FEDERAL COURT OF AUSTRALIA ADMINISTRATIVE LAW - Administrative Appeals Tribunal Act 1975 s 44(1) - appeal from decision of Administrative Appeals Tribunal. SUPERANNUATION - Superannuation Act 1922, s 60N - whether applicant's entitlements thereunder to be calculated by reference to contributions paid or contributions liable to be paid. Administrative Appeals Tribunal Act 1975 s 44(1) Superannuation Act 1922 (Cth) ss 4, 5, 12, 16, 18, 22, 28, 29, 30(1), 60A, 60D, 60N, 80C(1), Parts III, IV, IVA Superannuation Act 1976 (Cth) s156 Defence Act 1903 ss 5, 30, 31(1)(2)(3)(4) University of Newcastle v Chopra (1989) 63 ALJR 397 RUSSELL WALTER FOX v THE COMMISSIONER FOR SUPERANNUATION NG 25 of 1996 BLACK CJ, BRANSON, SACKVILLE JJ SYDNEY 20 AUGUST, 1997 IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) NG 25 of 1996 GENERAL DIVISION ) BETWEEN: RUSSELL WALTER FOX Applicant AND: THE COMMISSIONER FOR SUPERANNUATION Respondent CORAM: BLACK CJ, BRANSON, SACKVILLE JJ PLACE: SYDNEY DATE: 20 AUGUST 1997 MINUTES OF ORDER THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The applicant is to pay the respondent's costs of the appeal. Note: Settlement and entry of orders is dealt with by Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) NG 25 of 1996 GENERAL DIVISION ) BETWEEN: RUSSELL WALTER FOX Applicant AND: THE COMMISSIONER FOR SUPERANNUATION Respondent CORAM: BLACK CJ, BRANSON, SACKVILLE JJ PLACE: SYDNEY DATE: 20 AUGUST, 1997 REASONS FOR JUDGMENT THE COURT: THE PROCEEDING This is an appeal pursuant to s44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) from a decision of the Administrative Appeals Tribunal ("the AAT") made on 19 December 1995, whereby the Tribunal affirmed a decision of the Commissioner for Superannuation made in October 1992 and confirmed on 14 January 1994. The decision of the AAT was that, following the applicant's retirement on the ground of invalidity from the Permanent Military Forces on 23 March 1945, he became entitled to a pension under s 60N of the Superannuation Act 1922 (Cth) ("the Superannuation Act") based upon the salary applicable to him in his rank of lieutenant in the Permanent Military Forces. FACTUAL BACKGROUND The applicant was born on 30 September 1920 and is therefore now 76 years of age. He entered the Royal Military College, Duntroon, as a staff cadet, in February 1938. On 4 October 1939, the Second Australian Imperial Force ("2nd AIF") was established by the Governor-General in Council, pursuant to the Defence Act 1903 (Cth) ("the Defence Act"). The AIF was to comprise persons who voluntarily agreed to serve within or beyond the limits of the Commonwealth. On 5 October 1939, the War Cabinet decided that, as in the case of officers of the Commonwealth Public Service, members of the Permanent Military Forces who joined the 2nd AIF would have their superannuation contributions paid by the Commonwealth during their period of service with the 2nd AIF. Among other things, this decision was intended to overcome the difficulty that members of the Permanent Military Forces who joined the 2nd AIF might receive less take home pay than those who joined the 2nd AIF from outside the Permanent Military Forces. On 17 August 1940, the applicant graduated from the Royal Military College. The following day, 18 August 1940, he was appointed with the rank of lieutenant to the Australian Staff Corps, a corps of the Australian Military Forces. Because the applicant thereby became a member of the Permanent Military Forces, he became an "employee" within the definition of that term in the Superannuation Act, s 60A. As a member of the Australian Staff Corps, the applicant's annual rate of pay and of incremental advancements were specified at all material times in the Military Financial Regulations 1935. The Military Financial Regulations provided a base figure for a lieutenant (which was increased from time to time) and six annual increments in salary. On 6 September 1940, the applicant entered the Superannuation Fund and began to make contributions. On 12 December 1940, the examiner reported that the applicant was a new contributor under the Superannuation Act. His salary was recorded as £292 per annum and it was noted that he contributed for five units. A report dated 18 November 1941 recorded that the applicant's salary had been increased to £330 per annum from 15 August 1941. At this stage his contributions increased to six units. On 1 March 1942, the applicant was seconded to the 2nd AIF with the rank of lieutenant, but to be appointed as a captain temporarily. Under the War Financial (Military Forces) Regulations 1941, a member of the Permanent Military Forces, seconded for service with the 2nd AIF, was to receive the pay and allowances specified in those Regulations. However, if the permanent rate exceeded the AIF rate, the member was to be paid an allowance equal to the difference: see War Financial (Military Forces) Regulations 1941, reg 9(3) and equivalent later provisions. Upon being seconded to the 2nd