A-G for the NT v Chaffey & Anor; Santos v Chaffey & Anor

[2007] HCATrans 203

[2007] HCATrans 203

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Darwin  No D2 of 2007

B e t w e e n -

ATTORNEY-GENERAL FOR THE NORTHERN TERRITORY

Appellant

and

CAMERON OWEN CHAFFEY

First Respondent

SANTOS LIMITED

Second Respondent

Office of the Registry
  Darwin  No D3 of 2007

B e t w e e n -

SANTOS LIMITED

Appellant

and

CAMERON OWEN CHAFFEY

First Respondent

ATTORNEY-GENERAL FOR THE NORTHERN TERRITORY OF AUSTRALIA

Second Respondent

GLEESON CJ
GUMMOW J
KIRBY J
HAYNE J
CALLINAN
HEYDON J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 16 MAY 2007, AT 10.17 AM

Copyright in the High Court of Australia

__________________

MR T.I. PAULING, QC, Solicitor-General for the Northern Territory:  May it please the Court, I appear with MS S.L. BROWNHILL for the Attorney-General for the Northern Territory in both matters.  (instructed by Solicitor for the Northern Territory)

MR S.J. GAGELER, SC:  If the Court pleases, I appear with MR P.M. BARR, QC for Santos Limited in both matters.  (instructed by Hunt & Hunt)

MR B.W. WALKER, SC:  If it please the Court, I appear with MR M.P. GRANT, QC and MR N. CHRISTRUP for Mr Chaffey, the first respondent, in both matters.  (instructed by Ward Keller Lawyers)

MR D.M.J. BENNETT, QC, Solicitor-General of the Commonwealth of Australia:  May it please the Court, I appear with my learned friend, MR M.A. PERRY, QC and MR G.M. AITKEN for the Attorney‑General of the Commonwealth of Australia.  (instructed by Australian Government Solicitor)

CALLINAN J:   I should say that immediately before I was appointed to this Court, I was a director of Santos.  Is there is any problem about that?

MR PAULING:   I think your Honour informed us of that at the time of the special leave application and no objection was taken by any party to your Honour sitting. 

Your Honours, by arrangement, I will present the argument first followed by Mr Gageler and then the Solicitor for the Commonwealth.

GLEESON CJ:   Yes, Mr Solicitor.

MR PAULING:   Your Honour, this matter comes before the Court against a background that the legislative power of the Northern Territory Legislative Assembly provided for in the Northern Territory (Self‑Government) Act does not extend to the making of laws with respect to the acquisition of property otherwise than on just terms.  Section 50(1) of that Act provides:

The power of the Legislative Assembly conferred by section 6 in relation to the making of laws does not extend to the making of laws with respect to the acquisition of property otherwise than on just terms.

It is common ground that the authorities that deal with section 51(xxxi) of the Constitution are appropriate to be considered in looking at the scope of section 50(1). There is an exception which I will come to and that is that some of the academic writers, in suggesting how section 51(xxxi) might be further interpreted, rely on a notion of proportionality that would not apply in the Northern Territory because under the Self‑Government Act the power to legislate is not given under enumerated heads of power but is a plenary grant.

The matter arises because, to overcome a decision in the Work Health Court on 19 June 2003, upheld on appeal, that normal weekly earnings in the Work Health Act included the employer’s contribution to superannuation, that is the Hastings Deering Case, and for other purposes the Assembly passed Act No. 63 of 2004, the Work Health Amendment Act 2004 which commenced on 26 January 2005.  The relevant provisions of this Act have been held to be invalid as an “acquisition of property otherwise than on just terms” and it is from the majority decision of the Full Court so holding that this appeal by special leave is brought.

It is appropriate to go to the legislation and the amending legislation to gain an appreciation of the complexity of the scheme brought in with the Act to replace the former Workmen’s Compensation Act and to abolish by section 52 the right to bring an action for damages.  It is also in this area of discourse appropriate to recognise the importance of characterisation in this exercise.  Your Honour, Justice Kirby said, in Smith v ANL:

Although the stated issues in these proceedings properly address attention to each of the elements in s 51(xxxi), the ultimate requirement to consider the characterisation of the challenged law against the standard expressed in the paragraph, read as a whole, obliges the decision-maker to perform an act of judgment. Different legislation with different purposes and provisions will produce different outcomes.

Your Honour was there referring to Airservices Australia v Canadian Airlines:

In such matters, a court, performing the task of characterisation, is inescapably obliged to draw lines distinguishing constitutionally valid from constitutionally invalid provisions.

This case presents that task.  There are at present, except on the outer limits, no bright line tests and except in a case by case development it is unlikely that one will be developed.  I say that because this is a difficult area of the law in which to present oral submissions and that is because from any given starting point there are expressions in the cases which may be strung together to produce a plausible result in either direction.

We may begin with Peverill and draw fine analogies while the plaintiffs may begin with Georgiadis and distinguish Peverill.  Advising governments whether a particular measure will or will not be a law with respect to acquisition of property otherwise than on just terms then becomes somewhat chancy.

GLEESON CJ:   You probably have an immunity, Mr Solicitor.

HAYNE J:   An appeal to sympathy, is it, Mr Solicitor?

MR PAULING:   Yes.

CALLINAN J:   It seems to be creeping expropriation in all sorts of ways, heritage legislation, planing legislations, regulatory regimes for all sorts of things, nearly every one of them in some way diminishes property right.

MR PAULING:   I understand what your Honour is saying, but the difficulty for us is that in trying to analyse the cases and come to a coherent line of principle one meets an undisclosed process of reasoning where it is said that the better view is this and therefore that is what the Court does or that it is finely balanced and therefore the balance should go in favour of the workman because this is a beneficial bit of legislation.

The purpose of saying that is that, in our respectful submission, to start a debate in any one of the cases, whether it is Georgiadis or Mewett or Peverill and then try and expand that along or to distinguish it or to say it is an apt analogy can lead to any result depending on the way the debate goes and, accordingly, we invite close attention to our written submissions, including the reply, because that has been the product of much consideration and careful thought to try and maintain a line.  Might I also say that we adopt the written submissions of Santos and of the Commonwealth.  Can I come now to the Act and the amending Act.

KIRBY J:   One gets an impression, historically, that the notion of acquisition expanded with Georgiadis.  Is that a correct recollection that it introduced new ideas into the law?

MR PAULING:   Yes, your Honour.

KIRBY J:   Or was Georgiadis something that grew naturally out of earlier observations in the Court?

MR PAULING:   It followed a line of reasoning but also introduced some notions that have been picked up as sort of verbal formulations that are then used as though they were in substitution for the text of the Constitution. The tests that were applied there have a life of their own.

KIRBY J:   You mentioned academic opinion relating to the position in the Northern Territory, has there been any academic analysis, lately, of the trend of the Court’s authority in this area?

MR PAULING:   Yes, there has, your Honour.

KIRBY J:   I mentioned in the special leave the remarks in the latest edition of Professor Blackshield’s book but ‑ ‑ ‑

MR PAULING:   Yes, in Blackshield and Williams, the authors at page 1285 of the Fourth Edition said:

The refusal to find an “acquisition of property” in Nintendo, Mutual Pools and Peverill, combined with the willingness to do so in Georgiadis, Mewett and Newcrest, has resulted in difficult questions of judgment dependent on subtle distinctions, and exacerbated by the judicial differences in emphasis and approach.  The judgments in Airservices Australia v Canadian Airlines International Ltd (1999) 202 CLR 133 are further evidence of the lack of a common interpretation of s 51(xxxi).

CALLINAN J:   Where are you reading from, I am sorry?

