Criminale & Ors v State Authorities Superannuation Board

[1989] HCATrans 114

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S218 of 1988

B e t w e e n -

PAUL MICHAEL CRIMINALE,

FRANCIS KEITH MILLER,

MARION JOAN NILSSON,

LUCY JUDITH RITTER,

JUNE MARIE JONES,

ALWYN JOHN CORRIGAN and

GWEN JEAN WALKER

Applicants

and

STATE AUTHORITIES SUPERANNUATION

BOARD

First Respondent

THE UNITED DENTAL HOSPITAL OF

SYDNEY

Second Respondent

Criminale

Application for special leave to

appeal

MASON CJ DAWSON J GAUDRON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 12 MAY 1989, AT 10.54 AM

Copyright in the High Court of Australia

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MR T.E.F. HUGHES, QC:  May it please the Court, in this matter

I appear with my learned friend, MR W.R. HAYLEN,

for the applicants. (instructed by Jones Staff and Company)

MR D.M.J. BENNETT, QC:  May it please the Court, I appear

with my learned friend, MR I.L. JOHNSTON, QC, for

the first respondent. (instructed by S.W. Spencer)

MR J.F. KILDEA:  May it please the Court, I appear for the

second respondent. (instructed by Bartier Perry

and Purcell)

MASON CJ:	Yes, Mr Hughes.
MR HUGHES:	I should first say to the Court that the applicants

are six, and indeed the first six of the persons

named as applicants on the cover sheet of the application

book.

MASON CJ:  Yes. It is not often that somebody who has

succeeded below wants to appeal against the order.

MR HUGHES:  No.

MASON CJ: This seems to me to be a reflection on the legal

advice that has been tendered to your clients.

MR HUGHES:  I shall say nothing in my own defence, Your Honour,

but that is the position. The application,

Your Honours, raises a question affecting the

entitlement of those six employees of the United

Dental Hospital of Sydney to have enjoyed

participation between the commencement of their

employment which in most cases was in the fifties

and sixties by the hospital and a date in 1980

when they were ultimately admitted to participate

in the scheme of superannuation constituted by the

SUPERANNUATION ACT of 1916.

The case was brought as a test case with a view

to obtaining a decision as to the scope of certain

words of exclusion in the definition of the word
"employee" in section 3(1) of the Act.	I need not

trouble Your Honours to look at a print of the Act.

For the purposes of this application the relevant

statutory provision is set out sufficiently at page 3

of the application book. The definition of "employee",

perhaps not very informatively, says that it means a:

person employed by an 'employer' and who is

by the terms of his employment required to

give his whole time to the duties of his

employment.

Then there is a number of specific exclusions of named

office holders and I will not travel through those.

MASON CJ:  You only want the last two lines, do you not?

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MR HUGHES:  I only want the last two lines:

does not include ..... a person who is
paid at hourly, daily, weekly, or

fortnightly rates, or by piece-work.

I should say that, in our submission, the case has

wider repercussions affecting potentially people beyond

the six applicants. According. to the affidavit

in support of the application there are approximately

100 other employees, Your Honours, of the hospital who may be entitled to contribute to the scheme if

the applicants' contentions are correct. That

appears at page 64 of the application book. On an

even broader scale the decision has a potential we

would submit, for affecting the entitlement ot ~any

other persons employed in the public sector. If

the Court of Appeal has interpreted the particular

words in the subsection correctly, public sector

employers, as indeed the Court of Appeal recognized,

can exclude persons from the benefits of the

SUPERANNUATION ACT, even though their employment is

intended to be permanent, by the simple expedient

of stipulating a weekly rate of pay.

The Court of Appeal, Your Honours, interpreted

the words of exception as excluding from the

statutory definition of "employee" persons whose

contract of employment provides for hourly, daily,

weekly, or fortnightly rates of pay. The contrary

conclusion, for which we contended, was that the words

of exclusion are descriptive of the nature of the
hiring of the unitary term of employment so that the
words "a person who is paid at hourly, daily, weekly,
or fortnightly rates" are meant to be descriptive of

persons whose rates of pay are fixed in relation to

hirings of the several short durations specified in

the relevant words of the subsection.

