Ashmore and Commissioner for Superannuation [2000] AATA 159 (3 March 2000)

Last Updated: 13 March 2000

DECISION AND REASONS FOR DECISION [2000] AATA 159

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N1999/714

GENERAL ADMINISTRATIVE DIVISION )

Re CAROLYN ASHMORE

Applicant

And COMMISSIONER FOR SUPERANNUATION

Respondent

DECISION

Tribunal Senior Member M D Allen Senior Member M J Sassella Mr G D Stanford, Member

Date 3 March 2000

Place Sydney

Decision The decision under review is affirmed.

(Sgd) M D ALLEN

..............................................

Presiding Member

CATCHWORDS

SUPERANNUATION - Preservation of contributor's rights. Late election - extension of time. Decisions made at the time made with full knowledge of various options. Extension refused.

Superannuation Act 1976 - subs137(1), s154, subs157(1)

Chalk v Commissioner for Superannuation 50 FCR 150

Commissioner for Superannuation v Boardman 50 FCR 236

Re Ward and Commissioner for Superannuation 36 ALD 287

Brisbane South Regional Health Authority and Taylor 186 CLR 541

Commissioner for Superannuation v Adams 47 ALD 80

REASONS FOR DECISION

3 March 2000 Senior Member M D Allen Senior Member M J Sassella Mr G D Stanford, Member

1. By application lodged 4 May 1999 the Applicant sought review of a decision by a delegate of the Respondent made 23 April 1999. That decision read:

"I, Hugh Alan MAJOR, delegate of the Commissioner for Superannuation (the Commissioner), under subsection 154(4) of the Superannuation Act 1976 (the Act), CONFIRM the decision taken by another delegate on 19 February 1997 under subsection 154(2) of the Act not to allow Ms Ashmore an extension of time until 13 December 1996 in which to request reconsideration of the decision which was made on 23 March 1994 in accordance with subsection 157(1) of the Act."

2. Section 154 of the Superannuation Act 1976 reads inter alia:

"(1) In this section:

'decision' has the same meaning as in the Administrative Appeals Tribunal Act 1975;

'reviewable decision' means a decision of the Commissioner, or a delegate of the Commissioner, under this Act, under the superseded Act or under the regulations made under either of those Acts, and includes a decision of the Superannuation Board, or a delegate of the Superannuation Board (other than a decision under section 141 of the superseded Act);

...

(2) A person affected by a reviewable decision who is dissatisfied with the decision may, by notice in writing given to the Commissioner within the period of 30 days after the day on which the decision first comes to the notice of the person, or within such further period as the Commissioner allows, request the Commissioner to reconsider the decision.

(3) There shall be set out in the request the reasons for making the request.

(4) Upon receipt of the request, the Commissioner shall reconsider the decision and may confirm or revoke the decision or vary the decision in such manner as the Commissioner thinks fit.

(5) ...

(6) Applications may be made to the Administrative Appeals Tribunal for review of reviewable decisions that have been confirmed or varied under subsection (4) and for review of decisions of the Superannuation Board, or delegates of the Superannuation Board, made under section 141 of the superseded Act.

(7) For the purposes of such a review, the Tribunal shall, subject to subsections 21(1A) and 23(1) of the Administrative Appeals Tribunal Act 1975, be constituted by a presidential member and 2 non-presidential members, of whom at least one shall be an eligible employee or a pensioner, or by 3 non-presidential members, of whom at least one shall be an eligible employee or a pensioner and at least one shall be a senior non-presidential member."

3. In a well reasoned decision the delegate of the Respondent rejected the Applicant's claim on the basis that she had not lodged the said request for reconsideration within the period of 30 days after the day on which the original rejection of her claim for an extension of time in which to make a late election to preserve funds in the scheme established by the Superannuation Act 1976. In fact the original decision was made on 23 March 1994 and the request for reconsideration was not received until 13 December 1996.

4. Originally this matter came on for hearing before Senior Member M D Allen sitting alone at Sydney on 13 December 1999. Unfortunately, the Senior Member did not advert to subs154(7) of the Superannuation Act 1976. The matter was therefore re-listed before this Tribunal and the transcript of the previous proceedings taken in as Exhibit T2 and the original exhibits taken in as exhibits in these proceedings.

