Issues on the Application and the Appeal
28 I start with the applicant's application for an extension of time. The relevant factors are well-known: Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 at 348-349 per Wilcox J. As I have said, the length of the delay in this case is approximately eight weeks. The applicant's explanation for the delay is fairly general and not entirely satisfactory. Unsurprisingly, he was not given an unequivocal assurance by the Tribunal staff member as to when the decision would be handed down, and if he chooses to arrange his affairs in a particular way, then he must bear the consequences of his decision. Furthermore, his delay after returning from overseas is not clearly explained. The prejudice to the applicant if he is not granted an extension of time is that he will not be able to pursue his appeal. The respondent did not identify any prejudice to it if an extension of time is granted. I do not think the appeal is so hopeless that the extension of time should be refused on that ground. There is some public interest in the resolution of the issue raised by the applicant concerning the proper construction of "termination day" in s 6 of the Determination. On balance, I consider it appropriate to grant an extension of time.
29 Before addressing the notice of objection to competency and the appeal, I will identify the function of the Tribunal when dealing with a complaint by a member or former member of a regulated superannuation fund about a decision of the trustee of a fund. Section 14(2) of the Act provides that a person may make a complaint to the Tribunal that a trustee's decision is or was unfair or unreasonable. Section 14AA provides that a complaint may be made about a decision whether or not the decision involved the exercise of a discretion. A decision that does not involve the exercise of a discretion is taken to be unfair and unreasonable if the decision was contrary to law. Section 37(1) provides that, for the purpose of reviewing a decision of the trustee of a fund that is the subject of a complaint under s 14, the Tribunal has all the powers, obligations and discretions that are conferred on the trustee and, subject to subs (6), must make a determination in accordance with subs (3). Section 37(3) provides that, on reviewing a decision, the Tribunal must either affirm the decision, or remit the matter to which the decision relates to the decision-maker for reconsideration in accordance with the directions of the Tribunal, or vary the decision, or set aside the decision and substitute a decision for the decision so set aside. Section 37(6) provides (relevantly) that if the Tribunal is satisfied that the decision under review in its operation in relation to the complainant is fair and reasonable in the circumstances, then it must affirm the decision. Section 37(4) provides that if the Tribunal determines that there is unfairness or unreasonableness in relation to a trustee's decision, then it may only exercise its powers under subs (3) for the purpose of placing the complainant as nearly as practicable in such a position that the unfairness, unreasonableness, or both, no longer exists. Finally, s 37(5) provides (relevantly) that the Tribunal must not do anything under subs (3) that would be contrary to law or the governing rules of the Fund.
30 The Full Court of this Court considered the Tribunal's function under s 37 of the Act in Board of Trustees of the State Public Sector Superannuation Scheme v Edington (2011) 119 ALD 472; [2011] FCAFC 8 ("Edington"). In that case, Mr Edington made a claim on the superannuation scheme of which he was a member for a total and permanent disablement benefit. An incident involving two dogs had occurred when Mr Edington was on a property and this incident (according to Mr Edington) had resulted in an injury to his right foot, and either a post-traumatic stress disorder or an anxiety disorder. It is unnecessary to set out the details of the trust deed or the terms of insurance in this case. The issue before the trustee was whether Mr Edington's permanent and total disablement was related to Mr Edington's pre-existing condition of schizophrenia. The trustee decided that issue against Mr Edington relying on the report of one of the consulting psychiatrists which had been placed before it. On review, the Tribunal affirmed the trustee's decision and it relied on the opinions of a treating psychiatrist in addition to the consulting psychiatrist relied on by the trustee.
31 On appeal to this Court, a judge of the Court held that the Tribunal had committed an error of law in that it did not properly review the trustee's decision. The judge said that the Tribunal had not examined the trustee's reasons in sufficient detail as shown by the fact that it relied on evidence which was different from that relied on by the trustee.
32 On a further appeal to the Full Court, the Court reversed the judge's decision. The principal reasons were delivered by Kenny and Lander JJ. Their Honours said that the Tribunal's function involved a hearing de novo following which the Tribunal makes findings of fact in relation to the matter before it. Their Honours said that the Tribunal's function is different from that of the Administrative Appeals Tribunal which is required to make the correct or preferable decision. The Tribunal's function is to stand in the shoes of the trustee and to decide on all the information before it whether the trustee's decision was fair and reasonable in the circumstances. It is the decision, not the process of reasoning which led to it, which must be examined for fairness and reasonableness (at 484-485, [44]-[47]). Their Honours said that the Tribunal is to have regard to the trust deed and, where relevant, the insurance terms, and it is not restricted to the material before the trustee or to the approach to the relevant issues taken before the trustee. Nevertheless, the primary question before the Tribunal is whether the trustee's decision was fair and reasonable (at 486-487, [49]-[50]). On the one hand, the Tribunal must make its own findings of fact and it does not discharge its review function by doing no more than concluding that the trustee's findings were fair and reasonable. On the other hand, once the Tribunal has made its findings, the question for it is whether the trustee's decision was fair and reasonable (at 487, [51]). In the result in Edington, the Court said that it was open to the Tribunal to reach a conclusion that a trustee's decision was fair and reasonable even though its reasoning was different from that of the trustee. The Tribunal was not required to focus on the reasoning of the trustee and take the "extra step" of comparing the trustee's reasoning with its own (at 488, [54] per Kenny and Lander JJ; at 496, [86] per Logan J).
