BARRY MULCAHY AND OTHERS
v.
THE HYDRO-ELECTRIC COMMISSION
JUDGMENT
Federal Court of Australia
[2]
FEDERAL COURT OF AUSTRALIA
CONTRACT - implication of term as a necessary incident of a definable category of contractual relationship - employment contract - whether implied term that employer advise board of superannuation fund or employee of employee's right to elect to contribute to fund
EMPLOYMENT LAW - contract of employment - whether implied term that employer advise board of superannuation fund or employee of employee's right to elect to contribute to fund
EQUITY - unconscionable conduct - Trade Practices Act 1974 (Cth) s 51AA - whether respondent Commission's conduct in requesting Tasmanian Government to enact retrospective legislation to defeat potential causes of action against it constituted unconscionable conduct - whether imbalance of power amounts to special disadvantage - whether acting to protect one's own interests unconscionable - whether unconscionable conduct gives rise to a claim for damages - whether relief available where unconscionable conduct not connected with a transaction in respect of which relief is claimed
LIMITATION OF ACTIONS - Trade Practices Act 1974 (Cth) ss 82(2), 87(1CA)(a) - Limitation Act 1974 (Tas) s 4(1)(a) - time of accrual of cause of action - failure to notify of right to elect to contribute to superannuation fund where legislation gives right to elect to contribute - whether cause of action accrues when applicant became aware of right to contribute - whether knowledge of right to sue essential ingredient of cause of action - whether cause of action accrues upon termination of employment - Limitation Act 1974 (Tas) s 32(1) - fraud or concealment of right of action - whether limitation period runs from date of discovering fraud or concealment - whether "fraud" involves moral turpitude
NEGLIGENCE - whether employer under duty to advise board of superannuation fund or employee of temporary employee's right to elect to contribute to fund - whether general reliance relevant - employer not a public body with statutory duty to regulate activities which may cause loss or damage to members of public - whether continuing duty to advise after employment ceased - whether breach of duty - what constitutes sufficient notification of right to elect to contribute to fund- whether deliberate policy by employer to conceal right to elect - causation - whether employees would have elected to contribute if aware of right to elect
STATUTES - statutory powers and duties - breach of statutory duty - whether statutory corporation under duty to advise board of superannuation fund or employee of temporary employee's right to elect to contribute to fund - Retirement Benefits Act 1982 (Tas) s 82A - Retirement Benefits Regulations 1982 (Tas) regs 24(1)(ab), (ac) - obligation of "responsible officer" to notify board of fund of appointment of employee and to forward necessary forms for medical examination to employee - whether legislation created a cause of action for damages for breach of statutory duty - whether duty exists where penalty is imposed for breach of statute or regulations - whether duty imposed on commission
SUPERANNUATION - Retirement Benefits Act 1982 (Tas) - Retirement Benefits Fund - employees of Hydro-Electric Commission - permanent employees obliged to join - temporary employees may elect to join - whether permanent or temporary employee - date of determination of permanency - whether number of years' service determinative - entry into fund precluded entitlement to benefits under Public Servants Retiring and Death Allowances Act 1925 (Tas) - duty of "responsible officer" to notify board of fund and employees of rights and obligations in relation to contribution - whether duty breached - entitlement to "buy back" previous years' employment where join fund after commencement of employment - effect of retrospective legislation attempting to preclude causes of action based upon failure of responsible officer to notify of right to elect to contribute
TRADE PRACTICES - misleading or deceptive conduct - Trade Practices Act 1974 (Cth) s 52 - Fair Trading Act 1990 (Tas) s 14 - representation by employer that temporary employees not entitled to join superannuation fund - representation by silence - alleged failure to advise board of superannuation fund or temporary employees of right to elect to join fund - whether representations in "trade or commerce" -internal communication between employer and employee- Trade Practices Act 1974 (Cth) s 51AA - whether respondent Commission's conduct in requesting Tasmanian Government to enact retrospective legislation to defeat potential causes of action against it constituted unconscionable conduct - whether conduct in "trade or commerce" - whether s 51AA operates retrospectively - whether damages available for breach of s 51AA
WORDS AND PHRASES - "employed in a permanent capacity" - "employment of a temporary nature" - "in respect of" - "enactment" - "fraud"
Federal Court of Australia Act 1976 (Cth) Pt IVA
Public Service Superannuation Fund Act 1905 (Tas)
Public Service Act 1905 (Tas) ss 3, 67
Public Servants Retiring and Death Allowance Act 1925 (Tas) ss 2A, 3, 4
Hydro-Electric Commission Act 1929 (Tas)
Superannuation Act 1938(Tas) ss 3, 4, 8, 18, 19, 20, 28, 29, 30, 31, 43, 48
Public Service Act 1918 s 95
Public Service Act 1923 s 51
Retirement Benefits Act 1970 (Tas) ss 2, 2AA, 21, 23, 24, 25, 25A, 26, 28A, 29, 62
Retirement Benefit Act (No.2) 1974 (Tas)
Retirement Benefit Act (1982) (Tas) ss 3, 4, 5, 6, 10, 20, 23, 25, 29, 30, 32, 35, 72, 80, 82A, 87, 88, 90A
Income Tax Assessment Act 1936 (Cth) s 82AAT
Superannuation Regulations 1945 (Tas) reg 31
Retirement Benefits Regulations 1971 (Tas) reg 22
Retirement Benefits Regulations 1982 (Tas) reg 24
Retirement Benefits Amendment Regulations 1985 (Tas)
Retirement Benefits Amendment Act 1993
The Complex Ores Act 1909 (Tas)
Hydro-Electric Purchase Act 1914 (Tas)
Hydro-Electric Commission Act 1929 (Tas) ss 21, 26, 27, 28, 29
Hydro-Electric Commission Act 1944 (Tas) ss 15, 16
Hydro-Electric Commission Rules 1939 (Tas) rr 30A(1), 39A
Trade Practices Act 1974 (Cth) ss 51AA, 52, 81, 87
Fair Trading Act 1990 (Tas) s 14
Limitation Act 1974 (Tas) ss 4(1)(a), 32
Contravention of Statutes Act 1889 (Tas)
Hydro-Electric Commission Rules 1978 (Tas) rr 19, 40
Local Government Act 1958 (Vic)
Acts Interpretation Act 1931 (Tas) s 5
Re Goodwin [1986] Tas R 6 discussed
Rollins v The Hydro-Electric Commission [1953] Tas SR 42 mentioned
Launceston Corporation v The Hydro-Electric Commission (1959) 100 CLR 654 mentioned
Tasmanian Dam Case (1983) 158 CLR 1 mentioned
Haines v Woy Woy Shire Council (1933) 11 LGR (NSW) 99 distinguished
Williams v Macharg (1910) 10 CLR 599 distinguished
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 applied
Byrne v Australian Airlines Limited (1995) 185 CLR 410 applied
O'Connor v S P Bray Ltd (1937) 56 CLR 464 applied
X (Minors) v Bedfordshire County Council [1995] 2 AC 633 applied
Darling Island Stevedoring and Lighterage Co Ltd v Long (1957) 97 CLR 36 applied
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 applied
Scally v Southern Health and Social Services Board [1992] 1 AC 294 distinguished
Liverpool City Council v Irwin [1977] AC 239 mentioned
Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1986] AC 80 applied
Hawkins v Clayton (1988) 164 CLR 539 mentioned
Macpherson & Kelly v Kevin J Prunty & Associates [1983] 1 VR 573 mentioned
Pyrenees Shire Council v Day (1998) 72 ALJR 152 applied
Sutherland Shire Council v Heyman (1985) 157 CLR 424 mentioned
Stovin v Wise [1996] AC 923 mentioned
Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 applied
Boheto Pty Ltd v Sunbird Plaza Pty Ltd [1984] 2 Qd R 9 mentioned
R v Kidman (1915) 20 CLR 425 mentioned
Polyukhovich v The Commonwealth (1991) 172 CLR 501 mentioned
Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 applied
Blomley v Ryan (1956) 99 CLR 362 applied
Louth v Diprose (1992) 175 CLR 621 applied
Cooke v Gill (1873) 8 LR CP 107 applied
Wardley Australia Limited v Western Australia (1992) 175 CLR 514 applied
Gregg v Tasmanian Trustees Limited (1997) 143 ALR 328 applied
Torrens Aloha Pty Ltd v Citibank NA (1997) 144 ALR 89 applied
Invercargill City Council v Hamlin [1996] AC 624 discussed
Hamilton v Kaljo (1987) 17 NSWLR 381 followed
Kerry Pink "Through Hell's Gates: A History of Strahan and Macquarie Harbour" (3rd ed, 1997)
BARRY MULCAHY AND OTHERS v THE HYDRO-ELECTRIC COMMISSION
NO. TG 1 of 1996
JUDGE: HEEREY J
DATE: 3 JUNE 1998
PLACE: HOBART
[3]
THE COURT ORDERS THAT:
1. All applicants file and serve within 14 days submissions as to the form of final orders, including orders as to costs.
2. The respondent file and serve submissions in reply within seven days thereafter.
3. Further hearing adjourned to a date to be fixed.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
[4]
CONTENTS
Page
I INTRODUCTION 1
The issues 1
Retirement Benefits legislation
(a) Public Service Superannuation Fund Act 1905
("the 1905 Act") 2
(b) Public Servants Retiring and Death Allowances
Act 1925 ("the 1925 Act") 2
(c) Superannuation Act 1938 ("the 1938 Act") 3
(d) Retirement Benefits Act 1970 ("the 1970 Act") 5
(e) 1974 Amendments: RBF election for temporary
employees; buy back of contribution 6
(f) Retirement Benefits Act 1982 ("the 1982 Act") 7
(g) Election under the 1925 Act 11
(h) Notification obligations of "responsible officers" 11
(i) 1989 Amendments: further buy back provisions 14
(j) Retirement Benefits Amendment Act 1993 ("the 1993 Act") 15
The "jackpot" 15
The Hydro's operations 18
(a) Construction activity 18
(b) Administrative structures 23
(c) Employment categories 24
The pleadings 25
(a) Statement of claim 26
(b) Defence 30
(c) Reply 31
II PERMANENCY 31
[5]
Employment history of the applicants 42
(a) Cooper 42
(b) Duggan 43
(c) Johnstone 44
(d) Mulcahy 45
(e) Vlagsma 46
(f) Williams 46
Conclusion on permanency 47
III THE ALTERNATIVE CASE - TEMPORARY EMPLOYMENT 48
Duty to advise applicants or RBF Board during 48
employment
(a) Under statute 48
(i) Was there a right of action? 49
(ii) Was the duty imposed on the Hydro? 51
(b) Under contract 52
(c) In tort 55
Misleading and deceptive conduct 57
Continuing duty 58
Breach of duty (if owed) 59
(a) What the Hydro did 60
(i) Procedures 60
(ii) Head Office circular 65
(iii) Blue Book 66
(iv) Staff manual 71
(v) The Jack Russell meeting 72
(vi) RBF Seminars 75
(b) Conclusion 75
Causation (if breach of duty) 77
(a) Cooper 77
(b) Duggan 80
(c) Johnstone 82
(d) Mulcahy 84
(e) Vlagsma 93
(f) Williams 94
(g) Conclusion 98
Damages (if recoverable) 99
IV THE 1993 RETROSPECTIVE LEGISLATION 100
Construction 100
(a) The law 100
(b) "in respect of" 100
(c) "enactment" 101
Unconscionable conduct 102
(a) The law 102
(b) Negotiations with Government 103
(c) Special disadvantage 103
(d) Whether conduct unconscionable 104
(e) Unconscionable conduct as a cause of action 105
V LIMITATION DEFENCES 105
Accrual of causes of action 105
Fraud and concealment 107
VI SUMMARY OF FINDINGS 108
VII ORDERS 109
VIII ACKNOWLEDGMENTS 109
[6]
REASONS FOR JUDGMENT
I INTRODUCTION
The issues
The 194 applicants in this proceeding were formerly employees of the respondent, the Hydro-Electric Commission ("the Hydro"). Their employment terminated as a result of their retirement or retrenchment in the late 1980s or early 1990s. They claim that as a consequence of wrongful conduct by the Hydro they have lost the opportunity to obtain benefits under the Retirement Benefits Fund Scheme ("the RBF Scheme"). The RBF Scheme provided retirement benefits for employees of the Tasmanian Government and instrumentalities such as the Hydro. Permanent employees were obliged to join. From December 1974 onwards temporary employees could elect to join.
The applicants say that they were in truth permanent employees, and not temporary as the Hydro contends. Alternatively, the applicants say that if they were temporary employees the Hydro wrongfully neglected to inform them of their right to elect to join the RBF Scheme and in some instances positively misled them as to such rights.
This proceeding commenced as a representative proceeding under Pt IVA of the Federal Court of Australia Act 1976 (Cth). For a variety of reasons this procedure proved to be impracticable. Part IVA was abandoned and the proceeding has continued in the conventional way. However, the parties have agreed that six of the applicants are typical of various categories of applicants whose employment commenced and terminated at different times. Those times have legal significance for, amongst other things, limitation defences. By an order made on 27 June 1997 it was directed that the six selected applicants
"... be approved as being generally representative of all applicants in this matter and a trial on liability and damages be held concerning the selected applicants in a manner intended to bind all applicants and the respondent in respect of the principles applicable to liability save any differing personal circumstances of the other applicants."
Unless the context otherwise indicates, I shall hereafter use the expression "the applicants" as meaning the six selected applicants.
Retirement Benefits legislation
I shall refer briefly to relevant aspects of successive legislation dealing with superannuation or retirement benefits (for present purposes there appears to be no legal significance in the use of one term rather than another). All legislation hereafter referred to is Tasmanian, unless otherwise indicated.
(a) Public Service Superannuation Fund Act 1905 ("the 1905 Act")
This Act established a Superannuation Fund for benefits for each "Officer", which was defined (s 2) to mean a person employed in any branch of the Public Service (unless engaged under a special contract) -
"... whose employment shall, in the opinion, expressed in the prescribed manner, of the Board and of the Minister controlling the Department in which such a person is employed, be of a permanent character."
In the same year the Public Service Act 1905 came into force. By s 3, the Act applied to "all persons employed in any capacity in the Public Service". No distinction was drawn between permanent and temporary employees.
(b) Public Servants Retiring and Death Allowances Act 1925 ("the 1925 Act")
This Act provided for payment out of Consolidated Revenue of retirement and death allowances for public servants. In the case of retirement on account of sickness, compulsory retirement due to age, abolition of position or services becoming unnecessary, or voluntary retirement after age sixty, the allowance was to be an amount equalling one month's salary for the first four years of service and one week's salary for every full year of such further period: s 3. Payments were also to be made to the personal representative of a public servant in the case of death: s 4.
"Public servant" was defined to mean a person employed "in any position or capacity in the Public Service" other than a judge of the Supreme Court, a person remunerated by fees, allowance or commission, or a person not exclusively employed in the Public Service. "Public Service" was defined to mean "the Public Service of the State" and to include "any industry or undertaking carried on by or on behalf of the State". Hydro-electric operations at this stage were conducted by a Government department. The Hydro did not become a statutory corporation until 1929 with the passing of the Hydro-Electric Commission Act 1929.
By s 2A, inserted by Act No 105 of 1977, a contributor under the 1938 Act or the 1970 Act (as to which Acts see (c) and (d) below) could, by notice given at least three months before retirement, elect to receive benefits under the 1925 Act in lieu of benefits or refund of contributions under the 1938 or 1970 Acts.
Features of the 1925 Act which are important for the present case are:
· it extended to temporary employees;
· no contribution by the employee was required; and
· the Act and the RBF Scheme were mutually exclusive in the sense that a person could not receive benefits under both.
(c) Superannuation Act 1938 ("the 1938 Act")
This Act created a superannuation fund for State employees. By s 3, "employee" was defined to mean any person of or over the age of fifteen years
"... employed in a permanent capacity by or on behalf of the State in any department or branch of any of the services of the State or any undertaking carried on by or on behalf of the State, and includes any officer, the term of whose appointment is fixed by law, but excepting any person -
i Whose employment is of a casual or temporary nature:
ii Who is not required by the terms of his employment to give his full time to his duties:
iii Who is employed as an agent only:
iv Who is remunerated by fees, allowances, or commission only:
v Who is a contributor to the Superannuation Fund established under the laws of the Commonwealth for the Commonwealth Public Service or who, having been such a contributor, has ceased to be so by reason of age or:
vi Whose appointment is honorary -
and excepting also the judges of the Supreme Court and the members of the Police Force for whose benefit the Police Provident Fund is applicable".
By s 4 a Fund was established, into which were to be paid all contributions of employees, all payments by the Treasurer as provided by the Act, and all income from investment. Contributions were mandatory for employees (as defined); by s 18(1) it was provided:
"Except as otherwise in this Act provided, every employee under the age for retirement shall contribute to the Fund as hereinafter provided."
The contributions of employees were to commence, in the case of existing employees, on a day to be appointed by the Governor and in any other case "from the time of his [the employee's] appointment": s 18(3). Contributions were to be made by deductions from salary: s 19(1). The contributions were to be for units determined according to salary: s 20.
Part V provided for Pensions and Benefits. Pensions were payable either on the employee reaching the age for retirement or on the employee's early retirement on the grounds of "invalidity not due to his own fault": s 28. Under s 29 a qualified pension was payable upon compulsory retirement due to the employee's position becoming unnecessary, or due to shortage of work, or upon voluntary retirement on reaching age 60 (male) or 55 (female). Contributions were repayable, but without interest, upon either termination of employment for any cause other than death, or termination under ss 28, 29 and 30. In the case of death, pensions were payable to widows (Pt V Div II) and children (Pt V Div III), but otherwise death before retirement resulted in contributions being paid to the employee's personal representative or to such person as the Board might determine, again without interest: s 31.
Part VI of the 1938 Act dealt with the 1925 Act. By s 43(1) of the former, no right or benefit under the 1925 Act was to accrue to any employee (i.e. permanent employee - see above) in respect of any period of service after the commencement of the 1938 Act and the provisions of the 1925 Act were not to apply to any employee appointed after the commencement of the 1938 Act.
By s 48(1) an exception was made in the case of an employee who at the commencement of the 1938 Act had completed thirty years' service and had attained the age of sixty years. Such a person was given a right to elect to retain the gratuity provided by the 1925 Act but could thereafter take no benefit under the 1938 Act and could not be "compelled or permitted" to contribute under the latter Act.
Since no permanent employee could obtain a benefit under the 1925 Act there might be hardship in relation to such employees who were rejected as contributors under the 1938 Act on medical grounds. Section 43 of the 1938 Act was amended in 1943 to enable such persons to continue to be eligible for a benefit under the 1925 Act.
The dichotomy between, on the one hand, superannuation or retirement benefits legislation and, on the other hand, the 1925 Act, was retained throughout the time with which this case is concerned, although, as will be seen, subject to some further qualifications.
The observation can be made that although the 1925 Act was, from 1938 onwards, primarily for temporary, as opposed to permanent employees, the temporary employment contemplated was by no means transitory or short term. Such employment had many of the characteristics of permanency, and certainly was employment for a long time. Leaving aside sickness, death, redundancy and the like, the primary benefit required not only service for at least four years, but reaching the age of sixty. Thus Parliament recognized that "temporary" employment in the public sector could last for a full working life.
Although the 1938 Act extended to State undertakings such as the Hydro, it was at heart a superannuation scheme for public servants. In the case of public servants the criteria of permanency presented no difficulty because it was simply a question of whether the particular person had been gazetted: see Public Service Acts 1905, s 67; 1918, s 95; 1923, s 51. The distinction between temporary and permanent employees under a Public Service Act was important for the purposes of security of tenure. Temporary employees could be dismissed at any time; dismissal as a permanent employee was hedged with substantial restrictions: see 1918 Act ss 51 and 70; 1923 Act ss 31(11) and 26.
(d) Retirement Benefits Act 1970 ("the 1970 Act")
This Act introduced a new scheme to be administered by a Board called the Retirement Benefits Fund Board ("the Board"). The definition of "employee" in s 2(1) was for present purposes in substance the same as that in the 1938 Act. A person had to be employed "in a permanent capacity" and the definition excluded any person "whose employment is of a casual or temporary nature".
Contribution by an employee was mandatory: s 21. Contributions were payable by deduction from salary: s 24. Contributions for new employees were to commence from the day on which he was appointed "to the position by virtue of which he is an employee": s 23(1)(b). Contributions were to be 5.5 per cent of salary or, at the election of the employee, 2.75 per cent: s 25(4). A pension was payable where a contributor retired on obtaining retirement age, or elected to retire within five years of attaining that age, or retired on the ground of invalidity not due to his own fault: s 26.
The annual pension on retirement was to be one sixtieth of the employee's average salary in the three years preceding retirement multiplied by the years of service: s 26. "Service" was defined to mean the period during which the person contributed to the Fund: s 2(1). On resignation before retiring age, contributions were refundable, but without interest: s 29.
Rights and benefits for contributors ceased to accrue under the 1925 Act after the appointed day (1 July 1971) and the 1925 Act did not apply to a person who became an employee on or after the appointed day, save for those unable to satisfy medical examination: s 62.
(e) 1974 Amendments: RBF election for temporary employees; buy back of contribution
By the Retirement Benefits Act (No. 2) 1974, effective 19 December 1974, s 2AA was inserted in the 1970 Act. Sub-section (1) provided that a person who was not an employee but was employed in a temporary capacity could elect to become a contributor if during the past twelve months he had been continuously employed in a temporary capacity, and a certificate was issued by the appropriate authority stating that he was "likely to remain in employment for at least three years". Sub-section (4) provided:
"On the making by a person of an election under this section he shall be deemed to become an employee within the meaning of this Act and to remain such an employee for so long as he is employed in a temporary capacity or as an employee."
Sub-section (5) provided:
"For the purposes of this section a person shall be deemed to be employed in a temporary capacity if he is employed in such circumstances that had he been so employed in a permanent capacity he would have been an employee within the meaning of this Act ... ".
A contributor by virtue of s 2AA was not to be entitled to benefits on retirement unless he had completed three years' service: s 28A.
The 1974 amendment also introduced a new s 25A which provided for what came to be referred to as "buy back" of contribution. The buy back scheme operated as follows. The contributor could give notice to the Board that his length of service be increased by the period specified in the notice: sub-s (1). That notice had to be given within three months of the commencement of s 25A or on the employee becoming a contributor for full benefits: sub-s (2). The contributor had to be at least age thirty: sub-s (3). The request was to be accompanied by a medical certificate to the effect that the person was not likely to be rendered incapable before retirement age of performing his duties: sub-s (5). The Board was to obtain from an actuary an opinion as to the amount of the actuarial equivalent of the additional total pension benefit that would be derived under the Act for the period of service so increased: sub-s (6). The employee would then pay to the Board either in a lump sum or in such other manner as the Board might approve the amount stated in the actuarial opinion.
The right to buy back did not apply to a contributor who was an employee by virtue only of s 2AA. However if he became an employee (i.e. permanent employee) otherwise than by the operation of that section he could make a request within three months of becoming such an employee: s 25A(4).
(f) Retirement Benefits Act 1982 ("the 1982 Act")
This Act replaced the 1970 Act. In relevant respects it was not substantially different from that Act.
The definition of "employee" in the 1982 Act was more complex in that it referred specifically to a number of Government instrumentalities. Relevantly, "employee" was defined in s 3(1) as:
"a person who has attained the age of 15 years and who is -
...
(b) employed in a permanent capacity by the Hydro-Electric Commission".
The exclusion of temporary employees is contained in s 4:
"4 This Act does not apply to -
(a) a judge; or
(b) a person -
(i) whose employment is of a casual or temporary nature (not being a person to whom paragraph (k) of the definition of 'employee' in section 3(1) relates [i.e. student nurses at certain specified hospitals])."
Other sub-paragraphs under (b) cover much the same categories as those excluded in earlier Acts - agents, persons employed by fees and commissions, Commonwealth superannuation contributors etc.
The right of election for contribution by temporary employees, introduced in 1974, was continued. The right could be exercised where there had been twelve months' continuous employment and the employee obtained a certificate of likely employment for a further three years: s 5. An additional right was given to those who completed four years' continuous employment but were unable to obtain such a certificate: s 6.
