Plan except in those circumstances referred to in paragraph 2 of this application.'

24 In cross examination, Mr Harmer explained that when he retired he believed that there was an account in his name in the Plan, which contained the sum here in question. This understanding was plainly wrong. Mr Harmer conceded that he understood that the Plan was a defined benefit fund and that Caltex required actuarial advice in order to appreciate what its liabilities to the Plan were from time to time, because this would depend in part on decisions which individual members made from time to time

25 Changes to the RBL regime resulted in July 1990, from regulations then made under the Occupational Superannuation Standards Act 1987 (Cth). There was no evidence that this led to any relevant amendment to the Trust Deed or Rules of the Plan or that any retrospective adjustments to commuted pensions were thereby permitted, the circumstance addressed in the release. Mr Harmer's solicitors wrote in August 1990 to Mr Murphy, then managing director of Caltex, advising that Mr Harmer had obtained advice from Greenwoods and Freehills Pty Limited, 'specialist taxation advisers', as to a number of ways in which Mr Harmer's excess benefit could have been dealt with by the Plan in 1987, so as not to jeopardise the Plan's concessional tax treatment. It was also advised that Mr Harmer's release had given rise to a legally enforceable obligation on the part of the Plan or Caltex to Mr Harmer. Litigation was threatened, if payment of the excess benefit was not forthcoming.

26 At that time, 1990, Mr Harmer was not a member of the Plan, nor an employee of Caltex and none of the individual respondents to these proceedings were any longer trustees of the Plan. In September 1990, Caltex replied, denying any obligation to Mr Harmer on its part or that of the then trustees of the Plan. It was foreshadowed that any litigation would be defended.

27 At that time, Mr Harmer's solicitors were also pursuing discussions with the Insurance and Superannuation Commission, as to whether Mr Harmer's excess benefit could be paid to him from the Plan assets, given the then requirements of the Occupational Superannuation Standards Regulations Application Act 1992 (Cth). In November 1990, Caltex was advised of these discussions and it was alleged by Mr Harmer's solicitors that it had misled Mr Harmer in 1987, when he had also been subject to harsh, unfair and unconscionable treatment. Complaint was also made as to the failure to give Mr Harmer a copy of the Plan rules and deed in 1987. These allegations were strenuously denied by Caltex.

28 In 1991, without advice to Mr Harmer, the Plan was wound up by resolution of its members and its assets transferred to the new fund.

29 Nothing further appears to have occurred until 1995, when Mr Harmer raised his claims with the new fund, which refused to correspond with him about his claims. This led in April 1996, to a complaint being made by Mr Harmer to the Superannuation Complaints Tribunal, which was challenged in the Federal Court by the trustees of the new fund in July 1996. In November 1997, Beaumont J concluded that the Tribunal had no jurisdiction to deal with Mr Harmer's complaint, he never having been a member of the new fund, not even a notional member. His Honour held that Mr Harmer was not a person in respect of whom the trustee was obliged to act in the context of the fiduciary relationship which existed between the trustee and all the members of the trust, for whose benefit the trustee was bound to act. Beaumont J suggested that while Mr Harmer might have rights at general law, they could only go to whether the trustee should be required to turn its mind to the question of whether the rules of the new fund should be altered, so as to provide for persons in his position. His Honour also observed that the trustees would have to make that decision in the context of the terms and conditions upon which such amendments might depend, 'so that the interests of all of the members of the fund might be adequately catered for.'

30 Nothing further then occurred until these proceedings were initiated in December 1998. 31 The proceedings were also brought, as earlier noted, against several of the individual trustees of the Plan, who were also directors of Caltex. Mr Bucknall was Fiscal Director of the Caltex Group on his retirement. He had however retired from his employment and as trustee in July 1987, before Mr Harmer's retirement the following September. Mr Babbage, Caltex's Manufacturing Director also retired in September 1987. Mr McTaggart died some years ago. When he ceased being a trustee of the Plan was not in evidence. Mr Murphy, Caltex's Marketing Director at the time of Mr Harmer's retirement, ceased being a trustee in 1991 , when he was appointed Managing Director and CEO of Caltex.

32 I am well satisfied that the case is able to be advanced by the parties were affected by the lapse of time since the events in question. The matter was heard in 2001. The critical events occurred in 1986 and 1987. The three individual respondents had years ago retired from their employment with Caltex and as trustees of the Plan. Mr McTaggart, most closely involved in the discussions with Mr Harmer, had since died. While Caltex was able to locate some of the relevant records, there can be no certainty that all of the relevant records still exist or were located. It was inevitable that the witnesses' recollection of the events in question were affected by the passage of time. It is necessary to take these difficulties into account and I have done so. 33 It was uncontested on the evidence that Mr Harmer had retired from Caltex's employment after very many years of loyal and successful service at senior levels within that company. Mr Harmer had been a member of the Plan throughout his 40 years' employment. He was attracted to the opportunity to commute his pension by 100% upon attaining 55 years of age, having regard to his personal circumstances and his view, in light of the then current levels of inflation, that a non-indexed pension would soon erode in value. 34 The opportunity for 100% commutation was announced by Caltex in 1986. The effect of the RBL limits on that option were soon appreciated by Mr Harmer, being explained in meetings of employees addressed by Mr McTaggart. At the time of Mr Harmer's retirement, he was paid all of his entitlements under the Plan, in accordance with its rules, he having elected to commute 100% of his pension.

35 On the evidence it was Caltex which determined what superannuation benefits were offered to employees from time to time. Caltex established the Plan many years ago, initially as a pension plan. It later introduced 50% commutation, and eventually in 1986, 100% commutation. At the time in question, superannuation was a contractual benefit, rather than flowing from award or statutory obligations imposed on employers.

36 The trust deed required that both the board of Caltex and the trustees approve any changes to the Plan rules. Mr Bucknall's evidence was that such changes also required the prior approval of Caltex's ultimate parent, Caltex Petroleum Corporation, the US parent of the Australian Caltex group of companies. In amending the Plan rules the trustees and Caltex took care to comply with the requirements of the tax law, so that the tax status of the Plan was not jeopardised. No complaint was made about that approach by Mr Harmer in 1986 or 1987. He then accepted the importance of such compliance.

37 Mr Bucknall gave evidence of the unique position in which Caltex was placed in relation to taxation in Australia, which became the basis of some attack on the trustees in Mr Harmer's case. His evidence was relevantly to this effect: 1. I am a Fellow of the Australian Society of Certified Practising Accountants and a Fellow of the Australian Institute of Company Directors.

2. From July 1950 to March 1955 I was employed by the late John Vincent Ratcliffe, Tax Consultant and Auditor to Caltex Oil (Australia) Pty Limited and associated companies.

3. In June 1955 shortly before the commencement of operation of the Kurnell Refinery operated by Australian Oil Refinery Pty Ltd ("AOR"), now known as Caltex Refineries (NSW) Pty Ltd, I commenced employment with AOR as Internal Auditor.

4. Shortly after this time I became Assistant Chief Accountant and in September 1962 became Chief Accountant and later Company Secretary for Australian Lubricating Oil Refinery Pty Ltd ("ALOR") which was at that time a joint venture between Caltex, Golden Fleece Petroleum and Ampol.

In August 1968 I became Manager - Finance and Taxation employed by Caltex Oil Australia Pty Ltd ("COA"), a related company of AOR.

Shortly after this time I filled a newly created position as Tax Manager for the Caltex Group of Companies. In May 1978 I became General Manager - Finance Corporate. At the time of the acquisition of Golden Fleece Petroleum I headed the task force formed for that purpose and then became Golden Fleece Petroleum's Chief Executive Officer. That company subsequently ceased marketing operations and changed its name to Caltex Properties Limited.

In 1983 I became Fiscal Director of the Caltex Group including COA until I retired on 31 July 1987. In that position I was responsible for administering financial affairs of various corporate entities in the Caltex Group in relation to manufacturing, supply, shipping and marketing.

I have had the opportunity to read the Affidavit of Robert James Harmer sworn 22 December 1998 in these proceedings, as well as the Affidavit of Phillip Palangas sworn 11 February 1999 in these proceedings.

I recollect that since 1955 I was trustee from time to time of various Caltex Group benefit plans. I was a trustee of the Caltex Oil Australia Pensions Plan ("the Pensions Plan") at the time of my retirement in July 1987 and resigned from that role at that time. In addition to performing the formal duties of Trustee at the Refineries, such as the handling of hardship cases and the making of arrangements for the maintenance of orphans etc., I personally became involved on a voluntary basis in advising terminally ill members and widows in restructuring their banking and financial arrangements. If needed, the Companies provided support in various ways including transportation to assist with shopping and the ferrying of children to and from school. This personal involvement was aided by the fact that most employees of AOR and ALOR resided in the Sutherland Shire. Such personal contact in the case of COA employees however was necessarily limited to members of the Pensions plan located at the Company's head office in Sydney. I continue to have contact from time to time with retirees and widows and assist them with their problems wherever possible.

The Pensions Plan was known in the industry as a 'Widowed Orphan's Plan', as it provided pension benefits for members and their survivors. The Pensions Plan was recommended by the Caltex Petroleum Corporation (CPC), the US parent of the Australian Caltex Group of Companies, and was adopted as a standard for Caltex affiliates on a worldwide basis. A number of Australian nationals assigned to Caltex affiliates around the world are members of COA benefits plans.

The position of all foreign owned oil companies in Australia in relation to taxation matters was unique. Due to the fact that most oil companies were foreign owned the Tax Commissioner conducted arbitrary assessment of the oil companies income based on his determination of what profit had been derived on sales and then levied a tax assessment accordingly.

For many years such assessments gave rise to extended litigation with the Tax Commissioner. However, prior to my joining the Caltex Group this system changed and a system was put in place whereby negotiated settlements were reached with the Tax Commissioner as to income tax payable on a lump sum basis without either party conceding individual items of revenue or expenditure.

The oil industry is significant collector of taxation including duties and excise and other petroleum levies imposed by State and Federal governments. The particular status of oil companies resulted in frequent high level contact with Government Departments including the Australian Taxation Office.

The relationship between the Tax Commissioner and the Caltex Group was also very close in relation to superannuation matters. At one stage it was necessary to give the Commissioner a list of upcoming retirements by members of the Pensions Plan and other superannuation plans so that he could ensure that benefits were in accordance with his then current guidelines. These arrangements were in place approximately in the early 1970's at the end of which formality was relaxed in favour for a system of telephone clearance. Ultimately, telephone clearance was not pursued beyond the mid-70's.

