Colquhoun v SAS Trustee Corporation

The Present Proceedings

1. The current proceedings were commenced on 28 September 2023. The Plaintiff relies on an Amended Statement of Claim filed in Court on 5 February this year which seeks the following relief: "1. An order pursuant to section 21(4) of the Act that the decision of PSAC on 29 June 2023 be set aside. 2. An order pursuant to section 21(4) of the Act that the decision of the Defendant dated 8 August 2023 be set aside."
2. The third head of relief claimed was deleted in Court, but it was this: "3. An order pursuant to section 21(4) of the Act that the Plaintiff, who knew of the original determination of 29 June 2023, is entitled to, pursuant to section 10(1A)(b), receive a superannuation benefit equivalent to 80.16% of his attributable salary of his office from 24 August 2002."
3. Before I go into the details of the current dispute, there are a number of things which I should refer to. The first is to provide a short summary of the traumata to which the Plaintiff was exposed during the course of his service in the NSW Police, and that can be conveniently found in the judgment of Kearns ADCJ of 16 December 2021, which is Exhibit B. That short summary is this: "1. In 1974 or 1975, the Plaintiff assisted during riots at the Central [Police Station] cells. He found this stressful. 2. In mid 1976, the Plaintiff responded to a fatal plane crash at Cooma. The pilot, whom the Plaintiff knew, and the two passengers were killed. It was a gruesome situation. The Plaintiff was shaken, he started to suffer nightmares and flashbacks which continue. His sleep was affected. He began to drink to take his mind off it. 3. In 1982 and 1983, the Plaintiff was subjected to "five fatals in five days". The Plaintiff took to drinking significant amounts of alcohol. After this, he became shaky and broke down and cried. One of the accidents had involved a kidney recipient who died. His sister was the donor. When the Plaintiff informed the family of the incident, the sister broke down hysterically. The Plaintiff continues to think of this. At the time, he was barely sleeping and was suffering nightmares. He started to develop chest pains. He had continued anxiety. He continued heavy drinking. He began smoking heavily, two packets per day. His general practitioner prescribed medication with codeine. That helped him sleep. He became dependent on codeine. 4. The Plaintiff continued to be exposed to serious crime and traumatic incidents. His ability to cope became less and less. He had continued problems with sleep, anxiety and alcohol intake. 5. In the late 1980s, the Plaintiff discovered inconsistencies with the financial records of Lake Macquarie Police Citizens Youth Club where he was stationed to work. Two of the members of the board were Richard Face and Richard Smith, both former police officers. Mr Face was also a local Member of Parliament. The Plaintiff made a complaint to his superiors about misappropriation of funds from the PCYC. The Plaintiff then became the subject of persecution and harassment and forced complaints. 6. In October 1990, an anonymous complaint was made about the Plaintiff. It was sent to a number of Members of Parliament, senior police officers and the Ombudsman. The document included allegations that the Plaintiff was unfit for promotion, he was not doing his job properly and sleeping on the job, he had personality issues, he put misrepresentation in his promotion application and told lies generally, he was corrupt and deceitful, he sun-baked nude at the PCYC, he was drinking on duty. The substance of the allegations were false. In December 1990 and January 1991, reports with regard to the allegations found them to be largely unsubstantiated. On 1 February 1991, the Ombudsman reported that his office was taking no action on the allegations. 7. On 22 February 1991, Richard Smith wrote to the ombudsman complaining that the investigations into the PCYC were vexatious and making further allegations about the Plaintiff including his alleged behaviour to female officers and using a recording device. 8. On 6 March 1991, the Ombudsman informed the Commissioner of Police that he declined to investigate the complaint of Mr Smith and Face. 9. On 6 March 1991, the Ombudsman informed Mr Smith and Face that there were reasons to investigate the Lake Macquarie PCYC and that there was no prima facie evidence to support the allegations against the Plaintiff. 10. On 21 March 1991, Mr Face wrote to the Ombudsman informing him that he would pursue the allegations through other means. 11. On 4 August 1993, Mr Face's solicitors wrote to the Plaintiff, indicating that Mr Face was contemplating defamation proceedings against the Plaintiff. 12. On 27 December 1993, the Plaintiff was charged with using a listening device to record conversations without the other parties' consent and also with a number of other offences. 13. On 26 October 1993, Mr Smith wrote to the Minister of Police and Emergency Services, iterating complaints that had earlier been made against the Plaintiff anonymously. 14. On 18 November 1993, a letter was sent from the senior manager of the Employee Assistance branch to the acting president of the Federation of PCYC containing the following: "I am informed by your staff that Senior Sergeant Colquhoun has now exhausted all his available sick leave entitlements. Having regard to the circumstances of his absence, it will be inappropriate to grant special sick leave concessions to leave, unless you are prepared to grant him annual leave, arrangements will have to be made to cease further salary payments to him forthwith. This will need to be facilitated through the Staff and Personnel branch as soon as possible to avoid overpayment." 15. On 18 November 1993, a report from Acting Inspector AJ Buchanan noted that the Plaintiff was overdrawn on his sick leave and inquiries were necessary as to whether an application for special leave would be supported or whether he would avail himself of extended leave. The conversation with the Plaintiff that evening was noted in which the Plaintiff was agitated and stated he was not speaking to police anymore as he did not trust them. It might be noted at this point that the Plaintiff was increasingly stressed as confidential information he had provided to the police and also confidential medical information of the Plaintiff in the possession of the police had been leaked. It is not surprising that he did not trust the police. 16. On a date not clear, but probably in November 1993, Mr Face asked a number of questions in the Legislative Assembly of the Minister of Police and Emergency Services. The questions concerned the Plaintiff. They were on notice, which probably explains the different dates: 10 March 1994, 14 April 1994, 13 May 1994, on the documents that provide the questions and answers. The questions could only be described as vindictive and part of the campaign conducted by Mr Face against the Plaintiff. This caused further stress to the Plaintiff. 17. On 19 November 1993, the Newcastle Herald published an article about complaints that had been made against the Plaintiff. 18. On 14 January 1994 Mr Face wrote to the Minister for Police and Emergency Services concerning an application the Plaintiff had made for 'a security licence and a shooters licence'. He was opposing the application. In fact the Plaintiff had not applied for a shooters licence. 19. On 5 April 1995, the Plaintiff wrote to the Office of the Internal Affairs inquiring about his application for a security licence, and querying the length of delay in considering it. 20. In 1994 the Plaintiff was asked to attend Charlestown Police Station concerning an allegation that he was falsely claiming to be a Justice of the Peace. He was a Justice of the Peace. The allegation had been made by Mr Face."
4. I have omitted from that quotation His Honour's references to the source of the various traumata that he was summarising. It is of course ironical that Mr Richard Face was the member of the Legislative Assembly for Charlestown. In the Carr Government he became a Minister of the Crown, but was forced to resign and leave Parliament when he was charged with lying to the Independent Commission Against Corruption. Much of the traumata to which the Plaintiff was exposed was obviously because he found discrepancies in the records of the PCYC of which Mr Richard Smith was the president and Mr Richard Face was the secretary, and from which PCYC it was thought that each of Mr Smith and Mr Face were conducting a private business.
