Mulcahy v Hydro-Electric Commission
[1998] FCA 605
•3 JUNE 1998
BARRY MULCAHY AND OTHERS
v.
THE HYDRO-ELECTRIC COMMISSION
JUDGMENT
Federal Court of Australia
FEDERAL COURT OF AUSTRALIA
CONTRACT - implication of term as a necessary incident of a definable category of contractual relationship - employment contract - whether implied term that employer advise board of superannuation fund or employee of employee’s right to elect to contribute to fund
EMPLOYMENT LAW - contract of employment - whether implied term that employer advise board of superannuation fund or employee of employee’s right to elect to contribute to fund
EQUITY - unconscionable conduct - Trade Practices Act 1974 (Cth) s 51AA - whether respondent Commission’s conduct in requesting Tasmanian Government to enact retrospective legislation to defeat potential causes of action against it constituted unconscionable conduct - whether imbalance of power amounts to special disadvantage - whether acting to protect one’s own interests unconscionable - whether unconscionable conduct gives rise to a claim for damages - whether relief available where unconscionable conduct not connected with a transaction in respect of which relief is claimed
LIMITATION OF ACTIONS - Trade Practices Act 1974 (Cth) ss 82(2), 87(1CA)(a) - Limitation Act 1974 (Tas) s 4(1)(a) - time of accrual of cause of action - failure to notify of right to elect to contribute to superannuation fund where legislation gives right to elect to contribute - whether cause of action accrues when applicant became aware of right to contribute - whether knowledge of right to sue essential ingredient of cause of action - whether cause of action accrues upon termination of employment - Limitation Act 1974 (Tas) s 32(1) - fraud or concealment of right of action - whether limitation period runs from date of discovering fraud or concealment - whether “fraud” involves moral turpitude
NEGLIGENCE - whether employer under duty to advise board of superannuation fund or employee of temporary employee’s right to elect to contribute to fund - whether general reliance relevant - employer not a public body with statutory duty to regulate activities which may cause loss or damage to members of public - whether continuing duty to advise after employment ceased - whether breach of duty - what constitutes sufficient notification of right to elect to contribute to fund- whether deliberate policy by employer to conceal right to elect - causation - whether employees would have elected to contribute if aware of right to elect
STATUTES - statutory powers and duties - breach of statutory duty - whether statutory corporation under duty to advise board of superannuation fund or employee of temporary employee’s right to elect to contribute to fund - Retirement Benefits Act 1982 (Tas) s 82A - Retirement Benefits Regulations 1982 (Tas) regs 24(1)(ab), (ac) - obligation of “responsible officer” to notify board of fund of appointment of employee and to forward necessary forms for medical examination to employee - whether legislation created a cause of action for damages for breach of statutory duty - whether duty exists where penalty is imposed for breach of statute or regulations - whether duty imposed on commission
SUPERANNUATION - Retirement Benefits Act 1982 (Tas) - Retirement Benefits Fund - employees of Hydro-Electric Commission - permanent employees obliged to join - temporary employees may elect to join - whether permanent or temporary employee - date of determination of permanency - whether number of years’ service determinative - entry into fund precluded entitlement to benefits under Public Servants Retiring and Death Allowances Act 1925 (Tas) - duty of “responsible officer” to notify board of fund and employees of rights and obligations in relation to contribution - whether duty breached - entitlement to “buy back” previous years’ employment where join fund after commencement of employment - effect of retrospective legislation attempting to preclude causes of action based upon failure of responsible officer to notify of right to elect to contribute
TRADE PRACTICES - misleading or deceptive conduct - Trade Practices Act 1974 (Cth) s 52 - Fair Trading Act 1990 (Tas) s 14 - representation by employer that temporary employees not entitled to join superannuation fund - representation by silence - alleged failure to advise board of superannuation fund or temporary employees of right to elect to join fund - whether representations in “trade or commerce” - internal communication between employer and employee - Trade Practices Act 1974 (Cth) s 51AA - whether respondent Commission’s conduct in requesting Tasmanian Government to enact retrospective legislation to defeat potential causes of action against it constituted unconscionable conduct - whether conduct in “trade or commerce” - whether s 51AA operates retrospectively - whether damages available for breach of s 51AA
WORDS AND PHRASES - “employed in a permanent capacity” - “employment of a temporary nature” - “in respect of” - “enactment” - “fraud”
Federal Court of Australia Act 1976 (Cth) Pt IVA
Public Service Superannuation Fund Act 1905 (Tas)
Public Service Act 1905 (Tas) ss 3, 67
Public Servants Retiring and Death Allowance Act 1925 (Tas) ss 2A, 3, 4
Hydro-Electric Commission Act 1929 (Tas)
Superannuation Act 1938 (Tas) ss 3, 4, 8, 18, 19, 20, 28, 29, 30, 31, 43, 48
Public Service Act 1918 s 95
Public Service Act 1923 s 51
Retirement Benefits Act 1970 (Tas) ss 2, 2AA, 21, 23, 24, 25, 25A, 26, 28A, 29, 62
Retirement Benefit Act (No.2) 1974 (Tas)
Retirement Benefit Act (1982) (Tas) ss 3, 4, 5, 6, 10, 20, 23, 25, 29, 30, 32, 35, 72, 80, 82A, 87, 88, 90A
Income Tax Assessment Act 1936 (Cth) s 82AAT
Superannuation Regulations 1945 (Tas) reg 31
Retirement Benefits Regulations 1971 (Tas) reg 22
Retirement Benefits Regulations 1982 (Tas) reg 24
Retirement Benefits Amendment Regulations 1985 (Tas)
Retirement Benefits Amendment Act 1993
The Complex Ores Act 1909 (Tas)
Hydro-Electric Purchase Act 1914 (Tas)
Hydro-Electric Commission Act 1929 (Tas) ss 21, 26, 27, 28, 29
Hydro-Electric Commission Act 1944 (Tas) ss 15, 16
Hydro-Electric Commission Rules 1939 (Tas) rr 30A(1), 39A
Trade Practices Act 1974 (Cth) ss 51AA, 52, 81, 87
Fair Trading Act 1990 (Tas) s 14
Limitation Act 1974 (Tas) ss 4(1)(a), 32
Contravention of Statutes Act 1889 (Tas)
Hydro-Electric Commission Rules 1978 (Tas) rr 19, 40
Local Government Act 1958 (Vic)
Acts Interpretation Act 1931 (Tas) s 5
Re Goodwin [1986] Tas R 6 discussed
Rollins v The Hydro-Electric Commission [1953] Tas SR 42 mentioned
Launceston Corporation v The Hydro-Electric Commission (1959) 100 CLR 654 mentioned
Tasmanian Dam Case (1983) 158 CLR 1 mentioned
Haines v Woy Woy Shire Council (1933) 11 LGR (NSW) 99 distinguished
Williamsv Macharg (1910) 10 CLR 599 distinguished
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 applied
Byrne v Australian Airlines Limited (1995) 185 CLR 410 applied
O’Connor v S P Bray Ltd (1937) 56 CLR 464 applied
X (Minors) v Bedfordshire County Council [1995] 2 AC 633 applied
Darling Island Stevedoring and Lighterage Co Ltd v Long (1957) 97 CLR 36 applied
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 applied
Scally v Southern Health and Social Services Board [1992] 1 AC 294 distinguished
Liverpool City Council v Irwin [1977] AC 239 mentioned
Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1986] AC 80 applied
Hawkins v Clayton (1988) 164 CLR 539 mentioned
Macpherson & Kelly v Kevin J Prunty & Associates [1983] 1 VR 573 mentioned
Pyrenees Shire Council v Day (1998) 72 ALJR 152 applied
Sutherland Shire CouncilvHeyman (1985) 157 CLR 424 mentioned
Stovin v Wise [1996] AC 923 mentioned
Concrete Constructions (NSW) Pty Ltd vNelson (1990) 169 CLR 594 applied
Boheto Pty Ltd v Sunbird Plaza Pty Ltd [1984] 2 Qd R 9 mentioned
R v Kidman (1915) 20 CLR 425 mentioned
Polyukhovich v The Commonwealth (1991) 172 CLR 501 mentioned
Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 applied
Blomley v Ryan (1956) 99 CLR 362 applied
Louth v Diprose (1992) 175 CLR 621 applied
Cooke v Gill (1873) 8 LR CP 107 applied
Wardley Australia Limited v Western Australia (1992) 175 CLR 514 applied
Gregg v Tasmanian Trustees Limited (1997) 143 ALR 328 applied
Torrens Aloha Pty Ltd v Citibank NA (1997) 144 ALR 89 applied
Invercargill City Council v Hamlin [1996] AC 624 discussed
Hamilton v Kaljo (1987) 17 NSWLR 381 followed
Kerry Pink “Through Hell’s Gates: A History of Strahan and Macquarie Harbour” (3rd ed, 1997)
BARRY MULCAHY AND OTHERS v THE HYDRO-ELECTRIC COMMISSION
NO. TG 1 of 1996
JUDGE: HEEREY J
DATE: 3 JUNE 1998
PLACE: HOBART
IN THE FEDERAL COURT OF AUSTRALIA
TASMANIA DISTRICT REGISTRY
TG 1 of 1996
BETWEEN:
BARRY MULCAHY AND OTHERS
APPLICANTSAND:
THE HYDRO-ELECTRIC COMMISSION
RESPONDENTJUDGE:
HEEREY J
DATE OF ORDER:
3 JUNE 1998
WHERE MADE:
HOBART
THE COURT ORDERS THAT:
All applicants file and serve within 14 days submissions as to the form of final orders, including orders as to costs.
The respondent file and serve submissions in reply within seven days thereafter.
