BJA v NSW Health Service Arrum Aged Care
[2022] NSWPIC 601
•28 October 2022
| CERTIFICATE OF DETERMINATION OF MEMBER | |
Citation: | BJA v NSW Health Service – Arrum Aged Care & Ors [2022] NSWPIC 601 |
| APPLICANT: | BJA |
| FIRST RESPONDENT: | NSW Health Service – Arrum Aged Care |
| SECOND RESPONDENT: | BHB |
| THIRD RESPONDENT: | BBW |
| FOURTH RESPONDENT: | BEK |
| SENIOR Member: | Kerry Haddock |
| DATE OF DECISION: | 28 October 2022 |
CATCHWORDS: | WORKERS COMPENSATION - Lump sum apportioned in accordance with agreement between dependants; interest awarded from date claim duly made at a rate 2% above Reserve Bank of Australia cash rate; consideration of Holdlen Pty Limited v Walsh, McCafferty’s Management Pty Ltd v Pimlott, So v So, Haidary v Wandella Pet Foods Pty Ltd, Kaur v Thales Underwater Systems Pty Ltd and Kathryn Ann Kratz as executrix of the estate of the late Owen Beddall v Qantas Airways Limited; Held – the first respondent is liable for payment of lump sum compensation of $827,400, pursuant to section 25 of the Workers Compensation Act 1987. |
| determinations made: | 1. That the worker, BJC, died on 10 July 2020 as a result of injury arising out of or in the course of employment with the first respondent. 2. That the applicant was partly dependent on the worker. 3. That the second respondent was dependent on the worker. 4. That the third respondent was dependent on the worker. 5. That the fourth respondent was partly dependent on the worker. 6. That there were no other persons dependent on the worker. 7. That the first respondent is liable for payment of lump sum compensation of $827,400, pursuant to s 25 of the Workers Compensation Act 1987. 8. That the first respondent is to pay to the applicant the sum of $657,400, pursuant to s29(1) of the Workers Compensation Act 1987 and s 85A(1)(a) of the Workers Compensation Act 1987. 9. That the first respondent is to pay to the second respondent the sum of $75,000, pursuant to s 25(1) of the Workers Compensation Act 1987, such sum to be paid to the NSW Trustee and Guardian, to be held on trust pursuant to section 85(1)(a) of the Workers Compensation Act 1987 until he attains the age of 18 years. 10. That the first respondent is to pay to the third respondent the sum of $70,000, pursuant to s 25(1) of the Workers Compensation Act 1987, such sum to be paid to the NSW Trustee and Guardian, to be held on trust pursuant to section 85(1)(a) of the Workers Compensation Act 1987 until he attains the age of 18 years. 11. That the first respondent is to pay to the fourth respondent the sum of $25,000, pursuant to s 25(1) of the Workers Compensation Act 1987 and section 85A(1)(a) of the Workers Compensation Act 1987. 12. That the first respondent is to pay interest on the lump sum, pursuant to section 109 of the Workplace Injury Management and Workers Compensation Act 1998 apportioned in the same proportions of the apportionment of the lump sum, as follows: (a) from 11 August 2022 to 6 September 2022 at the rate of 3.85% per annum; (b) from 7 September 2022 to 4 October 2022 at the rate of 4.35% per annum, and (c) from 5 October 2022 to 19 October 2022 at the rate of 4.6% per annum. 13. The interest payable to the second and third respondents is to be paid to the NSW Trustee and Guardian. |
STATEMENT OF REASONS
BACKGROUND
The worker, BJC (BJC), was employed by the first respondent, NSW Health Service – Arrum Aged Care, as a registered nurse. BJC suffered an aortic dissection and died on 10 July 2020, after collapsing at work.
By letter dated 21 August 2020, the solicitors for the applicant, Mr BJA (the applicant), wrote to the first respondent, requesting a copy of BJC’s personnel file. BJA, is BJC’s widower. I will refer to him, the second respondent and the third respondent by their first names, to avoid confusion. No disrespect is intended.
By letter dated 26 August 2020, solicitors acting for the first respondent, Colin Biggers & Paisley Lawyers requested that BJA’s solicitors advise the basis on which they were authorised to act on behalf of the worker.
