FEDERAL COURT OF AUSTRALIA United Superannuation Pty Ltd v Harrison [2001] FCA 1468 SUPERANNUATION – Death benefit – Superannuation Scheme provided for automatic death cover – No insurance effected by trustee of superannuation fund – Doubt as to date on which employer nominated deceased employee to fund – Determination by Superannuation Complaints Tribunal to remit matter to trustee for purpose of considering possible recompense – Validity of that decision – Discussion concerning Tribunal's powers – Comment on undesirability of a scheme that makes employees' cover dependent on nomination by employer to trustee and nomination by trustee to insurer. Superannuation (Resolution of Complaints) Act 1993: ss 37, 46 and 47. UNITED SUPERANNUATION PTY LIMITED As the Trustee for The Statewide Superannuation Trust v IAN DOUGLAS HARRISON As executor of the Estate of Kerry Joy Reynolds N 928 of 2001 WILCOX J SYDNEY 19 OCTOBER 2001 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 928 of 2001 BETWEEN: UNITED SUPERANNUATION PTY LIMITED As the Trustee for The Statewide Superannuation Trust APPLICANT AND: IAN DOUGLAS HARRISON As executor of the Estate of Kerry Joy Reynolds RESPONDENT JUDGE: WILCOX J DATE OF ORDER: 19 OCTOBER 2001 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The determination of the Superannuation Complaints Tribunal dated 16 May 2001 be set aside and, in lieu thereof, it be ordered that the respondent's complaint to that Tribunal be dismissed. 2. The New South Wales District Registrar draw the Court's reasons for judgment to the attention of the Minister for Financial Services and Regulation and the Australian Prudential Regulatory Authority. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 928 of 2001 BETWEEN: UNITED SUPERANNUATION PTY LIMITED As the Trustee for The Statewide Superannuation Trust APPLICANT AND: IAN DOUGLAS HARRISON As executor of the Estate of Kerry Joy Reynolds RESPONDENT JUDGE: WILCOX J DATE: 19 OCTOBER 2001 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an appeal under s 46 of the Superannuation (Resolution of Complaints) Act 1993 ("the Complaints Act") against a determination of the Superannuation Complaints Tribunal ("the Tribunal"). The Tribunal upheld a complaint made to it by Ian Douglas Harrison, executor of the estate of the late Kerry Joy Reynolds, against United Superannuation Pty Limited ("United"), trustee of a superannuation fund known as Statewide Superannuation Trust ("the Fund"). Unhappily, the evidence reveals confusion and error, at every stage, by those dealing with Ms Reynolds or her executor. The documents 2 The relevant trust deed was made on 9 May 1996, in substitution for an original trust deed made in 1986. The substituted deed provided that the fund should continue to be vested in United as trustee. 3 The scheme of the substituted deed is that an application may be made by an employer who desires to become a "Participating Employer". The trustee may accept or reject such an application. In the present case it is clear the trustee accepted the application of the relevant employer, Lorjona Pty Ltd ("Lorjona"). 4 Clause 2.3.1 provides for a Participating Employer, from time to time, to advise the trustee "of the names of such employees of that Participating Employer who are eligible and it nominates to become Members of the Fund". Clause 2.3.2 covers former employees and cl 2.3.3 requires the Participating Employer to supply such information, documents and evidence as the trustee may require. 5 Clause 2.4 concerns the admission of employees. It reads: "2.4.1.Each Employee or Former Employee nominated for membership of the Fund by a Participating Employer shall upon nomination by the Participating Employer or, if required by the Trustee, upon making written application for membership in the form approved by the Trustee, become a Member of the Fund from the date the nomination or application is accepted by the Trustee. 2.4.2. The Trustee shall give to each person on or before becoming a Member such information as is required by the Relevant Requirements, including all information that the Trustee reasonably believes a Member would reasonably need for the purpose of understanding the main features of the management, financial condition and investment performance of the Fund." 6 It will be noted that employees become members of the Fund immediately upon nomination, unless the trustee requires a written application for membership. In the present case it does not appear there was such a requirement. However, there is a question as to the date upon which Ms Reynolds was nominated to the trustee by Lorjona. 