Woodford v Landline Investments Pty Ltd
[2000] QDC 258
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- Woodford v Landline Investments Pty Ltd[2000] QDC 258
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Woodford v Landline Investments Pty Ltd[2000] QDC 258
Woodford v Landline Investments Pty Ltd[2000] QDC 258
DISTRICT COURT OF QUEENSLAND
CITATION: | Woodford & Anor v. Landline Investments Pty Ltd & Ors [2000] QDC 258 |
PARTIES: | ESMAE MARGARET WOODFORD as Executrix of The Estate of HOWARD EDMUND WOODFORD (First Plaintiff) And ESMAE MARGARET WOODFORD (Second Plaintiff) v. LANDLINE INVESTMENTS PTY LTD (Formerly BUDERIM TRANSPORT PTY LTD) (First Defendant) And DAVID MICHELL WISE AND PETER FRANK WISE (Second Defendants) |
FILE NO/S: | D2458 of 2000; Maroochydore Plaint 124 of 1997 |
DIVISION: | |
PROCEEDING: | Separate trial of questions |
ORIGINATING COURT: | District Court Maroochydore |
DELIVERED ON: | 20 September 2000 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 6 September 2000 |
JUDGE: | McGill D.C.J. |
ORDER: | Each question answered “No”. Order plaintiff to pay defendants’ costs of separate trial to be assessed |
CATCHWORDS: | STATUTES – Interpretation – whether implied right of action for damages for breach of statutory obligation – Superannuation Guarantee (Administration) Act 1992 ss. 16, 46, 49 SUPERANNUATION – Superannuation Guarantee Charge – whether implied right of action for damages for breach of statutory obligations – Superannuation Guarantee (Administration) Act) 1992, ss. 16, 46, 49. Sover v. Henry Lane Pty Ltd (1967) 116 CLR 397 – followed Martin v. Western District of the Australasian Coal and Shale Employees’ Federation Workers’ Industrial Union of Australia (Mining Department) (1934) 34 SR (NSW) 593 – applied Hicks v. State of Queensland [1998] 1 Qd.R. 644 – cited Schiliro v. Peppercorn Child Care Centres Pty Ltd [2000] QCA 18 – cited Heil v. Suncoast Fitness (Appeal No. 5199/98, 15.12.98) - cited Mallinson v. The Scottish Australian Investment Co Ltd (1920) 28 CLR 66 – distinguished Byrne v. Australian Airlines Ltd (1995) 185 CLR 410 – applied Campbell v. University of New South Wales (1992) 44 IR 56 – doubted and distinguished Northern Suburbs General Cemetery Reserve Trust v. The Commonwealth (1993) 176 CLR 555 – cited Australian Tape Manufacturers Association Ltd v. The Commonwealth (1993) 176 CLR 480 – cited IRC v. Goldblatt [1972] 1 Ch. 498 – distinguished Groves v. Wimborne [1898] 2 QB 409 – distinguished University of Newcastle v. Chopra (1989) 63 ALJR 397 – considered South Australia v. Commonwealth (First Uniform Tax Case) (1942) 65 CLR 373 – cited Shepherd v. Hills (1885) 11 Ex 55; 156 ER 743 – distinguished Sellars v. Adelaide Petroleum NL (1994) 179 CLR 332 – cited Soutter v. P & O Resorts Pty Ltd (1999) 2 Qd.R. 106 – applied R v. Deputy Governor of Parkhurst Prison; ex parte Hague [1992] 1 AC 58 - cited |
COUNSEL: | P.D. Lane for the first plaintiff M.P. Amerena for defendants |
SOLICITORS: | Flower & Hart as town agents for McInnes Wilson for the first plaintiff Butler McDermott & Egan for the defendants |
- [1]The first plaintiff is the executrix of the estate of her late husband who was formerly employed by the first defendant (or it is alleged in the alternative the second defendants) as a truck driver until he died on 6 December 1995. By this action, a claim is brought by the plaintiff as executrix (and as second plaintiff in her own right) on various bases set out in a further amended plaint filed on 4 December 1998, alleging, broadly speaking, that she has lost the sum of $45,000 which would have been payable as a death benefit by the Transport Industry Superannuation Fund, in the events that have happened, if the first defendant (or in the alternative the second defendants) had paid to that fund contributions which ought to have been paid but which were not paid.
- [2]It is unnecessary for me to analyse the pleadings more closely because what is before me is the separate trial pursuant to r.483 of the following questions:
- (a)does a breach of s. 16 of the Superannuation Guarantee (Administration) Act 1992 (Cwth) give rise to a civil cause of action on the part of an employee against the employer?
- (b)does a breach of s. 46 of the said Act give rise to a civil cause of action on the part of an employee against the employer?
- (c)does a breach of s. 49 of the said Act give rise to a civil cause of action on the part of an employee against the employer?
An order that these questions be tried separately was made by His Honour Judge Pratt Q.C. on 29 June 2000. There was no argument before me as to the appropriateness of the questions or of my answering the questions, which are questions of law, turning on the true construction of that statute (“the Act”).
The Superannuation Guarantee (Administration) Act
- [3]The Act operates in conjunction with the Superannuation Guarantee Charge Act 1992 which provides in s. 5:
“Charge is imposed on any superannuation guarantee shortfall of an employer in a year.”
