Mudgee Explorer Tours Pty Ltd v Clarke - [2021] NSWPIC 41

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	Mudgee Explorer Tours Pty Ltd v Clarke [2021] NSWPIC 41
APPLICANT:	Mudgee Explorer Tours Pty Ltd
FIRST RESPONDENT:	Micheal Albert Clarke
SECOND RESPONDENT:	Lachlan Robert Thomas Brydon
THIRD RESPONDENT:	Riley Albert Clarke
MEMBER:	Mr John Wynyard
DATE OF DECISION:	23 March 2021
CATCHWORDS:	WORKERS COMPENSATION- Claim for interest on section 25 death benefit; dependants sought rate commensurate with Supreme or District Court practice, or at Public Trustee rate for best performing fund; phrase “duly made” in section 109 interpreted in Kaur v Thales Underwater Systems Pty Ltd and following cases said to be too restrictive; Held- Kaur v Thales Underwater Systems Pty Ltd followed; doctrine of stare decisis applied.
DETERMINATIONS MADE:	1. Interest is to be paid by the applicant on a pro rata basis to the apportionment agreed on 12 January 2021 at the rate of 2% per annum as follows: (a) With regard to the first respondent from 23 December 2020 to 12 January 2021. (b) With regard to the second respondent from 21 December 2020 to 12 January 2021. (c) With regard to the third respondent for the one day, 11 January 2021 to 12 January 2021.

STATEMENT OF REASONS

BACKGROUND

On 12 January 2021 agreement was reached between Micheal Albert Clarke, the first respondent, Lachlan Robert Thomas Brydon, the second respondent and Riley Albert Clarke the third respondent regarding the apportionment of the lump sum benefit payable pursuant to s 25 of the Workers Compensation Act 1987 (the 1987 Act) following the tragic death of Ms Kayla Clarke on 23 August 2019.
At the arbitration hearing on 12 January 2021 an application was made for interest to be paid on the lump sum and a timetable for written submissions was duly set. The submission of the dependants was a joint submission made by Mr J McEnaney, counsel for the third respondent, and the submissions in reply were prepared by Mr Stephen Harris of Messrs Moray & Agnew solicitors.

LEGISLATION

Section 25 of the 1987 Act provides:
“25 Death of worker leaving dependants
(1)     If death results from an injury, the amount of compensation payable by the employer under this Act shall be -
(a) the amount of $750,000 (the ‘lump sum death benefit’), which is to be apportioned among any dependants who are wholly or partly dependant for support on the worker or (if there are no such dependants) paid to the worker's legal personal representative, and
(b) in addition, an amount of $66.60 per week in respect of-
(i) each dependant child of the worker under the age of 16 years, and
(ii) each dependant child of the worker being a student over the age of 16 years but under the age of 21 years.
(2)     Payments in respect of a dependant child under subsection (1) (b) shall continue-
(a) except as provided by paragraph (b) - until the child dies or reaches the age of 16 years, whichever first occurs, or
(b) in the case of a dependant child who is a student at the time of the worker's death or after reaching the age of 16 years--until the child dies, reaches the age of 21 years or ceases to be a student, whichever first occurs.
(3)     The amount of any weekly payments, or other compensation payable under this Act, shall not be deducted from the amounts referred to in subsection (1) (a) or (b).
(4)     If an amount mentioned in subsection (1) (a) at any time after the commencement of this Act-
(a) is adjusted by the operation of Division 6, or
(b) is adjusted by an amendment of this section,
the compensation payable under subsection (1) (a) is to be calculated by reference to the amount in force at the date of death.
(4A) If the death of a worker results both from an injury received before the adjustment of an amount mentioned in subsection (1) (a) and an injury received after that adjustment, the worker shall, for the purposes of subsection (1) (a), be treated as having died as a result of the injury received after that adjustment.
(5)     In this section-
‘child of the worker’ means a child or stepchild of the worker and includes a person to whom the worker stood in the place of a parent.

