Australian Brain Foundation Ltd v Hyteco (NSW) Pty Ltd

NEW SOUTH WALES COURT OF APPEAL

CITATION: AUSTRALIAN BRAIN FOUNDATION LTD v HYTECO (NSW) PTY LTD [2000] NSWCA 301

FILE NUMBER(S):
40405/99

HEARING DATE(S): 3 October 2000

JUDGMENT DATE: 27/10/2000

PARTIES:
AUSTRALIAN BRAIN FOUNDATION LTD v HYTECO (NSW) PTY LTD

JUDGMENT OF: Mason P Powell JA Giles JA

LOWER COURT JURISDICTION: Compensation Court

LOWER COURT FILE NUMBER(S): CC 8846/95

LOWER COURT JUDICIAL OFFICER: Moran J

COUNSEL:
Appellant: A S Morrison SC
Respondent: P M Hall QC; D A Priestley

SOLICITORS:
Appellant: Stacks - The Law Firm
Respondent: Hunt & Hunt

CATCHWORDS:
Workers compensation - award of expenses to worker - dispute re quantum - delayed claim by service provider - interest refused on discretionary grounds - whether interest recoverable after principal paid. ND

LEGISLATION CITED:

DECISION:
Appeal dismissed.

JUDGMENT:

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40405/99
CC 8846/95

MASON P
POWELL JA
GILES JA
Friday 27 October 2000

AUSTRALIAN BRAIN FOUNDATION LIMITED v
HYTECO (NSW) PTY LTD
JUDGMENT

MASON P: In 1985, Dimitri Mamolea (the worker) suffered severe brain damage in a motor vehicle accident on his way home from his place of employment.
On 31 May 1990 Judge McGrath CJ entered an award against the employer, Hyteco (NSW) Pty Ltd, the present respondent. The award included an order that the respondent pay the worker’s medical and hospital expenses under s60 of the Workers Compensation Act 1987 (the Act). The application was stood over part heard with liberty to apply.
Following intensive hospital treatment, the worker had been moved from Westmead Hospital in February 1986 to St Edmund’s Hospital Eastwood. The latter hospital had an adjacent Brain Injury Therapy Centre (BITC) under the direction of Dr E A Freeman.
During the four year period when he was at St Edmund’s Hospital, the worker was taken by wheelchair each weekday to the adjacent BITC, spending between 9.30am and 4.30pm at that Centre. Whether his therapy treatment occupied one hour or several hours each day, he was charged a full daily rate of $150 per day in 1986 rising to $450 per day in 1990. This treatment had come to an end before Judge McGrath’s award.
Throughout the relevant period, the respondent’s insurer paid the hospital fees for St Edmund’s, but it refused to pay the additional daily fees claimed for the treatment at BITC. By the time that the final sum was calculated, the amount at issue was $270,550.
It is not clear when or indeed by whom the claim for these expenses was first made. What is clear is that no attempt was made to litigate the dispute about the expenses in its obvious procedural context, ie through taking up the liberty to apply reserved in and/or resuming the part-heard proceedings which were the subject of Judge McGrath’s 1990 award. This becomes all the more curious when it is observed that the same solicitors have represented the worker and the bodies which at various times have claimed entitlement for remuneration for the services rendered at BITC.
No attempt was made to litigate the dispute in a common law action between the service-provider and the worker. I am not suggesting that matters had to proceed in this manner. But had this occurred, the District Court would have had undoubted jurisdiction to determine the cost to the worker of these services, and to award interest, subject to any relevant provisions of the Act. The worker would then have been given a statutory indemnity in relation to those costs as determined, pursuant to s60 of the Act (see Coyle v Government Dockyard, Walsh Island (1929) 29 SR(NSW) 539, New South Wales Sugar Milling Co-Operative Ltd v Manning (1998) 44 NSWLR 442).
In 1993 Australian Brain Injury Institute Limited (in liq), filed an Application in the Compensation Court claiming an award against the respondent employer with respect to the disputed treatment expenses. The company invoked s61(8) of the Act which provides:
Any amount for which an employer is liable under this Division in respect of medical or related treatment may be recovered from the employer by the person who gave the treatment.
The claim was disputed by the respondent, acting through its insurer. It was contended that the worker’s treatment was not “reasonably necessary” (cf s60(1)) and that the rates charged were excessive in any event.
The 1993 Application came on for hearing before Judge Moran in May 1995. During that hearing, counsel for the applicant conceded that his client was not “the person who gave the treatment” within s61(8). The matter was adjourned part-heard to 25 May 1995. On that day three further Applications for Determination were filed against the respondent. One was filed by the worker by his tutor Runa Mamolea, claiming $270,550 (8844/95). The second was filed by a company called National Brain Injury Services Pty Ltd claiming expenses of $28,800 incurred between 23 January 1990 and April 1990 (8845/95). The third was filed by the present appellant, claiming expenses totalling $241,750 for the period between 1 July 1988 and 22 January 1990 (8846/95).