AIF, the applicant's superannuation contributions, determined by reference to his salary in the Permanent Military Forces, were paid by the Commonwealth in accordance with the October 1939 decision of the War Cabinet. On 19 April 1943, a further examiner's report noted that the applicant's salary had increased to £366 per annum as from 12 November 1942, and that his contributions had increased to seven units. This was a reference to his salary as a lieutenant in the Australian Staff Corps and not to his pay and allowances as an acting captain in the 2nd AIF. On 9 July 1943, the War Cabinet decided that, having regard to the desirability of uniformity of treatment among members of the various branches of the forces, the Commonwealth would "accept liability for the superannuation contributions of all its employees, including members of the Permanent Military and Air Forces, serving in the Forces during the war period". This decision was designed to address certain anomalies that had arisen. One anomaly was that members of the Permanent Military Forces, if appointed to the 2nd AIF, had their superannuation contributions paid by the Commonwealth for the whole term of their service in the 2nd AIF, while members of the Permanent Air Force had to pay their own contributions, except for any periods they actually served overseas. On 10 March 1944, the applicant's salary was recorded as having increased to £424 per annum as at 18 August 1943, and his contributions increased to eight units. Again, this was a reference to the annual rate of pay for a lieutenant in the Australian Staff Corps. Of course, the applicant's superannuation contributions were being paid by the Commonwealth on his behalf. On 23 March 1944, the applicant was appointed to the substantive rank of captain in the 2nd AIF, with retrospective effect from 1 September 1942. This promotion was confirmed by the Governor-General in Council on 18 May 1944. In 1944, the applicant became ill while on active service in Papua New Guinea. On 15 January 1945, he applied for a pension. A departmental report in respect of the applicant, dated 28 February 1945, records that his salary as defined by s 4 of the Superannuation Act was £450 per annum at the date of ceasing contributions and that the number of units contributed for was eight. The applicant did not see this document. The applicant was discharged on medical grounds as from 23 March 1945 and placed on the Retired List (NSW) with the rank of captain. At the time of his retirement, the applicant was receiving the daily rate of pay applicable to a captain in the 2nd AIF, namely £1-8-0 per day (£511 per annum) plus a dependant's allowance. This rate of pay was greater than the annual rate for a lieutenant in the Australian Staff Corps. As from 23 March 1945, the applicant received a pension under the Superannuation Act initially at the rate of £208 per annum. Following his discharge the applicant undertook legal studies and later became a barrister. He continued to receive the pension until 10 June 1960, when it was suspended on the ground that his health had been restored. In 1977, the applicant became a judge of this Court. His pension was restored as from 1 February 1989, the day after his retirement as a judge. There was a dispute between the applicant and the respondent as to the appropriate date for the reinstatement of his pension. That dispute was ultimately resolved by the respondent determining that the pension should be restored as from January 1978, in view of medical evidence as to the applicant's condition. Arrears of pension for the period 12 January 1978 to 31 January 1989 were paid to the applicant. Upon receipt of this payment, the applicant became aware that his pension had been calculated on the basis that his contributions were those applicable to a lieutenant in the Permanent Military Forces at the time of his discharge. He took the view that the pension should have been assessed by reference to his rank as captain in the 2nd AIF, and on the basis that he had been contributing for ten units of pension, not eight. This contention was accepted and his pension was increased prospectively from 22 August 1991. The applicant was also paid a lump sum of $60,158.64, representing arrears for two periods, viz. 23 March 1945 to 9 January 1960 (when the pension was suspended) and 1 January 1978 to 22 August 1991 (when payment at the increased rate commenced). The applicant then requested the Ombudsman to assist him in an application to have the arrears of pension paid at a rate reflecting the value of money in 1991. This led to an investigation, the outcome of which was a decision notified to the applicant by letter dated 20 October 1992. The respondent decided that the applicant's salary at the date of his retirement, for the purposes of the Superannuation Act, was that of a lieutenant in the Permanent Military Forces. That salary was £450 per annum. The pension was therefore to be calculated on the basis that the applicant