7 It seems to be clear that Ms Reynolds commenced to work for Lorjona in June 1997. She died on 18 July 1997, apparently as a result of injuries sustained in a motor accident on or shortly before that day. It is also clear that, on 29 July 1997, United received from Lorjona a cheque for $37,273.82, being employer's superannuation payments in respect of numerous employees. The contributions included $85.09 for Ms Reynolds. The schedule accompanying the payment identified 1 June 1997 as the "date contributions to start". Apparently the payment of $85.09 was ascribable only to June, and not any part of July. 8 At all relevant times United held a group life insurance policy issued by Citicorp Life Insurance Limited ("Citicorp"). That policy was designed to cover members of the Fund. It provided benefits to all persons falling within the policy definition of the word "Member" viz "a person who has been nominated by the Policyowner and accepted by us for membership in accordance with the provisions of this Policy". The "Policyowner" was identified as United. Clause 1 of the policy provided for automatic acceptance of Members for basic cover. It read: "1.1 Automatic Acceptance a) We will accept for membership any person who: (i) is Employed by the Employer and actively carrying out their Occupation at the date of nomination; (ii) conforms to the eligibility conditions that are listed in the First Schedule or agreed to between the Policyowner and us from time to time; and (iii) is nominated by the Policyowner, for Benefits equal to the Sum Insured [subject to the Sum Insured not exceeding the Automatic Acceptance Limited (where applicable)]. An 'At Work' certificate must be supplied by the Policyowner to us upon request. b) We reserve the right to decline to accept for membership any person: (i) whom the Policyowner fails to nominate within 90 days of first being eligible for membership; or (ii) who was not actively carrying out their Occupation on the date of entry nominated by the Policyowner, with the exception of those persons who complete 60 days continuous work from the date the person returned to their Occupation." 9 Clause 1.2 provided a regime of additional cover. This was to be available at the insurer's discretion and on submission of such information as might be required concerning the person's state of health. It is common ground that Ms Reynolds did not apply for additional cover under cl 1.2. 10 Clause 2.1 provided for commencement of risk, in the case of acceptance under cl 1.1(a), at the date of nomination for membership. The claim 11 Probate of Ms Reynolds' will was granted to Mr Harrison. He believed Ms Reynolds was a member of the Fund at the date of her death and that, as an automatic consequence, a death benefit was payable to her estate, in addition to the amount held by United on her account - $76.48, being the contribution of $85.09 with adjustments. Mr Harrison made that claim but it was rejected by United. On 30 April 1998 United advised Mr Harrison's solicitors, Stringer Clark, that it would pay to the estate only $63.18. It is not clear how that sum was calculated. Stringer Clark objected by letter dated 22 May 1998. 12 On 5 June 1998 Estella Curtale, a Member Services Officer of United, wrote to Stringer Clark. Her letter included the following: "Thank you for your letter of 22 May 1998 regarding the value of the late Mrs Reynold's benefit entitlement from the Fund. I am pleased to provide the following information: Mrs Reynolds was nominated for membership of the Fund by her employer Lorjona Ptd [sic] Ltd on the 1 July 1996. Contributions in respect of Mrs Reynolds were paid for the period June 1997. Insurance cover is offered to members via the Member Application form, a current copy of which is enclosed. Mrs Reynolds has never forwarded a member application to the Fund and has thus not elected any insurance cover. As such, she has never been accepted as an insured member of the Fund and there is no entitlement to any insurance amount. The annual member benefit statement forwarded to Mrs Reynolds for the year ended 30 June 1997, and the half yearly statements for the periods ended 31 December 1996 and 31 December 1997 all illustrated a death benefit equal to her account balance, with no insurance cover. No insurance premiums have ever been deducted from her account, as illustrated on each of the above statements." 13 This letter was riddled with mistakes. The date "1 July 1996" was clearly wrong. Counsel for United, Mr R N Gye, told me the figure "1996" was an error for "1997". That seems to be so, because Ms Reynolds did not commence employment with Lorjona, the relevant Participating Employer, until June 1997. However, the misstatement appears to be more than a typographical error in this letter. A subsequent letter from United to the solicitors, of 10 August 1998, referred to Lorjona's payment having been for the month of July 1996, not 1997. Although that information was varied on 30 November 1998, by a letter from another officer of United stating the contribution of $85.09 was "for the month of June 1997 not July 1996 as previously advised in my letter of 10th August 1998", United's formal Account Statements for 30 June 1998 and 30 June 1999 both stated Ms Reynolds joined the Fund on 1 July 1996. 14 Although contending that, in the letter of 5 June 1998, "1996" should have read "1997", Mr Gye says that, even with this correction, the date was wrong; it should have been 29 July 1997, when United received from Lorjona the contribution in respect of Ms Reynolds. That statement presupposes this event constituted the first nomination of Ms Reynolds by Lorjona for participation in the Fund. That may be the case; but it does not seem any evidence of that fact was placed before the Tribunal. 