SAS Trustee Corporation v Rayment

[2000] NSWCA 115

NEW SOUTH WALES COURT OF APPEAL

CITATION:     SAS Trustee Corporation v Rayment [2000]  NSWCA 115

FILE NUMBER(S):
40290/99

HEARING DATE(S):           14 April 2000

JUDGMENT DATE:            26/05/2000

PARTIES:
SAS Trustee Corporation v Marea Catherine Rayment

JUDGMENT OF:      Meagher JA Handley JA Fitzgerald JA   

LOWER COURT JURISDICTION: Compensation Court

LOWER COURT FILE NUMBER(S):        3688/98

LOWER COURT JUDICIAL OFFICER:     Hughes CCJ

COUNSEL:
T M Ower (Appellant)
M J McAuley (Respondent)

SOLICITORS:
B T Matthews, SAS (Appellant)
Walter Madden Jenkins (Respondent)

CATCHWORDS:
VICTIMS COMPENSATION - law enforcement victim - appeal from Compensation Court - whether "compensation for injury" under s 14 of Victims Compensation Act 1987 disentitles claimant from "gratuity" for medical expenses under s 12E(1) of Police Regulation (Superannuation) Act 1906

LEGISLATION CITED:
Police Regulation (Superannuation) Act 1906 (NSW)
Workers Compensation Act 1987 (NSW)
Victims Compensation Act 1987 (NSW)
Victims Compensation Act 1996 (NSW)
Miscellaneous Acts (Victims Compensation) Repeal and Amendment Regulation 1987 (NSW)
Statute Law (Miscellaneous Provisions) Act [No 2] 1992
Statute Law (Miscellaneous Provisions) Act [No 2] 1998

DECISION:
Appeal dismissed with costs

JUDGMENT:

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

40290/99
CC 3688/98

MEAGHER JA

HANDLEY JA

FITZGERALD JA

26 May 2000

SAS TRUSTEE CORPORATION  v  MAREA CATHERINE RAYMENT

VICTIMS COMPENSATION - law enforcement victim - appeal from Compensation Court - whether “compensation for injury” under s 14 of Victims Compensation Act 1987 disentitles claimant from “gratuity” for medical expenses under s 12E(1) of Police Regulation (Superannuation) Act 1906

The respondent police officer was injured on duty when she was assaulted while attempting to arrest an offender. She claimed and recovered compensation for injury under s 14(a) of the Victims Compensation Act 1987 (the 1987 Act) but did not claim for expenses under s 14(b) of the 1987 Act because her medical expenses were being paid by her employer. When her employer ceased paying her medical expenses the respondent applied for a “gratuity” for such expenses under s 12D of the Police Regulation (Superannuation) Act 1906 (the 1906 Act).  The Corporation claimed to be entitled to offset the compensation for injury under s 12E and refused her application.  She succeeded on appeal to the Compensation Court, and the Corporation appealed to the Court of Appeal.

HELD: dismissing the appeal: (1) (by majority, Handley JA dissenting) The purpose of s 12E(1) of the 1906 Act is to prevent double compensation for loss of the kind for which the police officer is seeking a gratuity under s 12D(1). Since the respondent received “compensation for injury” and not compensation for expenses under the 1987 Act, and the gratuity applied for under s 12D(1) of the 1906 Act related to expenses, she was not disentitled to the gratuity applied for. Bird v Commonwealth (1988) 165 CLR 1 referred to.

ORDERS

Appeal dismissed with costs.

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

40290/99
CC 3688/98

MEAGHER JA

HANDLEY JA

FITZGERALD JA

26 May 2000

SAS TRUSTEE CORPORATION  v  MAREA CATHERINE RAYMENT

JUDGMENT

1. MEAGHER JA:       I agree with Fitzgerald JA.

1. HANDLEY JA:        This is an appeal from the Compensation Court (Hughes CCJ) by the SAS Trustee Corporation (STC), the body charged with the administration of the Police Superannuation Fund under the Police Regulation (Superannuation) Act 1906 (as amended) (the Act). The respondent, Inspector Marea Rayment, was injured on duty on 22 October 1986 when she was assaulted while attempting to arrest an offender. This injury entitled her to benefits under s 12D of the Act, described as gratuities, for medical expenses, non-economic loss, and property damage. These are not to exceed the amounts payable in accordance with Divs 3, 4, and 5 of Pt 3 of the Workers Compensation Act 1987 which apply as if the police officer had been a worker for the purposes of that Act.  She was paid medical expenses for some years but then her claim for further medical expenses was not paid.