5. The prior ruling that, notwithstanding that the delegate had rejected the Applicant's claim on the basis of it being out of time, the matter of entitlement upon the merits of the application was before the Tribunal is confirmed. The reviewable decision had been considered by the delegate and confirmed. The decision in Lees v Comcare [1999] FCA 753, cited by the Respondent, is based upon the particular provisions of the Safety, Rehabilitation and Compensation Act 1988.

6. The Applicant on 28 May 1993 made a request to the Respondent, pursuant to s157 of the Superannuation Act 1976, to be permitted to make a late election to preserve her benefits in the fund established by the said Act. The relevant sections of the said Act are subs137(1) and subs157(1) which read:

"137. (1) A person who:

(a) ceases to be an eligible employee in circumstances to which paragraph (b) does not apply and, upon so ceasing, is not entitled to pension under this Act or invalidity benefit in accordance with section 69, 72 or 73; or

(b) ...

may, not later than 21 days after the person so ceases to be an eligible employee, elect, by notice in writing to the Commissioner, that this Division apply in relation to the person."

and,

"157. (1) Notwithstanding anything contained in this Act, where an election under this Act is made by a person after the expiration of the period allowed by or under this Act for the making of the election, and the Commissioner is satisfied that in all the circumstances of the case it is desirable that the election should be recognized, the Commissioner may direct that the election be treated as if it had been made within the period allowed and the election shall have effect accordingly."

7. The abovementioned legislative provisions have been discussed in two decisions of the Federal Court. The first being a Full Court decision (Black CJ, Davies and Cooper JJ) is Chalk v Commissioner for Superannuation 50 FCR 150; the other the decision of Von Doussa J in Commissioner for Superannuation v Boardman 50 FCR 236.

8. The principles to be adduced from those cases was discussed by a Tribunal presided over by Deputy President McMahon in Re Ward and Commissioner for Superannuation 36 ALD 287 at pp290 to 293. After setting out the principles, which are not necessary to be recapitulated here, the Tribunal summed up by stating (p293 paragraph 19):

"By and large the Federal Court has taken a broad brush approach to the exercise of the s 157(1) discretion. Ultimately the justice of the case will determine the outcome. The Federal Court has shown a reluctance to limit the elements to be considered in deciding what is just. Some of those elements, however, have been established. They include a consideration against the background that the section is beneficial legislation. They include the fact that excusable ignorance of rights is a relevant factor to be taken into account. They include an assertion of the applicant's evidentiary burden to explain the delay, although failure to offer an acceptable explanation is not necessarily fatal. Other elements have been considered in individual contexts in the many decisions of this tribunal. It may well be that in the absence of the adoption of detailed criteria of universal application by the Federal Court, other steps should be taken."

9. As pointed out by Finn J in Commissioner for Superannuation v Adams 47 ALD 80, it is wrong for the Tribunal to attempt to establish a set of "guidelines" and then, by the use of those guidelines, fetter its discretion. The legislation (subs157(1)) simply requires that the decision to extend the time in which to make a late election be made if, in all the circumstances of the case, it is desirable that the late election be recognised. The word "desirable" is like the word "substantial" discussed in Commissioner for Superannuation v Scott 71 ALR 408, a word calculated to conceal a lack of precision.

10. Since the decision of the Tribunal in Re Ward supra, the question of the principles to be applied upon an application to extend time have been discussed by the High Court in Brisbane South Regional Health Authority and Taylor 186 CLR 541. In particular, the majority pointed out that the discretion is one to grant the extension, not one to refuse. For example, at p547, Toohey and Gummow JJ said:

"... the ultimate onus of satisfying the court that time should be extended remains on the applicant."

Cf McHugh J (with whose reasons Dawson J agreed) at p551:

"An applicant for an extension of time who satisfies those conditions is entitled to ask the court to exercise its discretion in his or her favour. But the applicant still bears the onus of showing that the justice of the case requires the exercise of the discretion in his or her favour."

11. At 186 CLR pp552 and 553 McHugh J discussed the rationale for limitation periods. As His Honour there pointed out, a limitation period represents the legislature's judgment that the welfare of society is best served by courses of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good course of action being defeated. Similar principles apply here, namely that the legislature has determined that there should ordinarily be a set period of time in which an election to preserve funds in the scheme should be made.

12. Whilst having regard to the comments of McHugh J referred to above, it must also be kept in mind that the Brisbane South case supra was concerned with a limitation period pertaining to actions for damages for personal injury. In this matter the Respondent conceded that if the Applicant were granted the right to make a late election, there would be no prejudice to the fund in financial terms.