15 Statements made in the third and fourth paragraphs of Ms Curtale's letter are inconsistent with the terms of the insurance policy. Clause 1.1 of the policy obliged Citicorp to accept for basic cover any person who was employed by a Participating Employer and actively carried on their occupation at the date of nomination, who conformed with the relevant eligibility conditions and was nominated by United. It is accepted that Ms Reynolds carried on her occupation with Lorjona from sometime in June 1997 and conformed with the eligibility conditions. It was not necessary for her to make an application for insurance cover, as Ms Curtale asserted. All that was necessary was for United, the "Policyowner", to nominate her to Citicorp. 16 The fifth paragraph of Ms Curtale's letter is particularly strange. Ms Curtale must have been confusing Ms Reynolds with somebody else. As is now accepted by United, no member benefit statement was ever forwarded to Ms Reynolds for the year ended 30 June 1997; indeed, counsel says United did not know of her existence at that date. And no half yearly statements for 31 December 1996 and 31 December 1997 were forwarded to her. 17 Not surprisingly, Mr Harrison was not satisfied with Ms Curtale's letter. His solicitors pressed the claim for one unit of death cover. The claim was again rejected. On 19 October 1998, the Member Services Supervisor, Kaye Wellington, wrote a letter to the solicitors in which she said: "We confirm our previous advice that as the deceased did not complete a member application form electing insurance cover, she has never been accepted as an insured member of the fund and there is no entitlement to any insurance amount. The provision of death cover is subject to a number of conditions, including the completion of a member application form. The fund does not offer 'automatic entitlement' to death cover, rather, all members requesting cover are underwritten. Members who elect to receive only one unit of cover, within 90 days of joining their employer and completing a member application form are granted 1 unit of cover without the request to submit medical evidence. In all other circumstances medical evidence is required." 18 The fact that the person in charge of communicating with members concerning their rights fundamentally misunderstood members' insurance position suggests a serious deficiency in United's training of its personnel. The Tribunal complaint 19 After some further correspondence, on 5 March 1999, Mr Harrison made a formal complaint to the Tribunal. By ticking a box on the relevant form, Mr Harrison identified the subject matter of his complaint as "Death Benefit". He did not tick either of the boxes marked "Failure to Provide Information/Wrong Information" or "Other (Please specify)". 20 Mr Harrison responded in the following way to the question, on the form, "What is the Fund's decision(s) or action(s) you are not satisfied with?" "The Superannuation Fund has declined the payment of the Death Benefit on the basis that Kerry Reynolds was not a member of the Fund, notwithstanding the Super Fund accepted the deceased's employers contribution in June 1997. The Funds application form clearly states that 'One unit of death cover is automatically granted subject to you being at work on the date you applied to join the Fund': As the Fund accepted the first contribution, the deceased was a member of the Fund and accordingly the Death Benefit should be payable." 21 In response to a request to state why he believed the Fund's decision to be unfair or unreasonable, Mr Harrison said: "As the Fund accepted the employers contribution they accept Kerry Reynolds as a Member of the Fund. Also, as Kerry Reynolds died within the '90 day' period, she did not complete the member form or decline the Insurance Cover." 22 Mr Harrison identified his loss as "The payment of the Death Benefit of $60,000.00". He described the resolution he sought as "That the Fund pays the Death Benefit to the estate of Kerry Reynolds". 23 Citicorp was joined as a party to the complaint. 24 All three parties provided written submissions to the Tribunal. In their submission, Stringer Clark asserted that Ms Reynolds was a member of the Fund at the date of her death. They apparently relied on the fact that the Fund had accepted the contribution of $85.09 covering her for June 1997. The solicitors argued that all members enjoyed automatic death cover. 25 United stated, in its submission, that the first and only superannuation contribution in respect of Ms Reynolds was received on 29 July 1997, after her death. The trustee argued that Ms Reynolds was not a member of the Fund at the date of her death and that 29 July 1997 was the earliest point in time at which it could have nominated her to Citicorp for insurance cover. The submission included paras 6 and 7 as follows: "6. Kerry Reynolds had not completed a member application to join the Fund prior to us receiving the first and only contribution on 29 July 1997. We deposited the money and Kerry Reynolds was entered into our superannuation computer system as a 'PRO' (Provisional) member to indicate the fact that she had not completed an application form. 7. Automatic insurance cover can only be provided if the employee was at work on the date he/she applies to join the Fund (not absent form work through illness or injury) and applying for membership within 90 days of becoming eligible. An Application form was not received from the member within this time period nor was an application form received later." As the deceased provisional member did not satisfy these conditions, insurance cover was not provided." 