Liebig v The Police Superannuation Board - [2005] SADC 38

DISTRICT COURT OF SOUTH AUSTRALIA
(District Court Administrative and Disciplinary Division)
LIEBIG v THE POLICE SUPERANNUATION BOARD
Judgment of His Honour Judge Lee
3 May 2005
STATUTES - ACTS OF PARLIAMENT - INTERPRETATION
Applicant sought review of decision of SA Police Superannuation Board to reduce his pension by reason of his receipt of workers compensation – applicant seriously and permanently injured in motor vehicle accident whilst in course of employment as police officer – applicant commenced common law proceedings against other driver, redeemed his entitlement to future workers compensation, and began to receive a pension under Police Superannuation Act – whether weekly payments that must be repaid to employer from common law damages under s.54(7) of the Workers Rehabilitation and Compensation Act are payments to which s.40(1) of Police Superannuation Act applies – whether words of s.40(1) ambiguous or open to more than one construction – application dismissed.
Police Superannuation Act 1990 ss. 39, 40(1) & 40(4); Workers Rehabilitation and Compensation Act 1986 s.54(7); Acts Interpretation Act 1915 s.22, referred to.
Bull v Attornery General (NSW) (1913) 17 CLR 370; Mills v Meeking (1990) 169 CLR 214, considered.

