Commonwealth Superannuation Scheme Board of Trustees v Kitching [2004] FCAFC 299 (18 November 2004)

FEDERAL COURT OF AUSTRALIA

Commonwealth Superannuation Scheme Board of Trustees v Kitching
[2004] FCAFC 299

SUPERANNUATION – retirement on grounds of invalidity – whether one condition ‘connected with’ another – whether causal relationship required.

PRACTICE AND PROCEDURE – Appeal – no appeal against order – literal terms of order not wrong - order accompanied by erroneous statement of legal principle

WORDS AND PHRASES – ‘connected with’

Superannuation Act 1976 (Cth), ss 16, 66
Superannuation Act 1990 (Cth), s 6
Superannuation (Resolution of Complaints) Act 1993 (Cth), ss 12, 13, 37

Baxter Healthcare Pty Limited v Comptroller General of Customs (1997) 72 FCR 467 referred to
Commissioner for Superannuation v Miller [1985] FCA 445; (1985) 8 FCR 153 referred to
Commissioner for Superannuation v Perrett [1989] FCA 348; (1989) 23 FCR 425 referred to
Commissioner of Superannuation v Benham (1989) 22 FCR 413 referred to
Perrett v Commissioner for Superannuation (1991) 29 FCR 581 applied
Secretary Department of Social Security v Lowe [1999] FCA 705; (1999) 92 FCR 26 applied

COMMONWEALTH SUPERANNUATION SCHEME BOARD OF TRUSTEES V JOHN ANDREW KITCHING
W 120 of 2004

RD NICHOLSON, JACOBSON AND BENNETT JJ
18 NOVEMBER 2004
PERTH

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	W 120 of 2004

BETWEEN:	COMMONWEALTH SUPERANNUATION SCHEME BOARD OF TRUSTEES APPELLANT
AND:	JOHN ANDREW KITCHING RESPONDENT
JUDGES:	RD NICHOLSON, JACOBSON & BENNETT JJ
DATE OF ORDER:	18 NOVEMBER 2004
WHERE MADE:	PERTH

4. No order as to costs.

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

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	W 120 of 2004

BETWEEN:	COMMONWEALTH SUPERANNUATION SCHEME BOARD OF TRUSTEES APPELLANT
AND:	JOHN ANDREW KITCHING RESPONDENT

JUDGES:	NICHOLSON, JACOBSON & BENNETT JJ
DATE:	18 NOVEMBER 2004
PLACE:	PERTH

1 This is an appeal from part of a judgment of Lee J given on 18 May 2004. His Honour, in exercise of the jurisdiction of the Court under s 46 of the Superannuation (Resolution of Complaints) Act 1993 (Cth) set aside a decision of the Superannuation Complaints Tribunal ("the Tribunal") and remitted the matter to the Tribunal for determination according to law.

2 The appellant ("the Board") does not challenge his Honour’s orders setting aside the Tribunal’s decision. However, the Board contends that his Honour erroneously stated the law according to which the Tribunal was ordered to determine the matter on remittal.

3 Although ordinarily a right of appeal lies only in respect of a Court’s orders and not its reasons, there is an exception to this rule. As a Full Court said in Secretary Department of Social Security v Lowe [1999] FCA 705; (1999) 92 FCR 26 at [16], an order read in the light of the reasons justifying it may leave open to be implemented a conclusion which a Full Court holds to be erroneous. In such a case the Court has power on appeal to vary the order made below by the addition of an appropriate declaration; see Baxter Healthcare Pty Limited v Comptroller General of Customs (1997) 72 FCR 467 at 483.

4 Before considering his Honour’s reasons, and the decision of the Tribunal, it is necessary to set out the relevant legislative and factual background.

5 The Superannuation Act 1976 (Cth) ("the 1976 Act") established a superannuation scheme ("the CSS") for members of the Commonwealth Public Service. It replaced the scheme which was established by the Superannuation Act 1922 (Cth).

6 In 1990 a new scheme ("the PSS") was established by the Superannuation Act 1990 ("the 1990 Act"). However the 1976 Act continued to apply to an "eligible employee" who joined the CSS before 1 July 1990 and who did not elect to transfer to the PSS; see s 6(2)(a) and s 6(3) of the 1990 Act.

7 The respondent ("Mr Kitching") commenced employment as a Commonwealth public servant on 30 September 1986. He thereby became an eligible employee for the CSS.