2. There was no dispute that Inspector Rayment was entitled to these under s 12D as a result of her injury. However she had also pursued her rights under the Victims Compensation Act 1987 (the 1987 Act).  She received an interim award of $4,000 from the Victims Compensation Tribunal (the Tribunal) on 23 May 1989 and a further award of $16,000 on 15 September 1993.  Hughes CCJ held that these amounts were awarded as compensation for injury as provided in the 1987 Act, that is for pain and suffering and for loss of enjoyment of life, and not as compensation for medical expenses.

3. The STC, in its determination of 27 October 1997, declined to pay a gratuity for Inspector Rayment’s expenses, apparently being of the view that s 12E of the Act required the claim to be set-off against the moneys she had received under the 1987 Act.  Section 12E as currently in force provides so far as relevant:

   “(1)Where a member of the Police Force is hurt on duty in circumstances creating a legal liability in some person to pay damages in respect thereof and those damages are recovered, a gratuity shall not be payable under section 12B or 12D to the person who recovered the damages or, if a gratuity under section 12B or 12D has already been paid to the person who recovered the damages, the person shall be liable to repay to STC out of those damages the amount of the gratuity so paid. 

   (2)In sub section (1) damages does not include any sum ordered or directed to be paid pursuant to any provision of the Victims Compensation Act 1996 by way of compensation for injury, but any such sum so paid to a person shall be deducted from any gratuity subsequently payable to the person under section 12B or 12D in respect of the injury”.

4. Section 12B(2) creates an entitlement in dependants of a member or former member of the police force who dies as a result of being hurt on duty to receive a gratuity not exceeding the amount payable under Division 1 of Part 3 of the Workers Compensation Act as if the member or former member had been a worker.  Section 21 of the Act enables a person aggrieved by a decision of STC rejecting a claim to apply to the Compensation Court for a determination of the claim on its merits.  Inspector Rayment availed herself of this right and her proceedings came on for hearing before Hughes CCJ.  The Judge held that the Inspector was entitled to be paid her medical expenses because the compensation she had received under the 1987 Act did not include any amount for expenses, s 12E being “intended to eliminate the doubling up of medical expenses”.

5. Counsel for both parties came to the Court to argue the appeal on the text of s 12E quoted above.  However the section in its current form has no application because it refers to “any sum ordered or directed to be paid pursuant to any provision of the Victims Compensation Act 1996”.  The payment of $16,000 purports to have been made under the 1987 Act (see notice of determination of 15 September 1993), but that raised a further question because the injury on duty occurred on 22 October 1986 before the commencement of the 1987 Act. 

6. Counsel for the appellant eventually produced a copy of the Miscellaneous Acts (Victims Compensation) Repeal and Amendment Regulation 1987 which provided in cl 3 that the 1987 Act applies to an act of violence committed before the commencement of that Act where an application for compensation had not been finally determined before that commencement.  The Inspector therefore did receive her victims’ compensation under the 1987 Act.

7. However the Court was also informed that s 12 E contained no reference to payments under the 1987 Act until the commencement of the Statute Law (Miscellaneous Provisions) Act [No 2] 1992 which amended s 12E(2) by omitting a reference to the Crimes Act 1900 and inserting a reference to the Victims Compensation Act 1987. This amendment came into force on 8 October 1992.  The section was in that form when the Tribunal made its determination of 15 September 1993, and when the proceedings in the Compensation Court were initiated on 6 April 1998.  Section 12E(2) continued to refer to the 1987 Act until the commencement on 26 November 1998 of the Statute Law (Miscellaneous Provisions) Act [No 2] 1998 which substituted a reference to the 1996 Act without retrospective effect.