The respondent filed Answers to each Application. First, it required proper verification that the costs were incurred (cf s60(3)) and it put each applicant to proof that the amount claimed was “such amount as is reasonably appropriate to the treatment given, having regard to the reasonable necessity for the treatment and the customary charge made in the community for the treatment to persons other than workers” (cf s61(1)).
Secondly, the respondent invoked s61(3) which capped its liability for medical or related treatment in respect of the injury at $50,000. That capping was however capable of being lifted by a direction of the Compensation Court. The relevant provisions are found in s61(4) and (4A) which provide:
(4)Subject to the regulations, a direction may be given that the employer of a worker is liable for an amount additional to that fixed by subsection (3).
(4A) If proceedings relating to the worker’s claim for compensation are before the Compensation Court and those proceedings relate to, or include matters relating to, the provision of medical or related treatment for the worker, such a direction may be given by the Court. If no such proceedings are before the Compensation Court, such a direction may be given by the Authority on application made in respect of the worker from time to time.
A direction lifting the cap to $1 million was first sought on 22 May 1995. It was granted on 3 June 1996.
The hearing of the four Applications took place in May 1998 before Judge Moran. The evidence taken in each of the four applications filed in 1993 and 1995 was treated as evidence in each other application. His Honour handed down a reserved judgment on 29 May 1998.
Judge Moran was not satisfied that National Brain Injury Services Pty Ltd gave treatment to the worker in 1990 as it claimed. An award for the respondent was made in that Application.
The Application of the Australian Brain Injury Institute Pty Ltd (in liq) also resulted in an award for the respondent, for reasons that are no longer relevant.
Judge Moran held that the appellant was the person who gave the treatment to the worker at the BITC between 1 July 1986 and 23 January 1990.
His Honour then addressed the s61(1) issue as to whether the amount claimed by the appellant for such services was “reasonably appropriate”. This involved issues of fact which are not and could not be the subject of appeal to this Court. Judge Moran concluded that it was reasonably necessary for the worker to have medical or related treatment in the form of physiotherapy, occupational therapy, speech therapy and hydro-therapy over and above that which would have been available to him in a nursing home or hospital if accommodated on a full time basis between 1986 and 1990. However, the basis of charging at the BITC advanced by the appellant was rejected. His Honour was not satisfied that it was reasonably necessary for the respondent or its insurer to be asked to pay a contribution to the cost of the Centre based on a proportion of the costs per patient at a Centre which conducted research as well as providing treatment. The idea of charging on a per diem basis regardless of the numbers of hours of actual treatment was also rejected as unreasonable.
Judge Moran found that, in addition to the hour or so therapy treatment usually provided by nursing homes or hospitals, it was reasonably necessary that the worker have an additional one and a half hours per weekday from 1 July 1986 to 30 June 1988 and one hour per weekday from 1 July 1988 to 17 April 1990. He added that:
In reaching this conclusion I have not been satisfied on the whole of the evidence that the length of time and the number of hours of therapy each day given to the worker at BITC under supervision of Dr EA Freeman was reasonably appropriate for the treatment given.
Without the rates of fees for therapists in their specialities between 1986 and 1990 his Honour was unable to calculate an award for additional s60 expenses. In the worker’s 1995 Application, he made an Award in favour of the applicant for such expenses. He made no award for interest. This Court was informed that refusal of interest is commonplace in the Compensation Court where a worker applicant has not paid the expenses at time of award.
Accordingly, in the three Applications filed by companies claiming to have provided therapy services there were awards in favour of the respondent.