None of the applicants was employed for short

terms of the kind specified, although their pay was

stipulated to be made weekly. In fact, as it turned

out, they were paid fortnightly, but that does not

really matter.	They were taken on many years ago
as permanent employees of the hospital,	a word to

be understood in public service parlance, we suggest,

as distinguishing temporary employment. The details
of their appointments, Your Honours, is found by the

primary judge as set out at pages 56 to 58 of the

application book and the primary judge at page 23

of the application book found specifically that
they were permanent employees which would one take
to mean in the context of the details of their

appointment that they were not employees who could

be dismissed on a weeks notice, misconduct apart,

of course. They were employees whose engagement was

intended to be of long term duration and it had

specified instance about sick leave, holidays and

·other matters.

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DAWSON J:  That really involves reading the words 'paid at

weekly, fortnightly,"et cetera, 'tates'; as meaning

"hired on a weekly, fortnightly, basis".

MR HUGHES:  Yes, indeed. That is the dichotomy, and the

Court of Appeal recognized that there were difficulties

whichever approach one adopted. I should say that

we do suggest it is worthwhile bringing to the

Court's attention that there is a line of cases in

New South Wales, two at first instance level and one in the Court of Appeal, and I shall, if I may, hand

up three prints of the cases in question, in which

the several judges who determined the cases took a
view of the section that in our submission accords

with the interpretation that we would wish to put

upon the particuiar words of exclusion. The first

case is RE BLAIR and the SUPERANNUATION ACT, decided

by Mr Justice Brereton as long ago as 1958 and

reported in 75 WN 429, and the key passage in

His Honour's reasons ie. at page 430 in the se·cond column,

half-way down - His Honour said:

I am clearly of opinion that the basis

for the exception of persons on hourly, daily

weekly, or fortnightly rates is that the
benefits of the Act are intended to be
confined to persons whose employment is

likely to be of lengthy duration, and

whose rates of pay are such that they can

afford the contributions. Rates based on

short unitary periods are in general lower

than monthly or yearly rates, terminable at

shorter notice, and indicate less inherent

permanence of employment; and this test, I

feel sure, has been adopted as a somewhat

aribtrary indicator. I conclude that the

reference to "hourly, daily, weekly, or

fortnightly rates" is not intended to be the

mere mechanics of payment. After all, a man

on an hourly rate may be paid "by the hour",

but is not paid hourly, and a man on a daily

rate is rarely paid daily. The reference is

intended to be to the unitary term of

employment - is the employee paid "by the hour"

or "by the year"? - a consideration which, in

the absence of express terms, also affects
the question of necessary notice for

termination of the contract by either party.

It follows that, to answer the question posed,

one must look not to the incidence of pay

days, but to the terms, express or implied,
of the contract of employment.

The error which we respectfully submit the

Court of Appeal may be thought to have fallen into

is that they looked at the terms of the employment

but only at one of them, and they did not look

_at the crucially important term, what was the

duration of the hiring.

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The next case is ARKINS V STATE SUPERANNUATION

BOARD of more recent vintage, reported only in the

Industrial Reports, a decision of Mr Justice Hunt

in the administrative law division, and on the first

page of His Honour's judgment, half-way down the page -

His Honour said:

The definition of "employee" ins 3 was

considered by Brereton Jin RE BLAIR.

Construing the Act in that case, his Honour

expressed their the view that · the be n e f i t s of the

Act were intended to be confined to persons

whose employment is likely to be of lengthy

duration and whose rates of pay are such

that they can afford the contributions.

The reference to the shorter rates,

his Honour stated, indicated employment with less inherent permanence. I agree with that

approach.

His Honour also said, and I agree, that

the reference to "hourly, daily, weekly, or

fortnightly rates" is not intended to be to

the mere mechanics of payment; one must

look not to the incidence of paydays, but

to the terms, express or implied, of the

contract of employment.

