McGrath v P.M. Electric Pty Limited - [2023] NSWPICPD 31

DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY A MEMBER
CITATION:	McGrath v P.M. Electric Pty Limited [2023] NSWPICPD 31
APPELLANT:	Nicole McGrath
FIRST RESPONDENT:	P.M. Electric Pty Limited
SECOND RESPONDENT:	Taleya Amelia McGrath
THIRD RESPONDENT:	Kayden Charles McGrath
INSURER:	Employers Mutual NSW Ltd
FILE NUMBER:	A4-380/21
PRESIDENTIAL MEMBER:	Acting Deputy President Geoffrey Parker SC
DATE OF APPEAL DECISION:	31 May 2023
ORDERS MADE ON APPEAL:	1. Orders 11, 12 and 13 of the Certificate of Determination dated 2 June 2022 are confirmed.
CATCHWORDS:	WORKERS COMPENSATION – interest pursuant to s 109 of the Workplace Injury Management and Workers Compensation Act 1998 with respect to lump sum death benefit payable in accordance with s 25 of the Workers Compensation Act 1987 – alleged error of discretion – House v R [1936] HCA 40; 55 CLR 499 applied – held that the rate of inflation is not to be considered in exercising the discretion in s 109 of the Workplace Injury Management and Workers Compensation Act 1998
HEARING:	On the papers
REPRESENTATION:	Appellant:
Mr J Hallion, counsel
Owen Hodge Lawyers
First respondent:
Ms L Goodman, counsel
Gair Legal
Second respondent:
Mr T Driscoll, solicitor
Beilby Poulden Costello
Third respondent:
Mr M Calf, solicitor
M.A.C. Calf Lawyers & Associates
DECISION UNDER APPEAL
MEMBER:	Ms K Haddock
DATE OF Member’s DECISION:	2 June 2022

INTRODUCTION AND BACKGROUND FACTS

The appeal is from part of a Certificate of Determination dated 2 June 2022.
The parties agreed that the issues for determination by the Member were:
(a) the apportionment of the death benefit, and
(b) whether interest is to be paid on the death benefit and if so the amount of interest and the period over which it is to be awarded.
The appellant is the widow of Nicholas McGrath who died on 21 September 2019 whilst on a trip to the Formula 1 Grand Prix in Singapore funded by his employer, P.M. Electric Pty Limited (the respondent).
On 8 June 2021, a Member of the Personal Injury Commission (Commission) entered an award for the employer.[1]
[1] McGrath v PM Electric Pty Ltd [2021] NSWPIC 174.
On 4 March 2022, an appeal against that decision was successful and the matter was remitted for re-determination by another member of the Commission.[2] The Deputy President remitted the matter for determination of the issues as to whether:
(a) the injury arose out of or in the course of employment in accordance with s 4 of the 1987 Act;
(b) the deceased’s employment was a substantial contributing factor to the injury in accordance with s 9A of the Workers Compensation Act 1987 (the 1987 Act), and
(c) any remaining issues including in respect of the apportionment of any amount of compensation payable.
[2] McGrath v PM Electric Pty Ltd [2022] NSWPICPD 8.
On 2 June 2022 the re-determination was listed for determination. The substantive claim was resolved by consent in favour of the widow and the dependants. The Member exercised her discretion and determined the apportionment of the lump sum amongst the widow and the dependants.
The claim for interest was contested as to when the payment of interest should commence and at what rate.
The Member determined those issues and ordered the first respondent/employer to pay interest at the rate of 2.1% for the period 6 March 2020 to 31 May 2022 on each lump sum amount payable to the widow and the dependants.
The appeal is by the widow against the order for interest in her favour. She seeks to have Orders 11, 12 and 13 revoked to the extent that the rate of interest is determined to be 2.1% and the matter remitted to another Member for re-determination.
Letters (dated 12 and 19 July) have been lodged on behalf of the children indicating that the second and third respondents were entering submitting appearances. I am not sure that this would necessarily have entitled those respondents to the benefit of a successful appeal. But in view of the outcome of the appeal this is of no consequence.
For the reasons that follow, the appeal is rejected and the determination of the Member made 2 June 2022 as to Orders 11, 12, and 13 is confirmed.

