Chaffey v Santos Limited

Case [2006] NTSC 67

Chaffey v Santos Ltd [2006] NTSC 67

PARTIES:CHAFFEY, CAMERON OWEN

v

SANTOS LIMITED (ACN 007 550 923)

ATTORNEY–GENERAL FOR THE NORTHERN TERRITORY OF AUSTRALIA INTERVENING

TITLE OF COURT:  FULL COURT OF THE SUPREME COURT OF THE NORTHERN TERRITORY

JURISDICTION:  FULL COURT OF THE SUPREME COURT OF THE NORTHERN TERRITORY EXERCISING TERRITORY JURISDICTION

FILE NO:NO. 93 OF 2005 (20518847)

DELIVERED:  15 SEPTEMBER 2006

HEARING DATES:  24 & 28 APRIL 2006

JUDGMENT OF:  ANGEL, MILDREN & SOUTHWOOD JJ

CATCHWORDS:

Constitutional law – powers of Legislative Assembly – power to acquire property – injured worker entitled to worker’s compensation – retrospective amending Act reducing amount of compensation – whether an acquisition of property otherwise than on just terms – Northern Territory (Self–Government) Act, s 50 (Cth)

Legislation:

Interpretation Act (NT) s 59, s 62B

Supreme Court Act (NT) s 21(1)

Work Health Act (NT) s 49, s 49(1), s 49(1A), s 49 (1B), s 52, s 53, s 64, s 65, s 65(2), s 68, s 75B, s 80, s 81, s 82, s 83, s 85(2), s 88, s 89, s 91, s 91A, s 93, s 94, s 97, s 115(1), s 145(1), s 176(1), s 176(2), s 184, s 185, s 186, s 188, s 189
Work Health Amendment Act (NT) 2004 s 5, s 194, s 195
Workmen’s Compensation Act (NT) 1949–1984 s 20

Northern Territory (Self–Government) Act 1978 (Cth) s 50, s 50(1)
Superannuation Guarantee (Administration) Act 1992 (Cth)
The Australian Constitution s 51 (xxxi)

Applied:

Australian Tape Manufacturers Association Ltd v Commonwealth
(1993) 176 CLR 480

Clunies–Ross v The Commonwealth (1984) 155 CLR 193

Commonwealth v WMC Resources Ltd (1998) 194 CLR 1

Ha v New South Wales (1997) 189 CLR 465

Mutual Pools & Staff Pty Ltd v Commonwealth (1994) 179 CLR 155

Nintendo Co Ltd v Centronics Systems Pty Ltd (1994) 181 CLR 134

Re Director of Public Prosecutors; Ex parte Lawler (1994) 179 CLR 270

Smith v ANL Ltd (2000) 204 CLR 493

Theophanous v Commonwealth of Australia [2006] HCA 18

Followed:

Australian Capital Territory v Pinter (2002) 121 FCR 509

John Holland Constructions Pty Ltd v Hall (1987) 85 FLR 171

Referred to:

AAT King’s Tours PtyLtd  v Hughes (1994) 4 NTLR 185

Commonwealth v Tasmania (1983) 158 CLR 1

Georgiadis v Australian & Overseas Telecommunications Corporation                    (1994)179 CLR 297

Hastings Deering (Australia) Ltd v Smith [2004] NTCA 13

Laughton v Griffin (1895) AC 104

Maddalozzo v Maddick (1992) 108 FLR 159

Newcrest Mining (WA) Ltd v Commonwealth (1997) 190 CLR 513

Distinguished:

Health Insurance Commission v Peverill (1994) 179 CLR 226

REPRESENTATION:

Counsel:

Applicant:M Grant & N Christrup

Respondent:  P Barr QC

Intervenor:T Pauling QC with S Brownhill

Solicitors:

Applicant:Ward Keller

Respondent:  Hunt & Hunt

Intervenor:Solicitor for the Northern Territory

Judgment category classification:    A

Judgment ID Number:  Ang2006013

Number of pages:  45

IN THE FULL COURT OF THE
SUPREME COURT OF THE
NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN

Chaffey v Santos Ltd [2006] NTSC 67

No. 93 of…

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AGLC
Chaffey v Santos Limited [2006] NTSC 67
Case
[2006] NTSC 67
Decision Date

