Leece v Nuveen Real Estate (Australia) Ltd
[2024] NSWPIC 269
•23 May 2024
| CERTIFICATE OF DETERMINATION OF MEMBER | |
| CITATION: | Leece v Nuveen Real Estate (Australia) Ltd & Ors [2024] NSWPIC 269 |
| APPLICANT: | Sharon Leece |
| FIRST RESPONDENT: SECOND RESPONDENT: | Nuveen Real Estate (Australia) Limited Naia Mei Magrath |
| SENIOR MEMBER: | Kerry Haddock |
| DATE OF DECISION: | 23 May 2024 |
| CATCHWORDS: | WORKERS COMPENSATION - Claim for interest on lump sum death benefit; liability for payment of death benefit accepted; apportionment agreed. no agreement on claim for interest; consideration of Haidary v Wandella Pet Foods Pty Limited, Dynamix Pty Ltd and Burrangong Pet Foods Pty Ltd, Kaur v Thales Underwater Pty Ltd, Kratz as executrix of the estate of the Late Owen Beddall v Qantas Airways Limited, Powell v McClenahan & Ors, Aseru Facility Services Pty Ltd v Harrison & Ors, and Rogers v State of New South Wales (Northern NSW Local Health District) & Ors; Held – award of interest on lump sum apportioned to applicant and second respondent from the date that each claim was “duly made”; award of funds management in respect of the interest payable on the amount apportioned to the second respondent; interest awarded at rate 2% above applicable RBA cash rate. |
| DETERMINATIONS MADE: | The Commission determines: 1. The first respondent is to pay interest on the lump sum death benefit apportioned to the applicant, pursuant to s 109 of the Workplace Injury Management and Workers Compensation Act 1998, from 20 December 2023 to 22 May 2024 at the rate of 6.35% per annum. 2. The first respondent is to pay interest on the lump sum death benefit apportioned to the second respondent, pursuant to s 109 of the Workplace Injury Management and Workers Compensation Act 1998, from 6 February 2024 to 22 May 2024 at the rate of 6.35% per annum; and the amount so payable is to be paid to the NSW Trustee & Guardian to be held on trust for the benefit of the second respondent until she attains the age of 18 years. 3. The first respondent is to pay to the NSW Trustee & Guardian, pursuant to s 25(1A) of the Workers Compensation Act 1987, the fees concerning investing or otherwise managing the sum payable as interest on behalf of the second respondent. |
STATEMENT OF REASONS
BACKGROUND
The worker, Joseph (Joe) Magrath, died on 5 March 2020, as a result of injury arising out of or in the course of his employment with the first respondent, Nuveen Real Estate (Australia) Pty Limited (Nuveen).
The applicant, Sharon Leece (Ms Leece) is Mr Magrath’s widow, and the second respondent, Naia Mei Magrath, is the daughter of the worker and Ms Leece.
By Notification Form dated 3 December 2021, the applicant made a claim for the lump sum death benefit, pursuant to s 25(1) of the Workers Compensation Act 1987 (the 1987 Act). The Notification Form stated that the worker died by suicide on 5 March 2020. The applicant and the second respondent were named as dependents.
The first respondent’s insurer, EML, has accepted liability for the claim.
The applicant lodged an Application in Respect of Death of Worker (the Application) on
18 December 2023. She claimed the lump sum death benefit of $849,300 [sic].On 6 February 2024, the applicant made a claim for interest on the lump sum, pursuant to s 109 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act).
The first respondent lodged its Reply on 18 January 2024.
The second respondent lodged her Reply on 28 February 2024.
ISSUE FOR DETERMINATION
The parties agree that the following issue remains in dispute:
(a) whether the first respondent is liable for payment of interest on the lump sum, and, if so, the rate at which interest is to be paid, and the period/s in respect of which it is to be paid.
PROCEDURE BEFORE THE PERSONAL INJURY COMMISSION
The matter was listed for preliminary conference on 8 April 2024.
Mr Stockley of counsel, instructed by Mr Ohm, appeared for the applicant, who was present. Mr Studdert appeared for the first respondent. Mr Santone appeared for the second respondent. Ms Ryder of EML, and Ms Beverly Gill-Chappell, the next friend of the second respondent, also attended.
The applicant and the second respondent agreed on a proposed apportionment of the lump sum death benefit, and I was satisfied that the proposal was appropriate in the circumstances.
The parties were unable to agree on the claim for interest. Directions were made for the provision of written submissions, and the parties were advised that on receipt of those submissions, the claim for interest would be determined “on the papers”.
It was agreed that the sum payable pursuant to s 25(1A) of the 1987 Act in respect of the amount apportioned to the second respondent would be calculated once the claim for interest had been determined.
Submissions have now been received from all parties.
