Tratter v Aware Super

Federal Court of Australia|2023-05-19|Before: Mr J, Wheelahan J

Counsel for the Second Respondent: The Second Respondent was taken to have filed a submitting notice

Counsel for the Third Respondent: The Third Respondent filed a submitting notice

AND: AWARE SUPER (FORMERLY FIRST STATE SUPER) First Respondent

order made by: WHEELAHAN J DATE OF ORDER: 19 May 2023

The application is dismissed
There is no order as to costs Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Introduction 1 The applicant brings an appeal against a determination of the third respondent, the Australian Financial Complaints Authority, pursuant to s 1057(1) of the Corporations Act 2001 (Cth). Although the proceeding is styled an "appeal", it is a form of statutory judicial review. The "appeal" must be on a question of law, and I will refer to the questions of law raised by the applicant later in these reasons. 2 I will refer to the Australian Financial Complaints Authority as AFCA, because that is the acronym used in the Corporations Act. By its determination, AFCA affirmed a decision of the first respondent (the Trustee), which is the trustee of Aware Super superannuation fund, in relation to the distribution of a death benefit of approximately $243,000 that was payable upon the death of the applicant's late son, Mr Trevor Tratter, who died in March 2019. 3 Mr Tratter died without leaving a will. The applicant was Mr Tratter's personal representative to whom letters of administration were granted. Mr Tratter had made a non-binding nomination of the applicant as the preferred recipient of the death benefit. The Trustee determined to apportion the death benefit between the applicant as to 30%, and the second respondent as to 70%. The Trustee determined that the second respondent was the spouse of the deceased and therefore a dependant as that term was defined for the purposes of the trust deed by the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act). 4 The active parties to this proceeding are the applicant and the Trustee. AFCA filed a submitting notice, and the effect of an interlocutory order of the Court made 29 July 2022 is that the second respondent is to be taken to have filed a submitting notice.

Background 5 Mr Tratter joined the Health Super fund on 16 March 2009. On 30 June 2011, Health Super and First State Super merged and Mr Tratter's account was transferred to the First State Super fund. First State Super was later renamed Aware Super.

Nomination of the applicant to receive the death benefit 6 While he was a member of Health Super, Mr Tratter made an online nomination of the applicant to receive 100% of his death benefit. The terms of the Health Super fund trust deed did not allow for binding nominations, so therefore Mr Tratter's nomination of his mother was not binding on the former trustee. After the merger of the two funds, the Trustee indicated on Mr Tratter's annual benefit statements that his nomination was non-binding, and from 2014 it included text on his annual benefit statements explaining the implications of having a non-binding nomination and drawing attention to the option of making a binding nomination under the rules of the merged fund.

The rules of the Fund 7 The Fund was governed by a trust deed dated 19 February 1999 (the Trust Deed). The Trust Deed has been amended from time to time, including amendments that were effective from 30 June 2011 when members of the Health Super Fund were admitted. The Trust Deed provided for and annexed Rules of the Fund (the Fund Rules). At the relevant time, rule 8.6 of Division 1A of Section 1 of the Fund Rules relevantly provided - Recipient of a member's benefit - on death 8.6 Subject to any contrary provision in a Section or Division of these Rules, if a member dies: … (b) On or after the transition date the member's benefit must be cashed in favour of either or both of: (i) the member's legal personal representative; and (ii) one or more of the member's dependants, as the Trustee determines, unless … (Italics in original.) 8 Counsel for the applicant and the Trustee accepted during argument that the reference to the member's legal personal representative should be construed as being in his or her capacity as a representative of the member's estate, and not in a personal beneficial capacity. 9 Rules 8.9 and 8.10 provided that a non-binding nomination of the beneficiary of a death benefit was a mandatory relevant consideration for the Trustee, but did not fetter the Trustee's discretion - 8.9 The Trustee may permit a member to inform the Trustee (by notice) of the person or persons that the member would prefer to receive the member's benefit on or after the death of the member (non-binding nomination notice). 8.10 If the Trustee has received a non-binding nomination notice from a member, the Trustee must consider the notice but must exercise its own discretion as to the person or persons to whom the member's benefit is to be paid. 10 Rule 1.11 of Division 1A of the Fund Rules provided that italicised words and expressions in the Fund Rules had the same meaning as in the SIS Act and the Superannuation Industry (Supervision) Regulations 1994 (Cth). Accordingly, for the purposes of paragraph (b)(ii) of rule 8.6 of Division 1A of the Fund Rules, "dependant" had the inclusive meaning given in s 10(1) of the SIS Act - dependant, in relation to a person, includes the spouse of the person, any child of the person and any person with whom the person has an interdependency relationship. 11 The term "spouse of a person" was defined by s 10(1) of the SIS Act as including another person who, although not legally married to the person, lives with the person on a genuine domestic basis in a relationship as a couple.