5. For nearly a year after his resignation the Plaintiff did not work. On 4 May 2015, the Plaintiff was interviewed by Dr Peter Snowdon, a consultant psychiatrist retained by the Defendant. Dr Snowdon took this history of the Plaintiff's work after leaving the NSW Police: "Mr Colquhoun said that, for the subsequent eight months, he did 'nothing', but then, he said, with his working, he realised that he had to do something. In this regard, he said that, because of financial considerations, he had to sell the house which he had built, describing this as a 'big shock to the wife', who was working as a secretary to the manager of Orica, for the Asia Pacific region. On specific questioning, Mr Colquhoun said that he and his wife have remained very happily married, and have two children, a daughter aged 38, who is a photographer, and a daughter aged 32, who has her own children's clothes-store in which his wife now helps. He said that he also has five grandchildren. Mr Colquhoun said that his first step at returning to work was to obtain a taxi driver's licence, first, he said, leasing a taxi, before buying his own. On specific questioning, he said that he worked fulltime, 'absolutely' in this role, saying, with reference to a taxi, 'You've got to live in them, it's the only way to make money'. He said too, that his years with the PCYC had taught him how to keep books, saying that he had to run it as a business, the expertise from which he extended into running the taxi. I would comment that Mr Colquhoun appeared an intelligent man, who said that obviously long prior to resignation, he had obtained an Associate Diploma in Police Studies, specifically in Social Welfare, after four years, part time, in 1983. He said he used to attend this course one day a fortnight. With regard further to driving his own taxi, he said that, in 2007 or 2008, he had predominantly stopped driving himself, and had hired drivers, saying that then, two years later he sold the plates. On a specific questioning regarding why he did this, he said that he achieved a good price, and he was 'getting too old for the long shifts', particularly those on Saturday and Sunday nights, adding, 'There's too many idiots out there, and with my background, I was going to belt someone'. In this regard, he said that there were "a few little incidents", but nothing like those to which he had been exposed in the Police. He said that, just prior to selling the plates, he had lodged an expression of interest to transport children with special needs, as part of the Assisted Student Transport Program with the Department of Education. He said that being successful in this regard, the students who he transported were at the "behavioural end of town", with which he had dealt for most of his police career. He said, that he was also experienced in getting on with the parents of these children, who also had their own problems. Mr Colquhoun said that he obtained increasing amounts of this type of work subsequently incorporating his business through his accountant, his son in law [Mr Ryan Ansell]. On specific questioning, he said that the entity which he traded as was Thomas Colquhoun Pty Ltd. On specific questioning, he said that he had last, however, driven three years ago, employing drivers since, but adding that, occasionally, if they are ill, he stands in for them." That history appears to me to be accurate and consistent with not only what the Plaintiff told me but also histories obtained by other medical practitioners.
6. In connection with earlier litigation, the Plaintiff's solicitors qualified Dr Jeff Bertucen, another consultant psychiatrist. Dr Bertucen first examined the Plaintiff on 6 August 2012, and wrote a report bearing date 13 August 2012. When examined by Dr Bertucen in August 2012, the Plaintiff told him that he directly invested about 20 hours per week into the business which he had, transporting intellectually disabled children on behalf of the Department of Education.
7. The most recent medical reports are those of Dr Ashwinder Anand, another consultant psychiatrist qualified by the Defendant. Dr Anand examined the Plaintiff on 27 October 2021 and wrote a report bearing date 4 November 2021. He also issued a supplementary opinion which bears date 1 December 2021. Quite surprisingly, Dr Anand thought the Plaintiff was totally incapacitated for work outside the police force because of his accepted hurt on duty disability. In his supplementary report, Dr Anand said this: "I note that in my report I have mentioned that he's incapacitated for work outside of the police force because of the HOD conditions. While I maintain that he continues to be incapacitated to a marked degree because of his HOD conditions, I also note that he has been working in an administrative capacity between 2008 and up until the present. He has been contracted with the NSW Department of Education for the Assisted Student Transport Program which is responsible with conveying special needs children to and from school. He maintains at his role as an administrator in a managerial capacity. I also note that he plans to retire and hand over the running of the business to his son in law which will impact on his income. After reviewing the information that is provided by you, I would like to respond to your questions in which you've asked to specify the number of hours that I assessed is currently capable of undertaking in a position outside the NSW Police, for example sedentary/office work." The doctor went on to say that the Plaintiff had the capacity to work for around 15 hours per week in a sedentary capacity or administrative role outside of the police force.
8. On 22 February 2022, the Plaintiff was interviewed and assessed by Ms Kirsty Windsor, a Vocational Assessor, who has an Honours degree in psychology and further tertiary qualifications. She generated a report which bears date 3 March 2022, and to which I shall return shortly. However, the Plaintiff was also examined at the request of his solicitors by Dr Jeff Bertucen on 17 November 2023. That is both the date of the doctor's examination which was conducted by AVL and of the doctor's report. Dr Bertucen's reports are Exhibit T.
9. Dr Bertucen points out that he had last interviewed the Plaintiff on 6 August 2012. His report then contains this history: "Since this time, Mr Colquhoun relocated to an owned acreage property in Eleebana, NSW. His daughter Melinee lives in the second dwelling on the property together with her partner, Scott, and their six children. Scott has been working for Mr Colquhoun's business for the last four years and does "90% of the work". Mr Colquhoun still operates his previous business (providing transport for intellectually delayed students on contract to the NSW State Government). He states that his business has significantly expanded since the last interview and now encompasses a fleet of 35 vehicles. Nonetheless Mr Colquhoun 'states that for last five to six years he has stepped back from the day to day running of the business and that he might invest 'maybe he'll only invest' one maybe two hours a week...and he's 'set out to pretty much run itself'. Scott functions as the general manager of the company and handles the vast majority of day to day duties including recruiting of staff, handling vehicle breakdowns and procurement, payroll matters et cetera. He maintains an office in Charlestown and states that he has approximately 40 employees. On average Mr Colquhoun states that he might 'call into the office for 20 minutes maybe here and there'. Mr Colquhoun, as noted, has also served for nine years on the board of the Central Leagues Club situated at Charlestown, Newcastle. Board meetings take place monthly and last two hours on average. He states that aside from this commitment 'I hardly go there for official purposes', however socialises in the club bar with friends between five to 7pm most evenings. The board position is voluntary and it occasionally involves minor conflict or 'politics'. Mr Colquhoun stated 'I don't tend to get involved if I can help it...but sometimes you get heckled if some of the board members don't like a decision you have made'. He denies any significant or lasting effects on his mental state after these confrontations. Nevertheless he states, 'without my pills [see below] I wouldn't be able to function on the board'. Mr Colquhoun refers to his psychotropic medications (fluoxetine 20 milligrams in the morning, quetiapine 100 milligrams at night) prescribed initially in 2002 by his GP Dr Kim Manhood. Mr Colquhoun's alcohol intake was discussed at length in the previous report and had been at toxic levels over the course of many years until about 2020. Aside from eight to ten schooners of beer daily Mr Colquhoun found that he is regularly drinking half a bottle of scotch 'in the middle of the night to get back to sleep'. Mr Colquhoun attended a psychologist, Toby Newton-John, over the course of several years (2012-2015) however sessions discontinued as he 'came to the conclusion he couldn't do anything more for me' in light of treatment resistant heavy alcohol consumption. In 2020, however, Mr Colquhoun experienced a bout of severe reflex and stated 'even drinking water felt like drinking battery acid'. He ceased alcohol and the pain resolved after about one week or so. He has remained abstinent from alcohol since this time. Mr Colquhoun states that he had an endoscopy, which has been relatively normal, aside from some oesophageal, scaling and thickening. He denied any illicit substance use, or problem gambling, and has not smoked cigarettes for decades."
10. Dr Bertucen offered the diagnosis of "chronic post-traumatic stress disorder and major depressive disorder, currently in stable remission". He also points out that the previous chronic alcohol use disorder had gone into complete remission since approximately 2020. I understand from other medical reports and the evidence that the date for the cessation of alcohol was Good Friday 2020. Dr Bertucen offered a positive prognosis, he thought that the Plaintiff had a well-regulated lifestyle at the current time. He noted that he had a successful business, and his domestic circumstances were "harmonious". He expressed a view that ongoing abstinence from alcohol would contribute immeasurably to a positive ongoing prognosis. As to the Plaintiff's ability to work, Dr Bertucen said this in his report: "Mr Colquhoun maintains that he invests a minimal amount of time into his successful business, the day to day running of which is apparently capably handled by his son in law. In my view however if Scott were to withdraw from the business it is in my opinion unlikely that Mr Colquhoun would be able to significantly increase his involvement due to residual features of depressed mood, anxiety (particularly at the prospect of confrontation or managerial responsibility), and as a result his capacity for employment was in his view not likely to expand significantly beyond what the doctor thought was either two to four hours per week that the Plaintiff was currently performing."
11. As has been pointed out by learned counsel for the Defendant, Mr Ower, there is an inconsistency in the opinions of Dr Bertucen. The Plaintiff is now much better than he was back in 2012. In 2012 he was working on the history obtained by Dr Bertucen then, for 20 hours per week. His psychiatric condition has improved remarkably, and his substance abuse disorder is in complete remission. He now theoretically has the ability to do even more work than he did in 2012. The doctor had to concede that in cross examination.