CaseChat Overview and Summary

The case of Chaffey v Santos Limited before the Supreme Court of the Northern Territory involved a dispute concerning the retrospective amendment of the Work Health Act 1986 by the Work Health Amendment Act 2004, which reduced the amount of workers' compensation payable. The applicant, Chaffey, an injured worker, challenged the constitutionality of these amendments under section 50(1) of the Northern Territory (Self-Government) Act 1978, which requires that property shall not be acquired by the Northern Territory government otherwise than on just terms.

The primary legal issues before the court were whether the amendments to the Work Health Act constituted an acquisition of property within the meaning of section 50(1) of the Northern Territory (Self-Government) Act and, if so, whether these amendments amounted to a law with respect to the acquisition of property. The respondent argued that the amendments did not constitute an acquisition of property and, even if they did, they did not amount to a law with respect to the acquisition of property.

The court determined that the retrospective reduction in the compensation payable to the applicant indeed constituted an acquisition of property under section 50(1) of the Northern Territory (Self-Government) Act. The court reasoned that the applicant had a right to weekly compensation calculated according to the Act, and the amendments reduced this right, thereby conferring a benefit on employers, insurers, and the Northern Territory. The court held that workers' compensation entitlements could not be characterized as social security benefits and were not inherently susceptible to change, given their basis in the employer-employee relationship. The court also rejected the argument that the amendments were not a law with respect to the acquisition of property, concluding that they effectively reduced the applicant's property rights.

The court found that the amendments to the Work Health Act 1986, which reduced the amount of workers' compensation payable, constituted an acquisition of property under section 50(1) of the Northern Territory (Self-Government) Act. It was ordered that the amendments were unconstitutional as they did not provide just terms for the acquisition of property.

Orders

Orders of the court

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Background

Background to the litigation

The next question then is whether the applicant’s property has been acquired within the meaning of s 50(1) of the Act. A second question is whether, notwithstanding that the amendments effect an acquisition of property, the amendments are or amount to “a law with respect to the acquisition of property”. It is the contention of the respondent and of the intervener that the amending legislation does not effect an acquisition within the meaning of s 50(1) of the Northern Territory (Self-Government) Act and even if it does, it is not “a law with respect to the acquisition of property”.Statutory background The Work Health Act 1986, for the most part, came into force on 1 January 1987. The Act repealed the previous Workmen’s Compensation Act 1949-1984 (“the former Act”): see s 188. However that repeal did not affect causes of action in respect of an injury to or death of a worker arising out of or in the course of his or her employment before the commencement date including an action or claim at common law and those claims were able to be continued under the provisions of the former Act: see s 189. The purposes of the Work Health Act 1986, as set out in the preamble to the Act, were:“… 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 dependents of workers who die as the 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 Maddalozzo v Maddick (1992) 108 FLR 159 at 167, I referred to the shift of emphasis of the Work Health Act, when compared with the former Act in that the former Act provided solely for compensation for injured workers and for a compulsory insurance scheme to make sure that compensation would be paid, whereas the focus of the Work Health Act 1986 covered a wide range in that the Act dealt not only with compensation but with occupational health and safety, the rehabilitation of injured workers and the obligations of an employer to provide suitable employment to an injured worker or to find suitable work with another employer for him and to participate in efforts to retrain an injured employee. There are quite a number of differences between the two Acts to which reference was not made in Maddalozzo v Maddick. Under the former Act a worker could recover both compensation and common law damages although there were provisions preventing double recovery in that the former Act required the successful worker in a common law action to repay the compensation paid to the worker’s employer: see s 22(1). Under the Work Health Act 1986 actions at common law brought by a worker or a dependent of a worker against an employer or co-worker have been abolished (see s 52). However, common law actions against strangers other than the employer or co-workers are still possible even in cases where compensation is payable, although the worker is liable to repay the compensation from any damages recovered: see s 176(1) and s 176(2).

