SAS Trustee Corporation v Rossetti

Court of Appeal (NSW)|2018-03-29|Before: McColl JA, Basten JA, Payne JA, Mr J, Harrison J

Solicitors: SAS Trustee Corporation (Appellant) Cardillo Gray Partners (Respondent) File Number(s): 2017/193514 Decision under appeal Court or tribunal: Supreme Court Jurisdiction: Common Law Citation: [2017] NSWSC 732 Date of Decision: 15 June 2017 Before: Harrison AsJ File Number(s): 2016/18047

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Judgment

THE COURT: The appellant, SAS Trustee Corporation, may be referred to by its statutory acronym, STC. [1] The STC, formerly the State Authorities Superannuation Board, operates as trustee for and administers, relevantly for present purposes, the superannuation scheme established by the Police Regulation (Superannuation) Act 1906 (NSW) ("Police Regulation Act"). [2]
The respondent is a former police officer. His claim for an annuity under the Police Regulation Act having been refused by the STC, he sought to appeal to the Industrial Court pursuant to a power conferred by the Administration Act. Before the matter was determined by the Industrial Court, that Court was abolished and the jurisdiction and the appeal were transferred to the Supreme Court.
The respondent was successful before the primary judge (Harrison AsJ). [3] The STC has appealed from that decision. Although not raised by the parties, the first question which this Court must address is whether the Industrial Court had, and the Supreme Court now has, jurisdiction to hear the "appeal" from the determination of the STC. It is uncontroversial that, where a point is taken as to jurisdiction, it is the duty of the court to determine that matter first. [4] Usually that will turn on a question of law, but it may also turn on questions of fact. [5] Even if the parties do not take the point, if a real issue as to jurisdiction suggests itself to the court, it must be addressed. [6] The parties cannot confer jurisdiction on a court by consent. As explained in Cockle v Isaksen: [7] "The respondents showed no more desire than did the appellant to question the Court's jurisdiction to entertain the appeals. But for ourselves we were unable to perceive how ... an appeal in any of the present cases could lie to this Court, that is to say, unless that provision were considered invalid. In these circumstances we were not prepared to entertain the appeal simply because the parties wished us to do so."
In order to address the question of jurisdiction, it is appropriate first to outline aspects of the chronology relevant to that question.

Factual and procedural background

The respondent resigned from the Police Force on 6 May 1994. On 27 May 2010 (more than 16 years later) the respondent submitted an application for a superannuation benefit payable under s 10 of the Police Regulation Act. The application asserted that the respondent was incapable of discharging full operational duties on the last day of his service because of (a) post-traumatic stress disorder and (b) an injury to his right ankle.
The application for the benefit passed through a number of stages. On 23 February 2011 the Commissioner declined to certify the respondent's psychological injury as being "hurt on duty". On 26 July 2012 the Police Superannuation Advisory Committee declined to certify the respondent as "incapable, from a specified infirmity of body or mind, of discharging the duties of his office at the date of his resignation", being the test provided by s 10B of the Police Regulation Act as in force at the date of the respondent's resignation in May 1994. That decision constituted a decision of the STC, but was understood to be subject to an internal review, which the respondent requested.
The critical decision, sought to be the subject of an appeal, was made on 7 August 2014 and conveyed by letter to the respondent's solicitors on 11 August 2014. The letter stated: "On 7 August 2014, the dispute was determined pursuant to section 67 of the [Administration Act] by confirming the decision of the Police Superannuation Advisory Committee, as it is not satisfied, in terms of the version as at 6 May 1994 of section 10B(2) of the [Police Regulation Act], that Mr Rossetti was incapable, from an infirmity of body or mind, on the available medical evidence, of discharging the duties of his office at the time of his resignation on 6 May 1994."
The letter then proceeded to draw the solicitors' attention to a right of appeal under s 88 of the Administration Act, with respect to a determination of the STC under s 67 of that Act.
As will be explained shortly, the issue as to the jurisdiction of the Industrial Court under s 88 of the Administration Act was raised in a judgment in this Court in SAS Trustee Corporation v Woollard. [8] Relevantly for present purposes, the judgment in Woollard was delivered on 28 March 2014, more than four months before the letter sent to the respondent.
The right of appeal conferred by s 88 of the Administration Act contains a six month period within which to lodge an appeal. The respondent lodged an appeal with the Industrial Court of New South Wales on 10 February 2015. The STC filed a notice of appearance on 17 February 2015; unsurprisingly, considering the content of its letter, it took no objection to the jurisdiction of the Industrial Court.
The matter proceeded at what appears to have been a leisurely pace in the Industrial Court, prior to the abolition of that Court on 8 December 2016. The matter, being then an "unheard proceeding" for the purposes of the transitional provisions, [9] was transferred to the Supreme Court.
The matter was heard in the Common Law Division on 20 March 2017, judgment being delivered on 15 June 2017. The STC filed a notice of appeal on 14 September 2017.

