Massoudi v Rose Truck Pty Ltd - [2025] NSWPICPD 2

DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY A MEMBER
CITATION:	Massoudi v Rose Truck Pty Ltd [2025] NSWPICPD 2
APPELLANT:	Nadereh Massoudi
FIRST RESPONDENT:	Rose Truck Pty Ltd
SECOND RESPONDENT:	Workers Compensation Nominal Insurer
THIRD RESPONDENT:	Shahrokh Massoudi
FOURTH RESPONDENT:	Shadeeyeh Massoudi
FIFTH RESPONDENT:	Shabnam Massoudi
FILE NUMBER:	A1-W4433/23
PRESIDENTIAL MEMBER:	Acting Deputy President Kylie Nomchong SC
DATE OF APPEAL DECISION:	17 January 2025
ORDERS MADE ON APPEAL:	1. The Member’s Certificate of Determination dated 19 January 2024 is confirmed.
CATCHWORDS:	WORKERS COMPENSATION – death of company director who was a worker of the uninsured company – claim by dependants for lump sum death benefits under sections 25 and 26 of the Workers Compensation Act 1987 – consideration of sections 3(1A) and 4A of the Workers Compensation Act 1987 and section 4(2) of the Workplace Injury Management and Workers Compensation Act 1998 – whether dependants’ rights are separate and distinct rights under Part 3, Division 1 of the Workers Compensation Act 1987 having regard to s 3(1A) of the Workers Compensation Act 1987 and s 4(2) of the Workplace Injury Management and Workers Compensation Act 1998 – statutory interpretation – Alcan (NT) Alumina Pty Limited v Commissioner of Territory Revenue [2009] HCA 41; 239 CLR 27; Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355, and Moorabool and Central Highlands Power Alliance Inc v Minister for Energy and Resources [2024] VSCA 201 applied
HEARING:	On the papers
REPRESENTATION:	Appellant:
Mr S Hickey, counsel
Rishworth Dodd & Co
First respondent:
No appearance
Second respondent:
Mr J Fennel, counsel
Hall & Wilcox
Third respondent:
Mr D Hill, solicitor
McNally Jones Staff Lawyers
Fourth respondent:
Mr G Watson, solicitor
Grieve Watson Kelly Lawyers
Fifth respondent:
Mr I Roche, solicitor
Ian Roche Lawyers
DECISION UNDER APPEAL:	Massoudi v Workers Compensation Nominal Insurer (icare) [2024] NSWPIC 26
MEMBER:	Mr G Whiffin
DATE OF MEMBER’S DECISION:	19 January 2024

INTRODUCTION

The Member found that the claims of a deceased worker’s wife and children (who were dependants at the time of death) were not maintainable by reason of the operation of ss 3(1A) and 4A of the Workers Compensation Act 1987 (the 1987 Act) and s 4(2) of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) because the deceased worker was a director of the employing company at the time of his death and the employing company was uninsured for its liabilities under the 1987 Act.
This appeal is directed to whether the Member properly construed those statutory provisions.

BACKGROUND

Mr Farough Massoudi (the deceased worker) was the owner/operator of a trucking business called Rose Truck Pty Limited (the Company). He was the sole director and an employee of the Company.
Pursuant to s 155 of the 1987 Act, it was (and is) compulsory for an employer (other than a self-insurer) to obtain and maintain a policy of insurance that complied with Part 7, Division 1 of the 1987 Act, for the full amount of the employer’s liability under the Act in respect of all workers employed by the employer and for an unlimited amount in respect of the employer’s liability independently of the Act (Compulsory Insurance).
As at 15 April 2004, the Company did not have Compulsory Insurance.
On 15 April 2004, Mr Farough Massoudi died as a result of injuries he sustained during the course of his employment.
On 13 March 2023, Mr Massoudi’s wife, Ms Nadereh Massoudi (the appellant) and their three children (the third, fourth and fifth respondents), made a claim for lump sum compensation under s 25(1)(a) of the 1987 Act in the amount of $290,900 together with ongoing payments under s 25(1)(b) and reimbursement of funeral expenses pursuant to s 26 of the 1987 Act.[1]
[1] Application in Respect of Death of Worker (ARDW), p 11.
On 13 April 2023, the Nominal Insurer (the second respondent) declined the claims.[2]
[2] ARDW, pp 12–15.
On 21 June 2023, the appellant and the third, fourth and fifth respondents filed an ARDW in this Commission.
The matter came before the Member for arbitration on 25 September 2023. On 26 September 2023, the presiding Member directed that the parties file further evidence and submissions.
On 19 January 2024, the presiding Member determined the claims were not maintainable and made an award in favour of the second respondent.[3]
[3] Massoudi v Workers Compensation Nominal Insurer (icare) [2024] NSWPIC 26 (Statement of Reasons).

ON THE PAPERS

Section 52(3) of the Personal Injury Commission Act 2020 provides:
“(3) 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 and enabling legislation without holding any conference or formal hearing.”
Having regard to Procedural Directions PIC2 and WC3; 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. This is particularly so since the parties had agreed to a series of facts and the sole issue in dispute in this appeal is one of statutory construction.

