Dohnt v Green [2006] FCA 30 (2 February 2006)

MICHAEL JAMES DOHNT v PAUL ANDREW GREEN & COLONIAL MUTUAL SUPERANNUATION PTY LIMITED

SAD 203 of 2005

MANSFIELD J
2 FEBRUARY 2006
ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SAD 203 OF 2006

BETWEEN:	MICHAEL JAMES DOHNT APPELLANT
AND:	PAUL ANDREW GREEN FIRST RESPONDENT COLONIAL MUTUAL SUPERANNUATION PTY LIMITED SECOND RESPONDENT
JUDGE:	MANSFIELD J
DATE OF ORDER:	2 FEBRUARY 2006
WHERE MADE:	ADELAIDE

THE COURT ORDERS THAT:

1. The appeal is dismissed.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SAD 203 OF 2006

BETWEEN:	MICHAEL JAMES DOHNT APPELLANT
AND:	PAUL ANDREW GREEN FIRST RESPONDENT COLONIAL MUTUAL SUPERANNUATION PTY LIMITED SECOND RESPONDENT

JUDGE:	MANSFIELD J
DATE:	2 FEBRUARY 2006
PLACE:	ADELAIDE

2 It is an appeal from a decision of the Superannuation Complaints Tribunal (the Tribunal) under the Act.

3 In 1983, Paul Andrew Green (Mr Green) married Tracy Lee Goldsworthy (the deceased). They had two children of the marriage, Lauren Jade Green born on 22 April 1988 and Kristen Lee Green born on 14 April 1992. They are now 17 and 13 respectively. The marriage failed by 1994, and in that year a property settlement and a spousal maintenance order was made in the Family Court. Subsequently, in 1996 custody of the two children was awarded to Mr Green.

4 In 1994, the deceased commenced a relationship with Michael James Dohnt (Mr Dohnt). The relationship was obviously a strong one. In August 1999 they commenced living together in a de facto spousal relationship. They were living in that relationship up to the time of the deceased’s death on 18 February 2003, when she was aged only 41.

5 On 2 January 2001, the deceased joined the Colonial Supertrace Eligible Rollover Fund (the Fund) of which the trustee was Colonial Mutual Superannuation Pty Limited (the Trustee). At the time of her death, the death benefit payable pursuant to the trust deed establishing the Fund (including interest now to 15 March 2004) was $14,369.22. Under the trust deed, the Trustee was obliged to pay the member’s death benefit in accordance with superannuation law, and consistently with that law, to one or more of the dependants or legal personal representative of the deceased ‘in proportions which the Trustee decides’. The trust deed defines dependants to include a spouse and a child, and spouse includes a person living with the deceased member on a bona fide domestic basis as the husband or wife of that member.

6 It is common ground that each of Mr Dohnt, and Lauren Green and Kristen Green were each dependants eligible to receive some or all of the member’s death benefit under the Fund from the Trustee.

7 On 31 October 2003, and affirmed upon review on 30 January 2004, the Trustee decided to pay the whole of the death benefit to Mr Dohnt.

8 On 16 February 2004, Mr Green in essence on behalf of Lauren Green and Kristen Green made a complaint to the Tribunal pursuant to s 14(2) of the Act that the Trustee’s decision was unfair or unreasonable.

9 The Trustee’s decision was based upon the fact that Mr Dohnt had provided the deceased with financial support and had incurred testamentary expenses including funeral expenses. The two daughters were not living with the deceased at the time of her death, and they were not financially dependent on the deceased at the time of her death. Consequently the Trustee concluded that the two daughters were not dependent on the deceased for financial or other support and were solely dependent on their father at the time of death. The Trustee’s view was that there was no reasonable expectation that the deceased would have provided support for the children, nor would the children have reasonably expected support from her had she not died. The Trustee also had regard to the requests of the elder daughter Lauren Green, from the mother of the deceased, and from Mr Dohnt to pay the amount of the death benefit to Mr Dohnt. Mr Green had requested that it be paid to the two daughters.