8 Section 16(2) of the 1976 Act provides that the Commissioner (who was the predecessor of the Board) may require a person who proposes to become or becomes an eligible employee to undergo a medical examination.

9 Section 16(4) of the 1976 Act requires the Commissioner to consider the medical report and, if the Court should be of the opinion:-

11 Part IVA of the 1976 Act deals with retirement from employment on the ground of invalidity, or, as it is sometimes described, an incapacity or incapacitating condition. Part IVA provides for the Commissioner to issue a certificate of invalidity in respect of an eligible employee. Section 54C provides for the issue of a certificate for an eligible employee who is unable to perform his or her duties by reason of a mental or physical condition.

12 Under s 66(1) of the 1976 Act a person who ceases to be an eligible employee by reason of retirement on the ground of invalidity before reaching the maximum retiring age is entitled to an invalidity pension and/or a lump sum benefit except in a case to which
s 66(2) applies.

(b) there was in force in respect of the person, immediately before the person's retirement, a benefit classification certificate; and

14 Section 66(2A) of the 1976 Act authorises the Commissioner to form an opinion for the purposes of s 66(2) where an eligible employee is about to retire on the ground of invalidity. Section 66(2A) is as follows:-

(a) a person will, in the near future, cease to be an eligible employee by reason of retirement on the ground of invalidity before attaining the person's maximum retiring age;

(b) there will be in force in respect of the person, immediately before the person's retirement, a benefit classification certificate; and

(c) the incapacity which will be the ground for the person's retirement was caused, or was substantially contributed to, by a physical or mental condition or conditions specified in the certificate or by a physical or mental condition or conditions connected with such a condition or such conditions"

15 The requirement that the incapacity be caused or substantially contributed to by the physical or mental condition is often described as the first limb of s 66(2)(c) and s 66(2A)(c). The requirement that the incapacity be caused or substantially contributed to by a condition "connected with" such a condition is often described as the second limb of s 66(2)(c) and
s 66(2A)(c).

16 The Superannuation (Resolution of Complaints) Act 1993 (Cth) ("the SRC Act") established the Tribunal. The functions of the Tribunal, as stated in s 12 of the SRC Act, are to inquire into complaints about the administration of superannuation funds. The Tribunal is required to try to resolve the complaint by conciliation and, if it cannot so resolve the complaint, to review the decision or conduct to which the complaint relates.

17 Section 14 applies to complaints made to a trustee by a member of a regulated superannuation fund. The CSS is a regulated superannuation fund.

18 Section 14(2) of the SRC Act provides that a person may make a complaint to the Tribunal that a decision of a trustee of a fund "is or was unfair or unreasonable".

19 Section 37(1) of the SRC Act gives the Tribunal, for the purpose of reviewing a decision of the trustee of a fund, all the powers, obligations and discretions that are conferred on the trustee.

20 Under s 37(3) of the SRC Act, the Tribunal may, inter alia, affirm, vary or set aside the decision of the trustee.

21 Section 37(4) provides that the Tribunal may only exercise the determination-making power under s 37(3) for the purpose of placing the complainant as nearly as practicable in such a position that the unfairness or unreasonableness that the Tribunal has found to exist, no longer exists.

22 On 30 September 1986, Mr Kitching commenced employment as a Commonwealth public servant in the Department of Employment, Education, Training and Youth Affairs. From that date Mr Kitching became an eligible employee for the purposes of the 1976 Act.

23 On 14 October 1986 Mr Kitching underwent a medical examination for the purposes of s 16(2) of the 1976 Act.

24 On 6 April 1987 a delegate of the Commissioner issued a BCC for Mr Kitching under s 16(4) of the 1976 Act. The relevant condition which the delegate specified was "manic depressive psychosis". This was the condition by reason of which the delegate considered that there was a real risk that Mr Kitching would not continue to be an eligible employee until he attained the maximum retiring age.

25 On 17 November 1999 a delegate of the Board approved Mr Kitching’s retirement on invalidity grounds pursuant to s 54H(2) of the 1976 Act. The delegate certified pursuant to s 54C of the 1976 Act that if Mr Kitching retired he would be entitled to receive invalidity benefits under Division 4 of Part V of the 1976 Act.

26 On 18 November 1999 the delegate of the Board formed the opinion, for the purposes of s 66 (2A) of the 1976 Act, that the incapacity which would be the ground for the retirement of Mr Kitching was caused or substantially contributed to by a physical or mental condition specified in the BCC, namely manic depressive psychosis or by a physical or mental condition connected with such a condition.

