Seafarers' Retirement Fund Pty Ltd v Oppenhuis

Introduction 1 On 27 June 1994 the respondent, who was a member of the Seafarers' Retirement Fund ("the Fund"), lodged a claim for a disablement benefit. During 1995 the applicant ("the trustee"), which is the trustee of the Fund, decided that the respondent was entitled to a partial, but not a total and permanent, disablement benefit pursuant to the Trust Deed and Rules of the Fund ("the Trust Deed"). 2 Decisions of the Fund, being a regulated superannuation fund, were able to be the subject of a complaint to the Superannuation Complaints Tribunal ("the Tribunal") pursuant to the Superannuation (Resolution of Complaints) Act 1993 (Cth) ("the Act"). The respondent made a complaint to the Tribunal pursuant to s 14(2) of the Act on the ground that the trustee's decision was unfair and unreasonable. On 27 February 1997 the Tribunal upheld the complaint, set aside the trustee's decision and substituted its own decision to the effect that the respondent was entitled to a total and permanent disablement benefit ("the disability benefit") under the Trust Deed. 3 The trustee has appealed to the Court from the decision of the Tribunal on the ground of error of law: see s 46(1) of the Act. Upon the trustee agreeing not to seek any order for costs of the appeal the respondent, through his solicitors, indicated that he did not wish to be heard on the appeal. As the appeal raised questions relating to the Tribunal's power to determine complaints in respect of non-discretionary decisions of a trustee of a regulated fund, the Chairperson of the Tribunal sought, and was granted, leave to intervene to make submissions on that issue. Background The complaint related to the trustee's decision that the respondent was not entitled to be paid the disability benefit under Rule 14(a) of the Trust Deed which, relevantly, provides for the benefit to be payable to a member: "(i) who ceases to be an Employee because his physical or mental condition is such that he is incapable of performing his duties satisfactorily or is a danger to others; and (ii) whom a medical practitioner appointed by the Trustees certifies is never likely in his opinion because of such physical or mental condition to be capable of working again in the maritime or any other industry." 4 Rule 14(b) provides for the trustee to appoint one or more medical practitioners to provide the certificate referred to in Rule 14(a)(ii) and, in the event of a division of opinion, the "opinion of the majority shall prevail". 5 In making its decision under Rule 14(a) the trustee relied on reports by medical practitioners purportedly appointed under Rule 14(a)(ii). On the hearing of the complaint the Tribunal considered additional medical reports, including reports that were provided subsequent to the trustee's decision, and determined that the respondent was suffering from coronary artery disease and severe post traumatic stress disorder which rendered him unfit for all types of work. The Tribunal decided that, notwithstanding Rule 14(a)(ii), it was entitled to stand in the shoes of the trustee and arrive at the conclusion that the respondent was permanently and totally disabled and therefore entitled to the disability benefit. 6 In substance, the Tribunal decided that Rule 14(a)(ii) was only an "enabling" provision and that it was entitled to act on the advice of medical practitioners under Rule 24 of the Trust Deed without being required to obtain a certificate under Rule 14(a)(ii). The Tribunal also decided that s 58 of the Superannuation Industry (Supervision) Act 1993 (Cth), which required a trustee to act without "direction", meant that it was not bound to obtain a medical practitioner's certificate under Rule 14(a)(ii). 7 The appeal raises three issues. The first relates to the jurisdiction of the Tribunal to hear complaints in relation to non-discretionary decisions. The second relates to whether the review to be conducted by the Tribunal is a hearing de novo. The third relates to the entitlement of the Tribunal to make a decision to dispense with compliance with Rule 14(a)(ii), which is a condition precedent to the exercise of the trustee's power to decide that a member is entitled to a disability benefit under the Trust Deed. Jurisdiction 8 Section 14 of the Act relevantly, provides: "(1) This section applies if the trustee of a fund has made a decision (whether before or after the commencement of this Act) in relation to: (a) a particular member or a particular former member of a regulated superannuation fund; or (b) a particular beneficiary or a particular former beneficiary of an approved deposit fund. (1A) … (2) Subject to subsection (3) and section 15, a person may make a complaint (other than an excluded complaint) to the Tribunal, that the decision is or was unfair or unreasonable." 9 Although s 14 of the Act provides generally for complaints to be made against a decision, whenever made, of a trustee of a regulated fund on the ground that it is unfair or unreasonable, the Full Court in Wilkinson v CARE Superannuation (1998) 79 FCR 469 held that it was implicit that complaints under the Act were confined to the review of discretionary decisions of a trustee: cf Collins v AMP Superannuation Ltd (1997) 75 FCR 565. In Attorney-General (Cth) v Breckler (1999) 163 ALR 576 at 583 Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ observed, without deciding, that the criterion of "unfair or unreasonable" suggests that what is involved is a complaint as to the exercise of a discretion, rather than a complaint in relation to the discharge by a trustee of its duties, for example, to distribute to those answering a specified criterion: cf Kirby J at 602-603. 