8. On 27 October 1997, when the STC made its decision to refuse payment of a gratuity for Inspector Rayment’s medical expenses, s 12E(2) provided that any sum “paid pursuant to any provision of the Victims Compensation Act 1987 by way of compensation for injury … shall be deducted from any gratuity subsequently payable to the person under s 12B or 12D in respect of the injury”.  “Compensation for injury” was defined in s 10(1) of the 1987 Act as meaning, so far as relevant:

   “(a) … In relation to a law enforcement victim:

   (i)        compensation for pain and suffering; and

   (ii)       compensation for loss of enjoyment of life, or

   (b)in relation to a close relative of a deceased victim of an act of violence:

   (i)        compensation for pain and suffering;

   (ii)       compensation for loss of enjoyment of life; and

   (iii)      compensation for grief”.

9. Inspector Rayment was a law enforcement victim as defined by s 10(1).  Section 14 of the 1987 Act provided:

   “A law enforcement victim is eligible to receive:

   (a)      compensation for injury;

   (b)      compensation for expenses; and

   (c)       compensation for loss of personal effects”.

10. The determination of the Tribunal of 15 September 1993 stated that the $16,000 paid to Inspector Rayment was “compensation for injury”.  It was faintly suggested by Mr McAuley, who appeared for the respondent, that there was some ambiguity in the meaning of the first limb of s 12E(2) and that the words “compensation for injury” might have their ordinary meaning, not their meaning as defined in the 1987 Act.  However in my judgment the language is intractable.  The words “any sum ordered or directed to be paid pursuant to any provision of the Victims Compensation Act 1987” are a clear reference to provisions of that Act.  The further reference to “by way of compensation for injury” is also linked to that Act.  The reference to “any provision” does not introduce an ambiguity because police officers may be hurt on duty both in the course of law enforcement (s 14 and the definition in s 10(3)) and otherwise, for example when they are victims of an act of random violence.

11. The first limb of s 12E(2) is therefore satisfied in this case. The payment of $16,000 was not “damages” for the purposes of s 12E(1) and the Inspector did not have to repay any gratuity previously received out of her compensation. This however leaves the second limb of sub s (2) which provides that “any such sum so paid to a person shall be deducted from any gratuity subsequently payable to the person under section 12B or 12D in respect of the injury”.

12. Section 12B covers compensation for death and section 12D covers medical expenses, compensation for non-economic loss, and compensation for property damage. The literal meaning of the second limb of s 12E(2) appears to require payments of compensation for injury under the 1987 Act (but not compensation payments under s 14(b) and (c) for expenses and loss of personal effects) to be set off against gratuities payable for death under s 12B, and for medical expenses, non-economic loss and property damage under s 12D.

13. The literal meaning of the second limb produces strange results, verging on the bizarre. The offsetting of compensation for injury received under the 1987 Act against a future gratuity under s 12D for non-economic loss assessed in accordance with Div 4 of Pt 3 of the Workers Compensation Act 1987 may be both rational and fair, but no reason appears why a police officer or his or her dependants as the case may be should be able to avoid this result and retain both payments by the simple expedient of obtaining the s 12B or s 12D gratuity before obtaining compensation under the 1987 Act.

14. Section 12E(2) does not require compensation for expenses or for loss of personal effects under s 14 of the 1987 Act to be offset against gratuities for the same types of losses under s 12D, although there appear to be good reasons why such payments should be set off. On the other hand there is no apparent reason why compensation for injury as defined in the 1987 Act, which is a form of compensation for non-economic loss, should be offset against gratuities payable as compensation for economic loss in the form of medical expenses or property damage. There is also difficulty in seeing why compensation for injury in the case of a close relative of a deceased victim of an act of violence which is available for non-economic loss should be offset against a gratuity payable under s 12B to dependants which is a form of compensation for economic loss.

15. Section 21 of the 1987 Act provides that the Tribunal, when awarding compensation, shall have regard to any amount which has been paid to the victim or to which he or she is entitled “under any other Act or law (including any Act or law relating to workers’ compensation)” (s 21(a) (iii)).  One way or another this expression includes the Police Regulation (Superannuation) Act.  This provision would allow the Tribunal to offset gratuities received or receivable for medical expenses and property damage against entitlements to compensation for expenses and loss of personal effects otherwise payable in accordance with s 14(b) and (c) of the 1987 Act.

