FEDERAL COURT OF AUSTRALIA Military Superannuation and Benefits Board of Trustees No 1 v Batt [2003] FCA 71 MILITARY SUPERANNUATION AND BENEFITS BOARD OF TRUSTEES NO 1 v ROSS ANDREW BATT V 1209 OF 2001 NORTH J 10 FEBRUARY 2003 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 1209 OF 2001 BETWEEN: MILITARY SUPERANNUATION AND BENEFITS BOARD OF TRUSTEES NO 1 APPLICANT AND: ROSS ANDREW BATT RESPONDENT JUDGE: NORTH J DATE OF ORDER: 10 FEBRUARY 2003 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The appeal is allowed. 2. The determination of the Superannuation Complaints Tribunal that "[i]nterest on the difference between the Class B pension and the Class A pension should be paid from the first pension payday on or after 12 June 1997 at the fund earning rate or the rate as otherwise provided by the Rules" is set aside (this question is hereinafter referred to as "the matter"). 3. The matter is remitted to the Superannuation Complaints Tribunal to determine whether interest on the difference between the Class B pension and the Class A pension should be paid from the first pension payday, on or after 12 June 1997, at the fund earning or the rate, or the rate as otherwise provided by the Rules. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 1209 OF 2001 BETWEEN: MILITARY SUPERANNUATION AND BENEFITS BOARD OF TRUSTEES NO 1 APPLICANT AND: ROSS ANDREW BATT RESPONDENT JUDGE: NORTH J DATE: 10 FEBRUARY 2003 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 When the respondent, Mr Batt, was discharged from the army, he was classified as entitled to a Class B pension under the Military Superannuation and Benefits Scheme. He asked the applicant, the Military Superannuation and Benefits Board of Trustees No 1 (the Board), to review his classification. On 12 June 1997, the Incapacity Classification Committee (the Committee) rejected the claim for reclassification. Mr Batt then asked the Board for a reconsideration of this decision on 28 August 1998. The Board also rejected Mr Batt's claim for reclassification. Mr Batt then lodged a complaint with the Superannuation Complaints Tribunal (the Tribunal). 2 On 31 October 2001, the Tribunal determined that Mr Batt was entitled to a Class A pension. It backdated that entitlement to the date of the Committee's original decision on 12 June 1997. The Tribunal then continued: "Interest on the difference between the Class B pension and the Class A pension should be paid from the first pension payday on or after 12 June 1997 at the fund earning rate or the rate as otherwise provided by the Rules." 3 The applicant appealed to the Court under s 46 of the Superannuation (Resolution of Complaints) Act 1993 (Cth) (the Act). The grounds of appeal were: "(a) The Tribunal erred in law in that it made a decision on review in respect of a matter which was not before it because there had been no MSB Board decision on interest which was the subject of the complaint to the Tribunal; (b) The Tribunal erred law [sic] in deciding that interest on the difference between the Class B invalidity pension and the Class A invalidity pension should be paid to the respondent from the first pension pay day on or after 12 June 1997 when there was no power within the Act, the Trust Deed or the Rules under which the Tribunal could make that decision; (i) as the Tribunal was reviewing the Board's decision of 12 June 1997, the only relevant delay is any delay by the Board in commencing payment of Class A invalidity pension. As it had decided the Class B pension should remain, there was not, nor could there be, any relevant delay; (ii) MSB Rule 69 only empowers a decision to pay interest in respect of delay after the date on which a decision to award a particular rate of pension is made (ie it operates prospectively only); (c) The Tribunal erred in law in failing to make any findings of fact necessary to support its decision that interest should be paid on the difference between the Class B invalidity pension and the Class A invalidity pension from the first pension pay day on or after 12 June 1997 at the fund earning rate or the rate as otherwise provided by the Rules; (d) The Tribunal erred in law in failing to provide any reasons for its decision that interest should be paid as specified in ground 4(c) above." 4 Written submissions were filed which challenged the power of the Tribunal to award interest, and also alleged that the Tribunal erred in law in failing to provide reasons for the determination as to interest. 5 The respondent did not take any part in the proceedings. 6 Section 40 of the Act provides that the tribunal must give written reasons for its determination. The applicant argued, and I accept, that the Tribunal did not, in its short reference to interest, give reasons as to why it made that determination. An important purpose of the requirement to give reasons is to provide an appeal court with the means of knowing why the tribunal came to its conclusion. 7 In the present case, the failure of the Tribunal to give reasons presents particular difficulties. In the absence of any argument from the respondent, the failure of the Tribunal to state its reasons for determining that interest be paid does not give the Court any contending argument upon which to adjudicate. Section 46(3) of the Act empowers the Court to hear and determine the appeal, and to make such orders as it thinks appropriate. It is appropriate to order that the issue of interest alone be remitted to the Tribunal for further consideration. 8 It would be desirable that the members who made the original determination deal with the question remitted by this Court. I have been told that one of the members of the Tribunal has since died. It will be up to the Tribunal Chairperson to determine who constitutes the Tribunal for the purpose of considering the remitted question. 9 Although the vice in the decision, which has given rise to the order for remittal, is the failure of the Tribunal to provide reasons for its decision, it is appropriate that the determination be set aside, so that the Tribunal may consider afresh the whole question of the payment of interest. 10 My first inclination was to remit to the Tribunal only the function of complying with s 40. This would have required the Tribunal to give reasons for an already determined answer. I am, however, persuaded by the submission of Mr Hanks QC, who appeared as senior counsel for the applicant, that one of the reasons for the requirement that a tribunal give reasons is to ensure that the tribunal itself examines the jurisdictional and factual basis upon which any determination might be made. It is therefore appropriate to allow the Tribunal to come to the issue afresh. That means that it is entitled to come to the conclusion either that interest should be paid, or that interest should not be paid. That will be entirely a matter for the Tribunal. For instance, it may be that, on reflection, the Tribunal determines that it has no power to order interest. This observation from the Court should not be seen as suggesting any conclusion on the question. I have not entered into the issue whether the determination was correct in law or not, other than on the limited basis that the Tribunal failed to provide reasons for its decision on the issue. 11 In order to ensure that Mr Batt is justly treated, I have asked for and received from the applicant an assurance that, in the event that Mr Batt takes no further part in the argument on the remitted question, then his failure to pursue the matter will not be relied upon by the applicant as a reason for suggesting that the Tribunal determine that interest not be paid. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice North. Associate: Dated: 13 February 2003 Counsel for the Applicant: Mr P Hanks QC Solicitor for the Applicant: Australian Government Solicitor No appearance for the Respondent Date of Hearing: 10 February 2003 Date of Judgment: 10 February 2003