University of Newcastle v Chopra

Following her medical examination, the university informed Mrs Chopra by letter dated 28 April 1970 that a medical certificate had been received from the Department of Public Health to the effect that she be accepted for permanent appointment and for limited benefits under the Act. The certificate was a report of the Chief Medical Officer of the Department within the meaning of s 11A(2) of the Act. At a later stage in these reasons it will be necessary to refer to the terms of that subsection in more detail. For the moment it is sufficient to say that, on receipt of such a report, the Board was authorised to refuse to accept the employee who was the subject of the report as a contributor, to accept the employee as a contributor for limited benefits or to postpone acceptance of the employee as a contributor or as a contributor for limited benefits. Which, if any, of these options the Board exercised in relation to Mrs Chopra is by no means clear. It is a question to which we shall return.

As it is understood that you do not wish to contribute to the Superannuation Scheme, it will be necessary for you to apply for exemption. It is pointed out that such exemption debars you from consequently acquiring any rights in the fund. Mrs Chopra did not apply for exemption. Nor did she apply for exemption when the university by letter dated 30 May 1978 requested her to sign an application for exemption and send it to the Board. This request followed a discussion between officers of the university and the Board in the course of which the representative of the Board advised that Mrs Chopra had never been granted an exemption.

There is a note in the university records that on 7 March 1979 Mrs Chopra informed the university that she did not intend to apply for exemption because she disagreed with the fund's "discriminatory rules against females". But in evidence Mrs Chopra stated that she would have joined the fund if she had been advised correctly by the university that she could subscribe for a lesser number of units than the number appropriate to her salary. When she took up her position with the university she could not afford the very large contribution for the number of units appropriate to her salary and the university had erroneously informed her that she could not join the Fund unless she subscribed for that number of units. At no time has Mrs Chopra paid any contribution to the Fund. Nor has the university paid any contribution to the Fund either by way of deduction from her salary in respect of her as an employee or by way of employer contribution.

However, some six years later, Mrs Chopra wrote to the university on 14 January 1985 requesting that it place her name on "the New Entrants' Schedule" of the Fund, indicating the date on which she commenced permanent employment at the university. The reference to "the New Entrants' Schedule" was a reference to amendments to the Act made in 1985 to which we shall refer later. On 5 February 1985 the university replied, stating that it was unable to comply with her request.

On 22 March 1985 the assistant secretary of the Board wrote to the Vice-Chancellor of the university seeking advice as to Mrs Chopra's "eligibility to contribute" to the fund. The letter stated that on the basis of the information supplied to the Board by Mrs Chopra's union (which appears from the letter to have been accurate and complete) she appeared to be eligible for membership of the fund. It was again confirmed that Mrs Chopra had not been granted exemption.

Further correspondence ensued. It failed to resolve the question of Mrs Chopra's eligibility, although it indicated that the assistant secretary of the Board regarded her as eligible to contribute, subject to any advice which the university might provide.

In October 1985 Mrs Chopra commenced an action against the university and the Board seeking declarations of her entitlement as a contributor to, and as a member of, the fund. Yeldham J dismissed the action. However, on appeal, the Court of Appeal (Mahoney, Priestley and McHugh JJA) allowed Mrs Chopra's appeal with costs. The Court declared: (1) that Mrs Chopra from the time of her appointment as a lecturer was a contributor to the fund within the meaning of the Act; (2) that the Board was and is required to recognise Mrs Chopra as a contributor to, and a member of, the fund; and (3) that the appellants were required to treat and regard Mrs Chopra as entitled to all applicable benefits, privileges and rights of being a contributor to, and a member of, the fund. See (1988) 27 IR 104. It is from these orders and declarations that the appellants appeal to this Court.

Since Mrs Chopra took up her appointment as a lecturer the Act has been amended in 1976 and 1985 in respects that are relevant to her claim to be considered as a contributor to, and a member of, the fund. So it is necessary to examine first the Act as it stood when she became an employee of the university and thereafter the relevant amendments.

Part II of the Act established the fund. Broadly speaking, the assets of the fund comprised the contributions of employers and employees, the investments made from time to time and the income and profits generated by those investments. The members of the fund, or those claiming through them, were given pension entitlements calculated by reference to the number of units for which the individual member was subscribing. Section 4(1) provided that there would be paid into the fund contributions of employers and employees under the Act and that there should be paid from the fund the benefits provided for under the Act. The fund was to be invested and interest derived from investment of the fund was to form part of the fund: s 4(2). By s 11(1) every employee was required to contribute to the fund. "Employee" was defined by s 3(1) to mean a "person employed by an "employer", and who is by the terms of his employment required to give his whole time to the duties of his employment, but does not include a professor of the University of Newcastle" with certain other exceptions which are not presently relevant.

There were provisions for exemption. In the event of exemption, neither the person exempted "nor any other person claiming through him shall be entitled to any benefit under this Act, but the contributions (if any) paid by or in respect of the person so exempted shall be refunded" (s 11(1)).

An employee who was not exempted was under an obligation to contribute to the fund until the age of 60 or earlier cessation of employment, but a woman employee had an option to contribute at the rate prescribed for retirement at the age of 55 in which event her obligation to contribute ceased at that age or earlier cessation of employment (s 11(2)). The amount of contribution for which an employee was liable was the amount necessary to provide for the prescribed number of units of pension appropriate to the salary payable to the employee (s 12(1)). The prescribed number of units appropriate to Mrs Chopra's salary level was 31. In the case of an employee of the age of 30 or more when entering service, the Board had power, on application, to reduce the number of units to no less than six (see par (a) of the proviso to s 12(1)). Mrs Chopra did not seek a reduction in the number of units for which she was liable to contribute. So the applicable number of units remained at 31.

Section 16(1) and (2) imposed an obligation on an employer to make contributions to the fund in the case of an employee who was a contributor. Subsection (1) provided:

Each employer shall contribute to the fund regular payments at prescribed periods in respect of each contributor employed by him, based (except where otherwise in this Act provided) upon the number of units of pension for which such contributor contributes, upon sex, upon the age at which such contributor commences to contribute for each unit, and, in the case of a woman contributor, upon whether she contributes for a pension payable at age fifty-five or age sixty; and such payments shall be in accordance with the tables of contributions prescribed. Subsection (2) provided, so far as it was material, that the employer's contributions should be paid from the date of commencement of the employee's contributions and should cease "when the contributor ceases to contribute to the fund".

Section 19(2) and (3) dealt with the problem of unpaid contributions. Subsection (2) provided:

Any contribution unpaid on the due date shall bear interest at the rate of four and one-half per centum per annum from such due date until the date of payment:

Provided that the Board may, in case of hardship, waive payment of such interest.

Subsection (3) provided: The Board may recover the amount of any contribution due and unpaid together with interest thereon in any court of competent jurisdiction.

In 1972 these provisions were replaced by s 91A. This section enabled the Board to recover any moneys owing to the fund by an employee or pensioner, or by the widow of a deceased employee or pensioner, or by any other person, together with interest thereon, by deduction from amounts payable from the fund to the employee or pensioner or other person or persons claiming through such employee or pensioner.

An employee's contributions to the fund were to be paid by the employer by way of deductions from the employee's salary. Section 20 provided:

The contributions of contributors shall be deducted by employers from the salaries of such contributors at each payment of such salaries, and shall, together with the employers' contributions, be paid without deduction for postage, forwarding, or exchange, to the Board. A "contributor", on his retirement, was entitled to payment out of the fund of a pension calculated "according to the number of units for which he contributed at the time of his retirement" and by reference to the date on which he became a contributor (s 27) or, in the case of early retirement, by reference to the number of units for which the contributor "had contributed" for at least three years and the age of the contributor at retirement (s 28A, which was introduced in 1944). A woman "who has contributed" for a pension payable on retirement at the age of 55 was entitled to a full pension (s 28).