‘dependant child of the worker’ means a child of the worker who was wholly or partly dependant for support on the worker.

‘student’ means a person receiving full-time education at a school, college or university.”
Section 29 of the 1987 Act provides:
“29 Apportionment of payments between dependants
(1)     The compensation payable under this Division to each dependant of a deceased worker may be apportioned by the Commission or by the NSW Trustee.
(1A) The lump sum death benefit payable under this Division is not to be apportioned if a deceased worker leaves only one dependant (whether wholly or partly dependant on the worker for support) and the whole of the lump sum death benefit is to be paid to that one dependant.
(1B) In apportioning the lump sum death benefit payable under this Division between 2 or more dependants, the whole lump sum death benefit is to be apportioned among those dependants (so that the sum of the apportioned amounts equals the full lump sum death benefit).
(2)     Application for apportionment may be made by or on behalf of a person entitled to the compensation--
(a) to the NSW Trustee, or
(b) to the Commission (whether or not an application has been made to the NSW Trustee or the NSW Trustee has made a decision).
(3)     The NSW Trustee may decline to deal with an application for apportionment and advise the parties to apply to the Commission.
(4)     The NSW Trustee is not to deal with an application for apportionment of compensation if an application for apportionment of the same compensation is before the Commission.
(5)     A decision by the NSW Trustee to apportion compensation under this Division is subject to any decision made by the Commission with respect to the matter.
(6)     If there are both total and partial dependants of a deceased worker, the compensation may be apportioned partly to the total and partly to the partial dependants.
(7)     If a dependant dies--
(a) before a claim under this Division is made, or
(b) if a claim has been made, before an agreement or award has been arrived at or made,
the legal personal representative of the dependant has no right to payment of compensation, and the amount of compensation shall be calculated and apportioned as if that dependant had died before the worker.
(8)     The regulations may make provision for or with respect to the publication of applications for apportionment and any other matter connected with apportionment.”
Section 109 of the Workplace Injury Management and Workers Compensation Act 1998 (1998 Act) provides:
“(1)    In any proceedings before the Commission, the Commission may order that there is to be included, in any sum to be paid, interest at such rate as the Commission thinks fit on the whole or any part of the sum for the whole or any part of the period before the sum is payable, subject to the limitations imposed by this section.
(2)     Interest cannot be ordered under this section-
(a) on any compensation payable under Division 4 of Part 3 of the 1987 Act, or
(b) on any compensation payable under this Act for any period before a claim for the compensation was duly made, or
(c) on any compensation payable under this Act for any period during which proceedings before the Commission were adjourned on the application of the claimant for the compensation or pursuant to section 102.
(3)     This section does not-

(a) authorise the giving of interest upon interest, or
(b) apply in relation to any debt upon which interest is payable as of right whether by virtue of any agreement or otherwise.”
Section 85 of the 1987 Act provides:
“85 Payments to NSW Trustee for benefit of beneficiary

(1)     The following compensation shall be paid to the NSW Trustee in trust for the benefit of the persons entitled to the compensation--
(a) compensation payable in respect of the death of a worker (unless paid to a worker's legal personal representative or a particular person in accordance with this Act or an award),
(b) compensation payable to a person who is mentally ill (unless the Commission otherwise orders),
(c) compensation payable to a worker under the age of 18 years if the worker agrees or the Commission directs that the compensation be paid to the NSW Trustee,
(d) a lump sum commutation payment which the worker agrees or the Commission orders to be paid to the NSW Trustee.
(2)     Any money so paid to the NSW Trustee may be invested, applied, paid out or otherwise dealt with by the NSW Trustee in such manner as the NSW Trustee thinks fit for the benefit of the persons entitled to the money.
(3)     If a surviving spouse (including widow or widower) (over 18 years of age and not mentally ill) is the only person entitled to compensation paid to the NSW Trustee in respect of the death of a worker, the compensation shall be paid out to the surviving spouse in one or more lump sums determined by the NSW Trustee.
(4)     A reference in subsection (3) to the surviving spouse of a deceased worker includes a reference to a dependant of the worker who is the de facto partner of the worker.
(5)     In the case of a lump sum commutation payment, the NSW Trustee shall exercise its powers under this section in accordance with the agreement or order under which it was paid to the NSW Trustee.
(6)     The Commission may, for any sufficient cause, vary the manner in which the NSW Trustee invests, applies, pays out or otherwise deals with money under this section.
(7)     The NSW Trustee may apply for any such variation.
(8)     The receipt of the NSW Trustee is sufficient discharge in respect of any money paid to the NSW Trustee under this section.”
Section 85A of the 1987 Act provides:
“85A Payment of benefits to beneficiaries