Then in a more recent case, 1985, reported only 1n

the Industrial Reports, ATHANASIOU V STATE

SUPERANNUATION BOARD, a decision of the Court of

Appeal constituted by the President, Mr Justice Mahoney

and Mr Justice Priestley, the President at page 205

said, in the statement of the material facts at the

top of the page:

The deceased entered the service of the

Electricity Commission of New South

Wales on 8 December 1980 as a temporary

employee.	He had previously passed a
medical examination.	However, it was
not in dispute that this examination was
not a "medical examination of the
prescribed standard" for the purpose of
s lOA of the Act. His employment with
the Electricity Commission was confirmed
on 29 January 1982. He thus became a
permanent employee. This rendered him an
"employee" as defined bys 3 of the Act.

This case was concerned, Your Honours - and I need not trouble Your Honours with the details - with the

question whether he had, while originally being within

the ambit of the scheme, become disqualified by

reason of unfitness. The next passage to which

I should briefly refer - - -

MASON CJ:  I think you have marked the relevant passages,

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have you not, so that we have been able to see

them for ourselves?

MR HUGHES:  Yes. Then, Your Honours, I shall not read any

further.

DAWSON J:  It would have been easy enough, Mr Hughes, to have

said, "employed upon an hourly, daily, weekly, or

fortnightly basis", would it not? I mean, what you

are really suggesting should be done is to not accept

the literal meaning - - -

MR HUGHES:	Indeed, I am.
DAWSON J:	- - - and just because of the results which it

produces.

MR HUGHES:	Well, not accept the literal meaning, not solely for that reason, Your Honour, but for another
reason which I shall very shortly state. A clue to
the possible justifiability of liberating the words of the exclusion from the shackles of literal
interpretation is perhaps to be found by
concentrating for a moment on the last phrase in the words of exclusion which relevantly is "paid .....
by piece work".  Now, piece work is obviously a
form of employment, rather than a method of
remuneration.  The expression "paid ..... by piece
work" as used in the subsection, is elliptical and
incomplete.  To give those particular words a sensible
payment under employment as a piece worker.
operation they have to be read as referring to of congruity and harmony between the two parts of the exclusion the concept of payment at rates
pertaining to particular periodical kinds of
employment ought to be carried back into the earlier
words of the last two lines of the subsection.

That is the approach that we would wish to advance

and we ask the Court to bear in mind that this

legislation has been considered in these earlier
cases to which I have alluded.	While Mr Justice Lee,

at first instance, gave careful consideration to

mention in the reasons for judgment of the those cases, none of them, with respect, found a feature of the judgment in respect of which we seek leave to appeal.

MASON CJ:  What do you say about the passage in the judgment

that deals with the circumstance that all the

applicants are covered by industrial awards?

MR HUGHES:  They are indeed, and that raises a further element.

Some of the applicants under the industrial awards, work in categories or

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classifications which, under the relevant

industrial awards, were expressed to be remunerated

at a per annum rate.

MASON CJ:  That seems to have, as it were, subsided into

relative insignficance in the case, if you look at

the judgment at pages 42 and 43 of the application

book.

MR HUGHES:	We did rely on the awards, Your Honour.
MASON CJ:	Do you rely on it in this application?
MR HUGHES:	Yes, but we had thought to put the main thrust of our

argument upon the very distinct findings of the primary judge, accepted by the court on appeal,

that the nature of the employment of each of these

people was permanent.

DAWSON J:  The awards are not consistent, are they?

Some say - - -

MR HUGHES:  No, Your Honour. Some say "per week" and some

say -

DAWSON J:	Per annum.
MASON CJ:	Well, there is but one award, but the award contains

different provisions relating to different

categories - - -

MR HUGHES:  Yes, with no apparently logical ground for

differentiation.

MASON CJ:	Well, it is an award.
MR HUGHES:	If I say that with disrespect or only a modicum

of disrespect - we do not disclaim reliance on the

awards but, as I have endeavoured to put, the main

thrust of the case for the purposes of this

application - - -

MASON CJ:  I do not quite follow how the judge managed to,

as it were, avoid the significance of the awards.