The amount of the charge is equal to the amount of the shortfall: s.6. The concept of a “superannuation guarantee shortfall” is identified in s. 17 of the Act as the total of the employer’s individual superannuation guarantee shortfalls for the year, the employer’s nominal interest component for the year[1], and the employer’s administration component for the year[2]. The employer’s individual superannuation guarantee shortfall is prima facie a percentage of the total salary or wages paid by the employer to the employee for the half year, being the percentage identified as the “charge percentage for the employer for the half year”. The relevant percentage is identified in various tables in ss. 20-23, beginning at 3% or 4% and increasing progressively so that by the year 2002-3 and subsequent years the percentage will be 9%.
- [4]There are, however, various provisions for reducing the “charge percentage” if contributions are made to superannuation funds by the employer for the benefit of the employee during the period specified in the Act, in accordance with formulae set out in s. 22 or s. 23. Section 22 applies where a contribution is made to a defined benefit superannuation scheme, and s. 23 applies where contributions are made to a superannuation fund other than a defined benefit superannuation scheme. Section 23 provides for contributions made under an industrial award or law, those made under an occupational superannuation arrangement, those made under a scheme that specifies a notional earnings base, and those made under a scheme that does not specify a notional earnings base. The mechanism by which this is calculated in these various situations is specified in the Act; it is unnecessary to analyse it in detail. For example, if during the relevant period, an employer is required by an industrial award or law of a specified kind to contribute for the benefit of an employee to a superannuation fund and the requisite contribution is a specified percentage of the employee’s notional earnings base or a percentage of that base calculated in accordance with the award or law and the employer does make those contributions in accordance with the award or law, the charge percentage is reduced by the amount of the percentage figure that expresses the contribution to the fund as a proportion of the total amount of the employee’s notional earnings base.
- [5]In the ordinary case, therefore if the employer makes a contribution to an appropriate superannuation fund of an amount which, expressed as a percentage of the total remuneration paid to the employee, is as large as or larger than the charge percentage for the relevant period, the charge percentage will be reduced to zero so that there will be no individual superannuation guarantee shortfall in respect of that employee. If that applies to all employees of an employer, there will be no superannuation guarantee shortfall because the requirements of the operation of s. 17 will not be present, and there will therefore be nothing subjected to the charge by s. 5 of the Superannuation Guarantee Charge Act.
- [6]In summary, if the employer does not pay the superannuation fund for the benefit of the employee at least a specified percentage of the employee’s remuneration, the employer is liable to pay the shortfall in that percentage as a charge to the Commonwealth. The true nature of this arrangement is identified by the fact that the charge is imposed by a separate Act; it is in substance a tax,[3] that is to say a payroll tax, but it is an atypical tax, for its purpose is not to raise revenue for the Commonwealth, but to encourage the provision of superannuation benefits to employees. The motive for the legislation is to provide encouragement for employers to make the contributions, which would in effect generate deductions so that they can reduce the amount of their liability for the tax to nothing. This is legitimate, and does not affect the character or validity of the legislation: Northern Suburbs General Cemetery Reserve Trust v. The Commonwealth (1993) 176 CLR 555 at 569.
- [7]That this was the intention of the legislature emerges from the explanatory memorandum tabled in the House of Representatives which identifies the purpose of the Bills as follows:
“The Superannuation Guarantee (Administration) Bill 1992 and the Superannuation Guarantee (Charge) Bill 1992 implement the Government’s decision announced in the 1991-92 budget, to impose a tax on an employer where the employer provides superannuation support below a minimum level. The purpose of the Bills is to encourage employers to provide a minimum level of superannuation support for employees.”
The second reading speech when the Bill for the Act was introduced in the Senate and included the following:
“The Bill, which applies from 1 July 1992, will encourage employers to provide a minimum level of superannuation support for employees. Where employers provide less than the minimum level of superannuation support, they will be liable for a superannuation guarantee charge. … Superannuation support must be provided through a complying superannuation fund in order to be counted towards the minimum level superannuation support. The fund can either a defined contribution fund or a defined benefit fund. … If an employer does not provide the minimum level of superannuation support, a charge will be imposed on the employer. … The interest component is a proxy for superannuation funds earnings. The interest will be calculated from the commencement of the financial year until the time the superannuation guarantee charge is due to be paid. The purpose of the administration charge is to recover some of the costs incurred in administrating the Act. … The Commissioner of Taxation will be responsible for administering the superannuation guarantee scheme. The scheme will be administered on a self assessment basis with generally only those employers who are liable to pay the superannuation guarantee charge required to furnish a statement to the Australian Taxation Office. … Revenue collected under the Bill will be placed in the Consolidated Revenue fund. An amount equivalent to the charge, less the administration component, will be redistributed to a complying superannuation fund for the benefit of those employees in respect of whom the charge was paid.”
(See Hansard, Senate, 27.5.92, p. 2697-9.)
- [8]The operation of the legislation was considered by Sundberg J in Findlay v. Commissioner of Taxation (1998) 88 FCR 300. His Honour said at p. 302-3:
“Under s. 16 of the Administration Act the charge is payable by the employer. Pursuant to ss. 17, 18 and 19, the shortfall is calculated by reference to salary or wages paid to an employer’s employees in any year. … If a shortfall remains after 14 August in the year following the year in which the salary or wages were paid, the employer is required to lodge a superannuation guarantee statement (s. 33), and the charge becomes payable pursuant to s. 46. The charge is a debt due to the Commonwealth payable to the Commissioner: s.50.”
