Nature of the Fund
104The Fund is a defined benefit scheme in which a disabled member of the police force so certified pursuant to s 10B(1) or s 10B(2) receives the benefit defined in s 10(1A) of the Police Superannuation Act.
105Members of the police force are "in some sense, a servant of the Crown" ( Enever v R [1906] HCA 3; (1906) 3 CLR 969 (at 975 - 6) per Griffith CJ) but their relationship with the Crown is not that of employer - employee: Attorney-General (NSW) v Perpetual Trustee Company (Ltd) [1955] HCA 9; (1955) 92 CLR 113 (Privy Council). Some statutes, such as s 85 of the Police Act , have the effect of deeming an employer - employee relationship to exist for some purposes. What is relevant for present purposes is that the Fund, as a general proposition, bears a strong resemblance to an employee superannuation scheme. It is created in the context of a relationship having many of the hallmarks of an employer - employee one. A person only qualified to make contributions if they were a member of the police force, or an employee of the Police Association of New South Wales: s 5 (3), Police Superannuation Act. Contributions were deducted from member's salaries: s 5(1), Police Superannuation Act. The fact that there was no apparent relationship between the appellant as trustee and the police force does not detract from characterising it, at least by analogy, as an employee superannuation scheme: Re Manufacturing Grocers' Employees Federation of Australia; Ex parte Australian Chamber of Manufactures [1986] HCA 23; (1986) 160 CLR 341 (at 357).
106In Finch v Telstra Super Pty Ltd , the High Court considered the nature of such superannuation funds as relevant contextual material in determining the ambit of the duty of a trustee of a defined benefit fund forming an opinion as to who should be the beneficiary of a distribution under the trust deed. The Court said (footnotes omitted):
"[33] Another aspect of the factual context is that the Deed is dealing with the superannuation of employees. For some people, superannuation is their greatest asset apart from their houses; for others it is even more valuable . Different criteria might be thought to apply to the operation of a superannuation fund from those which apply to discretionary decisions made by a trustee holding a power of appointment under a non-superannuation trust . Employer superannuation is part of the remuneration of employees. Membership of the employee superannuation fund may be compulsory. Superannuation, unsurprisingly, is a matter of trade union interest. The question of superannuation entitlements may form the subject of an industrial dispute within the meaning of s 51(xxxv) of the Constitution. Superannuation is not a matter of mere bounty, or potential enjoyment of another's benefaction. It is something for which, in large measure, employees have exchanged value - their work and their contributions. It is 'deferred pay'. These are propositions which are not falsified by arguments advanced by the Trustee to the effect that the Death and Total and Permanent Invalidity benefits under the Deed involve in part an element of bounty . Superannuation is a method of attracting labour. The legitimate expectations which beneficiaries of superannuation funds have that decisions about benefit will be soundly taken are thus high. So is the general public importance of them being sound.
...
[35] Because of the potentially lengthy time periods over which superannuation savings are accumulated, it was natural, and it is now in many instances mandatory, for a trust mechanism to be employed. These funds have increasingly come under detailed statutory regulation. The government considers that the taxation advantages of superannuation should not be enjoyed unless superannuation funds are operating efficiently and lawfully. For that reason it has, by procuring the enactment of the Superannuation Industry (Supervision) Act 1993 (Cth) ('the Supervision Act') and regulations made under it, imposed quite rigorous regulatory standards. The Deed reflects the enactment of that legislation.
[Their Honours set out s 3(1) and 3(2) of the Supervision Act and continued]
[36] Thus the public significance of superannuation and the close attention paid to it through statutory regulation support the conclusion that the decisions of superannuation trustees are not likely to be largely immunised from judicial control without clear contrary language in the relevant trust document. Decisions like those which the Trustee made in this case are not discretionary decisions in the sense used in Karger v Paul .
[37] Those reasons also suggest, though the contrary was apparently not put to it, that the Court of Appeal was wrong to approach the present controversy as if the principles stated in Karger v Paul , developed in and appropriate to other fields, were applicable in the present field without any qualification. But the question how far those principles should be qualified may be postponed for a time."
See also J C Campbell, "Exercise by superannuation trustees of discretionary powers", (2009) 83 Australian Law Journal 159 (at 167 - 173).
107The High Court's remarks are apposite, particularly bearing in mind that the Introductory Note to Part 3 of the Administration Act which, although not part of the Act (s 6, Administration Act), is relevant extrinsic material (s 34(2)(a), Interpretation Act ) states:
"Generally, the trustee will have functions (which include powers, authorities and duties) that are consistent with the requirements of the Superannuation Industry (Supervision) Act 1993 of the Commonwealth. That Act regulates the functions of trustees of superannuation funds and the administration of superannuation schemes but does not apply directly to the STC schemes...."