(1) Despite section 85, the Commission may authorise the payment of compensation referred to in section 85 (1)-
(a) to the person who is entitled to the compensation, or
(b) to such other person, for the benefit of the person entitled to the compensation, as the Commission thinks fit.
(2) Any such payment is to be made in the manner authorised by the Commission.”

The dependants’ submissions

Mr McEnaney referred to the relevant legislation governing payment of a lump sum death benefit and the procedural provisions governing it including ss 29 and 85 of the 1987 Act. Mr McEnaney then submitted that discretion given to the Commission by s 109 of the 1987 Act relating to payment of interest was compensatory and not punitive of delay in nature, referring to Beves v Patrick Stevedores No 2 Pty Ltd[1].
[1] [2014] NSWWCC 178 (Beves).
The upshot of the legislative provisions referred to, Mr McEnaney submitted, made it compulsory for the insurer to pay the death benefit to the NSW Trustee once it accepted liability. The claimants were able to apply to the NSW Trustee or the Commission for an apportionment. Pursuant to s 85 the NSW Trustee could invest the money for the benefit of persons entitled to it pending the determination of the apportionment argument. Interest was payable once the lump sum pursuant to s 25 was “duly made.” The terms of s 109 should be interpreted bearing in mind the beneficial nature of the legislation and authorities which Mr McEnaney then referred to.
Mr McEnaney submitted that there were competing interpretations at Arbitral level as to the meaning of “duly made” as provided by s 109. He referred to a decision of His Honour President Judge Keating in Kaur v Thales Underwater Systems Pty Ltd[2]. His Honour’s dicta had been accepted in Kratz v Qantas Airways Limited[3] in which Arbitrator Isaksen referred to unpublished arbitral decisions which adopted His Honour’s dicta, Shanika Cooper v
[2] [2011] NSWWCC Pd 6 (Kaur).
[3] [2020] NSWWCC 36 (Kratz).
[4] Unreported WCC 6411/18 (Cooper).
[5] Unreported WCC 533/19 (Lavelle).
G & W Mudge Concreting Pty Ltd & others)[4]and Lavelle v David Paul Browne & others[5] (WCC533/19).
The approach of Arbitrator Isaksen Mr McEnaney described as being “far too restrictive” and was further inconsistent with the plain language meaning of “duly made” and the approach demonstrated by other arbitrators to the interpretation of that phrase in other cases.
It was submitted that, properly construed, s 109 and its requirement that the claim be “duly made” was more concerned with a validly brought claim rather than whether it was fully particularised. This was illustrated by the approach taken by other arbitrators to the phrase in different contexts.
In Hutchins v State Rail Authority of NSW (unreported) matter number WCC 14735-2004, the claim that the failure to serve a medico-legal report constituted a failure by a worker to “duly make” a claim, was rejected.
Mr McEnaney also referred to Mackenzie v De Silva Muirs Pty Ltd (unreported) WCC 5700-17, where the phrase “duly made” was referred to in the context of whether a particular form of service was required for a worker to duly make a claim. It was found that a different form of service nonetheless was sufficient to duly make a claim if it gave sufficient particulars to the insurer to determine the claim.
I was also referred to Lester v Noahs Ark Centre of Shoalhaven [2013] NSWWCC 94 which was concerned with the question of proper service of the claim where the worker had done all that was necessary to make a claim within the timeframe allowed. The claim was held to be duly made.
In Clarke v Able Systems Pty Ltd [2013] NSWWCC 329 the issue was whether a s 66 claim had been duly made where it had been addressed to a technically wrong entity but which adequately identified the employer and the insurer notwithstanding the incorrectly addressed claim.
Mr McEnaney submitted that the operation of s 109 was not specifically related to death claims but had a more general application.
A consideration of these cases demonstrated, Mr McEnaney contended, that it was “routinely accepted” that when there was sufficient information for an insurer to determine liability and there was no apparent prejudice, a claim was seen to be “duly made”.
It followed that, bearing in mind the beneficial purpose of the legislation, a claim should be “duly made” when the insurer has the minimum amount of information necessary to determine it.
With regard to s 25 it was routine for an insurer to accept or deny a claim at a stage where all potential dependants had not been fully particularised. Mr McEnaney noted that that was the situation in the present case, and in Kaur and Kratz.
It followed, Mr McEnaney argued, that a claim was duly made once the insurer was possessed of sufficient information to determine liability. Where such a decision was made, the claim crystallised into a “duly made” claim and interest should commence to run from that time.
The interpretation as expressed by President Judge Keating in Kaur and the cases following it, had the effect of additionally burdening dependants with the task of proving a negative, “that is, proving that there are no other persons who might make a claim under s 25 lump sum.” This was self-evidently unfair and was illustrated by many cases before the Commission. It was unfair, Mr McEnaney argued, that the genuine dependants should be penalised by the fact that the claims could not be construed as “duly made” until that task had been performed.
Moreover, it was argued that it was not unknown in the Commission for potential claimants not to make a claim through ignorance, and accordingly their claim would only be extinguished when the Commission ultimately made its determination pursuant to s 25 orders in issue. Those claims could never be “fully particularised” because they were simply resolved by determination.
The present approach followed by the Commission regarding cases pursuant to s 109 was contrary to the compensatory principle, as a successful claimant could not claim interest until he/she had established that there were no other possible claimants.
Accordingly, Mr McEnaney submitted the Commission should interpret the claim “duly made” as applying once an insurer knew enough about the claim to determine whether it accepted or denied liability.
This interpretation had the advantage of properly shifting the burden responsibility onto the party that has enjoyed the financial benefit of the unpaid s 25 lump sum. Mr McEnaney referred to Cameron v StateCover Mutual Ltd [2015] NSWWCC 325 and Shashati v Secretary, Department of Family and Community Services [2017] NSWWCC 99 (Shashati).
Mr McEnaney referred to dicta by Arbitrator Harris in Shashati which was also concerned with s 25 and in which Arbitrator Harris found that a claim was duly made when sufficient information is available for the insurer to make a determination of liability.
The fact that the legislation did not require specific material to be served within specific timeframes for s 25 applications meant that a claim was duly made when sufficient information was available for the insurer to make a determination of liability. This would be at a far earlier time than the present practice permitted. Mr McEnaney said that in the present case two of the three respondents were children and not able to volunteer evidence of their dependancy to the insurer, whereas in Shashati a letter from the applicant’s solicitors sufficed to make the causal connection between the death and the injury. To deny the children interest on the money awarded to them would be “somewhat absurd” Mr McEnaney submitted.
In the present case there was no controversy about the worker’s death and its cause. Accordingly the insurer would have been in possession of sufficient information to make a determination as to liability within weeks or months of the date of death.
Mr McEnaney then suggested that the insurer should be directed to produce its complete file regarding the timeframe between the notification of injury and the eventual acceptance of liability. (This was not a proper application for the dependants to make in the midst of submissions but I note that the applicant voluntarily lodged evidence in response to the submissions in any event).
The interpretation advanced by Mr McEnaney would properly shift the burden onto the insurer that enjoyed the benefit of possession of the lump sum with its concomitant benefit of interest and investment returns.
Mr McEnaney submitted that the actual rate of interest ordered should be in terms of the District Court Practice Note DC (Civil) No 15 issued on 22 June 2010, which indicated that the pre-judgment interest rate should be calculated at a rate 4% above the last cash rate published by the Reserve Bank of Australia.
I was referred to the unreported cases of Cameron v Enviro Pallets Pty Ltd (WCC 2070/20) and Baroudi v Kelly Services Pty Ltd (WCC 5220/19) where that suggested rate was found to be excessive and the rates of 2-2.5% were ordered.
Mr McEnaney however submitted that that reasoning appeared to be based on “arbitral speculation” about the quality and returns of investments by the NSW Trustee.
This reasoning was erroneous it was submitted because actual investment returns did reach and exceed 4% pa even in the present environment, and as the purpose of interest is compensatory, should not be read narrowly so as to indicate compensation for lost investment opportunities.
Mr McEnaney submitted that a lump sum benefit made pursuant to s 25 had a wider scope than simply its capacity to earn interest. It is compensatory of lost access to opportunities it was argued. The purpose of the lump sum was to be used variously to meet the costs of necessities of life and access educational and social opportunities.
To award interest only on the basis of a perceived potential rate of return in any particular economic climate was to take an overly narrow rule of the purpose of the award of interest Mr McEnaney said.