The Tax Commissioner monitored superannuation funds not only in respect of their pay-outs but also in respect of total investments of the fund. In the event that the Commissioner considered the total investments excessive, he could disallow tax exemption for the income arising from those investments. Similarly, payments to members in excess of the Commissioner's guidelines could jeopardise the tax exempt status of the Plan.

Whenever enhancements were sought to be made to the Pensions Plan a two step process was required. Firstly, concurrence had to be obtained from CPC and then the change had to be approved by the Commissioner. In some cases enhancements were recommended by CPC.

As the Public Officer of the Caltex Group I was also the point of contact for the Australian Taxation Office.

38 The trustees who are respondents to these proceedings were all appointed by Caltex, and were also members of its board. In 1986 employee elected trustees were introduced by amendment to the Plan rules. Who and when such trustees were appointed, was not dealt with in the evidence.

39 The cost to Caltex of funding the Plan varied from time to time. Mr Bucknall gave evidence that in 1986, prior to his retirement the following June, the Plan was an expensive operation for Caltex, reflecting some 19% of the company's then annual salary bill. This position improved in following years, with Caltex later enjoying funding holidays.

40 The introduction of the 100% commutation option proved to have a beneficial effect upon the financial position of the Plan, when members began selecting that option. This was a less costly option to fund, than the other available options. This experience had an impact upon the financial support which Caltex was later obliged to provide to the Plan. As a defined benefits fund, members of the Plan had specified entitlements upon the happening of particular events. Caltex was obliged to provide the necessary financial support to ensure that such entitlements could be met from time to time when members resigned or retired, whatever election they then made. For that purpose, actuarial advice was obtained from time to time by the Plan, as to the level of support required from Caltex. 41 The position in 1987 was such that Caltex was relieved from the need to provide any financial support to the Plan. On the evidence that relief persisted for some considerable time. This was described as a 'funding holiday'.

42 The effect of the RBL guidelines when 100% commutation was introduced in 1986, was a discount of 2.5% of the commuted sum for each year that the retiring member fell short of age 65. That sum was itself calculated by reference to 7 times the member's final average salary, in accordance with RBL guidelines. The introduction of 100% commutation was explained to members of the Plan, in writing by Caltex and orally in meetings addressed by trustees. It took Mr Harmer a little time to appreciate the negative impact of such a choice in his own circumstances. It transpired that the RBL guidelines had the greatest negative impact upon members of the Plan such as he, who had joined at a young age, had long periods of service and a relatively high defined benefit.

43 Whether or not there was any commutation of a pension in a particular case, or at what level, was nevertheless entirely a matter for the individual member concerned. There proved to be attractions to such a course for many members - access to a lump sum payment which attracted reduced tax, as opposed to receipt of a pension over the remaining years of the member's life, which reflected salary upon termination, but was not subject to indexation. 44 It was common ground that had the Plan in its rules not adhered to the RBL provisions of the legislation in relation to 100% commutation, it would have had the effect in Mr Harmer's case, that he would have been entitled to a payment some $100,000 greater from the Plan, than the payment made. The RBL provisions did not apply to the 50% commutation option available to Plan members. That option had been introduced at a time when such a limitation did not exist. The Commissioner approved the Plan continuing to operate on that basis in relation to 50% commutation, even after the RBL limits were introduced. This was an obvious benefit to members, which the Commissioner declined to extend to 100% commutation, when that option was introduced in 1986.

45 The $103,000 here claimed by Mr Harmer as his excess benefit, was not paid out to any other members of the Plan or to Caltex. It was simply an amount which the Plan was not obliged to pay to anyone, Mr Harmer not having any entitlement to it under the Deed or rules of the Plan. The practical position was that this sum was available to be utilised when other payments had to be made to other members of the Plan from its assets, thereby consequently reducing the need for any call for support to be made from Caltex by the trustees of the Plan. It was this result which was the basis of Mr Harmer's complaint of unfairness. 46 It was also common ground that the trustees of the Plan could not have made any payment to Mr Harmer, other than that which he received. Any other payment, either at the time of his retirement or later, when the RBL guidelines were altered, would have required amendment of the relevant rules of the Plan. This was expressly recognised in the terms of the release which the parties negotiated after Mr Harmer's retirement. No orders were however sought in these proceedings as to such amendments to the Plan rules or its Trust Deed. Mr Harmer's claim was expressly directed to his contract of employment and the terms of the agreed release.

47 It was also common ground that the trustees of the Plan could not themselves have established an excess benefit fund, as Mr Harmer was suggesting in 1987 and could not have paid Mr Harmer's excess benefit into such a fund, without the rules of the Plan being amended to permit such a payment to be made. It was not in issue that such a fund could have been established by Caltex. What was in issue was whether Caltex could have done so at the time without jeopardising the position of the Plan, especially to the detriment of its members.

48 On the evidence, Caltex had various options available to it in relation to the concerns which Mr Harmer was raising on his retirement. It could have made an ex gratia payment to him in respect of the sum in question. From time to time Caltex had taken steps to 'top up' the pensions which members of the Plan received, or to make other ex gratia payments to employees. There was, however, no suggestion that Mr Harmer was treated differently to any other employees who were in a similar position to him, in relation to the claimed excess benefit here in issue.

49 The Plan provided for a pension which was not indexed. From time to time Caltex 'topped up' such pensions, but it was not obliged to do so. This was a matter of complaint by employees in 1987 and in part explained why 100% commutation became an attractive option. It was not claimed in these proceedings however, that the making of an ex gratia payment was something which Mr Harmer raised with Caltex at the time he was contemplating retirement, or that it was unfair that it did not then make such a payment to him. Nor were orders for such a payment sought in these proceedings. 50 What was suggested in the case advanced at the hearing, was that it was unfair that Caltex and the trustees did not take then available steps to establish an excess benefit fund, so that the claimed $103,000 could have been paid into such a fund, out of the funds of the Plan. It was this which was at the heart of the complaint in these proceedings.

51 After Mr Bucknall had given his oral evidence, the hearing was adjourned and Mr Harmer sought advice from Mr Carter. Mr Harmer was then granted leave to re-open his case, to call expert evidence from Mr Carter. Mr Carter's evidence was contained in a letter of 22 November 2001 to Mr Harmer's solicitors. Mr Carter's opinion was premised on the understanding that the value of Mr Harmer's 100% commuted pension was $402,000, but that he had received only $292,000, with the remaining balance exceeding the RBL limit and thus being forfeited in the fund. I note that this was not an entirely accurate reflection of the circumstances, which were in fact otherwise agreed.

52 Mr Carter gave his opinion about the effects of various provisions of the Income Tax Assessment Act 1936 (Cth) in the 1987/8 tax year, as well as the RBL guidelines, which had a history going back to 1970. He acknowledged that 'were the trustee of a superannuation fund to pay benefits to a member in excess of the stipulated amount then the exempt taxation status of the fund could be endangered'. He, however, also dealt with the availability, since 1970, of s121DAB funds, to house excessive benefits, where they could then be taxed on a different basis. He also dealt with the possibility of ex gratia payments being made by Caltex, reflecting the amount of foregone excess benefits, not subject to the benefits limits applying to superannuation benefits, so long as such payments were made in 'good faith'.

53 Mr Carter was cross examined as to the nature of a defined benefit fund. It was suggested to him, that given the nature of the Plan rules, there had been no forfeiture of any entitlement by Mr Harmer when he commutated his pension. Mr Carter accepted that this was another way of characterising what had occurred. Mr Carter's evidence was that in 1987, Caltex could have lawfully established a fund to receive Mr Harmer's excess benefit, without jeopardy to the Plan's tax status, had it chosen to do so. This was consistent with evidence that such funds had been established by other employers at that time, as Mr Jean had then advised Mr Harmer. Mr Carter was also cross examined as to his construction of s121DAB. He spoke of his experience of that section having been used as practical way to deliver excess benefits to employees. He agreed that there was a technical possibility that the Commissioner could use s26AFA in relation to such a fund, but he had not seen that in practice. On his evidence, the effect of that approach would have been upon the taxation of the money in the hands of the member, it then being taxed at the marginal rate, rather than at a reduced rate.

54 Mr Bucknall was recalled to deal with Mr Carter's evidence. He disagreed that Mr Harmer had forfeited any of his entitlements from the Plan upon termination of his employment. He confirmed that Mr Harmer had not sought any ex gratia payments from Caltex at the time of his retirement. Nor had that possibility been discussed with the Tax Office. Mr Bucknall explained that such an approach would have been raised with the Tax Office before implementation. Caltex had done this when making other ex gratia payments to employees, such as redundancy payments and topping up pension rights. Caltex had also earlier advised the Commissioner that it did not provide golden handshakes to executives. In Mr Bucknall's view, a change in this position would have required advice to the Tax Office.

55 Mr Bucknall was cross examined as to his recollection of his conversation with Mr Hoctor and why it had not been included in his original affidavit. He explained that it had to do with the lapse of time, the tyranny of distance, (he now lives in Queensland) and trying to keep his affidavit short and to the point. He agreed that he was aware of the existence of excess benefit funds at the time Mr Harmer raised them, but explained that in his experience they had nothing to do with pension schemes, they applied in his history entirely to accumulation funds. He also explained that as a trustee of the Plan, he would not have risked a fund of the magnitude of the Plan, on a legal opinion such as Mr Carter's, that an excess benefit fund would be a benefit. His recollection was that it was Mr McTaggart who had obtained legal advice.

56 Mr Bucknall was also cross examined on the question of conflict and acknowledged his various obligations as a trustee and as a director of Caltex. He did not regard himself to be in a position of conflict, but to have a variety of obligations, which he had to meet and manage. He agreed that when speaking to the Tax Commissioner about the superannuation fund he was representing two interests, those of the members of the Plan, but also that of Caltex. His evidence was that he was always conscious that the company's contributions had to be protected.

57 He also vehemently denied that in accepting Mr Hoctor's opinion that an excess benefit fund was 'not on' for Mr Harmer, he was in truth acting in favour of Caltex, rather than Mr Harmer. Mr Bucknall's position was that it didn't matter whether he agreed with Mr Hoctor's view or not, he had no basis of appeal from Mr Hoctor's decision.