Further hearing adjourned to a date to be fixed.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
TASMANIA DISTRICT REGISTRY
TG 1 of 1996
BETWEEN:
BARRY MULCAHY AND OTHERS
APPLICANTSAND:
THE HYDRO-ELECTRIC COMMISSION
RESPONDENT
JUDGE:
HEEREY J
DATE:
3 JUNE 1998
PLACE:
HOBART
CONTENTS
Page
INTRODUCTION 1
The issues 1
Retirement Benefits legislation
(a)Public Service Superannuation Fund Act 1905
(“the 1905 Act”) 2
(b) Public Servants Retiring and Death Allowances
Act 1925 (“the 1925 Act”) 2
(c) Superannuation Act 1938 (“the 1938 Act”) 3
(d) Retirement Benefits Act 1970 (“the 1970 Act”) 5
(e) 1974 Amendments: RBF election for temporary
employees; buy back of contribution 6
(f) Retirement Benefits Act 1982 (“the 1982 Act”) 7
(g) Election under the 1925 Act 11
(h) Notification obligations of “responsible officers” 11(i) 1989 Amendments: further buy back provisions 14
(j) Retirement Benefits Amendment Act 1993 (“the 1993 Act”) 15
The “jackpot” 15
The Hydro’s operations 18
(a) Construction activity 18
(b) Administrative structures 23
(c) Employment categories 24
The pleadings 25
(a) Statement of claim 26
(b) Defence 30
(c) Reply 31
PERMANENCY 31
“Employed in a permanent capacity” 31
Hydro policies as to permanency 36
Employment history of the applicants 42
(a) Cooper 42
(b) Duggan 43(c) Johnstone 44
(d) Mulcahy 45
(e) Vlagsma 46
(f) Williams 46
Conclusion on permanency 47
THE ALTERNATIVE CASE - TEMPORARY EMPLOYMENT 48
Duty to advise applicants or RBF Board during 48
employment
(a) Under statute 48
(i) Was there a right of action? 49
(ii) Was the duty imposed on the Hydro? 51
(b) Under contract 52
(c) In tort 55
Misleading and deceptive conduct 57
Continuing duty 58
Breach of duty (if owed) 59
(a) What the Hydro did 60
(i) Procedures 60
(ii) Head Office circular 65
(iii) Blue Book 66
(iv) Staff manual 71
(v) The Jack Russell meeting 72
(vi) RBF Seminars 75
(b) Conclusion 75
Causation (if breach of duty) 77
(a) Cooper 77
(b) Duggan 80
(c) Johnstone 82
(d) Mulcahy 84
(e) Vlagsma 93
(f) Williams 94
(g) Conclusion 98
Damages (if recoverable) 99
THE 1993 RETROSPECTIVE LEGISLATION 100
Construction 100
(a) The law 100
(b) “in respect of” 100
(c) “enactment” 101
Unconscionable conduct 102
(a) The law 102
(b) Negotiations with Government 103
(c) Special disadvantage 103
(d) Whether conduct unconscionable 104
(e) Unconscionable conduct as a cause of action 105
LIMITATION DEFENCES 105
Accrual of causes of action 105
Fraud and concealment 107
SUMMARY OF FINDINGS 108
ORDERS 109
ACKNOWLEDGMENTS 109
REASONS FOR JUDGMENT
INTRODUCTION
The issues
The 194 applicants in this proceeding were formerly employees of the respondent, the Hydro-Electric Commission (“the Hydro”). Their employment terminated as a result of their retirement or retrenchment in the late 1980s or early 1990s. They claim that as a consequence of wrongful conduct by the Hydro they have lost the opportunity to obtain benefits under the Retirement Benefits Fund Scheme (“the RBF Scheme”). The RBF Scheme provided retirement benefits for employees of the Tasmanian Government and instrumentalities such as the Hydro. Permanent employees were obliged to join. From December 1974 onwards temporary employees could elect to join.
The applicants say that they were in truth permanent employees, and not temporary as the Hydro contends. Alternatively, the applicants say that if they were temporary employees the Hydro wrongfully neglected to inform them of their right to elect to join the RBF Scheme and in some instances positively misled them as to such rights.
This proceeding commenced as a representative proceeding under Pt IVA of the Federal Court of Australia Act 1976 (Cth). For a variety of reasons this procedure proved to be impracticable. Part IVA was abandoned and the proceeding has continued in the conventional way. However, the parties have agreed that six of the applicants are typical of various categories of applicants whose employment commenced and terminated at different times. Those times have legal significance for, amongst other things, limitation defences. By an order made on 27 June 1997 it was directed that the six selected applicants
“... be approved as being generally representative of all applicants in this matter and a trial on liability and damages be held concerning the selected applicants in a manner intended to bind all applicants and the respondent in respect of the principles applicable to liability save any differing personal circumstances of the other applicants.”
Unless the context otherwise indicates, I shall hereafter use the expression “the applicants” as meaning the six selected applicants.
Retirement Benefits legislation
I shall refer briefly to relevant aspects of successive legislation dealing with superannuation or retirement benefits (for present purposes there appears to be no legal significance in the use of one term rather than another). All legislation hereafter referred to is Tasmanian, unless otherwise indicated.
(a)Public Service Superannuation Fund Act 1905 (“the 1905 Act”)
This Act established a Superannuation Fund for benefits for each “Officer”, which was defined (s 2) to mean a person employed in any branch of the Public Service (unless engaged under a special contract) -
“... whose employment shall, in the opinion, expressed in the prescribed manner, of the Board and of the Minister controlling the Department in which such a person is employed, be of a permanent character.”
In the same year the Public Service Act 1905 came into force. By s 3, the Act applied to “all persons employed in any capacity in the Public Service”. No distinction was drawn between permanent and temporary employees.
(b) Public Servants Retiring and Death Allowances Act 1925 (“the 1925 Act”)
This Act provided for payment out of Consolidated Revenue of retirement and death allowances for public servants. In the case of retirement on account of sickness, compulsory retirement due to age, abolition of position or services becoming unnecessary, or voluntary retirement after age sixty, the allowance was to be an amount equalling one month’s salary for the first four years of service and one week’s salary for every full year of such further period: s 3. Payments were also to be made to the personal representative of a public servant in the case of death: s 4.
“Public servant” was defined to mean a person employed “in any position or capacity in the Public Service” other than a judge of the Supreme Court, a person remunerated by fees, allowance or commission, or a person not exclusively employed in the Public Service. “Public Service” was defined to mean “the Public Service of the State” and to include “any industry or undertaking carried on by or on behalf of the State”. Hydro-electric operations at this stage were conducted by a Government department. The Hydro did not become a statutory corporation until 1929 with the passing of the Hydro-Electric Commission Act 1929.
By s 2A, inserted by Act No 105 of 1977, a contributor under the 1938 Act or the 1970 Act (as to which Acts see (c) and (d) below) could, by notice given at least three months before retirement, elect to receive benefits under the 1925 Act in lieu of benefits or refund of contributions under the 1938 or 1970 Acts.
Features of the 1925 Act which are important for the present case are:
·it extended to temporary employees;
·no contribution by the employee was required; and
·the Act and the RBF Scheme were mutually exclusive in the sense that a person could not receive benefits under both.
(c) Superannuation Act 1938 (“the 1938 Act”)
This Act created a superannuation fund for State employees. By s 3, “employee” was defined to mean any person of or over the age of fifteen years
“... employed in a permanent capacity by or on behalf of the State in any department or branch of any of the services of the State or any undertaking carried on by or on behalf of the State, and includes any officer, the term of whose appointment is fixed by law, but excepting any person -
i Whose employment is of a casual or temporary nature:
iiWho is not required by the terms of his employment to give his full time to his duties:
iii Who is employed as an agent only:
ivWho is remunerated by fees, allowances, or commission only:
vWho is a contributor to the Superannuation Fund established under the laws of the Commonwealth for the Commonwealth Public Service or who, having been such a contributor, has ceased to be so by reason of age or:
viWhose appointment is honorary -
and excepting also the judges of the Supreme Court and the members of the Police Force for whose benefit the Police Provident Fund is applicable”.
By s 4 a Fund was established, into which were to be paid all contributions of employees, all payments by the Treasurer as provided by the Act, and all income from investment. Contributions were mandatory for employees (as defined); by s 18(1) it was provided:
“Except as otherwise in this Act provided, every employee under the age for retirement shall contribute to the Fund as hereinafter provided.”
The contributions of employees were to commence, in the case of existing employees, on a day to be appointed by the Governor and in any other case “from the time of his [the employee’s] appointment”: s 18(3). Contributions were to be made by deductions from salary: s 19(1). The contributions were to be for units determined according to salary: s 20.
Part V provided for Pensions and Benefits. Pensions were payable either on the employee reaching the age for retirement or on the employee’s early retirement on the grounds of “invalidity not due to his own fault”: s 28. Under s 29 a qualified pension was payable upon compulsory retirement due to the employee’s position becoming unnecessary, or due to shortage of work, or upon voluntary retirement on reaching age 60 (male) or 55 (female). Contributions were repayable, but without interest, upon either termination of employment for any cause other than death, or termination under ss 28, 29 and 30. In the case of death, pensions were payable to widows (Pt V Div II) and children (Pt V Div III), but otherwise death before retirement resulted in contributions being paid to the employee’s personal representative or to such person as the Board might determine, again without interest: s 31.
Part VI of the 1938 Act dealt with the 1925 Act. By s 43(1) of the former, no right or benefit under the 1925 Act was to accrue to any employee (i.e. permanent employee - see above) in respect of any period of service after the commencement of the 1938 Act and the provisions of the 1925 Act were not to apply to any employee appointed after the commencement of the 1938 Act.
By s 48(1) an exception was made in the case of an employee who at the commencement of the 1938 Act had completed thirty years’ service and had attained the age of sixty years. Such a person was given a right to elect to retain the gratuity provided by the 1925 Act but could thereafter take no benefit under the 1938 Act and could not be “compelled or permitted” to contribute under the latter Act.
Since no permanent employee could obtain a benefit under the 1925 Act there might be hardship in relation to such employees who were rejected as contributors under the 1938 Act on medical grounds. Section 43 of the 1938 Act was amended in 1943 to enable such persons to continue to be eligible for a benefit under the 1925 Act.
The dichotomy between, on the one hand, superannuation or retirement benefits legislation and, on the other hand, the 1925 Act, was retained throughout the time with which this case is concerned, although, as will be seen, subject to some further qualifications.
The observation can be made that although the 1925 Act was, from 1938 onwards, primarily for temporary, as opposed to permanent employees, the temporary employment contemplated was by no means transitory or short term. Such employment had many of the characteristics of permanency, and certainly was employment for a long time. Leaving aside sickness, death, redundancy and the like, the primary benefit required not only service for at least four years, but reaching the age of sixty. Thus Parliament recognized that “temporary” employment in the public sector could last for a full working life.
Although the 1938 Act extended to State undertakings such as the Hydro, it was at heart a superannuation scheme for public servants. In the case of public servants the criteria of permanency presented no difficulty because it was simply a question of whether the particular person had been gazetted: see Public Service Acts 1905, s 67; 1918, s 95; 1923, s 51. The distinction between temporary and permanent employees under a Public Service Act was important for the purposes of security of tenure. Temporary employees could be dismissed at any time; dismissal as a permanent employee was hedged with substantial restrictions: see 1918 Act ss 51 and 70; 1923 Act ss 31(11) and 26.
(d) Retirement Benefits Act 1970 (“the 1970 Act”)
This Act introduced a new scheme to be administered by a Board called the Retirement Benefits Fund Board (“the Board”). The definition of “employee” in s 2(1) was for present purposes in substance the same as that in the 1938 Act. A person had to be employed “in a permanent capacity” and the definition excluded any person “whose employment is of a casual or temporary nature”.
