FEDERAL COURT OF AUSTRALIA Gray v United Super Pty Limited as Trustee for the Construction and Building Unions Superannuation Fund [2011] FCA 40 Citation: Gray v United Super Pty Limited as Trustee for the Construction and Building Unions Superannuation Fund [2011] FCA 40 Appeal from: D09-10\048 [2010] SCTA 23 Parties: DIANNE GRAY v UNITED SUPER PTY LIMITED AS TRUSTEE FOR THE CONSTRUCTION AND BUILDING UNIONS SUPERANNUATION FUND and CARISSA ANNE PAGETT File number: NSD 599 of 2010 Judge: STONE J Date of judgment: 3 February 2011 Catchwords: ADMINISTRATIVE LAW – appeal from Superannuation Complaints Tribunal – whether former de facto wife of deceased entitled to superannuation death benefit – whether former de facto wife a "spouse" within the meaning of that term in the superannuation trust deed – Tribunal found that even if she was a spouse it would not be fair and reasonable for a proportion of the death benefit to be paid to her – Tribunal found that entirety of death benefit should be paid to daughter of deceased ADMINISTRATIVE LAW – appeal from Superannuation Complaints Tribunal – questions of law – whether questions posed by applicant are questions of law ADMINISTRATIVE LAW – appeal from Superannuation Complaints Tribunal – exercise of discretion by Tribunal – whether open to the Tribunal to find that it would not be fair and reasonable for a proportion of the death benefit to be paid to applicant – application dismissed Legislation: Superannuation (Resolution of Complaints) Act 1993 (Cth) ss 37(1)(a), 37(4), (5) and 46 Cases cited: HEST Australia Ltd v Sykley (2005) 147 FCR 249 Date of hearing: 16 September 2010 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 20 Counsel for the Applicant: R Battley Solicitor for the Applicant: McDonnell Schroder Solicitors Solicitor for the First Respondent: B Grant, IFS Legal Counsel for the Second Respondent: C Cassimatis IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 599 of 2010 ON APPEAL FROM THE SUPERANNUATION COMPLAINTS TRIBUNAL BETWEEN: DIANNE GRAY Applicant AND: UNITED SUPER PTY LIMITED AS TRUSTEE FOR THE CONSTRUCTION AND BUILDING UNIONS SUPERANNUATION FUND First Respondent CARISSA ANNE PAGETT Second Respondent JUDGE: STONE J DATE OF ORDER: 3 FEBRUARY 2011 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The application be dismissed with costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 599 of 2010 ON APPEAL FROM THE SUPERANNUATION COMPLAINTS TRIBUNAL BETWEEN: DIANNE GRAY Applicant AND: UNITED SUPER PTY LIMITED AS TRUSTEE FOR THE CONSTRUCTION AND BUILDING UNIONS SUPERANNUATION FUND First Respondent CARISSA ANNE PAGETT Second Respondent JUDGE: STONE J DATE: 3 FEBRUARY 2011 PLACE: SYDNEY REASONS FOR JUDGMENT Introduction 1 The applicant, Dianne Gray, was formerly the de facto spouse of Raymond Gray who died on 20 May 2008 at the age of 60. Mr Gray was a member of the Construction and Building Industry Superannuation Fund (Fund) from 1 September 1988 to the date of his death. The one child from this relationship is the second respondent in this proceeding, Carissa Pagett, who was born 12 September 1977. 2 Following Mr Gray's death, the trustee of the Fund resolved to pay the death benefit payable from the Fund (amounting to approximately $96,886) as to 15% to the applicant and 85% to Ms Pagett. Both Ms Gray and Ms Pagett complained to the Trustee however on 18 November 2008 the Trustee affirmed the decision. Pursuant to the Superannuation (Resolution of Complaints) Act 1993 (Cth) (Complaints Act), Ms Gray and Ms Pagett then complained to the Superannuation Complaints Tribunal in relation to the Trustee's decision. Under s 37(6) of the Complaints Act the Tribunal was required to affirm the Trustee's decision if satisfied that, in its operation to Ms Gray and Ms Pagett, the decision was "fair and reasonable in the circumstances". 3 On 21 April 2010 the Tribunal set aside the Trustee's decision and awarded the whole of the deceased member's death benefit to Ms Pagett. Ms Gray now appeals from that decision. The Tribunal's decision 4 In reviewing the Trustee's decision the Tribunal has "all the powers, obligations and discretions that are conferred on the trustee"; s 37(1)(a) Complaints Act. Its power to vary or set aside the Trustee's decision may only be exercised for the purpose of redressing "as nearly as practicable", and subject to any provision or the Trust Deed governing the operation of the Fund, any unfairness or unreasonableness or both that arises from the Trustee's decision; s 37(4) and (5). 5 The Tribunal noted that the Trust Deed, provided that, relevantly, the death benefit was to be paid to the deceased member's "Dependants" as defined in the Trust Deed. That definition included the "Spouse or widow or widower", a "Child" of the member as well as persons wholly or partially dependent on the member. 