MR PAULING:   I am reading from the work by Professor Blackshield and Professor Williams.  It is in our list of authorities.

KIRBY J:   In the case of Theophanous we, I think, suggested that that was just inescapable in the nature of the task.

MR PAULING:   In the plurality judgment, your Honour?

KIRBY J:   Yes.

MR PAULING:   The work I was quoting from was Blackshield and Williams, Australian Constitutional Law and Theory, Commentary and Materials, Fourth Edition, The Federation Press, unabridged, at page 1285.  There are also two other articles to which I will later make reference.  One is from the Public Law Review and it is by Simon Evans called, “When Is an Acquisition of Property Not an Acquisition of Property? The Search for a Principled Approach to section 51(xxxi)”. It is from September 2000, Volume 11 of the Public Law Review commencing at page 183.  A more recent discussion that starts with some of the propositions from Mr Evans’ paper is to be found in the Sydney Law Review Volume 27, “Overriding Guarantee of Just Terms or Supplementary Source of Power?: Rethinking s51(xxxi) of the Constitution” It is by Rosalind Dixon.

KIRBY J:   Thank you.  I will have a look at those.  You deal with them in your ‑ ‑ ‑

MR PAULING:   The article starts at page 639.  We pick up some of the themes that Ms Dixon speaks of starting at paragraph 12 of our written submission where we say that there are a number of categories of legislation or effect that are outside 51(xxxi) and we summarise those as being, firstly:

(a)where the property is “inherently susceptible to modification”;

(b)where the concept of compensation is irrelevant or incongruous to the acquisition in question and;

(c)where the law is not one for the acquisition of property as such, but is rather part of and incidental to a general regulatory scheme aimed at the adjustment of competing rights and liabilities.

These are matters that your Honour the Chief Justice in particular looked at in Theophanous recently to see whether, for example, it was incongruous in those circumstances that there might be forfeiture or the taking away of the superannuation benefits of a corrupt politician given the scheme by which the superannuation rights were created in the persons to whom they were directed.  It is better that I proceed to the Act.  The correct and appropriate version for your Honours to have is the reprint as of November 2002.  That presents the Act in force at the time of both the injury and the time of coming into force of the Amendment Act. 

We have put as a schedule to our submissions a number of relevant sections with a notice to whether or not they have been changed at all.  In one case there was an immaterial amendment to describe a nurse as a registered nurse rather than something else but, apart from that, the law is as it is in that reprint subject to the amendment which is the subject of these proceedings.  Can I take your Honours to the long title of the Act.  It has multiple objects and unlike the Act which it replaces, which is the Worker’s Compensation Act, the primary focus is not on compensation.  It is:

An Act to promote occupational health and safety in the Territory to prevent workplace injuries and diseases, to protect the health and safety of the public in relation to work activities, to promote the rehabilitation and maximum recovery from incapacity of injured workers, to provide financial compensation to workers incapacitated from workplace injuries or diseases and to the dependants of workers who die as a results of such injuries or diseases, to establish certain bodies and a fund for the proper administration of the Act, and for related purposes.

In the judgment of Justice Mildren at paragraph [43], which is in the joint appeal book at page 26, his Honour helpfully sets out a number of the parts of the second reading speech which introduced this bill and in the middle of the page it is pointed out that the Minister said:

Cost containment is a prerequisite to the continuation of a proper system of workers’ compensation benefits.  This bill sets in place the mechanisms for cost containment.  I believe we all share the common aim of remedying the problems with the current system.  I believe we all share the fundamental philosophy of this bill: safety is the first priority in preventing injury and disease as far as possible; where injury and disease occur, the rehabilitation of the injured worker must be the major aim; and there must be a system to compensate injured workers with justice and support them with dignity during their period of incapacity.

Your Honours, the Act in that way disclosed a shift in emphasis from the earlier workmen’s compensation legislation, a move away from compensation for injuries and towards the prevention of workplace injuries in the first place and the rehabilitation of injured workers so that they may return to work and cease receiving compensation.  At Part II of the Act, which is not in the provision annexed to our submissions, establishes the Work Health Authority by section 6.  It is constituted by the chief executive officer with the functions set out in section 10 of administering and enforcing the Act.  You will see in those provisions that it commences with:

(a)to advise the Minister on matters relating to occupational health and safety policy in the Territory;

(b)to develop, publish and recommend occupational health and safety standards for the Territory;

(c)to enforce . . . 

(e)to identify priorities and needs . . . 

(z) to further the objects of this Act –

The point of taking your Honours to those sort of provisions is to show that this bit of legislation involved a major departure from what had gone before.  Under the Workmen’s Compensation Act the right to sue at common law was maintained subject to the fact that if one had obtained compensation under this Act and also damages at common law, then the compensation was to be paid back.

KIRBY J:   How does it affect the question that is before us that there is a major change if in the course of the major change there is an acquisition of property?

MR PAULING:   The way we come to it, your Honour, is to show that by the structure and nature of the Act and the way in which it proceeds it was inherent in the provisions whereby compensation was payable that they may be varied or changed from time to time, that they were as prescribed and that the Act was an organism that, in order to adjust the economic viability, if you like, of the scheme, the fairness to workers and so on, that it was of its nature liable to be changed in accordance with economic circumstances.

KIRBY J:   That might be so for workers compensation benefits, but what is said to be different here is that there had previously been the basic common law rights and grafted onto that were statutory workers compensation benefits and that then there is interposed a provision which abolishes the common law rights and gives certain rights in lieu and that is a significant difference.

MR PAULING:   Yes, it is a significant difference and the reason that I referred earlier to the passage that your Honour wrote in Smith v ANL was to say one needs to understand the whole statutory structure that you are dealing with to see whether it is apt to say of the provisions that they are subject to modification from time to time, that they are capable of being changed without that change representing an acquisition of property otherwise in unjust terms, that they are modifiable.  The contrast is with the older cases dealing with workmen’s compensation legislation, particularly in New South Wales, that insisted that matters were fixed as at the date of an event whether it be injury or death, that things were not changed, that new Acts could not apply to events that were already completed.

Those sort of presumption cases like Fisher v Hebburn that dealt with whether or not a particular bit of changed legislation operated retrospectively or not, those cases were dealing with an approach to work health that was quite different to the modern approach.  They were dealing with fixed notions that you would become entitled to this amount of money at that time and you cannot change it, you cannot take it away, whereas what we are saying is that in the whole scheme of this Act, which is complex and covers a great range of objectives, that it is more readily able to be seen that the rights are modifiable without being necessarily an acquisition of property otherwise on unjust terms.

CALLINAN J:   Sometimes the valuation question becomes bound up in the first question whether there is an acquisition, that, in fact, if you scrutinise what has happened it may be that there has been no diminution in value or diminution in the property rights.  I am not saying that is this case, but the two questions are entirely distinct and they need to be kept distinct, but sometimes you have to look at the before and after position on a valuation basis to decide whether there has even been an acquisition.

MR PAULING:   I mean, when we get to section 53 which is the provision that creates the right to compensation, it will be our submission that there are indications there that this Act was intended to be able to be changed to reflect the economic situation at the time.

CALLINAN J:   That is a different question.  I am talking about value to the person affected, not some general value overall to a number of different people.

MR PAULING:   It may be that in a given circumstance, by reducing a monetary component of compensation and increasing some other component, that for the injured worker they are in fact at least as well off if not better off than if they had more money and less other ‑ ‑ ‑

CALLINAN J:   Quite, but it may be necessary to link that up some way with the circumstances and the legislation for the change.

