ADCO Constructions Pty Ltd v Goudappel and Anor

[2013] HCATrans 250

[2013] HCATrans 250

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S96 of 2013

B e t w e e n -

ADCO CONSTRUCTIONS PTY LTD ABN 001 044 391

Applicant

and

RONALD GOUDAPPEL

First Respondent

WORKCOVER AUTHORITY OF NSW

Second Respondent

Application for special leave to appeal

KIEFEL J
KEANE J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 11 OCTOBER 2013, AT 11.33 AM

Copyright in the High Court of Australia

MR D.F. JACKSON, QC:   If the Court pleases, I appear with my learned friends, MR W.A.D. EDWARDS and MR S.L.C. FLETT, for the applicant.  (instructed by Moray & Agnew Solicitors)

MR J.B. SIMPKINS, SC:   If your Honour please, I appear with MR E.G. ROMANIUK and MR L.G. MORGAN for the first respondent.  (instructed by Leitch Hasson Dent Solicitors)

MR J.K. KIRK, SC:   May it please the Court, I appear with my learned friend, MR S.J. FREE, for the second respondent, but supporting the grant of special leave.  (instructed by WorkCover Authority of NSW)

KIEFEL J:   Yes, Mr Jackson.

MR JACKSON: Your Honours, the application for special leave concerns the application of clause 11 of the Workers Compensation Amendment (Transitional) Regulation 2012. It is a provision of considerable practical importance, as appears from paragraph 3 of the affidavit of Geniere Aplin that your Honours will see at page 63 of the application book. Your Honours, its importance in quantum terms may seem different to the respondent but that is why there is the position as to costs stated at paragraph 29, page 61 where we would bear the costs.

Your Honours, to see the effect of clause 11 may I go first to the start of the several provisions to which I wish to take your Honours? Your Honours will see that if one goes first to section 66 of the Workers Compensation Act 1987 in the form which it took in 2012. You will see that in the materials book behind tab 1 at page 20.

Your Honours will see that section 66(1) conferred an entitlement to lump sum compensation for impairment resulting from a compensable injury. The quantum turned on the percentage of impairment and there was no minimum percentage. The respondent was assessed as having a 6 per cent impairment - your Honours will see that in the President’s ruling at paragraphs 4 and 5, page 3. I do not think I need take your Honours to that. The result was that the then section 66(2)(a) applied and there would have been an award in his favour on that basis.

That Act to which I have just taken your Honours was amended by the amending Act of 2012 which performed a number of functions. The first was that a substituted section 66 came into operation, your Honours will see behind tab 2 of the materials at page 36 - the numbers, your Honours, I should have said, at the bottom of the page. You will see in item [5] that the entitlement to lump sum compensation now only arose if the degree of permanent impairment exceeded 10 per cent.

That gave rise, your Honours, to a question whether the new provision applied to persons in the position of the respondent, that is, persons who had already applied for compensation under the Act before the 2012 amendment and, as one might expect, there were savings and transitional provisions dealing with a number of situations including of that kind arising from the amendments and, your Honours, they were provided for relevantly by Schedule 12 of the 2012 amending Act which you will see at page 40 of the materials, again behind tab 2.

Your Honours will Schedule 12 of the Amending Act and then if one goes to that provision at page 40 your Honours will see that it inserted a new Part 19H of the Act – “Provisions consequent on enactment”, et cetera.  Now, your Honours, the new Part 19H contained three provisions of present relevance.  The first was that it provided, as your Honours will see at page 41 in clause 3, that:

Except as provided by this Part or the regulations, an amendment made by the 2012 amending Act extends to:

. . . 

(b)a claim for compensation made before the commencement of the amendment –

The second thing, your Honours, was that clause 15, which is at page 45, said that:

An amendment made by Schedule 2 to the 2012 amending Act –

as was this –

extends to a claim for compensation made on or after 19 June 2012, but not so such a claim made before that date.