THE MEMBER’S STATEMENT OF REASONS AND FINDINGS

The Member issued a direction on 13 April 2022 whereby the application was amended to include a claim for interest. The matter was listed for conciliation/arbitration hearing on 23 June 2022.
On 27 April 2022 the first respondent (employer) withdrew its dispute as to liability.
On 2 June 2022, following receipt of written submissions, the Member apportioned the lump sum payable under s 25 of the 1987 Act, $810,050. The appellant’s share was 70% and each dependant received a 15% share.
The Member found the claim for death benefit to have been made on 3 December 2019.
On 6 March 2020 icare issued a notice disputing liability pursuant to s 78 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act).
On 25 January 2021 an Application to Resolve Dispute (ARD) was filed in the former Workers Compensation Commission. There are various documents attached to the ARD are of no significance to this appeal.
On 2 February 2021 particulars of the claim were requested. These were provided on 8February 2021.
The Member set out the relevant legislative framework, including s 109 of the 1998 Act which provides for the payment of interest. She then set out in detail the parties’ submissions.
The Member noted that subject to the limitations set out in subss 109(2) and (3), the power to award interest is discretionary. She observed relevantly that subs (2)(b) provides that interest cannot be awarded on any compensation payable for any period before a claim for compensation was duly made.
She referred to the decision of Haidaryv Wandella Pet Foods & Ors[3] as authority that an order for interest was to compensate the worker for the loss of income, not to penalise the employer.
[3] [2005] NSWWCCPD 9.
The employer’s first argument that no claim for interest had been made was rejected because on 13 April 2022, the appellant had been granted leave without objection to amend the application to include a claim for interest.[4] Furthermore, the order for re-determination following the successful appeal against the first determination included remittal for re-determination of “inter alia, the payment of interest.”[5]
[4] McGrath v P.M. Electric Pty Ltd [2022] NSWPIC 263 (reasons), [80].
[5] Reasons, [81].
The Member determined that the matter was one in which it was appropriate to exercise the discretion to make an order for the payment of interest. There is no appeal from this determination.
The next issue was the date from which the interest should be paid. After discussing Zhang v Universe Investments Pty Limited t/as Kings Seafoods[6] and a superseded guideline, the Member noted that there was no guideline specifically relevant, but that the SIRA Standards of Practice (the latest version of April 2022) directed in standard 31.1 that:
“If an insurer becomes aware of a death that may be work-related, the insurer is to proactively investigate the circumstances of the death, including in cases where the death occurred some time after a work-related injury.”[7]
[6] [2021] NSWPIC 128 (Zhang).
[7] Reasons, [90].
The Member referred to Keating P’s decision of Kaur v Thales Underwater Systems Pty Ltd[8] for the proposition that “duly made” meant “fully particularised”.[9]
[8] [2011] NSWWCCPD 6, [139].
[9] Reasons, [97].
She found:
“I am satisfied that, as at 6 March 2020, the claim was ‘duly made’, in that the first respondent had sufficient evidence on which to determine the claim, including the issue of dependency. It may not have been able to apportion the lump sum, but it could have taken either of the courses referred to by Arbitrator Batchelor in Zhang. Interest should be awarded from 6 March 2020 to date.”[10]
[10] Reasons, [102].
That determination is not the subject of challenge in the appeal.
The Member referred to Pheeney v Doolan (No 2)[11] relied upon by the appellant for the following proposition referring to interest:
“It provides an ancillary power akin to an order for costs, and its purpose is to aid the court to do more complete justice between the parties than is otherwise possible … It is not designed to compensate a plaintiff for loss arising out of the cause of action, but to provide compensation where it is otherwise appropriate to do so for the circumstance that a sum of money has been outstanding to him for a period of time.”
[11] [1977] 1 NSWLR 601 (Pheeney).
In response to the submission by the appellant that the rate of inflation should be factored into the determination of the appropriate rate of interest, the Member said:
“I do not accept the [appellant’s] submission that the rate of inflation should be applied to the award of interest. Had the death benefit been paid in March 2020, she and the second and third respondents would not have achieved a rate of bank interest that was remotely commensurate with the rate of inflation.
In Bennett,^[[12]] it was held that interest should generally be awarded on the ‘neutral’ basis that the defendant ‘ought to have paid’ the plaintiff at a particular time, but did not, and since that time the plaintiff has been out-of-pocket of that money and the defendant has had the benefit of it. The first respondent has had the benefit of the lump sum, but it would also not have achieved a rate of interest that was commensurate with inflation.”[13]
[12] Bennett v Jones [1977] 2 NSWLR 355 (Bennett).
[13] Reasons, [103]–[104].
This conclusion by the Member is central to the submissions made by the appellant in support of the appeal, even though it does not form an explicit ground of appeal.
The Member determined that the appropriate rate at which to award interest on the death benefit was 2.1% per annum.[14]
[14] Reasons, [106].
The dispositive finding with respect to the rate of interest was as follows:
“The cash rate set by the Reserve Bank has recently been raised to 0.35%, and there are indications that interest rates may rise. However, they are still historically low. The first respondent submitted that recent awards of interest have varied between 2% and 2.5% per annum, but most recently, they appear to have varied between 2% per annum and 2.1% per annum. In some cases, the parties agreed on a somewhat higher rate of interest.”[15]
[15] Reasons, [105].
She awarded interest on each of the amounts payable by the employer at the rate of 2.1% per annum for the period 6 March 2020 to 31 March 2022.