Contribution by an employee was mandatory: s 21. Contributions were payable by deduction from salary: s 24. Contributions for new employees were to commence from the day on which he was appointed “to the position by virtue of which he is an employee”: s 23(1)(b). Contributions were to be 5.5 per cent of salary or, at the election of the employee, 2.75 per cent: s 25(4). A pension was payable where a contributor retired on obtaining retirement age, or elected to retire within five years of attaining that age, or retired on the ground of invalidity not due to his own fault: s 26.
The annual pension on retirement was to be one sixtieth of the employee’s average salary in the three years preceding retirement multiplied by the years of service: s 26. “Service” was defined to mean the period during which the person contributed to the Fund: s 2(1). On resignation before retiring age, contributions were refundable, but without interest: s 29.
Rights and benefits for contributors ceased to accrue under the 1925 Act after the appointed day (1 July 1971) and the 1925 Act did not apply to a person who became an employee on or after the appointed day, save for those unable to satisfy medical examination: s 62.
(e) 1974 Amendments: RBF election for temporary employees; buy back of contribution
By the Retirement Benefits Act (No. 2) 1974, effective 19 December 1974, s 2AA was inserted in the 1970 Act. Sub-section (1) provided that a person who was not an employee but was employed in a temporary capacity could elect to become a contributor if during the past twelve months he had been continuously employed in a temporary capacity, and a certificate was issued by the appropriate authority stating that he was “likely to remain in employment for at least three years”. Sub-section (4) provided:
“On the making by a person of an election under this section he shall be deemed to become an employee within the meaning of this Act and to remain such an employee for so long as he is employed in a temporary capacity or as an employee.”
Sub-section (5) provided:
“For the purposes of this section a person shall be deemed to be employed in a temporary capacity if he is employed in such circumstances that had he been so employed in a permanent capacity he would have been an employee within the meaning of this Act ... ”.
A contributor by virtue of s 2AA was not to be entitled to benefits on retirement unless he had completed three years’ service: s 28A.
The 1974 amendment also introduced a new s 25A which provided for what came to be referred to as “buy back” of contribution. The buy back scheme operated as follows. The contributor could give notice to the Board that his length of service be increased by the period specified in the notice: sub-s (1). That notice had to be given within three months of the commencement of s 25A or on the employee becoming a contributor for full benefits: sub-s (2). The contributor had to be at least age thirty: sub-s (3). The request was to be accompanied by a medical certificate to the effect that the person was not likely to be rendered incapable before retirement age of performing his duties: sub-s (5). The Board was to obtain from an actuary an opinion as to the amount of the actuarial equivalent of the additional total pension benefit that would be derived under the Act for the period of service so increased: sub-s (6). The employee would then pay to the Board either in a lump sum or in such other manner as the Board might approve the amount stated in the actuarial opinion.
The right to buy back did not apply to a contributor who was an employee by virtue only of s 2AA. However if he became an employee (i.e. permanent employee) otherwise than by the operation of that section he could make a request within three months of becoming such an employee: s 25A(4).
(f) Retirement Benefits Act 1982 (“the 1982 Act”)
This Act replaced the 1970 Act. In relevant respects it was not substantially different from that Act.
The definition of “employee” in the 1982 Act was more complex in that it referred specifically to a number of Government instrumentalities. Relevantly, “employee” was defined in s 3(1) as:
“a person who has attained the age of 15 years and who is -
...(b)employed in a permanent capacity by the Hydro-Electric Commission”.
The exclusion of temporary employees is contained in s 4:
“4 This Act does not apply to -
(a) a judge; or(b)a person -
(i) whose employment is of a casual or temporary nature (not being a person to whom paragraph (k) of the definition of ‘employee’ in section 3(1) relates [i.e. student nurses at certain specified hospitals]).”
Other sub-paragraphs under (b) cover much the same categories as those excluded in earlier Acts - agents, persons employed by fees and commissions, Commonwealth superannuation contributors etc.
The right of election for contribution by temporary employees, introduced in 1974, was continued. The right could be exercised where there had been twelve months’ continuous employment and the employee obtained a certificate of likely employment for a further three years: s 5. An additional right was given to those who completed four years’ continuous employment but were unable to obtain such a certificate: s 6.
The following provisions of the 1982 Act corresponded to those in the 1970 Act already mentioned. The Board constituted under the 1970 Act was to continue in existence: s 10, as was the Fund: s 20. Contributions for existing contributors or new employees remained mandatory: s 23(1). Contributions of an employee were to commence
“on the day on which he is appointed to the office or position by virtue of which he is an employee or on the day on which he is accepted by the Board as a contributor for full benefits or limited benefits, whichever is the later day”: s 25(1)(b).
Other provisions refer to discretionary powers of the Board to in effect waive medical requirements: ss 23(5) and (6).
Contributions were fixed by s 28 and schedule 3. Rates were set as a percentage of salary as follows:
percentage
40 years’ service higher rate 5.50
40 years’ service lower rate 2.75
35 years’ service 8.00
30 years’ service 11.00
Section 29 continued the “buy back” provisions introduced by the 1974 amendments, although this right was still not available to temporary employees who became contributors as a result of election: s 29(5).
Part V prescribed the pensions and other benefits payable. Basically the qualification was the same as under the 1970 Act, i.e. retiring, attaining retiring age or within five years thereof, or retiring at any time on the ground of invalidity not due to the employee’s own fault: s 30. There was provision for pensions for employees retiring between age 55 and 60: s 32. The rate of pension was to be calculated in accordance with schedule 4. The formula therein worked by reference to average annual salary in the twelve months preceding retirement, the length of “service” (i.e. the period during which the employee contributed: s 3(1)) and a factor dependent on the rate of contribution (40 years’ service higher rate or lower rate, 35 years’ service scheme or 30 years service scheme).
Section 35 governed refund of contributions where an employee resigned without becoming entitled to a pension. The “prescribed sum of money” was payable. By s 35(4), a contributor to the 40 years’ service scheme only recovered contributions. A contributor to the 35 and 30 years’ service schemes recovered:
(i)that part of his total contribution which he would have paid if he had always been a contributor to the 40 years’ service scheme; and
(ii)the amount of the balance of his contributions (being the amount attributable to the 35 or 30 years’ service scheme) together with interest at a rate to be determined by the Board from year to year, but not less than 3.5 per cent.
(By Act No. 21 of 1987 a new s 90A was inserted which conferred a general right to interest where persons were entitled to refunds of contribution. Interest was to be at a rate determined by the Board on actuarial advice and was to accrue from 1 April 1987.)
In relation to the 1925 Act, s 72 of the 1982 Act continued the effect of s 62 of the 1970 Act, i.e. no rights or benefits were to accrue to an employee under the 1925 Act after 1 July 1971 and the 1925 Act was not to apply to a person who became an employee from 1 July 1971 onwards.
However, ss 72(3) and 73 preserved rights under the 1925 Act for employees who could not obtain the necessary medical certification and also persons who made an election under s 2A of the 1925 Act.
Sections 87 and 88 conferred certain powers on the Board. Those sections relevantly provided:
“87(1) Where the Board is satisfied, after such inquiry as it thinks necessary, that a person has, otherwise than through his own fault, lost or ceased to be entitled to a right, privilege, or benefit under this Act to which he was otherwise entitled or might have obtained, and that it is equitable that he should be allowed to have the enjoyment of the right, privilege, or benefit, the Board may, with the approval of the Minister, permit the person to exercise the right or grant to him the privilege or benefit, notwithstanding that the time prescribed for doing any act in relation to the entitlement may have expired.
(2) The Board may, in the exercise of its powers under sub-section (1), impose such conditions and requirements as it may think just and as the Minister may approve.
...
88(1) Where, by reason of a mistake or an omission of an officer of a department or an authority of the State or by reason of an accident, the name of an employee has not been communicated to the Board and the employee has reached the age for retirement, or has died while still an employee without having contributed to the Fund, a pension is payable to or in respect of that employee in accordance with this section.
...
(6) Where, as the result of any mistake, omission, or accident, a person who is an employee within the meaning of the Act of 1970 immediately before the first commencement day [1 July 1982] had made no contributions under that Act or the Superannuation Act 1938, that person shall be deemed to have become an employee within the meaning of this Act on such date, not being a date before the first commencement day, as the Board may determine.”
These provisions substantially reproduced earlier provisions as follows:
1982 Act 1970 Act 1938 Act
(amended 1944)s 87 s 77 s 70
s 88 s 78 s 71
(g) Election under the 1925 Act
Acts No. 50 of 1983 and 49 of 1984 provided that existing and new employees could elect whether they wanted to be eligible under the 1925 Act. Failure to elect was deemed to be an election not to be included. The reason for this was that under s 82AAT of the Income Tax Assessment Act 1936 (Cth) taxation deductions could only be obtained for premiums for private superannuation schemes if a taxpayer was not a beneficiary of an employer scheme. The 1925 Act was considered to be such a scheme.
(h) Notification obligations of “responsible officers”
For many years regulations (and later statute) imposed an obligation on “responsible officers” to notify the entity administering retirement benefits legislation and employees of rights and obligations in relation to contribution.
By reg 31 of the Superannuation Regulations 1945 the “responsible officer” of each department or instrumentality was to notify the then Board upon the appointment of an employee and to forward the necessary forms for medical examination. “Responsible officer” was defined to mean “the officer to whom is assigned the duty of conducting the superannuation business of the department, branch, or instrumentality”. Similar obligations were imposed by reg 22 of the Retirement Benefits Regulations 1971 and reg 24 of the Retirement Benefits Regulations 1982 (“the 1982 Regulations”). The Retirement Benefits Amendment Regulations 1985 inserted new regs 24(1)(ab) and (ac) in the 1982 Regulations to require notification in respect of temporary employees who had rights to elect under ss 5 or 6 of the 1982 Act. The regulations as amended provided that the responsible officer of a department, branch or authority -
“(ab)shall, as soon as a person employed in that Agency, State authority, or branch is entitled to elect under section 5 (1) or 6 (1) (a) of the Act to become a contributor or as soon as a person becomes employed in that Agency, State authority, or branch as provided in section 6 (1) (b) or (c) of the Act -
(i)notify that person, in writing, of his eligibility to elect to contribute to the Fund; and
(ii)deliver or forward to that person an election in accordance with Form 11;
(ac)shall, if a person to whom paragraph (ab) applies makes an election in accordance with Form 11, immediately -
(i)deliver or forward that election to the Board;
(ii)notify the Board, in writing, of the date of his birth, the date of his appointment, and the salary assigned to the office or position held by him; and
(iii)deliver or forward to that person the forms furnished by the Board in respect of the certificate of medical examination and particulars of birth respectively to be supplied to the Board by that person.”