MR PAULING:   I will endeavour to do so, your Honour.  Could I just then proceed just to fill out the shape of the Act.  Part III sets up a work health advisory council constituted by a chief executive officer and other members who are nominated by organisations representing:

the interests of employers, workers, insurers or professional persons concerned with medical and rehabilitation treatment –

and it carries out a number of functions and imposes duties.  Sorry, it is Part IV imposes duties, but there is this council and it carries out the particular functions.  Part IV of the Act deals with occupational health and safety and it is not necessary for the Court to do more than note that this is not an Act which relates purely to compensation for injured workers. 

Part V is the all‑important part and it is headed “WORKERS COMPENSATION AND REHABILITATION”.  If I can take you to Part V which commences with section 49, which is the section that became amended.  It is called “Preliminary” and it has a number of definitions, including a definition of “normal weekly earnings” which is found on page 36 of the print.  It says:

“normal weekly earnings”, in relation to a worker, means –

(a)subject to paragraphs (b), (c) and (d), remuneration for the worker’s normal weekly number of hours of work calculated at his or her ordinary time rate of pay –

and (b), (c) and (d) need not detain us, but that is the general definition which was found by the magistrate in the Work Health Court.  It was found that remuneration included the employer’s contribution to superannuation.  It then defines “normal weekly number of hours” and “ordinary time rate of pay” which says:

“ordinary time rate of pay” means –

(a)in the case of a worker who is remunerated in relation to an ordinary time rate of pay fixed by the terms of his or her employment – the time rate of pay so fixed –

So it is into section 49 that the impugned sections were put by way of amendment.

Then, your Honours, we get to Division 2 of Part V which is headed “General”.  There are some provisions which have been the subject of amendment in relation to seamen that are not relevant to this case, but then we get to section 52:

Abolition of certain rights to bring action

(1)      Subject to section 189, no action for damages in favour of a worker or a dependant of a worker shall lie against –

(a)the employer of the worker;

(b)any person who, at the relevant time, was a worker employed by the same employer as the deceased or injured worker; or

(c)the Nominal Insurer,

in respect of –

(d)     an injury to the worker; or

(e)     the death of the worker –

(i)        as a result of; or

(ii)       materially contributed to by,

an injury.

GUMMOW J:   Section 189 is a transitional provision which does comply with section 50, I guess, of the Self‑Government Act.

MR PAULING:   Yes, your Honour, so that it was not intended that vested causes of action be abolished.  Yes, that was precisely to comply with that requirement that that section was included.

In section 52(2), to the matter beyond doubt:

The purpose of subsection (1) is to ensure that, so far as the legislative power of the Legislative Assembly permits, no action for damages at common law shall lie in the Territory or otherwise in the circumstances described in that subsection and nothing in this Act shall be construed as derogating from that purpose.

Then your Honours come to section 53, the operative provision in relation to compensation and there are some indications, we say, there that indicate that the Act and its provisions in relation to compensation are subject to modification.  The text is, for the relevant purposes, as it was unamended:

Subject to this Part, where a worker suffers an injury within or outside the Territory and that injury results in or materially contributes to his or her –

(a)death;

(b)impairment; or

(c)incapacity,

there is payable by his or her employer to the worker or the worker’s dependants, in accordance with this Part, such compensation as is prescribed.

GUMMOW J:   What is the force of that phrase “as is prescribed”?  Is it prescribed by regulations made under 187?

MR PAULING:   There are some regulations but otherwise Part V itself prescribes what sort of costs and expenses are recoupable from the insurer.  It describes the level of compensation, in our respectful submission, because subsequent sections that I will bring you to show what that entitlement might be, for example, if there is a loss of mobility or a need to modify a home or do other things.  It is prescribed in the sense, your Honours, that it is generally a percentage of normal weekly earnings or average weekly earnings which are both defined terms within the Act.  The scheme in Part V prescribes all of the different aspects of benefit that the worker may obtain.

GUMMOW J:   The relevant provision here is section 65, is it?

MR PAULING:   In relation to long‑term incapacity?

GUMMOW J:   This worker here.

MR PAULING:   Yes, there, again, it is dealing with defined terms:

75% of his or her loss of earning capacity or 150% of average weekly earnings at the time the payment is made, whichever is the lesser amount, until –

(a)he or she attains the age of 65 –

A point to be made at this stage, of course, is that, unlike all the other cases where the common law rights have been abolished or Pinter in the ACT where a component of compensation for victims of crime were taken out, these are all one‑off events, whereas what we are dealing with in this case for the time is a continuing benefit that may as well go on for 40 years or longer.  The Act contemplates, for example, that young workers may well suffer permanent incapacity and that the compensation payable will rise over time until they are an adult rate but then would continue until the retirement age of 65.

We say it is significant in a scheme that might last that long that really, as Justice Angel found, as prescribed really brings into it, from time to time, the notion that one looks at the state of the Act and the compensation available at the time it is actually payable or when it needs to be calculated and that it is liable to change.  That is the first limb of our argument.  It is inherent in the nature of the scheme here that for a variety of reasons, including economic circumstances, the payments benefits may rise or be adjusted downward depending on what is happening.  So, taking you to that part of the Act is really to start developing the first of the three arguments we advance in our written submissions.

There are provisions in relation to disease which need not detain us.  There is a provision, payment of salary or wages for the day of injury, that is section 56.  We can skip then to 62 which deals with a lump sum compensation in respect of death and it provides for the distribution as between the spouse and children depending on the number and so on of how that lump sum ‑ ‑ ‑

GLEESON CJ:   I think we have skipped it, I do not have 62.

GUMMOW J:   No, we seem to skip from page 43 to 50.

MR PAULING:   Sorry, is your Honour looking at the extracts?  I am not sure.

GUMMOW J:   I am looking at the reprint of 1 November 2002.

MR PAULING:   I could only imagine that what has been printed for your Honours is only the sections that we listed in the list of authorities in the statute.

HAYNE J:   It would be as well, I think, if we had at least the whole of Part V.

MR PAULING:   Yes, I will arrange for that.

HAYNE J:   Probably we would need even more than that, at least the whole of Part V.

MR PAULING:   I will make sure your Honours have that immediately after lunch.  So your Honours do not have section 64?

GLEESON CJ:   Yes, that is on page 50 of the print.

MR PAULING:   Yes, so that is as you would expect in legislation of this sort that during the first 26 weeks of incapacity the worker’s income is maintained at the level it was when he was able to work.  Interestingly, it provides that if the person is injured immediately before they were due to retire that does not matter, the payments will continue for the full 26 weeks.  Then you get to 65, which your Honour Justice Gummow drew attention to, which deals with the prescription of the formula for working out or calculating the compensation payable to somebody suffering a long-term incapacity.  You will notice in section 65(2) that it talks about:

the difference between –

(a)his or her normal weekly earnings indexed in accordance with subsection (3);  and

(b)the amount, if any, he or she is from time to time reasonably capable of earning in a week in work he or she is capable of undertaking if –

(i)in respect of the period to the end of the first 104 weeks of total or partial incapacity – he or she were to engage in the most profitable employment (including self-employment), if any, reasonably available to him or her;  and

(ii)in respect of the period after the first 104 weeks of total or partial incapacity – he or she were to engage in the most profitable employment that could be undertaken by that worker, whether or not such employment is available to him or her,

and having regard to the matters referred to in section 68 –

which go to education, age, experience, training, language skills and so on.

GLEESON CJ:   I suppose any of the numbers in section 65 could be changed from time to time.