Mr Micheal Clarke, the first respondent was now solely responsible for the maintenance of both children which involved amongst other things, mortgage repayments and counselling costs. The practical effect was that the dependants had their economic, educational and social opportunities additionally curtailed since the death of Mrs Clarke because they did not have the monies available.
Referring once again to Beves, Mr McEnaney submitted that an award of interest was a compensatory remedy for that detriment. The rate awarded therefore should be in accordance with the abovementioned District Court Practice Note.
Finally, Mr McEnaney submitted as an alternative that the interest rate should be no less than the rate available by way of investment with the NSW Trustee’s highest returning fund.
Mr McEnaney submitted that a review of the legislation showed that the legislative intent within s 85 was that the insurer was compelled to pay to the NSW Trustee the money to be held on behalf of the beneficiaries. The intention evident in s 29 was that an application would then be made either to the Commission or the Trustee directly for apportionment between the dependants.
Mr McEnaney referred to the June 2020 Australia’s Fixed Interest Fund (which he asserted was the highest returning fund operated by the Public Trustee), and its average return over different periods – six months (3.5%), 12 months (4.1%), three years (5.4%) and 10 years (5.3%).
These were the latest available figures, Mr McEnaney said, and he submitted that those rates were returned after fees of .10% of the value of invested assets per annum had been deducted.
Mr McEnaney submitted that this method would yield around 4% per annum on an average of the 3 - 10 year return. This is not substantially different to the practice in the District Court, he submitted.