27 With effect from 31 December 1999 Mr Kitching was retired from the Commonwealth public service on the ground of invalidity. By reason of his work at Centrelink, in particular the need to deal with aggressive and abusive clients, Mr Kitching developed a condition known as generalised anxiety disorder and depression. It was this condition which incapacitated him from work.

28 On 24 February 2000, Mr Kitching requested the Board, pursuant to s 153AH of the 1976 Act to review the decision made by the delegate on 18 November 1999. On 11 October 2000 the Board affirmed the delegate’s decision.

29 On or about 17 November 2000, Mr Kitching lodged a complaint with the Tribunal under s 14(2) of the SRC Act. The complaint sought a decision setting aside the determination made by the Board on 11 October 2000.

30 Mr Kitching contended before the Tribunal that the invalidating condition which caused his retirement was stress and anxiety rather than the BCC condition of manic depressive psychosis, or bipolar affective disorder as it is now known.

31 Initially, the Tribunal correctly stated the question which was raised by the review. It said that the question was whether Mr Kitching’s incapacity was caused or was substantially contributed to by the condition specified in the BCC or by a connected condition.

32 However, the Tribunal then reformulated the question as being whether the incapacity was caused or was substantially contributed to by the bipolar disorder. In so doing, the Tribunal ignored the second basis of the decision namely that the incapacity was caused by a condition connected with the BCC condition.

33 The finding made by the Tribunal was that Mr Kitching’s incapacity was not caused or substantially contributed to by the bipolar disorder. The Tribunal then found that the Board’s decision was not fair and reasonable in its application to Mr Kitching.

34 The Tribunal’s decision therefore failed to deal with the question of whether the incapacity condition was connected with the BCC condition. That is to say, the Tribunal failed to deal with the second limb of s 66(2A)(c) of the 1976 Act.

Previous Federal Court authorities on the meaning of the second limb of s 66(2)(c) and
s 66(2A)(c)

35 In Commissioner for Superannuation v Miller [1985] FCA 445; (1985) 8 FCR 153 ("Miller") a Full Court (Davies, Beaumont and Pincus JJ) dealt with the question of whether a decision of the Administrative Appeals Tribunal ("the AAT") on the effect of s 66(2)(c) of the 1976 Act involved an error of law.

36 In Miller, the fund member's stated BCC condition was initally described as 'removal of breast lump' but was amended to read 'hormonal mastopathy presenting as breast lumps.' She underwent a bilateral mastetomy and reconstruction using a silicone prosthesis. A complication of the prosthesis was the development of painful adhesions in the breast, which rendered her unfit for work involving elevation of the arms.

37 The AAT found that the consequences of surgery for removal of the patient’s breasts could not reasonably be foreseen. This led the AAT to the view that Mrs Miller’s incapacity was not caused or substantially contributed to by a physical condition connected with the condition stated in the BCC.

38 All of the members of the Full Court in Miller were of the view that the decision of the AAT that the incapacitating condition was not "connected with" the BCC condition on the ground of lack of foreseeability involved an error of law. However, Davies J and Pincus J took a different approach to Beaumont J on the proper construction of the words "connected with" in s 66(2)(c).

39 Davies J and Pincus J were of the view that the words "connected with" involved a causal relationship. Beaumont J, whilst suggesting that a causal nexus may not be required, found it unnecessary to decide the question.

43 In Commissioner of Superannuation v Benham (1989) 22 FCR 413 ("Benham") a Full Court (Morling, Beaumont and Burchett JJ) heard an appeal from a decision of a judge of the Court dismissing an appeal from a decision of the AAT.

44 In Benham, the AAT and the primary judge proceeded on the basis that the decision of the Court in Miller was authority for the proposition that in order to bring a case within the second limb of s 66(2)(c) of the 1976 Act, it was necessary to establish a causal relationship between the BCC condition and the condition which caused the incapacity.

45 The reasons of the Court in Benham were unanimous. Their Honours expressed the view that there were significant differences between the views of Davies J and Pincus J in Miller, notwithstanding the fact that both spoke in terms of the need for a causal relationship.

46 Morling, Beaumont and Burchett JJ said (at 420) that for Davies J, the incapacitating condition must have arisen out of or developed from the condition specified in the BCC so that it could be said that the incapacity was caused by the BCC condition.

47 Their Honours said that, by contrast, for Pincus J, it would be sufficient that the incapacity was caused by the "associated" condition.

