Colquhoun v SAS Trustee Corporation

By notice of motion filed on 10 April 2018, the defendant, SAS Trustee Corporation (“STC”), seeks orders that these proceedings be transferred to the District Court pursuant to s 146(1) of the Civil Procedure Act 2005 (NSW). It also seeks an order that costs of the proceedings be costs in the cause.

The plaintiff, Thomas Colquhoun, is a former police officer of the New South Wales Police Force. He resigned from that role on 14 December 1993.

On 21 August 2012, the plaintiff made an application for benefits payable under s 10 of the Police Regulation (Superannuation) Act 1906 (NSW) (“Police Regulation Act”). STC administers the superannuation scheme established by the Police Regulation Act. Before the plaintiff could receive the benefits applied for, it was a prerequisite that he be certified as incapable of discharging the duties of his office, from a specified infirmity of body or mind, as at the date of his resignation: s 10B of the Police Regulation Act.

On 30 July 2015, the Police Superannuation Advisory Committee declined to certify that the plaintiff was, in terms of s 10B(2) of the Police Regulation Act, incapable of discharging the duties of his office due to a specified infirmity. The plaintiff subsequently sought a review of this decision by the STC Member Services Committee pursuant to s 67 of the Superannuation Administration Act 1996 (NSW) (the “Administration Act”).

On 18 August 2016, STC wrote to the plaintiff’s solicitor and informed him that the STC Member Services Committee had confirmed the decision of the Police Superannuation Advisory Committee. The letter went on in these terms:

Following receipt of this letter, on 25 November 2016, the plaintiff did appeal to the Industrial Court of New South Wales under s 88 of the Administration Act. Before the matter could be finalised, the Industrial Court was abolished and the appeal was transferred to the Supreme Court: Industrial Relations Act 1996 (NSW), Sch 4, Pt 18, cll 65(1) and 66(1); Industrial Relations Amendment (Industrial Court) Act 2016 (NSW), Sch 2, cl 2.33.

The appeal was subsequently listed for hearing on 16 April 2018 in the Common Law division of this Court.

On 29 March 2018, the Court of Appeal allowed an appeal in the decision of SAS Trustee Corporation v Rossetti [2018] NSWCA 68 (“Rossetti”). Reasons for the decision were published on 10 April 2018. The Court (McColl, Basten and Payne JJA) held that the right of appeal against a decision of STC arising out of the Police Regulation Act lay to the District Court and not to the Supreme Court under s 88. The effect of Rossetti is that the present appeal has been made to this court in error; it should have been brought to the District Court. I shall return to this decision in more detail below.

The orders were not sought by consent. Senior counsel for the plaintiff raised concerns as to whether s 146(1) of the Civil Procedure Act can be relied upon in the present circumstances. It was also submitted that the defendant should pay the plaintiff’s costs of these proceedings to date. It was accepted by the parties that, if I do not make an order transferring these proceedings to the District Court, they will have to be commenced afresh in the District Court.

Section 146(1) of the Civil Procedure Act relevantly provides:

Section 147(2) of the Civil Procedure Act provides that a transfer order does not invalidate any order made prior to the proceedings being transferred. Section 148 provides:

For completeness, it is noted that s 44(1)(e) of the District Court Act 1973 (NSW) provides:

Before turning to consider the respective arguments of the parties, it is pertinent to note the relevant statutory provisions of the Administration Act and the Police Regulation Act.

Section 10 of the Police Regulation Act provides that a superannuation allowance is to be paid when a police officer is hurt on duty. Section 10B provides:

The right of appeal is provided for in s 21(1) of the Police Regulation Act as follows:

Thus, an appeal lies to the District Court if STC has made a decision on a matter arising under the Police Regulation Act “by reason of a member of the police force being hurt on duty.” Otherwise, s 67 of the Administration Act provides:

Relevantly, s 88(1)-(2) of the Administration Act provides:

In SAS Trustee Corporation v Woollard [2014] NSWCA 75, Basten JA noted that an appeal lies to the Industrial Court under s 67 of the Administration Act only if an appeal could not have been made to the District Court under s 21 of the Police Regulation Act. His Honour was satisfied that such an appeal does lie to the District Court in a matter concerning superannuation allowances and gratuities under ss 10 and 10B of the Police Regulation Act and thus the Industrial Court lacked jurisdiction to consider the appeal. Despite this decision, STC continued to inform persons (including the Plaintiff on 18 August 2016) that, if they wished to appeal a decision, they should do so in the Industrial Court.

In Bigg v SAS Trustee Corporation [2016] NSWCA 236, the Court of Appeal considered the question of whether s 10B(2) of the Police Regulation Act applied to a police officer who had been dismissed following the Police Royal Commission on the basis that the police officer had engaged in corrupt or criminal conduct and was no longer a fit and proper person. The court held that the section could not permissibly be construed to operate in such a matter. Relevantly to the present consideration, at [21], the Court noted s 21 of the Police Regulation Act and observed that the decision in that case involved a preliminary issue not dependent on the applicant being hurt on duty. In those circumstances it was accepted that this was not a dispute to which s 21 of the Police Regulation Act applied.