As indicated above, it had been held by Judge Moran that the present appellant had provided therapy services to the worker in 1986-1990, albeit that the extent and rates claimed were excessive. However, the appellant’s Application resulted in an award for the respondent for the following reason:
Any award should be made in favour of the Worker. There is already an award for Section 60 expenses in favour of the Worker. It would be inappropriate to make two Awards in favour of two Applicants for the same liability. The primary person entitled to an Award for Section 60 expenses in my view is the Worker.
In the reasons delivered on 29 May 1998, his Honour pointed out that the original 1987 proceedings in which Judge McGrath made an award could have been made a vehicle for the issues which had been determined. However, this was not advanced as the reason for dismissing the appellant’s Application.
It was Judge Moran’s award for the respondent made on 29 May 1998 that finally determined the proceedings between the parties to the present appeal. That appeal was first instituted by Notice of Appeal without Appointment on 3 June 1999. It was therefore filed well out of time. When this was pointed out by the Court during the hearing, senior counsel for the appellant sought leave to extend the time. That leave was opposed, in part because the appeal lacked substance. Leave was also opposed having regard to what happened after 29 May 1998.
Although the Applications filed on behalf of the three companies were each determined by award in favour of the respondent on 29 May 1998, they were stood over for later mention for orders concerning costs.
On 3 May 1999, application was made by the appellant for reconsideration of the award in favour of the respondent that is the subject of the present appeal (cf Compensation Court Act s17(4)). That application was struck out for various reasons (Bk 37-38).
Judge Moran then received evidence and heard argument on the issue of quantum of expenses. The costs of all of the 1993 and 1995 applications were also addressed. For reasons given on 5 May 1999 the 1995 Application by the worker (through his tutor) was determined in the following terms:
Having duly considered the matters submitted, THE COURT -
HEREBY ORDERS AND AWARDS:
1.That the respondent pay the section 60 expenses of Runa Mamolea forthwith in the sum of $83,600.
2.That there be no order as to interest on the said sum of $83,600.
3.That the respondent pay the applicant’s costs (including fee for senior counsel, costs of notice of motion to increase limit of section 60 expenses and fee for junior counsel in respect of the said notice of motion to increase limit of section 60 expenses) forthwith after they have been agreed or assessed; such costs not to include those incurred before 22nd May 1995, costs of part of 23rd May 1995 or costs of the day of 24th May 1995.
There was a further hearing on 27 May 1999. The transcript (R 20-7) discloses that counsel for the worker’s tutor and for the respondent employer were concerned to ensure a proper mechanism for the payment directly to the present appellant of the expenses awarded to the legally incompetent worker. Reference was made to s83(6). The upshot was the following:
Having duly considered the matters submitted, THE COURT -
1.HEREBY ORDERS AND AWARDS:
(1)That the respondent pay a sum of $79,400 to the Australia Brain Foundation Limited and a sum of $4,200 to National Brain Injuries Services Pty Ltd.
(2)That receipt of the abovementioned monies be a full and satisfactory discharge of the obligations of the respondent, under the award herein of this Court for section 60 expenses.
2. NOTES the abovementioned order is not by consent.
This order was entered, bearing date 27 May 1999. The expenses were paid to their intended recipients shortly thereafter.
The appellant acknowledges that its Notice of Appeal was filed well out of time. It contends that, viewed in totality, the matter remained unresolved until 5 May 1999. Even putting aside entirely the abortive application for reconsideration (par 26 above), I accept that this submission carries considerable weight, although it is by no means a complete answer to the problem of the late appeal.
The appellant has received all that it now claims to be entitled to in relation to the principal cost of the services rendered. Accordingly, the present appeal is to be characterised as a claim for interest with respect to services provided between 1986-1990 and paid for in or shortly after May 1999. The appellant argued before us, as it had before Judge Moran, that it was the party that was out of pocket between 1990 and 1999. This would have been very compelling in a claim against the worker for expenses plus interest in the District Court Act. But the appellant never ventured down that path. Rather, it sought to recover its outlay in the context of the four terribly delayed, procedurally inept and long drawn out sets of proceedings instituted by common solicitors on behalf of overlapping and competing claimants.
