Webb v Retirement Benefits Fund Board
[2004] TASSC 48
•25 May 2004
[2004] TASSC 48
CITATION: Webb v Retirement Benefits Fund Board [2004] TASSC 48
PARTIES: WEBB, Kay Lynnette
v
RETIREMENT BENEFITS FUND BOARD
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: APPELLATE
FILE NO/S: LCA 109/2003
DELIVERED ON: 25 May 2004
DELIVERED AT: Hobart
HEARING DATE: 5 April 2004
JUDGMENT OF: Evans J
CATCHWORDS:
Superannuation – Public Service funds – Statutory terminology – Particular expressions relating to fund membership – Entitlement to invalidity pension – Need not be determined prior to termination.
Retirement Benefits Regulations 1994 (Tas), regs38, 40, 96.
Aust Dig Superannuation [33]
REPRESENTATION:
Counsel:
Appellant: L K Mackey
Respondent: A J Abbott, A R Mills
Solicitors:
Appellant: Ogilvie Jennings
Respondent: Piggott Wood & Baker
Judgment Number: [2004] TASSC 48
Number of paragraphs: 16
Serial No 48/2004
File No LCA 109/2003
KAY LYNNETTE WEBB v RETIREMENT BENEFITS FUND BOARD
REASONS FOR JUDGMENT EVANS J
25 May 2004
The appellant appeals, pursuant to the Retirement Benefits Regulations 1994 ("the Regulations") reg107, against the respondent Board's decision that, she having resigned from her employment before the Board had decided whether it accepted her claim to retire on the grounds of invalidity, she had lost the right to have the Board determine that her retirement was for invalidity.
On 13 February 1990, the appellant as an employee of TAFE Tasmania, became a contributor for full benefits to the superannuation scheme administered by the Board under the Retirement Benefits Act 1982 ("the 1982 Act"). Pursuant to the 1982 Act, all contributions paid by employees in the situation of the appellant were paid into the Retirement Benefits Fund ("the Fund"). The 1982 Act was repealed by the Retirement Benefits Act 1993 ("the Act") which, by s11, provides for the continuation of the Fund and requires the Board to pay out of the Fund all amounts prescribed by the the Regulations. In accordance with the Act and the Regulations, Pt4, the appellant, as an existing contributor to the Fund who was under the age of retirement, was at all relevant times required to continue to contribute to the Fund. The Regulations, Pt4, provide for the payment of a variety of benefits to a contributor. The benefits include:
· a lump sum benefit payable upon retirement or upon attaining 70 years where the contributor continued as a permanent employee after attaining the age of retirement (65 years), reg42;
· a lump sum benefit payable upon retirement, otherwise than because of invalidity, after attaining the preservation age (55 years) but on or before attaining the age of retirement, reg36;
· a lump sum benefit payable to a contributor who is compulsorily retired for reasons of redundancy or voluntarily retires under an employment redundancy programme, reg37;
· a lump sum benefit payable to a contributor who resigns or is dismissed before attaining the preservation age, reg41;
· a lump sum benefit payable to a contributor who retires on the grounds of invalidity before attaining the age of retirement, reg38.
On 11 May 2000, the appellant, then 52 years of age, requested the Board to consider her application for an invalidity benefit pursuant to reg38 on the basis that she was incapacitated for work due to severe anxiety and depression. Regulations relevant to the construction of the provisions that governed the Board's consideration of this request include the following:
"3 (1) In these regulations –
'contributor' means –
(a) an employee who is contributing to the Fund, as required by Part 4; or
'contributor for full benefits' means a contributor whose contributions to the Fund entitle him or her to an invalidity benefit without regard to the length of his or her service … ;
'employee' means a person appointed or employed in any position or capacity under the State Service Act or in any industry or undertaking carried on by or on behalf of the State … ;
'interim invalidity pensioner' means a person who is in receipt of an interim invalidity pension;
'invalidity' means total and permanent incapacity, that is such bodily infirmity, physical incapacity or mental incapacity of such a kind that the Board is satisfied that the employee is, and until age 60 years will continue to be, unfit to work in a position for which the employee is reasonably qualified by education, training or experience and for which he or she may be required to accept;
'invalidity pensioner' means a person who is in receipt of an invalidity pension;
34 (1) If the Board determines under regulation 96 that a contributor, other than a contributor who at his or her actual date of retirement was contributing as a part-time employee, is suffering from invalidity, his or her prospective service for the purpose of regulations 38 and 39 is taken to commence on the day immediately following his or her actual date of retirement and end on the day on which he or she would have attained age 60 years or he or she would have achieved 25 years service, whichever is the earlier.