The Trustee's determination 12 Both the applicant and the second respondent objected to the Trustee's determination to pay the death benefit to the applicant and the second respondent in the proportions of 30% to the applicant and 70% to the second respondent. Initially, the matter went to the Trustee's Complaints and Disputes Executive Panel. The Panel decided to affirm the Trustee's previous determination. The Trustee wrote to the parties by separate letters dated 11 May 2020 setting out the Panel's reasons, which are summarised as follows - (a) both the applicant and second respondent had demonstrated financial dependence upon Mr Tratter; (b) the second respondent was the de facto spouse of Mr Tratter; (c) Mr Tratter's nomination of his mother as the beneficiary of his death benefit was made prior to the commencement of his relationship with his spouse; (d) the nomination was not binding, and therefore the Trustee's discretion was enlivened; (e) as the spouse of Mr Tratter, the second respondent was recognised in "superannuation law" as a dependent, and as the spouse had the primary right to receive the death benefit; (f) the applicant had provided evidence of her partial financial dependence on Mr Tratter in relation to the sharing of some property that she owned jointly with the deceased; and (g) weighing up the amount of those expenses, the Panel considered that a distribution to the applicant of 30% of the benefit was a reasonable provision to cover the approximate amount she would have continued to receive from the deceased had Mr Tratter not died.