6 The Tribunal stated, as a finding of fact, that at the latest date, the de facto relationship between the applicant and Mr Gray ceased by November 2006 and that they ceased living in the same house by November 2007. The Tribunal summarised the submissions that had been made by each complainant, as well as by Mr Gray's sister and by the Trustee. It considered the length of the de facto relationship between the deceased member and Ms Gray (close to 30 years), the express statement in Mr Gray's will that he did not wish Ms Gray to receive a benefit from his death, Mr Gray's nomination to the Trustee of his sister and his daughter as persons to receive the death benefit from the Fund, the fact that District Court proceedings between Ms Gray and the executrix of Mr Gray's estate had been finalised by settlement and Mr Gray's statutory declaration made on the same date as his last will to the effect that he had made no provision in his will for Ms Gray because she was financially independent. The Tribunal summarised the Trustee's decision and its own findings as follows: The Trustee decided that [Ms Gray] should be included in the distribution of the death benefit on the basis that she was financially dependent on the Deceased Member because he was paying the mortgage instalments (and other outgoings) on the house in which, at the time of his death, he was living but in which [Ms Gray] was not living. However, as the mortgage was a joint borrowing by the Deceased Member and [Ms Gray], she had an obligation in relation to repayments of the mortgage and, because the Deceased Member was meeting the mortgage instalments, [Ms Gray] was financially dependent on him to that extent. The evidence before the Tribunal is that that mortgage was repaid on 29 October 2008, the title to the property was transferred to [Ms Gray] as a result of the settlement of the District Court proceedings and that [Ms Gray] sold the house on 24 September 2009 and the Tribunal finds accordingly. 7 The Tribunal found however, because the mortgage had been repaid on 29 October 2008 which was only shortly before the Trustee made its final decision on 14 November 2008, that fact was probably not known to the Trustee. The Tribunal also found that the title of the property was transferred to Ms Gray in settlement of the District Court proceedings and that Ms Gray had sold the house in September 2009. Consequently, the Tribunal found that as from 29 October 2008 Ms Gray's financial dependence on Mr Gray or on his estate no longer existed. The Tribunal therefore concluded: In this case, as the financial dependence of [Ms Gray] no longer existed at the time of the Trustee's final decision, it is the view of the Tribunal that the Trustee's decision to distribute 15% of the death benefit to [Ms Gray], on the basis of her financial dependence, was not fair and reasonable given that she was no longer so dependent at the time of the Trustee's final decision. 8 The Tribunal also rejected two further bases for Ms Gray's claim to a share of the death benefit. It considered that any contribution that Ms Gray might have made to the superannuation benefit by living with the deceased member as his de facto spouse was irrelevant to the decision that the Trustee was required to make. It said: That decision was to identify the persons who fell within the definition of "Dependant" and to whom a payment might be made under the Trust Deed and the legislation. Whether a person has made contributions to a superannuation benefit is not relevant to the operation of this definition. It is only after "Dependants" have been identified that the Trustee is obliged to consider the relative merits of claims to payment of the benefit. 9 Ms Gray submitted to the Tribunal that she was a "Spouse" within the meaning of the definition in cl 7.2 of the Trust Deed and therefore she was a "Dependant" in relation to Mr Gray. Relevantly, the Trust Deed defines "Spouse" as, (a) a person legally married to the Member or former Member at the time of the Member's death in respect of which an entitlement to a Benefit may arise; and/or (b) a person who, in the opinion of the Trustee, ordinarily lived with the Member or former Member on a permanent and bona fide domestic basis prior to the Member's death or any other event in respect of which an entitlement to a Benefit may arise; and (c) in any other case, a person defined as a "spouse" by the Relevant Law. 10 While the Tribunal noted this submission it did not find it necessary to decide whether Ms Gray came within the definition of "Spouse" in the Trust Deed. It said that even if Ms Gray did come within the definition, that as the couple had separated well before Mr Gray's death and as the property proceedings in the District Court were settled to determine the property entitlements between Ms Gray and Mr Gray's estate, it was "not fair and reasonable for a proportion of the death benefit to be distributed to her". It decided that as Ms Pagett is Mr Gray's natural daughter it was "fair and reasonable for the entirety of the benefit to be paid to her". The present appeal 11 Section 46 of the Complaints Act provides that an appeal may lie from the Tribunal to the Federal Court "on a question of law". Though deficient in form, the notice of appeal could be construed as impliedly raising questions of law concerning the proper construction of the definitions of "Spouse" and "Dependant" in the Trust Deed. It also alleged that the Tribunal had erred in the exercise of its discretion by failing to consider relevant matters and taking into account irrelevant matters. On consideration, however, the grounds of appeal and the submissions of the applicant show that, with one exception, the applicant's complaints are directed to the Tribunal's findings of fact which, by the terms of s 46, are beyond this Court's jurisdiction. 