12. I return to the opinion of Ms Windsor. Her "executive summary" contains the following history of his work since leaving the police force, and of his current condition. It also contains a summary of her assessment of the Plaintiff, which is this: "Following his resignation from NSW Police Mr Colquhoun worked as a taxi driver from approximately 1994 to 2008. At this time he secured contract work with the NSW Department of Education with the Assisted Student Transport Program. Mr Colquhoun grew this business to the point where at the time of assessment he reported having 35 drivers and 30 runs. He runs the business under the company name, Thomas Colquhoun Pty Ltd. Mr Colquhoun initially was involved in all aspects of the business, including driving, hiring of drivers, liaising with all stakeholders, and undertaking administrative requirements. More recently, he has stepped back from having an active role; handing over the running of the business to his son in law in February 2021. At the time of assessment, Mr Colquhoun reported that he was going into the office at around five hours per week; to check emails and assess with any issues that may require his input. With a regard to his HOD psychological condition, Mr Colquhoun advised that he was not engaging in any active treatment. He did not report experiencing any major stressors in his life and advised that he is mindful not to create any situations that will cause him stress. With a regard to non HOD conditions, Mr Colquhoun reported pain and restriction with both knees and his lower back, which impacts on his capacity for walking, bending, and any manual work. He also reported having high cholesterol, hypertension, type 2 diabetes and alcohol addiction. It is noted that Ms Colquhoun has been sober since Good Friday 2020. Medical evidence was reviewed for this assessment, with the most recent reports being those of Dr Anand, consultant psychiatrist, dated 4 November 2021 and 1 December 2021. Dr Anand opined a diagnosis of major depression with anxiety. He recommended that Mr Colquhoun has capacity to work around 15 hours per week in a sedentary capacity/administrative role outside the police force. FINDINGS ON ASSESSMENT Mr Colquhoun presents with good vocational capacity. Since resigning from the Police Force in 1993, he has secured and maintained employment; initially as a taxi driver and for the last 13, 14 years as an operator with the Assisted Student Transport scheme. He has demonstrated managerial, administrative, communication, organisation and decision making skills. Mr Colquhoun's HOD condition does impact somewhat on his capacity in that he is likely to experience difficulty with any roles or situations which are stressful, highly demanding or conflictual. Mr Colquhoun has also reduced capacity in terms of hours of work, with 15 hours per week recommended by Dr Anand. Mr Colquhoun's non HOD conditions also impact on his capacity, specifically his knee and back issues which restrict his capacity to undertake any roles requiring manual work or walking for prolonged periods of time. Mr Colquhoun's age is also a factor which impacts on his employability. He is turning 68 this year. Whilst candidates cannot be discriminated against on the basis of age, realistically his prospects of obtaining work in particular fields at his age are somewhat limited. This is the case irrespective of his HOD conditions. Mr Colquhoun is also reducing his hours at work through choice; he has reached a stage in his life where he can continue to draw an income without needing to be actively involved in his business."
13. It ought be observed that Ms Windsor's opinion that the Plaintiff could only work 15 hours per week is based on the recommendation of Dr Anand, not on her own assessment. In section 14 of her report, Ms Windsor records this: "Mr Colquhoun advised that on a typical day he will go to bed around 8.30/9pm and will sometimes "toss and turn". He generally gets up between 7.30/8am and will have breakfast and listen to ABC News. He will check the mail and emails, and will go into the office, where his receptionist will make him a cup of coffee, and he will check the drivers on their routes and any mail/email. He may go and have lunch with his wife. He will leave the office by 3.30/4pm and return home, then go to the local club from 4.30 6.30pm to meet up with 6 to 8 friends, where he will have diet ginger beer. He will then return home to have dinner and watch television. The assessor [Ms Windsor] questioned Mr Colquhoun about the disparity between the time spent at the office and his report of working one hour a day. It was somewhat unclear about how much time he's actually spending at the office. He indicated that he comes and goes through the day."
14. That, of course, was pursued in cross examination. The Plaintiff told me that he might arrive at the office at 10.30 or 11 o'clock, he might take an hour for lunch with his wife commencing at 12.30, and he thought that he might return to the office for about an hour after lunch. However, both in the offices at Charlestown and his local club, it was eventually established, I believe, he could be seen to be for about four hours a day or 20 hours a week. The Plaintiff clearly does not have any strict routine. For example, he reported that on some days he might not go to the office at all. But he also said on other days he might spend longer hours than usual in the office, and he drew attention to one day where he worked for six hours driving a vehicle in connection with one of his driving routes for the Department of Education.
15. The Plaintiff has not kept any diary or made any notes of his comings and goings as far as the business is concerned, and therefore it was somewhat hard to hold him down. However, it is highly likely that he might average about 20 hours per week working in some fashion or other for his business. For example, he is called upon from time to time by his son in law, Scott Longworth, to make some executive decisions and to give him advice from time to time. The office of Thomas Colquhoun Pty Ltd is in the same office as that of his accountant, his other son in law, Mr Ryan Ansell. It appears that both his sons in law are working actively for him, albeit that the only son in law on the payroll is Mr Longworth.
16. He obviously keeps an eye on his business. His son in law admitted that the Plaintiff is the managing director of the business and clearly Mr Longworth takes directions from him if directions are given to him. Clearly, Mr Longworth also takes advice from the Plaintiff. It can be seen that through his diligence and industry, the Plaintiff has built for himself a very successful business. He points out that the business can be terminated at any time by the Department of Education, no doubt if there were some problem such as some interference with a student, or injury to a student, or perhaps motor vehicle accident, something which might imperil the life of a student being transported by the Plaintiff's business. One can think of other situations in which the contract might be ended, including of course changes of policy by the Department of Education itself. However, at the current time the Plaintiff has a three year contract with the Department of Education which commenced at the beginning of this year. There is a review every six months which, according to the Plaintiff's evidence, has something to do with the CPI, meaning that each six months the rates payable to him might be varied in accordance with the CPI. However, it is clear that the Plaintiff has had this work for 15 years, up until the end of 2023, and will have the work for the next three years if nothing goes amiss, which given the longevity of contract thus far would appear to be likely. Clearly the Plaintiff has worked hard over the time, since 2018, to build up his business and it is doing very well.
17. Mr Scott Longworth gave evidence. He said that he had been working for Thomas Colquhoun Pty Ltd since January 2021. The other evidence is that it was in February 2021, but it seems likely that the work commenced at the commencement of the school year in 2021, which may have been late January or early February. Mr Longworth said that he worked for 40 or more hours per week. That can be found at T70.50, and T72.05. It took Mr Longworth about a year to learn the job from the Plaintiff. He was receiving a salary of some $82,000 per annum: T73.21. However, he also has the use of a company car, which can be used not only for work purposes but also for private use. That appears to be in addition to his salary. However, in addition to his salary Mr Longworth and his partner, the Plaintiff's daughter, and their six children enjoy free accommodation provided by the Plaintiff. The Plaintiff has a large property at Eleebana on which stand two dwelling houses. One is occupied by the Plaintiff and his wife, the other is occupied by Mr Longworth and his partner, Melinee, and their six children. It is a six-bedroom dwelling house.
18. I have no idea what a six-bedroom dwelling house may cost to rent in the Charlestown area of the Lower Hunter Valley, but it would not be an insignificant amount. The value of the company car provided to Mr Longworth and the free accommodation provided to him and his family must also be taken into account. It also transpires that the Plaintiff has a company car which he can use for business purposes, and for personal use, as does his wife Kerrie Colquhoun, whom the Plaintiff admitted used it solely for personal use. Furthermore, the Plaintiff's daughter, Melinee, has a company car, but she does not work in the company, she works as a retail assistant in a jewellery shop, part-time of course because she and her partner, Mr Longworth, have to raise six children between the ages of 15 and two, not an insignificant workload in itself. The income and benefits enjoyed by Mr Longworth must be considered because prior to his being hired at the commencement of 2021, the Plaintiff himself was doing all the work that he now does, and were Thomas Colquhoun and Thomas Colquhoun Pty Ltd at arm's length, which they are not, one could expect that he would have enjoyed the same income and benefits as Mr Longworth now enjoys.