The third feature, your Honours, was that it contained an expanded regulation put in the Act, an expanded regulation‑making power, which you will see at page 42.  That commences, I should say, at page 41.  The relevant part of it is clause 5(4).  Could I just say, your Honours, I have used the expression “clauses” but this is a part of the Act, it is not a regulation.  Your Honours will see that it says in clause 5(4) that:

The power in Part 20 to make regulations that contain provisions of a saving or transitional nature consequent on the enactment of the 2012 amending Act extends to authorise the making of regulations whereby the provisions of the Workers Compensation Acts are deemed to be amended in the manner specified in the regulations.

Now, your Honours, in relation to that provision a regulation was made purportedly, no doubt, in the exercise of the power so conferred. That regulation was clause 11 and it was part of the amending regulations. Your Honours will see that it can be seen behind tab 5 at page 96 at the bottom of the page and your Honours will see that clause 11 said two things. The first was by clause 11(1) that:

The amendments –

to section 66 –

made by Schedule 2 to the 2012 amending Act –

which was the one that changed section 66, did apply –

to a claim for compensation made before 19 June 2012 –

Then clause 11(2) said specifically that -

Clause 15 of Part 19H . . . is to be read subject to subclause (1).

Now, your Honours, could we just submit in summary, in very, very clear terms, with respect, clause 11 purports to amend Part 19H of the Act and particularly clause 15 of Part 19H. Clause 15 of Part 19H was a provision of a savings or transitional nature and its making was authorised by clause 5(4) of Part 19H itself. We have set out the stages involved in that in our written submissions in the application book at page 59, paragraph 16. I will not go to the detail of them, I set them out in summary orally.

Now, could I go to the decision of the Court of Appeal?  The result arrived at by the Court of Appeal appears at page 47, paragraph 33 - I said the result, your Honours.  The result, your Honours will see, was that it said:

To the extent that the transitional regulation sought to prejudicially affect that right –

that is, a right to obtain a benefit which it was said accrued at the date of injury –

it was beyond power and invalid.

Now, the reasoning supporting the latter conclusion that it was beyond power and invalid is, if I may say so with respect, not clear.  The starting point may be seen at page 43, paragraph 24.  The relevant part of it, your Honours, is contained in the last five or six lines of that paragraph where the view was expressed that the regulation‑making power in Part 20, clause 1 of the Act did not extend to the making of regulations which operated retrospectively.  Your Honours, I do not think I need to take your Honours to it, but if your Honours want to look at clause 20, point 1, it is at page 77 of the materials behind tab 3.

Continuing with the reasons for judgment of the Court of Appeal, the Court of Appeal then directed its attention at paragraphs 25 and 26 on page 44 to clause 5 of Part 19H.  Now, your Honours will see in paragraph 26, if I could go to that first, that there is a discussion of various parts of clause 5, but the discussion of clause 5(4), the operative provision, commences at about line 31 and your Honours will see that it said:

The precise scope of cl 5(4) must, in any event, remain somewhat obscure.

Well, your Honours, one sees in relation to it that one goes back then to paragraph 25 and one sees in 25 that it was said:

It is necessary next to consider the operation of cl 5 –

Your Honours, it may have been put only briefly, but the operation of clause 5(4) was pretty clear, with respect, as the court said in the last line of paragraph 25.  But if I can just go back then to paragraph 26, what is said in the last five lines of paragraph 26 was that the operation of clause 5(4) was:

restricted to regulations of a “saving or transitional nature consequent on the enactment of the 2012 amending Act”; it is not obvious that this power would permit a regulation to do more than vary the savings and transitional provisions in Schedule 6 –

That is exactly what it did, your Honours.