See also, for a summary of the Act and some reference to the policy behind it, Monoghan “Superannuation Guarantee” (1992) CCH Jo. of Aust. Taxn Vol 4 No 2 p. 56; article by Channell (1994) 24 Q L Soc. Jo 51. See also Superannuation Test Case (1994) 55 IR 447 at 451.
Sections In Issue
- [9]Section 16 of the Act provides:
“Superannuation guarantee charge imposed on an employer’s superannuation guarantee shortfall for a year is payable by the employer.”
The charge is imposed by the Charge Act, and the effect of this section is simply to provide that the charge which is so imposed is payable by the employer, and to identify that it is the employer’s superannuation guarantee shortfall on which the charge is imposed. This is the key to the mechanism under the Act by which the amount of the charge is to be calculated, by quantifying the employer’s superannuation guarantee shortfall.
- [10]Section 46 provides:
“Superannuation guarantee charge for a year is payable:
- (a)if, on or before 14 August in the following year, the employer lodges a superannuation guarantee statement, or a statement under s.34 indicating a superannuation guarantee shortfall for that year – on that day; or
- (b)if, after that day, the employer lodges a superannuation guarantee statement or a statement under s.34 indicating a superannuation guarantee shortfall for that year – on the day on which the statement is lodged.”
This section fixes the time at which the superannuation guarantee charge is payable in circumstances where such a charge is payable. It is dependent upon compliance with the obligation imposed by s. 33 on an employer who has a superannuation guarantee shortfall for the year, to lodge a superannuation guarantee statement for the year on or before 14 August in the following year, or any later day allowed by the Commissioner.
- [11]By s. 34, where a person who was at any time during the year an employer has not lodged a superannuation guarantee statement for the year, the Commissioner may, by written notice, require that person to state in writing to the Commissioner whether the person has a superannuation guarantee shortfall for the year, and if so, to set out the information required in a superannuation guarantee statement. Section 36 permits the Commissioner to make an assessment of the employer’s superannuation guarantee shortfall for the year if the employer has not lodged a superannuation guarantee statement and the Commissioner is of the opinion that the employer is liable to pay the superannuation guarantee charge for the year. The assessment is to be the amount that in the Commissioner’s opinion might reasonably be expected to be the shortfall: s. 5(2). There is provision for the amendment of assessment and refund of overpaid amounts: s. 37, s. 38.
- [12]Section 49 provides relevantly as follows:
- (1)Subject to this section, if any superannuation guarantee charge remains unpaid after the time when it became payable, or would but for s.48 have become payable, additional superannuation guarantee charge is payable, by way of penalty, by the employer liable to pay the superannuation guarantee charge.
By subsection (2) this is payable at a rate applicable under the regulations on the amount unpaid less amounts in respect of the employer’s administration component and the employer’s nominal interest component.
- [13]It is also relevant to consider some other provisions. Section 50 provides:
- (1)Superannuation guarantee charge that is payable:
- (a)is a debt due to the Commonwealth and payable to the Commissioner in the manner and at the place prescribed; and
- (b)may be sued for and recovered in a court of competent jurisdiction by the Commissioner or a Deputy Commissioner suing in his or her official name.
- (2)In subsection (1) “superannuation guarantee charge” includes additional superannuation guarantee charge under s.49 or Part 7.
- [14]Part 7 provides an amount by way of penalty additional to the superannuation charge equal to double the amount of superannuation guarantee charge payable by the employer for the year if the employer refuses or fails to provide when required under the Act a superannuation guarantee statement or information relevant to assessing the employer’s liability to pay superannuation guarantee charge for the year. There is also a liability to pay such a penalty if an employer makes a statement that is false or misleading in any material particular or omits from a statement anything without which the statement was misleading in a material particular. It is also payable if there are other specified failures. There is also provision for the Commissioner to remit all or part of this additional charge: s. 62(3). Such a scheme of additional tax as penalty for non-compliance is familiar from the Income Tax Assessment Act.
- [15]If an amount is paid by way of superannuation guarantee charge, it is paid to consolidated revenue. It follows that the money is raised for public purposes, a broad concept: Australian Tape Manufacturers Association Ltd v. The Commonwealth (1993) 176 CLR 480 at 504-5. However, by s. 65, the Commissioner has to pay the shortfall component[4] for the benefit of the employee to a complying superannuation fund nominated by the employee, or (following amendment in 1994) to an account kept under the Small Superannuation Accounts Act 1995 in the name of the employee. If the employee has died, the Commissioner must pay the amount to the legal personal representative of the employee: s. 67. If the employee has retired due to permanent incapacity or invalidity, and the employee has given appropriate notice and other materials supporting this to the Commissioner, the Commissioner must pay the amount to the former employee: s. 66. The Act does not make special provision for the situation where an employee has retired for other reasons, but presumably s. 65 applies. All such amounts are paid from consolidated revenue: s. 71.
