Hu v Rongfar Property Service Pty Limited - [2021] NSWPIC 95

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	Hu v Rongfar Property Service Pty Ltd [2021] NSWPIC 95
APPLICANT:	Yinzhi Hu
FIRST RESPONDENT:	Rongfar Property Service Pty Ltd
SECOND RESPONDENT:	Jing Sun
THIRD RESPONDENT:	Fengliang Sun
FOURTH RESPONDENT:	Emily Wang
MEMBER:	Ms Kerry Haddock
DATE OF DECISION:	27 April 2021
CATCHWORDS:	WORKERS COMPENSATION- Claim for interest pursuant to section 109 of the 1998 Act on death benefit payable pursuant to section 25 of 1987 Act, where apportionment agreed; Haidary v Wandella Pet Foods Pty Limited, Dynamix Pty Ltd and Burragong Foods Pty Ltd and Kaur v Thales Underwater Systems Pty Ltd considered; consideration of when the claim was “duly made”; Held- claim was duly made when it was fully particularised by provision of evidence of dependency; interest apportioned equally; Civil Procedure Act 2005 not applied; interest awarded at 2% per annum from the date claim was fully particularised to date of hearing.
DETERMINATIONS MADE:	1. That the first respondent is to pay, pursuant to section 109 of the Workplace InjuryManagement and Workers Compensation Act 1998, interest as follows: (a) to the applicant on the sum of $275,800 at the rate of 2% per annum from 21 December 2020 to 14 April 2021; (b) to the second respondent on the sum of $275,800 at the rate of 2% per annum from 21 December 2020 to 14 April 2021, and (c) to the third respondent on the sum of $275,800 at the rate of 2% per annum from 21 December 2020 to 14 April 2021.

STATEMENT OF REASONS

BACKGROUND

The worker, Zhirong Sun (Mr Sun), sustained injury in the employ of the first respondent, Rongfar Property Service Pty Ltd (Rongfar) on 3 May 2020 when he fell from a ladder while trimming a hedge, striking his head. Mr Sun died as a result of his injuries on 1 June 2020.
On 9 June 2020, Mr Sun’s widow, Ms Yinzhi Hu, completed an iCare Workers Insurance Notification Form (the Notification). Ms Hu made a claim for the death benefit pursuant to section 25 of the Workers Compensation Act 1987 (the 1987 Act), claiming to have been dependent on the worker. She provided details of other dependants, being Ms Jing (Fran) Sun, the worker’s daughter; and Mr Fengliang Sun, the worker’s son.
On 5 July 2020, Ms Hu, Ms Sun and Mr Sun entered into an Insurance Compensation Distribution Agreement (the Agreement), whereby they agreed that the total amount of compensation was to be shared equally between them.
On 10 September 2020, Icare advised Ms Sun (to whom its Case Management Specialist had spoken by telephone) that liability for the claim had been accepted. Icare would therefore pay the lump sum payment of $827,400; funeral expenses up to $15,000; and weekly payments for each dependent child. Icare advised Ms Sun that, before it could pay, it needed her help to identify how many dependants were eligible for compensation.
Ms Hu filed an Application in Respect of Death of Worker (the Application) on 16 October 2020. She joined Rongfar, Ms Sun and Mr Sun as respondents. The Application sought apportionment of the death benefit between Ms Hu, Ms Sun and Mr Sun.
On 17 November 2020, the Registrar’s Delegate directed that Ms Emily Wang (Emily) be joined to the proceedings as the fourth respondent. Emily is the daughter of Ms Sun, the second respondent. As Emily is a minor, her father, Mr David Wei Wang, acted as her tutor. Emily was directed to file a Reply by 8 December 2020.
On 16 December 2020, I directed the applicant to file and serve evidence with respect to dependency by 23 December 2020.
All other parties were granted leave to submit further evidence by 8 January 2021.
The applicant, second, third and fourth respondents were directed to file and serve written submissions on the issues of apportionment and interest by 22 January 2021.
The parties were granted leave to file and serve submissions in reply by 29 January 2021 and granted leave to apply in respect of the timetable.
On 21 December 2020, the applicant filed evidence with respect to dependency.
On 21 December 2020, the third respondent filed evidence with respect to the possible dependency of his son, Haoyuan Sun.
On 22 January 2021, the applicant filed her submissions.
On 29 January 2021, the third respondent filed his submissions.
On 29 January 2021, the second respondent filed evidence as to dependency and her submissions.
On 1 February 2021, the first respondent filed its submissions.
On 12 February 2021, the fourth respondent filed her submissions.

