Correct Addresses are Everything - Jones v SCT & Statewide Superannuation Pty Ltd [2011] FCA 1255

As SMSFs are not subject to the jurisdiction of the Superannuation Complaints Tribunal,  SUPERCentral News usually does not comment upon cases involving the Tribunal.  However, this case does merit consideration because it raises questions as to whether proper notice had been given by the Trustee and the consequences of the failure to provide notice.

The facts are relatively straightforward.  The Applicant’s son was a member of a superannuation fund, the trustee of which was Statewide Superannuation Pty Ltd.  The Applicant’s son died in a car accident.  The Trustee determined to pay the son’s death benefit to his mother (the Applicant’s former wife) on the basis that the son and the mother were in an interdependency relationship at the time of his death. 

The Trustee duly notified each potential claimant of its decision to allocate the death benefit to the member’s mother.  

The Applicant, in response to the notification by the Trustee, objected to the decision and engaged a firm of lawyers to assist him in preparing and making the objection.  The Trustee considered the Applicant’s objection and upheld its previous decision.  The Trustee posted a letter to the lawyers advising that the Trustee had not changed its original decision to pay the benefit to the mother.  

The issue before the Court was whether the Trustee had in fact provided notice to the Applicant that it was upholding its original decision.  The significance of whether notice had been provided was that the Applicant had 28 days from receipt of the notice to lodge a complaint with the SCT.

If the Trustee had in fact provided the notice, then the Applicant was out of time to lodge a complaint with the SCT.  On the other hand, if the Trustee had not provided the notice, the 28 day period had not started.

How do you prove a negative?  How could the Applicant prove that the law firm never received the notice from the Trustee?

The judge held that the Trustee had in fact provided the notice and also held that the law firm never received that notice: in short the notice was posted but never delivered.

How do you prove that the letter was posted?  Proof is by way of direct evidence of the persons who were involved in the preparation, approval, signing and dispatch of the letter. 

How do you prove a negative?  Obviously, no direct evidence can be given of non-receipt.  However, evidence can be provided of the systems the law firm used when it received mail and evidence can be provided of the actions taken to track down the letter.

The judge held that the law firm had undertaken reasonable steps to attempt to locate the letter and also that its administrative systems (eg incoming mail register which was maintained on a daily basis) in respect of incoming letters, were sufficiently robust to permit the conclusion to be made that the absence of any record of receipt of the letter meant that the letter was not received.

As the Trustee’s notification letter while posted had not been received, the 28 day period in which to lodge a complaint to the SCT had not commenced to run.

Additionally, the judge noted that even if the letter had been received by the law firm, the 28 day period would not have commenced as the Trustee provided the letter to the law firm and not to the Applicant.

The significance of this decision is that Trustees will either have to communicate directly with complainants even though they may be represented by lawyers or, where lawyers are acting on behalf of complainants, require the lawyers to provide a letter of authorisation from the complainant,  by which the complainant which authorises the Trustee to provide communicate with and provide notices to the lawyers.

Further, lawyers (and any other advisers) need to have in place robust systems (ie incoming and outgoing mail registers which are updated on a daily basis) to record each physical correspondence issued or received by the lawyer.