- [16]By s. 51 there is special provision made for substituted service of a document on an employer for the purposes of recovery of superannuation guarantee charge. By s. 52, any superannuation guarantee charge is given a priority in the liquidation of the company equal to a debt of the kind referred to in para. 556(1)(e) of the Corporation Law, that is to say, the same priority as wages due to employees. There are special provisions governing the liability of a receiver or receiver and manager of a company to pay the superannuation guarantee charge on behalf of the company (s. 53), recovery of superannuation guarantee charge from the trustee of the deceases employer (s. 54) and recovery of the charge for an unadministered deceased estate (s. 55) and a form of statutory garnishee over debts owed to persons liable to pay the superannuation guarantee charge: s. 56. These special provisions give the Commissioner some advantage in collecting the charge over an ordinary unsecured creditor of the employer.
Authorities On Whether Statute Confers Private Right of Action For Breach
- [17]In some cases a statute will expressly confer a cause of action for damages on an individual who suffers as a result of a breach of a statutory obligation. Such cases are straightforward enough, but relatively rare. There are other cases where it has been held that, although there is not an express provision to that effect in the statute, the statute by implication creates a private right of action in an individual who suffers as a result of a breach of statutory obligation. Whether such a right of action is impliedly conferred is a matter of construction of the statute in the light of the surrounding circumstances: Sovar v. Henry Lane Pty Ltd (1967) 116 CLR 397 at 405 per Kitto J. There was a comprehensive analysis of the authorities in the judgment of Jordan CJ in Martin v. Western District of the Australasian Coal and Shale Employees’ Federation Workers’ Industrial Union of Australia (Mining Department) (1934) 34 SR (NSW) 593 at 596-8 (omitting citation of authority):
“If a statute creates a new duty, the question of whether a person who suffers damage by reason of a breach of the new duty may maintain an action in the ordinary courts for the breach depends upon the intention to be extracted from the statute when read as a whole, having regard to its general scope and purview as well as to its particular provisions … Regard may be had to considerations of policy and to the convenience or inconvenience which would result from the existence or non-existence of a right of action … , and to the probability or improbability that the legislature would intend to impose liabilities of the character which would arise from the existence of a right of action. No single feature – other than a provision dealing expressly with the point – can be regarded as being in all cases conclusive. Each statute must be considered for itself. But there are various matters which are important as pointing to the existence or non-existence of a right of action as the case may be. Of the matters which go to negative the existence of a right of action, the most important is the provision by the statute which creates the new duty of a special means for its enforcement. Where a special means is so provided, the general rule is that the performance of the duty cannot be enforced in any other manner. … But this rule is not invariable … It may not apply if the remedy is inadequate. Thus it has been held that a penalty does not exclude a right of action in the ordinary courts, where the new duty has been created to protect a particular class of persons from injury of a particular kind … Other matters which point to the absence of any right of action are: the fact that the statutory remedy enures for the benefit of the person injured by the breach …; the fact that the statute is private rather than public and general in its character …; and the fact that the scheme of the Act leaves the questions involved to be determined by a special tribunal … On the other hand, matters which point to the existence of the right of action are: the fact that no remedy … or an obviously inadequate remedy … has been provided by the statute creating the duty (although the fact that no forensic remedy is provided is not of itself necessarily sufficient to give a right of action …); the fact that the new duty is created for the benefit of a particular class of persons …; the fact that the duty is to make a money payment …; and the fact that the person injured receives no benefit from the statutory penalty … But the question is in every case to be resolved by a consideration of the Act as a whole. There is no hard and fast rule which can be applied to solving the particular case.”
- [18]There are two recent Queensland decisions which consider the application of these principles. In Hicks v. State of Queensland [1998] 1 Qd.R. 644, Moynihan J held that the Anti-Discrimination Act 1991 did not provide a private cause of action for damages for breach. His Honour was particularly influenced by the provisions in the Act establishing an anti-discrimination tribunal with power to decide whether the respondent had contravened the Act, and if it did so, to make a number of orders, including an order to pay compensation: s. 209. In Schiliro v. Peppercorn Child Care Centres Pty Ltd [2000] QCA 18, the Court of Appeal held that s. 28 of the Workplace Health and Safety Act 1995 did give a private cause of action to an employee who suffered injury as a result of a breach of it by the employer. The decision turned largely on the fact that similar provisions had been held for a long time both in Australia and in England to create a private right of action for breach in employees, and the legislature, by reenacting a similar provision without providing expressly to the contrary, must be taken to have intended to continue that state of affairs. This was in contrast to other jurisdictions where civil rights of action for breach of comparable legislation had been specifically excluded. The court also took account of the circumstance that the section was directed towards employee safety, and that it did recognise a defence. The court noted without adverse comment an earlier decision of the court in Heil v. Suncoast Fitness (Appeal No. 5199/98, 15.12.98) that s. 10 of the Workplace Health and Safety Act 1989 did not confer a private cause of action on a person who was not an employee. The position seems to be that this legislation creates a private cause of action in an employee who suffers loss or damage as a result of a breach, but not in other persons.