Form 11 was in these terms:
“FORM 11 Regulation 24 (1) (ab)
Tasmania
Retirement Benefits Act 1982
ELECTION UNDER SECTION 5 (1) OR 6 (1) OF ACT
To the Retirement Benefits Fund Board,
Hobart.I understand that I am a person eligible to become a contributor to the Retirement Benefits Fund pursuant to *section 5 (1)/ * section 6 (1) of the Retirement Benefits Act 1982.
I am employed --
*(a) in the ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..;
(Name of Agency)*(b) in the ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..;
(Name of State authority, not being an Agency)*(c) in the ........ ........ ........ ........ ........ ........ ........ ........ ... Branch of
........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......
(Name of Agency)
*(d) in the ........ ........ ........ ........ ........ ........ ........ ........ ....Branch of
........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......
(Name of State authority, not being an Agency)
The rights available to me under the provisions of *section 5/*section 6 of the Retirement Benefits Act 1982 have been explained to me by the responsible officer of the above *Agency/*State authority/*branch and I hereby elect to become a contributor to the Retirement Benefits Fund subject to my undergoing a satisfactory medical examination.
Dated this day of 19 .
........ ........ ........ ........ ........ ........ .
Signature.
Witness to signature ........ ........ ........ ........ ....
Address of witness ........ ........ ........ ........ .....
*Strike out if inapplicable.”
In the 1982 Regulations “responsible officer” was defined to mean (reg 3(1):
“... the officer of a department, branch, or authority to whom is assigned the duty of conducting the business in connection with retirement benefits of the department, branch or authority”.
By Act No. 56 of 1989 these obligations were inserted into the 1982 Act itself. “Responsible officer” was defined as follows (s 3(1)):
“‘responsible officer’, in relation to an Agency or branch, means -
(a)the person employed in that Agency or branch to whom is assigned the duty of conducting the business of the Agency or branch in relation to the Fund; or
(b)where that duty is not so assigned, the head, or person in charge, of the Agency or branch”.
A new s 82A(1)(a) required the responsible officer to notify the Board “upon the appointment of a person as an employee” (i.e. a permanent employee: s 3(1)). By s 82A(1)(b) and (c) obligations to notify the Board and the relevant person were imposed in respect of persons entitled to elect under ss 5 or 6. In substance the terms were the same as reg 24(1)(ab) and (ac) of the 1982 Regulations.
(i) 1989 Amendments; further buy back provisions
By Act No. 56 of 1989 a new s 3(4) was inserted into the 1982 Act:
“(4) Where-
(a) throughout a period that ended before the first commencement day [1 July 1982] a contributor was -
(i)an employee within the meaning of the Act of 1938 or the Act of 1970; or
(ii)a person who was not such an employee by reason only that the employment of that person was not employment in a permanent capacity; or
(iii)a person of a kind referred to in section 27(1)(a) [student teacher, cadet or other trainee]; and
(b)the contributor did not, in respect of that period -
(i)make contributions under the Act of 1938 to the Superannuation Fund; or
(ii)make contributions under the Act of 1970 to the Fund; and
(c)the contributor, by notice in writing given to the Board, elects that that period, or a specified part of that period, be regarded, for the purposes of this Act, as service -
the Board may, subject to subsection (4A), declare that period, or part period, to be a period that shall be regarded as service for the purposes of this Act.”
Sub-section (4A) provided that a declaration by the Board was to be subject to the contributor paying a “special contribution” which was to be calculated in accordance with sub-s (4B). The latter provided a complex formula based on the contributions which would have been paid under the 1938 and/or 1970 Acts.
(j) Retirement Benefits Amendment Act 1993 (“the 1993 Act”)
This Act made amendments to the 1982 Act which are important for the present case.
Provisions were inserted in s 82A dealing with liability in respect of failure of a responsible officer to notify a person of a right to elect to become a contributor. The new sub-ss (6), (7) and (8) were as follows:
“(6) No action lies in respect of the failure by a responsible officer of an Agency or branch -
(a)to notify a person that the person is entitled to elect to become a contributor; or
(b) provide the person with a form of election -
as required under this section or a corresponding previous enactment.
(7) Subsection (6) applies in respect of a failure referred to in that subsection that occurred before, on or after the day on which that subsection commenced notwithstanding that proceedings have been instituted and are pending on that day.
(8) The enactment of subsection (6) does not affect any judgment of a court made before the day on which a Bill for the Retirement Benefits Amendment Act 1993 was presented to the Parliament.”
Section 87 was amended to exclude an exercise of discretion in favour of persons who had ceased to be employees. A new sub-s (1A) provided:
“(1A) The Board must not exercise its powers under subsection (1) -
(a)so as to allow a person who, at the time the Board makes a determination under that subsection, is not an employee or is not a person referred to in section 5 (1) or 6 (1) to become a contributor; or
(b)so as to allow the date on which a person referred to in paragraph (a) became a contributor to be varied.”
The “jackpot”
It will be convenient at this stage to refer to a complex interaction of legislation, administrative decisions and general perceptions which resulted in what counsel for the Hydro referred to as a “jackpot”. By 1992 a means had become available for Hydro employees (whether temporary or not) who were facing retrenchment to buy back extensive years of service and receive large payouts on retirement, typically of the order of $60,000 or more. All of the applicants in the present case (not only the six selected applicants) are Hydro employees whose employment terminated before the availability of the “jackpot” became widely known and who therefore missed out on those benefits. Counsel for the Hydro contends that the awareness of losing a large benefit has fundamentally flawed and coloured the applicants’ evidence. The validity of this contention needs to be considered later in relation to the individual applicants’ evidence. But for the moment I shall do no more than outline the circumstances which gave rise to the “jackpot”.
As already noted, the legislation had since 1944 contained provisions conferring a discretionary power on the Board to allow an “employee” to become a contributor retrospectively where his or her name had not been communicated to the Board by reason of mistake or omission of an officer of a department or an authority, or by reason of an accident; s 88 is the relevant provision in the 1982 Act. However these sections only allowed employees to become retrospective contributors back to the date of commencement of the applicable Act. Thus s 88(6) of the 1982 Act prohibited the Board from deeming a person to have been an employee from a date prior to 1 July 1982; s 3A(2) of the 1970 Act (inserted by Act No. 113 of 1974) made a like provision in relation to that Act.
Section 87 of the 1982 Act and earlier equivalents gave to the Board a general discretionary power in relation to a “person” who had lost a right, privilege or benefit otherwise than through his own fault. This clearly extended to persons employed in a temporary capacity who, as has been seen, were excluded from the definition of “employee”. However in administering the Act the Board took the view that if permanent employees could not get retrospectivity back to a period beyond commencement of the applicable Act (1 July 1982 in the case of the 1982 Act), the same limitation should apply to temporary employees.
On 12 February 1986 Cosgrove J handed down his decision in Re Goodwin [1986] Tas R 6. Mr Goodwin had commenced service with the Hydro as a cadet engineer in 1943 and began superannuation contributions in 1949. Cosgrove J held that the commencement date of his service for the purpose of calculating his entitlement under the 1982 Act was 1943. This meant that Mr Goodwin received benefits for which he had not contributed. As a result, the 1982 Act was amended by Act No. 56 of 1989 which came into operation on 21 December 1989 (see Part I Section 2(i) above).
The Secretary of the Board, Mr Garry Fletcher, deposed in this proceeding (CB21/18) that the Bill for the 1989 amendment was amended in the course of its passage through Parliament without the Board being consulted. It may be that the amendment produced unintended consequences.
In any event, about a year after the amendment, an employee of the Department of Construction relied on it to buy back service shortly prior to taking redundancy. This opportunity gradually became known during the latter part of 1992 and, in the words of Mr Fletcher (CB21/19):
“the RBF Board received many applications from temporary employees to elect to contribute pursuant to Section 5, 6 and 87 of the 1982 Act. Having been accepted as contributors, the new contributors exercised the rights granted under Section 4 of Act No. 56 of 1989 to purchase periods of non contributory service.”
(See also CB2/55, 3/249, T948).
There were some 600 applications. The power given by the 1989 amendment only applied to a “contributor”. If a person had not been a contributor at all, he or she had to obtain an exercise of the Board’s discretion under s 87 which, in the practice the Board adopted, required the person to assert that he or she had no knowledge of his or her entitlement to elect to become a contributor. Once a temporary employee had obtained the Board’s exercise of discretion to be treated as a contributor back to 1 July 1982 he or she could then, as of right pursuant to s 3(4), buy back service to the commencement of his or her temporary employment. Of course contributions had to be paid for (s 3(4A)), but the Board allowed that payment be paid by way of set-off at the time the redundancy payment was taken. No cash outlay was required.
In 1992 the Board also received a number of applications from persons no longer employed. Mr Fletcher deposed (CB21/19):
“In considering these applications the Board expressed the view that it was doubtful that these persons were covered by Section 87 as they were no longer eligible to contribute. The persons were advised of the Board’s reservations and invited to submit evidence supporting the view that the Board could consider their applications under Section 87. No evidence was ever received by the RBF Board.”
Such persons, including the applicants in the present case, missed out on the “jackpot”.
The Hydro’s operations
(a) Construction activity
The legal history of Hydro-Electric operations in Tasmania commences with the Complex Ores Act 1909 which authorised a Victorian company called The Complex Ores Ltd to take water from the Rivers Shannon and Ouse for generating electricity. Details of subsequent events are set out in the judgment of Crisp J in Rollins v The Hydro-Electric Commission [1953] Tas SR 42 at 45 et seq. By the Hydro-Electric Purchase Act 1914 the Tasmanian Government acquired the undertaking of an assignee of The Complex Ores Ltd and, in the words of the High Court in Launceston Corporation v The Hydro-Electric Commission (1959) 100 CLR 654 at 660,
“... the development, management and control of an undertaking of great importance to the State ... before 1929 was the responsibility of a department of State, viz. the Hydro-Electric Department.”
In 1929 the Hydro was established as a body corporate by the Hydro-Electric Commission Act 1929. The long title described that Act as:
“AN ACT to provide for the Establishment of a Commission to manage and control the State Hydro-Electric Works; and to provide for State Control of all Waters in Lakes, Falls, Rivers, and Streams, and to vest such control in the said Commission; to empower the said Commission to regulate the use of such Waters in certain cases.”
By s 21 the State hydro-electric works were vested in the Hydro. By s 26 the Hydro was to have the management and control of the State hydro-electric works and of the existing Hydro-Electric Department. By s 27 certain powers were conferred on the Hydro. Section 27 provided:
“It shall be lawful for the Commission for and on behalf of the State to -
I. Construct, operate, manage, control and generally carry on the State hydro-electric works, and carry on and conduct any business whatsoever relating to the generation, transmission, distribution, and sale of electrical energy, and carry out any purpose in relation thereto which the Commission may deem desirable in the interests of the State:
...V. Appoint, discharge, and determine the salaries, remuneration, and allowances of all officers, clerks, workmen, and servants whom the Commission may deem necessary to carry on the State hydro-electric works or otherwise for carrying out the purposes of this Act; ...”.
