Massoudi v Workers Compensation Nominal Insurer (iCare) & Ors
[2024] NSWPIC 26
•19 January 2024
| CERTIFICATE OF DETERMINATION OF MEMBER | |
| CITATION: | Massoudi v Workers Compensation Nominal Insurer (iCare) & Ors [2024] NSWPIC 26 |
| APPLICANT: | Nadereh Massoudi |
| FIRST RESPONDENT: | Rose Truck Pty Limited |
| SECOND RESPONDENT: | Workers Compensation Nominal Insurer |
| THIRD RESPONDENT: | Shahrokh Massoudi |
| FOURTH RESPONDENT: | Shadeeyeh Massoudi |
| FIFTH RESPONDENT: | Shabnam Massoudi |
| MEMBER: | Gaius Whiffin |
| DATE OF DECISION: | 19 January 2024 |
| CATCHWORDS: | WORKERS COMPENSATION - Claim for benefits in respect of the death of a worker; whether the dependants’ claims are maintainable in circumstances where the worker was a director of an uninsured company; consideration as to how to interpret sections 4A and 3(1A) of the Workers Compensation Act 1987 (the 1987 Act), and section 4(2) of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act); consideration of statements, claim correspondence, and factual material; Military Rehabilitation and Compensation Commission v May, Project Blue Sky Inc v Australian Broadcasting Authority, Alcan (NT) Alumina Pty Limited v Commissioner of Territory Revenue, Grain Growers Limited v Chief Commissioner of State Revenue (NSW), Hadfields Steel Works Limited v Meyer, Meyer v Hadfields Steel Works Limited, SZTAL v Minister for Immigration and Border Protection, Hesami v Hong Australia Corporation Pty Limited, Newcastle City Council v GIO General Limited, Saeed v Minister for Immigration and Citizenship, Kline v Official Secretary to the Governor General, Khoury v Government Insurance Office of (NSW), and Amaca v Cremer & Ors considered; Held – the claims of the applicant, the third respondent, the fourth respondent, and the fifth respondent arising out of the death of the worker on 15 April 2004, pursuant to part 3 division 1 of the 1987 Act, are not maintainable by reason of section 4A, having regard to my interpretation of that provision as well as section 3(1A) and section 4(2) of the 1998 Act; award for the second respondent. |
| DETERMINATIONS MADE: | The Commission determines: 1. That the claims of the applicant, 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. |
STATEMENT OF REASONS
BACKGROUND
Farough Massoudi (the worker) died on 15 April 2004 as a result of injuries which he received on that date in the course of his employment with Rose Truck Pty Limited (the first respondent) as a truck driver. He was a director of the first respondent at the time. There was no policy of insurance in existence at the time to cover the liabilities of the first respondent under the Workers Compensation Act 1987 (the 1987 Act) to injured workers.
The worker was 45-years-old at the time of his death, and he lived with his wife, Nadereh Massoudi (the applicant), and their three children, who were then aged 18, 13 and 9 respectively.
His wife is currently 59-years-of-age. His son, Shahrokh Massoudi (the third respondent), is currently 38-years-of-age. His eldest daughter, Shadeeyeh Massoudi (the fourth respondent), is currently 33-years-of-age. His youngest daughter, Shabnam Massoudi (the fifth respondent), is currently 29-years-of-age.
The applicant initially claimed compensation from the Workers Compensation Nominal Insurer (the second respondent) pursuant to Part 3 Division 1 of the 1987 Act, arising out of the death of the worker, by way of a letter from her solicitors dated 13 March 2023. The second respondent was claimed against due to the first respondent’s lack of insurance coverage at the date of the worker’s death.
The second respondent issued a notice responding to the applicant’s claim on 13 April 2023, pursuant to s 78 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act). It denied liability for the claim, relying upon s 4A of the 1987 Act, which prevents an injured worker who was also a director of an uninsured employer from being entitled to compensation under the 1987 Act.
By way of an Application in Respect of Death of Worker (ARDW) lodged with the Personal Injury Commission (the Commission) on 21 June 2023, the applicant seeks orders that a lump sum pursuant to s 25(1)(a) of the 1987 Act in the amount of $290,900 be paid by the second respondent (as apportioned between her, the third respondent, the fourth respondent, and the fifth respondent, in accordance with s 29 of the 1987 Act), and that the worker’s funeral expenses be paid pursuant to s 26 of the 1987 Act, as well as that weekly compensation be paid in relation to the third respondent, the fourth respondent, and the fifth respondent (during applicable periods) pursuant to s 25(1)(b) of the 1987 Act.
ISSUES FOR DETERMINATION
The parties eventually agreed that the only issues requiring determination by the Commission were:
(a) are the claims brought by the applicant, the third respondent, the fourth respondent, and the fifth respondent maintainable, having regard to s 4A of the 1987 Act, as well as s 3(1A) of the 1987 Act and s 4(2) of the 1998 Act;
(b) if the answer to (a) is in the affirmative, who was dependent for support on the worker at the date of his death;
(c) if the answer to (a) is in the affirmative, how should the amount of $290,900 be apportioned between those dependants, pursuant to s 29 of the 1987 Act;
(d) if the answer to (a) is in the affirmative, what are the entitlements of the third respondent, the fourth respondent, and the fifth respondent pursuant to s 25(1)(b) of the 1987 Act;
(e) if the answer to (a) is in the affirmative, is there an entitlement pursuant to s 26 of the 1987 Act, and
(f) if the answer to (a) is in the affirmative, is any party entitled to interest on compensation awarded to them, pursuant to s 109 of the 1998 Act.
