Treasury to remedy the effect of MetLife Insurance Limited v Australian Financial Complaints Authority Limited [2022] FCAFC 173, that left certain superannuation related complaints outside of AFCA's jurisdiction.
When I argued MetLife Insurance Limited v Australian Financial Complaints Authority Limited [2022] FCAFC 173, I ran up hard against legislative language that arguably did not reflect the policy intent of providing the Australian Financial Complaints Authority (AFCA) with power to determine all complaints against financial service providers (in this case, superannuation funds and insurers of their members).
The legislative construction issue revolved around the words "a complaint relating to superannuation" in s 1053(1) of the Corporations Act. That section said that "a complaint relating to superannuation" could only be made to AFCA if it fell within certain enumerated categories. The constructional choice before the Court was between:
- giving the words "a complaint relating to superannuation" a wide meaning - which meant that there may be such complaints that did not fit the enumerated categories and thus could not be brought to AFCA at all;
- giving those words a narrower meaning to the effect that the enumerated categories only define those superannuation related complaints that can be brought within the superannuation jurisdiction of AFCA, but nothing more. The effect of this construction would have been that "a complaint relating to superannuation" that fell outside the enumerated categories could nevertheless be brought in AFCA's non-superannuation jurisdiction.
This was no arid debate. The case concerned a TPD claim by an ex-policeman whose superannuation fund had effected a life and TPD policy that provided cover for him. His claim for TPD was rejected by the insurer and the trustee of the fund determined that the decision was reasonable. He was out of time to bring a complaint in AFCA's superannuation jurisdiction. But he was within time to bring a complaint against the insurer directly in AFCA's non-superannuation jurisdiction.
AFCA entertained the complaint against the insurer and decided that the complainant was TPD and that the claim should be paid.
The author understands that AFCA has determined many such complaints in the past and has many such complaints in process.
MetLife commenced proceedings in the Federal Court to overturn AFCA's decision arguing principally that, as the complaint was "a complaint relating to superannuation" (adopting the wide construction of those words), AFCA had no power to entertain the complaint in its non-superannuation jurisdiction. Colvin J disagreed. His decision can be found here.
MetLife then appealed. The Full Court rejected that the text, legislative context, or extrinsic materials (such as the Second Reading Speech and Explanatory Memorandum) gave rise to the narrow construction contended for by AFCA.
The consequence of this decision was that there remained a class of complaints "relating to superannuation" that could not be resolved at AFCA at all. This was an unhappy result that ran contrary to the evident policy intent and to the practice of both AFCA and its predecessors in dealing with such complaints. Following this decision, this class of complaints were left without a venue except for the courts.
Yesterday the government released an exposure draft of amendments to the Corporations Act to remedy this defect.
The release of the exposure draft and explanatory memorandum says this:
The government is consulting on Treasury Laws Amendment (Measures for Consultation) Bill 2023: AFCA jurisdiction to hear superannuation matters (the draft bill), related to the MetLife v Australian Financial Complaints Authority [2022] FCAFC 173 (MetLife) decision.
The MetLife decision held that AFCA did not have jurisdiction to hear complaints relating to superannuation unless the complaint was specifically listed in section 1053(1) of the Corporations Act 2001 (Cth).
The complaints listed in section 1053(1) correspond to the jurisdiction of the former Superannuation Complaints Tribunal and the Corporations Act provides AFCA with certain statutory powers in relation to these types of complaints. However, this section was never intended to limit AFCA’s ability to consider other complaints related to superannuation outside of its superannuation jurisdiction.
The bill updates the Corporations Act to expand AFCA's jurisdiction so that it operates as intended:
complaints specifically listed in section 1053 will be treated as superannuation complaints, and will be subject to the additional provisions set out in Part 7.10A, Division 3;
other complaints relating to superannuation will be able to be heard in AFCA's non-superannuation jurisdiction.
The exposure drafts can be seen here.