48 Their Honours went on to say that the judgment of Beaumont J in Miller appeared to be the majority view because Davies J, while adding his own comments on the proper construction of the second limb of s 66(2)(c) of the 1976 Act, expressed general agreement with the judgment of Beaumont J.

49 Next, their Honours turned to the proper construction of the second limb (at 420-421). They took into account the statutory purpose of the provision in reaching their views. Their Honours assumed that one of the statutory purposes was the protection of the fund from depletion by payment of benefits where there was a substantial connection between the BCC condition and the incapacitating condition. A second consideration was that the legislation is "beneficial" legislation which should be construed accordingly.

50 Applying those considerations, their Honours came to the following view, at 421:-

51 In Commissioner for Superannuation v Perrett [1989] FCA 348; (1989) 23 FCR 425, Jenkinson J was of the view (at 433) that the expression "connected with" in s 66(2)(c) comprehends, on its proper construction, something short of the relationship between cause and effect.

52 His Honour (at 433) expressed agreement with the views of Beaumont J in Miller that "connected with" encompasses those cases where a link or association exists, in a relevant medical sense, between the BCC condition and the incapacitating condition.

53 Jenkinson J set aside the decision of the AAT and remitted the matter for consideration. The AAT reheard the matter and gave a second decision which came back to the Court on a question of law. That question was then considered by a Full Court (Wilcox, Burchett and Ryan JJ) in Perrett v Commissioner for Superannuation (1991) 29 FCR 581 ("Perrett").

54 The Full Court in Perrett dismissed the appeal. Their Honours were of the view that no error was involved in the finding that the incapacitating condition, namely psoriatic arthritis, was caused or substantially contributed to by the BCC condition of psoriasis, notwithstanding the lack of a causal relationship between the two conditions.

55 Their Honours’ rejection of the need for a causal nexus recorded an appreciation of the difficulties which flow from that approach. Their Honours noted (at 592) the likely difficulty in many cases of determining the relevant connection once the requirement of causation is abandoned. They also noted the force of a submission that the decision in Benham did not reflect a correct analysis of the judgments of the Court in Miller.

56 However, their Honours went on to say that "it was too late to reopen the issue of causality". They said that whether or not the Court’s reasoning in Benham inevitably flowed from Miller, the members of the Full Court in Benham clearly rejected the argument that the words "connected with" required a causal relationship. This approach, their Honours observed in Perrett, could not be said to be plainly wrong.

57 Importantly, their Honours proceeded to construe the words themselves. They said that the natural meaning of the words "connected with" strongly suggests that a causal connection is not required. They observed that, had the draftsman intended to confine the operation of the second limb to cases where there was a causal nexus, there would have been no difficulty in saying so in plain terms.

58 His Honour dealt with the essential question on the appeal at [27] by accepting the Board’s submissions that the Tribunal had failed to consider the second limb of s 66(2A)(c) of the 1976 Act.

59 His Honour observed, at [28] that although the Tribunal had initially posed the correct question in terms of both limbs of the 1976 Act, it failed thereafter to address the question of whether the further condition was "connected with" the BCC condition.

60 This aspect of his Honour’s judgment is quite uncontroversial and, of course, is not challenged.

61 However, before dealing with the question of the Tribunal’s failure to address the second limb, the learned judge embarked upon an analysis of the judgments of the Full Courts in Miller, Benham and Perrett. His Honour also referred to the decision of
Jenkinson J at first instance in Perrett.

62 His Honour was critical of the reasoning of the Full Court in Benham. He expressed the view at [20], that the reasons of Davies J and Pincus J in Miller were in accord on the need for "a chain of causation" or a "substantial causal link". He noted, at [21], that the Full Court in Benham did not say that Davies J and Pincus J were plainly wrong.

63 His Honour was also critical of the approach taken by Jenkinson J. He stated that it was not open to Jenkinson J to depart from the reasons provided by Davies J and Pincus J in Miller. His Honour continued by saying , at [22]:-

64 His Honour then turned at [23] to the decision of the Full Court in Perrett and in particular to the observation that it was too late to reopen the issue of causation. The effect of what his Honour said at [24] was that the issue was not closed because no court has treated the reasons of Davies J and Pincus J in Miller as plainly wrong. His Honour did not consider the fact that the Full Court in Perrett had given reasons for their conclusion that were inconsistent with the views of Davies J and Pincus J in Miller.