(2) Subject to subregulation (3), if the Board determines under regulation 96 that a contributor who at his or her actual date of retirement was contributing as a part-time employee is suffering from invalidity, his or her prospective service for the purpose of regulations 38 and 39 is to be calculated in accordance with the following formula: …
38 (1) If, before attaining the age for retirement a contributor for full benefits, other than an amalgamated contributor or a provident fund contributor –
(a) retires on the grounds of invalidity; or
(b) . . .
the contributor, … is entitled to a lump sum benefit calculated in accordance with the following formula: …
39 (1) If, before attaining the age for retirement, a contributor for limited benefits, other than an amalgamated contributor or a provident fund contributor –
(a) retires on the grounds of invalidity; or
(b) . . .
the contributor is entitled to a lump sum benefit calculated in accordance with the following formula: …
67 If any question arises as to whether an eligible employee or a contributor is unable, by reason of invalidity, to perform his or her duties, the Board is to determine the matter under regulation 96 or, in respect of an eligible employee or a contributor to whom regulation 64 applies, in accordance with the terms of the policy referred to in that regulation.
96 (1) If a question arises under these regulations, either before or after retirement as to whether –
(a) an employee is suffering from such bodily infirmity, physical incapacity or mental incapacity as to be retired on the grounds of invalidity; or
(b) an employee who immediately before 1 July 1994 was a contributor under the repealed Act is not suffering from bodily infirmity, physical incapacity or mental incapacity as to be retired on the grounds of invalidity but is suffering from incapacity or infirmity as to be retired on the grounds of partial and permanent incapacity or infirmity; or
(c) a person who is in receipt of an invalidity pension is wholly incapacitated; or
(d) the health of a person who is in receipt of an invalidity pension is such that the person is able to resume duty –
the question is to be determined by the Board having regard to any medical or other evidence provided by, or on behalf of, the employee or person on the basis of a report of a legally-qualified medical practitioner appointed or employed by the Board.
(2) If the Board determines that an employee who has applied to retire on the grounds of invalidity –
(a) is unfit to perform the duties of his or her position; and
(b) is likely to recover sufficiently so as to enable him or her to perform the duties of his or her position, or such other position which he or she might be required to accept; and
(c) should not be retired on the grounds of invalidity –
the Board may determine that the employee is entitled to an interim invalidity pension.
(3) If a contributor becomes entitled to an interim invalidity pension, he or she remains a contributor and is to continue to contribute to the Fund as provided by regulation 30.
(4) For the purposes of subregulation (1)(b),
'partial and permanent incapacity or infirmity', in relation to an existing contributor or an amalgamated contributor, means incapacity or infirmity suffered by a contributor of such kind that the Board is satisfied that, by reason of his or her suffering that incapacity or infirmity, the contributor is unfit to continue to perform the duties of his or her office or position or the duties of some other office or position that he or she may be required to accept.
(5) If an employee is entitled to an interim invalidity pension under a determination under subregulation (2) –
(a) the State Service Commissioner, in the case of an employee who, immediately before becoming entitled to that pension, was a State Service officer or State Service employee; or
(b) the Head of the Agency in which that person was employed immediately before becoming entitled to that pension –
must not retire that person, or permit him or her to retire on the grounds of invalidity during the period that he or she is entitled to that pension.