The case for the appellants is that the effect of the definition of "Contributor" in s 3(1), coupled with the fact that ss 27, 28 and 28A describe the persons entitled to receive benefits from the fund by reference to their having contributed to the fund, was to confine the class of contributors and the membership of the fund to those who actually paid contributions to the fund by means of deductions made by their employers from their earnings. The Court of Appeal rejected this interpretation, concluding that the critical words in the definition, "who is contributing", were wide enough to comprehend a person who is liable to contribute to the fund. The appellants challenge the correctness of the Court of Appeal's construction on the ground that the words of the definition should be given their natural and primary meaning and that this meaning is reinforced when attention is given to the consequences which would flow from the adoption of the construction preferred by the Court of Appeal.

Initially, the word "contributor" was defined to mean an "employee who is contributing under this Act". The definition was amended in 1969 by the addition of the words "or whose contributions have ceased pursuant to"s 11(2). No doubt these amendments were made in order to overcome the problem occasioned by the fact that some employees continued in employment after the payment of their contributions and those of their employers ceased pursuant to s 11(2). The definition in its original form, read literally, would exclude such employees from the receipt of benefits. But it could scarcely be suggested that, before the amendments, such employees were not entitled to benefits. Only if the words "contributing" and "contributed" were given a literal meaning would these employees be disentitled.

We acknowledge that the words "who is contributing" in their usual or primary sense signify a person who is in fact paying or making contributions, whether directly or indirectly, by means of deductions made from his earnings by his employer. But the expression is capable of signifying a person who is liable to make a contribution. R v Kershaw (1856) 6 El & Bl 999[119 ER 1136] is an interesting illustration of this proposition. There, the Court of Queen's Bench (Lord Campbell CJ, Coleridge, Wightman and Erle JJ) unanimously held that the words "inhabitants contributing to the highway rate" in a statute included all those who were liable to the rate (at 1005-1006, 1007 [1138-1139 of ER]). Of course the context in Kershaw was such as to provide strong reasons for arriving at the meaning favoured by the court.

The context here, though naturally very different from that in Kershaw , likewise provides strong reasons for reaching the same conclusion as that reached by the Court of Appeal. The Act established the fund as the central element of a compulsory scheme designed to provide superannuation benefits for a wide range of public sector employees. Every employee and every employer to whom the Act applied came under a statutory obligation to contribute to the fund, unless the employee was exempted from that obligation in accordance with the statutory provisions. An employee who was not exempted had no option to step outside the fund and was not relieved from making contributions. Nor was the employer relieved from making contributions in respect of the employee or making deductions from his earnings and paying them to the Board in the absence of such an exemption. Interest was payable on unpaid contributions and the Board was entitled to sue to recover them. Before 1972, the Board could sue the employer. Whether the Board could sue an employee was perhaps open to question, but that is not a decisive consideration.

In this setting it stands to reason that the expression "who is contributing" originally included not only those persons who were making contributions but also those who were liable to make contributions. The fact that it was the employer, not the employee, who was responsible for making the payments reinforces the conclusion that the expression "is contributing"referred to the existence of an obligation to make payments to the fund, recurring at regular intervals, satisfaction of that obligation being irrelevant for these purposes. Thus, an employee who was not exempted and was under a statutory obligation to make contributions was a "contributor" within the meaning of the definition in s 3(1). Likewise, the references in ss 27 and 28 and later in s 28A which conferred an entitlement to a pension by reference to the number of units for which the contributor "was contributing" or "had contributed" or "has contributed" were to be read accordingly. When ss 27, 28 and 28A. were so read, there was no difficulty in ascertaining the employee's pension entitlement; it was that appropriate to the number of units for which he was liable to contribute.

If it were otherwise then the scheme would have been deprived in some measure of its compulsory character. An employee and his employer in concert would have been able effectively to withdraw from the scheme, even though the employee was not exempted in accordance with the statutory provisions. It would have been possible to evade the statutory prescriptions governing exemptions, notwithstanding the existence of a clear legislative intention that, apart from exemption, there was no avenue of escape or relief from the obligation to contribute.

The consequences which would have ensued from the interpretation for which the appellants contend highlight the difficulties which it would have entailed. What, for example, was the status of an employee whose contributions had not been paid for some time so that he was no longer regularly making contributions? Unless "contributor" bore the extended meaning, such an employee was not entitled to the receipt of benefits if he then died. And what of the employee in respect of whom contributions were not paid to the fund through the employer's default? The two situations illustrate graphically why it was that the extended meaning was to be preferred. Needless to say, it would have been inequitable if, in the two situations just mentioned, the employees were disentitled to the receipt of benefits from the fund - so inequitable that it cannot be supposed that it was intended by the legislature. In resolving this question of interpretation, the Court is faced with a choice between two probable meanings - the literal and the extended meaning of the definition. It is not for the Court to devise an answer to the problem which arises in the particular circumstances of this case otherwise than by reference to the meaning of the definition.

If it be accepted that an employee who was medically fit and not exempted was initially a contributor, how did that employee cease to be a contributor as a result of non-payment of contributions? A breach by the employer, even with the concurrence of the employee, of the statutory duty to pay the first contribution did not deprive the employee of his character as a contributor, though the failure to pay initially created a right in the Board under s 19 to recover the payment with interest and later under s 91A to recover out of the employee's entitlement in the fund. These were the only consequences of non-payment for which the Act provided. In all the labyrinthine complexity with which the draftsman has managed to envelop the legislative intention, one thing was conspicuously clear. It was that the statute made no provision whatsoever for the exclusion, disqualification or disentitlement of an employee or contributor in respect of whom contributions ceased to be paid. The statute proceeded on the footing that non-payment of contributions did not entail disentitlement; instead, it provided for entitlement in this situation subject to the Board's right of recourse for unpaid instalments and interest.

So there was no firm foundation in the statute for asserting that an employer's failure to pay contributions, with the assent of the employee, resulted in an absence or loss of entitlement. Nor was there a solid basis for saying that the Board had a discretion to accept or refuse late payment of contributions; the statute was innocent of any such suggestion. The Board might have been unaware, through the employer's default or for some other reason, that the particular individual was an employee to whom the Act applied, in which event it would be idle to say that the Board had a discretion with respect to the employee's contributions.

Apart from s 11A, which was introduced in 1944 and amended in 1969, the Act contained no provision giving the Board power to accept or reject an employee as a contributor to the fund. Section 11A(1) provided for the medical examination of an employee. Section 11A(2) provided:

Where the report of the Chief Medical Officer indicates such employee is suffering from any physical or mental defect which is likely to affect his health or longevity or his capacity to continue in his employment the Board may -

(a) refuse to accept such employee as a contributor; or

(b) accept such employee as a contributor for limited benefits; or

(c) postpone his acceptance as a contributor or as a contributor for limited benefits until such time as the Board, having regard to the report of the Chief Medical Officer, determines.

An employee accepted as a contributor or as a contributor for limited benefits pursuant to paragraph (c) of this subsection shall make contributions as from the first day of the four-weekly contribution period in which he is accepted as such or as from such other day as the Board may in special circumstances allow.