33 In National Mutual Life Association of Australia Ltd v Campbell (2000) 99 FCR 562 at 570-571, the Full Court of this Court said that whether a decision, or its operation in relation to a person is fair and reasonable in the circumstances, involves a value judgment, the making of which is committed to the Tribunal. A decision which involves elements of fact, degree, opinion or judgment is capable of being characterised as unfair and unreasonable.
34 In a case involving an allegation that the Tribunal had failed to take relevant matters into account (HEST Australia v Sykley (2005) 147 FCR 248), Crennan J sitting as a judge of this Court said (at 261, [48]-[49]):
The ground of failure to take into account relevant considerations is only made out if the decision-maker fails to take into account a consideration it is bound to take into account: Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39. The respondent argued that the matters identified above are matters the Tribunal was entitled, but not bound, to take into account. In reply, the applicant said that it could be implied that it was necessary for the Tribunal to consider these matters because they are fundamental to the assessment of whether the failure to notify the applicant of the payment was unreasonable.
The Complaints Act does not expressly identify specific considerations which the Tribunal is bound to consider. The relevant considerations are therefore determined by the subject matter, scope and purpose of the Act: Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 40. The purpose of the Complaints Act is to ensure members and beneficiaries are not adversely affected by unfair and unreasonable decisions of insurers and trustees: see s 14 and s 37. ...
35 In Retail Employees Superannuation Pty Ltd v Crocker (2001) 48 ATR 359; [2001] FCA 1330 at [28], Allsop J (as his Honour then was) said:
The question as to whether a decision was unfair or unreasonable cannot be judged otherwise than by having regard to the conformity of the decision with the governing rules of the fund and the terms of the policy. The conformity of the decision with those matters is therefore a relevant consideration in the sense discussed in Minister for Aboriginal Affairs v Peko-Wallsend (1986) 162 CLR 24 at 39-40 and see Telstra Corporation Ltd v Seven Cable Television Pty Ltd (2000) 178 ALR 707 (special leave refused on 20 August 2001). If conformity with the governing rules or the terms of the policy required the very decision, which was made, to be made, the strictures of subs 37(5), the universe of possible conduct under subs 37(3) and the balance of the Act, including subs 37(6), would require a conclusion of the Tribunal that the decision was not unfair or unreasonable. It could not be otherwise, as it would, on this hypothesis, be the only decision capable of being reached by the Trustee or the Insurer in the light of the governing rules or terms of the policy; or, put another way, any determination under paras 37(3)(b),(c) or (d) would involve the Tribunal doing an act contrary to the governing rules or the terms of the policy.
36 The way in which a provision which limits an appeal to an appeal on a question of law affects the procedural and substantive law attending such an appeal was considered by the Full Court of this Court in the recent decision of Haritos v Commissioner of Taxation [2015] FCAFC 92 ("Haritos"). That case concerned the scope and operation of s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth). Section 46(1) of the Act is in materially similar terms to s 44(1) of the Administrative Appeals Tribunal Act and the same approach should be taken to it. The relevant principles to emerge from Haritos are summarised by the Court at [62] and, relevant to this case, are as follows:
(1) The subject-matter of the Court's jurisdiction under s 44 of the AAT Act is confined to a question or questions of law. The ambit of the appeal is confined to a question or questions of law.
(2) The statement of the question of law with sufficient precision is a matter of great importance to the efficient and effective hearing and determination of appeals from the Tribunal.
(3) The Court has jurisdiction to decide whether or not an appeal from the Tribunal is on a question of law. It also has power to grant a party leave to amend a notice of appeal from the Tribunal under s 44.
(4) Any requirements of drafting precision concerning the form of the question of law do not go to the existence of the jurisdiction conferred on the Court by s 44(3) to hear and determine appeals instituted in the Court in accordance with s 44(1), but to the exercise of that jurisdiction.
(5) In certain circumstances it may be preferable, as a matter of practice and procedure, to determine whether or not the appeal is on a question of law as part of the hearing of the appeal.
(6) Whether or not the appeal is on a question of law is to be approached as a matter of substance rather than form.
(7) A question of law within s 44 is not confined to jurisdictional error but extends to a non-jurisdictional question of law.
(8) The expression "may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal" in s 44 should not be read as if the words "pure" or "only" qualified "question of law". Not all so-called "mixed questions of fact and law" stand outside an appeal on a question of law.
...
(see also May v Military Rehabilitation and Compensation Commission [2015] FCAFC 93).
37 I turn now to examine the questions which the applicant identifies as question of law in his draft notice of appeal ([25]).