PROCEDURE BEFORE THE COMMISSION
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.
The dispute proceeded to a conciliation/arbitration before the Commission on 25 September 2023. On that occasion, the applicant was represented by Mr Stephen Hickey of counsel, instructed by Mr Dodd. The first respondent was not represented, as it had been deregistered as a company on 17 January 2010. The second respondent was represented by Mr John Fennel of counsel, instructed by Mr Ainsworth. The third respondent was represented by Mr Allen Parker of counsel, instructed by Mr Hill. The fourth respondent was represented by Mr Watson, solicitor, with his colleague, Ms Ajok. The fifth respondent was represented by Mr Roche, solicitor, with his colleague, Ms Roberts. The applicant, the third respondent, the fourth respondent, and the fifth respondent were all present, as was Ms Barnsley from the second respondent.
As the dispute could not be resolved, it proceeded to an arbitration hearing. The issues requiring determination by the Commission (see paragraph 7 above) were agreed upon by all the parties, and the following facts were also agreed upon by all the parties:
(a) the worker suffered injury arising out of or in the course of his employment with the first respondent on 15 April 2004;
(b) the worker was employed by the first respondent when he suffered the injury;
(c) the worker died as a result of the injury on 15 April 2004;
(d) the worker was a director of the first respondent as at 15 April 2004, and
(e) the first respondent was uninsured as at 15 April 2004 in order to cover its liabilities under the 1987 Act.
An agreement was also reached between the applicant, the third respondent, the fourth respondent, and the fifth respondent regarding the apportionment (pursuant to s 29 of the 1987 Act) that they would ask the Commission to approve, if it was to award lump sum compensation pursuant to s 25(1)(a) of the 1987 Act. The second respondent did not wish to submit against that agreement, and conceded that the relevant lump sum compensation amount that would need to be apportioned (if awarded by the Commission) was the amount of $290,900. The apportionment agreement was:
(a) applicant – $200,900;
(b) third respondent – $30,000;
(c) fourth respondent – $30,000, and
(d) fifth respondent – $30,000.
Finally, it was also agreed that further documentation needed lodging with the Commission regarding the potential claims pursuant to ss 26 and 25(1)(b) of the 1987 Act. Various directions were therefore made by the Commission regarding the lodging and admission (if not objected to) of this documentation.
The parties then provided oral submissions to the Commission, and directions were made regarding the provision of any further written submissions.
As a result, following the arbitration hearing on 25 September 2023, applications to admit late documents were lodged and further written submissions were provided (by the applicant, the third respondent, and the second respondent). I will admit into evidence the applications to admit late documents, and I will have regard to the further written submissions in reaching my determination.
EVIDENCE
Documentary evidence
The following documents were in evidence before the Commission and considered in making this determination:
(a) the ARDW and its attached documents – admitted without objection from any party at the arbitration hearing;
(b) the applicant’s Application to Admit Late Documents dated 13 September 2023 (applicant’s first AALD) and its attached documents – admitted without objection from any party at the arbitration hearing;
(c) the applicant’s Application to Admit Late Documents dated 6 October 2023 (applicant’s second AALD) and its attached documents – admitted in accordance with the direction made at the arbitration hearing;
(d) the third respondent’s Reply (third Reply) and its attached documents – admitted without objection from any party at the arbitration hearing;
(e) the third respondent’s Application to Admit Late Documents dated 19 September 2023 (third respondent’s AALD) and its attached documents – admitted without objection from any party at the arbitration hearing;
(f) the fourth respondent’s Reply (fourth Reply) and its attached documents – admitted without objection from any party at the arbitration hearing;
(g) the fourth respondent’s Application to Admit Late Documents dated 18 September 2023 (fourth respondent’s first AALD) and its attached documents – admitted without objection from any party at the arbitration hearing;
(h) the fourth respondent’s Application to Admit Late Documents dated 7 October 2023 (fourth respondent’s second AALD) and its attached documents – admitted in accordance with the direction made at the arbitration hearing;
(i) the fifth respondent’s Reply (fifth Reply) and its attached documents – admitted without objection from any party at the arbitration hearing;
(j) the fifth respondent’s Application to Admit Late Documents dated 11 September 2023 (fifth respondent’s first AALD) and its attached documents – admitted without objection from any party at the arbitration hearing;
(k) the fifth respondent’s Application to Admit Late Documents dated 9 October 2023 (fifth respondent’s second AALD) and its attached documents – admitted in accordance with the direction made at the arbitration hearing, and
(l) the second respondent’s Reply (second Reply) and its attached documents – admitted without objection from any party at the arbitration hearing.
Oral evidence
There was no oral evidence sought to be given at the arbitration hearing.
Evidence consideration
I have considered all of the evidence presented to me by all the parties. I do not however need to refer to it in detail when considering the first issue which I need to determine as to whether the compensation claims being made are maintainable having regard to s 4A of the 1987 Act, specifically considering the agreed facts referred to at paragraph 10 above. There do not appear to be any significant factual disputes to resolve in this regard. I will therefore refer to the evidence only if specifically directed to it during the parties’ submissions.
