Coles Myer Ltd v Rudzinski

[2005] NSWWCCPD 51

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
STATUS: Decision confirmed on Appeal: Coles Myer Ltd v Rudzinski [2006] NSWCA 161; (2006) 5 DDCR 36
CITATION:		Coles Myer Ltd v Rudzinski [2005] NSWWCCPD 51
APPELLANT:		Coles Myer Ltd
RESPONDENT:		Jolanta Rudzinski
INSURER:		Coles Myer Ltd
FILE NUMBER:		WCC 12766-03
DATE OF ARBITRATOR’S DECISION:		30 April 2004
DATE OF APPEAL DECISION:		20 June 2005
SUBJECT MATTER OF DECISION:		The meaning of “totally or mainly dependent for support” in section 37(4) of the Workers Compensation Act 1987.
PRESIDENTIAL MEMBER:		Acting Deputy President Robin Handley
HEARING:		On the papers
REPRESENTATION:		Appellant:		Gillis Delany Brown, Lawyers
Respondent:		Leitch Hasson Dent, Solicitors
ORDERS MADE ON APPEAL:		The decision of the Arbitrator is confirmed.
The Appellant, Coles Myer Ltd, is to pay the costs of the appeal as agreed or assessed.

BACKGROUND TO THE APPEAL

1. On 28 May 2004, the Appellant, Coles Myer Ltd (‘Coles Myer’), sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) in respect of a decision dated 30 April 2004.

1. The Respondent to the Appeal is Jolanta Rudzinski.

1. Ms Rudzinski was born in Poland on 6 June 1962 and is aged 43. She migrated to Australia at the age of 19, married, and she and her husband, George Rudzinski, have two children, Bianca who was born on 11 December 1986 and is now aged 18, and Benjamin who was born on 22 November 1988 and is now aged 16.

1. From October 1996, Ms Rudzinski was employed as a sales assistant by Coles Myer at its Penrith store. She injured her lower back in an accident at work on 6 May 2002 when hit across the lower abdomen by part of a display stand that she and others were moving. She notified Coles Myer of the injury on 9 May 2002. Initially, Ms Rudzinski tried to continue working but, after a few days of working with pain, she was off work for 10 weeks. She then returned to work for three hours a day on three days a week until early June 2003. By letter dated 19 June 2003, Coles Myer informed Ms Rudzinski that given the level of her medical restrictions and her “inability to return to work and maintain suitable duties, we consider it unlikely that you will be able to return to duties within the store in the near future”.

1. A dispute arose between the parties because Coles Myer were paying Ms Rudzinski weekly compensation without allowance for her two children. On 28 July 2003, she lodged an ‘Application to Resolve a Dispute’ with the Commission in relation to her claim for weekly compensation from 6 May 2002. Coles Myer’s “Reply” was lodged on 15 August 2003. Following a teleconference between the Arbitrator and the parties on 26 October 2003, Ms Rudzinski lodged further ‘Applications to Resolve a Dispute’ with the Commission in relation to a claim for compensation for medical and other treatment expenses (file number WCC 16764-03) and in relation to a claim for compensation for permanent impairment (file number WCC 3137-04). A further teleconference was held on 9 March 2004 and a conciliation/arbitration was held on 22 April 2004. The Arbitrator referred medical issues raised in relation to the claim for medical and other treatment expenses and permanent impairment to two Approved Medical Specialists and, conciliation in the dispute about Ms Rudzinski’s weekly compensation claim having failed, conducted an arbitration hearing and proceeded to make a determination on that issue.

THE DECISION UNDER REVIEW

1. The Certificate of Determination, dated 30 April 2004, records the Arbitrator’s orders as follows:

“1. Payments of weekly compensation to the Applicant, as from 11 September 2003, are to be calculated in accordance with the provisions of s 37 of the Workers Compensation Act 1987 and on the basis of two dependent children and thereafter to continue in accordance with the provisions of the Act.
2. The Respondent to pay the costs of the Applicant as agreed or assessed.”