The jurisdiction of AFCA 13 Careful attention must be given to the terms of the legislation in order to identify AFCA's function upon a complaint being made to it. Similar observations have been made by the High Court in relation to the statutory grant of a right of appeal: see, Dwyer v Calco Timbers Pty Ltd [2008] HCA 13; 234 CLR 124 at [2]. 14 AFCA's function in relation to superannuation complaints is conferred by Division 3 of Part 7.10A of the Corporations Act. The legislative history of Part 7.10A and the establishment of the AFCA scheme were referred to by the Full Court in QSuper Board v Australian Financial Complaints Authority Limited [2020] FCAFC 55; 276 FCR 97 (QSuper) at [13]-[17]. In relation to superannuation complaints, the AFCA scheme took the place of the Superannuation Complaints Tribunal that was established by the Superannuation (Resolution of Complaints) Act 1993 (Cth), which on 5 March 2022 was repealed by the Treasury Laws Amendment (Putting Consumers First - Establishment of the Australian Financial Complaints Authority) Act 2018 (Cth). The leading decisions of the Court concerning the construction of s 14(2) and s 37 of the Superannuation (Resolution of Complaints) Act remain relevant to the construction of the corresponding provisions of the Corporations Act concerning the AFCA scheme. 15 The content of a complaint that may be made to AFCA in relation to a death benefit is constrained by s 1053(1)(j), which provides that a person may make a complaint in relation to a death benefit only if the complaint is that the decision was unfair or unreasonable. The powers of AFCA conferred by s 1055 of the Corporations Act are aligned with the authorised subject-matter of the complaint. In relation to death benefits, s 1055(3) mandates that AFCA must affirm the decision under review if it is satisfied that the decision, in its operation, was fair and reasonable in all the circumstances - (3) AFCA must affirm a decision relating to the payment of a death benefit if AFCA is satisfied that the decision, in its operation in relation to: (a) the complainant; and (b) any other person joined under subsection 1056A(3) as a party to the complaint; was fair and reasonable in all the circumstances. 16 Correspondingly, AFCA's powers in s 1055(6) to vary, set aside, substitute, or remit a decision are conditioned by s 1055(5) on AFCA finding that the decision under review relating to the payment of a death benefit is, in its operation, unfair, or unreasonable, or both. The formation of this opinion by AFCA is a subjective jurisdictional fact - (5) If AFCA is satisfied that a decision relating to the payment of a death benefit, in its operation in relation to: (a) the complainant; and (b) any other person joined under subsection 1056A(3) as a party to the complaint; is unfair or unreasonable, or both, AFCA may take any one or more of the actions mentioned in subsection (6), but only for the purpose of placing the complainant (and any other person so joined as a party), as nearly as practicable, in such a position that the unfairness, unreasonableness, or both, no longer exists. 17 A discretionary decision of a trustee of a superannuation fund in relation to the payment of a death benefit would not ordinarily be open to challenge in a court of equity by the application of the criteria of fairness or reasonableness of the decision in its operation: see Attorney-General (Cth) v Breckler [1999] HCA 28; 197 CLR 83 at [24] and [39] (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ). The AFCA scheme establishes a statutory right of review with statutory remedies. If AFCA determines that a trustee's decision is unfair or unreasonable in its operation and then varies or substitutes the trustee's decision, then new legal rights are created, noting however that while determinations made by AFCA are binding on members of the scheme they are not binding on complainants under the scheme: QSuper at [155]; Corporations Act s 1051A(4)(e). 18 The Full Court in QSuper explained at [64] that AFCA is to determine for itself whether the trustee's discretionary decision in its operation in relation to the complainant and any other person joined to the complaint was fair and reasonable in all the circumstances. This involves a de novo consideration in the sense that AFCA is not restricted to documents that were before the trustee: Board of Trustees of the State Public Sector Superannuation Scheme v Edington [2011] FCAFC 8; 119 ALD 472 (Edington) at [50] (Kenny and Lander JJ). This follows from the terms of s 1054A, under which AFCA is empowered to require the provision of written information and the production of documents. The enquiry requires AFCA to make its own assessment of the