CERTIFICATE OF DETERMINATION

For completeness I set out the full Certificate of Determination, notwithstanding that there is only a limited challenge.
The Commission determined:
1. That the worker, Nicholas Charles McGrath, died on 21 September 2019 as a result of injury arising out of or in the course of employment with the first respondent, pursuant to section 4 of the Workers Compensation Act 1987.
2. That the worker’s employment was a substantial contributing factor to the injury, pursuant to section 9A of the Workers Compensation Act 1987.
3.      That the [appellant] was partly dependent for support on the worker at the date of his death.
4.      That the second respondent was dependent for support on the worker at the date of his death.
5.      That the third respondent was dependent for support on the worker at the date of his death.
6.      That there were no other persons dependent for support on the worker at the date of his death.
7.      That the first respondent is liable for payment of lump sum compensation of $810,050.
8. That the first respondent is to pay to the [appellant], pursuant to section 25(1)(a) of the Workers Compensation Act 1987 and section 85A(1)(a) of the Workers Compensation Act 1987, the sum of $567,035.
9. That the first respondent is to pay the sum of $121,507.50, pursuant to section 25(1)(a) of the Workers Compensation Act 1987, to the NSW Trustee and Guardian, to be held on trust pursuant to section 85(1)(a) of the Workers Compensation Act 1987, for the second respondent until she attains the age of 18 years.
10. That the first respondent is to pay the sum of $121,507.50, pursuant to section 25(1)(a) of the Workers Compensation Act 1987, to the NSW Trustee and Guardian, to be held on trust pursuant to section 85(1)(a) of the Workers Compensation Act 1987, for the third respondent until he attains the age of 18 years.
11. That the first respondent is to pay to the [appellant], pursuant to section 109 of the Workplace Injury Management and Workers Compensation Act 1998, interest on the sum of $567,035 at the rate of 2.1% per annum for the period from 6 March 2020 to 31 May 2022.
12. That the first respondent is to pay, pursuant to section 109 of the Workplace Injury Management and Workers Compensation Act 1998, interest on the sum of $121,507.50 at the rate of 2.1% per annum for the period from 6 March 2020 to 31 May 2022; and the interest is to be paid to the NSW Trustee and Guardian, to be held on trust pursuant to section 85(1)(a) of the Workers Compensation Act 1987 for the second respondent until she attains the age of 18 years.
13. That the first respondent is to pay, pursuant to section 109 of the Workplace Injury Management and Workers Compensation Act 1998 interest on the sum of $121,507.50 at the rate of 2.1% per annum for the period from 6 March 2020 to 31 May 2022; and the interest is to be paid to the NSW Trustee and Guardian, to be held on trust pursuant to section 85(1)(a) of the Workers Compensation Act 1987 for the third respondent until he attains the age of 18 years.
14.    That the parties have liberty to apply.
The challenge is to orders 11, 12 and 13. I am not sure of the appellant’s standing to challenge orders 12 and 13 given that each of the children were separately represented at the determination before the Member. But given my conclusion adverse to the appeal, this is of no significance.

GROUND OF APPEAL

The appellant relies upon the following ground of appeal:
“Error of law in failing to exercise discretion pursuant to s 109 [of the 1998 Act] in accordance with precedent authority.”

THRESHOLD MATTERS

The appeal was lodged within a 28-day time limit.[16] The amount in issue is 2.1% on $567,035 for the period 6 March 2020 to 31 May 2022. It therefore satisfies the monetary threshold stipulated by s 352(3) of the 1998 Act.
[16] Section 352(4) of the 1998 Act.