BJA’s solicitors advised the first respondent’s solicitors on 1 September 2020 that they were instructed to investigate potential claims that may be available to him under the Workers Compensation Act1987 (the 1987 Act), or elsewhere, in respect of the passing of his wife. They were aware of a letter that had been sent to the worker on 8 July 2020, inviting her to attend a disciplinary meeting on 10 July 2020. She was extremely distressed about attending the meeting, after which she collapsed and lost consciousness.
By letter dated 3 September 2020, Colin Biggers & Paisley advised BJA’s solicitors that it was still unclear how they were authorised to request access to information relating to BJC’s employment. The issue needed to be “clarified” before the first respondent could consider the request. The applicant had contacted the first respondent directly to request similar information, and [t]he same uncertainty arises” with respect to this request.
On 6 October 2020, the applicant completed a claim for lump sum compensation as a result of the worker’s death.
On 10 September 2021, the first respondent’s insurer, Insurance and Care NSW (iCare) advised BJA that liability for the claim had been accepted. ICare requested information and documentation regarding dependency.
It appears that the first respondent requested a review of iCare’s decision. The applicant’s solicitors were advised by iCare on 22 November 2021 that it had reviewed its decision, which was maintained. The “case management specialist” had been informed of the decision and would contact him to discuss the outcome and assist with ongoing claims management.
By letter dated 28 January 2022, the solicitors for the first respondent advised the applicant’s solicitors of their retainer. They requested confirmation that BHBand BBW, the children of the marriage, would be separately represented, and details of their tutors and legal representatives. The first respondent’s solicitors advised that, until such representation had been arranged, and Replies were lodged providing particulars and evidence of the claims of each dependent, they expected the proceedings “will” [sic] be able to advance and did not consider the claim had been duly made for the purpose of any claim for interest pursuant to s 109 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act).
The first respondent’s solicitors referred to the applicant’s statement that he and the worker had sent money monthly to her mother and father, who resided overseas. They advised that the evidence suggested a degree of dependency by those people and requested evidence that they either were not dependant on the worker or did not wish to make a claim for apportionment of the lump sum compensation. Otherwise, they advised, consideration may need to be given to those parties being named as respondents.
By letter dated 3 February 2022, the applicant’s solicitors advised that, as the children were minors, and the applicant would inevitably be appointed their tutor, it was likely that any conflict would not be cured by having them separately represented. They considered the best course would be to obtain counsel’s advice, to be put before the Personal Injury Commission (the Commission) for its determination. The member would be at liberty to make his or her own determination with regard to apportionment, should his or her opinion differ from that suggested by counsel.
The applicant’s solicitors lodged an Application in Respect of Death of Worker (the Application) on 28 July 2022. Tinovimba, BBW and Ms BEK were named as the second, third, and fourth respondents, respectively. BEKis the worker’s mother.
The Application claimed payment of the lump sum of $827,400, to be apportioned in accordance with the advice of Mr Goodridge of counsel, dated 14 July 2022. While no claim for interest is made in the Application, Mr Goodridge’s advice, which is attached, does include a claim for interest.
The second respondent lodged his Reply on 9 August 2022.
The fourth respondent lodged her Reply on 11 August 2022.
The first respondent lodged its Reply on 22 August 2022.
17. No Reply has been lodged by the third respondent, but he and the second respondent rely on the evidence of the applicant. It appears that two Replies have been lodged by BHBin error.
ISSUES FOR DETERMINATION
The parties agree that the following issues remain to be determined:
(a) apportionment of the lump sum death benefit, and
(b) whether the applicant, the second respondent, the third respondent, and the fourth respondent are entitled to payment of interest on the lump sum, and, if so, the period during which and the rate at which interest is to be paid.
PROCEDURE BEFORE THE COMMISSION
The matter was listed for preliminary conference before me on 31 August 2022. Mr Griffith appeared for the applicant, the second respondent and the third respondent; Mr Kim appeared for the first respondent; and Mr Staninovski appeared for the fourth respondent. Mr Munya Gwede attended to interpret the proceedings for the fourth respondent. Ms Osnabrugge of EML and Ms Dean of iCare also attended.
Mr Griffith confirmed that the second and third respondents rely on the evidence of the applicant. He was obtaining counsels’ advice with respect to apportionment to the second and third respondents. Mr Staninovski advised that he was instructed that the fourth respondent accepted the advice on apportionment provided by Mr Goodridge.
