Delta Services Pty Ltd v BBV

CERTIFICATE OF DETERMINATION OF MEMBER
Citation:	Delta Services Pty Ltd v BBV & Ors [2022] NSWPIC 649
APPLICANT:	Delta Services Pty Ltd
first RESPONDENT:	BBV
second respondent:	BGC
third respondent:	BIA
fourth respondent:	BJB
SENIOR Member:	Kerry Haddock
DATE OF DECISION:	23 November 2022
CATCHWORDS:	WORKERS COMPENSATION - Claim for interest on lump sum death benefit pursuant to section 109 of the Workplace Injury Management and Workers Compensation Act 1998; claim opposed by applicant; orders for apportionment of lump sum and direction for written submissions on issue of interest made at preliminary conference; consideration of 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 – no order for interest.
determinations made:	1. That there is no order for interest.

STATEMENT OF REASONS

BACKGROUND

The worker, BKC, died on 24 March 2022 as a result of injuries arising out of or in the course of her employment with the applicant, Delta Services Pty Ltd.
The first, second, third and fourth respondents are, respectively, the partner of the worker, and the children of the relationship.

Findings and orders have previously been made in respect of apportionment of the lump sum death benefit payable pursuant to s 25 of the Workers Compensation Act 1987 (the 1987 Act), in Matter Number [2022] NSWPIC 551. The worker and the respondents were anonymised in that determination and are similarly anonymised in this determination.
Directions were made in Matter Number [2022] NSWPIC 551 for the filing and service of submissions in respect of the claim for interest on the lump sum, which is being determined separately, so as not to further delay payment of the lump sum.
By email dated 19 May 2022, the solicitors for the first respondent served on iCare Workers Insurance (iCare) the claim form; his authority to release information; the worker’s death certificate; the birth certificates of the second and fourth respondents; and an authority to iCare. They advised that the first respondent was not in receipt of the third respondent’s birth certificate, which would be obtained and provided in due course. They asked that receipt of the claim form be acknowledged, and they be advised whether any further information was requested.
By email dated 5 July 2022, the solicitors for the applicant requested that the first respondent’s solicitors provide a copy of BIA’s birth certificate, or, if not held, details of her date of birth, and, if held, a copy of the police report.
By letter dated 6 July 2022, the first respondent’s solicitors replied that he could not locate BIA’s birth certificate and would need to request a copy from Births, Deaths and Marriages. A copy would be provided once it was received. BIA’s date of birth was provided. The solicitors did not have a copy of the police report but undertook to provide it should it be received. Information about a post-mortem was also provided.
By letter dated 11 July 2022, iCare advised the first respondent that liability for the claim had been accepted.
By letter dated 12 July 2022, the solicitors for the applicant advised the solicitors for the first respondent that it appeared that the respondents were the only persons dependent for support on the worker. They advised that, unless they heard to the contrary, they would assume that their client was not requested to pay the lump sum compensation, payable pursuant to s 25(1)(a) of the 1987 Act, to the NSW Trustee and Guardian, but rather that payment to the adult dependant/s should be made pursuant to s 85A(1) of the Act.
The applicant lodged an Application in Respect of Death of Worker (the Application) on 12 July 2022.
The first respondent lodged his Reply on 5 August 2022.
The second, third and fourth respondents lodged their Replies on 22 August 2022.

ISSUE FOR DETERMINATION

The following issue remains in dispute:
(a) whether the respondents are entitled to payment of interest on the lump sum death benefit, and, if so, the period during which interest is to be paid, and the rate/s at which it is to be paid.

PROCEDURE BEFORE THE PERSONAL INJURY COMMISSION (Commission)

The matter was listed for preliminary conference on 14 September 2022. Mr Harris appeared for the applicant, and Ms Thurgood appeared for the first respondent, who was present. Ms Osnabrugge of EML also attended.
Ms Thurgood advised that she had statements from potential dependants that confirmed they did not make any claim on the lump sum. She had served that evidence on the applicant’s solicitors, but it had not yet been lodged. The first respondent had had difficulty obtaining BIA’s birth certificate, and Ms Thurgood was to make that request.
Ms Thurgood had submissions from counsel regarding dependency of the children and was in the process of obtaining submissions from another counsel.
Directions were made for the filling of evidence in respect of other potential dependants, BIA’s birth certificate, and submissions on apportionment. Those directions were complied with. Findings and orders have been made in respect of apportionment and payment of the lump sum.
The parties were advised that at the conclusion of the time allowed for submissions on the claim for interest, the issue would be determined “on the papers”.
I am satisfied that the parties to the dispute understand the nature of the application and the legal implications of any assertion made in the information supplied. I have used my best endeavours in attempting to bring the parties to the dispute to a settlement acceptable to all of them. I am satisfied that the parties have had sufficient opportunity to explore settlement and they have been unable to reach an agreed resolution of the dispute.