- [19]One decision of the High Court which was discussed in argument was Mallinson v. The Scottish Australian Investment Co Ltd (1920) 28 CLR 66. In that case it was held that s. 40(1)(b) of the Commonwealth Conciliation and Arbitration Act 1904 – 1918, which authorised the Commonwealth Court of Conciliation and Arbitration by its award to “prescribe a minimum rate of wages or remuneration” conferred on an employee a cause of action to recover wages at the rate prescribed by the award if less than that amount had been paid, provided that the employee and employer were bound by the award. There were remedies provided under the Act, and the court approached the question on the basis of a rule stated in Shepherd v. Hills (1855) 11 Ex 55 at 67; 156 ER 743 at 747 per Parke B: “Wherever an Act of Parliament creates a duty or obligation to pay money, an action will lie for its recovery, unless the Act contains some provision to the contrary”. In these circumstances, where there was a mechanism provided the issue was whether:
“… it was the intention of the legislature that the remedy provided should be a substitute for the right of action which would otherwise exist; and in determining this question, it is material to consider whether the obligation imposed by the Act was designed to benefit a particular class of persons (eg employees) and to complete their employers to perform certain duties for their benefit … It is also material to consider whether the provision made by the Act for compelling obedience to its commands is in the nature of a penalty for disobedience or in the nature of compensation to the person whose rights are affected by the failure to perform the obligations imposed by the Act.” (p. 71)
- [20]The court at p. 72 said that when an award was made under the Act:
“The alteration which the [Commonwealth Court of Conciliation and Arbitration] is thus empowered to make in the rights and liabilities of the parties is not an alteration in the character of the payment but in its amount. The amount is still to be paid as ‘wages or remuneration,’ and this necessarily imports that the employee shall have a right to receive, and if necessary to recover, from the employer payment of the amount calculated according to the rate fixed by the award. The right conferred being a right to receive from a designated person a liquated sum of money, the question is whether the Act contains provision forbidding the recovery by appropriate legal proceedings of the amount payable.” (p. 72).
The court said at p. 73 that:
“The right to receive wages sprang from the existence of the relationship of master and servant and the performance of services therein, and notwithstanding the Act it is still the existence of this relationship and the performance of services therein which confers on the employee the right to remuneration – all that the Act has done in this respect is to substitute another method of determining the amount of the remuneration.”
- [21]The remedies provided by the Act involved the imposition of penalties on employers and although individual employees who were members of the relevant union had a right to bring enforcement proceedings, the complainant was not necessarily entitled to any portion of the amount paid by way of penalty, although the court had a discretion to order part of the penalty to be paid to “such person as is specified in the order”. There was also a provision for a court to make an order for the payment of wages due to an employee, but only on the application of a party to an award, which would ordinarily not be the employee. The court concluded at p. 75:
“In the present case the Act provides no means, or at any rate no reasonably effective means, by which the individual complaining of injury sustained in consequence of the breach of an award by a refusal to pay him the amount to which he is entitled thereunder can obtain any redress or compensation …”
- [22]Given that an employee has an action at common law to enforce the contract of employment, if the statute is characterised as simply modifying the remuneration payable under that contract, there is no reason why an action on the contract for wages should not be used to recover the amount which by law is the minimum amount payable by way of wages under that contract. The issue then becomes whether the existence of an alternative scheme of enforcement extends to an implied prohibition on the enforcement by way of an action on the contract. The court was approaching the issue on the basis that the entitlement to recover the award remuneration would be enforceable in the ordinary courts, unless the statute was to be treated as impliedly taking away that cause of action, by the creation of alternative mechanisms for enforcement which had not been expressly made exclusive. That seems to me to be a very different question from whether a statute which provides that a particular amount is payable to the Commonwealth, in circumstances where if it is paid some related amount is required to be paid into a superannuation fund or otherwise dealt with for the benefit of the employee, impliedly gives the employee a private right of action for damages for breach of the obligation to pay the money. The present case does not fall within the rule in Shepherd v. Hills, because the relevant provisions of the Act make the money payable to the Commonwealth, not to the employee.
- [23]The question of the enforceability of award provisions was considered again by the High Court in Byrne v. Australian Airlines Ltd (1995) 185 CLR 410, where the approach that an award was imported into the contract of employment independently of the parties intention was rejected. Two judgments were delivered, although both arrived at the same conclusion. Brennan CJ, Dawson and Toohey JJ considered Mallinson and said at p. 419:
“There is, in our view, nothing in Mallinson to suggest that the award’s prescription of a minimum rate of pay became a term of the contract of employment. The award affected an alteration in the rights and obligations of the parties to the contract, but it did so by force of the Conciliation and Arbitration Act. The debt which arose as a consequence was a debt which owed its origin to the statute and not to the contract. That is why the court examined the Conciliation and Arbitration Act in order to determine whether it contained anything inconsistent with recovery by way of civil action.”
With all due respect, that is not the way that I would have interpreted the reference to the alteration in the rights and liabilities of the parties being “not an alteration in the character of the payment, but in its amount” because it seems to me that money payable under a statute is of a different character from money payable under a contract[5]. Nevertheless, I would, with respect, entirely endorse this characterisation of the situation in Mallinson as the appropriate one. The effect of the award was not to vary the terms of the contract between the parties, but to impose an independent obligation which to some extent superseded the contractual obligation to pay remuneration. The award did not change the terms of the contract, but provided an independent statutory obligation to pay.