Section 28 provided that no new hydro-electric works should be constructed by the Hydro unless and until the monies therefore had been voted by Parliament.
Section 29 provided that before any vote was submitted to Parliament for new hydro-electric works a report was to be furnished by the Commission to the Minister setting out a number of matters including the nature of the works, estimated costs, annual revenue etc and
“the opinion of the Commission as to the necessity or desirability of the works, together with recommendations and a resumé of the reasons on which such recommendations are founded.”
By the Hydro-Electric Commission Act 1944 the Hydro as constituted under the 1929 Act was to continue. Provisions substantially identical to ss 27, 28 and 29 of the 1929 Act were contained in ss 15(2) and 16(1) and (2).
The Hydro and its predecessor Department constructed some 30 Hydro-Electric dams and power stations over a period of 80 years from 1914. The construction of dams generally involved the following steps: construction of a tunnel, the building of a small dam upstream of the proposed construction area, diversion of the river from the small dam through the tunnel, the building of another dam downstream of the construction area to prevent water from flowing back into the construction area, the removal of loose rock and rubble from the valley walls and river bed, construction of a footing to connect the dam and the valley walls and floor, and finally the closure of the diversion tunnel so that the lake fills.
Construction of the power station usually took place while the dam was being built. This involved the construction of tunnels and/or channels through which the water flowed, and the installation of turbines and generators.
The movement of labour from one project to the next was described by Mr Brian Hoyle, an engineer with substantial experience in the Hydro Construction Division, in the following terms (CB2/97-98):
“There were [sic] a core of construction employees whom [sic] went from scheme to scheme especially at staff levels. Within the engineering field we would try and transfer the skills from one site to allow for the most efficient building of a new dam site. As one scheme was finishing another scheme was commencing so there was a balancing of skills required at different schemes. Different stages of schemes required different skills. Road Makers would first commence building roads to the dam sites. Road Makers would be progressively followed by Tunnellers, Concreters and other Tradesmen and award workers to build the dams. Work would then commence on building the Power Stations and finally Electrical Tradesmen would move in and install the electrical machinery. By the stage the Electrical Tradesman [sic] had moved in the Earth Movers and road workers were generally commencing on the next Hydro Scheme. It would take approximately 10 years to complete a Hydro Scheme. This procedure had occurred throughout my time at the Hydro. During my service at the Hydro the Mersey Forth and Lower Derwent Power Scheme commenced in the 1960’s followed by Strathgordon in the 1960’s, and early 1970’s followed by the Pieman Scheme in the mid 1970’s. In the early 1980’s the Gordon below Franklin Scheme commenced and was replaced by the King and Anthony Scheme which continued until the early 1990’s.”
In terms of the engagement of a construction workforce in the years with which this case is concerned, the following developments took place in the following years:
Middle Gordon 1968 to 1980
King River Stage 2 1983 to 1992
Gordon Machine No. 3 1986 to 1990
Pieman 1974 to 1992
Mersey Forth 1964 to 1975
Wayatinah 1963 to 1969
Meadowbank 1963 to 1966
Poatina 1963 to 1966
The figures for the total construction workforce in the years 1963 to 1992 were as follows (CB16/5):
1963 1720
1964 1840
1965 1965
1966 2087
1967 2262
1968 2434
1969 2423
1970 2338
1971 1943
1972 1966
1973 1647
1974 1421
1975 1145
1976 1121
1977 1144
1978 1315
1979 1385
1980 1397
1981 1530
1982 1532
1983 1639
1984 1669
1985 1828
1986 1998
1987 1688
1988 1315
1989 1052
1990 1024
1991 958
1992 767
Although the applicants themselves had long periods of service, there was a substantial turnover among wages employees as a whole. From 1961 to 1992 the average figure was 39 per cent per year (CB16/2) and probably higher in the construction workforce (T1211).
The broader social, economic and political setting in which Hydro construction took place over these years is described by Kerry Pink in his monograph “Through Hell’s Gates: A History of Strahan and Macquarie Harbour” (3rd ed, 1997, at 65):
“By the early 1980s Tasmania had 23 hydro-electric power stations with an annual generating capacity of about 1,000 megawatts - the biggest hydro-electric system in Australia. In a little over 50 years virtually all the State’s major lake and river catchments had been harnessed by the HEC - Great Lake, the Derwent, South Esk, Mersey-Forth, Middle Gordon and Pieman rivers - and Tasmania with a population of 450,000 was producing about 10 times more power per capita than any other State.
The HEC and its continuous programme of hydro-industrialisation, seen as vital to Tasmania’s industrial development and economic stability, had traditionally enjoyed the unqualified support of successive Tasmanian Governments. With a staff of 2,000 and some 4,500 wage employees the HEC maintained an on-going programme with one major scheme nearing completion, one in the early stages of construction and one on the drawing boards.
Yet in the 1980s, despite its huge power output, Tasmania had the highest rate of unemployment in the country. A number of economists and academics who were not necessarily conservationists began to question the validity of the assumption that the availability of more cheap bulk power would assure Tasmania of more industries, more jobs and a stronger economy.”
The end of the Hydro as a constructor of major hydro-electric works began in the mid to late 1980s. In 1983 Federal legislation, upheld by the High Court in the Tasmanian Dam Case (1983) 158 CLR 1, stopped the Gordon below Franklin scheme. Two smaller schemes, the King and Anthony, were later completed but by 1986 it was realized that there would be no work on future dams. There was no further potential for hydro-electric schemes which were viable in terms of the quantity of electricity produced as against the cost of construction. At the same time there was a questioning of the actual potential for electricity consumption.
By the late 1980s and early 1990s redundancies on a large scale were occurring, giving rise to the claims with which this case is concerned.
(b) Administrative structures
The Commission itself consisted of the Commissioner and four part-time Associate Commissioners. Apart from the Commissioner’s Private Secretary, the Director and Staff of the Planning and Public Affairs Group, the organisation was divided into five branches: Secretarial, Civil Engineering, Electrical Engineering (also known as Design), Power (also known as Operations) and Distribution (also known as Retail Supply).
The Civil Engineering Branch was responsible for the investigation, design and construction of all civil works involved in power developments and allied projects. It was divided into four divisions: Construction, Design, Architectural and Investigation. Construction personnel were also called field personnel.
The Personnel Department was part of the Secretarial Branch. It was headed by a person in a position variously entitled from time to time Personnel Superintendent, Personnel Manager and Manager - Human Resources.
Responsible to the Personnel Superintendent was a Senior Industrial Officer and Assistant Industrial Officer. All the foregoing were stationed at the Head Office of the Hydro in Hobart. Further down in the hierarchy were Works Industrial Officers who were stationed in towns near Hydro construction sites, and in particular at Tullah on the West Coast.
From the mid-1980s onwards the Hydro engaged in considerable restructuring, which is not relevant for present purposes.
(c) Employment categories
Relevantly Hydro personnel were categorised as:
(a) (i) Staff or
(ii) Wages (or “Award”)
and
(b) (i) Permanent or(ii) Temporary.
Staff personnel could be either Permanent or Temporary.
A person could only be appointed as Staff with the Commissioner’s approval and upon signing a Head Office engagement form. Persons appointed as Permanent Staff received a letter notifying them that the appointment was probationary and terminable on one month’s notice. Permanent Staff were required to contribute to superannuation. Their appointment also had to be confirmed by the Commissioner, and they received a letter to that effect. Temporary Staff received a letter notifying them that the appointment was probationary and terminable on two weeks’ notice.
By contrast, a person engaged as a Wages employee did not need either approval or confirmation by the Commissioner, did not sign a Head Office engagement form and did not receive any standard form letter as to engagement.
Staff employees generally enjoyed more privileges than the Wages employees, such as more sick leave and annual leave. The Staff and Wages employees were housed separately and had separate messes. The organisational structure had a vaguely military appearance, with Staff corresponding to Officers and NCOs and Wages or Award employees to Other Ranks.
Within the Construction Division, professional staff such as engineers, geologists or surveyors were generally classified as Permanent Staff. The Temporary Staff generally consisted of supervisors, foremen and tradesmen.
In terms of security of tenure, appointment to Permanent Staff was not all that permanent. Permanent Staff could be terminated on one month’s notice: Hydro-Electric Commission Rules 1939, r 30A(1). The 1952 and 1978 Rules contained like provisions: rr 41(1) and 40(1) respectively. Temporary Staff could be terminated on two weeks’ notice: 1939 Rules, r 30A(2), or on such notice as the instrument of appointment specified: r 41(2) of the 1952 Rules and r 40(2) of the 1978 Rules. In fact letters of appointment always specified two weeks.
Wages employees were terminable on one week’s notice: r 30A(3) of the 1939 Rules. The 1952 Rules and 1978 Rules probably did not apply to Wages employees as they are not officers within the meaning of these Rules. However Labour Engagement Forms specified that the engagement was weekly.
Pay for Staff, both Permanent and Temporary, was by annual salary reviewed annually. Wages employees were paid at an hourly rate each fortnight. Hence there were Timekeepers at each workplace.
Categorisation as permanent or temporary appears to have had no real significance other than in relation to superannuation or retirement benefits. There was a degree of circularity. Sometimes a permanent employee was described as one who was entitled to superannuation.
The pleadings
(a) Statement of claim
In its final form the applicants’ statement of claim alleges that each of the applicants was employed in a permanent capacity by the Hydro, and therefore that each of the applicants was an employee as defined in the 1982 Act, that each of the applicants Cooper, Duggan, Johnstone, Mulcahy and Williams was an employee as defined in the 1970 Act and that each of the applicants Duggan, Mulcahy and Williams was an employee as defined in the 1938 Act. Alternatively, each of the applicants is said to have been employed in a temporary capacity. By par 9 it is alleged that the Hydro was under duties (referred to as “the specific statutory duties”) under the successive Superannuation or Retirement Benefits Regulations and the 1982 Act to advise the relevant Board that the particular applicant was a permanent employee, or alternatively to advise the Board and each of the applicants that he was a temporary employer entitled to elect to become a contributor. A duty to provide each of the applicants with any necessary forms is also alleged.
By par 10 it is alleged that the Hydro breached the specific statutory duties by failing to advise the relevant Board or the applicants of their right to elect or provide them with the necessary forms. By par 11 it is alleged that pursuant to reg 19 of the Hydro-Electric Commission Rules 1978
“... any officer of the respondent was under a duty ... to comply with, and give effect to all Acts, regulations, rules and instructions made or issued for his guidance which included the 1982 Act and Regulations and the 1970 Act and Regulations and the 1938 Act and Regulations”.
This duty is referred to in the pleading as the “general statutory duty”.