Applicant’s submissions
The applicant initially lodged written submissions with the Commission dated 12 September 2023. She largely relied upon those submissions during her oral submissions at the arbitration hearing.
In her written submissions, the applicant recognises the need “to examine and construe s 4A 1987 Act and s 4(2) 1998 Act and the death benefit provisions in Part 3 Division 1 of the 1987 Act having regard to text, context, purpose and the existing case law”. In relation to statutory interpretation, she refers to the authorities of Military Rehabilitation and Compensation Commission v May [2016] HCA 19 (May), Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 (Blue Sky), Alcan (NT) Alumina Pty Limited v Commissioner of Territory Revenue [2009] HCA 41 (Alcan), and Grain Growers Limited v Chief Commissioner of State Revenue (NSW) [2016] NSWCA 359 (Grain Growers).
She submits that s 4(2) of the 1998 Act “has a distinct and separate facilitative application in respect of claims for compensation that a deceased worker might have brought for his own benefit…but for the worker’s death”. However, claims by dependants arising under Part 3 Division 1 of the 1987 Act independently arise from any claim that a deceased worker could have brought and have a different “status and class” as defined in the part.
The applicant then comes to the crux of her argument regarding how to interpret s 4A of the 1987 Act, and I think it is useful here to quote directly from her written submissions:
“10. When construing s 4A one notes the opening words of the section refer to ‘the employer’s (Rose Truck Pty Ltd’s) liability under this Act in respect of ‘an injured worker’ and then provides conjunctively with the use of the word ‘and’ the requirement to be satisfied that ‘the injured worker’ was at the relevant time a director [emphasis in original] of the corporation (Rose Truck) and if so [emphasis in original] (noting the opening phrase of the section) ‘the injured worker’ is not entitled to any compensation under this Act in respect of that liability [emphasis in original].
11. ‘That liability’ referred to in s 4A is a specific liability otherwise for ‘the injured worker’ but excluded provided a particular dual test set in the section is fulfilled on the facts. The test is conjunctive and requires:
(i)the corporation was uninsured to the extent described in relation to ‘an injured worker’ and
(ii)‘the injured worker’ was at the relevant time ‘a director of the corporation’.
12. In s 4A the words ‘the injured worker’ are used twice and the definitive article is used to refer with specificity to an injured worker who is also ‘a director’. In contrast the indefinite article is used in the preceding words ‘an injured worker’. The words ‘an injured worker’ are used generally and contextually when the section is describing the corporation’s requisite omission to have in place a policy of insurance to cover the full amount of the employer’s liability under the Act in respect of ‘an injured worker’ if the section is to operate.
13. Thereafter, the specific exclusionary effect of the section is met if ‘the injured worker fits the requisite definition as ‘a director of the corporation’. The second usage of the words ‘the injured worker’ refers to that same worker who is excluded from any entitlement to compensation in respect of that liability provided he or she be ‘a director of the corporation’. The dependants are outside the second limb of the conjunctive test in submission 11 above.”
The applicant summarises that as, pursuant to s 4A of the 1987 Act, the injured worker is required to be a director of the relevant corporation for the section to have exclusionary work to do, a construction of the section could not include the dependants as being covered by it because they were not directors of the first respondent.
The applicant then quotes extensively from the High Court decision in Hadfields Steel Works Limited v Meyer [1962] HCA 34, as well as from the Supreme Court decision from which the High Court appeal arose, Meyer v Hadfields Steel Works Limited (1961) 79 WN (NSW) 322 (Hadfields). These decisions considered the relationship between s 63(2) of the Workers’ Compensation Act 1926 (the 1926 Act) and s 6(2) of the 1926 Act. Section 63(2) prevented a worker from obtaining any workers compensation benefits once he/she had obtained a damages judgement, and s 6(2) was worded in very similar terms to s 4(2) of the 1998 Act. In Hadfields, both the Supreme Court and the High Court decided that s 6(2) did not prevent a widow obtaining compensation (similar to the compensation available under Part 3 Division 1 of the 1987 Act) following the death of her husband some years after his work injury, despite the fact that he had obtained damages in relation to that injury during his lifetime. The submission is made as a result by the applicant that:
“...the rights of the dependants are to be construed as separate and apart from those of the deceased and are derived from the statutory application of the ‘death claim’ sections of the Act to any dependants (as defined in the Acts) of the deceased as at date of his death”.
In her written submissions, the applicant finally submits that it is difficult to conceive of any public policy considerations as to why the worker’s dependants should not be entitled to compensation in the same way as the dependants of any other deceased worker who dies while employed by (but is not a director of) an uninsured employer.
In relation to public policy considerations, the applicant also notes that if the dependants had been able to utilise s 20 of the 1987 Act in order to found a claim against a principal with whom the first respondent has contracted, the first respondent’s lack of insurance would not have prevented the dependants’ claim against the principal.
During her oral submissions at the arbitration hearing, the applicant notes that s 3(1A) of the 1987 Act was identical to s 4(2) of the 1998 Act, and would also therefore not have any effect to make s 4A of the 1987 Act applicable to prevent the claims of the dependants. She concedes that the sub-section was introduced into the 1987 Act at the same time as s 4A, but sees no particular significance in this regard.