His Honour seems to down play the argument that was

presented as if really the counsel presenting it had

little confidence in it.

MR HUGHES:  Yes - peripheral. Well, Your Honour, I always

have a bad memory of submissions I have made to a

court nine - - -

MASON CJ:  You seem to remember the successful ones well

enough.

MR HUGHES:  They are easiel;' Your Honour, but even then it is

difficult to recapture the details of an argument.

But I cannot speak with any confidence of the

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particular emphasis that we placed on the awards,

but my junior assures me that we placed more

emphasis on them than Mr Justice Mahoney recognized

in his reasons for judgment.

(Continued on page 9)

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MASON CJ: What,your submission is that the award provision

should be read as if it formed part of the contract

between employers and employees.

MR HUGHES:  Yes, and there is authority it this Court for that

which I am bound to say, and I say it at once, I did

not cite - perhaps - we said that the award was part

of the material that need e_d be taken into account

in determining whether the employment of the several
applicants came, or did not come, within the ambit

of the exception.

DAWSON J: And how did you deal with the inconsistency?

You said, well obviously the award does not place any

importance on the use of the words " paid weekly" and "paid

fortnightly" - it regards those terms indifferently

andwhat it does provide for is permanency of

employment.

MR HUGHES:  Yes. The permanency was provided in this case,

Your Honour, I should say, by the very terms of the engagement of the several applicants which are

set out in detail in - - -

DAWSON J:	I just was wondering what you said about the award
in view of the inconsistency?
MR HUGHES:	We said, as best I can reconstruct -and I emphasize

it is reconstruction rather than a recollection - - -

DAWSON J: Well, what do you say now for that matter?

MR HUGHES:  We say now that the terms of the award in so far as

they provide for a per annum salary, albeit payable
weekly, are of distinct relevance to the question of

the applicant.

DAWSON J: In all cases it is a per annum salary,is it not?

MR HUGHES:  Not in all, Your Honour. In some it is a "per week".

There is a differentiation between some of the - - -

MASON CJ:	Group C employees - I think in their case it is a
"per week" provision in the award.

MR HUGHES:  Yes. Some of the applicants are group C.

MASON CJ:  Yes. There is an exception. I think female

employees falling under group C - it is paid on a

per annum basis, male employees on a weekly basis.

MR HUGHES.	Yes. Well, Your Honours - - -
DAWSON J:	Then you must come back to saying, well, the

Act treats the term "payable on a weekly basis"

indifferently with "payable on a per annum basis".

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MR HUGHES:  Yes. What we say is that - what we say at bottom

is that, when you look at the last phrase in the

subsection, referring to piece-work that concentrates

on the nature of the employment. It means, paid at

rates applicable to piec2-workers' employment, so that that concept can be carried back into the other words

of exclusion so that you fasten on the overall

contractual position, not just on the stipulation as

to the mechanics of payment, and the Court of Appeal

agreed that the question of entitlement to

superannuation could not be determined merely by the

mechanics of payment, the whim of a paymaster. The

competition between - the issue between the parties

is really the very narrow one that I have tried to

describe.	I doubt if there is much more that I can
usefully say to Your Honours.	I ha.ye
endeavoured to expose the point.	As to its

importance, we would submit there can be little doubt

as to its significance to the public sector of

employees.

MASON CJ: Yes, although our previous experience of this

statute does not encourage one to grant special

leave in any case concerning its application.

MR HUGHES: Well, CHOPRA's case was decided only the other day,

as Your Honours would know, but this question -

MASON CJ: It is a quite distinct question.

MR HUGHES:  - - - provided point is deemed to be sufficiently

arguable, it really does throw up an important issue.

MASON CJ: Yes, Mr Bennett.

MR BENNETT:  I have preparedanoutline of submissiorawhich I hand to the Court.

MASON CJ: Well, Mr Bennett, you would persuade us that it is

not an arguable question.

