Hamilton and Commissioner for Superannuation [2003] AATA 122 (7 February 2003)

Last Updated: 7 February 2003

DECISION AND REASONS FOR DECISION [2003] AATA 122

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q2002/658

GENERAL ADMINISTRATIVE DIVISION	)
	Re	IAN HAMILTON

Applicant

And

COMMISSIONER FOR SUPERANNUATION

Respondent

DECISION

Tribunal

Deputy President, Don Muller

Date 7 February 2003

Place Brisbane

Decision

The application for an extension of time pursuant to section 29(7) of the Administrative Appeals Act 1975 for the review of the Respondent's reconsideration dated 30 November 1992 is refused.

............Signed..................................

D.W. MULLER

DEPUTY PRESIDENT

CATCHWORDS

EXTENSION OF TIME - applicant withdrew application - new application for review seven years later - whether acceptable explanation of delay- whether merits of the case outweigh delay- whether prejudice to respondent- principles of extension of time.

Superannuation Act 1976 (Cth) s137 (1), s.154(2),(3),(4), (5) and (6), s 157 (1)

Administrative Appeals Tribunal Act 1975 (Cth) ss29 (7), 42A(1A)(1B)

Comcare v A'Hearn (1993) 45 FCR 441

Commissioner for Superannuation v Boardman (1994) 50 FCR 236 at 244

Liddle v Commissioner of Superannuation 14 AAR 456

Hunter Valley Developments Pty Ltd v Cohen (1984) 58 ALR 305

Re Mulheron and Australian Telecommunications Corporation (1991) 23 ALD 309

REASONS FOR DECISION

Deputy President Don Muller

1. This is an application for an extension of time for the making of a second application to the Tribunal for a review of a decision of the Respondent dated 30 November 1992, not to grant a late election to preserve the Applicant's superannuation benefits under section 157 (1) Superannuation Act 1976 ("the Act").

2. The relevant background to this matter can be summarised as follows:

(i) Ian Hamilton, the Applicant, was born on 31 January 1940.

(ii) On 9 January 1956, he joined the then Postmaster-General's Department as a Technician-in-Training.

(iii) The Applicant was accepted as a contributor to the Commonwealth Superannuation Scheme ("CSS") on 21 September 1956.

(iv) The Applicant's employment was later transferred to Telecom when that entity took over telecommunications operations from the Postmaster-General's Department.

(v) By virtue of having been an "employee" for the purposes of the Superannuation Act 1922 (the superceded Act), the Applicant became an "eligible employee" for the purposes of the Superannuation Act 1976 (the Act), at the date of commencement on 1 July 1976.

(vi) In late 1980, the Applicant became somewhat disenchanted with Telecom. He had applied for a promotion but the higher position "went to a Technician who only gained his qualifications without examination...". The Applicant was "greatly upset" at the time and he thought that it was "grossly unfair".. He was based in Sydney at the time.

(vii) On 31 December 1980, the Applicant went on leave which he anticipated would last for 12 months.

(viii) The Applicant was accompanied on leave with his wife and children. They spent most of 1981 in south east Queensland.

(ix) On 31 December 1981, the Applicant resigned his position at Telecom, while he was still on leave. He then ceased to be an "eligible employee" for the purposes of the Act.

(x) On 7 January 1982 the Applicant completed the application form titled "Refund of Accumulated Contributions/Lump Sum Benefit or Election for Preservation of Superannuation Rights Form", also known as an S2A Form. The S2A form contained three options. The Applicant elected to "Apply for payment of a lump sum benefit" by crossing out the remaining two options which were:

"(a) Apply for a refund of accumulated contributions", and

(c) Elect for preservation of superannuation benefits"

(xi) The Applicant's CSS file was destroyed in the 1980s pursuant to the provisions of the Archives Act 1903. A copy of the Applicant's letter of 7 January 1982 was retrieved from the records of Telstra.

(xii) The letter of 7 January 1982 was treated as an election under subsection 137(1) of the Act which provided:

"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) ceases to be an eligible employee in circumstances by virtue of which the person is to be deemed, under sub-section 58(3), to have retired involuntarily,

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."

(xiii) On 2 April 1982 the Applicant was paid a lump sum of $9,525.28.

(xiv) During 1982, the Applicant managed a motel in south-east Queensland.

(xv) The Applicant used the money he received from the superannuation scheme to purchase:

(a) A block of land containing an area of 2,000 square metres, at Hervey Bay, for $4,000, and

(b) An industrial rag business for $5,000.

