Kent v South Australian Superannuation Board - [2016] SADC 118

DISTRICT COURT OF SOUTH AUSTRALIA
(District Court Administrative and Disciplinary Division)
KENT v SOUTH AUSTRALIAN SUPERANNUATION BOARD
[2016] SADC 118
Judgment of His Honour Judge David Smith
30 September 2016
SUPERANNUATION - BENEFITS - GENERALLY
Appellant worked for a health service which was an agency of the government of South Australia - he thereby became a member of a superannuation scheme established under the Southern State Superannuation Act 2009 (SA) ('the Act') which was administered by the Respondent - the scheme provided, inter alia, benefits for members who were incapacitated for work - upon the Appellant being incapacitated for work he was paid Income Protection payments (also referred to in the legislation as a Disability Pension) - in the course of receiving the said payments the Appellant resigned - as a result the Appellant's payments were stopped - the Appellant complained - the Respondent upheld the decisions of the Scheme's officers to stop payments and relied upon a directive in sub-regulation 19 of Regulation 36 of the Southern State Superannuation Regulations 2009 (SA) ('the Regulations') that '... a person ... whose employment terminates ... ceases to be entitled to the pension ...'.
Appellant appeals pursuant to s25 of the said Act - held dismissing the appeal - that upon a proper construction of the ordinary grammatical meaning of the words of Regulation 36(19) the Appellant's entitlement to Income Protection payments ceased upon his resignation and the Scheme had no authority to continue making such payments.
Southern State Superannuation Act 2009 (SA) s 25; Southern State Superannuation Regulations 2009 (SA) 36(19); District Court Act 1991 ss 42E and 42F; Australian Education Union v Department of Education and Children's Services (2012) 248 CLR 1, referred to.