ISSUES FOR DETERMINATION

The parties agree that the following issues remain in dispute:

(a) whether the first respondent is required to pay interest on the death benefit, and
(b) if so, the amount of interest and the period over which it is to be paid.

PROCEDURE BEFORE THE COMMISSION

The matter was listed for conciliation/hearing on 14 April 2021.
Ms Grotte, instructed by Ms Ang, appeared for the applicant; Mr Stockley, instructed by Mr Michael, appeared for the first respondent; Mr Hammond, instructed by Ms Alfan, appeared for the second respondent; Ms Balendra, instructed by Ms Liu, appeared for the third respondent; and Mr Loukas, instructed by Ms Azer, appeared for the fourth respondent.
The applicant, the second respondent, the third respondent, and Mr Wang were present. Ms Dean and Ms Small from iCare and Ms Osnabrugge from EML also attended. Mr Li, interpreter in Mandarin, was also present.
Ms Osnabrugge confirmed that the first respondent has attended to payment of the worker’s funeral expenses.
The parties agreed on a proposed apportionment of the death benefit. I was satisfied that the agreed apportionment was appropriate in the circumstances and consent findings and orders were made.
The first respondent and the other parties were unable to agree on whether interest should be paid on the death benefit, and, if so, the appropriate award of interest, or the period in respect of which it should be awarded. It was therefore necessary that I determine that dispute.
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 that 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 attached documents;

(b)    Reply by first respondent and attached documents;

(c)    Reply by third respondent and attached documents;

(d)    Reply by fourth respondent and attached documents;

(e)    Application to Admit Late Documents dated 10 November 2020 and attached documents, filed by the applicant;

(f)    Application to Admit Late Documents dated 13 November 2020 and attached documents (Reply), filed by the second respondent;

(g)    Application to Admit Late Documents dated 8 December 2020 and attached documents, filed by the applicant;

(h)    Application to Admit Late Documents dated 21 December 2020 and attached documents, filed by the applicant;

(i)    Application to Admit Late Documents dated 21 December 2020 and attached documents, filed by the third respondent;

(j)    Application to Admit Late Documents dated 29 January 2021 and attached documents (including submissions), filed by the second respondent;

(k)    Application to Admit Late Documents dated 1 February 2021 and attached documents (including submissions), filed by the first respondent, and

(l)    Application to Admit Late Documents dated 12 February 2021 and attached documents (including submissions), filed by the fourth respondent.

Oral Evidence

There was no application by any party to call oral evidence or cross-examine any witness.

FINDINGS AND REASONS

Evidence

Given that consent orders have been entered into in respect of apportionment, it is unnecessary that I refer in detail to most of the evidence.
I will refer to the events that are relevant to the issue of an award of interest.
The applicant completed the Notification on 9 June 2020.
The applicant, the second respondent and the third respondent entered into the Agreement on 5 July 2020.
Icare accepted liability for the claim and requested help in identifying the dependants by letter dated 10 September 2020.
The Application was filed on 16 October 2020.
At the telephone conference on 17 November 2020, the Registrar’s Delegate directed that Emily be joined as a party to the proceedings. This is assumed to be due to the evidence of her mother, the second respondent, of payment by the worker and the applicant of Emily’s school fees. Emily attends a school for children with special needs.
The fourth respondent filed her Reply on 8 December 2020. She relied on the evidence filed by the second respondent with respect to her dependency.
At the telephone conference on 16 December 2020, I directed the applicant to file and serve evidence with respect to dependency by 23 December 2020, as there was no such evidence attached to the Application.
The applicant filed evidence of dependency on 21 December 2020.
Consent orders with respect to the apportionment of the death benefit were made on 14 April 2021.

Legislation

Section 25 of the 1987 Act provides:
“Death of worker leaving dependants
(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:
“Apportionment of payments between dependants
(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 Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) provides:

“109 Interest before order for payment

(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.”

SUBMISSIONS

The parties’ submissions have been recorded, so I will refer to them only briefly. I have also had regard to their written submissions.

