[2003] SASC 231

1 PRIOR J: I agree with the reasons given by Justice Besanko. In Action No 1836 of 2002 there should be a declaration that reg 4(4) and reg 4(5) are invalid. Each of the questions in the Cases Stated should be answered as he proposes.

2 BLEBY J: I agree with the orders proposed by Besanko J in each matter. I agree with his reasons and have nothing to add.

3 BESANKO J: There are three actions before the Court. The first action (No 1826 of 2002) is a case stated on a question of law for the opinion of this Court in an action in the Workers Compensation Tribunal between Mr Michael Epstein and WorkCover Corporation/Mercantile Mutual Insurance (SA Workers Compensation) Ltd (Naracoorte Football Club Inc). I will refer to this action as the first action. The power to state a case on a question of law for the opinion of this Court is contained in s 86A of the Workers Rehabilitation and Compensation Act 1986 ("the Act", sometimes referred to in other documents as "WRCA"). The second action (No 1836 of 2002) is an action instituted in this Court by Mr Epstein against the WorkCover Corporation of South Australia and QBE Mercantile Mutual Insurance (SA Workers Compensation) Ltd seeking a declaration that certain regulations made under the Act are invalid. I will refer to this action as the second action. On 2 April 2003 a Master of this Court made an order that the second action be heard by this Court.

4 The third action (No 369 of 2003) is also a case stated on a question of law for the opinion of this Court in an action in the Workers Compensation Tribunal between Mr Daniel Morton and The WorkCover Corporation of South Australia and Allianz Australia Workers Compensation (SA) Ltd. I will refer to this action as the third action. On 2 April 2003 a Master of this Court made an order that the third action be heard concurrently with the first and second actions.

5 In the first action the Full Bench of the Workers Compensation Tribunal ("the Full Bench") set out a number of facts. Those facts are as follows:

"1. Michael John Epstein (the worker) was employed in November 1998 by the Naracoorte Football Club (the Club) to be the Club's coach for the 1999 football season.

2. His duties required him to take training sessions two evenings a week involving all team grades, to coach the reserves and senior teams, to participate in the selection of all teams and to play for as well as coach the senior team on Saturdays.

3. On 5 June 1999 while playing for the senior team the worker suffered injury to his right shoulder.

4. At the time of the injury the worker was also employed by two other employers in Naracoorte which employment gave him aggregate earnings of some $580 nett per week.

5. On 16 June 1999 the worker lodged a claim for compensation in respect of his shoulder injury.

6. On 2 July 1999 the Corporation determined pursuant to s.53 WRCA to reject the worker's claim.

7. At the relevant time, s.58 WRCA provided:

'Certain sporting injuries not to be compensable

58. (1) Notwithstanding any other provision of this Act, but subject to subsection (2), where -

(a) a worker is employed by an employer solely -

(i) to participate as a contestant in a sporting or athletic activity (and to engage in training or preparation with a view to such participation); or

(ii) to act as a referee or umpire in relation to a sporting or athletic contest (and to engage in training or preparation with a view to so acting); and

(b) remuneration is not payable under the contract of employment except in respect of such employment,

a disability arising out of or in the course of that employment is not compensable.

(2) This section does not apply to -

(a) a person authorised or permitted under the Racing Act 1976 to ride or drive in a race as defined in that Act; or

(b) a boxer, wrestler or referee employed or engaged for a fee to take part in a boxing or wrestling match; or

(c) a person who derives an entire livelihood, or an annual income in excess of the prescribed amount, from employment of a kind referred to in subsection (1)(a).

In this section -

'the prescribed amount' means -

(a) in relation to 1987 - $27,200;

(b) in relation to a subsequent year - a sum (calculated to the nearest multiple of $100) that bears to $25,000 the same proportion as the Consumer Price Index for the September quarter of the immediately preceding year bears to the Consumer Price Index for the September quarter, 1985'.

8. It was agreed between the parties that the worker was not employed 'solely to participate as a contestant in a sporting or athletic activity'.

9. At the relevant time Regulation 4(4) (now revoked) of the Workers Rehabilitation and Compensation (Claims and Registration) Regulations 1987 provided:-

'Pursuant to s.3(7) of the Act, but subject to sub Regulation (5), a worker who is employed by an employer to participate as a contestant in a sporting or athletic activity (and to engage in training or preparation with a view to such participation, and other associated activities) is, in relation to that employment, excluded from the application of the Act.'

10. Section 3(7) WRCA provided -

'The regulations may exclude (either absolutely or subject to limitations or conditions stated in the regulations) specify (sic) classes of workers wholly or partially from the application of this Act.'

11. At the relevant time, s.3(8) provided -

'A regulation under subsection (7) cannot be made unless the board, by unanimous resolution of the members present at a meeting of the Board, agrees to the making of the regulation (but this requirement does not extend to a regulation revoking, or reducing the scope of an exclusion.)'

12. Sections 3(7) and 3(8) were inserted into the Act by Act number 4 of 1991 which was passed on 21 March 1991 and came into operation on 8 April 1991.

13. On 15 February 1991 the Board passed a resolution which was recorded in the following terms -

'The Board unanimously AGREED to the making of a regulation to exclude all sporting professionals except those specifically referred to under s.58(1)(a) and (b) (boxers, wrestlers, referees, jockeys and trotting drivers) from the application of the Act, subject to the approval by Parliament and enactment of the proposed amendment to s.3(7) and (8) of the Act which will provide the power to make such regulations.'

14. At first instance, against the background of the Statement of Agreed Facts which is Annexure A, the worker contended and the Corporation disputed, that Regulation 4(4) was invalid as having been made otherwise than in accordance with s.3(8).

15. The Workers Compensation Tribunal held that Regulation 4(4) was validly made. Annexure B is the judgment of the Tribunal at first instance delivered on 12 April 2001.