The following provisions of the 1982 Act corresponded to those in the 1970 Act already mentioned. The Board constituted under the 1970 Act was to continue in existence: s 10, as was the Fund: s 20. Contributions for existing contributors or new employees remained mandatory: s 23(1). Contributions of an employee were to commence
"on the day on which he is appointed to the office or position by virtue of which he is an employee or on the day on which he is accepted by the Board as a contributor for full benefits or limited benefits, whichever is the later day": s 25(1)(b).
Other provisions refer to discretionary powers of the Board to in effect waive medical requirements: ss 23(5) and (6).
Contributions were fixed by s 28 and schedule 3. Rates were set as a percentage of salary as follows:
percentage
40 years' service higher rate 5.50
40 years' service lower rate 2.75
35 years' service 8.00
30 years' service 11.00
Section 29 continued the "buy back" provisions introduced by the 1974 amendments, although this right was still not available to temporary employees who became contributors as a result of election: s 29(5).
Part V prescribed the pensions and other benefits payable. Basically the qualification was the same as under the 1970 Act, i.e. retiring, attaining retiring age or within five years thereof, or retiring at any time on the ground of invalidity not due to the employee's own fault: s 30. There was provision for pensions for employees retiring between age 55 and 60: s 32. The rate of pension was to be calculated in accordance with schedule 4. The formula therein worked by reference to average annual salary in the twelve months preceding retirement, the length of "service" (i.e. the period during which the employee contributed: s 3(1)) and a factor dependent on the rate of contribution (40 years' service higher rate or lower rate, 35 years' service scheme or 30 years service scheme).
Section 35 governed refund of contributions where an employee resigned without becoming entitled to a pension. The "prescribed sum of money" was payable. By s 35(4), a contributor to the 40 years' service scheme only recovered contributions. A contributor to the 35 and 30 years' service schemes recovered:
(i) that part of his total contribution which he would have paid if he had always been a contributor to the 40 years' service scheme; and
(ii) the amount of the balance of his contributions (being the amount attributable to the 35 or 30 years' service scheme) together with interest at a rate to be determined by the Board from year to year, but not less than 3.5 per cent.
(By Act No. 21 of 1987 a new s 90A was inserted which conferred a general right to interest where persons were entitled to refunds of contribution. Interest was to be at a rate determined by the Board on actuarial advice and was to accrue from 1 April 1987.)
In relation to the 1925 Act, s 72 of the 1982 Act continued the effect of s 62 of the 1970 Act, i.e. no rights or benefits were to accrue to an employee under the 1925 Act after 1 July 1971 and the 1925 Act was not to apply to a person who became an employee from 1 July 1971 onwards.
However, ss 72(3) and 73 preserved rights under the 1925 Act for employees who could not obtain the necessary medical certification and also persons who made an election under s 2A of the 1925 Act.
Sections 87 and 88 conferred certain powers on the Board. Those sections relevantly provided:
"87(1) Where the Board is satisfied, after such inquiry as it thinks necessary, that a person has, otherwise than through his own fault, lost or ceased to be entitled to a right, privilege, or benefit under this Act to which he was otherwise entitled or might have obtained, and that it is equitable that he should be allowed to have the enjoyment of the right, privilege, or benefit, the Board may, with the approval of the Minister, permit the person to exercise the right or grant to him the privilege or benefit, notwithstanding that the time prescribed for doing any act in relation to the entitlement may have expired.
(2) The Board may, in the exercise of its powers under sub-section (1), impose such conditions and requirements as it may think just and as the Minister may approve.
...
88(1) Where, by reason of a mistake or an omission of an officer of a department or an authority of the State or by reason of an accident, the name of an employee has not been communicated to the Board and the employee has reached the age for retirement, or has died while still an employee without having contributed to the Fund, a pension is payable to or in respect of that employee in accordance with this section.
...
(6) Where, as the result of any mistake, omission, or accident, a person who is an employee within the meaning of the Act of 1970 immediately before the first commencement day [1 July 1982] had made no contributions under that Act or the Superannuation Act 1938, that person shall be deemed to have become an employee within the meaning of this Act on such date, not being a date before the first commencement day, as the Board may determine."
These provisions substantially reproduced earlier provisions as follows:
1982 Act 1970 Act 1938 Act
(amended 1944)
s 87 s 77 s 70
s 88 s 78 s 71
(g) Election under the 1925 Act
Acts No. 50 of 1983 and 49 of 1984 provided that existing and new employees could elect whether they wanted to be eligible under the 1925 Act. Failure to elect was deemed to be an election not to be included. The reason for this was that under s 82AAT of the Income Tax Assessment Act 1936 (Cth) taxation deductions could only be obtained for premiums for private superannuation schemes if a taxpayer was not a beneficiary of an employer scheme. The 1925 Act was considered to be such a scheme.
(h) Notification obligations of "responsible officers"
For many years regulations (and later statute) imposed an obligation on "responsible officers" to notify the entity administering retirement benefits legislation and employees of rights and obligations in relation to contribution.
By reg 31 of the Superannuation Regulations 1945 the "responsible officer" of each department or instrumentality was to notify the then Board upon the appointment of an employee and to forward the necessary forms for medical examination. "Responsible officer" was defined to mean "the officer to whom is assigned the duty of conducting the superannuation business of the department, branch, or instrumentality". Similar obligations were imposed by reg 22 of the Retirement Benefits Regulations 1971 and reg 24 of the Retirement Benefits Regulations 1982 ("the 1982 Regulations"). The Retirement Benefits Amendment Regulations 1985 inserted new regs 24(1)(ab) and (ac) in the 1982 Regulations to require notification in respect of temporary employees who had rights to elect under ss 5 or 6 of the 1982 Act. The regulations as amended provided that the responsible officer of a department, branch or authority -
"(ab) shall, as soon as a person employed in that Agency, State authority, or branch is entitled to elect under section 5 (1) or 6 (1) (a) of the Act to become a contributor or as soon as a person becomes employed in that Agency, State authority, or branch as provided in section 6 (1) (b) or (c) of the Act -
(i) notify that person, in writing, of his eligibility to elect to contribute to the Fund; and
(ii) deliver or forward to that person an election in accordance with Form 11;
(ac) shall, if a person to whom paragraph (ab) applies makes an election in accordance with Form 11, immediately -
(i) deliver or forward that election to the Board;
(ii) notify the Board, in writing, of the date of his birth, the date of his appointment, and the salary assigned to the office or position held by him; and
(iii) deliver or forward to that person the forms furnished by the Board in respect of the certificate of medical examination and particulars of birth respectively to be supplied to the Board by that person."
Form 11 was in these terms:
"FORM 11 Regulation 24 (1) (ab)
Tasmania
Retirement Benefits Act 1982
ELECTION UNDER SECTION 5 (1) OR 6 (1) OF ACT
To the Retirement Benefits Fund Board,
Hobart.
I understand that I am a person eligible to become a contributor to the Retirement Benefits Fund pursuant to *section 5 (1)/ * section 6 (1) of the Retirement Benefits Act 1982.
I am employed --
*(a) in the ..................................................................................;
(Name of Agency)
*(b) in the ..................................................................................;
(Name of State authority, not being an Agency)
*(c) in the ................................................................... Branch of
......................................................................................
(Name of Agency)
*(d) in the ....................................................................Branch of
.......................................................................................
(Name of State authority, not being an Agency)
The rights available to me under the provisions of *section 5/*section 6 of the Retirement Benefits Act 1982 have been explained to me by the responsible officer of the above *Agency/*State authority/*branch and I hereby elect to become a contributor to the Retirement Benefits Fund subject to my undergoing a satisfactory medical examination.
Dated this day of 19 .
.................................................
Signature.
Witness to signature ....................................
Address of witness .....................................
*Strike out if inapplicable."
In the 1982 Regulations "responsible officer" was defined to mean (reg 3(1):
"... the officer of a department, branch, or authority to whom is assigned the duty of conducting the business in connection with retirement benefits of the department, branch or authority".
By Act No. 56 of 1989 these obligations were inserted into the 1982 Act itself. "Responsible officer" was defined as follows (s 3(1)):
"'responsible officer', in relation to an Agency or branch, means -
(a) the person employed in that Agency or branch to whom is assigned the duty of conducting the business of the Agency or branch in relation to the Fund; or
(b) where that duty is not so assigned, the head, or person in charge, of the Agency or branch".
A new s 82A(1)(a) required the responsible officer to notify the Board "upon the appointment of a person as an employee" (i.e. a permanent employee: s 3(1)). By s 82A(1)(b) and (c) obligations to notify the Board and the relevant person were imposed in respect of persons entitled to elect under ss 5 or 6. In substance the terms were the same as reg 24(1)(ab) and (ac) of the 1982 Regulations.
(i) 1989 Amendments; further buy back provisions
By Act No. 56 of 1989 a new s 3(4) was inserted into the 1982 Act:
"(4) Where-
(a) throughout a period that ended before the first commencement day [1 July 1982] a contributor was -
(i) an employee within the meaning of the Act of 1938 or the Act of 1970; or
(ii) a person who was not such an employee by reason only that the employment of that person was not employment in a permanent capacity; or
(iii) a person of a kind referred to in section 27(1)(a) [student teacher, cadet or other trainee]; and
(b) the contributor did not, in respect of that period -
(i) make contributions under the Act of 1938 to the Superannuation Fund; or
(ii) make contributions under the Act of 1970 to the Fund; and
(c) the contributor, by notice in writing given to the Board, elects that that period, or a specified part of that period, be regarded, for the purposes of this Act, as service -
the Board may, subject to subsection (4A), declare that period, or part period, to be a period that shall be regarded as service for the purposes of this Act."
Sub-section (4A) provided that a declaration by the Board was to be subject to the contributor paying a "special contribution" which was to be calculated in accordance with sub-s (4B). The latter provided a complex formula based on the contributions which would have been paid under the 1938 and/or 1970 Acts.
(j) Retirement Benefits Amendment Act 1993 ("the 1993 Act")
This Act made amendments to the 1982 Act which are important for the present case.
Provisions were inserted in s 82A dealing with liability in respect of failure of a responsible officer to notify a person of a right to elect to become a contributor. The new sub-ss (6), (7) and (8) were as follows:
"(6) No action lies in respect of the failure by a responsible officer of an Agency or branch -
(a) to notify a person that the person is entitled to elect to become a contributor; or
(b) provide the person with a form of election -
as required under this section or a corresponding previous enactment.
(7) Subsection (6) applies in respect of a failure referred to in that subsection that occurred before, on or after the day on which that subsection commenced notwithstanding that proceedings have been instituted and are pending on that day.
(8) The enactment of subsection (6) does not affect any judgment of a court made before the day on which a Bill for the Retirement Benefits Amendment Act 1993 was presented to the Parliament."
Section 87 was amended to exclude an exercise of discretion in favour of persons who had ceased to be employees. A new sub-s (1A) provided:
"(1A) The Board must not exercise its powers under subsection (1) -
(a) so as to allow a person who, at the time the Board makes a determination under that subsection, is not an employee or is not a person referred to in section 5 (1) or 6 (1) to become a contributor; or
(b) so as to allow the date on which a person referred to in paragraph (a) became a contributor to be varied."
The "jackpot"
It will be convenient at this stage to refer to a complex interaction of legislation, administrative decisions and general perceptions which resulted in what counsel for the Hydro referred to as a "jackpot". By 1992 a means had become available for Hydro employees (whether temporary or not) who were facing retrenchment to buy back extensive years of service and receive large payouts on retirement, typically of the order of $60,000 or more. All of the applicants in the present case (not only the six selected applicants) are Hydro employees whose employment terminated before the availability of the "jackpot" became widely known and who therefore missed out on those benefits. Counsel for the Hydro contends that the awareness of losing a large benefit has fundamentally flawed and coloured the applicants' evidence. The validity of this contention needs to be considered later in relation to the individual applicants' evidence. But for the moment I shall do no more than outline the circumstances which gave rise to the "jackpot".
As already noted, the legislation had since 1944 contained provisions conferring a discretionary power on the Board to allow an "employee" to become a contributor retrospectively where his or her name had not been communicated to the Board by reason of mistake or omission of an officer of a department or an authority, or by reason of an accident; s 88 is the relevant provision in the 1982 Act. However these sections only allowed employees to become retrospective contributors back to the date of commencement of the applicable Act. Thus s 88(6) of the 1982 Act prohibited the Board from deeming a person to have been an employee from a date prior to 1 July 1982; s 3A(2) of the 1970 Act (inserted by Act No. 113 of 1974) made a like provision in relation to that Act.
Section 87 of the 1982 Act and earlier equivalents gave to the Board a general discretionary power in relation to a "person" who had lost a right, privilege or benefit otherwise than through his own fault. This clearly extended to persons employed in a temporary capacity who, as has been seen, were excluded from the definition of "employee". However in administering the Act the Board took the view that if permanent employees could not get retrospectivity back to a period beyond commencement of the applicable Act (1 July 1982 in the case of the 1982 Act), the same limitation should apply to temporary employees.
On 12 February 1986 Cosgrove J handed down his decision in Re Goodwin [1986]Tas R 6. Mr Goodwin had commenced service with the Hydro as a cadet engineer in 1943 and began superannuation contributions in 1949. Cosgrove J held that the commencement date of his service for the purpose of calculating his entitlement under the 1982 Act was 1943. This meant that Mr Goodwin received benefits for which he had not contributed. As a result, the 1982 Act was amended by Act No. 56 of 1989 which came into operation on 21 December 1989 (see Part I Section 2(i) above).
The Secretary of the Board, Mr Garry Fletcher, deposed in this proceeding (CB21/18) that the Bill for the 1989 amendment was amended in the course of its passage through Parliament without the Board being consulted. It may be that the amendment produced unintended consequences.
In any event, about a year after the amendment, an employee of the Department of Construction relied on it to buy back service shortly prior to taking redundancy. This opportunity gradually became known during the latter part of 1992 and, in the words of Mr Fletcher (CB21/19):
"the RBF Board received many applications from temporary employees to elect to contribute pursuant to Section 5, 6 and 87 of the 1982 Act. Having been accepted as contributors, the new contributors exercised the rights granted under Section 4 of Act No. 56 of 1989 to purchase periods of non contributory service."
(See also CB2/55, 3/249, T948).
There were some 600 applications. The power given by the 1989 amendment only applied to a "contributor". If a person had not been a contributor at all, he or she had to obtain an exercise of the Board's discretion under s 87 which, in the practice the Board adopted, required the person to assert that he or she had no knowledge of his or her entitlement to elect to become a contributor. Once a temporary employee had obtained the Board's exercise of discretion to be treated as a contributor back to 1 July 1982 he or she could then, as of right pursuant to s 3(4), buy back service to the commencement of his or her temporary employment. Of course contributions had to be paid for (s 3(4A)), but the Board allowed that payment be paid by way of set-off at the time the redundancy payment was taken. No cash outlay was required.
In 1992 the Board also received a number of applications from persons no longer employed. Mr Fletcher deposed (CB21/19):
"In considering these applications the Board expressed the view that it was doubtful that these persons were covered by Section 87 as they were no longer eligible to contribute. The persons were advised of the Board's reservations and invited to submit evidence supporting the view that the Board could consider their applications under Section 87. No evidence was ever received by the RBF Board."
Such persons, including the applicants in the present case, missed out on the "jackpot".
The Hydro's operations
(a) Construction activity
The legal history of Hydro-Electric operations in Tasmania commences with the Complex Ores Act 1909 which authorised a Victorian company called The Complex Ores Ltd to take water from the Rivers Shannon and Ouse for generating electricity. Details of subsequent events are set out in the judgment of Crisp J in Rollins v The Hydro-Electric Commission [1953] Tas SR 42 at 45 et seq. By the Hydro-Electric Purchase Act 1914 the Tasmanian Government acquired the undertaking of an assignee of The Complex Ores Ltd and, in the words of the High Court in Launceston Corporation v The Hydro-Electric Commission (1959) 100 CLR 654 at 660,
"... the development, management and control of an undertaking of great importance to the State ... before 1929 was the responsibility of a department of State, viz. the Hydro-Electric Department."
In 1929 the Hydro was established as a body corporate by the Hydro-Electric Commission Act 1929. The long title described that Act as:
"AN ACT to provide for the Establishment of a Commission to manage and control the State Hydro-Electric Works; and to provide for State Control of all Waters in Lakes, Falls, Rivers, and Streams, and to vest such control in the said Commission; to empower the said Commission to regulate the use of such Waters in certain cases."
By s 21 the State hydro-electric works were vested in the Hydro. By s 26 the Hydro was to have the management and control of the State hydro-electric works and of the existing Hydro-Electric Department. By s 27 certain powers were conferred on the Hydro. Section 27 provided:
"It shall be lawful for the Commission for and on behalf of the State to -
I. Construct, operate, manage, control and generally carry on the State hydro-electric works, and carry on and conduct any business whatsoever relating to the generation, transmission, distribution, and sale of electrical energy, and carry out any purpose in relation thereto which the Commission may deem desirable in the interests of the State:
...
V. Appoint, discharge, and determine the salaries, remuneration, and allowances of all officers, clerks, workmen, and servants whom the Commission may deem necessary to carry on the State hydro-electric works or otherwise for carrying out the purposes of this Act; ...".
Section 28 provided that no new hydro-electric works should be constructed by the Hydro unless and until the monies therefore had been voted by Parliament.
Section 29 provided that before any vote was submitted to Parliament for new hydro-electric works a report was to be furnished by the Commission to the Minister setting out a number of matters including the nature of the works, estimated costs, annual revenue etc and
"the opinion of the Commission as to the necessity or desirability of the works, together with recommendations and a resumé of the reasons on which such recommendations are founded."
By the Hydro-Electric Commission Act 1944 the Hydro as constituted under the 1929 Act was to continue. Provisions substantially identical to ss 27, 28 and 29 of the 1929 Act were contained in ss 15(2) and 16(1) and (2).
The Hydro and its predecessor Department constructed some 30 Hydro-Electric dams and power stations over a period of 80 years from 1914. The construction of dams generally involved the following steps: construction of a tunnel, the building of a small dam upstream of the proposed construction area, diversion of the river from the small dam through the tunnel, the building of another dam downstream of the construction area to prevent water from flowing back into the construction area, the removal of loose rock and rubble from the valley walls and river bed, construction of a footing to connect the dam and the valley walls and floor, and finally the closure of the diversion tunnel so that the lake fills.
Construction of the power station usually took place while the dam was being built. This involved the construction of tunnels and/or channels through which the water flowed, and the installation of turbines and generators.
The movement of labour from one project to the next was described by Mr Brian Hoyle, an engineer with substantial experience in the Hydro Construction Division, in the following terms (CB2/97-98):
"There were [sic] a core of construction employees whom [sic] went from scheme to scheme especially at staff levels. Within the engineering field we would try and transfer the skills from one site to allow for the most efficient building of a new dam site. As one scheme was finishing another scheme was commencing so there was a balancing of skills required at different schemes. Different stages of schemes required different skills. Road Makers would first commence building roads to the dam sites. Road Makers would be progressively followed by Tunnellers, Concreters and other Tradesmen and award workers to build the dams. Work would then commence on building the Power Stations and finally Electrical Tradesmen would move in and install the electrical machinery. By the stage the Electrical Tradesman [sic] had moved in the Earth Movers and road workers were generally commencing on the next Hydro Scheme. It would take approximately 10 years to complete a Hydro Scheme. This procedure had occurred throughout my time at the Hydro. During my service at the Hydro the Mersey Forth and Lower Derwent Power Scheme commenced in the 1960's followed by Strathgordon in the 1960's, and early 1970's followed by the Pieman Scheme in the mid 1970's. In the early 1980's the Gordon below Franklin Scheme commenced and was replaced by the King and Anthony Scheme which continued until the early 1990's."
In terms of the engagement of a construction workforce in the years with which this case is concerned, the following developments took place in the following years:
Middle Gordon 1968 to 1980
King River Stage 2 1983 to 1992
Gordon Machine No. 3 1986 to 1990
Pieman 1974 to 1992
Mersey Forth 1964 to 1975
Wayatinah 1963 to 1969
Meadowbank 1963 to 1966
Poatina 1963 to 1966
[7]
The figures for the total construction workforce in the years 1963 to 1992 were as follows (CB16/5):
1963 1720
1964 1840
1965 1965
1966 2087
1967 2262
1968 2434
1969 2423
1970 2338
1971 1943
1972 1966
1973 1647
1974 1421
1975 1145
1976 1121
1977 1144
1978 1315
1979 1385
1980 1397
1981 1530
1982 1532
1983 1639
1984 1669
1985 1828
1986 1998
1987 1688
1988 1315
1989 1052
1990 1024
1991 958
1992 767
Although the applicants themselves had long periods of service, there was a substantial turnover among wages employees as a whole. From 1961 to 1992 the average figure was 39 per cent per year (CB16/2) and probably higher in the construction workforce (T1211).
The broader social, economic and political setting in which Hydro construction took place over these years is described by Kerry Pink in his monograph "Through Hell's Gates: A History of Strahan and Macquarie Harbour" (3rd ed, 1997, at 65):
"By the early 1980s Tasmania had 23 hydro-electric power stations with an annual generating capacity of about 1,000 megawatts - the biggest hydro-electric system in Australia. In a little over 50 years virtually all the State's major lake and river catchments had been harnessed by the HEC - Great Lake, the Derwent, South Esk, Mersey-Forth, Middle Gordon and Pieman rivers - and Tasmania with a population of 450,000 was producing about 10 times more power per capita than any other State.
The HEC and its continuous programme of hydro-industrialisation, seen as vital to Tasmania's industrial development and economic stability, had traditionally enjoyed the unqualified support of successive Tasmanian Governments. With a staff of 2,000 and some 4,500 wage employees the HEC maintained an on-going programme with one major scheme nearing completion, one in the early stages of construction and one on the drawing boards.
Yet in the 1980s, despite its huge power output, Tasmania had the highest rate of unemployment in the country. A number of economists and academics who were not necessarily conservationists began to question the validity of the assumption that the availability of more cheap bulk power would assure Tasmania of more industries, more jobs and a stronger economy."
The end of the Hydro as a constructor of major hydro-electric works began in the mid to late 1980s. In 1983 Federal legislation, upheld by the High Court in the Tasmanian Dam Case (1983) 158 CLR 1, stopped the Gordon below Franklin scheme. Two smaller schemes, the King and Anthony, were later completed but by 1986 it was realized that there would be no work on future dams. There was no further potential for hydro-electric schemes which were viable in terms of the quantity of electricity produced as against the cost of construction. At the same time there was a questioning of the actual potential for electricity consumption.
By the late 1980s and early 1990s redundancies on a large scale were occurring, giving rise to the claims with which this case is concerned.
(b) Administrative structures
The Commission itself consisted of the Commissioner and four part-time Associate Commissioners. Apart from the Commissioner's Private Secretary, the Director and Staff of the Planning and Public Affairs Group, the organisation was divided into five branches: Secretarial, Civil Engineering, Electrical Engineering (also known as Design), Power (also known as Operations) and Distribution (also known as Retail Supply).
The Civil Engineering Branch was responsible for the investigation, design and construction of all civil works involved in power developments and allied projects. It was divided into four divisions: Construction, Design, Architectural and Investigation. Construction personnel were also called field personnel.
The Personnel Department was part of the Secretarial Branch. It was headed by a person in a position variously entitled from time to time Personnel Superintendent, Personnel Manager and Manager - Human Resources.
Responsible to the Personnel Superintendent was a Senior Industrial Officer and Assistant Industrial Officer. All the foregoing were stationed at the Head Office of the Hydro in Hobart. Further down in the hierarchy were Works Industrial Officers who were stationed in towns near Hydro construction sites, and in particular at Tullah on the West Coast.
From the mid-1980s onwards the Hydro engaged in considerable restructuring, which is not relevant for present purposes.
(c) Employment categories
Relevantly Hydro personnel were categorised as:
(a) (i) Staff or
(ii) Wages (or "Award")
and
(b) (i) Permanent or
(ii) Temporary.
Staff personnel could be either Permanent or Temporary.
A person could only be appointed as Staff with the Commissioner's approval and upon signing a Head Office engagement form. Persons appointed as Permanent Staff received a letter notifying them that the appointment was probationary and terminable on one month's notice. Permanent Staff were required to contribute to superannuation. Their appointment also had to be confirmed by the Commissioner, and they received a letter to that effect. Temporary Staff received a letter notifying them that the appointment was probationary and terminable on two weeks' notice.