13. The Applicant joined the Commonwealth Public Service on 2 January 1968. By the year 1988 she had risen to a responsible position within the then Department of Immigration. For example, in July 1976 she was Second Secretary at the Australian Embassy in Manilla. From May 1983 she was the Second Secretary in the Australian Embassy in Dublin. Paragraph 25 to 31 in Exhibit A2 (the Applicant's affidavit) sets out in more detail the positions held by her in the period from February 1986 to November 1987, all positions being at Assistant Director or Director level in the Department of Immigration. At the time of her resignation from the Commonwealth Public Service, the Applicant was the Director, Review Branch, in the Department of Immigration at Brisbane.

14. In July 1979 the Applicant was diagnosed as suffering from multiple sclerosis (MS). Notwithstanding this diagnosis and its implications, the Applicant did take an overseas appointment in 1983, namely that of the Second Secretary of the Australian Embassy, Dublin.

15. Whilst working in the Department of Immigration at Brisbane in April 1988, the Applicant received an offer to transfer to the private sector. Negotiations between the Applicant and the international firm of accountants Coopers and Lybrand were successful and the Applicant resigned from the Commonwealth Public Service to become a senior manager in that firm's Migration Services Division.

16. At the time of her resignation from the Commonwealth Public Service, the Applicant received financial advice from a Mr Phillip Thompson, a National Mutual Life Limited representative. The relationship between the Applicant and Mr Thompson is unclear but in the undated letter to the Respondent requesting reconsideration (see Tab 37 of the annexure to Exhibit A1), the Applicant states:

"The advice that I did obtain at the time of my resignation from Phillip Thompson, ... appears, in hindsight, biased and commission driven. I had a personal relationship with Mr Thompson and at the time relied heavily on his guidance and advice and entrusted him to make financial decisions on my behalf."

17. Unfortunately, both for the Applicant and the Respondent, Mr Thompson is now deceased. Whereas the inference can be drawn from the material tendered in this case that Mr Thompson was intent on selling a product from which he would draw commission, the lapse of time makes it impossible for the Respondent to explore this allegation and ask Mr Thompson as to his version of events and why he recommended to the Applicant she adopt the course she did.

18. The Applicant now claims that at the time she resigned from the Commonwealth Public Service she did not understand the concept of "preservation" and was misled by the advice she received from Mr Thompson.

19. Although initially successful in the private sector, the Applicant's career faltered when the Federal Government abolished the Business Migration Scheme. Her position as a manager at Coopers and Lybrand came under pressure as business decreased and she made the decision to enter into self-employment as a Migration Agent although links were kept to Coopers and Lybrand.

20. On or about 26 November 1992, the Applicant was informed that she was to be appointed to the Migration Agents Registration Board.

21. On 23 March 1993 the Applicant became aware of the option of requesting a late election to preserve benefits in the Superannuation Fund. On 1 April 1993 she requested copies of documents from her personnel file with the Department of Immigration relating to her resignation and copies were provided. On 28 May 1993 she made a formal request to the Respondent seeking, as she put it, "reinstatement of my contributions to the Australian Government Superannuation Scheme".

22. In that letter to the Respondent she states inter alia (see Tab 25 of the annexure to Exhibit A1):

"... Mr Thompson was a close personal friend who took a considerable amount of time to advise me in various matters. Unfortunately Mr Thompson is now deceased. I was extremely confident that the advice he gave me was in my best interest and that he had appraised me of all options."

She also added at page 2 of the letter:

"... However, I submit that I acted on what I considered the best advice available to me at the time and in the belief that I was not entitled to preserve my contributions. ..."

23. The Applicant, in cross-examination, maintained that at the time she resigned from the Commonwealth Public Service she did not have any appreciation of what the word "preservation" meant.

24. We do not accept that the option of preservation of contributions in the fund was not before the Applicant when she resigned. In seeking to understand the Applicant's motives at the time we bear in mind that, unlike the applicants in some other cases who were relatively junior employees or tradesmen, the Applicant held a responsible position in the Department of Immigration after 20 year's service in the Commonwealth Public Service. Her career was at an executive level and she could, no doubt, readily apprehend the contents of documents forwarded to her.

25. The Applicant was cross-examined as to the effect of a document which was appended to Exhibit R1 in these proceedings. That document is a copy of a facsimile forwarded to the Applicant by the Personnel Section of the Department of Immigration. It contains a document headed "Statement of Benefits" and includes "Deferred Benefit Calculations" and a schedule of expected benefits should the Applicant preserve her funds in the Superannuation Scheme. The next two pages of the said document are information on preservation of benefits.

