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FCA affirms AFCA’s broad jurisdiction to deal with superannuation complaints

  • Newsletter Article
  • Published 13.04.2022
MetLife Insurance Limited v Australian Financial Complaints Authority (FCA 2022)

Key Takeaways

AFCA’s jurisdiction to deal with complaints related to superannuation is not limited to those specifically listed at s1053(1)(a)-(j) of the Corporations Act 2001 (Cth) (the Act). The Court confirmed that certain complaints related to superannuation - such as an out of time complaint by a fund member against an insurer of a superannuation fund - can be dealt with under the general jurisdiction.

In the factual circumstances of this matter, there was an agreement between the AFCA member (the Insurer) and the legal entities of the Financial Ombudsman Service (FOS) and AFCA that AFCA would take over the active FOS complaint.

The question of whether AFCA should undertake an active role in court proceedings (as it did here) having regard to its status as an independent decision maker remains open pending further submissions as to costs.

Brief Facts

Mr Edgecombe was the member of a superannuation fund through which he was insured for disability benefits under two policies of insurance. He had made claims under both polices which were declined.

He had an active complaint before FOS in respect of one of the policies (the 2017 complaint) at the date AFCA commenced operating. AFCA took over that complaint once its operations commenced.

Mr Edgecombe then lodged a further complaint with AFCA about the decision of the Insurer, in respect of the second policy (the 2018 complaint).

Over the objections of the Insurer, by reference to its Operational Guidelines and Rule B.4.3.1, AFCA accepted the 2018 complaint, notwithstanding that it was out of time under the AFCA Rules governing a superannuation complaint. AFCA went on to find for Mr Edgecombe in respect of both complaints.

The Insurer challenged AFCA’s authority to determine the complaints and accordingly sought declarations in the FCA that it was not bound by the AFCA determinations in respect of either complaint.


The Insurer’s position was that, in respect of the 2018 complaint, AFCA’s jurisdiction in respect of complaints related to superannuation derived from s1053(1) of the Act, and was therefore limited to the categories of complaints listed in paragraphs (a) to (j) of s1053(1). It followed that if a complaint relating to superannuation did not fall within one of those subparagraphs, AFCA had no jurisdiction to hear it.  

It was agreed by the parties that as Mr Edgecombe’s complaint was made only against the Insurer, it did not fall within one of those subparagraphs.

AFCA’s position was that s1053(1) operated to identify those complaints related to superannuation to which the additional burdens and benefits of the Division, commensurate with those of the Superannuation Claims Tribunal, would apply (i.e. ‘superannuation complaints’) and not to identify a class of complaints over which its jurisdiction was restricted.

In dispute was the interpretation of the following part of s1053(1) of the Act:

1. A person may, subject to s1056, make a complaint relating to superannuation under the AFCA scheme only if the complaint is a complaint:


It fell to the Court to interpret what was meant by the section and more specifically what was meant by the term ‘complaint relating to’.

The principles of statutory interpretation were not in issue. Chappell as executor of the estate of Hitchcock v Goldspan Investments Pty Ltd (WASCA 2021) was quoted with approval:

‘the focus of statutory construction is upon the test of the provisions having regard to their context and purpose’…. The context includes the existing state of the law, the history of the legislative scheme and the mischief to which the statute is directed…..The purpose of legislation must be derived from the statutory text and not from any assumption about the desired or desirable reach or operation of the relevant provisions…The intended reach of a legislative provision is to be discerned from the words of the provision and not by making an a prior assumption about its purpose…’

And further in SZTAL v Minister for Immigration and Border Protection (HCA 2017):

‘Considerations of context and purpose simply recognise that, understood in its statutory, historical and other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose that meaning must be rejected.’

The context and purpose of s1053(1) included, as recommended by the Ramsey Report, the creation of the ‘one stop shop’ for financial services complaints. Prior to AFCA, financial industry complaints could, depending upon the circumstances, be dealt with by three different external dispute resolution bodies, the Credit & Investment Ombudsman, FOS and the SCT.