By contrast, a person engaged as a Wages employee did not need either approval or confirmation by the Commissioner, did not sign a Head Office engagement form and did not receive any standard form letter as to engagement.
Staff employees generally enjoyed more privileges than the Wages employees, such as more sick leave and annual leave. The Staff and Wages employees were housed separately and had separate messes. The organisational structure had a vaguely military appearance, with Staff corresponding to Officers and NCOs and Wages or Award employees to Other Ranks.
Within the Construction Division, professional staff such as engineers, geologists or surveyors were generally classified as Permanent Staff. The Temporary Staff generally consisted of supervisors, foremen and tradesmen.
In terms of security of tenure, appointment to Permanent Staff was not all that permanent. Permanent Staff could be terminated on one month's notice: Hydro-Electric Commission Rules 1939, r 30A(1). The 1952 and 1978 Rules contained like provisions: rr 41(1) and 40(1) respectively. Temporary Staff could be terminated on two weeks' notice: 1939 Rules, r 30A(2), or on such notice as the instrument of appointment specified: r 41(2) of the 1952 Rules and r 40(2) of the 1978 Rules. In fact letters of appointment always specified two weeks.
Wages employees were terminable on one week's notice: r 30A(3) of the 1939 Rules. The 1952 Rules and 1978 Rules probably did not apply to Wages employees as they are not officers within the meaning of these Rules. However Labour Engagement Forms specified that the engagement was weekly.
Pay for Staff, both Permanent and Temporary, was by annual salary reviewed annually. Wages employees were paid at an hourly rate each fortnight. Hence there were Timekeepers at each workplace.
Categorisation as permanent or temporary appears to have had no real significance other than in relation to superannuation or retirement benefits. There was a degree of circularity. Sometimes a permanent employee was described as one who was entitled to superannuation.
5. The pleadings
(a) Statement of claim
In its final form the applicants' statement of claim alleges that each of the applicants was employed in a permanent capacity by the Hydro, and therefore that each of the applicants was an employee as defined in the 1982 Act, that each of the applicants Cooper, Duggan, Johnstone, Mulcahy and Williams was an employee as defined in the 1970 Act and that each of the applicants Duggan, Mulcahy and Williams was an employee as defined in the 1938 Act. Alternatively, each of the applicants is said to have been employed in a temporary capacity. By par 9 it is alleged that the Hydro was under duties (referred to as "the specific statutory duties") under the successive Superannuation or Retirement Benefits Regulations and the 1982 Act to advise the relevant Board that the particular applicant was a permanent employee, or alternatively to advise the Board and each of the applicants that he was a temporary employer entitled to elect to become a contributor. A duty to provide each of the applicants with any necessary forms is also alleged.
By par 10 it is alleged that the Hydro breached the specific statutory duties by failing to advise the relevant Board or the applicants of their right to elect or provide them with the necessary forms. By par 11 it is alleged that pursuant to reg 19 of the Hydro-Electric Commission Rules 1978
"... any officer of the respondent was under a duty ... to comply with, and give effect to all Acts, regulations, rules and instructions made or issued for his guidance which included the 1982 Act and Regulations and the 1970 Act and Regulations and the 1938 Act and Regulations".
This duty is referred to in the pleading as the "general statutory duty".
By par 12 it is alleged that in breach of the general statutory duty the Hydro failed to comply with such Acts and regulations. The breaches relied on are the same as those pleaded in par 10 in respect of the specific statutory duties.
Paragraphs 13 and 14 plead causes of action in contract. By par 13 it is alleged that there were implied terms in each of the contracts of employment in substance that the Hydro would disclose to each applicant his obligation to become a contributor, provide necessary forms, inform the trustee that each applicant was a permanent employee and ensure the provisions of the relevant statute and regulations were complied with. Alternatively it is pleaded that there were implied terms that the Hydro would advise each applicant of his right to elect to become a contributor, provide him with the necessary forms, inform the trustee that the applicant was a temporary employee and ensure that provisions of the relevant statute and regulations were complied with. (The terms "trustee" and "Board" are used interchangeably. Nothing turns on this.)
Paragraph 14 alleges that in breach of the implied terms the Hydro failed to make the disclosures and give the information etc referred to.
Paragraphs 15 to 18 plead causes of action in negligence. By par 15 it is alleged that the applicants relied upon the Hydro, as it knew or ought to have known, to disclose, inform and advise them of the full range of benefits available to them as employees of the Hydro in respect of their employment. In particular to inform them that as permanent employees they were obliged to contribute to the RBF Scheme, or alternatively, as temporary employees, they were entitled to elect to participate in and contribute to the RBF Scheme.
Paragraph 16 alleges that the Hydro assumed responsibility as regards each and every applicant to inform him of these matters.
Paragraph 17 alleges that by reason of the matters pleaded in pars 15 and 16 the Hydro was under a duty to each applicant to exercise reasonable care to advise him of the benefits available, not to represent to any applicant that he was not obliged to contribute, not to create a belief in any applicant that he was not obliged to contribute, and to disabuse any incorrect belief that he was not obliged to contribute. Alternatively, the Hydro is said to have been under a duty to exercise reasonable care to inform the applicants of the benefits available to them as temporary employees, not to represent to them that they were not entitled to contribute, not to create a belief that they were not entitled to contribute and to disabuse any incorrect belief in the applicants that they were not entitled to contribute. All those duties are collectively referred to as "the common law duties".
Paragraph 18 alleges breach of the common law duties by (a) failing to inform the applicants of the full range of benefits available to them as employees of the Hydro and in particular that as permanent employees they were obliged to contribute to the RBF Scheme, (b) representing by conduct and by silence that they were not obliged to contribute (referred to as "the first representation"), (c) creating a belief that they were not obliged to contribute and (d) failing to disabuse an incorrect belief that they were not obliged to contribute.
Particulars are given, including in relation to some of the applicants' specific allegations of their being informed that they were not eligible for superannuation. Under the heading "Particulars of Silence" it is alleged that the Hydro
"had adopted a policy whereby it would not advise employees which it classified as temporary of their entitlement to contribute to the RBF Scheme".
Alternatively, it is alleged that the Hydro failed to inform the applicants that as temporary employees they were entitled to elect to contribute and represented by conduct and silence that they were not entitled to contribute (referred to as "the second representation"). Under the heading "Particulars of Silence" in relation to the second representation it is alleged that the Hydro adopted a policy whereby it would not advise employees which it classified as temporary of their entitlement to contribute to the RBF Scheme.
Paragraph 19 alleges that at the time of making the first representation the Hydro intended and well knew, or ought to have known, that the applicants would rely on the first representation and be induced thereby to refrain from applying to contribute to the RBF Scheme. Paragraphs 20 and 21 plead a cause of action in misleading and deceptive conduct in trade or commerce constituted by the first representation.
Paragraph 22 alleges that the Hydro intended that the applicants would rely on the second representation. Paragraphs 23 and 24 allege misleading and deceptive conduct in trade and commerce in respect of the second representation.
Paragraph 25 alleges that the Hydro bore "continuing duties" after the discharge of the applicants' employment contract to inform them of their rights under the 1982 Act and not to represent to them that they had no rights under that Act. Paragraph 26 alleges breaches of the continuing duties, including a "continuing representation" which, by silence represented to the applicants that they held no rights or entitlements under the 1982 Act.
Paragraphs 27 to 29 allege that the continuing representation in relation to former employees was misleading and deceptive conduct in trade and commerce and that each applicant relied on such representation and believed himself to have no rights or entitlements under the 1982 Act.
Paragraphs 30 to 33 allege unconscionable conduct. By par 30 it is alleged that between 9 November 1992 and 13 August 1993 the applicants were under a special disadvantage in dealing with the Hydro. The applicants allege that the Hydro was aware that they potentially or actually had claims against it, that the Hydro was familiar with the way such claims were litigated whereas the applicants were not, that none of the applicants had obtained independent advice, that the Hydro "enjoyed a close and working relationship with the Government of Tasmania whereas the applicants did not", and that the Hydro shared a common financial interest with the Government of the State of Tasmania but the applicants did not. By par 31 it is alleged that in or about November 1992 the Hydro requested or reached an agreement with the Executive Government of the State of Tasmania that retrospective legislation to defeat any of the applicants' claims would be drafted and introduced into the Parliament of the State of Tasmania. Paragraph 32 alleges that in so doing the Hydro was engaged in trade and commerce. By par 33 it is alleged that the conduct of the Hydro was unconscionable both in equity and contrary to s 51AA of the Trade Practices Act 1974 (Cth) ("Trade Practices Act").
Paragraph 34 alleges a contravention of s 53B of the Trade Practices Act. This was not pressed at trial.
Paragraph 35 alleges that in consequence of the various causes of action the applicants have lost the opportunity to receive the benefits upon termination of employment provided by the 1982 Act. They are also said to have lost the opportunity to make a decision to continue to accrue or maximize their superannuation entitlements by not terminating their employment. They have thereby suffered loss and damage.
Paragraph 36 is a claim for interest. Paragraph 37 is a claim for exemplary damages which alleges that the policy of the Hydro to classify permanent employees as temporary was "deliberately designed to injure their economic interests" and that since at least 1975 the policy of the Hydro not to advise employees whom it regarded as temporary of their entitlement to elect to contribute to the RBF Scheme was deliberately undertaken so as to reduce operational costs of the Hydro notwithstanding that, to its knowledge, the policy directly injured the economic interests of the applicants. It is further said that since at least November 1992 the Hydro acted deliberately so as to deny the applicants their statutory entitlements by recourse to retrospective litigation.
(b) Defence
Subject to some minor qualifications as to dates, the Hydro admits that the applicants were employed by it. It denies that they were employed in a permanent capacity and says that each applicant "was engaged by the Respondent as a temporary employee and remained so engaged and classified throughout the periods of his employment". The Hydro admits that pursuant to the 1982 Act the applicants were entitled to elect to become contributors to the RBF Scheme upon satisfying the requirements of ss 5 or 6. Paragraphs 9 to 37 of the statement of claim are denied.
The Hydro pleads that no action is maintainable against it by reason of s 82A(6) and (7) of the 1982 Act (i.e. the retrospective amendments introduced by the 1993 Act).
It further pleads that any claims under the Trade Practices Act are statute barred under s 82(2) of that Act, not having been commenced within three years of the date when the causes of action accrued.
As to the claims under the Fair Trading Act 1990, (this Act is not specifically mentioned in the statement of claim but is subsumed under the reference to misleading and deceptive conduct in trade and commerce) it is pleaded that they are based on events which occurred prior to the commencement of that Act on 19 December 1990. In any event, so far as the Fair Trading Act allows proceedings to be instituted over three years after causes of action have accrued, its provisions are said to be inconsistent with s 82(2) of the Trade Practices Act and therefore void pursuant to s 109 of The Constitution 1901 (Cth).
In the alternative the Hydro relies on s 4(1)(a) of the Limitation Act 1974 and says that the claims founded in tort or contract or for breach of statutory duty were statute barred after the expiration of six years from the accrual of the causes of action.
The Hydro also relies on terms imposed by the Court when leave was granted on 27 June 1997 to file and serve the statement of claim in its final form (that earlier pleading being dated 4 April 1997). By those terms it was directed that in respect of any claims which do not arise out of the same facts or substantially the same facts as those pleaded in the statement of claim dated 4 April 1997 to which the Hydro pleads a statutory limitation defence, the date of commencement of the proceedings shall be 4 June 1997.
Paragraph 44 alleges contributory negligence by reason of the applicants failing to enquire as to, obtain and read a Hydro employees' handbook, failing to make an election to become a contributor, failing to approach the Hydro for engagement as a permanent employee, and failing to make enquiries to the Senior Wages Clerk at the Hydro Head Office and electing to be eligible for benefits under the 1925 Act, which benefits were only available to non-superannuation contributors.
(c) Reply
By their reply the applicants allege in relation to the Limitation Act defence that each cause of action was concealed by the fraud of Hydro and/or that the action is for relief from the consequences of a mistake caused by the Hydro. It is asserted that any cause of action did not accrue until the Hydro's acts or omissions became known to the applicants. Paragraph 4 alleges that the Hydro expressly or impliedly represented to the applicants that they were not entitled to become members of the RBF Scheme, abstained from advising them that they were entitled to join and provided no assistance to the applicants as to whether they were entitled to join. It is alleged that as a consequence it would be unconscionable and against good conscience for the Hydro to rely upon any limitation provision and that it is estopped and precluded from so doing.
II PERMANENCY
"Employed in a permanent capacity"
The expression "a person ... employed in a permanent capacity" is not a legal term of art, like "lease" or "partnership". The words are ordinary English words which have to be construed and given effect to in the context of this particular legislation. I do not see any significance for present purposes in the drafting differences in the definitions in the 1938, 1970 and 1982 Acts. All have the characteristic that "permanent" and "temporary" are treated as mutually exclusive. This accords with dictionary definitions which, amongst other things, define "permanent" as "not temporary" and "temporary" as "not permanent": see Macquarie Dictionary, Shorter Oxford Dictionary and Oxford English Dictionary.
Counsel for the applicants placed particular reliance on the decision of Street J in Haines v Woy Woy Shire Council (1933) 11 LGR (NSW) 99. The case involved a prosecution of the Council for breach of a local government ordinance which required prior advertisement in the case of "an appointment ... to any permanent position in the service of a Council". The position was that of an "A" grade Clerk. The evidence was that since its inception the Council had always employed four staff: a Shire Clerk, a Deputy Clerk who was also required to be an "A" grade Clerk, a "B" grade Clerk and a junior. Street J said of the appointment in question (at 101):
"The new appointment was not due to any re-organization of the staff, which has always consisted of four members, the "A" grade Clerk being second in command, and taking charge in the absence of the Shire Clerk."
His Honour went on to say (ibid):
"There is nowhere in the Local Government Act itself any statutory provision drawing a distinction between permanent and temporary appointments, or directing whether any particular appointment is or is not regarded as a permanent one. The ordinance itself refers to 'appointments' and to 'positions' and the word 'permanent' in the ordinance qualifies the words 'position in the service of a council'."
Later (at 102) his Honour said:
"It seems to me that in each case the question whether or not any particular position is or is not a permanent position must be determined on a consideration of all the surrounding circumstances. Mr Mitchell suggested that an adequate definition of 'permanent position' would be any position which appears to be one that forms or is to form part of the regular administration of a Council, or one which, as things stand, has not been established for merely temporary purposes, but will continue indefinitely unless some resolution is passed by the Council re-organizing the service. That appears to me to be the real test as to whether or not a position is permanent. It does not mean that it is to last for ever, but I think that any position that has no definite time limit to its existence, and which forms an integral part of the ordinary and regular administration of the Council is a permanent position."
Counsel for the applicants argued that the criterion in the present case for permanency was the same, and that the relevant test was whether the work of each applicant was an integral part of the ordinary and regular administration of the Hydro. Construction of dams and other works by the Construction Division of the Hydro was, counsel argued, part of the ordinary and regular administration of the Hydro. Therefore those who were employed to do such work were employed in a permanent capacity.
I do not accept this argument. Haines dealt with a different statutory context. The ordinance was concerned with the permanency or otherwise of the position to which the person was appointed. In the present case we are concerned with the nature and purpose of the person's employment. The 1982 Act, and the earlier Acts, do not predicate a fixed establishment or office.
The distinction is made by the Privy Council in Williams v Macharg (1910) 10 CLR 599 where the issue was whether a person had been a member of the NSW Civil Service over a particular period. Their Lordships said (at 602):
"It is the holding of a permanent salaried office which constitutes membership, not the quality or duration of the tenure."
The present case is the reverse of the situation in Williams. We are concerned with the quality of each applicant's tenure, that is to say whether or not he was employed in a permanent capacity. This case does to deal with any particular office such as Plant Operator or Maintenance Painter.
Some further features of the concept "employed in a permanent capacity" in the present context are as follows. First, the test of permanency or otherwise is to be applied at the date of engagement or at any subsequent stage where there is an express agreement to vary the nature of the employment. The person may be appointed in a permanent capacity or, having been appointed in a temporary capacity, may be appointed in a permanent capacity at some later date. However I do not accept the applicants' contention that at the end of a lengthy period of service one may be able to say that a person, initially a temporary employee, is now a permanent employee and must have become permanent at some stage "depending on the circumstances".
The argument that employment, initially in a temporary capacity, may change over time in some gradual evolutionary way is inconsistent with the RBF Scheme. Membership imposed very precise obligations to contribute by way of deduction from salary. These obligations must be readily determinable. In particular the RBF Scheme Acts speak of "appointment" as the event which triggers the obligation to contribute, see for example s 25(1)(b) of the 1982 Act. The notion of "appointment" necessarily requires some specific act occurring at a determinable point in time.
Secondly, the criterion is an objective one. Reference has already been made to the decision of Cosgrove J in Re Goodwin [1986] Tas R 6. Mr Goodwin had been engaged as a Cadet Engineer in 1943 and in 1949 he was taken onto the Hydro Staff. The issue was whether during his service as a Cadet he was employed in a permanent capacity for the purpose of computing his entitlement under the 1982 Act. Cosgrove J said (at 13) that the status of the appellant during his term of cadetship "must be construed from the Points of Agreement, the letter of 3 March 1943 and the indenture". The letter in question was one confirming Mr Goodwin's appointment and the indenture was the formal employment agreement. The "Points of Agreement" was a memorandum of agreed facts which included a statement that there was "a very lively expectation" that cadets would go on to be employed by the Commission. As I read the report, the "expectation" was referring to the circumstances at the time of Mr Goodwin's engagement, albeit that they were confirmed by later events.
His Honour went on to say (at 15):
"It is difficult to establish the insignia of 'permanency'. I use the inverted commas because, as counsel agreed, there is no employment which is permanent. Sometimes entry into or the capacity to enter into a superannuation scheme is regarded as an indication that employment is 'permanent'. But that is to put the cart before the horse, because it is the character of 'permanency' in the employment that gives the right to enter the scheme. Indefiniteness is not the same as permanency, nor is a fixed termination point or a fixed point for the exercise of a choice, a sure indication that the employment is other than permanent.
...
It was not possible for the Commission, by an administrative act, to alter the meaning or application on the statute, nor for the appellant to contract himself outside the scope of the statute.
...
In the end, the resolution of the question depends upon the view one takes of the essential relationship between the Commission and the cadet. The relationship is illumined by the contract, but not necessarily entirely shaped by it. In my view, the relationship was a permanent relationship, involving training, and intended to last indefinitely albeit on changing levels but affording both parties opportunities to terminate." (Emphasis in original.)
I agree with Cosgrove J that the parties cannot contract out of the statute. To take an extreme example, if a person was employed for a fixed term of one month, the Hydro and that person could not validly agree that person would be employed in "a permanent capacity" for the purposes of the RBF Scheme. Nevertheless in this context substantial deference must be given to the express and implied terms of the contract the parties made. Permanency was by no means an unmixed blessing for an employee. It brought with it the obligation to contribute 5.5 per cent of salary with the prospect that the employee might work for many years, but retire more than five years before retiring age and only receive back contributions without interest (for most of the period with which this case is concerned). Also such a person would lose his rights to a free benefit under the 1925 Act.
As will be seen later, there was at one stage a dispute at a very high level between the Tasmanian Treasury and the Hydro in which the former was attacking the latter for treating employees as "temporary" where they were in truth "permanent". But the status of being "employed in a permanent capacity" is not something external to the contractual relationship of employer and employee, in the sense of being something fixed and immutable around which the parties have to make their contract as best they can. There were pros and cons for either side in the status of being permanent or temporary. What the Court is concerned with however, is not the "actual intentions, aspirations or expectations of the parties before or at the time of the contract" but what is, objectively determined, the genesis and object of the transaction: Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 347-352 per Mason J. To the extent that Goodwin involved an ascertainment of the actual expectations of the parties (a fortiori of one only of the parties), I would respectfully not agree.
Thirdly, lengthy service is not necessarily determinative of permanency. As has been already observed, the 1925 Act applied mainly to temporary employees but it assumed that in the ordinary case no benefits would be available for them until retirement at age 60.
I now turn to the evidence which bears on this issue.
[8]
Hydro policies as to permanency
On 30 January 1939, as a consequence of the 1938 Act, a memorandum of the then Commissioner (CB4/3) noted that
"... it has been necessary to classify the staff of the Commission as permanent or temporary. The position held by each officer has been reviewed, and where the position has been regarded as permanent in character the officer at present occupying the position will be eligible for admission as a contributor to the Fund." (Emphasis in original.)
A later memorandum by the Secretary of the Hydro on 3 February 1939 (CB4/5) noted that in effecting the classification required by the 1938 Act
"... the basis adopted has been to determine whether the position held by each officer at the date of commencement of the Act is of a permanent character."
In 1943 the Hydro adopted a policy that members of Temporary Staff were to be "eligible for classification as permanent" for the purposes of membership of the superannuation fund when they had completed four years' service, or if absent on defence leave, had completed three years' service (CB 4/13).
But at an early stage, at least from the end of the Second World War, a view emerged in the Hydro workforce that forced contribution to superannuation would be resisted. Mr Jack Russell, who worked for the Hydro from 1935 until 1978 and was Personnel Superintendent from 1965 until his retirement, said (T756) that shortly after he returned from the war he had been told that the Secretary of the Tasmanian Trades and Labor Council called on the Staff Industrial Officer, Mr Best and said that if his men were told they had to contribute to superannuation he would call the whole Commission out on strike.
Mr Best had said:
"We'll look after that; they will apply if they want to and we'll tell them and that's ... where it stayed."
Mr Russell was asked (T758):
"Q. But because of this fear of industrial unrest, the policy was adopted that you would not look at whether a position was really permanent or temporary unless and until the incumbent asked to be made permanent?
A. If they asked to be made permanent then their job would be considered and their prospects of ...
Q. But the Commission itself as far as you were aware was not concerned to identify whether a particular position was permanent or not unless the incumbent in that position asked?
A. I suppose that's - I suppose I'd agree with that, yes."
However Mr Russell was also asked (T757):
"Q. So there could be any number of employees who really had permanent jobs but because they never asked to be classified as permanent were never recognised as permanent?
A. I can't actually agree with that. There were people in construction work which we knew was finite, was going to finish, the Retail Supply Branch, the Power Branch are likely to go on forever but the construction part of it, when it was finished the Civil Branch handed it over to Power Branch who went on to run the place and the Civil Branch had to retrench or hopefully be able to transfer to another job. There were a number of times there had to be retrenchments but they avoided it if it was at all possible."
In the mid to late 1960s the issue of superannuation for construction employees emerged again. A memorandum from the chief accountant of 15 December 1966 (CB4/64) in relation to a Mr G Eastwood stated:
"The proposed continuation of deductions for this award employee is contrary to the existing practice for employees not on staff or declared to be permanent for purposes of superannuation.
There are many of our existing work force seeking the same privilege without success."
On 17 July 1969 the Secretary of the Hydro wrote to the Secretary of the Board (CB4/66) saying:
"The Commission is repeatedly being asked to consider transferring officers from temporary staff to permanent staff to enable them to qualify as 'employees' for the purposes of the Superannuation Act. In the case of some officers, particularly those engaged in construction work, it is difficult to foresee whether work will be available until normal age of retirement. If this proves not to be the case, the Commission would be obliged to meet the costs of a qualified pension."
The letter concluded with a request for an actuarial assessment.
On 23 July 1969 in answer to another query from the Secretary of the Hydro, the Secretary of the Board wrote (CB4/68):
"... it is for the employing authority in each case to determine whether an employee is 'permanent' within the meaning of Section 3 of the Superannuation Act and that, in making such determination, the employing authority should be reasonably certain that the employee will continue in the employment of the Commission to normal retiring age."
The Secretary of the Hydro replied on 10 November 1969 (CB4/69) saying:
"We appreciate that it is for the employing authority to determine whether an employee is 'permanent' or not. In many cases it is extremely difficult to make a decision and one of the factors is the cost to the Commission if an error is made. This is the reason why we would like some indication of the level of qualified pensions."
The request for actuarial advice was repeated.
On 16 November 1971 (CB4/143) the State Treasurer Mr W A Bethune (who was then also Premier) wrote to the Commissioner of the Hydro stating that he was informed that:
"... it now appears that, over a period of years, a practice has been allowed to develop in the Commission whereby a person who is an employee within the meaning of the Superannuation Act has been permitted to inform the Commission whether or not he desires to contribute to the Fund. This practice is, of course, contrary to the provisions of the relevant legislation ...
.
I request your assurance that the provisions of the Retirement Benefits Act will be complied with in the future in the following manner:
1. The Commission will determine whether or not a person is a permanent employee.
2. Under no circumstances will a person be given the option of contributing to the Fund or not.
3. That so soon as a person is appointed to a permanent position in the Commission, arrangements will be made for his medical examination for the purpose of the Retirement Benefits Act.
4. His medical certificate will be forwarded to the Superannuation Branch as soon as it has been received by the Commission."
The Hydro replied by a letter under the hand of the Commissioner addressed to the Premier dated 3 December 1971 (CB4/149). The letter included the following:
"EXISTING EMPLOYEES:
The question as to whether an employee's service was or is permanent within the meaning of the Superannuation Act has always presented difficulty. The Commission has a substantial body of employees whose employment can be regarded as permanent. These are officers engaged in the operation and maintenance of the power system and on administrative duties and others involved in design and construction of new works. At the other end of the scale is a substantial body of employees whose services are definitely of a temporary nature. Between these two extremes there is another substantial number of employees in respect of which it is difficult to decide whether their services are likely to be permanent or not. It is a matter of opinion which, expressed at a certain time, may turn out to be right or wrong. Employment that is temporary to begin with may become permanent at a later date. Many of the employees concerned are 'wages' employees working under Award conditions.
We understand that when the Superannuation Act came into force representatives of the Unions protested at the prospect of award workers being obliged to become contributors to the Superannuation scheme. As benefits were dependent on the contributions according to age and wages it was agreed by persons now deceased that arbitrary decisions would not be made and that each case should be decided on its merits as it arose. Those in this general category that applied for entry were considered - some were accepted and some rejected.
A review of all the individual cases now would take a considerable period. The situation is very involved because it is not known with certainty how much or for how long work will be available for at least some of these employees. The Commission can give an opinion in each case as to the permanency of the work but the Retirement Benefits Act does not appear to place the onus on individual employers to make a 'determination'. In fact this seems to be something which the Board is required to do under Section 68 of the Retirement Benefits Act 1970 when it determines the nature and length of an employees service, subject to the right of appeal to a judge.
It is apparent that arbitrary decisions requiring employees who do not wish to become contributors so to do will almost certainly result in a great deal of industrial unrest.
NEW EMPLOYEES:
So far as new employees are concerned we consider the position is somewhat simpler. Nevertheless, there is likely to be difficulty in respect of the 'middle' group of employees if by arbitrary decision they are obliged to become contributors. We would find the same difficulty in forming an opinion in some cases as to whether employees were permanent or not and an opinion given at one time could be subject to alteration with a change in circumstances and may not at the time of retirement be accepted by the Board.
As to the question whether a person should be given the option of contributing to the Fund or not. In cases that are difficult to determine we would raise the question whether it is not in fact a more satisfactory procedure to take into account the views and circumstances of the employee concerned.
There is no problem regarding medical examination and provision of certificates for those persons appointed to positions considered to be of a permanent nature.
As we said at the outset we feel that the whole situation is extremely involved and that more consideration needs to be given the matter in the hope that a simpler procedure may be devised. We are now at the request of the Board wrestling with the problem of investigating the service of the 700 employees who have transferred to the new scheme and are finding this an involved and time consuming task.
We are ready to contribute to a discussion on this subject if it is thought it would be helpful."
The evidence included an extract from minutes of a staff conference on 20 May 1975 (CB4/192). The minute recorded the Acting Secretary's report that he had in collaboration with the Chief Accountant and Personnel Superintendent, reviewed the practicability of establishing tests, formulae or guidelines to be applied for applications from temporary employees to contribute to the RBF Scheme. The review committee were unable to recommend general tests other than that Heads of Branches must seriously consider:
"(1) the type of work performed by the applicant;
(2) the applicant's performance;
(3) how essential the job is for achieving the Commission's objectives;
(4) the degree of uncertainty covering the ensuing three years as to the Commission's ability or desirability to retain the applicant in the relevant job.
If there is any doubt as to (2), (3) and (4) above the application should be rejected. The above approach has been approved by the Commissioner.
The Acting Secretary advised that an appropriate administrative procedure has been established to process the 22 applications received to date. Several of the applicants are occupying positions which can be considered as 'permanent' and these will be submitted to the Commissioner for confirmation. The remainder will be dealt with as temporary employees in terms of the Act."
The minute is a little ambiguous. It may be that the applications referred to were from persons who sought classification as permanent as opposed to those exercising their right as temporary employees under the recently introduced amendment.
In a memo dated 28 April 1993 (CB6/242) from the Manager Human Resources, approved by the General Manager, it is stated in the context of award restructuring and the removal of the distinctions based on "wages" and "staff":
"One of those outstanding matters relate to former 'wages' employees being eligible to contribute to the Retirement Benefits Fund. In the past 'wages' employees were engaged as temporary employees. This was principally done to satisfy the requirements of the RBF Act that temporary employees were not compulsorily required to contribute to RBF. The distinction was not based on any objective assessment of tenure."
However, this comes late in the piece and I do not attach much weight to it as against the evidence of Mr Russell and the correspondence of the Secretary of the Hydro with the Treasury.
The evidence falls far short of establishing that, as alleged by the applicants, there was a deliberate policy adopted by the Hydro to avoid the obligations imposed on it by the RBF Scheme and that in furtherance of that policy the Hydro classified as temporary persons who were in fact employed in a permanent capacity. Rather, the conclusion I draw overall is that the Hydro made a genuine attempt to grapple with the problems posed by the inherently unpredictable nature of its construction activity and the strenuous objection of much of its workforce to compulsory membership in what was, for many, a not particularly attractive or suitable scheme. And this is so notwithstanding that there is an indication that, on the other hand, some did want to join. The obvious solution would be to give temporary employees a choice - which is what Parliament did by introducing the 1974 amendment.
Employment history of the applicants
I now turn to the evidence of the applicants insofar as their own employment history bears on the issue of permanency. In the statement of claim they appear in alphabetical order and I shall follow the same sequence. Unless otherwise indicated, nothing was expressly said at the time of engagement as to an applicant being employed in a temporary or permanent capacity.
(a) Cooper
Mr Peter Cooper was employed by the Hydro from 2 August 1976 until 16 April 1992. He was interviewed at Tullah by Mr Mulcahy and started a week later as a Machine Borer/Operator. He signed a labour engagement form in the following terms (CB2/38):
"HYDRO-ELECTRIC COMMISSION
No. 71957
LABOUR ENGAGEMENT
DUPLICATE TO
EMPLOYMENT OFFICE
Date 2 - 8 - 76
Surname COOPER Returned Soldier or Sailor ...................
Christian Names PETER WILLIAM Occupation MACH BORER
Address 176 PARKER ST D'PORT Previous Employer RENISON BELL
Date of Birth 25 - 5 - 39 Trade Union ..........................................
Single or Married, or Widower M Selected for Work at TULLAH ANTHONY
Name and Address
Nearest Relative 'W' M. COOPER 176 PARKER STREET D'PORT
Engaged by W.I.O. Employee's Signature P W Cooper
Employee's Identity No. 035 075 Car Fare Docket No. P.T.O.
Entered Employment Card by ....... Date [illegible] 1976."
[9]
From 1976 until 1986 Mr Cooper was based at Tullah, from 1986 until 1990 at Crotty and from then until his retrenchment in 1992 he returned to Tullah. Throughout his time at the Hydro he transferred from dam site to dam site as directed and worked on tunnels and roadworks. He was involved in any work which involved drilling and blasting. He said that it was not until he received redundancy documents that he noticed his employment had been classified as temporary/full-time by the Hydro. Nothing was said when he was engaged as to whether his employment was temporary or permanent or limited for a fixed project or a fixed period of time. He said in his affidavit (CB2/31):
"When I started at the Hydro I considered that the Hydro provided a long term employment and was seen to be like other government jobs in that it had security. I therefore considered that I would have a job for as long as I required and/or needed. The Hydro were continually building dams and had done so for 50 years. I thought that this work would continue."
(b) Duggan
Mr Garry Duggan was employed by the Hydro from 1 December 1969 to 27 October 1989. He commenced as an apprentice fitter and turner at Gowrie Park and transferred to Strathgordon in late 1972 (with his father who was also employed by the Hydro) and then in late 1974 transferred to Tullah where he remained until accepting voluntary redundancy.
On 11 October 1983 he was appointed to the Staff of the Hydro as a Supervisor Grade 2 in the Plant Workshop, Civil Engineering Branch, Pieman River Power Development, based at Tullah. The letter of appointment (CB2/56) stated that the appointment
"... is classified as temporary, and although subject to the Hydro-Electric Commission Rules, two weeks' notice only in writing of termination of service by either party is required."
Mr Duggan deposed that (CB2/52) "Despite this classification I always considered my job to be permanent". His father spent most of his life in the Hydro and his four brothers all worked for it. He saw the Hydro as guaranteeing long term future employment. Transfers were made automatically from one scheme to another where construction work was available. He believed that provided he was willing to transfer, construction work would commence and provide him with continuing employment.
He further deposed (CB2/53):
"I had no idea why the Hydro classified me as a temporary. The only explanation I have is because I was based in the construction workforce of the Hydro. There was a general consensus on dam sites that the Hydro classified you as temporary because you were on a construction site."
(c) Johnstone
Mr Colin Johnstone worked for the Hydro as long ago as 1960 at age 14. However his employment relevant to the present case commenced on 24 October 1977 when he was engaged as a truck driver. Later he became a plant operator. He accepted redundancy on 16 July 1992. His labour engagement form is in the same form as that of Mr Cooper's and does not state whether he was temporary or permanent.
On 15 October 1979 he was appointed to the Staff of the Hydro as a Foreman Grade 2 (Assistant to Operator Supervisor) in the Construction Division, Civil Engineering Branch, Pieman River Power Development. The memorandum of appointment (CB2/151) noted that the appointment was "classified as temporary". He held positions as Plant Operator Foreman and Plant Operator Supervisor, at one stage having over 130 employees under him. On average he was responsible for 50 to 60 men. He believed that he had a job for as long as he needed and his employment would continue. His father worked with the Hydro as did his eight brothers. It had not been suggested to him that his employment was for a limited period of time or was limited to a certain scheme. To his mind his employment was permanent.
(d) Mulcahy
Mr Barry Mulcahy was employed by the Hydro from 19 March 1956 to 5 July 1991. On 25 August 1956 he was appointed to Staff. His memorandum of appointment dated 22 August 1956 (CB2/200) advised of his appointment
"to the temporary Staff of this Commission as a Timekeeper/Clerk in the Secretarial Branch at Wayatinah ... Until you are otherwise notified, your appointment is classified as temporary and as such is subject to termination by two weeks' notice in writing by either party."
Mr Mulcahy started work with the Hydro as a Time Keeper at Wayatinah until 1967 when he transferred to Strathgordon. He continued to work as a Time Keeper. In 1976 he was transferred to Tullah as a Senior Time Keeper and in about 1978 was promoted to Assistant Industrial Officer. In 1982 he was transferred to Queenstown and was responsible for industrial relations on the King scheme. In 1984 he was made Works Industrial Officer after the retirement of Mr Claude Taplin and in 1988 became Senior Industrial Officer in charge of the Hydro West Coast Construction workforce on both the King and Anthony schemes. He held this position until his retirement on 5 July 1991.
Mr Mulcahy's work as a Time Keeper involved observing and recording work done and keeping records thereof. He described this as (CB2/188):
"the first line of communication for many workers for many things, checking entitlements annual and sick leave, ordering meals and picking up cribs, explaining rates and allowances."
When he became Works Industrial Officer he was responsible for hiring, firing and disciplining the construction workforce. In his affidavit he deposed (CB2/193):
"The great bulk of staff on construction sites, myself included, were always considered to be temporary staff and therefore could not participate in the RBF Scheme."
And further (CB2/194):
"In my opinion the term temporary employee was a label which was put on the construction workforce by the Hydro. I was always told and always believed that construction employees were temporary employees within the meaning of the RBF Act. The term temporary was what the Hydro classified the construction workforce as but despite the use of the term temporary, employment with the Hydro could not be considered temporary. It was always the understanding of the workforce that if you kept your nose clean, behaved and did the work satisfactorily you had a job for life. The workforce would transfer from one dam site to another and the Hydro would always do its best to find alternative employment."
(e) Vlagsma
Mr Gerrit Vlagsma worked for the Hydro from 25 May 1982 to 10 February 1990. His labour engagement form (CB 10/31) is in essentially the same form as Mr Cooper's.
On commencing employment with the Hydro he worked at Stringers Creek as a truck driver for four years then transferred to Crotty for three years and finished at Lynchford. Throughout this time he worked as a truck driver. He deposed (CB 2/259-260) that when he started work
"I believed that I had a job which would last for a long time. The Hydro was a major employer on the West Coast of Tasmania and had a lot of employees. I believed that provided I did the job which was asked of me my employment would continue. At the time of joining the Hydro I was not told that I was employed for a fixed time or until a certain dam site was completed. I was signed on and my employment continued from that day. I considered that I had a permanent job and it was never suggested to me that my employment was temporary. I was a full-time employee, I worked overtime and received long service leave, sick leave and annual leave. I believed that my job was permanent."
(f) Williams
Mr Kevin Williams was employed by the Hydro from 29 April 1946 to 5 December 1986. He had at an early stage commenced employment with the Hydro at Tarraleah in 1941 as a Nipper and in 1943 was transferred to Butlers Gorge. In 1944 he joined the RAAF and returned to employment with the Hydro on 29 April 1946. He worked for some three months as a carpenter's labourer and thereafter as a painter continuously up until his retirement at age 60.
On his engagement in 1946 he signed a labour engagement form which was in the same terms as Mr Cooper's.
Between 1946 and 1955 he lived and worked at Butlers Gorge. He then transferred to Wayatinah. From Wayatinah he transferred to Gowrie Park and then in 1972 to Tarraleah where he completed his service. Each of these towns were Hydro towns established to service dams which were built or in the process of being built. Throughout Mr Williams' time he was in the Construction Division. His work involved painting the homes and general maintenance work for houses and buildings. By the time he was at Gowrie Park he was responsible for approximately 20 painters.
4. Conclusion on permanency
I am not persuaded that any of the applicants were employed in a permanent capacity within the meaning of the applicable legislation, either on their initial engagement or any time thereafter. I accept that there was a subjective intention on the part of at least some of the applicants that they would remain in employment indefinitely for a period which might be very lengthy, or indeed all their working life. Nevertheless, on their initial engagement, which for the reasons already mentioned, I regard as the relevant point in time, the Hydro was not an organization which could be said to carry on the business of dam construction on a continuous and indefinite basis. Parliamentary approval was required for each new project. For many years the political reality may have been that such approval was likely to be something of a formality. The first time a Hydro proposal failed to win speedy Parliamentary approval was in 1979-1980 when the Lowe Government initially rejected the Gordon below Franklin scheme and proposed legislation for a different scheme, the Gordon above Olga: see Pink, op cit, pp 65 et seq. Nevertheless the very nature of the Hydro's operations meant that its construction workforce could only be utilized from one Parliament-approved project to the next. The correspondence to which I have referred, particularly that in the 1970s, shows that the senior management of the Hydro were acutely conscious of this. In this and in other respects the applicants' case involves a trenchant attack on the ethical conduct of the Hydro. I do not think that criticism is warranted. In cases where applicants or other employees were expressly designated as temporary, I do not think that was from any desire of Hydro management to avoid its lawful obligations. Moreover, one cannot ignore, any more than the management could, the fact that many of the workforce, for good reason, did not want to be anything other than temporary.
III THE ALTERNATIVE CASE - TEMPORARY EMPLOYMENT
Duty to advise applicants or RBF Board during employment
(a) Under statute
Since I have held that all the applicants were employed in a temporary, not permanent, capacity reg 31 of the 1945 Regulations, reg 22 of the 1971 Regulations and reg 24 of the 1982 Regulations as pleaded in pars 9(a), (b) and (c) of the statement of claim are not applicable. Those regulations imposed duties in relation to permanent employees. There was no statutory requirement concerning notification of temporary employees of their right to elect until 29 November 1985 when reg 24(1)(ab) and (ac) of the 1982 regulations came into force. By this stage all of the applicants had been engaged, the most recent being Mr Vlagsma on 25 May 1982.
Counsel for the Hydro contended that reg 24(1)(ab) could have no application because it operated "as soon as" a person is entitled to elect under ss 5(1) or 6(1)(a) of the 1982 Act to become a contributor. He argued that s 5(1) was never satisfied because a certificate as to likely appointment for three years was never issued. Section 6(1)(a) had been satisfied, but at a point in time prior to the promulgation of reg 24(1)(ab) (except in the case of Mr Vlagsma).
I do not accept these arguments. As to s 5, since the whole purpose of the regulation is to convey knowledge of the right to elect, and no one would obtain a certificate unless he or she had that knowledge, it would be pointless to construe the regulation as imposing the requirement to notify only after the person obtained a certificate. Likewise s 6 predicates inability to obtain the three year certificate which necessarily involves the employee having made an unsuccessful application for such a certificate. This need not happen immediately upon the expiration of the four year period of continuous service.
I therefore will proceed on the basis that reg 24(1)(ab) and its statutory successor s 82A applied to the applicants. Two questions arise:
(i) Did the regulation and/or the statute create a right of action for damages for breach of statutory duty?
(ii) If so, was that duty imposed on the Hydro?
(i) Was there a right of action?
An authoritative modern statement of the law is contained in the judgment of Brennan CJ, Dawson and Toohey JJ in Byrne v Australian Airlines Limited (1995) 185 CLR 410 at 424:
"A cause of action for damages for breach of statutory duty arises where a statute which imposes an obligation for the protection or benefit of a particular class of persons is, upon its proper construction, intended to provide a ground of civil liability when the breach of the obligation causes injury or damage of a kind against which the statute was designed to afford protection."
In the context of workplace safety regulation the law has long found such a duty to arise because, in the words of Dixon J in O'Connor v S P Bray Ltd (1937) 56 CLR 464 at 478,
"The effect of such a provision is to define specifically what must be done in furtherance of the general duty to protect the safety of those affected by the operations carried on."
However the mere fact that the legislation in question is one dealing with or touching on the relationship of employer and employee does not necessarily mean that an action for damages arises. Byrne itself illustrates this. The High Court held that breach of a term of an Award made under the Industrial Relations Act 1988 (Cth) which provided that termination of employment not be harsh, unjust or unreasonable did not give rise to a right of action for damages because, inter alia, the term of the Award did not become a term of the employment contract. In X (Minors) v Bedfordshire County Council [1995] 2 AC 633 at 731 Lord Browne-Wilkinson said (with the concurrence of all other members of the House of Lords):
"The basic proposition is that in the ordinary case a breach of statutory duty does not, by itself, give rise to any private law cause of action. However a private law cause of action will arise if it can be shown, as a matter of construction of the statute, that the statutory duty was imposed for the protection of a limited class of the public and that Parliament intended to confer on members of that class a private right of action for breach of the duty.
...
Although the question is one of statutory construction and therefore each case turns on the provisions in the relevant statute, it is significant that your Lordships were not referred to any case where it had been held that statutory provisions establishing a regulatory system or a scheme of social welfare for the benefit of the public at large had been held to give rise to a private right of action for damages for breach of statutory duty. Although regulatory or welfare legislation affecting a particular area of activity does in fact provide protection to those individuals particularly affected by that activity, the legislation is not to be treated as being passed for the benefit of those individuals but for the benefit of society in general. Thus legislation regulating the conduct of betting or prisons did not give the rise to a statutory right of action vested in those adversely affected by the breach of the statutory provisions, i.e. bookmakers and prisoners: see Cutler's case [1949] A.C. 398; Reg. v. Deputy Governor of Parkhurst Prison, ex parte Hague [1992] 1 A.C. 58. The cases where a private right of action for breach of statutory duty have been held to arise are all cases in which the statutory duty has been very limited and specific as opposed to general administrative functions imposed on public bodies and involving the exercise of administrative discretions."
In my view reg 24(1)(ab) and s 82A are to be seen as part of a complex regulatory scheme providing for retirement benefits for public sector employees in Tasmania. Employers, whether in the public or private sector, are not under any obligation to give financial advice or look after their employees' economic welfare in the way that they are obliged to take reasonable care for employees' physical safety. There is thus no larger duty of which this particular regulation and statutory provision might form a specific instance, as that concept is discussed in O'Connor.
Moreover there was in the case of a breach of reg 24(1)(ab) a specific penalty of $500 imposed (reg 24(3)), and not just for breach of the regulations as a whole but "this regulation", i.e. reg 24. For s 82A the general provisions of the Contravention of Statutes Act 1889, which provide a penalty of $50 for breach of any statutory provision, would apply. These are pointers to the lack of any intent on the part of Parliament that a private cause of action be constituted.
Further, the ameliorative powers and discretions conferred on the Board by ss 87 and 88 of the 1982 Act and earlier equivalent provisions are a strong indication against the existence of an intention to create a right of action for damages for breach of statutory duty. In the event of a mistake or negligence, prejudice to an employee was to be remedied by the application of these provisions.
(ii) Was the duty imposed on the Hydro?
If, contrary to the conclusion I have reached, there was any duty enforceable by an action for damages it was in my view enforceable only against the "responsible officer". A High Court authority directly in point is Darling Island Stevedoring and Lighterage Co Ltd v Long (1957) 97 CLR 36. A regulation made under the Navigation Act 1912-1953 (Cth) required that the "person-in-charge" of loading or unloading a ship was required to remove hatch beams. The regulations defined "person-in-charge" as "any person directly or indirectly in control of the persons actually engaged in the process of loading or unloading that ship". Williams J, with whom the other members of the Court agreed, said (at 51):
"Regulation 31 relates to certain simple but very important precautions that must be taken before loading or unloading begins. They are precautions which fall aptly to be observed by the person actually on the spot and in control of the operations. There is no sufficient indication of intention in the regulations as a whole or in particular in reg. 31 that duties imposed upon the person in charge should be imposed upon any person except the person actually in control of the work of loading or unloading the ship."
Likewise Kitto J said (at 59):
"In my opinion the only person upon whom this regulation places any obligation is the person referred to by the expression the 'person-in-charge'."
I see no valid ground of distinction in the present case. Bearing in mind that the RBF Scheme was to operate not only for the Hydro but throughout Tasmanian Government departments and other instrumentalities, with no doubt differences in size, function, administrative structure and resources, there is obvious sense in a regulation which puts responsibility in relation to notification on some identifiable individual, the person "on the spot", to use the expression of Williams J.
Neither the statement of claim nor the case as conducted on behalf of the applicants sought to identify the relevant individual who was the "responsible officer", although evidence as to this appeared in passing. No such person is a respondent to this proceeding. Nor is it any part of the applicants' case to make the Hydro vicariously responsible for any default of a "responsible officer". The skill and care with which the applicants' case has been conducted persuades me that this is not an oversight, but a recognition of the insuperable obstacle placed against such a claim by the High Court's decision in Long. This is because the second limb of Long was that since the duty was owed by the "person-in-charge" it was not a duty for which the employer was vicariously liable. Williams J said (at 52-53):
"But the employer could not be made liable for the breach by his servant of a duty imposed by a statute or regulation on the servant and not on the employer. To make the employer liable in such a case would be to enlarge the scope and operation of the statute or regulation. Where a statute or regulation creates a civil right of action it can be enforced in an action for damages at common law. But it is the statute or regulation that creates the civil right and not the common law. It is the common law that supplies the remedy.
...
It would seem to be quite inconsistent with principle to hold that an employer upon whom no personal liability is imposed by a statute or regulation can be sued for a breach of that duty simply because it is committed by an employee in the course of his employment."
The applicants also relied on a duty said to arise under r 19 of the Hydro-Electric Commission Rules 1978. That regulation provides that every officer shall promptly and correctly carry out all duties pertaining to his office, and in due course and at proper times comply with, and give effect to, all Acts, regulations, rules and instructions made or issued for guidance in the performance of his duties. "Officer" is defined by r 3 to mean "an employee of the Commission who is in receipt of remuneration expressed in terms of an annual salary". If for the reasons mentioned the specific reg 24(1)(ab) and s 82A do not give rise to any action for breach, I find it quite impossible to conclude that r 19 is anything other than of a regulatory nature.