26 These paragraphs further demonstrate United's confusion about its own documents. As Mr Gye agrees, they contained three errors. First, the trust deed made no reference to a "Provisional" member; a person was either a member of the Fund or was not a member. Second, unless United requested a formal application for membership, this was not necessary; nomination by the employer was sufficient, and this could be effected by remission of the contribution for a particular person. Third, no formal application for insurance was required. Basic death cover was automatically provided to all members. 27 Citicorp's submission stated it had no knowledge of Ms Reynolds prior to her death; she had never been nominated by United to Citicorp. The Tribunal's decision 28 It appears the Tribunal decided not to conduct a formal hearing, but to determine the matter on the basis of the documents supplied to it, including the parties' submissions. The Tribunal correctly appreciated there was an issue between the complainant and the trustee concerning a critical question (whether Ms Reynolds was a member of the Fund at the date of her death) and this question turned on whether Ms Reynolds was "nominated" by Lorjona to United prior to her death, rather than the date upon which the contribution was received. The Tribunal determined the issue, apparently, by reference to the letter of Ms Curtale quoted at para 12 above. In its reasons for decision, the Tribunal said: "In accordance with Clause 2.4.1, the Deceased could only become a member of the Fund on the date the nomination (or if there be a written application the application) is accepted by the Trustee. In this case the Tribunal is satisfied from the evidence that there was no written application requested by the Trustee and none was made by the Complainant. However, there existed a nomination for membership by the Employer. The Trustee reports that the Deceased was nominated for full membership of the Fund on 1 July 1997 (mistakenly described in the letter of the Trustee to the Complainant's solicitor dated 5 June 1998 as '1996'). From oral information provided by the Trustee to the Tribunal, the Tribunal understands that nomination occurs when the employer forwards the nominated employee's name to the Trustee and acceptance is confirmed when the name is entered in the Trustee's records. The Trustee in a letter of 15 April 1999 to the Tribunal stated that payments were not received by the Trustee until after the Deceased's date of death. Under the Trust Deed there is no necessary link between payment and the acceptance of a nomination. Accordingly, the fact that the payment was not received by the Trustee until after the date of death is not determinative in deciding whether or not the Deceased has been accepted as a member. From the above information it is reasonable to conclude, and the Tribunal so concludes, that the Deceased was nominated for membership of the Fund on 1 July 1997 by the Participating Employer and that on the day or shortly thereafter and certainly before the date of death of the Deceased, the Deceased was accepted as a Member of the Fund." 29 The Tribunal then dealt with the position of Citicorp. It concluded there was no evidence that United had nominated Ms Reynolds to Citicorp; accordingly, Citicorp had no liability. No challenge to that conclusion is made in this proceeding. 30 Returning to the position of United, the Tribunal said: "The Tribunal is, however, satisfied that the Deceased was nominated by the Employer and accepted by the Trustee as a member of the Fund. As required under Rule B.4 the Trustee is to ensure that the employee who wishes to become a member of the Fund is notified in writing before joining of his/her right to receive benefits. Information is given in 'a Member Application' brochure apparently published in February 1979. Under the heading of 'Insurance Cover' the member is informed that he or she has an automatically granted cover subject to the person being at work on the day application to join the Fund is made and providing the person is nominated by the participating employer within 90 days of becoming eligible and importantly 'providing you, [i.e. the member] do not elect to decline the insurance over'. There is no evidence that the Deceased Member declined insurance cover. Accordingly, the Tribunal is satisfied that she did not decline cover. The Trustees' submission that the Deceased did not satisfy the conditions because she did not forward an application pre-supposes it was the Deceased Member who needed to satisfy the conditions. However, it is quite plain that under clause 1.1(b)(I) of the Insurance Policy, it is the 'Policy owner', i.e. Trustee which is responsible for making the nomination. The information provided by the Trustee to the Member is wrong in suggesting that it is the Member who needs to nominate him/herself within 90 days of being first eligible for membership. In the Tribunal's view, the information contained in the pamphlet is misleading. The Tribunal notes the contents of Clause 15(a) of the Trust Deed, in particular sub-clause (ii) which does not exempt a liability arising as the result of inter alia 'a reckless failure to exercise the degree of