The following memorandum has been submitted to me for advice:

Mr A.B., Sub-Collector of Customs, Melbourne, who is shortly to retire, questions the method of computing his pension under section 44 of Act 160, Victoria. He contends that his pension should be calculated on the average salary received by him during the actual three years immediately preceding his retirement, instead of during the three calendar years. If his pension is calculated under the present method, he will receive £10 per annum less than he would receive if his pension were calculated as he claims it should be.

1. The existing practice of calculating the pension on the average salary of the officer during the three calendar years preceding retirement has always been followed in the State of Victoria.
2. The point was submitted to the Crown Solicitor who ruled as follows:

I think that the words 'average annual salary received by him during [the] three years preceding his superannuation' mean what they say, and that the average can only be calculated by taking the annual salary received during the actual three years referred to.

3. When the Crown Solicitor gave this opinion he had before him copies of opinions given by State Attorneys-General Higinbotham in 1863 and in 1867, Kerferd in 1876, Sir Bryan O'Loghlen in 1893 and State Crown Solicitor Guinness in 1893.
4. Under Commonwealth law the proportion payable by the State, of a Commonwealth pension, is based upon the salary at date of transfer. The new method of calculating the total pension will not therefore affect the State's proportion.
5. It is suggested that a copy of the opinion be forwarded to the Auditor-General, the Public Service Commissioner, the chief officers of Commonwealth Departments in Victoria, and the Permanent Heads of Departments with the request that in future the pensions of Victorian transferred officers be calculated in accordance with the Crown Solicitor's ruling.
6. As the new method of calculation is a departure from a long-established State practice, I recommend that a copy of the opinion be forwarded through the Prime Minister for the information of the State Premier. The Premier might be informed that the new method which it is intended to follow will not affect the amount of the State's proportion of pension because, under section 84 of the Constitution, the State's proportion is based on the salary paid to the officer at the date of his transfer to the Commonwealth.

The opinion of the Crown Solicitor mentioned in the memorandum puts a different construction on section 44 of the Civil Service Act 1862 (Victoria) No. 160 to that which has been accepted and acted upon for a long period.

Section 44 which provides the rates of superannuation allowance is as follows:

Every superannuated officer (except as hereinbefore expressly provided) whether his remuneration be computed by day pay weekly wages or annual salary shall receive in respect of such superannuation the following annual allowance (that is to say): After ten years' service and under eleven years' ten-sixtieths of the average annual salary received by him during three years preceding his superannuation; after eleven and under twelve years' service eleven-sixtieths of such annual salary; and in like manner for each additional year of service an addition to his annual allowance of one-sixtieth of such salary until he has completed the full term of service of forty years:

but the total amount of any superannuation allowance shall in no case exceed forty-sixtieths of the salary on which the allowance is computed.

The interpretation of the section is one of extreme difficulty owing to the ambiguous language used. If section 44 stood alone I think the opinion of the Crown Solicitor might be sustained, but the section has to be read in conjunction with the other sections and in the light of the statute as a whole. From such a consideration it seems to me that the interpretation of the Attorney-General of the State of Victoria is the sounder view. However, I think that in the administration of the Act, the interpretation which has so long been placed upon it and acted upon should not be lightly disturbed.

I am of opinion that a similar rule should be applied in administration as is applied by the courts when asked to override a long-standing interpretation of the law. In the case of Lancashire and Yorkshire Railway Co. v. Mayor of Bury 14

App.Cas. 417, Lord FitzGerald said, at p. 422:

There appears to me to be no distinction in fact between the case now before your Lordships and the case which was decided thirty-one years ago in the Court of Queen's Bench, a decision subsequently adopted and universally acted upon down to the present time. To disturb a decision of that kind we should require to be satisfied that there was some cardinal error connected with it, and I am not satisfied at all that there is any error . . .

Lord Herschell, in the case of Tancred, Arrol and Co. v. Steel Company of Scotland 15 App.Cas. 125, said, at p. 141:

I understand it to be settled Scotch law that a provision in a contract that future disputes shall be referred to a person designated only by his filling a particular office or position does not oust the jurisdiction of the Court, or rather, it would be more accurate to say, does not bar the right of either party to resort to the Court in case disputes should arise upon the contract. I think that that doctrine having been laid down so long ago, whether it rests upon any sound basis or not, it would be most improper to depart from it now, because one would be really altering the contract between the parties; for we have a right to suppose that that they have entered into it upon the basis of that which for nearly a century has been understood to be the law.

In the case in which I am asked to advise, though there may be ambiguity in the language used, definite rulings have been given from time to time interpreting the relations between the State and its servants and these have been continuously acted upon over a long period of years. I do not think these should be disturbed unless the opinions of the Attorney-General were clearly wrong, and of that I am by no means satisfied, but rather I favour the view that taking the Act as a whole their interpretation is right.

[Vol. 15, p. 458]