was contributing for eight units of pension, not ten units. Accordingly, the applicant's pension was reduced to the rate applicable for eight units. The applicant requested a review of the respondent's decision. On 14 January 1994, a delegate of the respondent confirmed the decision. The applicant lodged an application for review with the AAT on 16 February 1994. On 19 December 1995, the AAT affirmed the respondent's decision. STATUTORY BACKGROUND Defence Act The Defence Act, as in force during the period 1939-1945, applied to all the Naval and Military Forces of the Commonwealth and to all members thereof (s 5). Section 30 provided that the Defence Force - "shall consist of the Naval and Military Forces of the Commonwealth, and shall be divided into two branches called the Permanent Forces and the Citizen Forces." Since the 2nd AIF did not form part of the Citizen Forces, it was part of the Permanent Forces. Section 31(1) provided as follows: "The Permanent Military Forces shall consist of officers who are appointed officers of those Forces, and of soldiers, who are bound to continuous military service during the continuance of their engagements." Section 31(2) provided that, except in time of war and with the exception of Administrative and Instructional Staffs, no permanent military forces should be raised or organised, save as mentioned in s31(3). Section 31(3) empowered the Governor-General to declare that it was necessary in the public interest to maintain permanent military forces, in which case permanent forces raised in time of war could be maintained after the time of war. Section 31(4) was added to the Defence Act by the Defence Act (No.3) 1939. Since it was the subject of debate, it should be set out in full: "An officer or soldier appointed or enlisted, on or after the third day of September, One thousand nine hundred and thirty-nine, for service in a military force raised in time of war for war service, or a soldier enlisted on or after that date solely for service in time of war, shall not, by reason only of such appointment or enlistment, be deemed to be an employee within the meaning of the Superannuation Act, 1922-1937." The second reading speech of the Minister for the Army (The Hon. G.A. Street) explained the purpose of the amending legislation as follows (Cth Parl Deb, HR, 8 December 1939, 2480) as follows: "This is a small bill to rectify an anomaly which has arisen in that, by virtue of the provisions of section 31 of the Defence Act, every officer who is appointed to, and every soldier who has enlisted in, the 2nd Australian Imperial Force, is a member of the Permanent Forces, as are also those men who have enlisted in the garrison battalions. The last-mentioned group comprises former members of the 1st Australian Imperial Force who are relieving the Military Forces in the guarding of vulnerable points. Under the Superannuation Act, these officers and soldiers are liable to contribute to the fund established under the act, and therefore may become entitled to receive superannuation benefits. The inclusion of such officers and men is foreign to the purpose of the act, which is designed to make provision for persons employed by the Commonwealth in a permanent capacity. It would also result in embarrassing the fund. Therefore, this bill provides that officers and soldiers shall not be deemed to be employees of the Commonwealth within the meaning of the Superannuation Act, and shall not be eligible or liable to contribute thereunder." Superannuation Act The Superannuation Act, as in force in March 1945 and at relevant times before that date, established the Superannuation Fund into which contributions were to be paid by Commonwealth employees and by the Commonwealth, and from which benefits provided by the Act were to be paid (s 5). The benefits included pensions to be paid to persons retiring from employment by the Commonwealth and, in certain circumstances, to members of their families. Section 4 of the Superannuation Act contained the following relevant definitions: "'Contributor' means an employee who is or has been contributing under this Act to the Fund; ... 'Employee' means a person employed in a permanent capacity by the Commonwealth, who is by the terms of his employment required to give his whole time to the duties of his employment, but does not include a Justice of the High Court or a Judge of any other Court created by the Parliament; 'Salary' means salary or wages, and includes the value of allowances such as allowances for rent, house allowed rent free, light, fuel, rations, and fees allowed regularly as emoluments of office, but does not include bonuses, overtime payments, or allowances for forage, equipment, climatic disadvantages, cost of living or travelling expenses; 'Service' means service under, or employment by, the Commonwealth or an approved authority." Part III of the Superannuation Act was concerned with contributions to the Superannuation Fund. Section 12 of the Superannuation Act provided