Baker Built Pty Ltd v Meany
[2022] NSWPIC 311
•21 June 2022
| CERTIFICATE OF DETERMINATION OF MEMBER | |
CITATION: | Baker Built Pty Ltd v Meany & Ors [2022] NSWPIC 311 |
| APPLICANT: | Baker Built Pty Ltd |
FIRST RESPONDENT: | Melissa Rose Meany |
SECOND RESPONDENT | Hunter Adam Meany |
| PRINCIPAL MEMBER: | Josephine Bamber |
| DATE OF DECISION: | 21 June 2022 |
| CATCHWORDS: | WORKERS COMPENSATION - Apportionment of lump sum death benefit pursuant to section 25 Workers Compensation Act 1987 and consideration of whether payment of the sum apportioned to two year old minor should be made to NSW Trustee or to a discretionary trust; Held– payment to be made to NSW Trustee. |
| DETERMINATIONS MADE: | |
That the deceased worker, Adam Kenneth Meany, died on 30 June 2021 from injuries sustained in the course of his employment with the first respondent, Baker Built Pty Ltd.
That the compensation payable by the applicant in accordance with section 25(1)(a) of the Workers Compensation Act 1987 on the death of the deceased worker is $838,750.
That Melissa Rose Meany, his widow, and Hunter Adam Meany, his son, were dependent for support upon the deceased worker at the date of his death.
That no other persons were dependent for support upon the deceased worker at the date of his death.
Pursuant to section 29 of the Workers Compensation Act 1987 the apportionment of lump sum payment between the dependents is as follows:
a. Melissa Rose Meany $665,712, and
b. Hunter Adam Meany $173,038.
That the applicant is to pay to Melissa Rose Meany the sum of $665,712.
Pursuant to section 85 of the Workers Compensation Act 1987 the applicant is to pay the sum of $173,038 to the NSW Trustee for the benefit of Hunter Adam Meany.
STATEMENT OF REASONS
BACKGROUND
Adam Kenneth Meany, the deceased, died in the course of his employment with the applicant, Baker Built Pty Limited on 30 June 2021. As the applicant has admitted liability for compensation flowing from Mr Meany’s death it is not necessary for the details of his injury and death to be summarised in these reasons.
In the Application in Respect of the Death of a Worker (the Application) orders are sought in relation to the apportionment of the lump sum provided by section 25 of the Workers Compensation Act 1987 (the 1987 Act). The lump sum figure is $838,750.
Melissa Rose Meany, the widow of the deceased worker is the first respondent and their son, Hunter Adam Meany, who is now aged two is the second respondent. They are the only persons claiming dependency on the deceased worker at the time of his death.
The main issue for the Personal Injury Commission (the Commission) to determine is how the sum apportioned to Hunter is to be paid and invested. His representatives have sought for the Commission to order payment into a trust to be administered by Hunter’s uncle,
Luke Wayne Meany.
PROCEDURE BEFORE THE COMMISSION
A telephone conference was convened before me on 11 April 2022.
The applicant was represented by Tim Ainsworth, solicitor, instructed by Ms Liza Dean, icare, and Ms Rachel Ryder, EML. Melissa Meany was represented by Andrew Hourigan, counsel, instructed by Dominic Tonkin, solicitor. Hunter was represented by Mr Al- Khafaji, solicitor, instructed by Mr Luke Meany described as his tutor.
The parties were directed to file written submissions in relation to the issues of apportionment and investment of the sum apportioned to Hunter.
EVIDENCE
Documentary evidence
The following documents were in evidence before the Commission and taken into account in making this determination:
(a) the Application;
(b) first respondent’s Reply;
(c) second respondent’s Reply;
(d) Application to Admit Late Documents filed by the second respondent dated 4 April 2022 attaching an affidavit of Luke Wayne Meany sworn 1 April 2022;
(e) Application to Admit Late Documents filed by the first respondent dated 8 April 2022;
(f) affidavit of Luke Wayne Meany sworn 20 May 2022;
(g) submissions by second respondent dated 21 April 2022;
(h) submissions by the first respondent dated 28 April 2022;
(i) submissions by the applicant dated 4 May 2022, and
(j) further submissions by the second respondent dated 20 May 2022.
FINDINGS AND REASONS
Statutory declarations are before the Commission from the following relatives of the deceased worker, Alison de la Harpe, his sister[1], Carmel Josephine Meany, his mother[2], and his father, Wayne Kenneth Meany[3]. These persons confirm that they were not dependent for support on the deceased worker at the time of his death.