The meaning of the last paragraph is by no means clear. It was submitted that the opening six words of the paragraph were a reference to the acceptance of a contributor for unlimited benefits, in which event the later words "pursuant to paragraph (c)" would seem to be a mistaken reference to par (b). But the better view is that the last paragraph was directed to fixing the time of commencement of the payment of contributions in the case of an employee whose acceptance as a contributor had been postponed under par (c). In our view the Board, on receipt of a report under s 11A, was not restricted to an exercise of the powers mentioned in pars (a), (b) and (c). The Board might accept the employee as a contributor without any qualification. But it seems to us that the Act contemplated that, on receipt of the report, the Board would consider and determine the status of the employee as a contributor. In other words, the Board was under a duty to consider the matter and decide whether it would reject the employee, accept him for limited benefits or postpone his acceptance, before it could accept him without qualification. Section 11A introduced the notion of "acceptance" of a contributor who was the subject of a report under s 11A(2). Such a person could not qualify as a contributor unless it was shown that he was accepted pursuant to pars (b) or (c) of s 11A(2) or accepted without any qualification otherwise than pursuant to s 11A(2).

Accordingly, in our view, acceptance as a contributor by the Board of a person who was the subject of an adverse report under s 11A was an essential element in his or her qualifying as a "contributor". That, so it seems to us, was the effect of s 11A(2).

The problem in this case is that there is no evidence that the Board fulfilled its duty to consider whether to "accept" Mrs Chopra at all. It is not possible to infer merely from the university's request that Mrs Chopra apply for exemption that the Board "accepted" Mrs Chopra as a contributor, because there is no evidence, at least prior to the 1976 amendments to the Act, that the Board had any knowledge of the university's request. Exemption would obviate the necessity for the Board dealing with Mrs Chopra's case under s 11A(2). The application for exemption was to be made to the Board. But the Board, apart from informing the university, presumably in response to its request, that Mrs Chopra was not exempted, appears to have had no knowledge of Mrs Chopra's employment by the university until very much later in 1985, when she endeavoured to contribute to the fund. The university treated her as an employee accepted as a contributor who was bound to contribute unless she applied for an exemption. The Board ultimately became aware of these circumstances as a result of representations by her union. These circumstances make it very likely that the Board would have accepted Mrs Chopra as a contributor for limited benefits pursuant to s 11A(2)(b), had the Board considered the question. However, the evidence does not demonstrate that the Board ever considered the question and no finding of fact on the issue has been made by the courts below.

In 1976 the definition of "contributor" was amended by the Superannuation (Amendment) Act 1976 NSW (the 1976 Act) which came into force on 13 January 1977. The new definition was in these terms:

"Contributor" means an employee, but does not include -

(a) an employee while exempted from contributing to the Fund (whether before, on or after 13th January, 1977);

(b) an employee while rejected or not accepted as a contributor under this Act as in force at any time before 13th January, 1977; or

Section 10H was one of a series of provisions introduced by the 1976 Act to replace s 11A and associated provisions, which were repealed by that Act. Section 10H(1) excluded a person who, on 12 January 1977, was an employee but not a contributor "because the Board refused to accept him as such a contributor or postponed his acceptance as such a contributor".

Mrs Chopra submits that she fell within the new definition and that she was not excluded, as the appellants contend, by par (b) of the definition. The critical question on this aspect of the case is whether par (b) is a reference back to s 11A(2) alone or, in addition, to non-acceptance otherwise occurring. The lack of correspondence between the language of s 11A(2), namely "refuse to accept" and "postpone his acceptance", and that of par (b) of the new definition, namely "rejected or not accepted", is the basis of the appellants' submission that the draftsman was looking beyond s 11A(2) to a situation in which the Board had failed to accept an employee as a contributor. The appellants also make the point that, as s 10H(1) accurately reflected the language of s 11A(2), it is significant that par (b) of the new definition was expressed in different terms. In our view this submission is correct. Section 10H(1) was appropriate to exclude persons in respect of whom the Board exercised its powers under s 11A(2)(a) and (c). And par (b) of the definition, or so much of it as refers to "not accepted", was appropriate to exclude a person who was not in fact accepted as a contributor because the Board did not consider whether it should exercise its powers under s 11A(2). The presence of the word "rejected" in par (b) of the definition is a mystery. We are unable to account for its presence. This unexplained mystery does not alter the fact that the 1976 amendments excluded Mrs Chopra from the class of contributors.

A further and formidable barrier confronts Mrs Chopra. In 1985 Parliament provided for the closure of the fund. The Superannuation (Scheme Closure) Amendment Act 1985 NSW (the First Closure Act) inserted a new s 1A into the Act. The section provided:

(1) In this section, "prescribed day" means the day appointed and notified under section 2(3) of the State Public Service Superannuation Act, 1985.

(2) Notwithstanding any other provision of this Act, a person is not required or entitled to become a contributor to the fund and is not entitled to elect to become a contributor to the fund -

(a) in the case of a person who was an employee, but was not a contributor, immediately before the prescribed day or whose election to contribute to the fund had not, immediately before the prescribed day, taken effect - except in accordance with regulations made pursuant to section 86(1A); or

(b) if the person becomes an employee on or after the prescribed day.

The First Closure Act came into force on 30 April 1985 and it remained in force until 28 November 1985 when it was repealed by the Superannuation (Further Amendment) Act 1985 NSW (the Second Closure Act) with retrospective effect as from 1 July 1985. The State Public Service Superannuation Act 1985 came into force on 30 April 1985. The day appointed under s 2(3) of that Act was 1 July 1985.

On 1 July 1985 the Superannuation Regulations were amended by inserting a new reg 21 with the heading "Persons not excluded from contributing on closure of fund". It enabled a person who was an employee but was not contributing to the fund to elect to contribute to the fund in accordance with the provisions of the regulation.

The First Closure Act did not achieve its purpose because the statutory definition of "contributor" in the principal Act was unaffected. In order to overcome this problem the Second Closure Act was enacted. It substituted a new s 1A in these terms:

(1) Notwithstanding any other provision of this Act (except subsection (3)), a person is not required or entitled to commence contributing to the fund on or after 1 July 1985.

(2) Subsection (1) applies, subject to subsection (3), to a person who was previously a contributor to the fund, whether before or after 1 July 1985.

(a) a person who was, immediately before 1 July 1985, an employee but was not contributing to the fund, being a person to whom Schedule XXI applies and who elects to become a contributor to the fund in accordance with that Schedule;

Schedule XXI, so far as it is relevant, is in these terms:

Existing employees who may elect to contribute to Fund

1.(1) Except as provided by subclause (2), this Schedule applies to a person -

(a) who was, immediately before 1 July 1985, an employee but was not contributing to the Fund; and

(b) who would, but for section 1A, be required or entitled, subject to the provisions of this Act, to contribute to the Fund.

2.(1) A person to whom this Schedule applies may elect to contribute to the Fund if -

(a) before 1 July 1985, the employer of the person has notified the Board that the person is an employee; or

(i) the employer of the person notifies the Board that the person is an employee; or

(ii) the person lodges at the office of the Board a certificate signed by or on behalf of his or her employer stating that the person is an employee.

(2) Where, within the period of 28 days after a person to whom this Schedule applies is given notice by the Board that the employer of the person has notified the Board that the person is an employee, the person does not make an election referred to in subclause (1) or apply to the Board to be excluded from the provisions of this Schedule, the person shall be deemed to have directed that the notification given by the employer be regarded as an election referred to in subclause (1).

Mrs Chopra was a person to whom s 1A(1) applied, if, but only if, she elected to become a contributor "in accordance with" the Schedule: s 1A(3)(a). An entitlement to make such an election arises only upon notification to the Board of the employee's status as employee, pursuant to cl 2(1) of the Schedule. We are prepared to assume that Mrs Chopra did elect to contribute to the fund. But she was only eligible to make such an election if the necessary notification had taken place.