that every employee had to contribute to the Superannuation Fund from the date of commencement of his or her employment. Section 81 empowered the Board to recover contributions under the Act in any court of competent jurisdiction. However, the manner of payment of contributions was dealt with by s 22 of the Superannuation Act, which provided as follows: "The contributions of contributors shall be deducted from their salaries at each payment of salaries, and shall be paid, without deduction for postage, forwarding or exchange, to the Board: Provided that where a contributor is on leave of absence through illness, either without pay or at less than full pay, the Board may, upon his application, permit the contributions falling due during his absence to be paid by him in such smaller sums, and at such periods, as the Board approves." Section 13 of the Superannuation Act provided that, subject to the Act, contributions by an employee were to be in respect of units of pension as defined by s 28 of the Act, and that "the number of units in respect of which an employee shall contribute shall have relation to the salary of the employee", in accordance with a scale set out in the section. Column 1 to the table in s 13 specified a range of annual salaries. Column 2 required the employee to contribute the amount necessary to produce units of pension as specified in the table. Thus, for example, an employee with an "Annual Salary" of between £416 and £468 was required to contribute for eight units, yielding a pension of £208 per annum (half the lowest point in the annual salary scale). The amount of contribution payable by an employee was governed by s 16 of the Superannuation Act. It provided as follows: "The amount of contribution which shall be paid by an employee shall, except where otherwise provided in this Act, be based upon - (a) the number of units or half-unit of pension in respect of which the employee contributes; (b) sex; and (c) the age at which the employee commences to contribute for each unit or half-unit, and shall be in accordance with the tables of contributions prescribed by or under this Act." The rates of contribution per unit depended on the assumed retiring age and on the age of the contributor at the time he or she commenced to contribute for each unit. Thus, a male contributor aged twenty five at his next birthday was required to pay £0.4.3 per fortnight for the first £52 of pension payable on retirement at age sixty, while a male who joined the fund aged fifty was required to pay £1.1.2 per fortnight for the same entitlement. An employee who became entitled or required to contribute for additional units was to pay the amount of contribution determined by his or her age at the time the contributions for additional units were first made. Section 18 of the Superannuation Act provided for the Commonwealth to contribute to pensions payable under the Act on the following basis: "In respect of each unit or portion of a unit of pension, paid from the fund on the basis of a contribution corresponding to the rate prescribed for the age of the employee at the date upon which he commenced to pay the contribution, a sum equal to one-half of the payment so made shall be paid by the Commonwealth to the fund." In other words, the legislation contemplated that the Commonwealth would meet half the costs of the payment of each unit of pension paid from the fund. Part IV of the Superannuation Act was concerned with pensions and benefits payable under the Act. Section 24 provided that a contributor who was retired on the ground of invalidity or physical or mental incapacity was to be entitled to a pension. The amount of the pension to be received by a contributor upon retirement was fixed by ss 29 and 30 of the Superannuation Act. Section 29 provided as follows: "Subject to this Act, a contributor shall, upon retirement, be entitled to receive a pension according to the number of units for which he was contributing at the time of his retirement: Provided that any contributor - (a) who has attained the age of sixty years and elects, or is called upon to retire before attaining the maximum age for retirement; or (b) the age for whose retirement is fixed by law at an earlier age than sixty-five years, who retires on attaining the age so fixed, shall as from the date of his retirement be entitled to a pension which is the actuarial equivalent of the contributions made or to be made by him and of the share of pension payable by the Commonwealth and accruing to him under this Act." Section 30(1), so far as is here relevant, provided as follows: "Where a contributor is retired on the ground of invalidity or physical or mental incapacity to perform his duties, he shall - (a) if the invalidity or incapacity is not due to wilful action on his part for the purpose of obtaining pension - be entitled to the full pension for which he was contributing at the time of his retirement; and (b) if the invalidity or incapacity is due to wilful action on his