evidence, ascertain the facts for itself, and upon the material before it to consider whether the decision of the trustee that is under review was fair and reasonable: Edington at [46], [51], [53] (Kenny and Lander JJ). That is the central question framed by the legislation, and it involves a value judgment the making of which is committed to AFCA: see, National Mutual Life Association of Australasia Ltd v Campbell [2000] FCA 852; 99 FCR 562 (National Mutual) at 566 (Black CJ, Emmett and Hely JJ). The question does not require AFCA to determine whether there was some error by the trustee, but is concerned only with the manner in which the trustee's decision operates: QSuper at [155]. It follows that AFCA is not engaged in some form of judicial review: Retail Employees Superannuation Pty Ltd v Crocker [2001] FCA 1330 (Crocker) at [29] (Allsop J). That is not to say that some error by a trustee may not inform the answer to the question whether the trustee's decision in its operation was unfair or unreasonable: Mercer Superannuation (Australia) Ltd v Billinghurst [2017] FCAFC 201; 255 FCR 144 at [34]-[35] (Flick and Kerr JJ). Nor, having regard to the gateway to and the limitations on AFCA's exercise of power, does AFCA's function involve determining for itself the correct or preferable decision, which is the judicial formulation used to describe the function of the Administrative Appeals Tribunal: see, Hornsby v Military Superannuation & Benefits Board of Trustees [No 1] [2003] FCA 54; 126 FCR 484 at [17] (Mansfield J); Cameron v Board of Trustees of the State Public Sector Superannuation Scheme [2003] FCAFC 214; 130 FCR 122 at [43] (Whitlam, Kiefel and Dowsett JJ); Edington at [46] (Kenny and Lander JJ). 19 Counsel for the applicant and for the Trustee accepted that that the reference to "unreasonable" in s 1053(1)(j) and s 1055(5) of the Corporations Act was not a reference to unreasonable in the sense that no reasonable trustee could have arrived at the decision: cf, in the context of decisions involving the exercise of public power, Attorney-General (NSW) v Quin [1990] HCA 21; 170 CLR 1 at 36 (Brennan J). That conclusion is supported by the text of the legislation. As identified by the Full Court in QSuper at [64], the focus of the scheme of review is on the fairness or reasonableness of the decision "in its operation" in relation to the complainant or joined party. Fairness and reasonableness are broad concepts, and in ordinary usage a decision may be referred to as unreasonable when it is not really beyond the bounds of reason at all: see National Mutual at [36]. In Reeves v Nulis Nominees (Australia) Limited (Trustee) [2022] FCA 627, Nicholas J held that in contradistinction to legal unreasonableness in administrative law, AFCA is required instead to determine whether a trustee's decision was fair and reasonable in accordance with the ordinary meaning of those words. This is not, however, an enquiry that is at large. As Allsop J explained in Crocker at [27] in relation to the former legislation - The task of the [Superannuation Complaints Tribunal] and the meaning of the phrase "unfair or unreasonable" are inextricably intertwined and both are governed by the Act, and, especially, by s 37. It is the decision of the Trustee, recognising its obligation to act in conformity with the governing rules of the fund, and the decision of the Insurer, recognising its obligation (and entitlement) to act in conformity with the terms of the relevant policy, which must be reviewed for unfairness or unreasonableness. The unfairness or unreasonableness must be of the decision (as expanded by s 4) under, and in conformity with, the governing rules or the terms of the policy. It is not some other perceived (rightly or wrongly) unfairness or unreasonableness in and about the conduct of the fund. 20 If AFCA reaches the state of satisfaction required by s 1055(5), it is then open to AFCA to vary or set aside the decision and substitute its own decision. This is subject to the limitation that the power can be exercised only for the purpose of placing the affected persons as nearly as practicable in such a position that the unfairness or unreasonableness or both no longer exists. AFCA's powers are also subject to the limitations in s 1055(7) which include that it must not make a determination that would be contrary to law, or to the governing rules of the fund. 21 Under s 1055A, AFCA is required to give reasons for its determination. That obligation is subject to the requirement in s 25D of the Acts Interpretation Act 1901 (Cth) that the reasons should set out the findings on material questions of fact and refer to the evidence or other material on which those findings were based.