1. The Arbitrator found that Ms Rudzinski was not precluded from claiming her children as dependents because her husband provided them with greater financial support. Ms Rudzinski provided their children with financial support within her economic capability and that financial support was substantial: “The children have been mainly dependent upon the Applicant for support up to and from 11 September 2003.” The Arbitrator found that Ms Rudzinski’s daughter Bianca was a full-time student and her son Benjamin had not yet attained the age of 16.

ISSUE IN DISPUTE

1. The issue in dispute in the appeal is whether, pursuant to section 37(4) of the Workers Compensation Act 1987 (‘the 1987 Act’), Ms Rudzinski’s two children were totally or mainly dependent for support upon her at the date compensation became payable to her.

ON THE PAPERS REVIEW

1. Section 354(6) of the 1998 Act states:

“(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”

1. Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by Ms Rudzinski’s solicitors that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances. I reject Coles Myer’s solicitors’ submission that the matter is incapable of being determined on the papers. I have the benefit of written submissions from both parties on the appeal, as well as their written submissions to the Arbitrator and a copy of the transcript of the arbitration hearing in the course of which the parties discussed their submissions and the relevant case law.

1. Neither party sought to adduce fresh evidence.

LEAVE

1. Before proceeding to deal with an appeal, the Commission must determine whether the application meets the requirements of section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’), which states:

“352Appeal against decision of Commission constituted by Arbitrator

(1)A party to a dispute in connection with a claim for compensation may, with leave of the Commission constituted by a Presidential member, appeal to the Commission as so constituted against a decision in respect of the dispute by the Commission constituted by an Arbitrator.

(2)The Commission is not to grant leave to appeal unless the amount of compensation at issue on the appeal is both:

(a)at least $5,000 (or such other amount as may be prescribed by the regulations), and

(b)at least 20% of the amount awarded in the decision appealed against.

(3)If the Commission refuses to grant leave to appeal, the Commission must state reasons for the refusal in writing to the parties.

(4)An appeal can only be made within 28 days after the making of the decision appealed against.

(5)An appeal under this section is to be by way of review of the decision appealed against.

(6)Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission.

(7)On appeal, the decision may be confirmed or may be revoked and a new decision made in its place.

Alternatively, the matter may be remitted back to the Arbitrator concerned, or to another Arbitrator, for determination in accordance with any decision or directions of the Commission.

(8)In this section, decision includes an award, interim award, order, determination, ruling and direction.”

1. The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.

1. With regard to section 352(2), Coles Myer’s solicitors state that Ms Rudzinski’s claim for additional weekly benefits from 11 September 2003 is expected to exceed $5,000 and that 100% of the Arbitrator’s award is appealed against. I am satisfied that the weekly compensation claimed meets the required threshold and that I should grant leave to appeal. Leave to appeal is therefore granted.

THE RELEVANT LEGISLATION

1. Section 37(4) of the 1987 Act states:

“(4) For the purposes of this section, a person is a dependent wife, husband, de facto spouse or other family member, child, brother or sister in relation to a worker if the person is totally or mainly dependent for support on the worker at the date compensation becomes payable to the worker or (whether married to the worker or born before or after that date) becomes so dependent after that date.”

1. In section 37(7), ‘child’ is defined as follows:

“child, in relation to a worker, means:
(a) child or stepchild of the worker who is under the age of 16 years,
(b) a person under the age of 16 years to whom the worker stands in the place of a parent, or

(c) a student who is a child or stepchild of the worker or is a person to whom the worker stands in the place of a parent.”

EVIDENCE AND SUBMISSIONS

1. There is no dispute as to either the facts concerning the injury or Ms Rudzinski’s incapacity. Between the date of the injury and until 11 September 2003, she received weekly compensation on the basis of either total or partial incapacity. Since 11 September 2003, she has been paid the maximum rate of weekly compensation for a single worker without dependents, pursuant to section 37 of the 1987 Act, on the basis of total incapacity.

1. The parties agree that Ms Rudzinski’s husband is employed as a maintenance fitter at a salary of approximately $49,000 per annum, or approximately $942 gross per week. At the time of the injury, Ms Rudzinski was earning approximately $529 gross per week, and comparable earnings as at 11 September 2003 were $542.34 gross per week.

