Henry v Commonwealth
[2012] ACTSC 94
•June 15, 2012
KEVIN JOHN HENRY v COMMONWEALTH OF AUSTRALIA
[2012] ACTSC 94 (15 June 2012)
LIMITATION OF ACTIONS – Contracts, Torts and Personal Actions – application of the Limitation Act1969 (NSW) – whether action brought outside the limits imposed by the legislation – plaintiff commenced proceedings within the limitation period
Limitation Act1969 (NSW), s 14
Limitation Act 1985 (ACT), s 11
Superannuation Act1922 (Cth)
Superannuation Act 1976 (Cth), ss 80, 136, 138, 139A, 144
Superannuation Act 1990 (Cth)
Superannuation Legislation Amendment Act (No. 1) 1995 (Cth)
Trade Practices Act 1975 (Cth), s 82
Court Procedures Rules 2006 (ACT), r 1521
John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514
Western Australia v Bond Corporation Holdings Ltd (1991) 28 FCR 68
Cartledge v E Jopling and Sons Ltd [1963] AC 758
Commonwealth of Australia v Cornwell (2007) 229 CLR 519
No. SC 70 of 2010
Judge: Burns J
Supreme Court of the ACT
Date: 15 June 2012
IN THE SUPREME COURT OF THE )
) No. SC 70 of 2010
AUSTRALIAN CAPITAL TERRITORY )
BETWEEN: KEVIN JOHN HENRY
Plaintiff
AND:COMMONWEALTH OF AUSTRALIA
Defendant
RULING
Judge: Burns J
Date: 15 June 2012
Place: Canberra
THE COURT RULES THAT:
The provisions of s 14 of the Limitation Act 1969 (NSW) do not operate such that the causes of action pleaded by the plaintiff are not maintainable.
Background
The plaintiff, Kevin John Henry, born 26 October 1949, commenced employment with the defendant, the Commonwealth of Australia, on 23 June 1969 as a permanent employee. Shortly thereafter, he commenced contributing to the superannuation scheme established by the Superannuation Act 1922 (Cth) (the 1922 scheme). At all relevant times he was employed in the State of New South Wales.
The plaintiff’s membership of the 1922 scheme was compulsorily transferred to the Commonwealth Superannuation Scheme (the CSS) established by the Superannuation Act 1976 (Cth) (the 1976 Act) on 1 July 1976.
On 3 January 1986 the plaintiff voluntarily resigned from his employment with the defendant, thus ceasing membership of the CSS. Prior to his resignation, on 11 December 1985 the plaintiff elected in writing to receive a benefit on his resignation consisting of a refund of his accumulated contributions to the CSS, plus interest that has accrued on that sum. The plaintiff received payment of that sum on or about 19 February 1986.
The plaintiff commenced employment with the New South Wales Department of Finance (now the Office of State Revenue) as a permanent employee on 6 January 1986. From that date he commenced contributions to the NSW State Public Service Superannuation Fund.
The plaintiff retired from employment with the New South Wales Office of State Revenue on 13 July 2007.
It is common ground between the parties that upon his resignation from the defendant on 3 January 1986, the relevant provisions of the 1976 Act, as in force at the time, gave the plaintiff the option to:
(a)apply for a refund of his accumulated contributions to the CSS, plus interest;
(b)apply for a payment of lump sum Commonwealth superannuation benefit; or
(c)apply to have his Commonwealth Superannuation rights preserved in the CSS.
On 11 December 2001 the plaintiff wrote to the Commonwealth Superannuation Administration (ComSuper) seeking “re-admission” to the CSS. His letter was accepted as an application to make a late election under s 137 (1) of the 1976 Act to preserve his superannuation rights, as they existed at the date of his resignation from Commonwealth employment, within the CSS. On 22 July 2002 this application was refused. The plaintiff had no basis for a reconsideration of this decision.