The Treasury Laws Amendment (Putting Consumers First Establishment of the Australian Financial Complaints Authority) Act 2018 provided for changes to the Act with a view to creating that ‘one stop shop’. At the same time maintaining the essential differences between the SCT and the Ombudsman services, including the distinctive nature of its complaints process for handling superannuation complaints. For example: unlimited monetary jurisdiction, the power to join third parties such as the insurer, determinations to give effect to the legal rights of the parties, having the powers, obligations and discretions conferred on an insurer in making determinations, reference of legal questions to the FCA for determination, and the right to seek a review of its determinations in the FCA.

His Honour found that the:

‘provisions in Division 3 of the Corporations Act that were introduced by the AFCA Establishment Act were directed to establishing a one stop shop rather than changing the types of determinations that could be previously be made by the Tribunal and the Ombudsman Service respectively… Therefore the context supports a construction which continues the availability of the kinds of determinations that would be made under the previous regime rather than a construction which identifies a category of complaints that could no longer be brought before external dispute resolution.

It follows that, having regard to the context, the construction advanced by AFCA is to be preferred. The phrase ‘ a complaint relating to superannuation under the AFCA scheme ‘ means a complaint that relates to superannuation in the sense that it seeks to invoke the particular statutory authority conferred by Division 3.’

Although the case turned on the above construction issue there were a number of alternative arguments put to and considered by the Court.

AFCA submitted that in any event, there was an ad hoc agreement between the parties by which AFCA was to determine the 2018 complaint outside the AFCA Scheme. Whilst his Honour accepted that AFCA had the power to enter into such an ad hoc agreement, he found no evidence that this was the case as all the dealings of the parties were undertaken on the basis that they were giving effect to the AFCA Rules under the AFCA Scheme. He found therefore that AFCA acquired (and indeed, required) no further authority than that conferred by the AFCA Scheme in dealing with the 2018 complaint.

In respect of the 2017 complaint, the parties agreed that this was properly brought before FOS. The issue was whether AFCA, rather than FOS, could determine the claim on the basis that there was a novation of the agreement between FOS and the Insurer (to allow AFCA to deal with the 2017 complaint). His Honour found that novation had been established on the evidence. He did so based on the presence of an agreed process for submitting complaints for determination under the AFCA scheme, as well as the fact that the Insurer was required to have such a process in place in order to meet its statutory requirements.

Given his findings on the issue of novation, his Honour did not need to determine whether there was in place an ad hoc agreement between the parties by which AFCA was to determine the 2017 complaint. Nevertheless, his Honour noted that if such an argument were in play, it would face the same evidentiary difficulties as that presented in respect of the 2018 complaint.

The final issue of interest raised by the Insurer was whether it was appropriate for AFCA to undertake such an active role in the proceedings, having regard to its status as the independent decision maker under the AFCA scheme.

It is well established that, where court proceedings are brought that arise out of tribunal proceedings, there are limits to the role that the tribunal may appropriately take in those proceedings. In R v Australian Broadcasting Tribunal; Ex parte Hardiman (HCA 1980) the HCA held that:

‘a tribunal or statutory decision maker entrusted with the responsibility of making an independent decision to determine a dispute between parties should confine its role in the proceedings to the making of submissions addressing the powers and procedures of the tribunal or decision maker.’

In this case, his Honour noted that the Hardiman principle is not limited to administrative decisions, and raised the possibility that it may also apply to decisions of independent statutory decision makers giving effect to the requirements of a statutory scheme. Having said that however, he ultimately deferred further consideration of this issue pending further submissions on costs, which it was said to impact.


The decision affirms AFCA’s position expressed in its Operational Guidelines and Rules B 4.3.1 and E.1. That is, AFCA has jurisdiction to deal with a complaint about an insurer’s decision under a group policy held by a trustee as follows:

  • if the complaint is lodged within time – it will be dealt with as a superannuation complaint by joining the insurer to a complaint against a trustee; and
  • if the complaint is lodged out of time – it will be dealt with as a non-superannuation complaint against the insurer.

It remains to be seen how this judgment may impact when and where superannuation complaints are lodged.