MR BENNETT: Well, Your Honours, there is insufficient doubt,

I think the phrase is. The fallacy of my

learned friend's approach is that he sets up a

dichotomy where there should be a trichotomy. The

choice is not between saying, on the one hand the

test is being permanent or temporary, and on the

other hand, the test is whether you are oaid weekly,

fortnightly et cetera; there is a third choice which

was the one the Court of Appeal adopted, which

rejected both those extreme positions, and that

middle course was really what the statute said,

which is whether the person is paid at a rate

which is weekly, fortnightly et cetera.

GAUDRON J: Well, how do you then avoid the awards providing

for annual rates?

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MR BENNETT:  Your Honour, that applied to some, only, of the

applicants, first of all, because in some cases

the award provided for weekly rates. In one

sense, if that were the only grounds, some, but not

all, should have special leave. Secondly, and

perhaps more importantly, on the true construction

of the award, it was our argument that the award

did not require the employee to be paid annual or

weekly rates. In other words, if one had an

employee in relation to whom the award said $20,000

per year, if you entered into a weekly contract with
that employee to pay $200 per week, or whatever the

equivalent is, one could not be prosecuted for a

breach of the award because one had entered into a

weekly and not an annual contract.

In other words, the argument was that the

award was not about defining whether the person

was paid at weekly, hourly or annual rates.

GAUDRON J:  I suppose there is no evidence that these

employees got over-award payments?

MR BENNETT:  I am not sure what the evidence was on that,

Your Honour. Certainly their payments were

fixed by letters of appointment which, in all

cases except Dr Walker, who, of course, succeeded,

referred to a weekly rate. If Your Honours turn to

page 36 of the application book, Your Honours will

see that Their Honours reject one of the two

extremes put by my learned friend.	At the top of
the page, line 2:

Whether a person falls within this description

is, in my opinion, not to be determined according

to whether, at particular times, his remuneration

is in fact being paid hourly, daily, weekly or

fortnightly. Nor is it to be determined

according to whether he happens to be paid

during a particular period at hourly, daily,

weekly or fortnightly rates of pay. It could not

have been the intention of the legislature that	entitlement to participate ..... was to be	determined by what, from time to time, the
paymaster happened to do.

And then they co on to say it is the terms of employment.

And that, Your Honours, is exactly what was

said in both BLAIR's case and ARKINS case. May I

just show Your Honour the passages in those case

which make that clear.

In BLAIR's case, 75 WN, at page 430

Your Honours will see at the bottom of the first

column at point 9 , the appointment was:

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Salary range 1,231 to 1,517 pounds

per annum, payable on a fortnightly

bases.

And then, on the next page, a third of the way down,

at the paragraph before my learned friend started

reading:

The whole question is whether or not

he is being paid at "hourly, daily, weekly

or fortnightly rates" within the meaning

of the Act. He is in fact paid fortnightly,

but this is nothing to the point, as either

an annual salary or a weekly wage may be, and

often is, paid fortnightly.

And in the passage my friend read, talking about

permanence, that was merely put as the reason for it.

It was not put as what the statute meant.	So, if
Your Honours go on:

I am clearly of opinion that the basis for the

exception ..... is that the benefits of the

Act are intended to be confined to persons whose employment is likely to be of lengthy

duration -

They are not saying permanence is the test, they

are saying the reason that distinction was laid

down between the - was that a person being paid on

an annual basis is more likely to be a permanent

employee. But they are not saying that is the test.

Similarly, one has exactly the same thing in the next case, in ARKINS. There, it is(l980)13 IR, and

at page 104 my learned friend read the two paragraphs

starting at point 5, with a definition of "employee".

I simply remind Your Honours of the last words

of the second paragraph he read, which say,

but to the terms, express or implied, of the

contract of employment.

That is what one looks to. And again, on the

next page Your Honours will see, at point 2:

RESOLVED That the following appointments

be approved:

Mr ED B Arkins, ..... at 888.0.0 pounds

per annum, payable on a fortnightly

basis.