On 1 February 2010 the plaintiff commenced proceedings in this Court claiming damages from the defendant on the basis of negligence, negligent advice and breach of statutory duty. The plaintiff’s claim is based upon an allegation (denied by the defendant) that prior to his resignation on 3 January 1986 he had been wrongly advised by senior officers in the Department in which he worked that his only option on resignation was to take a refund of his contributions plus interest. The plaintiff says that on the basis of that advice he opted to and did receive payment of his accumulated contributions plus interest. The plaintiff says that but for the negligent advice given to him he would have applied to have his Commonwealth superannuation rights preserved in the CSS, making him eligible to receive deferred benefits under the 1976 Act upon his retirement from public employment on 13 July 2007. As a consequence of opting to take a refund of his contributions plus interest upon his resignation in 1986, the plaintiff claims that upon his retirement on 13 July 2007 he lost:
(a)a CSS indexed pension and a contributor financed non-indexed pension; or
(b)a CSS indexed pension plus a refund of accumulated contributions.
The defendant has denied liability with respect to each cause of action pleaded by the plaintiff. With respect to each of the plaintiff’s causes of action the defendant also pleads that they are not maintainable by reason of the operation of s 14 of the Limitation Act 1969 (NSW) as having been brought outside the limitation period of six years from the date on which they first accrued to the plaintiff.
On 13 April 2012 this Court made consent orders pursuant to Rule 1521 of the Court Procedures Rules 2006 (ACT) that the question of the application of s 14 of the Limitation Act 1969 (NSW) to the plaintiff’s causes of action be determined separately from, and before, other issues arising in the proceedings.
The Relevant Legislation
Section 14 of the Limitation Act1969 (NSW) relevantly provides:
14 General
(1)An action on any of the following causes of action is not maintainable if brought after the expiration of a limitation period of six years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims:
(a)a cause of action founded on contract (including quasi contract) not being a cause of action founded on a deed,
(b)a cause of action founded on tort, including a cause of action for damages for breach of statutory duty,
(c)a cause of action to enforce a recognizance,
(d)a cause of action to recover money recoverable by virtue of an enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture.
The parties are in agreement that this is the applicable limitation legislation, as the law governing all questions of substance in Australian torts involving an interstate element is the lex loci delicti, and the application of limitation periods is a question of substance: John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503.
Certain provisions of the Superannuation Act 1922 (Cth) and the 1976 Act are relevant to the plaintiffs claim, but it is unnecessary to set them out here in order to deal with this preliminary issue.
The Issue
The question raised in this application is: do the provisions of s 14 of the Limitation Act 1969 (NSW) operate so as to make the causes of action pleaded by the plaintiff not maintainable? The answer to that question depends on when the plaintiff’s causes of action first accrued to him. Counsel accept that each of the plaintiff’s causes of action accrued on the same date, but they differ in identifying that date. The plaintiff submits that each of the causes of action first accrued to him on the date he retired from employment with the New South Wales Office of State Revenue on 13 July 2007. If that submission is correct, the current proceedings were commenced well within the six year limitation period provided by the Limitation Act 1969 (NSW). The defendant submits that each of the plaintiff’s causes of action first accrued to him either on the date he resigned from employment with the defendant (3 January 1986) or, alternatively, on the date his application for a late election under s 137 (1) of the 1976 Act was refused (22 July 2002) and he had no available basis for seeking a reconsideration of that refusal. If either of the defendant’s submissions is correct, these proceedings were commenced outside the applicable six year limitation period.
Relevant Case Law
Each party referred me to the High Court decision in Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 (Wardley) where the principle question was “the time at which a cause of action under s 82 of the Trade Practices Act 1975 (Cth) ... accrues if, as a result of misleading or deceptive conduct, a party enters into an indemnity which is subsequently called upon”. The applicable statutory limitation provision, s 82 (2) of the Trade Practices Act1975 (Cth), provided that the period of limitation began to run at the time when the plaintiff’s cause of action accrued.
At first instance French J (as his Honour then was) determined that the State of Western Australian (the plaintiff) had suffered loss at the moment it executed the indemnity as “it assumed a risk of loss that was very much greater than it had been led to believe was the case on the representations made to it”: Western Australia v Bond Corporation Holdings Ltd (1991) 28 FCR 68 at 86. In so holding his Honour held at 87 that “risk of loss is itself a category of loss”, with a consequence that one of the causes of action pleaded by the plaintiff was out of time. On appeal, the Full Court of the Federal Court (Spender, Gummow and Lee JJ) reversed the decision of French J on this point. The matter then proceeded on appeal to the High Court.