16. If the 1987 Act was administered by the Tribunal in this way, this could explain why s 12E(2) deals only with compensation for injury and not with the other two forms of compensation payments. However if this is so one wonders why the Tribunal would not also take into account any gratuity paid or payable under s 12D for non-economic loss when awarding compensation for injury. If the $20,000 compensation under the 1987 Act was assessed on this basis, there should be no grounds for offsetting that payment against any future s 12D gratuity for non-economic loss, but s 12E(2) certainly requires this to be done.

17. The results of a literal interpretation of the second limb of s 12E(2) appear so arbitrary and unreasonable that I would willingly adopt another construction if that were possible, particularly if one could discern the necessary legislative intent on a broader examination of the Act.  The principles which authorise the Court to adopt such an approach were stated in Cooper Brookes (Wollongong) Pty Ltd v FCT (1981) 147 CLR 297 particularly in the joint judgment of Mason and Wilson JJ at 320-1:

    “… mere inconvenience of result in itself is not a ground for departing from the natural and ordinary sense of the language read in its context.  But there are cases in which inconvenience of result or improbability of result assist the Court in concluding that an alternative construction which is reasonably open is to be preferred to the literal meaning because the alternative interpretation more closely conforms with the legislative intent discernible from other provisions in the statute … when the Judge labels the operation of the statute as ‘absurd’, ‘extraordinary’, ‘capricious’, ‘irrational’ or ‘obscure’ he assigns a ground for concluding that the legislature could not have intended such an operation and that an alternative interpretation must be preferred.  But the propriety of departing from the literal interpretation is not confined to situations described by these labels.  It extends to any situation in which for good reason the operation of the statute on a literal reading does not conform to the legislative intent as ascertained from the provisions of the statute, including the policy which may be discerned from those provisions”.

18. Counsel were not able to suggest any plausible explanation for the form of these sections, or to identify some scheme in the legislation which underlay the text which had been imperfectly reflected in the language of the second limb of s 12E(2).  Counsel also informed us that there was nothing in the Second Reading Speech, or in the other explanatory materials, which threw light on the scheme of the legislation, or the purpose of Parliament, or which suggested some other meaning for the second limb of s 12E(2).

19. In an attempt to understand s 12E in the form which is relevant in this case, I have examined the legislative history of these provisions dating from 1979. Section 12D(1) and s 12E(1) have been the subject of minor amendments since such as the introduction of gender specific language, but are unchanged in substance. Since 1979 s 12B(2) has made provision for gratuities to be paid to dependants on the death of a member of the Force who was hurt on duty, and s 12D(1) has made provision for gratuities to be paid to the member for medical expenses, non-economic loss, and property damage. Of greater relevance is the fact that the text of s 12E(2) has not changed either, apart from the substitution of a reference to the 1987 Act, for the original reference to the Crimes Act 1900.

20. Courts have recognised the width of the meaning of the phrase “in respect of”. It appears at the end of s 12E(2), where it defines the relationship between the injury suffered by the member of the Force who was hurt on duty, and a gratuity payable under s 12B on the death of the member, or under s 12D in other cases. There is no difficulty in treating a gratuity payable under s 12D for medical expenses or property damage as “payable … in respect of the injury” for the purposes of s 12E(2). The phrase may however, depending on the context, have a narrower meaning. The principles were discussed by Mason J in State Government Insurance Office (Q) v Rees (1979) 144 CLR 549 at 561:

    “The expression ‘in respect of’ denotes a relationship or connection between two things. In State Government Insurance Office v Crittenden (1966) 117 CLR 412, 416 Taylor J quoted, with evident approval, the remarks of Mann CJ in Trustees Executors and Agency Co Ltd v Reilly [1941] VLR 110, 111 ‘the words in respect of are difficult to definition, but they have the widest possible meaning of any expression intended to convey some connection or relation between the two subject matters to which the words refer’. The same view was taken later in Club Motor Insurance Agency Pty Ltd v Sargent (1969) 118 CLR 658. But as with other words and expressions the meaning to be ascribed to ‘in respect of’ depends very much on the context in which it is found”.