care and diligence that … is required to exercises[sic]'. The facts of this case illustrate the need, particularly in cases where the Trust Deed requires information to be given, for the Trustee to take care in ensuring correct information is provided to members and/or potential members. The Tribunal notes the general need for trustees of funds to give members all information that the trustee reasonably believes the member needs for purposes of understanding his/her benefit entitlements. (Generally Regulation 2.22 of the Superannuation Industry (Supervision) Regulations and specifically in Regulation 2.24(1)(i) the amount of any sum assured). The Tribunal is, however, concerned that the information given by the Trustee in its information pamphlet: (a) does not accord with the terms of the Policy vis a vis automatic cover; and (b) does not accord with the manner in which the Trustee processes nominations for membership of the Fund, in particular a sub-set of membership not provided for in the Trust Deed is created (i.e. provisional members). Such mis-information is considered by the Tribunal to constitute a reckless failure to exercise a degree of care and diligence that is required to be exercised and that accordingly the Trustee should consider recompensing the Estate of the Deceased in an amount equivalent to the level of one unit of insurance cover. The Tribunal itself in an administrative de novo review and should not reach such a determination. It can, however, set aside the decision under review and remit the matter to the Trustee to consider whether recompense as suggested would be appropriate. If the Complainant is not satisfied with the Trustee's consideration pursuant to this issued direction of the Tribunal he may again approach the Tribunal after giving the Trustee an opportunity to reconsider any initial decision it reaches." 31 The reference to February 1979, as the date of the brochure, is plainly wrong. That was before creation of the Fund. However, the quoted words accurately reproduce a statement made in an information pamphlet issued by United, which was before the Tribunal and apparently on issue at material times. (Another information pamphlet issued by United incorrectly stated an additional requirement for cover, "You applying for membership within 90 days of becoming eligible".) 32 The formal determination of the Tribunal was expressed in these terms: "For the purposes of reviewing a decision of the Trustee, the Tribunal has all the powers, obligations and discretions that are conferred on the Trustee (s 37(1)(a) of the Complaints Act). Pursuant to s 37(6) of the Complaints Act, the Tribunal must affirm a decision if it is satisfied that the decision in its operation in relation to the Complainant on behalf of the Deceased Member, was fair and reasonable in its operation in the Complainant's circumstances. The Tribunal is not so satisfied. Pursuant to the provisions of s 37(3) of the Complaints Act, the Tribunal may set aside the decision under review and substitute a decision for the decision so set aside. It may also remit a matter to the Trustee for further re-consideration in accordance with directions of the Tribunal. Pursuant to the provisions of s 37(3) of the Complaints [Act], the decision under review is set aside and the matter is remitted to the Trustee to give consideration as to whether recompense as suggested should be given to the Complainant." The application for review 33 Section 46(1) of the Complaints Act provides for an appeal to this Court, on a question of law, from a determination of the Tribunal. The appeal is to be instituted within 28 days or such further period as the Court may allow (subs (2)). Subsection (3) provides that the Court "is to hear and determine the appeal and may make such order as it thinks appropriate". That may include "an order remitting the matter to be determined again by the Tribunal in accordance with the directions of the Court" (subs (4)). Subsection (5) provides that the Court "must not make an order awarding costs against a complainant if the complainant does not defend an appeal instituted by another party to the complaint". 34 On 13 June 2001 United filed an application in this Court, by way of appeal under s 46 of the Act. Mr Harrison filed an appearance but elected not to defend the matter. He may have taken that course in order to ensure no costs order would be made against the estate. If so, Mr Harrison's caution is understandable; but it has had the result, unfortunate from my point of view, that no person has put submissions in opposition to those of United. United's submissions 35 At the forefront of the submissions put to the Court by Mr Gye, on behalf of United, is a claim that the Tribunal erred in its references to cl 15(a) of the Trust Deed. Mr Gye correctly pointed out that the deed dated 9 May 1996 contains no cl 15(a), and no provision relating to a reckless failure to exercise care and diligence. It is not clear where the Tribunal obtained these words; Mr Gye suggests the Tribunal may have looked at a later version of the trust deed. This is probably correct. The Tribunal's file contains a Deed of Variation dated 16 June 1999 which contains a cl 15(a) in those terms. But that clause could not apply to events that occurred in 1997. Mr Gye argues the absence of the quoted provision, in the relevant trust deed, fatally undermines the Tribunal's conclusions. It will be recalled the Tribunal said the misinformation in United's pamphlet constituted "a reckless failure to exercise a degree of care and diligence that is required to be exercised", within the meaning of cl 15(a); accordingly the trustee should consider recompensing the estate. 