NATURE OF THE APPEAL PURSUANT TO SECTION 352(5) OF THE 1998 ACT

The jurisdiction provided in subsection 352(5) of the 1998 Act is:
“An appeal under this section is limited to a determination of whether the decision appealed against was or was not affected by any error of fact, law or discretion, and to the correction of any such error. The appeal is not a review or new hearing.”
Thus the jurisdiction extends to the correction of errors in the exercise of discretion. However, it is to be stressed before the jurisdiction is engaged there must be an error of fact, law or discretion. The jurisdiction is not engaged by a mere preference for another outcome. This is particularly relevant where what is asserted is an error in the exercise of a discretion given to the Member who is to determine the parties’ dispute.

ON THE PAPERS

The parties agree that it is appropriate for the matter to be determined on the papers.
Section 52(3) of the Personal Injury Commission Act 2020 provides that:
“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.”
Procedural Directions PIC2 and WC3 provide that I may be satisfied that the documents and submissions of the parties provide me with sufficient information so the appeal can be determined on the papers without holding any formal hearing.
I am so satisfied and propose to determine the matter “on the papers” without holding any conference or formal hearing.

GROUND ONE: ERROR OF LAW IN FAILING TO EXERCISE DISCRETION PURSUANT TO SECTION 109 [OF THE 1998 ACT] IN ACCORDANCE WITH PRECEDENT AUTHORITY

The appellant’s submissions

The appellant’s submissions commence with a summary of the Member’s Statement of Reasons.
The appellant says:
“In her reasons the Member concluded an interest rate of 2.1% upon the basis that neither the appellant nor the first respondent would have achieved a rate of bank interest commensurate with inflation and by implication neither party could have effectively hedged against the effects of inflation.
Essential to the Member’s reasoning was that accessible or achievable rate of interest to the parties was the rate of bank interest offered in a retail bank savings account being 2% above the Reserve Bank cash rate. The Member found then the relevant retail savings rate of interest provided the benchmark to be used under s 109 [of the] 1998 Act to determine the rate of statutory interest to compensate a claimant for financial disadvantage as a result of the delay in payment of an award of compensation.
Before the Member the inflationary effect on the lump sum benefit was unchallenged nor that the use of the retail bank interest rate failed to address the financial disadvantage as a result of the delay due to inflationary effects on the loss of value of the lump sum.”[17]
[17] Appellant’s submissions, [2.2.13]–[2.2.14].
The appellant submits that the “uncontested facts” in support of the inflationary effect were that “in the intervening 2 years the CPI indexed death benefit under s 25 [of the 1987 Act] had been increased to $862,350 due to cost-of-living factors. That is, the inflationary factors reflected in CPI resulted in an increase in the benefit by $52,300 while the appellant waited to be paid.”[18]
[18] Appellant’s submissions, [2.2.15].
The appellant submits that a corollary of the inflationary effects on the claimed death benefit was a commensurate erosion in the value of entitlement of $810,050. Assuming an inflation rate of 5.1% since the time that the payment was due by the first respondent, the value of the death benefit has been eroded by as much as $41,000.30. The appellant complains that there was an unfairness to her because the retail banking interest rate was not commensurate with the rate of inflation.[19]
[19] Appellant’s submissions, [2.2.19].
It is asserted:
“There is no legal presumption that interest under s 109 [of the 1998 Act] is constrained by the current retail bank savings rate and there was no evidence advanced by the first respondent that it was constrained from accessing alternative investments in management funds yielding much higher rates. The assumption then by the Member as to what was found to be the commercial rate of interest accessible does not find a basis in the evidence before the Commission.”[20]
[20] Appellant’s submissions, [2.2.20].
Bennett is submitted to provide that a defendant who disputes compensation for inflationary factors in an interest award due to unfairness bears the evidentiary onus to advance mitigating evidence of that unfairness. In this case there was none.
The appellant submits that the Member should have but did not draw an inference adverse to the respondent for its failure to adduce evidence that an order for interest based on the rate of inflation would be unfair.
The Insurance Fund under s 154 of the 1987 Act has an effective return of interest on investments by icare of 17.92%.
The contention is that the Member erred by “acting on wrong principle, taking irrelevant matters into account, ignoring relevant matters and making factual mistakes.”[21]
[21] Appellant’s submissions, [2.3.3].
It is submitted:
“The overriding principle being subject to fairness to both parties [is] the appellant be compensated for the financial disadvantage due to the delay in payment of money to which there was an historical legal entitlement.”[22]
[22] Appellant’s submissions, [2.3.5].