Directions were made for written submissions to be provided on the issues of apportionment and interest. As I have noted, the Application does not include a claim for interest, but Mr Goodridge’s attached advice does. To the extent that it is necessary, the applicant, the second respondent, the third respondent, and the fourth respondent are granted leave to claim interest on the lump sum.
The parties were advised that at the conclusion of the time allowed for submissions, the remaining issues would be determined “on the papers”.
The parties have provided written submissions in accordance with my direction.
EVIDENCE
Documentary evidence
The following documents were in evidence before the Commission and considered in making this determination:
(a) the Application and attachments;
(b) Reply by first respondent and attachments;
(c) Reply by second respondent, and
(d) Reply by fourth respondent and attachments.
FINDINGS AND REASONS
Evidence of the applicant, BJA
BJA’s first statement is dated 14 December 2021.
BJA and the worker had two sons, the second and third respondents. BBW is
16-years-old and BHBis 14-years-old. He is now their full-time carer. He and his wife were financially dependent upon each other at the date of her death.At the time of the worker’s passing, he was employed as a registered nurse, working approximately nine shifts per fortnight. The worker was employed part time, and also worked approximately nine shifts per fortnight. He has provided details of their earnings, and there was little difference for the financial year ended 30 June 2020.
The couple had two joint accounts, one of which contained savings towards the purchase of a family home. They also had individual accounts, into which their wages were paid. They shared the cost of rent and utilities.
BHBand BBW attend a private school, and he and the worker shared the cost of their school fees, uniforms, excursions, clothing, entertainment, and other expenses typically associated with having two teenage boys.
He and the worker also jointly sent $150 to $200 (US) monthly to the worker’s mother and father, who both reside overseas.
He was named as the beneficiary of his wife’s superannuation death benefit.
His wife assisted him with such activities as dropping the children at school and sports and collecting them; attending parent/teacher meetings; hosting yearly birthday parties for the children; cleaning their apartment; preparing meals; and doing the laundry. His wife also drove the children to church every Sunday.
He and his wife were a partnership in every sense of the word. They shared all expenses and were completely reliant and dependent on each other for financial support and were raising their family together.
BJA made a further statement dated 20 July 2022.
The worker’s father passed away on 26 June 2020. Aside from BJA, the children and his mother-in-law, BEK, the worker had no other dependents.
The worker’s two siblings reside in Zimbabwe. They have confirmed they were not dependent on her at any time and have no intention of claiming to be dependents. The worker had no other children from any other relationship.
Evidence of the fourth respondent, Ronicah Matsororo
Ms Matsororo’s statement is dated 2 May 2022.
She is aged 80. She has never been employed and was previously a housewife. She lives alone. She is a hyper intensive patient and has struggled with back pains for a long time.
She has provided a breakdown of her monthly living expenses, medical expenses, and the financial contributions she receives from others.
The worker used to transfer money to her via World Remit. The transfers would sometimes come from the applicant. She received transfers from the worker or BJA once a month.
The worker often made transfers to her daughter, BDF, who would then give her the cash. BDF used to work for Barclays Bank, so she trusted her to handle financial matters on her behalf.
The statement attaches a schedule of monthly medical expenses of $150 US; and living expenses of $550 US. Income was provided by the applicant and the worker ($300 US); BDF ($150 US); BDI ($50 US); and other sources ($200 US).
The evidence includes World Remit receipts showing payments to BEK (presumed to be the fourth respondent), BDF, Tatenda Matsvororo, Nancy Matsvororo, Edward Musarandoga, Brenda Ndhlela, Tracy Machanzi, Rodwell Chaitezvi, Lucille Yanano Matsvororo, BDI, and Cuthbert Matswororo [sic]; . Payments were made by BJA.
The statement attaches some reports of investigations of Ms Matsororo’s lumbar spine. It is unnecessary that I refer to them.
Evidence of Maxwell Matsvororo and Chapo Magweba
BDI is the worker’s brother, and BDFis her sister.
On 5 February 2021, BDI and BDFprovided a joint statement. They represented the fourth respondent, who is semi-literate. They had advised the applicant “to put our mother as the benefit dependent”. They confirmed that their father died on 26 June 2020 and attached his death certificate.