MR PAULING:   Yes, your Honour.  Yes, we say that is something that the legislature is capable of doing without offending section 50, to adjust the scheme for whatever reason that may be recommended to make it fair or easier running, or whether it be economical or otherwise.  The problem which I will come to when I am dealing with characterisation is that the result of an inquiry of this sort will vary according to at what level of abstraction one defines a right.  If one defined the right as to be paid compensation as prescribed from time to time under the Act, then a diminution of something by reducing this to 52 weeks instead of 104 weeks might just be seen as an adjustment that does not offend section 50.  But if you focus, as the majority in the court below did, and say the right in question here is to be paid the component of normal weekly earnings that is represented by the employer’s contribution to superannuation and you get rid of that, that is more readily seen to be an extinguishment and so would offend section 50.  So the result of the case can be determined by the level of abstraction which one looks at the right, the nature of the right.  It is our submission that what crystallises is a right to compensation as prescribed from time to time.

GUMMOW J:   There might be a degree of prescription which destroyed ‑ ‑ ‑

MR PAULING:   Again that would be, yes, indeed, a matter of degree.  One would say this right has been so far eroded that it is substantially gone.  We say that we are not in that arena here but what we are saying is that when we come to the third point which is a genuine adjustment of competing interests that here was an abnormality which was unexpected.  I know that the majority in the court below said that the government should have expected but, be that as it may, the purpose of the Act was to remedy that unexpected outcome.  And more readily then one sees that it is an attempt of a genuine adjustment of competing interests and not at extinguishing altogether the right to compensation.  Then in section 65(3) it talks about how you calculate or work out the loss of earning capacity.  Yes, 65(3) of course is the indexing formula.  It says:

The normal weekly earnings of a worker for the purpose of calculating his or her loss of earning capacity or for the purposes of subsection (8) or (9) at a particular date shall be taken to be his or her normal weekly earnings immediately before the date on which he or she first became entitled to compensation multiplied by the average weekly earnings at the particular date and divided by the average weekly earnings applying at the date on which he or she first became entitled to compensation.

Now, what appears from that is that as at the date of injury one cannot go to this Act and say, “Fixed and immutable is the fact that you will receive this much a week”, because for all sorts of reasons - and we will come to the fact that a person may have a spouse who is dependent which increases the amount of compensation or children who are dependent which increases the amount of compensation - there is a deal of flexibility, invariability inbuilt into the Act.

HAYNE J:   There is variability in the sense that future events may occur which will affect the way in which the Act is engaged in the circumstances as then obtaining.

MR PAULING:   Yes.

HAYNE J:   But recognising that to be so, the essential step in this branch of the argument is, is it not, that the right, the property, is a right to whatever is prescribed now or in the future?

MR PAULING:   Yes, that must be right.  Can I then just go to subsection (4) to emphasise the fact that compensation may go on for a very long time.  This deals with young people, in this sense:

(a)in the case of a worker who was an apprentice (including an adult apprentice) immediately before the date on which he or she first became entitled to compensation –

(i)as from the date on which he or she would otherwise have completed his or her apprenticeship – the full award wage for a tradesman in the trade in which the worker was an apprentice; and

I do not know quite how you work that out post Work Choices.  It may not be in the awards:

(ii)until that date – the normal weekly earnings that would have been his or hers had he or she continued in the apprenticeship; and

(b)in the case of a worker who was a junior employee immediately before the date on which he or she first became entitled to compensation –

(i)as from the date on which he or she would otherwise have ceased to earn wages at a junior rate of pay – the full award wage for a person performing the work that the junior worker performed –

and so on.  So it is contemplated by the Act that somebody might suffer a catastrophic accident as a young person and be entitled to compensation until the age of 65.  That works against the idea that is reflected in the older cases of things becoming fixed in stone as at the date of the injury of the relevant event.  Then, again, we have in subparagraph (12):

For the purposes of subsections (7) and (8), the amount is 50% of average weekly earnings and, in addition –

(a)12.5% of average weekly earnings, where the worker has a spouse who is, at the date of the relevant injury and at the time when compensation is paid under this section –

So therefore this section is contemplating that the 12.5 per cent may be payable from time to time until such a time as the person is not dependent, in which case it ceases.

CALLINAN J:   All of these problems would be resolved if the legislature actually said in the relevant legislation conferring any rights, “These rights will be subject to change from time to time, or may be subject to change from time to time” even a change which may have the effect of reducing the value of the right.  It would be so easy for legislatures to put it beyond doubt.

MR PAULING:   Yes.  I have to supply those words by inference or supply that effect.

CALLINAN J:   Exactly, aimed at a principle to the extent that it is a clear principle says, “If the right is inherently subject to a change or it is integral to the right itself” something of that kind, why not say it, then there would be absolutely no doubt about the matter and every legislature in Australia affected by this or the Constitution could say and we would not be having these arguments.

MR PAULING:   It may be that in 1987 when the Act was passed that sort of consideration was not so obvious.

CALLINAN J:   Twenty years later it could be easily amended – I suppose it could not be, that is the problem, it might not be. 

MR PAULING:   That is the problem.

CALLINAN J:   Still, the law has always been the same.  It just has to be refound from time to time, Mr Pauling.

MR PAULING:   Thank you, your Honour.  Can I just, finishing that section, indicate there is also a 6.2 per cent of average weekly earnings for each prescribed child.  Then, curiously, section 65A says:

A worker is not entitled to be paid compensation under section 64 or 65 during any period the worker is detained in a penal institution within or outside the Territory.

Section 65B:

A worker is not entitled to be paid compensation under section 64 or 65 during any period the worker resides outside Australia unless the worker’s rehabilitation is complete.

Sorry, I have been corrected and asked to withdraw “curious” and say this pleading clearly fits in with the major focus of the Act on rehabilitation and keeping people here so they can be rehabilitated and, presumably, if you are in a penal institution that is not available to you.

GLEESON CJ:   I think your cost of living goes down.

MR PAULING:   It might be quality of life.  Then, again, there are numerous other provisions dealing with assessment and then, in section 69, “Cancellation or reduction of compensation”.  So part of the scheme of the Act is that the employer can give notice to the employee, or the worker:

of the intention to cancel or reduce the compensation and, where the compensation is to be reduced, the amount to which it is to be reduced; and

(b)a statement in the approved form –

(i)setting out the reasons for the proposed cancellation or reduction;

(ii)to the effect that, if the worker wishes to dispute the decision to cancel or reduce compensation, the worker may apply to the Authority to have the dispute referred to mediation

and so on.  In the majority judgments below it was suggested that the fact that the legal personal representative of a deceased person might continue a claim already made, and that unpaid amounts might form part of the estate of a deceased worker, somehow added to the stability of the right to compensation and therefore made it less likely that it should be subject to variation.

The only comment I make is in section 69(2) it is implicit that compensation may be cancelled where a person “returns to work or dies” and that no notice need be given in those circumstances so that the idea that there is some continuing right that inures to the benefit of the estate is recoverable by the legal personal representative is really a faint support for the work that my learned friends give the sections to do.

Subdivision C begins with section 70 which defines “permanent impairment”. Section 71 sets out what would be known in earlier days as a maims table or a percentage – that is dealing with the whole person rather than particular maims. Then section 72 deals with assessment. Subdivision D deals with compensation for medical, surgical and rehabilitation treatment. Again, these are matters that arise from time to time when the treatment is given and the costs are reasonably incurred and the payment arises.

GLEESON CJ:   These entitlements in the ordinary case I presume are backed by insurance arrangements.

MR PAULING:   Yes, your Honour, unless one is dealing with the nominal insurer which is backed by the Territory.