The appellant says that the exercise of the discretion with respect to statutory interest is governed by the legal principles found in Bennett and Pheeney.
icare is a commercial entity that operates in a commercial setting and that “allows icare [to] participate in a diverse global investment pool”. The appellant cites the Insurance and Care (NSW) (icare) Annual Report 2020/21 which was tabled in the New South Wales Parliament.
The appellant says:
“The finding by the Member of parity in terms of the parties’ investment strategies and by implication the ability to hedge against financial disadvantage due to the delay struggles to be reconciled with common knowledge about the commercial and statutory framework under which icare operates.”[23]
[23] Appellant’s submissions, [2.3.8].
From that the appellant submits:
“… there is an assumption by the Member, in the absence of evidence, that icare was effectively constrained to hedge against inflation by a ‘commercial rate of interest’ of 2.1% being 2% above the Reserve Bank cash rate. However, there was no evidentiary basis for why icare was so constrained and a conspicuous and unexplained absence of evidence by icare on what became the critical evidence upon which the Member relied to establish an unfairness to the first respondent if the appellant was compensated for inflation.”[24]
[24] Appellant’s submissions, [2.3.9].
The appellant submits:
“Having regard to the principles laid down in Bennett to be applied in awarding the finding by the Member at [[103] of the reasons] that as the appellant was assumed not to have been able to access a higher commercial rate of interest to hedge against inflation indicates the Member acted on wrong principle in adopting a ‘commercial rate of interest’ and in the appellant’s submission plainly unjust for the purpose of a House v R review.
In the appellant’s submission the adoption of a ‘commercial rate of interest’ was inapposite firstly because the particular case did not involve a commercial context and secondly because a ‘commercial rate of interest’ did not compensate the appellant for inflationary factors. In fact, it was because the Member concluded that the found ‘commercial rate of interest’ would not effectively hedge against inflation that the Member found it would be unfair to require the first defendant to compensate the appellant for inflation.”[25]
[25] Appellant’s submissions, [2.3.11]–[2.3.12].
The appellant submits that the Member acted on a wrong principle. “The primary reason why an interest award is needed to perfect legal remedies is because the value of money diminishes over time. A primary reason for the diminution of the value of money is inflation and it is for this reason an award of interest that ignores inflationary factor[s] is ineffective to cure the disadvantage statutory interest is designed for.”[26]
[26] Appellant’s submissions, [2.3.13].
The appellant submits:
“The submission before the Member at first instance was that the loss of purchasing power of the lump sum due to inflation was a factor for which a claimant must be compensated for in the assessment of the rate of interest due to the delay of the first respondent in paying the compensation. That submission is mirrored in the principle laid down in Bennett by Moffitt P that ‘to the extent that the trial is delayed, past inflation is allowed for’.”[27]
[27] Appellant’s submissions, [2.3.16].
The appellant submits that the Member erred in not assessing what was the “financial disadvantage” to the appellant. That it was only after this was ascertained that consideration is given to whether an award of interest compensating for inflationary factors would result in an unfairness to the first respondent due to being unable to effectively hedge against inflationary factors.[28]
[28] Appellant’s submissions, [2.3.19].
The appellant submits that, given that icare stands behind the first respondent, “it cannot be argued that icare could not effectively hedge against inflationary factors during the delay in payments.” The appellant submits:
“The finding of the Member at [[103] of the reasons] that ‘the first respondent had the benefit of the lump sum, but it would also not have achieved a rate of interest commensurate with the inflation’ took the proposition from Bennett that the inability of a claimant to hedge against inflation will operate in favour of an award for compensation for inflationary factors and reversed it to make it a mitigating consideration operating in favour of icare and against the awarding of interest.
There was no evidence of mitigating factors that was advanced by the first respondent for icare that it would be unfair to include an award of interest compensation for the effect of inflationary factor[s] due to the delay in payment.
In light of the evidence of the inflationary effect of the delay and the … finding of the Member that the appellant could not effectively [hedge] against inflation in the absence of evidence from the first respondent then in the exercise of the discretion the award of interest ought to have included compensation for inflationary [sic].”[29]
[29] Appellant’s submissions, [2.3.24]–[2.3.26].
In the conclusion the appellant submits:
“The principle laid down in Bennett by Moffitt P was that if an entitlement to compensation for the effects of inflation due to delay was disputed for fairness or economic disadvantage by the opposing payer then mitigating evidence would rebut the presumption in favour of an award for the effects of inflation.
The principle in Bennett in respect of being unable to hedge against inflation is directed at claimants and to provide an evidentiary basis upon which a claim for compensation against inflation is established. It was never intended when regard is had to the discussion in Bennett that it be utilised as the Member found to constrain a claimant’s entitlement to compensation for inflation due to delay.
On a proper evaluation of the evidence there was no evidence to support that the first respondent and icare would suffer unfairness from an award of interest that compensated the appellant for the effects of inflation due to delay.”[30]
[30] Appellant’s submissions, [2.3.34]–[2.3.36].