They agreed that the amount apportioned to the fourth respondent would be deposited into the applicant’s account on her behalf. They were working on Australian visas to see where the worker had been buried and unveil her tombstone. During this visit with their mother, they would make arrangements to open an account on her behalf.
SUBMISSIONS
As written submissions have been provided, I will refer to them only briefly. The applicant and the second and third respondents are represented by experienced counsel, and the first and fourth respondents by experienced lawyers, and I am grateful for their assistance.
Applicant
As regards apportionment, the applicant submitted that the average monthly remittance to the fourth respondent was $300 AUD per month. Her life expectancy under the Australian tables is 10 years.
The applicant and the worker had been married for 20 years at the date of her death. Their children were aged 13 and 12 years, respectively, at the time. The applicant and the worker appeared to have a harmonious marriage and were educating their sons at a private school.
BJA and the worker were in the same occupation, with similar earnings. There are no facts to suggest that “a true partnership” is not a fair description of their marriage. Their tax returns reveal no assets of note, and they lived in rental accommodation.
The proper apportionment of the death benefit has been approached on the basis that the overwhelming probability is that the applicant will do everything he can to provide for himself and his children. This will necessarily include all assistance they may require to advance themselves, through education and otherwise.
It is common experience that parents will draw from lump sum funds to continue to assist their children; that children keep parents poor; and they don’t necessarily cease to be dependants at the age of 16, 18, or 21. It is probable that the applicant and the worker would have jointly contributed to ongoing expenses such as education, health, accommodation, motor vehicle expenses, marriages, and grandchildren. It is probable that remittances would have continued to be sent to the fourth respondent only if they had spare and sufficient funds.
The periods of dependency, as of now, are four years for Tinovimba; three years for BBW; 28 years for BJA; and 10 years for BEK. She and her husband received on average, 1.8% of the combined family income, or 3.6% of the worker’s gross earnings. The payments were purely discretionary.
There is no evidence to suggest that the fourth respondent had a reasonable expectation of support in all circumstances, or where the worker ceased to be an income earner. To allocate 3% of the death benefit to her seems appropriate. As the death benefit is $827,400, this equates to $24,822, say $25,000, plus interest.
The remaining $802,400, plus interest, is to be apportioned between the applicant and his two sons. On a purely time/period basis, the apportionment would be 4/35 to Tinovimba; 3/35 to BBW; and 28/35 to BJA.
The applicant has identified reasons why there is usually a preference for greater apportionment towards the remaining parent. The most obvious example is that he will continue to provide for the children.
The mathematical apportionments have a somewhat fair feeling. The applicant would adjust the payments to the children to bring them more into line with each other. There is only one [sic] year difference in the children’s dates of birth. They will both have lost their mother for almost the same period.
The applicant therefore submitted that the apportionment, plus proportionate interest, should be as follows:
· $25,000 to BEK;
· $75,000 to Tinovimba;
· $70,000 to BBW, and
· $657,400 to BJA.
As regards the claim for interest, the applicant submitted that the issues to be considered are:
(a) should interest be paid;
(b) the proportionate distribution between dependents;
(c) the rate of interest to be paid, and
(d) the period for which interest should be paid.
The applicant referred to s 109 of the 1998 Act. The Commission may order interest on compensation prior to the date of an order for payment. It is a discretionary power and interest may be ordered on the whole or part of a sum payable. It cannot be ordered in respect of periods before the claim is made. It is not to be compounded. Its function is compensatory and not punitive.
The applicant submitted that the dependents had been out of funds between the period the claim was made and the payment date. Applying the above principles and compensating the dependents for the time loss of money, interest should be paid. It is self-evident that, given the compensatory nature of interest, the distribution should be proportionate to the value of the awards for the respective dependents.
The applicant submitted that interest is usually calculated using the rate prescribed by the Uniform Civil Procedure Rules 2005 (UCPR). There are two rates prescribed, that is 4% above the Reserve Bank of Australia (RBA) cash rate, and 6% above the RBA cash rate. The lower rate is referable to s 100 of the Civil Procedure Act 2005, whilst the higher rate is referable to s 101 of the Act. They, in turn, prescribe the rate payable prior to, and subsequent to, an order for payment.