19. The process which led to the Defendant granting the Plaintiff an increase in his HOD pension, and the circumstances in which the Defendant reduced his HOD pension must be taken into account, and I propose to do so now.
20. The application made by the Police Association of New South Wales on behalf of the Plaintiff for an increase in the Plaintiff's base HOD pension is Exhibit 2. The letter bears date 2 March 2021, it was received by the Defendant on 5 March 2021. On page 3 of the letter from the Police Association, these representations are made: "Between 2008 and the present, Mr Colquhoun has been contracted with the NSW Department of Education from the Assisted Student Transport Program, which is responsible for conveying special needs children to and from school. Mr Colquhoun's business name is Thomas Colquhoun Pty Ltd. His main role in this business is administrative, in a managerial capacity. The business currently employs 30 drivers. He's assisted by his eldest daughter in the operation of the business, and he is rarely, if ever, involved in the physical driving of students. He works approximately 10 hours per week, earning $3,000 per week before tax. This has been his salary since 2013, however prior to that, his annual salary was between $30,000 and $40,000. When Mr Colquhoun initially started this work, he had one vehicle which he personally drove. In the first few years, he built up the business, so by 2015, he was doing administrative duties only unless he was needed to do driving. Initially, he worked a 40 hour week which has slowly reduced as he employed other drivers. Mr Colquhoun submitted notice to the Department of Education on 10 February 2021 that he'll be stepping down from his managerial role, and his son in law will be taking over the day to day operation of the business. Mr Colquhoun has found that his HOD psychological condition affects his ability to do this type of work when he is under stress. When he has [handed] over the operation of the business to his son in law, Mr Colquhoun hopes to retire so he's only needed in the event of a major issue. Mr Colquhoun advises that once he steps back from work, he will need to employ other administrative staff which would impact on his income and estimates that his income would reduce to $1,000 per week pre tax. However, if a contract is not renewed or the government cancels the program, there would be zero income." The letter goes in to point out that the Plaintiff's current contract with the Department of Education expired on 31 June 2024, but it is clear from the Plaintiff's oral evidence that a new contract was granted to him at the commencement of this year. Furthermore, there is no 31 June in any one year.
21. Section 10(1BA) provides this: "A superannuation allowance referred to in subsection (1A) or an additional amount of a superannuation allowance referred to in subsection (1D) is not payable to a disabled member of the police force unless an application for payment of the allowance or additional amount concerned is made: (a) before the member reaches the age of 60 years, or (b) not later than 5 years after the member resigns or retires, whichever is the later." At the time that this application was made on behalf of the Plaintiff, he was both over 60 and more than five years had elapsed since he retired.
22. However, that provision can be dealt with under section 16A of the Act. That provision provides this: "(1) STC may accept an election, application or choice that is not made or received within the time required under this Act if it is satisfied that in all the circumstances of the case it is desirable to do so. (2) STC may impose conditions on the acceptance of the election, application or choice. (3) STC may deal with the election, application or choice accepted under this section as if it had been made or received within the required time."
23. Exhibit 14 is a submission to the delegate for the STC and a decision of that delegate. That points out the problem with the application that had been made on behalf of the Plaintiff, and then points to the provisions of section 16A. There then appears on the first page of Exhibit 14 this recommendation: "It is recommended that the chief executive, as delegate for STC, decide that the application made by former Senior Sergeant Thomas Colquhoun under section 10(1A)(b) of the...Act for an increase to his PSS section 10 HOD pension, that was made outside the timeframe provided for in section 10(1BA) of the...Act. It may be accepted under section 16A of the...Act and dealt with as though it had been made within time, on the condition that any increase in pension awarded by PSAC not have an effective date earlier than 24 August 2012. That recommendation was approved by the chief executive Mr John Livanas, on 18 May 2021."
24. The next thing that occurred was a letter sent by the Defendant to the Plaintiff bearing date 13 July 2021. That is Exhibit 3. That advised the Plaintiff that the chief executive had accepted the late pension increase under section 16A of the Act. It goes on to state this: "We note that you own a business, Thomas Colquhoun Pty Ltd, and are contracted with the NSW Department of Education for the Assisted Student Transport Program. The application for pension increase confirms that you currently work for approximately ten hours per week in a managerial capacity, earning $3,000 per week (gross) which has been your salary since 2013. To enable us to provide a full picture of the level of your incapacity for work outside the NSW Police, to the Police Superannuation Advisory Committee (PSAC), we request that you please provide us with the following information: * a full copy of your business tax returns for the last three financial years (together with all schedules, attachments and assessments); copies of your profit and loss statements and a summary of the year to date figures. * a fully [sic] copy of your personal tax returns for the last three financial years (including all attachments). * a copy of your last three payslips. Upon receipt of the above your application will receive further consideration."
25. On 21 July 2021 the Plaintiff sent an email to Amanda Reece, and to Mr Stuart Gray. Amanda Reece is an officer or employee of the Police Association of New South Wales. The application of 2 March 2021 was submitted under her hand. Mr Stuart Gray is the Plaintiff's solicitor. The Plaintiff sent him a copy of the letter of the Defendant of 13 July, which he received on 20 July 2021. The letter contains this material: "I have no problem with supplying my personal tax returns and payslips, however, although I refer to the 'firm' as mine, it is in fact registered with ASIC...with sole shareholder being my wife Kerrie Fay Colquhoun. She is a director and I hold the position of managing director. Therefore Thomas Colquhoun Pty Ltd is my employer owned by Kerrie Fay Colquhoun. Hence I do not believe I'm entitled to disclose the subject tax returns as described in the attached. Please advise if I am wrong. Further, until recently in my annual wage was $166,000. However due to COVID and other impacts in the 'firms' turnover, my annual salary is now $100,000. I am not entitled to any government subsidies to my way."
26. I do not know what advice the Plaintiff received in answer to his request. However, the next relevant event that occurred was the examination of Dr Anand on 27 October 2021, and the provision of his report of 4 November 2021 to the Defendant. The next relevant event was a letter from the Plaintiff to the Defendant bearing the date 18 November 2021, which is Exhibit 4. The opening paragraph of the letter refers to a request on 18 November 2021 which was said to be attached to it. The attachment is not part of Exhibit 4. It may have been a reiteration of what was requested in the letter of 13 July 2021, which is Exhibit 3. The last three paragraphs of Exhibit 4 are these: "My son in law is effectively the manager of the firm and I now only perform an oversight role and I am now, for want of a term, semi retired, performing less than ten hours actual work per week. Since leaving the NSW Police Force, I found the first 20 years very difficult financially, but I have been lucky of recent, having won a contract with the Government and being employed by a firm owned by my wife, who pays me. My last three payslips are attached."
27. The payslips are part of Exhibit 4, and they are fortnightly payslips. Each of the three payslips state that the Plaintiff's annual salary was $104,000. That would indicate that the Plaintiff ought to have been paid $2,000 per week, or $4,000 per fortnight. The payslip for the fortnight ending 29 September 2021 shows the Plaintiff was working 30 hours per week, and he was being paid at the rate of $50 per hour, so that for the fortnight his total gross income was $3,000, that is $1500 per week. The payslip for the fortnight ending on 26 October 2021 shows that he worked for 80 hours at the rate of $50 per hour, indicating that his gross income for the fortnight was $4,000 or $2,000 per week. His payslip for the fortnight ending 9 November 2021 shows exactly the same earnings.
