SUPERANNUATION COMPLAINTS TRIBUNAL - CONSTITUTIONAL VALIDITY UPHELD BY THE HIGH COURT OF AUSTRALIA
On June 17, 1999 the High Court of Australia delivered a unanimous decision in the case of The Attorney-General of the Commonwealth v. Breckler [1999] HCA 28 (17 June 1999) ("The Breckler case") which effectively upholds the validity of the legislation which establishes and confers power upon the Superannuation Complaints Tribunal. A joint judgment was delivered by Chief Justice Gleeson and Justices Gaudron, McHugh, Gummow, Hayne and Callinan. Justice Kirby delivered an individual judgment which upholds the validity of the powers exercised by the Tribunal. Justice Kirby was also in favour of amendment of the procedures of the High Court to accept intervention in cases of importance by an appropriate "amicus curiae".
The decision of the High Court in effect reverses the decision of the Full Court of the Federal Court of Australia in the case of Wilkinson v. Clerical Administrative & Related Employees Superannuation Pty Ltd [1998] 79 FCR 469. The Breckler case was determined concurrently with the Wilkinson case by the Full Court, however, the Wilkinson case was settled prior to proceeding to the hearing of an appeal to the High Court. In that case two Justices of the Full Court of the Federal Court of Australia, Justices Lockhart and Heerey held that the Superannuation Complaints Tribunal was exercising the original jurisdiction of the Federal Court established under Chapter III of the Constitution and therefore invalid in that the Tribunal exercised judicial power, rather than administrative power. A dissenting approach was taken by Justice Sundberg in the Full Federal Court decision where he answered the question as to whether the Tribunal breached constitutional validity by saying "No" on the grounds that the Tribunal exercised administrative power only and that for the decisions of the Tribunal to be enforced it was necessary for a litigant to register the decisions of the Tribunal in a Court of Law for the Court to enforce the Tribunal's decision.
The Judges of the High Court effectively accepted the reasoning of Justice Sundberg and indicated that while the Tribunal appeared to have elements of judicial power, in fact "the powers were of an administrative nature and did not amount to an independent exercise of judicial power in a Court of competent jurisdiction", quoting from the dissenting judgment of Justice Sundberg at page 502 of the Wilkinson judgment.
The Justices of the High Court supported the reasoning of Justice Sundberg in distinguishing the applicability of an earlier High Court case Brandy v. Human Rights and Equal Opportunity Commission [1995] 183 CLR 245.
In Brandy's case the High Court had held that the powers exercised by the Human Rights & Equal Opportunity Commission were such that registration in the Federal Court of the determination of the Commission gave the order of the Commission in effect the power of that Court. The High Court determined that registration of the Commission's order which was an administrative act converted a non-binding administrative determination into a binding authoritative and curially enforceable determination so that the legislation establishing the Commission in fact contravened the constitutional prohibition against the conferring of judicial power upon an administrative body.
In their joint judgment the Justices of the High Court have held that pursuant to the Superannuation Industry (Supervision) Act 1993 and Superannuation Industry Supervision Regulations the trustee of the relevant trust fund had elected to become a regulated superannuation fund which was necessary given the importance of attracting the operation of Part IX of the Income Tax Act in circumstances where it would be a breach of trust not to exercise the election so as to obtain the revenue benefits which follow albeit at a concommitant price of attracting the regulatory regime of which the Tribunal is a component. At paragraph 44 the Justices state "The availability of an election of this nature may be and in the context of the present legislative scheme is a decisive pointer in favour of validity".
At paragraph 45 the Justices stated "A determination which constitutes the factum by reference to which legislation operates to confer curially enforceable rights and liabilities does not necessarily involve the exercise of judicial power. The provisions we have discussed would involve what Mason C J Brennan and Toohey JJ identified in Brandy v. Human Rights and Equal Opportunity Commission as "an independent exercise of judicial power" to give effect in this way to a determination by the Tribunal."
Accordingly the Court held that there was not an exercise of judicial power by the Superannuation Complaints Tribunal.
Justice Kirby in his judgment also determined that the Tribunal acted within the restraints of the Constitution. Justice Kirby adopted a view expressed as follows at paragraph 85 "The interest of the Parliament in ensuring that proper standards are observed in the decision of trustees affecting regulated superannuation funds appears to be based principally upon the huge sums constituted by the aggregate of such funds and their large significance for the financial well-being of the nation and those living within it. Once it is accepted that a fund administered by trustees is a "regulated superannuation fund" within the legislation, the interest of the Parliament to provide for a measure of federal regulation is attracted. It would be a mistake to view the "continuum" of federal administrative power today as confined to the times of activities performed by government at the time of federation. The Constitution does not impose such rigid limitations."
In reviewing s.37 of the Superannuation (Resolution of Complaints) Act 1993 which confers powers upon the Tribunal Justice Kirby stated at paragraph 90 "Whatever may have been the position prior to the 1995 amendments, once the Complaints Act was altered to confine the powers of the Tribunal to issues of unfairness or unreasonableness, it was plain that the Tribunal's functions were not those normal to a court." His Honour Justice Kirby also did not accept the argument put forward by the trustees to the fund that the decision of the Tribunal would be conclusive and therefore "binding and authoritative" or "final and conclusive" and therefore they must assumed characteristics common to orders of courts. The trustees argued that this was thus an exercise of judicial power.
Justice Kirby did not agree with this proposition and stated that the administrative acts of the Tribunal were open to collateral view by the Courts such as by appeal to the Federal Court. In all the circumstances the Tribunal's determination was of an administrative nature and therefore the judicial power of the Commonwealth had not been conferred upon the Tribunal.
The effect of the Breckler decision is to restore the power of the Superannuation Complaints Tribunal to deal with complaints by members of regulated funds who are dissatisfied with the decision of their trustee. The Breckler decision dealt with a situation where the trustees were required to make a discretionary decision between the interests of competing members of the fund. The Wilkinson matter involving the case of Mr Bishop was a case of a non-discretionary decision being made by the trustee, in effect either to accept or reject the member's claim.
The reasoning of the High Court would appear to be relevant to both discretionary and non-discretionary decisions of trustees and therefore have wide application to all complaints made by members of regulated funds to the Superannuation Complaints Tribunal.
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JOHN VINCENT SINISGALLI Accredited Commercial Litigation Specialist A partner of Trumble Szanto Lawyers |
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