Mrs Chopra relies on a letter dated 29 March 1985 from the Vice-Chancellor of the university to the Board as constituting a notification within the meaning of cl 2(1)(a). The letter was a response to a letter from the Board setting out some particulars of Mrs Chopra's employment, stating that she appeared to be "eligible for fund membership" and asking for "advice on the question of Mrs Chopra's eligibility to contribute to" the fund. The letter of 29 March stated:

We have received your letter of 22nd March [1985] regarding a member of the university's staff.

Naturally, we have felt obliged to seek legal opinion on this matter and consequently it would seem to be inappropriate for us to engage in involved discussion with your office at this stage.

Although this letter contains an admission that Mrs Chopra was a member of the university staff, it was not a notification within the meaning of cl 2(1). Plainly the clause contemplated a communication by an employer to the Board that a person was an employee for the purpose of bringing that person under the scheme, whether in the ordinary course of events or by way of election under the closure provisions. Normally one would expect that the notification would contain, or be accompanied by, a statement of the particulars which the Board would need to know for the purpose of keeping the accounting and other records of the fund. To constitute a notification, it was not essential that these particulars accompanied or formed part of the communication. But it was essential that the notification be made for the purpose mentioned. Viewed in this light, the letter of 29 March was not such a notification; it was not a communication which positively asserted Mrs Chopra's status as an employee for the purpose of bringing her under the scheme as a contributor. Indeed, the terms of the letter indicated that the university was anxious to avoid committing itself to any position in relation to Mrs Chopra.

For much the same reason we reject Mrs Chopra's contention that the provision in October 1985 to the Board's legal officer by the solicitor for Mrs Chopra of photocopies of documents on her personnel file held by the university, evidencing her status as an employee, constituted a notification or that a letter dated 19 December 1985 from the university's solicitors to the Board's principal legal officer confirming what had taken place at a meeting between them was such a notification.

What we have said is sufficient to dispose of Mrs Chopra's claim that any rights she may have had survived the 1985 amendments. It may seem strange that an employee's right to elect to contribute may depend upon action taken by the employer and the Board. But that is how cll 1 and 2 are framed, and it is understandable that the legislature decided to confine the right of election to employees who were the subject of notification by an employer to the Board. By confining the right of election in this way the legislature excluded employees who, like Mrs Chopra, were not the subject of a notification because they wished to remain outside the fund.

In the result Mrs Chopra is not entitled to commence making contributions to the fund. We would allow the appeals.

Mrs Audrey Chopra commenced duty as a lecturer in the Department of Education of The University of Newcastle in or about February 1970. She thereupon became an "employee" within the meaning of that term in the Superannuation Act 1916 NSW (the Act). The Act has been amended from time to time. It will be convenient to refer to the provisions in force at any material time as though they have remained unamended unless the amendment affects the rights or obligations of the respective parties. "Employee" is defined by s 3(1) of the Act to mean a "person employed by an "employer", and who is by the terms of his employment required to give his whole time to the duties of his employment, but does not include a professor of the University of Newcastle" and certain other exceptions which are not presently material. Every employee was required to submit himself or herself to medical examination on commencing employment. Mrs Chopra did so. The Chief Medical Officer stated that Mrs Chopra should "[b]e accepted for permanent appointment and for limited benefits under the Superannuation Act ". The report reflected the provisions of s 11A(2) which provided:

Where the report of the Chief Medical Officer indicates such employee is suffering from any physical or mental defect which is likely to affect his health or longevity or his capacity to continue in his employment the Board may -

(a) refuse to accept such employee as a contributor; or

(b) accept such employee as a contributor for limited benefits; or

(c) postpone his acceptance as a contributor or as a contributor for limited benefits until such time as the Board, having regard to the report of the Chief Medical Officer, determines.

An employee accepted as a contributor or as a contributor for limited benefits pursuant to paragraph (c) of this subsection shall make contributions as from the first day of the four-weekly contribution period in which he is accepted as such or as from such other day as the Board may in special circumstances allow.

If an employee who is accepted as a contributor for limited benefits retires on the ground of invalidity or physical or mental incapacity, the employee's rights on retirement are less than a full pension: s 29(1B). However, Mrs Chopra was not accepted as a contributor for limited benefits. It appears that she objected to joining a scheme which contained what she described as "anti-female" provisions and was unwilling to contribute to the superannuation fund although s 11(1) of the Act imposes on every employee an obligation to "contribute to the fund from the first day of the month or four-weekly contribution period, as the case may be, in which his employment commences ". The Act provides for certain classes of employees to be exempted by the Board from the obligation to contribute. Where a person is exempted neither he nor any other person claiming through him shall be entitled to any benefit under this Act, but the contributions (if any) paid by or in respect of the person so exempted shall be refunded. (s 11(1)).

Mrs Chopra was eligible for exemption but she did not apply to be exempted. In the absence of exemption, Mrs Chopra was under a statutory obligation to contribute to the State Superannuation Fund until the age of 60 or, at her option, the age of 55 or on earlier cessation of employment: s 11(2). The contribution for which she was liable had to be ascertained by reference to her salary. By s 12(1) the amount of an employee's contribution is the amount necessary to provide for the prescribed number of units of pension which is appropriate to the salary of the employee. In the case of Mrs Chopra the prescribed number of units of pension was 31. A proviso to s 12(1)(b) empowers the Board to reduce the number of units in the case of an employee who is of or over the age of 30 when entering service to no less than six. Mrs Chopra did not seek any reduction in the number of units for which she was required to contribute. Accordingly, she was under an obligation to contribute for 31 units.

When an employee is a contributor to the fund, the Act imposes on the employer an obligation to contribute: see s 16(1) which provides:

Each employer shall contribute to the Fund regular payments at prescribed periods in respect of each contributor employed by him, based (except where otherwise in this Act provided) upon the number of units of pension for which such contributor contributes, upon sex, upon the age at which such contributor commences to contribute for each unit, and, in the case of a woman contributor, upon whether she contributes for a pension payable at age fifty-five or age sixty; and such payments shall be in accordance with the tables of conditions prescribed. Employees' contributions are deducted from their salaries pursuant to s 20, which reads: The contributions of contributors shall be deducted by employers from the salaries of such contributors at each payment of such salaries, and shall, together with the employers' contributions, be paid without deduction for postage, forwarding, or exchange, to the Board.

Pensions are payable out of the fund to a "contributor" (a term presently to be considered) on retirement. Pensions are calculated by reference to the date on which an employee became a "contributor" and the number of units for which he or she "was contributing" at the time of his or her retirement (s 27) or, in the case of early retirement, the age of retirement and the number of units for which the contributor had contributed for more than three years: s 28A. A woman "who has contributed" for a pension payable on retirement at age 55 is entitled to a full pension: s 28(1). Section 3(1) defined "Contributor" to mean "employee who is contributing under this Act". In 1969, the definition was expanded to include those "whose contributions have ceased pursuant to subsection two of section eleven of this Act". In 1976, as we shall see, a new definition was substituted. In fact no contributions by Mrs Chopra were deducted from her salary and no contributions by the university were made pursuant to s 16(1). Nevertheless, by a summons dated 10 October 1985 issued out of the Supreme Court of NSW, Mrs Chopra sought declarations against the university and the State Superannuation Board that she was, and was entitled to be treated as, a "contributor". Having submitted a letter of resignation on 1 October 1985 effective on 31 December 1985, presumably Mrs Chopra would claim an entitlement to superannuation benefits after that date.