Applicant

The applicant, in her written submissions, submitted that interest should be calculated from the date of the worker’s death. She made no submission as to the rate of interest that should be paid.
Ms Grotte, for the applicant, in oral submissions, submitted that the point of departure is section 109(2)(b) of the 1998 Act. Interest is payable once the claim is “duly made”. It is within the discretion of the Commission.
The applicant submitted that the claim was duly made on 9 June 2020, the date of the Notification. The dependants were identified and there are no other dependants. She submitted that section 282 of the 1998 Act is relevant. All relevant particulars had been made known to the insurer.
The applicant submitted that, for a claim to be duly made, it need not have been accepted by the insurer, not all dependants need to have been identified, or proof given to the insurer to support the claim for dependency.
If I were to be against the applicant with respect to her first submission, she submitted that the next logical date from which interest should run is 10 September 2020, when the claim was accepted. It is not the case that the claim is not ready until the Application is filed.
As for the rate of compensation, the applicant submitted that section 109(1) of the 1998 Act provides that this is at the discretion of the Commission. She noted that other members of the Commission appear to have adjudicated this rate as 2%. She submitted that there would only be the question of comity, but there is no rationale for awarding 2%. It is an arbitrary figure and I am not required to follow it.
The applicant submitted that I may take guidance from District Court Practice Note Number 15, which refers to sections 100(1) and 100(2) of the Civil Procedure Act2005. It sets the interest rate at 4% above the cash rate, which is set by the Reserve Bank. The cash rate is currently 0.25%. The applicant submits that the current low interest rates are already taken into account by the fact that 4% is set by reference to the cash rate.
The applicant’s primary submission was that interest should be ordered on the death benefit at 4.25% per annum from 9 June 2020, apportioned equally between the three dependants. Her alternative submission was that interest should be paid on the same basis, but from 9 September 2020.
In reply to the first respondent, the applicant submitted that the first respondent was satisfied as at 10 September 2020 regarding the claim for dependency. The death benefit becomes payable if there is a dependency. There is no need to articulate competing claims at that point. If there is only one dependant, that dependant gets all of the benefit. The amount does not increase if there is more than one dependant.
The applicant submitted that another potentially relevant date was 5 July 2020, when the Agreement was entered into.
As for the rate of interest, the applicant submitted that the discretion provided for by section 109 is not predicated on whether the insurer did or did not determine the claim with a lack of alacrity. An award of interest is not a punishment, but simply something available under the legislation. It is solely attached to when a claim is duly made.

First respondent

Mr Stockley, for the first respondent, submitted that the discretion referred to in section 109(1) is subject to the limitation set by section 109 itself, and fettered by section 109(2), which refers to any period before the claim was duly made. The legislation does not contain any definition of when a claim is duly made. Section 282 of the 1998 Act does not contain a definition in terms of a claim for the death benefit.
The first respondent submitted that, applying a non-technical approach, the claim must contain some element that articulates what the claimant wants, in such a way as to allow the respondent to determine the claim. In the case of a death claim, the first question that might arise is whether any amount is payable.
The first respondent submitted that it was not until the competing claims of the dependants were articulated that the claim was made. It was not until then that it knew to whom to pay compensation. The notion of a claim being duly made cannot be satisfied by the Notification. It is a necessary part of the claim being made, but that is all.
The first respondent submitted that the next possible date that a claim was made was when the Application was filed in the Commission. It identified three dependants, but a further Reply was filed in due course, on 8 December 2020, identifying a potential fourth dependant.

It should be noted that the first respondent’s written submissions submitted that there should be no award of interest before the Application was filed on 16 October 2020; and that interest should not exceed 2%.
The first respondent submitted that the matter was not in a position to proceed at the telephone conference on 16 December 2020, when a direction was made with respect to dependency. The next possible relevant date was when the direction was complied with on 21 December 2020.
The first respondent submitted that, once the fourth respondent acknowledged the agreement between the other respondents, the claim was duly made. So, the next possible date was 12 February 2021, when the fourth respondent made her submissions.
The first respondent submitted that there had never been a liability issue, and the insurer had dealt with the matter in an appropriate way. The statutory amount is regularly indexed, and the apportionment was made within 12 months of the date of the worker’s death. Interest in workers’ compensation is different from that in the District Court and Supreme Court. The Commission has its own regime.
The first respondent finally submitted that the award of 2% interest is not arbitrary. It exceeds anything the Big 4 banks would pay. It submits I should adhere to the approach of my fellow members; and that interest is not payable for any period before Emily’s concession.

Second respondent’s submissions

The second respondent largely adopted the applicant’s submissions but added that the Notification is headed “Report a Fatality or Make a Fatality Claim”. The applicant had ticked the box marked “yes” next to the question of whether she was making a claim for death benefits. On that basis, the second respondent submitted that I would accept the claim was duly made on that date.

Third respondent’s submissions

The third respondent relied on his written submissions, in which he submitted that interest should be paid at the rate of 4% from the date of the worker’s death and divided proportionately.

Fourth respondent’s submissions

The fourth respondent adopted the first respondent’s submissions.

