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

Hastings Deering (Australia) Ltd v Smith [2004] NTCA 13
PARTIES:HASTINGS DEERING (AUSTRALIA) LTD

v
SMITH, David John

TITLE OF COURT:  COURT OF APPEAL OF THE NORTHERN TERRITORY
JURISDICTION:  CIVIL APPEAL FROM THE SUPREME COURT EXERCISING TERRITORY JURISDICTION
FILE NO:AP 2/04 (20118381)
DELIVERED:  27 October 2004
HEARING DATES:  3 September 2004
JUDGMENT OF:  MARTIN (BR) CJ, ANGEL J & PRIESTLEY AJ
CATCHWORDS:

WORKERS COMPENSATION
Work Health Act 1986 (NT) – Appeal to the Court of Appeal from the Work Health Court – whether superannuation contributions are part of “remuneration” for the purposes of calculating “normal weekly earnings” – s 49(b) & (c) whether “ordinary time rate of pay” includes non-cash benefits – appeal dismissed.
Superannuation Guarantee (Administration) Act 1992 (Cth), s 11
Work Health Act 1986 (NT) s 49, s 49(2), s 53, s 64, and s 65
Re The Manufacturing Grocers’ Employees Federation of Australia and Another; Ex Parte The Australian Chamber of Manufactures and Another (1986) 160 CLR 341 at 351 and 356; Murwangi Community Aboriginal Corporation v Carroll (2002) 171 FLR 116 at 118; NT Drilling Pty Ltd v McFarland [2004] NTSC 23; applied.
Great Northern Railway Company v Dawson [1905] 1 KB 331; Dothie & Others v Robert Macandrew and Co [1908] 1 KB 803; Simmonds v The Stourbridge Glazed Brick and Fire Clay Company Limited [1910] 2 KB 269 at 274; Skailes v Blue Anchor Line Limited [1911] 1 KB 360 at 363; Doncaster Amalgamated Collieries Limited v Leech [1941] 1 KB 649 at 653; Izdes v LG Bennett & Company Pty Limited t/a Alba Industries (1995) 61 IR 439; The Queen v Portus and Another; Ex Parte ANZ Banking Group Ltd (1972) CLR 353; Thompson v Primary Producers Improvers Pty Ltd [2004] NTCA; May v Lilyvale Hotel Pty Limited (1995) 68 IR 112 at 116; Rigby v Technisearch Ltd (1996) 67 IR 68 at 91; Victims Compensation Fund Corporation v Brown and Others (2003) 201 ALR 260; Scott v Sun Alliance Australia Limited and Another (1993) 178 CLR 1 at 5, considered.
Ardino v Count Financial Group Pty Ltd 126 ALR 49, at 54; Reynolds v Southcorp Wines Pty Ltd and Another (2002) 122 FCR 301 at 318, distinguished.
REPRESENTATION:
Counsel:
Appellant:D Trim QC and P Barr
Respondent:  S Southwood QC
Solicitors:
Appellant:Hunt & Hunt
Respondent:  Ward Keller
Judgment category classification:         A
Judgment ID Number:  Mar0413
Number of pages:  28

IN THE COURT OF APPEAL
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN
Hastings Deering (Australia) Ltd v Smith [2004] NTCA 13

No. AP2/04 (20118381)
BETWEEN:

HASTINGS DEERING (AUSTRALIA) LTD (ACN 054 094 647)

Appellant

AND:

DAVID JOHN SMITH

Respondent

CORAM: MARTIN (BR) CJ, ANGEL J & PRIESTLEY AJ
REASONS FOR JUDGMENT
(Delivered 27 October 2004)
Martin (BR) CJ:
Introduction

This is an appeal against a decision of a Judge dismissing an appeal from a decision of the Work Health Court.
The respondent was employed by the appellant as a heavy equipment fitter. During his employment the respondent…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2004] NTCA 13
Decision Date: 27 October 2004

CaseChat Overview and Summary

In the case of Hastings Deering (Australia) Ltd v Smith, the dispute arose from an appeal by the employer, Hastings Deering (Australia) Ltd, to the Court of Appeal from the Work Health Court in the Northern Territory. The primary issue before the court was whether superannuation contributions are to be included in the calculation of “normal weekly earnings” for the purposes of determining the employer’s liability under the Work Health Act 1986 (NT). This question was significant in determining the amount of compensation payable to the employee, Smith, following a workplace injury.