part for the purpose of obtaining pension - be entitled to a refund of the contributions paid by him to the fund: ..." Part IVA of the Superannuation Act was inserted into the Act in 1924. Section 60A defined an "employee", for the purposes of that Part, as a member of the Permanent Military Forces. Part IVA, in effect, suspended the direct operation of Parts III and IV of the Act so far as members of the Permanent Military Forces were concerned. However, Parts III and IV had a continuing relevance to members of the Permanent Military Forces by reason of the provisions of Part IVA. Section 60D of the Superannuation Act provided as follows: "Employees and officers shall, subject to this Part, be liable and entitled to contribute in accordance with Part III of this Act for units of pension under this Act, and, for the purpose of determining the rights and obligations of those employees and officers in respect of contributions for units of pension, Part III shall, subject to this Part, apply in relation to contributions by those employees and officers." Section 60H provided for the tables of contributions referred to in s 16 to continue to apply to contributions by "employees", as defined for the purposes of Part IVA. Section 60I provided that the provisions of Part IV should, subject to Part IVA, apply in relation to the pensions and benefits of employees. Section 60N of the Superannuation Act is the section pursuant to which the applicant's pension has been paid. It provided as follows: "Where a contributor under this Part is retired on the ground of invalidity or physical or mental incapacity to perform his duties, he shall - (a) if the invalidity or incapacity is not due to wilful action on his part for the purpose of obtaining pension, be entitled to the full pension for which he was contributing at the time of his retirement; and (b) if the invalidity or incapacity is due to wilful action on his part for the purpose of obtaining pension, be entitled to a refund of his contributions." Section 80C(1) of the Superannuation Act, which was inserted into the Act in 1942, provided: "Where the Board is satisfied that any pension or benefit has, whether before or after the commencement of this section, become payable under this Act as the result of the service of a contributor as a member of the Forces, the Commonwealth shall pay to the fund the amount by which the proportion of the pension or benefits equivalent to the contributions made by the contributor is less than the amount of the pension or benefit." CONTENTIONS The applicant has identified two broad questions said to arise on the appeal, as follows: "A. Whether 'salary' in the definition of the Superannuation Act, 1922 ('the Act') means the actual salary paid to the Applicant as a member of the Australian Military Forces in 1945 ('the Salary Issue'); and B. Whether the Applicant's position as a contributor under the Act limits the pension payable to him to an amount less than that which would be calculated using the Applicant's actual salary in the Australian Military Forces ('the AMF') in 1945 ('the Contribution Issue')." The respondent on the other hand contends that the applicant's entitlement to pension is to be determined by reference to s 60N(a) of the Superannuation Act. Mr Hanks, on behalf of the respondent, submits that, by limiting the applicant's entitlement to "the full pension for which he was contributing at the time of his retirement", s 60N(a) required the applicant to be paid a pension calculated by reference to the eight units for which he was in fact contributing at the time of his retirement. For that reason the respondent argues that - "(a) The question whether the Applicant's 'salary' for the purposes of the Act was limited to the nominal pay granted to him by reason of his appointment to the Australian Staff Corps ('the ASC') or referred to the daily rate of pay payable to him by virtue of his secondment to the Australian Imperial Force ('AIF') was relevant to a different question - the extent of the applicant's obligation to contribute for units of pension under s 13(1) of the [Superannuation] Act during the time of his secondment to the AIF. But the answer to that question did not bear upon the issue framed by s 60N(a) of the Act. (b) The question whether, at the time of his retirement on the ground of invalidity, the Applicant held the rank of lieutenant or captain is equally irrelevant to the issue framed by s 60N(a) of the Act." The respondent further contends that, in any event, the AAT made no error of law in dealing with the salary issue or the rank issue such as to justify setting aside its decision. CONSIDERATION AND CONCLUSIONS There is no dispute that the applicant's entitlement to pension derives from s 60N of the Superannuation Act. Such entitlement in his case is to "the full pension for which he was contributing at the time of his retirement" within the meaning of s 60N(a). There is also no dispute that the contributions in fact being deducted