Kula Systems Pty Ltd v Workers Compensation Nominal Insurer

[2019] NSWWCCPD 68

DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR

CITATION:

Kula Systems Pty Ltd v Workers Compensation Nominal Insurer [2019] NSWWCCPD 68

APPELLANT:

Kula Systems Pty Ltd

RESPONDENT:

Workers Compensation Nominal Insurer

Appellant’s INSURER:

Uninsured

FILE NUMBER:

A3-6271/16

ARBITRATOR:

Mr J Wynyard

DATE OF ARBITRATOR’S DECISION:

5 April 2019

DATE OF APPEAL DECISION:

20 December 2019

SUBJECT MATTER OF DECISION:

Monetary threshold required by s 352(3) of the Workplace Injury Management and Workers Compensation Act 1998; appeal solely in relation to costs – application of Grimson v Intergral Energy [2003] NSWWCCPD 29; monetary threshold not met

PRESIDENTIAL MEMBER:

Deputy President Elizabeth Wood

HEARING:

On the papers

REPRESENTATION:

Appellant:

Mr J Hallion, counsel

Novakovic Lawyers

Respondent:

Mr P Morris SC, counsel

Sparke Helmore Lawyers

ORDERS MADE ON APPEAL:

1.           The monetary threshold pursuant to s 352(3) of the Workplace Injury Management and Workers Compensation Act 1998 has not been met and there is no right to appeal.

INTRODUCTION

1.           This appeal is an appeal brought by Kula Systems Pty Ltd (the employer) against the same decision of the Arbitrator as the appeal brought by the Workers Compensation Nominal Insurer in appeal no A2-6271/16 – Workers Compensation Nominal Insurer v Kula Systems Pty Ltd.

2.           The facts and history relating the claim are summarised in the background to the matter as set out in the Nominal Insurer’s case and because of the narrow scope of this appeal, it is not necessary to repeat the entire history here. It is sufficient to note that the employer did not hold a workers compensation policy of insurance at the time a worker, Mr Aleksandar Ognjenovic was injured.

3. The Workers Compensation Nominal Insurer (the Nominal Insurer) served a notice on the employer pursuant to s 145(1) of the Workers Compensation Act 1987 (the 1987 Act) seeking reimbursement of work injury damages paid by the Nominal Insurer to the worker in accordance with a deed of release, which was signed by the worker, the Nominal Insurer and the employer.

4.           The employer applied to the Commission for a determination of its liability in accordance with s 145(3) of the 1987 Act in respect of the payment for which the Nominal Insurer sought reimbursement.

5.           Following a protracted history, the matter proceeded to arbitration. The employer sought a costs order against the Nominal Insurer.

6.           The Arbitrator issued a Certificate of Determination (COD) dated 9 April 2019, determining that the employer was not liable to reimburse the Nominal Insurer for the work injury damages paid to the worker. The Arbitrator did not include a costs order.

7.           The employer appeals from the failure by the Arbitrator to order costs in its favour.

ON THE PAPERS

8. Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) provides:

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

9.           Both parties are content for the matter to be determined on the papers.

10.         I have had regard to Practice Directions Nos 1 and 6; the documents that are before me, and the submissions by the parties that the appeal can proceed to be determined on the basis of these documents. I am satisfied that I have sufficient information to proceed ‘on the papers’ without holding any conference or formal hearing and that this is the appropriate course in the circumstances.

THRESHOLD MATTERS

11.         The employer filed an Application – Appeal Against Decision of Arbitrator on 6 May 2019 (the appeal). The appeal did not comply with Practice Direction No 6. A delegate of the Registrar issued a direction dated 8 May 2019, directing the employer to file an amended appeal to comply with the Practice Direction, and to include submissions as to the reasons the appeal was lodged out of time. The employer was also directed to make submissions as to whether the threshold to appeal pursuant to s 353(3) of the 1998 Act has been met.

12.         The employer filed an amended appeal on 22 May 2019.

13.         The employer submitted that it obtained advice from counsel as to whether it should appeal solely in respect of the costs order and counsel advised that the employer would require leave to appeal a costs order pursuant to s 353 of the 1998 Act, which would not be likely to be given unless the substantive matters in the proceedings were appealed.

14.         The employer made further submissions as to when it became aware of the appeal filed by the Nominal Insurer and the reasons for the delay in filing the appeal, as well as why leave ought to be granted to appeal the costs order.