1. Coles Myer’s solicitors submit that the phrase “the date compensation becomes payable to the worker” in section 37(4) of the 1987 Act is ambiguous. For example, does this mean the date of injury, the date from which section 37 applies, or is it the date of determination? In any event, the difference between Ms Rudzinski’s and her husband’s earnings “has been, and continues to be substantial”. In Spenceley v Deniliquin Shire Council (2001) 22 NSWCCR 7 (‘Spenceley’) at paragraph 15, Armitage J discussed the meaning of ‘mainly dependent’. He suggested that this would not include a situation where the difference between the incomes of the husband and wife is substantial: “where the wife’s income exceeded to a much greater degree the income of the worker in weekly payments of compensation”. His Honour stressed the importance of examining the factual circumstances of each case.

1. Referring to the dictionary meaning of ‘mainly’ as “chiefly, in the main, primarily, principally”, Coles Myer’s solicitors submitted that there was insufficient evidence before the Arbitrator to enable her to make a finding that the two children are ‘mainly dependent’ on Ms Rudzinski. Ms Rudzinski did not include her two children in the table of alleged dependents in her initial claim form dated 9 May 2002. Their names appear to have been included initially but then crossed out and “N/A” inserted. The Arbitrator also failed to take into account Ms Rudzinski’s daughter’s casual earnings of $80 per week which should have formed part of the factual circumstances in relation to the issue of dependency.  

1. In summary, Coles Myer’s solicitors submitted that Ms Rudzinski’s two children have not at any material time been totally or mainly dependent on her for support. They sought to distinguish Campbell v Department of Community Services (2000) 19 NSWCCR 336 (‘Campbell’) on its facts: in that case, the disparity between the two spouses’ earnings was not substantial. In Ms Rudzinski’s case, the disparity is approximately $400 per week.

1. Ms Rudzinski’s solicitors submit that there is no strict principle that a child is mainly dependent upon the higher earning parent. A child can be totally dependent on both parents earning income. Ms Rudzinski’s husband’s net income of approximately $3,000 per month is used towards mortgage repayments of between $2,500 and $2,800 per month (arbitration hearing transcript page 1) and is paid into a separate account for this purpose. Ms Rudzinski’s income “is used towards household expenses such as food, clothing, bills, petrol, health cover, school expenses and tutoring”. Ms Rudzinski, and not her husband, claims the children as dependents for taxation purposes (hearing transcript page 3). Her daughter, Bianca, is a full-time student at Glenmore Park High School and only employed on a casual basis at a pharmacy in Penrith. She earns approximately $80 per week which she uses solely for her own needs. Her son, Benjamin, is also a full-time student and received pocket money from Ms Rudzinski’s income.

1. Referring to the decision in Spenceley, Ms Rudzinski’s solicitors submitted that the two children were at all material times mainly dependent on Ms Rudzinski for their day to day needs - even though she and the children are dependent upon Mr Rudzinski for payment of the mortgage so that they have a ‘roof over their heads’. The facts and findings in Campbell are very similar to those in this case. Moreover, in McCafferty’s Management Pty Ltd v Pimlott (1995) 12 NSWCCR 360 (‘Pimlott’), the Court of Appeal confirmed that both parents have a joint and several obligation to support their child. In Ms Rudzinski’s case, there was sufficient evidence before the Arbitrator to satisfy her that the children were mainly dependent on Ms Rudzinski and have been so at all relevant times.

DISCUSSION AND FINDINGS

1. As stated above, the issue in dispute is whether, pursuant to section 37(4) of the 1987 Act, Ms Rudzinski’s children were totally or mainly dependent for support upon her at the date compensation became payable to her.

1. The role of the Presidential Member on appeal is to review the Arbitrator’s decision as a whole. The review is not a rehearing. In this case, Coles Myer must demonstrate that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172; The King Island Company Limited v Deery [2005] NSW WCC PD 1) in order to enliven the Presidential Member’s power to interfere with the Arbitrator’s decision pursuant to section 352(7) of the 1998 Act. In this case, Coles Myer submit that there was insufficient evidence before the Arbitrator to support her conclusion that Ms Rudzinski’s children were totally or mainly dependent upon her for support.