36 Mr Gye also argued there was no causal connection between any misinformation in the pamphlet and the loss claimed by the estate; the only reason why the estate lost the death benefit was that Ms Reynolds was not a member of the Fund at the date of her death. Mr Gye submitted that, this being so, there is no point in the matter being remitted to the Tribunal for further hearing; properly directing itself, the Tribunal has no option but to dismiss the complaint. Mr Gye argued that the Tribunal erred in concerning itself with the question whether the trustee should offer recompense to Mr Harrison. He said the Tribunal's function was confined to determining what benefits are payable to members under the relevant trust documents. Conclusions 37 Mr Gye's criticisms of the Tribunal's decision appear valid. The relevant deed did not include a provision in the terms of the cl 15(a) relied on by the Tribunal. The reference to this clause seems to be a further error in consideration of Mr Harrison's claim. 38 However, even if a relevant deed had contained a provision about reckless failure to exercise due care and diligence, the Tribunal's findings would not have established any link between that failure and the loss claimed by Mr Harrison. The information pamphlet quoted by the Tribunal incorrectly stated the automatic insurance cover was subject to the person being nominated by the employer within 90 days of becoming eligible. The true condition was that the insurer had not exercised its right to decline a person whom the trustee failed to nominate within 90 days of becoming eligible for membership. But the difference between these two statements was of no importance in this case. The death benefit was not lost because of misinformation in the pamphlet; there was no evidence Ms Reynolds ever saw the pamphlet. The death benefit was lost because of delay in submitting her name to Citicorp. Ms Reynolds commenced her employment sometime in June. If Lorjona had promptly nominated her to United, and United had promptly nominated her to Citicorp, she would have been covered by the insurance policy at the date of her death and the death benefit would have been payable to the estate. If there was a relevant failure, by United, to exercise due care and diligence, it had to be in relation to delay in notifying Citicorp. 39 It is apparent that the Tribunal fell into error of law. It based its conclusion upon a fact (the existence of a provision in terms of the claimed cl 15(a)) which did not exist. Even if that fact did exist, it had no causal connection with the loss claimed by Mr Harrison. The Tribunal's decision must be set aside. 40 The more difficult question is what further order should be made. Should I remit the matter to the Tribunal for redetermination pursuant to s 47(4) of the Act? Or should I hold there is no basis upon which the Tribunal may lawfully give relief to Mr Harrison, and therefore order the dismissal of the complaint? Mr Gye submitted United knew nothing of Ms Reynolds until after her death. If that was the case, I agree, United could not have been guilty of any relevant delay; accordingly, there would be no basis for any requirement that United consider whether recompense would be appropriate. However, the Tribunal did not make a finding to the effect of Mr Gye's statement. Rather, it found Ms Reynolds "was nominated for membership of the Fund on 1 July 1997 by the Participating Employer". Presumably, the source of that information was Ms Curtale's letter. The Tribunal may also have noted that not even United's formal submission to the Tribunal disclaimed knowledge of Ms Reynolds before 29 July; rather, United referred to the absence of payment until that day and repeated its misconceived argument about the need to receive a membership application form. 41 If it is correct that Ms Reynolds was nominated by Lorjona to United on 1 July 1997, there is ample room for the view that United's failure to nominate her to Citicorp during the 18 days before her death constituted a failure of due care and diligence. It ought to have been possible for United to devise and implement a system which would ensure new nominations were immediately passed on to Citicorp; any delay left the member at risk. Would failure to do this entitle the Tribunal to require United to consider whether it ought to recompense the estate for the loss occasioned by its negligence? 42 Mr Gye submits this question must be answered in the negative. I have come to the conclusion that he is correct, although not for the reason he suggests. 