28. The next relevant event was, of course, the assessment by Ms Windsor on behalf of the Defendant. On page 9 of her report of 3 March 2022, which is Exhibit 1, the following is stated: "Mr Colquhoun advised that he earns approximately $150,000 per year and that this fluctuates depending on how many driving contracts he has. He provided two payslips as follows: "Pay period 9 June 2021 22 June 2021: Net pay: $4,476 Pay period 23 June 2021 6 July 2021: Net pay: $2,980""
29. Of course, if the Plaintiff were earning $150,000 per annum, his average weekly wage would be approximately $2,885. It is clear that in addition to those payslips, Mr Colquhoun also had the payslips that had been provided to the Defendant under the cover of Exhibit 4. Despite knowing what the Plaintiff's payslips showed, Ms Windsor identified a number of jobs which she thought were appropriate work options for the Plaintiff. The first was as a general clerk who would earn $1,481 per week for a 38-hour week. The next was as an automobile driver who would earn $1,104 per week for a 38-hour week. However, such a driver would need to obtain a commercial driver's licence. The Plaintiff is not entitled to that because he is dependent upon insulin for his control of his type 2 diabetes, and that would disqualify him from having a commercial driver's licence. The third option put forward by Ms Windsor was an insurance investigator who, at the age of 45 years or more, would earn $1,941.38. The next option was an office manager who, at the age of 45 years or more, would earn $1,501 for a 38-hour week. The final option was a radio dispatcher who, again at aged 45 or more, could earn $1,742 for a 38-hour week. She also considered a security officer and a compliance officer.
30. However, she pointed out that a security officer can involve confrontation and high stress situations. Furthermore, it was noted that the Plaintiff's physical ailments, in particular the fact that he had both knees replaced and had back pain, would inhibit his ability to stand, walk and bend. As far as a compliance officer was concerned, she also noted that that involved a potential for high stress situations and being challenged about the decisions being made with regard to compliance. Again, she thought that the Plaintiff's HOD conditions would make him unsuitable for that role.
31. There are a number of other occupations that Ms Windsor thought were not suitable, only due to the Plaintiff's age and for vocational reasons, they included a consultant in security, a corporate services manager and a courier/delivery driver.

The Pension Increase

1. The next relevant document is Exhibit E, a submission to PSAC made on behalf of the administrator on behalf of the Defendant. On page 7 of Exhibit E, there is a precis of the Plaintiff's payslips that were annexed to his letter which is Exhibit 4. Despite knowing what the Plaintiff was then actually drawing, and had been drawing from Thomas Colquhoun Pty Ltd in recent times, and despite what the Plaintiff had admitted was his annual salary, the calculation contained in Exhibit E is based on the job of office manager that was chosen as one of the options by Ms Windsor. Under the heading "highest wage employment option without HOD infirmities" the submission refers to the job of office manager, the fulltime gross salary of $1,501 per week for a 38 hour per week, and then provides the total of $1,501. Under the heading "most appropriate/highest wage employment option with HOD infirmities" the job is again office manager, but merely for 15 hours a week, which ends up with a salary of $592.50 per week. The difference between the two is a loss of $908.50 per week, which gives a percentage loss of 60.53%. That would entitle the Plaintiff to a pension increase of 60.53% of 12.25% which ends up with a percentage increase of 7.41%, leading to a pension of 80.16%, which was the recommended pension rate in the submission.
2. The conclusion expressed on page 14 of the submission is this: "The applicant is self employed and has a contract with the NSW Department of Education for the Assisted Transport Program. He has progressed from being a taxi driver to running the business and overseeing 35 drivers. Mr Colquhoun advised that he stepped back from being actively involved in the business in February 2021 and his son in law has taken over the day to day operations, advising that he was at a point in his life where he could reduce the amount of work he was doing, continuing to draw a good wage (approximately $150,000 per year) and enjoy 'not doing much and getting paid'. Currently, he indicated that he would go into the office each day to check emails, and respond to any issues that might need his attention. Ms Windsor commented on page 8 that it was '...somewhat unclear about how much time he's actually spending at the office. He indicated that he comes and goes through the day'. Ms Windsor agreed with Dr Anand's assessment that Mr Colquhoun has the capacity to work around 15 hours per week outside the NSW Police Force. For the purpose of the calculation, the most appropriate employment option of office manager has been utilised with HOD medical conditions on a part time basis (15 hours per week) and on a fulltime basis without HOD medical conditions; because this is a similar role to what the applicant has been undertaking for years while growing his business, and in Ms Windsor's opinion 'Mr Colquhoun possesses excellent vocational capacity for this role. His strength in decision making and organisation would be valued'. Based on the above information the following recommendation is assessed on the applicant's current capacity for work on a part time basis."
3. At its meeting on 27 April 2022, PSAC decided to approve an increase to the Plaintiff's pension from the base rate of 72.75% to 80.16% of the attributed salary of his office at the date of his medical discharge. That increase was to become effective on 24 August 2012, which of course ties in with the conditional approval made by the Defendant under section 16A of the Act. As is normal in the letter to the Plaintiff advising of its decision, which is Exhibit F, the Defendant advised the Plaintiff of his right to make an application to this Court, which he did as I have earlier pointed out. However, that application was discontinued. It is clear from Exhibit 11 that on 22 December 2021 the Plaintiff's salary was increased to $187,200 per annum. The payslip for the fortnight ending 4 January 2022 shows the Plaintiff as working for 80 hours per fortnight at a rate of $90 per hour, giving a total gross wage for the fortnight of $7,200, or $3,600 per week.
4. Exhibit 11 contains payslips for the periods from 24 November 2021 until 4 July 2023. It was the reading of those payslips which caused the Defendant to make the decision, which is the subject of this appeal, the reduction of the Plaintiff's HOD pension back to the base rate, commencing on 22 December 2021, the commencement of the period of time when the Plaintiff's weekly income increased to $3,600. However, the only change was the increase in the wage being paid to the Plaintiff by Thomas Colquhoun Pty Ltd by a company which was in effect the mechanism he chose to run the business which he had developed over many years. Nothing other changed as far as anyone can establish.
5. The Plaintiff's medical condition stabilised in 2020 when he became abstinent from alcohol and was prescribed appropriate psychotropic medication by Dr Manhood. His workload eased commencing in 2021 when his son in law, Mr Scott Longworth, became the operations manager of the business. That easing back would have taken time because it took time to train Mr Longworth to do the job that, in essence, had previously been done by the Plaintiff himself.