The complaint to AFCA 22 On 12 May 2020, the second respondent lodged a complaint with AFCA in relation to the Trustee's decision, and sought to have AFCA allocate 100% of the death benefit to him. The applicant was joined as a party to the complaint and submitted to AFCA that she should receive 100% of the death benefit. 23 AFCA affirmed the Trustee's decision, and provided a statement of reasons. Towards the outset of its reasons AFCA stated, materially - 1.2 Issues and key findings … Is the trustee's decision fair and reasonable? Yes, the trustee's decision is fair and reasonable in its operation in relation to [the second respondent] and [the applicant] in all the circumstances. The trustee correctly identified each of the [second respondent] and [applicant] as being dependants of the deceased member. It was open to the trustee to allocate the death benefit in the proportions that it identified. 24 AFCA explained its review power and process in the following terms - In determining superannuation complaints, AFCA must: • comply with its rules and the law • consider whether the trustee's decision is fair and reasonable in its operation in relation to the complainant and the joined party in all the circumstances • not make a determination that is contrary to law or the trust deed. This means the issue is not what decision I would have made, but whether the decision under review was fair and reasonable. 25 In arriving at its findings AFCA set out in some detail submissions made by the applicant in which she disputed that the second respondent was Mr Tratter's spouse. The Authority did not accept these submissions, finding that the second respondent was living with Mr Tratter on a genuine domestic basis in a relationship as a couple, with the consequence that the second respondent was Mr Tratter's spouse at the time of his death for the purposes of the Trust Deed. 26 The Authority then considered the position of the applicant, finding that the applicant was partially financially dependent on Mr Tratter because there was a pattern of contribution by Mr Tratter towards the costs and maintenance and upkeep of a property that he and the applicant owned jointly, and that Mr Tratter was also jointly liable with the applicant for the rates on the property. AFCA did not accept that the applicant was financially dependent upon Mr Tratter by reason of a substantial loan that she had given to him which had not been repaid. AFCA stated that the existence of a debt was not a factor that established financial dependency, and it was not a purpose of a superannuation death benefit to meet the debts of a deceased estate. 27 As a result, AFCA determined that both the applicant and the second respondent were dependants of Mr Tratter at the time of his death. That finding brought both the applicant and the second respondent within the class of persons to whom the Trustee was required under the Fund Rules to pay the death benefit. 28 In section 2.5 of its reasons, AFCA addressed the expectation of the second respondent (the complainant before AFCA) of receiving financial support from Mr Tratter had he not died - 2.5 Did the complainant have an expectation of receiving financial support from the deceased member if the deceased member had not died? Yes, the complainant had an expectation of receiving financial support from the deceased member if the deceased member had not died. There is an expectation between spouses that they will share in their combined financial resources, including superannuation. If the deceased member had not died, there is nothing to suggest he would not have continued making financial contributions towards his and the complainant's living expenses. In particular, he would have continued to make contributions towards the mortgage payments on the property in which he and the complainant lived. Without the deceased member's contributions, the complainant has the burden of meeting these payments alone. 29 In section 2.6 of its reasons, AFCA then addressed the expectation of the applicant (who was the joined party before AFCA) of receiving financial support from Mr Tratter had he not died - 2.6 Did the joined party have an expectation of receiving financial support from the deceased member if the deceased member had not died? Yes, the joined party had an expectation of receiving financial support from the deceased member if the deceased member had not died. The joined party has demonstrated the deceased member contributed towards the maintenance and upkeep of the property they jointly owned. She has also provided evidence she is on a low income and has a small superannuation balance, and has said she would have relied on the deceased member for financial support as she aged. She has provided information about some capital expenditure she says the deceased member had committed to make, including for the sinking of a bore on the property. Without the deceased member's contribution, the joined party has the burden of maintaining the property alone (noting she also has the benefit of having inherited the deceased member's share in the property through survivorship). 30 In section 2.7 of its reasons, AFCA concluded that the Trustee's decision was fair and reasonable, stating - 2.7 Is the trustee's decision fair and reasonable? Yes, the trustee's decision is fair and reasonable in its operation in relation to the complainant and the joined party in all the circumstances. The trustee correctly identified each of the complainant and the joined party as being dependants of the deceased member. It was open to the trustee to allocate the death benefit in the proportions that it identified. The purpose of a superannuation death benefit is to provide for a deceased member's dependants who were receiving financial support and might reasonably have expected to receive or continue to receive financial support from the deceased member, had they not died. As the deceased member's spouse, the complainant could reasonably have expected to receive financial support from the deceased member for the remainder of their lives together. As a person who was partially financially dependent on the deceased member, the joined party could reasonably have expected to receive some financial support from the deceased member for the remainder of her life. … With the exercise of a trustee discretion, there is often a range of decisions that might be considered fair and reasonable, if the trustee's decision falls within that range, it must be affirmed. I am satisfied it was open to the trustee to allocate the death benefit in the manner and proportions it did.