Whether or not s61(8) is confined to rights of action in the Compensation Court, the statutory right thus conferred is subject to the processes of application for an award. In this context, the Compensation Court’s power to include interest in an award of expenses is found in s109 of the Workplace Injury Management and Workers Compensation Act 1998. The section provides:
109.   Interest before order for payment (cf former s 113)
(1)   In any proceedings in the Compensation Court, the Court may order that there is to be included, in any sum to be paid, interest at such rate as it thinks fit on the whole or any part of the sum for the whole or any part of the period before the sum is payable, subject to the limitations imposed by this section.
(2)Interest cannot be ordered under this section:
(a)on any compensation payable under Division 4 of Part 3 of the 1987 Act, or
(b)on any compensation payable under this Act for any period before a claim for the compensation was duly made, or
(c)on any compensation payable under this Act for any period during which proceedings before the Court were adjourned on the application of the claimant for the compensation or pursuant to section 102.
(3)   This section does not:
(a)authorise the giving of interest upon interest, or
(b)apply in relation to any debt upon which interest is payable as of right whether by virtue of any agreement or otherwise.
Section 109 is modelled on the original form of s94 of the Supreme Court Act 1970. Several deficiencies in that provision that were identified by the Law Reform Commission of New South Wales in its Report, Interest on Certain Debts, LRC 35, 1983. One was the requirement that the award of interest must be included in the amount for which judgment is given (see §§4.27ff). This meant that acceptance of tender of a principal debt removed the basis for an award of interest under the section, even if acceptance occurred after the commencement of proceedings and before judgment. Section 94 of the Supreme Court Act and s83A of the District Court Act were subsequently amended to remove this deficit, but it remains part of s109 of the Workplace Injury Management and Workers Compensation Act 1998. This raises a difficulty for the appellant in its present endeavour to procure an award for interest in the Application between itself and the respondent employer. If, at the time when the order appealed against was made, both principal and interest were wrongly refused, then s75A(10) of the Supreme Court Act 1970 prima facie arms the Court of Appeal with power to do what should have been done in the court below. But since 1995 the appellant has pursued and recovered the principal sum by the alternative means of the worker’s 1995 application. The worker is not party to the present appeal. There would therefore appear to be at least procedural difficulties in this Court simply awarding principal and interest to the appellant at this stage of events. I am not persuaded that those difficulties can be removed, at least without joinder of the worker and no such application has been made.
There is also the difficulty of ordering interest in respect of the period before the claim for the compensation was made (cf s109(2)(b)). It would appear that such claim was first made by the appellant in 1995. This would dramatically reduce the amount of interest otherwise capable of being awarded through the appellant’s chosen vessel of Application 8846/95.
In any event, I am not persuaded that the primary judge committed any error of principle when in the exercise of his discretion he concluded on 29 May 1998 that it was inappropriate to make two overlapping awards in favour of two applicants for the same liability and that, in the circumstances of this case, the primary person entitled to an award of s60 expenses was the worker. There may be situations where the service-provider should be given priority to press its claim for expenses (with interest), but the morass of late and overlapping applications in the present case meant that this issue did not emerge with sufficient clarity. Certainly I am unpersuaded that this is an appropriate case to extend time to bring an appeal to consider the issue in detail.
In my view the appeal should be dismissed as incompetent, the application to extend time refused and the appellant ordered to pay the respondent’s costs in this Court.
POWELL JA: I agree with Mason P.
GILES JA: I agree with Mason P.
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LAST UPDATED: 01/11/2000

[2000] NSWCA 301

27 October 2000

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