THRESHOLD MATTERS

There is no dispute between the parties that the threshold requirements as to quantum and time pursuant to ss 352(3) and 352(4) of the 1998 Act have been met.

THE EVIDENCE

In 2002, Rose Truck Pty Limited (ACN 101 610 253) was registered as a company pursuant to the Corporations Act 2001 (Cth). Farough Massoudi was the sole director of the Company. The appellant held the office of Company Secretary. The deceased worker and the appellant were the only two shareholders in the Company.[4]
[4] ARDW, pp 19–22.
The deceased worked died on 15 April 2004.
The appellant was appointed as the sole director of the Company on or about 12 May 2004. Some five and a half years later, the Company was de-registered on 17 January 2010.[5]
[5] ARDW, pp 23–36.
There was no issue between the parties that the deceased worker died as a result of injuries suffered in the course of his employment with the Company. It was also an agreed fact that the deceased worker was a director of the Company prior to and as at the time of his death.
In terms of the relationship between the deceased and the appellant (and the third, fourth and fifth respondents), there is no issue that the appellant was his wife and a dependant as at the date of his death. Further, it is accepted that the third, fourth and fifth respondents were the children of the deceased and aged 18, 13 and 9 years respectively as at the date of the deceased’s death. No part of the decision below canvassed whether the appellant and respondents were dependants within the meaning of s 25 of the 1987 Act or, if so, for how long.
At paragraph [15] of the Statement of Reasons, the Member set out a list of all of the documentary material that had been placed before him. The majority of those materials were directed to the claims in respect of weekly payments for each of the dependent children under s 25(1)(b) of the 1987 Act. However, the Member determined that it was not necessary to examine or analyse those materials in any detail for the purposes of determining the gateway issue as to whether or not, as a matter of statutory construction, the claims were maintainable by reason of the operation of ss 3(1A) and 4A of the 1987 Act and s 4(2) of the 1998 Act.

THE MEMBER’S REASONS

The Member looked carefully at the text of ss 3(1A) and 4A of the 1987 Act and s 4(2) of the 1998 Act and noted that ss 3(1A) and 4A of the 1987 Act had been inserted into the Act consecutively (as Items [3] and [4]) by operation of the Workcover Legislation Amendment Act 1995 (Amendment Act). For that reason, the Member considered the content of the Explanatory Note to the Workcover Legislation Amendment Bill 1995 (Bill) and made particular note of the new provisions which were designed to strengthen or underscore the need for employers to obtain Compulsory Insurance. These included the new provisions which specified that employees who were directors of the employer company could not make workers compensation claims and that where claims were made by other employees of an uninsured employer, that the Nominal Insurer could recover the debt personally from a director of an employing company.[6]
[6] Statement of Reasons, [47]–[51].
The Member also noted that the Explanatory Memorandum stated that the amendments to s 3 made it plain that the term ‘worker’ included that worker’s legal personal representative or dependants where the worker was deceased.[7]
[7] Statement of Reasons, [51].
The Member considered and set out the submissions that had been made about the findings made in Hadfields Steel Works Limited v Meyer[8] and Meyer v Hadfields Steel Works Limited[9] (Hadfields) by the appellant below. Whilst finding that the rights of dependants on the death of a worker are distinct from those of the worker and are not derived through the worker, the Member found that those rights are still subject to the provisions of s 4A of the 1987 Act.[10] Given that s 4A was inserted specifically to ensure that injured employees who were directors of uninsured companies were unable to claim, the Member found (by reference to the finding of Evatt CJ and Manning J in Hadfields) that such a construction was to be applied “only where the context and subject matter permit”.
[8] [1962] HCA 34; 108 CLR 171.
[9] (1961) 79 WN (NSW) 322.
[10] Statement of Reasons, [57].
The Member rejected the appellant’s argument that the operation of s 3(1A) of the 1987 Act meant that, upon the death of an injured worker who was also a director, s 4A should be read as meaning that dependants could only be precluded from making claims if they (personally) were also directors of the uninsured employing company at the time of the injury.[11] Relying on the fact that s 3(1A) is expressed as an inclusive rather than comprehensive definition, the Member determined that in construing s 4A, any reference to the term “worker” would include both the injured worker and the dependants.
[11] Statement of Reasons, [60]–[62].
In coming to the conclusion that the rights of the dependants were not maintainable because of the operation of the combination of ss 3(1A) and 4A of the 1987 Act, the Member identified the principles of statutory construction as those enunciated in various authorities including Alcan (NT) Alumina Pty Limited v Commissioner of Territory Revenue;[12] Project Blue Sky Inc v Australian Broadcasting Authority,[13] and Newcastle City Council v GIO General Limited.[14]
[12] [2009] HCA 41; 239 CLR 27.
[13] [1998] HCA 28; 194 CLR 355.
[14] [1997] HCA 53; 191 CLR 85.
The Member then looked to the text of s 4A of the 1987 Act, the context in which it was enacted and the legislative purpose of the scheme. The Member found that it was relevant that ss 3(1A), 4A and s 145A of the 1987 Act were all intended to operate together as part of the suite of amendments. The Member found that the purpose of s 4A, being to deprive an injured worker who was also a director of an uninsured employer company from being able to receive workers compensation benefits; and the power under s 145A for the Nominal Insurer to recover payments that had been made to injured workers of an uninsured employer, from the directors of that company, means that the correct construction of s 4A is that the dependants of a deceased worker (who was also a director) are to be treated in the same way to that deceased worker, after death.[15]
[15] Statement of Reasons, [75].
The Member found that the terms of the Explanatory Note and the Second Reading Speech were not particularly helpful in assisting in the interpretation of ss 3(1A) and 4A of the 1987 Act, save for the fact that the express intentions of the Bill included strengthening the provisions in relation to non-insurance and extending the definition of “worker” to include the worker’s dependants.[16]
[16] Statement of Reasons, [76]–[77].
Finally, the Member looked at those authorities which have held that workers compensation is beneficial legislation and should be construed in that way. However, the Member made reference to Amaca v Cremer[17] that a beneficial approach did not mean that the true signification of the provision should be strained or exceeded, and that a beneficial approach did not entitle a construction that was unreasonable or unnatural. The Member found that if construed according to the submissions of the appellant below, it would be too strained and such a construction would be unreasonable.[18] Rather, the Member found that the construction that he accorded to ss 3(1A) and 4A of the 1987 Act, which prevented the dependants of a worker who was a director of an uninsured employer company, from claiming compensation pursuant to Part 3 Division 1 of the 1987 Act was the most consistent and harmonious interpretation.
[17] [2006] NSWCA 164; 66 NSWLR 400, [51].
[18] Statement of Reasons, [80].
The Certificate of Determination issued on 19 January 2024 records:
“The Commission determines:
1. That the claims of the [appellant], the third respondent, the fourth respondent, and the fifth respondent arising out of the death of Farough Massoudi (the worker) on 15 April 2004, pursuant to Part 3 Division 1 of the Workers Compensation Act 1987 (the 1987 Act), are not maintainable by reason of s 4A of the 1987 Act, having regard to s 3(1A) of the 1987 Act and s 4(2) of the Workplace Injury Management and Workers Compensation Act 1998.
The Commission orders:
2. There will be an award in favour of the second respondent.”

GROUND OF APPEAL

There is a single ground of appeal which is:
“The Member erred at Reasons [56], [62], [70], [73], [75] & [81] in misdirecting himself and applying an incorrect application of s 3(1A) to s 4A and thereby determining that upon the death of the deceased the dependant’s separate and distinct rights under Part 3 Division 1 of the 1987 Act became subject to s 4A and were extinguished.”

LEGISLATION

The determination involves the statutory construction of ss 3(1A) and 4A of the 1987 Act and s 4(2) of the 1998 Act.
The first two of those statutory provisions were inserted into the 1987 Act through the enactment of the Workcover Legislation Amendment Act 1995 (NSW), which was assented to on 20 December 1995.
The parties and the Member made reference to the Explanatory Note to the Workcover Legislation Amendment Bill 1995.
In addition, the second respondent referred to and relied on ss 33 and 34 of the Interpretation Act 1987 (NSW).
This appeal is governed by s 352 of the 1998 Act.

SUBMISSIONS

The appellant’s submissions, on the whole, were reflective of her submissions below. The appellant submitted that the rights of dependants arise independently and are to be treated as separate and distinct rights from those of a deceased injured worker. In that regard, the appellant relied on the decision in Hadfields and sought to draw a parallel in relation to the scenario of this matter.
The appellant rejected the Member’s finding that public policy considerations would be served because the effect of the decision was to deprive the dependants of the deceased worker of the claimed benefits because the Company was uninsured. This was said to be so notwithstanding that the deceased worker was a director of the Company at the time of the injury and death.
The appellant submitted that the words “employer’s liability” in s 4A refer only to the deceased worker and should not be construed as adversely affecting a dependant’s claim.
When looking at the text of s 4A, the appellant submitted that the correct approach arising out of the application of s 3(1A) was to substitute the word “worker” with the word “dependants” in s 4A and that would mean that the disentitling consequences of s 4A would only apply if the dependants were directors of the uninsured company at the time of the injury.
The third respondent relied on the submissions of the appellant.[19]
[19] Letter from McNally Jones Staff on behalf of the third respondent to the Commission dated 21 March 2024.
The fourth respondent relied on the submissions of the appellant.[20]
[20] Letter from Grieve Watson Kelly on behalf of the fourth respondent to the Commission dated 21 March 2024.
The fifth respondent relied on the submissions of the appellant.[21]
[21] Email from Ian Roche Lawyers on behalf of the fifth respondent to the Commission dated 21 March 2024.
No submissions nor any appearance was made by the first respondent, being the Company (deregistered).
The second respondent submitted that the process of statutory interpretation undertaken by the Member was orthodox and consistent with ss 33 and 34 of the Interpretation Act 1987. As such, it was also consistent with the correct approach to statutory interpretation of having regard to the text, context and purpose of a provision.
The second respondent submitted that the appellant's reliance on Hadfields was misconceived because Hadfields did not enunciate an unwavering principle. Rather, Sugarman J in the High Court observed that s 6(2) of the Workers’ Compensation Act 1926 (the 1926 Act) was to enable adaptation and application in respect of the rights and provisions under the Act. Further, the purpose of the section was to avoid circumlocution. As such, the second respondent submitted that it was not the function of s 3(1A) to simply substitute words into other provisions elsewhere in the Act. Rather, s 3(1A) had to be adapted and applied in the context of each particular provision. As such, when that process of adaptation is carried out, the result is that s 4A applies on the death of an injured worker, to his dependants. Accordingly, the second respondent submits that the finding made by the Member in respect of the application of Hadfields was correct.
In relation to the context and purpose, the second respondent noted that s 4A did not exclude the operation of s 3(1A) of the 1987 Act. Therefore, it was open and available to the Member to conclude that the provisions were intended to operate together. This was said to be an orthodox approach to statutory construction.
The second respondent noted that the purpose identified by the Attorney General, when reading the Bill was “to address the WorkCover scheme cost problem” and that one aspect of the Bill was to address breaches by employers of their obligations to obtain compulsory insurance. Accordingly, the second respondent submitted that the interpretation applied by the Member gave effect to these parliamentary intentions.
The second respondent referred to the provisions of ss 145 and 145A of the 1987 Act which permit the Nominal Insurer to recover compensation payments made to injured workers from unscrupulous employers and their culpable directors. The second respondent contended that the interpretation applied by the Member to s 4A was consistent with that purpose.
Finally, the second respondent submitted that the Member was correct to reject the third respondent’s submissions below that “it defies belief that Parliament would take away the rights of spouses and children of deceased workers without specifically stating that as a fact.”

DISCUSSION

By reason of s 352(5) of the 1998 Act, the nature of an appeal is limited to a determination of whether the decision was affected by any error of fact, law or discretion. The appeal is not a review or new hearing.

Here, there are no factual findings under appeal. The appeal is directed solely to an alleged error of law by the presiding Member as to the proper construction and application of ss 3(1A) and 4A of the 1987 Act and s 4(2) of the 1998 Act. However, there can be no appellate intervention without a finding that there has been error.[22]
[22] Iqbal v Hotel Operation Solutions Pty Ltd [2022] NSWCA 138, [11].
The appeal is directed to the findings made by the Member at [56], [62], [70], [73], [75] and [81] of the Statement of Reasons on the basis that the Member misdirected himself and applied an incorrect interpretation to ss 3(1A) and 4A of the 1987 Act. Therefore, the starting point is to determine whether the test or principles the Member set for himself in construing the statutory provisions were correct.
In that regard, the Member identified the principles of statutory construction[23] as enunciated in the authorities in Alcan (NT) Alumina Pty Limited v Commissioner of Territory Revenue;[24] Project Blue Sky Inc v Australian Broadcasting Authority;[25] and Newcastle City Council v GIO General Limited.[26] The Member also noted the summary of the relevant principles identified by Roche DP in Hesami v Hong Australia Corporation Pty Limited[27] which, in turn, relied on the decision of the NSW Court of Appeal in Wilson v State Rail Authority of New South Wales.[28] In so doing, the Member correctly recognised that the first consideration is of the ordinary, grammatical sense of the text itself. However, the text is to be considered in light of its context and the legislative purpose of the scheme.
[23] Statement of Reasons, [63]–[67].
[24] [2009] HCA 41; 239 CLR 27.
[25] [1998] HCA 28; 194 CLR 355.
[26] [1997] HCA 53; 191 CLR 85.
[27] [2011] NSWWCCPD 14.
[28] [2010] NSWCA 198, [12].
These are the correct principles. The High Court confirmed them in SAS Trustee Corporation v Miles.[29] They have been consistently applied across all jurisdictions in Australia for many years. This approach has been recently applied by the New South Wales Supreme Court of Appeal in Tsolis v Health Care Complaints Commission.[30]
[29] [2018] HCA 55; 265 CLR 137, 149 [20] (per Kiefel CJ, Bell and Nettle JJ), see also 157 [41] (per Gageler J), 162–3 [64] (per Edelman J).
[30] [2024] NSWCA 284 (29 November 2024), per Leeming JA, Kirk and Stern JJA agreeing.
Recently, the Victorian Supreme Court of Appeal in Moorabool and Central Highlands Power Alliance Inc v Minister for Energy and Resources[31] helpfully summarised those principles in the following manner:
“82. The starting point in any exercise of statutory construction is the text of the provision. However, the text is to be considered in light of its context and purpose.[32] Context includes the legislative context, because the meaning of a provision must be determined by reference to the entire Act.[33] Consideration of purpose is further reinforced by s 35(a) of the Interpretation of Legislation Act 1984, which in summary provides that a construction that would promote the purpose of the Act (whether or not that purpose is expressly stated) shall be preferred to a construction that would not promote that purpose or object.
83. Identification of the statutory purpose may appear from an express statement in the statute or by reference to, or inference from, its language. Discernment of purpose may be aided by reference to any relevant extrinsic materials, in particular those that identify the mischief to which it is directed.[34] It is also permissible to have regard to extrinsic materials in resolving the meaning of the text, particularly in cases of ambiguity.[35] However, legislative history and extrinsic materials cannot displace the meaning of the statutory text.[36] Finally, it is permissible, in determining which of two competing interpretations of a statute ought to be adopted, to have regard to the consequences of each interpretation.”[37]
[31] [2024] VSCA 201 (Moorabool) (Emerton P, Walker and Osborn JJA). This case was recently endorsed in Footscray Football Club Limited (ACN 005 226 595) v Adam Kneale [2024] VSCA 314 (12 December 2024).
[32] SAS Trustee Corporation v Miles (2018) 265 CLR 137, 149 [20] (Kiefel CJ, Bell and Nettle JJ); see also 157 [41] (Gageler J), 162–3 [64] (Edelman J); [2018] HCA 55. And see Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27, 46–7 [47] (Hayne, Heydon, Crennan and Kiefel JJ) and the cases there cited at n 105, n 108 and n 109; [2009] HCA 41; AB (a pseudonym) v Independent Broad‑Based Anti‑Corruption Commission (2024) 98 ALJR 532, 537–8 [21] (Gageler CJ, Gordon, Edelman, Steward, Gleeson, Jagot and Beech‑Jones JJ); [2024] HCA 10.
[33] Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, 381 [69] (McHugh, Gummow, Kirby and Hayne JJ); [1998] HCA 28 (‘Project Blue Sky’). See also Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v Moorcroft (2021) 273 CLR 21, 35–6 [15] (Kiefel CJ, Keane, Gordon, Steward and Gleeson JJ); [2021] HCA 19.
[34] Lacey v Attorney‑General (Qld) (2011) 242 CLR 573, 592 [44] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ); [2011] HCA 10. See also Port of Newcastle v Glencore Coal (2021) 274 CLR 565, 594 [87] (Kiefel CJ, Gageler, Gordon, Steward and Gordon JJ); [2021] HCA 39.
[35] Interpretation of Legislation Act 1984, s 35(b).
[36] Commissioner of Taxation (Cth) v Consolidated Media Holdings Ltd (2012) 250 CLR 503, 519 [39] (French CJ, Hayne, Crennan, Bell and Gageler JJ); [2012] HCA 55.
[37] R v Young (1999) 46 NSWLR 681, 687–8 [15] (Spigelman CJ); [1999] NSWCCA 166. See also Project Blue Sky (1998) 194 CLR 355, 384 [78] (McHugh, Gummow, Kirby and Hayne JJ); [1998] HCA 28; CTM v The Queen (2008) 236 CLR 440, 509 [237] (Heydon J); [2008] HCA 25. See generally the discussion in Dennis Pearce, Statutory Interpretation in Australia (LexisNexis, 10^th ed, 2024) 79–85 [2.61]–[2.65].
In the recitation of the principles, the Victorian Court of Appeal referred to s 35 of the Interpretation of Legislation Act 1984 (Vic). Section 35(a) is in similar terms to that found in s 33 of the Interpretation Act 1987 (NSW) which states:
“In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object.”
Whilst the Member in this case did not make any reference to that legislative provision in the Statement of Reasons, there is no error because the Member’s reasoning was consistent with it, in that he specifically turned his mind to the legislative purpose of the provisions and determined that the interpretation which he favoured was in harmony with that purpose.[38]
[38] Statement of Reasons, [81].
Before moving to the manner in which the Member conducted his reasoning, I note that there are no Presidential decisions of this Commission as to the interpretation of s 4A in the context of s 3(1A) of the 1987 Act.[39]
[39] There are two decisions of Arbitrators of the Workers Compensation Commission which refer to the provisions but neither of which provide any assistance to the question of construction under consideration here; see Freitas v Corrimal Travel Pty Ltd [2011] NSWWCC 296 and Jesic v Trajik Management Pty Limited t/as White Horse Hotel Princes Highway St Peters [2012] NSWWCC 356.
I note that s 3(1A) of the 1987 Act was considered briefly in Kimberly-Clark Australia Pty Ltd v Thompson[40] in the context of a claim by a spouse for nervous shock in relation to the death of her husband during the course of his employment. Basten JA held at [22]:
“This language is now found in s 4(2) of the [1998 Act] and in s 3(1A) of the [1987 Act]. The same purpose is apparent as under the earlier legislation. Further, because the extended definition only applies in the case of death of the worker, it makes no sense to treat the categories so identified as potential recipients of common law damages for injuries they themselves have suffered. There was no evident purpose, either in 1910, in 1926 or in 1998, in treating those who suffered nervous shock as the result of an industrial accident as being subject to constraints imposed on their general law rights by workers compensation legislation in the event that they were dependants of a worker who died, but not if the worker lived.”
[40] [2006] NSWCA 264; 67 NSWLR 187 (Kimberly-Clark), [22].
In my opinion, this passage supports the approach taken by the Member wherein he found that the proper construction of ss 3(1A) and 4A of the 1987 Act depended on the context and legislative purpose of the provisions. Further, as is clear from the above extract, the spouse of the deceased worker in Kimberly-Clarke was not making a claim for compensation under the 1987 Act or the 1998 Act, but rather a claim at common law, which was not constrained by anything in the workers compensation scheme. This case was not drawn to the attention of the Member in the hearing.
However, the appellant relied on the Hadfields decisions. The Member considered those submissions but found that the decisions did not assist in the correct statutory interpretation of s 4A in the context of s 3(1A) of the 1987 Act. The Member noted that the High Court held that s 63(2) of the Workers’ Compensation Act 1926 (now repealed) (1926 Act) was directed to preventing double recovery by a worker in relation to his compensable injuries by preventing a worker from obtaining further compensation payments under the Act if the worker had obtained judgment in a common law claim in respect of the same injuries. The High Court held that this did not preclude the dependants from running a claim, after the death of the worker, either under the Act nor under the Compensation to Relatives Act 1897 (NSW). The High Court described this as a “distributive operation”.
At paragraph [56] of the Statement of Reasons, the Member found that this distributive operation, if applied in this matter, would still be subject to the provisions of s 4A of the 1987 Act. I note that s 4A had no analogue in the 1926 Act and was therefore no part of the decision-making of either the Court of Appeal nor the High Court in Hadfields. I accept the second respondent’s submissions on this point, which refer back to the finding made by the Member that the rights of an injured worker, who is also a director of the uninsured employing company are extinguished ab initio.[41] By reason of the fact that the deceased worker, being the sole director of the Company, had not obtained or maintained Compulsory Insurance, he never had any rights to claim under the 1987 Act nor the 1998 Act.
[41] Second respondent’s submissions at [23]–[24]; Statement of Reasons, [52].
The second respondent referred to the decision of Sugarman J in Hadfields in which his Honour found that the purpose of s 6(2) of the 1926 Act was to avoid the circumlocution in the legislation, which would otherwise be necessary if the worker was dead.
In my opinion, the Member was correct to hold that this means that s 3(1A) operates only where the injured worker is dead but otherwise had rights to compensation, not where those rights were non-existent because of the failure of the injured worker, in his role as director, to have Compulsory Insurance.
Accordingly, I find no error in the finding made by the Member at paragraph [56] of the Statement of Reasons.
In terms of the text of the statutory provisions under consideration, the Member correctly identified that the task to be addressed was to apply the definitional provision of the term injured “worker” in s 3(1A) of the 1987 Act (replicated in s 4(2) of the 1998 Act) into the disentitling provision in s 4A of the 1987 Act.[42]
[42] Statement of Reasons, [52].
The appellant below submitted that whilst s 4A of the 1987 Act would have had application to exclude compensation claims made by the deceased worker had he lived, it had no application to the claims of the dependent spouse and children, unless they were also directors of the uninsured Company at the time of the injury. This textual interpretation was said to arise by the appellant contending that the correct mechanism was to substitute the term “worker” wherever it arose in s 4A with the term “worker’s dependants”.
In his reasoning, the Member correctly dispelled this submission by identifying that the flaw in the appellant’s argument was that s 3(1A) says that the term “worker” includes, amongst other things, the “worker’s dependants” and that therefore the term “worker” includes the deceased worker himself as well as the other classes of persons listed in the extended definition in s 3(1A).
The second respondent in its submissions referred to the decision of Sugarman J in Hadfields which held:
“It is unlike the usual interpretation clause which provided a statutory dictionary, speaking at all times and in all events. Under these circumstances, the use of the word ‘includes’ is not necessarily indicative of an intention to enlarge the meaning of the word ‘worker’ in such fashion that it is always to be taken as referring to a group of persons composed of the worker himself and of the other classes referred to in the subsection. The subsection, which mentions these classes of persons disjunctively is also capable of being read as having an operation which is substitutional and alternative, substituting for the reference to the worker a reference to one or more of the enumerated classes, as may be appropriate in the particular circumstances.”
