Case: Employers First v Tolhurst Capital Ltd [2005] FCA 616 ; (2005) 143 FCR 356
Outcome: considered
Section 46(1) of the ROC Act empowers a party to appeal to this Court, on a question of law, from a determination of the Tribunal. The appeal for which s 46(1) provides is a proceeding that comes before the Court for hearing and determination in the exercise of its original, rather than its appellate, jurisdiction: see Employers First v Tolhurst Capital Ltd [2005] FCA 616 ; (2005) 143 FCR 356 (' Employers First ') at 357-358 [1] per Branson J. The subject matter of an appeal brought pursuant to s 46(1) is the question or questions of law on which the appeal is brought: Employers First at 357-358 [1]; and see generally TNT Skypak International (Aust) Pty Ltd v Commissioner of Taxation (1988) 19 ATR 1067 at 1070 per Gummow J. 39 Section 14(1) is directed to the nature of the trustee's decision, whereas s 14(6) is concerned with the nature of the complaint: see Employers First at 372-373 [74]. For the Tribunal to have jurisdiction, the decision complained of before the Tribunal must be one made 'in relation to a particular member' and the complaint must not 'relate to the management of a fund as a whole'. The Tribunal determined that it had jurisdiction on the basis that 'the Complaints relate to whether the [applicant] has acted appropriately in relation to these [respondents'] accounts, not to members' accounts generally'. The applicant contends that, by mistakenly asserting the existence of its jurisdiction, the Tribunal erred in law: Craig v South Australia [1995] HCA 58 ; (1995) 184 CLR 163 at 177. 43 The applicant also submitted that the Complaints were excluded from the Tribunal's jurisdiction by s 14(6), as they were not relevantly distinguishable from a complaint concerning the investment policy being adopted by the trustee of a fund. It relied on the statement by Branson J in Employers First at 372-373 [74] that '[a] clear example of a complaint that relates to the management of a fund as a whole would be a complaint concerning the investment policy being adopted by the trustee of the fund'. 44 For the reasons set out below, I am satisfied that the Tribunal had jurisdiction to make the Determinations. 45 Most, if not all, of the applicant's arguments on jurisdiction depend on the actions it took, adversely to the respondents, being characterised as a single decision in respect of all members of Division C of the Fund to set an interest rate applicable to members' account balances. The applicant denies that any implementation decisions were taken in relation to each member's account balance; rather, it asserts that the interest rate was applied to each member's account balance by a process more accurately described as an administrative or mechanical function. The necessary factual or evidentiary basis for these contentions is entirely absent. 53 These conclusions are supported by the analysis in Employers First . In Employers First , the trustee issued member statements to a particular member, Mr Barratt, for the years ended 30 June 1995, 1996 and 1997 in which it calculated his retirement benefit by aggregating the defined benefit calculated under r 4 of the trust deed and the superannuation guarantee contributions that had been paid in respect of his membership of the fund. However, on Mr Barratt's retirement, the trustee notified him that the only lump sum retirement benefit to which he was entitled was that calculated under r 4 of the trust deed. In the course of her reasons, Branson J concluded that the retirement benefits to which Mr Barratt was entitled were only those prescribed by r 4: at 370 [60]-[61]. But, in the result, Branson J remitted the matter to the Tribunal for rehearing and determination on the ground that Mr Barratt had been denied procedural fairness in the course of the review process. 54 Branson J held that the Tribunal's jurisdiction was not excluded by s 14(6). Her Honour said at 372-373 [74]-[76]: 'It appears that there is no judicial authority on the proper interpretation of s 14(6) of the [ROC Act]. It seems clear, however, that the subsection is concerned with the nature of the complaint made under the section, rather than with the nature of the determination reached by the Tribunal on that complaint. A clear example of a complaint that relates to the management of a fund as a whole would be a complaint concerning the investment policy being adopted by the trustee of the fund. In this case Mr Barratt complained about the amount of the lump sum retirement benefit to which the Trustee had decided that he was entitled on his retirement. Mr Barratt founded his complaint upon the Member Statements. The Member Statements were concerned with his particular entitlement under the Plan. I conclude that, on its proper construction, s 14(6) of the [ROC Act] did not prohibit the Tribunal from dealing with Mr Barratt's complaint. It is not necessary for me to hazard a comprehensive definition of a complaint that relates to the management of a fund as a whole within the meaning of s 14(6) of the [ROC Act].' 55 Before me, the applicant submitted that Employers First is distinguishable. Alternatively, it submitted that I should find that Branson J's observations concerning s 14(6) were wrong or need not be followed on the grounds that they were unnecessary to her decision. I reject these submissions. 56 According to the applicant, Employers First can be distinguished on the basis that the gravamen of Mr Barratt's complaint was that he was entitled to receive a lump sum retirement benefit that was consistent with the information previously provided to him in member statements (at 364 [35]); whereas the gravamen of the respondents' Complaints is that the word 'interest' in cl C.4.10 of the Deed bears a particular meaning such that it can only be positive. The applicant also submitted that it is unrealistic to characterise each respondent's Complaint as one relating to the debit applied to his or her individual account. 57 In my opinion, the supposed distinctions are fallacious. Each respondent sought to review the applicant's decision to reduce his or her benefits by an amount that was variously said to be a negative investment return or negative interest. Each such decision related to the particular member and to his or her entitlements. That position is not altered or denied by the fact that the respondents argue that the applicant had no power under cl C.4.10 of the Deed to effect the debits to their accounts, or to apply a negative investment return or negative crediting rate to all deferred benefit members. Like Mr Barratt, the respondents complain about the amount of their benefits, as notified by member statements. More particularly, they complain that the applicant unlawfully reduced the amount of their benefits. 58 The contention that Branson J's observations need not be followed because they were obiter dicta is unsound. Her Honour's conclusions concerning jurisdiction were integral to her decision and to the order she made remitting the matter back to the Tribunal for hearing and determination according to law. 59 Another reason why s 14(6) is inapplicable is that, in my opinion, a Complaint that the Deed has been contravened in a way that directly and adversely affects the financial position of the particular member lodging the Complaint cannot be described as a complaint about 'the management of a fund as a whole'. This is so even if it be assumed that the Complaints should be characterised in the way the applicant contends, ie as relating only to the question whether the debiting of interest contravened cl C.4.10 of the Deed. If the Complaints are upheld and if the applicant has in fact debited interest in contravention of cl C.4.10 of the Deed, that action could hardly be described as one relating to the management of the Fund as a whole. The Complaints are substantive and genuine and the applicant did not suggest otherwise. It follows, in my view, that the nature of the Complaints is such that they fall squarely within the Tribunal's jurisdiction. 60 The Tribunal concluded that the word 'interest' in cl C.4.10 of the Deed does not, on its proper construction, contemplate 'negative interest'. It was common ground that this construction involves a question of law.