10 Under s 37 of the Act, 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). There is a two stage process imposed on the Tribunal when considering a complaint. The first is imposed by s 37(6), obliging the Tribunal to affirm a decision the subject of the complaint except in certain circumstances. It provides:

11 If the Tribunal is satisfied that the decision, in its operation in relation to a person identified was not fair and reasonable in the circumstances, the second step in its process is to substitute a decision for the decision of the Trustee. The power to do so is expressed in s 37(3) in the following terms:

12 In exercising that power, however, the Tribunal is directed by s 37(4) in the following terms:

13 The Tribunal decided that the decision of the Trustee, in its operation in relation to Lauren Green and Kristen Green (persons who had become parties to the complaint and claimed to be persons having an interest in the death benefit) was not fair and reasonable in the circumstances. Consequently, it was able to and obliged to exercise its power under s 37(3) for the purpose of placing the complainant as nearly as practicable in such a position that the unfairness or unreasonable or both which it had discerned should no longer exist.

14 The Tribunal concluded that the failure of the trustee to make any provision for the needs of the daughters, in particular the younger daughter Kristen Green, as they progressed with their education, meant that the decision was not fair and reasonable in the circumstances. It concluded that:

15 Pursuant to s 37(3) and s 37(4), the Tribunal then determined that the death benefit should be distributed as to 30% to the first daughter Lauren Green, and as to 70% to the second daughter Kristen Green to reflect her greater need having regard to her youth and the anticipated years of schooling yet to be undertaken. It added

16 There were a number of matters raised by Mr Dohnt which, he contended, demonstrated legal error on the part of the Tribunal. It is convenient to take them sequentially, although as appears below, in my view, ultimately they do not involve an error of law.

17 First was Mr Dohnt’s claim that the Tribunal had failed to have regard to his stated preparedness to receive the death benefit on his own behalf and that of the two daughters, Lauren Green and Kristen Green. He said that he conveyed to the Tribunal (and to the Trustee) that he would receive the death benefit, and after paying from it the funeral expenses (which he quantified at $2750) and money he had paid for a photographic studio expense of $2100 for photographs of the deceased and Lauren Green, the balance would be split in three ways. He pointed out that he had in addition paid a number of other costs relating to the death of the deceased or following upon her death, and concerning the administration of her affairs.

18 In my judgment the Tribunal did not fail to have regard to that offer. It was not an offer on his part to receive moneys as trustee for Lauren Green and Kristen Green, that is they would be awarded certain sums with him as trustee. He made plain in the course of my questioning of him that his proposal involved him receiving the entire sum in his own right, to the intention that he would pay the expenses mentioned and that he would then set aside one third of the balance for each of the two daughters. The Tribunal referred to that proposal, both in reciting the position of Mr Dohnt before it, and in recording his submissions. In those circumstances, the Tribunal simply did not fail to have regard to that offer. It may not have given the weight to his offer which Mr Dohnt intended it to have, but that is a different matter which does not involve any error of law.

19 It was next contended that the two daughters Lauren Green and Kristen Green, because they were not financially dependent upon the deceased at the time of her death, were not eligible under the trust deed to be the beneficiary of the exercise of the Trustee’s discretion (or that of the Tribunal). In my view, that simply misreads the trust deed. Those eligible for distribution of the death benefit under cl 6.4 of the trust deed, in the discretion of the Trustee, were the dependants and the legal personal representative of the deceased. The expression ‘dependants’ is defined to include a child, as well as a spouse or a person living in a spousal relationship (such as Mr Dohnt), and other persons who the trustee believes is wholly or partially dependent upon the deceased at the time of death. The fact of actual financial dependency upon the deceased at the time of death in the case of her children was not a prerequisite to eligibility to be awarded by the Trustee (or by the Tribunal) some or all of the death benefit.