from the applicant's salary, as at the time of his retirement, were contributions for eight units of pension. No other contributions are asserted to have been made by him. The contribution for eight units was based upon the salary applicable to him as a lieutenant in the Permanent Military Forces. To succeed on this appeal, the applicant must establish both that the words "full pension for which he was contributing" in s 60N of the Superannuation Act are to be understood as meaning "full pension for which he was liable to contribute", and that he was liable under the Superannuation Act to contribute for more than eight units of pension. In addressing the first question, the starting point must be the statutory language. Various forms of the expression "for which he was contributing" appeared in a number of provisions in the Superannuation Act, apart from s 60N(a): see, for example, ss 16, 29, 31. This language, on its face, suggests that the scheme as established by the Act was intended to provide benefits by reference to contributions actually made to the fund, except where otherwise stated. As a matter of ordinary usage of language, there appears to be a distinction between the concept of the number of units for which a person "was contributing" at a particular time and the concept of the number for which he or she "was required (or liable) to contribute" at that time. This impression is reinforced by the definition of "contributor" in s 4(1) of the Superannuation Act, which referred to "an employee who is or has been contributing under this Act to the Fund". This definition does not suggest that the mere fact that a person was obliged by the legislation to contribute to the Fund meant that he or she became a contributor. Both parties referred to the consideration by the High Court of the provisions of the Superannuation Act 1916 (NSW) ("the NSW Act") in University of Newcastle v Chopra (1989) 63 ALJR 397. The basic structure of the NSW Act was, in many ways, similar to that of the Superannuation Act. It provided for a compulsory superannuation scheme, subject to health based eligibility criteria, with the possibility of approved exemption from the scheme. The facts in Chopra's Case were that Mrs Chopra indicated to her employer at the time of her employment, that she did not wish to contribute to the superannuation scheme, but she declined to apply for an exemption from it. The contributions which, under the Act, it would have been appropriate for her employer to deduct from her salary for payment into the fund were not made. Just before the time of her intended retirement, Mrs Chopra commenced an action against her employer and the State Authorities Superannuation Board seeking declarations of her entitlement as a contributor to, and as a member of, the fund. The NSW Act provided that a "contributor", on his or her retirement, was entitled to payment out of the fund of a pension calculated "according to the number of units for which he contributed at the time of his retirement". The word "contributor" was defined prior to 1976 to mean an "employee who is contributing under this Act". In considering the significance of the above provisions prior to 1996, Mason CJ and Gaudron J said, at 400-401: "We acknowledge that the words 'who is contributing' in their usual or primary sense signify a person who is in fact paying or making contributions, whether directly or indirectly, by means of deductions made from his earnings by his employer. But the expression is capable of signifying a person who is liable to make a contribution. R v Kershaw (1856) 6 El & Bl 999 [119 ER 1136] is an interesting illustration of this proposition. There, the Court of Queen's Bench ... unanimously held that the words 'inhabitants contributing to the highway rate' in a statute included all those who were liable to the rate .... Of course the context in Kershaw was such as to provide strong reasons for arriving at the meaning favoured by the court. The context here, though naturally very different from that in Kershaw, likewise provides strong reasons for reaching the same conclusion as reached by the Court of Appeal." Their Honours went on to refer to the compulsory nature of the scheme, the statutory obligation on every employer and employee covered by the Act to contribute to the scheme unless exempted from the obligation to do so, the fact that interest was payable on unpaid contributions and the entitlement of the Board to sue to recover unpaid contributions. They concluded, at 401: "In this setting it stands to reason that the expression 'who is contributing' originally included not only those persons who were making contributions but also those who were liable to make contributions." The other members of the High Court in Chopra took a different view of the meaning of the words "who is contributing". Brennan and Dawson JJ said, at 406: "Mrs Chopra was not contributing to the Fund at any time during her employment. She made no contributions to the