The appeal to this Court 31 By a second further amended notice of appeal, the applicant raises the following questions of law - 1. The test to be applied a. What is the correct test to be applied in reviewing the determination of the First Respondent when that determination was within the range of decisions that were open to the First Respondent; and b. [Deleted] 2. Fair and reasonable determination a. What is required to conclude that the operation of the Decision is fair and reasonable in all the circumstances, as required by section 1055 Corporations Act; and b. [Deleted] 3. Grounds for reasons Has the Third Respondent failed to give any or any adequate grounds for its decision at [2.7] of its determination 32 The applicant relies on two grounds of appeal - 1. The Third Respondent erred in making the Decision in that it asked itself the wrong question, namely whether the determination of the First Respondent was open to the First Respondent when it should have enquired, inter alia, whether the operation of the Decision in relation to the Applicant was fair and reasonable in all the circumstances; 2. [Deleted] 3. The Third Respondent has failed to provide any or any adequate grounds as to the basis for its determination at [2.7] that "the trustee's decision is fair and reasonable in its operation in relation to the complainant and the joined party in all the circumstances. The trustee correctly identified each of the complainant and joined party as being dependants of the deceased member. It was open to the trustee to allocate the death benefit in the proportions that it identified."

The applicant's submissions 33 Counsel for the applicant submitted that while AFCA's remit in making a determination of a superannuation complaint was circumscribed by the relevant provisions of the Corporations Act, the relevant question for AFCA was not simply whether the decision was open to the Trustee, but whether the decision operated fairly and reasonably in all the circumstances. Counsel submitted that the question of fairness and reasonableness is to be answered by reference to whether or not the decision in its operation in relation to the applicant and the second respondent was fair and reasonable in all of the circumstances. It was submitted that to discharge its function AFCA was required to look beyond whether the decision was reasonably open to the trustee, but was required to go further and consider how that decision would then operate upon each of the applicant and the second respondent and in that context ask itself whether it was fair and reasonable in all of the circumstances. Counsel submitted that this duty entailed, amongst other things, an enquiry as to: (1) the financial needs of the applicant; (2) the wishes of the deceased, insofar as they can be determined; and (3) the extent to which departure from those wishes would operate unfairly as against the applicant. It was submitted that the applicant arguably had a greater need than the second respondent and that the balancing of interests was not considered. 34 Counsel submitted that it was an error in approach for AFCA to accept the correctness of the Trustee's decision as a starting point, or to accept the correctness of the claims of the second respondent as a starting point. It was submitted that AFCA's error in approach was highlighted by the unwavering focus on the question of the existence or not of an interdependent relationship between Mr Tratter and the second respondent, and to consider to what extent, if any, the applicant was financially dependent on Mr Tratter. It was submitted that while both were relevant considerations, they did not address the question raised by the Act, which was whether the decision, in its operation in relation to the applicant, was fair and reasonable in all the circumstances. It was submitted that the Act does not direct AFCA to determine the fairness or reasonableness of the Trustee's decision by financial dependency alone. 35 Counsel for the applicant further submitted that AFCA had not discharged the statutory function conferred upon it by merely adhering to the statutory formula that the determination of the Trustee was fair and reasonable without considering the circumstances of the applicant, which counsel submitted included: (1) she was dependent upon Mr Tratter; (2) she had no independent income-earning capacity of her own; (3) she had loaned a substantial sum of money to Mr Tratter which remained unpaid; and (4) she was going to incur the burden of the maintenance and upkeep of the family home. 36 Counsel further submitted that while AFCA relied on the fact that there was no binding nomination of the applicant as the beneficiary of the death benefit, conversely, AFCA did not take account of the fact that there was no nomination at all of the second respondent as a beneficiary. It was further submitted that the absence of a binding nomination of the applicant was seemingly relied on by AFCA as a consideration operating against the applicant. 37 It was also submitted that the error made by the Trustee in the first instance and affirmed by AFCA on review was to consider the starting point as a complete entitlement on the part of the second respondent, subject to a carve-out in favour of the applicant. Counsel for the applicant relied on the reasons of the Complaints and Disputes Executive Panel of the Trustee which I summarised at [12(e)] above - The Panel noted that as the spouse of the deceased, [the second respondent] was recognised in superannuation law as a dependant, and as the spouse had the primary right to receive the death benefit. [The applicant] had provided evidence of partial financial dependence in relation to the sharing of some expenses for the property she jointly owned with the deceased. Weighing up the amount of those expenses the Panel considered a distribution of 30% of the benefit to [the applicant] was a reasonable provision to cover the approximate amount she would have continued to receive from the deceased had he not died. 38 Counsel submitted that AFCA followed the same path as the Trustee in treating the second respondent as having a prima facie entitlement that had to be displaced in circumstances where the applicant was the nominated beneficiary. 39 Finally, counsel for the applicant submitted that there was nothing in AFCA's reasons, particularly at section 2.7, that informed the reader as to why the apportionment of the death benefit made by the Trustee was fair and reasonable.

The Trustee's submissions 40 Counsel for the Trustee submitted that a fair reading of AFCA's statement of reasons as a whole disclosed that AFCA made no error in relation to its task. It was submitted that, as disclosed in various parts of its determination, AFCA understood that its role was to determine and therefore to address the question whether the Trustee's decision, in its operation in relation to the applicant and the second respondent, was fair and reasonable in all the circumstances. It was submitted that AFCA did not limit itself to asking the question whether the Trustee's decision was merely "open to it". 41 Counsel submitted that AFCA's consideration of the questions relating to the status of the applicant and the second respondent as "dependants" of the deceased was a necessary step in making its determination. The Trustee's decision would not have been fair or reasonable if either the applicant or the second respondent did not fall within the definition of "dependant" in the Fund Rules. Furthermore, both the applicant and the second respondent provided extensive submissions to the Authority on the question of whether each was a "dependant" of the deceased, thereby qualifying for distribution of the death benefit under the Fund Rules. 42 As to AFCA's consideration of the fairness and reasonableness of the Trustee's apportionment of the death benefit between the applicant and the second respondent, counsel for the Trustee submitted that it was important to give consideration to the totality of the Authority's reasons, and not with an eye clearly focused or an ear keenly attuned to the perception of error. It was submitted that by its determination AFCA considered a significant body of evidence provided by both the applicant and the second respondent in relation to their respective financial situations, and included consideration of the appellant's financial situation and needs. It was submitted that AFCA's consideration of the evidence of the applicant and the second respondent included sections 2.5 and 2.6 of its statement of reasons to which I referred at [28] and [29] above. 43 As to the submission on behalf of the applicant that the Trustee, and in turn AFCA, had considered as a starting point that the second respondent was entitled to 100% of the benefit, counsel for the Trustee submitted that there was nothing in AFCA's determination to support this submission. It was submitted that AFCA had correctly identified both the applicant and the second respondent as dependants, and went on to determine that the Trustee's decision as to apportionment was fair and reasonable in all the circumstances. 44 In relation to the applicant's submission that the absence of a binding nomination in favour of the applicant operated against the applicant, counsel for the Trustee submitted that this was not a fair or accurate characterisation of AFCA's consideration of the relevance of the death benefit nomination. It was submitted that AFCA considered the relevance of the nomination in order to address a submission to AFCA by the applicant that the deceased had not received clear information about the status of his nomination. It was submitted that it was in this context that AFCA determined that the Trustee had acted appropriately in the consideration it gave to the non-binding nomination.