By par 12 it is alleged that in breach of the general statutory duty the Hydro failed to comply with such Acts and regulations. The breaches relied on are the same as those pleaded in par 10 in respect of the specific statutory duties.
Paragraphs 13 and 14 plead causes of action in contract. By par 13 it is alleged that there were implied terms in each of the contracts of employment in substance that the Hydro would disclose to each applicant his obligation to become a contributor, provide necessary forms, inform the trustee that each applicant was a permanent employee and ensure the provisions of the relevant statute and regulations were complied with. Alternatively it is pleaded that there were implied terms that the Hydro would advise each applicant of his right to elect to become a contributor, provide him with the necessary forms, inform the trustee that the applicant was a temporary employee and ensure that provisions of the relevant statute and regulations were complied with. (The terms “trustee” and “Board” are used interchangeably. Nothing turns on this.)
Paragraph 14 alleges that in breach of the implied terms the Hydro failed to make the disclosures and give the information etc referred to.
Paragraphs 15 to 18 plead causes of action in negligence. By par 15 it is alleged that the applicants relied upon the Hydro, as it knew or ought to have known, to disclose, inform and advise them of the full range of benefits available to them as employees of the Hydro in respect of their employment. In particular to inform them that as permanent employees they were obliged to contribute to the RBF Scheme, or alternatively, as temporary employees, they were entitled to elect to participate in and contribute to the RBF Scheme.
Paragraph 16 alleges that the Hydro assumed responsibility as regards each and every applicant to inform him of these matters.
Paragraph 17 alleges that by reason of the matters pleaded in pars 15 and 16 the Hydro was under a duty to each applicant to exercise reasonable care to advise him of the benefits available, not to represent to any applicant that he was not obliged to contribute, not to create a belief in any applicant that he was not obliged to contribute, and to disabuse any incorrect belief that he was not obliged to contribute. Alternatively, the Hydro is said to have been under a duty to exercise reasonable care to inform the applicants of the benefits available to them as temporary employees, not to represent to them that they were not entitled to contribute, not to create a belief that they were not entitled to contribute and to disabuse any incorrect belief in the applicants that they were not entitled to contribute. All those duties are collectively referred to as “the common law duties”.
Paragraph 18 alleges breach of the common law duties by (a) failing to inform the applicants of the full range of benefits available to them as employees of the Hydro and in particular that as permanent employees they were obliged to contribute to the RBF Scheme, (b) representing by conduct and by silence that they were not obliged to contribute (referred to as “the first representation”), (c) creating a belief that they were not obliged to contribute and (d) failing to disabuse an incorrect belief that they were not obliged to contribute.
Particulars are given, including in relation to some of the applicants’ specific allegations of their being informed that they were not eligible for superannuation. Under the heading “Particulars of Silence” it is alleged that the Hydro
“had adopted a policy whereby it would not advise employees which it classified as temporary of their entitlement to contribute to the RBF Scheme”.
Alternatively, it is alleged that the Hydro failed to inform the applicants that as temporary employees they were entitled to elect to contribute and represented by conduct and silence that they were not entitled to contribute (referred to as “the second representation”). Under the heading “Particulars of Silence” in relation to the second representation it is alleged that the Hydro adopted a policy whereby it would not advise employees which it classified as temporary of their entitlement to contribute to the RBF Scheme.
Paragraph 19 alleges that at the time of making the first representation the Hydro intended and well knew, or ought to have known, that the applicants would rely on the first representation and be induced thereby to refrain from applying to contribute to the RBF Scheme. Paragraphs 20 and 21 plead a cause of action in misleading and deceptive conduct in trade or commerce constituted by the first representation.
Paragraph 22 alleges that the Hydro intended that the applicants would rely on the second representation. Paragraphs 23 and 24 allege misleading and deceptive conduct in trade and commerce in respect of the second representation.
Paragraph 25 alleges that the Hydro bore “continuing duties” after the discharge of the applicants’ employment contract to inform them of their rights under the 1982 Act and not to represent to them that they had no rights under that Act. Paragraph 26 alleges breaches of the continuing duties, including a “continuing representation” which, by silence represented to the applicants that they held no rights or entitlements under the 1982 Act.
Paragraphs 27 to 29 allege that the continuing representation in relation to former employees was misleading and deceptive conduct in trade and commerce and that each applicant relied on such representation and believed himself to have no rights or entitlements under the 1982 Act.
Paragraphs 30 to 33 allege unconscionable conduct. By par 30 it is alleged that between 9 November 1992 and 13 August 1993 the applicants were under a special disadvantage in dealing with the Hydro. The applicants allege that the Hydro was aware that they potentially or actually had claims against it, that the Hydro was familiar with the way such claims were litigated whereas the applicants were not, that none of the applicants had obtained independent advice, that the Hydro “enjoyed a close and working relationship with the Government of Tasmania whereas the applicants did not”, and that the Hydro shared a common financial interest with the Government of the State of Tasmania but the applicants did not. By par 31 it is alleged that in or about November 1992 the Hydro requested or reached an agreement with the Executive Government of the State of Tasmania that retrospective legislation to defeat any of the applicants’ claims would be drafted and introduced into the Parliament of the State of Tasmania. Paragraph 32 alleges that in so doing the Hydro was engaged in trade and commerce. By par 33 it is alleged that the conduct of the Hydro was unconscionable both in equity and contrary to s 51AA of the Trade Practices Act 1974 (Cth) (“Trade Practices Act”).
Paragraph 34 alleges a contravention of s 53B of the Trade Practices Act. This was not pressed at trial.
Paragraph 35 alleges that in consequence of the various causes of action the applicants have lost the opportunity to receive the benefits upon termination of employment provided by the 1982 Act. They are also said to have lost the opportunity to make a decision to continue to accrue or maximize their superannuation entitlements by not terminating their employment. They have thereby suffered loss and damage.
Paragraph 36 is a claim for interest. Paragraph 37 is a claim for exemplary damages which alleges that the policy of the Hydro to classify permanent employees as temporary was “deliberately designed to injure their economic interests” and that since at least 1975 the policy of the Hydro not to advise employees whom it regarded as temporary of their entitlement to elect to contribute to the RBF Scheme was deliberately undertaken so as to reduce operational costs of the Hydro notwithstanding that, to its knowledge, the policy directly injured the economic interests of the applicants. It is further said that since at least November 1992 the Hydro acted deliberately so as to deny the applicants their statutory entitlements by recourse to retrospective litigation.
(b) Defence
Subject to some minor qualifications as to dates, the Hydro admits that the applicants were employed by it. It denies that they were employed in a permanent capacity and says that each applicant “was engaged by the Respondent as a temporary employee and remained so engaged and classified throughout the periods of his employment”. The Hydro admits that pursuant to the 1982 Act the applicants were entitled to elect to become contributors to the RBF Scheme upon satisfying the requirements of ss 5 or 6. Paragraphs 9 to 37 of the statement of claim are denied.
The Hydro pleads that no action is maintainable against it by reason of s 82A(6) and (7) of the 1982 Act (i.e. the retrospective amendments introduced by the 1993 Act).
It further pleads that any claims under the Trade Practices Act are statute barred under s 82(2) of that Act, not having been commenced within three years of the date when the causes of action accrued.
As to the claims under the Fair Trading Act 1990, (this Act is not specifically mentioned in the statement of claim but is subsumed under the reference to misleading and deceptive conduct in trade and commerce) it is pleaded that they are based on events which occurred prior to the commencement of that Act on 19 December 1990. In any event, so far as the Fair Trading Act allows proceedings to be instituted over three years after causes of action have accrued, its provisions are said to be inconsistent with s 82(2) of the Trade Practices Act and therefore void pursuant to s 109 of The Constitution 1901 (Cth).
In the alternative the Hydro relies on s 4(1)(a) of the Limitation Act 1974 and says that the claims founded in tort or contract or for breach of statutory duty were statute barred after the expiration of six years from the accrual of the causes of action.
The Hydro also relies on terms imposed by the Court when leave was granted on 27 June 1997 to file and serve the statement of claim in its final form (that earlier pleading being dated 4 April 1997). By those terms it was directed that in respect of any claims which do not arise out of the same facts or substantially the same facts as those pleaded in the statement of claim dated 4 April 1997 to which the Hydro pleads a statutory limitation defence, the date of commencement of the proceedings shall be 4 June 1997.
Paragraph 44 alleges contributory negligence by reason of the applicants failing to enquire as to, obtain and read a Hydro employees’ handbook, failing to make an election to become a contributor, failing to approach the Hydro for engagement as a permanent employee, and failing to make enquiries to the Senior Wages Clerk at the Hydro Head Office and electing to be eligible for benefits under the 1925 Act, which benefits were only available to non-superannuation contributors.
(c) Reply
By their reply the applicants allege in relation to the Limitation Act defence that each cause of action was concealed by the fraud of Hydro and/or that the action is for relief from the consequences of a mistake caused by the Hydro. It is asserted that any cause of action did not accrue until the Hydro’s acts or omissions became known to the applicants. Paragraph 4 alleges that the Hydro expressly or impliedly represented to the applicants that they were not entitled to become members of the RBF Scheme, abstained from advising them that they were entitled to join and provided no assistance to the applicants as to whether they were entitled to join. It is alleged that as a consequence it would be unconscionable and against good conscience for the Hydro to rely upon any limitation provision and that it is estopped and precluded from so doing.
PERMANENCY
“Employed in a permanent capacity”
The expression “a person ... employed in a permanent capacity” is not a legal term of art, like “lease” or “partnership”. The words are ordinary English words which have to be construed and given effect to in the context of this particular legislation. I do not see any significance for present purposes in the drafting differences in the definitions in the 1938, 1970 and 1982 Acts. All have the characteristic that “permanent” and “temporary” are treated as mutually exclusive. This accords with dictionary definitions which, amongst other things, define “permanent” as “not temporary” and “temporary” as “not permanent”: see Macquarie Dictionary, Shorter Oxford Dictionary and Oxford English Dictionary.
Counsel for the applicants placed particular reliance on the decision of Street J in Haines v Woy Woy Shire Council (1933) 11 LGR (NSW) 99. The case involved a prosecution of the Council for breach of a local government ordinance which required prior advertisement in the case of “an appointment ... to any permanent position in the service of a Council”. The position was that of an “A” grade Clerk. The evidence was that since its inception the Council had always employed four staff: a Shire Clerk, a Deputy Clerk who was also required to be an “A” grade Clerk, a “B” grade Clerk and a junior. Street J said of the appointment in question (at 101):
“The new appointment was not due to any re-organization of the staff, which has always consisted of four members, the “A” grade Clerk being second in command, and taking charge in the absence of the Shire Clerk.”