Fund. In our opinion that is conclusive to show that she was not a 'contributor' within the definition of that term prior to its amendment in 1976. We are in respectful disagreement with the members of the Court of Appeal who held that she was a 'contributor', reasoning that an employer who was liable to contribute was contributing." Justice Toohey observed that the scheme of the NSW Act recognised that the status of an employee as a contributor would not be lost merely because a contribution falling due was not paid; mechanisms for the recovery of contributions in such circumstances were provided by the Act. However, his Honour went on, at 410: "But, in this case Mrs Chopra refused over many years to contribute to the Scheme, notwithstanding the matter having been brought to her attention more than once by her employer. No deductions were made from her salary because she had declined to respond, apparently because of an objection to the Scheme. There is no basis upon which to conclude that Mrs Chopra ever satisfied the criterion of being an 'employee who is contributing under the Act.' True it is that she was an employee, for that status remained unaffected, but she was not an employee 'who is contributing'. ... The difficulties inherent in Mrs Chopra's argument may be seen when it is sought to apply s 27 of the Act and determine the pension to which she is entitled. It is the case that there is a formula by which contributions are assessed. But how is it possible to say, in terms of s 27, what are the number of units for which she contributed 'at the time of [her] retirement'? In truth Mrs Chopra never contributed for any." The reasoning of the majority in Chopra supports the view that the words "the full pension for which he was contributing", in s 60N(a) of the Superannuation Act, should be given their usual or primary meaning. It is true that the facts in the present case are not identical to those in Chopra, in that the applicant in the present case did not make a deliberate decision to refuse to contribute in respect of more than eight units of pension. But the fact is that, while he was never asked to, he did not contribute for any more than eight units of pension (and nor did the Commonwealth on his behalf). The records of the Fund make it clear that his contributions were calculated by reference to his annual salary as a lieutenant in the Permanent Military Forces and that that was the basis on which contributions were made on his behalf to the Fund. This is not a case of a clerical error in the calculation of the correct amounts to be deducted from a contributor's salary, nor of a failure by a contributor to make payments recorded as due during a period of leave of absence (see s 22). If the applicant's construction of s 60N(a) were to be adopted, some of the difficulties referred to by Toohey J in Chopra would arise. The Superannuation Act provided that a contributor, in certain circumstances, could elect to increase or decrease contributions: s 13(2) - (7). (See also s 14, permitting the Board to exempt an employee from contributing for more than two units of pension in certain circumstances.) Thus, the nexus between salary and unit entitlements could be broken, depending on the employee's circumstances and the nature of any election made by the contributor. Unless the phrase "for which he was contributing at the time of his retirement" is construed to mean the contributions in fact made by the contributor, there might be great difficulty in determining the appropriate pension to be paid to a particular contributor. In our view, the construction that accords with the ordinary meaning of s 60N(a) is consistent with the nature of the scheme established by the legislation. The Fund was clearly intended to be financed by contributions from members, together with the 50 per cent subvention by the Commonwealth, provided for in s 18 of the Superannuation Act. Contributions were set at levels that clearly reflected an actuarial assessment of the likely cost of benefits to be provided to contributors, having regard to their life expectancy and the risk of early retirement or of death prior to retiring age. The Superannuation Act itself contained references to actuarial calculations, suggesting that it was intended that the level of contributions should be adjusted from time to time to ensure that, subject to the Commonwealth's subvention, the scheme was self funding: see, for example, ss 29, 35(1), 36(1). In fact, the legislation was amended in 1942 to increase contribution rates. This was done to rectify a deficiency in the Fund caused by the high rate of retirement on invalidity and the low rate of mortality amongst pensioners: Superannuation Act 1942 (Cth). The amendments came about, as the second reading speech discloses, in consequence of an actuarial investigation of the Fund as at 31 December 1939 which disclosed a deficiency of some £309,000. The Minister's speech noted that the Commonwealth Actuary was in constant touch with