16. The worker appealed the decision to the Full Bench of the Workers Compensation Tribunal pursuant to s.86(1) WRCA.

17. The Full Bench of the Tribunal held that the Tribunal did not have the jurisdiction to determine the validity of Regulation 4(4) in circumstances where the issue was whether the regulation had been validly made in accordance with statutory procedure. The Full Bench of the Tribunal thereupon acted upon the presumption that Regulation 4(4) was validly made, proceeded to interpret the regulation and held that the regulation operated to exclude the worker from the operation of the Act. The judgment of the Full Bench of the Tribunal delivered in (sic) 10 May 2002 is Annexure C.

18. On 9 July 2002 the Full Bench of the Tribunal set aside its judgment of 10 May 2002 pursuant to s.88H of the Act by consent.

19. By judgment delivered on 26 August 2002 the Full Bench of the Workers Compensation Tribunal determined to state a case for the opinion of the Supreme Court as to whether the Tribunal has jurisdiction to determine the validity of the regulation and also as to the validity and interpretation of the regulation. The judgment of 26 August 2002 is annexure D."

6 For the sake of completeness I set out regulation 4(5):

"(5) Subregulation (4) does not apply to -

(a) a person authorised or permitted under the Racing Act 1976 to ride or drive in a race as defined in that Act;

or

(b) a boxer or wrestler employed or engaged for a fee to take part in a boxing or wrestling match."

7 I will refer to regulation 4(4) and (5) as "the regulation".

8 It is unnecessary for me to set out the Statement of Agreed Facts referred to in paragraph 14 of the facts set out above.

9 The matters referred to in paragraphs 7, 9, 10, 11, 12 above are matters of law and are not in dispute. In the second action Mr Epstein's solicitors filed an affidavit deposing to certain factual matters. On the basis of that affidavit, the Statement of Agreed Facts and other material (including the various decisions of the Tribunal) put before the Court, I find in the second action that the facts are as set out by the Full Bench in the case stated in the first action. I did not understand counsel for defendants in the second action to contend otherwise.

10 I turn now to say something about the respective decisions of the Workers Compensation Tribunal in the first action.

11 At first instance, a Deputy President of the Tribunal held that regulation 4(4) was validly made in accordance with s 3(8) of the Act, and that it followed that Mr Epstein was excluded from the application of the Act by virtue of that regulation. The Corporation's determination of 2 July 1999 to refuse Mr Epstein's claim for compensation was confirmed. At first instance it was agreed between the parties that s 58 of the Act did not apply to exclude Mr Epstein from coverage by the Act because Mr Epstein was not employed solely to participate as a contestant in a sporting or athletic activity. The Corporation relied on reg 4(4). The Deputy President held that reg 4(4) applied to Mr Epstein and the circumstances in which he suffered his injury. In relation to the submission that reg 4(4) was invalid, the Deputy President rejected a submission that the resolution of the board of management of The WorkCover Corporation of South Australia ("the Board") of 15 February 1991 was ineffective because s 3(7) and s 3(8) were not passed until 21 March 1991 and did not come into operation on 8 April 1991. The Deputy President rejected a submission that by reason of the differences between the terms of the resolution and the regulation, the Board had not agreed to the making of the regulation within the provisions of subsection 3(8).

12 There was an appeal from the decision of the Deputy President to the Full Bench. Counsel for Mr Epstein submitted that the Deputy President's decision was wrong in law, and she asked the Full Bench to state a case for the opinion of this Court pursuant to s 86A of the Act. Counsel for the respondents to the appeal opposed the stating of a case. The Full Bench declined to state a case. The Full Bench said that the appeal raised a fundamental issue as to whether the Tribunal had power to "declare the validity of a regulation" in circumstances in which it is alleged that the formal requirements for the making of the regulation had not been met. The Tribunal said:

"24. However, there is a distinction between the permissible function of construing the statute under which the regulation was made and then interpreting the regulation to ascertain whether it is within the ambit of the statute, and the function of reviewing an administrative act such as is involved in determining whether the regulation was made in accordance with certain formal requirements. Whereas the former function is central to the determination of the appellant's entitlement pursuant to the Act, the latter is a declaratory function and not one which can be construed as arising by implication from the Act, which gives the Tribunal its jurisdiction."

13 The Full Bench concluded that the Deputy President did not have the jurisdiction to determine if the procedural requirements for the making of a regulation had been complied with. The Deputy President and the Full Bench could only proceed on the basis that there had been compliance. In those circumstances, the Full Bench did not have the power to state a case about a matter outside its jurisdiction.

14 The Full Bench then turned to the question of whether reg 4(4) applied to Mr Epstein and the circumstances in which he suffered his injury. The Full Bench said that s 30(4) could be regarded as the first step in a legislative approach in relation to disabilities arising out of or in the course of sporting activities. Section 58 is the second step in the legislative approach. Like s 30(4) it excludes certain disabilities arising out of or in the course of sporting activities. Regulation 4(4) is the third step in the legislative approach. The Full Bench expressed its conclusion in the following way:

"46. We would conclude that reg 4(4) is not inconsistent with s 58 and s 30(4). It identifies a category of workers excluded from the Act in circumstances where s 3(7) of the Act authorised that identification to be done by regulation. Parliament obviously regarded the identification of such workers to be incidental to the operation of the Act and therefore suitably dealt with by regulation. Reg 4(4) does not depart from s 58 or s 30(4) or go outside the field of operation of the statute, rather it supplements the Act by providing the last step in the legislative approach to the compensatibility of disabilities arising out of or in the course of sporting activities. In this instance it operates to exclude the appellant worker. At the time of his injury he was participating as a contestant in a sporting activity as stated in Agreed Fact number 16 'while seeking to take possession of the football the applicant was involved in body contact with another player in consequence of which the applicant injured his right shoulder'. (AB 42)."

15 Shortly after the Full Bench delivered its reasons, Mr Epstein filed an application in the Tribunal seeking an order that the judgment of the Full Bench be set aside pursuant to s 88H of the Act on the basis that he had not been given an adequate opportunity to be heard on the issue of the Tribunal's jurisdiction. The respondents to the appeal consented to the setting aside of the judgment, and the matter was re-argued before the Full Bench. Although counsel for Mr Epstein conceded that the Tribunal did not have the power to make declarations, she submitted that the Tribunal had jurisdiction to determine the validity of the regulation irrespective of whether the challenge to the validity of the regulation was made on procedural or substantive grounds. Counsel for Mr Epstein submitted that the Full Bench could state a case to the Supreme Court as to the validity of the regulation pursuant to s 86A of the Act. In the alternative, counsel submitted that the Full Bench should proceed to determine the validity of the regulation. As I understand it, counsel for Mr Epstein did not oppose the Full Bench stating a case for the opinion of this Court on the issue of the Tribunal's jurisdiction to entertain a collateral challenge to the validity of reg 4(4). Counsel for the respondents to the appeal did not suggest that the Tribunal did not have jurisdiction to determine the validity of the regulation as a collateral issue. He opposed the stating of a case to this Court either on the question of the Tribunal's jurisdiction to entertain a collateral challenge to the validity of the regulation or on the question of validity of the regulation.

16 The Full Bench of the Tribunal referred to the decision of this Court in Hinton Demolitions Pty Ltd v Lower No 2 (1971) 1 SASR 512. The Full Bench concluded that in view of the state of the authorities in South Australia, the limited circumstances in which the Supreme Court may otherwise interfere with a decision of the Tribunal (s 88I of the Act) and the complexity of the issues, it should state a case for the opinion of this Court.

17 Section 86A of the Act gives the Full Bench of the Tribunal power to state a case on a question of law for the opinion of this Court. The questions in the Case Stated dated 11 November 2002 are as follows:

"1. Does the Workers Compensation Tribunal have the jurisdiction to determine the validity of (now revoked) Regulation 4(4) of the Workers Rehabilitation and Compensation (Claims and Registration) Regulations 1987 as a collateral issue in the determination of a claim for compensation by a worker against the worker's employer?

2. Was the making of Regulation 4(4) a valid exercise of the power contained in s 3(7) of the Workers Rehabilitation and Compensation Act 1986?

3. If Regulation 4(4) was validly made pursuant to section 3(7) of the Act is it inconsistent with the terms of the Workers Rehabilitation and Compensation Act 1986 and, if inconsistent, outside the regulation making power?

4. Do the words 'in relation to that employment' in Regulation 4(4) operate to exclude the worker from the operation of the Act?"

18 On 28 January 2003, Mr Epstein commenced the second action in this Court. The relief sought in the amended summons is a declaration that the regulation is invalid. As I have said, the summons is supported by an affidavit from Mr Epstein's solicitors. The solicitor states that he had been instructed to commence the action seeking a declaration that the regulation is invalid because of the possibility that this Court might answer question 1 of the Case Stated in the first action in the negative and then not proceed to answer the further questions relating to the validity and meaning of the regulation.

19 In the third action, the Full Bench of the Tribunal made an order on 11 March 2003 to state a case on a question of law for the opinion of this Court. The facts referred to in the case stated are as follows:

"1. The applicant sustained an injury to his neck and cervical spine in an Australian Football League football match on 20 June 1998 whilst participating as a contestant in a sporting activity pursuant to the terms of his contract of employment and was incapacitated from time to time thereafter as a result.

2. On 20 June 1998 the applicant was playing football for Port Adelaide Football Club Inc. pursuant to a playing contract entered into on 17 January 1998 between the claimant, the Port Adelaide Football Club Inc. and the Australian Football League.

3. During the 1998 playing season, the applicant received payments from the Port Adelaide Football Club Inc as follows:

4. The payments referred to in paragraph 3 hereof were paid pursuant to the applicant's playing contract.

5. The prescribed amount applicable to Section 58 of the Workers Rehabilitation and Compensation Act 1986 for the year 1998 was $41,700.

6. The applicant submitted a claim for compensation dated 7 June 2001 in respect to the injury referred to in paragraph 1 hereof."

20 The questions in the case stated are as follows:

"1. Was the making of Regulation 4(4) a valid exercise of the power contained in Section 3(7) of the Workers Rehabilitation and Compensation Act 1986?

2. If Regulation 4(4) was validly made pursuant to Section 3(7) of the Act, is it inconsistent with the terms of the Workers Rehabilitation and Compensation Act 1986, and, if inconsistent, outside the regulation making power?"

The Case Stated in the First Action and in the Third Action

21 In the first action the Full Bench entertained a serious doubt as to whether the Tribunal had the power to determine the validity of a regulation as a collateral issue in relation to the worker's claim for compensation pursuant to the Act. The Full Bench referred to the English decisions of Bugg v Director of Public Prosecutions [1993] QB 473 and Boddington v British Transport Police [1998] UKHL 13; [1999] 2 AC 143 and concluded that the position in England was that a collateral challenge to delegated legislation whether on substantive or procedural grounds was permitted. The Tribunal said that there are authorities in this country which suggest a similar approach should be taken here (Selby v Pennings (1998) 19 WAR 520; Ousley v R [1997] HCA 49; (1997) 192 CLR 69). However, the Full Bench said that the decision of this Court in Hinton Demolitions (above) was significant on this point. The ground of challenge in that case was a failure to comply with the rules of natural justice in relation to the determination of the load capacity of a truck and trailer.

22 As I understand it, the Full Bench decided to state a case for the opinion of this Court because it entertained a serious doubt as to its jurisdiction to entertain a collateral challenge to the validity of the regulation (at least on all of the grounds advanced) in light of the decision of this Court in Hinton Demolitions. It seems to me that Bray CJ (at 523) approached the issue of whether a collateral challenge to the determination was permissible by reference to whether the relevant act was a nullity or merely voidable. If the former, the act could be challenged by anyone in any proceeding in which the question of validity was relevant, whereas if the act was merely voidable it can only be challenged by an appropriate party in appropriate proceedings. Bray CJ held that the ground of challenge brought the case within the second class. Wells J, on the other hand, in formulating relevant principles and rules said (at 549):

"2. Except for those cases where what is claimed to be an administrative act has not even the colour of lawful authority, or where an authority or public official, who is a party to a civil action, pleads, and relies on his own administrative act, an allegedly unlawful administrative act cannot be collaterally impeached in any cause or matter, civil or criminal, unless an Act of Parliament or a valid regulation unequivocally authorises such impeachment. The only correct way of attacking an allegedly unlawful administrative act is by means of a separate proceeding appropriate for the purpose."

23 Mitchell J (at 525) agreed with the reasons of both Bray CJ and Wells J on this point.

24 With respect, the decision by the Full Bench to state a case in the first action was appropriate at the time it was made. However, by the time the matter reached this Court there were difficulties in this Court proceeding to answer question 1 in the case stated in the first action. First, this Court was constituted as a Court of three and if it was not possible to distinguish the decision in Hinton Demolitions, the Court would need to reconstitute as a Court of five before consideration could be given to overruling the decision. Secondly, no party before us sought to argue that the Tribunal did not have jurisdiction to entertain a collateral challenge on the grounds advanced. Although we received helpful written submissions from both parties to the first action, the Court was concerned that it might be asked to decide an important point without the benefit of full and detailed opposing arguments. As against these considerations, after the order for a case stated in the first action had been made, Mr Epstein commenced the second action in this Court. The second action is clearly an appropriate action in terms of a challenge to validity of the regulation. All parties before us accepted that the determination of the second action would be sufficient for their respective purposes and that it would not be necessary to answer the questions in either case stated. In other words, all parties accepted that if this Court in the second action declared that the relevant regulation was invalid that would be sufficient. Equally if this Court in the second action declared that the relevant regulation was valid that would be sufficient. In either event the matters would go back to the Full Bench and effect would be given to the declaration of this Court. I note that if the Court declared that the regulation was valid, question 4 in the case stated in the first action would not be answered, but I have a real doubt in any event as to whether it is an appropriate question for a case stated as arguably it is not a question of law. In view of my conclusion that the regulation is invalid, it is not necessary to debate this particular issue any further.

25 In these circumstances the Court decided that it would determine the second action and that it was not necessary to decide the questions in either case stated.

26 Before leaving this issue I mention the fact that counsel for Mr Epstein seemed to suggest that the decision of the High Court in Pfeiffer v Stevens (2001) 209 CLR 57 was authority for the proposition that a collateral attack on the validity of delegated legislation was permissible. I reject that submission. The jurisdiction of the lower Court to determine the validity of the legislation in issue in that case appears not to have been in dispute and the question of collateral attack is not discussed by the members of the High Court.

27 I turn now to consider the claim for a declaration on the second action. I have already set out the relevant findings of fact in that action.

The Claim for a Declaration of Invalidity in the Second Action

28 The plaintiff submits that the regulation was invalid on a number of grounds. First, he submits that the requirements of s 3(8) were not met in two respects, either of which (it was said) was fatal to the validity of the regulation. It was submitted that the resolution of the Board was passed before the enactment of s 3(8). The resolution was a nullity or, at least, ineffective. It was also submitted that the differences between the terms of the resolution and the regulation were such that there was no agreement to the making of the regulation within the provisions of s 3(8).

29 Secondly, the plaintiff submits that the regulation was invalid on the ground that it was inconsistent with the scheme of the Act, and in particular, with ss 30(4) and 58 of the Act. As I understand it, this submission is to the effect that the regulation is not within the empowering provision in s 3(7) of the Act when that section is considered with other sections in the Act, in particular, ss 30(4) and 58.

Was There Compliance with the Requirements of Section 3(8)?

The Resolution is Passed Before Sections 3(7) and 3(8) came into Operation

31 Subsections 3(7) and (8) were part of the Workers Rehabilitation and Compensation (Miscellaneous Provisions) Amendment Act 1991 (No 4 of 1991). The Amendment Act was assented to on 21 March 1991 and came into operation on 8 April 1991.

32 The resolution of the Board was passed unanimously on 15 February 1991.

33 Mr Epstein submits that the resolution is a nullity or, at least ineffective because it was passed before subsections 3(7) and (8) came into operation on 8 April 1991.

34 It is clear from the terms of the resolution that the Board anticipated the enactment of subsections 3(7) and (8). The resolution was not a nullity when it was passed. There is no reason to think the Board did not have power to pass the resolution. The Board had wide ranging powers under the Act (see, for example, s 14). The resolution would be of no effect unless and until subsections 3(7) and (8) came into operation, but there is no reason to think that once that happened the resolution could not operate according to its terms.

35 Counsel for Mr Epstein referred to s 14C of the Acts Interpretation Act 1915. That section relevantly provides:

"14C (1) Where

(a) a provision of an Act that has passed is not yet in operation; and

(b) it is expedient that a power expressed to be conferred by the provision be exercised before it comes into operation, the power may be so exercised before the provision comes into operation.

(2) Subject to subsection (3), anything created, granted, issued, done or made under or pursuant to a provision by virtue of subsection (1) will take effect when the provision comes into operation and not before."

36 I do not think this section is of assistance in the resolution of the present issue. The section deals with quite a different situation, namely, the exercise of a power conferred by a provision in an Act which has been passed but which has not yet come into operation. In this case we are not considering the exercise by the Board of a power it did not otherwise possess. In February 1991 the Board had the power to pass the resolution.

37 I reject the submission that there was non-compliance with the requirements of s 3(8) because the resolution of the Board was passed before s 3(7) and (8) came into operation.

The Resolution is in Different Terms to the Regulation

38 The resolution is to the effect that the Board agreed to the making of a regulation to exclude all sporting professionals from the application of the Act except for those persons specifically referred to under s 58(1)(a) and (b) (boxers, wrestlers, referees, jockeys and trotting drivers). It is necessary to first note some points about the exception to the exclusion. First, I think the reference to s 58(1)(a) and (b) is clearly a slip and the reference should be to s 58(2)(a) and (b). That is made clear by the words which appear in parentheses and I would read the resolution in that way. Secondly, the resolution in defining the exceptions to the exclusion does not include the exception in s 58(2)(c).

39 The resolution refers to "sporting professionals" without defining that term. There is no definition of the term in the Act or any of the regulations made under the Act.

40 The regulation itself contains a statement that it is made pursuant to a resolution of the Board of the Workers Rehabilitation and Compensation Corporation passed with the unanimous agreement of the members present at a meeting of that Board. Regulation 4(4) contains the exclusion from the application of the Act. Regulation 4(5) contains the exceptions to the exclusion. The exception in reg 4(5) mirrors the matters in s 58(2)(a) and (b) as envisaged by the resolution except that it does not include a reference to a referee employed or engaged for a fee to take part in a boxing or a wrestling match. In other words, the relevant regulation does not fully implement the terms of the resolution in this respect. In view of my conclusions on other matters it is unnecessary for me to consider this particular difference any further.

41 A more significant difference between the terms of the resolution and the terms of the regulation is that the resolution refers to "sporting professionals" whereas the regulation identifies the class excluded as (omitting the words in parentheses) "a worker who is employed by an employer to participate as a contestant in a sporting or athletic activity ... in relation to that employment".

42 As I have said, the term "sporting professionals" is not defined in the Act, any regulations made under the Act or in the resolution of the Board. The term has no obvious or well accepted meaning. It may identify a larger class of workers than the class identified in the regulation (eg., to include a professional coach who suffers a disability and that disability is not suffered in the course of a sporting or athletic activity) or it may identify a smaller class of workers than the class identified in the regulation (eg., only those who earn their living or most of their living from participation in sport or sporting activities). I have looked at the ordinary meaning of the words, "sporting" and "professional" but the definitions in various dictionaries do not assist in resolving the present problem.

43 The defendants submit that there does not need to be a precise correspondence between the terms of the resolution and the terms of the regulation. Section 3(7) of the Act gave the Governor, with the advice and consent of the Executive Council, the power to make regulations which exclude specified classes of workers wholly or partially from the application of the Act. However, such a regulation could not be made unless there was a unanimous resolution of the Board agreeing to the making of the regulation. The defendants accepted that there needed to be a link between the agreement of the Board and the regulation made, but submitted that it is sufficient if there is "correspondence" between the definition of the relevant class as identified in the resolution and the class defined in the regulation. The defendant referred to certain observations of Wells J in Myer Queenstown Garden Plaza Pty Ltd v Port Adelaide Corp & The Attorney-General (1975) 11 SASR 504. In that case, Wells J considered the meaning of a statutory provision to the effect that regulations may be made "on the recommendation of" a Council. Wells J said (at 548 - 549):

"A thing may be recommended in general terms, in more specific terms, or in terms of great particularity. If the recommendation comes in general terms, the plain implication is that the person receiving it will not forfeit the approbation with which the thing is introduced if he exercises his own discretion over detail. But if the thing recommended is propounded with a wealth of detail, every variation introduced by the person making use of the recommendation tends to increase the probability that the accompanying approbation would not be given to the final result. The person considering the recommendation may have the power to make variations, perhaps extensive variations, or even to disregard what was introduced, but if he does so he may then be acting 'after consideration of (or receiving) the recommendation', but not 'on the recommendation'.

A person may, in my opinion, only act on a recommendation if, after consideration of it, he adopts it in substance and makes only such variations in what was originally commended as would, in all the circumstances, not forfeit that commendation. In short, the more detailed the recommendation, the more complex and comprehensive the machinery by means of which the recommendation is reached, the less scope will there be for departure, by the person acting on the recommendation, from its terms. ...

I hold, therefore, that the expression 'on the recommendation of ...... a Council' connote the Act's insistence that the regulations made and the draft regulations recommended should correspond closely. In my opinion, that correspondence must extend to the substance of the regulations. In that sentence the word substance imports, firstly, that formal changes of arrangement, order, headings, punctuation, spelling and the like, are permitted; and secondly, that variations in meaning that induce important changes in operation will render the regulations incorporating such changes ultra vires. Whether or not a change is important for this purpose will depend, as a matter of fact and degree, upon the nature and extent of the change having regard, especially, to the implications of s. 38."

44 In my opinion, the words in s 3(8) "the Board, ... agrees to the making of the regulation" requires a very close correspondence between the resolution and the regulation. The words of s 3(8) are more demanding than the words considered by Wells J in Myer Queenstown, and it follows in my opinion that a closer correspondence between the resolution containing the agreement of the Board and the terms of the regulation is required than that envisaged by the test formulated by Wells J in the above passage. It must also be remembered that the making of a regulation excluding a class of workers from the application of the Act is a significant step.

45 The plaintiff submits that the agreement of the Board must be to the precise terms of the regulation, and that therefore, the Board must have the text of the regulation before it at the time it is considering whether it agrees to the making of the regulation. The plaintiff refers to certain observations by McHugh J in Pfeiffer v Stevens (above). I do not think the legal requirement can be expressed in such absolute terms. It seems to me that there may be cases where there are minor and immaterial variations and yet it can be said that the Board has agreed to the making of the regulation. With respect, I do not find the observations of McHugh J in Pfeiffer v Stevens to be of assistance. They were made in the particular statutory context in issue in that case. At the same time, having regard to the terms of s 3(8) and the importance of the power to exclude specified classes of workers from the application of the Act in s 3(7), there must be a very close correspondence between the terms of the resolution and the terms of the relevant regulation. Such a close correspondence is not present in this case. It is simply not possible to conclude that the class of workers identified in the regulation is the class of workers the Board had in mind at the time the resolution was passed.

46 The defendants submit that there was sufficient compliance with subsection 3(8) because the Board's agreement at least included the class of workers identified in the regulation. In other words, even if the term "sporting professionals" encompassed a wider class than that identified in the regulation that did not matter because at least the class identified in the regulation was within the class identified in the resolution. I think there are two answers to that submission. First, I am not prepared to assume that the term "sporting professionals" includes the class of workers identified in the regulation. It might be said that it is likely that it does. However, that is not sufficient; the position needs to be free from any doubt or at least any significant doubt. Secondly, even if I am wrong about the first point, I am not prepared to assume that agreement to a wide class necessarily involves agreement to a subclass. It is perfectly possible that the Board's agreement was limited to the particular class identified in the resolution and that it would not have agreed to a regulation dealing only with the subclass.

47 There has been non-compliance with a statutory precondition to the making of the regulation. Does that render the regulation invalid? That question is no longer answered by characterising the precondition as mandatory to the exercise of the power or as directory, and in the latter case by determining if there has been substantial compliance with the precondition. In Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355, McHugh, Gummow, Kirby and Hayne JJ said (at 388 - 389, omitting footnote references):

"An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition. Unfortunately, a finding of purpose or no purpose in this context often reflects a contestable judgment. The cases show various factors that have proved decisive in various contexts, but they do no more than provide guidance in analogous circumstances. There is no decisive rule that can be applied (63); there is not even a ranking of relevant factors or categories to give guidance on the issue."

48 A little later at 390 - 391, their Honours said:

"In our opinion, the Court of Appeal of New South Wales was correct in Tasker v Fullwood in criticising the continued use of the 'elusive distinction between directory and mandatory requirements' and the division of directory acts into those which have substantially complied with a statutory command and those which have not. They are classifications that have outlived their usefulness because they deflect attention from the real issue which is whether an act done in breach of the legislative provision is invalid. The classification of a statutory provision as mandatory or directory records a result which has been reached on other grounds. The classification is the end of the inquiry, not the beginning. That being so, a court, determining the validity of an act done in breach of a statutory provision, may easily focus on the wrong factors if it asks itself whether compliance with the provision is mandatory or directory and, if directory, whether there has been substantial compliance with the provision. A better test for determining the issue of validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid. This has been the preferred approach of courts in this country in recent years, particularly in New South Wales. In determining the question of purpose, regard must be had to 'the language of the relevant provision and the scope and object of the whole statute.'"

49 There are a number of considerations which suggest that a failure to comply with the requirements of s 3(8) is fatal to the validity of a regulation. First, the wording of s 3(8) - "A regulation under subsection (7) cannot be made unless ..." - is imperative. Secondly, the subject matter of the power in s 3(7) is very significant. The Act confers important rights and imposes significant obligations. The act of excluding a class of workers from the application of the Act is an important one. Thirdly, the body which must agree (the board of management of The WorkCover Corporation) occupies an important position under the Act. At the relevant time it was to consist of representatives of various groups who had an interest in the proper and efficient operation of the scheme established by the Act (s 8). The WorkCover Corporation which was managed by the board was responsible for the administration of the Act. Fourthly, the question of whether the requirements of s 3(8) have been met is capable of being determined relatively easily. All that is called for is a comparison between the resolution and the regulation. These matters suggest that non-compliance with s 3(8) means that the regulation is invalid.

50 On the other hand, it must be recognised that holding a regulation invalid is a significant step and may result in inconvenience and expense to those persons and entities who have regulated their conduct on the basis that the regulation is valid. The Court does not have any precise evidence on the point, but I am prepared to assume that inconvenience will result from a declaration that the regulation is invalid. This has always been an important consideration (Montreal Street Railway Company v Normandin [1917] UKPC 2; [1917] AC 170) and points in the direction of finding a legislative purpose that a breach of the precondition is not to result in the invalidity of the regulation.

51 Counsel for the defendants submits that in determining whether non-compliance with a statutory precondition results in invalidity the Court may have regard to the degree or extent of non-compliance. He submits that the degree or extent of non-compliance in this case is not significant, or at least not so significant that it should result in invalidity. I am inclined to agree that the Court may have regard to the degree or extent of non-compliance and I am prepared to assume for the purposes of argument that the proposition is correct. However, I do not think it advances the defendants' arguments. On one view, the nature of this particular statutory precondition is such that there has either been compliance or there has not. Even if this approach is wrong, it cannot be said that the degree of non-compliance in this case is insubstantial or minor. As I said earlier, I am not prepared to assume that the term "sporting professionals" includes the class of workers identified in the regulation. Even if it does, I am not prepared to assume that agreement to a wide class necessarily involves agreement to a subclass.

52 In my opinion, the four factors which I have identified clearly outweigh the inconvenience which will result from a declaration of invalidity of the regulation. I think a legislative purpose can be discerned that a regulation not made with the agreement of the Board under subsection 3(8) is invalid. The Board did not agree with the making of the regulation and accordingly the regulation was invalid. I would so declare. No party suggested that the fact the relevant regulation has since been revoked meant that a Court should not now make a declaration of invalidity.

53 In view of this conclusion it is not strictly necessary for me to consider the plaintiff's submission that by reason of other provisions in the Act, s 3(7) did not confer a power to make the regulation. However, as that matter was fully argued it is appropriate that I express my conclusions on this submission.

54 The plaintiff submits that the regulation was invalid because it was inconsistent with provisions in the Act, namely, ss 58 and 30(4). However, it seems to me that the real question in the present case is whether the regulation is within the regulation-making power in the Act when that power is construed in light of other provisions in the Act. Pursuant to s 124 of the Act the Governor may make such regulations as are contemplated by the Act which includes regulations of the type identified in s 3(7) of the Act, namely, regulations excluding specified classes of workers wholly or partially from the application of the Act. There may be cases where a regulation is inconsistent with a specific provision in the Act (see, for example, Macris v Lucas [1971] SASR 329). In those cases the regulation is invalid because the Court holds that the regulation-making power does not include the power to make a regulation which is inconsistent with a specific provision in the Act. A regulation may be outside a regulation-making power not because of direct inconsistency, but because the regulation-making power properly construed having regard to the other provisions in the Act does not encompass regulations which extend, alter or vary the treatment of a particular subject matter in the Act.

55 In Morton v Union Steamship Co of New Zealand Ltd [1951] HCA 42; (1951) 83 CLR 402 the High Court considered the validity of a regulation made under a regulation-making power expressed in very general terms ie., "all matters ... as may be necessary or convenient to be prescribed for giving effect to this Act or for the conduct of any business relating to the Excise". In that context, the Court said (at 410):

"A power expressed in such terms to make regulations enables the Governor-General in Council to make regulations incidental to the administration of the Act. Regulations may be adopted for the more effective administration of the provisions actually contained in the Act, but not regulations which vary or depart from the positive provisions made by the Act or regulations which go outside the field of operation which the Act marks out for itself. The ambit of the power must be ascertained by the character of the statute and the nature of the provisions it contains. An important consideration is the degree to which the legislature has disclosed an intention of dealing with the subject with which the statute is concerned.

In an Act of Parliament which lays down only the main outlines of policy and indicates an intention of leaving it to the Governor-General to work out that policy by specific regulation, a power to make regulations may have a wide ambit. Its ambit may be very different in an Act of Parliament which deals specifically and in detail with the subject matter to which the statute is addressed. In the case of a statute of the latter kind an incidental power of the description contained in s 164 cannot be supposed to express an intention that the Governor-General should deal with the same matters in another way."

(See also Carbines v Powell [1925] HCA 16; (1925) 36 CLR 88; Banks v Transport Regulation Board (Vic) [1968] HCA 23; (1968) 119 CLR 222 per Barwick CJ at 235).

56 A good illustration of the application of the relevant principle is contained in In re the Metropolitan Abattoirs Acts 1908 - 1930; Ex parte George Chapman Limited [1932] SAStRp 19; [1932] SASR 184. The Abattoirs Acts defined an abattoir area being the city and suburbs of Adelaide. The Act gave the Metropolitan Abattoirs Board a monopoly over certain activities in the area. The Act required a person bringing certain beef and pork which had been derived from stock slaughtered outside the area to obtain a permit from the Board if he wished to expose for sale or sell the imported goods within the area. The regulation under challenge went further and required an application for a permit to be made whatever the purpose of or intention in bringing in the meat may be. The Full Court of this Court held that the regulation was invalid. Napier J (with whom Murray CJ agreed) said (at 190):

"I think it is obvious that the regulation which seizes control of pork which merely comes into the area in the course of transit, between the place where the animal is slaughtered and the factory in which it is turned into the exempted product, is ultra vires upon the ground that it seeks to extend the control authorized by the Statutes to a new subject-matter, without any special authority, and that it is, therefore, repugnant to the spirit and intendment of the Act. Parliament has seen fit to forbid possession for the purposes of supplying in the area. To possess for the purposes of export or curing for bacon is not forbidden. On the contrary, there is a necessary implication from the express authority to slaughter, namely, that the meat may be held in store or factory for either of these purposes. I think that this regulation purports to restrict the liberty which Parliament has seen fit to preserve. It is, therefore, ultra vires, and, in my opinion, the rule should be made absolute."

Piper J (with whom Murray CJ also agreed) said (at 193 - 194):

"It cannot be said that any of the sections now referred to shews any object or purpose justifying interference by regulation with conduct which the Act leaves perfectly lawful - the mere transport of meat into the area, it not being carried 'for delivery on sale,' and not being exposed for sale, or in possession of a person apparently for the purpose of sale for human consumption."

57 At the time the regulation in this case was made, s 58 of the Act was in the following terms:

"58(1) Notwithstanding any other provision of this Act, but subject to subsection (2), where -

(a) a worker is employed by an employer solely -

(i) to participate as a contestant in a sporting or athletic activity (and to engage in training or preparation with a view to such participation);

or

(ii) to act as a referee or umpire in relation to a sporting or athletic contest (and to engage in training or preparation with a view to so acting);

and

(b) remuneration is not payable under the contract of employment except in respect of such employment

a disability arising out of or in the course of that employment is not compensable.

(2) This section does not apply to -

(a) a person authorised or permitted under the Racing Act, 1976 to ride or drive in a race as defined in that Act;

(b) a boxer, wrestler or referee employed or engaged for a fee to take part in a boxing or wrestling match; or

(c) a person who derives an entire livelihood, or an annual income in excess of the prescribed amount, from employment of a kind referred to in subsection (1)(a).

(3) In this section - 'the prescribed amount' means -

(a) in relation to 1986 - $25,000

(c) in relation to a subsequent year - a sum (calculated to the nearest multiple of $100) that bears to $25,000 the same proportion as the consumer price index for the September quarter of the immediately preceding year bears to the consumer price index for the September quarter, 1985."

58 The plaintiff submits that he is not caught by s 58 because at the relevant time he was also employed by the Naracoorte Football Club Inc to coach football teams and therefore he was not employed by his employer solely to participate as a contestant in a sporting or athletic activity and remuneration was not payable under his contract of employment only in respect of such employment. When the plaintiff's application in the first action came before the Deputy President it was agreed between the parties that s 58 did not apply to exclude the plaintiff from coverage by the Act because the plaintiff was not employed "solely to participate as a contestant in a sporting or athletic activity". The regulation clearly goes further than s 58. A worker employed by an employer to participate as a contestant in a sporting or athletic activity and to carry out other tasks is not able to claim compensation if he suffers a disability in the course of the sporting or athletic activity. Furthermore, the regulation covers a person who is excluded from the operation of s 58 because, although employed by an employer solely to participate as a contestant in a sporting or athletic activity, he derives an annual income in excess of the prescribed amount from that employment (s 58(3)).