65 His Honour said at [24] – [25] that the proper construction of the words "connected with" imports a causal nexus. He pointed to the need to construe the provisions of ss 16 and 66 of the 1976 Act consistently, because of the relationship between those sections.

66 His Honour also pointed at [25] and [26] to considerations of fairness to employees arising from the possible reduction in the amount of their retirement benefits and the beneficial purpose of the legislation to support his approach to construction.

67 The starting point in the learned primary judge’s analysis was that the observations of Davies J and Pincus J in Miller were authoritative and that it was not open to later courts to depart from them because they have not been said to be plainly wrong.

68 However, strictly speaking, the remarks of Davies J and Pincus J were obiter. This is because the basis of the decision of the Court was that the concept of foreseeability did not determine the answer to the question of whether the adhesions from the mastectomy were "connected with" the BCC condition.

69 Moreover, it is true that there are differences between the views of Davies J and Pincus J as to the precise nature of the causal relationship which is sufficient to enliven the effect of the second limb. As stated at [40] – [41] above, Pincus J spoke of a "common cause" of the two conditions whereas Davies J considered that the provision would be attracted where there was a "chain of causation" such that the BCC condition could be said to have caused or substantially contributed to the incapacity which caused the retirement.

70 It was therefore open to the Full Court in Benham to depart from the views of Davies J and Pincus J without stating that their Honours were plainly wrong. Similarly, it was open to Jenkinson J and the Full Court in Perrett to depart from the views of Davies J and Pincus J.

71 Nevertheless, there is, as was noted by the Full Court in Perrett, strong force in the proposition that the members of the Court in Benham misconstrued the reasoning of the Court in Miller. It is plain that there was a majority view in Miller, albeit it obiter, that a causal nexus was required. The only difference between Davies J and Pincus J was as to the precise nature of the causal relationship contemplated by the subsection.

72 Be that as it may, it was open to the Full Court in Benham to express its own view of the proper construction of the second limb of s 66(2)(c) of the 1976 Act. The Court did so by stating that the condition causing the incapacity would be "connected with" the BCC condition where there was "a real and substantial connection" between the two.

73 This approach involved reading into the second limb words which did not appear in it. The second limb merely refers to "a physical or mental condition or conditions ‘connected with’ such a condition", that is, the BCC condition. It does not expressly include any requirement that the connection be real or substantial. We will refer to this again below.

74 As in Miller, the reasoning of the Court in Benham on the question of construction of the words "connected with" was, strictly speaking, obiter. This was because the basis of the decision was that an aggravation of the incapacitating condition which was unrelated to the BCC condition was not connected with the BCC condition.

75 Nevertheless, it is plain that the Court explained the construction of the second limb of s 66(2)(c) of the 1976 Act and that it did so in a way which would, ordinarily, be treated as an authoritative exposition of the meaning of the subsection.

76 In any event, the issue was authoritatively determined by the Full Court in Perrett. Their Honours proceeded upon the basis that whatever the deficiencies in the analysis undertaken by Morling, Beaumont and Burchett JJ of the earlier reasons in Miller, the Full Court in Perrett clearly rejected the argument that the words "connected with" imported a causal relationship.

77 Moreover, the analysis undertaken by the Full Court in Perrett of the construction of the second limb, independently of any reliance upon the force of the precedent contained in Benham, was part of the ratio of the case. This constitutes a binding determination of the proper construction of the second limb which we would follow unless we are convinced it is plainly wrong.

78 We do not see how it can be said that the approach of the Full Court in Perrett can be said to be plainly wrong. The question of construction of the second limb is one on which reasonable minds could differ.

79 Wilcox, Burchett and Ryan JJ expressly approved the conclusion expressed by the Full Court in Benham and by Jenkinson J in Perrett. It seems to us that the approach to construction in those cases does much to remove the difficulties which would otherwise flow from the rejection of the need for a causal nexus.

80 This comes about first, by reason of the requirement that the connection be real and substantial. Second, the observations of Jenkinson J provide a relatively clear frame of reference by which the connection can be assessed. His Honour said (at 433) that the link or association between the BCC condition and the incapacitating condition may be constituted by a higher incidence in a community in whom another medical condition is known to exist than among the rest of the community.

82 We were assisted by Mr McCormack, counsel for Mr Kitching who appeared pro bono. Although we do not accept his submissions, his analysis enabled us to deal effectively with the questions raised. We were also assisted by the written and oral submission of Mr Hanks SC, Senior Counsel for the Board.