1. The relevant authorities are referred to above. In Campbell, a decision of Curtis J in the Compensation Court of NSW, the applicant suffered injuries at a time when she was earning $35,000 per annum and her husband $42,000. His Honour rejected a submission that a child is mainly dependent upon the parent who earns more money. He said:

“15. A child may in some circumstances be totally dependant upon each of two sources of income, the continuation of which is necessary for the support of that child.”

1. His Honour drew attention to:

“16. … the uncontradicted evidence of the applicant [that] her money went into her separate bank account and from it she paid for all of the food and clothing for the children. Her husband’s money went into his separate account from which he paid the mortgage and the repairs and such bills as electricity. I believe the provision of food and clothing to be so fundamental that the children were mainly dependent on the applicant for support.”

1. In Spenceley, a decision of Armitage J in the Compensation Court of NSW, the applicant’s monthly workers compensation benefits of $893 were his only source of income. His wife’s monthly income was $1,536. His Honour said, at paragraph 12, that he was guided by Meagher JA’s “remark” in Pimlott (at 364B):

“that the obligation of each parent to support a child is joint and several, and a child may in a particular case be totally dependent upon one parent for support notwithstanding that he or she is totally dependent also upon the other parent. I gain also considerable assistance from the observation by Giles JA at 642 [51] in Holdlen [Holdlen Pty Ltd v Walsh (2000) 19 NSWCCR 629] that ‘total dependence is not incompatible with the receipt of support from someone else’.”

1. Armitage J said, at paragraph 13, that he was also guided by the decision in Campbell, where Curtis J recognised that dependency is a question of fact,

“to be judged on the circumstances of the particular case, and is not always excluded as a matter of law in circumstances where a child receives support also from a parent other than the injured worker.”

1. Discussing the facts in Spenceley, his Honour said that when one looked at the total monthly income of the applicant and his wife,

“14. … it is obvious that subtraction of one or other parent’s income would be catastrophic to the household finances generally, and by extension to the support provided by both parents to Nykita [the child].

15. It seems to me reasonable in those circumstances to say that the child Nykita has at all material times been mainly, though perhaps not totally, dependent upon the applicant, even though she is also dependent to a considerable degree upon her mother …

16. … It seems to me that the expression ‘mainly’ is intended to focus not so much on the relative contributions of the worker and other persons to a child’s support but rather upon whether the child has any income of his or her own and the degree to which that interacts with the support received from the worker, although, of course, the support received from other persons, such as in this case the wife, must also be relevant in that calculus.”

1. Clearly, there are similarities between the facts of Campbell and Spenceley and those of the present case. As in Campbell, Mr Rudzinski’s income is used primarily to make the monthly payments on the family’s mortgages; Ms Rudzinski’s income is used for household expenses including all the day-to-day needs of the children. As in Spenceley, one can envisage that the subtraction of either Ms Rudzinski’s or her husband’s income would have dire consequences for their household finances.

1. In my view, there was sufficient evidence for the Arbitrator to conclude that Ms Rudzinski’s children were mainly dependent for their support on their mother at all relevant times. In relation to Ms Rudzinski not including the children in the table of alleged dependents in her initial claim form dated 9 May 2002, I note that Ms Rudzinski told the Arbitrator at the hearing that the Coles Myer’s personnel section told her to cross out the children’s names because they already had them in their files (arbitration hearing transcript page 2). Thus, the Arbitrator did not err and this ground of appeal fails.

1. There is one other submission made by Coles Myer that I should address – its submission that the meaning of the phrase “the date compensation becomes payable to the worker” is ambiguous. In my opinion, that issue was dealt with in Ritchie v Wambo Mining Corporation Ltd (1995) 12 NSWCCR 273, at 277, where Johns J in the Compensation Court of NSW said that the date compensation became payable in that case was “the date that compensation is payable to the respondent worker week by week”. I therefore conclude that there is no ambiguity.

DECISION

1. The decision of the Arbitrator is confirmed.

COSTS

1. The Appellant, Coles Myer Ltd, is to pay the costs of the appeal as agreed or assessed.

Robin Handley

Acting Deputy President  20 June 2005

I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBIN HANDLEY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

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