(xvi) The Applicant ran the rag business at the same time as he was managing the motel.

(xvii) The Applicant was re-employed by Telecom five years later on 2 April 1987 and is currently employed by Telstra as a Communication Technician 4, working mainly in telephone exchanges.

(xviii) The Applicant has claimed that in 1990 he became aware of the right to make a late election to preserve superannuation benefits subject to the Commissioner's discretion under section 157 (1) of the Act, which provides:

"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 recognised, 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."

(xix) On 5 September 1990 the Applicant applied to the Retirement Benefits Office for late election to preserve superannuation benefits under section 157 (1) of the Act.

(xx) The delegate of the Respondent decided on 3 January 1992 :

"for the purpose of subsection 157(1) of the Act, I am not satisfied that in all the circumstances of the case it is desirable that the election under subsection 137(1) made by Mr. Hamilton on 5 September 1990 should be recognised."

(xxi) On 30 November 1992, under sub sections 154 (2),(3),(4) and (5) of the Act, the Respondent affirmed the decision dated 3 January 1992 not to grant a late election under section 157(1) of the Act.

(xxii) On 31 December 1992 the Applicant applied to the Administrative Appeals Tribunal for a review of the reconsideration dated 30 November 1992 pursuant to section 154(6) of the Act.

(xxiii) On 22 November 1994 the Applicant withdrew the Application to the Tribunal under section 42A (1A) of the Administrative Appeals Tribunal Act 1975 and it was dismissed under section 42A (1B) of that Act.

(xxiv) Over seven years later, on 31 July 2002, the Applicant sought to make a second application to the Tribunal to seek a review of the decision dated 30 November 1992.

(xxv) This application for extension of time relates to the second application for review to the AAT.

3. The Applicant has not applied to have his former dismissed application reinstated under either of subsections 42A(9) or (10) of the Administrative Appeals Tribunal Act 1975. In any event neither of those subsections apply to his situation because 28 days have well and truly passed since the dismissal in 1994, and it was not dismissed in error at the time.

4. The Applicant is entitled to make a fresh application provided that any necessary extension of time is granted. Re Mulheron and Australian Telecommunications Corporation (1991) 23 ALD 309 at 314.

5. The time within which application for review to the AAT should have been made was within 28 days of the Applicant receiving the reviewable decision. That is, he should have made his application to the AAT by the end of December 1992. This was what he did in fact do when he first applied to the Tribunal. The Tribunal may allow an extension of time for the making of an application (see subsection 29(7) of the AAT Act). The principles to be applied in exercising the discretion to grant or not grant an extension of time were canvassed by O'Connor J in Re Mulheron (supra) where she quoted with approval from a decision of Deputy President Todd in Re Johnson and Commonwealth of Australia (unreported No. 5619, 5 January 1990) at 314:

" (a) Prima facie proceedings commenced outside the prescribed period will not be entertained. An extension of time will be granted, however, if it is proper to do so.

(b) It is relevant whether the applicant rested on his rights or took action to make the decision-maker aware that the decision was being contested.

(c) Any prejudice to the respondent that would be caused by granting the extension of time is relevant.

(d) Any wider prejudice to the general public in terms of disruption to established practices is relevant.

(e) The merits of the substantial application are relevant.

(f) Fairness of granting the extension of time as between the applicant and other persons in a like position is relevant."

O'Connor J went on to say:

"(18) The balancing of these factors will depend on the individual cases. In cases where there is a second application, the earlier application having been dismissed, the circumstances in which the first application was dismissed will be highly relevant particularly in terms of (b) and (d) above."

6. There is an evidentiary burden on the Applicant to place before the Tribunal all relevant information in order for the Tribunal to satisfy itself that it is proper in the circumstances to grant an extension of time, see Hunter Valley Developments Pty Ltd v Cohen (1984) 58 ALR 305.

7. In the present case, the Applicant gave the following reasons for withdrawing his application in 1994:

(i) He was emotionally and financially exhausted at the end of 1994 having to support a wife and three children and having to pay $2000.00 in legal fees.

(ii) He thought he needed to join his employer as a respondent.

(iii) His CSS files had been destroyed in the 1980s.

(iv) It had been decided between the parties and the AAT to await the decisions in cases of two other applicants, with similar factual and legal circumstances, namely Chalk and Boardman. Those decisions were not handed down until mid 1994. The results did not give Mr. Hamilton much cause for optimism.

(v) Mr. Hamilton lost faith in his legal representatives.