20 It is clear, from the material before the Tribunal, that it was aware that both the daughters had ongoing financial needs for education, maintenance and the like and that the deceased was not supporting them in that financial way at the time of her death. (I note that in submissions Mr Dohnt said that the deceased was supporting the two daughters by a payment of $20 per month child support through her Centrelink allowance.) However, for the reasons the Tribunal gave, it was entitled not simply to recognise that they were eligible beneficiaries, but also that they were entitled to their mother’s support on an ongoing basis (as well as the support of their father); see for example Aafjes v Kearney [1976] HCA 5; (1976) 180 CLR 199. That was recognised by the Tribunal. In other words, the Tribunal has not has not erred in its understanding of the law. It was not obliged to make no determination in favour of the daughters in the absence of immediate financial dependency. It was entitled to have regard to the relationship between the deceased and the two children, their needs, and the like.

21 The third error alleged by Mr Dohnt concerned the failure of the Tribunal to have regard to the payments he had made on behalf of the deceased and in respect of the testamentary and funeral expenses. It is a fact that the deceased participated in the fund only from a date after the commencement of their de facto relationship and when they were living together. It would be reasonable to infer that the purpose of the fund was therefore to provide for their mutual later support. It is also a fact that Mr Dohnt had financially supported the deceased for some nine years prior to her death, as she had been bankrupted on two occasions, and whilst she was on a disability support pension. It is common ground also that he had paid some expenses following the death of the deceased, including a contribution of $1425 towards her funeral expenses, and some other debts of hers at the time of her death, including for the photographic session with herself and Lauren Green.

22 The Tribunal noted that Mr Dohnt and the deceased appeared to have mutually supportive financial arrangements and that he was ‘earning good money’. That appears to be an overstatement of the evidence. He said that he was earning good money at the time the relationship first commenced and apparently for a little time after that. The evidence before the Tribunal nevertheless indicates that in periods that he was employed he was employed remuneratively and that from his statement of financial records and his ATO records during 2003 he still was earning sums in the order of $20,000 to $25,000 per annum. It cannot be said in those circumstances that the Tribunal made a finding about his financial affairs which was unsupported by evidence so as to demonstrate an error of law on its part.

23 Finally, Mr Dohnt contended that the Tribunal had failed to have regard, or proper regard, to his payment of expenses on behalf of the deceased or after her death and in particular the payment of $1425 towards funeral expenses. The Tribunal was aware of his general circumstances. It noted that he has his own sources of income and is financially independent. It had regard to the relatively small sum available to be distributed. It specifically said that it made no allowance for payment of funeral expenses because it understood they were reimbursed in part by Centrelink. That last statement may be a little inaccurate. Mr Dohnt pointed out that it is a reference to a payment of $1605 received by him from Centrelink as a bereavement allowance under the Social Security Act 1991 (Cth). It was not a sum designated specifically for funeral expenses. It was received independently of, and before, he paid for the funeral expenses. He applied that sum to payment of debts of the deceased, and to funeral expenses. It may be that that sum was used to pay funeral expenses, and that he paid other amounts from his own resources to pay her other debts. However, the point of the Tribunal’s remark was the fact that Mr Dohnt had received some payment from Centrelink following the death of the deceased which covered the amount of his contribution towards the funeral expenses. In those circumstances, I do not think it was an error of law on its part to take into payment that consideration in the way it did.

24 It is not the role of the Court to form a view as to the correctness of the decision of the Tribunal or to form its own view as to how the discretion of the Tribunal ought to have been exercised. It is the role of the Court simply to determine if there is legal error on the part of the Tribunal. Having regard to the matters which have been raised, in my view no legal error is established. Consequently, although it is possible to have considerable empathy for the circumstances of Mr Dohnt, in my judgment the appeal should be dismissed. I so order. The parties were agreed that there should be no order for the costs of the appeal. The Court is grateful for the pro bono assistance of counsel for the two daughters.

I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.

Counsel for the Applicant:	The applicant appeared in person

Counsel for Lauren Green and Kristen Green:	L Detmold (pro bono)

Date of Hearing:	20 December 2005

Date of Judgment:	2 February 2006

Federal Court of Australia

Dohnt v Green [2006] FCA 30 (2 February 2006)