The respondent’s submissions

The respondent cites House v R[31] as the governing principle.
[31] [1936] HCA 40; 55 CLR 499 (House v R).
It then says:
“It is submitted that the rate of interest awarded by Member Haddock is similar to the rate of interest awarded by other Members of the Commission: See for example, 2.1% (being 2% above the Reserve Bank cash rate of 0.10%) in ZKM v Chen [2022] NSWPIC 108; 2% in Hu v Rongfar Property Services Pty Ltd [2021] NSWPIC 95; 2% (because of the comparatively low cash rate in the relevant period) in Wilson v State of New South Wales [2022] NSWPIC 396 and 2.5% in Richards v Macarthur Electrical Connection Pty Ltd [2021] NSWPIC 524.”[32]
[32] Respondent’s submissions, [8].
The respondent quotes from Mudgee Explorer Tours Pty Limited v Clarke,[33] in which Member Wynyard, after considering r 36.7(1) of the Uniform Civil Procedure Rules 2005 where the specified rate is 4% above the cash rate, found an allowance of 2% above the cash rate as more reasonable and realistic in the context of a lump sum death benefit claim.
[33] [2021] NSWPIC 41 (Clarke).
The respondent submits that under s 109 of the 1998 Act, the rate of interest is completely in the discretion of the Commission. The respondent says:
“It is clear from the authorities extracted above that the Commission has not adopted methods of determining the interest rate to be awarded such as rule 36.7(1) of the Uniform Civil Procedure Rules 2005. It would appear that the method generally adopted is by reference to the cash rate set by the Reserve Bank and tempering that by comparing the rate of bank interest that would be achieved not only by the beneficiaries of the death benefit but also by the insurer who had had the benefit of the lump sum payable. It is submitted that this is to achieve a fair result to both parties.”[34]
[34] Respondent’s submissions, [12].
The respondent notes that the Member rejected the appellant’s submission that the rate of inflation was to be applied on the basis that “a rate of bank interest that was remotely commensurate with the rate of inflation” could not be achieved.
The respondent submits that there is no evidence that the Member was wrong in principle as is demonstrated by the fact that the Commission has always adopted the method that the Member had in this case.
It is submitted that there is no evidence before the Member of any particular financial disadvantage other than not having the use of the money earlier. The Member took this into account and awarded 2.1% from 6 March 2020 to compensate the appellant.