15.         The Nominal Insurer submits that the employer’s reliance on s 353 is misplaced because that section applies to appeals from a decision of a Presidential member of the Commission to the Court of Appeal. The employer submits that the only mechanism to appeal an arbitrator’s decision is s 352(3) of the 1998 Act, which provides that an amount of compensation of at least $5,000 must be at issue, and costs are not compensation.

Discussion

16.         The employer’s reliance on s 353 of the 1998 Act is misplaced. That section deals with appeals from a Presidential member to the Court of Appeal and requires that an application for leave to appeal is required if, among other matters, the appeal is limited to an appeal about costs. Section 352 does not allow for an application to be brought by leave and satisfaction of the threshold requirement as to the quantum of compensation at issue is mandatory. The section speaks of there being “no appeal under this section” which is prohibitive of an appeal being brought when the monetary threshold has not been satisfied. There is, therefore, no discretion vested in the Commission to otherwise grant leave to appeal.

17.         Section 4 of the 1998 Act defines “compensation” as “compensation under the Workers Compensation Acts, and includes any monetary benefit under those Acts”.

18.         Section 352(3) provides:

“There is no appeal under this section unless the amount of compensation at issue on the appeal is both:

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

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

19.         There must therefore be “an amount of compensation at issue” in order to bring an appeal.

20.         The question of whether an order pertaining to costs constitutes “an amount of compensation” has been considered in a number of Presidential appeals and by various Presidential members.

21.         In Grimson v Integral Energy, Deputy President Fleming observed:

“The decision ‘no order as to costs’ clearly does not concern an ‘amount of compensation’, either in the appeal, or in the original claim. The costs associated with an application to the Commission are not themselves an amount of compensation under the Workers Compensation Acts. ‘Compensation’ is defined in section 4 of the 1998 Act as ‘compensation means compensation under the Workers Compensation Acts, and includes any monetary benefit under those Acts’. Chapter 4 of the 1998 Act deals with ‘Workers Compensation’. Part 3 of the 1987 Act deals with ‘Compensation-Benefits’. In the circumstances of this case there was no ‘amount of compensation at issue’ as the substantive proceedings had been discontinued. This itself raises a question as to the power to award costs which, given the conclusion I have reached on the leave issue, is not a matter that need be finally decided in this appeal.”

22.         The decision in Grimson has been consistently followed in numerous Presidential decisions. Acting Deputy President Roche (as he then was) followed Deputy President Fleming’s reasoning in Sorbello v Yellamo Pty Ltd and came to the same conclusion, that is, that costs could not be “an amount of compensation.”

23.         Deputy President Byron also applied Grimson in Roads and Traffic Authority v Warden and formed the view that:

“Where an appeal relates only to an issue of costs there is no dispute before the Commission, constituted by a Presidential Member, about an amount of compensation between the parties, as required by section 352(2) of the 1998 Act.”

24.         President Keating took the same approach in El-Said v 3WJ Pty Limited. After citing Grimson and other Presidential decisions on point, his Honour concluded that:

“The only order made by the Arbitrator, other than recording the discontinuance was an order awarding costs in favour of the Respondent under section 112 of the 1998 Act, after the Worker sought to discontinue the proceedings. The appeal does not relate to an ‘amount of compensation’ but relates to the Arbitrator’s order as to costs.

I am satisfied that the decisions referred to above are correct and an appeal in relation to a costs order does not meet the threshold requirements in section 352(2) and therefore leave to appeal is refused. Having made this order it is unnecessary to consider the Appellant’s grounds of appeal.”

25.         At the time these decisions were made, appeals pursuant to s 352 of the 1998 Act required leave to be granted, and the former s 352(2) (the equivalent provision to the current s 352(3)) provided that leave could not be granted unless the monetary threshold was met. Appeals from decisions of arbitrators made from 1 February 2011 do not require leave to appeal, but the same prohibition in relation to the monetary threshold applies.

26.         I note that, although invited to do so, the employer made no submissions about the threshold requirements. I see no reason to depart from the consistent reasoning and conclusions reached in the above cases. In this case, the monetary thresholds pursuant to s 352(3) have not been satisfied and there is no right to appeal.

DECISION

27.         The monetary threshold pursuant to s 352(3) of the 1998 Act has not been met and there is no right to appeal.

Elizabeth Wood

Deputy President

20 December 2019