59 The plaintiff submits that the primacy of s 58 is shown by the opening words of the section, "Notwithstanding any other provision of this Act". I do not think those words advance the plaintiff's case. The section creates an exception to those circumstances in which a disability arising out of or in the course of employment is compensable. The section does not confer a right to compensation. The plaintiff submits that s 58 covers the field in terms of the compensability of injuries sustained by contestants in sporting or athletic activities. The plaintiff points to the fact that s 58 not only creates an exclusion, but in s 58(2) Parliament carefully defines the limits of the exclusion. The best example perhaps is the fact that above a certain monetary amount the exclusion does not apply. There is force in these submissions.

60 The defendants submit that s 3(7) deals with a different subject matter from that dealt with in s 58. Section 3(7) deals with excluding a specified class of workers wholly or partially from the application of the Act, whereas s 58 provides that disabilities arising out of or in the course of certain forms of employment are not compensable. The defendants referred to important sections in the Act other than the sections referring to rights to compensation under the Act. For example, reference was made to s 54 (the right to claim damages at common law), s 59 (registration of employers), s 66 (payment of levies), s 69 (furnishing of returns) and s 74 (liability to keep accounts). It is true that excluding a specified class of workers from the application of the Act affects rights and obligations in addition to the right to claim compensation. However that does not mean that s 3(7) and s 58 deal with different subject matters. The fact is that the subject matter in s 58 is included in the subject matter of s 3(7). Furthermore, s 3(7) includes a power to exclude a specified class of workers partially from the application of the Act and I think that includes the power to make a regulation which goes no further than providing that a specified class of workers is excluded from the section giving the right to compensation for disabilities arising out of or in the course of employment.

61 In my opinion, if the only relevant regulation-making power was the general power to make regulations (s 124: "such regulations as are contemplated by this Act, or as are necessary or expedient for the purposes of the Act") then it would be strongly arguable that the regulation was invalid because the general empowering provision would be read so as not to authorise a regulation which varies or departs from the scheme established by s 58 or goes outside the field of operation the Act makes out for itself (Morton v Union Steamship Co of New Zealand Ltd). However, the general provision does not stand by itself. The terms of s 3(7) are quite clear. The subsection specifically authorises a regulation which takes a specified class of workers outside the operation of the Act. In the face of such clear words I do not think it can be said the regulation-making power in s 3(7) should be read down so that it does not include the power to extend an exclusion already in the Act (ie., s 58) at the time the regulation-making power was enacted.

62 The plaintiff also referred to s 30 of the Act. That section defines the conditions under which a disability is compensable. The plaintiff placed particular reliance on s 30(4) which came into effect on 1 July 1994 and provides as follows:

"(4) However, a disability does not arise from employment if it arises out of, or in the course of, the worker's involvement in a social or sporting activity, except where the activity forms part of the worker's employment or is undertaken at the direction or request of the employer."

63 Section 30(4) must be read subject to s 58. If s 58 is not (as I have held) a reason for reading down the regulation-making power in s 3(7), there is less reason to think s 30(4) would be. The plaintiff referred to the decision of the Full Court in General Motors-Holden's v Busby (1996) 68 SASR 1. In that case a worker suffered an injury whilst playing table tennis at his place of employment during his authorised lunch break. The question for determination was whether such injury was compensable as arising from employment. A majority of the Full Court held that it was not compensable. Lander J said (at 10):

"The plain words in my opinion disqualify any worker who suffers a disability whilst involved in a social or sporting activity, except in the circumstances provided for in the exception in s 30(4) itself, and those circumstances are where the activity forms part of the worker's employment or is undertaken at the direction or request of the employer. In my opinion reference to worker's employment in s 30(4) is not a reference back to s 30(3) but is used to describe the type of employment in which the worker is involved. I think that is so because the words are used in conjunction with 'the activity'. None of the circumstances in s 30(3) relate to the activity of the worker's employment.

Those words mean in my opinion that if, for example, a person was employed as a tennis coach and injured himself or herself during the course of coaching tennis then that person would still be able to claim compensation because the worker would be injured in circumstances where the activity ie playing tennis, formed part of the worker's employment. So also if the employer directs workers to undergo social or sporting activities and during those social or sporting activities the worker suffers a disability then the worker is entitled to compensation."

64 Neither s 58 nor the regulation were in issue in Busby's case. I do not think the exception in s 30(4) gives rise to a right to compensation. The right to compensation is contained in s 30(1) as defined by the succeeding subsections of s 30 and other sections in the Act, such as s 58. The right to compensation given by s 30(1) is qualified by the exclusion in s 58(1). Furthermore, it is qualified by s 3(7), namely, the power by regulation to exclude specified classes of workers wholly or partially from the application of the Act.

65 In my opinion, the plaintiff's submission that the regulation is invalid because it is inconsistent or repugnant to s 58 and/or s 30(4) of the Act must be rejected.

66 In my opinion, the regulation was invalid because there was a failure to comply with s 3(8) of the Act at the time it was purportedly made. In the second action (No 1836 of 2002), I would make a declaration that Regulations 4(4) and (5) of the Workers Rehabilitation and Compensation (Claims and Rehabilitation) Regulations, 1987 as amended are invalid.

67 In each case stated I would, for the reasons I have given, answer each question as follows:

"In view of the order of the Court in Action Number 1836 of 2002 it is unnecessary to answer this question."

68 I would hear the parties as to any other orders and costs.