The court had to decide whether the term “remuneration” in section 49(b) and (c) of the Work Health Act 1986 (NT) included superannuation contributions and whether the “ordinary time rate of pay” should encompass non-cash benefits such as superannuation. The court’s analysis required a consideration of the broader concepts of “earnings” and “remuneration,” which extend beyond mere salary or wages. Historical cases such as Great Northern Railway Company v Dawson, Dothie v Robert Macandrew & Co, Simmonds v The Stourbridge Glazed Brick and Fire Clay Company Limited, and Skailes v Blue Anchor Line Limited provided context by illustrating that non-cash benefits could be included in earnings and remuneration. The court also considered Doncaster Amalgamated Collieries Limited v Leech, which reinforced the idea that benefits earned by an employee are part of their earnings.

The court held that superannuation contributions are indeed part of “remuneration” for the purposes of calculating “normal weekly earnings.” The reasoning was based on the intention of the guarantee legislation, which is to ensure that employees are rewarded for their services. This includes non-cash benefits such as superannuation, which are intended for the future benefit of the employee. Consequently, the appeal was dismissed, and the court upheld the inclusion of superannuation contributions in the calculation of normal weekly earnings.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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.Superannuation contributions “earned” as part of “remuneration” The concepts of “earnings” and “remuneration” are well recognised as of wider import than “salary” or “wages”. Speaking generally, in the context of worker’s compensation legislation, earnings and remuneration frequently include non-cash components that are properly regarded as a reward for services rendered. In Great Northern Railway Company v Dawson [1905] 1 KB 331, the Court of Appeal held that the value to an employee of the use of a uniform was to be taken into account in assessing the employee’s earnings for the purposes of compensation under the Workmen’s Compensation Act 1897. The value to be assessed was held to be the value to the employee of the use of the clothing. In Dothie v Robert Macandrew & Co [1908] 1 KB 803 the Court of Appeal was concerned with whether the “remuneration” of an employee exceeded a particular amount. The Court held that the value to the employee of the reasonable board and food provided by the employer was part of the employee’s remuneration. The average weekly earnings of an employee for the purposes of the Workmen’s Compensation Act 1906 came under consideration in Simmonds v The Stourbridge Glazed Brick and Fire Clay Company Limited [1910] 2 KB 269. The value of an allowance for coal or house rent was regarded as part of the employee’s average weekly earnings. Darling J expressed the following view (274):“In order to ascertain what those average weekly earnings were the judge ought to take into account not only the money wages of the workman, but also what he was entitled to receive in kind in his employment … ”. In Skailes v Blue Anchor Line Limited [1911] 1 KB 360, with the support of Farwell LJ, Cozens-Hardy MR made the following observations (363):“Now “remuneration” is not the same thing as salary or cash payment by the employer. The word “remuneration” is only found in s 13 of the Act and in Sched I, par 2(a), and this latter paragraph satisfies me that remuneration involves precisely the same considerations as earnings. I do not think it is open to this Court, after our decision in Dothie v Robert Macandrew & Co, to take any other view. We there held that the value of board and lodging must be brought into account in considering whether the remuneration of the deceased man exceeded £250, and that the mere cash salary was not to be solely regarded.” (footnotes omitted) A different factual situation was considered in Doncaster Amalgamated Collieries Limited v Leech [1941] 1 KB 649. A soldier separated from his family by reason of his service received a family allowance which was paid direct to his wife. It was argued that the family allowance was not “earnings” within the meaning of the Workmen’s Compensation Act 1925. The Court held that the allowance was earned by the soldier. As Scott LJ said in dealing with the question of whether the allowance was earned (653):“To my mind the answer is obvious. He is entitled to it and he does earn it, and none the less so because he is compelled to assent to the condition on which he earns it, namely, that it shall be paid direct to his wife.”