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;
(d)    Reply by third respondent;
(e)    Reply by fourth respondent;
(f)    Application to Admit Late Documents dated 20 September 2022 and attachments, filed by the first respondent, and
(g)    Application to Admit Late Documents dated 27 September 2022 and attachments, filed by the first respondent.

FINDINGS AND REASONS

Submissions

Respondents

The respondents claim interest pursuant to s 109 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) on the lump sum, to be apportioned between them on a pro rata basis.
The respondents submitted that the basis to award interest is that they were denied the use of the compensation during the period from when the claim was duly made to when apportionment of the lump sum was ordered – Bennett v Jones (1997) 2 NSWLR 355 (Bennett).
The respondents acknowledge that the applicant was not tardy in considering the claim. Whilst this may be a factor the Commission considers, they submitted it is not the sole determining factor to consider in exercising its discretion to order interest. They submitted the Commission ought to exercise its discretion to in their favour.
The respondents submitted that the claim was duly made on 19 May 2022, when the notification form and supporting documents were provided to the applicant.
The applicant (assumed to mean the insurer) had previously been informed of the worker’s death by the employer, and a claim number was issued. Particulars of dependency were provided in the correspondence of 19 May 2022, and the applicant did not request further particulars.
As to the rate at which interest is to be awarded, the respondents acknowledge that the determination is within the Commission’s discretion. They noted that it had recently been guided by the Uniform Civil Procedure Rules 2005 with respect to the rate of interest, being the cash target rate plus 2%.
The respondents submitted that the period from 19 May 2022 had been a volatile period for the Australian economy, with a great variation of the cash target rate. They submitted that the cash target rate plus 2% for each relevant period is reasonable.