[1] Application p7.
[2] Application p 19.
[3] Application p 22.
Melissa Rose Meany has provided a statutory declaration sworn on 28 January 2022[4] in which she attests that she and Hunter were the only dependents of the deceased worker. Her financial circumstances together with the deceased are set out in that document. I am satisfied that she and Hunter were dependent on the deceased for support at the time of his death.
[4] Application p 10.
I am also satisfied based upon all of the evidence before the Commission that no other person was dependent for support on the deceased at the time of his death.
In the Reply filed on behalf of Hunter, his uncle Luke Wayne Meany consents to act as tutor for Hunter in these proceedings. I note that there are no provisions in the Personal Injury Commission Act 2020 for the Commission to appoint a tutor.
Luke Wayne Meany has also provided a statutory declaration sworn on 1 April 2022[5] in which he states he has agreed to act as a trustee of the Hunter Adam Meany Trust which is to be established for the management of the lump sum benefit to be awarded to Hunter in these proceedings. Luke Meany states he is a chartered accountant and a member of the Australian Restructuring Insolvency and Turnaround Association, and that he has been employed as a Manager since October 2020 at KPMG, and prior to that he was employed at Ferrier Hodgson. He is also the Honorary Treasurer of the Woy Woy Rugby Club. He attaches a copy of a proposed trust document titled Deed of Settlement of Discretionary Trust.
[5] Late document application 4 April 2022 p 1.
Luke Meany has also provided an affidavit sworn on 20 May 2022 attaching an amended copy of the proposed trust document.
A statutory declaration has been filed by Sally Victoria Bartho, the sister of
Melissa Rose Meany, in which she states she has agreed to act as a trustee of the Hunter Adam Meany Trust which is to be established for the management of the lump sum benefit to be awarded to Hunter in these proceedings. She also attaches a copy of a proposed trust document titled Deed of Settlement of Discretionary Trust[6]. Her curriculum vitae is attached setting out her occupation as a midwife.[6] Late document application 8 April 2022 p 5.
Submissions
Applicant
The applicant states that it makes no submissions relating to the proposed apportionment of the lump sum nor as to whether the Commission should order the share apportioned to Hunter be paid into the proposed discretionary trust. However, it has drawn the Commissions attention to the following points:
“5. Clause 2 of the deed references a number of ‘general beneficiaries’ which includes ‘parents, brothers, sisters, spouses, widows, widowers, remoter issue, lineal or lateral relation, children and next of kin of the nominated beneficiary…’ as well as ‘any director or shareholder of a Corporation that is a Nominated Beneficiary…’ and ‘any Corporation wherever incorporated or resident any share in which is beneficially owned or held by any General Beneficiary…’ amongst others.
6. Clause 2.4 of the deed provides that the trustee can add a beneficiary at any time with the consent of the nominated beneficiary.
7. Clause 4.7 of the deed provides the trustee with discretionary powers to ‘apply or set aside any amount to or in favour of one or more of the beneficiaries in such proportions and in such manner as the Trustee shall think fit. The Trustee shall have an absolute discretion as to the making of any decision and shall not be required to assign any reason for making the decision.’
8. Clause 5 of the deed gives powers to deal with the trust funds for the purposes of investment, tax minimisation and other reasons.
9. The trustees are also able to appoint other trustees pursuant to clause 8, and cannot be held liable in negligence for mismanagement of funds pursuant to clause 10 of the deed.”
I note that the amended proposed trust document at 2.2.1 has inserted a clause to the effect that if the nominated beneficiary does not survive and attain the age of 25 then the following clause referring to alternate beneficiaries will apply. Also clause 2.4 is deleted. These amendments were made to address the points raised by the applicant as noted in the further submissions dated 20 May 2022 from the second respondent.
Second respondent
Submissions on behalf of Hunter dated 21 April 2022 state that the parties have agreed on apportionment of 60% $503,250 to Melissa and 40% to Hunter $335,500. It is submitted that the Commission should not order that the amount apportioned to Hunter from the lump sum death benefit be paid to the NSW Trustee and instead should be paid to the Hunter Adam Meany Trust. The submissions argue that this alternate arrangement has the following benefits:
(a) the proposed trustees are members of Hunter’s family and as such they would be able to pay great attention and care to the monies within the trust;
(b) the proposed trustees have professional qualifications to enable them to efficiently manage the funds and make investment decisions;
(c) the proposed trust will preclude Hunter from accessing the funds until age 25 when he will be educated, mature and able to make informed financial decision with respect to a large sum of money, and
(d) the NSW Trustee and Guardian Regulation 2017 prescribes an account keeping fee of $10 per month and a further fee for investment planning of $150 per hour and there is concern about the level of fees that will be payable over the lifetime of the investment, noting Hunter’s young age.