10 Shortly prior to the High Court decision in Breckler the legislature amended the Act by the Superannuation Legislation Amendment (Resolution of Complaints) Act 1998 (Cth) ("the amending Act") which came into effect on 11 December 1998. The amending Act introduced s 14AA which provided: "(1) To avoid doubt, a complaint may be made under this Part about a decision whether or not the decision involved the exercise of a discretion. (2) However, a decision that did not involve the exercise of a discretion is taken to have been unfair and unreasonable if the decision was contrary to law." 11 The Explanatory Memorandum to the Amending Bill, inter alia, referred to the decision of the Full Court in Breckler and stated (at 9): "To ensure that the Tribunal's ongoing functions extend to non-discretionary decisions, the Bill will insert a new provision in the SRC Act which clarifies that a complaint may be made under the SRC Act in relation to a decision which involves the exercise of a discretion or a decision which does not involve the exercise of a discretion (Bill Schedule 1 item 8, subsection 14AA(1)). New subsection 14AA(1) will ensure that the Tribunal is able to receive complaints about both discretionary and non-discretionary decisions, and hence exercise its inquiry and conciliation and arbitration functions in relation to such complaints. In addition the Bill will insert a further provision to the effect that a decision which does not involve the exercise of a discretion is taken to be unfair or unreasonable if the decision was legally incorrect (Bill Schedule 1, item 8, subsection 14AA(2)). In relation to non-discretionary decisions this will resolve the tension between the requirement to determine a complaint by reference to a 'fair and reasonable' test and the requirement not to do anything that is contrary to law. Section 14AA has general application to the Tribunal's inquiry, conciliation, review and arbitration functions under the SRC Act." 12 Whilst s 14AA plainly applies to all complaints to the Tribunal about non-discretionary decisions of a trustee made after 11 December 1998 it is not so clear whether it was to have retrospective effect. When the Act is read together with the amending Act (see s 15 of the Acts Interpretation Act 1901 (Cth) and Commissioner of Stamps v Telegraph Investment Co Pty Ltd (1995) 184 CLR 453 at 463 and 479) it appears clear from s 14(1) of the Act that, subject to certain express exceptions in ss 14(1A) and 14(5)-(6D), the amending provision is to apply to complaints that are made under the Act about decisions by a trustee of a regulated fund, whether the trustee's decision was made before or after the commencement of the principal Act. Thus, if the Act, as amended, is to apply to complaints about decisions of a trustee made before the amending Act it would seem to be anomalous to exclude from its operation, in the amended form, decisions of the Tribunal concerning such a complaint on the ground that the Tribunal decision was made prior to the amending Act. 13 On the other hand, if s 14AA of the amending Act is taken to extend the operation of the Act to empower the Tribunal to deal with complaints about non-discretionary decisions, then there are good grounds for contending that the amending Act affects existing rights and obligations and should not be given a retrospective operation, unless the language expressly or by necessary implication requires such a construction: see Rodway v The Queen (1990) 169 CLR 515 at 518-520. 14 An exception, however, to the presumption against retrospectivity arises in respect of Acts that declare, explain or interpret the meaning of an earlier Act: see Pearce and Geddes, Statutory Interpretation in Australia (4th ed 1996) para 10.10 and Bennion, Statutory Interpretation (2nd ed 1992) at 105. It is necessary to look at the content of the Act in question and decide whether the relevant provisions are intended to be declaratory and therefore retrospective, rather than prospective, in their operation: see Harding v Commissioners of Stamps (Qld) [1898] AC 769 at 775-776 and Inland Revenue Commissioners v Joiner [1975] 1 WLR 1701 at 1715. 15 There are strong indications from the content of the Act, as amended, that it is intended to be declaratory rather than prospective. First, s 14AA of the amending Act is stated to be for the purpose of "avoid[ing] doubt". If the operation of the section was intended only to be prospective no purpose is served by s 14AA(1) being introduced by the words "To avoid doubt". Secondly, when the amending Act was enacted there was "doubt" as to the operation of the Act, notwithstanding the decision of the Full Court that, by implication, the Act only applied to discretionary decisions. At that time the decision of the Full Court that held the Act to be unconstitutional was under appeal to the High Court and the decision of that court on the validity and operation of the Act was yet to be handed down. Thirdly, as I have already explained, the Act, as amended, is to apply to complaints about decisions of a trustee whenever made. 16 In these circumstances the preferable view is that s 14AA of the amending Act was intended to explain, and therefore be declaratory of, the existing state of the law, with the consequence that it was intended to operate from the date on which the Act that it is "interpreting" came into operation. 