38 The first four questions identified by the applicant relate to the construction of the Superannuation Act, the Superannuation Industry (Supervision) Act, and the Determination. In one form or another, the central issue raised by these questions is whether the applicant's benefit could be calculated in accordance with the earnings rate on 28 July 2011. The first respondent says that it could not be, and that decision was upheld by the Tribunal. The applicant says that it could be, and that a recalculation of his benefits on that basis was the only fair and reasonable response to the incorrect advice given to him by the first respondent. It is not entirely clear to me how this response (i.e., as if the advice the applicant was given is correct) fits in with his claim of what he would have done had he been given the correct advice (i.e., he would have switched to the Cash option), but that difference was not developed in submissions, and I do not think it appropriate for me to pursue it any further. In my opinion, the applicant's submission that his benefit could and should be calculated on the basis of the earnings rate on 28 July 2011 raises a question of law because it raises a question of the proper construction of the two superannuation Acts and the Determination. It is a question of the nature of the point, not how strong it is. The appeal is competent and the notice of objection to competency must be dismissed.
39 As to the fifth and sixth questions, I take those questions to raise the issue of whether an allowance for capital gains tax should have been included in the settlement offer and whether the rate of indexation used by the trustee was correct. The former issue was raised before the Tribunal and is identified as a question of law in the draft notice of appeal. The latter issue does not appear to have been raised before the Tribunal, but is identified by the applicant as a question of law in the draft notice of appeal. The issue of the reversionary spouse benefit was raised before the Tribunal and is the subject of complaint in the draft notice of appeal, although not identified by the applicant as a question of law. As the applicant represents himself, I will not decline to consider the issue because it is not formally identified as a question of law. The Tribunal's approach to the applicant's life expectancy was not the subject of the draft notice of appeal. It was referred to by the applicant in his submissions, but, I think, ultimately abandoned. If not, it ought to be rejected in any event. It was not an error, let alone an error of law, for the trustee and then the Tribunal to proceed by reference to life expectancy tables, rather than speculating about how long the applicant may live.
40 There is nothing in the superannuation Acts about the basis for formulating an offer of compensation. I was not referred to anything in the rules of the Fund dealing with that topic. The guiding light is whether the offer is fair and reasonable. This is not to say that the Tribunal might not commit an error of law in its consideration of a settlement offer. It might make a finding for which there is no evidence, its reasons might be illogical or irrational, or it might fail to take into account a relevant consideration.
41 I turn now to examine the merits of the applicant's questions.
42 The applicant submits that the Tribunal's construction of the definition of "termination day" in s 6 of the Determination is erroneous. In expanding on this submission, he pointed to the following:
(1) The Tribunal's construction means that the benefit payable will depend on when it is determined, and that is arbitrary and could result in differences between members whose position is essentially the same. This construction of the Determination should not be adopted in light of general obligations imposed on a trustee by the superannuation Acts to ensure equity and fairness between members and to act in the best interests of members;
(2) A reason advanced by the Tribunal for the construction of the Determination which it adopted, namely, it was undesirable that a member be able to lock in rates retrospectively did not apply in the applicant's case as he did not try and lock in rates retrospectively;
(3) If the Tribunal's construction of the definition of "termination day" is the correct one, then the Determination is invalid because it is contrary to the provisions of the superannuation legislation.
43 I reject these arguments. In my opinion, the proper construction of the definition of "termination day" in s 6 of the Determination is clear. It seems to me that, in the context of a calculation of interest and the determination of a benefit, "determines" means to define or fix or to settle (Concise Oxford Dictionary of Current English (8th ed, Clarendon Press, Oxford, 1990) p 318), and that the Tribunal did not err in interpreting the word to mean the act of calculating and processing. I do not think the Tribunal was suggesting that the applicant was trying to lock in rates retrospectively; rather the Tribunal was saying that the construction advanced by the applicant could have that consequence. I do not think that is an error. Finally, assuming it is open to the applicant in this proceeding to submit that the Tribunal erred in law in deciding that the offer was fair and reasonable because it relied on a Determination which is invalid, I do not think that the Determination is invalid. One can assume, I think, that the decision-maker will calculate and process benefits in the ordinary course of business. There is nothing to suggest that the date would be manipulated. There is nothing inherently unfair in selecting as the relevant day, the day of calculation and processing. As important as the general obligations in the superannuation Acts are, there is nothing to suggest that they should be given an operation which would bring down all or part of the Determination.
44 As to the matters raised by the applicant which go to the quantum of the offer, I do not think any of these raise a question of law. First, I think that the Tribunal was entitled to rely on the information provided by the trustee about whether capital gains tax would be payable on any settlement amount. It was part of its function to receive that advice and act on it if satisfied it was appropriate to do so. Secondly, it was open to the Tribunal to find that an offer based on an annual indexation rate of 1.5% was fair and reasonable. The fact that the Tribunal did not proceed on the basis of the indexation rate over the past 27 years does not mean that it committed an error of law. Finally, the Tribunal cannot be said to have erred in law in deciding that the trustee was not bound to have regard to a reversionary spouse pension in the absence of the identification of a potential spouse.