I accept the second respondent’s submissions that the effect of this finding is that the application of s 3(1A) may be either inclusive or substitutional and alternative.[43] Further, I accept as correct that the selection of either option is to be done by reference to the particular provision to which it is to be applied.
[43] Second respondent’s submissions, [25]–[27].
Accordingly, I am of the view that the Member engaged in no error in finding that, if the deceased worker was a director of the uninsured Company at the time of his injury (and death), not only were his workers compensation rights extinguished, so too were the rights of the other classes of persons enumerated in the extended definition of ‘worker’ in s 3(1A) of the 1987 Act. Not only is that finding appropriate given the text of s 4A but it is further enforced by the context and legislative purpose of that section, which is considered below.
I find no error in paragraph [62] of the Statement of Reasons.
I next turn to the context and legislative purpose of the provisions.
It is appropriate to begin with the stated the objectives of the legislation contained in s 3 of the 1998 Act which are as follows:
“The purpose of this Act is to establish a workplace injury management and workers compensation system with the following objectives—
(a)     to assist in securing the health, safety and welfare of workers and in particular preventing work-related injury,
(b)     to provide—
• prompt treatment of injuries, and
• effective and proactive management of injuries, and
• necessary medical and vocational rehabilitation following injuries,
in order to assist injured workers and to promote their return to work as soon as possible,
(c)     to provide injured workers and their dependants with income support during incapacity, payment for permanent impairment or death, and payment for reasonable treatment and other related expenses,
(d)     to be fair, affordable, and financially viable,
(e)     to ensure contributions by employers are commensurate with the risks faced, taking into account strategies and performance in injury prevention, injury management, and return to work,
(f)      to deliver the above objectives efficiently and effectively.”
It is apparent from those legislative objectives that there is a balance to be struck between the provision of benefits to workers and, in the case of their death, to their dependants, with the need to ensure a fair system and one which is financially viable. In order to ensure the fairness and financial viability of the system, an inherent component of the system is that employers are required to comply with their obligation to obtain and maintain Compulsory Insurance.
Section 155 of the 1987 Act requires all employers in New South Wales to obtain and maintain “a policy of insurance that complies with this Division for the full amount of the employer's liability under this Act in respect of all workers employed by the employer …” (emphasis added). Failure to do so creates an offence under the Act with the concomitant imposition of civil penalties.
This same emphasis was noted by the Member[44] and I agree that the wording is important because it conveys the necessity to be insured not just in respect of workers but for the whole of the liability which flows from an injury or death. This includes, in my opinion, the liability for death benefits to dependants and funeral expenses. I find no error in the finding at paragraph [70] of the Statement of Reasons.
[44] Statement of Reasons, [70].
In addition to s 155 of the 1987 Act, there are a raft of other provisions contained in Part 7, Divisions 1 and 2 which are directed to ensuring that employers obtain and maintain Compulsory Insurance. These include provisions allowing for the recovery of monies paid by the Nominal Insurer to injured employees from an uninsured employer and its directors (ss 145 and 145A) and the recovery of double premiums for contravention of the insurance requirements from an uninsured employer and its directors (ss 156 and 156B).
It is instructive, and consistent with the application of principles of statutory construction, to not only determine the context of the statute but also to look at the context in which the relevant provisions were inserted into the legislation.
The Member’s determination as to the beneficial nature of the legislation was correct. However, as was held by the High Court of Australia in ADCO Constructions Pty Ltd v Goudappel:[45]
“It can be accepted … that the [1987 Act’s] remedial character reflects a beneficial purpose which requires a beneficial construction, if open, in favour of the injured worker. But to accept the beneficial purpose of the [1987 Act] as a whole does not mean that every provision or amendment to a provision has a beneficial purpose or is to be construed beneficially. The purpose of the provision must be identified.”
[45] [2014] HCA 18; 254 CLR 1, [29]. See also Payne JA (Gleeson JA and Sackville AJA agreeing) in Hunter Quarries Pty Ltd v Mexon (2018) 98 NSWLR 526; [2018] NSWCA 178, [66].
The Member considered, amongst other things, the fact that ss 3(1A) and 4A were inserted into the 1987 Act at the same time and proximate to each other. In addition, the Member found it highly relevant to the context of the subsection that it was enacted when non- insurance of employers was a stated consideration. The Member noted that apart from s 4A, the Bill also introduced s 145A, which allows the Nominal Insurer to recover compensation paid by insurers directly and personally from the directors of an uninsured employer company.[46]
[46] Statement of Reasons, [74].
The Member acknowledged that he was not required to use extrinsic materials for the purposes of interpretation and that he needed to take care in having regard to any such materials. In that context, the Member considered the Explanatory Note to the Bill. Whilst the Member considered the content to be vague, he noted that what could be gleaned from it was an intention to strengthen the provisions in relation to non-insurance and to extend the definition of ‘worker’ to include dependants.
In that regard, the Member rejected the appellant’s submissions below and found that a public policy consideration at the time of the Amendment Act was to deal with non-insurance and noted that the Amendment Act contained a significant number of provisions freezing or condensing entitlements.