- [24]Mallinson was a case where in effect the statute said: “X must pay Y $Z” and when that is done, the consequence is to give Y a cause of action against X for $Z as money payable under a statute unless the statute expressly or by implication provides to the contrary. But it is, in my opinion, a different thing to say that where a statute contains such a provision it not only gives Y a cause of action to recover money payable under a statute, but gives to W, a person who suffers loss or damage as a result of the failure of X to make the payment required by the statute, an action for damages against X. That is the situation I have to consider. In Byrne, their Honours, at p.425, noted that the Act there under consideration provided for the enforcement of awards by means which did not contemplate the existence of private rights enforceable by way of an action for damages. They had particular regard to the fact that a relatively modest maximum penalty was imposed for breach of an award, and the fact that there was express provision for the recovery of underpayments and of wages under the award, as inconsistent with a right to sue for damages for breach of an award.
- [25]The other members of the court, McHugh and Gummow JJ, noted at p. 461 the legislation was in a different form from that considered in Mallinson, and that:
“The existence of rights conferred by the legislation to recover payments due under awards and the power of the court to order payment of penalties tend against the proposition that, from the nature, scope and terms of the legislation, there arises the further inference that damages are recoverable.”
This indicates that, in the situation described earlier, the fact that the statute provides that Y may recover from X the money payable under the statute tends against an inference that damages for failure to pay that money are also recoverable. All members of the court were of the opinion that there was no action for damages available for breach of a term of the award, and that the award was not incorporated wholly into the contract, although it would have been open to the parties to have done so. I think the latter point may be of some significance here; it would have been open to the parties to the contract of employment to have specified either that the employer would make certain contributions to a superannuation funds on behalf of the employee, or that the employer would pay the superannuation guarantee charge, if it became payable. If such a term had been then incorporated into the contract, there would have been an action for damages for breach of that obligation. But the parties were free to incorporate it or not, as was the case in Byrne.
Campbell v. University of NSW
- [26]I was told that there are no cases specifically on whether the Act gives a private right of action, but I was referred to a decision of Campbell v. University of New South Wales (1992) 44 IR 56, where Carruthers J of the Supreme Court of New South Wales held that the State Superannuation Act 1916, which imposed a statutory duty on certain employers to treat certain employees as members of the fund and pay contributions to the fund for them, gave an employee who was not so treated and who suffered loss as a result a private right of action for damages.
- [27]His Honour referred briefly to the legislation and said (p. 68):
“Quite clearly, given the aim of the Act and the prescription of benefits for contributors, the Act is for the advantage of a particular class of persons, and, except indirectly, not for the public at large. Within the Act there are no remedies prescribed by penalty for breaches of the relevant duties. Further, there is no express denial of the right of a person injured by such a breach to bring an action for breach of statutory duty.”
His Honour referred to Mallinson (supra), IRC v. Goldblatt [1972] 1 Ch. 498 at 504, and Groves v. Wimborne [1898] 2 QB 409 at 415-6 where there is a statement of a prima facie entitlement to an action where a statute provides for the performance of a particular duty and someone belonging to a class of persons, for whose benefit and protection the statute imposed the duty, is injured by failure to perform it. The passage is in fairly strong and general terms, and seems to me, with respect, inconsistent with the Australian authorities which say that it is simply a matter of construction of the statute whether or not there is an intention to confer a cause of action. Groves was a case involving legislation for the protection of employees against physical injury, so that it really belongs to the same line of cases as Schiliro (supra). It is so cited in Byrne at p. 424 n.76.
- [28]Such cases seem to be in a category of their own when it comes to implying the existence of a private right of action into the statute. In Soutter v. P & O Resorts Pty Ltd [1999] 2 Qd.R. 106 at 111, Pincus JA, with whom the other members of the court agreed, said:
“Courts have been wary to treat statutes governing conditions at places of work as conferring a right of action as for a breach of statutory duty upon injured employees, but it does not seem to me that the spirit of those cases has ruled in other areas.”
His Honour considered a number of authorities, and cited with apparent approval the judgment of Lord Bridge of Harwich in R v. Deputy Governor of Parkhurst Prison; ex parte Hague [1992] 1 AC 58 at 159, where
“One finds a denial of proposition that the question is whether the legislature intended to confer protection from damage. To find a right of action one must go further and consider whether the intention was to confer one.”
After considering the particular features of the section concerned, and the legislation in which it stood, and a number of practical considerations, His Honour concluded at p. 112:
“In my opinion, no sufficiently strong reason appears to treat the provision in question as giving rise to a civil action for its breach.”
That appears to me to be quite different from the approach indicated in the passage of the judgment of Vaughan Williams LJ from Groves cited at p. 68 of the judgment in Campbell. As to the other authorities referred to there, Mallinson needs now to be understood in the light of the explanation of that decision in Byrne. Goldblatt is an example of another area where the approach in Groves was applied, on authority in 1913. I do not think that the consideration of just these cases provides sufficient guidance to the true position in Australia today.
- [29]His Honour referred to the existence of a remedy in the Board established under the Act to recover any money owing to the fund by an employee as a debt in any court of competent jurisdiction: s.91A. The point was made in that case on behalf of the defendant that if the Board recovers contributions by suit, then ultimately so does the employee, because any contributions so recovered were held for the benefit of the employee. His Honour continued at p.68:
“I cannot accept the legislation has imposed a duty upon the University without creating a correlative right in the plaintiff. In my view, the provisions of s. 91A do not displace the plaintiff’s common law rights, in part because of their inadequacy in relation to the kind of damage suffered by the plaintiff.”