Police Regulation Act - scope of review jurisdiction

The appellate jurisdiction with respect to decisions by the STC under the Police Regulation Act was raised in one judgment in Woollard. That case concerned an appeal taken to the Industrial Court, as did this case. Although the present case involves an appeal from the Supreme Court, following the transfer of the jurisdiction of the Industrial Court, that circumstance does not affect the reasoning in Woollard.
The issue of jurisdiction was not addressed by the parties in Woollard. Nor was it raised by the parties in the present proceedings, but the Court advised the parties prior to the hearing that it wished to hear from them as to the jurisdiction of the Industrial Court and, in turn, the Supreme Court. The STC, no doubt appropriately, adopted a neutral position, while assisting the Court with an analysis of the legislation. The respondent, which had an interest in preserving the judgment under appeal, submitted that the Court had jurisdiction.
Because the issue is of some importance, it is appropriate to restate the basic issue of statutory construction and address its resolution.
The letter to the respondent of 11 August 2014 asserted that the decision of the STC was made pursuant to s 67 of the Administration Act. That provision relevantly states: 67 Determination of disputes (1) A dispute under this or any other Act concerning an STC scheme is to be determined by STC or an STC disputes committee, except as otherwise provided by the regulations. … (5) This section does not apply to a dispute in respect of which an application may be made to the District Court under section 21 of the Police Regulation (Superannuation) Act 1906.
On the basis that he was a disabled member of the Police Force, on 27 May 2010 the respondent sought an annual superannuation allowance, pursuant to s 10 of the Police Regulation Act. Section 10B(2), as in force at the date of his discharge, provided as follows: 10B Medical examination of disabled member and determination of whether hurt on duty … (2) An annual superannuation allowance shall not be granted under section 10 to a former member of the police force who resigned or retired unless: … (b) the Board (having regard to medical advice on the condition and fitness for employment of the member) has certified that the former member would have been incapable, from that infirmity of body or mind, of discharging the duties of his office at the time of his resignation or retirement.
The STC, as the successor to the Board, declined to certify in accordance with that provision. Accordingly the respondent was not entitled to the annual superannuation allowance. Had he been so certified, the respondent would further have required a decision of the Commissioner of Police that the infirmity to which the certificate related "was caused by … the former member having been hurt on duty when he was a member of the Police Force", pursuant to s 10B(3)(a).
Section 21 of the Police Regulation Act, as in force at the date of the decision of the STC in August 2014, provided: 21 Determination by District Court (1) A person who considers himself or herself aggrieved by: (a) a decision made by STC on a matter that arises under this Act by reason of a member of the police force being hurt on duty, or (b) a decision made by the Commissioner of Police under section … 10B(3)(a) …, may, within the period of 6 months after the person is notified of that decision, apply to the District Court for a determination in relation to that decision.
If the refusal of the STC to certify that the respondent satisfied the conditions of s 10B(2) constituted a decision by the STC on a matter arising under the Police Regulation Act for the purposes of s 21(1)(a), then, pursuant to s 67(5) of the Administration Act, that decision was not a decision under s 67. The final link in the statutory chain is s 88 of the Administration Act which, as in force in 2014, relevantly provided: 88 Appeals (1) A person aggrieved by a determination of STC or an STC disputes committee under section 67 (relating to determination of disputes) may appeal against the determination to the Industrial Relations Commission in Court Session (the Commission). [10]
Thus, if the decision of the STC was not a determination under s 67, there was no right of appeal to the Industrial Court (as the Industrial Commission in Court Session was then known), pursuant to the Administration Act. There was no other source of jurisdiction in the Industrial Court.
The reasoning in Woollard at [100]-[103] addressed a possible argument that s 21(1)(a) did not apply to a decision made by the STC with respect to a former (as opposed to a current) member of the Police Force. That distinction was not pressed by either party and it is not necessary to revisit its rejection in Woollard; it does not provide a satisfactory basis for limiting the jurisdiction under s 21(1). A second issue, not fully articulated in Woollard, is that the decision of the STC under s 10B(2) is a precondition to a finding by the Commissioner, under s 10B(3)(a), that the officer was "hurt on duty". It is thus arguable that the prior decision of the STC did not concern a matter arising under the Act "by reason of [the member] being hurt on duty". It may be accepted that this language is ambiguous: it could refer either to a matter arising by reason of a claim that the member was hurt on duty, or by reason of a determination that the member had been hurt on duty.
The latter, narrower, construction would limit appeals from decisions of the STC under s 21 largely to assessments as to the amount of the appropriate allowance or gratuity, for example under s 12 or s 12D of the Police Regulation Act. In other words, the narrower construction would not leave s 21(1)(a) with no operation.
While that is a possible construction, it does not conform to the apparent purpose of the provision. Whether a member has been hurt on duty is a decision to be made by the Commissioner in all circumstances. The scheme of the legislation, since 1979, [11] divides decisions as to the capacity of the injured member to perform the functions of a police officer (vested in the STC) and the cause of the infirmity, namely whether or not it is work-related (vested in the Commissioner). There is nothing in the language of s 21 which would support the view that the District Court was to review important discretionary and evaluative judgments of the Commissioner, but not similar decisions of the STC.
Further, pars (a) and (b) of s 21(1) should be in the reverse order if only decisions by the STC following certification by the Commissioner were to be reviewable.