12 The exception referred to above relates to the applicant's submission that the Tribunal's construction of the term, "Spouse", was inconsistent with the definition in cl 7.2 of the Trust Deed. The applicant submits that the Tribunal wrongly concluded that Ms Gray did not qualify as Mr Gray's spouse. It is not necessary to detail the applicant's submissions on the point because, as pointed out at [10] above the Tribunal made no such finding. Rather it clearly made the point that, whether or not Ms Gray came within the definition, in the exercise of its discretion it did not regard any distribution of death benefit to her as fair and reasonable. The Tribunal said: [Ms Gray] has submitted that she may come within the definition of "Spouse" and be entitled to be considered as a beneficiary of the death benefit because she ordinarily lived with the Deceased Member prior to his death. However, in view of their separation well before his death and in view of the fact that the property proceedings in the District Court were settled to determine the property entitlements between [Ms Gray] and the estate, it was, in the Tribunal's view, not fair and reasonable for a proportion of the death benefit to be distributed to her even if she did come within the definition of "Spouse". 13 Clause 5.5(b)(ii) of the Trust Deed allows the Trustee, in its discretion, to apply or pay the death benefit, to such one or more of the following persons to the exclusion of the other or others and in such manner or proportions as the Trustee determines, namely to: (A) the Member's Dependants provided that the Trustee may take cognisance of any particular Dependant nominated to the Trustee by the deceased Member; and (B) the Member's legal personal representative … (C) any other person to whom the payment of the Benefit is permitted under the Relevant Law. 14 Relevantly, Ms Gray had to qualify as a "Dependant" in order to be a member of the class of persons to whom the Trustee might pay some or all of the death benefit. It was not an error for the Trustee to consider whether, should Ms Gray qualify as a dependant, it would exercise its discretion to make a distribution to her. It could have approached the question by determining if she qualified as a dependant before turning its attention to discretionary issues. It was, however, equally valid for the Tribunal to approach the matter by addressing discretionary considerations first. This is clearly what the Tribunal did in relation to Ms Gray's standing as a spouse. There was no error in this approach. 15 The same analysis applies to the submissions made in relation to the definition of "Dependant" in so far as it included persons mentioned in subclauses (A) and (C). The applicant submitted that the order of the District Court (see [6] above) "irrefutably establishes: (i) the interdependency; and (ii) the partial dependency" of the applicant and that, far from being severed by the order of the District Court, the relationship of dependency was affirmed by it. This submission confuses the qualifying factor for consideration by the Trustee for a possible distribution with the exercise of the Trustee's discretion. As with the possible qualification of the applicant as a spouse, establishing dependency of some form or other would only make Ms Gray eligible for consideration; it would not entitle her to a share of the death benefit. 16 In any event, the Tribunal held that Ms Gray's financial dependence on Mr Gray or his estate had ceased as from 29 October 2008; see [7] above. It would seem that as a consequence of this finding the Tribunal did not regard Ms Gray as qualifying as a dependant on the grounds of being a person wholly or partially dependent on Mr Gray. In any event, the Tribunal did address discretionary issues relating to dependence and in doing so took into account the Terms of Settlement of the District Court proceedings entered into between Ms Gray and the executrix of Mr Gray's estate. Clause 13 of the Settlement provides: Pursuant to s 19 Property (Relationships) Act 1984 the parties intend, so far as is practicable, that these orders … will finally determine the financial relationships between them and avoid further proceedings between them. 17 In the circumstances it was open to the Tribunal, for the reasons it gave, to conclude that it would be fair and reasonable for the entirety of the death benefit to be given to Ms Pagett as a child of the deceased member and to exclude Ms Gray from participation in the benefit. 18 Although the applicant claims that the Tribunal took into account irrelevant matters, those matters were not identified with any precision. The Complaints Act does not identify specific considerations that the Tribunal is bound to consider nor does it identify matters that the Tribunal is not to take into account. In other words, subject to the terms of the Trust Deed, it was for the Tribunal in its discretion, to decide what in all the circumstances would be a fair and reasonable distribution of the death benefit. This ground of appeal has not been made out. 19 Similarly, the claim that the Tribunal failed to take into account relevant matters must fail. As Crennan J observed in HEST Australia Ltd v Sykley (2005) 147 FCR 249 at [49], in the absence of specific criteria in the Trust Deed the factors that the Tribunal must take into account will be determined by the "subject matter, scope and purpose" of the Complaints Act, the purpose of which "is to ensure members and beneficiaries are not adversely affected by unfair and unreasonable decisions of insurers and trustees". The applicant has not established that the Tribunal failed to consider relevant matters. Rather, in challenging the Tribunal's decision, the applicant impermissibly cavils with the weight that the Tribunal has attributed to the factors it has considered. This is not a matter that this Court has jurisdiction to address. 20 For the reasons given above, the application must be dismissed with costs. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone. Associate: Dated: 3 February 2011