(6) If, after such inquiry as it thinks necessary following a question arising with respect to a matter referred to in this regulation, the Board is satisfied that the health of an employee, an interim invalidity pensioner or invalidity pensioner is such as to enable him or her to perform the duties of an office or a position that is available to him or her and that he or she may be required to accept, the Board is to report its decision –
(a) to the State Service Commissioner, in the case of –
(i) an employee who, immediately before the holding of the inquiry; or
(ii) an interim invalidity pensioner or an invalidity pensioner who, immediately before becoming entitled to an invalidity pension –
was a State Service officer or State Service employee; or
(b) in any other case, to the Head of the Agency in which –
(i) the employee was employed immediately before the holding of the inquiry; or
(ii) the interim invalidity pensioner or the invalidity pensioner was employed immediately before becoming entitled to an invalidity pension; or
(c) if the Board considers it appropriate, to both the State Service Commissioner and any Head of Agency or Chief Executive of a statutory authority the Board considers may be able to provide suitable alternative employment."
The Board considered the appellant's request for an invalidity benefit in accordance with reg38 and reg96(2), and determined that she was entitled to an interim invalid pension. That pension was paid to the appellant from 13 May 2000 until 12 May 2002. As to an interim invalidity pension, reg40 relevantly provided:
"40 (1) If the Board determines, under regulation 96, that a contributor other than a provident fund contributor is entitled to an interim invalidity pension and the contributor has been absent from duty on sick leave without salary for a continuous period of 30 days, the contributor is entitled to a pension equal to 75% of the salary received by the contributor over the last 12 months of employment for a period not exceeding 2 years, or any shorter period, the Board determines.
…
(4) If the period for which an interim invalidity pension payable under this regulation has expired, that pension ceases and the contributor is taken to have resigned unless the Board grants a benefit under regulation 38 or 39 or the contributor returns to duty."
On 12 May 2002, the appellant having received an interim invalidity pension for the maximum allowable period of two years (reg40(1)), reg40(4) came into play. The appellant did not return to her duties. By reason of that provision, unless the Board granted her a benefit under reg38 (she was not eligible for a benefit under reg39), she would be taken to have resigned. At that time, the Board was still assessing the extent of the appellant's incapacity and her entitlement to an invalidity benefit pursuant to reg38. For the purposes of that assessment, the Board had arranged for the appellant to be examined by a medical practitioner on 8 May 2002.
Prior to the appellant's initial application for an invalidity benefit on the basis that she was incapacitated from work by a severe anxiety disorder, she had claimed workers compensation from her employer on the basis of that incapacity. That claim had been disputed by her employer, but on 12 March 2002, it was settled. A term of the settlement was that the appellant resign from her employment, and this she did with effect from 19 June 2002. When her resignation came into effect, the Board had not reached a decision on her outstanding application for an invalidity benefit.
Throughout the period of the Board's consideration of the appellant’s application for an invalidity benefit, it had repeatedly advised her: that it only had power to determine her eligibility for the benefit whilst she remained an employee; and, that she should not terminate her employment before her application for an invalidity benefit had been finalised. Consistent with that advice, when the appellant's resignation from her employment came into effect, the Board concluded that she had lost the right to have the Board accept that her retirement was on the grounds of invalidity.
It is common ground that the Board's view, that an employee's entitlement to an invalidity benefit was lost if the employee's employment was terminated prior to the Board’s acceptance of the invalidity, accords with the legislative schemes which governed the Fund prior to the Act, that is, the scheme under the Retirement Benefits Act 1970 (s26(1A)), and the scheme under the 1982 Act (s30(2)). What is in issue before me is whether the same loss of entitlement arises in those circumstances under the scheme governed by the Act and Regulations. Whilst the Regulations have been amended since the decision of the Board that is the subject of this appeal, the amendments do not have any bearing on the outcome of the appeal. In these reasons I refer to the Regulations as they were at the time of the decision under appeal.