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 Personal Injury Commission (Commission) and considered in making this determination:
(a) Application and attached documents;
(b) Reply by first respondent and attached documents;
(c) Reply by second respondent and attached documents, and
(d) Application to Admit Late Documents (AALD), lodged by the applicant, dated
7 February 2024, and attached document.
FINDINGS AND REASONS
Given the narrow ambit of the dispute, it is unnecessary that I discuss all of the evidence.
Evidence of the applicant, Sharon Leece
Ms Leece’s first statement is dated 26 June 2023.
She and Joe began living together in China in 2005. Their daughter, Naia Mei Magrath, was born in December 2007.
She and the worker were married in 2015. He had not been married before and had no other children or dependents.
They decided to move to Australia. During the period of the move, she was financially dependent on Joe, as they agreed she would organise the move and then settle their daughter into school, so that he could focus on his new role with Nuveen.
In April 2019, they visited Sydney to do some research into areas to live and school options for Naia, who was then aged 11.
In December 2019, the family moved to Sydney. Neither she nor Joe had any family or friends in Sydney.
She began her own job search in Australia in February 2020.
Joe died on 5 March 2020.
In late 2020, she moved back to Hong Kong, where she held permanent resident status. She had the right to live and work there, as did Naia. They had close friends, who were like family, and could offer support.
She planned to remain in Hong Kong until her daughter finished secondary school.
The applicant’s second statement is dated 6 February 2024. She made the statement for her daughter.
Naia was 16 years old. She lived with Ms Leece in Hong Kong. She was in year 11 in a school that was identified, and of which confirmation of enrolment was provided.
Naia would remain at the school until she finished her secondary education in June 2026.
It was hoped that Naia would go to University in either England or Canada, starting a three year degree in September 2026.
There were no other dependents of which the applicant knew.
Evidence of the second respondent, Naia Magrath (statement signed by Beverly Gill-Chappell)
The statement is dated 28 February 2024.
Beverly Gill-Chappell was her tutor in these proceedings.
She had the best relationship with her father. He always helped her whenever he could. He loved spending time at home with her and mum, and they loved travelling and exploring as a family.
She really loved sports, and her dad was always there to encourage her, cheering her on. They went on lots of outdoors adventures. He loved camping and hiking and took her to the beach.
She was 12 when her father passed away, so she completely relied on him financially. She did not have many domestic duties, but her dad said it was important to learn life skills.
Her father and mother shared taking her to the school bus and picking her up. Her father also took her the doctor and dentist appointments. At the weekends, he would drive her to her sports meets.
Medical evidence
Dr Christopher Canaris – consultant psychiatrist
Dr Canaris’s report is dated 14 September 2023.
It is unnecessary to repeat much of the contents of the report.
Dr Canaris concluded that it was more probable than not that the worker was suffering from a psychological or psychiatric disorder at the time of his death. His workplace difficulties appeared to be the main contributing factor to the emergence of the disorder.
Dr Canaris also concluded that it was more likely than not that the worker’s depressive illness materially contributed to his suicide.
SUBMISSIONS
The parties have provided written submissions. It is therefore unnecessary that I refer to them in detail.
Applicant
The applicant claimed interest from the date of the claim, that is 3 December 2021. She submitted that the claim attached supporting documentation that identified and notified all dependants.
The applicant submitted that the acceptance of the claim was not delayed for want of details of dependency. None was sought. The acceptance of the claim appeared to have occurred only after the Application was lodged.
The applicant submitted that interest should be paid at the Reserve Bank of Australia (RBA) cash rate, plus 2%, in accordance with Commission practice.
In reply to the first respondent, the applicant submitted that the first respondent never denied liability. It had advanced no evidence as to its enquiries in response to the claim.
The applicant submitted that from 3 December 2021, it was clear that this was a claim on behalf of a widow and infant orphan. There could have been no issue as to dependency per se.
The applicant submitted that the underlying rationale for payment of statutory interest is compensation. The [first] respondent had had the benefit of the funds. The dependants had been deprived of them.
Second respondent
The second respondent agreed with and adopted the applicant’s primary submissions.
First respondent
The first respondent submitted that on 20 June 2022, its solicitors requested of the applicant’s solicitors particulars of the claim, including contact details of surviving family members and medical evidence. This request was followed up in July 2022, August 2022, and November 2022. No further particulars were provided.
The first respondent provided information to the applicant’s solicitors on 28 April 2023.
The Application was lodged on 18 December 2023 and served on 21 December 2023. The applicant served liability evidence on 20 December 2023.
The applicant provided a statement dated 26 June 2023, as part of the Application, which provided details of her dependency.
The Application listed the second respondent as dependent on the worker.
The first respondent accepted liability for the claim on 12 January 2024. It lodged its Reply on 18 January 2024.
On 24 January 2024, the Commission issued a Direction that the applicant was to advise whether the second respondent had separate legal representation. The second respondent was directed to lodge her Reply by 2 February 2024.