The applicant then lodged further written submissions with the Commission dated 24 October 2023. In these submissions, she generally deals with the Explanatory Note to the WorkCover Legislation Amendment Bill 1995 (the 1995 Bill), which introduced both ss 3(1A) and 4A of the 1987 Act. She quotes from pages 3 and 15 of the Explanatory Note and submits that the wording in it “does not evince an intention to deprive the dependants of s 25 death benefits due to being workers for the purposes of s 4A”.
Submissions of third respondent
The third respondent made some brief oral submissions at the arbitration hearing, and he also lodged written submissions with the Commission dated 13 October 2023. He adopts the applicant’s submissions, and adds:
(a) “it defies belief that Parliament would take away the rights of spouses and children of deceased workers without specifically stating that as a fact” - the Second Reading Speech of the 1995 Bill contains no support for such an intention, and indeed, if the rights of spouses and children were to be deprived by Act amendments, “such an action would be clearly spelt out and there be an opportunity to debate”; and
(b) as s 4A of the 1987 Act does not punish employees of an uninsured company (other than the director of the company), it should not punish dependants.
Submissions of fourth respondent
The fourth respondent orally adopted the submissions of the applicant and the third respondent at the arbitration hearing. She did not otherwise lodge any written submissions with the Commission.
Submissions of fifth respondent
The fifth respondent orally adopted the submissions of the applicant and the third respondent at the arbitration hearing. She did not otherwise lodge any written submissions with the Commission.
Submissions of second respondent
The second respondent initially lodged written submissions with the Commission dated 12 September 2023.
In its written submissions, the second respondent notes that ss 3(1A) and 4A of the 1987 Act were introduced by consecutive items in the 1995 Bill, which “strongly favours the submission that Parliament intended the sections to operate together”. As a result, the decisions in Hadfields should not be used to override Parliament’s clear intention. Further, Hadfields involved the interpretation of sections of the 1926 Act dealing with the double recovery of compensation, which pre-dated by some time the introduction of s 4A of the 1987 Act. That case is therefore not an authority relevant to the claims of the dependants.
The second respondent expanded upon its written submissions during oral submissions at the arbitration hearing.
The second respondent notes there is no authority interpreting s 4A of the 1987 Act, and the Commission is therefore dealing with a “novel issue” requiring reference to the first principles of statutory interpretation.
The second respondent refers to ss 33 and 34 of the Interpretation Act 1987 as well as the authority of SZTAL v Minister for Immigration and Border Protection [2017] HCA 34 (at [14]) (SZTAL). The starting point when interpreting legislation is to consider its text, context, and purpose. Extrinsic material can be used to assist in that interpretation.
The second respondent relies primarily on s 3(1A) of the 1987 Act (rather than s 4(2) of the 1998 Act) in its submissions as that provision was introduced in the same 1995 Bill as s 4A of the 1987 Act. The interpretation of ss 3(1A) and 4A require a consideration of the text of those two provisions, in the context of the 1987 Act, having regard to the purpose of Parliament in enacting the two provisions.
In relation to ‘text’, the second respondent submits that s 3(1A) has to be given work to do, and the work that it does can be different in the context of different provisions in the 1987 Act that it relates to. The “colour” taken by s 3(1A) depended upon the associated provision (such as s 4A of the 1987 Act) that was being interpreted. This was in fact made clear by the Supreme Court in Hadfields.
The harmonious interpretation of the text of s 3(1A) of the 1987 Act is to ensure that workers and dependants receive “equivalent treatment” under the 1987 Act. This interpretation leads to the conclusion that if an injured worker is disentitled to compensation, his/her dependants would also be so disentitled.
It is not simply a matter of using s 3(1A) of the 1987 Act to substitute words into s 4A of the 1987 Act, but rather reading the two provisions together in order to distill the intention of Parliament in enacting the two provisions.
In relation to the applicant’s submission that the rights of dependants under Part 3 Division 1 of the 1987 Act are “separate and apart from those of the deceased”, the second respondent submits that for dependants to access those rights, the deceased must have suffered an injury related to his/her employment in accordance with s 4 of the 1987 Act. The injury is the deceased’s injury and the employment is the deceased’s employment. As a result:
“…it is not entirely right to say that the rights of a worker and the rights of a dependant are distinct and separate from one another. They depend on one another, and that dependence is expressed through s 3(1A) of the 1987 Act”.
In relation to ‘context’, the second respondent submits that s 4A of the 1987 Act should be interpreted in the context of other provisions in the 1987 Act that limit liability or entitlement to compensation. The second respondent mentions s 9A of the 1987 Act. The second respondent also submits that s 4A is “in the same vein” as ss 145 and 145A of the 1987 Act (which provide for the recovery from uninsured companies or their directors, of compensation paid), in attempting to limit the liability of the Workers Compensation Nominal Insurer.
In relation to ‘purpose’, the second respondent submits that ss 3(1A) and 4A follow each other in both the Schedule listing the amendments made by the 1995 Bill, as well as in the Explanatory Note to the 1995 Bill. These facts strongly support the proposition that the drafters of the 1995 Bill must have had regard to the provisions operating together, yet there was no attempt made to qualify the operation of s 3(1A).
The second respondent then quotes from the Second Reading Speech of the 1995 Bill to establish that the costs of the workers compensation scheme, and limiting those costs, were important considerations, as follows:
“The current WorkCover Scheme cost problem, which was inherited by the present Government, must be addressed to insure the financial viability of the Scheme to meet claims of injured workers, as well as to avoid adverse effects on employment and the economy of this State.
On the subject of workers compensation insurance, the Bill includes several measures to deter breach by employers of their obligations in that regard. This includes the introduction of imprisonment – applicable both to employers who are individuals and to directors of uninsured corporations – for up to 6 months as an additional penalty option in appropriate cases…Avoidance of insurance obligations by a minority of employers is grossly unfair to the majority who property insure, since the latter are effectively subsidising the former.”
The second respondent then finalises its oral submissions, as follows:
“The intention of the scheme in the second respondent’s submission is not so much to punish people like the dependants of the deceased, but rather to ensure that there is not leakage from the scheme in relation to liabilities that are not covered by insurance”.
The second respondent then lodged further written submissions with the Commission dated 27 October 2023.
The second respondent deals with the dependants’ submission that if Parliament had intended to deprive the dependants of a director of an uninsured company from compensation, it would have made specific reference to its intention in this regard in the Explanatory Note to or the Second Reading Speech of the 1995 Bill. The second respondent describes this submission as misconceived in the context of the legislative framework of the 1987 Act, which creates liabilities that are not enforceable outside the parameters of the legislation. Those liabilities require certain compensation to be paid if a worker sustains an injury, and they require a worker’s employer to obtain insurance to cover the liabilities. If an employer fails to obtain that insurance, a worker can claim compensation from the second respondent, and the second respondent can then recover the compensation paid back from the relevant employer or its directors. The second respondent submits:
“To put it another way, the legislation is not punitive, as is submitted by the Applicant and the Third Respondent, but rather a way of limiting payments from an insurer (the Nominal Insurer) when no insurance has been obtained…The dependants are not ‘deprived’ of benefits. There is no benefit payable because the injury was to a worker who did not insure the risk that eventuated. The legislation effectively pierces the corporate vale such as to place such a worker in the situation of a sole trader absent the corporate legal person. In the case of a sole trader, also, there would be no entitlement to death benefits”.
FINDINGS AND REASONS
Are the claims brought by the applicant, the third respondent, the fourth respondent, and the fifth respondent maintainable, having regard to s 4A of the 1987 Act, as well as s 3(1A) of the 1987 Act and s 4(2) of the 1998 Act?
Section 4A of the 1987 Act provides:
“If an employer that is a corporation had not obtained, or was not maintaining in force, at the relevant time a policy of insurance for the full amount of the employer's liability under this Act in respect of an injured worker and the injured worker was at the relevant time a director of the corporation, the injured worker is not entitled to any compensation under this Act in respect of that liability”.
Section 3(1A) of the 1987 Act then provides:
“(1A) A reference to a worker who has been injured includes, if the worker is dead, a reference to the worker's legal personal representative or the worker's dependants, or any other person to whom or for whose benefit compensation is payable”.
Section 4(2) of the 1998 Act provides in identical terms:
“(2) Extended meaning of injured worker A reference in this Act to a worker who has been injured includes, if the worker is dead, a reference to the worker's legal personal representative, or the worker's dependants, or any other person to whom or for whose benefit compensation is payable”.
Sections 4A and 3(1A) of the 1987 Act were inserted into it following the passing of the 1995 Bill. The Schedule listing the amendments made by the 1995 Bill includes the amendments to ss 3(1A) and 4A consecutively at [3] and [4] respectively. Section 4(2) of the 1998 Act followed when the 1998 Act was passed.
The Explanatory Note to the 1995 Bill provides both an overview of the Bill and an outline of the Bill’s provisions. In relation to ss 4A and 3(1A) of the 1987 Act, the relevant overview provides as follows:
“(t) Penalties for failure to take out workers compensation insurance are
increased, including by the introduction of imprisonment for up to 6
months as a penalty option. Other provisions are introduced and
existing provisions strengthened to increase the effectiveness of the
compulsory insurance provisions.(u) The definition of worker is extended to make it clear that, where the
worker has died, the legal personal representative or dependents of the
worker are included.”Then, in relation to ss 4A and 3(1A), the relevant outline provides as follows:
“Enforcement of requirement for workers compensation Insurance
The current penalty of up to $20,000 for failure by the employer to insure under the Act is increased to include imprisonment of up to 6months. Provisions are also introduced specifying that injured directors of uninsured companies may not claim against the Workcover Uninsured Fund and that, where that Fund has to pay compensation to injured employees (other than directors, who are excluded) the Workcover Authority may recover the debt owing to the Fund personally against a director of the company. The director is then entitled to recover the amount back from the company. Procedural improvements are made to make the current civil penalty for non-insurance (twice the avoided premium recoverable by the Authority as a debt) more effective against defaulting employers. As well, the Bill allows for regulations to prescribe an amnesty period for defaulting employers to obtain insurance. (See Schedule 1 [67], [76] and [77]-[81])
Clarification that expression ‘worker’ extends to legal personal representative or dependants of deceased worker
The Bill amends section 3 to make it clear that the term ‘worker’ includes, in relation to a deceased worker, the legal personal representative or dependents of the worker. Transitional provisions make it clear that this amendment is for clarification only and accordingly applies in respect of any worker, including a worker who died or was injured before the commencement of the amendment. (See Schedule 1 [3])”
I do not find the interpretation of the provisions interpreted in the decisions in Hadfields to be overly helpful in order for me to determine how to apply s 3(1A) of the 1987 Act to the interpretation of s 4A of the 1987 Act. Although s 3(1A) is in similar terms to s 6(2) of the 1926 Act, it is in my opinion not possible to draw any significant parallel between how s 4A is to be interpreted having regard to s 3(1A) and how s 63(2) of the 1926 Act was interpreted in Hadfields having regard to s 6(2) of that Act. Section 4A deals with an entirely different scenario than s 63(2) of the 1926 Act. Section 4A deals with the circumstance where a worker’s entitlement to compensation is extinguished ab initio, rather than the circumstance where a worker has indeed prosecuted a compensation entitlement and is therefore not entitled to further compensation.
Section 63(2) of the 1926 Act stated as follows:
“In such case the worker may proceed both under this Act and independently of this Act but where he obtains judgment against his employer independently of this Act he shall not be entitled to any compensation under this Act other than compensation paid to him before such judgment”.
Section 6(2) of the 1926 Act stated as follows:
“Any reference to a worker who has been injured shall, where the worker is dead, include a reference to his legal personal representative or to his dependants, or other person to whom or for whose benefit compensation is payable”.
The High Court in Hadfields summarised its finding as to how s 6(2) of the 1926 Act was to be used to interpret s 63(2) as follows [at 4]:
“Section 63 (2) is but one of several provisions contained in s. 63 which are directed against double recovery by a worker in respect of compensable injuries and when the section is read as a whole it is clear enough that the stipulation in sub-s. (2) that a worker ‘may proceed under this Act and independently of this Act’ speaks, primarily, of proceedings to enforce his rights in the circumstances contemplated by sub-s. (1). But the rights of his dependants under the Act where death results from his injuries are separate and distinct rights and it seems to us that when it becomes necessary to consider how far and to what extent dependants of a deceased worker are affected by the provisions of sub-s. (2) the result of the application of the provisions of s. 6 (2) is, in effect, to accord to s. 63 (2) a distributive operation. That is to say, it is intended to apply to a worker in his lifetime in relation to his rights and, in circumstances where after his death his dependants have both a right to compensation and a right to damages under the Compensation to Relatives Act, to his dependants in respect of those rights.”
If such a “distributive operation” was applied to s 4A of the 1987 Act, the dependants’ rights (which would include their “separate and distinct rights” pursuant to Part 3 Division 1 of the 1987 Act) still became subject to s 4A upon the worker’s death, when the sub-section began to apply to those rights.
While the applicant is correct in submitting that it is well established (and certainly confirmed in both decisions in Hadfields) that the rights of dependants upon the death of a worker (pursuant to Part 3 Division 1 of the 1987 Act) are distinct from those of the worker and not derived through him, the rights are still subject to s 4A of the 1987 Act.
The fact that s 6(2) of the 1926 Act produced a “distributive operation” does not in my opinion assist me in my application of s 4A of the 1987 Act to the dependants’ rights.
There are however some passages (regarding how to interpret s 6(2) of the 1926 Act) from the Supreme Court decision in Hadfields which I do find of assistance in this regard. Evatt CJ and Manning J stated (at pages 322-323):
“The terms of s 6(2) cannot in our view be read without qualification. The subsection provides that any [emphasis in original] reference to a worker who has been injured shall, where the worker is dead, include a reference to (inter alia [emphasis in original]) his dependants. This must be read as having application only where the context and subject matter so permit.”
Further, Sugerman J stated (at page 326):
“Section 6(2) is consequential upon this conferment of separate statutory rights to compensation upon dependants and others. Its plain purpose is to enable the adaptation and application, to and in respect of these rights and their enforcement, of provisions of the Act which in their substance are susceptible of such application but in their terms are applicable only to and in respect of the rights of the injured worker himself. The object is to avoid the circumlocution which would otherwise be necessary in order to deal in the one provision, not only with the event of the injured worker’s being alive, but also with the event of his being dead with resultant rights to compensation in his dependants and other persons…Section 6(2) according to its terms operates only ‘where the worker is dead’. It is unlike the usual interpretation clause which provides 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”.
In this context, I reject the applicant’s submission (and interpretation of s 4A of the 1987 Act) at paragraph 21 above. That interpretation relies upon a dual test needing to be satisfied in order for s 4A to extinguish rights. The second limb of the test requires “the injured worker was at the relevant time a director of the corporation”. The applicant argues that the use of the definitive article refers “with specificity to an injured worker who is also a director”. As none of the dependants were directors of the first respondent, a reference to them rather than the worker when dealing with the second limb of the test would not extinguish their rights.
The flaw in the applicant’s argument is that s 3(1A) of the 1987 Act and s 4(2) of the 1998 Act both use the term “includes” when describing the classes (such as dependants) that fall within the section. As Sugerman J in Hadfields stated, this can be read both as enlarging the meaning of the term ‘worker’ to include the worker himself and the other classes referred to, and also as allowing one or more of the relevant classes to be substituted for that term “as may be appropriate in the particular circumstances”. Evatt CJ and Manning J in Hadfields also emphasised that in section 6(2) of the 1926 Act, dependants were only one of the relevant classes covered.
In my opinion, it is not possible to simply substitute the term ‘injured worker’ with the term ‘dependant’ when interpreting s 4A of the 1987 Act, in the dependants’ claim. The term also includes the worker himself and any of the other classes referred to in s 3(1A) of the 1987 Act and s 4(2) of the 1988 Act. In those circumstances, I do not accept the applicant’s argument that s 4A only applies if the dependants were directors of the first respondent. In my opinion, the worker continues to be included within the term ‘the injured worker’ when that term is used in s 4A, so that his directorship of the uninsured first respondent leads to both his and the dependants’ compensation entitlements (including those pursuant to Part 3 Division 1 of the 1987 Act) being extinguished.
This interpretation is I believe consistent with the principles of statutory interpretation enunciated in the various authorities.
In Hesami v Hong Australia Corporation Pty Limited [2011] NSWWCCPD 14 (Hesami), Roche DP helpfully summarised these principles, as follows [at 43]:
“In interpreting this provision, I must apply the principles of statutory construction explained by Allsop P (Giles and Hodgson JJA agreeing) in Wilson v State Rail Authority of New South Wales [2010] NSWCA 198 at [12]. It is convenient to set out his Honour’s statement in point form (excluding citations):
·(a) ‘[i]t is the language of Parliament that must be interpreted and construed’;
·(b) ‘in construing an Act, a court is permitted to have regard to the words used by Parliament in their legal and historical context’;
·(c) ‘[c]ontext is to be considered in the first instance, not merely when some ambiguity is discerned’;
·(d) ‘[c]ontext is to be understood in its widest sense to include such things as the existing state of the law and the mischief or object to which the statute was directed’;
·(e) ‘[f]undamental to the task, of course, is the giving of close attention to the text and structure of the Act, as the words used by Parliament to effect its legislative purpose’, and
·(f) ‘general words, informed by an understanding of the context, and of the mischief to which the Act is directed, may be constrained in their effect’.”
The High Court has made it clear in numerous cases that statutory interpretation requires reference to the text, context and purpose of a provision. In Alcan, the plurality stated (at [47]):
“This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.”
French CJ in Alcan separately stated (at [4]):
“The starting point in consideration of the first question is the ordinary and grammatical sense of the statutory words to be interpreted having regard to their context and the legislative purpose. That proposition accords with the approach to construction characterised by Gaudron J in Corporate Affairs Commission (NSW) v Yuill as:
‘dictated by elementary considerations of fairness, for, after all, those who are subject to the law's commands are entitled to conduct themselves on the basis that those commands have meaning and effect according to ordinary grammar and usage.’
In so saying, it must be accepted that context and legislative purpose will cast light upon the sense in which the words of the statute are to be read. Context is here used in a wide sense referable, inter alia, to the existing state of the law and the mischief which the statute was intended to remedy.”
In Blue Sky, the plurality of the High Court stated (at [69]-[70]):
“The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined ‘by reference to the language of the instrument viewed as a whole’. In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that ‘the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed’. Thus, the process of construction must always begin by examining the context of the provision that is being construed.
A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions.”
And (at [78]):
“However, the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.”
Further, in Newcastle City Council v GIO General Limited [1997] HCA 53 (GIO), McHugh J warned:
“When the express words of a legislative provision are reasonably capable of only one construction and neither the purpose of the provision nor any other provision in the legislation throws doubt on that construction, a court cannot ignore it and substitute a different construction because it furthers the objects of the legislation.”
It is clear to me that s 4A of the 1987 Act (insofar as it applies to dependants of a director of an uninsured company) is capable of more than one construction, and that there is some ambiguity in its construction. There is no clear meaning to the text of the provision in this regard in accordance with Alcan. This is apparent from the construction put forward in the applicant’s submissions (see paragraph 21 above), despite the inclusive nature of the term ‘injured worker’ that can be gleaned from the statutory language of s 3(1A) of the 1987 Act and from the Supreme Court decision in Hadfields.
I will now therefore consider the context of the two provisions and their legislative purpose, as directed by Alcan and Blue Sky.
Importantly, s 4A specifically seeks to deal with the situation where there is no policy of insurance in force “for the full [emphasis added] amount of the employer’s liability under this Act in respect of an injured worker”. This liability would in my opinion, include liability in relation to the dependants’ claims pursuant to Part 3 Division 1 of the 1987 Act. That is the context of s 4A.
It sets a background where insurance is required to cover entire liability under the 1987 Act before then proceeding to deal with the consequences of non-insurance.
While I accept that the dependants’ claims are separate and distinct rights from the worker’s right to claim, the dependants’ claims still require there to be liability under the 1987 Act for an injury suffered by a worker.
In the context which I have found, I am also willing to find that the purpose behind s 4A of the 1987 Act was to exclude any claims arising out of an injured worker’s injury, including claims by dependants, where the injured worker was the director of an uninsured company. This in my opinion makes for the most consistent and harmonious reading of the provision, in accordance with Blue Sky.