Legislative history

Further support for the broader approach may be found in the legislative history. Prior to the commencement of the Police Regulation (Superannuation and Appeals) Amendment Act 1979 (NSW) ("1979 Amendment Act") in November 1979, the Police Regulation Act was a far simpler instrument. The Act established a Police Superannuation Fund which was under the control of the Police Superannuation Board, also constituted by the Act. [12] The Act served two separate purposes. First, it provided for superannuation in the form of a pension payable to a member of the police force who had served at least 20 years and had not retired before age 60. Secondly, it provided for members who were discharged due to incapacity, arising from an infirmity occasioned through injury in the actual execution of their duties. [13] All functions in relation to the administration of both parts of the scheme were undertaken by the Board. There was no right of appeal or review with respect to decisions of the Board.
The 1979 Amendment Act, inserting s 21 into the Act for the first time, made a raft of changes to the functions of the Board and set up a division between the functions of the Board and those of the Commissioner. Further, the term "hurt on duty" was introduced by the 1979 Amendment Act and defined in s 1(2) of the Police Regulation Act, as follows: hurt on duty, in relation to a member of the police force, means injured in such circumstances as would, if the member were a worker within the meaning of the Workers Compensation Act 1987, entitle the member to compensation under that Act. [14]
In his second reading speech for the 1979 Amendment Act, the Minister stated that, "[t]he main changes will be to bring benefits to Police in line with those under the Workers' Compensation Act which has been used to determine the level of lump sum benefits for the loss of a limb, the loss of an eye, etc, and also in the event of death." [15]
This change was important because, as the Minister further explained: [16] "Members of the Police Force have been excluded from workers compensation from the enactment, in 1926, of the principal workers compensation legislation now in force. The reason for the exclusion was the existence of a scheme of compensation for police hurt on duty in the principal Police Regulation (Superannuation) Act, enacted in 1906. … It has been decided that police should continue to be excluded from workers compensation. However, it is recognised that the compensation elements in the police superannuation scheme need to be improved and, in certain respects, brought into line with the compensation provided for the general work force."
Specifically with respect to s 21, the Minister stated: [17] "Appeals in relation to hurt-on-duty matters would be provided for in new section 21 to be inserted in the principal Act by item (20). Section 21 provides for appeals to the Workers' Compensation Commission by any person aggrieved by a decision made by the Police Superannuation Board or the Commissioner of Police in relation to any police hurt-on-duty question arising under the Act."
In October 1986 two bills were introduced dealing with superannuation appeals. [18] Describing the then current scheme in relation to the Police Regulation Act, the Minister stated: [19] "In the case of the Police Regulation Superannuation Act appeals relating to hurt-on-duty matters currently lie to the State Compensation Court. This situation arises because the police superannuation scheme is in effect a combined superannuation and workers' compensation scheme. The present bill preserves the right of appeal to the State Compensation Court. However, the bill also provides that appeals not related to hurt-on-duty matters will be to the Industrial Commission in the same manner as provided for other statutory superannuation schemes."
Once the dual structure of the Police Regulation Act is appreciated, it is clear what is meant by references to "hurt-on-duty matters". The language refers to the alternative to the workers' compensation legislation, from which police were excluded. The terminology distinguishes such decisions from decisions relating to superannuation payments, payable on retirement. The Board (and now the STC) is engaged in both functions. These separate functions may, in colloquial terms, be referred to as the "compensation function" and the "pension function".