His Honour went on to say (ibid):
“There is nowhere in the Local Government Act itself any statutory provision drawing a distinction between permanent and temporary appointments, or directing whether any particular appointment is or is not regarded as a permanent one. The ordinance itself refers to ‘appointments’ and to ‘positions’ and the word ‘permanent’ in the ordinance qualifies the words ‘position in the service of a council’.”
Later (at 102) his Honour said:
“It seems to me that in each case the question whether or not any particular position is or is not a permanent position must be determined on a consideration of all the surrounding circumstances. Mr Mitchell suggested that an adequate definition of ‘permanent position’ would be any position which appears to be one that forms or is to form part of the regular administration of a Council, or one which, as things stand, has not been established for merely temporary purposes, but will continue indefinitely unless some resolution is passed by the Council re-organizing the service. That appears to me to be the real test as to whether or not a position is permanent. It does not mean that it is to last for ever, but I think that any position that has no definite time limit to its existence, and which forms an integral part of the ordinary and regular administration of the Council is a permanent position.”
Counsel for the applicants argued that the criterion in the present case for permanency was the same, and that the relevant test was whether the work of each applicant was an integral part of the ordinary and regular administration of the Hydro. Construction of dams and other works by the Construction Division of the Hydro was, counsel argued, part of the ordinary and regular administration of the Hydro. Therefore those who were employed to do such work were employed in a permanent capacity.
I do not accept this argument. Haines dealt with a different statutory context. The ordinance was concerned with the permanency or otherwise of the position to which the person was appointed. In the present case we are concerned with the nature and purpose of the person’s employment. The 1982 Act, and the earlier Acts, do not predicate a fixed establishment or office.
The distinction is made by the Privy Council in Williamsv Macharg (1910) 10 CLR 599 where the issue was whether a person had been a member of the NSW Civil Service over a particular period. Their Lordships said (at 602):
“It is the holding of a permanent salaried office which constitutes membership, not the quality or duration of the tenure.”
The present case is the reverse of the situation in Williams. We are concerned with the quality of each applicant’s tenure, that is to say whether or not he was employed in a permanent capacity. This case does to deal with any particular office such as Plant Operator or Maintenance Painter.
Some further features of the concept “employed in a permanent capacity” in the present context are as follows. First, the test of permanency or otherwise is to be applied at the date of engagement or at any subsequent stage where there is an express agreement to vary the nature of the employment. The person may be appointed in a permanent capacity or, having been appointed in a temporary capacity, may be appointed in a permanent capacity at some later date. However I do not accept the applicants’ contention that at the end of a lengthy period of service one may be able to say that a person, initially a temporary employee, is now a permanent employee and must have become permanent at some stage “depending on the circumstances”.
After 1977 there was the additional element that an employee could retain the option to claim the 1925 Act entitlement if it turned out at the time of the retirement that that entitlement was better than under the RBF Act.
After 1982 a worker who decided the prospects of a benefit under the RBF Scheme were outweighed by the costs, but who nevertheless wanted portable private superannuation, had to make an assessment of prospects under the 1925 Act. If those prospects were sufficiently remote, it was better to elect out of that Act in order to obtain the benefit of tax deductibility on the private superannuation premiums. Thus a worker who elected out of the 1925 Act in order to obtain tax deductibility on insurance premiums would probably have considered there was no realistic prospect of obtaining a benefit under the Act, that is, of continuing in employment until retirement age. The significance of this is that the qualifications for obtaining a benefit under the 1925 Act were essentially the same as obtaining a benefit under the RBF Scheme. Thus those such as the applicants Cooper and Vlagsma who elected out of the 1925 Act probably would for that reason alone not have contemplated contributing to the RBF Scheme.
Damages (if recoverable)
Actuarial evidence was given by Mr Colin Grenfell on behalf of the applicants and Mr Brian Bendzulla on behalf of the Hydro.
The basic approach was the same. In respect of each applicant the actuaries take
the amount of the RBF benefit that he would have obtained on termination, less
1925 Act payments received, less
an allowance for the contributions that the applicant would have hypothetically made.
There were some item of difference as to which I asked counsel to give some further attention. The main item of contention remaining was in relation to interest on the notional contributions which the applicant would have made ((iii) above). Were it necessary to quantify damages I would accept the revised calculations of Mr Grenfell contained in his report of 21 April 1998.
THE 1993 RETROSPECTIVE LEGISLATION
The 1993 retrospective legislation is discussed above in Part I Section 2(j). Counsel for the Hydro submitted that the legislation would preclude some of the applicants’ causes of action even if they were to be otherwise successful.
Construction
(a) The law
While legislatures can validly enact retrospective legislation, courts will not give retrospective effect to the legislation further than is necessary to comply with the meaning of the statute strictly construed: Boheto Pty Ltd v Sunbird Plaza Pty Ltd [1984] 2 Qd R 9 at 14, per Lord Templeman; R v Kidman (1915) 20 CLR 425 at 442-443 per Isaacs J; Polyukhovich v The Commonwealth (1991) 172 CLR 501 at 642 per Dawson J.
(b) “in respect of”
“Action” in s 86A(6) is used here in the sense of a cause of action. A single proceeding in a court may contain a number of causes of action (the present case being a good example). Obviously enough, Parliament is not to be taken as having intended to defeat the whole proceeding. The causes of action in the present case which might be affected by s 82A(6) are those which allege breach of statutory duty, breach of contract, breach of a tortious duty of care and misleading and deceptive conduct arising out of the alleged failure of the Hydro to inform the applicants of their right, as temporary employees, to elect to become contributors to the RBF Scheme. If the applicants had been found to be permanent employees, s 82A(6) would have no application.
Focussing more closely, s 82A(6) is directed at an action which answers the description of an “action ... in respect of the failure by a responsible officer of an Agency or branch” to notify a person of entitlement to elect or to provide a form of election.
In my opinion none of the relevant causes of action answer that description. None of those causes of action as pleaded contain as a material element the relevant failure of a “responsible officer” of the Hydro: see Part III Section 1(a) above. For present purposes, the applicants’ causes of action complain of a failure by the Hydro, pursuant to statutory, contractual or tortious duty, to notify the applicants of their rights of election. The causes of action are not “in respect of the failure of a responsible officer” because they do not rely on any such failure. There is a general failure alleged on the part of the Hydro, not a failure which can be characterised as a failure by any particular individual or the holder of any particular office. And those parts of the applicants’ case which rely on positive misrepresentation are not allegations of a failure by anybody.
The matter may be tested in this way. Let it be assumed that there was evidence that the Secretary of the Hydro had written to each applicant, prior to the termination of his employment, advising of his right of entitlement. Such evidence would provide a complete answer to all the causes of action based on temporary employment, notwithstanding that the “responsible officer” had not complied with his regulatory and statutory obligations.
I conclude that, could the applicants otherwise successfully make out the relevant causes of action, the 1993 Act would not defeat their claims.
(c) “enactment”
The applicants also relied on another basis for claiming that the 1993 Act did not preclude their causes of action. In its terms, sub-s(6) only applies to a failure to notify under “this section” (i.e. s 82A) or “a corresponding previous enactment”. Section 82A was inserted into the 1982 Act in 1989. Therefore it is said no obligation existed under s 82A at the time at which the applicants say that the Hydro was under an obligation to notify them of their entitlements. The previous version of s 82A was contained in reg 24(1)(ab) of the 1982 Regulations. The applicants submit that actions based upon a failure to notify in accordance with reg 24 are not covered by s 82A(6) because reg 24 is not an “enactment”.
I do not agree. The word “enactment” refers to both Acts and regulations. Both are laws which derive their authority from Parliament. Even if “enactment” in its ordinary meaning refers only to an Act, s 5(2) of the Acts Interpretation Act 1931 has the effect that it also includes regulations made under an Act.
Unconscionable conduct
(a) The law
The applicants claim that the Hydro’s conduct in requesting the Tasmanian Government to effect the passage of the 1993 Act constituted unconscionable conduct in equity and was in breach of s 51AA(1) of the Trade Practices Act, which provides:
“51AA. (1) A corporation must not, in trade or commerce, engage in conduct that is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories.”
It is not strictly necessary to determine this issue since I have found that the applicants have not established their claims, and if they had, the 1993 Act would not be an answer. However in case an appellate court should reach different conclusions, I shall say something about the argument.
I can immediately dispose of the claim under s 51AA for a number of reasons. As with the causes of action under s 52, s 51AA requires that the conduct in question occur “in trade or commerce”. On the authority of Nelson (see Part III Section 2 above), the Hydro’s communications with the Government in relation to the 1993 Act could not be said to have occurred in trade or commerce. The Hydro was not engaged in trade or commercial dealings with the Government in this regard. Also, s 51AA only came into operation on 21 January 1993. It does not purport to have retrospective operation and could only apply to conduct which occurred after that date. Finally, s 51AA is contained in Part IVA of the Trade Practices Act. Damages cannot be recovered under s 82 of the Trade Practices Act for a breach of s 51AA because s 82 does not apply to Part IVA. For those reasons, the claim for damages for breach of s 51AA of the Trade Practices Act must fail.
In any case, the conduct of the Hydro was not unconscionable. The doctrine of unconscionable conduct in equity is succinctly stated by Deane J in Commercial Bank of Australia Ltdv Amadio (1983) 151 CLR 447 at 474 as follows:
“Unconscionable dealing looks to the conduct of the stronger party in attempting to enforce, or retain the benefit of, a dealing with a person under a special disability in circumstances where it is not consistent with equity or good conscience that he should do so. The adverse circumstances which may constitute a special disability for the purposes of the principles relating to relief against unconscionable dealing may take a wide variety of forms and are not susceptible to being comprehensively catalogues [sic].”
See also Blomley v Ryan (1956) 99 CLR 362 at 428-9 and Louth v Diprose (1992) 175 CLR 621.
(b) Negotiations with Government
The evidence on this issue was that by 1992 the Hydro estimated that there were somewhere between 500 and 1300 potential former employees’ claims. No budgetary allocation had been made (T967). If there were only 500 claimants, the estimated cost to the Hydro was $26.6 million (T969). On 24 February 1993 Mr Robert Kimber, the Senior Legal Officer of the Hydro, wrote to the Secretary of the Treasury (CB6/203) giving the figure just mentioned and other information “to underline the potentially serious financial consequences to the Commission if the [retrospective] legislation was not forthcoming” (T969). The financial interests of the Hydro and the Tasmanian Government were, if not identical, aligned (T970). Mr Kimber was closely involved in discussions with Treasury and RBF representatives in the drafting of the legislation. Counsel for the applicants pointed out:
“All of this was done without even the slightest reference to the applicants of what was going on, or advising them of the likely consequences of the legislation.”