My task is to determine the intention of Parliament from the provisions of the Act and the Regulations at the material time. Do the relevant provisions manifest an intention that a contributor's entitlement to a determination that he or she retired on the grounds of invalidity is lost if such a determination has not been made by the Board before the contributor's retirement? No provision in the Act or the Regulations contains an express statement to that effect. I am unable to derive from reg38 and the definition of "invalidity" any temporal limit on the Board’s assessment of whether a person's retirement is on the grounds of invalidity, that is, any requirement that the assessment be made by the Board either before or after the retirement. Insofar as these provisions contain any temporal requirement, it is that an applicant for an invalidity benefit satisfy a number of conditions as at the time of that person's retirement, they being:
·that the person had not attained the age of retirement;
·that the person was a contributor for full benefits; and
·that the person retired on the grounds of invalidity.
The inference that I draw from reg38 and the definition of "invalidity" is that there is no restriction on the time when the Board may reach a determination on whether a retirement is or was on the grounds of invalidity, that is, the Board may make its determination in anticipation of or subsequent to the relevant retirement. This inference appears to be recognised by reg96(1)(a) which provides that:
"If a question arises … , either before or after retirement as to whether –
(a) an employee is suffering from such bodily infirmity, physical incapacity or mental incapacity as to be retired on the grounds of invalidity;
…
the question is to be determined by the Board having regard to any medical or other evidence provided by, or on behalf of, the employee or person on the basis of a report of a legally-qualified medical practitioner appointed or employed by the Board."
The question encompassed by reg96(1)(a) is the core question for determination when assessing a person's eligibility for an invalidity benefit. Insofar as reg96(1)(a) expressly provides that the question may arise "either before or after retirement", it appears to provide express support for the inference I draw from reg38 and the definition of "invalidity". Counsel for the Board submits otherwise. He submits that the scheme of the relevant Regulations, viewed together, and the plain meaning of the words used in reg96, lead to the conclusion that:
· a person may only apply for an invalidity benefit whilst that person is an employee within the meaning of the Regulations; and
· any application made by a person for an invalidity benefit may only be determined by the Board prior to the retirement of the person from his or her service as an employee within the meaning of the Regulations.
In support of this submission, counsel for the Board points out that reg96(1)(a) and (b) and reg96(2) pose questions for determination by the Board in relation to invalidity in terms of a retirement in the future; and as to the proposition that the introduction to reg96(1) expressly recognises that a question as to invalidity may arise for determination after an employee's retirement, counsel for the Board submits that the words "or after retirement" should not be construed as applying to par(a) and par(b) of that provision. He submits that as the questions posed by those paragraphs are expressed in terms of a retirement in the future, the reference in the introduction to reg96(1) to a question arising "after retirement" cannot sensibly relate to those paragraphs. He submits that the words "after retirement" have only been included in the introduction in order to cater for the questions postulated by par(c) and par(d). It is correct that the questions postulated by those paragraphs may arise for the determination of the Board after a person's retirement. A condition of a person's receipt of an invalidity benefit is that the person has retired on the grounds of invalidity, reg38(1)(a). In specified circumstances, a person who has retired on the grounds of invalidity and is entitled to an invalidity benefit, must convert the whole or part of the benefit into an invalidity pension, reg77. In some circumstances, such as being restored to health, reg85 provides that the Board may suspend or reduce the amount of an invalidity pension. A question as to the suspension or reduction of an invalidity pension is covered by par(d) of reg96(1), and can only arise after the termination of the recipient’s employment. Counsel for the Board further submits that the references to "an employee" in par(a) and par(b) show that the questions for determination pursuant to those paragraphs must arise "before … retirement", whilst the references to "a person" in par(c) and par(d) recognise that questions for determination under those paragraphs may arise "after retirement". Additional matters relied upon by counsel are:
· the fact that only "a contributor", that is, an employee, is eligible for an invalidity benefit, reg38(1); and
· a presumption, which counsel says can be found in reg34, that the Board's determination of the period of an employee's "prospective service" for the purposes of the calculation of an invalidity benefit must be made prior to the employee's retirement.