8. The Applicant did not give any reason for the delay from 1994 to 31 July 2002. He said that he just got on with his life and family. He gave evidence that in September 2001 he was talking about the matter with his brother and as a result of that conversation he decided to "crank it up again". He talked to his local Member of Parliament and then decided to "have another go at the AAT".

9. The Respondent provided the Tribunal with a lengthy written submission that the Applicant should not be granted an extension of time. The submission contained 66 paragraphs over 14 pages. It is not necessary to repeat all of those submissions in this decision. However, the Tribunal accepts that all of the submissions were valid and adopts the following submissions as being of special significance in this decision.

(i) There is no acceptable explanation given by the Applicant for the cause of the delay from 1994 until 2002 in seeking the review for the second time.

(ii) The Applicant was legally represented in the First Application, he was aware of his rights, and he deliberately chose not to exercise those rights fully.

(iii) In the years from the date of the withdrawal of the first application to the date of the second application, the Applicant gave no indication to the Respondent that he did not consider the reviewable decision to be final.

(iv) The Respondent would be prejudiced by the extremely late application for review because:

(a) The events which surrounded the Applicant's resignation and election in 1981/82, occurred over 20 years ago.

(b) The Applicant's file was destroyed in accordance with archival policy before the reviewable decision was made. Therefore, potential evidence as to what advice the applicant obtained from the RBO before his resignation in 1981 is not available.

(c) The Respondent is potentially prejudiced in being unable to identify witnesses to give oral evidence as to the circumstances of the applicant's completion of the Form S2A. If witnesses were available, it is unlikely that after more than 20 years, their memories would be reliable as to what resigning employees in general and the Applicant in particular, were told about their superannuation options. Consequently, the Respondent and the Tribunal are not able to test properly the Applicant's evidence as to what he was advised about superannuation.

(v) Elections play a central role in the determination of the entitlements of contributors and the orderly administration of the scheme. The regime of internal and external review of decisions established by section 154 of the Act is designed to promote the orderly administration of the scheme by ensuring that the question of whether a person is entitled to late election is capable of being determined unequivocally and in a timely manner. Failure to comply with the time limits prescribed under the Act is prejudicial to the orderly administration of the scheme. It is especially prejudicial to the respondent having to devote considerable resources to investigating events which occurred over 20 years ago, as is the case here.

(vi) In the circumstances, it is unreasonable for the Respondent again to be made a party to litigation in the same forum and incur the costs of litigation of the same decision, particularly as the Applicant cannot be the subject of a costs order.

(vii) It is in the public interest that procedural time limits should be enforced unless the merits of the particular application warrant an extension: Commissioner for Superannuation v Boardman (1994) 50 FCR 236 at 245.

(viii) On the basis of the material presently available, the Applicant's substantive case is weak.

(a) The Applicant's central argument is that at the time he completed the Form S2A he was ignorant of the preservation option. However, there is no compelling evidence before the Tribunal to indicate that the Applicant's decision was not informed.

(b) There is no evidence that the Applicant was unable to understand the choice he made by reason of physical or mental incapacity.

(c) On re-employment by Telecom in 1987 the Applicant would have been made aware of superannuation options. The Applicant did not make a late election until 1990.

(d) For a late election to be treated as though it were not late, the Commission had to be `satisfied that in all the circumstance of the case it is desirable that the election should be recognised'. By `desirable' it is meant `that of being fair in order to do justice between the person who seeks to make the late election and the requirements of the fund': Commissioner for Superannuation v Boardman (1994) 50 FCR 236 at 247. It is only desirable to recognise a late election if there are objectively good reasons which justify the person's not being required to comply with the time limits otherwise specified in the Act: Re Liddle and Commissioner for Superannuation 1991 14 AAR 456. The evidence before the Tribunal does not demonstrate objectively good reasons why the Applicant's election, made eight years after the time prescribed by the Parliament, should be recognised or that to do so is necessary to do justice between the Applicant and the Respondent.

10. The Tribunal considers that this is a case where the balance of factors is strongly against the granting of an extension of time to the Applicant to make application for review of the decision made on 30 November 1992.

I certify that the 10 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President Don Muller

Signed: .......................................................................................

C. O'Donovan, Associate

Date/s of Hearing 10 September 2002

Date of Decision 7 February 2003

Applicant Mr. D. Hamilton, brother of applicant

Counsel for the Respondent Mr. A. Dillon

Solicitor for the Respondent Australian Government Solicitor