The applicant conceded that both s 109 of the 1998 Act and the application of legal principle by analogy direct the Commission to the lower rate, in the usual circumstances, because the sums are outstanding prior to any order for payment. The applicant submitted there appears to be nothing unusual in this claim and the lower rate should be applied.
The applicant submitted that the interest rate at 19 September 2022, the date of the submissions, was 6.35%, being the cash rate of 2.35%, plus 4%.
As regards the period for which interest should be paid, the applicant submitted that SIRA’s practice guidance for death claims provides:
“Because of the substantial nature of the lump sum death benefit, substantial interest can accrue quickly and insurers should be aware of the potential consequences.”
The applicant submitted that the relevant history is:
· claim lodged 12 October 2020;
· liability accepted 10 September 2021;
· employer review sought communicated 18 September 2021;
· review to maintain acceptance communicated 22 November 2021;
· Application served 17 January 2022, and
· current Application served 9 August 2022.
The applicant submitted that interest is potentially payable from 12 October 2020 to date. In the ordinary circumstances, interest should be awarded for the whole period. Here there is a reason why it can be argued that the order should be otherwise.
The original Application was withdrawn and re-filed. There was a seven-month period between 17 January 2022 and 9 August 2022, where it could be argued there was a hiatus during which interest should not run. The applicant submitted that any attraction to this argument should be resisted.
The applicant submitted that interest is not punitive, but compensatory for the time the dependents are without funds. The insurer has had the benefit of the funds, and any investment income, starting with the claim and ending with their receipt of the funds. The dependents have not.
The applicant finally submitted that interest should be awarded at the rate of 4% above the RBA cash rate.
Second respondent
The second respondent submitted that there can be no doubt that he, the applicant, and the third respondent were financially dependent on the worker at the time of her death. The fourth respondent was also financially dependent, as regular amounts were transferred to her.
The second respondent agreed with the methodology adopted by the applicant and his conclusion on apportionment.
The second respondent has made no submissions on the issue of interest, noting that if there was no agreement, he would be happy to provide further submissions.
Third respondent
The third respondent submitted that he is a dependant, and no issues arise.
The third respondent agreed with the proposed apportionment to him.
The third respondent submitted that interest should be paid and apportioned in the same proportions as the lump sum.
Fourth respondent
The fourth respondent adopted the applicant’s submissions as to apportionment and interest.
First respondent
The first respondent made no submissions in respect of apportionment of the lump sum.
As regards whether interest should be paid, the first respondent submitted that an order for interest is discretionary: Brambles Australia Ltd t/as Gardner Perrott Industrial Services v Hamilton & Monier Ltd t/as Monier [2006] NSWWCCPD 169 at [43].
The first respondent submitted that an order for interest should not be made, as it had not been possible for its insurer to pay any portion of the death benefit until the present proceedings were finalised. It submitted that it was only when the proceedings were lodged in August 2022 that all dependents were properly named, and their claims identified.
The first respondent submitted that, even if the Commission is satisfied in its discretion that an order for interest should be made, that discretion is subject to the limitations imposed by s 109 of the 1998 Act. Relevantly, s 109(2)(b) provides that interest cannot be ordered “on any compensation payable under this Act for any period before a claim for the compensation was duly made.”
The first respondent referred to the decision of President Keating in Kaur v Thales Underwater Systems Pty Ltd [2011] NSWWCCPD 6 (Kaur). It submitted that Kaur continues to be applied. In the context of a claim pursuant to s 25(1)(a) of the 1987 Act, the Commission has consistently held that such a claim is not “duly made” until particulars of dependency have been furnished.
The first respondent referred to Youseph v Homebush Unit Trust t/as Primo Smallgoods [2021] NSWPIC 299; and Jason B and Natarsha N Cullinan v Cullinan & Ors [2022] NSWPIC 7. It submitted that the identity of those potentially dependent on the worker was not outlined until service of the applicant’s statement, dated 14 December 2021. It was served as part of the Application in Respect of Death of Worker lodged on 17 January 2022. It was discontinued on 8 February 2022, as the fourth respondent had not been joined as a party, particularised a claim, or provided evidence of dependency.
The first respondent submitted there was a delay of six months, which was not caused by it or in its control, before the Application was filed on 9 August 2022, with all four dependents joined as parties.