So both employees in ARKINS and BLAIR were clearly

being paid annual salaries, although they were

being physically paid fortnightly.	And at the bottom
of page 105 His Honour says:

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In my view, none of this confusion is of

any real assistance in the determination of

the terms of the contract of employment

described in the minutes.

And, then over the page he says, at the first

full paragraph:

I infer, as sought by the plaintiff, that

the second year rate for Heads of Departments

was an annual, not a weekly, one.

So, His Honour goes, ultimately, not to saying,

"Is this man a permanent or temporary quasi

public servant?", but, "Is this man a person

who is paid, as the statute says, at an annual

rate?".

The dictum in ATHANASIOU, by the President

Mr Justice Kirby, was not something which was at

a point in the case where he was dealing with the

issue which the case concerned. One cannot determine

from the judgment what the rate of payment was,

whether it was weekly, fortnightly, or annual; what

the wording was. One just does not know that. One

assumes it was annual, as most public service

positions are, and if that is so, His Honour would

have assumed that the time when he became paid

annually, or on an annual basis, was at the time

when he became a permanent employee. But not - it

does not follow from the short passage my friend

read, dealing with a matter which does not appear

to have been an issue in that case, that permanence

rather than the basis of payment was seen as the

deciding issue.

So, the cases, we would submit, so far

from not assisting my friend, indicate the contrary

approach. The construction taken by the Court of

Appeal is one - I am sorry, taken by the trial judge,	is one which involves, as I have said in
paragraph 3, treating the words as a type of
multiple hendiadys, giving it a composite meaning -
that is really what His Honour does, and what my
friend does. He takes the whole phrase, says we
will not read this as meaning what it says, we will
read it rather as having a broad brush approach
of permanent or temporary, because that is really
what they were trying to do.

And, Your Honour, even in this enlightened

age of purpose of construction, one cannot, we

would submit, go to that extreme and find a meaning

in the words which defies their natural meaning.

And we add to that the point we have made in

paragraph 6, which is that there is nothing

surprising about saying that the employer

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can specify the type of employment, because

it is, in substance, a contract of adhesion,

and for superannuation planning purposes, it is

obviously sensible the employer should be able

to decide whether employees come into a particular
category or not. These employees, as we know,

were in fact under another fund for the whole

of the period we are concerned about.

Now, there is one final matter I should

mention, and that is referred to in paragraph 9,

and that is that if special leave is granted,

we would cross appeal against the appellants and

against Dr Walker on the basis of the

inconsistency argument.

GAUDRON J: Well, she is not a party any more.

MR BENNETT:	That does not prevent us cross appealing.
GAUDRON J:	I thought Mr Hughes said she was not an applicant.
MASON CJ:	She is, as it were, not going to be a party to

the appeal. You would have to institute separate

proceedings by way of appeal.

GAUDRON J: And for special leave.

MR BENNETT: Well, that is not my submission on the rules.

But, Your Honour, we would submit first of all, when

my friend says she is not an applicant, really,

she should be a respondent to my friend's

application. The reason she should be a respondent

is that, although she may not be affected by orders

he seeks, the effect of him applying for special

leave is to extend the time within which we can

institute a cross appeal against her.

MASON CJ: Well, that my be true, Mr Bennett, but this is a

vulgar procedural matter which need not delay

us this time.

MR BENNETT:  Yes. I will not take Your Honour any further on that.

But,Your Honour, we would submit the distinction drawn by my friend has no parameters in law, flies

in the face of the statute and, in my respectful

submission, there is insufficient doubt to justify

a grant.

MASON CJ: Yes. Thank you, Mr Bennett. Now,Mr Kildea, do you

wish to address us on this matter?

MR KILDEA:  I adopt the submissions of Mr Bennett. I do not

wish to add to them.

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MASON CJ: Yes, thank you. We need not trouble you,

Mr Hughes. The Court will grant special leave to

appeal in this matter.

AT 11.31 AM THE MATTER WAS ADJOURNED SINE DIE.

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