KIEFEL J:   His Honour goes on to say, “a consequence covered by Part 20, cl 1(4)”.  Part 20, clause 1(4) has the effect that – I was actually thinking of clause 1(3) which I think the respondents rely upon which says that provisions of a savings or transitional nature may be made, but they do not operate so as to effect existing rights.  Is his Honour at paragraph 26 alluding to some overarching influence that Part 20 continues to play so that there is some kind of inconsistency argument between Part 20 and clause 5(4) and how they are intended to operate so that clause 5(4) has to express itself to overcome Part 20?  Is that what his Honour has in mind?

MR JACKSON:   Well, your Honour, if that is what he is saying it is not, may I say so, with respect, very clearly expressed, but the difficulty with that concept in any event is that it just does not seem to take into account what clause 5(4) itself says in relation to the ambit of additional regulation‑making power that is conferred by the provision and, your Honours, if I could just go back to the terms of clause 5(4), which is at page 42, you will see that it says that:

The power in Part 20 to make regulations that contain provisions of a saving or transitional nature consequent on the enactment of the 2012 amending Act extends to authorise the making of regulations whereby the provisions of the Workers Compensation Acts are deemed to be amended in the manner specified in the regulations.

Now, your Honours, what is being spoken about are savings or transitional provisions.  It could not be clearer, with respect, than that the provision of say clause 19H of the Act which dealt with whether the previously existing right was or was not preserved was a saving provision or transitional, whichever title one prefers.  It is the very thing that is the subject matter of the additional power referred to in clause 5(4).  If one looks at clause 5(4) again:

extends to authorise the making of regulations whereby the provisions . . . are deemed to be amended in the manner specified in the regulations.

Your Honours, what took place, in our submission, is something that is entirely authorised by the provisions of the Act.

KIEFEL J:   Mr Jackson, do you draw a distinction between the operation of clause 5(4) and clause 1 in Part 20 in this sense, that clause 5(4), as you have pointed out on a couple of occasions, is intended to amend the Act itself whereas Part 20, clause 1 refers to how regulations operate as regulations?  Is that a relevant distinction?

MR JACKSON:   Yes, your Honour, but could I put it this way:  Part 20 is a provision which specifies matters that otherwise might be contemplated by the regulation‑making power and there is a more general regulation‑making power which we have referred to at page 59, paragraph 16.  You will see it is in paragraph 16.  It is section 280(1) of the Act that is referred to in 16(a).

KIEFEL J:   Yes, but Part 20 deals more specifically with provisions of savings and transitional nature.

MR JACKSON:   Yes, your Honour.  Then the terms of clause 5(4) go on to expand the power contemplated, otherwise existing pursuant to Part 20.

KIEFEL J:   Now, Justice Basten accepts that, does he not, at paragraph 26 at about line 27, that clause 5(4) “expands the terms of Part 20”?

MR JACKSON:   Yes, your Honour, but where there is error is in the remaining part of that paragraph because what does not seem to be appreciated, with respect, is that clause 15 of Part 19H is a part of the Act that is itself quintessentially, in a sense, of a savings or traditional nature and when his Honour says in the last few lines of 26:

it is not obvious that this power would permit a regulation to do more than vary the savings and transitional provisions in Schedule 6 –

that is the very thing that the regulation is doing.

KIEFEL J:   But the fact that Part 20, clause 1 is dealing with the same topic appears to have some relevance to his Honour.  It is just not immediately apparent what his Honour was intending by the reference to it in that last line.

MR JACKSON:   Well, your Honour, that is one of the difficulties, I say so again, with respect.  Your Honours, if one goes to the remainder of the reasons, paragraph 27 is not concerned with clause 5(4) and then you will see the conclusion at paragraph 28 on page 45, particularly in the second and third sentences:

cl 5 expands the temporal reach of the power . . . to make a transitional regulation . . . it does not expand the consequences of such a regulation.  Even if it did have that effect, it would not affect the outcome in the present case unless it prejudicially affected rights which had accrued prior to the date on which it commenced.  As the transitional regulation did not seek to backdate its operation –

But, your Honour, the words of clause 11(1) and 11(2) are words dealing with backdating - backdating can occur in a number of ways. It is hard to see any more specific than that in clause 11. Your Honours, we would submit this is a case that involves an issue of law. Its application goes well beyond the present case and the decision of the Court of Appeal is very arguably incorrect.