The appellant’s submissions in reply

In reply the appellant provides six pages of further submissions, including reference to six additional authorities not previously referred to. I doubt that these additional submissions are properly described as “in reply”. Furthermore, the submission at paragraph [4.4] (see [77] below) was, as I understand it, not put at the hearing before the Member who made no determination on it. It is not part of the appeal.[35]
[35] Brambles Industries v Bell [2010] NSWCA 162 [30]
The appellant refers to the decision of Furina v Transfield Construction Pty Limited,[36] a decision with respect to an award under s 151M of the 1987 Act, and to MBP (SA) Pty Limited v Gogic[37] where the High Court found that it was inappropriate to award interest for pre-trial pain and suffering at a commercial rate when the damages were being assessed by the Court at the time of the assessment and not at the time of the injury.
[36] (1994) 10 NSWCCR 23 (Furina).
[37] [1991] HCA 3; 171 CLR 657 (Gogic).
The appellant refers to a passage from Gogic in which their Honours said:
“Damages for pre-trial non-economic loss, however, are assessed in accordance with the value of money as at the time of the award. In no way is any loss which a plaintiff incurs by reason of being deprived of his or her damages for pre-trial non-economic loss brought about by inflationary factors. In those circumstances, to award interest on damages for non-economic loss during the pre-trial period by reference to commercial rates is to compensate the plaintiff for a ‘loss’ which he or she has not sustained.”[38]
[38] Gogic, [7].
At [2.9] the appellant makes the point that where there is a statutory award, the reasoning applied in Gogic is inapposite because the amount awarded for non-economic loss is not ascertained in terms of the monetary value as at the time of judgment.
The appellant submits:
“2.13 In the appellant’s submission, the reasoning in Marsland^[[39]] and Furina, dealing as they do with a statutory benefit limited to a statutory cap determined fixed in time, is equally compelling in respect of s 25 [of the 1987 Act] where the date of death is September 2019 and the date of the award is May 2022.
2.14 The approach of the Member and the authority cited in support cannot be reconciled with the authority in Gogic, Marsland, Furina, and Bennett … as it does not have regard to the inflationary effects that erode the value of money as a result of what in Marsland was characterised as an ‘arbitrary and artificial statutory limit’.”[40]
[39] Marsland v Andjelic (No 2) (1993) 32 NSWLR 649 (Marsland).
[40] Appellant’s submissions in reply, [2.13]–[2.14].
The appellant submits that [Mudgee Explorer Tours Pty Ltd v] Clarke is wrong because it fails to have regard to the inflationary effect on the value of money. The appellant submits that what is required in the discretion of s 109 of the 1998 Act is, having found an entitlement, what rate of interest will compensate the appellant by reason of the “arbitrary and artificial statutory limit” fixed under s 25 of the 1987 Act.
The appellant then under the heading “Proper Approach” says:
“While … s 151M [of the 1987 Act] imposes a constraint on the calculation of the rate of interest the decision on the calculation provides guidance which if applied in the present case would avoid what the High Court identified in House v R an obviously unfair outcome.
In this regard the average of post judgment interest under r 36.7 UCPR over the period is calculated and applied to the whole of the statutory award which in this case would be an interest rate of 6.53% on the whole of the award from 6 March 2020 to 31 May 2022.
This rate of interest addresses both the inflationary effects of the delay associated with the circumstances where the statute imposes an ‘arbitrary and artificial statutory limit’ fixed at a point in time different from when the award is made and also for the party being kept out of funds and [having] the use of the funds which, in this case, it is a matter of public record icare was attracting around 18% pa return.
The Member was not asked to determine but it follows that adopting this reasoning then interest should further be awarded for the past weekly dependent rate by adopting say 50% of the 6.53% on the whole of the arrears.”[41]
[41] Appellant’s submissions in reply, [4.1]–[4.4].