Legal Principles

1. In Miles v SASTC [2016] NSWDC 56, I pointed out what a Plaintiff must prove if he wishes to establish an entitlement to an increased pension after one had been initially granted. In doing so, I reviewed earlier decisions of my colleagues. I said this: "1 This is an application under s 21 of the Police Regulation (Superannuation) Act 1906 ("the Act"). The plaintiff seeks an increase in his pension entitlement under s 10(1A) of the Act. This is the plaintiff's second application of this nature to this Court. His first application was in matter number RJ136 of 2005. I heard and determined that application on 2 February 2006. Initially, the defendant had determined that the plaintiff's pension entitlement under s 10(1A)(b) entitled him to a total pension of 81% of the salary of his office. I set aside the decision of the defendant which had been made on 30 September 2004 and I determined that the plaintiff's total pension entitlement was 82.55% of the salary of his office. Unfortunately, my reasons for judgment of 2 February 2006 have not been uploaded onto Caselaw or otherwise published. Because those reasons set out the background to the present application and the plaintiff's situation as at 2 February 2006, I adopt those reasons and annex them to this judgment as annexure A. 2 The plaintiff made a further application to the defendant, dated 8 November 2013. That application had a covering letter from the plaintiff's solicitors of 12 November 2013. Those two documents are exhibit Z in these proceedings. Question 27 of the application form is this: "Are you currently incapacitated for work outside the Police Force to any extent?" The answer provided by the plaintiff was: "Yes, totally incapacitated." Question 29 of the application is this: "Have you previously applied for a pension increase and are now in receipt of a pension amount of less than 85% of your attributed salary of office?" The answer supplied by the plaintiff to that question was this: "Yes, physical injuries have deteriorated." 3 The Police Superannuation Advisory Committee (PSAC), constituted under s 2H of the Act, pursuant to a delegation from the defendant under ss 2I and 2J of the Act, considered the plaintiff's application on 29 January 2015. PSAC declined to increase the plaintiff's pension above the rate that I fixed on 2 February 2006. A letter containing the defendant's decision, dated 2 February 2015, is addressed to the plaintiff's solicitors. A copy of it is exhibit AA before me. The plaintiff considers himself aggrieved by that decision and brings the present application. What the plaintiff must prove 4 An initial thing that ought be considered is: what must the plaintiff prove? The authorities currently establish that the plaintiff must prove a change of circumstances since the last relevan1t decision, i.e., the decision that I made on 2 February 2006. The commencement point for this line of authority is the decision of Quirk DCJ in McDougall v SASTC (Unreported, 18 October 2004, RJ9881/03). As that decision has not been uploaded onto Caselaw or reported I should spend some little time pointing out the facts of the case and her Honour's ruling. 5 McDougall was medically retired from the NSW Police in 1993. He was certified as suffering from the infirmities of chronic anxiety disorder and chronic substance abuse. In December 1997 the Commissioner of Police determined that the suffering by McDougall of his chronic anxiety disorder and chronic substance abuse was caused by his having been hurt on duty. In February 1999 McDougall made an application to the present defendant for an increase in his pension under s 10(1A)(b) of the Act. That application was refused by the STC. That was the subject of an application to the Compensation Court of New South Wales pursuant to s 21. The case was "settled". The Court made orders by consent setting aside the decision of the defendant and replacing it with a decision granting an increase in the plaintiff's pension to a total of 77.5% of the salary of his office as at the date of discharge. The application which came before Quirk DCJ was an application for a further increase originally made by McDougall in a letter of 17 September 2002. 6 Of McDougall's second application to the defendant, her Honour said this: "The appellant again cited his chronic sleeping problems and also his hypertension. In that letter, the appellant stated, 'my condition has improved somewhat, but I do not think I will ever return to good health again'. He also referred to his age, which was then 55 and that his employment prospects would be very slim even if he were in good health." Her Honour then recited the declining by the defendant of McDougall's second application. 7 Commencing on p 8 her Honour said this: "The appellant's own evidence is that his condition has been much the same over the last 25 years, perhaps in some ways improved - that is insofar as his insomnia is concerned, although he cites his age and other health problems as causing him more difficulty in 'handling it.' However he does not really point to any specific way in which such difficulty would or could hinder his ability to work and as far as I can see his history to the doctors in terms of his capacity to work has been the same over the years since 1999 up to the present time. Mr Ower relies on the principles of res judicata and estoppel or Anshun estoppel as operating to prevent the appellant from re litigating his application for an increase in his pension. Mr Dailly for the appellant submits that the settlement between the parties in 2002 may have been reached for all sorts of reasons and that there has been no judicial determination of the matter in issue at the time and which is again in issue before me. The [Act] provides, as I have said, for an increase in the pension under s 10 to be made by the STC commensurate with member's incapacity for work outside the police force and as has been submitted by Mr Ower, and which is not disputed by Mr Dailly, the manner in which that section is to be interpreted is set out in Lembcke v SAS Trustee Corporation. Section 10(1D) provides for the STC to vary any such determination at any time. The matters that the STC takes into account when considering an application to vary are not set out in the Act. It would be extraordinary if the STC could simply vary a pension at will. There must be, in my view, some evidence brought before this Court on an appeal from a decision of the STC as to a change in circumstances or fresh evidence. The evidence before me from the appellant is that, as I have already said, his condition is much the same. The facts are the same except for the age of the appellant, which obviously has increased since 2002, the date of the last settlement. He is now 57 years of age and as even Dr Wade concedes, age is and could be a negative factor in the appellant or anyone else I suppose at the age of 57 finding and indeed performing some work. However, age was a factor which was also relied upon by the appellant at the time that the last appeal from the decision of the STC came before the Court in 2002. Whilst it may be that there were reasons for the parties entering into the settlement which provided for an increase of the pension from 72.5% to 77.5%, there is no evidence before me of those reasons. In my view, there has been no evidence of change of circumstances or fresh evidence, which would enable me to come to a finding other than that which was agreed between the parties - that is, that the 77.5% pension was commensurate at the time with the incapacity for work outside the police force, or that his incapacity had increased." 8 What fell from her Honour as to the need for a proof of a change of circumstance or fresh evidence, was applied by Ashford DCJ in Wilson v SASTC (unreported, 1 November 2007, matter RJ369\06). Unfortunately I do not have a copy of Judge Ashford's reasons for judgment in Wilson but what her Honour said has been subsequently quoted in another judgment which I shall soon cite. 9 In Collins v SASTC [2012] NSWDC 225; (2012) 11 DDCR 198, I said commencing at [15]: "[15] The first thing to consider is what must be proved. A similar situation to the current case arose in McDougall v SAS Trustee Corporation (unreported, 18 October 2004, RJ9881/03), a decision of my colleague, Judge Quirk. Her Honour pointed out that under s 10(1D) the defendant might make at any time a determination of an additional amount payable under s 10 of the Act, and also vary any such determination at any time. Her Honour went on to say this: "The matters that the STC takes into account when considering an application to vary are not set out in the Act. It would be extraordinary if the STC could simply vary a pension at will. There must be, in my view, some evidence bought before this Court on an appeal from a decision of the STC as to a change in circumstances or fresh evidence." [16] As this Court can only do what the STC ought to have done, the inference to be drawn from what her Honour said is that before the STC varies a pension there must be before it some evidence of a change of circumstances or some fresh evidence. Her Honour's decision was followed by Ashford J in Wilson v SAS Trustee Corporation (unreported, 1 November 2007, RJ369/06). Her Honour specifically agreed with Judge Quirk's reasoning. Unfortunately, neither of those two decisions has been reported, but her Honour Judge Quirk's decision ought to have been reported. I mean no criticism of the reporting service in saying that; it is probably the case that Judge Quirk did not send a copy of her decision for reporting." 10 In Wheadon v SASTC (unreported, 19 September 2014, matter RJ558/13), the matter was considered by Gibb DCJ. On 1 November 2001, Wheadon applied to the defendant for an increase in his pension allowance to 100% the salary of his office backdated to 16 March 1998. That application was in effect under s 10(1A)(c) of the Act. That application was considered by the defendant on 30 April 2002. The defendant decided to increase the plaintiff's pension allowance from 72.75% to 81% of the salary of his office with effect from 1 November 2001, the date that the defendant received the application to increase the pension. Although the pension increase had been sought under s 10(1A)(c), the determination by the defendant was under s 10(1A)(b) of the Act. Wheadon did not appeal that determination. Wheadon then made a further application to the defendant which was decided by the defendant on 3 June 2013. On that occasion the defendant increased Wheadon's pension to 92% the salary of his office, payable to him from 18 February 2013. In other words, the defendant accepted that Wheadon was totally incapacitated for work outside the police force and granted him an allowance under s 10(1A)(c) of the Act. He then made an application to this Court under s 21 which came on for hearing before Gibb DCJ and led to the decision to which I have referred. 11 Commencing on p 10, her Honour said this: "If the plaintiff's submissions be right, there is no change in circumstances and no fresh evidence, and nothing has changed since the 2002 determination. The proper approach is to dismiss the plaintiff's application in whole. The Police Superannuation Advisory Committee should not have made the decision that it did. As the defendant submitted: 'OWER: …I'm just concentrating my submission on there being no change and, if there is no change, then technically there should be no change to the 81% over the whole period.' This submission rests upon an issue that has been explored in judgments by other judges of this court, but not, it seems, by the Court of Appeal. On 18 October 2004, Quirk DCJ said in McDougall v SASTC: [Her Honour then quoted most of what I have quoted in [7] above.] In November 2007, Ashford DCJ addressed a similar problem in Wilson v SASTC and applied the reasoning above: 'McDougall v SASTC is a decision of Judge Quirk, unreported, on 18 December 2004 in respect of an application to increase the pension entitlement… Her Honour was of the opinion the plaintiff had not demonstrated any change in circumstances or fresh evidence which could justify an increase in pension entitlement as sought. The plaintiff told the Court his condition remained much the same and her Honour came to the view that having regard to s 10(1D) which provides for the STC to vary any determination at any time it would be extraordinary if the STC could simply vary a pension at will, and for a plaintiff to succeed in such an application there must be some evidence before the Court such as would demonstrate a change in circumstances or fresh evidence. I agree with her Honour's reasoning'. It is not just judicial comity which dictates that I follow that line of reasoning. It accords with principle and common sense. The need for finality in decision making is not quarantined exclusively to litigation. It also has significance in the context of a statutory trust. McColl JA said in SASTC v Cox [2011] NSWCA 408: '14. As Basten JA (Allsop P and Young JA agreeing) observed in Swift v SASTC [2010] NSWCA 182 (at [10] - [11]) ("Swift"), while s 10 ostensibly took the form of the operative provision pursuant to which a disabled member of the force "may be granted" a relevant gratuity or allowance, it 'contains no unequivocal conferral of power to make such a grant' and s 10(1B) is "the closest to an express power" to grant an annual superannuation allowance to be found in the Police Superannuation Act. […] 94. The appellant is the "trustee" of the Fund. There is no reason to think the legislature intended to use the expression in other than its legal and technical sense (cf Bathurst City Council v PWC Properties Pty Ltd [1998] HCA59; (1998) 195 CLR 566 (at 585 - 586)), although it must be accepted that the Fund lacks the element of the "traditional trust [as] one under which the settlor, by way of bounty, transfers property to trustees to be administered for the beneficiaries as the objects of his bounty [and in respect of which] normally, there is no legal relationship between the parties apart from the trust [and] the beneficiaries have given no consideration for what they receive.':… The [Act] allows a period of 6 months after the person is notified of a decision to apply to the District Court for redetermination. It would be odd if it were open to seek a fresh determination (without having appealed that determination) without a change in circumstance or fresh evidence. I apply the same approach as was taken by Ashford DCJ in Wilson v SASTC." 12 There are thus four judges of this Court who have adopted this approach i.e. Judge Quirk, Judge Ashford, Judge Gibb and I. On a second or further application under s 10(1A) of the Act it is incumbent upon the plaintiff to prove a material change of circumstance prior to his or her being entitled to a further determination of the quantum of the plaintiff's pension entitlement."