58 The case advanced directed attention to what steps were taken by Caltex and the trustees in relation to the establishment of an excess benefit fund. It was here that the delay in initiating these proceedings had an impact upon the evidence. It must be accepted that the delay impeded the respondent's defence of the claim. Mr McTaggart, who was closely involved in Caltex's consideration of these matters and in discussions with Mr Harmer and Mr Bucknall about the claim which Mr Harmer was then pressing, both as a member of Caltex's board and as a trustee, has died. It was he who asked Mr Bucknall to meet with officers of the Tax Commissioner in Canberra, after Caltex was provided with a copy of the letter of May 1987 from Mr Jean. Mr Bucknall did so. He gave evidence as to his recollection of his discussion with Mr Hoctor about Caltex's correspondence to the Tax Commissioner about the topic of excess benefit funds. That evidence must be accepted. There was no basis upon which it could properly have been rejected, but for the effects of the lapse of time between the events in question and the hearing.

59 There appears to have been no written confirmation to Caltex of Mr Hoctor's advice, given in conference to Mr Bucknall. There was no evidence as to what discussions Mr Bucknall had with Mr McTaggart about this meeting or Caltex's consideration of the approach which it would take as a result. Mr Bucknall's recollection of Mr Hoctor's advice was, however, consistent with the approach which Caltex thereafter adopted, in not establishing an excess benefit fund, making no payment to Mr Harmer in relation to the excess benefit, later denying Mr Harmer's claim that it had promised him to further investigate how such a payment could be made to him and denying that he had any entitlement to the payment of the excess benefit which he claimed, either from it, the Plan or later from the new fund. Mr Bucknall was also cross examined as to whether expert advice had been sought about the excess benefit fund. He understood that it was Mr McTaggart who had obtained such advice.

60 Mr Bucknall retired shortly after his discussions with Mr Hoctor in July 1987 and was not involved in further discussions between Mr Harmer and Mr McTaggart, about the payments to be made to Mr Harmer from the Plan on his retirement in September.

61 What was said in Mr Harmer's discussions with Mr McTaggart about these matters, is also open to some speculation. Mr Harmer gave no evidence about what was said. Caltex's decision not to establish an excess benefit fund, does not appear to have been conveyed to him in writing. On his retirement, he understood it was still being considered. Nevertheless, he did then understand that the excess benefit was not going to be paid to him out of the Plan. It was for this reason that he was wanting to preserve the possibility that changes in the tax laws in future, might enable him to claim payment of that sum from the Plan. There was no reference in the correspondence to the possibility of Caltex establishing an excess benefit fund in Mr Harmer's favour, although it was a possibility touched upon in the discussions between Mr Hentze and Mr Colvin, in relation to the terms of the release.

62 Mr Harmer's evidence was that his decision to retire, notwithstanding his concerns about his excess benefit if he elected 100% commutation, was influenced by a number of factors. These included that he would not progress further with the company, that his continuing contributions of 5.2% of salary were not going to be reflected in increased superannuation payments and indeed, that his contributions over the preceding 10 to 12 years had been a waste, given the RBL guidelines. He made his decision as to 100% commutation, because he believed that investment of a lump sum payment would be a better investment for his future, than continued employment with Caltex.

63 On Mr Harmer's evidence he understood that other retiring employees requesting 100% commutation of their pensions were being required to provide the Plan with a complete release from further claims, as a part of the application for 100% commutation. It was that requirement which led to negotiations about the terms of the release required by the trustees.

64 Mr Harmer obtained a copy of the commutation request and declined to provide the required release, because he was not prepared to relinquish the possibility that he could later recover the excess benefit from the Plan. He submitted an amended form of release, which provided an exemption in relation to a further claim 'authorised by the Australian Taxation Office and then only in relation to the sum of $103,119 and all accumulated interest'. This was not acceptable to the trustees. This led to a meeting with Mr McTaggart and Mr Hentze, when a letter from the trustees was given to Mr Harmer, advising him that the trustees could only make the payment due to him in accordance with the rules of the Plan and that they could not undertake to pay the excess benefit to him, if the RBL guidelines altered in the future.

65 Despite the otherwise cordial circumstances surrounding Mr Harmer's retirement, including personal thanks from the then Chairman and Chief Executive for his many contributions to Caltex, Mr Harmer and the trustees had reached an impasse. This plainly affected Mr Harmer, whose evidence was that he felt devastated at the treatment he then received. Relationships between he and Mr McTaggart may well have deteriorated as a result. When he sought to inspect the trust deed and rules, he was given access to them, but was declined a copy. He retired without any request for commutation in acceptable terms having been signed by he and his wife and no commutation of his pension. Correspondence and discussions between his solicitor and Mr Hentze then ensued, to the point where agreement on terms was reached.

66 Mr Harmer's evidence was that when he then sought to obtain advice about his position, he was hampered, because Caltex declined to provide him with a copy of the Plan trust deed and rules. Arrangements to inspect these documents were made, but this was a fruitless process from his point of view, given the state of those documents, which had been the subject of many amendments over the years. There was no explanation of this refusal at the hearing and indeed, it seems to have been a most unfortunate approach in the circumstances.

67 As earlier noted, the witnesses' recollection of the events in question had obviously been affected by the lapse of time. This did not only affect Mr Bucknall. Mr Murphy's evidence was that the trustees had received various advice from specialist consultants such as AMP and Mercer Towers Perrin, during 1986 to 1990, a period of rapid change in relation to superannuation. He recollected that similar changes were occurring elsewhere in industry at that time. 100% commutation was introduced after such expert advice was received. He could not recollect the details of that advice, given the number of years which had elapsed in the meantime, but was adamant that the position of excess benefits was one of the matters about which advice was received This was consistent with Mr McTaggart's letter to Mr Harmer in 1986. Whether any such advice was given in writing was not clear. None was in evidence.

68 Mr Murphy could not recollect legal advice being sought by the trustees about Mr Harmer's particular circumstances, perhaps not surprisingly, given that a number of other employees were in a similar position and a petition from some 60 employees had been received, which had been the subject of meetings and discussions between representatives of Caltex, the trustees and the employees.

69 Mr Murphy could recollect the controversy surrounding lump sum payments for long serving individuals like Mr Harmer and that there was considerable discussion amongst the trustees about the issue. His recollection was that the trustees came to the view that they had to act in the interests of the fund and all members and in accordance with the Plan rules, so as to protect the benefits for all, rather than trying to accommodate individuals and thereby creating precedents. He, however, had no detailed recollection of the particular meetings of the trustees, where these matters were discussed. Mr Murphy described the trustees approach as 'conservative', aimed at protecting the Plan assets for the benefit of all members. He also recollected that Caltex's capacity to pay through its contributions was always a consideration when superannuation matters were discussed. In cross examination he explained that the trustees were anxious to act in the interests of the members and that these matters required a good deal of discussion, but the view which the trustees reached was that excess benefits could not be paid out of the Plan, if it was to retain its tax status, in the interests of all of the members. Mr Murphy agreed that the trustees took no different view, up until the time of Mr Harmer's retirement.

70 At the time of the decision, Mr Murphy also agreed that the trustees had actuarial advice that the Plan's assets covered member's current entitlements and that it would not require support from Caltex, for a period of about 7 years. He agreed also that the practical effect of the Government introduced RBL guidelines, was to reduce the contributions from Caltex necessary to fund benefits from the Plan and that the introduction of tax on employer contributions had pushed up the normal contribution rate. In cross examination he also agreed that to the extent that excess benefits remained in the fund, it was strengthened and to that extent, the contribution holiday Caltex was receiving might have been extended. Mr Murphy explained that this, however, was not the prime motivation for the trustees' decisions. They were rather motivated by a desire not to jeopardise the tax exempt status of the Plan as a whole, for the benefit of the members.

71 Mr Babbage was a trustee of the Plan at various times between 1973 and his retirement in September 1987 at age 63, he having determined that the optimum time for him to retire had become 62, following upon the introduction of 100% commutation. This flowed from his position in the company and its inability to offer him terms which made his continued employment attractive. Given his age at retirement, the RBL limits had little personal effect upon him, excess benefits in his case were not a large amount. He had little recollection of Mr Harmer's circumstances and could not recollect discussions amongst the trustees about his particular position. He did recollect that Caltex regularly participated in national surveys on salaries and benefits and that the advice the trustees received was that the Plan was competitive. In cross examination he explained that Caltex also kept a watch on worldwide trends, because some of its schemes operated worldwide. He had a vague recollection of the steps taken to obtain the Commissioner's approval to permit 100% commutation of pensions. This was desired to keep the Plan competitive in a market where changes were rapid, including through Government initiative.

72 In cross examination Mr Babbage explained that he had worked with Mr Harmer for many years. He thought that the trustees could simply have responded to Mr Harmer's claims with the 'rules are the rules', he seeing it as the trustees' responsibility to apply them, but they in fact had made representations to try and help his situation. Mr Babbage was asked to consider whether, if it could have been done legally, he would have regarded it as appropriate for the trustees to facilitate the payment of the excess benefit to Mr Harmer. He took the view that the trustees would have required advice about this.

73 Mr Babbage was also cross examined about a conflict in his position as a trustee of the Plan and as a director of Caltex. He disagreed, although he accepted that as a trustee he had to consider making decisions which affected him personally, given his own membership of the Plan. He illustrated his point by explaining how adherence to the rules of the Plan in the case of Mr Harmer, led to a result which was of benefit to Caltex, given its obligation to fund the Plan, but in other cases such adherence was to its detriment. As a trustee he sought to apply the rules, whatever the circumstances.

74 Mr Babbage was sympathetic to Mr Harmer's complaints, but regarded himself as bound by the Plan rules and rulings of the Tax Office, which restricted the payment which could be made to him. Mr Babbage recollected that approaches were made to the Commissioner after Mr Harmer's complaints, in which he was not involved. He understood that the Commissioner's view was that he would not waive 'the seven times rule'. This was a reference to that part of the RBL formula which determined an individual member's excess benefit, by reference to seven times their annual salary, a matter about which Mr Harmer was complaining in the various representations which he made.

75 It was Mr Hentze's evidence that the Human Resources department administered superannuation matters at Caltex, under Mr McTaggart's control and he provided advice about such matters from time to time. Mr Hentze gave advice in relation to the need for Mr Harmer to give a release when commuting his pension and was involved in the negotiations with Mr Colvin about the terms of the release. He recollected that his instructions from the trustees came from Mr McTaggart, but had little independent recollection of what had occurred. He had been given access to what he believed was his old file, which had been located, but he was uncertain whether it was complete.

76 Ms Waters gave evidence of the searches made for Caltex's old files and the difficulties encountered, given the lapse of time, the merger of various Caltex operations with those of Ampol Limited in 1995, a relocation in 1996 and the outsourcing of administration of superannuation matters to William M Mercer Pty Limited. On her evidence, she had been unable to retrieve some files which appeared to exist, from the relevant records.

