Statutes - acts of parliament - operation and effect of statutes

Legislation providing for a method of assessment of compensation to be prescribed by regulation regulation came into force after determination by Corporation of compensation payable - appeal to Review Officer - whether Review Officer should have applied regulation language of statute indicates immediate application to all cases falling for decision - presumption against retrospective operation either rebutted, or strictly not applicable presumption against interference with vested rights rebutted, and in any case no vested right of sort argued for regulation applicable to Review Officer's decision.

HRNG ADELAIDE, 5 March 1996 #DATE 3:4:1996 #ADD 20:5:1996

JUDGE1 DOYLE CJ By section 100(3) of the Workers Rehabilitation and Compensation Act ("the Act") the appeal is limited to a question of law.

By its decision the Tribunal dismissed an appeal against a determination of a Review Officer made under the Act, and confirmed the determination of the Review Officer.

The determination of the Review Officer, made on 12 May 1995, was that the entitlement of the worker in question to a lump sum payment under Schedule 3 of the Act was not to be determined by the application of Regulation 16A of the Worker's Rehabilitation and Compensation (General) Regulations 1987 ("the Regulations").

Schedule 3 to the Act deals with the well known lump sum table payments in respect of a permanent disability. Clause 5 of Schedule 3 provides as follows: "Where a worker is entitled to compensation in respect of two or more disabilities to which this schedule applies, the worker's entitlement will be determined in accordance with the principles prescribed by the regulations (but the total entitlement cannot exceed 100% of the prescribed sum)."

A regulation was made on 17 March 1994, but the regulation was later disallowed. There was then a period during which there was no relevant regulation. Regulation 16A, the regulation in question, came into force on 27 April 1995. It is not necessary to set out the terms of the regulation. It suffices to say that it provides a formula to be applied for the purposes of clause 5 of Schedule 3.

The worker suffered an injury on 23 May 1989, and that injury was a compensable disability. The claim for a lump sum was made by letter dated 11 August 1992. The claim was one in respect of two or more disabilities and so fell within cl5 of the Schedule. Schedule 3 in its present form came into force after those dates (on 10 December 1992), but the case proceeded on the basis that it applied to the injury and to the claim. That assumption is correct, having regard to the terms of the relevant transitional provision.

The material before the Court does not indicate the date on which the Legislative Council disallowed the regulation first made under clause 5. The Corporation's determination of the worker's entitlement in this matter was made on 22 December 1994. The case has been argued on the basis that that was after the date of disallowance. Despite the disallowance, apparently the Corporation made its determination by reference to the approach provided by the disallowed regulation. The Review Officer found that the Corporation erred in doing so, and in my opinion that decision was correct. It follows that the Review Officer had to determine the correct method of determining the worker's entitlement.

The Review Officer held that Regulation 16A could apply only to injuries that occurred after 27 April 1995, the date on which the regulation came into operation. The Review Officer held that to apply it to the injury of the worker in question would be to give it a retrospective effect.

The Tribunal upheld the Review Officer on this point. The Tribunal accepted that Regulation 16A was a procedural provision, but said that it did not follow that it was applicable. It held that Regulation 16A was not merely procedural but also affected the rights of the parties. It adverted to the fact that, if the regulation was not applied, the entitlement of the worker was $87,300, but that if the regulation were applied the entitlement was $57,094.20. The Tribunal referred to the decision of the High Court in Rodway v The Queen [1990] HCA 19; (1990) 169 CLR 515 and in particular to the following passage at 518: "... But the difference between substantive law and procedure is often difficult to draw and statutes which are commonly classified as procedural - statutes of limitation, for example - may operate in such a way as to affect existing rights or obligations. When they operate in that way they are not merely procedural and they fall within the presumption against retrospective operation. ... "

The Tribunal relied further upon the following passage from Republic of Costa Rica v Erlanger (1876) 3 Ch D 62 at 69: "No suitor has any vested interest in the course of procedure, nor any right to complain, if during the litigation the procedure is changed, provided, of course, that no injustice is done."

The Tribunal said that grave injustice would be done because had the Corporation not, at the outset, wrongly determined the worker's entitlement, there would have been no application for review and the worker's entitlement would have been settled and beyond review before Regulation 16A came into force.