The first respondent submitted that particulars of dependency were not fully furnished, the claim not duly made, and the Commission not in a position to make relevant findings and orders, until the Application was lodged on 9 August 202, and Replies by the second, third and fourth respondents on 11 August 2022.
The first respondent submitted that it was only as a result of the fourth respondent’s Reply and evidence that it could be known she sought to be considered a dependant and claimed a portion of the lump sum. It was also only as a result of this Reply and evidence that it became known that the fourth respondent’s late husband (who had been mentioned by the applicant in his statement dated 14 December 2021 as a potential dependant) would not be claiming, as he was since deceased.
As regards the rate of interest, the first respondent submitted that, for interest up to judgment/the date of order for payment, the UCPR does not prescribe a particular interest rate. This is because s 100 of the Civil Procedure Act 2005 directs that interest up to judgment is to be calculated “at such rate as the court thinks fit on the whole or any part of the money and for the whole or any part of the period from the time the cause of action arose until the time the judgment takes effect.”
The first respondent submitted that s 109 of the 1998 Act is in similar terms, in that it states that interest is to be paid “at such rate as the Commission 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.”
The first respondent submitted that the Commission (and previously the Workers Compensation Commission) has determined in several authorities the rate it thinks fit reflects the rate of return the dependents could have expected to achieve in the current economic climate; and therefore the appropriate rate to place them in the position they would have been in if the money had been paid when the claim was duly made, to be closer to 2% above the RBA cash rate. (Emphasis in original.)
The first respondent cited Bott v Workers Compensation Nominal Insurer (iCare) [2021] NSWPIC 474 (2%); Hughes Helicopters Pty Ltd v Brink [2021] NSWPIC 393 (2.1%); Mudgee Explorer Tours Pty Ltd v Clarke [2021] NSWPIC 41 (Clarke) (2%); ZKM Pty Ltd v Chen [2022] NSWPIC 108 (2%); McGrath v P.M. Electric Pty Ltd & Ors [2022] NSWPIC 26 (2.1%); and BAJ by her tutor BAK v SCPR & M Pennisi (no longer trading) & Ors [2022] NSWPIC 217 (2%).
The first respondent therefore submitted that the appropriate rate of interest, if the Commission determines that interest should be payable, is 2% above the RBA cash rate.
SUMMARY
Section 25 of the 1987 Act provides:
“(1) If death results from an injury, the amount of compensation payable by the employer under this Act shall be--
(a) the amount of $750,000 (the ‘lump sum death benefit’), which is to be apportioned among any dependants who are wholly or partly dependent for support on the worker or (if there are no such dependants) paid to the worker's legal personal representative, and
(b) in addition, an amount of $66.60 per week in respect of--
(i) each dependent child of the worker under the age of 16 years, and
(ii) each dependent child of the worker being a student over the age of 16 years but under the age of 21 years.
(2) Payments in respect of a dependent child under subsection (1) (b) shall continue--
(a) except as provided by paragraph (b)--until the child dies or reaches the age of 16 years, whichever first occurs, or
(b) in the case of a dependent child who is a student at the time of the worker's death or after reaching the age of 16 years--until the child dies, reaches the age of 21 years or ceases to be a student, whichever first occurs.
(3) The amount of any weekly payments, or other compensation payable under this Act, shall not be deducted from the amounts referred to in subsection (1) (a) or (b).
(4) If an amount mentioned in subsection (1) (a) at any time after the commencement of this Act--
(a) is adjusted by the operation of Division 6, or
(b) is adjusted by an amendment of this section,
the compensation payable under subsection (1) (a) is to be calculated by reference to the amount in force at the date of death.
(4A) If the death of a worker results both from an injury received before the adjustment of an amount mentioned in subsection (1) (a) and an injury received after that adjustment, the worker shall, for the purposes of subsection (1) (a), be treated as having died as a result of the injury received after that adjustment.
(5) In this section--
‘child of the worker’ means a child or stepchild of the worker and includes a person to whom the worker stood in the place of a parent.
‘dependent child of the worker’ means a child of the worker who was wholly or partly dependent for support on the worker.
‘student’ means a person receiving full-time education at a school, college or university.”Section 29 of the 1987 Act provides:
“(1) The compensation payable under this Division to each dependant of a deceased worker may be apportioned by the Commission or by the NSW Trustee.