77 Mr Hentze had kept notes of various conversations with Mr Colvin. In the initial conversation Mr Colvin suggested that Mr Harmer was entitled to $400,000 out of the plan, but that the trustees would only pay $300,000, because of the RBL guidelines. Mr Hentze corrected this, by telling him that Mr Harmer was only entitled to $300,000 because of the Plan rules, which precluded the trustees paying more than the Commissioner's guidelines and that "I understand that Harmer wants to try to preserve his $100,000 if the rules change and on my understanding the Trustees have no beef with that." Reference was made by Mr Colvin to an excess benefit fund and Mr Hentze accepted that this would be 'within the meaning of my phrase if the rules change'. He emphasised, however, that Mr Harmer was then entitled $300,000 not $400,000 and if he sought 100% commutation of his pension, he and his wife had to waive their entitlement to a pension, because there would be nothing left in the Plan to fund it.

78 Mr Hentze was cross examined as to his understanding of the trustees' position. He expressed the view that he was confident that if the Plan rules had permitted paying the additional $100,000 to Mr Harmer at the time, the trustees would have paid it to him. They paid him what they were empowered to pay him.

79 Mr Colvin proposed a release which included the words "I note that the trustees will use their best endeavours to explore any possible means by which the Residual Amount plus earnings may be made available to me. I note than I will be informed of any progress in this regard. The 'Residual Amount', was identified to be the excess benefit in question. On 16 September Mr Hentze informed Mr Colvin that the trustees could under no circumstances give Mr Harmer such an undertaking, nor would they discuss with him what their future course of action might be. All they undertook was to inform him if he 'becomes entitled to the Residual Amount, or a pension based on the Residual Amount, or to some other future benefit'.

80 In other correspondence Mr Hentze noted that the trustees understood Mr Harmer's anxiety to preserve whatever future rights he might have. It was noted that in the 'hypothetical event that the Australian Taxation office increases the maximum benefits payable as a lump sum from Superannuation schemes and permits retrospective adjustments and the trustees agree to such retrospective adjustments, Mr Harmer may become eligible for future benefits from the plan'. The trustees could however not determine what such benefits might be, at that time.

81 Agreement on the terms of the release was reached and the release signed on 18 September.

82 Mr Hentze explained that he had later reviewed his file in relation to Mr Harmer in 1990, which had then led to a written rejection by Caltex of Mr Harmer's claim. He had also advised Mr Murphy in 1991, that in his opinion Mr Harmer then had no right to make any claims against Caltex or the Plan and hence, the claim then advanced was rejected. Caltex had also obtained counsel's advice, which led to a letter of 14 January 1991, rejecting the claim and indicating that any litigation would be defended. The parties' respective cases 83 The case as opened for Mr Harmer by Mr Fernon of counsel, went to the unfairness of Caltex failing to take steps available to it prior to Mr Harmer's retirement in 1987, to ensure that he received the benefit of his excess benefit or to do so later, when the tax rules altered. Complaint was also made about the conduct of the individual respondents who were both trustees of the Plan and officers of Caltex. It was argued that they were in a position of conflict and had failed to act in the interests of members such as Mr Harmer.

84 In closing it was submitted that the evidence had demonstrated that the rules of the Plan had been amended in order to reflect the RBL tax ruling, in order to facilitate the tax status of the fund. The unfair result of this approach was that the excess benefit was not paid to Mr Harmer. He was a long serving employee of Caltex. Mr Carter's evidence demonstrated that despite the RBL guidelines, steps could then have been taken by Caltex to pay the excess benefit to Mr Harmer, to establish an excess benefits fund. The fact that the Plan was a defined benefits fund would not have precluded this. While Mr Bucknall had a different understanding, he was no tax expert. Advice was readily available, but Caltex had not sought to obtain it. It was thus clear that the rules of the Plan had operated unfairly for Mr Harmer.

85 It was further submitted that the evidence suggested that the trustees had no real problem with paying the money to Mr Harmer, but for these RBL rules. Despite this, there was neither proper investigation, nor agitation, of Mr Harmer's position by the individual trustees. It was not alleged that there was any conspiracy to deprive Mr Harmer of his entitlements. Rather, each individual trustee had an obligation to Mr Harmer as a member of the Plan and the conflict between that position and the obligations flowing upon those individuals as directors of Caltex, placed them into a position of conflict.

86 The evidence showed little delineation between Caltex and the operation of the Plan. Mr Bucknall's evidence as to the different approaches he adopted when dealing with the Tax Commissioner on behalf of Caltex, as opposed to the Plan demonstrated this. When wearing his Caltex hat, assistance was sought from tax counsel, in order that the interests of the company could be pursued, but not when it was the interests of the Plan being discussed.

87 Mr Bucknall's evidence of his discussion with Mr Hoctor, about the possibility of an excess benefit fund, demonstrated that as Caltex's fiscal director, he was opposed to such a payment being made. Caltex's policy was that there should not be any golden handshakes. While Mr Bucknall said that he did not wish to take any step which would risk the Plan, the trustees had no written legal advice about the establishment of an excess benefit fund. Nor did Caltex.

88 It was relevant to note that this decision benefited Caltex at a time when it was receiving a contribution holiday from the Plan, which was in surplus. That was to be compared with the detriment flowing to Mr Harmer, who was deprived of his excess benefit, amounting to about 1/4 of his superannuation entitlements.

89 It was submitted that these circumstances could be distinguished from those considered in Smith v Craig Mostyn & Co. Pty Ltd (1984) 8 IR 344, because Mr Harmer was not seeking to change his entitlements or to make comparisons with other funds. The only reason the benefit in question was not paid to him, was as the result of the tax rules, which had effect because the individual trustees were in a position of conflict and did not pursue available steps which would have ensured payment to Mr Harmer.

90 Had the trustees been independent, having learned from the Tax Commissioner that other employers had established excess benefit funds for such circumstances, they should have investigated how such funds operated, rather than just accepting the Commissioner's ruling, as given by Mr Hoctor. It was accepted that any investigation would have required action by Caltex to establish another fund. It was the failure to take such action, which here established the relevant unfairness. Mr Harmer required the co-operation of Caltex and the trustees to obtain the benefit, which was unfairly withheld, to Caltex's benefit and Mr Harmer's detriment.

91 As to the 6th respondent, it was plain on the authorities such as Ace Business Brokers Pty Ltd v Phillips-Treby (2000) 100 IR 420, that orders could be made against it. Such orders were appropriate, as were the orders sought against the individual trustees, given that the trust itself could not be sued.

92 The case opened by Mr Murphy of counsel for the individual respondents, was that the Plan in question was not one where individual members had an increasing amount held in trust to their account. It was a defined benefit fund and the trustees were obliged to ensure that there were sufficient funds in order to meet the Plan's liabilities from time to time. On the evidence, the contributions required from Caltex from time to time, in order that the Plan could meet its obligations, ranged from 19% of its salary bill to nothing. This was impacted by a variety of factors, such as member's decisions and investment performance.

93 The discount amount introduced in 1986, for taking a pension on retirement below age 65 was 2.5%. It had earlier been 3% and in earlier times 6%. These changes had not just reflected tax changes, but also improvements in the Plan benefits for members. The commutation scale for 100% conversion to a lump sum, was 12.1% at age 55 down to 9.3% at normal retirement at age 65. There was no allegation of unfairness about these aspects of calculation of the lump sum, rather the concern arose in relation to the RBL limit of 7 times annual salary payable on normal retirement at age 65. It was the 2.5% deduction on that amount, which gave rise to the excess benefit here in issue.

94 The individual trustees were bound by the rules of the Plan in relation to these matters. While they were senior officers of Caltex, the claim was advanced against them in their capacity as trustees of the Plan The rules of the Plan, however, did not permit them to pay anything from the Plan, other than in accordance with the Rules. They had no power to establish an alternate fund or to make payments into such a fund, so as to avoid the effect of the Tax rulings. Nor did they have power to amend the rules of the Plan, which required decisions of both Caltex and all of the Plan trustees. While the three individual respondents were members of the board of Caltex, there were 8 other members of that board, who would been involved in such a decision. Only the board of Caltex could have determined to establish another fund.

95 It was also relevant that at the time of complaint about steps taken in 1995, none of the respondents were trustees and the Plan had long been wound up.

96 In final submissions it was argued that the case against the individual trustees was entirely misconceived from the outset, they having been selected as respondents only because they were trustees at a particular point in time. They were also members of the board of Caltex, but only ever formed a minority of the 12 directors. The relief sought in the summons was impossible for the individual respondents to provide, nor had it been pursued with them before the proceedings were initiated. It was also relevant that in the case of the 2nd and 3rd respondents, the complaints as to their conduct even post-dated their retirement as trustees.

97 Before the summons was lodged 1998, the trust in question had been wound up. None of the individual respondents remained trustees after 1991. Even if the proceedings had been commenced earlier, the relief sought against them could not have been granted, because as trustees of the Plan they could only make payments in accordance with its rules. The payment here claimed could not be so made and would require a breach of trust on their part.

98 The fund in question was established to provide a pension for members, with a reversion to their families. The introduction, initially of 50% commutation and later 100%, when the tax rules permitted this, could not have made such a fund unfair. It thereby could only have become fairer, providing members with additional options, which they were never obliged to adopt. The complaint in relation to deprivation of excess benefit was the result of Mr Harmer's decision to retire 10 years before normal retirement age, with the consequences which flowed from that decision under the Plan rules, which were then known to him.

99 The real complaint against the individual respondents was that as trustees, they had not advocated on Mr Harmer's behalf, for an improvement in his benefits. This was put in 2001, when it was also argued that there were no records of advice having been sought by the trustees from experts in 1987, to assist in the pursuit of such improvements. Such complaints would not be accepted, because it would permit the applicant an unconscionable benefit from his unexplained delay in initiation of these proceedings.