The Court is confronted, yet again, with the issue of the application of a law, which affects the entitlement of a worker under the Act, to a disability which occurred before the relevant law came into force and to a claim for compensation made before that date. A number of such cases have already arisen under the Act. Parliament is, of course, entitled to enact legislation capable of applying to existing disabilities and to rely upon the Courts to interpret that legislation and, in the course of doing so, to apply the usual presumptions. But experience has shown that particular difficulties can arise in a situation of the type identified by me, and while principles of statutory interpretation are capable of supplying an answer, those principles involve distinctions which at times are elusive. Nor can one be satisfied that the results are always satisfactory. I make this point not by way of complaint, but merely to emphasise that in cases such as the case now before the Court the answer will turn upon the application of legal principles which themselves are not precise in their application. The Court is not able to give a decision according to its assessment of fairness or its assessment of what Parliament probably had in mind or its assessment of what is most efficient in the administration of the Act. These matters to some degree may influence the application of the legal rules which the Court must apply, but in the end the Court must apply the ordinary rules of interpretation to the relevant law.

The rules of interpretation have their own difficulties. There is a presumption against giving retrospective operation to legislation. But the correct identification of what is a retrospective operation is not always easy, because most legislation affects existing rights and obligations. A distinction is drawn between procedural provisions and provisions having a substantive effect, but once again in our system of law it is often difficult to distinguish between what is procedural and what is substantive. There is a presumption against the interference with vested rights, but deciding what is a right for these purposes is not always easy. Procedural statutes can affect rights. And in the end one is searching for a Parliamentary intent, and when Parliament is silent on the matter the process of divining that intent, once one moves from the application of the presumptions, can be quite subjective.

I mention these matters only to explain that if the result of the application of these rules at times seems unpredictable, or to provide unsatisfactory results, the answer lies in the fact that the rules themselves are difficult to apply. But the Courts must do the best they can if Parliament leaves the issue to them.

There can be no doubt that Regulation 16A applies to a determination under cl5 made after Regulation 16A came into operation, even if the relevant disability was suffered before Regulation 16A came into operation. That result follows from the fact that cl5 applies to disabilities suffered before the amended Schedule 3 came into operation. That result, in turn, is achieved by the transitional provisions enacted when the Third Schedule was amended.

Accordingly, and bearing that in mind, the question is whether Regulation 16A applies to a disability suffered before the Regulation came into operation when a determination has been made by the Corporation before the Regulation came into operation but the determination falls for review by a Review Officer after Regulation 16A came into operation. Is a different result to be reached (compared with the situation referred to in the preceding paragraph) because a determination was made by the Corporation in respect of the disability before Regulation 16A came into operation? It needs to be borne steadily in mind that the issue is not the applicability of Regulation 16A to disabilities suffered before the Regulation came into operation. The issue is the applicability of Regulation 16A to such disabilities when a determination has been made by the Corporation in respect of a disability before Regulation 16A came into operation.

It also needs to be borne in mind that the issue arises in the present case only because the Corporation having determined the worker's entitlement incorrectly, the worker sought a review by a Review Officer and by the date of the Review Officer's determination Regulation 16A had come into force.

The hearing before the Review Officer was a full re-hearing. Section 96(2) of the Act provides that the decision of the Review Officer is a "fresh determination" of the matters to which the decision subject to review relates. The decision of the Review Officer takes effect in substitution for the decision of the Corporation: section 96(3). Decisions of this Court establish that the Review Officer is to apply the law and the facts as they stand at the date of the determination by the Review Officer: Santos Limited v Saunders (1988) 49 SASR 556; Workcover Corporation v Hojski (1993) 170 LSJS 129.

That being so, it cannot be said that the Review Officer was required to apply the law as it was when the Corporation first determined the worker's entitlement. That line of reasoning cannot be used to avoid the applicability of Regulation 16A to the case in hand. I express no view on the position which would arise had Regulation 16A come into force between the date of a determination by a Review Officer and the date of a decision by the Tribunal on appeal from a Review Officer.

It does not follow from what I have said that Regulation 16A was to be applied by the Review Officer in the instant case. All I have said so far is that it cannot be said that the application of Regulation 16A was excluded on the basis that the law to be applied was the law as at the date of the Corporation's determination. That leaves for decision the question of whether Regulation 16A was applicable to the claim for a lump sum when it fell to be determined by the Review Officer.