Evidence

Evidence Before The Court

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Decision

Reasons for decision

So far as the right to compensation is concerned the right which the applicant had was a right, if necessary by taking action in the Work Health Court to enforce an entitlement to weekly compensation calculated in accordance with the Act. By reducing that right, retrospectively, the legislature has reduced the applicant’s right and conferred a benefit on employers, insurers, self-insurers and, to the extent that the Northern Territory is a self-insurer, the Northern Territory. Moreover, I do not think that workers’ entitlements can be characterised as social security benefits. They are not paid out of consolidated revenue, but are in the first instance required to be met by employers. A worker’s right to receive workers compensation may be seen as an incident of the relationship of master and servant. In return for giving up his rights to sue at common law an employee, when he enters into a contract of employment, obtains the benefit of a no fault scheme of workers compensation benefits. I observe also that in Hastings Deering (Australia) Ltd v Smith (supra) Martin CJ said in relation to the Superannuation Guarantee (Administration) Act 1992 (Cth) at [22]:“The intention of the guarantee legislation is that employees will be rewarded for their efforts as employees by payments emanating from the employer being credited to a fund established for the future benefit of the employee. In the ordinary sense of the word, and as a matter of fact, those payments are “earned” by an employee as a reward for the services rendered by the employee to the employer.”Was the result of the Court of Appeal’s decision relevantly unexpected? It may be that insurers have set premiums for workers compensation cover in the past without having regard to the potential for employer funded superannuation benefits to be treated as part of employees’ remuneration. If that was a mistake by some or even all of the insurers, it is a mistake I think which we cannot take any cognisance of. The insurance industry was perfectly capable of getting legal advice on what is and what is not remuneration. It is to be noted that the learned Magistrate and four Judges of this Court have unanimously held that employer funded superannuation benefits are part of remuneration so that at the very least insurers ought to have been aware of the possibility that such might be the true meaning of that term. It is not uncommon for courts to interpret statutory provisions which may give to those provisions a broader meaning than the insurance industry might hope to expect. But in my opinion that does not alter the character of the payments to which the employee is entitled and nor does it follow that the statutory benefits are by their nature susceptible of modification or extinguishment.Are the applicant’s statutory rights inherently susceptible to change? An assignment of a worker’s rights to compensation payable under the Act is void as against the employer or insurer: see s 186 of the Act. However, s 186 does not provide that such an assignment is void for all purposes and it may be that as between the worker and the assignee the assignment is still valid. There is no specific provision in the Act preventing compensation payments from being attached. Section 184 of the Act provides that claims to compensation survive after a claimant’s death and may be brought by the claimant’s personal representative. Section 185 of the Act provides that unpaid compensation forms part of a deceased worker’s estate. Section 186 contains provisions designed to prevent the contracting out of the provisions of the Act. These provisions are consistent with the concession that the applicant’s rights are property rights. Moreover, they tell against the argument that the rights are inherently susceptible to change. Rights which are inherently susceptible to change are presumably also susceptible to being not merely altered, but revoked altogether. In my opinion, s 184 and s 185 in particular indicate that it was not contemplated that such rights could be revoked. Further, in my opinion, given that the rights to compensation under the Act replaced entirely a worker’s rights to common law damages for personal injuries against his employer and co-workers for negligence or breach of contract, a statutory right of this nature is far removed from mere “statutory entitlements to receive payments from consolidated revenue not based on antecedent propriety rights recognised by the general law”: c.f. Mason CJ, Deane and Gaudron JJ in Peverill at 237. It was submitted that statutory rights which replaced common law rights were inherently defeasible but I am unable to follow the logic of this argument. It was submitted that in Pinter (supra) each of the Justices in the majority thought that the fact that the statutory rights did not replace common law rights was important to this question. Although in that case the statutory scheme did not replace common law rights and was seen as reforming the law to provide a more effective remedy so that the statutory rights and common law rights “walked hand in hand” (to adopt Black CJ’s expression at 524), I do not see why a scheme which replaces common law rights cannot similarly be characterised as one which is not inherently susceptible to change, particularly when the rights under the Act are based upon the relationship between master and servant.

Ratio Decidendi

Legal Principle Established

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