Applicant

The applicant submitted that the Commission should make no order for payment of interest, and the claim should be dismissed.
The applicant submitted that no respondent has suffered any financial disadvantage by reason of the delay in payment of the lump sum; each has enjoyed a financial advantage; and an order for interest is precluded by s 109(2)(c) of the 1998 Act.
In the alternative, the applicant submitted that interest should not be ordered prior to 28 September 2022, the date on which the claim was “duly made”.
The applicant submitted that the relevant dates are:
·        24 March 2022: date of death;
·        19 May 2022: notification form submitted;
·        11 July 2022: liability accepted;
·        12 July 2022: letter from applicant’s solicitors to respondents’ solicitors in relation to options for payment of the lump sum;
·        15 July 2022: Application registered;
·        24 August 2022: replies served on behalf of the respondents, without supporting evidence;
·        14 September 2022: preliminary conference adjourned to enable further evidence in relation to dependency to be filed;
·        21 September 2022: Application to Admit Late Documents annexing further evidence in relation to dependency, filed on 20 September 2022, served;
·        28 September 2022: Application to Admit Late Documents annexing final evidence in relation to dependency, filed on 27 September 2022, served;
·        30 September 2022: Certificate of Determination (COD) issued ordering payment of the lump sum;
·        4 October 2022: letter issued by the applicant’s solicitors to NSW Trustee and Guardian with details of accounts opened for second, third and fourth respondents;
·        6 October 2022: payment by insurer to first respondent of $467,115;
·        18 October 2022: email received from NSW Trustee and Guardian with details of accounts opened for the second, third and fourth respondents, and
·        19 October 2022: payment by insurer to NSW Trustee and Guardian of the sums awarded in favour of the first, second and third respondents [sic].
The applicant submitted that the power to award interest is discretionary: Haidary v Wandella Pet Foods Pty Ltd [2005] NSWWCCPD 9 (Haidary); Canham v Kenna Investments Pty Ltd [2006] NSWWCCPD 2020; and Kaur v Thales Underwater Systems Pty Ltd [2011] NSWWCCPD 6 (Kaur).
The applicant relied on Pheeney v Doolan [1977] 1 NSWLR 601 (Pheeney) and Bennett. It submitted that unless payment was made to the NSW Trustee and Guardian, it was not legally possible for the insurer to pay the lump sum to the respondents until the Commission had determined those persons who were dependent for support on the worker and apportionment, and had made orders for payment. It further submitted that, had such payment been made, no payment would have been made by the NSW Trustee and Guardian until the COD was issued on 30 September 2022.
The applicant submitted that there was no response from the respondents to its solicitors’ letter dated 12 July 2022, in which it noted that it had the option of paying the lump sum to the NSW Trustee and Guardian. It submitted this reflected their knowledge that fees imposed had that been done would have been prohibitive, such that no dependant would make such a request.
The applicant submitted that the respondents have not suffered a “loss of his or her income”, and, had the lump sum been paid to the NSW Trustee and Guardian, the fees imposed would have been to their financial detriment. It submitted the delay has been to their advantage, as no fees are payable in respect of the major share apportioned to the first respondent; and all the payments have been made quicker [sic] than had the insurer immediately paid the sum to the NSW Trustee and Guardian, pursuant to s 85(1) of the 1987 Act.
The applicant submitted that the respondents’ submission that interest should be awarded as they were denied the use of the compensation during the period from when the claim was duly made, to when apportionment was ordered, is incorrect, for the reasons above, and ignores the “second limb” in decisions such as Pheeney and Bennett, that is that a second consideration is whether any financial disadvantage has resulted from the delay.
The applicant conceded that its submissions have been rejected, or at least not accepted, in my decision in JDC Kitchens v Negherbon and Ors [sic] [2022] NSWPIC 531 (JDC Kitchens) and in Zona Coatings Pty Ltd v Zrinski & Ors [2022] NSWPIC 547 (Zona Coatings). It submitted those decisions are incorrect, and “can advise” that each is the subject of a request for reconsideration, pursuant to s 57 of the Personal Injury Commission Act 2020.
The applicant submitted that s 109(2)(c) of the 1998 Act preludes an order for payment of interest for any period during which proceedings were adjourned on the application of the claimant for compensation.
The applicant submitted that at the preliminary conference on 15 August 2022, the matter was adjourned because of outstanding particulars of dependency, which constituted an adjournment, precluding an order for interest after 15 August 2022; and the claim was not “duly made” until 27 September 2022. Section 109(2)(b) precludes an order for interest prior to the date the claim was duly made.
The applicant submitted that it is well established that a claim by a dependant is not “duly made” until full particulars of the alleged dependency have been provided: Kaur. It referred to several decisions in which it was held that “duly made” refers to a date when the claim is fully particularised. It submitted the respondents’ submission that the claim was “duly made” on 19 May 2022 is inconsistent with these decisions and in particular with Kaur, which is binding.
The applicant submitted that the claim was not “duly made” until 28 September 2022 (having previously submitted the appropriate date was 27 September 2022), when its solicitors received the final Application to Admit Late Documents filed on 27 September 2022.
The applicant agreed with the respondents’ submissions as to the appropriate rates of interest.
The applicant finally submitted that the claim for interest should be dismissed, because, in the exercise of its discretion, the Commission is to have regard to the fact that the respondents have not suffered any financial disadvantage by the delay in receipt of the lump sum, but have received an advantage; and, in any event, an order for interest is precluded by s 109(1)(c) of the 1998 Act.

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
…”
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.”
The power to award interest is discretionary and may apply to some or all of the compensation payable, 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, while the discretion is wide, regard must be held to the facts of the case.
In Haidary, Deputy President Fleming 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).”
Section 109 (2)(b) of the 1998 Act provides that interest cannot be ordered for any period before a claim was duly made.
President Keating said in Kaur:
“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 36, in which Arbitrator Isaksen, as he then was, referred to the decision of Arbitrator Wynyard, as he then was, in Shanika Cooper v G & W Mudge Concreting Pty Ltd & others (WCC6411/18) and his own decision in Lavelle v David Paul Browne & others (WCC533/19).
The respondents submitted that the claim was duly made on 19 May 2022, when the notification form and supporting documents were provided.
I do not accept this submission. The claim was not “fully particularised”, so that the applicant was in a position to determine it, when it was merely notified of the worker’s death. Some particulars of dependency, without supporting documentation, were provided when the respondents’ Replies were lodged on 24 August 2022. Some further particulars were provided on 21 September 2022. The final particulars were provided on 27 September 2022 and included BIA’s birth certificate.
It follows that, in my view, any award of interest on the lump sum could be made only for the period from 27 September 2022 to the date of the issue of the COD, that is 30 September 2022.
In the circumstances, I decline to exercise my discretion to order interest on the lump sum. In doing so, I make no criticism of the first respondent and those who advise him. The first respondent clearly did his best, in difficult circumstances that included the necessity to move house in the period just after the worker’s death, to provide the necessary evidence, while trying to maintain his employment and care for their children.
That is sufficient to dispose of the claim for interest. However, had it been necessary to consider them, I would once again not have accepted the applicant’s submissions that interest is not payable because the respondents have been advantaged by the lump sum not having been paid to the NSW Trustee and Guardian. To the decisions in JDC Kitchens and Zona Coatings, I would add that I did not accept the same submissions in BCP v Secretary (Department of Communities and Justice) & Ors [2022] NSWPIC 615.

56.In Pheeney, Moffitt P said:
“While the essential nature of the award is to compensate a plaintiff by reason of delay in payment of moneys, there is no entitlement to interest. The court must be persuaded that it is just, between the plaintiff and defendant, to make an order of interest in relation to each of the elements referred to in the section, namely the rate, the sum to bear interest, and the period for which interest is to accrue.”

Also in Pheeney, Reynolds JA said (at [613]) that the purpose of s 94 (since repealed) of the Supreme Court Act 1970 is:
“....to aid the court to do more complete justice between the parties than otherwise possible. It does not confer a substantive right to interest upon creditors and persons who have suffered injury to personal property, and its application is dependent upon proceedings being instituted in the Supreme Court and continuing to judgment. It is not designed to compensate a plaintiff for loss arising out of cause of action, but to provide compensation where it is otherwise appropriate to do so for the circumstance that a sum of money has been outstanding to him for a period of time.”
In Bennett, Moffitt P said (at [367]):
"A number of questions arise. Is the power to award interest such that it should be used punitively, so a plaintiff or defendant is penalised for delay or failure to observe court procedures; or is it entirely compensatory, so as to do no more than that which is fair in a pecuniary sense between the parties? Is the jurisdiction to be exercised, or not exercised, simply by inquiry whether the defendant ought to have paid money to the plaintiff at some earlier date; or is it to be awarded on some more neutral basis, as that, for some reason, the money has been outstanding for a period, in which the defendant had the benefit of not paying it and the plaintiff the detriment of not having it, and that delay and the conduct of a party is relevant, only so far as by reason of it, there is, or may be, economic disadvantage to the opposing party by an award of interest being, or not being, made? For reasons I will indicate, in my view the approach last mentioned in each of the two foregoing queries is that which is in conformity with the statute.” (Emphasis added).
His honour continued, at [370]:
“I see no reason why the simple fact that a defendant does not have to pay money when his liability arises, and has the benefit of non-payment for a period, should not provide a basis to make a discretionary order for payment of interest for the whole period. One had the money, and the other not. If it is not a commercial setting, the gain and loss may not be measured by a commercial rate of interest.”
As Arbitrator Sweeney (as he then was) said in Beves v Patrick Stevedores No 2 Pty Ltd & Anor [2014] NSWWCC 178, in a “death claim”, where the compensation has not been paid, the insurer/scheme agent has been in possession of the award monies, and the worker [sic] has been deprived of their use. He noted that the common law principles must be considered in the light of s 109 of the 1998 Act.
Arbitrator Sweeney pointed out that the course of events that transpired in Beves was beyond the control of the insurer. He said:
“Nevertheless, the insurer has had the compensation moneys throughout this period and presumably invested it to its advantage. To paraphrase Bennett, interest is not to be awarded simply on the basis that the respondent ought to have paid the money earlier, but on the more neutral basis that ‘the money has been outstanding for a period during which the defendant has had the benefit of not paying it, and the plaintiff the detriment of not having it’”.
It is not to the point that, had the insurer paid the monies to the NSW Trustee and Guardian, they may have been depleted. What is to the point is, as Moffitt P said, “for some reason”, they have been outstanding, and during that period, the insurer had the benefit of their use. It is also not to the point, as was the case in Beves, that the course of events was outside the applicant’s control.
The orders are set out in the COD.

[2022] NSWPIC 649

23 November 2022