100 In any event, the evidence did not demonstrate inactivity by the trustees, but the contrary. Mr Harmer's position would have been improved, had the Tax Commissioner accepted a reduction in normal retirement age at 60, rather than 65. The trustees pursued this, but it was rejected, the Commissioner having a discretion as to that matter. Mr Harmer then agitated his position further with the Commission and received a similar response in relation to that matter. Given what was put by Mr Jean in relation to excess benefit funds, however, Mr Bucknall saw Mr Hoctor for a second time, on Mr Harmer's behalf. Mr Hoctor confirmed however, that an excess benefit fund was 'not on' at Caltex, the matter being discussed in the very context of the correspondence which Mr Harmer had received from Mr Jean, as to such a possibility. Rather than no advocacy on Mr Harmer's behalf, there was vigorous advocacy, when the trustees already had legal advice that further pursuit of the matter could be counterproductive. Some 14 years after the event, it could not be fairly said that Mr Bucknall was half hearted in his discussions with Mr Hoctor, as the result of any conflict. Nothing supported that conclusion. Mr Bucknall was only in Canberra to pursue Mr Harmer's interests. Acceptance of the umpire's decision could not provide a fair basis for criticism of he or the other trustees.

101 There was also evidence that Mr McTaggart was in discussions with tax lawyers about the very issue at that time. The detail of that advice was now not known. In 2001, Mr Carter said in his opinion, an excess benefit fund could have been established in 1987. The Tax Commissioner had refused to approve it. The trustees could not now be criticised for having acted in accordance with that decision. It would have been a breach of their duties as trustees to have acted inconsistently with it.

102 There were various other submissions developed in relation to Mr Carter's evidence which I do not canvass.

103 The case opened for Caltex and the 6th respondent, the trustee of the new fund by Mr Hatcher of counsel, was that the evidence led by Mr Harmer did not suggest that the new fund had any involvement at all in any of the matters complained of, or any impropriety on its part. It received some of the funds of the Plan when it was wound up by its beneficiaries and continued to provide benefits to continuing members, in accordance with the relevant deed. There was nothing which the new fund could or should have done in relation to Mr Harmer's claims, having regard to the terms of the deed which bound its operation. It held no funds on behalf of Mr Harmer and no claims had ever been made against it, except as dealt with in the Federal Court proceedings, where Mr Harmer failed. It was not suggested that the terms of the deed of the new fund would permit any payment to be made by it in favour of Mr Harmer.

104 In final submissions, it was argued that the case advanced by the applicant at the hearing was that it was Caltex which had received the benefit of Mr Harmer's excess benefit. It followed, in those circumstances, that no connection had been established between the claim and the 6th respondent. The applicant had failed to address any part of his case against the 6th respondent and so the claim against it must be dismissed with an order for costs, on an indemnity basis.

105 As to Caltex, the evidence demonstrated that the benefits it provided to its employees under the Plan were both generous and fair. The approach of Watson J in Craig Mostyn at 349, was relied upon. The Plan was one which until 1986 did not allow any departure from the provision of a pension, other than 50% commutation. In those circumstances, how could it be that by then introducing 100% commutation, in accordance with the applicable tax regime, the Plan became unfair? The question of fairness had to be determined as at the relevant time in 1987, when Mr Harmer retired. The question did not arise in 2001, simply given the intervening delay in initiation of the proceedings.

106 The evidence demonstrated that at the relevant time, the options available to Mr Harmer were spelled out to him and he understood them. Inherent in the claim was that the consequence of his selection of 100% commutation, was some unjust enrichment by Caltex. The claim could not be made out, because there was nothing unjust in an employer complying with its tax obligations. Nor could enrichment be established. The actuarial material showed that the Plan was supported by Caltex on the basis that members would take the most advantageous payment from the scheme - the 50% commutation/50% pension option. A member who chose a less advantageous benefit, 'voluntarily left money in the fund' on termination of membership.

107 On even simple mathematics, in relation to a final average salary of $59,000, 5% contributions over 40 years amounted to $120,000. Payment from the Plan funded by Caltex was substantially more than this - $310,000, as the result of the various elections which Mr Harmer made, including declining the opportunity after 1986, to continue in employment and to transfer to the non-contributory superannuation fund and electing rather to retire at age 55, with 100% commutation, rather than 50% or a full pension. That payment could be contrasted with the scheme in Craig Mostyn, where an employee, who on resignation received, his own contributions, plus interest from the fund in question, which was accepted as fair.

108 In final submissions it was put that the claim that the trustees of the Plan should have advocated in favour of Mr Harmer, with Caltex and the Tax Commissioner, would have put them into the position of acting contrary to their duties as trustees. They were obliged to give effect to the terms of the trust. To do anything else would have involved a breach of their duties.

109 On the evidence, the individual trustees and board members of Caltex, were of similar age and had similar service as employees with Caltex. The evidence showed that until Mr Harmer threatened litigation, there were friendly relations between the parties. The case advanced for the applicant was not that the rules of the Plan which the trustees were obliged to obey were unfair, but rather that the trustees, because of their other duties as directors of Caltex, were in a position of conflict.

110 There were many cases where trustees in such a position had been found not to have properly exercised discretions vested in them. That complaint was not made here, because Mr Harmer was given all of his entitlements under the rules. No exercise of any discretion arose.

111 The Plan provided for 50% commutation. The trustees and Caltex approached the Commissioner, seeking the introduction of 100% commutation. The Commissioner agreed, so long as no more than the RBL flowed to a member retiring on such a basis. The Plan rules were amended to reflect this, giving the trustees no discretion in that matter, consistently with the Income Tax Assessment Act 1997 (Cth) . The Court had no jurisdiction in this case to overcome the effects of the Income Tax Assessment Act 1997 (Cth), even if the view were taken that the effects of that legislation were unfair.

112 As to the complaints about the contribution holiday which Caltex enjoyed, this was a possibility which always arose in a scheme which required an employer to fund any shortfall in a defined benefit plan. On the evidence, at one point, that obligation necessitated contributions by Caltex at the level of 19% of salary, at other times no contributions were required. Of itself, this demonstrated that the submission that the result of Mr Harmer's election of 100% commutation was a windfall for Caltex, was wrong.

113 This was also demonstrated by the fact that the only superannuation fund which Caltex had ever agreed to fund was a scheme which provided for a 100% commutation option, on the basis that members were entitled to no more than what flowed from the RBL guidelines. Caltex then funded that scheme on the basis of actuarial advice it received as to its future liability. That advice was that the most expensive option for Caltex was if employees selected 50% commutation. This was funded. Employees like Mr Harmer nevertheless selected an option which cost Caltex less. Having done so, should he and others who had made a similar selection, be fairly entitled, many years later, to come back to this Court to ask Caltex to pay them more?

114 It was argued to be a fact of life that individuals were adversely affected by tax rulings from time to time. Redressing such ills might provide a never ending source of work for this Court under the section, had it the jurisdiction to entertain such claims. It did not. The same approach would here be taken to that taken in New South Wales Rugby League Limited & Anor v Allen & Anor (1998) 83 IR 397, where it was held that it was not role of the Court under the section, to overcome the effects of such legislation.

115 In reply it was put for Mr Harmer that this was no part of the case advanced by the applicant. What was claimed was available under the tax legislation in question. It was the fairness of the failure to take advantage of that possibility which was raised.

116 As to the individual respondents, it was conceded that the relief claimed in the summons, that they pay or cause another entity to pay the sum claimed to the applicant, would require modification to the trust fund deed or rules, to permit such payment to be made. It was accepted that technically, such relief might require amendment of the summons, formal relief for which was then sought if it became necessary. It was accepted that were this late application to be entertained, the respondents would be entitled to be heard as to it.

117 It was emphasised that all that Mr Harmer claimed could have flowed, had Caltex and the trustees together taken action. Mr Carter's evidence that establishment of an excess benefit fund, under the relevant legislation, would not have been precluded in the case of a defined benefit fund would be accepted. It was known well at the time that the concept of such a fund had existed since 1970. The legislation drew no distinction between defined and excess benefit funds. His evidence should be accepted.

118 It would also be accepted that no advice or consideration was given by the respondents to Mr Harmer's representations, because if there had been, the outcome would have been different for him. The answer was not hard to find. As to Mr Bucknall's meeting with Mr Hoctor, if it occurred as he recollected it, it demonstrated that the trustee's position favoured Caltex. As to delay, no prejudice had been demonstrated on the part of the respondents. No submissions were advanced as to the deficiency of the documents discovered by the respondent's searches. Evidence of prejudice was here so scant as to warrant no consideration by the Court.

119 As to Craig Mostyn, it was submitted that comparisons were what much of the jurisdiction under the section was concerned with and that decision provided no bar to the relief here sought.

120 The conduct of Caltex after Mr Harmer's resignation was also relevant. It was relevant that it was not until after he was able to obtain a copy the trust fund deed and rules as the result of the Federal Court proceedings, that he was in a position to understand the whole position in which he had been placed.

Consideration 121 It is convenient to deal at the outset with the 6th respondent, joined by order made in the interlocutory judgment of 16 June 2000. There I concluded that joinder should be ordered notwithstanding the obvious difficulties which lay in the path of the applicant succeeding against the new fund, of which Mr Harmer had never been a member, which was not in existence at the time of the events in question and which it was not suggested was culpably associated with them.

122 Given the case advanced at the hearing, that it was Caltex, rather than members of the new fund, which had the benefit of the applicant's unfair deprivation of the excess benefit in question, I am satisfied that no case was made out against the 6th respondent. It follows that the claim against it must be dismissed, with an order for costs in its favour. 123 The same conclusion flows in relation to the individual respondents, each a trustee at one time of the Plan and also a member of the board of Caltex. The basis upon which orders might be made against persons not party to the contract attacked under the section, has oft been discussed. See for instance Brown v Rezitis (1970) 127 CLR 157 at pp163-166 and more recently Ace Business Brokers Pty Ltd. 124 Here it was the applicant's case that the income tax ruling and the rules of the Plan reflecting the RBL limit, were not in reality an impediment to the excess benefit being paid to Mr Harmer out of the Plan funds. However, it was conceded that in order for such a payment to be made, it was Caltex which had to take steps to establish such an excess benefit fund and to amend the Plan rules, to permit payment of any excess benefit to that fund in respect of Mr Harmer. The rules of the Plan contemplated that they could be altered by resolution of the Board of directors of Caltex and of the trustees of the Plan, at duly constituted meetings. It was argued that all that Mr Harmer was seeking could have been achieved, by the adoption of the necessary resolutions, so as to enable Mr Harmer to receive the full benefit of his superannuation entitlements after 40 years service with Caltex. 125 On the evidence, there can, however, be no certainty that all of the trustees of the Plan at the relevant time, were joined as respondents to these proceedings. Indeed the evidence suggests that they were not. The changes made to the Plan in 1986 introduced two new positions of employee elected trustees. No such trustees were made respondents to these proceedings. Mr Bucknall was certainly not a trustee when Mr Harmer retired and opted for 100% commutation of his pension. Mr Babbage may not have been a trustee then, it is not possible to be certain. Who, if anyone replaced Mr Bucknall and Mr Babbage as trustees, was not explored. It follows that all of those responsible for the attitude which the trustees of the Plan were taking on Mr Harmer's retirement, are likely not to be before the Court in these proceedings. Undoubtedly this difficulty might flow from the lapse of time between Mr Harmer's resignation and the commencement of the proceedings and resulting difficulties in identification of the individuals concerned. Nevertheless, it is a difficulty which cannot be overlooked and provides a substantial impediment to any orders being made against those individuals who are respondents to these proceedings.