21. The words ‘in respect of the injury’ in their context might refer to a gratuity payable for the direct physical consequences of the injury, or they could refer to any gratuity payable as a result of the injury. Gratuities under s 12B are payable to dependants of a deceased member of the Force who died as a result of being hurt on duty. Such gratuities are not payable for the physical consequences of the injury to the victim, but for the economic consequences for the dependants of the death of the victim. Similarly the gratuities payable under s 12D(1) for medical expenses and property damage are not payable for the direct physical consequences of the injury, but for its economic consequences for the victim.

22. In my judgment the reference to a gratuity payable under s 12B demonstrates that the phrase “in respect of the injury” cannot be limited to the direct physical consequences of the injury for the victim. Given that gratuities payable under s 12B to dependants of a deceased member of the Police Force are “payable … in respect of the injury” to the deceased, it is not possible, in my judgment, to treat gratuities payable under s 12D to the injured member for medical expenses and property damage as not “payable … in respect of the injury”.

1. I am unable to discern any scheme, purpose or policy in the legislation which underlies its text which could inform and direct any construction other than the literal one.  In the absence of a plausible alternative the Court must, in my opinion, given literal effect to the statutory language despite the arbitrary and haphazard results.  This was the approach adopted by Kirby P in Grljak v Trivan Pty Ltd (1994) 35 NSWLR 82 at 84 where he said:

   “The provisions of s 151Z of the Workers Compensation Act 1987 are not entirely clear. Nor is the policy that lies behind them. In these circumstances … the only safe course for the court to adopt is to give the words their apparent literal meaning”.

2. In my judgment no other construction of the statutory language is available, and the Court, of course, is not free to re-write the text to reflect its own ideas of what would be a fair and just provision for dealing with the overlap between these two compensation schemes.

3. The literal meaning of s 12E(2) is clear, and its application in the present case is also clear.  The Inspector received $20,000 under the 1987 Act as “compensation for injury”, and this sum, so paid, “shall be deducted from any gratuity subsequently payable … under s … 12D in respect of the injury”.  The appeal to this Court must therefore be allowed.

4. The Inspector received $20,000 by way of compensation for injury and since the appeal to this Court involved the claim of the Corporation to offset this amount against her continuing medical expenses, it would appear that the appeal lay as of right.  I am content to deal with the appeal on this basis.  In my opinion the following orders should be made:

   (1)      Appeal allowed with costs;

   (2)Set aside the determination of the Compensation Court and in lieu thereof order that the decision of the STC of 27 October 1997 declining to pay the respondent a gratuity in respect of the claimed expenses be confirmed;

   (3)      The respondent to have a certificate under the Suitors Fund Act.

5. FITZGERALD JA:   The respondent is a member of the police force who was injured while on duty and in the course of law enforcement within the meaning of the Victims Compensation Act 1987 Now the Victims Compensation Act, 1996.. It is common ground that she thereby became a “law enforcement victim” within the meaning of that Act and, subject to the other provisions of Pt 3 Div 2 including the maximum compensation limits contained in s 16, became eligible to receive compensation in accordance with s 14.

6. At the material times, s 14 was in the following terms:

   “Compensation to law enforcement victims

   14.      A law enforcement officer is eligible to receive:

   (a)      compensation for injury;

   (b)      compensation for expenses;

   and

   (c)       compensation for loss of personal effects.”

   Subsection 10(1) contained definitions of “compensation for expenses”, “compensation for injury” and “compensation for loss of personal effects”.

7. The respondent made an application for “compensation for injury” under the Victims Compensation Act and received a total of $20,000. The final award was dated 15 September 1993. She did not apply for or receive any “compensation for expenses” under that Act, perhaps because at the material time her medical expenses were being paid or reimbursed by the Commissioner of Police. See s 21 of the Victims Compensation Act, 1987. 

8. For reasons which are unexplained, the Commissioner of Police’s payment or reimbursement of the respondent’s medical expenses terminated and she made application to the appellant for a “gratuity” in respect of those expenses under s 12D of the Police Regulation (Superannuation) Act 1906. It is common ground that the respondent satisfied the requirements of that subsection.

9. The appellant refused the respondent’s application for a gratuity and she appealed to the Compensation Court under s 21 of the Police Regulation (Superannuation) Act. The Compensation Court decided that the respondent is entitled to the gratuity applied for. The appellant has appealed from the Compensation Court’s decision to this Court.