I also do not believe that the introduction of ss 4A and 3(1A) of the 1987 Act, at the same time and proximate to each other in the 1995 Bill, can be ignored as suggested by the dependants. Although s 3(1A) clearly is relevant to many sections of the 1987 Act other than s 4A, I do find it highly relevant to the context of the sub-section that it was enacted by a Bill where non-insurance of employers was a consideration. Apart from s 4A, the 1995 Bill also introduced s 145A of the 1987 Act, which allows the Nominal Insurer to recover compensation paid to injured workers directly from directors of uninsured employers in certain circumstances. I accept as a result the second respondent’s submission (see paragraph 32 above) that Parliament intended ss 4A and 3(1A) to operate together.
Further, in relation to s 3(1A) of the 1987 Act, the context of that provision seems clear to me that it is intended to ensure that dependants of a deceased worker are to be treated equivalently to a deceased worker, following the worker’s death. It is clear that the provision was intended to operate wherever there was a reference to an injured worker in the 1987 Act.
I do not believe that I need to specifically use extrinsic materials in order to interpret ss 4A and 3(1A) of the 1987 Act. I also note the care that I need to take in having regard to those materials – see Saeed v Minister for Immigration and Citizenship [2010] HCA 23 and Kline v Official Secretary to the Governor General [2013] HCA 52.
However, in any case, neither the Explanatory Note to the 1995 Bill (see paragraph 51 above) nor its Second Reading Speech (see paragraph 43 above) provide much guidance as to how to interpret s 4A of the 1987 Act with s 3(1A) of the 1987 Act. These extrinsic materials are quite vague and the most that can be gleaned from them are intentions to:
(a) strengthen provisions in relation to non-insurance, and
(b) extend the definition of ‘worker’ to include dependants.
In relation to the remainder of the dependants’ submissions:
(a) having regard to both the Explanatory Note to the 1995 Bill and its Second Reading Speech, it seems to me that the main public policy consideration of Parliament at the time was to deal with non-insurance, rather than the preservation of entitlements – indeed, the Bill contained a significant number of provisions reducing entitlements;
(b) while there may be some inconsistency in dependants’ being able to utilise s 20 of the 1987 Act to claim compensation against a principal, even where the injured worker was a director of an uninsured company, this would seem to me to be a minor inconsistency, and certainly not one which I should have regard to in order to reach a harmonious interpretation of ss 4A and 3(1A) of the 1987 Act in accordance with Blue Sky;
(c) I reject the submission at paragraph 28(a) above – my interpretation of the text, context, and purpose of the 1995 Bill is that Parliament intended to make dependants subject to s 4A of the 1987 Act if the injured worker was a director of an uninsured company, and I do not see a requirement for such an intention to be spelt out with the clarity submitted, and
(d) it is not appropriate to equate the dependants of an injured worker who was a director of an insured company with injured employees (who were not directors) -– those injured employees are entitled to compensation as a result of the specific injuries which they have suffered, whereas the dependants’ compensation entitlements depend upon a worker suffering an injury (for which he/she cannot obtain compensation himself/herself).
It is often submitted correctly that workers compensation legislation should be construed beneficially, but the interpretation still must “be restrained within the confines of ‘the actual language employed’ and what is ‘fairly open’ on the words used” (per the plurality in Khoury v Government Insurance Office of (NSW) [1984] HCA 55 (at [29])). This interpretation was then re-inforced by the Supreme Court in Amaca v Cremer & Ors [2006] NSWCA 164 (Cremer), where McColl JA stated (at [51]):
“It is essential to recall, that in Bull v Attorney-General (NSW) [1913] HCA 60; (1913) 17 CLR 370, the classic judgment on interpreting remedial statutes, Isaacs J said (at 384) that the beneficial approach did not mean ‘that the true signification of the provision should be strained or exceeded, but that it should be construed so as to give the fullest relief which the fair meaning of its language will allow’. Thus, identifying s 12B as remedial should not obscure the question of determining the meaning of the relevant words: Victims Compensation Fund Corporation v Brown [2003] HCA 54; (2003) 77 ALJR 1797 at [33] per Heydon J (with whom McHugh ACJ, Gummow, Kirby and Hayne JJ agreed). Further, the principle that beneficial legislation should be given a liberal construction does not entitle a court to give it a construction that is unreasonable or unnatural: IW v City of Perth (People Living with AIDS case) [1997] HCA 30; (1997) 191 CLR 1 (at 11 – 12) per Brennan CJ and McHugh J.”
Having regard to the text, context and purpose of ss 4A and 3(1A) of the 1987 Act, as inserted by the 1995 Bill, I consider that the interpretation given to those provisions by the dependants (see specifically paragraphs 21-22 above) is too strained a construction, so as to make that construction unreasonable in accordance with Cremer.
I consider that the construction of ss 4A and 3(1A) of the 1987 Act, which would prevent the dependants from claiming compensation pursuant to Part Division 1 of the 1987 Act because the worker was a director of an uninsured company, is the most consistent and harmonious interpretation of those provisions, in order to reflect the purpose of all the provisions in the 1995 Bill, as well as in the 1987 Act as a whole.
SUMMARY
I find that the claims of the applicant, the third respondent, the fourth respondent, and the fifth respondent arising out of the death of the worker on 15 April 2004, pursuant to Part 3 Division 1 of the 1987 Act, are not maintainable by reason of s 4A of the 1987 Act, having regard to my interpretation of that provision as well as s 3(1A) of the 1987 Act and s 4(2) of the 1998 Act.
As a result, there will be an award made in favour of the second respondent.
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