Territory Stories

February 2008 report to the Legislative Assembly



February 2008 report to the Legislative Assembly


Report to the Legislative Assembly; Reports; PublicationNT




Made available via the Publications (Legal Deposit) Act 2004 (NT).






Northern Territory. Auditor-General's Office -- Periodicals; Finance, Public -- Northern Territory -- Accounting -- Periodicals; Northern Territory -- Appropriations and expenditures -- Periodicals

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Northern Territory Auditor-General's Office

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154 Auditor-General for the Northern Territory February 2008 Report Territory Insurance Office cont Key issues Chaffey v Santos Limited The Supreme Court case Chaffey v Santos Limited involved consideration of the validity of amendments to the Work Health Act. The amendments to the Act altered the definition of normal weekly earnings by excluding employer superannuation contributions from the calculation of normal weekly earnings. In 2005/06, the Board had made an additional provision of $2 million, recognising the risk associated with the potential for workers compensation claimants to pursue retrospective superannuation benefits if the amendments to the Act were held to be invalid. On 2 August 2007, the High Court of Australia delivered an appeal judgment in the matter of Attorney-General for the Northern Territory and Chaffey: Santos Limited v Chaffey [2007] HCA 24. The judgment was in favour of TIOs workers compensation business and thus in accordance with AASB 110, Events after the Balance Sheet date, TIO reversed the provision of $2.0 million previously made by the Board in 2005/06. Securitisation of TIO Home Loans During the year TIO entered into a sub-origination and management agreement with Integris Securitisation Services Pty Ltd (Master Servicer) and Cuscal Management Pty Limited (Manager) which are wholly owned subsidiaries of Cuscal Limited, to assign securitised TIO home loans to Integrity Trust, which is managed by Perpetual Trustee Company Limited (Trustee of the Trust). The assignment of a portfolio of home loans was undertaken as part of a process of altering TIOs capital structure. This involved the assignment of a portfolio of home loans by TIO to the Trust in return for cash consideration. The value of the home loans assigned at 30 June 2007 was $224 million and the cash received from the Trust was $223 million. The securitised loans continue to be recognised as assets on TIOs balance sheet because the contractual arrangements of the securitisation program conditions were not considered to have satisfied the conditions necessary for de-recognition of assets specified by the accounting standard AASB 139, Financial Instruments: Recognition and Measurement. As the assets assigned to the Trust continue to be recognised as assets by TIO, the consideration received was recognised as a liability.

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