17 Accordingly, the contention of senior counsel for the Chairperson of the Tribunal, that s 14AA of the amending Act is declaratory and applies retrospectively, ought to be accepted. It follows that by reason of ss 14(1) and 14AA the non-discretionary decision of the trustee, made during 1995, was capable of being the subject of a complaint to the Tribunal and, for the purposes of the present appeal, although the Tribunal made its decision in 1997 it is to be taken to have had jurisdiction and power to deal with it under s 37 of the Act. The Tribunal's powers on review 18 The Tribunal treated itself as entitled to hear the matter de novo on the basis of such material as it saw fit, irrespective of whether the material was before the trustee when it made its decision. 19 Sections 36 and 37 of the Act provide for the Tribunal to review the decision of the trustee. It is now well settled that the question of whether a "review" provided for by statute relates to judicial control by way of administrative review (which may require error to be demonstrated), or a comprehensive administrative review de novo is to be determined from the context in which the word appears: see Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245 at 261 and Republic of South Africa v Dutton (1997) 77 FCR 128 at 132-134. Where the reviewing entity stands in the shoes of the decision maker the review is likely to be by way of a hearing de novo (see Re Brindle; Ex parte FB and FA McMahon Pty Ltd (1992) 35 FCR 506 at 511-512). Also, where the reviewing body is exercising its own discretion and therefore is to inform itself of the basis on which it is to do so, the hearing is likely to be de novo (see Harris v Calladine (1991) 172 CLR 84 at 125 and Re Brindle at 51). 20 Contrary to the submission of senior counsel for the trustee, in my view, the context and nature of the review by the Tribunal provided for under the Act can leave little doubt that the review provided for under ss 36 and 37 of the Act is to be by way of a hearing de novo which can include, but is not restricted to, the material before a trustee. The following matters are relevant in that regard. 21 First, for the purposes of "reviewing a decision of the trustee of a fund" the Tribunal "has all the powers, obligations and discretions that are conferred on the trustee" (s 37(1)(a)) and the decision of the Tribunal is to be substituted for the decision of the trustee (s 41(3)). These provisions strongly suggest a hearing de novo. Secondly, the Tribunal must affirm the trustee's decision if it is satisfied that the decision "in its operation" in relation to the complainant was fair and reasonable in the circumstances (s 37(6)), but can review the decision if it is or was unfair or unreasonable (s 14(2)). Although the trustee's decision is reviewable by the Tribunal on the ground that it is unfair or unreasonable, that is not a criterion that the trustee is obliged to observe in the exercise of its powers (see Breckler at 579). Accordingly, it would be anomalous for the Tribunal to be confined to the material before the trustee when its decision is being reviewed on a ground not binding on the trustee when it made its primary decision. 22 Thirdly, the statutory scheme to which I have referred and the extensive powers of the Tribunal concerning the material to which it is entitled to have regard (see ss 24, 24AA, 25 and 36) do not suggest that on a review the Tribunal is to be confined to the material before, and acted upon, by the trustee. Rather, they suggest that the legislature intended that the review is to be conducted de novo, with the Tribunal standing in the shoes of the trustee: see Collins at 578. Rule 14(a)(ii) 23 Under the Act, as it applied at the time of the Tribunal's decision, the Tribunal's function in respect of a decision relating to a member's disablement was to determine whether the decision of the trustee is or was unfair or unreasonable (s 14(2)) or was in its operation fair and reasonable (s 37(6)) rather than whether or not the respondent was unfit and not capable of working again. The latter decision was not one which was reposed in the trustee under Rule 14(a) and therefore could not be made by the Tribunal on review, as to do so would be contrary to the governing rules of the Fund: see Rule 14(a) and s 37(5). Section 14AA does not affect that conclusion, save that the criterion of "unfair and unreasonable" is satisfied if the trustee's decision was contrary to law: see s 14AA(2). 24 Accordingly, the Tribunal was not entitled to treat itself as free to ignore the preconditions prescribed by Rule 14(a) for an entitlement to a total and permanent disablement benefit. I do not accept that the requirement that a trustee comply with Rule 14(a)(ii) constitutes the exercise of any of the trustee's powers in accordance with the direction of any other person contrary to s 58 of the Superannuation Industry (Supervision) Act 1993 (Cth). Rule 14(a) prescribed a condition for an entitlement and does not authorise any person to "direct" the trustee as to the manner in which it is to exercise its powers under the Trust Deed. 25 Surprisingly, the Tribunal appears to have overlooked ss 18(1)(d) and 37(2) which specifically empower the Tribunal to join the certifying medical practitioners as parties to the complaint and to review the decisions of the practitioners as to the existence or extent of the respondent's disablement. Whilst it is unnecessary for me to decide whether, in lieu of that course, it is open to the Tribunal to appoint its own medical practitioner or practitioners for the purposes of Rule 14(a) it is sufficient for present purposes to observe that the Act provided the Tribunal with ample power to effectively and fairly deal with the respondent's complaint without acting contrary to the governing rules of the Fund. 26 Accordingly, the Tribunal erred in law in making a decision which was contrary to the governing rules of the Fund and therefore contrary to s 37(5) of the Act. Conclusion 27 For the above reasons the decision of the Tribunal is to be set aside and the matter is