Consideration 45 AFCA is not a judicial body. Its obligation to give reasons for its determinations is statutory, and is subject to the standard of reasons established by the Acts Interpretation Act, s 25D, which has been described as imposing limited obligations: QSuper at [202]. It is axiomatic that in evaluating AFCA's reasons for its determination the reasons are to be read as a whole, and not in an over-zealous way with an eye keenly attuned to error. 46 I do not accept the applicant's claim that AFCA asked itself the wrong question in considering the competing positions of the applicant and the second respondent. It is clear from AFCA's reasons that it addressed itself to the correct question, namely whether the Trustee's decision was fair and reasonable in its operation in relation to the applicant and the second respondent in all the circumstances. AFCA addressed this issue directly when identifying the issues and key findings in section 1.2 of its statement of reasons which I extracted at [23] above. The key findings reflected AFCA's conclusion at 2.7, which I have extracted at [30] above. 47 After identifying its key findings, AFCA set out its reasons for determining that both the applicant and the second respondent were qualified to be considered as beneficiaries of the death benefit, holding that the second respondent was the deceased's spouse, and that the applicant was financially dependent upon the deceased to the extent identified in AFCA's reasons. AFCA considered this issue at some length in response to the competing submissions of the applicant and the second respondent, each contending before AFCA that the other was not a dependent. AFCA then identified the nature of their dependency, making the findings at 2.5 and 2.6 which I have extracted at [28] and [29] above. In a nutshell, the nature of the second respondent's expected dependency was that of a spouse, involving combined financial resources. The nature of the applicant's expected dependency was in relation to expenses arising in connection with the jointly owned property, but noting that the applicant took the jointly-owned property as the survivor. Both the applicant and the second respondent were found by AFCA at 2.7 of its statement of reasons to be persons who could reasonably have expected to receive some financial support from the deceased. In the case of the second respondent that was for the remainder of their lives together, and in the case of the applicant for the remainder of her life. As to the apportionment between them, AFCA's determination was that the Trustee's exercise of discretion was within the range. 48 I reject the submission made on behalf of the applicant that AFCA asked itself only whether the Trustee's decision was open to it. The submission is not based on a fair reading of AFCA's statement of reasons. As I have explained, before AFCA had jurisdiction to intervene, it had to reach a state of satisfaction that the Trustee's decision, which included its apportionment, was not fair and reasonable in its operation. As is so often the case with questions of apportionment involving the exercise of discretion or evaluative conclusions, AFCA recognised that, in the circumstances of this case, there was no one correct decision, but that there was an acceptable range of decisions that might be considered fair and reasonable. A decision on a discretionary or evaluative question of apportionment which is reviewable on the ground that it is not fair or reasonable in its operation is akin to a judicial decision upon a "question, not of principle or of positive findings of fact or law, but of proportion, of balance and relative emphasis, and of weighing different considerations. It involves an individual choice or discretion, as to which there may well be differences of opinion by different minds": British Fame (Owners) v Macgregor (Owners) [1943] AC 197 at 201 (Lord Wright). See also, Pennington v Norris [1956] HCA 26; 96 CLR 10 at 15-16 (Dixon CJ, Webb, Fullagar and Kitto JJ); Podrebersek v Australian Iron & Steel Pty Ltd [1985] HCA 34; 59 ALR 529 at 532 (Gibbs CJ, Mason, Wilson, Brennan and Deane JJ), and in the context of testator's family maintenance, Singer v Berghouse [1994] HCA 40; 181 CLR 201 at 212 (Mason CJ, Deane and McHugh JJ). The fact that AFCA might have apportioned the benefit differently did not make the Trustee's apportionment unfair, or unreasonable, or both. In saying this, I observe that AFCA did not suggest that it might have reached a different apportionment, but confined itself to the question whether the Trustee's decision was within the range of what was fair and reasonable. 49 I do not accept the submissions of the applicant that AFCA erred by accepting the correctness of the Trustee's decision as a starting point. For one thing, AFCA made its own findings in relation to the fact of and the nature of the dependence of the applicant and the second respondent upon the deceased. As it was required to do, upon the basis of those findings AFCA then addressed whether the Trustee's apportionment of the benefit was unfair or unreasonable, which was its statutory task. As I have mentioned, AFCA's powers to intervene arose only if it formed a state of satisfaction that the Trustee's decision was unfair or unreasonable or both in its operation, which necessarily required that attention be directed to the Trustee's ultimate decision. The review by AFCA was not a re-consideration de novo, but was conditioned on forming an opinion that the Trustee's decision was unfair, unreasonable or both. In addressing this question, it is clear that AFCA took account of the deceased's non-binding nomination of the applicant as his intended recipient of the death benefit. AFCA referred to the deceased's nomination of the applicant in its chronology at section 3.4 of its statement of reasons, and considered the nomination in some detail in section 2.2. AFCA noted that the nomination was not binding on the Trustee, and stated that the Trustee acted appropriately in the consideration it gave to the nomination. No error of law has been shown in relation to AFCA's analysis in this regard. 50 In view of the above, the claim by the applicant that AFCA's reasons for its determination were not adequate must be rejected. AFCA set out in sufficient detail the findings that it did make on questions of fact that it considered were material to its decision: see, Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323 at [68] (McHugh, Gummow and Hayne JJ). Insofar as the applicant's complaint about adequacy of reasons was directed to AFCA's determination that the Trustee's apportionment was open to it because it was within the range of decisions that might be considered as fair and reasonable, AFCA's conclusion was one of evaluation based upon its anterior findings. In the context of the whole of AFCA's reasons its conclusion in relation to the Trustee's apportionment did not admit of any more elaboration and nothing more in the way of reasons was required.

Conclusion 51 The application will be dismissed. I will hear the parties on costs.

Pro bono counsel 52 Mr John Ribbands acted for the applicant on a pro bono basis. Prior to his involvement, the applicant was unrepresented and her material raised an array of false issues which would have increased substantially the cost of this proceeding. After Mr Ribbands became involved the questions raised by the application were confined to those that were reasonably arguable. The questions of law and the grounds of appeal that Mr Ribbands settled were skilfully argued. This assisted the Court and had the result that the best arguments that could be put on behalf of the applicant were advanced. Mr Ribbands is to be commended for representing the applicant to a high standard in the best traditions of the Australian Bars. I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wheelahan.

Treasury Laws Amendment (Putting Consumers First - Establishment of the Australian Financial Complaints Authority) Act 2018(Cth)

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