LIEBIG v THE POLICE SUPERANNUATION BOARD
[2005] SADC 38

This is an application to this Court pursuant to s.39 of the Police Superannuation Act 1990. The applicant is a former member of the South Australian Police Force (SAPOL). He seeks a review of a decision of the Police Superannuation Board to reduce his pension by reason of his receipt of workers compensation.
The purpose of the Police Superannuation Act is to provide income maintenance for members and former members of SAPOL and their dependents during periods when they do not receive salary because of retirement (ss.21 and 28), retrenchment (ss.23 and 29), disability or invalidity (ss.24, 25, 30 and 31) and death (ss.26, 32 and 33).
The applicant joined the SA Police Superannuation Fund on 4 June 1973, and thereafter made contributions to the Fund from his salary in accordance with the Act.
On 2 February 1993, the applicant was seriously injured in a motor vehicle accident whilst in the course of his employment as a police officer. He became substantially and permanently incapacitated as a result. He began to receive payments of compensation under the Workers Rehabilitation and Compensation Act 1986 in the form of income maintenance and medical and like expenses.
In 1995, he commenced common law proceedings in this Court against the other driver.
On 4 September 2001, he entered into an agreement to redeem his entitlement to future payments of compensation.
On 24 September 2001, he resigned from his employment with SAPOL on grounds of invalidity.
On 7 November 2001, he began to receive his pension after his annual leave entitlement had expired.
On 26 September 2002, the Crown Solicitor’s Office gave notice to the applicant of SAPOL’s intention to recover all of the compensation that had been paid to him, totalling $572,118.23. The sum included a s.43 payment of $143,693.10 and a redemption payment of $110,000.
On 13 November 2002, the applicant settled his common law claim with the driver’s insurer, and received, after a reduction of 10% for contributory negligence, the sum of $1,375,000.
On 6 March 2003, a representative of the Fund wrote to the applicant’s solicitors advising that the applicant’s notional pension entitlement of $1,111 gross per fortnight would be reduced by an amount of $292.30 gross per fortnight in accordance with s.40(4) of the Act. It is that advice which has led to the application to this Court.
It will now be convenient to quote the relevant provisions of s.40 of the Police Superannuation Act:
“(1)Where at any time during a financial year a contributor who is receiving, or would, but for this subsection, be entitled to receive, a pension under another provision of this Act is also receiving or entitled to receive—
(a) weekly payments of workers compensation; or
(b) in the case of a relevant contributor—income from remunerative activities engaged in by the contributor,
the following provisions apply:
(c) the pension will be reduced by the amount of the workers compensation payments and, if those payments equal or exceed the amount of the pension, the pension will be suspended;
….
(4)Where a right to weekly workers compensation payments has been surrendered in whole or in part by commutation or by agreement, the person who would have been entitled to those payments if the right to them had not been surrendered will be taken, for the purposes of this section, to be receiving them unless—
(a) if the person is a contributor—the contributor has reached the age of 60; or
(b) if the person is the spouse of a deceased contributor—the contributor would have reached the age of 60 if he or she were still alive.”
The submission of the applicant’s counsel is that subsection (4) operates upon the assumption that, but for redemption, the applicant would have continued to receive weekly payments of workers compensation as of right to keep for himself. I have underlined the key words of the submission. If, as is the case here, the payments are subject to a charge in favour of the employer, or to the applicant’s obligation to repay them to the employer, the applicant will not have “received” the payments in any relevant sense. He will not have received them as of right to keep for himself. Indeed, he may have been in possession of the payments for no more than a day.
I should mention that s.54(7) of the Workers Rehabilitation and Compensation Act 1986 is the provision which entitles the Workcover Corporation or an exempt employer to recover compensation paid or payable to an employee from damages which the employee has received or is entitled to receive from a wrongdoer. SAPOL is an exempt employer.
So the question for decision is whether weekly payments that must be repaid to the employer from common law damages are payments to which s.40(1) of the Police Superannuation Act applies.
Counsel for the applicant described such payments as a temporary or non-beneficial receipt, more like the receipt of an agent coupled with an entitlement to use the money until such time as it is repaid.
Counsel submitted that, because there is no double receipt in those circumstances, a reduction in the pension would defeat the purpose of s.40 which is to prevent the receipt of double compensation. Citing Bull v Attorney General (NSW) (1913) 17 CLR 370 at 384, counsel submitted that the Act is of a remedial or beneficial nature, and as such “should be construed so as to give the fullest relief that the fair meaning of its language will allow”.
Counsel submitted that the provision by the Act of a level of benefits reflects a social contract with employees to reward them for the work that they do and the investment that they make through their contributions.
As for the word “receiving” and “receive”, counsel asked: does it mean receive beneficially or does it mean receive for the time being or does it mean receive subject to an obligation to repayment? Counsel said that this ambiguity should be resolved by giving the words the fullest relief that a fair reading of the Act would allow and that would be consistent with the purpose of the Act.
The submission of the respondent’s counsel is that, according to the clear meaning of s.40(1) of the Police Superannuation Act, a pension must necessarily be reduced by the amount of actual weekly payments, or deemed weekly payments in the event of redemption, and that, if Parliament had intended to make an exception in the case of weekly payments that are refundable from common law damages, it would have said so.
Counsel made the point that the Workers Rehabilitation and Compensation Act, including s.54(7), was enacted in 1986, whereas the Police Superannuation Act was enacted in 1990. Section 40(1) of the latter Act has been amended twice since then, but on neither occasion did Parliament see fit to qualify the meaning of “receiving” and “receive” in subsection (1).
Counsel referred to s.22 of the Acts Interpretation Act 1915 which states that, in the event that a provision is reasonably open to more than one construction, a construction that would promote the purpose or object of the Act must be preferred. In Mills v Meeking (1990) 169 CLR 214 at 235, Dawson J said of the Victorian equivalent of s.22:
“The requirement that a court look to the purpose or object of the Act is thus more than an instruction to adopt the traditional mischief or purpose rule in preference to the literal rule of construction. The mischief or purpose rule required an ambiguity or inconsistency before a court could have regard to purpose: (citations omitted). The approach required by s 35 needs no ambiguity or inconsistency; it allows a court to consider the purposes of an Act in determining whether there is more than one possible construction. Reference to the purposes may reveal that the draftsman has inadvertently overlooked something which he would have dealt with had his attention been drawn to it and if it is possible as a matter of construction to repair the defect, then this must be done. However, if the literal meaning of a provision is to be modified by reference to the purposes of the Act, the modification must be precisely identifiable as that which is necessary to effectuate those purposes and it must be consistent with the wording otherwise adopted by the draftsman. Section 35 requires a court to construe an Act, not to rewrite it, in the light of its purposes.”
In the end, I consider that the literal meaning of s.40(1) should prevail. It is true that an employee who forgoes weekly payments and elects to rest content with common law damages will receive a higher level of pension than an employee who does not. It is also true that two employees who sustain identical injuries in an accident which gives rise to the payment of common law damages, one injured in the course of his employment and the other not, will receive different levels of pension if the employee in the course of his employment elects to receive weekly payments of compensation.
However that may be, I agree with counsel for the respondent that those differences are a necessary consequence of the words that Parliament has used, and that any attempt by me to overcome them would amount to a rewriting of the legislation.
Moreover, as counsel for the respondent pointed out, the applicant’s construction would produce difficulties of its own. Counsel posed the case of an employee who elects to receive his future compensation from his employer by way of weekly payments rather than by way of redemption. If that employee receives or is entitled to receive common law damages, the employer would be entitled to recover from those damages the present value of its outstanding liability to the employee. Yet, notwithstanding the absence of any double receipt in those circumstances, s.40(1) would still operate upon the employee’s continuing receipt of weekly payments to reduce his pension.
I do not find any ambiguity in the words “receiving” and “receive” in s.40(1). I consider that they mean the physical acceptance of something. A person “receives” a weekly payment in my view, irrespective of whether he does so beneficially or otherwise. Nor, reverting to s.22 of the Acts Interpretation Act, do I consider that s.40(1) is reasonably open to more than one construction.
In the result, the application is dismissed.