The reference in s 21(1)(a) to decisions by the Board "on a matter that arises under this Act by reason of a member of the Police Force being hurt on duty" adopts language which is designed to separate decisions in the exercise of the compensation function from those in exercise of the pension function. Section 21 was clearly intended to encompass all decisions made with respect to the compensation function and not merely those decisions which arose only after the entitlement to compensation had been established by a decision of the Board (with respect to capacity) and a decision of the Commissioner (with respect to causation). This bifurcation of functions was only introduced with the 1979 Amendment Act.
The 1979 Amendment Act was solely concerned with the internal regulation of police superannuation matters; the Board, which exercised both compensation and pension functions, became subject to review, but only with respect to the compensation function. When, in 1986, provision was made for superannuation appeals generally, it became necessary to address the exercise by the Board of its pension function. In that context, the Minister made the statement set out at [31] above, stating that, in effect, there was no intention to vary or diminish the right of appeal to the Compensation Court. Rather, two new provisions were inserted in the Police Regulation Act in the following terms: Determination of disputes 20A Subject to sections 20B and 21, a dispute under this Act shall be determined by the Board or the Commissioner of Police, as the case requires. Appeals - other than hurt on duty cases 20B(1) A person aggrieved by - (a) a decision made by the Board (not being a decision referred to in section 21(1)(a)); or (b) a decision by the Commissioner of Police under section 10(6)(g), may appeal against the decision to the Industrial Commission of New South Wales.
Nothing turns on s 20B(1)(b), which was omitted the following year. Indeed, later in 1987 both ss 20A and 20B were repealed with the enactment of ss 26 and 27 of the Superannuation Administration Act 1987 (NSW), s 26 being the precursor to s 67 of the Administration Act. Section 26(2) provided that the section applied to a dispute under the Police Regulation Act "in relation to any matter, other than a matter relating to or arising from a question of whether or not a member of the Police Force or a former member of the Police Force was hurt on duty".
It is clear that the purpose of this provision was to exclude all disputes which fell within the scope of s 21(1). So understood, it preserved the existing scheme which provided for review by a workers' compensation commissioner of decisions made in the exercise of the compensation function. It is not possible to read the language of s 26(2) ("a matter relating to or arising from a question of whether … a member … or a former member … was hurt on duty") as excluding decisions as to whether the member was not capable of discharging his or her duties. It would have been inconsistent with the apparent purpose to lump those decisions in with decisions made in exercise of the pension function and send them to the Industrial Commission; it would also be inconsistent with the apparent purpose to leave those decisions without any form of appeal or review.
The subject matter of review under s 21 has not been relevantly amended since its enactment in 1979. Various changes have been made to the body vested with power to hear applications under s 21. As enacted, that body was the Workers' Compensation Commission; in 1984, the Commission was replaced by the Compensation Court; [20] in 1987, the Court was replaced by "a workers compensation commissioner"; [21] in 1992, the jurisdiction reverted to the Compensation Court, [22] and, in 2002, when the Compensation Court was abolished and its jurisdiction in workers' compensation matters conferred on the District Court, s 21 was amended to substitute the District Court as the body with the relevant jurisdiction under s 21(1). [23] Thus, throughout its history, the review provided by s 21(1) has been vested in a body responsible for workers' compensation determinations. Again, this history provides a consistent recognition that "hurt on duty" claims fall within the compensation function under the Police Regulation Act.

