SAS Trustee Corporation v Miles

[2017] HCATrans 208

[2017] HCATrans 208

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S150 of 2017

B e t w e e n -

SAS TRUSTEE CORPORATION

Applicant

and

PETER MILES

Respondent

Application for special leave to appeal

KIEFEL CJ
GAGELER J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 20 OCTOBER 2017, AT 10.43 AM

Copyright in the High Court of Australia

MR N. WILLIAMS, SC:   May it please the Court, I appear with my learned friend, MS S. PALANIAPPAN, for the applicant.  (instructed by SAS Trustee Corporation)

MR J.M. MORRIS, SC:  May it please the Court, I appear with my learned friends, MR M.J. WEIGHTMAN and MR H.D. MORRISON, for the respondent.  (instructed by Cardillo Gray Partners)

KIEFEL CJ:   Yes, Mr Williams.

MR WILLIAMS:   Your Honours, the key statutory provisions start from page 122 of the book.  On page 122, the first of the two separate streams of entitlement to superannuation allowance is created by section 7.  It is the general case, as shown by the heading, which includes the words:

except where member hurt on duty –

The general case, the qualification is:

20 years of more of equivalent full‑time service and retires on or after attaining the age of 60 years or . . . discharged after being certified . . . to be incapable . . . of personally exercising the functions of a police officer –

At the foot of the page, about line 55, the maximum rate provided in that case is 72.750 per cent and in subsection (2):

An annual superannuation allowance under –

section 7 is not payable in respect of a member who is eligible under section 10, the hurt on duty provisions.

Section 8, on the following page, 124, deals with the determination of medical unfitness.  Certification by STC, the present applicant, is required that the member is:

incapable, from infirmity of body or mind, of personally exercising the functions of a police officer –

We note in passing in the words below 1(b) the operative words:

unless STC –

in the second line of that:

from infirmity –

It is generally expressed in contrast to the provisions that follow. 

The second stream of entitlement comes from section 10 which is on page 125.  The heading is of some significance, being extrinsic material:

Superannuation allowance where member hurt on duty ‑

To attract the section, the person must be within the definition that is set out at about line 20 on the page:

disabled member of the police force –

Skipping the bulk of that for the moment – as I will come back to it – at about line 30, the key limitation is imposed and that is that the infirmity has to have been determined:

pursuant to section 10B(3) or on appeal, to have been caused by the member being hurt on duty –

Given that limitation, 10B becomes the first point of call in construing the statute and it is on section 127.  Like section 8, it contains a prohibition in each of subsections (1) and (2) on granting an allowance:

unless STC . . . has certified the member to be incapable . . . of personally exercising the functions –

Section 10B(1) closely parallels ‑ this deals with persons who are discharged ‑ it closely parallels section 8(1) with one quite important difference and that is in the third line – it must be:

from a specified infirmity –

So, in this case, it is no longer general but the infirmity must be specified.  A similar effect is achieved in subsection (2), the key operative part of which being (c):

STC . . . has certified that the former member was incapable, from that infirmity of body or mind –

And that is a reference back to the infirmity in paragraph (a), the one which had been notified to the Commissioner within six months of receiving the injury.

So, in the case of resignation or retirement, which is that dealt with in subsection (2), there is a requirement of notification before:

resignation or retirement and within 6 months of receiving the injury –

Plainly, this requirement is to support the function with which the Commissioner of Police is vested by subsection (3) by requiring a notice within a period that might permit investigation of factual matters.  Subsection (3) is the critical provision for current purposes:

Where a member . . . certified under subsection (1) or (2), the Commissioner of Police shall:

(a)decide whether or not the infirmity to which the certificate relates –

that is, a specific infirmity:

was caused by the member being hurt on duty . . . and the date or dates on which –

that occurred, and give the person:

written notification of the decision.

When section 10B is read as a whole, its precise focus upon a particular injury and a specific infirmity becomes clear, an infirmity which has to be certified first by STC and specified and then becomes the subject of a “hurt on duty” determination by the Commissioner.  And, it is with context firmly in mind, that the threshold question – not the gateway, we would say, but the threshold – that section 10 back on page 125 must be construed. 

I have called attention already to the section heading which, as Justice Sackville recognised, is not part of the text in New South Wales but is an important part of context for the purposes of extrinsic material.  I have mentioned already the definition of “disabled member” at point 20, but it is important to emphasise the reference to the specified infirmity in paragraph (a) and that the infirmity referred to in paragraph (b) is, necessarily, the one that was referred to in 10B(2)(a), that is, the one that caused the injury notified to the Commissioner.

It is important also to note that the word “incapable” appears in both limbs.  The incapacity, so expressed, is directly that arising from being hurt on duty.  It is the one that comes directly out of the 10B(3) determination.  The operative limitation then follows after paragraph (b), the infirmity being determined pursuant to 10B(3) to have been “caused by the member being hurt on duty”.

It is settled law that definition provisions are to be read into the operative provisions that give effect to them before the whole is then construed so that when one turns to the chapeau of subsection (1A), the reference to:

a disabled member of the police –

picks up the definition from higher up the page which, in turn, operates through a 10B(3) determination.  That definition requires that the member be incapable from a “hurt on duty” injury and that is critical context when considering the meaning of “incapacity” in (1A)(b)(ii), the critical provision, because when the definition is read in, “incapable” appears twice – incapable in the chapeau – incapacity in 10B(2) and in the first use of “incapable” it is plainly incapacity arising from “hurt on duty”.

KIEFEL CJ:   Mr Williams, we might call upon the respondent at this point.

MR WILLIAMS:   May it please the Court.