In Rossetti, the respondent had submitted an application for benefits paid under the Police Regulation Act. The STC declined to certify that he was incapable of discharging his duties as at the date of his resignation within s 10B. He brought an appeal from that determination to the Industrial Court under s 88 of the Administration Act. The Court of Appeal held that STC’s determination was on a matter arising under the Police Regulation Act by reason of a member of the police force hurt on duty. A right of appeal therefore lay to the District Court under s 21 of the Police Regulation Act. As the STC determination was caught by s 21, it did not involve the determination of a dispute under the Administration Act. Therefore, a right of appeal did not lie to the Supreme Court under s 88.

The Court of Appeal in Rossetti noted that, under the legislation, the decision as to whether an injured police officer has the capacity to perform the functions of a police officer is vested in the STC, whereas the decision as to whether the cause of the infirmity is work-related is vested in the Commissioner. As the Court of Appeal observed at [24], there is nothing in the language of s 21 of the Police Regulation Act “which would support the view that the District Court was to review important discretionary and evaluative judgments of the Commissioner, but not similar decisions of the STC.” The Court went on to observe (at [32]) that, once the “dual structure” of the Police Regulation Act is considered, it is clear that “hurt on duty” within s 21 of the Police Regulation Act refers to the alternative workers’ compensation legislation, from which police were excluded.

Counsel for STC submitted that, in view of the Court of Appeal decision in Rossetti, the proceedings should be transferred to the District Court in accordance with the Court’s jurisdiction under s 146(1) of the Civil Procedure Act. Such a transfer would be the most cost-effective way to proceed. It was further submitted that the fact that this court has no jurisdiction to finally determine the appeal is irrelevant to the question of jurisdiction to transfer the proceedings to the District Court.

The plaintiff raised the concern that if I make this order transferring the proceedings to the District Court, an issue may later arise should the matter then be appealed to the Court of Appeal by a party, as to whether there was jurisdiction to transfer the matter. The plaintiff submitted that there is a difference between a court making an order unaware of any deficiency in jurisdiction and where a court is asked to make an order fully knowing that there is a jurisdictional issue. The presumption of jurisdiction does not arise in the latter situation. It was submitted that the present case can be distinguished from Re Macks; Ex parte Saint (2000) 204 CLR 158; [2000] HCA 62, where orders made by a superior court lacking the jurisdiction to do so were held to be valid. In Victorian Stevedoring and General Contracting Co Pty Ltd v Dignan (1931) 46 CLR 73 at 106; [1931] HCA 34, it was held that the validity of an order made without jurisdiction is derived from the making of the order by the court and not from the underlying statute.

It was submitted that this is not a matter of determining the validity of orders already made; no orders transferring proceedings have been entered. Rather, the power to make an order transferring these proceedings is dependent upon the jurisdiction to do so.

As Leeming JA recently observed in Barr (a pseudonym) v Director of Public Prosecutions (NSW) [2018] NSWCA 47 at [29], the “first duty” of a court is to determine whether it has jurisdiction. The question of whether this court has jurisdiction to transfer these proceedings to the District Court turns on a narrow question of statutory construction: are these appeal proceedings brought, in error, to the Industrial Court under s 88 of the Administration Act “before” this court for the purposes of s 146(1) of the Civil Procedure Act.

Clearly, the proceedings are currently before the Court. They were listed for hearing to commence on 16 April 2018. They were commenced on 22 November 2016. The question is whether or not there is a statutory precondition that the proceedings be “properly” before this court before they could be transferred to the District Court under s 146(1) of the Civil Procedure Act. Although I have extracted the relevant portion of s 146(1) above at [10], it is useful to reproduce it here. Section 146(1) relevantly provides:

As the High Court observed in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27; [2009] HCA 41 at [47], the task of statutory construction begins with the words of the statute considered in context, which includes the general purposes and policy of the provisions. Section 146(1) of the Civil Procedure Act provides that, if this Court is satisfied, in relation to “proceedings before it”, that the proceedings could properly have been commenced in the District Court, it may order that the proceedings be transferred to the District Court. Ascribing the words “proceedings before it” their ordinary meaning, I am satisfied that these appeal proceedings are currently before the court. To conclude otherwise would be to read down those words so as to insert the word “properly” before the word “before” in s 146(1). No basis to read the provision down in this way was advanced by either of the parties. Furthermore, the fact that the word “properly” is otherwise included in s 146(1)(a) is another basis for not construing the words “proceedings before it” in s 146(1) as meaning proceedings “properly” before it.