108Writing extra-judicially, Sir Robert Walker contrasted the "linear process" of a family trust under which "the settlor's or testator's bounty proceeds through the trustees to the beneficiaries" with "[a] pension trust [which] is more aptly envisaged as a triangle [with] [t]he trustees ... at the apex, the employer and the employees ... at the other corners [and] ... linked to the trustees by both fiduciary and contractual obligations": "Some Trust Principles in the Pensions Context", Trends in Contemporary Trust Law , AJ Oakley (ed), Clarendon Press (Oxford) (1996), 123 (at 124). That geometric analogy carries particular force in this case when it is recalled that PSAC (which is constituted under the Police Superannuation Act) both advises the appellant and was its delegated authority in respect of Fund matters.
109The fact that the Fund operates against an employment background might suggest "a greater tenderness for the employee's rights, so long as it does not mean that benefits to the employee inconsistent with the bargain or quite outside its conceivable contemplation should automatically flow to the employee": Uncle v Parker (1994) 55 IR 120 (at 123) per Santow J (as his Honour then was) referring to Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41. However it should be recognised that, ordinarily, "a member of a superannuation fund is neither the legal nor the beneficial owner of the amount that stands to the credit of his account from time to time": CSR Ltd v Chief Commissioner of State Revenue [2006] NSWSC 1380; (2006) 68 NSWLR 440 (at [12]) per Gzell J; Wrightson Ltd v Fletcher Challenge Nominees Ltd (2001) 1 NZSC 40,532; [2002] 2 NZLR 1 (at [28]) (Privy Council). I say "ordinarily" because the question whether the respondent had any such interest or, indeed, whether he had any "account" in the Fund was not debated.
110I do not understand Basten JA's statement in Swift (at [32]) that the fact Mr Swift had contributed to the scheme, being an "underlying facet[] of the scheme ... had no bearing one way or the other on the exercise of the discretion and the statute did not require their express consideration in this context" to mean that the fact of such contributions is not relevant to the larger, and different, question of ascertaining the scope of the appellant's duties. The fact of such contributions has been said to "make it even more important that the trustees should exercise their powers in the best interests of the beneficiaries": Cowan v Scargill [1985] Ch 270 (at 290) per Sir Robert Megarry V-C; see also Asea Brown Boveri Superannuation Fund No 1 Pty Ltd v Asea Brown Boveri Pty Ltd, McKeown, Gray & ABB Properties (Vic) Pty Ltd [1999] 1 VR 144 (at [57] [59]) per Beach J. The significance of employees' contributions was also emphasised in Finch (at [33]).
111The appellant sought to distinguish Hawkesley v May on the basis that the respondent's entitlement, if any, to an allowance was set out in public documents. However that fact has not always proved decisive, at least in an employment context.
112In Scally v Southern Health and Social Services Board [1992] 1 AC 294 the House of Lords held that where a contract of employment, negotiated between employers and a representative body, contained a particular term conferring upon the employee a valuable right contingent upon his or her acting as required to obtain the benefit, of which the employee could not be expected to be aware unless the term was brought to the attention of the employee, there was an implied obligation on the employer to take reasonable steps to publicise the term: see Byrne & Frew v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 (at 452) per McHugh and Gummow JJ.
113In Scally , under the terms of their contracts of employment negotiated by representatives of their professional bodies or trade unions, employees of the Northern Ireland Health Board were required to make contributions to a statutory superannuation scheme whereby they would receive full pension benefits upon completion of 40 years' contributory service. By the terms of the Health Services (Superannuation) (Amendment) (No 3) Regulations (Northern Ireland) 1974, employees who had joined the health services too late to complete 40 years service before retirement were given the right to purchase "added years" of pension entitlement on advantageous terms in order to make up the full 40 years' contributions. That right was only exercisable within 12 months of the date the regulation came into force or the commencement of employment, if later. Thereafter the right could be exercised only on less favourable terms. The plaintiffs were four doctors who each had to purchase "added years" to qualify for pension benefits. The department which employed the doctors had, apparently, brought to the attention of employees in the health services details of the superannuation scheme to which they were required to contribute, but had not drawn the plaintiffs' attention to the amendment which conferred the "added years" entitlement. They took proceedings against the boards by which they were employed claiming damages for breach of contract, negligence and breach of statutory duty under s 4 of the Contracts of Employment and Redundancy Payments Act (Northern Ireland) 1965 (NI) in respect of the failure to inform them of their right to buy added years.