That requires a consideration of the terms of cl5 and of Regulation 16A. In my opinion the question is answered by the terms of cl5 itself.

In cl5 Parliament has said that a worker's entitlement "will be determined" in accordance with principles prescribed by Regulations. Clearly, Parliament must have contemplated that there would be a period during which no relevant Regulation would be in force. So Parliament must have contemplated that there would be a period during which determinations under cl5 would not be affected by a Regulation under cl5. But it seems to me that by the terms of cl5 Parliament has clearly indicated that once a Regulation is made it will be applied thereafter in all cases falling to be decided under cl5.

I can see no reason to exclude, from the reach of a Regulation made under cl5, a determination made by a Review Officer which will take effect in substitution for a determination made by the Corporation before the relevant Regulation came into operation. I consider that Parliament must have intended that all decisions which fell to be made under cl5 once the relevant Regulation came into operation would be subject to its application.

That is why I said that it seems to me that the terms of cl5 themselves resolve the issues before the Court. I consider that Parliament has made its intention clear.

This preliminary conclusion has to be considered in the light of the presumption against giving to legislation a retrospective effect and in the light of the presumption against an intention to interfere with vested rights.

As to the former, the first point to be made is that in my opinion the terms of cl5 rebut the operation of presumption. At the level of substance, it is not difficult to conceive of Parliament intending Regulation under cl5 to apply to all determinations made once it came into effect. At a more technical level it can be said that Regulation 16A operates prospectively, and not retrospectively, because it controls something which necessarily happens after the Regulation comes into force, that is, the assessment of an entitlement under cl5. On that more technical approach it can be said that the issue of retrospective operation does not arise at all.

As to the presumption against interference with vested rights, it seems to me that the force of that presumption is weakened by the fact that Parliament has expressly contemplated the later enactment of a Regulation which will affect the quantum of compensation. The effect of the transitional provisions in Schedule 3 is that cl5 and the Regulation made under it will apply to a determination of compensation in respect of disabilities suffered before the enactment of the amended Schedule 3 and before the enactment of Regulation 16A. It follows, that if there was a vested right, Parliament has expressly contemplated interfering with it, and there is no indication that Parliament intended to draw a distinction simply because a determination had been made by the Corporation before the Regulation was enacted.

But there is a more fundamental difficulty with the argument which invokes the presumption against interference with vested rights. In my opinion the true position is that the worker, prior to the commencement of Regulation 16A, had a right to the determination of the worker's entitlement under cl5. It was not a right to a determination free from the effect of a Regulation made under cl5. The right was simply a right to a determination under cl5, and all one can add is that until a Regulation was made the contemplated Regulation could not affect the determination.

For these reasons I have come to the conclusion that cl5 is a sufficiently clear indication of the intention of Parliament that once a Regulation is made it will apply to all determinations of entitlement to which cl5 is applicable. It will apply to a determination by the Corporation. It will apply equally to a determination by a Review Officer even though the determination takes effect in substitution for a determination made by the Corporation before the Regulation comes into force.

I have not found it necessary to analyse the matter in terms of distinctions between matters of substance and procedure, or in terms of vested rights, although I have indicated my views on some of these matters.

In some respects it may be said that the outcome is an unfortunate one. The result is that the worker will recover substantially less than the worker would have recovered had the Corporation correctly determined the matter from the outset. But in this respect it has to be borne in mind that the worker is no worse off than a worker who suffered a permanent disability before Regulation 16A was enacted but whose claim was not determined by the Corporation until after it was enacted. It is inherent in the Parliamentary scheme that the manner in which claims will be determined will depend upon the timing of the determination.

It follows that, in my opinion, the Tribunal erred in law. So did the Review Officer.

I would allow the appeal and set aside the order of the Tribunal dated 19 July 1995 ordering that the appeal to the Tribunal be dismissed and confirming the determination of the Review Officer of 12 May 1995. For that order of the Tribunal I would substitute an order that the appeal to the Tribunal be allowed, that the determination of the Review Officer dated 12 May 1995 be set aside, and that the entitlement of the worker be determined at such amount as the Tribunal shall decide in the light of these reasons. It follows, of course, that the amount is to be determined by applying Regulation 16A to the determination.