43 Mr Gye's argument is that, upon the hearing of any complaint, the Tribunal is limited to considering whether or not a particular benefit is payable, having regard to the facts concerning the particular member and the terms of the relevant trust deed; the Tribunal has no mandate to concern itself with the conduct of the trustee. Mr Gye says that, if a trustee has occasioned loss to a member because of misleading information or other misleading conduct, that matter may be raised in an action for damages under s 147 of the Superannuation Industry (Supervision) Act 1993 ("the Supervision Act"); if the trustee's negligent conduct has caused loss, that loss may be recovered at common law. In each case, Mr Gye argues, the appropriate course, and the only available course, is an action for damages in a court of competent jurisdiction. 44 I do not doubt that a person who has suffered loss because of a trustee's misleading or negligent conduct, or its breach of a relevant contractual provision, has a cause of action at law. However, it does not follow the Tribunal is incompetent to require a trustee to consider recompense. The High Court of Australia has held the Tribunal does not exercise the judicial power of the Commonwealth: see Attorney-General v Breckler [1999] HCA 28; 197 CLR 83. However, it is important to note the basis of that decision. The Court did not hold the Tribunal lacks power to decide about the existence of rights or obligations of the parties; at least in respect of some rights and obligations, this is the purpose for which the Tribunal was constituted. The reason why the Tribunal does not exercise Commonwealth judicial power in respect of superannuation funds is that its jurisdiction is confined to complaints against regulated superannuation funds; that is, funds that have made an election, under s 19 of the Supervision Act, to submit to a particular regulatory regime in order to obtain the benefits offered by Part IX of the Income Tax Assessment Act 1936. The majority (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ) distinguished the situation of the Tribunal with that discussed by Kitto J in The Queen v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361: see para 41 in Breckler. Their Honours said a Tribunal determination involves, not the exercise of the sovereign power, "but the arbitration of a dispute with procedures and criteria adopted by the constituent trust instrument, the existing charter, for the resolution of certain disputes arising thereunder":see para 43. Having regard to this basis of decision, there is no a priori reason to exclude the possibility of the Tribunal validly requiring a trustee to consider recompensing a member for loss occasioned by its misleading or negligent conduct. The jurisdiction of the Tribunal is expressed, in s 37(4) of theComplaints Act, in wide terms; the Tribunal's exercise of determination making power is to be exercised "for the purpose of placing the complainant as nearly as practicable in such a position that the unfairness, unreasonableness, or both, that the Tribunal has determined to exist in relation to the trustee's decision that is the subject to the complaint no longer exists." In a particular case, it may be appropriate to determine that the appropriate way of removing unfairness or unreasonableness is by requiring consideration of monetary recompense. I note that, in Retail Employees Superannuation Pty Ltd v Crocker [2001] FCA 1330, Allsop J remitted a complaint to the Tribunal for the purpose of it considering whether to require a trustee to exercise a power, given to it by the deed, to compromise a claim: see paras 136 to 138 of his Honour's reasons for judgment. 45 However, it is necessary to bear in mind the words, in s 37(4), "in relation to the trustee's decision that is the subject of the complaint". In the present case, Mr Harrison identified the decision under complaint as a decision to decline payment of the death benefit, on the basis that Ms Reynolds was not a member of the Fund. I agree with Allsop J (at para 129 in Crocker) that it is inappropriate to take a narrow view of what constitutes the relevant decision. However, the relevant decision must be one that concerns the claimant's rights under the relevant trust deed; it is not sufficient that it concern a claim made outside the trust deed, even though arising only because of the existence of the trust deed. That view is consistent with a distinction made by Allsop J in para 132 of Crocker: "The Trustee decided to reject Ms Crocker's claims without a consideration of whether it should act under clause 7(c). In that sense,the Trustee made no decision under clause 7(c). Thus it was said by the Trustee that the Tribunal had (and would have) no jurisdiction to entertain any such matter. I do not accept this. It is true that if the matters thrown up by events and circumstances, including correspondence from the member, do not properly raise anything beyond what was in fact decided by the Trustee, it is not appropriate for the Tribunal, with a matter before it received by way of s 14 and under Part 4 of the Act, to take the opportunity to deal with other aspects of the relationship between the member and the Trustee foreign to the decision for review". (Original emphasis) 46 Unlike the situation in Crocker, in the present case there is no relevant trust deed provision. The Tribunal thought there was; that was the point of its reference to the supposed cl 15(a). But it seems there is no relevant provision; accordingly, any direction by the Tribunal to United to consider recompense would be made only against the background that United might thereby avert a claim under s 147 of