I support this view. In addition, to the matters raised by the Member, it is palpably clear that a predominant purpose of the Amendment Act was to make the scheme more financially viable. There were a number of provisions directed to reducing the compensation available under the Act. For example, amendments were made to freeze compensation levels pursuant to s 66 of the 1987 Act; to impose a 5% eligibility threshold for industrial deafness; to insert s 11A, which specified that no compensation would be paid for psychological injuries unless employment was a substantial cause of the injury and that no compensation would be paid where the injury resulted from the reasonable actions of the employer with respect to promotion, demotion, staffing, etc. In addition, there were changes which limited or abolished interest payments and imposed time limits and other procedural constraints which were designed to reduce the number of compensation and work injury damages claims that could be made.
I also note that the Amendment Act not only introduced ss 4A and 145A[47], but also increased the maximum penalty for employers for failing to take out Compulsory Insurance by including the introduction of a penalty of imprisonment for up to six months in addition to the pre-existing penalty of a maximum of 200 penalty units (later increased to 500 penalty units).
[47] Amendment Act, Schedule 1, Item [69].
In addition, other provisions were introduced to strengthen the effectiveness of the Compulsory Insurance requirement. The Explanatory Note stated that procedural improvements were being made to make the current civil penalty for non-insurance, being twice the avoided premium recoverable by the Authority as a debt, more effective against defaulting employers.
I find that there was no error in the Member finding that the context and legislative purpose of these new provisions were intended to address non-insurance.
I am of the view that this evident purpose was reasonably certain by reference to the text, context and legislative purpose of the Amendment Act. In my opinion, the evident purpose of s 4A (as well as the other provisions such as s 145) was to strengthen the requirement for employers to obtain Compulsory Insurance by introducing adverse measures against the directors of an uninsured company, whereby not only would the directors be unable to make a claim under the Act if they themselves were employees of the company who were injured during the course of employment but also that the Nominal Insurer would be able to recover any payments made to any other injured employees of the uninsured company personally from those directors.
It follows that I find no error in the Member’s determination at paragraph [73] of the Statement of Reasons that the purpose behind s 4A was to exclude any claims arising out of an insured worker’s injury, including claims by dependants where the injured worker was a director of an uninsured employer company because it is the most consistent and harmonious reading of the provision.[48]
[48] Statement of Reasons, [73].
At paragraph [75] of the Statement of Reasons, the Member found that in the same context, s 3(1A) – in its application to s 4A – means that the dependants of a deceased worker are to be treated the same as a deceased worker, following the death. By reason of the matters referred to above, in relation to the context and legislative purpose of the introduction of the provisions, I find no error in that finding.
Accordingly, the conclusionary determination by the Member at paragraph [81] of the Statement of Reasons was appropriately made and is not affected by any error of law.
I note that in Moorabool, the Victorian Court of Appeal noted that “it is permissible, in determining which of two competing interpretations of a statute ought to be adopted, to have regard to the consequences of each interpretation.”[49]
[49] Moorabool, [83], citing R v Young (1999) 46 NSWLR 681, 687–8 [15] (Spigelman CJ); [1999] NSWCCA 166. See also Project Blue Sky (1998) 194 CLR 355, 384 [78] (McHugh, Gummow, Kirby and Hayne JJ); [1998] HCA 28; CTM v The Queen (2008) 236 CLR 440, 509 [237] (Heydon J); [2008] HCA 25. See generally the discussion in Dennis Pearce, Statutory Interpretation in Australia (LexisNexis, 10^th ed, 2024) 79–85 [2.61]–[2.65].
Taking the appellant’s contention that s 4A did not disentitle her or the third, fourth and fifth respondents from a claim for death benefits under ss 25 and 26 of the 1987 Act because they were separate and distinct rights, then the corollary would be that even though Mr Massoudi had failed to ensure that Compulsory Insurance was in place, his dependants would nevertheless get the benefits of a workers compensation scheme that is predicated on Compulsory Insurance. I accept the submissions of the second respondent that in those circumstances the payment of compensation to the appellant and to the third, fourth and fifth respondents would represent “a pure, unmitigated cost to the NSW Workers Compensation scheme [and it] would not be consistent with the insurance-based model”.[50] I find that such an outcome would be inconsistent and disharmonious with the legislative scheme. It is also an entirely different outcome to that in Hadfields and Kimberly-Clarke where the deceased worker’s employers had been compliant with Compulsory Insurance.
[50] Second respondent’s submissions, [33].
In this particular matter, it also means between the date of death of Mr Massoudi (on 15 April 2004) and 17 January 2010, when the appellant herself was the sole director of the Company, then any payment of death benefits and funeral expenses would have been able to be recovered against the Company under s 145 of the 1987 Act and against the appellant personally under s 145A of the 1987 Act. In addition, a prosecution could have been undertaken and, if successful, a penalty imposed on the Company for a contravention of s 155 of the 1987 Act, with the penalty being twice the premium that should have been paid under s 156 or on the appellant under s 156A. Further, during that time, the appellant was the sole shareholder of the Company and so the reduction of the assets of the Company by reason of the imposition of such penalties would have cancelled out the value of the death benefit insofar as the appellant was concerned. The circularity of that outcome might be seen to be specific to this factual context but it would not be an uncommon outcome in the situation of the many family owned/operated businesses. It is also an outcome which involves the time and expense of the prosecutions and the taking of the steps needed for the recovery of the penalties. As it was, the appellant and the third, fourth and fifth respondents did not make their claim until 2023, some 13 years after the Company was de-registered. I have not taken these matters into account in determining the correctness of the Member’s decision, but I set it out to illustrate that, in this particular matter, the separate and distinct entitlements that the appellant claims, would only have resulted in a benefit to the appellant because of the timing of her application for death benefits.

DECISION

Ground 1 of the appeal is not made out.
The appeal is dismissed.
The Member’s Certificate of Determination dated 19 January 2024 is confirmed.

Kylie Nomchong SC
ACTING DEPUTY PRESIDENT

17 January 2025