(b) Under contract
A term may be implied in a contract because it represents the presumed or imputed intention of the parties, that is to say what the Court concludes they would have agreed upon had they turned their mind to the question. The criteria for the implication of such a term are laid down in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283, see also Byrne, 185 CLR at 422.
[10]
Counsel for the applicants, correctly in my view, did not contend that the implied terms alleged were of this category. Rather he argued that the implied terms fell within a second category where the term in question is "a necessary incident of a definable category of contractual relationship": Scally v Southern Health and Social Services Board [1992] 1 AC 294 at 307, see also Byrne at 447-453.
In Scally medical practitioners employed by Health Boards in Northern Ireland had not been informed of their right to elect to purchase years of service for superannuation purposes within a fixed period of commencing employment. The House of Lords upheld their claim that there was an implied term in their contracts to bring this right to their attention. The contracts of employment had been negotiated by representative professional bodies. It was a critical element in the case that the relevant rights were contained in the employment contracts. In a speech concurred in by all members of the House, Lord Bridge of Harwich said (at 306):
"I recognise that a quite different situation might arise where the pension rights available to an employee in connection with his employment were not part of the terms of his contract of employment but arose out of a separate contract between the employee and an insurance company or the trustees of a pension fund. But that is not this case. Here there is no doubt whatever that the terms of the superannuation scheme as laid down in the regulations in force from time to time were embodied in the terms of the contract of employment of each plaintiff."
The present case is even further removed because the superannuation rights arise under statute.
The issue in Scally was whether the law would imply the alleged term "as a necessary incident of a definable character of contractual relationship". Lord Bridge, in upholding the plaintiffs' claim, noted that the category of contractual relationship in which the implication would arise had to be "defined with sufficient precision". He said (at 307):
"I would define it as the relationship of employer and employee where the following circumstances obtain: (1) the terms of the contract of employment have not been negotiated with the individual employee but result from negotiation with a representative body or are otherwise incorporated by reference; (2) a particular term of the contract makes available to the employee a valuable right contingent upon action being taken by him to avail himself of its benefit; (3) the employee cannot, in all the circumstances, reasonably be expected to be aware of the term unless it is drawn to his attention."
The present case is distinguishable. The criteria mentioned by Lord Bridge are not present. Each applicant's right to elect to become contributors to the RBF Scheme was a statutory one. It did not flow from his contract of employment or any other contractual relationship with the Hydro. It arose from the amendment of the 1970 Act in 1974 and the subsequent 1982 Act. There is, generally speaking, no obligation on an employer to advise an employee of legal rights, certainly not where the employees, as in the present case, are of full age and not under any legal disability. Moreover, the contracts of employment were not negotiated with a representative body. And the rights were contained not in some inaccessible location but in an Act of Parliament.
In Byrne, McHugh and Gummow JJ considered Scally and also Liverpool City Council v Irwin [1977] AC 239 where the House of Lords held that the landlord of a fifteen storey tower block of public housing had contractual duties to maintain lifts and other common property. The appellants in Byrne argued that employment contracts were a well recognised "class of contract" and that as a necessary incident of that relationship the clause of the Award was necessarily imported into the contract. In rejecting this argument McHugh and Gummow JJ said (at 452-453):
"However, there is no 'necessity' for such a step in the sense in which that term was applied in cases such as Irwin and Scally. The contract of employment is not, from the viewpoint of the employee, rendered nugatory if the existing provisions thereof remain, as a matter of contract, to operate concurrently with the regime established by the Award and deriving its authority from statute."
In my respectful opinion that reasoning is applicable in the present case. The RBF Scheme and the rights and obligations thereunder are established by statute. Employment contracts with those employers covered by the Scheme (if that be treated as a "class of contract") can work perfectly well without the implication of the term contended for. There is not "necessity", in the relevant sense.
(c) In tort
In my opinion, there was no duty of care owed by the Hydro to the applicants, the breach of which would give rise to an action for damages for negligence.
Because each of the applicants and the Hydro was in a contractual relationship, the obligations of the latter are to be determined by the terms of that contract, whether express or implied. The approach of Lord Bridge in Scally (at 303) is applicable:
"If a duty of the kind in question was not inherent in the contractual relationship, I do not see how it could possibly be derived from the tort of negligence."
His Lordship then proceeded to cite a passage from the advice of the Privy Council in Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1986] AC 80 at 107. It is a lengthy passage and it is sufficient to say that in my opinion it is applicable in the present case.
Lord Bridge then continued (at 303):
"In the instant case I believe that an attempt to analyse the issue in terms of the law of tort may be positively misleading. If the question is framed in terms of the law of negligence, it takes the form: did the employers owe a duty of care to employees to save them from economic loss consequent on a failure to purchase added years of pensionable entitlement in due time? The strong trend of recent authority has been to narrow the range of circumstances which the law of tort will recognise as sufficient to impose on one person a duty of care to protect another from damage which consists in purely economic loss. This induced Kelly L.J. to say:
'It would be contrary to the current inclination of the law to imply a term into contracts of employment enabling a claim by an employee for purely economic loss to be brought against an employer where no express term in those contracts provided for such relief.'"
I do not read the observations of Lord Bridge as inconsistent with modern decisions which hold that in the case of a professional retainer, such as solicitor and client, there is a duty owed in tort as well as contract: Hawkins v Clayton (1988) 164 CLR 539 at 574 per Deane J; Macpherson & Kelly v Kevin J Prunty & Associates [1983] 1 VR 573.
Secondly, as counsel for the applicants frankly conceded, the concept of "general reliance" as a foundation for the establishment of a duty of care is now no longer tenable in Australia in the light of the judgments of a majority of the High Court (Brennan CJ, Gummow and Kirby JJ) in Pyrenees Shire Council v Day (1998) 72 ALJR 152.
Thirdly, the cases in this area of the law of negligence are all concerned with public bodies who are given by statute a power or a duty to regulate activities which are a potential cause of loss or damage to members of the public. In Sutherland Shire Council v Heyman (1985) 157 CLR 424 at 464 Mason J mentioned as examples:
"The control of air traffic, the safety inspection of aircraft and the fighting of a fire in a building by a fire authority".
Heyman itself was concerned with a Municipal Council's approval of building plans and inspection of footings. Day involved a Victorian Municipal Council which had statutory power under the Local Government Act 1958 (Vic) to carry out works or take any other measures for the prevention of fires and also to give notices requiring fire places and chimneys to be made safe. In Stovin v Wise [1996] AC 923 it was alleged a road authority failed to exercise its powers to direct owners of land adjoining a highway to remove obstructions which contributed to a collision by obstructing a motorist's view.
The present case is fundamentally different. The Hydro was established by statute to generate and supply electricity and, subject to Parliamentary approval in each instance, to construct dams and other works for that purpose. It is no part of its function to give legal or financial advice to its employees or anybody else. Still less is there any specific statutory power or duty for such purpose.
The Hydro is an employer which, along with other employers in the public sector in Tasmania, is subject to various obligations under the RBF Scheme. There were also responsibilities at various times imposed on the "responsible officer" under reg 24(1)(ab) and s 87A. For the reasons already mentioned those provisions do not confer a right of action for breach of statutory duty. There is in my opinion no basis to found an action for a duty of care giving rise to an action for damages in negligence.
2. Misleading and deceptive conduct
Section 52(1) of the Trade Practices Act 1974 (Cth) provides:
"(1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive."
Section 14 of the Fair Trading Act 1990 is in the same terms, although it did not come into operation until 19 December 1990.
Because the Fair Trading Act came into operation at such a late date its application was not pressed. In any event, a claim under that Act would fail for the same reason that defeats the Trade Practices Act claim. The representations complained of, whether express or "by silence", were not "in trade or commerce" within the meaning of s 52(1). The leading authority is Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594. A worker was instructed by his foreman to remove the grates from the entry points of air conditioning shafts on a construction site. The foreman told the worker that each grate was secured by bolts. The worker claimed that this statement was untrue and that while he was removing one of the grates it gave way and caused him to fall to the bottom of the shaft and suffer serious injuries. He claimed damages against his employer on the basis that the foreman's untrue statement was conduct which was misleading or deceptive or likely to mislead or deceive, contrary to s 52. The High Court held that the statement of claim did not disclose a cause of action. The principal judgment was that of Mason CJ, Deane, Dawson and Gaudron JJ. The construction of s 52 which their Honours preferred was expressed in these terms (at 603):
"... the reference to conduct 'in trade or commerce' in s. 52 can be construed as referring only to conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character. So construed, to borrow and adapt words used by Dixon J. in a different context in Bank of N.S.W. v The Commonwealth (1948) 76 CLR 1 at 381, the words 'in trade or commerce' refer to 'the central conception' of trade or commerce and not to the 'immense field of activities' in which corporations may engage in the course of, or for the purposes of, carrying on some overall trading or commercial business."
Their Honours concluded (at 604-605):
"The alleged misleading or deceptive conduct of the Company's foreman in the present case consisted of an internal communication by one employee to another employee in the course of their ordinary activities in and about the construction of a building. It follows from what has been said above that the conduct was not, for relevant purposes, conduct 'in trade or commerce' and would not, if established, constitute a contravention of s. 52 of the Act."
In the present case the relationship between the Hydro and each of the applicants was that of employer and employee. There were no trade or commercial dealings between them in the relevant sense. I am bound by Nelson to reject this part of the applicants' claim.
3. Continuing duty
Counsel for the applicants contended that the Hydro owed a duty to them which continued after their employment ceased. The duty was to advise applicants of their right to apply to the Board for the exercise of its discretionary power under s 87(1) of the 1982 Act. The Board, it was argued, had power to permit a person to exercise a right, or grant to that person a privilege or benefit, because "person" meant simply any individual and was not confined to persons who were employees at the time of the application. It was pointed out that, by contrast, s 88 refers to "employee".
It is immediately apparent that on this construction "person" would mean anyone in all the world, irrespective of any connection with the employer.
The evidence disclosed that there were different legal opinions held as to the ambit of s 87. The Board however considered that it did not extend to persons who had ceased employment. The 1993 Act put the matter beyond doubt by inserting a new s 87(1A) which provided that the Board must not exercise its powers under s 87(1) so as to allow a person who at the time of the determination was not an employee (i.e. permanent employee), or a person referred to in ss 5(1) or 6(1), to become a contributor or to allow a variation of the date on which a person became a contributor. Counsel for the applicants accepted that if there was a right arising from the alleged continuing duty, it was annihilated by the 1993 Act. Accordingly the hypothetical scenario necessarily involves:
(i) advice to an applicant after termination of employment but prior to 13 August 1993 (when the 1993 Act commenced);
(ii) the applicant making an application to the Board under s 87;
(iii) the Board, contrary to the view it in fact held, exercising its discretion in favour of the applicant by allowing him to become a contributor.
At best that would be the loss of a chance. I do not agree that the chance is to be assessed at 100 per cent on the basis that the Board would have in fact acted in accordance with what is now argued to be the true construction of s 87. On the contrary, I consider the chance to have no value because there is no basis for assuming that the Board would have acted differently from the way it in fact did.
In any event there was in my opinion no such continuing duty as alleged. Counsel conceded that the duty could only lie in tort since the contractual relationship had terminated. He said it was not so much a "fresh duty as a continuation of the duty of care which existed during the course of the employment." For the reasons already discussed, there was no duty in tort to existing employees. A fortiori, no duty could be owed to former employees. The mutual obligations of employer and employee had ceased.
4. Breach of duty (if owed)
In the event that there should be an appeal, I shall proceed to make findings as to whether there was any breach of relevant duties by the Hydro if, contrary to my holding, such duties existed.
There was a large body of evidence as to general knowledge or lack of knowledge within the Hydro, and in particular in the construction workforce, of the existence of the RBF Scheme and the right of temporary employees to elect. In one sense, this evidence is not of great assistance. It is impossible to come to a conclusion either that nobody knew of the RBF Scheme or, on the other hand, that everybody knew of it. Rather, I think it is necessary to focus on the steps that the Hydro took to bring this knowledge to those in the workforce. It will then be necessary to look at the evidence bearing on each applicant's knowledge. This latter evidence bears on the issue of causation. If it were found that the Hydro had breached the duty, it would still be necessary to consider, in the case of each applicant, whether he in fact had knowledge of the RBF Scheme or, if he did not, whether the acquiring of that knowledge would in fact have resulted in him making an election.
(a) What the Hydro did
(i) Procedures
Prior to the 1974 amendment some temporary employees applied for appointment to the permanent staff for the purpose of becoming contributors. For example on 31 August 1959 Mr Lance Duggan, a brother of the applicant, then a clerk based at Poatina, applied for appointment to the permanent staff and to contribute to the State Superannuation Fund (CB14/109). The application was recommended by the Works Accountant (CB14/108) but rejected on 20 October 1959 (CB14/107). However he applied again, this time successfully, and a form (CB14/94) recording his confirmation of appointment is signed by the Commissioner. The form includes a certification in these terms signed by the Chief Accountant:
"I certify that to the best of my knowledge Mr Duggan's
services or position will not become unnecessary through curtailment of work and that he/she may be regarded as employed in a permanent capacity within the meaning of the Superannuation Act 1938."
A letter from the Chief Accountant to Mr Duggan on 4 February 1964 (CB14/95) advised him that before appointment to the Permanent Staff was confirmed it was necessary for him to undergo a medical examination. The letter said:
"If the examination is satisfactory and after confirmation of appointment it will be compulsory for you to contribute to the State Superannuation Fund, unless you have been granted an exemption by the Superannuation Board from contributing to the Fund."
An explanatory memorandum on the Superannuation Act was enclosed. On 16 March 1964 the Personnel Superintendent wrote to Mr Duggan confirming his appointment to the Staff and that he was "now required to contribute to the State Superannuation Fund, and the Chief Accountant will make the necessary arrangements accordingly" (CB 14/92). The Personnel Superintendent on the same day sent a memorandum to the Chief Accountant confirming Mr Duggan's appointment and that he would now be required to contribute to the State Superannuation Fund (CB14/93). All these documents appear to be of a routine administrative nature and indicate that transfer from temporary to permanent status for the express purpose of contributing to the Superannuation Fund was an established procedure.
Another example is that of Mr Claude Taplin who was engaged on 16 October 1951. He signed a Head Office Engagement Form (CB23/625). This was a printed form which differed from the Engagement Form signed by Mr Cooper and other applicants. The difference appears to have been that those engaged at Head Office in Hobart signed a form like Mr Taplin's. The printed part of the form included the following:
[11]
"I agree that my employment shall be classified as TEMPORARY until otherwise approved by the Hydro-Electric Commission." (Emphasis in original.)
On 3 September 1964 the Chief Accountant sent a pro forma letter to Mr Taplin advising him of his appointment to the Permanent Staff and of his obligation to contribute to superannuation. On 14 September Mr Taplin wrote (CB23/630) stating:
"I wish to apply for an exemption from contributing to the State Superannuation Fund, on the basis of several previous applications submitted on my behalf over a period of 13 years having been refused."
By memorandum of 24 September 1964 (CB23/631) the Secretary of the Hydro stated:
"With reference to your letter of 14th September concerning an exemption from contributing to the Superannuation Fund, it is advised that circumstances governing your condition of employment have changed since your appointment as an Engineering Clerk in Launceston.
The position of Timekeeper-Clerk occupied by you whilst located in the field was classified as temporary, and as such, did not carry superannuation benefits. Your present position is of permanent classification and you cannot be exempt from contributing to the Superannuation Fund because of the reasons you have submitted.
Enclosed for your information is a pamphlet containing the principal provisions of the Superannuation Act, and section II refers to exemptions."
After the 1974 amendment a system was established to deal with applications by temporary employees. Evidence was given as to this by Mr Noel Wilson who worked for the Hydro between 1956 and 1992, for the last six years as Senior Personnel Officer. At the time of the 1974 amendment he was Staff Clerk, Personnel Department. Mr Wilson deposed (CB20/53-54):
"3. I have a clear recollection of the implementation of a system to deal with processing the applications from temporary employees which resulted from the amendment. I was involved in establishing the system as part of my job responsibility. As I recall, a memo was prepared advising of the circumstances in which temporary employees could apply to become superannuation contributors as temporary employees and indicating that if they wanted to apply they should write to the Secretary providing details of their age, position and length of service. The memo was sent to all wages and temporary employees who were not RBF contributors.
4. As part of the system I established a Register of all applications. The Register was a bound hard cover book divided into alphabetical sections. I divided the pages of the Register into columns. The first entry was the name of the applicant and the columns recorded the progress of the application through the system. The system involved completing a standard form and sending it for approval to the Head of Department/Division and Head of Branch of the relevant employees as well as the Personnel Superintendent and the Commissioner/ Secretary.
The Register was not in evidence, nor were the specific terms of the memo referred to by Mr Wilson. But his veracity was not challenged and I accept his evidence. He did produce a number of sample copies of applications. One of these (CB20/58) is in a typed form which commences:
"The under named has applied to become a contributor under Part II Section 2AA(1)(4) of the Retirement Benefits Act (No. 2) 1974."
There was then room for name, classification, branch, location, salary, department/division and date of commencing with the Hydro. Then the form continues:
"Section B
Secretary
Thru' P.S.
I hereby certify that: -
1. The above officer has given satisfactory service for ____ years.
2. The position occupied by the above named officer will, in my opinion, be required for at least the three years next ensuing.
I therefore recommend that he/she be permitted to contribute to the Retirement Benefits Fund.
Signed___________________ Signed ___________________
Head of Dept./Division. Head of Branch.
Endorsed ________________ Approved_________________
Personnel Superintendent Commissioner
Secretary"
Mr Wilson deposed that he has no particular recall of the Head Office circular although he did process applications as a consequence. One example of this was an application from Mr Geoffrey Leedham dated 12 October 1977 (CB20/62). Mr Leedham wrote:
"Re Head Office Circular No. 15/1977
Retirement Benefits for Temporary Employees
I hereby seek admission to this fund at the 5˝% of gross salary."
The forms that were in evidence show this procedure being adopted as early as May 1975. By 20 May some 22 applications had been received (CB4/192). Mr Wilson also deposed that he occasionally received enquiries about superannuation from employees. When temporary employees enquired about their eligibility he advised them when and how they could apply. If the enquiry was as to something about which he was not certain he referred the enquiry to the State Superannuation office. There was also evidence from Mr Neil Hunt who worked for the Hydro from 1940 to 1983, apart from military service during the Second World War. He was attached to the wages section and was Senior Wages Clerk from 29 October 1973 until his retirement. As such he was the "responsible officer" for superannuation. He described that role as follows (CB9/59):
"This was not a large part of my work. I received and passed on circulars and the like from the relevant superannuation authorities. They were passed on to the Personnel Department/Industrial Relation Department and employees of the Hydro. Boxes of the information came in and they were distributed to, amongst others the Works Industrial Officers on construction sites."
His primary involvement in a day to day sense was the deduction and payment of contributions once a contributor had been admitted. Admissions were arranged by the Personnel Department or Industrial Relations Department who would advise him that a person was to be a contributor and he would arrange for a medical examination of the person and the outcome of the examination would be passed on to the superannuation authorities. On receiving notification that they had been accepted as a contributor he would arrange for appropriate payroll deductions.
Mr Wilson was aware of the 1974 amendment and received a circular from the Superannuation Branch dated 10 December 1975 (CB9/65) referring to it. He said that the circular was "probably distributed throughout the Hydro". He confirmed that the standard form was used for applications from temporary employees to become contributors. When the 1982 Act introduced an additional entitlement for temporary employees to contribute after four years' continuous service, without any need for a certificate as to three more years' service, Mr Hunt received a pamphlet from the Board detailing the Act (CB9/69) which he says "would have been distributed throughout the workforce".
An example of a temporary employee who joined under the 1974 amendment was Mr Robin Bricknell. He worked for the Hydro from 1968 to 1992. In 1977 he was working at Poatina as a Maintenance Handyman. While at Poatina he heard, in a way he does not specify, about changes to eligibility to join the RBF Scheme. He deposed (CB9/53):
"I discussed joining with other employees. Some tried to talk me out of joining. They said I shouldn't join because I would be worse off. My wife and I spoke to John King who encouraged me to join, so I did."
His application was approved on 7 November 1977. The form used was that already referred to (CB9/56).
Another example of the form shows a typed heading "Tullah" indicating that standard forms were available there (CB11/317). Procedures were in place for Time Keepers and Wages Clerks to arrange for applicants to attend for medical examinations (T405).
(ii) Head Office circular
On 15 August 1977 the Head Office of the Hydro produced a circular in the following terms (CB8/69):
"THE HYDRO-ELECTRIC COMMISSION
TASMANIA
Head Office,
HOBART
HEAD OFFICE CIRCULAR NO. 15/1977
RETIREMENT BENEFITS FOR TEMPORARY EMPLOYEES
The Retirement Benefits Act No. 2, 1974, contemplates the application of retirement benefits to "temporary" employees under certain conditions.
The main criteria are satisfactory service for at least one year prior to application being made and a certification by the Commission that continuous employment for the ensuing three years is expected.
Employees who apply to become contributors will be required to undergo a medical examination and, if their application is then accepted by the Retirement Benefits Board, will normally contribute to the fund fortnightly at the rate of 5˝% of gross salary. Employees may, however, elect to contribute at the rate of 2ľ% with a corresponding reduction in benefits.
Contributors' pensions and other benefits are determined basically by the length of service as a contributor and annual rate of salary or wage. This can be compared with entitlements which otherwise may be due under the provisions of the Public Servants' Retiring and Death Allowances Act, 1925.
Further information can be provided on request. Applications to become a contributor should be made in writing to the Secretary, through head of Branch concerned.
(Sgd) R.R. Raward
Secretary"
In practice Head Office circulars were distributed throughout the whole of the Commission and in particular posted on notice boards. Mr William Gunn, a fitter on the Wages Staff saw the circular on the notice board at the main workshop and in the mess at Tullah (CB3/108). Mr Christopher Bonnily who was at the time a Clerk in the Civil Engineering Laboratory at Moonah (a suburb of Hobart) placed the circular on the notice boards there (CB3/29). The ordinary practice was for circulars to go on the notice boards at Tullah where there were notice boards in the main workshop and in the messes (T407). Head Office circulars were also sent to Union representatives (CB3/276). There was in evidence applications to become contributors which are expressed to be in reliance on the Head Office circular: Holstein, August 1977 (CB23/656); Leedham,12 October 1977 (CB20/62); Painting, 28 April 1978 (CB20/64). Generally the evidence supports the conclusion that Head Office circulars and the placing of them on notice boards were an accepted and effective form of communication (T240, 307, 407, 415, 446, 572). That is not to say of course that everybody necessarily read everything that was on notice boards.
(iii) Blue Book
In 1980 the Hydro published a booklet (CB11/231) which because of the colour of its cover was universally referred to as the Blue Book. It is 20 cm by 10 cm. On the cardboard cover are the words
"WELCOME
TO THE
HEC [logo]
Information
For
New Wages Employees
THE HYDRO-ELECTRIC COMMISSION
TASMANIA."
On page one under the heading "Welcome" there are some general remarks of an exhortatory nature and also the following:
"This booklet outlines the general organisation to which you now belong and gives a brief summary of employment conditions. It is an introduction only. Your Foreman, Supervisor or Timekeeper will be pleased to help you with any further information you may need."
The booklet contains thirty pages and deals with a variety of matters such as Award coverage, Industrial Chaplain, intoxicating liquor, issue of protective clothing, leave provisions, overtime, personal phone calls, safety rules, taxation, Union membership, conditions of work and pay arrangements. At page 27 the following appears:
"Retirement
Provisions
PUBLIC SERVANTS RETIRING AND
DEATH ALLOWANCES ACT 1925
After 4 years' continuous service with the Commission, an employee who retires or is retired through ill health may be entitled to an allowance under the above Act at the rate of approximately one week's pay for each completed year of service.
Such allowance is payable out of Consolidated Revenue and is not contributed to directly or indirectly by the Commission.
RETIREMENT BENEFITS FUND
You may elect to contribute to the Retirement Benefits Fund after being continuously employed with the Commission for twelve months.
Admission to the fund is subject to your passing a medical examination and the Commission certifying that you are likely to remain employed by the Commission for at least three years.
Fortnightly contributions will be deducted from your pay."