83 Mr McCormack submitted that whatever the binding force of the decision of the Full Court in Perrett, we should consider the proper construction of the sub-section for ourselves and that we should refuse to follow the earlier authority which was plainly wrong.

84 He submitted that upon the proper construction of the second limb, the words "connected with" plainly required a causal nexus. This was because, so it was said, the legislature intended to import three different levels of causal connection. These were "caused" or "substantially contributed to", as contained in the first limb, and "connected with" in the second limb.

85 Whilst there is force in the observations of Davies J and Pincus J that the words in the second limb do contemplate causation, we are of the view that the short answer to the respondent’s contention is that the legislature has deliberately selected a phrase of wide application where there was no shortage of stock expressions for denoting a causal relationship.

86 Furthermore, the juxtaposition of the words "connected with" appears to underscore the deliberate choice made by Parliament. That is to say, Parliament appears to have deliberately extended the reach of the second limb of s 66(2)(c) and s 66(2A)(c), to include a relationship even if not a causal one, between the two conditions.

87 It is true that the construction we favour involves reading the words "connected with" so as to include the words "real" and "substantial". That is to say, the connection must be one which is real and substantial. In our view this is a fair reading of the second limb in light of the statutory purposes of the legislation as referred to in Benham. It was conceded by Mr Hanks that ss 66(2)(c), 66(2A)(c) and 16(4) are related provisions and that the second limb must be construed harmoniously in each case. We do not consider that the approach to construction which we favour involves any disharmony between those provisions.

88 Mr McCormack relied upon the principle of ejusdem generis as a canon of construction to limit the connection stated in the second limb to the causal nexus stated in the first limb. However, we cannot accept this submission. It is plain that the second limb of the subsection is intended to do some work in the legislative scheme and that it is appropriate that it be construed in its own terms. In any event, the ejusdem generis principle only applies where general words follow specific references and where it is possible to identify a genus. Neither of these requirements is satisfied.

89 Mr McCormack placed great reliance on the beneficial nature of the legislation. He also pointed to the adverse impact on employees of the possible loss of superannuation benefits in circumstances which are not clearly defined by the approach to construction adopted in Perrett. It is true that the legislation is beneficial, but that is not sufficient to dispose us to the approach to construction urged upon us by Mr McCormack.

90 The learned primary judge also relied upon the beneficial nature of the legislation. He observed at [26] that the objective of the 1976 Act is to provide for benefits to be paid as the outcome of contributions made to a superannuation scheme.

91 But that is not a complete statement of the objectives. As the Full Court observed in Benham (at 420-421), s 66(2) is concerned with protecting a fund against the greater risk of an incapacitating condition befalling a particular employee than in the case of employees generally. The construction of s 66(2)(c) proposed in Benham and Perrett, and with which we agree, allows a balance to be achieved between the competing objectives to which we have referred.

92 Thus, where the BCC condition creates a substantial risk (one that is significantly greater than in the case of employees generally) of the employee retiring because of the invalidity, the protection of the fund justifies reducing the benefits to be paid to the employee. Where the risk is not significantly greater, the necessary protection of the fund does not require the removal from the retired employee of a portion of the employee’s benefit.

93 We note that, although Mr McCormack submitted that the provisions of s 66(2)(c) and s 66(2A)(c) are of a penal nature, in truth these provisions are of benefit to employees. This is because the provisions enable persons who might not otherwise be admitted to membership of a fund, because of a potentially disabling condition, to join the fund. The condition of so doing is that the member will be deprived of a portion of his or her benefits if an incapacitating condition is caused by or substantially contributed to by the disabling condition present at the time when the member joined the fund or by a condition connected with it.

94 For the reasons stated above, we are of the view that the approach to construction of the second limb adopted by the learned primary judge was not open to him.

(a) that the appeal be allowed.
(b) set aside order 1 of the orders made by the primary judge on 18 May 2004.
(c) substitute in lieu of order 1 the following order:-

I certify that the preceding ninety five (95) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices RD Nicholson, Jacobson & Bennett.

Counsel for the Appellant:	Mr Peter Hanks SC

Solicitor for the Appellant:	Australian Government Solicitor

Counsel for the Respondent:	Mr Richard McCormack

Date of Hearing:	2 November 2004

Date of Judgment:	18 November 2004

Federal Court of Australia - Full Court Decisions

Commonwealth Superannuation Scheme Board of Trustees v Kitching [2004] FCAFC 299 (18 November 2004)