In the High Court, the plurality decision (Mason CJ, Dawson, Gaudron and McHugh JJ) considered the concept of economic loss or damage in the context of misrepresentations, and said (at 527):
Economic loss may take a variety of forms and, as Gaudron J. noted in Hawkins v. Clayton, the answer to the question when a cause of action for negligence causing economic loss accrues may require consideration of the precise interest infringed by the negligent act or omission. The kind of economic loss which is sustained and the time when it is first sustained depend upon the nature of the interest infringed and, perhaps, the nature of the interference to which it is subjected. With economic loss, as with other forms of damage, there has to be some actual damage. Prospective loss is not enough.
(footnotes omitted)
Immediately after this passage, their Honours draw a distinction between sustaining “detriment in a general sense” and sustaining loss or damage. When the State of Western Australia entered into the indemnity agreement it suffered detriment, in the sense that it became subject to a potential liability where no such potential liability had previously existed. It also suffered detriment in the sense that the risk it was running by entering the agreement was greater than the risk it had been led to believe it would be exposed to. However, whether it ultimately sustained any loss by reason of entering into the indemnity agreement was contingent upon a number of events occurring, which may or may not have occurred. In particular, liability was contingent upon events occurring which gave rise to a right on the part of the indemnified party to call on the indemnity. Their Honours said (at 532):
In our opinion, in such a case, the plaintiff sustains no actual damage until the contingency is fulfilled and the loss becomes actual; until that happens the loss is prospective and many never be incurred.
Their Honours go on to say (at 532-533):
The conclusion which we have reached with respect to the time when the plaintiff first suffers loss in respect of contingent loss or liability accords with the comment of Gaudron J. in Hawkins v. Clayton:
“[I]f the interest infringed is an interest in recouping moneys advanced it may be appropriate to fix the time of accrual of the cause of action when recoupment becomes impossible rather than at the time when the antecedent right to recoup should have come into existence, for the actual loss is sustained only when recoupment becomes impossible.” (Original emphasis)
Gaudron J went on to point out:
“It would be too simplistic to restrict analysis of economic loss merely to a consideration of reduced value or increased liability.”
The conclusion which we have reached is reinforced by the general considerations to which we referred earlier. It is unjust and unreasonable to expect the plaintiff to commence proceedings before the contingency is fulfilled. If an action is commenced before that date, it will fail if the events so transpire that it becomes clear that no loss is, or will be, incurred. Moreover, the plaintiff will run the risk that damages will be estimated on a contingency basis, in which event the compensation awarded may not fully compensate the plaintiff for the loss ultimately suffered.
The second case to which I was referred was The Commonwealth of Australia v Cornwell (2007) 229 CLR 519 (Cornwell), where Mr Cornwell delayed entry to the relevant Commonwealth public sector superannuation schemes for 22 years due to negligent advice that he was not eligible to join those schemes. In 1965 when the advice was given he would have been eligible to join the 1922 scheme. He ultimately joined the CSS in 1987. He retired in 1994 and commenced an action in 1999 claiming the additional benefits he would have received if he had joined the 1922 scheme in 1965. The Commonwealth contended that his claim was statute barred on the basis that his loss became actual either in 1976 when the 1922 scheme was replaced, or in 1987 when he joined the CSS.
The relevant limitation period in Cornwell was six years from the date that the cause of action first accrued: s 11 Limitation Act1985 (ACT). Gleeson CJ, Gummow, Kirby and Haydon JJ jointly found that Mr Cornwell’s claim was not statute barred:
In Hawkins v Clayton, Gaudron J emphasised the importance for actions for negligence causing economic loss in identifying the interest said to be infringed, whether it be the value of property, the physical integrity of property, or the recoupment of moneys advanced. Thereafter, in Wardley Australia Ltd v Western Australia, Mason CJ, Dawson, Gaudron and McHugh JJ observed:
“To compel a plaintiff to institute proceedings before the existence of his or her loss is ascertained or ascertainable would be unjust. Moreover, it would increase the possibility that the courts would be forced to estimate damages on the basis of likelihood or probability instead of assessing damages by reference to established events. In such a situation, there would be an ever-present risk of undercompensation or overcompensation, the risk of the former being the greater.”
Their Honours also said:
“The kind of economic loss which is sustained and the time when it is first sustained depend upon the nature of the interest infringed and, perhaps, the nature of the interference to which it is subjected. With economic loss, as with other forms of damage, there has to be some actual damage. Prospective loss is not enough”
In Law Society v Sephton & Co [2006] 2 AC 543 at 569, Lord Mance said, with reference to Wardley, that he saw the attraction of an approach: “the effect of which is that unless and until a remote contingency eventuates the claimant is not expected to issue proceedings which he would not normally issue or wish to issue unless and until that point arrives.”
Here, the economic loss which the respondent sustained was alleged to be the lesser benefit which he obtained on his retirement, this being worth less than it would have been had he not relied upon the negligent advice given to him in 1965. But to speak simply of a “retirement benefit” and its value is to obscure the nature of the economic loss involved. This does not turn upon proprietary or other rights or obligations created and governed by the general law, such as the indemnity granted by the respondent in Wardley, or the continuing financial obligations undertaken by the lessees in Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388. What the respondent stood to enjoy upon “retirement” was an “entitlement” conferred by federal statute law. This “entitlement” was his “interest” in the sense used in the above passage from Wardley.
The significance attached to retirement on grounds of health, by retrenchment, for cause, upon death and for other reasons depended upon the terms of the particular legislation. What was only in prospect until the falling in of one or more of various contingencies, matured into actual loss only at the end of the respondent’s service and upon the falling in of one or more of the statutory contingencies which had to be met for the respondent to be entitled to a statutory benefit. Hence the submission by the respondent that it was only upon his retirement that the relevant statutory contingency fell in upon which the respondent became entitled to a benefit which was limited or diminished and his cause of action first accrued.”
The plaintiff’s submission
The plaintiff submits that a cause of action in negligence is complete when the damage caused by the breach of duty is sustained. The damage must be real, rather than nominal: Cartledge v E Jopling & Sons Ltd [1963] AC 758. Time does not begin to run until such damage is suffered. Actual damage must be suffered, and prospective loss is not enough: Wardley.
The plaintiff further submits that his claim is governed by the principles enunciated by the High Court in Cornwell.
The plaintiff submits that he did not suffer loss, in any relevant sense, until all of the statutory pre-conditions necessary to give rise to his lost benefits had first accrued, and that this was not the case until his retirement on 13 July 2007. It was only at that time, the plaintiff says, that it could be established that all of the following statutory conditions necessary for his loss to accrue had been fulfilled, namely:
(a)he had survived beyond minimum retirement age under the Superannuation Act1976 (Cth); and
(b) he had permanently retired from the workforce; and
(c)he had retired in circumstances where, but for the events upon which his cause of action relies, he would first have applied to receive his preserved Commonwealth Superannuation retirement benefits.
Prior to that date, the plaintiff says, his claim was “merely one in prospect that had not matured into actual loss”. The plaintiff contends that there could be no damage occasioned to him unless it was possible to say that there is a loss, by comparing:
(a)the factual events (namely what retirement benefits have actually been received by the plaintiff) with
(b)the counter-factual events (namely the CSS benefits which would have accrued to the plaintiff but for the negligence or breach of duty).
In the present case, this analysis means, the plaintiff says, that until all of the contingencies fell into place with respect to the counter-factual events, he had not suffered relevant loss, as opposed to a general detriment. The plaintiff submits that as participation in the CSS did not give rise to any legally enforceable right of benefit prior to the falling in of a statutory entitlement upon the occurrence of specific events defined as statutory triggers for entitlements, it was necessary for the exigencies of life to unfold before it could be known whether, and if so, what, statutory entitlement the plaintiff would have received but for the defendant’s negligence.