KIEFEL J:   Mr Jackson, I should have asked you at the outset too, does your client’s position at paragraph 29 of the written submissions in relation to costs extend to not affecting orders for costs made below?

MR JACKSON:   If pressed, your Honour, yes.

KIEFEL J:   Yes, Mr Kirk.

MR KIRK:   Your Honours, I do not propose to be 20 minutes.  There is one topic I wish to focus on which relates to the nature of savings or transitional measures.  Before doing so can I just add a little bit to what my learned friend, Mr Jackson, said as to the interrelationship of clause 1 in Part 20 and clause 5 in Part 19H?  A convenient way of finding them together is at application book page 41.  There his Honour Justice Basten sets out Part 20, clause 1 and then at the bottom of the page, clause 5 of page 19H. 

We would submit, consistently with Mr Jackson, that the intention of the Parliament in clause 19 is plainly to expand the reach of clause 1.  They interact because clause 5(1) speaks about regulations made under Part 20, but if one looks at the effect of clause 5(1) it authorises backdating earlier than is permitted by clause 1.  One can go back prior to the date of assent of the amending Act, whereas if one looks at clause 1(2), under clause 1 you can only “take effect as from the date of assent”, so we are pushing the backstop back, and that is consistent with an intent to deal with accrued rights. 

Secondly, subclause (2) of clause 5 disapplies clause 1(3) of Part 20, and if one goes back to clause 1(3), it is that clause which plainly manifests, in our respectful submission, the intent of the Parliament to protect accrued rights in relation to ordinary Part 20 regulations, and that is expressly disapplied and one significant problem, with respect, with the Court of Appeal’s reasoning is that no significance is given to the deliberate choice by the Parliament to disapply the very protection that was otherwise set out in relation to accrued rights.

Clause 5(3) is in very similar effect to clause 1(4), so I do not think that takes things any further, but clause 5(4), as Mr Jackson put, goes beyond clause 1 in that it is a broader Henry VIII clause - I note clause 3 could also be seen – that is 5(3) could be seen as a Henry VIII clause, but clause 5(4) takes the matter even further. 

Can I then turn to the fact that both of these clauses are making provision for regulations of a savings or transitional nature?  Your Honours will find that first in clause 1(1) and then secondly in clause 5(1).  As your Honours will appreciate, whenever any new legislative regime is introduced questions necessarily arise about how the new regime interacts with the old regime, whether it was general law or statutory, so questions arise such as do the new norms apply to applications on foot but not yet determined?  Do they apply to applications received after commencement but by reference to facts that occurred before commencement?

These are issues of how the law straddles those intermediate categories where facts cross over the date of commencement.  If there is no transitional provision, as there commonly is not, there can be very difficult questions which arise as to construing the intent of the Parliament as to how it applies to those straddling cases.  Now, there are means, of course, of resolving that.  One has principles about not affecting accrued rights.  One gets into complicated issues about differences between procedure and substance because the principle about accrued rights applies differently to procedure and substance. 

One of the benefits of transitional provisions is it resolves the issue clearly.  Further, of course, the Parliament may wish to enable fine distinctions to be drawn in relation to how the new regime applies to that straddling set of facts.

KIEFEL J:   You mean they might want to make it obscure by complex drafting mechanisms?

MR KIRK: Yes, I was trying to sell the virtue of making it less complex. That is not to say this is a model of legislative drafting, I accept that. However, for the reasons Mr Jackson put, when one works one’s way through the provisions and you come to clause 11 of the regulation there is a very clear answer, and that is of great assistance to people who have to apply the law in practice - the claims managers, the solicitors, the people out there in the real world, even before you get to the Workers Compensation Commission and the courts.