On 31 January 2024, the applicant requested a further 14 days to comply with the Direction; and the request was granted on 1 February 2024.
On 6 February 2024, the applicant provided notice of a claim for interest pursuant to s 109 of the 1998 Act.
On 7 February 2024, the applicant served an unsealed AALD, attaching evidence that addressed the second respondent’s dependency.
On 16 February 2024, the applicant notified the first respondent that the second respondent required a further extension of 14 days to comply with the Direction. The Commission noted the extension on 19 February 2024.
The first respondent submitted that an order for interest is discretionary, and a matter for the Commission; and the purpose of the order is to compensate the applicant and not penalise the employer/insurer (Haidary v Wandella Pet Foods Pty Limited, Dynamix Pty Ltd and Burrangong Pet Foods Pty Ltd).[1]
[1] [2005] NSWWCCPD 9 (Haidary).
The first respondent referred to the decision in Kaur v Thales Underwater Systems Pty Ltd[2] with respect to interest being ordered prior to a claim being “duly made”. It referred also to Kratz as executrix of the estate of the Late Owen Beddall v Qantas Airways Limited[3] and the cases discussed therein; Hu v Rongfar Property Services Pty Ltd:[4] and Youseph v Homebush Unit Trust t/as Primo Smallgoods.[5]
[2] [2011] NSWWCCPD 6 (Kaur).
[3] [2020] NSWWCC 36 (Kratz).
[4] [2021] NSWPIC 95.
[5] [2021] NSWPIC 299.
The first respondent submitted that the applicant had failed to comply with the Commission’s Procedural Direction WC1 – Compensation payable on death, as she seemingly failed to arrange for separate legal representation for all dependents prior to commencing proceedings. This should be taken into consideration as a discretionary factor when determining the claim for interest.
The first respondent submitted that the applicant’s claim was “duly made” on
20 December 2023, being the date that the liability evidence relied upon and requested on 20 June 2022 was served. Alternatively, it was made on 21 December 2023, when the Application containing the applicant’s statement addressing dependency was served. Accordingly, 20 December 2023 was the earliest date from which interest could be payable to the applicant.The first respondent submitted that the second respondent’s claim was “duly made” on
6 February 2024, when full particulars of her dependency were served. That was the earliest date from which interest could be payable to her.As regards the rate at which interest should be payable, the first respondent submitted that the Commission should take into consideration the actual rates of interest offered by the banks, which are consistent with the cash rates published by the RBA (4.10% up to
8 November 2023 and 4.35% since).The first respondent referred to recent cases in which the Commission had awarded interest at a rate that was 2% above the cash rate – Powell v McClenahan & Ors;[6] Aseru Facility Services Pty Ltd v Harrison & Ors;[7] and Rogers v State of New South Wales (Northern NSW Local Health District) & Ors.[8]
[6] [2024] NSWPIC 139.
[7] [2023] NSWPIC 629.
[8] [2023] NSWPIC 398.
The first respondent submitted that the rate of interest, if any, ordered, should be no more than 2% above the RBA cash rate, consistent with recent Commission decisions and the interest rates offered by banks on deposits.
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”
As the first respondent submitted, the power to award interest is discretionary. It may apply to some or all of the compensation, 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 discretionary. Although the discretion is a wide one, regard must be paid to the facts of the case.
In Haidary, Deputy President Fleming said (citations omitted):
“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; Healey v McPherson Binding Pty Ltd ).”
In my view, it is appropriate that I exercise the discretion to award interest in this matter.
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 Kratz, 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[9] and his own decision in Lavelle v David Paul Browne & others.[10]
[9] WCC 6411/18.
[10] WCC533/19.
I do not accept that the applicant’s claim was “duly made” when the claim was made. The applicant provided no liability evidence, and no particulars of the extent of her dependency on the worker. The second respondent is a minor child, and therefore would be entitled to be regarded as dependent on the worker, but no particulars of her dependency were provided until the applicant made a supplementary statement on 6 February 2024.
I accept the first respondent’s submission that the earliest date on which it could be said that the applicant’s claim was duly made was on 20 December 2023; and the second respondent’s claim was duly made on 6 February 2024.
Neither the applicant nor the second respondent submitted that interest should be apportioned other than in the same proportions as the lump sum.
As regards the rate of interest to be applied, both the applicant and the first respondent submitted that an appropriate rate was one that was 2% above the applicable RBA cash rate. The second respondent adopted the applicant’s submissions. I accept those submissions, which are in accordance with recent determinations of the Commission.
I determine the following:
(a) it is appropriate to exercise the discretion to award interest on the lump sum compensation;
(b) the applicant’s claim was duly made on 20 December 2023;
(c) the second respondent’s claim was duly made on 6 February 2024, and
(d) the appropriate rate of interest is a rate that is 2% above the applicable RBA cash rate.
The orders are set out in the Certificate of Determination.
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