In 1984 a second edition was published. The part relating to the 1925 Act was as follows (CB11/27-28):
"Retirement
Provisions
PUBLIC SERVANTS RETIRING AND DEATH ALLOWANCES ACT 1925
Subject to completion of a qualifying period of service you may be entitled to an allowance under the above Act in the event of your retirement through age or ill health or, in the case of death, the allowance would be paid to your personal representative. The allowance is equivalent to approximately one week's pay for each year of service.
The qualifying period of service is two years in the case of death and four years in the case of retirement.
You are required to elect whether or not you wish to be considered as eligible to receive an allowance under the Act upon commencement with the Commission.
Eligibility under the Act excludes you from an entitlement to tax deductions in respect of your contributions (if any) to a private superannuation scheme."
That part dealing with the Retirement Benefits Fund was as for the first edition except that before the reference to fortnightly contributions there was inserted:
"An election to contribute to Retirement Benefits Fund disentitles you to any benefits under the Public Servants' Retiring and Death Allowances Act 1925."
And at the end the following was inserted:
"For further information on retirement provisions please contact the Senior Wages Clerk at Head Office."
The initiative for the Blue Book to a large extent came from the Combined Union Council ("CUC"), a body consisting of representatives of some eight unions with members in the Hydro workforce on the West Coast. From time to time the CUC would have meetings with representatives of the Hydro including Mr Claude Taplin, Mr John King and Mr Garry Baker. In a newsletter which went to all Union members the CUC reported on a meeting with Hydro representatives held at Tullah on 7 March 1979. The newsletter included a report (CB10/55):
"The need for a better introduction programme for new men has been acknowledged. Among the items discussed was the production of a booklet and the need for a more detailed introduction to a person's rights and responsibilities as well as his part in the vitally important job of producing power for the state."
On 7 August 1980 Mr John King, the Senior Industrial Relations Officer, circulated a draft of what was to become the Blue Book seeking comments (CB 4/232). This was sent to, amongst others, Mr Taplin, the Works Industrial Officer at Tullah (CB3/155). When finally produced a copy of the Blue Book was sent to some fifteen unions (CB7/112). The Secretary of the CUC wrote to the Hydro congratulating it on the "printing, presentation and contents" of the booklet. The Secretary stated that the council felt that the Blue Book "will be very helpful to new employees" (CB7/111).
In about mid 1984 a reprint was prepared. The CUC wrote on 30 January 1985 (CB10/74) expressing concern about the "very long delay" in supplying a reprint. The Blue Book was said to have been out of print since July 1985 (sic, presumably 1984). The letter concluded:
"The matter has been brought to the attention of the local Works Industrial Officer by myself on many occasions and the only response has been that it is at the Publishers.
We take this opportunity to express our extreme disappointment at the non supply of this important brochure and we hope that you can facilitate the matter."
The Hydro replied on 7 March 1985 (CB10/75) advising that it was also concerned with the delays and advising that the Blue Book would be available for distribution within the next three or four weeks. It was stated:
"Copies will be made available to all employees who have not been issued with the booklet due to these production difficulties."
There was evidence of the Blue Book being used by Mr Taplin in relation to disciplinary matters. For example he used it for drawing attention to its prohibition against bringing alcohol on to job sites: (CB10/76, 77, 78). Sometimes the Blue Book was sent to a person to remind him of his obligations: T388.
As to distribution, Mr Alexander Gergel who from 1978 onwards worked in the employment office of the Hydro deposed (CB3/100-101):
"6. My work included engaging Wages employees. Whenever a Wages employee was engaged at Head Office after the publication of the Blue Book they were provided with a copy. Bundles of Blue Books were also distributed throughout the Hydro for crib rooms and the like. During the period of my employment subsequent to publication of the Blue Book I on many occasions received requests from Works Industrial Officers, Assistant Works Industrial Officers, Timekeepers and their assistants for bundles of the Blue Books which were sent to them."
[12]
I certify that this and the preceding One hundred and nine pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey
[13]
Counsel for the Applicants: Mr Peter Tree and Mr Simon Cooper
[14]
Counsel for the Respondent: Mr Peter Evans and Mrs Kim Bennett
[15]
Solicitor for the Respondent: Butler McIntyre & Butler
[16]
Date of Hearing: 22-6 September 1997, 10-14 November 1997, 8-12 December 1997, 3-6 March 1998, 15-21 April 1998
Works Industrial Officers in the major constructions areas engaged Wages employees on site. Amongst those that I dealt with were Claude Taplin, Barry Mulcahy, Alf Newman and Jack Bennett. Blue Books were distributed to these Works Industrial Officers to be handed to the new employees as they [were] engaged on site."
Mr Ian Johnstone gave evidence to the like effect (at CB3/117).
I should say that although Mr Gergel gave an estimate of 1000 as the total number of Blue Books printed (T851) I am not satisfied that that is accurate. He had ceased employment with the Hydro in 1988 and was not speaking from any records. There is no doubt, as has been seen, that there was a period in the second half of 1984 when the Blue Book was out of print, but apart from that, the general impression I get is that there were copies readily available on site, as well as being handed out to new employees. Mr Bernard Kelly said that in the Union room at Tullah when operations were being closed down in about 1993 there were Blue Books "laying all over the floor" (T1082). Mr Steven Knott, who from 1987 was the Works Industrial Officer for the Gordon River Power Development based at Strathgordon said that while working there he was provided with copies of the Blue Book and also the Staff Manual to distribute to new employees as part of the normal induction process. After the Blue Book had been printed he received a bundle of them for redistribution to construction employees at Strathgordon. It was decided to distribute a copy to all Wages employees and they were delivered with the Wages employees' pay packets (CB20/41). Copies of the Blue Book were provided to new employees at depots at Devonport, Ulverstone, Roseberry, Queenstown and Farrell, near Tullah (CB20/50-51). There is evidence of existing, as opposed to new, employees getting copies at Poatina and Gowrie Park (T817), at Wayatinah (CB3/81) and at Tullah (T303).
Mr William Gunn had various periods of employment with the Hydro including from January 1979 until the late 1980s at the main repair workshop at Tullah. He worked as a Fitter on wages and was a site representative for his union and a member of the CUC. He recalls that when the Blue Books were introduced they were distributed extensively to the workforce. They were given to existing employees as well as new employees. They were brought out to the main workshop and he would estimate "there were at least a dozen there" (CB3/107). Mr Nigel McGowan in 1980/81 was a Storeman/Timekeeper at Tarraleah and until 1984 a Clerk at that location. Between 1984 and 1990 he remained at Tarraleah as a Clerk having been appointed to the Permanent Staff. He recalls receiving bundles of the Blue Book at Tarraleah which were given to wages employees (CB3/325).
(iv) Staff manual
This was the Staff equivalent of the Blue Book. The manual was initially prepared in about 1979 by Mr Noel Wilson after he became the Personnel Officer responsible for Staff recruitment. The prime purpose of the manual was to educate those who selected and engaged Staff as to the process that had to be followed and to enable them to do so without assistance from Personnel Department specialists (CB20/55). The manual was prepared in conjunction with the Administration Officers of each Branch and some of the Administration Officers of divisions of Branches. About 100 copies were made and distributed to the Branches. A copy of the manual that was in evidence has an A4 size loose leaf ring folder format. This version was dated July 1987 and describes procedures for Staff selection, appointment and induction. Attachment H gives details as to the proportion of salary payable and the benefits obtainable. It states that detailed information and options will be provided when the appointees commence duty. It is stated that temporary officers are not required to contribute to the RBF. Attachment J gives more detail as to the RBF Scheme including a statement that employees eligible for a benefit under the 1925 Act lose that entitlement when they become contributors. Under the heading Temporary Appointments, it is stated:
"Appointee is not required to contribute. Employees under wages conditions and temporary staff may apply to contribute, under provisions for temporary employees, at any time after they have completed 12 months continuous service with the Commission."
Similar information is contained in loose sheets with the manual.
In early 1990, wages recruitment and staff recruitment were consolidated. At this stage Mr Stewart Sheppard was the Personnel Administration Officer. He adapted the manual for recruitment of all employees whether wages, temporary or permanent. The manual was distributed throughout the Hydro, in particular to anybody associated with the engagement of employees (CB3/273), including Works Industrial Officers and the like (CB20/18).
(v) The Jack Russell meeting
Mr Jack Russell had become Personnel Superintendent in 1965 and remained in that position until his retirement on 28 June 1978. Following upon the amendments in December 1974, he became concerned that wages and other temporary employees were reluctant to join. He tried to persuade his brother-in-law Mr Bill Marr and another Wages employee Mr Norman Haywood to join the RBF Scheme. The former refused but the latter agreed.
In early January 1978 Mr Russell arranged to meet representatives of the Union with Hydro membership on the West Coast. The meeting was held at Tullah on 3 January 1978. Mr Russell took Mr Haywood to the meeting. There were about ten to fifteen Union representatives there. Some of them asked why Mr Haywood was present. Mr Russell said that he was there as his guest in the hope that he would persuade them to encourage others to follow his example. Mr Russell tried to persuade Union representatives at the meeting to encourage their members to join the RBF Scheme. Some of them responded by saying they would not be encouraging their members to pay 5.5 per cent of their wages when they could get one week's pay for each year's service for nothing under the 1925 Act (CB3/265).
At the meeting Mr Russell distributed copies of a document giving details about the RBF Scheme. It was in the following terms (CB3/267):
"WHAT ABOUT THE RETIREMENT BENEFITS FUND FOR WAGES PERSONNEL
What do I have to do to Join the Fund?
If you are a person appointed to a permanent position, and you wish to joint [sic] the Retirement Benefits Fund, you will need to apply to do so through the Head of your Branch. If you are appointed to a temporary position, you must serve 12 months before you can be admitted to the Fund, but you may apply in the same way before then.
2. Are Medical Examinations required, and if so, how much will it cost me?
Yes, a medical examination will be required but it will not cost you anything - the examination is free of charge and will be arranged for you.
3. How much of my wages would I have to contribute, and does this include Service Pay and other Allowances?
Presuming your health is Certificate 'A', you will have to contribute at the normal rate of 5˝% of your annual wages, or you may elect, within a month of becoming an employee, to contribute a lower rate of 2ľ% of annual wages. The lower rate entitles you to only half benefits.
Service Pay is included as part of your annual wages but not any other allowances.
4. Are there any age groups that would not benefit from the Scheme?
Yes. The 62 to 65 year old group who are temporary employees. A temporary employee has to serve 12 months before being admitted - then a further 3 years' service to be entitled to a pension. Other than an invalidity pension. Even then, the possible pension would be extremely small.
5. In the event of my death, does the pension pass on to my spouse and/or children?
Yes. If you die, your widow will receive two-thirds of the pension you would have received if you had retired due to ill health on the day of death. If you are already retired and receiving a pension, your widow will receive two-thirds of that pension. The children will each receive, until they are 16 years (or up to 21 years if students), 5% of your pension. If both parents are deceased, each child will receive 20% until the same ages are reached.
6. What benefits employment-wise can I expect to gain?
Whether you are an employee contributing to the Fund or not, will have no affect [sic] concerning your present or future service with the Commission.
7. If I terminate my employment with the Commission, what refund of contributions would I receive?
If you resign or are dismissed you will be paid 100% of the contributions you have paid.
If you die and be not [sic] survived by a widow, your estate will receive 100% refund of your contributions.
If you die and be survived [sic] by children eligible for a pension, the children will receive a part-pension and the calculated difference, if any, paid to your estate.
8. What happens if I am retrenched?
There are benefits payable relative to the period you have been contributing to the Fund.
9. How am I paid on retirement, and does this payment affect Government Age Pension?
Firstly, the Fund pension is paid fortnightly and, secondly, it may affect any other Social Security benefits.
It depends on your total other income, including the Fund pension, as to how much additional Government age or other pension you will be entitled to.
10. Under the Retiring and Death Allowance Act (1925), I would receive Approximately 1 week's pay for each year of service. Is this affected by the Retirement Benefits Fund?
Yes. By joining the Retirement Benefits Fund your rights under the Retiring and Death Allowance Act are forfeited, but this may change in the near future, as there is a Bill before Parliament.
11. Should I decide to join the Fund but require further information, who would I approach?
The Senior Wages Clerk in the Wages Section at Head Office is the officer who will be able to assist you and answer any other question which you may have in mind." (Emphasis in original)
In part Mr Russell was trying (unsuccessfully as it turned out) to get Union support for a proposed amendment to the 1970 Act which would give temporary employees who elected to join the right to count prior service. The existing position was that a temporary employee electing to join would lose rights under the 1925 Act and start from scratch under the RBF Scheme. Mr Bernard Kelly, a Plant Operator who was the FEDFA representative at the meeting recalls (CB20/21) that the general opinion formed from the meeting was that it was a good idea for the younger employees but people who had five or more years were better off keeping their 1925 Act entitlement. And this advice was given to members of most of the Unions.
(vi) RBF Seminars
Mr Peter Sutczak was employed in the Hydro Personnel Department on the employee welfare side. In 1983 he became the Welfare Officer for West Coast employees although he was based at Head Office. He began running retirement seminars for older employees. One type was for RBF contributors and the other was for non-RBF contributors. He conducted the seminars at Hobart, Launceston, on the North West Coast and at Tarraleah and Tullah. This was a yearly programme until the late 1980s. In about February 1984 he travelled to Tullah and conducted a retirement seminar for non-RBF contributors which discussed the 1925 Act. There were about 40 or 50 workers who attended (CB3/283).
Mr Ian Woodgate in 1985 was a Clerical Officer with the RBF itself. One aspect of his work was to arrange seminars for existing and prospective contributors. In March 1985 he arranged seminars for existing and prospective Hydro contributors at Tarraleah, Queenstown, Tullah and Burnie. He dealt with a Mr Pittman at Tarraleah, Mr Barry Mulcahy at Queenstown and Mr Wayne Newman at Tullah. The standard form letter he sent advised that representatives would attend "to provide counselling for existing and prospective contributors to the Retirement Benefits Fund". The reference "prospective contributors" was a reference to temporary employees who might be considering election. At the meeting Mr Woodgate explained the conditions for eligibility of temporary employees (T1005). All in all in 1985 he was involved in the conduct of at least ten seminars.
(b) Conclusion
Were it necessary to decide the issue, I would hold that the applicants have failed to establish that the Hydro breached any duty. The evidence clearly rebuts any suggestion that there was a deliberate policy to conceal this knowledge from the workforce. Very soon after the 1974 amendment came into operation a routine clerical and administrative system was set up for dealing with applications. The Head Office circular, the Blue Book and the Staff Office manual were all widely distributed throughout the workforce. It needs to be recalled at the end that this case is not concerned with a review of the administrative efficiency or otherwise of the Hydro organisation. In retrospect I have no doubt that there are some things that could have been done more efficiently. The same could doubtless be said of most large organisations. And a belief that the RBF Scheme was only for permanent employees probably did linger in some quarters for years after 1974. But if, contrary to my finding, there was a duty owed under statute or in contract or tort by the Hydro to advise temporary employees of their right of election, such a duty could be no more than an obligation to take reasonable steps to bring this information to the notice of such employees.
The case mounted is that of a deliberate concealment of knowledge of a right conferred by statute and a misleading of the workforce, of such a nature to warrant an award of exemplary damages. It is a serious allegation and I think in fairness to the Hydro it needs to be unequivocally said that it is not made out.
I place particular significance on the Blue Book. From 1980 onwards there was, with the active encouragement of the Unions representing the workforce, a widely circulated repository of workers' rights and obligations, which clearly included the right of temporary employees to elect to become contributors. This proved to be an awkward historical fact which many of the applicants and their witnesses went to extreme lengths to get around. Either they did not see the Blue Book, or did not read it, or said that everybody thought that it did not matter. Perhaps the high water mark of this approach is contained in the affidavit of Mr Mulcahy (CB2/191):
"It was always my opinion that the blue books had little relevance to construction workers. Information contained was what we told to new construction employees in any event. Some of the most important information for new construction employees such as the costs of camping and messing, camp allowances and protective clothing allowance was not mentioned. In this way the booklet was not designed for the construction workforce and was considered of little relevance. Any mention of the RBF Scheme in the Blue Books reinforced the view that the book had little relevance because I had always been told and believed that the construction workforce could not participate."
I do not accept this evidence. For many years the RBF Scheme was seen, with good reason, as unattractive for temporary employees. It required a loss of 5.5 per cent of wages and rights under the 1925 Act (which cost nothing) and the possibility of leaving after many years' service and only receiving back contributions, without interest. In the light of subsequent unforeseen events and the "jackpot" there has been an attempt, with varying degrees of consciousness, to rewrite history.
Causation
As already noted, if there was a duty owed by the Hydro to the applicants and if that duty was breached, there would still arise the question whether the breach was causative of the applicants' failure to elect to become contributors to the RBF Scheme. In other words, would any information the Hydro provided about the RBF Scheme have resulted in the applicants becoming contributors? I shall now turn to the evidence on this issue.
(a) Cooper
Mr Cooper was based at Tullah from 1976 until 1986. He said in evidence that in about April/May 1978 he heard two workmates, Nobby Haywood and Bill Marr, talking about superannuation in the crib hut at the Murchison Road site (CB2/32). Both men were talking about the benefits they would receive when they retired. The amounts sounded very attractive. Mr Haywood was speaking of $300,000 (T326). Mr Cooper decided to approach the Timekeeper Mr Lane the next day. When he did so he asked Mr Lane "What's this superannuation that Nobby and Bill are in, I want to join it". Mr Lane said "It's only for Staff and as you're not Staff you're not eligible". He subsequently mentioned to Mr Marr that it was for Staff only and Mr Marr said the scheme must have been altered. Mr Cooper said (CB2/33) that the terms "RBF" or "Retirement Benefits Fund" were not used in those times. There was only general talk about superannuation. It was not until about 1992 that he first heard the terms RBF or Retirement Benefits Fund.
Mr Lane did not give evidence as to the specific conversation, although he did say that his belief was that Award employees were not eligible and that RBF membership was by invitation (CB2/165).
I am not prepared to accept Mr Cooper's version. What did Mr Cooper do when faced with the apparent contradiction between what Mr Lane had supposedly told him and the fact of Mr Haywood's apparent entitlement? He was cross-examined as follows (T328-329):
"Q. You knew he was wrong because Nobby Haywood was a member.
A. Yes.
Q. And Bill Marr was a member, and they were not Staff?
A. I didn't know they wasn't Staff at the time, I was only new chum on the Hydro, only been there a couple of years.
Q. You very quickly knew that they were Wages employees, did you not?
A. Well I suppose we were all Wages employees, we were all getting paid.
Q. Mr Cooper, you knew the recognised difference between Staff and Wages employees did you not?
A. Oh well I suppose I did in that case.
Q. You were well aware that they were both Wages employees, were you not?
A. Yes.
Q. Now you knew that what you had been told was wrong if Mr Haywood and Mr Marr were right, did you not?
A. Well I suppose I did.
Q. Yes. So, why did you not say that if Mr Lane and Mr Haywood and Mr Marr are Wages employees, why are they allowed to join?
A. Well it never entered my head.
Q. Bearing in mind you had been told something that sounded wrong, who was the superior person that you went to, to check about that?
A. I didn't go to anyone. I took Michael's word for it.
Q. You did not check with anyone?
A. No.
Q. So you were not so keen as to test it?
A. No."
Mr Cooper continued to work with Mr Haywood for another six months. When asked (T330) why in that period he never queried why Mr Haywood could obtain superannuation and he could not, Mr Cooper's answer then was that Mr Haywood had been a permanent employee. He was asked (T330):
"Q. Oh right, so you actually knew it was a question of permanence did you?
A. Mm.
Q. Who told you it was a question of permanence?
A. Well I thought we were all permanent.
Mr Cooper denied having ever seen the Blue Book in the course of his employment.
He said that he did not know about the 1925 Act until the day he finished. Yet on 9 February 1984 he signed a form of election under s 2C of the 1925 Act (CB23/596).
On the same day he signed an acknowledgment of receipt of an explanatory information in relation to the 1925 Act (CB23/597). That information took the form of a circular (CB23/658) and was headed "IMPORTANT CIRCULAR TO ALL EMPLOYEES NOT CONTRIBUTING TO THE RETIREMENT BENEFITS FUND". On 10 July 1990 he signed another election form, this time electing not to be eligible under the 1925 Act.
The discussions with Mr Haywood were only a few months after the Jack Russell meeting at Tullah in which the Personnel Superintendent had come from Hobart to speak to some fifteen Union representatives urging temporary employees to join the RBF Scheme, a meeting which Mr Haywood had attended.
I am not persuaded that Mr Cooper was ignorant of the RBF Scheme. Even if the Hydro had directly communicated with him in writing advising of his right to elect - the maximum that the duty could have entailed - I am not satisfied that he would have elected to join.
(b) Duggan
Mr Garry Duggan deposed that he was aware of the Superannuation Scheme in the Hydro but that his understanding was that you had to be in Power Branch or Head Office to be eligible (CB2/53). His brother Lance was Paymaster at Tullah and Garry Duggan knew that his brother was entitled to participate. His brother told him that he was allowed into superannuation "instead of receiving a pay rise when he transferred to Gowrie Park in the 1960s". Mr Garry Duggan said it was his belief that as an employee based in Construction he was not entitled to superannuation. He deposed as to two interviews at the Tullah Administrative Office for a Staff appointment. The first was in 1980 or 1981 when he was interviewed by Mr Jack Grant and Mr Lance Brown. He was unsuccessful. He deposed that he asked about superannuation and was advised that he was not eligible to join "at that time". The second interview was in August or September 1983. In his affidavit he deposed that he was interviewed by Dave Rabe, Ted Byrne, John Minchin and Lance Brown. Despite Mr Duggan's denial in evidence, it is clear from an interview report summary (CB2/20) that Mr Grant was also present. Mr Duggan deposed that he was advised by Mr Brown that he was not eligible to join. From that time on he "never pushed the issue" and pursued private superannuation arrangements through Legal & General.
He deposed (CB2/54) that "the fact that you could not receive superannuation" was discussed regularly in crib rooms and on construction sites. One of his superiors, Mr Alf Williams, said to a group in the workshop on the Henty Anthony Scheme in the mid 1980s, "If I can't get on it, you guys have got no hope". Mr Williams said something similar in a discussion in a utility driving home from work one day in about mid 1984.
There is no doubt that Mr Lance Duggan, a construction employee, had been a contributor to the RBF Scheme since his appointment to Permanent Staff in 1964 (CB14/92). The explanation that this was a trade-off for not getting a pay increase was not borne out by the evidence. He received the ordinary annual increases and indeed on 19 November 1964 applied for a review of his salary asserting an increase in duties as a consequence of his transfer to Gowrie Park (CB14/90), an application which was rejected (CB14/89).
In his evidence Mr Lance Duggan retreated substantially. He said the superannuation/no wage increase trade-off was his "understanding" and when pressed with the inconsistency of his application for a wage increase he said "I didn't say that I did a deal with them" (T440). Indeed, he could not recall discussing joining the RBF with his brother Garry. His evidence was that "I would have said you're quite at liberty to apply but your chances of being accepted to the RBF Scheme are nil" (T457). He was then asked:
"Q. Why would you have said that?
A. Well that was always my understanding.
Q. But you knew that Mr Haywood was a member?
A. I did.
Q. And you knew that there were other Award workers who were members?
A. One or two, yes.
Q. And you knew that there were temporary Staff who were members? People who had been in temporary Staff positions who were members?
A. Yes.
Q. And you had done it yourself?
A. That's true. I still don't understand why I was appointed.
Q. Then why would you not suggest it to your brother? That he apply?
A. Well, if he would have asked me I would have said 'You are quite at liberty to apply, but your chances are Buckley'.
Q. Why would you have said that he had Buckley's when you knew that others were doing it and succeeding?
A. Well, that was just my perception."
As for Mr Garry Duggan himself, he said he never asked his brother how he became a member of the RBF Scheme and did not know of that fact until a function for their mother's 80th birthday, which was about a year ago, and then only because he overheard him telling somebody else (T273).