the Supervision Actor a common law claim of negligence. I do not think such a direction is a decision that pertains to the unfairness or unreasonableness of the decision to decline payment of the death benefit under the trust deed. As it seems to me, and confining attention only to the trust deed, United made the only decision reasonably open to it. Clause 13.3 of the trust deed states that, where a death benefit under the Fund is provided by way of insurance, "the Trustee shall not be obliged to make or commence payment of the benefit except as and to the extent that moneys for the benefit are received by the Trustee from the relevant insurer". The scheme of this Fund was that death benefits were to be provided by way of insurance, and no moneys were ever received by United, in respect of Ms Reynolds, from an insurer. 47 Further, Rule F of the Rules for the Management of the Fund states: "F.1 Death in Service If the Member dies while he is in the Service of the Participating Employer prior to the Retiring Age the benefit payable shall … be an amount equal to the aggregate of:- F.1.1 the Member's Retirement Account at the date of payment; and F.1.2 the Insured Benefit (if any)." 48 As I have reached the conclusion that there is no basis upon which the Tribunal might validly direct United to reconsider its position under the trust deed, there is no point in the matter being remitted to the Tribunal. As a matter of law, the Tribunal would have no option but to dismiss the complaint. That being the case, it is appropriate for the Court to make an order of dismissal. I will take that course. 49 This does not mean Mr Harrison has no redress. On the contrary, the estate seems to have an irresistible claim against either Lorjona or United. The delay in nominating Ms Reynolds to Citicorp was clearly the fault of one or both of these companies; and that delay is the reason why no death benefit is payable. 50 If it is correct (as United now asserts), that United heard nothing about Ms Reynolds until after her death, it cannot be said that United was responsible for any relevant delay, and therefore the loss of the benefit. However, on that basis, Lorjona was responsible for a lengthy delay that caused loss of the benefit. Lorjona could, and should, have nominated Ms Reynolds to United as soon as she entered the company's employment; thereby enabling United to nominate her to Citicorp. Any such delay by Lorjona may have been a breach by it of its contract of employment with Ms Reynolds; alternatively, it seems to be a breach of its duty of care towards her. 51 On the other hand, if Lorjona nominated Ms Reynolds to United on 1 July 1997, as Ms Curtale said, it would seem United breached its contractual obligations to her; or alternatively its duty of care. However, it may be unsafe for the estate to act in reliance on Ms Curtale's letter in determining any future course of action. The letter is so full of error that it might be preferable to ascertain the true facts in relation to nomination. Some general concerns 52 Ordinarily, I would say no more. However, this case raises matters of general concern that, in my opinion, warrant attention by those concerned with the regulation of superannuation funds. Funds regulated under the Supervision Act enjoy significant taxation concessions and now comprise many billions of dollars. As I understand the position, it is now virtually mandatory for employers to make contributions, on behalf of their employees, to one or other of them. Employees know this and would expect to obtain coverage from the commencement of their employment. It is therefore a matter of concern that it was possible for Statewise Superannuation Trust to operate under a trust deed that did not ensure death benefit cover from the date of commencement of the employee's employment but, rather, depended upon two separate acts of nomination, either of which could be delayed without the employee's knowledge. Under a system like that enshrined in this deed, employees of inefficient or dishonest employers are at considerable risk. There would seem to be a compelling case for making whatever legislative amendments are necessary to ensure all regulated funds provide full cover to all employees as from the date of commencement of their employment, regardless of any omission by the employer or trustee. 53 Second, I note from the Fund's annual report, which is in the Tribunal's file, that at 30 June 1997 it controlled over $148 million of contributors' funds. It is a matter of concern to me that a company entrusted with funds of this order should have exhibited such confusion about its members' rights, and should have issued such inaccurate documents, as the evidence shows United to have done. Plainly, there is a need to ensure better training of employees of regulated funds. 54 Because of my concern about these matters, I propose to direct the New South Wales District Registrar of the Court to draw these reasons for judgment to the attention of the Minister for Financial Services and Regulation and the Australian Prudential Regulatory Authority. I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox. Associate: Dated: 19 October 2001 Counsel for the Applicant: N Gye Solicitor for the Applicant: Deacons The Respondent did not appear. Date of Hearing: 5 October 2001