The plaintiff submits that if he had commenced proceedings to recover damages under his present causes of action in 1986, he would undoubtedly have been met with the proposition by the defendant that it could not yet be determined if he had suffered any loss. If he had deferred his benefits in the CSS any number of events may have occurred which could have precluded him obtaining a deferred benefit, including:
(a)he may have resumed Commonwealth employment and been re-admitted to the CSS (upon which event deferred benefits would no longer be payable): s 144 Superannuation Act 1976 (Cth) (as amended);
(b)he may have been retrenched, suffered financial difficulty or otherwise required immediate access to funds and applied for a refund of his contributions and interest: s 80 Superannuation Act1976 (Cth);
(c)he may have asked, in lieu of continued preservation, to have a transfer value paid from the CSS to another superannuation scheme applicable to public employees who permitted that option: s 139A Superannuation Act1976 (Cth);
(d)he may have died before receiving any deferred benefit, in which event he personally would not have received such benefits. In such an event the Commonwealth could assert that there was no breach of duty as any negligent advice had not been given to any eligible spouse or dependent child. They could not be said to have relied on the advice and thereby would not assert any loss; or
(e)he may have become physically or mentally incapacitated from employment and applied to receive his CSS benefit at any time before attaining minimum retirement age.
The defendant’s submission
In its written submissions the defendant sets out the following propositions:
11.The ratio decidendi in Cornwell is that where that which a plaintiff stands to enjoy upon the contingency of retirement on grounds of health, by retrenchment, for cause, upon death and for other reasons was an ‘entitlement’ conferred by federal statute law, then what is in prospect until the falling in of one or more of the various contingencies under the legislation matures into actual loss only at the end of the plaintiff’s service and upon the falling in of one or more of the statutory contingencies which had to be met for the plaintiff to be entitled to a statutory benefit (Cornwell at [18] – [19] and see also [33]).
12.Cornwell does not stand for the proposition that once a plaintiff actually receives a statutory superannuation benefit on the falling in of one of the various statutory contingencies, (as Mr Henry did at the end of his Commonwealth service and CSS membership on 3 January 1986 and upon accessing his superannuation benefit on 19 February 1986 by taking a refund of his contributions plus interest), the time for bringing an action claiming damages for loss suffered as a result of being advised that an alternative manner of dealing with the benefit was not open, does not commence to run until the date when some other hypothetical contingency giving rise to some other hypothetical entitlement related to that alternate course, not in fact taken, would have fallen in.
13.Moreover, Cornwell does not stand for the proposition that in every case where a loss is claimed in respect of negligent advice concerning a superannuation entitlement under federal legislation, damage is contingent until the plaintiff retires upon reaching the age of retirement.
14.In Cornwell, Mr Cornwell’s statutory entitled to a superannuation benefit did in fact fall in for the first time when he turned 55 and retired from Commonwealth employment. The High Court was not therefore concerned with the situation that might have occurred if Mr Cornwell had earlier become entitled to a different statutory benefit, for example, by way of involuntary retirement.
15.It is tolerably clear from the decision in Cornwell that if Mr Cornwell voluntarily retired at age 54, for example, he would not have been required to wait until age 55 before suing to recover damages suffered because his entitlement, whether it was by way of lump sum or deferred benefits, was or would be less than he should have received had he been advised he was eligible to join Commonwealth superannuation at an earlier date than he in fact did.
16.The Court in Cornwell was only concerned at all with the statutory contingency of retirement at age 55 because that was Mr Cornwell’s particular personal circumstance and his particular “entitlement” date. The Court was well aware of the significance of statutory contingencies other than retirement at age 55, the falling in of which would also trigger an entitlement to a benefit.
17.In other words, in Mr Cornwell’s case the relevant statutory contingency was his retirement at age 55, but other relevant contingencies falling in in other cases at the end of a period of Commonwealth service before retirement age also give rise to an “entitlement” to a statutory benefit. In Mr Henry’s case the relevant contingency was voluntary resignation from eligible service with the Commonwealth and cessation of membership of the CSS. When that contingency fell in on 3 January 1986 his “entitlement” arose and he was paid his elected benefit on 19 February 1986. At that point, on his case as pleaded, he suffered actual damage and his causes of action accrued.