As to the first interview for a Staff position, I do not accept that Mr Grant incorrectly told Mr Duggan he was not eligible. In about 1979 Mr Grant supported the application of Mr Claus Karens, a Foreman on Temporary Staff at the Tullah workshop, for membership of the RBF Scheme (CB9/45). Mr Grant's own evidence was that it was always his impression that Award employees were entitled to join the RBF Scheme subject to satisfying certain requirements. He was aware of the legislative changes in 1974 and 1982 (CB3/104). I do not accept that Mr Brown gave the incorrect advice in the way claimed by Mr Garry Duggan. I have to say that Mr Brown was not a satisfactory witness. He had left the Hydro in 1991 and in his affidavit made sweeping assertions without checking the manuals and other documents in existence at the time.
I do not accept Mr Garry Duggan's assertions as to Mr Alf Williams. It was Alf Williams with whom Mr Carins discussed joining the RBF (CB9/44). Mr Duggan knew his father was a member but did not make an enquiry of him, nor of his brother Lance (T277).
I do not accept Mr Garry Duggan's evidence as to lack of knowledge of the RBF Scheme. His account is inconsistent with contemporaneous documents. It is inherently unlikely that if his father and brother were members he would not know about the Scheme. I conclude that he did know about it and that whatever communication the Hydro might have had with him would not have made any difference because it did not suit him to join in the light of his knowledge and belief as to its benefits for him.
(c) Johnstone
After some earlier periods of employment with the Hydro Mr Colin Johnstone commenced work on 24 October 1977 as a Truck Driver. He later became a Plant Operator and on 15 October 1979 was appointed to Temporary Staff (CB2/151). Initially in 1977 he was engaged by Mr Mulcahy. No mention was made of superannuation. In a previous job with the Queenstown Council he had superannuation contributions deducted. On his appointment to Staff nothing was said about superannuation. He had an interview at that stage with Mr Jack Grant and Mr Derek Watters. He said in evidence he did not know of any superannuation policies that were available to himself or Hydro employees generally. He says he was never informed by any person within the Hydro of a superannuation scheme and therefore believed no superannuation was available. In about 1982 he arranged for his own scheme with National Mutual. When he himself engaged people through the Works Industrial Officers notably Mr Taplin, Mr Mulcahy and Mr Graeme Lynch, there was never any mention of any superannuation or RBF Scheme.
Mr Johnstone's position is rare, and possibly unique, among the applicants and their witnesses. His case is not of misunderstanding or misinformation about the RBF Scheme and his entitlement to join it, but rather that he was never aware of the existence of superannuation or the RBF Scheme at all.
I am not persuaded that Mr Johnstone did not know of the RBF Scheme during his employment with the Hydro. His evidence tended to shift between assertions that there was no superannuation available at all (CB2/146) to claims that there was some scheme but that he, or some workers, could not join it (T309). Moreover his case is that even though he had previously contributed to superannuation while working for the Queenstown Council he never even enquired as to whether superannuation was available at the Hydro. He did not ask about the possibility of transferring the Queenstown Council superannuation (T315, 319). He never asked any senior staff at Tullah or his immediate supervisor, Mr Jack Grant or anyone at Head Office (T319). Moreover I think it likely that he became aware of the Scheme at the time of the Jack Russell meeting at Tullah. He was working there as a Plant Operator at the time. He was a member of the FEDFA. That Union's representatives were Mr Kelvin McCoy and Mr Bernard Kelly. The latter at least was well aware of RBF entitlements (CB20/20). Mr Kelly, who attended the Jack Russell meeting deposed (CB20/21):
"9. I understand the general opinion formed from the meeting was that it was a good idea for the younger employees but people who had five or more years service were better off keeping their 1925 Act entitlement and I believe this advice was given to members of most of the Unions.
10. I held a meeting of Plant Operators at which I passed on this advice. I definitely told the younger members they should join but none of them asked me about it and as far as I know none of them joined. In general they did not appear to be interested."
That Mr Johnstone at the time of the Jack Russell meeting would have displayed little interest in superannuation is perhaps understandable. He had had a varied working career up until then. He commenced with the Hydro at age 14 and worked for about seven years. He then played football for East Devonport for two years while working as a truck driver for Mayne Nickless. He went back to the Hydro in 1969 but left in 1971 to coach football at Longford and Queenstown. He worked during this period as a truck driver at Longford and for the Queenstown Council. With his superannuation on the Queenstown Council he only got back his contribution (T314). So a non-portable scheme like the RBF Scheme would be an unattractive prospect. Other plant operators, Messrs Haywood, Marr and Morrison were aware of the RBF Scheme (CB11/448, 11/301 T453). Mr Johnstone's immediate superior Mr Grant was aware.
Mr Johnstone's evidence as to his knowledge of the Blue Book was unconvincing. He said that he had seen it "in my travels" in the late 80s (T303). It could have been anywhere, including a crib room. He was not aware of the information in it (T303).
Also he signed an election form under the 1925 Act which as already noted expressly referred to the Retirement Benefits Fund (CB 23/666). He also signed an acknowledgment (CB10/69).
In summary, Mr Johnstone is an applicant who does not assert any misleading information but rather a total lack of knowledge of the existence of the RBF Scheme. I do not accept his evidence. I conclude that he was aware of the Scheme but did not believe it suited him. Whatever notification Hydro had given would have not made any difference.
(d) Mulcahy
Mr Mulcahy asserts a belief throughout his employment with the Hydro that as a temporary employee he was not entitled to contribute to the RBF Scheme. He deposed (CB2/191) that whenever talk of superannuation came up he had always been told by his superiors that Construction employees were considered to be temporary employees and therefore could not participate in superannuation. He says he would have told numerous employees in Construction the same thing. He says that when he was first employed by the Hydro in 1956 he was told that only those persons employed as Permanent Staff were entitled to superannuation (which of course was correct at that time). He deposed (CB2/192):
"From this time on I always understood that I was not entitled to superannuation. This belief continued and was confirmed in subsequent discussions had with Claude Taplin and Head office Industrial personnel such as John King, Gary Baker, David Bannerman, Mick Matthews. I am unable to recall any specific conversation."
It will be necessary to consider the evidence as to the alleged misinformation by each of those persons.
First, Claude Taplin. In his affidavit (CB2/192) Mr Mulcahy deposed:
"18. Claude Taplin was my superior at Tullah and he always advised me that as a construction employee you could not join the RBF Scheme. If an employee asked him he would always state that as a construction employee you were not entitled to join. I recall Claude Taplin giving this advice to employees and I gave similar advice. Claude Taplin made quite clear that only certain areas of the Hydro were entitled to join the RBF Scheme most notably power branch and head office. The experiences of Claude Taplin supported this view. Claude Taplin participated in the RBF Scheme when he was transferred to the Launceston office of the Hydro Electric Commission and was based in Power Branch. It was mandatory for him to join and he continued to participate when he returned to Tullah and the construction workforce. Claude advised me that this is how he was able to join the RBF Scheme but why other construction employees could not."
Mr Taplin died in June 1995. Mr Mulcahy's evidence about conversations with Mr Taplin was rather confused. He said that by 1980 he knew about the provisions in the Blue Book relating to a certificate for three years' future service which would enable temporary employees to contribute, but he knew that that was not available for those in Construction (T149). He put discussion as to these matters with Mr Taplin in about 1976 at Strathgordon. However the Blue Book was not produced until 1980 and Mr Taplin left Strathgordon in 1969 (CB23/635).
Mr Taplin retired from the Hydro in 1988. On 11 June 1993 a Committee of the Legislative Council conducted hearings as to the proposed retrospective amendments to the 1982 Act. Mr Robert Kimber, a solicitor with the Hydro, gave evidence at the Committee hearing. Mr Mulcahy, another applicant Mr Kevin Williams, and Mr Kelvin McCoy made submissions to the effect that whilst employed with the Hydro they had never been informed of the right of Wages employees and Temporary Staff employees to elect to become contributors. They also said in substance that Mr Taplin had told them and other employees that they were not entitled to become superannuation contributors.
Mr Kimber telephoned Mr Taplin and explained the allegation. Mr Taplin said he was well aware of the entitlements of temporary employees to elect to become contributors. Mr Kimber noted at the time that Mr Taplin strongly denied the allegation of misinformation and was prepared to swear "on a stack of Bibles" to the contrary. He held the position of Works Industrial Officer and part of his duties involved the induction of new employees, a process which would involve either handing out, or going through matters in, the Blue Book.
On 20 April 1995 Mr Kimber again telephoned Mr Taplin to discuss with him an allegation made by Mr John Gleeson who had complained to the Ombudsman about entitlement to contribute to the RBF Scheme. Mr Taplin denied this and wrote a letter from his home in Launceston dated 8 May 1995 which was as follows (CB3/126):
"To whom it may concern
I was employed by the Hydro-Electric Commission from 17/9/51 to 16/5/88.
On 4/1/71 I was appointed Works Industrial Officer Pieman River Power Development based at Tullah.
During my service induction meetings were held with prospective employees, attended by H.E.C. and combined union representatives. A book setting out entitlements including superannuation was issued.
As I recall there was no entitlement for an employee to become a contributor to R.B.F prior to 1974.
As from 1974 a temporary employee could apply for admittance after 12 months service if the employer guaranteed a further 3 years service.
From 1982 these employees could contribute if they so desired after having 4 years continuous employment.
On the few occasions that R.B.F. was mentioned in my presence I would most certainly conclude by saying 'It is the employees decision'.
I have never had a discussion with a person known to me as John Gleeson regarding superannuation, indeed I do not recall ever having spoken to him about any subject.
To the best of my knowledge the only Award Construction Employee to apply to the Retirement Benefits Fund to become a contributor was "Nobby" Heyward, his application was accepted.
Yours faithfully
(sgd) C N Taplin"
Mr Kimber noted Mr Taplin as saying, in the same conversation, that Mr Mulcahy had seen him in the last few weeks suggesting that the Hydro had given incorrect advice to employees and asking that he (Mr Taplin) sign a statutory declaration to that effect. Mr Taplin had refused. Mr Mulcahy had suggested that "some form of sweetheart deal" had been done with Mr Taplin and the Hydro. Mr Mulcahy in his evidence admitted having spoken to Mr Taplin and said that Mr Taplin had refused to sign such an affidavit (T155).
Counsel for the Hydro comments, to my mind validly, that notwithstanding Mr Mulcahy becoming aware, at by the latest the end of 1992, that he had missed out on the "jackpot", he made no attempt to communicate with his former immediate superior, Mr Taplin, the one who above all others had been, according to Mr Mulcahy's version, responsible for misleading him in such a damaging way. Conversely, it does not seem to me that Mr Taplin would have any motive to deny falsely that he had given misinformation to Mr Mulcahy and others. The suggested possibility that he might have feared being sued himself seems very remote.
Mr Taplin's letter of 8 May 1995 was written when he had been retired from the Hydro for seven years. Yet it is precise and accurate as to RBF Scheme entitlements. There are two possibilities. Either Mr Taplin was, while employed by the Hydro, ignorant of those entitlements and only acquired that knowledge when he wrote the letter for the purposes of rebutting Mr Gleeson's allegation, or Mr Taplin had known the true position all along. The latter seems much more likely. Why would Mr Taplin, retired in Launceston, take the initiative of enquiring as to the true position of RBF entitlements which (on Mr Mulcahy's case) was quite contrary to what Mr Taplin had always believed? Moreover, such an enquiry would be unlikely to occur without the involvement, in a quite improper way, of Mr Kimber.
If Mr Taplin knew the true position in 1995, and had always known it while he was employed by the Hydro, there is no logical reason why he should have misled Mr Mulcahy and others. There was no personal benefit for him in doing so.
Secondly, Mr John King. Mr King was employed by the Hydro from 1959 to 1984. From 1969 onwards he was in the Personnel Department and in 1982 became the Human Resources Manager. Mr King was one of a number of witnesses for the applicants who had been out of the Hydro's employ for a substantial period and who swore affidavits in sweeping and conclusionary terms. (Strictly speaking such evidence was probably inadmissible.) Mr King deposed (CB2/158):
"I had dealings with Barry Mulcahy who was an Industrial Officer on various West Coast construction sites. Throughout most of my period of service with the Hydro, Barry would have been told that as a construction worker he was classed as temporary and therefore not entitled to join the RBF Scheme. This would be the same advice that was given to any construction employee who sought access to the Scheme at that time."
Of course up until the end of 1974 that was in fact the position. However in cross-examination (T670) it emerged that he was well aware of the correct position and in particular of the statements in the Blue Book, which he accepted as accurate. He was instrumental in advising a friend, Mr Robin Bricknell, who was a temporary employee, to join (T671). His reliance on the Blue Book was apparent from the following answer (T673):
"There is no doubt in the early 70s and perhaps into the late 70s I would have to [say to] people that you are not entitled to contribute to RBF because you are on Construction, you're a temporary employee, and there is no eligibility. That advice would have changed early in the 80s that there is an opportunity; the Blue Book would demonstrate that."
When a passage from his affidavit relating to Mr Mulcahy was put to him he said (T673):
"Q. That, I take it, applies only to the period up until the amendment to the Act under which temporary employees could join?
A. Well, it would in a broad sense. I would have to say I cannot recall any issues or discussions over superannuation over the last two or three years of my time in the Commission and that's about the time from the book was produced in say `81/82."
I thought Mr King was an intelligent witness whose evidence as a whole was quite unhelpful to Mr Mulcahy and the other applicants. Certainly he provides no basis for suggesting that there was some policy that, even if temporary employees could elect to join, those in Construction could not.
Thirdly, Mr Garry Baker. Mr Garry Baker is currently the Executive Director of the Hydro. He commenced work in 1961 as a Junior Commercial Officer. From 1970 he was in the Personnel Department and became Personnel Manager, succeeding Mr King, in 1984. He occupied that position until about 1991 when he was appointed Manager Corporate Services. He was personally involved in the preparation of the Blue Book, although Mr Mick Matthews had the carriage of that matter.
He deposed (CB3/6) that in the course of his work he had many communications with Mr Taplin and Mr Mulcahy and considered Mr Mulcahy a "very good friend". On 30 June 1989 he received a letter from Mr Mulcahy enquiring about seeking his help in obtaining continuity of service for the purposes of long leave and the 1925 Act in respect of Mr Mulcahy's earlier service with the State Health Department, PMG and the Commonwealth Sub Treasury. After personal contact with the Solicitor General Mr Baker was able to achieve a satisfactory outcome. However Mr Mulcahy's letter is important for present purposes. It is as follows (CB3/15):
"TO Mr G Baker
Manager Human Resources
SUBJECT CONTINUITY OF EMPLOYMENT
DATE 30 JUNE 1989
Dear Sir
I respectfully request that consideration can be given to my service with the State Health Department, PMG (now Telecom) and the Commonwealth Sub Treasury prior to my joining the Hydro-Electric Commission in 1956.
Continuity is vitally important at this stage in my working life and it is compounded by the fact that I have never been considered for Retirement Benefits Fund.
My history indicates that I was either ill advised or perhaps not advised at all by these three authorities on the importance of continuity of service, and the passing of time has removed any recollection of any discussion on the matter.
However, although I attach no blame on the Hydro-Electric Commission for the predicament I now find myself in, I do respectfully ask for your assistance in the matter. Attached is evidence of my working time with the State Health Department, PMG and Commonwealth Sub Treasury.
Yours faithfully
B. Mulcahy
Field Industrial Officer
West Coast"
The expression "I have never been considered for the Retirement Benefits Fund" is to my mind inconsistent with a belief by Mr Mulcahy at the time that he had no entitlement, by way of election, to become a contributor to the RBF Scheme. Being "considered for" the Fund necessarily suggests some consideration by the Management of the Fund following an application by him. It is consistent with no such consideration having been given because he never made an application, because it never seemed a good idea to do so. If Mr Mulcahy's belief had been as he now asserts, it would be more natural for him to write something along the lines of "Of course, as I am only temporary Staff I have never been eligible to join RBF".
At the date of this letter the 1989 amendment had not come into operation (Royal Assent was on 21 December 1989). And, as has been mentioned, the potential of the amendment to enable temporary employees to join and buy back prior service did not become widely known until 1992. So as at June 1989 there would be no point in Mr Mulcahy joining the RBF Scheme because he could not buy back previous service - and would lose his rights under the 1925 Act in respect of 33 years' service. Thus his letter to my mind suggests that he regrets never having applied to join the RBF Scheme rather than that he believed he never had any right to do so.
On 22 June 1994 Mr Mulcahy wrote rather a bitter letter to Mr Baker (CB3/20) saying, amongst other things:
"I would like to remind you of what was said to me by yourself on numerous occasions, particularly during my last few years with the HEC. 'Its a shame you are not in the R.B.F'. Never once did you or for that matter any of your staff ever intimate to me that such a step was my entitlement and of course with that entitlement was the option to buy back pre 1982 service. Not once was it said 'why haven't you joined'."
By this stage Mr Mulcahy had become, as he states in his letter, a spokesperson for 166 former Hydro employees. Mr Baker deposed (CB3/6) that he telephoned Mr Mulcahy and said that his assertion about Mr Baker saying it was a shame that he wasn't in the RBF was not correct and that he was most disappointed with the personal attack. He said that he told Mr Mulcahy that he did not recall giving advice or discussing various options with him other than to advise him to seek further information from RBF. The phone call finished on an amicable basis. Mr Mulcahy called at his office a short time later and the two men went off to lunch together.
In any case, Mr Mulcahy's letter is not a complaint about misinformation as to his entitlement to elect to join the RBF Scheme. It is rather suggestive of a comment or observation by Mr Baker that Mr Mulcahy could have been in the Scheme and that it was a pity he was not. As already discussed, such a comment would be consistent with Mr Mulcahy being in a position (pre-"jackpot") where the RBF Scheme could have been beneficial for him had he joined earlier. He does not impute to Mr Baker a comment that "It's a shame you could not be in the RBF". And the real thrust of Mr Mulcahy's complaint was that he was not positively informed of the procedures that might have led him to the "jackpot". As will be discussed later, that was no part of the applicants' case to this Court.
I am quite satisfied Mr Baker never gave Mr Mulcahy any misleading advice about his entitlement to contribute to the RBF Scheme.
Fourthly, Mr David Bannerman. Mr Bannerman was Senior Industrial Relations Officer with the Hydro from 1985 until 1990. Mr Bannerman did not give any direct evidence of advising Mr Mulcahy. However he was the only one of the four persons named whose evidence displayed a misunderstanding of the true position. He asserted (CB2/4) that in 1985 he was directly responsible to Mr Baker and raised with him the eligibility of blue collar employees joining the RBF Scheme. He said that during these discussions with "various officers" of the Hydro it was made clear that Staff and Wages employees (other than engineers) who were engaged on construction sites were considered temporary employees for the purposes of the Retirement Benefits Act and were therefore not entitled to contribute to the RBF Scheme. Mr Bannerman stated that he was not aware why this policy existed but he "was told that it was long standing and had applied since the early years of operation by the Hydro. I accepted this advice and did not pursue the issue any further". And later (CB2/5):
"Staff in construction were classified as temporary with the exception of Engineers and other professionals for the purposes of the RBF Actand therefore were not entitled to participate in the RBF Scheme."
These employees were described as "temporary staff" and (CB2/6)
"It was well understood that a person in construction could not contribute to the RBF Scheme and this was communicated to the construction workforce."
The "communication" was not produced and of course is totally inconsistent with documentation such as the Blue Book and Head Office circular. It may be Mr Bannerman confused in his own mind "entitlement" and "obligation". In any event his evidence is quite inconsistent with that of Mr King, Mr Baker and Mr Matthews and I do not accept it.
Fifthly, Mr Mick Matthews. Mr Matthews was primarily responsible for the actual work in preparation of the Blue Book (CB3/129). He was cross-examined but it was not suggested to him that he misunderstood the correct position or misled Mr Mulcahy (T1093-1096).
Further, Mr Mulcahy had knowledge of Temporary Staff who were members of RBF Scheme, namely Mr Haywood, Mr Peter Turner, Mr Morrison, Mr Nation and Mr Read.
If Mr Mulcahy was concerned at his non eligibility for the RBF Scheme he never asked anybody at Head Office or at Tullah. It was put to him (T237):
"Q. The fact is you did not ask anyone, did you?
A. I had no reason to ask these people because the fact that I knew that I could not be a participant. How they got in it in general terms I would say good luck to them, but it was never anything more than that." (T231)
And (at T231):
"Q. Are you saying you were desperately keen to join?
A. Well, it was uppermost in my mind in my working life."
Further, Mr Mulcahy was based at Tullah at the time of the Head Officer circular and the Jack Russell meeting. It seems unlikely that he was not aware of those and particularly the latter, the whole purpose of which was concerned with temporary members joining the RBF Scheme. Mr Mulcahy's attempt to downplay the significance of the Blue Books has already been mentioned. I find it most unconvincing.
I do not accept Mr Mulcahy's case. I find that he was aware of his entitlement as a Temporary Staff member to elect to contribute to the RBF Scheme and that he did not do so prior to the termination of his employment because it did not suit him.
(e) Vlagsma
Mr Vlagsma deposed that about two weeks after commencing employment on 25 May 1982 he was visiting the Industrial Officers and spoke to Mr Taplin about superannuation. Earlier in 1982 he had joined a fund with AMP whilst he was with a former employer. He says he asked Mr Taplin about any superannuation policies which the Hydro had. Mr Taplin simply said that "the only Fund which was available was for Staff". Mr Vlagsma said he accepted this advice and did not pursue the issue any further. Mr Vlagsma deposed in his affidavit (CB2/259) that "At the time of joining the Hydro I do not recall being given a blue booklet detailing the conditions of my employment with the Hydro." In his cross-examination however he was more positive, being quite adamant that he had not seen the Blue Book until the hearing (T340). However his account of raising the question of superannuation became less definite. In his affidavit it appears as quite a specific enquiry, prompted by his recently joining another fund with his former employer. In cross-examination however he rather volunteered that it was an "off the cuff" question (T346). In fact he cancelled the earlier policy after eight months.
He claimed that he first learned of the 1925 Act in the course of the trial (T342). In fact he signed Forms of Election under the 1925 Act (CB10/112-114).
Generally he was not a particularly satisfactory witness, although in fairness there is probably some medical explanation for his memory impairment (T339). I am not prepared to find that he was misled by Mr Taplin in the way he suggested. His employment engagement was not long after the Blue Book was introduced. Mr Taplin knew about the Blue Book and there was no reason for him to misrepresent its contents. I am not satisfied that Mr Vlagsma would have elected to join the RBF Scheme, whatever form of communication the Hydro had effected.
(f) Williams
Mr Williams deposed that he first enquired about superannuation in about 1970. An Industrial Officer at Gowrie Park, Mr Stan Cameron, told him that as an Award employee he was not entitled to join (CB2/264). This query had been prompted by the experience of his daughter Linda (now Linda Bootland). She had commenced employment with the Hydro as a Typist/Clerk at Gowrie Park in 1970 and was required to contribute to superannuation. In 1976 Mr Williams took out a life insurance policy with Australia & New Zealand Insurance Company.
In 1980 the matter of superannuation again came up. He deposed (CB2/264):
"9. In 1980 I was concerned at providing for my retirement. At Tarraleah there were employees who contributed to superannuation and employees who did not. Employees who I knew contributed to superannuation were Jim Wilson and David Philpot who were on staff. To resolve any uncertainty and to determine whether I could contribute, I approached the Senior Works Clerk at Tarraleah, Mr Wayne Newman and inquired about my eligibility for Superannuation. I asked Mr Newman whether I was entitled to join Superannuation and he informed me that as an award worker I was not entitled to participate in superannuation and that you had to be a permanent staff member to contribute. This was consistent with my previous belief and I did not pursue the matter further. The advice which I received from my superiors was always accepted as correct and I did not question it further.
10. I believed that superannuation was for staff members only and that award workers were ineligible. After being told by Mr Cameron and Mr Newman that I had to be on staff to participate I believed this information must be correct and did not pursue the matter further. In those days word of management was considered to be correct and was not questioned. Mr Newman's advice was consistent with the earlier advice of Mr Cameron which confirmed my views that I was not entitled."
He deposed that the first time he had heard the term "RBF Scheme" used was after his retirement. In 1991 he attended a reunion at Tarraleah and a painter Mr Terry Emmerton informed him that Mr Laurie Peters had received approximately $70,000 to $80,000 when he retired. Somebody else confirmed this and said that Mr Peters was in the RBF Scheme. Mr Williams confirmed this with Mr Peters. He deposed (CB2/265):
"Had I been made aware that Mr Peters was entitled to participate in the RBF Scheme I would have pursued the matter with far more vigor. Like myself Mr Peters was employed as an Award employee. Had I been aware of my entitlements to join the RBF Scheme I would have contributed and would not have retired when I did. I would have continued working until age 65 to ensure I received a pension from the RBF Scheme."