CONSIDERATION

The appellant and the respondent accept that the relevant principle is in House v R. The settled rule is that an appellate court will not disturb the exercise of a discretion by the primary decision maker unless it is convinced that he or she has acted on a wrong principle of law, misapprehended the facts, or taken into account irrelevant matters or failed to take into account relevant matters. In addition, while error may not be apparent or demonstrable, the outcome is so unreasonable or unjust that it can only have been achieved on the basis of error.
The appellant’s submission in paragraph [2.3.13] is that the Member acted on a wrong principle in ignoring inflationary factors to cure the disadvantage which she submits statutory interest is designed for. In my view, that proposition should not be accepted for the reasons that follow.
Firstly, s 109 of the 1998 Act does not mention inflation as a factor relevant to determining the rate of interest. Section 25(4) of the 1987 Act indicates that the legislature did not intend for the death benefit to be adjusted for CPI adjustments between the date of death and the date of the order.
The reasonable inference is that the legislature does not intend the statutory benefit to be adjusted for inflation between the date of death and the date of the determination.
Secondly, ss 110 and 111 of the 1998 Act each provide for interest to be paid on unpaid amounts of compensation. Unlike s 109, the rate of interest in these sections is subject to an order by the Commission to the contrary prescribed either by the regulation or, in the absence of such a prescribed rate, the rate prescribed for the purpose of s 101 of the Civil Procedure Act 2005. That indicates the legislature intended the decision maker to have a very wide discretion as to the correct rate of interest for the purpose of s 109.
Fourthly, the scheme of the Act is to award compensation in the event of a worker’s death as a lump sum, fixed at the date of death, and to compensate by way of interest on the lump sum, entitlement between the date of death and the date of the determination.
The awarding of interest under s 109 is thus compensatory in accordance with conventional practice in relation to the awarding of pre-trial interest.[42]
[42] Pheeney; Bennett.
Fifthly, the discretion is in one sense more constrained than that provided for in the Civil Procedure Act because interest is not to be awarded for the period prior to the claim being “duly” made.
The Member found that the claim was duly made on 6 March 2020 and that interest should be calculated from that date. This was in accordance with the appellant’s submissions.[43]
[43] Reasons, [91], [102].
Sixthly, the Member’s reasoning at [103] of the reasons is conventional. What the appellant lost by the delay in payment was the use of the funds. If the death benefit had been paid to the appellant in March 2020, she would have had available the funds to be disposed of as she regarded as appropriate. The Member’s conclusion, “[h]ad the death benefit been paid in March 2020, she and the second and third respondents would not have achieved a rate of bank interest that was remotely commensurate with the rate of inflation”, is a finding of fact which is not disputed.
Because the relevant loss to be compensated is the loss which the appellant suffered because she did not have the funds in her hands, what icare may have achieved on its investments is entirely irrelevant.
Seventhly, the appellant’s submission that the overriding principle of s 109 is to compensate for the financial disadvantage due to the delay in payment of money overstates the intention of s 109. The language of s 109 is simpler and that language states clearly the legislative intent that is to permit a discretionary award of interest.
Eighthly, the question of what is the appropriate rate of interest is entirely discretionary for the Member. A judicial discretion has to be exercised for reasons attuned to the purpose of the statute. The reasons adopted by the Member are at paragraph [105] of the reasons.
She recognised that interest rates referrable to the period commencing 6 March 2020 were historically and notoriously low. The appellant does not submit to the contrary.
The Member adopted the cash rate plus an additional amount as reflecting what the appellant would likely have earned had the funds been paid to her on 6 March 2020. In this regard her determination accorded with other decisions in the Commission. This achieved a measure of consistency in relation to awarding interest more broadly.
The appellant suggests an alternative rate of interest,[44] which she says remedies the circumstance that the statute imposes an “arbitrary and artificial statutory limit” fixed at a point of time different from when the award is made and accounts for the fact that, as a matter of public record, icare attracted in the same period an 18% per annum return.
[44] Appellant’s submissions in reply, [4.2]–[4.3].
The submission is rejected for the following reasons:
(a)    It is an attempt to avoid what the legislature plainly intended, that is, that the amount of benefit should be fixed at the date of death.
(b)    There is no equivalence between icare’s return on the statutory fund and the appellant’s position as an individual recipient of the death benefit. The critical issue is what interest rate would the appellant have earned on the funds had she received them on 6 March 2020.
(c) Section 109 provides for the payment of interest. It does not empower the Commission to provide “compensation” for inflationary loss. If the legislature wanted to do that it would have made this explicit.
(d) For the reasons indicated above, in my view, s 109 and s 25(4) are against making an award of interest on the basis of inflation.
(e)    It is irrelevant to the appellant what icare did or did not make on its investment portfolio.
The appellant correctly identifies that to successfully upset what is admittedly a discretionary decision, it is necessary to establish that the decision maker has acted on a wrong principle, taken irrelevant matters into account, ignored relevant matters, made a factual mistake, or in the alternative the decision is so unreasonable or plainly unjust that it may be inferred that there has been an error even when error cannot be identified.[45]
[45] House v R, 505.
The asserted error is the failure to take into account the effect of inflation. That is submitted to be wrong in principle and to lead to an unreasonable or unjust outcome. For the reasons indicated, I disagree that inflation is required to be taken into account.
The outcome accords with what other members of the Commission have done. The Member has exposed her reasoning which does not exhibit error of legal principle. No error of fact is asserted. In my view, to include consideration of inflation in determining the rate of interest would be to take into account an irrelevant matter. There are no other matters she is said to have failed to take into account.

Furthermore, in my view the outcome reached by the Member is neither unjust nor unreasonable so as to bespeak error otherwise undetectable. As at 6 March 2020, the cash rate was notoriously at 0.1%. I am not persuaded that an allowance of 2% in addition to the cash rate as at the date of the determination is wrong or unfair to the appellant.
In my view, the appeal fails and the determination of the Member should be confirmed.

DECISION

I confirm orders 11,12 and 13 of the Member’s determination.

Geoffrey Parker SC
Acting Deputy President

31 May 2023