18.In cases such as the present it is the “entitlement” which is the relevant “interest” necessary to be identified for the purposes of determining when economic loss is sustained. (Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 527; Cornwell at [18]).
19.Mr Cornwell’s “interest” was his “entitlement” which arose upon his retirement at age 55. Mr Henry’s “interest” was his “entitlement” which arose upon his voluntary resignation from eligible employment with the Commonwealth and cessation of CSS membership on 3 January 1986. The difference between the factual scenario in Cornwell and Mr Henry’s position is the time at which the superannuation “entitlement” arose.
20.The first date on which Mr Cornwell became entitled to superannuation benefits was when he retired at age 55 on 31 December 1994. This was because he had spent his entire working life in the employment of the Commonwealth and none of the possible contingencies that would have given rise to an entitlement to superannuation benefits had actually occurred until he retired. Mr Cornwell had no entitlement to any superannuation benefits until he retired at the age of 55 and that is why his loss was held not to have actualised until that time.
21.Mr Henry’s situation on the other hand is that he became entitled to superannuation benefits upon his voluntary resignation on 3 January 1986. He could have elected to preserve his benefits and take them as deferred benefits at a future date but he chose (albeit because of alleged negligent advice about the lack of any alternative), to receive a payment of his accumulated superannuation contributions plus interest. His relevant “interest” was therefore his “entitlement” arising on 3 January 1986 and his loss crystallized on that date.
(Original emphasis)
The defendant further submits that even if the plaintiff’s damage “was not actual” at the time of his resignation as he had an available entitlement to apply to ComSuper to make a late election under s 157 (1) of the 1976 Act to preserve his benefits in the CSS, that entitlement ceased when such an application was, in fact, refused on 22 July 2002.
The defendant submits that upon the falling in of the relevant statutory contingency of resignation on 3 January 1986, the plaintiff became entitled to a superannuation benefit he in fact received. The defendant says that any loss suffered by the plaintiff was suffered at that time, and damages could have been assessed using conventional principles of assessment.
Consideration
As I noted earlier, the question for resolution in this matter is: when did the plaintiff’s causes of action accrue? In the circumstances of this case, that question is answered by the answer to another question: when did the plaintiff suffer actual, as opposed to contingent, damage as a result of the defendant’s negligence?
The plaintiff says that he only suffered actual damage when he retired from public employment on 13 July 2007. The defendant says that the plaintiff suffered actual damage either when he received his resignation benefit in 1986, or at the latest when his application to make a late election to preserve his benefits under the 1976 Act was refused in 2002.
In my opinion, none of these positions is correct.
In order to explain why I consider the positions held by both parties are incorrect, and to identify the correct date from which the limitation period commenced to run, it is necessary to refer to some basic principles.
The function of an award of damages in tort is to place the victim back into the position they would have been in had the tort not been committed. The comparison called for by this principle is between the position the victim is in because of the commission of the tort, and that which he or she would have been in but for the tort. So, in the present case the comparison is between what the plaintiff received as a consequence of the defendant’s negligent misrepresentation, and what he would have received if the negligent misrepresentation had not been made.
This, in effect, is the factual/counter-factual analysis urged by the plaintiff. There is no doubt what the plaintiff received by reason of the negligent misrepresentation: his resignation benefit in 1986. That is the factual side of the comparison. The counter factual side, what he would have received but for the negligent misrepresentation, depends on relevant contingencies being satisfied, including those relevant to the operation of the 1976 Act.