Conclusion

As noted in Woollard, and not disputed in this case, there was no right of review or appeal prior to the introduction of s 21 in 1979. According to the narrow reading of s 21(1)(a), an evaluative assessment by the STC (as to the capacity of a claimant to discharge the functions of a police officer, and thus satisfy one step towards the equivalent of a workers' compensation payment), would have been unreviewable, whereas a similar evaluative assessment by the Commissioner (as to whether the infirmity was caused whilst on duty) would have been reviewable. That would be a bizarre result and would not further the purpose of the provision derived from its terms, the legislative history and the relevant second reading speeches. The purpose of s 21(1) was to provide a right of review, by the body responsible for determining workers' compensation claims, of decisions made in the exercise of the compensation functions conferred under the Police Regulation Act.
There is no reason to suppose that subsequent changes to the Administration Act were intended to alter the reading of s 21 which would have been appropriate at the time of its enactment. The express effect of s 67(5) of the Administration Act is to exclude decisions reviewable under s 21 from being categorised as decisions under s 67. That includes a decision by the STC under s 10B(2).
For these reasons, on 29 March 2018, the Court concluded that the Supreme Court, as the successor to the Industrial Court, did not have jurisdiction to determine the proceedings commenced in the Industrial Court. The appeal was therefore allowed and the judgment below set aside. Costs were ordered in favour of the respondent, both in this Court and in the Common Law Division, on the basis that he had been led to commence proceedings in the Industrial Court, and continue them in the Supreme Court, by the letter from the STC asserting that there was a right of appeal to the Industrial Court under s 88 of the Industrial Relations Act. The STC, again quite properly, did not oppose such an order.
An application for indemnity costs by the respondent was rejected. There was no suggestion that the STC had acted otherwise than in good faith, though on a mistaken view of the law. To the extent that the issue had been raised by this Court in Woollard, neither the STC nor the solicitors for the respondent appeared to be familiar with the issue. In these circumstances the Court considered it sufficient that the costs awarded against the STC be assessed on the ordinary basis.

Endnotes

Superannuation Administration Act 1996 (NSW) ("Administration Act"), s 48(2).
Administration Act, s 4, STS fund or STS scheme; s 49, s 50.
James Rossetti v SAS Trustee Corporation [2017] NSWSC 732.
See generally, Zhang v Zemin (2010) 79 NSWLR 513; [2010] NSWCA 255 at [39]-[45] (Spigelman CJ, Allsop P and McClellan CJ at CL agreeing); Obeid v R (2015) 91 NSWLR 226; [2015] NSWCCA 309 at [9] (Bathurst CJ, Beazley P and Leeming JA).
Federated Engine-Drivers and Firemen's Association of Australasia v The Broken Hill Proprietary Co Ltd (1911) 12 CLR 398 at 415 (Griffiths CJ); [1911] HCA 31.
Federated Amalgamated Government Railway and Tramway Service Association v The New South Wales Railway Traffic Employees' Association (1906) 4 CLR 488 at 495 (Griffiths CJ, Barton and O'Connor JJ agreeing); [1906] HCA 94.
(1957) 99 CLR 155 at 161 (Dixon CJ, McTiernan and Kitto JJ); [1957] HCA 85.
(2014) 86 NSWLR 367; [2014] NSWCA 75 ("Woollard").
Industrial Relations Act 1996 (NSW), Sch 4, Pt 18, cl 65(1), unheard proceedings; cl 66(1), the "successor court" for this purpose being the Supreme Court pursuant to the Industrial Relations Amendment (Industrial Court) Act 2016 (NSW), Sch 2.33.
The jurisdiction could only be exercised by the Commission in Court Session, known as the Industrial Court of New South Wales: Industrial Relations Act 1996 (NSW), s 153(1)(h); s 151A.
See [27] below.
Sections 3 and 2A respectively.
Police Regulation Act, ss 7 and 10.
As originally enacted, the reference to the statute was to the Workers' Compensation Act 1926 (NSW).
NSW Legislative Assembly, Parliamentary Debates (Hansard), 16 October 1979 at 1844.
Ibid.
Ibid at 1848.
Industrial Arbitration (Superannuation Appeals) Amendment Bill; Miscellaneous Acts (Superannuation Appeals) Amendment Bill.
NSW Legislative Assembly, Parliamentary Debates (Hansard), 22 October 1986 at 5192.
Miscellaneous Acts (Workers' Compensation) Amendment Act 1984 (NSW), Sch 1, Pt 1.
Police Regulation (Superannuation) (Workers Compensation) Amendment Act 1987 (NSW), Sch 1(12).
Superannuation Legislation (Amendment) Act 1992 (NSW), Sch 2.
Compensation Court Repeal Act 2002 (NSW), Sch 1.6 [1], [2]. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 April 2018

Compensation Court Repeal Act 2002(NSW)

Industrial Relations Amendment (Industrial Court) Act 2016(NSW)

Miscellaneous Acts (Workers' Compensation) Amendment Act 1984(NSW)

Police Regulation (Superannuation and Appeals) Amendment Act 1979(NSW)

Police Regulation (Superannuation) (Workers Compensation) Amendment Act 1987(NSW)

Superannuation Administration Act 1987(NSW)

Superannuation Legislation (Amendment) Act 1992(NSW)

Workers' Compensation Act 1926(NSW)

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