2. There appears to me to be no material change of circumstance. However, there was fresh evidence that became available to the Defendant, namely the knowledge of the substantial increase in what was being paid to him by his business.
3. In the same decision, I also considered the relevance of increasing age, it is irrelevant. At [40], I said this: "The effluxion of time and age are not relevant considerations. Clearly, with a passage of time a Plaintiff's age will increase. Age was not something taken into account by Quirk DCJ in McDougall, nor in my view is it appropriate to take into account here. One good reason for not doing that is that there are statutes applicable in this State that prohibit employers from discriminating against persons on account of, interalia, their age. Further on the same topic, Dr Anderson expressed the view that there has been no dramatic change in the Plaintiff's condition since 2006, although he thought it fairly obvious that a gradual deterioration, particularly in the spinal column, was due to degenerative changes that had been diagnosed."
4. How pension increases should be calculated has been authority decided by the Court of Appeal in Lembcke v SAS Trustee Corporation [2003] NSWCA 136; (2003) 56 NSWLR 736; (2003) 25 NSWCCR 464. The leading judgment was given by Santow JA, with whom Meagher and Ipp JJA agreed, albeit that they gave further reasons. At [48], His Honour said this: "In determining incapacity, one may draw upon the well established principle that a worker's actual earnings are likely to be the measure of incapacity for work outside the police force, unless it is established that the worker's actual earnings are not a proper test: Pira Pty Ltd Trading as Langdon and Bartley v Tucker (1996) 14 NSWCCR 26 at 31-32 applying the reasoning in Aitkin v Goodyear Tyre and Rubber Co (Aust) Ltd (1945) 46 SR (NSW) 20; 62 WN (NSW) 233."
5. Aitkin concerned the proper interpretation of section 11(1) of the Workers Compensation Act 1926, that is, it concerned the assessment of the compensation payable to a partially incapacitated worker under the Workers Compensation Act then in force. The decision was one of the Full Bench of the Supreme Court comprising Jordan CJ, Halse Rogers and Street JJ. The judgment of the Court was delivered by the Chief Justice. Commencing on page 22, His Honour said this: "Section 11 provides that, in the case of partial incapacity, the weekly payment shall in no case exceed the difference between the amount of the average with the earnings of the worker before the injury, and the average weekly amount he is earning, or is able to earn, in some suitable employment or business, after the injury, but shall bear such relation to the amount of that difference as under the circumstances of the case may appear proper. The burden of proving that the incapacity established by the worker is partial only, and, if so, of proving the other facts necessary to limit the weekly payment under section 11 is upon the employer. The English section corresponding with section 11 has been considered in several decided cases. It was held by the House of Lords in Blakenore v Delta Mule (1919) Ltd (1935) 28 BWCC 193 at 199, that the phrase "is earning or is able to earn", et cetera, means "is earning, or, in some suitable employment or business, is able to earn". Each of these alternatives has been elaborately considered in a number of decided cases. As to the phrase "is earning", it has been held that if the partially incapacitated worker is earning something, his action earnings must prima facie be taken as the basis, and the rate of compensation provided for by section 9 by a reduced by a calculation based on the excess of his pre injury average weekly earnings above what he is actually earning: Blakenore v Delta (1919) Ltd. If, however, it is proved that his actual earnings are not a proper test, because there is some reason unconnected with his earning power which makes them lower than they should be, the other alternative, what he is 'able to earn', must be adopted. This is so where it is shown that he is deliberating taking lower, paid work than he could get, or is idling, and on this account receiving less than he could be reasonably expected to obtain, or where his actual earnings have been compulsorily reduced by something unconnected with his injury or general earning power: Jones v Amalgamated Anthracite Collieries Ltd [1944] AC 14 at 25; but, if the compulsory outside influence, instead of reducing, increases his actual earnings beyond what his injury make him otherwise capable of earning, his actual earnings must be taken as the basis: Heaney v BA Collieries Ltd (1944) 171 LT 163. If, however, he is not earning anything, or, for some good reason, what he is earning cannot be treated as a proper basis, regard must be had to the alternative basis provided by the section what he is 'able to earn'. It has been held that this means physically capable of earning remuneration of a particular amount in some suitable employment or business, irrespectively of whether the demand for workers in the suitable employment is such as to admit of his getting a job. Hence, if he is not earning anything, he is entitled to compensation calculated only on the basis of the excess of his pre injury average weekly earnings over what he could earn in some suitable employment if he could get a job: Cardiff Corporation v Hall [1911] 1 KB 1009; McNally v Furness, Withy & Co Ltd [1913] 3 KB 605 at 606; Bevan v Nixon's Navigation Co [1929] AC 44."
6. Learned counsel Mr Ower did not refer to Heaney v BA Colliers Ltd. It must be considered in light of what fell from the Chief Justice. Unfortunately, I do not have access to the Law Times reports, but Heaney v BA Colliers Ltd is reported at [1944] 2 All ER 289. The decision was one of the English Court of Appeal comprised of Scott, Luxmoore, and du Parcq LJJ. The judgment of the Court was delivered by du Parcq LJ. Heaney had been injured in an accident on 18 November 1937, and thereafter received compensation on the footing of total incapacity until early March 1938. From then until 3 September 1939, he was working intermittently for the respondent to the appeal on light duties, earning wages appreciably lower than his pre-accident wages, and receiving compensation on the basis of partial incapacity. On 3 September 1939, he was called up for military service, and since then had been receiving army pay and allowances which taken together amounted to less than his pre-accident wages, but exceeded probably those he could or would have earned in any civil employment. In May 1942, Heaney applied for review of compensation for partial incapacity commencing on 5 March 1938, giving credit for all sums received thus far by way of compensation. He contended that his army pay, and allowances should be disregarded and the compensation should be calculated on the basis of his true earning capacity. His Lordship said at 291H: "In our judgment, the application of the words of the section to the facts of this case presents no real difficulty. It is well settled that the words 'which he is earning' are not qualified by the later words 'in some suitable business or employment'. If a workman is in fact earning money in any capacity the general rule is that amount which he is earning must be the basis of the calculation which falls to be made. This general rule has been applied in this Court to the pay and allowances of a man who has voluntarily enlisted in the army (Port of London Authority v Gray [1919] 1 KB 65). This general rule is, however, subject to a necessary exception. Section 9 lays down rules for calculating the amount of compensation for incapacity for work, and they must not be applied so as to compel an employer to compensate a workman for a loss of earnings which is due, not to incapacity for work, but to some cause wholly unconnected with his incapacity. If a man chooses to take work at a low rate of pay when he could get better paid work, or if he chooses to be idle and to do less work than might reasonably be expected of him, and so keeps down his wages, then his actual earnings cannot be taken as the basis of the calculation. In such cases the words 'which he is earning' cease to be applicable, and the arbitrator must ascertain what the man is 'able to earn in some suitable employment or business'. The peculiarity of Jones' case [1944] AC 14 was that the workman had not elected, but had been compelled to take work for lower pay than he could have earned in other employment. The decision of the House of Lords was that, in the circumstances his 'earnings' in the army could not be treated as the basis of the calculation. If they were so treated, the employers would be compensating the workman not for a loss due to incapacity but for the loss due to his liability to serve in the forces of the Crown. For this purpose we are of the opinion that no distinction can be made between the volunteer and the conscript. In each case the loss suffered is due to a cause which has nothing to do with the man's incapacity, and it is immaterial that the cause is in the one case the man's voluntary act, and in the other an act done under compulsion of law."
