FCA confirms AFCA not required to comply with rules of evidence

  • Newsletter Article
  • Published 30.06.2021
Cummins v Petterd (FCA 2021)

Key Takeaways

The recent FCA decision in Petterd confirms that AFCA are not required to follow rules of evidence or the rule in Browne v Dunn (a long standing technical rule of evidence that requires a witness to have a chance to respond to evidence which may contradict what they say). 

AFCA can determine a decision to be ‘fair and reasonable’ without necessarily determining the truth of competing accounts. As such, submissions in disputes involving competing factual accounts, should focus more broadly on the ways in which the evidence supports a particular version of events and, if a party considers an interview is required to clarify discrepancies then such a submission will need to be made to AFCA (noting that AFCA generally does not interview the parties).

Brief Facts

AFCA determined to affirm a decision of the trustee of a superannuation fund that death benefits were payable to Ms Petterd, the ‘claimed spouse’, of the deceased. The deceased’s children appealed that decision claiming that Ms Petterd was not their father’s ‘partner until his death’ and that the death benefits should be payable to them. 

The question of law ultimately pursued before the Court by the deceased’s children was: Is AFCA required to accommodate the rule in Browne v Dunn before coming to a decision?  

In general terms, the rule in Browne v Dunn is that when a witness is giving evidence and evidence is intended to be called that contradicts their evidence, then the substance of that contradictory evidence must be put to the witness during cross-examination, and they be given the opportunity to respond or comment on the adverse evidence.

Judgment 

The FCA dismissed the appeal and determined that AFCA was not required to accommodate the rule in Browne v Dunn for the following five reasons:

  1. Administrative decision-makers are not normally required to comply with the rules of evidence nor the rule in Browne v Dunn. There was no reason identified as to why that general proposition should not apply to AFCA.
  2. The AFCA framework ‘does not sit comfortably with – and is in fact inconsistent with – any application of the rule in Browne v Dunn.’  The Court identified that AFCA is directed to affirm a decision of the trustee if ‘satisfied’ that the decision was ‘fair and reasonable in all the circumstances.’  The Court noted that AFCA may reach such a state of ‘satisfaction’ without any necessity to determine the ‘truth’ of competing accounts.
  3. The statutory and regulatory provisions which address how AFCA is to discharge its functions support a conclusion that the rule in Browne v Dunn is not a rule to be followed or applied by AFCA. For example, the requirement that AFCA is to determine complaints ‘in a way that is fair, efficient, timely and independent’.
  4. There was nothing in the facts of the case which mandated that AFCA could only be satisfied that the decision of the trustee was ‘fair and reasonable’ by applying the rule in Browne v Dunn. The Court noted that the competing accounts as to whether Ms Petterd was the ‘partner’ of the deceased until the time of his death, was a factual issue upon which the deceased’s children had been afforded an adequate opportunity to advance for consideration their competing account.
  5. The way in which AFCA proceeded in the present case was not procedurally unfair. The reasoning provided by AFCA demonstrated how AFCA weighed the evidence and drew a conclusion. The Court commented that a submission was never made before AFCA and that it would not be proceeding in a fair manner if it did not conduct interviews for the purpose of getting the input of those who had advanced conflicting accounts of the relationship between the deceased and Ms Petterd.

Implications

It is not surprising that the FCA dismissed the appeal given that AFCA’s rules and framework make it clear that it is not bound by the rules of evidence. The FCA decision demonstrates that challenges to AFCA’s decisions on the basis that they did not follow the rules of evidence will generally fail.  

Indeed, parties before AFCA need to ensure submissions are generally framed in a way, which does not stress the rules of evidence but rather attempts to demonstrate in other ways why particular evidence should receive more weight by AFCA, in the event of conflicting accounts.  

AFCA does not generally conduct interviews. AFCA’s Operational Guidelines indicate circumstances where AFCA may exercise their power to require a party to attend an interview to answer questions; an example being when material provided to AFCA is unclear or contradictory and requires clarification. 

What is clear from the FCA decision, is that a party who considers that AFCA should conduct an interview (noting cross-examination is not permitted), should put forward that submission during the AFCA complaint process.