Insurer’s submissions

Mr Harris resisted the suggestion that an order should be made for the insurer to produce the documents referred to. He submitted that those documents should have been sought well before the conciliation/arbitration on 12 January 2021 if not on that actual date. As noted nonetheless the insurer has produced from its file the relevant documentary material relating to its knowledge of the claim and the actions taken by it.
Mr Harris submitted that the relevant dates were as follows:
“23 August 2019          Deceased’s death
3 September 2019       Email from insurer to first respondent requesting evidence in support of the claim
7 May 2020 Email from insurer to first respondent attaching acceptance of letter and requesting particulars of dependancy
7 May 2020Liability accepted by insurer
21 December 2020      Reply by second respondent filed
23 December 2020      Reply by first respondent filed
11 January 2021          Reply filed by third respondent filed
12 January 2021          Teleconference at which matter determined”
Mr Harris agreed that the power to award interest was discretionary pursuant to s 109 of the 1998 Act.
The reality of the situation Mr Harris said was that it was not practically possible for the insurer to pay any part of the claimed lump sum until orders were made by the Commission on 12 January 2021. That hearing identified the persons who were dependant, determined the apportionment of the lump sum between those persons and made the orders which allowed the insurer to either pay the money directly or to the NSW Trustee.
Mr Harris conceded the possibility of paying the money directly to the NSW Trustee pursuant to s 85(1)(a) of the 1987 Act but submitted that such a course had not been requested by any of the claimants and that it should be assumed and accepted that no dependant would have requested such a payment, as the fees imposed by the NSW Trustee would have exceeded any entitlement to interest, particularly as the fees would have been charged on the management of the entire lump sum.
Mr Harris accepted that it was well established that a paramount consideration regarding the exercise of discretion pursuant to s 109 was that the insurer had the use of the funds whilst the person/s entitled to them was denied of that use. However, in death claims Mr Harris argued that different considerations applied.
When dealing with death claims, Mr Harris submitted that the insurer was unable to make any payment without an order from the Commission, other than to pay the monies directly to the Public Trustee. This was not a request that an insurer would expect from any litigant, Mr Harris said, because there was no utility in doing so for the same reason, that the fees would have exceeded the interest payable.
This factor should result in the exercise of the Commission’s discretion to decline to order any interest to be paid in cases involving s 25, as the relevance of this fact had not been considered in prior claims for interest with regard to lump sum payments ordered pursuant to s 25.
Alternatively, Mr Harris submitted that if interest were to be ordered, there were two factors to be considered. The first was the period for which interest should be allowed and the second, the appropriate rate.
With regard to the first question, Mr Harris referred to the terms of s 109(2)(b) and the effect of the phrase “duly made”. Mr Harris acknowledged the decisions referred to by Mr McEnaney and submitted that those that are not concerned with s 25 were inconsistent with the clear statement of opinion relative to fatality claims in Kaur.
Mr Harris also referred to Cooper and the interpretation therein of the phrase “duly made” as referring to a date when the applicant’s claim was fully particularised. This interpretation was accepted as noted by Mr McEnaney in Lavelle and A1 Arbor Tree Service Pty Ltd v Matai & Ors (2123/20) (A1 Arbor).[6]
[6] Unreported, no. 2123/20 decision dated 19 February 2021 (A1 Arbor).
Mr Harris referred to Shashati, submitting that the decision is to be distinguished, as the issue as to “duly made” concerned the question of liability, and not dependency. Kaur was not relevant to that issue and although referred to by Arbitrator Harris in Alexander[7] was not referred to in Shashati.
[7] Alexander v JB Cullinan & N N Cullinan & Ors (Alexander).
Applying the dicta that “duly made” meant “when fully particularised,” Mr Harris contended that it followed that the periods for which payment of interest should be ordered were for the first respondent, the filing of the reply on 23 December 2020. For the second respondent, the filing of the reply on 21 December 2020 and for the third respondent the filing of the reply on 11 January 2021. The common denominator between those dates was that each was the date on which the evidence relied upon in relation to dependence was communicated to the insurer.
However, Mr Harris added, a proper reading of the terms of s 109(2)(c) would demonstrate that the dependancy evidence supplied on those dates occurred after proceedings before the Commission had been adjourned on 24 November 2020. It followed that there should be no order for the payment of interest.
The applicable rate was also addressed by Mr Harris. He referred to discussions regarding the principles to be applied in Cameron v StateCover Mutual [2015] NSWWCC 325 and Riverdene Equine Hospital Pty Ltd v Tupani [2015] NSWWCC 240, both decisions of Arbitrator Bachelor.
I was also referred to Cameron v Enviro Pallets Pty Ltd (2070/20), Baroudi v Kelly Services Pty Ltd (5220/19), Baldwin v Fleetmaster Services Pty Ltd (1648/20) and Mr Harris also referred to Walters, Lindsay v City Clean Payroll Pty Ltd[8] and A1 Arbor as to the actual rates that were permitted.
[8] Unreported no. 6364/20 decision dated 14 January 2021 (Lindsay).