actuarial matters affecting the Fund: Cth Parl Deb, HR, 18 September 1942, 534-536 (the Treasurer). The emphasis on the actuarial integrity of the Fund, both in the legislation itself and in the process of determining contribution rates, suggests that actual contributions received by the Fund were regarded as the key to pension entitlements of contributors. The applicant contends that s 80C of the Superannuation Act and s156 of the Superannuation Act 1976 (Cth) support the approach of treating the words "full pension for which he was contributing" in s 60N as referring to liability to contribute. Section 80C(1) of the Superannuation Act has been set out above. So far as members of the Forces are concerned, it altered the general position, set by s 18 of the Act, that the Commonwealth is to pay into the fund one half of the payment made from the fund in respect of each unit or portion of a unit of pension. Section 80C was, no doubt, enacted to minimise the impact of the exigencies of war on the actuarial assumptions upon which the management of the fund was based. In our view, s 80C of the Superannuation Act provides no support for the contention that the words "full pension for which he was contributing" in s 60N of the Act should be understood as bearing a meaning other than their usual or primary meaning. If anything, s 80C reinforces the view that the superannuation scheme was intended to be administered in a way that reflected the actuarial assumptions on which it was based. Section 156 of the Superannuation Act 1976 (Cth) provides, so far as is here relevant, as follows: "(1) An amount payable to the Commissioner under this Act, including an amount of unpaid contributions, may be paid to the Commissioner in a lump sum or in such instalments and at such times as the Commissioner approves. (2) An amount payable to the Commissioner under this Act, including an amount of unpaid contributions, may be recovered by the Commissioner in a court of competent jurisdiction as a debt due and payable to the Commissioner. (3) The amount of any unpaid contributions payable by a person to the Commissioner may be deducted from any payment or payments of benefit payable under this Act to or in respect of the person." While these provisions provide mechanisms for the recovery of unpaid contributions, they provide little, if any, assistance in the construction of s 60N of the Superannuation Act. We accept that the words "the full pension for which he was contributing" have a broader meaning than, say, "the full pension for which he actually paid all contributions due under the Act". For example, as we have already suggested, a person would not necessarily cease to be contributing for a particular number of units of pension merely because of clerical error in the calculation of deductions from his or her salary, or because of the making of a special arrangement under s 22 of the Superannuation Act with respect to a period of leave of absence through illness on less than full pay. However, s156 of the Superannuation Act 1976 (Cth) is not of assistance in determining whether s 60N of the Superannuation Act can be understood as creating an entitlement to pension in an amount for which an employee was liable to contribute, even though contributions were never sought from the contributor, recorded as due by the contributor, or paid or purportedly paid by the contributor. For reasons we have given, that question must be answered in the negative. We should add that we do not regard s 31(4) of the Defence Act as bearing on the proper construction of s 60N(a) of the Superannuation Act. The addition of s 31(4) in 1939, as outlined earlier, rather suggests that, at that time, it was not intended that members of the Permanent Forces who joined the 2nd AIF should be subject to the Superannuation Act by virtue of their service in the 2nd AIF. However, the sub-section does not assist in construing s 60N(a) of the Superannuation Act. The AAT found that, at the time of his retirement, the applicant was contributing for eight units of pension. This finding as a matter of fact is supported by the evidence and, in our view, involves no error of law. The applicant's entitlement to pension pursuant to s 60N of the Superannuation Act, being an entitlement to "the full pension for which he was contributing at the time of his retirement", is thus an entitlement to eight units of pension. Our conclusion makes it unnecessary to give consideration to the meaning of the word "salary" within the meaning of ss 4 and 13 of the Superannuation Act. The appeal should be dismissed, with costs. I certify that this and the preceding 13 pages are a true copy of the Reasons for Judgment of the Court. Associate: Date: 20 August, 1997 Counsel for the applicant: Mr M.J. Slattery QC, with Mr B.J. Shields Solicitors for the applicant: Ebsworth & Ebsworth Counsel for the respondent: Mr P. Hanks Solicitors for the respondent: Australian Government Solicitor Dates of hearing: 26, 27 February 1997.