It is quite clear from the above that the receipt of the resignation benefit received by the plaintiff in 1986 cannot be the starting point for the calculation of the limitation period because this only informs us of the factual side of the comparison. What the plaintiff would have received but for the negligent misrepresentation may conveniently, if superficially, be described as a deferred benefit. But whether he would have received that deferred benefit, and in what amount, remained conjecture in 1986. The plaintiff may have returned to Commonwealth employment before the closure of the CSS in 1990, at which time he would not have been entitled to any deferred benefit. The plaintiff may have died leaving a spouse before he was entitled to a deferred benefit, in which case his estate would not have been entitled to a benefit, but his spouse would have been entitled to a benefit. These are only two of a myriad of contingencies that, as at 1986, could have arisen in the plaintiff’s future so as to affect his entitlement to a deferred benefit. It is only necessary to examine s 136 of the 1976 Act, which sets out the various forms a deferred benefit may take, to appreciate that in 1986 it could not be said that the plaintiff had suffered any loss by reason of the defendant’s negligent misrepresentation.
The defendant relied heavily upon the majority in Cornwell speaking of Mr Cornwell’s prospective loss maturing into actual loss “at the end of [Mr Cornwell’s] service and upon the falling in of one or more of the statutory contingencies which had to be met for [him] to be entitled to a statutory benefit”. That statement must be considered in its context. Mr Cornwell’s claim was based on loss caused to him by reason of delay in him joining the CSS because of the Commonwealth’s negligence. But from 1987 onwards he was a member of the CSS or its successor scheme under the Superannuation Act1990 (Cth). Mr Cornwell’s retirement benefit provided the factual position. His counter-factual position was the benefit he would have been entitled to on his retirement but for the Commonwealth’s negligence.
It is not surprising that in the circumstances of Cornwell the High Court focussed on the statutory contingencies which had to be met before Mr Cornwell became entitled to a statutory benefit. Mr Cornwell’s retirement date became the date for accrual of his loss as that was the date on which it became clear what his actual entitlement would be, thus making it clear he had suffered a loss.
The plaintiff was not a member of a Commonwealth public sector superannuation scheme at the date he retired, so that his retirement date is not relevant to determining whether the statutory contingencies he would have been subject to had he preserved his benefits under the 1976 Act have fallen in such that it is clear that he has suffered a loss. The submission made by the plaintiff (as set out in par 25 above) that one of the contingencies that had to be fulfilled before he became entitled to a deferred benefit under the 1976 Act was his permanent retirement from the workforce, is wrong. That was the case prior to the passing of the Superannuation Legislation Amendment Act (No. 1) 1995 (Cth), which removed this condition on the payment of deferred benefits.
The date upon which it became clear whether the plaintiff suffered a loss by reason of the defendant’s negligent misrepresentation is set by s 138 of the 1976 Act. It is the date upon which deferred benefits would have been payable. On that date the counter-factual position crystallised such that it was possible to determine if the plaintiff had suffered a loss. Section 138 (2) of the 1976 Act, as in force from 1995 onwards, provides that deferred benefits are payable on the day immediately after the earliest of the following dates:
(a) the date on which the Commonwealth Superannuation Commission considers the person to have become totally and permanently incapacitated;
(b) the date of the persons death;
(c) a date selected by the person, so long as that date is after the persons minimum retirement age as set by the 1976 Act; or
(d) the persons 65th birthday.
For the plaintiff’s purposes, he became entitled to a deferred benefit on the day after he achieved his minimum retiring age, being his 55th birthday: s 3 of the 1976 Act. That date was 27 October 2004. On that date it was clear that all of the statutory contingencies had fallen in so as to entitle him to a benefit. To suggest that a later, arbitrary date chosen by the plaintiff (such as his date of retirement) is the appropriate date, effectively allows the plaintiff to choose the commencement of the limitation period, and is not mandated by reference to the relevant statutory scheme.
The plaintiff commenced the current proceedings on 1 February 2010, inside the six year limitation period which expired on 26 October 2010.
Result
The provisions of s 14 of the Limitation Act1969 (NSW) do not operate such that the causes of action pleaded by the plaintiff are not maintainable.
I certify that the preceding forty four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Burns.
Associate:
Date: 15 June 2012
Counsel for the plaintiff: Mr P Semmler QC and Mr R Davis
Solicitor for the appellant: Snedden Hall & Gallop
Counsel for the defendant: Mr S Estcourt QC
Solicitor for the defendant: Australian Government Solicitor
Date of hearing: 29 May 2012
Date of judgment: 15 June 2012
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