114Lord Bridge of Harwich (with whom Lords Roskill, Goff, Jauncey and Lowry agreed) (at 304) identified the problem as "a novel one which could not arise in a classical contractual situation in which all the contractual terms, having been agreed between the parties must, ex hypothesi, have been known to both parties." He referred to the modern trend:
"... for individuals to enter into contracts, particularly contracts of employment, on complex terms which had been settled in the course of negotiations between representative bodies or organisations and many details of which the individual employee cannot be expected to know unless they are drawn to his attention."
115His Lordship identified the case as being an example of this phenomenon "arising in the context of the statutory provisions which regulate the operation of the health services in Northern Ireland". He concluded (at 306 - 307) that a term to the effect of that I have set out (at [112]) would be implied as a necessary incident of the relationship of employer and employee in circumstances where:
"(1) the terms of the contract of employment have not been negotiated with the individual employee but result from negotiation with a representative body or are otherwise incorporated by reference;
(2) a particular term of the contract makes available to the employee a valuable right contingent upon action being taken by him to avail himself of its benefits ;
(3) the employee cannot, in all the circumstances, reasonably be expected to be aware of the term unless it is drawn to his attention." (Emphasis added)
116Scally has, in my view, some relevance in informing the content of the appellant's s 51(1)(c) duty to exercise its functions in relation to the Fund in the best interests of persons entitled to receive benefits under it. In particular, it casts doubt upon the proposition that a person should be expected to be aware of all matters of public record in favour of emphasising the obligation of those responsible for administering statutory schemes in an employment context to inform its beneficiaries of their statutory rights. In Scally , Lord Bridge (at 305) regarded as "so unattractive that [he] would accept it only if driven to the conclusion that there was no other legally tenable alternative", the proposition "that the law provided no means of ensuring that the intended beneficiaries of the opportunity to buy added years became aware of it, so that it would be a matter of chance whether or not, in relation to any individual employee, [the regulation] achieved its intended purpose". In so saying his Lordship clearly regarded it as inherently implausible that employees would stumble across a regulation creating a "right", of whose nature they were completely unaware.
117Hawkesley v May , Hartigan Nominees (per Mahoney JA) and Scally support the proposition that a trustee and/or an employer is obliged to advise persons with actual entitlements to benefits of their rights in this respect - even if ( Scally ) those rights are recorded in public documents.
118However before the reasoning in those cases can be applied analogically to a trustee in the appellant's position, the question must be answered as to how it can come under such an obligation in relation to a person or persons of whose "potential rights" or "entitlement" it may be unaware. Is the fact, as the primary judge appears to have assumed, that it is aware of an identifiable class of contributors sufficient?
119The focus of the inquiry must be on the statutory scheme and the positions of the parties. Although expressed in the context of whether a tortious duty of care was owed, and/or a cause of action for breach of statutory duty existed, observations to like effect in, for example, Pyrenees Shire Council v Day [1998] HCA 3; (1998) 192 CLR 330 (at [126] per Gummow J and Stuart v Kirkland-Veenstra [2009] HCA 15; (2009) 237 CLR 215 (at [112]) per Gummow, Hayne and Heydon JJ; see also French J (at [53]); Crennan and Kiefel JJ (at [139] - [145]) are of utility in framing the inquiry.
120Here there is no doubt the appellant owed duties to "beneficiaries": s 51, Administration Act. The legislature appears to have operated on the premise, however, that that is a self-identifying class, and, implicitly, identified to the appellant upon application.
121The primary judge appears to have based her "duty" conclusion (at [58], [76]) on the fact that some sort of relationship would exist between the appellant and retiring police officers because the latter would be being paid monies from the Fund. That, with respect, begs the question as to how the appellant should deduce that any such individual might have an entitlement to a superannuation allowance falling within the s 10B criteria, which entitlement depends upon matters peculiarly within the police officer's knowledge and, possibly the Police Medical Service and the Commissioner of Police. Even that may be doubted in this case, bearing in mind the respondent's evidence that he did not discuss his left foot with the police medical officer at the time of his retirement (primary judgment (at [22])) and, as the historical documents reveal (see [28] above), had not apparently complained of it since 1985.