I do not consider that anything turns on par(a) and par(b) of reg96(1) posing questions for determination as to invalidity in terms of a retirement in the future. These questions fall for consideration on the basis of the facts at the time of the retirement. That the questions can properly be expressed in terms of a future retirement does not mean that the determination of the questions must be made prior to the retirement. For similar reasons, nothing turns on the references to "an employee" in pars(a) and (b), and the references to "a person" in pars(c) and (d). These are references to the status of the applicant or recipient at the time that is pertinant to the question covered by the paragraph. They are not references to the status of the applicant or recipient at the time that the Board considers and determines the issue in question. As to a question covered by par(c) or par(d), at the time that is pertinent to that question, the recipient must be in receipt of an invalidity pension consequent upon the termination of his or her employment. If the recipient had accepted a position as an employee by the time the Board came to determine the question, this change in the recipient's status would not bar the Board from determining the issue. Similarly, the termination of the employment of a claimant for an invalidity benefit does not bar the Board from determining a question covered by par(a) or par(b) as to whether the termination was for invalidity.
I do not derive any assistance from the reference in reg34(1) to "a contributor" the Board has determined "is suffering from invalidity", and the reference in reg38 to "a contributor" who "retires on the ground of invalidity". These references do no more than recognise that for a person to be eligible for the benefit dealt with by those regulations, the person must have been a contributor at the time of retirement. The references say nothing about when the Board may reach a determination on whether an applicant has retired, or is to retire, on the ground of invalidity. I also derive no assistance from the use of the term "prospective service" in reg34. Insofar as the period of service referred to ends at a future date, that is, the date upon which the contributor ought have attained 60 years or achieved 25 years' service, the term "prospective" is entirely apt regardless of whether the period commenced before or after the date of the Board's determination.
Finally, I return to reg40(4) which provides that:
"If the period for which an interim invalidity pension [is] payable … has expired, that pension ceases and the contributor is taken to have resigned unless the Board grants a benefit under regulation 38 or 39 or the contributor returns to duty."
The resignation deemed by this provision is conditional; it does not come into effect if the contributor returns to duty or retires on the grounds of invalidity. Consistent with this provision, it is open to the Board to make a determination on whether the recipient of the extinguished pension has returned, or is to return, to duty, or has retired, or is to retire, on the ground of invalidity, subsequent to the date of that person's deemed but conditional resignation, that is, the date when the period for the payment of the pension ended. As to invalidity, if the Board decides that the recipient does not suffer from an invalidity which entitled the recipient to retire on that ground, the recipient is deemed to have resigned on the date when the pension payments ceased. Technically this recognises that the determination of a question of invalidity can be decided subsequent to the date of a person's deemed resignation. Bearing in mind that until the date of the Board's decision, the deemed resignation is only conditional, I do not consider that reg40(4) provides any assistance one way or the other in relation to the issue before me.
I am unable to derive from the provisions under consideration a condition to the effect that an applicant for an invalidity benefit loses his or her entitlement to receive that benefit if the applicant resigns before the Board has determined whether it will accept that the retirement is on the ground of invalidity. My inability to extract a condition to this effect from the relevant provisions flows from what I consider to be the plain meaning and intent of the language used. In construing the provisions, I have not found it necessary to resort to the concept that ambiguities in beneficial legislation should be interpreted in a manner favourable to those it is intended to benefit: R v Kearney; ex parte Jurlama (1984) 52 ALR 24 at 28; Zangzinchai v Milanta (1994) 125 ALR 265 at 272.
The appeal is allowed and the Board's decision is set aside. I order that the matter be remitted to the Board for re-determination according to law.
0
3
1