10. Subsections 12D(1) and 12E(1) of the Police Regulation (Superannuation) Act provide:

    “Gratuities to members hurt on duty in respect of loss of limbs, medical expenses etc.

    12D. (1) The [appellant] may pay to a member of the police force who is hurt on duty … a gratuity of such amount as the [appellant] determines, not exceeding the amount that, in the opinion of the [appellant], would have been payable to the member …. under Divisions 3, 4 and 5 of Part 3 of the Workers Compensation Act 1987 if the member were … a worker for the purposes of that Act.

    …….

    “Repayment to Board in certain cases

    12E.    (1)      Where a member of the police force is hurt on duty in circumstances creating a legal liability in some person to pay damages in respect thereof and those damages are recovered, a gratuity shall not be payable under section … 12D to the person who recovered the damages or, if a gratuity under section … 12D has already been paid to the person who recovered the damages, he shall be liable to repay to the Board out of those damages the amount of the gratuity so paid.”

11. The meaning of subs 12E(1) is unclear. In particular, “damages” might refer to damages recovered by an injured member of the police force for loss of any kind or might be limited to damages for loss of the kind for which the police officer is also seeking a gratuity under subs 12D(1).

12. The latter construction better gives effect to the apparent purpose of subs 12E(1), which is to prevent double compensation. Further, that construction accords with established principles applicable to the interpretation of such legislation, which is to be construed “beneficially”, not “in the spirit of meticulous literalism”, and, in the case of ambiguity, the construction favourable to the worker is to be preferred. Bird v Commonwealth (1988) 165 CLR 1,6,9.

13. At the time when the appellant refused the respondent’s application for a gratuity, subsection 12E(2) of the Police Regulation (Superannuation) Act was in the following terms:

    “(2)     In subsection (1), “damages” does not include any sum ordered or directed to be paid pursuant to any provision of the Victims Compensation Act 1987 by way of compensation for injury, but any such sum so paid to a person shall be deducted from any gratuity subsequently payable to the person under section 12B or 12D in respect of the injury.”

14. The question for decision is whether the “compensation for injury” which the respondent received under the Victims Compensation Act 1987 must, by virtue of subs 12E(2) of the Police Regulation (Superannuation) Act, be deducted from the gratuity which it is accepted would otherwise be payable to her under subs 12D(1) of that Act.

15. In his reasons for judgment, Handley JA has expressed the opinion, contrary to the respondent’s submission, that “compensation for injury” in subs 12E(2) of the Police Regulation (Superannuation) Act means “compensation for injury” as defined in subs 10(1) of the Victims Compensation legislation. I will assume that that is so, although I do not consider it necessary to decide the point.

16. The drafting of subs 12E(2) of the Police Regulation (Superannuation) Act, like the drafting of subs (1) of the same section, leaves much to be desired. However, the general legislative purpose is discernible. Victims Compensation Act compensation to which subs 12E(2) of the Police Regulation (Superannuation) Act applies is excluded from the operation of subs 12E(1) and made the subject of a regime which is more favourable to a member of the police force such as the respondent who was injured while on duty and in the course of law enforcement. The latter part of subs 12E(2) of the Police Regulation (Superannuation) Act requires the deduction of Victims Compensation Act compensation from a gratuity if and only if damages recovered for the loss for which the Victims Compensation Act compensation was granted would have disentitled the member of the police force in question to the gratuity or, if it had been paid, obliged its repayment under subs 12E(1) of the Police Regulation (Superannuation) Act.

17. The critical question therefore is whether the loss for which the respondent received Victims Compensation Act compensation was one which would disentitle her to the gratuity applied for or require its repayment if she had instead recovered damages for that loss.

18. Since the respondent received “compensation for injury”, not compensation for expenses, under the Victims Compensation Act 1987 and the gratuity applied for relates to expenses, that question must be answered in the negative if the opinion which I earlier expressed in para 8 in relation to the operation of subs 12E(1) of the Police Regulation (Superannuation) Act is correct.

19. Accordingly, I would dismiss the appeal, with costs.

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LAST UPDATED:    30/05/2000