The overriding purpose of the Civil Procedure Act is to promote the “just, cheap and quick” resolution of civil proceedings such as these: s 56. It would be inconsistent with that purpose, and the case management principles in the Civil Procedure Act, to read s 146(1) down so as to only permit the transfer of proceedings which were “properly” before the Supreme Court in the first place.

For these reasons, I am satisfied that I have the power under s 146(1) of the Civil Procedure Act to transfer these proceedings to the District Court.

The second question is whether I am otherwise satisfied that it is appropriate to make the order sought under s 146(1) of the Civil Procedure Act. The statutory precondition to the making of such an order is my satisfaction that these proceedings could properly have been commenced in the District Court. Having regard to the legislative scheme outlined above and the decision in Rossetti, I am satisfied that this is the case. Although the power to make such an order is discretionary, no discretionary factors militating against a transfer order being made were raised in this matter. Accordingly, I propose to make the order sought.

STC submitted that the appropriate costs order would be that costs are reserved in circumstances where the ultimate issue is still to be determined. On the issue of STC’s conduct, counsel for STC brought the Court’s attention to the decision of Philip Evans v SAS Trustee Corporation (District Court (NSW), 10 December 2008, unrep) in which, in 2008, Judge Neilson took a different view to the later decision in Rossetti.

The plaintiff seeks an order that STC pay the costs of the proceedings to date. Significantly, the plaintiff submitted that it was STC who advised the plaintiff that his right of appeal was to the Industrial Court, which was the more favourable costs jurisdiction for the STC.

Section 98(1)(a) of the Civil Procedure Act provides that costs are in the discretion of the court. Section 98(1)(b) provides that the court has “full power to determine by whom, to whom and to what extent costs are to be paid”. Despite this, the discretion that s 98 of the Civil Procedure Act provides is subject to the qualification that “the discretion must be exercised judicially in accordance with established principle and factors directly connected with the litigation” (see Oshlack v Richmond River Council (1998) 193 CLR 72 at 96; [1998] HCA 11 at [65], per McHugh J). Among the fetters on the discretion to award costs are the rules of the court contained in Part 42 of the UCPR. The usual rule is that costs follow the event, unless it appears to the court that some other order should be made: UCPR, r 42.1.

STC has been successful on this motion but, in the unusual circumstances of this matter, it does not follow that a costs order should be made in its favour. STC did not submit otherwise. The question of costs is to be considered in the context that it was STC who advised the plaintiff to appeal to the Industrial Court under s 88 of the Administration Act in the first place.

The situation that arises in the present case is similar to that in Rossetti. In that matter, the Court of Appeal determined that the appropriate costs order was that STC pay the costs of the proceedings both in the Court of Appeal and in the Common Law Division, on the basis that STC had led Mr Rossetti to commence proceedings in the Industrial Court (and continue them in the Supreme Court) in the same manner as they did in the present case, namely, by a letter asserting that there was a right of appeal under s 88 of the Industrial Relations Act. At [40] of the decision in Rossetti, it is recorded that STC “quite properly, did not oppose such an order”. I note that a dissimilarity between the two cases is that in Rossetti, STC was ordered to pay costs after being unsuccessful before Harrison AJ and successful in the Court of Appeal, albeit only on the question of jurisdiction; a matter raised by the Court and nor the parties.

The argument advanced by STC in support of the proposition that costs should be “in the cause” is that it would avoid a situation where the plaintiff is the beneficiary of a costs order in proceedings that are ultimately found by the District Court to be without merit. That is, although the proceedings in the Supreme Court are now finalised, the outcome in the District Court is unknown.

The plaintiff pointed to the different costs regimes between this court and the District Court. The relevant provision regarding the award of costs against an unsuccessful applicant in the District Court is s 21(9) of the Police Regulation Act which provides that the District Court shall not order the payment of costs, unless satisfied that the application was frivolous or vexatious or made fraudulently or without proper justification. The Industrial Court, on the other hand, has unfettered jurisdiction as to costs: s 181(1) of the Industrial Relations Act. In response, STC indicated that, as a model litigant, it undertook not to claim any costs against the plaintiff to date if he is unsuccessful in the District Court.

These proceedings were listed for a hearing on a date shortly after the decision in Rossetti. It is to be expected that some of the costs already incurred will not need to be duplicated when the matter is transferred to the District Court. As such, it seems to me that what the plaintiff in fact seeks is the costs thrown away of being misled, albeit in good faith, to commence his appeal in the wrong court.

Having regard to all of these factors, I propose that STC pay the plaintiff’s costs of these proceedings to date, on the ordinary basis, “thrown away” by these proceedings being transferred to the District Court. In circumstances where there was no suggestion of a lack of bona fides, the costs should be on the ordinary basis rather than an indemnity basis.

In consideration of the above, I make the following orders: