Goulburn Flight Training Centre Pty Limited v Druck

CERTIFICATE OF DETERMINATION OF MEMBER
Citation:	Goulburn Flight Training Centre Pty Limited v Druck & Ors [2023] NSWPIC 35
APPLICANT:	Goulburn Flight Training Centre Pty Limited
FIRST RESPONDENT:	Heather Druck
SECOND RESPONDENT:	BFJ
THIRD RESPONDENT:	Claire Louise Pinder
FOURTH RESPONDENT:	BGI
FIFTH RESPONDENT:	BHG
senior Member:	Kerry Haddock
DATE OF DECISION:	30 January 2023
CATCHWORDS:	WORKERS COMPENSATION - Workplace Injury Management and Workers Compensation Act 1998; claim for interest on lump sum death benefit pursuant to section 109; claim opposed by applicant; consideration of Bennett v Jones, Beves v Patrick Stevedores No 2 Pty Ltd & Anor, Haidary v Wandella Pet Foods Pty Ltd, Kaur v Thales Underwater Systems Pty Ltd, Kathryn Ann Kratz as executrix of the estate of the late Owen Beddall v Qantas Airways Limited, ZKM Pty Ltd v Chen, BCP v Secretary (Department of Communities and Justice) & Ors, JDC Kitchens Pty Ltd v Negherbon & Anor and BJA v NSW Health Service – Arrum Aged Care & Ors; Held – award of interest from the date the claim was “duly made” at a rate 2% above the Reserve Bank of Australia cash rate, apportioned in the same proportions as the lump sum; interest payable to the second, fourth and fifth respondents to be paid to the NSW Trustee and Guardian.
determinations made:	The applicant is to pay to the first respondent, pursuant to s 109 of the Workplace Injury Management and Workers Compensation Act 1998, interest on the sum of $293,562.50 as follows: (a) from 17 June 2022 to 5 July 2022 at the rate of 2.85% per annum; (b) from 6 July 2022 to 2 August 2022 at the rate of 3.35% per annum; (c) from 3 August 2022 to 6 September 2022 at the rate of 3.85% per annum; (d) from 7 September 2022 to 4 October 2022 at the rate of 4.35% per annum; (e) from 5 October 2022 to 1 November 2022 at the rate of 4.60% per annum, and (f) from 2 November 2022 to 30 January 2023 at the rate of 5.10% per annum. 2. The applicant is to pay, pursuant to s 109 of the Workplace Injury Management and Workers Compensation Act 1998, to the NSW Trustee and Guardian, to be held on trust for the second respondent until she attains the age of 18 years, interest on the sum of $209,687.50 as follows: (a) from 17 June 2022 to 5 July 2022 at the rate of 2.85% per annum; (b) from 6 July 2022 to 2 August 2022 at the rate of 3.35% per annum; (c) from 3 August 2022 to 6 September 2022 at the rate of 3.85% per annum; (d) from 7 September 2022 to 4 October 2022 at the rate of 4.35% per annum; (e) from 5 October 2022 to 1 November 2022 at the rate of 4.60% per annum, and (f) from 2 November 2022 to 30 January 2023 at the rate of 5.10% per annum. 3. The applicant is to pay to the third respondent, pursuant to s 109 of the Workplace Injury Management and Workers Compensation Act 1998, interest on the sum of $67,100 as follows: (a) from 3 June 2022 to 7 June 2022 at the rate of 2.35% per annum; (b) from 8 June 2022 to 5 July 2022 at the rate of 2.85% per annum; (c) from 6 July 2022 to 2 August 2022 at the rate of 3.35% per annum; (d) from 3 August 2022 to 6 September 2022 at the rate of 3.85% per annum; (e) from 7 September 2022 to 4 October 2022 at the rate of 4.35% per annum; (f) from 5 October 2022 to 1 November 2022 at the rate of 4.60% per annum, and (g) from 2 November 2022 to 30 January 2023 at the rate of 5.10% per annum. 4. The applicant is to pay, pursuant to s 109 of the Workplace Injury Management and Workers Compensation Act 1998, to the NSW Trustee and Guardian, to be held on trust for the fourth respondent until he attains the age of 18 years, interest on the sum of $134,200 as follows: (a) from 15 June 2022 to 5 July 2022 at the rate of 2.85% per annum; (b) from 6 July 2022 to 2 August 2022 at the rate of 3.35% per annum; (c) from 3 August 2022 to 6 September 2022n at the rate of 3.85% per annum; (d) from 7 September 2022 to 4 October 2022 at the rate of 4.35% per annum; (e) from 5 October 2022 to 1 November 2022 at the rate of 4.60% per annum, and (f) from 2 November 2022 to 30 January 2023 at the rate of 5.10% per annum. 5. The applicant is to pay, pursuant to s 109 of the Workplace Injury Management and Workers Compensation Act 1998, to the NSW Trustee and Guardian, to be held on trust for the fifth respondent until he attains the age of 18 years, interest on the sum of $134,200 as follows: (a) from 15 June 2022 to 5 July 2022 at the rate of 2.85% per annum; (b) from 6 July 2022 to 2 August 2022 at the rate of 3.35% per annum; (c) from 3 August 2022 to 6 September 2022n at the rate of 3.85% per annum; (d) from 7 September 2022 to 4 October 2022 at the rate of 4.35% per annum; (e) from 5 October 2022 to 1 November 2022 at the rate of 4.60% per annum, and (f) from 2 November 2022 to 30 January 2023 at the rate of 5.10% per annum.

STATEMENT OF REASONS

BACKGROUND

The worker, Stephen Hoare (Mr Hoare) was employed by the applicant, Goulburn Flight Training Centre Pty Limited, as a sky diving instructor.
Mr Hoare died on 27 June 2021 when both his main and reserve parachutes failed to deploy correctly during a tandem jump, causing him to fall to the ground.
By letter dated 3 December 2021, solicitors acting for the first respondent, Heather Druck (Ms Druck), Mr Hoare’s widow, made on her behalf and on behalf of the second respondent, BFJ (Nova), their daughter, a claim pursuant to s 25 (for the lump sum death benefit) and s 26 (for funeral expenses) of the Workers Compensation Act 1987 (the 1987 Act).
On 14 December 2021, the applicant’s workers compensation insurer, Insurance & Care NSW (iCare) sent an email to Ms Druck’s solicitors, requesting further information about the claim, including statutory declarations.
By letter dated 21 December 2021, Ms Druck’s solicitors provided some further information. They advised that there were other dependants for whom they did not act, so the matter would need to proceed to the Personal Injury Commission (the Commission), and statements would be prepared at that time. They advised “There is no basis for a request for a statutory declaration”.
Ms Druck also completed a Notification Form on 21 December 2021.
By letter dated 23 March 2022, iCare advised Ms Druck that liability for the claim had been accepted, but it needed to identify how many dependants may be eligible for compensation.
On 25 May 2022, the applicant filed an Application in Respect of Death of Worker (the Application).
The third respondent filed her Reply on 3 June 2022.
The fourth respondent filed his Reply on 15 June 2022.
The fifth respondent filed his Reply on 15 June 2022.
The first respondent filed her Reply as an attachment to an Application to Admit Late Documents dated 17 June 2022.
The second respondent filed her Reply as an attachment to an Application to Admit Late Documents dated 17 June 2022.

ISSUE FOR DETERMINATION

The following issue remains in dispute:
(a) whether interest is to be paid on the death benefit and if so, the rate/s of interest and the period/s over which it is to be awarded.

PROCEDURE BEFORE THE COMMISSION

The matter was listed for preliminary conference before me on 22 June 2022. Mr Myles appeared for the applicant; Mr Masselos appeared for the first and second respondents;
Mr Dababneh appeared for the third respondent; Ms Azer appeared for the fourth respondent; and Mr Tohme appeared for the fifth respondent. Ms Druck attended; Ms Hoare attended as representative for the fourth respondent; and Ms Neil attended as representative for the fifth respondent. Mr Payne of EML and Ms Dean of iCare also attended.
Mr Myles advised that a claim for interest on the lump sum had been made in correspondence. A timetable was set for the service of further evidence and written submissions. The parties were advised that, at the conclusion of the time allowed for submissions, the matter would be determined “on the papers”. They were granted liberty to request a further telephone conference.
The parties requested a further preliminary conference, which was held on
29 September 2022. Mr Myles appeared for the applicant. Mr Masselos appeared for the first and second respondents; Mr Dababneh appeared for the third respondent; Mr Issa and
Ms Le appeared for the fourth respondent; and Mr Tohme appeared for the fifth respondent. Ms Hoare attended as representative for the fourth respondent; and Ms Neil attended as representative for the fifth respondent. Mr Payne of EML and Ms Dean of iCare also attended.
The first and second respondents objected to late documents filed by the fourth respondent, dated 12 July 2022 and 7 September 2022; and by the third respondent dated
23 September 2022. The first respondent had filed late documents dated 31 August 2022, to which no objection was taken by any party.
After hearing the submissions of those parties who wished to be heard, I determined to admit the documents in respect of which objection was taken. The submissions and my reasons were recorded.
The third respondent then made an application for the matter to be listed for conciliation/arbitration hearing, as an application to cross-examine the first respondent, and possibly members of her family, was foreshadowed.
Directions were made for the filing of any further evidence, and for the parties to agree on a suitable date for hearing. It was agreed that submissions on the issue of interest were closed. The applicant would then not need to brief counsel for the hearing, which would assist the parties to agree on a suitable date.
The parties subsequently advised the Commission that they had agreed on
2 December 2022 as the date for conciliation/arbitration hearing.
At the conciliation/arbitration hearing, Mr McCann appeared for the applicant; Mr Stockley of counsel, instructed by Mr Masselos, appeared for the first respondent; Mr Tanner of counsel, also instructed by Mr Masselos, appeared for the second respondent; Ms Grotte of counsel, instructed by Mr Dababneh, appeared for the third respondent; Mr Malouf of counsel, instructed by Mr Issa and Ms Le, appeared for the fourth respondent; and Mr Robison of counsel, instructed by Mr Tohme and Ms Dorey, appeared for the fifth respondent.
The respondents reached agreement on apportionment of the lump sum death benefit, and appropriate findings and orders were made. The parties were unable to agree on the claim for interest on the death benefit.
Mr Tanner, speaking to his written submissions on interest, submitted that interest should be awarded at a rate that is 4% above the Reserve Bank of Australia (RBA) cash rate.
Ms Grotte, speaking to her written submissions, submitted that interest should be awarded at the rate of 5.85%, which is 4%, plus 1.85%, which represented the current RBA cash rate.
Mr McCann relied on the applicant’s written submissions.
The parties were advised that the claim for interest would be determined “on the papers”. They agreed that interest, if it is to be awarded, should be awarded on a pro rata basis.

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 third respondent and attachments;
(c)     Reply by fourth respondent and attachments;
(d)     Reply by fifth respondent and attachments;
(e)     Application to Admit Late Documents dated 8 June 2022 and attachments, filed by third respondent;
(f)     Application to Admit Late Documents dated 17 June 2022 and attachments, filed by first respondent (Reply);
(g)     Application to Admit Late Documents dated 17 June 2022 and attachments, filed by second respondent (Reply);
(h)     Application to Admit Late Documents dated 12 July 2022 and attachments, dated 12 July 2022, filed by fourth respondent;
(i)     Application to Admit Late Documents dated 31 August 2022 and attachments, filed by first respondent;
(j)     Application to Admit Late Documents dated 7 September 2022 and attachments, filed by fourth respondent;
(k)     Application to Admit Late Documents dated 23 September 2022 and attachments, filed by third respondent, and
(l)     Application to Admit Late Documents dated 29 November 2022 and attachments, filed by first respondent.

FINDINGS AND REASONS

As the only matter to be determined is the claim for interest, it is unnecessary that I discuss much of the evidence.

Evidence of the first respondent, Heather Druck

The first respondent’s statement is dated 17 June 2022.
She commenced a college course but completed only two semesters. She worked in various jobs, including in retail; mail room attendant/inventory clerk; barista and shift supervisor; waitress; and in animal care.
She met the worker at Chicagoland Skydiving Centre in May 2018, and they commenced a relationship shortly thereafter. She continued to live at the “drop zone” and work at the animal hospital.
The worker secured work experience in Texas and asked her to come with him. She quit her job in December 2018 and moved to Luling, Texas in January 2019. She was offered a job shortly after, working around 28 hours per week, checking in customers and helping with marketing. She has provided details of her earnings.
She fell pregnant in February 2019, and by April the worker had secured work as an instructor. Skydive Midwest in Wisconsin offered him a position and agreed to sponsor his visa. In April 2019, he bought an RV motorhome for them to live in in Wisconsin.
The worker travelled to England in May 2019, to see his sons and apply for a new visa. He was denied re-entry to the USA and decided to do a base-jumping course in Europe. She agreed to meet him in France in May 2019, and they were married in Gibraltar in July 2019.
The worker returned to England to look for work, and she returned to the USA to live with her parents. Their goal was for him to return to the USA, so they decided to look into a spousal visa.
The worker accepted a job in Uluru and returned to Australia in August 2019. She decided to stay in the USA to have the baby, as she would have assistance with medical costs, and other assistance.
She accepted a role with Target, commencing in early November 2019. She had only been in the job for 1.5 weeks when she went into early labour. BFJ was born in November 2019.
The worker commenced work in New Zealand in January 2020. She and BFJ followed him in March 2020. She arrived on a tourist visa and was totally dependent on the worker.
In late March 2020, the skydiving work in New Zealand started to dry up due to Covid, and they decided to visit the worker’s family in Sydney. They arrived in May 2020, planning to return to New Zealand in July 2020. While they were in Australia, the government closed the border, and they were not permitted to leave. They remained in New South Wales, staying with the worker’s family.
In September 2020, the worker found work as a stonemason. Shortly after, they moved into a flat. They moved to another flat in Mona Vale a couple of months later, and were living there at the time of the accident.
The worker commenced work with the applicant in February 2021. The accident occurred on 27 June 2021.
They were not financially well off at the time of the accident. She has provided details of their outgoings. The worker paid child support for his sons, but she thinks he was behind in his payments. He was prioritising her and their baby, as she was unable to work.
She could not continue living in Australia without financial support. The worker’s family lent her money and paid her airfare to the USA, where she returned on 16 August 2021, and lived with her parents.
Her parents are retired and not well off. They cannot afford to support her and BFJ indefinitely. She cannot afford childcare, so her work options are limited. In December 2021, she started work for Door Dash, doing night meal deliveries three or four days a week. Her parents look after BFJ while she works. She has provided details of her earnings and expenses.
She spends all she earns on living expenses for her and Nova, but still relies on her parents for help. She is not eligible for unemployment benefits. She is receiving food stamps and BFJ has government-funded health insurance until she turns five. Apart from the RV motor home, which she cannot sell because she cannot afford the cost of registration, she has no other assets.
She has always been a low income earner and has limited skills. Their intended roles were that the worker would be the primary breadwinner and she would be Nova’s primary carer.
She and the worker had decided to send BFJ to a Montessori school. She could have returned to part-time low paid work when BFJ was older. They would otherwise have home-schooled Nova, which would have prevented her from working.

Evidence of the second respondent, BFJ

The second respondent relies on the evidence of Ms Druck.

Evidence of the third respondent, Claire Louise Pinder

Ms Pinder’s statement is dated 2 June 2022.
She was married to the worker between April 2010 and May 2019. They lived together in Sydney from November 2005, and in January 2006 they returned to the UK, where they lived together in London until they married.
BGI was born in 2011 and BHG in 2014. Since 2014, they had lived in the family home in Berkshire. They lived in the UK from 2006 to 2018 and travelled to Australia only for holidays.
She and the worker separated in around January 2018, and after mediation and financial settlement, they officially divorced in May 2019.
Their sons took the divorce and the worker leaving the UK in 2018, badly. Lachlan, in particular, had mental health issues.
Arrangements were made and agreed on a background of certain representations by the worker. This importantly included that he would be based in the UK and provide support, both financial and in relation to the children. Arrangements were made for payment of maintenance that was based on the worker’s erratic earnings at the time. It was to be reviewed once he secured stable work, and then annually.
The worker was to have the boys with him for half of each week, and be responsible for other regular expenses, such as clothing, school uniforms, clubs, childcare during school holidays, and after school costs. After the settlement and divorce, he disclosed he wasn’t planning to be based in the UK.
The worker travelled to America in March 2018, returning three times to visit the boys in 2018. He returned to America until June 2019, when he returned to the UK to visit and help with the boys for about a month.
The worker stayed at the family home. He helped with DIY and garden maintenance. He then travelled to Australia for six months and New Zealand for three months. Due to Covid, he wasn’t able to visit and help with the boys. Shortly before the accident, they discussed him coming to visit and help with them in September 2021.
In June 2019, when the worker visited, he disclosed his relationship with Ms Druck, the pregnancy, and the plan to marry so he could apply for a work permit and residency in the USA.
She struggled with the children on her own, and working long hours, with approximately 3.5 hours travel a day. The worker’s financial contribution was expected to be far more, and the payments were irregular and intermittent.
She took a loan from her father to pay for the financial settlement, with an agreement to repay it within five years. The boys could not cope with more changes, so she needed to keep the family home.
Before the divorce, she worked four days a week for Google. She has provided details of her earnings. She was forced to resign, as she could not juggle working in London and the children.
She started work in June 2019 for a Berlin-based company, working four days per week from home, and her earnings were less. She struggled to keep up with living expenses, and lost this job in December 2020, due to Covid.

She was unemployed between December 2020 and March 2021. She had to freeze her mortgage payments for six months.
In March 2021, she found a job with iTech Media in London. She works from home, and has provided details of her earnings. She is expected to travel to London one to two days per week. This is difficult, as travel costs are approximately £85 per day. She cannot afford this, as it is not covered by her company.
Because of the mental health, learning difficulties, and childcare issues with the children, she was forced to move them to a local private school. She has provided details of the associated fees, and how they are expected to increase.
Lachlan’s mental health issues have continued. He has received support, for which she has used her private health insurance. The school has recommended that both boys get support. She does not have the funds to pay for BHG to have an assessment or additional tutoring. She cannot afford further counselling sessions.
She has given details of her outgoings.

Evidence of the fourth respondent, BGI

The fourth respondent relies on a statement of the third respondent, dated 14 June 2022. Some of the evidence is contained in her previous statement.
The fourth respondent has required support and counselling, the details of which it is unnecessary to discuss. He has struggled significantly since his father’s death.

Evidence of the fifth respondent, BHG

The fifth respondent relies on the statement of Fiona Neal, dated 15 June 2022. It does not add substantially to the evidence of the third respondent.

SUBMISSIONS

The parties have provided written submissions, so I will refer to them only briefly.

First respondent

The first respondent submitted that interest should be awarded from the date of the worker’s death to the date of determination, at the rate of 4.1% per annum, to be apportioned pro rata to the lump sum.

Second respondent

The second respondent submitted that liability accrued from the date of death. There has never been any dispute that the relevant lump sum death benefit is payable to the worker’s dependants.
The insurer has, since the date of death, had the benefit of the sum to be disbursed to the dependants. An essential and distinguishing feature of compensation pursuant to s 25 of the 1987 Act is that the benefit is fixed. Its quantum is known from the outset.
The second respondent submitted that it would be inequitable and unconscionable for the insurer to profit from the delay in determination of apportionment of the lump sum, which is not affected by the number of dependants. They should not be deprived of interest that has accrued from the date of death because time has elapsed, through no fault of theirs, before orders for apportionment were made. There is no reason why a single dependant, or those in a less contentious case, should be treated more favourably.
The second respondent submitted that an award of interest is not punitive. It merely compensates the dependant for the loss occasioned by being deprived of the use of the compensation for a period after the right to it accrued, during which time the insurer enjoyed its benefit.
The second respondent referred to the decision of the Court of Appeal in Bennett v Jones [1977] 2 NSWLR 355 (Bennett) [at 370].
The second respondent submitted that the applicant would have been aware on the date of death that it was liable to pay compensation. Interest should run from that date. In the alternative, it should run from 3 December 2021, when the claim was made, being the date on which the insurer was aware that the lump sum was payable.
As regards the rate of interest, the second respondent submitted that it should be awarded as contemplated in Practice Note No. SC Gen 16. The Supreme Court pre-judgment rate of interest, effective from 1 January 2021, is 4.1% per annum, and interest on the lump sum, as apportioned, should be payable at that rate, from 27 June 2021.

Third respondent

The third respondent submitted that interest compensates for the loss occasioned by the dependants being deprived of the use of the compensation from the time the claim was duly made to the time of determination. During this period, the insurer has enjoyed the benefit of the funds. It is appropriate that interest be paid on the lump sum payable to her.
The third respondent submitted that the claim was “duly made” when the relevant particulars were provided. This was on 25 January 2022, when the investigation was completed, at which time the insurer had sufficient details to accept liability and be aware of potential dependants.
The third respondent submitted the Commission has a broad discretion under s 109 of the 1998 Act in respect of the rate of interest. The practice has developed to award 2% per annum or thereabouts, but such a rate has no reasoned rationale as its foundation. It is inconsistent with Practice Note SC Gen 16.
The third respondent submitted that, for the sake of comity, uniformity and certainty, the interest rate to be applied ought to be 5.85%, which is 4%, plus 1.85%, representing the current RBA cash rate.

Fourth respondent

The fourth respondent submitted that interest should commence to run as at the date the claim was first made on the applicant, apportioned pursuant to the apportionment ordered in respect of the death benefit. He adopted the first respondent’s submissions, submitting that interest should be paid from the date of death to the date of determination, at the rate of 4.1% per annum, apportioned pro rata to the lump sum.

Fifth respondent

The fifth respondent adopted the submissions of the second respondent and submitted that interest should be paid at the rate of 4.1% per annum from the date the claim was duly made, which was when he filed and served his Reply on 15 June 2022.

Applicant

The applicant submitted that no order for interest should be made. It is well settled that an application [sic] for interest is discretionary, and there are circumstances where, even though an insurer may have been holding the monies payable, it is not appropriate to order interest.
The applicant referred to decisions such as Lloyd v T Rainsford Pty Ltd (ATF FrapaulmarTrust) [2022] NSWPIC 357 (Lloyd) and Jason B and Natasha N Cullinan v Cullinan & Ors [2022] NSWPIC 7, and submitted a similar finding should be made, when regard is given to the timeframes.
The applicant submitted that it was the party that progressed investigations; and made every attempt to proactively and promptly determine liability and seek information, seeking statutory declarations as early as 12 December 2021. This was not provided by the first and second respondents until 17 June 2022.
A statement of dependency was not received from the third respondent until 3 June 2022, when her Reply was filed. Further evidence was filed on 8 June 2022. The fourth and fifth respondent’s Replies were not received until 15 June 2022.
The applicant submitted that the first respondent was requested to provide evidence of dependency on 12 December 2021, and again when notified on 23 March 2022 that liability could be accepted, but it was not forthcoming until much later.
The applicant submitted that it was prepared to resolve the matter at the teleconference on 22 June 2022, when the only impediment was that the respondents had not agreed on dependency. It submitted the matter ought to have resolved, less than a week after the evidence of all parties was served.
The applicant submitted it should not be prejudiced by the conduct of the other parties and ordered to pay interest when it has, at all times, been proactive in trying to resolve the claim.
In the alternative, the applicant submitted that the respondents’ arguments about the payment and calculation of interest have been rejected by the Commission on many occasions.
The applicant submitted that s 109 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) mandates that a claim for interest cannot be made [sic] prior to a claim having been duly made. It referred to Kaur v Thales Underwater Systems Pty Ltd [2011] NSWWCCPD 6 (Kaur).
The applicant submitted that it is irrelevant that the quantum of the death benefit is known immediately, because it cannot be paid until the relevant dependants are known and claims duly made. There are multiple instances of the Commission having confirmed that the date on which the claim is duly made is not the date of the first notification, or the date at which an insurer accepts liability. (Emphasis in original).
The applicant submitted that the date at which a claim was duly and properly made was the date at which full particulars of the claim for dependency were provided. It referred to decisions such as Mudgee Explorer Tours Pty Ltd v Clarke [2021] NSWPIC 41 (Clarke); Youseph v Homebush Unit Trust t/as Primo Smallgoods [2021] NSWPIC 299; Lloyd; and Nightingale Transport (QLD) Pty Limited v Boulmetis and Others [2022] NSWPIC 366.
The applicant submitted that the dates at which proper evidence was served by the respective respondents, and therefore the dates, if interest is awarded, from which it should be awarded, are:
(a)     first and second respondents: 17 June 2022;
(b)     third respondent: 3 June 2022, and
(c)     fourth and fifth respondents: 15 June 2022.
The applicant adopted the fifth respondent’s submission as to the date the claim was duly made. He is the only respondent to have conceded that his claim was duly and properly made only once the Reply was filed.
The applicant submitted that none of the applicants has referred to any decision of the Commission where the rate of interest in a claim for the death benefit was considered, or any decision where 4.1% per annum was found to be appropriate.
The applicant referred to Clarke; Grayling v Pickering Transport Pty Ltd [2021] NSWPIC 90; Hu v Rongfar Property Service Pty Ltd [2021] NSWPIC 95; Bott v Workers Compensation Nominal Insurer (iCare) [2021] NSWPIC 474; Frimon Pty Ltd t/as Viel & Santin Transport v Johnson & others [2022] NSWPIC 78; ZKM Pty Ltd v Chen [2022] NSWPIC 108 (Chen); and Wilson v State of New South Wales & others [2022] NSWPIC 396.
In the alternative, the applicant referred to matters in which the Commission ordered interest at 2.1% per annum during 2022: O’Connor v State of New South Wales (Ambulance Service of NSW) [2022] NSWPIC 27; and McGrath v P.M. Electric Pty Ltd & Ors [2022] NSWPIC 263.
The applicant submitted that the arguments that interest should be paid at or above the Supreme Court rate, or that it is inconsistent for the Commission to adopt different rates to the courts, have been rejected in matters such as Hughes Helicopters Pty Ltd v Brink [2021] NSWPIC 393; Clarke; and Chen. Section 109 of the 1998 Act is discretionary, which differentiates it. Little or no weight can be attributed to submissions that Supreme Court rates should apply.
The applicant submitted that, in exercising its discretion, the Commission has regard to the rates a claimant could obtain from a financial institution. That gives proper regard to the marketplace, as discussed by Barwick CJ in Ruby v Marsh [1975] HCA 32; (1975) 132 CLR 642, which was relied on in Brink and Clarke.
The applicant submitted there is utility in the Commission providing certainty, predictability and consistency in decisions on interest, which is a proper and plausible reason to maintain the practice of awarding it at 2% per annum. The Commission has issued a litany of decisions over the past two years, noting that it would be unjust to award interest at a rate in excess of anything that could be expected in any reasonable financial institution.
The applicant does not dispute that the cash rate has very recently been increased, but again submitted the matter could have been resolved in June 2022. It is therefore appropriate to maintain the position the Commission has adopted in past matters on the rate of interest.
The applicant’s primary position is that any order for interest should be calculated at 2% per annum. Alternatively, the order for interest ought to be no more than 2.5% per annum, but only from the date at which the RBA cash rate exceeded 0.5% per annum I(from 8 June 2022).
The applicant submitted that, if interest is awarded, it should be apportioned in the same way as the death benefit.

SUMMARY

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 v Wandella Pet Foods Pty Ltd [2005] NSWWCCPD 9, 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.”
“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 (WCC 533/19).
It is possible for claims to be “duly made” at different times.
The applicant’s submission that no order for interest should be made because it attempted to promptly determine and progress the matter is rejected. As was held in Haidary, an award of interest is intended to compensate the worker, or in this case the respondents, not to punish the employer.
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.”
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 noted that what transpired in Beves was beyond the insurer’s control, but:
“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’.”
Regardless of the steps taken by the insurer to progress or resolve the claim, the fact remains that it has had the benefit of the compensation, and the respondents have not. I intend to exercise my discretion to make awards of interest.
As Arbitrator Sweeney pointed out in Beves, the common law principles must be considered in the light of s 109 of the 1998 Act.
The submissions that interest should be ordered from the date of the worker’s death, or when the investigation was completed, are rejected. They ignore the authority of Kaur, which has been consistently applied in the Commission.
The respondent’s claims were not “duly made” until full particulars of their claimed dependency were provided. The first respondent was asked to provide further evidence of dependency in December 2021 and did not do so.
The fifth respondent has, properly in my view, submitted that his claim was duly made when his Reply was filed and served on 15 June 2022. The respective parties’ claims were “duly made” when they filed and served their Replies, attaching their evidence as to dependency on the worker.
I accept the applicant’s alternative submission that the respondents’ claims were duly made on the following dates:
(a)     first respondent: 17 June 2022;
(b)     second respondent: 17 June 2022;
(c)     third respondent: 3 June 2022;
(d)     fourth respondent: 15 June 2022, and
(e)     fifth respondent: 15 June 2022.
As regards the rate at which interest is to be awarded, there is no prescribed rate of interest, and the Commission does not have a standard applicable interest rate.
While the applicant submitted that interest, should it be awarded, should be awarded at 2% per annum, in comity with previous decisions of the Commission, more recently awards of interest have been made a higher rate, taking into account the recent rises in the cash rate. For example, the decisions in ZKM Pty Ltd v Chen [2022] NSWPIC 108; BCP v Secretary (Department of Communities and Justice) & Ors[2022] NSWPIC 615; JDC Kitchens Pty Ltd v Negherbon & Anor [2022] NSWPIC 531 and BJA v NSW Health Service – Arrum Aged Care & Ors[2022] NSWPIC 601.

In my view, the appropriate rate at which interest should be awarded is the rate that is 2% above the RBA cash rate at the relevant date, to be awarded to each respondent from the date on which he or she duly made the claim; and apportioned in accordance with the apportionment of the lump sum. The interest payable to the second, fourth and fifth respondents is to be paid to the NSW Trustee and Guardian.
The orders are as set out in the Certificate of Determination.

[2023] NSWPIC 35

30 January 2023