GLEESON CJ:   Is it relevant to our task to consider the scheme of insurance that exists or is there simply a compulsory form of insurance?  Is the operation of the insurers regulated by the Territory, for example, or overseen, as it used to be in some States?

MR PAULING:   Yes, it was.  Indeed, in some States the government would set the premiums and have advisory boards that reported on things and limit them.  From the Attorney‑General’s point of view, the Northern Territory Government is a self‑insurer and stands behind the nominal insurer.  For example, in the case where HIH fell over the Territory had to pick up the liabilities that were unfulfilled.  We will come to that in Part VII of the Act, your Honours, which deals with insurance but I do not think it, with respect, weighs upon the answer to the issue that is presented to the Court in this case.

CALLINAN J:   Can employers self-insure?

MR PAULING:   Yes.  There are certain requirements that have to be met before they can.

CALLINAN J:   I suppose the other side of the coin might be that they could be placed in a disadvantageous position, both the employer and the insurer, if the superannuation were increased.

MR PAULING:   Yes.

CALLINAN J:   Would they have some sort of an argument that that imposition involves ‑ ‑ ‑

MR PAULING:   An acquisition.

CALLINAN J:   Yes.

MR PAULING:   If it was increased because of a Commonwealth legislation being the superannuation guarantee, it is conceivable that the application of that Act in those circumstances may effect an acquisition of the insurer’s property.  That is the view that Justice Angel took.

CALLINAN J:   It would involve the gouging of some money out of them for which the legislation some time earlier did not make provision.

MR PAULING:   But presumably it would operate prospectively and presumably there would be some opportunity for the insurer then to adjust the premiums to reflect that fact.

CALLINAN J:   Perhaps not.

MR PAULING:   The problem that we faced was that it operated retrospectively in the nature of declaratory relief.  From 1987 normal weekly earnings was remuneration included superannuation.

GLEESON CJ:   Well, from the Territory Government’s point of view, the first problem was the retrospective operation of the decision of the Supreme Court of the Northern Territory. 

MR PAULING:   Yes.

GLEESON CJ:   Confronted with a decision of the Supreme Court of the Northern Territory that had retrospective operation, the Northern Territory Government attempted to cope with that problem by the legislation with which we are concerned.

MR PAULING:   Precisely.

KIRBY J:   I suppose you can say that notoriously since Prince Otto von Bismarck introduced workers’ compensation law in Prussia and we copied it ultimately in most common law countries, that it has been of the nature of this form of benefit that it has been changing all the time, often many times in the space of a year.  The thing that affected me in WMC Resources was that the permits there had to have a certain stability because very large investments were being spent on it.

Now Justice Toohey and I felt that that gave rise to the right to compensation, but the majority held not and therefore when I look at this problem, if I was wrong in WMC Resources where there were multi‑million dollars and there were big investments and the need for stability and certainty, and that that was held to be simply a permit that could be wiped away, because it was granted it could be ungranted, then how much more is this sort of case where the nature of this type of benefit that it is changing all the time as since the 1870s to 1880s.

MR PAULING:   Well, yes.  If one looked at the repealed Workmen’s Compensation Act, there is not a page that does not have a notation, “omitted”, “substituted”, “amended”, “deleted” because it was changing to meet the way in which courts dealt with particular cases and reached particular decisions dealing with beneficial legislation.

CALLINAN J:   And every time I suppose to the disadvantage of defendants and their insurers.

MR PAULING:    Yes.

CALLINAN J:   Even if you make allowance for the changing value of money over time and nearly always something was added to the benefit of the employee or the injured person in consequence of which the defendant or the defendant’s insurer was obliged to pay more.

MR PAULING:   Well, such a case occurred with this Act where on the advice of the advisory body, the percentage involved with permanent impairment went from 70 to 75 per cent, I think.  I will come back to that provision.  That raised the level in favour of the worker which seemed to be a fairer provision.

CALLINAN J:   But I am really talking more about an inference of integral susceptibility to modification, because that is something that can be discerned on the other side of the coin, that is something to which the ultimate person paying is subjected to financial disadvantage from time to time. 

KIRBY J:   Of course, the only problem with what I put to you is that then leaves very little space for the Georgiadis-type doctrine because it is the nature that legislation is changing and can change.  Then the question becomes where does one draw a line and how does one acknowledge that we do not have a takings provision, but we have an acquisition of property and property can be ephemeral and based in statute.  This is why it is difficult to find a bright line.

MR PAULING:   Of course it is difficult.  If you are looking at Georgiadis, one can readily see that what was being taken away was a common law right, something that could be readily recognised, as it were, not part of a complex series of benefits and restraints and so on that might be found in a comprehensive work health scheme, such as we are dealing with here.  To take away a common law right does not permit of language of modifying the right although that is, in a sense, what was said in Smith v ANL, in argument at least.  There one is completely extinguishing such a right and yet you are not dealing with what I have been talking about as an ongoing, continuing process whereby payments are made from week to week and circumstances can and will change. 

I will just return to the structure of the Act.  Division 4 is rehabilitation and other compensation so we are seeing that this is not a simple process whereby one simply looks at the weekly earnings of the worker and says, “You’ll get, during incapacity, a percentage of that level”.  There are all sorts of other matters that come into it including household services, attendant care services, home modifications, vehicle modifications.  This Act is set up with a completely different philosophy and requires, in our respectful submission, flexibility.  Can I just note that “rehabilitation” is defined in section 75 which is at page 59.  It says:

(1)      The purpose of this Division is to ensure the rehabilitation of an injured worker following an injury

(2)      For the purposes of subsection (1), “rehabilitation” means the process necessary to ensure, as far as is practicable, having regard to community standards from time to time, that an injured worker is restored to the same physical, economic and social condition in which the worker was before suffering the relevant injury.

GLEESON CJ:   One of the objects of that is to get the worker off compensation.

MR PAULING:   Yes, and back to work.  But again it is part of the philosophy that there is a certain dignity one might think in his being able to fully be rehabilitated and return to work.

KIRBY J:   Are you sure that this was dignified by a philosophy and not simply by saving money?

MR PAULING:   There are two aspects to that.  One that is referred to in Justice Mildren’s judgment refers to then Professor Sackville’s report about workmen’s compensation and other forms of compensation.  But the general material and the way in which the Act is structured suggests, as the second reading suggested, that there was an element of dignity and philosophy in it ‑ ‑ ‑

KIRBY J:   I think that was the sugar.  The reality was that a lot of people who are injured are much worse off today than they were, much worse off.

MR PAULING:   I cannot comment on that; I do not know.

KIRBY J:   They bear the burden of injuries rather than industry.  However, that is not our concern today.

MR PAULING:   I am asked to ask your Honours to note that in the Hansard at page 1341 at the bottom of the page there is an explanation as to the current system for longer-term injured workers.  Can I just read it.  It says:

The current system for longer-term injured workers was far more in the nature of welfare than compensation:  a flat rate benefit no matter what you earned before the injury plus amounts for dependants.  The proposed scheme is tied to lost earning‑capacity which, in the case of those injured workers who can no longer work at all, will be what that person earned prior to the injury.  Because of the presence of common law and the unrestricted ability to negotiate lump‑sum computation payments, the current system gives injured workers no incentive to rehabilitate themselves and return to remunerative work as soon as possible.  This is a fact that is not only disadvantageous to the system but also to the workers themselves.  What happens to people who sit around waiting for common law actions to be concluded is well‑established.  They become miserable and sorry for themselves and obsessed with their illness and disability.  This is the sort of thing we want to eliminate and the proposed system will do that.

So there is a bit of both sides of the coin in that respect. 

Your Honours, I then go to Division 5, which is at page 65, “Claim Procedures and Determination”.  Section 79 says:

In this Division “weekly payment” means a weekly payment of compensation.

It provides for notice of injury, the form of the notice, the form of the claim, puts obligations on the employer.  In 85, “Decision as to eligibility for compensation”:

(1)An employer shall, on receiving a claim for compensation –

(a)accept liability for the compensation;

(b)defer accepting liability for the compensation; or

(c)dispute liability –

so a mechanism is put in place.  Then 86 is headed “Application to alter level of weekly payments”:

(1)     A worker who is receiving weekly payments may apply to the employer for an increase or decrease in the level of weekly payments.

(2)     An employer shall, within 14 days after receiving an application under subsection (1), accept or reject the application –

and so on.  Then “Weekly payments”:

(1)     Unless otherwise agreed in writing by the worker, a weekly payment shall be made to the worker before the expiration of 7 days after the end of the week in respect of which it is payable or, where the worker is normally paid at intervals greater than one week, before the expiration of 7 days after the end of the period in respect of which he or she is normally paid.

Then there are provisions for late payment of weekly payments and return to work.

Your Honours, then Part VI of the Act sets up a Work Health Court and we need not take your Honours to that.  Part VIA is about dispute resolution.  Then we get to Division 3 of that part, workers compensation insurance.  Section 126 provides: 

Every employer who is not a self-insurer shall obtain from an approved insurer a policy of insurance or indemnity for the full amount of his or her liability under this Act (other than Part IV) to all workers employed by him or her and for an amount of not less than the prescribed amount in respect of his or her liability independently of this Act for an injury to a worker in his or her employ, and shall maintain such policy in force.

Then there are penalty provisions.  Then it deals with liability as between approved insurers, then subcontracting.

GLEESON CJ:   Is there some sort of oversight of the financial viability of insurers?

MR PAULING:   There is a body that does review it.  It is set up as the Work Health Advisory Council.

GLEESON CJ:   However, I gather from a remark that you made earlier that HIH was an approved insurer.

MR PAULING:   Yes, section 119 deals with approved insurers and self‑insurers.  It is in Part VII dealing with insurance:

Without limiting its discretion under subsection (2), the Authority –

that is the Work Health Authority –

shall, before approving or refusing to approve an insurer, take into consideration -

(a)the insurer’s ability to provide the necessary insurance service, including the ability to meet time limits . . . 

(c)      the financial viability of the insurer -

et cetera.  So then, your Honours, we see in 137, for example, “Default of approved insurer”.  It deals with the nominal insurer and while it is not explicitly in the Act, it is the case that the Northern Territory stands behind the nominal insurer.  The nominal insurer is dealt with in Division 5 at page 107:

(1A)    The purposes of the Nominal Insurer are –

(a)to protect injured workers whose employers do not have workers compensation insurance; and

(b)to protect employers and injured workers where insurers default in the payment of compensation under workers compensation insurance.

Division 6 deals with the Nominal Insurer’s Fund and payments out of it.  Then finally can I take you to section 184 which deals with survival of claims.  Firstly:

(1)This section does not apply to or in relation to compensation under section 71.

That is compensation for permanent impairment -

(2)Where a person who is entitled to make a claim for compensation dies, that claim may be made by his or her legal personal representative.

(3)A claim for compensation is not affected by the death of the claimant after the claim was given or served on the employer, the Nominal Insurer or the Authority, as the case may be.

Then there are provisions applicable on the death of a beneficiary and compensation in 186 is not assignable, that is:

An assignment of compensation payable under this Act is void as against an employer or an insurer.

Then, as one would expect, there is a provision against contracting out.

GLEESON CJ:   Is Mr Chaffey still on compensation?

MR PAULING:   I believe so.

GLEESON CJ:   I perhaps misunderstood but I thought originally that what was at stake in this litigation was the amount payable to Mr Chaffey in respect of the time in between his injury and the date of this amending legislation but, is it the case that what is at stake in this litigation is the amount payable to Mr Chaffey for the whole of the time that he remains on compensation and, if he remains on compensation, until he turns 65, for the whole of the time between now and when he turns 65?

MR PAULING:   Yes, that is the case, your Honour.

HAYNE J:   Just before you leave the Act, do you make any point about section 187(1), the regulation power, and in particular paragraph (g)?

MR PAULING:   Again it suggests that by subordinate legislation the amount payable may be adjusted from time to time by that mechanism.  Of course, it being delegated legislation, if it defended section 50 it would suffer the same fate.  Can I hand up to your Honours a more comprehensive copy of the Act.

GLEESON CJ:   Thank you.

MR PAULING:   I had earlier mentioned that one can, in a sense, predict the result by determining at what level of abstraction one focuses on to describe the right that has either been impaired, diminished, extinguished, whatever epithet might be appropriate at the time.  One of the rights that a worker would, on my learned friend’s view of the Act, get is a right to have late payments penalised at an interest rate of 20 percent and, indeed, if the payment is wilfully withheld you can get double that.  In 1987 when this Act came into effect, and the 20 percent has been there since then, 20 percent reflected really the market rate of interest pertaining at about that time. 

Since there is a right to get interest at 20 percent, to recognise the present level of interest rates, that percent was dropped to 6 percent, then presumably that is again another acquisition of property otherwise on unjust terms and not permissible, at least not in relation to people who are presently receiving compensation because if that is the level of abstraction one wanted to go to in describing the right, then you have extinguished, or partially extinguished it, at least severely modified it.  I suppose it is another indication that to sort of start off and say everything is fixed at the date of the event whether it be impairment, death or injury, and these things cannot be changed, sits uneasily with the scheme as set up which, as we say in our first line of argument, is inherently susceptible of modification. 

GLEESON CJ:   There is a certain ambiguity in that expression.  If it were not legally susceptible of change, the problem would not arise.  The problem only arises because, by hypothesis, somebody can change it.

MR PAULING:   Well, yes.  There is no doubt the Parliament can pass a law doing these things.  The question is whether it survives scrutiny or whether it is within power, but I would like to think about what your Honour has just put to me and come back to that.  Can I take you then to the Amendment Act to see what the legislative response was to the cases.  Do your Honours have a copy of Act No 63 of 2004?

GLEESON CJ:   Thank you.

MR PAULING:  Section 5 dealing with “Interpretation for Part V” there are some definitions put in to deal with health practitioners.  Perhaps I should start with section 4 “Interpretation”:

Section 3 of the Principal Act is amended by omitting paragraph (b) of the definition of “self‑insurer” in subsection (1) and substituting the following: 

“(b)     except in Part VII, subject to section 118(2) - the Territory –

So that is the purpose unconnected with the present problem.  Section 49 is amended to deal with medical, surgical and rehabilitation treatment, again not to do with any notion of acquisition, but in (c) it says:

by inserting after subsection (1) the following:

“(1A)  For the purposes of the definition of ‘normal weekly earnings’ in subsection (1), a worker’s remuneration does not include superannuation contributions made by the employer.

“(1B)  Subsection (1A) is taken to have come into operation on 1 January 1987 -

which is when the principal Act came into operation.  Then there is a note for section 49(1B):

Section 195 contains transitional matters specifying when subsection (1A) does not affect the calculation of compensation by reference to remuneration otherwise excluded by that subsection.”

So that included cases where there had been an order about it, it had been actually paid, but not otherwise.  Then other provisions are made:  cancellation or reduction of compensation, 69 is amended by applying a time limit by omitting from the subsection “may apply” and substituting “may, within 90 days after receiving the statement, apply”.

Then there is form of claim, decision as to eligibility for compensation, again imposing a timeframe; a new provision in relation to initial medical opinion, medical examinations, application for and conduct of mediation.  Then we get to the transitional provisions.  Back where it says “commencement date” in 194 means the commencement date of the Work Health Amendment Act 2004, and 195 “Calculation of normal weekly earnings”:

Section 49(1A) does not affect the following compensation, the calculation of which involved the calculation of normal weekly earnings by reference to remuneration that included a superannuation contribution referred to in section 49(1A):

(a)compensation paid under section 64 or 65 before the commencement date;

(b)compensation payable under section 64 or 65 in respect of a period before the commencement date in accordance with an order of the Court or Supreme Court made before the commencement date.

“(2) Despite anything to the contrary in section 12 of the Interpretation Act or in any other law in force in the Territory, and subject to subsection (1), section 49(1A) and (1B) applies in relation to the calculation of compensation –

(a)paid before the commencement date; or

(b)payable on or after the commencement ‑ ‑ ‑

GUMMOW J:   We can read that along, Mr Solicitor, but how does all this square with question 1?  How do the transitional provisions fit in with question 1 in this case?

MR PAULING:   With the case stated, your Honour?

GUMMOW J:   Yes.  It is set out at page 54.  It is directed to the position of Mr Walker’s client.  What was his factual situation?

MR PAULING:   There had not been an order in relation to Mr Chaffey, but there had been acceptance of his claim for compensation and he was being paid but he was not being paid the amount that would represent the employer’s contribution of superannuation.

GUMMOW J:   He was not being paid that?

MR PAULING:   Not being paid.  I understand that is in part of the agreed facts.

GUMMOW J:   Yes.

MR PAULING:   Yes, paragraph 9.

The calculation of the compensation paid to the Worker during the period up to and including 26 January 2005 did not involve the calculation of “normal weekly earnings” by reference to remuneration that included the superannuation contributions.

GUMMOW J:   And there was no section 195 order?

MR PAULING:   No, there was not, your Honour.

GUMMOW J:   That is paragraph 10.  Thank you.

MR PAULING:   Which then rather brings me back to our written submissions, your Honour.  I notice the time so I will just draw attention to the salient features of it ‑ ‑ ‑

GUMMOW J:   The salient features are in your reply really.

MR PAULING:   Yes.

GUMMOW J:   None the worst for that.

HAYNE J:   The best traditions in this Court.

MR PAULING:   I had drawn attention to two articles, one by Rosalind Dixon for the Sydney Law Review.  The approach that she takes in the end rather follows the approach taken by the late Justice Selway that one looks for some sort of low level proportionality.  I have already indicated that has really got no relevance to section 50 because we are not looking at enumerated heads of power, but she does follow through on a case by case basis and suggests that there is some coherence. 

MR GAGELER:   No, and in Mr Chaffey’s case, which is the point that I was making ‑ ‑ ‑

GUMMOW J:   We do not know.

MR GAGELER:   The common law right – of course we do not know because we do not have the elements of the cause of action that would have existed, but quite apart from that, the common law rights were abolished as from 1 January 1987 and therefore had no bearing at all upon the circumstances giving rise to the entitlement under this Act.

CALLINAN J:   Mr Gageler, do you remember – I know it is going back a fair while – whether you have seen any commentaries upon the Woodhouse scheme? There was a question asked about that earlier, I think, and in fact as part of the report, Mr Woodhouse, as he then was, did - was a full Act which he suggested be enacted which showed exactly what the changes would be. Was there any commentary upon that as to the effect – as to the operation of section 51(xxxi), do you know? Do not worry about it now if you do not know about it, but I would be interested to see ‑ ‑ ‑

MR GAGELER:   I recall it at the time and I remember reading quite a number of learned opinions on the subject.

GLEESON CJ:   There was a report by the Senate Legal and Constitutional Committee.

MR GAGELER:   Yes, but, your Honour, it could always be accommodated by a provision such as section 189 of this Act, that is, the problem that was identified in Georgiadis and Smith v ANL was the extinguishment of vested existing courses of action changing the law for the future ‑ ‑ ‑

CALLINAN J:   Yes, transitional rights.  I would just be interested in the commentary, not now but perhaps the Solicitor would be able to put his hand on that report that the Chief Justice referred to and perhaps any other relevant commentaries.  I would like to see them anyway.

MR GAGELER:   Your Honours, turning very briefly to section 65 and 69, the problem with our learned friend’s reliance on section 65 is twofold.  One, the route to section 65 is through section 53.  Section 65 in the terms of section 53 is part of the prescription.  The second is that if you look at ‑ ‑ ‑

GUMMOW J:   So can you just explain that textually?

MR GAGELER:   Yes.  You start with section 53.  It confers – I will leave out most of the words “such compensation as is prescribed”.  If that is properly read as prescribed by the Act from time to time, it takes you to section 65, as it exists from time to time, and section 65, in its terms, of course, uses a similar language.  The first four words of section 65 are “Subject to this Part”.

So far as section 69 is concerned, if you look at what it is doing, section 69 is not concerned with a “cancellation or reduction” of any right or entitlement to payment.  What section 69 is concerned with is the “cancellation or reduction” by the employer of amounts paid as compensation by the employer, and all that section 69 is doing is saying, in circumstances where the employer reduces the payments to a worker, notice must be given, and part of the notice that has to be given is notice to the effect – this is section 69(1)(b)(iii) – that:

the worker may appeal to the Court against the decision to cancel or reduce compensation ‑ ‑ ‑

GLEESON CJ:   I had read 69, I must admit, as talking about cancellation or reduction of payments, as it were, by reference to the criteria for calculating the amounts set out in the Act.

MR GAGELER:   Yes, that is right.  So what happens is that the employer reduces or stops altogether payments because of the employer’s view as to the operation of the Act.

GLEESON CJ:   An issue might be whether you are still incapacitated?

MR GAGELER:   Exactly, and all that section 69 does is say, well look, if the employer does that, the worker has to be given notice.  What does the worker then do?  If the worker wants to challenge it, it can go to the court, …..make an application under section 104, the court then exercises powers under section 94, and what is the court concerned with doing, the court is concerned with applying sections 53 and 69 as they may exist from time to time.

CALLINAN J:   I suppose another reason might be if the worker found full‑time employment at a better salary or something like that?

MR GAGELER:   Yes, there can be any number of reasons.

CRENNAN J:   Or a child is no longer dependent, all those sorts of things?

MR GAGELER:   Yes, that is right, all those sorts of things, and of course, section 69 just does not apply – is not necessarily confined to a case of payments in accordance with section 65.

CRENNAN J:   Did you want to mention a second problem in relation to Mr Walker’s reliance on section 65?  You mentioned the route is through section 53.

MR GAGELER:   It was just that the opening words of section 65 used the same language, that is, “subject to this Part” and raised the same issue.

CRENNAN J:   Yes.

MR GAGELER:   Finally, your Honours, there is just this observation.  The statements from time to time in the Court to the effect that it is unlikely that a law regulating the mutual rights and obligations to parties in a particular relationship will give rise to an acquisition of property, are well enough illustrated by the discussion that occurred between the Bench and Mr Walker as to whether and, if so, how it could be said that there was any acquisition of property in any circumstances from the employer. 

Here the mutuality of the rights and obligations is complete in the sense that it is the very definition of the obligation of the employer in section 53 that gives rise to the right of the worker, that is, the right, the entitlement which we accept has a sufficient proprietary nature to be property for the purposes of section 51(xxxi) of the Constitution and section 50(1) of the Northern Territory (Self-Government) Act are mirror images. Dollar for dollar they are mirror images. But to apply sections 51(xxxi) and 50(1) to an adjustment of those mutual rights and obligations would have this asymmetric or anomalous operation.

CALLINAN J:   I hear you say that, but “adjustment” is just a word that can be really meaningless, Mr Gageler.

MR GAGELER:   I have not quite got there, your Honour.

CALLINAN J:   Sorry, I interrupted you.  It is a word that I must say arouses me.

MR GAGELER:   To increase the right of the worker, to give the worker an extra $2, is to take $2 off the employer, and yet there is no way in which the increase in the liability of the employer can be characterised as an acquisition of property.  Yet to do it the other way around, that is to decrease the right of the worker, would give rise to an acquisition of property.  It is just an anomalous asymmetrical operation.

CALLINAN J:   One way of trying to equate it with an item of property and not describe it as an item of property might be to say that the employer’s statutory chose in action or obligation to satisfy chose in action is increased and the amount of the increase in that obligation is a detriment to the employer.

MR GAGELER:   It is definitely a detriment and it is a dollar for dollar detriment.

CALLINAN J:   What I am really suggesting is that it is an unsatisfactory characterisation – as I think I said – in relation to Tasmanian Dam where it was said that what was acquired – there was nothing really acquired – that in fact what was acquired had the value – enormous value – of a restrictive

covenant.  Somebody would have to pay a fortune to get a restrictive covenant which sterilised a large area of real estate.  You may not always be able to describe what happens in conventional terms of property, but people are very seriously prejudiced, advantaged and disadvantaged, and that is why you have to be very careful when you start looking here, as you have, at the other side of the coin.

MR GAGELER:   Yes, but since the British Medical Association Case – I think that was back in the 1930s, your Honour – nobody has said that section 51(xxxi) is concerned with the preservation of value. It is concerned with the protection of property and one has to find something that answers that description.

CALLINAN J:   It might be time somebody did.

MR GAGELER:   Not me.

MR WALKER:   Your Honours, I wonder if I might be heard, with a sentence or two, in answer to what I think is a new point?

GLEESON CJ:   Yes, go ahead, Mr Walker.

MR WALKER:   This notion of an anomaly created by the asymmetry of property for the worker but not property for the employer for the purposes of the acquisition.  Now, it is new not only in this case but also in the jurisprudence – we have given references already to the passages in the various authorities – making it clear that it is actually a hallmark of a law being one with respect to the acquisition of property where in a purely statutory scheme the benefit to one person is reduced and the liability to another is correlatively reduced, that is, the benefit burden, balance or seesaw.

So that so far at least, the jurisprudence in this Court not only sees no anomaly or asymmetry in what my learned friend detects, but actually sees an appropriate relation; one person goes down, the other person goes up and that is an indication of the acquisition of property by the law in question.

GLEESON CJ:   What did Georgiadis say about the asymmetry problem?

MR WALKER:   It would never have arisen in Georgiadis because one cannot help reading Georgiadis on the basis that, at least for the purposes of that case, it was because what I will call the Commonwealth’s interests were spared liabilities by the legislation in question that this was seen to be an acquisition, namely, notwithstanding they did not end up with anything in their hands, title deeds or motor vehicles or anything, they were spared a liability, and somebody else assuredly had property, the chose in action.  It

had disappeared.  How it had disappeared?  Well, the defendant does not have to perform any more, and that was how it became an acquisition.

There was no call in that case to talk about asymmetry between a plaintiff and defendant not involving the Commonwealth.  Now that the law has apparently moved so that there can be an acquisition under 51(xxxi) without any Commonwealth entity getting anything, indeed, not being spared any liability, there may be another person, in this case, the employer or the insurer, now that the law has moved to that point, my friend has in reply supposedly raised this point.

I will repeat my respectful endorsement of what my friend has himself said about the case law.  It is very difficult to reconcile, but it certainly does not produce any support for that being a reason not to (a) treat as property what is property and (b) treat its detraction as being a form of acquisition unless there are other well‑established reasons why it should not be.

Another way of putting it is a chose in action, that is, the plaintiff’s right, that is clearly property, but nobody has ever supposed that the opposite of the chose in action, that is, the defendant’s liability is also property, and that is why there is no asymmetry at all.  The only property in question is the plaintiff’s right, not the defendant’s opposite of a right.  If it please your Honours.

GLEESON CJ:   Mr Gageler, would you like to respond to that?

MR GAGELER:   The asymmetry is that if section 51(xxxi) applies to the adjustment of rights and obligations within a statutory scheme, the effect will be that the rights and the corresponding obligations can only be increased. They cannot be decreased. That is the asymmetry.

GLEESON CJ:   Mr Solicitor for the Commonwealth, did you want to say something?

MR BENNETT:   Your Honours, there are just three very short points I wanted to make in relation to matters which my learned friend, Mr Walker, submitted about my submissions.  The first is he referred to section 65(3) which uses the phrase “first became entitled to compensation” and he described it as a present liabilities solvendum in futuro.

Your Honours, the short answer to that is this.  The words “first became entitled” mean nothing more than first became entitled by becoming entitled to that week’s compensation.  They do not mean first became entitled to the whole of the compensation in the future to which, of course, the worker is not entitled initially.  That is something to which she becomes entitled or she becomes entitled from time to time.  So we submit that to describe it as a present debt solvendum in futuro is completely inaccurate. 

Secondly, my learned friends made the standard submission, if the legislature intended the rights to be variable by future legislation, why did it not say so?  There are two answers to that.  First, one does not normally in legislation expressly refer to future amendment, although here there is a pretty good indirect reference to it, as I have shown your Honours.  Secondly, one can always answer that submission with the converse submission, if they meant what my learned friend said, why did they not say that?  The fact is they did not and the problem has to be solved.

CALLINAN J:   But you can distinguish between statutes that have a potential if amended to affect rights and other statutes, lots of statutes do not affect personal rights.  So your category of statutes in question would be relatively small or might not be large.

MR BENNETT:   That is one of the matters one would take into account in making the judgment that has to be made.  Thirdly, my friend referred to the sort of two-step process where the Commonwealth first takes away a piece of property on just terms by substituting a statutory right and then takes away the statutory right.  The answer is, if it was as simple as that, and we say for all the reasons that have been given this case is not, if it was as simple as that, that would be a good argument for the case being on the other side of the prima facie result.  We do not say that all statutory rights are rights which are unaffected.  We said prima facie. 

Fourthly and finally, my learned friend referred to section 69, and apart from adopting the answer given by my learned friend, Mr Gageler, we note that section 69 itself begins with the words “Subject to this Subdivision” which of course involves all the same considerations, particularly as that is the subdivision which contains most of the operative provisions.

GLEESON CJ:   Did you want to make any contribution to the asymmetry argument that erupted at the end.

MR BENNETT:   No, your Honour, except to say that it is not a complete asymmetry.  There may be cases where adding to a liability is an acquisition of property because it is taking the property or acquiring the property that is subsequently paid pursuant to that liability.  So there is a certain symmetry which can exist and one of the problems would be that if the decision of the court below were upheld, that any amendment, whether increasing or reducing compensation, might well be vulnerable under the provision about the acquisition of property.  So in that sense it is of importance.  Of course

here what is said is that something is being taken because a person has an expectation of receiving benefits for many years in the future and that is a surprising consequence.  May it please the Court.

GLEESON CJ:   Thank you.  We will reserve our decision in this matter and we will adjourn until 10.15 tomorrow.

AT 4.10 PM THE MATTER WAS ADJOURNED