126 It was the submission of the applicant that the evidence demonstrated that the trustees favoured the position of Caltex, over that of Mr Harmer, in relation to the excess benefit he was claiming. I am not convinced that this submission was made out, either in relation to the individual respondents or those who were trustees at the relevant time. What was undisputed was that the trustees were obliged to act in accordance with the rules of the trust and that they did so, in the payments which were made to Mr Harmer on his retirement, after the terms of the release were agreed. There was also no doubt on the case advanced that he was then paid all that was due to him under the rules of the Plan. The trustees had no discretion to pay him anything else. Nor did the trust deed give the trustees a role in acting as an advocate for Mr Harmer, either in relation to Caltex or the Commissioner of Taxation. Nor was any discretion being exercised by the trustees in respect of the payments made to Mr Harmer on his retirement, in respect of which any conflict could have arisen for the trustees, given their other roles as members of the Caltex board.

127 While some warranted criticism might be directed at the trustees, in relation to the difficulties which Mr Harmer experienced in obtaining a copy of the trust fund deed and rules in 1987, to which he presumably was entitled as a member of the Plan, those difficulties cannot provide a sufficient basis for the claims here advanced against the trustees.

128 It follows that the claims made against the individual trustees must also be dismissed, with an order for costs in their favour.

129 As to Caltex, the position is not so readily disposed of. The Plan was plainly a generous one, given the benefits which flowed to members at the time in question. The evidence demonstrated that Caltex had acted to improve Plan benefits over the years, by taking steps such as improving the pension payments, which were not indexed, introducing commutation options and various other improvements, as well as making other ex gratia payments to employees from time to time.

130 The level of contributions which Caltex was making in 1986, in order to meet its liabilities under the Plan amounted to 19% of its annual salary bill. In a defined benefits fund, the need to make such large contributions may, of course, arise from time to time, given factors over which the employer concerned has no control. They include matters such as the investment performance of the fund assets and payments which the fund is obliged to meet, following upon decisions made by members. Improved benefits, which an employer may agree to from time to time, will also affect the cost of funding such a scheme. Conversely, the factors over which an employer has no control may also operate to the employers' benefit from time to time, by impacting upon the level of contributions which the employer may have to make, in some cases to the point where a contribution holiday is enjoyed. That is what occurred here.

131 There is nothing unfair per se, in a defined benefits fund, as opposed to an accumulation fund. Nor is a contribution holiday for an employer supporting such a fund per se, unfair. There was nothing in any of the evidence about matters of that kind in this case, which could lead to the view that there was anything unfair in the Plan or its operation, which would require relief under the section in these proceedings, so far as Mr Harmer was concerned.

132 That is not to say that Caltex acted in an entirely disinterested fashion. The evidence suggested that it was concerned about the high cost of operation of the Plan and took contribution holidays, in accordance with actuarial advice, when the opportunity arose. Those steps undoubtedly were to the advantage of Caltex and its shareholders, although Mr Jean's advice that the Tax Commissioner required that a fund not hold excess moneys or assets, and that such excesses were required to be returned to the employer, to be taxed, in its hand, cannot be ignored. It is difficult to see how Caltex's contribution holiday operated to the detriment of members, in these circumstances. There was no suggestion that the Plan was ever unable to meet its obligations to members or that any member, even Mr Harmer, ever received anything less than what they were entitled to under the Plan rules. 133 Clearly, members of the Plan could not complain about the approach which Caltex and the trustees of the Plan adopted to funding questions, unless some unfairness was visited upon them as a result. Mr Harmer of course perceived such unfairness in relation to the Plan reflecting the RBL guidelines, raised and pursued that matter, to the point where the agreed release was given, after he obtained legal advice. Finally, over a decade later, these proceedings were brought in pursuit of that complaint. The evidence did not really explain why the proceedings were not brought in a more timely fashion. The complaint pursued at the hearing concerned how the option of 100% commutation of a pension, operated in practice in 1987, as between Mr Harmer and Caltex. I turn to that matter.

134 The evidence was that in 1986, 100% commutation was an improvement in the Plan of considerable interest to a number of employees, including Mr Harmer, who at that time had three other options. They were a non-indexed pension, 50% commutation of such a pension, or membership of another fund entirely, on a non-contributory basis. Caltex had taken advice about 100% commutation and had sought the approval of the Tax Commissioner, before its introduction. Given the size of this fund, (with assets in the order of $100 million) and its obvious importance to the employees of Caltex, such a precaution was plainly a wise one, as Mr Harmer accepted at the time. I am satisfied that risking the tax exempt status of the Plan when introducing a new optional benefit for members, was not in the interests of either Caltex nor its employees. There was nothing unfair in Caltex taking steps to ensure that the introduction of a new benefit did not adversely affect itself or its employees.

135 In fact, in 1986, Caltex sought to improve the Plan in various ways which did not meet the Tax Commissioner's approval, because they involved a departure from the RBL guidelines. This included reducing normal retirement age from 65 to 60 years, which would have been to Mr Harmer's advantage. This was rejected. The Commissioner also insisted that the 100% commutation option comply with the RBL guidelines. Despite this attitude to the new option, the Commissioner nevertheless continued to approve the existing 50% commutation option continuing, which in some respects did not comply with the RBL guidelines. Mr McTaggart's letter to Mr Harmer went into some detail about how these matters were approached by Caltex with the Tax Commissioner. There were two obvious things which can be gleaned from the evidence about the introduction of these changes.

136 The first was that the conflict asserted for Mr Harmer to have faced the trustees when considering the concerns he was expressing, was not the only conflict which potentially arose for them. The trustees respondent to these proceedings were not only trustees and members of the Board of Caltex, but also themselves members of the Plan. That was an obvious potential conflict. Similar potential conflicts would have arisen for other members of the Board, when acting in that capacity, if they too were members of the Plan. In those circumstances, Caltex taking steps to ensure that the tax exempt status of the Plan was not affected by the introduction of improved benefits, would have been of personal concern to all those individuals, as well as being of importance to Caltex. It was plainly also a matter of personal interest to Mr Harmer, as he understood it at the time, as his correspondence then made clear. As I have noted, I am satisfied that no relevant unfairness, so far as Mr Harmer was concerned, was demonstrated to have resulted from the adoption of this approach. On the evidence, the individual respondents were aware of the potential conflicts which faced them, given the various positions and offices which they held, as well as their personal positions. It cannot be concluded that they acted other than in accordance with their obligations as trustees - in accordance with the rules of the Plan to which they were bound to give effect.

137 The second point is that given that it was a company like Caltex, which was the employer of Mr Harmer, it can readily be inferred that in 1986 it could have treated its employees, including Mr Harmer, more generously than it did in relation to superannuation had it wished to do so. It was in fact then endeavouring to introduce more generous superannuation benefits for its employees than the Commissioner was prepared to approve. It was not argued in these proceedings that in 1986, Caltex could not have increased the amount of the pension payments it was funding through the Plan, or that it could not have introduced indexation for pensions, or that it could not have made ex gratia payments to employees adversely affected by changing tax laws. That it did not take such steps is however, not a proper basis for a finding of unfairness of the contract here in question. Section 106, after all, is not concerned with a redistribution of money from those who could better afford to do without it, to those who would be better off with it. The section is concerned with other matters.

138 In this case, this is not an unimportant point. While at the time of his retirement in 1987, Mr Harmer did not suggest that Caltex should make an ex gratia payment to him in the sum of the excess benefit he was concerned about, nor was such a claim advanced in the summons, this possibility was alluded to in the evidence led in Mr Harmer's case. It was Mr Carter's expert evidence given in 2001, that Caltex could have made such a payment to Mr Harmer at the time of his retirement, without risk for the Plan. I am well satisfied that this is not a proper basis for any finding to be made in Mr Harmer's favour in these proceedings, many years after the events in question. In any event, given Mr Bucknall's evidence as to the approval which Caltex sought from the Tax Commissioner at the time in relation to ex gratia payments which it made from time to time, there must be real doubt that this possibility was as 'safe' or free of difficulty, as Mr Carter perceived it to be, given Caltex's particular circumstances.

139 I turn then to the disagreement between Mr Harmer and the trustees of the Plan at the time of his retirement. Mr Harmer was not entitled to payment of the excess benefit here claimed under the Plan rules. He then sought to have the right to later pursue its payment by the trustees, if circumstances changed. He retired from his employment, without agreement being reached about this. Once the terms of the release were agreed, legal advice having been obtained, Mr Harmer commuted his pension by 100% and was then paid all that he was entitled to under the rules of the Plan in the event of that election, by both he and his wife. Mr Harmer thereafter ceased being a member of the Plan, upon the terms of the agreement reached in relation to the release. It will be recollected that the release relevantly provided: I clearly understand in signing this application that no further benefits will be payable to me or my spouse except such benefits as I may be eligible to receive as a result of amendments to the Trust Deed and Rules and the Australian Taxation Commissioner's reasonable benefits guidelines which permit retrospective adjustments to commuted pensions or unless other circumstances prevail which allow the trustees to make such additional payments. I clearly understand that in the event of amendments being made which would permit a further lump sum being paid it is unlikely that the amount would exceed the difference between my entitlement of $310,265.30 and the commutation amount calculated in accordance with the Plan formula of $418,703.50.

140 There was no evidence that any later change in either the rules of the Plan, the applicable tax legislation, the RBL guidelines or any other circumstance gave Mr Harmer a right to payment of the excess benefit by the Plan, of which he was deprived by the trustees or by Caltex. There was no suggestion that the release was ever triggered by any later event, so as to entitle Mr Harmer to the payment now sought in these proceedings - hence the variation of the release sought in the summons.