7. It can be seen, therefore, in the statement made by the Chief Justice in Aitkin, relying upon Heaney, that if the compulsory outside influence instead of reducing, increases his actual earnings beyond what his injury would make him otherwise capable of earning, his actual earnings must be taken as the basis of the calculation. However, there is no authority which states that in the situation such as the present, the Court must into account an abnormally large salary being paid to the worker because of his not being at arm's length from his employer.
8. Before I leave this aspect of the case, I should indicate that I have reread Pira Pty Ltd t/as Langdon & Bartley v Tucker again, but there is nothing in it that is relevant to this case other than the continuing application of Aitkin's case. Pira Pty Ltd t/as Langdon & Bartley v Tucker was an unsuccessful appeal from one of my decisions. The principal judgment was given by Abadee AJA with whom Cole JA and Beazley JA (as Her Excellency then was) agreed.
9. The other thing which I must point out is that this is not a claim for workers' compensation. This is a claim for a superannuation benefit. A worker does not, and in fact the law prevents him, from making any contribution to the purchase of compulsory insurance which pays for workers' compensation. That is not so with respect to superannuation. The Plaintiff, as I said at the commencement of these reasons, was a contributor to the Police Superannuation Fund. It is from that Fund that theoretically the benefits payable under the Act are made. It is to that Fund that the Plaintiff paid part of the salary of his office by way of contribution to his superannuation entitlement. The fact that the Police Superannuation Fund may well be in deficit and has been for many years is irrelevant. This was a cover which the Plaintiff by his contributions to the Superannuation Fund, purchased.

Consideration

1. Here, it is abundantly clear that the Plaintiff built up a very successful business. Due to his increasing age and the business' increasing profitability, he decided to employ somebody to do work that he had previously been doing, thereby lessening the stress that might be placed upon him, lessening the physical demands of the work, and allowing him to enjoy the profit which his business was making.
2. Unfortunately, the affairs of Thomas Colquhoun Pty Ltd could have been better managed. Instead of his taking profit by way of a very large salary wholly incommensurate with what he was actually doing, he could have been paid director's fees, the company could have declared a dividend, he could have been a joint shareholder with his wife, they could have derived dividends from their shareholding in the company and could have taken the profit from the company in that fashion. Why that was not attended to, I do not know, but it may have something to do with a double impost of company tax and income tax. It, in my view, would be completely improper to take into consideration the fact that the Plaintiff was drawing on the profits of his company by taking an extremely large salary for what he was doing, drawing a weekly payment of $3,600 per week since 22 December 2021.
3. Another aspect of this case is this, I have remarked on many occasions in jocular terms that the inevitable result of the decision of the Court of Appeal in Lembcke v SAS Trustee Corporation is that, on the analysis of the section adopted by the Court of Appeal, it is almost axiomatic that there be some addition to the base pension to account for the incapacity of a former member of the police force who has lost part of his ability to earn in the open labour market. To use the jocular expression that I use with counsel, "Every punter gets a prize".
4. Clearly, there are certain things which the Plaintiff now cannot do because of his certified HOD infirmity of anxiety and depression, whatever the correct diagnosis of the condition is. In those circumstances, the decision of the Defendant to reduce the Plaintiff's salary back to the base rate is, in my view, insupportable. Furthermore, from admissions clearly made by the Plaintiff, for example, to Ms Windsor that he was earning approximately $150,000 per annum or $2,885 per week, and by the admission contained in the application made by the Police Association on his behalf that he was earning $3,000 per week before tax for his 10 hours work a week, the Defendant well knew that the Plaintiff's income was much greater than what was contained in the submission made to PSAC by the administrator retained by the Defendant. There was much force in the submission put to me by Mr Hammond on behalf of the Plaintiff that this is an attempt by the Defendant to remedy its own mistake contained in the submission made to it, which was acted upon by the PSAC on 27 April 2022.
5. The question is: what relief should the Court grant? Clearly the Plaintiff has invoked section 21 of the Act which allows determinations by this Court. Under section 21(4) this Court, after considering an application under section 21, may make a determination that the decision of the Defendant or of the Commissioner of Police, as the case may be, in respect of the application that was made be either confirmed or set aside, and replaced by a different decision made by the Court. I cannot, in my view, merely set aside the decision made by the Defendant on 29 June 2023. I am required by section 21(4)(b) to replace it with a different decision made by me.
6. Quirk DCJ made a very positive finding as to the Plaintiff's credibility. At page 33 she said this: "I should say that the Plaintiff presented in a straight forward manner, made appropriate concessions in cross examination, and I by and large accept him as a witness of truth. Much of his evidence about his circumstances leading up to his resignation is corroborated in contemporaneous documents." There was no adverse comment made by Kearns ADCJ about the Plaintiff's presentation. The Plaintiff presented as a very relaxed easy-going man who clearly has had exposure to many Court cases, not only concerning his pension entitlement but no doubt over the many years he was a serving member of the NSW Police Force. Clearly, he is the master of what he wishes to do, but he does not appear to me to seek to be idle. He was able, when first examined by Dr Bertucen, to work for 20 hours per week. Objectively his HOD condition has improved remarkably since that time. It would, in my view, be completely inconsistent to now say that he could only work for either five hours per week, or ten hours per week, or the 15 hours per week that forms the assessment of Dr Anand. I accept that the Plaintiff still has the ability to work for 20 hours per week. That must be contrasted with the 40 hours per week that Mr Scott Longworth is now doing for Thomas Colquhoun Pty Ltd, or, as Mr Longworth put it, 40 hours per week plus.
7. Had Mr Longworth not been retained by Thomas Colquhoun Pty Ltd the Plaintiff would now be doing what Mr Longworth does, albeit the Plaintiff may have been more promptly doing it because of his much longer experience in the job. If pressed, bearing in mind what I have already said about the base salary of Mr Longworth, and the perquisites that he receives from the Plaintiff, and the Plaintiff's company, I would value what the Plaintiff could do uninjured as being $150,000 per annum. In my view his ability to do that work, to earn that money over a 40 hour week has been diminished by half. The additional amount payable under section 10(1A)(b) is 12.25%. Half of that is 6.125%. When I add that to the base salary of 72.75% I ascertain that the amount payable is 78.875%. That, in my view, is what the Plaintiff's pension ought now be.
8. The question then becomes when I should commence that payment? Three options had been put before me by counsel. The first is today's date, the second is the date on which PSAC made its decision, 29 June 2023, and the third was 22 December 2021 when the Defendant reduced the Plaintiff's pension to the basic rate. On my view of the operation of section 21(4) of the Act, bearing in mind that the pension rate of 80.16% stopped on 21 December 2021 I should commence the rate I have determined from 22 December 2021.
9. I have inquired of counsel whether any further reasons are required. I am told that none is so required. For those reasons I set aside the decision of the Defendant (PSAC) made on 29 June 2023. I determine that the Plaintiff's hurt on duty salary pension benefit be from 22 December 2021, 78.875% of the attributed salary of his office. I order the Defendant to pay the Plaintiff's costs. ……. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 31 July 2024