His Honour does not appear to have explained why he regarded the remedy under s. 91A as “inadequate in relation to the kind of damage suffered by the plaintiff”, but possibly he had in mind that a right to recover the amount of the contribution which ought to have been paid, together with presumably interest by statute, would not put the plaintiff in the same position as if the contributions had actually been paid and there was then the opportunity to earn compound interest on them, presumably under concessionary tax arrangements. His Honour appears to have approached the matter on the basis that there was a presumption that the existence of a statutory obligation gave the plaintiff a remedy. But the only situation where there is a presumption is the rule in Shepherd v. Hills, where a statute provides for money to be paid to a particular person, and there is a presumption that that person therefore has an action enforceable in the ordinary courts to recover the money as money payable under a statute. His Honour appears to have overlooked the distinction which I referred to earlier between an action in debt to recover money payable under a statute, and an action for damages by someone other than the payee for breach of the statutory obligation.
- [30]His Honour also referred to comment by Toohey J in University of Newcastle v. Chopra (1989) 63 ALJR 397 at 411:
“If an employer is derelict in its statutory duty to deduct the contributions of an employee from salary or to make its own contributions to the Board, no doubt the employee has an action in damages for any loss suffered thereby”.
The issue in that case did not involve any consideration of whether or not the statute created a cause of action in damages in the employee for any loss suffered, and the other members of the court, although speaking of the statutory obligation, did not suggest that it gave rise to such a separate action. Nevertheless, I can understand why Carruthers J regarded that comment as supporting the conclusion that he reached (p. 69) that there was a statutory duty by the University to the plaintiff. Toohey J cited the three cases also cited by Carruthers J, and this judgment was written years before Byrne. Carruthers J then went on to consider whether the University had failed to act with reasonable care, and concluded that it had in relation to the duty imposed on it by statute. This seems, with respect, puzzling; the duty apparently imposed was a duty to pay contributions, not a duty to take reasonable care properly to administer the act, or to take reasonable care to pay appropriate contributions to the fund. His Honour then concluded there had been a breach of statutory duty which had caused actionable damage to the plaintiff.
- [31]It will be apparent from what I have said that I have doubts about the validity of the reasoning process adopted by His Honour in relation to the legislation there under consideration. I think, however, that it is sufficient for present purposes for me to express the opinion that the current legislation is distinguishable. That statute imposed a specific obligation to contribute to the fund in respect of an employee, unless the employee was exempted. Contributions when made were to be held in the fund, together with accretions, for the benefit of the employee. In that situation, the payment was made, not directly to the employee, but directly to the benefit of the employee. In the present case the obligation was to pay a tax to the Commonwealth which when paid went into consolidated revenue. As a result the identity of the money was lost; there is no earmarking of any funds in consolidated revenue, even if there is a relationship between money paid in and particular money paid out for a particular purpose: South Australia v. The Commonwealth (First Uniform Tax Case) (1942) 65 CLR 373 at 414 per Latham CJ. The effect of s. 65 would be sufficient to establish the issue of causation, but it does not alter the character of the obligation imposed by the statute on the employer.
Analysis
- [32]I have already discussed the circumstance that the statutory obligation is to pay to someone other than the employee. The next consideration is whether the remedy provided by the statute was inadequate. I have referred to the statutory provisions available to the Commissioner for enforcement; they were in a number of respects more extensive, or superior to, the remedies available to an ordinary litigant suing to recover damages. The provision with regard to additional superannuation guarantee charge under s. 49 is obviously intended to provide some protection against late payment so as to cushion the effect of any such late payment on the employee. Whether this will put the employee in a better or worse position depends on how the rate applicable under the regulations compares with the earning rate in fact achieved by the superannuation fund into which the contributions would have been paid if they had been paid by the employer. There is no reason to assume for the purpose of construing the statute that that difference, which may in a particular case be either way, led to an inadequate remedy. The point is that the statute has made some provision to deal with this difficulty. Whether the statutory remedy provided is adequate should really be analysed prospectively since the question is one of what legislative intention is to be inferred, and that must be by reference to the situation when the Act is passed. Accordingly, it would not help to show that, in a particular case, the mechanism provided under the statute may be less beneficial than a cause of action for damages.
- [33]There is also the consideration that, in the situation being considered in Campbell where the University thought (as His Honour held incorrectly) that the plaintiff was not qualified to be a member of the fund, there was no particular reason why the Board which had the statutory right to recover contributions would have known about the plaintiff or would have been in a position to pursue the matter, unless perhaps stirred up by the plaintiff. On the other hand, conferring a cause of action to recover unpaid charge on the Commissioner of Taxation is a process which might be expected to result in delinquent employers being pursued. The general administration of the Act is put in the hands of the Commissioner (s. 43) and it was obviously the legislative intent, in view of the provisions for default assessments, and provisions in ss.76 and 77 to facilitate the investigation of the existence of any liability to pay the charge by the Commissioner, and the requirement in s. 79 for records to be kept and retained by employers, that the obligations created by the Act would be enforced by the Commissioner.