Mrs Chopra's right to superannuation benefits, if any, is statutory, not contractual. Her obligation to contribute was also statutory, not contractual. It is not necessarily true that Mrs Chopra has no statutory rights because she has not discharged her statutory obligations. The acquisition of statutory rights and the incurring of statutory liabilities depend on satisfaction of the relevant statutory criteria. The acquisition of a statutory right may depend on the discharge of a statutory obligation if the statute prescribes the latter as a criterion of entitlement to the former, but that is a question of statutory interpretation; there is no necessary analogy with contract. It is therefore necessary to examine the Act and the amendments which have been made to it in order to ascertain whether Mrs Chopra has acquired the rights of a contributor.

Section 4(1) of the Act created a State Superannuation Fund

into which shall be paid the contributions of employers and of their employees under this Act; and from which shall be paid the benefits provided for in this Act. Detailed provision is made for the investment of the fund. Section 4(2) provides: Interest derived from the investment of the fund shall form part thereof. The fund is managed by the State Superannuation Board, now described as the State Authorities Superannuation Board (the Board).

The scheme of the Act is simple enough, though actuarial calculations are doubtless essential to its efficient operation. Employees and employers are obliged to contribute to the fund during the period of employment until the employee attains retirement age or takes early retirement. The fund is augmented by contributions and the interest derived from its investment. Pensions are paid out of the fund. They reflect, not necessarily precisely, the contributions made by or in respect of employees, adjusted in each case for time of entry as a contributor and age of retirement. The statutory scheme thus provides for retirement benefits to be paid out to pensioners who have contributed to the fund during their employment and in respect of whom employers' contributions have been made. If, notwithstanding that context, an employee were held entitled to the rights of a contributor without any contribution by or in respect of the employee having been made, the burden of those rights would have to be borne by the fund to the detriment of existing or future contributors. A construction having such an inequitable operation should not be adopted unless the language of the Act or of the later amendments to the Act clearly requires it.

Had the university deducted Mrs Chopra's contribution from her salary and paid the contributions of employer and employee to the Board in accordance with s 20 of the Act, Mrs Chopra would have become a contributor because she would have answered the statutory definition of the term, but it is submitted that the university's failure to deduct her contributions from her salary and to pay the employer's and employee's contributions to the Board does not disqualify an employee from the status of "contributor" and deprive an employee of the right conferred by s 21 on a contributor to retire or to be retired on a pension. The answer to this submission is that an employer's failure to make deductions from an employee's salary is not a substitute criterion which entitles the employee to the status of contributor and to the rights which the Act confers on contributors. Mrs Chopra was not contributing to the fund at any time during her employment. She made no contributions to the fund. In our opinion that is conclusive to show that she was not a "contributor" within the definition of that term prior to its amendment in 1976. We are in respectful disagreement with the members of the Court of Appeal who held that she was a "contributor", reasoning that an employee who was liable to contribute was contributing. The equation of liability to contribute with contributing is inconsistent with the requirement that a contributor be an employee who "is contributing", and it impermissibly treats the existence of a criterion of liability as fulfilment of a criterion of entitlement to the disadvantage of persons who have contributed and are contributing to the fund. This view is borne out by Pt IV of the Act, which confers on contributors who retire from employment an entitlement to a pension calculated by reference to the number of units for which "the contributor at retirement was contributing" or, in some instances, by reference to the number of units for which the "contributor had contributed" or "has contributed" for a period before retirement. The criteria of pension entitlement thus ensure that a pension be paid only to a "contributor" who has in fact contributed to the fund.

In 1976 the Act was amended by the Superannuation (Amendment) Act 1976 NSW (the 1976 amendment) which came into force on 13 January 1977. That amendment omitted the definition of "Contributor" in s 3(1) and inserted in its stead the following:

"Contributor" means an employee, but does not include -

(a) an employee while exempted from contributing to the Fund (whether before, on or after 13th January, 1977);

(b) an employee while rejected or not accepted as a contributor under this Act as in force at any time before 13th January, 1977; or

There is no doubt that Mrs Chopra was an "employee". However, the university and the Board submit that she was "not accepted as a contributor" (par (b) of the definition) under the Act as it stood prior to the 1976 amendment coming into force on 13 January 1977. Having regard to the terms of par (b), the reader might have expected that the Act contained some provision for the acceptance as contributors of employees in general, but it contained no such provision. Section 11A(2) and a consequential provision (s 11D) appear to be the only express provisions which deal with rejection or postponement of acceptance as a contributor. Section 11A(2) conferred certain powers on the Board if, but only if, an employee was the subject of an adverse or qualified medical report. The Board was not bound to exercise the powers thus conferred but that subsection provided for acceptance by the Board in two cases. The Board could accept an employee as a contributor for limited benefits under par (b) or, if the Board in exercise of its powers under s 11A(2)(c) postponed the acceptance of an employee as a contributor or as a contributor for limited benefits, the last paragraph of s 11A(2) provided for acceptance by the Board in termination of the postponement. However, neither paragraph empowered or required the Board to accept an employee whose medical report was favourable and unqualified. Such an employee was bound to contribute under s 11(1) without any acceptance by the Board. The Act contemplates that when, but only when, a medical report is unfavourable or qualified, acceptance as a contributor is dependent on the Board's determination. Therefore, although an employee whose report is favourable and unqualified may be "accepted" without consideration of the Board, an employee whose report is unfavourable or qualified could not be accepted without consideration by the Board. The Act did not choose to specify what was to constitute "acceptance" in other cases and it is unnecessary to decide that question in this case. Mrs Chopra's medical report was qualified, and she could not have been "accepted" if the Board had not considered whether any of the powers conferred by s 11A(2) should have been exercised in her case. She had not been "accepted" by the Board. Nor, if it matters, had she been "accepted" in any other way as a contributor prior to 13 January 1977. Accordingly, she did not become a "contributor" under the definition inserted by the 1976 amendment. She may have been an employee bound to contribute by s 11 of the Act prior to the 1976 amendment and by s 10O (2) thereafter, but she did not become a contributor under the Act either prior to the 1976 amendment or thereafter.

Paragraph (c) of the 1976 definition of "contributor" is complementary to par (b). It refers to s 10H which was introduced by the 1976 amending Act as part of a series of provisions relating to classification and medical examination of contributors. These provisions were substituted for s 11A and its associated provisions which were then repealed. Section 10H(1) excludes a person who, on 12 January 1977, was an employee but not a contributor "because the Board refused to accept him as such a contributor or postponed his acceptance as such a contributor". The present relevance of that section is that the 1976 amendment did not eliminate the dichotomy between an employee who was a contributor and an employee who was not a contributor which existed prior to 13 January 1977. Section 10H has no direct relevance to Mrs Chopra whose case was never considered by the Board.

In 1985 it was decided that the superannuation scheme should be closed. To this end the Parliament passed the Superannuation (Scheme Closure) Amendment Act 1985 NSW which inserted s 1A of the Act reading as follows:

(1) In this section, "prescribed day" means the day appointed and notified under section 2(3) of the State Public Service Superannuation Act, 1985.

(2) Notwithstanding any other provision of this Act, a person is not required or entitled to become a contributor to the Fund and is not entitled to elect to become a contributor to the Fund -

(a) in the case of a person who was an employee, but was not a contributor, immediately before the prescribed day or whose election to contribute to the Fund had not, immediately before the prescribed day, taken effect - except in accordance with regulations made pursuant to section 86(1A); or

(b) if the person becomes an employee on or after the prescribed day.

The "prescribed day" was 1 July 1985: New South Wales Government Gazette, No 76 of 1 May 1985. We shall refer to this Act as "the first 1985 amendment". The first 1985 amendment left the 1976 definition of "contributor" unaltered. Mrs Chopra was not a "contributor" under that definition and thus she was excluded from contributing to the fund after 1 July 1985. However, a further Act, the Superannuation (Further Amendment) Act 1985 NSW (the second 1985 amendment), omitted s 1A and, by a retrospective provision (s 2(1)), inserted as on 1 July 1985 a new s 1A as follows:

(1) Notwithstanding any other provision of this Act (except subsection (3)), a person is not required or entitled to commence contributing to the Fund on or after 1 July 1985.

(a) a person who was, immediately before 1 July 1985, an employee but was not contributing to the Fund, being a person to whom Schedule XXI applies and who elects to become a contributor to the fund in accordance with that Schedule;

Schedule XXI applied, inter alios, "to a person who was, immediately before 1 July 1985, an employee but was not contributing to the Fund": cl 1(1)(a). By cl 2(1), it was provided: A person to whom this Schedule applies may elect to contribute to the fund if -

(a) before 1 July 1985, the employer of the person has notified the Board that the person is an employee; or

(i) the employer of the person notifies the Board that the person is an employee; or

(ii) the person lodges at the office of the Board a certificate signed by or on behalf of his or her employer stating that the person is an employee.

It was submitted that the university did in fact notify the Board that Mrs Chopra was an employee, reliance being placed on certain correspondence. On 22 March 1985, the Board wrote to the Vice-Chancellor setting out information in its possession about Mrs Chopra's employment and noting that Mrs Chopra appeared to be "eligible for fund membership". (This letter was written, of course, before the first 1985 amendment came into force.) The Board asked for "advice on the question of Mrs Chopra's eligibility to contribute to the State Superannuation Fund". The Vice-Chancellor replied on 29 March 1985 as follows:

We have received your letter of 22 March regarding a member of the university's staff.

Naturally, we have felt obliged to seek legal opinion on this matter and consequently it would seem to be inappropriate for us to engage in involved discussion with your Office at this stage.

That letter does not "notify" that Mrs Chopra was an "employee" for the purposes of the Act, though the acknowledgment that she was a "member of the university's staff" admits some of the elements of the definition of "employee". There was no other correspondence prior to 1 July 1985. Therefore there was no notification which satisfied cl 2(1) of Sch XXI.

Then, Mrs Chopra having commenced these proceedings on 10 October 1985, a solicitor retained by the university attended a conference with the principal legal officer of the Board and, according to the solicitor's letter of 19 December 1985 confirming the conference, the solicitor had provided the person representing the principal legal officer

with photocopies of documents on the personnel file held by the University of Newcastle in respect of Mrs Audrey Lillian Chopra.

We note that such copy documents included all correspondence between the u[n]iversity and Mrs Chopra concerning the terms of her appointment as a lecturer in the Department of Education including a letter from the Vice Chancellor to Mrs Chopra dated 24 October 1969.

No doubt that correspondence indicated that Mrs Chopra was an "employee", but we are unable to accept a submission that a solicitor for an employer who provides photocopied correspondence to a solicitor for the Board for the purposes of pending litigation and (so far as the evidence shows) for no other purpose notifies the Board for the purposes of cl 2(1)(b)(i) of Sch XXI that a person referred to in the correspondence is an employee. What is needed to satisfy cl 2(1)(b) is an express notice of the fact to be notified. It is not sufficient that the Board acquires knowledge of the fact from sources which are not and do not purport to be an express notice. There is a difference between notifying a fact and furnishing material from which knowledge of the fact may be acquired: cf Burgh v Legg (1839) 8 LJ (NS) Exch 258. In our opinion, there is no particular form which an employer must adopt to notify to the Board that a nominated person is an employee, provided the notice purports to notify the fact expressly. It was submitted that an employer had a choice whether or not to notify the Board or to sign a certificate with respect to an employee for the purposes of cl 2(1) and that some deliberateness was essential to the giving of an effective notice or the signing of an effective certificate. But the schedule contains no words requiring that, or any other, state of mind. However, the provision of photocopy documents by an employer's solicitor to the Board's solicitor for the purpose of pending litigation does not purport to notify the Board expressly that the person referred to in those documents is an employee.

In any event, an employee in respect of whom such a notice has been given is not a person who falls within subs (3)(a) of s 1A of the Act inserted by the second 1985 amendment unless that person "elects to become a contributor". Mrs Chopra did not elect to become a contributor. Nevertheless, it is submitted that she should be deemed to have made an election pursuant to cl 2(2) of Sch XXI:

(2) Where, within the period of 28 days after a person to whom this Schedule applies is given notice by the Board that the employer of the person has notified the Board that the person is an employee, the person does not make an election referred to in subclause (1) or apply to the Board to be excluded from the provisions of this Schedule, the person shall be deemed to have directed that the notification given by the employer be regarded as an election referred to in subclause (1).

This subclause has no application to Mrs Chopra's case. There was no notice given by the Board which would start the 28-day period running and (for the reasons earlier given) there was no "notification given by the employer" which might be regarded as an election by Mrs Chopra under cl 2(1).

It follows that Mrs Chopra never became a contributor and her claim to be treated as a contributor must fail. Had Mrs Chopra been entitled to the status of a contributor, it may be that any claim to a pension would nevertheless fail on the ground that at the time of, or for a period prior to, retirement she was not in fact contributing to the fund and had not contributed for a pension payable on reaching the age of 55: see ss 27, 28, 28A and the subsequent provisions of Div 2 of Pt IV. This aspect was not fully argued on appeal and it is unnecessary to decide this question.

It is sufficient to hold that Mrs Chopra did not and does not satisfy any of the definitions of "contributor" and did not fall within subs (3)(a) of s 1A inserted by the second 1985 amendment. The appeals should be allowed and the judgment of Yeldham J dismissing her summons should be restored.

The resolution of the issues raised by these appeals calls for a journey through part of the maze that is the Superannuation Act 1916 NSW (the Act).

The facts are straightforward. On 24 October 1969 the University of Newcastle, one of the appellants, wrote to Mrs Chopra, who is effectively the respondent, offering her appointment as lecturer in its Department of Education. The offer was expressed to be conditional upon Mrs Chopra satisfactorily passing a medical examination. The examination, the letter noted, "is mainly to determine your eligibility to become a contributor to the New South Wales State Superannuation Scheme". This was a reference to the State Superannuation Fund established by the Act. It is variously referred to in these reasons as the scheme and the fund.

By letter dated 26 October 1969 Mrs Chopra accepted the offer of appointment. Arrangements were made for her medical examination. On 28 April 1970 the university wrote to Mrs Chopra to say that a medical certificate had been received from the Department of Public Health to the effect that she "Be accepted for permanent appointment and for limited benefits under the Superannuation Act ". The letter continued:

As it is understood that you do not wish to contribute to the superannuation scheme, it will be necessary for you to apply for exemption. It is pointed out that such exemption debars you from consequently acquiring any rights in the fund.

Mrs Chopra did not reply to this letter nor did she seek exemption under the Act. She would have had no difficulty in obtaining exemption under s 11(1) of the Act because her husband was already a contributor to the scheme.

There the matter rested for some eight years during which time Mrs Chopra was on the staff of the university. On 30 May 1978 the university again wrote to her, referring to its letter of 28 April 1970, noting that no application for exemption had been received and attaching a letter for her to sign and forward to the State Superannuation Board. The Board, under its present name of State Authorities Superannuation Board, is one of the appellants in these proceedings. The letter for signature is not in evidence but clearly it was an application for exemption under the Act. Once again Mrs Chopra did not reply nor did she take any step towards exemption. The university's records note a telephone conversation with Mrs Chopra on 7 March 1979 in which she said she did not forward the letter sent to her and did not intend to do so "because she disagrees with the "anti-female" provisions of the NSW SF".

After a lapse of nearly six more years Mrs Chopra wrote to the university on 14 January 1985, "On the basis of union advice" (a reference to advice from the University Academic Staff Association of NSW), to "formally request that the university place my name on the New Entrants' Schedule of the NSW State Superannuation Scheme, indicating the date on which I commenced permanent employment with the university". The reference to "New Entrants' Schedule" came about, as I understand it, by reason of the proposed closure of the scheme; it is convenient to defer consideration of the closure of the scheme until later in these reasons. On 5 February 1985 the university replied that it was unable to accede to Mrs Chopra's request.

In October 1985 Mrs Chopra brought action against the university and the Board seeking declarations of her entitlement to be recognised as a contributor to, and member of, the fund established under the Act. She failed before Yeldham J but succeeded before the Court of Appeal.

The Act was amended in 1976 and in 1985 in respects that have a direct bearing on Mrs Chopra's entitlement to recognition as a member of the fund. But first it is necessary to see how things stood when she was appointed Lecturer in Education in 1970. Part II of the Act had established a State Superannuation Fund "into which shall be paid the contributions of employers and of their employees under this Act; and from which shall be paid the benefits provided for in this Act" (s 4). The university is but one of many bodies to which the Act applies.

By s 11 every employee was required to contribute to the fund. There were provisions for exemption in various situations. One has been mentioned; another existed in the case of those who entered the service of an employer after a certain age. Contributions ceased at age 60 but a woman might elect to contribute for retirement at age 55 (s 11(2)). There were special provisions, where the report of the Chief Medical Officer indicated that an employee "is suffering from any physical or mental defect which is likely to affect his health or longevity or his capacity to continue in his employment". At the time of Mrs Chopra's engagement those provisions were in s 11A; that section was repealed and a new provision (s 10c) introduced in 1976.

Section 12 listed a scale of units of pension, a scale which was related to the salary of the employee, with a number of variations. The section empowered the Board, on application, to reduce the units of contribution where a person was more than 30 years of age at the time of entering the service of an employer. Section 14 provided that "The amount of contribution to be paid by each employee shall be based upon the number of units of pension for which such contributor contributes, upon sex, upon the age at which such contributor commences to contribute for each unit, and, in the case of a woman contributor, upon whether she contributes for a pension payable at age fifty-five or age sixty ". Section 16 required employers to contribute to the fund in accordance with the criteria just mentioned. Section 20 required employers to deduct the contributions of contributors from their salaries and to pay those contributions together with the employers' contributions "without deduction" to the Board. Section 27 provided that on the retirement of a contributor he or she be entitled to receive a pension "according to the number of units for which he contributed at the time of his retirement". The section listed annual amounts of pension corresponding with the scale of units.

At the forefront of the argument between the parties was the meaning of "contributor" under the Act. In the appellants' submission, a person was not entitled to a pension unless he or she was a contributor and a person was not a contributor unless he or she was contributing towards a pension. Mrs Chopra's contention was that the Act imposed an obligation on employer and employee to contribute to the fund and a further obligation on the employer to deduct the employee's contribution from salary. Once Mrs Chopra was appointed as Lecturer in Education, so the argument ran, those obligations came into force, carrying with them a statutory entitlement to a pension on her retirement. There had been no exemption under the Act, therefore Mrs Chopra was entitled to a pension notwithstanding that the university had failed to deduct the amounts due by her and to pay the amounts due by it. Mrs Chopra did not contend that she was entitled to be paid a pension without now making any contribution; rather, her submission was that the failure of the university to make deductions should be rectified and, that done (presumably by set-off), she should receive a pension.

In 1970 s 3(1) of the Act defined "contributor" to mean "employee who is contributing under this Act or whose contributions have ceased pursuant to subsection two of section eleven of this Act". Section 11(2) dealt with the attainment of certain ages by contributors. "Employee" was defined to mean "person employed by an "employer" " and "employer" was defined by reference to the Government of NSW and other bodies mentioned in a schedule to the Act.

On the face of it, unless Mrs Chopra was contributing under the Act, she was not a contributor in terms of s 3(1) and, if she was not a contributor, she was not a person entitled to a pension on retirement. But the argument that found favour with Mahoney JA in the Court of Appeal (in whose judgment Priestley and McHugh JJA agreed) was that "contributing" in the definition was "wide enough to include a person by or for whom no payments have been made but who is by the Act liable to make such payments". Mahoney JA's conclusion was that Mrs Chopra became a contributor when she became an employee of the university and that she remained a contributor until her retirement.

Save for the case of an adverse medical report, once an employee was contributing under the Act, there was no provision by which that employee ceased to be a contributor unless he or she ceased to be employed. As indicated, the definition of contributor extended so far as to include employees who were no longer liable to contribute by reason of s 11(2) of the Act. This extension to the definition was made by amendment to the Act in 1969 but, as Mason CJ and Gaudron J suggest, it could not be supposed that the Act meant otherwise even before amendment. However, the amendment points up that the status of contributor did not turn on liability to contribute. Rather, it was a status that, once attained, could not be forfeited by a person who remained an employee as defined by the Act.

It may be that, because of error or oversight, no deduction is made for a time. But s 19(2), repealed in 1972, subjected unpaid contributions to interest. And it is of some importance that s 19(3), likewise repealed, empowered the Board to recover the amount of any contribution "due and unpaid", together with interest, in any court of competent jurisdiction. These provisions contemplated that, for whatever reason, a contribution falling due might not be paid. There was no indication that, in those circumstances, an employee lost the status of contributor because contributions were not paid.

But, in this case Mrs Chopra refused over many years to contribute to the scheme, notwithstanding the matter having been brought to her attention more than once by her employer. No deductions were made from her salary because she had declined to respond, apparently because of an objection to the scheme. There is no basis upon which to conclude that Mrs Chopra ever satisfied the criterion of being an "employee who is contributing under this Act". True it is that she was an employee, for that status remained unaffected, but she was not an employee "who is contributing". Counsel for the respondent submitted that "the first question arising in this appeal is whether the refusal or failure of the employer to comply with ss 16 and 20 deprived the respondent of a right to claim benefits under the Act". That, I think, is to introduce a somewhat emotional note. The question is whether Mrs Chopra was a contributor.

The difficulties inherent in Mrs Chopra's argument may be seen when it is sought to apply s 27 of the Act and determine the pension to which she is entitled. It is the case that there is a formula by which contributions are assessed. But how is it possible to say, in terms of s 27, what are the number of units for which she contributed "at the time of [her] retirement"? In truth Mrs Chopra never contributed for any. It is no answer to say that s 12 provides a number of units according to the salary of the employee. Given the variety of options available to an employee under s 12, unit entitlement based on salary may bear little relation to what an employee would have contributed had he or she in fact made contributions. And, no matter what the notional entitlement of Mrs Chopra, she had not made contributions for any units at the time of her retirement or at any other time and therefore she had no pension entitlement under s 27. In the absence of any contribution, the fact that s 26(2) prescribed a minimum pension does not advance Mrs Chopra's case.

If an employer is derelict in its statutory duty to deduct the contributions of an employee from salary or to make its own contributions to the Board, no doubt the employee has an action in damages for any loss suffered thereby: Groves v Wimborne (Lord) [1898] 2 QB 402 at 407, 412-413, 415-416; Mallinson v Scottish Australian Investment Co Ltd (1920) 28 CLR 66 at 70-72; IRC v Goldblatt [1972] Ch 498 at 504. That is not to say that Mrs Chopra has such an action against the university. Her situation may well be different, given the circumstances of her case. The only point of referring to the statutory duty is to counter the suggestion in Mahoney JA's judgment that the possibility of an employee losing benefits through the failure of the university to meet its obligations somehow warrants placing a gloss on the words "who is contributing". Indeed, the availability of an alternative remedy answers the need to impute so strained a meaning to these words. In my view, no gloss is warranted.

It is true that s 20 of the Act required that the "contributions of contributors" (an expression that itself has some significance) should be deducted by employers from salaries and, together with the employer's contributions, be paid without deduction to the Board. But that was essentially a provision designed to ensure that contributions by employees and employers reached the Board and reached it intact. It does not help in answering the question whether a particular employee is a person who is contributing under the Act.

It is not necessary or desirable to attempt a statement as to the operation of the Act that will meet all situations. But, speaking generally, the notion of "contributor", as originally defined in the Act, required that contributions be made by an employee. Such a requirement could readily accommodate situations of error or oversight as referred to earlier in these reasons. When, as here, an employee was invited to contribute to the Scheme or apply for exemption and failed to do either over a period of 15 years and knew that during that time no deductions had been made from her salary or payments made by her employer, it is straining the English language beyond breaking point to conclude that she was a person who was contributing under the Act.

Mrs Chopra submits that, even if this be so, the changes made to the Act by the Superannuation (Amendment) Act 1976 conferred on her an entitlement to a pension. The amending statute omitted the definition of contributor to which reference has been made and substituted the following:

"Contributor" means an employee, but does not include

(a) an employee while exempted from contributing to the fund

(b) an employee while rejected or not accepted as a contributor under this Act as in force at any time before 13th January, 1977; or

It is agreed by the parties that pars (a) and (c) have no application to Mrs Chopra. By force of the amended definition she, being an employee, is a contributor unless, before 13 January 1977 (the date on which the 1976 amendments came into force) she was either rejected or not accepted as a contributor. It is not suggested that Mrs Chopra was rejected as a contributor; the question is whether she was "not accepted" as one. Again, on the plain meaning of the words, Mrs Chopra was not accepted as a contributor. She was invited to become a contributor or to apply for exemption; she did neither. In those circumstances, the appellants argue, she must be regarded as a person who was not accepted as a contributor. Mrs Chopra's answer to this contention is that par (b) of the amended definition of contributor is a reference to s 11A of the Act.

Section 11A(1) required an employee to submit to medical examination by the Chief Medical Officer. Subsection (2) provided that, where that report indicated that the employee was suffering from any physical or mental defect likely to affect his health or longevity or capacity to continue in employment, the Board might:

(a) refuse to accept such employee as a contributor; or

(b) accept such employee as a contributor for limited benefits; or

(c) postpone his acceptance as a contributor or as a contributor for limited benefits until such time as the Board, having regard to the report of the Chief Medical Officer, determines.

Counsel for Mrs Chopra submitted that the exclusion in par (b) of the amended definition of contributor referred only to employees who were refused pursuant to s 11A(2)(a), or whose acceptance was postponed under par (c) of that subsection. It was the appellants' contention that par (b) of the amended definition of contributor stood on its own feet and must be given the meaning its words demanded. They said that Mrs Chopra was not accepted as a contributor under the Act for, although invited to become a contributor or apply for exemption, she did neither. There is every reason why par (b) should not be read as referring to s 11A. The language of the two provisions is not the same; par (b) speaks of "rejected or not accepted" while s 11A(2) uses "refuse to accept" and "postpone his acceptance". Furthermore, s 10H(1) itself related to a person who was an employee but not a contributor because the Board "refused to accept him as such a contributor or postponed his acceptance as such a contributor". Yet such a person was expressly excluded from the definition of contributor by par (c) of the amended definition.

Paragraph (b) should be taken at its face value. Despite ss 11 and 20 of the Act, there was no acceptance of Mrs Chopra as a contributor. It was as a result of her unwillingness to participate in the statutory scheme that no deductions were made from her salary and that no money was paid to the Board. In those circumstances it would be flying in the face of the facts to hold otherwise than that she was not accepted as a contributor. What is significant about the amended definition of contributor is that it recognised that there may be circumstances in which employees had not been contributing.

Mrs Chopra has another string to her bow. In 1985 the pension fund was closed and a new scheme was instituted. This was done initially by the Superannuation (Scheme Closure) Amendment Act 1985. But a defect was found in this legislation and it was superseded by the Superannuation (Further Amendment) Act 1985. Section 1A(1), introduced by this later amendment, provides that a person "is not required or entitled to commence contributing to the Fund on or after 1 July 1985", the date the amendment came into operation. But subs (1) is expressed to be subject to subs (3). The latter provides that subs (1) does not apply to -

(a) a person who was, immediately before 1 July 1985, an employee but was not contributing to the Fund, being a person to whom Schedule XXI applies and who elects to become a contributor to the Fund in accordance with that Schedule.

Certainly Mrs Chopra was, immediately before 1 July 1985, an employee and she was not contributing to the fund. But was she a person to whom Sch XXI applied and did she elect to become a contributor to the fund in accordance with the Schedule?

It is unnecessary to refer to Sch XXI in great detail. Pursuant to cl 1 of the Schedule, Mrs Chopra was a person to whom the Schedule applied. By cl 2(1) such a person may elect to contribute to the fund in certain circumstances. Those circumstances arise if -

(a) before 1 July 1985, the employer of the person has notified the Board that the person is an employee; or

(i) the employer of the person notifies the Board that the person is an employee; or

(ii) the person lodges at the office of the Board a certificate signed by or on behalf of his or her employer stating that the person is an employee.

It is common ground that Mrs Chopra did not act pursuant to par (b)(ii). But it is said on her behalf that the university notified the Board that she was an employee. Reliance was placed on a letter from the university's solicitors to the Board's legal officer dated 19 December 1985 and also on her personnel file which the university's solicitors provided to the Board's legal officer as part of discovery in the present litigation and which included the university's offer of appointment dated 24 October 1969 and Mrs Chopra's acceptance dated 26 October 1969.

In my view, there was no notification within cl 2(1)(b) of Sch XXI. I do not think that cl 2(1)(b) requires a formal notice by an employer to the Board, but it does require a conscious decision on the part of the employer to inform the Board of the status of an employee for the relevant purpose. The object of the 1985 legislation was to effect a closure of the existing fund. A person not contributing at the time the Act came into operation was shut out from the fund unless the employer, in this case the university, gave that person the opportunity of contributing by notifying the Board of the status of that person as an employee. The first letter to which the Court was referred was a letter acknowledging a letter from the Board in which the position of Mrs Chopra as an employee was mentioned incidentally and for a different purpose. It is reading far too much into that correspondence to treat it as a notification by the university for the purposes of cl 2 of the Schedule. Likewise, the provision of Mrs Chopra's file could not constitute a notification merely because it contained the offer of appointment and its acceptance.

And, of course, Mrs Chopra did not elect to contribute, unless she can take advantage of cl 2(2) of the Schedule which contains a deemed election in the circumstances there provided. The subclause reads:

Where, within the period of 28 days after a person to whom this Schedule applies is given notice by the Board that the employer of the person has notified the Board that the person is an employee, the person does not make an election referred to in subclause (1) or apply to the Board to be excluded from the provisions of this Schedule, the person shall be deemed to have directed that the notification given by the employer be regarded as an election referred to in subclause (1).

The short answer to any reliance by Mrs Chopra on this provision is that she was not given a notice by the Board in the terms of the subclause; hence, the subclause can have no application in her case.

I would allow the appeals of the university and of the Board, set aside the orders of the Court of Appeal and restore the orders of Yeldham J.