26. Cross-examined the Applicant stated that although she received the document, she did not read it. She conceded that it was sufficiently detailed to allow her to compare options.

27. Tab 9 of the exhibits to Exhibit A2 in these proceedings is a copy of a VOCADEX message sent by the Applicant to the Australian Government Retirement Benefits Office on 5 April 1988. Set out in full it reads:

"OUR TELECON A.M. 5.4.88 REFERS

MY PARTICULARS ARE AS FOLLOWS

SURNAME: ASHMORE

FIRST NAMES: CAROLYN MARGARET

Ags no: 230-19724

Anticipated last day of service 3.6.88.

All rec. leave entitlements will be used by that date however 5.3 mths long servICe LEAVE will have accumulated.

is this relevant when considering preservation? (Tribunal's emphasis)

POSTAL ADDRESS: 2/108 SWANN RD TARINGA"

Given this document, we reject the Applicant's evidence that her understanding of the options open to her were limited to receiving a cash payout or rolling over funds into another Superannuation Fund.

28. In a letter dated 20 July 1993 the Applicant explains that Mr Thompson encouraged her to place funds with National Mutual as she would receive compound interest as opposed to the interest she had received in the Commonwealth Fund.

29. We are of a view therefore that the Applicant was aware of the right to preserve benefits in the Commonwealth Superannuation Fund but that, acting on the advice she received at the time, she elected to place her funds elsewhere.

30. This finding of fact is confirmed by the Applicant conceding in cross-examination that she received, signed the documents which are found at pages 32 to 34 of the documents prepared for the Tribunal pursuant to s37 of the Administrative Appeals Tribunal Act 1975. The document at page 32 is clearly headed "Preservation Information" and a subheading reads "What is a deferred benefit". At page 34 the choice is clearly apparent. The Applicant had a 20 year career in the Commonwealth Public Service dealing with documents and their results and she conceded that the documents were sufficient to put her on enquiry. The document dated 5 April 1988 to the Australian Government Retirement Benefits Office shows that she had been put on enquiry.

31. Following the initial rejection of her claim on 23 March 1994, the Applicant delayed until 13 December 1996 to request a reconsideration. The Applicant's case was that this was due to various factors including the effects upon her of the condition of multiple sclerosis. We note, however, that during that time she engaged in numerous other activities including starting a new business in Sydney after having moved from Brisbane, purchasing property and later selling it, undertaking overseas travel both for business and private purposes and continuing to act as a member of the Migration Agents Registration Board. We find that the reason that the Applicant did not lodge a request for reconsideration prior to 13 December 1996 was that she had, in her own words, "accepted the decision" and "given up". It was only when she was made aware of the decision in the case of Commissioner for Superannuation v Boardman supra that she determined to resurrect her claim. This is confirmed by her letter to the Respondent of 12 March 1997.

32. We have previously referred to the considerations which should be addressed by this Tribunal in deciding whether or not to exercise the discretion granted by subs157(1) of the Superannuation Act 1976.

33. In this matter we find that the Applicant made an informed decision in 1988 to reject the option to preserve her benefits in the scheme established by the Superannuation Act 1976. In 1993 she made an application to make a late election to preserve benefits but when this was rejected on 23 March 1994 (and notified to her by letter dated 24 March 1994), she made a conscious decision not to take the matter further. It was not until the decision of the Federal Court in Boardman supra was brought to her attention that she determined to proceed further with her request to make a late election.

34. There is nothing in the material before us which persuades us that there has been some supervening event which makes the correct or preferable decision one to permit the Applicant to now make a late election. The mere fact perceived investment benefits have not materialised is, in our view, insufficient to tip the scales in this matter. That the decisions previously made by the Applicant were made with full knowledge of her various options at the time render this case one where it cannot be said that it is desirable to permit a late election. The decision under review is therefore affirmed.

I certify that the 34 preceding paragraphs are a true copy of the reasons for the decision herein of:

Senior Member M D Allen

Senior Member M J Sassella

Mr G D Stanford, Member

Signed: Ivanka Mamic .....................................................................................

Associate

Dates of Hearing 13 December 1999 and 21 February 2000

Date of Decision 3 March 2000

Counsel for the Applicant Mr J R Clarke

Solicitor for Applicant Clayton Utz

Solicitor for the Respondent Mr D O'Donovan,

Australian Government Solicitor's Office