141 The real complaint, as it became clear at the hearing, was that before Mr Harmer's retirement, Caltex should have taken steps then lawfully available to it, to establish a second superannuation fund, an excess benefit fund, to enable Mr Harmer to become a member of that fund; that Caltex could have also altered the rules of the Plan, so that the trustees had the power to pay the excess benefit out of the funds of the Plan, to that excess benefit fund, so that Mr Harmer would have had the benefit of it; and finally, that those steps would not have jeopardised the position of other members of the Plan. It was Mr Carter's evidence that none of these steps would have put the tax exempt status of the Plan at risk. It was Mr Bucknall's evidence that Mr Hoctor had advised Caltex that such an excess benefit fund was then not available to Caltex.

142 So understood, it became apparent that there were a number of problems with the case advanced. The first was that it was a claim not made in the summons and as conceded by Mr Fernon in reply, would require leave to amend, were it to be pressed at this late stage of the proceedings. The respondents would be entitled to be heard in relation to such an application, which would require consideration of matters such as those discussed by Hungerford J in O'Brien v Australian Native Landscapes Pty Ltd & Ors (2001) 105 IR 409 at 415-418, namely whether at such a late stage of the proceedings, amendment could be permitted, without doing injustice to the other parties. The amendment to the summons as to such relief would have to be formulated and documented and would, on any view, appear to give rise to the need to consider authorities such as Gosper v Sawyer (1984) 160 CLR 548.

143 There the High Court had to consider an application brought under s88F by a former employee of Shell, in relation to the benefits paid to him out of the superannuation fund operated by that company, on his retirement following upon injury in the course of his employment. The Court considered various questions, including whether the trust deed fell within the jurisdiction of the Commission under the predecessor to s106, s88F of the Industrial Arbitration Act 1940. The view of Mason and Deane JJ (at 569), was that it was doubtful that such a claim for variation to a trust deed, so that a member of the superannuation fund would be entitled to receive more from the fund, was a claim in relation to a contract or arrangement relating thereto, rather than a claim in relation to the trust relationship between the fund member and the trustees, by which all other members of the fund were also affected.

144 As I have noted, the crux of the applicant's case was that it was Caltex, not other members of the Plan, who had the benefit of the money sum here claimed. Even were I to conclude that establishment of an excess benefit fund would have been available to Caltex in 1987, thereby making the benefits flowing to Mr Harmer on retirement potentially more generous than the Plan provided, a case that the contract here in question was unfair, as that term is defined in s105 of that Act, must however still be made out. Given the view I have reached on that question, it is unnecessary to consider the question of further amendment of the summons, so late in these proceedings.

145 The fundamental question which falls to be determined in this case turns on the fairness of the payments made to Mr Harmer on his retirement from the Plan, following his election of 100% commutation of his pension, that option having first been introduced for members in 1986, limited in accordance with the RBL guidelines, and incorporated in the Plan rules. The establishment of an excess benefit fund was only, after all, concerned with the receipt of money said to have been unfairly withheld from Mr Harmer; given the basis upon which 100% commutation was then available. I am not convinced that the new option introduced in 1986, made the contract here in question relevantly unfair. Nor can I conclude that any unfairness has been demonstrated in relation to the release negotiated on Mr Harmer's retirement, by his solicitor, when Mr Harmer and his wife elected that option.

146 The evidence was that Caltex operated contributory and non-contributory superannuation funds for its employees. Mr Harmer, like other employees, had flexibility to move between them. He was a member of the contributory pension plan and was attracted to retirement at age 55 with 100% commutation of his pension when that option was introduced in 1986, because it gave him access to a large sum of money, which he could invest on terms which were very attractive to him. This, in his view, would ensure better provision for his retirement than the other available options for retirement - a pension, or 50% commutation of that pension or continuing employment to age 65. Retirement at age 55 also gave him the opportunity to pursue other work - in a consulting business which he had established. Those considerations undoubtedly explained why Mr Harmer was not attracted to continued employment and membership of the non-contributory fund, also available to him, as did his belief that he had few promotional opportunities available with Caltex in the future. That he would wish to maximise his lump sum payout in those circumstances, was entirely understandable.

147 As I have already said, there was no doubt that 100% commutation was introduced by Caltex on a basis which accorded with the applicable tax laws, introduced in order to generally limit the amount of lump sum payments which individuals might receive on retirement at various ages. The reasons for this policy approach were explained to Mr Harmer by Mr Jean, in response to the representations which he made to the Tax Commissioner in early 1987. While the effect of those laws can readily be appreciated as being regarded by Mr Harmer as having worked a real unfairness for him, thereby leading to his pursuit of Caltex, the trustees and the Tax Commissioner to have the rules of the Plan altered, so as to ameliorate that effect, I can find nothing unfair in Caltex ensuring that the superannuation benefits it offered to its employees complied with the applicable tax laws. In coming to that conclusion, I have taken account of the fact that Caltex sought to improve that position for its employees, but the Tax Commissioner refused to approve what was proposed, which involved a departure from the RBL guidelines.

148 Had the RBL guidelines not existed and been reflected in the rules of the Plan, when 100% commutation was introduced in 1986, as the Tax Commissioner always required of Caltex, Mr Harmer would have been entitled to a payment on retirement at age 55 years, $103,000 greater than the payment he was in fact entitled to. Those guidelines however existed when 100% commutation was first introduced by Caltex and were reflected in the rules which introduced that option to members of the Plan, from the outset, as the Tax Commissioner then required. The Plan rules never made provision for any 100% commutation, unaffected by those guidelines. Mr Harmer was thus never deprived of the sum of $103,000, by any action taken by Caltex. He never had any right to such a payment. He only had that right if he elected the 50% commutation option. Rather, he elected the option of 100% commutation, in accordance with the RBL limit, after it became available, having failed in the meantime in his quest to have the rules altered, but having succeeded in having the trustees accept his right to further pursue the matter, if the rules later changed so as to permit such a retrospective adjustment. Unfortunately for Mr Harmer, there was no later change of any benefit to him. Despite the view now expressed by Mr Carter as to the possibility that an excess benefit fund could have been established for Mr Harmer in 1987, he, in fact, never obtained the relevant Tax Office approval for such a course. If Mr Carter's views were correct, it is difficult to see why such approval would not have been forthcoming.

149 Under the terms of the trust deed, Caltex was obliged to fund the Plan on the basis of all options available. The actuarial advice it received was that the most costly option, from its point of view, was if members chose 50% commutation of their pensions. This, no doubt, reflected the fact that the 50% commutation option was one of long standing and had never been subject to the RBL guidelines. In 1986, the Tax Commissioner had agreed to a continuation of that position, when 100% commutation was introduced, but refused any relaxation of the RBL guidelines in respect of that new option. The Commissioner had then also refused to approve an ordinary retirement date of age 60 years rather than 65 years, which would also have benefited those choosing 100% commutation option. A later review on a general community basis was foreshadowed, by the Commissioner. Mr Harmer retired before such a review emerged.

150 50% commutation was nevertheless the basis upon which Caltex funded the Plan. Its later experience proved to be that employees like Mr Harmer, for decisions they each made having regard to their own personal circumstances, preferred 100% commutation, even despite the effect of the RBL limit on the amount they were entitled to receive from the fund. The cost to Caltex of funding the Plan, thus proved to be lower than the most costly option which it had been funding, eventually leading to a funding holiday, following after a period when the cost of funding the Plan had plainly been heavy. I am not convinced that this result, over which Caltex had no control and which it could not influence, was such as to make the contract here in question relevantly unfair. Caltex, after all, was obliged to fund whatever choices employees made in accordance with their rights under the Plan rules.

151 When the RBL guidelines were altered some years later, the decisions which members of the Plan then made about their circumstances were undoubtedly affected. These developments too would have had resulting consequences for the basis upon which Caltex was then obliged to fund the Plan. Eventually a new superannuation fund was established and the members of the Plan resolved to wind it up. While it may have been desirable for Caltex to notify Mr Harmer of this development, he was then not a member of the Plan and had no right to be involved in the decision which the members of the Plan then made about their superannuation fund. Its assets were transferred to the new fund, which continues to provide pensions to continuing members. Again, I can find no relevant unfairness in any of these matters.

152 There is a disagreement between the parties as to whether in the circumstances of the Plan, an excess benefit fund could have been established by Caltex, in Mr Harmer's favour in 1987. Even were I to conclude that this was possible, a claim that it was possible to treat an employee more generously, even if made out, is not a sufficient basis to make out the claimed unfairness.

153 The approach of Watson J in Craig Mostyn, well illustrates this difficulty. His Honour was there considering the position of a senior executive who resigned to take up alternative employment after 30 years service. The superannuation fund was an accumulation fund. Both the employer and employees were free to make contributions, as they saw fit. The employee had not done so, but the employer had. Entitlements of members arose 3 months after retirement, with no vesting beforehand. Early retirement provided for a discount of 5% for each year that the member's age fell short of 65 years (for men). Provision was also made for payment to the employer, of a sum reflecting any payment made by it to the employee for various entitlements, including long service leave. These provisions led to a deduction of some $38,000 from the applicant's accumulated credit of some $61,000. The superannuation arrangement was attacked under s88F of the Industrial Arbitration Act 1940, the predecessor to s106 then in force (and also in 1987, on Mr Harmer's retirement). The attack was pursued on number of bases, including by way of comparisons drawn with other funds.