In 1992 he heard about employees being allowed to enter the RBF Scheme and buy back years of service. He applied to the Superannuation Fund Board. He also attended a meeting at the Tullah Hotel organised by Mr McCoy and Mr Mulcahy. He deposed (CB2/266) that at the meeting "we were informed that we had been incorrectly advised of our entitlements to join the RBF Scheme".
He made an application to the RBF Board who on 13 November 1992 (CB2/269) wrote to him asking him for a signed statement, preferably a statutory declaration, which would provide the information necessary to satisfy the Board that he had lost the right to join and contribute to the RBF Scheme through no fault of his own. In its letter the Board pointed out its "preliminary view" that it did not have a power to grant admission in the case of somebody who had ceased to be employed by the State.
Mr Williams produced a copy of a statutory declaration he made on 23 March 1994 (CB2/272) which he asserts was to comply with the requirements of the Board in its letter just mentioned (CB2/266). In the statutory declaration Mr Williams says amongst other things
"I was not advised that I could pay into the Hydro-Electric Commission Superannuation Fund nor was I informed that I could buy back my years of service. I was no longer employed with the Hydro-Electric Commission, when the buy-back scheme was introduced. I did not become aware of it until later.
...
In 1980 I was advised by Mr. Newman with regard to my superannuation options. On this advice I did not pursue membership of the superannuation fund available to Hydro-Electric Commission employees at that time."
The last two sentences seem ambiguous, and perhaps deliberately so. They are inconsistent with Mr Williams' affidavit in the present proceeding which alleges actually positively misleading advice by Mr Newman as to eligibility, as distinct from the desirability of joining. This is in a setting where at the meeting in 1992 the issue of incorrect advice, and not merely failure to advise, was raised.
There is some evidence of a circumstantial kind which in itself would point away from a conclusion that Mr Williams was, at all times prior to his retirement, unaware of the RBF Scheme and his eligibility to elect to join it. First, Mr Nigel McGowan whom Mr Williams knew well (Mr McGowan was Mr Newman's deputy) was from 1979 to 1981 a Storeman/Timekeeper at Tarraleah and from then until 1984 a Clerk Class 2 at the same location. He deposed (CB3/324) as to his knowledge of the eligibility of temporary employees to elect to join. He received bundles of the Blue Book which were given to employees and the Staff Manual which were given to members of Staff. He deposed (CB3/325):
"8. I recall the issue of eligibility for RBF being talked about in canteens at Tarraleah by staff and wages employees. I do not recall any discussion in which it was suggested that temporary staff or wages employees were not eligible to contribute to RBF. The loss of entitlements under the 1925 Act if you elected to join RBF was something that was discussed. There was also discussion about the merits of electing to join RBF when past service was not recognised.
9. Whilst I was employed at Tarraleah a common view that was expressed amongst employees that I came in contact with was that it was better to refuse an appointment to a permanent staff position and remain as a wages/temporary employee than to be classified as permanent and required to make compulsory contributions to RBF. The view expressed was that it was not worthwhile contributing to RBF given the cost involved and the loss of any entitlement under the 1925 Act which cost nothing."
Secondly, Mr Harold Cornelius was a Timekeeper/Clerk at Tarraleah. In 1986 he was appointed to Staff but complained about having been obliged to contribute to RBF. He went to Mr Baker for assistance. Mr Baker went with him to the Secretary of the Hydro and put his case for being allowed to be reclassified as temporary and hence not obliged to contribute to RBF. The Secretary agreed (CB3/5).
Thirdly, Mr Peters (already mentioned) and Mrs Connie Evans were employees not on Permanent Staff who elected to become RBF contributors at Tarraleah in 1981. Mrs Evans was a good friend of Mr and Mrs Williams and told Mrs Williams that she had joined the RBF and Mrs Williams said to her it was a good idea (T705). It seems unlikely that this would not have come to the knowledge of Mr Williams.
More fundamentally however there is an episode which is quite destructive of Mr Williams' case. Mr Ron King was a painter at Tarraleah. He was on Staff and had been a permanent employee and an RBF contributor since 2 November 1966 (CB10/119-122, 134A, 135, 135A). He was transferred to Hobart on 18 December 1978. Mr Williams took his position. But to avoid contributing to RBF, Mr Williams at his own instigation, was instead promoted to Grade 10 and thus remained a Wages employee. That this was the reason was confirmed by Mrs Evans (T706).
Mr Williams' efforts to meet this dilemma were quite unconvincing. He claimed that he did not know Mr King was a member of Staff and asserted quite positively that Mr King was "not paying into super" because he knew him personally (T359). In this untrue assertion he was supported by Mr Newman (T507). Indeed it was the discussion relating to succeeding Mr King that is the discussion referred to in par 9 of Mr William's affidavit. The version in his affidavit is, I find, untrue.
(g) Conclusion
As to all the applicants I am satisfied that, whatever information was made available to them by the Hydro about their right to elect to contribute to the RBF Scheme, they still would not in fact have elected.
The case as pleaded and conducted by the applicants is not a complaint that the Hydro failed to inform them of the particular procedures, statutory rights and discretions that resulted in the "jackpot". Rather their case is that, had they been informed of their right to elect which existed after the 1974 amendment, and no more, they would have exercised that right.
In addition to the particular circumstances in relation to each individual referred to above, this claim needs to be assessed against the objective likelihood of a rational decision being made to elect, assuming express advice being given as to that right but not any advice as to the "jackpot".
Prior to the 1974 amendment the RBF Scheme was only available to Permanent Staff. A rational decision might well be that it was better to stay as a Wages employee or in a Temporary Staff position rather than take a position on Permanent Staff which would oblige a mandatory 5.5 per cent deduction from salary, with no certainty of benefit and the loss of the 1925 Act entitlement.
From the 1974 amendment onward Wages employees and Temporary Staff had the option to join. But if there was no realistic probability of working until retirement age, a rational decision would in all probability involve staying with the 1925 Act, which involved no cost, rather than joining the RBF Scheme. If the employee had a real concern about superannuation, the obvious course would be to take out a portable private superannuation scheme which could be run in parallel with the (possibly remote) prospect of obtaining a benefit under the 1925 Act, which would cost nothing anyway.
After 1977 there was the additional element that an employee could retain the option to claim the 1925 Act entitlement if it turned out at the time of the retirement that that entitlement was better than under the RBF Act.
After 1982 a worker who decided the prospects of a benefit under the RBF Scheme were outweighed by the costs, but who nevertheless wanted portable private superannuation, had to make an assessment of prospects under the 1925 Act. If those prospects were sufficiently remote, it was better to elect out of that Act in order to obtain the benefit of tax deductibility on the private superannuation premiums. Thus a worker who elected out of the 1925 Act in order to obtain tax deductibility on insurance premiums would probably have considered there was no realistic prospect of obtaining a benefit under the Act, that is, of continuing in employment until retirement age. The significance of this is that the qualifications for obtaining a benefit under the 1925 Act were essentially the same as obtaining a benefit under the RBF Scheme. Thus those such as the applicants Cooper and Vlagsma who elected out of the 1925 Act probably would for that reason alone not have contemplated contributing to the RBF Scheme.
Damages (if recoverable)
Actuarial evidence was given by Mr Colin Grenfell on behalf of the applicants and Mr Brian Bendzulla on behalf of the Hydro.
The basic approach was the same. In respect of each applicant the actuaries take
(i) the amount of the RBF benefit that he would have obtained on termination, less
(ii) 1925 Act payments received, less
(iii) an allowance for the contributions that the applicant would have hypothetically made.
There were some item of difference as to which I asked counsel to give some further attention. The main item of contention remaining was in relation to interest on the notional contributions which the applicant would have made ((iii) above). Were it necessary to quantify damages I would accept the revised calculations of Mr Grenfell contained in his report of 21 April 1998.
IV THE 1993 RETROSPECTIVE LEGISLATION
The 1993 retrospective legislation is discussed above in Part I Section 2(j). Counsel for the Hydro submitted that the legislation would preclude some of the applicants' causes of action even if they were to be otherwise successful.
Construction
(a) The law
While legislatures can validly enact retrospective legislation, courts will not give retrospective effect to the legislation further than is necessary to comply with the meaning of the statute strictly construed: Boheto Pty Ltd v Sunbird Plaza Pty Ltd [1984] 2 Qd R 9 at 14, per Lord Templeman; R v Kidman (1915) 20 CLR 425 at 442-443 per Isaacs J; Polyukhovich v The Commonwealth (1991) 172 CLR 501 at 642 per Dawson J.
(b) "in respect of"
"Action" in s 86A(6) is used here in the sense of a cause of action. A single proceeding in a court may contain a number of causes of action (the present case being a good example). Obviously enough, Parliament is not to be taken as having intended to defeat the whole proceeding. The causes of action in the present case which might be affected by s 82A(6) are those which allege breach of statutory duty, breach of contract, breach of a tortious duty of care and misleading and deceptive conduct arising out of the alleged failure of the Hydro to inform the applicants of their right, as temporary employees, to elect to become contributors to the RBF Scheme. If the applicants had been found to be permanent employees, s 82A(6) would have no application.
Focussing more closely, s 82A(6) is directed at an action which answers the description of an "action ... in respect of the failure by a responsible officer of an Agency or branch" to notify a person of entitlement to elect or to provide a form of election.
In my opinion none of the relevant causes of action answer that description. None of those causes of action as pleaded contain as a material element the relevant failure of a "responsible officer" of the Hydro: see Part III Section 1(a) above. For present purposes, the applicants' causes of action complain of a failure by the Hydro, pursuant to statutory, contractual or tortious duty, to notify the applicants of their rights of election. The causes of action are not "in respect of the failure of a responsible officer" because they do not rely on any such failure. There is a general failure alleged on the part of the Hydro, not a failure which can be characterised as a failure by any particular individual or the holder of any particular office. And those parts of the applicants' case which rely on positive misrepresentation are not allegations of a failure by anybody.
The matter may be tested in this way. Let it be assumed that there was evidence that the Secretary of the Hydro had written to each applicant, prior to the termination of his employment, advising of his right of entitlement. Such evidence would provide a complete answer to all the causes of action based on temporary employment, notwithstanding that the "responsible officer" had not complied with his regulatory and statutory obligations.
I conclude that, could the applicants otherwise successfully make out the relevant causes of action, the 1993 Act would not defeat their claims.
(c) "enactment"
The applicants also relied on another basis for claiming that the 1993 Act did not preclude their causes of action. In its terms, sub-s(6) only applies to a failure to notify under "this section" (i.e. s 82A) or "a corresponding previous enactment". Section 82A was inserted into the 1982 Act in 1989. Therefore it is said no obligation existed under s 82A at the time at which the applicants say that the Hydro was under an obligation to notify them of their entitlements. The previous version of s 82A was contained in reg 24(1)(ab) of the 1982 Regulations. The applicants submit that actions based upon a failure to notify in accordance with reg 24 are not covered by s 82A(6) because reg 24 is not an "enactment".
I do not agree. The word "enactment" refers to both Acts and regulations. Both are laws which derive their authority from Parliament. Even if "enactment" in its ordinary meaning refers only to an Act, s 5(2) of the Acts Interpretation Act 1931 has the effect that it also includes regulations made under an Act.
Unconscionable conduct
(a) The law
The applicants claim that the Hydro's conduct in requesting the Tasmanian Government to effect the passage of the 1993 Act constituted unconscionable conduct in equity and was in breach of s 51AA(1) of the Trade Practices Act, which provides:
"51AA. (1) A corporation must not, in trade or commerce, engage in conduct that is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories."
It is not strictly necessary to determine this issue since I have found that the applicants have not established their claims, and if they had, the 1993 Act would not be an answer. However in case an appellate court should reach different conclusions, I shall say something about the argument.
I can immediately dispose of the claim under s 51AA for a number of reasons. As with the causes of action under s 52, s 51AA requires that the conduct in question occur "in trade or commerce". On the authority of Nelson (see Part III Section 2 above), the Hydro's communications with the Government in relation to the 1993 Act could not be said to have occurred in trade or commerce. The Hydro was not engaged in trade or commercial dealings with the Government in this regard. Also, s 51AA only came into operation on 21 January 1993. It does not purport to have retrospective operation and could only apply to conduct which occurred after that date. Finally, s 51AA is contained in Part IVA of the Trade Practices Act. Damages cannot be recovered under s 82 of the Trade Practices Act for a breach of s 51AA because s 82 does not apply to Part IVA. For those reasons, the claim for damages for breach of s 51AA of the Trade Practices Act must fail.
In any case, the conduct of the Hydro was not unconscionable. The doctrine of unconscionable conduct in equity is succinctly stated by Deane J in Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 474 as follows:
"Unconscionable dealing looks to the conduct of the stronger party in attempting to enforce, or retain the benefit of, a dealing with a person under a special disability in circumstances where it is not consistent with equity or good conscience that he should do so. The adverse circumstances which may constitute a special disability for the purposes of the principles relating to relief against unconscionable dealing may take a wide variety of forms and are not susceptible to being comprehensively catalogues [sic]."
See also Blomley v Ryan (1956) 99 CLR 362 at 428-9 and Louth v Diprose (1992) 175 CLR 621.
(b) Negotiations with Government
The evidence on this issue was that by 1992 the Hydro estimated that there were somewhere between 500 and 1300 potential former employees' claims. No budgetary allocation had been made (T967). If there were only 500 claimants, the estimated cost to the Hydro was $26.6 million (T969). On 24 February 1993 Mr Robert Kimber, the Senior Legal Officer of the Hydro, wrote to the Secretary of the Treasury (CB6/203) giving the figure just mentioned and other information "to underline the potentially serious financial consequences to the Commission if the [retrospective] legislation was not forthcoming" (T969). The financial interests of the Hydro and the Tasmanian Government were, if not identical, aligned (T970). Mr Kimber was closely involved in discussions with Treasury and RBF representatives in the drafting of the legislation. Counsel for the applicants pointed out:
"All of this was done without even the slightest reference to the applicants of what was going on, or advising them of the likely consequences of the legislation."
(c) Special disadvantage
The applicants were not at a special disadvantage vis-ŕ-vis the Hydro in any relevant sense. Not infrequently in employment relationships an employer occupies a stronger position than an individual employee in certain respects. But the mere fact that one party is more powerful than another does not mean that the less powerful party is at a special disadvantage. Something more must be shown. As Mason J said in Amadio (at 462):
"I qualify the word 'disadvantage' by the adjective 'special' in order to disavow any suggestion that the principle applies whenever there is some difference in the bargaining power of the parties and in order to emphasize that the disabling condition or circumstance is one which seriously affects the ability of the innocent party to make a judgment as to his own best interests ...".
The applicants did not point to any particular disability which meant that they were unable to make a judgment as to their own best interests.
In any event, there was not in relation to this aspect any transaction between the Hydro and the applicants. Typically the cases on unconscionable conduct involve a transaction between A and B, such as guarantee (Amadio) or gift (Louth), in which A is said to be at a special disadvantage vis-ŕ-vis B. The worst that can be said in the present case is that the Hydro dealt with a third party (the Tasmanian Government) in matters which might affect the interests of the applicants without disclosing those dealings to the applicants. Absent some relevant fiduciary duty owed by the Hydro to its employees in this regard - and none was suggested - I do not see how there was special disadvantage in any relevant sense.
And if the essential complaint is one of non-disclosure, the only difference that disclosure would have made is that the applicants might have been able, together with other former employees, Unions and other interested persons, to lobby against the proposed legislation and provoke public opposition to it. Whether that would or could have made any difference is impossible to say. In fact the legislation was discussed in the public domain before enactment, and in particular before a Committee of the Legislative Council (CB3/122). The Court is hardly in a position to assess the likely effectiveness of a hypothetical political and public relations campaign.
(d) Whether conduct unconscionable
Moreover, it is difficult to see how the Hydro's conduct was unconscionable. The Hydro recognised that the number and total amount of potential claims was huge, and acted to protect its own interests. For a party to act in protection of its own interests is not, without more, unconscionable conduct, something that "shocks the conscience". I venture to repeat what I said in "Truth, Lies and Stereotype: Stories of Mary and Louis" (1996) Newc LR Vol 1 No 3 at 22n, a discussion of Louth v Diprose:
"The law does not seek to enforce a standard of literal equality. Nor should it. In both commercial and private transactions one party will often be at an advantage because he or she is smarter, financially stronger, better informed or under less pressure than the other party. If the first party is aware of these advantages, he or she is, I suppose, in a sense 'exploiting' the other party. But it could not be rationally suggested the courts should set aside all such transactions. The Mary - Louis transaction might be seen as no more than the private and domestic equivalent of a commercial hard bargain where the better-positioned bargainer came out on top. Louis' infatuation was a self-inflicted weakness and Mary took advantage of it. That might have been unfair, but the world is not always fair. Mary's conduct did not pass over the ill-defined border into that specially reprehensible and repellent unfairness which lawyers call unconscionability - something that 'shocks the conscience'."
And since the Parliament of the State of Tasmania passed the 1993 Act it is not appropriate for a Court to make some kind of moral or ethical assessment of the legislation. The 1993 Act represents the democratic will of the people of Tasmania. There is no equivalent to the harsh or unjust outcome for the plaintiff which has usually founded unconscionable conduct claims.
(e) Unconscionable conduct as a cause of action
In any case, the applicants would face a further hurdle. Generally, an unconscionable conduct claim in equity only gives rise to the right to set aside the transaction which has been vitiated by the conduct. Counsel for the applicants was not able to point to any authority for the proposition that unconscionable conduct can found a free-standing claim, sounding in damages, and unconnected with some other transaction in respect of which relief is claimed.
V LIMITATION DEFENCES
Finally, I turn to the limitation defences. The Hydro asserts that many of the applicants' claims are statute-barred.
Accrual of causes of action
Section 4(1)(a) of the Limitation Act 1974 prescribes a six year limitation period for "actions founded on simple contract (including contract implied by law) or founded on tort, including actions for damages for breach of statutory duty". Section 82(2) of the Trade Practices Act 1974 (Cth) prescribes a three year limitation period for actions for damages under s 82 of that Act. For unconscionable conduct contrary to s 51AA of the Trade Practices Act the limitation period is two years: see s 87(1CA)(a).
I have found none of the causes of action relied on are made out. However I shall consider the application of these various limitation periods in the event that an appeal produces a different result.
A cause of action means "every fact which is material to be proved to enable the plaintiff to succeed": Cooke v Gill (1873) 8 LR CP 107 at 116 per Brett J.
Causes of action for breach of statutory duty and tort and under the Trade Practices Act (both for misleading and deceptive conduct and for unconscionable conduct) accrue at the time that damage is suffered. As to Trade Practices Act claimssee Wardley Australia Limited v Western Australia (1992) 175 CLR 514 (s 52 contravention) and Gregg v Tasmanian Trustees Limited (1997) 143 ALR 328 at 363-364 (s 51AA contravention). Causes of action in contract accrue at the time of breach, since breach of contract is actionable without proof of damage.
Knowledge of the right to sue is not an essential ingredient of a cause of action: Torrens Aloha Pty Ltd v Citibank NA (1997) 144 ALR 89 at 101 per Sackville J, with whom the other members of the Full Court agreed. Thus I do not accept the applicants' argument that their causes of action only accrued when they became aware that they had had, prior to termination of employment, a right to elect to become contributors. The cases dealing with the liability of builders and local government authorities in respect of defective buildings stand on a different footing (no pun intended). The cases are reviewed by the Privy Council in Invercargill City Council v Hamlin [1996] AC 624 at 644-649. Where cracking or other defects develop in a building, the cause of action will not accrue until the defects are discovered, or are reasonably discoverable. The rationale is that the loss and damage for which the claim is made is economic, not physical. Until the damage is discovered or reasonably discoverable the value of the building is not affected: Hamlin at 647, Heyman 157 CLR at 503-505 per Deane J. Hamlin does not detract from the general principle that limitation periods commence to run irrespective of the plaintiff's knowledge of the existence of the cause of action.
In the present case the claimed loss and damage is undoubtedly economic. However, the critical knowledge - the right of election for temporary employees - was reasonably discoverable and was not comparable to hidden cracking in a building. The right had been enshrined in Acts of the Tasmanian Parliament since 1974. The present case is analogous to the situation where negligent advice or conduct results in the loss of a right, such as the failure of a solicitor to commence a claim within a limitation period. Time for a claim against that solicitor will run from the time the period expired.
All causes of action in the present case accrued when each applicant's employment was terminated. For causes of action for breach of statutory duty or in tort, it was only then that the applicant lost the right to elect to contribute to the RBF Scheme and thereby suffered damage. For a cause of action in contract, if there was a contractual obligation, which of course I do not accept, it was a continuing one (see Scally at 308) and the Hydro was in breach of it on the last day of each applicant's employment.
The present proceeding commenced on 1 February 1996. The applicants Duggan and Williams, whose employment terminated before 1 February 1990, are outside the six year period and all their claims would be defeated. In respect of the Trade Practices Act claims, all applicants' claims would be defeated, whether under s 52 or s 51AA. The remaining causes of action are prima facie within the limitation period.
Fraud and concealment
Section 32 (1) of the Limitation Act 1974 provides:
"32 (1) Subject to subsection (2) where, in the case of any action for which a period of limitation is prescribed by this Act -
(a) the action is based upon the fraud of the defendant or his agent or of any person through whom he claims or his agent;
(b) the right of action is concealed by the fraud of any person referred to in paragraph (a); or
(c) the action is for relief from the consequences of a mistake,
the period of limitation shall not begin to run until the plaintiff has discovered the fraud or the mistake, as the case may be, or could with reasonable diligence have discovered it."
Subsection (2) is not relevant for present purposes. I respectfully agree with the decision of McLelland J in Hamilton v Kaljo (1987) 17 NSWLR 381 at 386 to the effect that "fraud" in a limitation statute necessarily involves dishonesty or moral turpitude, contrary to the English decisions referred to in his Honour's judgment. In my opinion the conduct of the Hydro did not involve fraud in the relevant sense. The worst that can be said is that more steps might have been taken to inform temporary employees of their right to elect. But in the light of the evidence as to the Blue Books, the Head Office circular and the systems which existed at Head Office I believe there is no foundation whatever for a suggestion of some kind of fraudulent conspiracy within the upper echelons of the Hydro to conceal RBF rights. For the same reason, there was no concealment. As already mentioned, the right of election was contained in a statute.
VI SUMMARY OF FINDINGS
The applicants were not permanent employees. The Hydro did not owe them any duty in law to advise them of their right to elect to become contributors to the RBF Scheme, whether such duty be founded in statute or in tort or contract. The Hydro did not, in relation to the applicants' right of election, engage in misleading or deceptive conduct in trade or commerce. If there was any such duty, there was no breach. If there was a breach, the applicants have not established that they would have suffered any damage.
The 1993 Act would not provide a bar to the applicants' claims, were those claims otherwise established. But were the 1993 Act to apply, the applicants could not defeat its operation by reliance on the doctrine of unconscionable conduct. Claims under statute and in tort or contract are barred by the Limitation Act 1974 in respect of those applicants whose employment terminated before 1 February 1990. The operation of the Limitation Act is not defeated by fraud or concealment. All claims under the Trade Practices Act are barred.
VII ORDERS
It must follow from the foregoing findings that the claims of the six selected applicants will be dismissed and that there be an order that they pay the Hydro's costs. However there should be an opportunity for submissions on the part of any of the other applicants who may wish to argue that there are personal circumstances which would take them outside these findings. The making of formal orders in respect of the claims by the six selected applicants will be postponed until submissions are dealt with. The order will be that the proceeding be adjourned to a date to be fixed and there will be a direction that any submissions on the part of the applicants, that is to say all applicants, be filed and served within fourteen days. Submissions by the Hydro in response are to be filed and served within seven days thereafter.
VIII ACKNOWLEDGMENTS
This has proved to be a large, complex and difficult case. There were 77 witnesses and a Court Book of 40 volumes. I have been greatly assisted by counsel and their instructing solicitors, by my successive Associates Ms Christine Petrov and Ms Marnie Hammond, my Secretary Mrs Judith Dikstaal, the staff at the Hobart Registry of the Court, and Auscript.