(c) Special disadvantage
The applicants were not at a special disadvantage vis-à-vis the Hydro in any relevant sense. Not infrequently in employment relationships an employer occupies a stronger position than an individual employee in certain respects. But the mere fact that one party is more powerful than another does not mean that the less powerful party is at a special disadvantage. Something more must be shown. As Mason J said in Amadio (at 462):
“I qualify the word ‘disadvantage’ by the adjective ‘special’ in order to disavow any suggestion that the principle applies whenever there is some difference in the bargaining power of the parties and in order to emphasize that the disabling condition or circumstance is one which seriously affects the ability of the innocent party to make a judgment as to his own best interests ...”.
The applicants did not point to any particular disability which meant that they were unable to make a judgment as to their own best interests.
In any event, there was not in relation to this aspect any transaction between the Hydro and the applicants. Typically the cases on unconscionable conduct involve a transaction between A and B, such as guarantee (Amadio) or gift (Louth), in which A is said to be at a special disadvantage vis-à-vis B. The worst that can be said in the present case is that the Hydro dealt with a third party (the Tasmanian Government) in matters which might affect the interests of the applicants without disclosing those dealings to the applicants. Absent some relevant fiduciary duty owed by the Hydro to its employees in this regard - and none was suggested - I do not see how there was special disadvantage in any relevant sense.
And if the essential complaint is one of non-disclosure, the only difference that disclosure would have made is that the applicants might have been able, together with other former employees, Unions and other interested persons, to lobby against the proposed legislation and provoke public opposition to it. Whether that would or could have made any difference is impossible to say. In fact the legislation was discussed in the public domain before enactment, and in particular before a Committee of the Legislative Council (CB3/122). The Court is hardly in a position to assess the likely effectiveness of a hypothetical political and public relations campaign.
(d) Whether conduct unconscionable
Moreover, it is difficult to see how the Hydro’s conduct was unconscionable. The Hydro recognised that the number and total amount of potential claims was huge, and acted to protect its own interests. For a party to act in protection of its own interests is not, without more, unconscionable conduct, something that “shocks the conscience”. I venture to repeat what I said in “Truth, Lies and Stereotype: Stories of Mary and Louis” (1996) Newc LR Vol 1 No 3 at 22n, a discussion of Louth v Diprose:
“The law does not seek to enforce a standard of literal equality. Nor should it. In both commercial and private transactions one party will often be at an advantage because he or she is smarter, financially stronger, better informed or under less pressure than the other party. If the first party is aware of these advantages, he or she is, I suppose, in a sense ‘exploiting’ the other party. But it could not be rationally suggested the courts should set aside all such transactions. The Mary - Louis transaction might be seen as no more than the private and domestic equivalent of a commercial hard bargain where the better-positioned bargainer came out on top. Louis’ infatuation was a self-inflicted weakness and Mary took advantage of it. That might have been unfair, but the world is not always fair. Mary’s conduct did not pass over the ill-defined border into that specially reprehensible and repellent unfairness which lawyers call unconscionability - something that ‘shocks the conscience’.”
And since the Parliament of the State of Tasmania passed the 1993 Act it is not appropriate for a Court to make some kind of moral or ethical assessment of the legislation. The 1993 Act represents the democratic will of the people of Tasmania. There is no equivalent to the harsh or unjust outcome for the plaintiff which has usually founded unconscionable conduct claims.
(e) Unconscionable conduct as a cause of action
In any case, the applicants would face a further hurdle. Generally, an unconscionable conduct claim in equity only gives rise to the right to set aside the transaction which has been vitiated by the conduct. Counsel for the applicants was not able to point to any authority for the proposition that unconscionable conduct can found a free-standing claim, sounding in damages, and unconnected with some other transaction in respect of which relief is claimed.
LIMITATION DEFENCES
Finally, I turn to the limitation defences. The Hydro asserts that many of the applicants’ claims are statute-barred.
Accrual of causes of action
Section 4(1)(a) of the Limitation Act 1974 prescribes a six year limitation period for “actions founded on simple contract (including contract implied by law) or founded on tort, including actions for damages for breach of statutory duty”. Section 82(2) of the Trade Practices Act 1974 (Cth) prescribes a three year limitation period for actions for damages under s 82 of that Act. For unconscionable conduct contrary to s 51AA of the Trade Practices Act the limitation period is two years: see s 87(1CA)(a).
I have found none of the causes of action relied on are made out. However I shall consider the application of these various limitation periods in the event that an appeal produces a different result.
A cause of action means “every fact which is material to be proved to enable the plaintiff to succeed”: Cooke v Gill (1873) 8 LR CP 107 at 116 per Brett J.
Causes of action for breach of statutory duty and tort and under the Trade Practices Act (both for misleading and deceptive conduct and for unconscionable conduct) accrue at the time that damage is suffered. As to Trade Practices Act claims see Wardley Australia Limited v Western Australia (1992) 175 CLR 514 (s 52 contravention) and Gregg v Tasmanian Trustees Limited (1997) 143 ALR 328 at 363-364 (s 51AA contravention). Causes of action in contract accrue at the time of breach, since breach of contract is actionable without proof of damage.
Knowledge of the right to sue is not an essential ingredient of a cause of action: Torrens Aloha Pty Ltd v Citibank NA (1997) 144 ALR 89 at 101 per Sackville J, with whom the other members of the Full Court agreed. Thus I do not accept the applicants’ argument that their causes of action only accrued when they became aware that they had had, prior to termination of employment, a right to elect to become contributors. The cases dealing with the liability of builders and local government authorities in respect of defective buildings stand on a different footing (no pun intended). The cases are reviewed by the Privy Council in Invercargill City Council v Hamlin [1996] AC 624 at 644-649. Where cracking or other defects develop in a building, the cause of action will not accrue until the defects are discovered, or are reasonably discoverable. The rationale is that the loss and damage for which the claim is made is economic, not physical. Until the damage is discovered or reasonably discoverable the value of the building is not affected: Hamlin at 647, Heyman 157 CLR at 503-505 per Deane J. Hamlin does not detract from the general principle that limitation periods commence to run irrespective of the plaintiff’s knowledge of the existence of the cause of action.
In the present case the claimed loss and damage is undoubtedly economic. However, the critical knowledge - the right of election for temporary employees - was reasonably discoverable and was not comparable to hidden cracking in a building. The right had been enshrined in Acts of the Tasmanian Parliament since 1974. The present case is analogous to the situation where negligent advice or conduct results in the loss of a right, such as the failure of a solicitor to commence a claim within a limitation period. Time for a claim against that solicitor will run from the time the period expired.
All causes of action in the present case accrued when each applicant’s employment was terminated. For causes of action for breach of statutory duty or in tort, it was only then that the applicant lost the right to elect to contribute to the RBF Scheme and thereby suffered damage. For a cause of action in contract, if there was a contractual obligation, which of course I do not accept, it was a continuing one (see Scally at 308) and the Hydro was in breach of it on the last day of each applicant’s employment.
The present proceeding commenced on 1 February 1996. The applicants Duggan and Williams, whose employment terminated before 1 February 1990, are outside the six year period and all their claims would be defeated. In respect of the Trade Practices Act claims, all applicants’ claims would be defeated, whether under s 52 or s 51AA. The remaining causes of action are prima facie within the limitation period.
Fraud and concealment
Section 32 (1) of the Limitation Act 1974 provides:
“32 (1) Subject to subsection (2) where, in the case of any action for which a period of limitation is prescribed by this Act -
(a)the action is based upon the fraud of the defendant or his agent or of any person through whom he claims or his agent;
(b)the right of action is concealed by the fraud of any person referred to in paragraph (a); or
(c)the action is for relief from the consequences of a mistake,
the period of limitation shall not begin to run until the plaintiff has discovered the fraud or the mistake, as the case may be, or could with reasonable diligence have discovered it.”
Subsection (2) is not relevant for present purposes. I respectfully agree with the decision of McLelland J in Hamilton v Kaljo (1987) 17 NSWLR 381 at 386 to the effect that “fraud” in a limitation statute necessarily involves dishonesty or moral turpitude, contrary to the English decisions referred to in his Honour’s judgment. In my opinion the conduct of the Hydro did not involve fraud in the relevant sense. The worst that can be said is that more steps might have been taken to inform temporary employees of their right to elect. But in the light of the evidence as to the Blue Books, the Head Office circular and the systems which existed at Head Office I believe there is no foundation whatever for a suggestion of some kind of fraudulent conspiracy within the upper echelons of the Hydro to conceal RBF rights. For the same reason, there was no concealment. As already mentioned, the right of election was contained in a statute.
SUMMARY OF FINDINGS
The applicants were not permanent employees. The Hydro did not owe them any duty in law to advise them of their right to elect to become contributors to the RBF Scheme, whether such duty be founded in statute or in tort or contract. The Hydro did not, in relation to the applicants’ right of election, engage in misleading or deceptive conduct in trade or commerce. If there was any such duty, there was no breach. If there was a breach, the applicants have not established that they would have suffered any damage.
The 1993 Act would not provide a bar to the applicants’ claims, were those claims otherwise established. But were the 1993 Act to apply, the applicants could not defeat its operation by reliance on the doctrine of unconscionable conduct. Claims under statute and in tort or contract are barred by the Limitation Act 1974 in respect of those applicants whose employment terminated before 1 February 1990. The operation of the Limitation Act is not defeated by fraud or concealment. All claims under the Trade Practices Act are barred.
ORDERS
It must follow from the foregoing findings that the claims of the six selected applicants will be dismissed and that there be an order that they pay the Hydro’s costs. However there should be an opportunity for submissions on the part of any of the other applicants who may wish to argue that there are personal circumstances which would take them outside these findings. The making of formal orders in respect of the claims by the six selected applicants will be postponed until submissions are dealt with. The order will be that the proceeding be adjourned to a date to be fixed and there will be a direction that any submissions on the part of the applicants, that is to say all applicants, be filed and served within fourteen days. Submissions by the Hydro in response are to be filed and served within seven days thereafter.
ACKNOWLEDGMENTS
This has proved to be a large, complex and difficult case. There were 77 witnesses and a Court Book of 40 volumes. I have been greatly assisted by counsel and their instructing solicitors, by my successive Associates Ms Christine Petrov and Ms Marnie Hammond, my Secretary Mrs Judith Dikstaal, the staff at the Hobart Registry of the Court, and Auscript.
I certify that this and the preceding One hundred and nine pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey
Associate:
Dated:
Counsel for the Applicants: Mr Peter Tree and Mr Simon Cooper Solicitor for the Applicants: Ogilvie McKenna Counsel for the Respondent: Mr Peter Evans and Mrs Kim Bennett Solicitor for the Respondent: Butler McIntyre & Butler Date of Hearing: 22-6 September 1997, 10-14 November 1997, 8-12 December 1997, 3-6 March 1998, 15-21 April 1998 Date of Judgment: 3 June 1998
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