122It was not, accordingly, to point to use as the foundation for the perceived obligation the fact that the class of persons to whom the advice obligation was owed was easily ascertainable, even if that class was confined, as the primary judge appears to have reasoned, to those leaving the police force. Many in that class, it might be inferred, would be retiring because of reasons entirely unconnected with a medical condition, such as reaching retirement age or, like Mr Swift, to pursue a commercial venture: Swift (at [21]).
123Before exploring this issue further, it is appropriate to examine the appellant's further complaint that the primary judge erred in failing to consider its s 10B(2) submission. That submission, in turn, has force only if, as the appellant contends and I would accept, there was no evidence to support the proposition that the respondent would have qualified for an allowance at the date of his retirement.
124The primary judge said (at [79]) that she accepted a submission that had the respondent "applied at the date of his discharge a superannuation payment would have been made to him from that time". There was, however, no evidence, in my view, to support the factual premise underlying the submission.
125Accepting, as I have found, that the version of s 10B(2) applicable at the time the respondent was discharged was that which allowed for a superannuation allowance only if the member of the police force was incapable of discharging the duties of his office at that time, there was evidence (see [43] above) that the respondent's left foot injury did not prevent him from discharging the restricted duties to which he was assigned as that time.
126The position was not advanced, should the contrary be thought, in my view, by the s 10B(2) "certification" (see [38] above). As is apparent, that certification adopted the language of s 10B(2) following the 2006 amendments.
127There is no provision in the Police Superannuation Act dealing with the effect of s 10B(2) certification. This Court has held that a judge hearing a s 21 application is bound to accept the anterior finding that a police officer was suffering from an infirmity when the Commissioner (or the Commissioner's Delegate) certified, pursuant to the s 10B(3)(a) whether that infirmity was a hurt on duty injury: see Saad v Commissioner of Police (1995) 12 NSWCCR 70 (at 75); Larson v Commissioner of Police [2004] NSWCA 126 (at [35]) and Murray v Commissioner of Police [2004] NSWCA 365 (at [29]). However those decisions turn, as I understand them, on the fact that the question whether a person was suffering such an infirmity cannot be the subject of a s 21 determination.
128The word "certified" is not used in s 10B(1) or (2) as a term of art. The certification is given no special status: cf Workplace Injury Management and Workers Compensation Act 1998 s 326 (medical assessment certificate conclusive evidence on enumerated matters). It does not lead to the issue of a "certificate", although if it did, absent statutory provision, that would not imbue it with any special lustre. Even when such conclusive certification provisions exist, they are strictly construed: Maurice Blackburn Cashman v Brown [2011] HCA 22; (2011) 242 CLR 647.
129It was, however, apparent from the correspondence between the appellant and the respondent that it postponed consideration of his application for an allowance pending the 2006 amendments coming into force. That was correspondence to which the primary judge, acting in effect as trustee of the Fund, should have had regard. As the appellant submitted, it provided the context for the matters the appellant "certified". Her Honour should also have had regard to s 10B(2) as in force at the time the appellant retired, and his evidence that, at that time, he was able to discharge the restricted duties to which he was assigned. It was also relevant that the appellant's decision to apply the 2006 amendments to the respondent's application was made in the context of the new s 9A(4) regime establishing a presumption that the date from which any such allowance should date would be that of the application, unless exceptional circumstances merited doing otherwise.
130While, as the appellant accepted, there had been a lengthy delay in considering the respondent's application, the reasons for that delay were relevant to the date from which the allowance commenced. If the delay had, in substance, redounded to his advantage, that was highly relevant to the exercise of the s 9A(4) discretion. The primary judge does not, with respect, appear to have appreciated when looking (at [75]) at the position in February 2005 that at that date the respondent would not have had the benefit of the 2006 amendments.
131These matters were, in my view, highly relevant to the question as to the date of commencement of any superannuation allowance awarded to the respondent. The primary judge failed to take them into consideration.
132In my view, it was incumbent upon the primary judge in making the s 21 determination to take into consideration the fact that the granting of the respondent's superannuation allowance had depended upon the application of the 2006 amendments. In failing to do so her Honour failed to take into account a relevant consideration. Her Honour, also, in my view, erred in point of law in concluding, contrary to the evidence, that the respondent would have been entitled to an allowance had he applied in June 1988. These errors were material to her Honour's decision as to the commencement date for that allowance.
133The question of the extent to which any obligation devolved upon the appellant to advise persons of their entitlements under the Fund can, accordingly, await an occasion when it is determinative.
134Since preparing these reasons I have had the benefit of reading Campbell JA's reasons. I agree with his Honour's (as always) illuminating analysis.