SUMMARY

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, whilst the discretion is wide, regard must be had to the facts of the case.
In Haidary v Wandella Pet Foods Pty Limited, Dynamix Pty Ltd and Burragong Pet Foods Pty Ltd [2005] NSWWCCPD 9 (Haidary), 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 NSW CCR; Healey v McPherson Binding Pty Ltd (1989) 5 NSWCCR 139).”
Applying Haidary, I believe it is appropriate to make an award of interest, and I propose to exercise my discretion to do so.
There is no legislative provision that provides for a time limit in which an insurer is required to determine a claim pursuant to section 25 of the 1987 Act. There is no requirement that a claimant provide specific information or evidence. Accordingly, the legislation does not require specific material to be served in making a claim for the death benefit pursuant to section 25 of the 1987 Act. I do not accept that section 282 of the 1998 Act is relevant.
In Kaur v Thales Underwater Systems Pty Ltd [2011] NSWWCCPD 6 (Kaur), 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 the compensation 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.”
In view of the decision in Kaur, the submission that interest is payable from the date of the worker’s death is rejected.
The phrase “duly made” has been held to mean “fully particularised”, and 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 Shanika Cooper v G & W Mudgee Concreting Pty Ltd & Ors (WCC6411/18) and his own decision in Lavelle v David Paul Browne & Ors (WCC533/19), in which he agreed with Arbitrator Wynyard’s approach. Arbitrator Wynyard took a similar approach in the recent decision of Mudgee Explorer Tours Pty Ltd v Clarke [2021] NSWPIC 41 (Clarke).
In Kratz, Arbitrator Isaksen refused to order interest in circumstances where, only a matter of days before the arbitration hearing, the applicant filed evidence that addressed the possible dependency of the worker’s birth mother. He did not regard the claim as having been fully particularised until that evidence was provided.
I intend to approach the issue of when the claim was “duly made” by considering when it was fully particularised.
The applicant, the second respondent and the third respondent agreed on an apportionment of liability on 5 July 2020. That apportionment was ultimately approved by the Commission. However, the Application, which was filed on 16 October 2020, did not provide any evidence as to the relative dependency, if any, of each party. The Commission had to be satisfied on the evidence that the agreement of the parties was appropriate.
The third respondent provided evidence of his dependency when he filed his Reply on 4 November 2020. He provided evidence on 21 December 2020 that no claim was made on behalf of his son, who was born after the worker’s death.
The second respondent provided evidence of her dependency when she filed her Reply on 13 November 2020. She also provided some evidence regarding payment by the worker of the fourth respondent’s school fees. In the circumstances, and where the fourth respondent was not found to be a dependant, I am prepared to accept that she had provided relevant evidence at that stage.
The applicant did not provide evidence of her dependency until 21 December 2020, having been directed to do so on 16 December 2020.
In my view, the claim was not fully particularised until 21 December 2020, when the applicant provided proof of her dependency.
In the matter of Clarke, Arbitrator Wynyard ordered that interest be paid for different periods to each dependant, in accordance with when his claim was made. In circumstances where the applicant and the third respondent have submitted that any interest ordered should be equally apportioned; the second and fourth respondents have largely adopted the applicant’s submissions; and where the first respondent did not submit otherwise, it seems to me that it is appropriate to apportion the interest equally. I will therefore allow interest on the entitlement of the applicant, the second respondent and the third respondent, from 21 December 2020.
As to the rate at which interest is to be paid, in Clarke, Arbitrator Wynyard referred to the decision of Arbitrator Isaksen in Cameron v Enviro Pallets Pty Ltd (Unreported No 2070/20), in which he said:
“The rate of interest provided by Rule 36.7(1) of the Uniform Civil Procedure Rules 2005 is 4% above the cash rate set by the Reserve Bank, but the Commission is not bound by that. I consider regard must be had for the economic circumstances that the nation as a whole is now facing and that 2% above the cash rate is a more reasonable and realistic rate that should be paid on the lump sum death benefit for the period that I have allowed”.
Arbitrator Wynyard was also referred to a number of other decisions in which the rate of 2% had been applied to an award of interest. He agreed with the approach of Arbitrator Isaksen and awarded interest at the rate of 2%. While I am not bound by those decisions, it appears to me to be an appropriate rate. It is unlikely that any of the dependants would achieve an interest rate of 4.25% should they invest the lump sum with any bank at this time.
I therefore make the following awards:
(a)    the first respondent is to pay to the applicant interest on the sum of $275,800 for the period from 21 December 2020 to 14 April 2021, at the rate of 2% per annum;

(b)    the first respondent is to pay to the second respondent interest on the sum of $275,800 for the period from 21 December 2020 to 14 April 2021, at the rate of 2% per annum, and

(c)    the first respondent is to pay to the third respondent interest on the sum of $275,800 for the period from 21 December 2020 to 14 April 2021, at the rate of 2% per annum.

Kerry Haddock
MEMBER

27 April 2021