(1A) The lump sum death benefit payable under this Division is not to be apportioned if a deceased worker leaves only one dependant (whether wholly or partly dependent on the worker for support) and the whole of the lump sum death benefit is to be paid to that one dependant.
(1B) In apportioning the lump sum death benefit payable under this Division between 2 or more dependants, the whole lump sum death benefit is to be apportioned among those dependants (so that the sum of the apportioned amounts equals the full lump sum death benefit).
(2) Application for apportionment may be made by or on behalf of a person entitled to the compensation--
(a) to the NSW Trustee, or
(b) to the Commission (whether or not an application has been made to the NSW Trustee or the NSW Trustee has made a decision).
(3) The NSW Trustee may decline to deal with an application for apportionment and advise the parties to apply to the Commission.
(4) The NSW Trustee is not to deal with an application for apportionment of compensation if an application for apportionment of the same compensation is before the Commission.
(5) A decision by the NSW Trustee to apportion compensation under this Division is subject to any decision made by the Commission with respect to the matter.
(6) If there are both total and partial dependants of a deceased worker, the compensation may be apportioned partly to the total and partly to the partial dependants.
(7) If a dependant dies--
(a) before a claim under this Division is made, or
(b) if a claim has been made, before an agreement or award has been arrived at or made, the legal personal representative of the dependant has no right to payment of compensation, and the amount of compensation shall be calculated and apportioned as if that dependant had died before the worker.
(8) The regulations may make provision for or with respect to the publication of applications for apportionment and any other matter connected with apportionment.”
Section 109 of the 1998 Act provides:
“(1) In any proceedings before the Commission, the Commission may order that there is to be included, in any sum to be paid, interest at such rate as the Commission 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 Commission 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.”
Apportionment
The first respondent has accepted liability for payment of the lump sum benefit, pursuant to s 25 of the 1987 Act. It does not dispute that the applicant, the second respondent, the third respondent, and the fourth respondent, were either wholly or partly dependent on the worker. It is therefore necessary that I consider only the apportionment of the lump sum between them.
In Holdlen Pty Limited v Walsh [2002] NSWCA 87, it was said that ‘[t]otal dependence is not incompatible with the fact of receipt of support from someone else.” That a child may be totally dependent upon both parents was recognised in McCafferty’s Management Pty Ltd v Pimlott (1995) NSWCCR 360, and in the decision of the Court of Appeal in So v So [2004] NSWCA 67.
The children of the marriage were totally dependent on both the applicant and the worker. Their earnings were very similar; and they shared the costs of rent and utilities and the boys’ expenses. They both took part in the boys’ activities.
The applicant was partly dependent on the worker. Although they kept separate accounts for their wages, his evidence is that they also had joint accounts, one of which contained their savings for a home. As I have noted, they shared the costs of outgoings, and the housework and care for their sons. They were, in the applicant’s words, “completely reliant and dependent on each other for financial support” and were raising their family together.
The fourth respondent was also partly dependent on the worker. She is elderly and has never been in paid employment. Both the worker and the applicant provided support to her when they were able, and she may have expected that support to continue.
Any amount of the lump sum apportioned to the applicant will benefit BHBand BBW. They remain in his care, and I accept his submission that the overwhelming probability is that he will do everything he can to provide for himself and the children. His period of dependency was also likely to have exceeded that of the children. I agree with his submission regarding the appropriate amount to be apportioned to him.
BHBand BBW are almost exactly two years apart in age. There is no evidence that either has special needs. They are enrolled in the same school. The amounts apportioned to each, with a slightly higher amount for the younger Tinovimba, are in my view appropriate.
I accept that the worker and the applicant would have continued to provide what support they could to BJC’s mother, bearing in mind their responsibility to their own family. The amount apportioned to BEKby the applicant’s submissions is in my view appropriate.
I therefore apportion the lump sum benefit as follows:
(a) applicant: $657,400;
(b) second respondent: $75,000;
(c) third respondent: $70,000, and
(d) fourth respondent: $25,000.
The worker’s brother and sister have requested that the amount apportioned to the fourth respondent be paid into the applicant’s account. The applicant has provided no evidence about this request, and no submissions have been made. In my view, it is not appropriate that I make any order other than that the monies be paid to the fourth respondent.