154 His Honour relevantly concluded at 349 to 350: 'Can it be said, however, that a scheme is unfair or otherwise offends under the section, simply because in the circumstances affecting the applicant, or in its general application, the scheme has deficiencies, or is not as favourable as other more modern schemes? There is no criteria based on some award of superannuation which might provide some comparison as occurs in the case of remuneration under a contract impugned under s.88F(1)(d) or (e). In my view the issue of fairness or other difficulty which might arise in respect of a scheme because of s.88F(1) is not be determined by comparing what might be said to be outmoded "accumulation" superannuation fund with more beneficial "promised benefit" or "defined benefit" funds, so that some norm or principles are established concerning which funds are fair and which are not. Nor do I see how, as a general proposition, it can be said that a scheme of benefits funded by employer contributions, offends against s.88F(1), because the benefits under it may be less favourable when compared with more beneficial schemes. Obviously the forces of the market place determine what employers can and may wish to concede by way of superannuation benefits. The results of those forces, assuming they can provide a test of relevance under s.88F(1), are inconclusive, The applicant is clearly better off than those members of superannuation schemes who, on resignation, receive no benefit at all from employer contributions. A 1980 survey showed that some 31 per cent of private sector schemes were in this category. Such schemes provided no more than a refund of employee contributions with interest on resignation. The applicant is certainly better off also than employees without any scheme at all. The Australian Bureau of Statistics Employment Benefits Survey of August 1983, reveals that only 52 per cent of male employees in the workforce in New South Wales enjoy superannuation benefits. (For females the proportion is much lower.) I do not see the role of the Commission under s.88F, in that context, as one in which it treads a path though a variety of schemes (which are referred to more generally than specifically in the evidence) to find one which may be average or, in some other sense, fair. A result which, in my view, would certainly not be open on any test under the section, would be to impose on the company the scheme it rejected in 1974. Even if the reasons advanced by the company for not accepting the recommendations then made, were to be rejected, as not being fully supported by the evidence, as suggested in argument, I do not see how it could be said to be an appropriate exercise of discretion under s.88F(1) for the Commission to base any finding on the recommended scheme and to impose an alteration (which the company could not have anticipated as being necessary to fund), as a consequence. It would be a result equally claimable by other employees of the company as well as the applicant. It may well be conceivable, as suggested earlier when discussing jurisdiction, that particular conditions in a superannuation scheme, relevant to the circumstances of an individual member, might be so draconian as a condition of entitlement or otherwise, or work such a consequence that they could be said to be so unfair, or harsh or unconscionable or contrary to the public interest that some avoidance or variation might be claimed under s.88F(1). How does that avail the applicant? There was no suggestion that he had not been treated equally with other employees. In fact, because of the arbitrariness of the working of the scheme, he may well have benefited compared with others. He benefited, on the evidence, by the allocation of funds from the reserve fund which resulted form deductions from credits of others leaving the company. He was well ahead of any employee not invited to join the fund. The applicant certainly suffered an extraordinary drastic reduction in the amount standing contingently to his credit in the fund because of the operation of cl.14(ii). He has a genuine complaint that even if the scheme is entirely funded by the employer, it has a bias which pays scant regard to his long service with the company. But, the credit accumulated his case, as with all beneficiaries under the fund, was not vested. Credits being accumulated were contingent on his continuing through to retirement with well defined consequences on leaving employment at an earlier date. They were conditions which presumably the applicant understood, or should have understood, when he joined the scheme and later when he became trustee. They were clearly set out in the printed deed. Reference was made in argument to restraint of trade because of this bias in the scheme. I do not find the argument compelling, however, that a paternalistic scheme which is directed at providing a benefit at normal retirement age and so influencing an employee to retain his employment, is necessarily contrary to the public interest. It was not established that the applicant was paid markedly less by way of salary because some further contingent accumulation was being apportioned by the company. Even if that were so to some extent, there is no evidence to suggest that the salary paid or such reduction as may have resulted, was so unfair that the section should be invoked. Having considered the evidence and the submissions, I am, therefore, of the view that the superannuation fund in this case, considered either generally or specifically as it affects the applicant because of cl.14(ii), is not such that the Commission should embark under s.88F(1) on a voyage into such uncharted waters as those involved in the rewriting of superannuation schemes. Despite obvious criticisms, that apportionment may be arbitrary or that benefits or their vesting do not measure up to the norm or some desirable optimum, the scheme under attack is not part of an arrangement which, in my view, (subject to what is said in relation to long service leave), can be said to offend against s.88F(1).'

155 The considerations exercising his Honour's mind in Craig Mostyn are plainly relevant here. While it was argued that one of the bases upon which s106 operates, was comparisons of differential treatment of individuals, this alone, cannot be the basis for relief under the section. Unfairness has to be demonstrated. In any event, here there was no evidence of any differential treatment, so far as Caltex employees were concerned. The mere fact that other employers had established excess benefit funds for their employees, of itself, is not a basis for a finding of unfairness, in relation to Caltex's refusal to do so. It may undoubtedly have been the case that there were more generous superannuation arrangements that operated in 1987, than that provided by Caltex. Craig Mostyn demonstrates that other superannuation funds operating around that time were less generous and many employees had no access to superannuation at all. The evidence as to such matters in this case, does not provide a basis for a finding of unfairness.

156 As I have noted, there was evidence that other employers had established excess benefit funds at the time in question. Mr Harmer had drawn this to Caltex's attention. The Tax Office, too, was aware of such arrangements, as Mr Jean's letter noted. There was, however, no evidence led in these proceedings as to the particular circumstances of those arrangements or what attitude the Tax Commissioner took to particular arrangements that came to his attention. Mr Carter's opinion was that at the time, such a scheme could have been established by Caltex in Mr Harmer's favour, consistently with the law and without jeopardy to the tax position of the Plan, even though the Plan was a defined benefit fund and not an accumulation fund. Mr Bucknall had a different understanding.

157 Mr McTaggart's correspondence to Mr Harmer demonstrated that in 1986 when Caltex had considered the introduction of 100% commutation, it was aware of the effect of the RBL guidelines for employees like Mr Harmer, had taken advice about the matter and had sought to ameliorate those effects in the discussions it pursued with the Tax Office, but to no avail. Its advice was that further pursuit of the matter with the Tax Office could be counterproductive for the Plan, but Mr McTaggart promised that the directors would take advantage of 'any opportunity that presents itself to improve on the current situation'. The decision to go ahead to introduce the 100% commutation option was made because it had no adverse impact upon most members and those who were affected by the RBL limits, like Mr Harmer, still retained the right to access the two existing options - a pension or 50% commutation, not affected by the RBL limitation.

158 Later, Mr Harmer raised his difficulty direct with the Tax Commissioner, describing his circumstances as flowing from a combination of the effect of the 65 year retiring age, the 7 times final average salary rule and the 2.5% per year early retirement penalty. In responding, Mr Jean explained that 'the income tax law does not offer unlimited concessions to superannuation arrangements.' He explained the policy basis of the excess benefit guidelines and that any resulting excess, under fund rules, belonged to the trustee, not the member concerned and ultimately might have to be returned to the employer, to be taxed in its hands. He went on to say: 'In many cases it is agreed between the employer, the trustee and the employees that excess moneys in a fund at the end of the day will be transferred into an excess benefits fund. Exemption from tax does not apply to these funds and they currently pay tax at 44.25%.

159 This confirmed Mr Harmer in his understanding that other employers had established excess benefit funds and he drew this to Mr McTaggart's attention. Consistent with the Board's earlier assurances, Caltex wrote to the Tax Commissioner, to explore this advice saying: 'As you are aware the Caltex Pensions Plan is a defined benefits plan currently invested with a major life office. The funding of the Pensions Plan is directed towards the provision of pension benefits. Members may elect to commute up to 50% with residual pension, or 100% of pension benefits as a lump sum (subject to Commissioner Guidelines) prior to receipt of a pension which effectively is at time of retirement. Therefore as any excess funding in respect to the 100% lump sum option cannot be determined until virtually the eve of retirement, any excess transferred to an excess benefits fund would only reside in such fund briefly prior to distribution to the members. Consequently earnings on the excess benefits fund would be negligible. The Company continues to be under pressure from Trade Unions and other employee groups in relation to superannuation benefits. The paragraph referred to in your letter to Mr. Harmer implies that an acceptable approach to excess benefits in a fund such as ours is to transfer such monies into an excess benefits fund immediately prior to retirement. We would appreciate your clarification and comment on this aspect. Additionally we would seek your view on the tax status of distributions from an excess benefits fund in the hands of members.'

160 On Mr Bucknall's evidence, when he met with Mr Hoctor in 1987 and discussed the matter, Mr Hoctor told him that such a fund was 'not on' for Caltex. The company accepted and acted on that view. This was the basis of Mr Harmer's complaint.

161 That complaint was supported by Mr Carter's contrary view, expressed in 2001. It follows that both Mr Hoctor and Mr Carter cannot have been right. I have, however, concluded that it is unnecessary to come to any view as to who was correct about this question in these proceedings. I cannot find it unfair that Caltex, having raised the matter with the Tax Office in response to the advice which Mr Harmer had received from Mr Jean, then acted in accordance with the view which it received. Even if Mr Hoctor was wrong in the view he expressed in 1987, that is not a proper basis in 2001 for any finding of unfairness in relation Caltex's conduct in 1987. On the approach of Watson J in Craig Mostyn, even if Mr Carter was correct and that view had been communicated to Caltex in 1987 and Caltex had still refused to establish such a fund, given the Tax Commissioner's attitude, such a refusal would not then have provided a proper basis for any order to be made in Mr Harmer's favour under s106, or its predecessor s88F. What would fairness have required in these circumstances? Steps such as Caltex's rejection of the Tax Commissioner's position, the risk for all members, including Mr Harmer, that the tax position of the Plan and the favourable treatment which it was receiving in relation to the 50% commutation option thereby be jeopardised? Litigation in the courts as to the proper construction of the relevant legislation and rulings? I am satisfied that a conclusion that fairness would have required Caltex to pursue such steps would not have been available in 1987, had Mr Carter's views then been pursued with Caltex, nor is it available now.

162 The effluxion of time since then has not improved that position. After all, not only does Mr Harmer now seek the $103,000 which he presumably could have pursued under s88F in 1987, but also an order for interest since his retirement. As I have noted, there was no real explanation for the delay in initiation of these proceedings. Any difficulties in obtaining access to the trust deed in 1987 provides no real or adequate explanation.

163 I have also been influenced in the conclusion which I have reached, by the approach adopted in another context, in New South Wales Rugby League Limited. There the Full Court was considering an order made under s275 of the Industrial Relations Act 1991, in relation to compensation payable to an injured football player. In part it was concluded by the trial judge that the lump sum payable under the Sporting Injuries Insurance Act 1979, was inadequate and thus relevantly unfair. The Full Court upheld the appeal, observing that the benefits under the legislation in question were minima and that employers were free to provide additional benefits above those prescribed by the legislation. It declined, however, to find relevant unfairness, because an employer had not acted to provide such additional benefits, even when comparisons with higher benefits available under worker's compensation legislation were available.

164 Here, the rules of the Plan gave effect to the requirements of the RBL guidelines established by the relevant tax legislation, whereby the superannuation available to retiring Caltex employees who elected 100% commutation, was limited in particular ways. Even if the view could properly be formed that steps were available to Caltex to avoid those limitations in relation to Mr Harmer's superannuation payments from the Plan, I am not satisfied that a failure to take them in the circumstances of this employment, could properly lead to a finding of unfairness within the meaning of s106.

165 It follows, that no matter how sympathetically one might view Mr Harmer's pursuit of the unfairness he perceives, no finding of relevant unfairness can be made in his favour. For all of these reasons, I order that the application be dismissed. The usual order would be that the applicant bear the respondents' costs, as agreed or assessed. If the parties are unable to agree on the terms of that order, they have liberty to approach within 21 days of the date of this judgment. ------------------------

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