Reference is made in these submissions that it was the practice of the Workers Compensation Commission to order that death benefits be paid into private discretionary trusts in appropriate cases.
First respondent
Melissa Meany strongly supports the submissions made on behalf of her son Hunter. However, it is submitted that if the Commission does not order that Hunter’s share be paid into the discretionary trust, then the apportionment should be 80% to herself and 20% to Hunter.
DETERMINATION
The Commission has the discretion pursuant to section 85A of the 1987 Act to order payment of the sum apportioned to a minor to be paid in a manner authorised by the Commission. However, the submission made that it was “the practice” of the Workers Compensation Commission to do so in appropriate cases is of no assistance as every case is determined on its own facts. In my experience as an Arbitrator of the Workers Compensation Commission since 2010, and as Principal Member with the current Commission, the discretion is usually exercised in favour of payment to the NSW Trustee to ensure that the monies are preserved until the minor reaches their majority.
In this case Luke Wayne Meany is aged 28 and he is a Chartered Accountant and is employed by KPMG. Sally Victoria Bartho is a midwife. I have no reason to doubt that they would intend to act in the best interests of Hunter given their familial ties to him as his uncle and aunt. I am concerned that Hunter is only aged two and so the money does need to be invested for a lengthy period. The only objection raised in relation to ordering payment to the NSW Trustee seems to relate to the fees they charge. However, the proposed trust document does in clause 13 allow for a trustee who is an accountant to charge professional fees.
In addition, I have concerns relating to the very wide investment powers given to the trustee such as at 6.43. It also contains a clause permitting the trustee power to act notwithstanding the trustee may have a direct or other personal interest in the transaction (6.35).
In this case with such a young dependent as Hunter, I find that I should exercise my discretion conservatively in favour of making an order to pay the sum apportioned to the NSW Trustee. I find the independence of the NSW Trustee is an advantage to managing the funds to preserve the capital for Hunter’s benefit. This does not preclude his mother setting aside further funds for Hunter from the higher share I have apportioned to her if she so choses.
As to the amount to be apportioned to Hunter I consider that 40% of the lump sum to Hunter being the sum of $335,500 is too high and does not reflect the loss of support of his father. His mother has suggested 20% being $167,750.
As with most cases precise calculation of loss of financial support cannot be made on the available information. Melissa Meany in her statutory declaration states her husband was earning $1,297 net per week at the time of his death on 30 June 2021. She had returned to work three days per week on 5 April 2021 earning $660 net. So the household income was approximately $1,957 net per week. It is usual to deduct a sum to approximate the money the deceased would have spent on himself which is about 17%[7] in a two person, one child household, $333. If one takes the deceased’s nett weekly earnings of $1,297 less $333 that leaves a loss of support to the family of $964 per week. If an assumption is made that 25% of this sum would have been for the support of Hunter that would equate to $241 per week, as an average. I have chosen 25% noting that it was the intention at the time of death for childcare costs to be incurred at some point and education at non-government schools was the desire of both of Hunter’s parents.
[7] Based on Table 1 in “Personal Consumption Percentages in Australia- Current Tables for 2018” Vincents Cumpston Sarjeant, with introduction by Professor Emeritus Harold Luntz.
Hunter has also been without support for the past year since his father’s death, which at $241 per week equals $12,532 per annum. If it is assumed that Hunter is likely to undertake some tertiary study or training an allowance needs to be made, for say, 20 years in the future for loss of support. To calculate the present day lump sum figure it is conventional to apply a discount rate with a multiplier of 5%, which for 20 years is 666. $241 per week times 666 equals $160,506. Therefore, Hunter’s loss of support is $160,506 plus $12,532 equalling $173,038.
While I acknowledge this calculation is based on assumptions, I note it is close to the figure suggested as an alternative by Melissa Rose Meany of 20% of the death benefit being $167,750.
Therefore, I order that the applicant pay the NSW Trustee the sum of $173,038 for the benefit of Hunter Adam Meany. I order the applicant to pay to Melissa Rose Meany the sum of $665,712.
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