- [34]Employers would also commonly be taxpayers, and employees would ordinarily be taxpayers, and employers would ordinarily be making PAYE deductions in respect of remuneration paid to employees, so there was a host of other information likely to be available to the Commissioner of Taxation for the purpose of cross-matching to keep track of delinquent employers. The Commissioner of Taxation was therefore in a particularly advantageous position to be able to enforce the obligations of an employer under the statute. I assume that in the present case that did not occur, and no doubt the legislature was sufficiently realistic to appreciate that there would be cases where it would not occur, but on the whole I think it reasonable to infer a legislative expectation that ordinarily the statutory obligation would be enforced by the Commissioner, and indeed an expectation that it ought to be enforced by the Commissioner.
- [35]That gives rise to the difficulty that there is some inconsistency between the existence of a private right of action for damages in the employee and the action for debt conferred expressly by the Act on the Commissioner, particularly where, if the debt is ultimately paid or recovered, a benefit is conferred under s. 65 on the employee. Does the existence of the action for damages depend upon the mere possibility that the charge will not ultimately be paid to or recovered by the Commissioner, so that the assessment of quantum might fluctuate depending on the degree of enthusiasm with which the Commissioner, at a particular time, is pursuing the employer: Sellars v. Adelaide Petroleum NL (1994) 179 CLR 332. There does not appear to be anything which would give the employer any sort of defence to an action by the Commissioner based on the prior satisfaction of a claim or judgment for damages for breach of the statutory obligation made directly by the employee, so that there would be the scope for the employee to receive the benefit twice: once under a (prompt) claim for damages for breach, and subsequently if a (rather more leisurely) action for debt by the Commissioner ultimately succeeded.
- [36]There is also the consideration that, in the ordinary case, the calculation for damages of breach would be a very complex issue: the assessment of the present value of the future loss of superannuation benefits generated as a consequence of a past failure to pay particular superannuation contributions is a process fraught with difficulty: see (1996) 17 QL 5. If there were parallel rights, and the employee has no control over the Commissioner’s enforcement of his right, which if enforced successfully, will produce a benefit for the employee, the calculation of the employee’s damages for breach of the statutory obligation, would become exceedingly complex. As well, in most causes the amount recoverable would not be large. I think that these are features of some relevance.
- [37]But for the existence of Part 8 in the Act, there could, I think, have been no suggestion that the Act conferred a private right of action for breach of ss. 16, 46 or 49. I do not think that the presence of that aspect of the overall scheme creates a situation where the appropriate inference is that there was an intention to give a private right of action for damages for breach of those sections. There is no policy reason why such a private right of action should have been part of the scheme of the legislation. The legislation contains a specific means for enforcement of the obligations referred to in ss. 16, 46 and 49, an action for debt by the Commissioner of Taxation. That remedy, if successful, provides a benefit to the employee. Because of the potential for inconsistency with the enforcement mechanism provided under the Act, such a private right of action is inconvenient. The Commissioner has advantages both in terms of investigation and in terms of enforcement which put him in a superior position to the employee for the purpose of extracting money from the employer. Particularly in view of this consideration, the statutory mechanism for enforcement is not inadequate, or at least not so inadequate as to be a strong indication of an intention impliedly to confer a private right of action.
- [38]Although the Act operates for the benefit of the employees, it would operate for the benefit of anyone and everyone in Australia who is in any relevant sense an employee, and that would include a substantial portion of the population, probably the great majority of the population at some time in their lives. It is therefore not a clear example of an Act which creates a duty for the benefit of a particular class of persons. Although there is an obligation to make a money payment, the payment is not made to the plaintiff. Looking at the considerations referred to in Martin (supra), therefore, in my opinion, the balance is clearly against the existence of a private right of action. There is nothing in the analysis in Byrne at pp. 424-6 and 457-462 of the question of whether any cause of action for damages for breach of statutory duty arises to suggest that an approach more favourable to the plaintiff is appropriate.
- [39]I have reached this conclusion without having regard to the content of the Superannuation Guarantee (Administration) Regulations 1993. Although there are some circumstances where it may be possible to have regard to regulations, either as throwing some light on the overall scheme of the legislation, or as exemplifying the possible scope of the regulation making power contained in the Act, in my opinion, ordinarily the content of regulations made under statute will not be a relevant factor when determining the true construction of the statute.
- [40]I therefore answer each of the questions “No”. I order that the first plaintiff pay the defendants’ costs of the separate trial of those questions to be assessed.
Footnotes
[1] Calculated in accordance with s. 31; this provides for interest from the beginning of the relevant year until the charge becomes payable. Interest after the charge becomes payable if it is not then paid is covered by s. 49.
[2] This is $50 plus $30 for each employee for whom there is an individual superannuation guarantee shortfall for the year: s. 32.
[3] Because of s. 55 of the Constitution. For an alternative view, see Aplins “Why The Superannuation Guarantee Scheme is Unconstitutional” (1999) 28 Aust. Tax Review 13. No issue as to validity arises in this case.
[4] That is, the amount of the charge less any amount in respect of the administration component and any amount of penalty charge (other than penalty charge under s. 49 that does not relate to additional superannuation guarantee charge under Part 7) included in the payment: s. 64.
[5] As their Honours said at p. 420, the statutory right did not change its character by being imported into the employment relationship, it remained money payable under a statute.