There is no reason, in our respectful submission, for the courts to take a very restrictive view of savings and transitional measures.  In many ways they are a benefit to people affected because it provides clear answer.  There are benefits to the courts.  It brings one to a notion of well, what are the key elements of a transitional provision?  There are two, in our respectful submission:  one, that it deals with those straddling issues, that it deals with those issues where it is a question of how the new regime applies, if at all, to existing facts; secondly, that it is temporary in its effect, it is transitional and then transitions away and that proposition emerges clearly from the…..case in the House of Lords, but I will not take your Honours to it. 

Now, here clause 11 of the regulation, in our respectful submission, was plainly dealing with those straddling cases, namely, people who had claims made but not specifically by reference to sections 66 or 67 who then make a claim for that after 19 June 2012. It is temporary in that it only applies to a limited class of cases, because once that straddling set of cases is dealt with the significance of the provision completely falls away.

In our respectful submission, the Court of Appeal failed to pay any significance to the fact that the regulation‑making power authorised savings or transitional provisions.  One has to understand what that concept is, what it is designed to do, one does not take an overly restrictive approach, in our respectful submission, and the Court of Appeal took no account of that.  The only place it touched upon it, we think, is in paragraph 26 at application book page 44, which my learned friend, Mr Jackson, has already taken your Honours to, particularly the last half of the paragraph which, as my learned friend put, seems rather to miss the point.

Now, we would not say that if there is a regulation‑making power for transitional provision that completely answers the question.  One would still look, of course, to the particular statutory terms, but here, as I sought to show at the beginning, the particular statutory terms manifest an intent to allow broad transitional provisions, much broader than would otherwise be allowed under clause 20.  Further, in some cases one might get to the issue or whether, and to what extent, the regulations are inconsistent with what is provided in the Act and find questions can arise there, but here that is resolved by the fact that we have at least one, if not three, Henry VIII provisions, so that is dealt with clearly there.

In terms of the importance of the case, the specific importance has been touched upon by my learned friend, Mr Jackson.  In our respectful submission, it also raises issues of general importance, first, in relation to the scope of a power to make regulations of a savings or transitional nature, where that is a fairly commonplace type of regulation‑making power throughout Australia. 

So far as we can find this Court has never considered that issue, that is to say, the scope of that power.  There are many cases in the Court where the Court has referred to transitional provisions, but in the sense of, as part of analysis, not as to the scope of the regulation‑making power.  There is, in fact, a general sparsity of authority as to what a transitional provision is, how far it can go, and your Honours will see that from the submissions where very little case law has been cited by any of us.

The danger is, in our respectful submission, that this Court of Appeal decision will now be a leading authority on how one construes this issue and it is, in our respectful submission, quite wrong.  For those reasons, this is an appropriate case for special leave.  As to costs, can I indicate, your Honours, regardless of any result, we do not seek our costs from anybody.  May it please the Court.

MR JACKSON:   Your Honour, may I correct something that I said about costs a moment ago?  Could I do it from here for the moment?

KIEFEL J:   Yes.

MR JACKSON:   It is simply that I said perhaps a little churlishly if pressed in relation to costs below our draft notice of appeal in fact does not seek any change in the orders for costs in the courts below.

KIEFEL J:   Thank you, Mr Jackson.  Yes, Mr Simpkins.

MR SIMPKINS:   Your Honours, we oppose the grant of special leave on the basis that the decision of the Court of Appeal, in our submission, was not attended by sufficient doubt.  We rely upon the reasons that his Honour Justice Basten gave in the decision that was concurred in.  We additionally rely upon two further matters by way of supplementation to the reasons that his Honour gave.  The first of those is a question of construction and it really is a basis for rejecting the applicability of the relevant regulation even if clause 5(4) could authorise a regulation that otherwise removed accrued rights.

KIEFEL J:   Now, the critical aspect of his Honour’s reasoning appears to be paragraph 26.

MR SIMPKINS:   It is really paragraphs 24 through to 27 we would say and we will take the Court through what we ‑ ‑ ‑

KIEFEL J:   Can you say in summary what his Honour was saying, if anything, about the relationship between Part 20, clause 1 and clause 5(4)?

MR SIMPKINS:   Yes, your Honour.  If one goes to the provisions to consider them, and they are conveniently set out in the application book at pages 41 and 42, on page 42 there appears clause 5(4), and one sees that the power that is relied upon to support the regulation is described in terms which references back to the power in Part 20.  So what is occurring in this relevant Henry VIII provision is that it is doing something by way of alteration or expansion to an existing power.

KIEFEL J:   Well, it is expanding it to allow the regulations to alter the Act.

MR SIMPKINS:   Yes, your Honour, but the point of going to this particular provision first is the first step in his Honour Justice Basten’s reasoning is to say, well, what the relevant clause is doing is to make a change to an existing power and his Honour therefore goes to the existing power to construe it, relevantly to ask the question whether the existing power itself is sufficiently broad to permit an alteration or a destruction of existing rights.  So, his Honour, looking at clause 5(4), takes the view that the first step is to consider the ambit of the existing power in Part 20.

The second step is to go to that power, and your Honour will see it set out on page 41 of the application book.  Part 20, clause 1 is a general regulation‑making authority.  It was construed by his Honour as not permitting the alteration or destruction of accrued rights, essentially for two reasons.  The first reason was the implication that his Honour drew as to the ambit of the power from subclause (3) read in the context of subclause (2), so subclause (2)’s context permitted the backdating of a regulation so that it still needed to take effect no earlier than the date of assent, but subclause (3) contemplated that there might be an effect of a regulation which occurred prior to publication in the gazette.

What subclause (3) of this part went on to say, as your Honours will see in subparagraph (a), is that if there was a backdating of the regulation so that it took effect before publication then it did not affect – and I am quoting - “the rights of that person existing before the date of its publication”.  So his Honour took from that that this was a protection of accrued rights in the event of backdating. 

From that his Honour deduced that therefore in order to give effect to that protection it must also be the proper construction of subclause (1), that it also could not be used to vary or destroy existing rights because otherwise this protection would be rendered nugatory and so his Honour arrived at a construction of Part 20, subclause (1) which was a construction which limited its operation so that it did not apply to accrued rights.

That was the first basis of his Honour’s reasoning.  The second basis was reliance upon the well‑known principles of construction in Maxwell v Murphy, and one sees at paragraph 24 at the foot of page 43 of the application book that his Honour relies upon that authority also for this construction of the general regulation‑making power.  So at this point of his Honour’s reasoning he has deduced that looking at the power that was being modified by clause 5(4), the power itself was not one which permitted any alteration or destruction of accrued rights.

When his Honour then turned to look at the clause said to empower the making of the new regulation, his Honour noted that it did two things expressly and his Honour deals with those in paragraph 26 of the judgment at application book page 44, so expressly what it did was to permit a now regulation to take effect before the date of assent, which was new, and secondly, it permitted a regulation to amend provisions of the Act, which was new but neither of those his Honour regarded as being any express alteration to the limitation that otherwise existed, namely that there could be no variation or destruction of existing rights.  One sees that sense in his Honour’s reasoning in paragraph 27, about halfway between lines 50 and 60, where his Honour says:

However, cl 5 is irrelevant for present purposes unless the effect of cl 5(2) is to expand the power conferred by Part 20 so as to allow a regulation to extinguish rights which had accrued prior to the date of its publication.  There is nothing to that effect expressly stated in cl 5 or which arises as a matter of necessary implication . . . that power is still found in Part 20, as qualified or expanded by cl 5.

So the thrust of his Honour’s reasoning is to say that the clause relied upon to support the regulation only can rise as far as the initial source, namely the power in Part 20, except to the extent that there is any express or necessary alteration to that power and his Honour could find none in the wording of clause 5(4).  We support all of that reasoning.

KIEFEL J:   Yes, but then his Honour has to deal with clause 5(2), which he does at paragraph 27.

MR SIMPKINS:   Yes, and what he essentially says about 5(2) is that this is an alteration to the power in this provision.  It is not an alteration of the original power in Part 20, so it is not altering the original power which remains limited in the way that his Honour construed it.  The other being made about this provision, namely clause 5(2), is it is not actually making an express expansion, so it does not expressly say that there is now a regulation‑making power that can affect accrued rights, it is withdrawing a prohibition and the question still is a matter of construction whether the original power has the limits that his Honour concluded it did and this removal of the prohibition in relation to a particular aspect his Honour concluded did not affect the limitations that had otherwise existed. 

Now, we support all that reasoning.  We say it provides a sufficient and satisfactory basis for the conclusions his Honour reached.  We, as I indicated a moment ago, want to support the conclusion that the Court reached with two additional matters.

KIEFEL J:   Could you just assist me with something?  At paragraph 27 on special leave book page 45 his Honour says:

Further, cl 5(2) is not addressed to the operation of cl 1(3) in respect of the power conferred by Part 20, but only its effect with respect to the expansion effected by cl 5 itself.

What does that mean?

MR SIMPKINS:   Your Honour, what his Honour is there saying is simply this, that - clause 5(2), he is saying something about the operation of the expanded power, whatever it may be, in clause 5.  It is not otherwise doing anything to alter Part 20, clause 1.  So in Part 20 the original power still has clause 3 and there is nothing to affect the original construction that his Honour gave to that regulation‑making authority.

KIEFEL J:   But what does his Honour make of clause 5(2)?

MR SIMPKINS:   His Honour ultimately makes nothing of it.  He reasons, we say correctly, that the question is the proper construction of the original power in Part 20 except to the extent that it may have been expanded in operation by clause 5(4).  His Honour found nothing in the express terms of clause 5(4) or in any implication from its provisions which expanded the provisional power so it could now extend to vary or extinguish accrued rights.

Your Honours, I indicated that there were two additional matters that we would rely upon in further support of the conclusion the Court of Appeal reached.  The first of those is, as we noted in our outline, there is authority, indeed well‑established authority in this Court, that workers compensation legislation is construed beneficially to workers.  We have included in our authorities book at tab 2 the decision in Bird v The Commonwealth.  Can I just turn briefly to page 9 of that authority?  Your Honours will see at page 9 of the joint judgment of Justices Deane and Gaudron this is said, and I reading from the first paragraph commencing on that page:

Moreover, it is well to remember that employee’s compensation legislation, such as the Act and the regulations, is remedial in its character “and, like all such Acts, should be construed beneficially” –

Then authority is given:

The “established principle” was correctly identified by Fullagar J. in the course of his dissenting judgment in Wilson v. Wilson’s Tile Works Pty. Ltd.:  ‘where two constructions of a Workers’ Compensation Act are possible that which is favourable to the worker should be preferred.”  If a person or case falls within the general spirit of such remedial legislation, and there are two possible interpretations, the courts ought not to construe the Act so as to exclude the person or case –

So the ordinary approach to construction of this legislation that is currently under consideration is that if there was an aspect of doubt about its operation, and on one construction the worker would be given the benefit of it, then that is the construction which would be preferred.  We say that supports the conclusion that his Honour came to about the limits of the regulation‑making power.

The second supplementary matter that we would rely upon is a matter of construction.  So the 2012 regulation is only supportable if it conforms to at the very least what is required by clause 5(4).  Looking at the terms of that provision in the application book at page 42, one sees that what is required is a regulation – and I am reading from the concluding words which set out or more accurately specifies the manner specified in the regulations, so it says that the power to amend extends:

to authorise the making of regulations whereby the provisions of the Workers Compensation Acts are deemed to be amended in the manner specified in the regulations.”

So one needs to find a regulation specifying an amendment. When one looks at clause 11, which is the relevant regulation, set out on the same page of the application book, it does not in any manner, shape or form approach anything remotely able to be characterised as specification.

KIEFEL J: What about clause 11(2)?

MR SIMPKINS: It does not identify the change – the actual meaning of clause 11(2) is opaque, to put it mildly. It seems to contemplate the possibility that one could read both the old clause 15 and the new clause 11 in some kind of harmonious interpretation so that they are, in effect, balanced against each other and there is some point of intersection which has been addressed by this order of precedence arrangement. But what it does not say and what it needed to say, in our submission, in order for it to be a regulation empowered by clause 5(4), is to identify the nature and extent of the amendments that were being made.

It does not do that and for that reason, even if our point about accrued rights was incorrect, we say that clause 5(4), if it supports the making of regulations that affect accrued rights, did not permit clause 11 because it failed to specify and therefore it was not a regulation that amended.

Your Honours, they are our submissions.  As your Honours no doubt have observed from observations that have been made this morning, we do seek protection in relation to costs and we have identified that I think in paragraph 18 of our outline.  If leave is granted, it ought to be upon the terms that we there set out.

KIEFEL J:   Anything in reply, Mr Jackson?

MR JACKSON:   Your Honours, may I deal with the three points made by our learned friends?  The first concerns clause 5(2) and again if I could go to page 42 of the application book, your Honours will see that clause 5(2) is speaking of the operation of clause 5 itself and what it is saying is that clause 1(3) of Part 20 does not limit the operation of, inter alia, clause 5(4).  So, your Honours, if one is looking at the provisions of clause 1(3) of Part 20 on page 41, they are the ones that in effect prohibit backdating in relation to rights.  That is taken away by clause 5(2) and one has to read clause 5(4) in that light.  That is the first point.

Your Honours, the second point we would make is in relation to the argument that the Workers Compensation Act is to be construed beneficially.  Well, your Honours, as a general proposition no doubt there is something in it.  As we have said in our reply submissions, paragraph 4 at page 83, the right to lump sum compensation is an entirely statutory creation that derives from section 9 of the Workers Compensation Act.  It is inherently susceptible to statutory variation.  The function of courts, of course, is to give rise to amendments from time to time, properly construed, and if they apply they apply.

The third feature, your Honours, concerns clause 5(4) and, your Honours, the last words of clause 5(4) – again, I am talking about page 42 – are ones that say:

regulations whereby the provisions of the Workers Compensation Acts are deemed to be amended in the manner specified in the regulations.”

If you go then to clause 11(1) you will see what it says about the amendments and then it says, in 11(2), as your Honour, the presiding Judge, said:

Clause 15 of Part 19H of Schedule 6 to the 1987 Act is to be read subject to subclause (1).”

It is a pure question of construction.  Your Honours, those are our submissions.

KIEFEL J:   The Court will adjourn briefly to consider the course it will take.

AT 12.20 PM SHORT ADJOURNMENT

UPON RESUMING AT 12.22 PM:

KIEFEL J:   There will be a grant of special leave in this matter.  The Court notes that the applicant does not seek to alter the orders of costs below and that it will bear the costs of the first and second respondents in this Court.  Is it to be more than half a day, Mr Jackson?

MR JACKSON:   I would not think so, your Honour.  It seems to me a morning case, if I can put it that way.

KIEFEL J:   Does anyone disagree with that?

MR SIMPKINS:   No, your Honour.

MR KIRK:   No, your Honour.

KIEFEL J:   Thank you.  Would the parties please obtain from the Registry the dates for the submissions and list of authorities and, of course, recall that those dates should be adhered to.  Thank you, gentlemen.

AT 12.23 PM THE MATTER WAS CONCLUDED