MR MORRIS:   Thank you, your Honours.  In large part, much of what my friend has addressed upon is non‑contentious.  The issue which exercised the majority of the Court of Appeal was a distinction between “capacity”, as it appears in 10B, and the definition section of “disabled member of the police force”, which is the incapacity of personally exercising the functions of a police officer, and the respondent has that certification.  There is no doubt that he was hurt on duty and he was certified as being incapable of being able to perform the tasks, or the functions, of a police officer.  There is that capacity and then in section 10(1A)(b)(ii) is another incapacity which was “incapacity for work outside the police force” ‑ ‑ ‑

KIEFEL CJ:   That is a different kind, is it, than hurt ‑ ‑ ‑

MR MORRIS:   ‑ ‑ ‑ and that is a different ‑ ‑ ‑

KIEFEL CJ:   ‑ ‑ ‑ than hurt from ‑ hurt on duty.

MR MORRIS:   Yes, yes.

GAGELER J:   Irrespective of the cause of the incapacity.

MR MORRIS:   Irrespective of the cause, irrespective of the cause.  And, the majority ‑ ‑ ‑

KIEFEL CJ:   That means that the police officer would be other than a disabled member of the police force in relation to the other cause.

MR MORRIS:   Yes.  And, in this case, by way of background, the respondent was certified as being incapable of performing his role as a police officer by reason of orthopaedic injuries and after his discharge he developed psychiatric injuries which were caused by his employment, but because he had not complied with the notification provisions of reporting them within six months on onset and before he retired, he was excluded from claiming them by reason of the operation of section 10B.  So, he had two medical conditions in parallel which the trial judge found had led to a 90 per cent incapacity in the open workforce.  That is in paragraph 82 of the primary judgment.

Now, the majority of the Court of Appeal observed that the provision, section 10(1A)(b)(ii), did not exclude, in its terms – which it could have done – “non‑hurt on duty injuries”, if I might use that shorthand.  In other words, it was an open section.  The majority also made the observation ‑ when one looks at the potential inconsistency – they looked for potential inconsistencies by drawing the conclusion they did, they looked to section 10(1A)(c) which provided a further uplift in superannuation entitlements of up to 100 per cent if the police officer was, firstly:

totally incapacitated for work outside the police work and, in the opinion of the STC, the member was hurt on duty ‑

You see, they have re‑incorporated the terms “hurt on duty” which does not appear in subparagraph (b)(ii) above.  And, thirdly, because:

the member was required to be exposed to risks to which members of the general workforce would normally not be required to be exposed –

KIEFEL CJ:   So, on your submission, the process then under section 10(1A)(b)(ii) would be for the applicant to consider the incapacity for work outside?

MR MORRIS:   Yes.

KIEFEL CJ:   And, what, hold a hearing and consider medical evidence and then, effectively, certify another incapacity?

MR MORRIS:   Yes.  In other words, all they need to do is demonstrate, as the respondent did in this case, that there is an increased incapacity for work outside the police force.

KIEFEL CJ:   But, that would not be the incapacity which has resulted in being eligible under the Superannuation Act. 

MR MORRIS:   Yes.  It may or may not be the same incapacity.  And, to that extent, that is the simple – because of the lack of constraining words in 10(1A)(b)(ii) – because of the lack of constraining words, that interpretation was open.  In this case, the respondent demonstrated that incapacity.  The trial judge accepted it and the majority of the Court of Appeal came to that conclusion.

In our respectful submission, in the Court below and here, the provisions of 10B provide a certification process – initially in subsections (1) and (2) – by the trustee corporation, which is the medical incapacity, and in 10B(3), is the police commissioner certifying that those infirmities were related to the discharge of duties by the police officer, and once that has happened the respondent – or the applicant – has discharged the mandatory pre‑condition and that section 10 is, in fact, a quantification provision.

Bearing in mind that police officers may be injured in their first year of service or their 20th year of service and they may have 20 years, essentially, in which they are unable to work or they have got this inability ‑ ‑ ‑ 

KIEFEL CJ:   But, approaching it in this way would mean that incapacity from any cause completely unrelated to – hypothetically – quite unrelated to their duty would be compensated for.

MR MORRIS:   Yes, which is recognition, in the general scheme, that – and Justice Sackville made this observation in the Court below – that the community accepts that police officers are exposed to risks and those that are hurt on duty are entitled to a greater level of entitlement than those who manage to pass through their service with the police service unscathed.

GAGELER J:   So, it is quite a different scheme, you say, from an ordinary workers’ compensation scheme.

MR MORRIS:   Absolutely.  And, this is a – as the New South Wales Court of Appeal observed in Lembcke – a superannuation scheme, not a compensation scheme, and these are the entitlements and this is the structure which the legislature has put in place.  I am not sure I can take it any further.

KIEFEL CJ:   Yes, thank you.

MR MORRIS:   Thank you.

KIEFEL CJ:   We do not need to trouble you further, Mr Williams.  There will be a grant of special leave in this matter.  What is your time estimate?

MR WILLIAMS:   Half a day, your Honour, and I believe that is common ground.

MR MORRIS:   Yes.

KIEFEL CJ:   Yes, thank you.  Is there an undertaking concerning costs?

MR WILLIAMS:   There is, your Honour.  It is given in paragraph 25 on page 115.  For the record:

the applicant undertakes to pay the respondent’s costs of this application and the appeal as a condition of any grant for special leave, and does not seek to disturb the order for costs below.

KIEFEL CJ:   Yes, thank you.  Could you ensure that your instructing solicitors obtain a copy of the directions in this matter – the timetable, from the Deputy Registrar?

MR WILLIAMS:   We will do that.

KIEFEL CJ:   The Court will adjourn to reconstitute.

AT 11:00 AM THE MATTER WAS CONCLUDED