KENT v SOUTH AUSTRALIAN SUPERANNUATION BOARD
[2016] SADC 118
Introduction

On 1 July 2009, the Appellant, Julian Kent, began work, as a consultant psychiatrist, in the Central Northern Adelaide Health Service, which is an agency of the Government of South Australia. By reason of that employment, he became a member of the ‘Triple S’ Superannuation Scheme (the Scheme), which is administered by the Respondent, the South Australian Superannuation Board, under the Southern State Superannuation Act 2009 (‘the Act’).
The Appellant became incapacitated for work because of a Major Depression and thereby became entitled to Income Protection Benefits under the Scheme. There is no suggestion that the Appellant’s mental illness was caused by his employment in the Health Service. He successfully applied for those benefits. The payments, which were 75% of his salary, commenced on 13 February 2012 and were payable for a maximum period of two years. After some nine months away from work, he became convinced that his illness was not going to abate and so, on 13 November 2012, he resigned.
Immediately upon the Appellant’s resignation, the Income Protection Benefits were stopped. The Scheme’s Officers indicated to the Appellant that Regulation 36(19) of the Southern State Superannuation Regulations 2009 (‘the Regulations’) required that, upon resignation, the payments of Income Protection Benefits stop. The Appellant, by his solicitor, complained. The Respondent, who reviewed the decisions of the Scheme’s officers, upheld the decisions to stop the payments, and in doing so, confirmed that Regulation 36(19) required that Benefits cease upon resignation. That sub-regulation provides as follows:
(19)A person in receipt of a disability pension whose employment terminates, or is taken to have been terminated under regulation 6(4), ceases to be entitled to the pension from the day immediately following the day on which the employment terminates or is taken to have been terminated.
It should be noted here that Income Protection Benefits are characterised as ‘… a disability pension …’ under both the Act and the Regulations.
Evidence
The evidence from which the above summary was drawn was put before me by the parties in a statement of agreed facts and a book of agreed documents. I set out hereunder the details of that agreed evidence:
·The Appellant was employed as a senior consultant psychiatrist with the Central Northern Adelaide Health Service, on an ‘Ongoing Part-Time Basis’, from 1 July 2009. (See Agreed document 2.1.)
·By virtue of the employment the Appellant became a member of the ‘Triple S’ Superannuation Scheme.
·As a member of the Scheme, the Appellant was entitled to claim a Disability Pension, that is, Income Protection Benefits. For total incapacity, the Appellant was entitled to 75% of his salary which was payable for a maximum continuous period of two years.
·The Respondent administers the Scheme in accordance with the Act and Regulations.
·The Appellant suffered from a Major Depression which, by January 2012, totally incapacitated him for work. He claimed Income Protection Benefits by application dated 11 January 2012. (See Agreed document 2.2.)
·The application was accepted on 28 February 2012 and the Appellant was paid benefits from 13 February 2012. (See Agreed document 2.3.)
·The Appellant resigned from his employment effective from 13 November 2012. (See Agreed document 2.5.)
·The payment of benefits ceased from 13 November 2012, which was the effective date of the Appellant’s resignation. He was duly notified by the Manager of Account Services at Super SA. (See Agreed document 2.6.)
·The Appellant remained totally and continuously incapacitated for work for no less than two years following the commencement of Income Protection Benefits.
·The Appellant, through his solicitor by letter dated 23 September 2014, complained of the stopping of his benefits. (See Agreed document 2.7.)
·The complaint was rejected by letter dated 20 November 2014 from Patrick McAvaney who was Director, Policy and Governance, Super SA. (See Agreed document 2.8.)
·By letter dated 28 January 2016, the Appellant, by his solicitor, sought, a Review of that rejection by the Respondent. (See Agreed document 2.9.)
·Relying upon Regulation 36(19), the Respondent upheld the decision to cease Income Protection Benefits and advised the Appellant of its decision by letter dated 29 March 2016. (See Agreed document 2.10.)
Appeal
Pursuant to s 25 of the Southern State Superannuation Act 2009, the Appellant appeals, against the decision of the Respondent, to the Administrative and Disciplinary Division of this court. In particular the Appellant seeks an order setting aside the decision of the Respondent of 29 March 2016 and substituting it with an order, that he be paid Income Protection Benefits for the balance of the two year period, namely 15 months, plus interest.
Of the two grounds of appeal in the Notice of Appeal, the Appellant has proceeded only with ground one which is pleaded as follows:
(1)The Respondent erred in concluding that the expression “… whose employment terminates …”[1] was satisfied by the appellant’s resignation at all or alternatively where his resignation was based on total incapacity in respect of which fortnightly Income Protection Benefits were then being paid.
[1] Regulation 36(19) of the Southern State Superannuation Regulations 2009 (“the Regulation”).
The second ground of appeal which, inter alia, alleged a breach of fiduciary duty and/or good faith, was abandoned and further there was no argument directed to the assertion in the papers that an employee of Super SA orally represented to the Appellant that his entitlement to Income Protection Benefits was unaffected by his resignation. (See Agreed documents 2.7 and 2.8).
Sections 42E and 42F of the District Court Act 1991 set out this Court’s powers on appeal. In particular this Court is to give ‘due weight to the decision appealed against and not depart from the decision except for cogent reasons …’. Further, this Court has robust powers on appeal, including the power to affirm the decision appealed against on the one hand, or to rescind the decision and substitute a decision which it thinks appropriate on the other.
Arguments
Counsel for the Appellant submitted that ‘terminates’, in the context of sub-regulation 19 of Regulation 36 and in particular in the sentence ‘… a person whose employment terminates …’, means ‘automatically’ ceases or comes to an end. Counsel explained that by using the word ‘automatically’ he meant coming to an end because of something inherent in the employment such as the expiration of an agreed term of employment or the completion of a specific job which was the object of the employment. He contrasted that to a termination brought about by the agency or intervention of a person such as a resignation by the employee or a dismissal by the employer. It followed, argued counsel, that Regulation 36(19) had no application to the appellant’s situation and notwithstanding that he resigned he was entitled to be paid the balance of the two years of Income Protection payments. It was a bold invitation to the Court to read into the straightforward language of the sub-regulation what was a substantial qualification.
On the other hand the Respondent, by its counsel Mr Keane, submitted that to read down or qualify the word ‘terminates’ in the way contended for by the Appellant, would necessarily signify that its meaning was ambiguous. Rather, argued counsel, the word ‘terminates’ in its context in both the Regulations and the Act was an ordinary, well understood, plain English word meaning ‘to bring to an end’ and it should be given that ordinary grammatical meaning. It follows, argued Mr Keane, that when the Appellant resigned, his employment terminated within the meaning of Regulation 36(19) and as a consequence he ceased to be entitled to payments of Income Protection Benefits.
Such is a brief summary of the arguments put to me. I emphasise that I have taken into account the written Outlines of Submissions together with the oral arguments that were presented in court.
Decision
The outcome of this appeal turns upon the correct construction of sub-regulation 19 of Regulation 36 and, in particular, the word ‘terminates’ within the context of the language of the sub-regulation.
The word ‘terminates’ and its variations are not defined in either the Act or the Regulations. Accordingly, there is no special or extended meaning to be given to this ordinary English word.
In commencing this exercise of construing the Regulation I refer to the words of French CJ, Hayne, Kiefel and Bell JJ at paragraph [26] of their judgment in Australian Education Union v Department of Education and Children’s Services:[2]
The process of construction begins with a consideration of the ordinary grammatical meaning of the words of the provision having regard to their context and legislative purpose.
The ordinary meaning of ‘terminate’ is to ‘come to an end’. Dictionary definitions confirm that. The Shorter Oxford English Dictionary Third Edition 1975, and a range of other dictionaries, define ‘terminates’ as ‘… to bring to an end, put an end to, cause to cease; to end …’.
[2] (2012) 248 CLR 1 at [26].
The ordinary grammatical meaning of the word ‘terminates’ as particularised above, is not altered by the context in which it appears in the Act and Regulations. Rather, the literal plain and unqualified meaning of the word, in the context in which it appears in the legislation, is consistent with the discernible purpose of the Act, which is to provide superannuation and other insurance like benefits for employees of the State Crown. If a person ceases to be an employee of the State Crown, then he or she may be disentitled to benefits which arise from that employment, namely the receipt of Income Protection Benefits.
Further, if Parliament intended that resignation not give rise to a stopping of Income Protection Benefits it could have said so with ease. Indeed, the Act and Regulations are replete with such qualifications. I set out hereunder some of them:
·‘terminates … on account of invalidity’ in Regulations 6(4)(a)(i)(A), 53(12) and 58(1)(a) and 58(11);
·‘terminates … on account of invalidity or death’ in Regulations 6(4)(b) and 35(5);
·‘terminates … by retirement or resignation’ in Regulation 6(2) and 6(4)(b);
·‘terminates for any reason … except …’ in Regulations 54(3)(b), 55(13) and 59(11);
·‘terminates … by retrenchment’ in Regulation 57(1); and
·‘terminates … due to the expiry of the contract’ in Regulation 58(12a).
Accordingly, when the Appellant resigned his employment, effective on 13 November 2012, he not only terminated his employment but pursuant to Regulation 36(19) he forfeited his right to receive further payments of Income Protection Benefits. The decision by the officers of the Respondent and the Review decision of the Respondent were plainly correct. The Scheme had no authority to continue payments.
In my view it is the clear intention of Parliament, as embodied in the legislation and in particular Regulation 36(19), that upon resigning an employee member of the Scheme ceases to be entitled to pension benefits including Income Protection Benefits.
Accordingly, there is no basis to depart from the decision the subject of the appeal. The appeal is therefore dismissed.