Interest
The power to award interest is discretionary and may apply to some or all of the compensation, for the entire period, from the date of the claim to the date of the order, or for a lesser period. The rate of interest is also a discretionary matter. However, whilst the discretion is wide, regard must be had to the facts of the case.
In Haidary v Wandella Pet Foods Pty Ltd [2005] NSWWCCPD 9, Deputy President Fleming discussed the reasoning behind an award of interest and the relevant interest rate. She said:
“The award of interest by the Commission, pursuant to section 109 of the 1998 Act is discretionary. Mr Haidary will only be entitled to interest, if awarded, on those amounts of his weekly entitlement that were unpaid, and only from the date that his claim ‘was duly made’. The likely amount of interest that would be due on these sums is small, relative to the whole of his claim, but nonetheless they may form part of Mr Haidary’s entitlement. The purpose of ordering interest on an award is to compensate the worker for the loss of his or her income, not to penalise the employer (Virag v James N Kirby t/as Betts Electric Motors (1990) 6 NSWCCR; Healey v McPherson Binding Pty Ltd (1989) 5 NSWCCR 139).”
The first respondent relies on the decision in Kaur, in which Keating P said at [139]:
“Section 109(2)(b) of the 1998 Act prohibits interest on any award of compensation payable under the Act for any period before a claim for compensation on behalf of the appellants was duly made. I accept the submission that the claim for compensation on behalf of the appellants was not duly made until the day of the arbitration. I therefore accept Thales’s submission that, as at the arbitration, the appellants could not be entitled to interest pursuant to s 109 of the 1998 Act”.
The phrase “duly made” has been held to mean “fully particularised”. It was applied in Kathryn Ann Kratz as executrix of the estate of the late Owen Beddall v Qantas Airways Limited [2020] NSWWCC (Kratz), in which Arbitrator Isaksen referred to the decision of Arbitrator Wynyard in Cooper v G & W Mudge Concreting Pty Ltd & Ors (Matter Number 6411/18, dated 18 September 2019, and his own decision in Lavelle v Browne & Ors (Matter Number 533/19, dated 10 October 2019), in which he agreed with Arbitrator Wynyard. Member Wynyard took a similar approach in Clarke. I respectfully agree with that approach.
I do not accept the applicant’s submission that any argument that interest should not run between 17 January 2022 and 9 August 2022 (the dates of filing of the first and second Applications) should be resisted.
The claim was not “duly made”, that is, fully particularised, in the first Application, and it was discontinued, according to the first respondent’s submissions, on 8 February 2022. The fourth respondent, who was a potential claimant, was not a party to the first Application.
Section 109(2)(b) of the 1998 Act prohibits the payment of interest for any period before the claim was duly made. I accept the first respondent’s submission that the claim was not fully particularised until the fourth respondent filed her Reply and her evidence on 11 August 2022. It was only then that all potential dependents were identified, and the evidence on which they relied in support of their claims was provided. I therefore decline to order interest on the lump sum before 11 August 2022. However, I will exercise my discretion to make an order for interest from that date.
The rate at which interest is to be awarded is also within the Commission’s discretion. It is not bound to apply the UCPR, but may award interest at “such rate as the Commission thinks fit.”
I accept the first respondent’s submission that the Commission, and previously the Workers Compensation Commission, has previously held that the rate of interest applied should reflect the rate of return that could have been expected in the current economic climate. The first respondent relied on decisions that provided for a rate approximately 2% above the RBA cash rate. There are other decisions in which a similar approach was taken, and to which it is unnecessary that I refer.
The rate of interest that is 2% above the RBA cash rate is 3.85% per annum from 11 August 2022 to 6 September 2022; 4.35% per annum from 7 September 2022 to 4 October 2022; and 4.6% from 5 October to date.
I therefore determine that the first respondent is to pay interest on the lump sum, in the same proportions as the apportionment, from 11 August 2022 to 19 October 2022, at the following rates:
(a) from 11 August 2022 to 6 September 2022 at 3.85% per annum;
(b) from 7 September 2022 to 4 October 2022 at 4.35% per annum, and
(c) from 5 October 2022 to October 2022 at 4.6% per annum.
The determinations and orders are as set out in the Certificate of Determination.
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