Mr McEnaney in reply

Mr McEnaney referred to the additional evidence supplied by Mr Harris and suggested there was further evidence that had not been supplied. He submitted that such evidence that had been supplied established that the insurer was aware as of 3 September 2019 that the death was work related and compensation was payable to the dependants. From that time onward Mr McEnaney submitted the insurer was only concerned with establishing to whom the money would eventually be paid.
Mr McEnaney repeated his original submissions, relating them to the evidence that was supplied by Mr Harris.
Mr McEnaney resisted the submission that potential respondents would never have requested payments to be made to the NSW Trustee as being unsubstantiated.
Mr McEnaney submitted that the argument at the base of this dispute was that the insurer had held the money since it decided that the employer was liable and withheld it from the proper beneficiaries accordingly for some extended period of time.
Mr McEnaney also said that the submission that the insurer was unable to deposit money with the NSW Trustee because the respondents had not asked for that to be done was turning a blind eye to the obvious reality of claims of this kind, namely that two of the dependants were children under the age 10. This was not uncommon a situation in death claims and it largely informed the purpose of s 85. Accordingly the date from which interest should be awarded was the date of the first conversation between the Claims Manager and Mr Clarke, namely 3 September 2019.
As to the applicable rate, Mr McEnaney submitted that the Supreme Court rate of interest ought to be applied.

DISCUSSION

I have read the submissions of the parties with great interest. Mr McEnaney raised some cogent and well-argued points which have been answered by Mr Harris with equally well expressed candour and persuasion.
Mr McEnaney cited a number of cases as to the meaning of the phrase “duly made.” He submitted that they established that the phrase should be read as meaning when “sufficient information” had been supplied. Whilst those cases that had applied the stricter interpretation of “fully particularised” were all concerned with interest payable on s 25 benefits, Mr McEnaney argued they were incorrectly decided.
Mr McEnaney referred to the 2017 decision of Arbitrator Harris in Shashati as an example of where the Commission had applied the lesser test in a s 25 case.
Shashati was concerned with when a claim for interest was duly made in circumstances where liability was in doubt. Arbitrator Harris discussed the effect of s 109, noting that it does not operate after the order for payment. He noted that the term “duly made” was not defined, but that the phrase had been the subject of numerous decisions in the Compensation Court, and he considered many of those decisions, concluding that they related to different legislative provisions which required compliance with specific time limits, or the provision of specific information.
Arbitrator Harris observed that there were no such requirements with regard to claims under s 25 of the 1987 Act. He referred to the respondent’s submission as to the interpretation of “duly made” as being when sufficient information had been served to enable a decision to be made about liability. The learned Arbitrator accepted that submission. He noted (at [82]) that such a definition that the claimant had to provide “sufficient information” was not “unduly onerous.”
Kaur was decided in 2011, but not cited before Arbitrator Harris. The relevant issue before President Judge Keating was that the Arbitrator had ordered interest to be paid to only one of the claimants, when other dependants had also succeeded.
At [139] His Honour said:
“Section 109(2)(b) . . . prohibits interest on any award of compensation payable under the Act for any period before a claim for the compensation was duly made. I accept the submission that the claim for compensation on behalf of the appellants was not duly made until the day of the arbitration. I therefore accept Thale’s submission that, as at the arbitration, the appellants could not be entitled to interest pursuant to s109 . . .”
His Honour set out the submissions by Thale at [136]:
“Thales makes the following submissions on the question of interest:
(a) The appellants do not specify whether interest is claimed under the Workers Compensation Act 1987 or only in respect of the interest accrued on funds held by the Public Trustee;
(b) No claim for interest was made at the arbitration on 20 September 2010 and no submissions were made regarding the Commission’s discretion to award such interest under the workers compensation legislation;
(c) Whilst interest is claimed at Pt 5.1 of the Application in Respect of the Death of a Worker filed on behalf of the second, third and fourth respondents (the second and fourth respondents being the first and second appellants), the application does not specify the nature of the interest claimed (that is, whether it is on the money held by the Public Trustee or interest under the workers compensation legislation);
(d) The application (claiming interest) was not served until 23 days after the arbitration, notwithstanding the Arbitrator’s order that it be filed and served within seven days;
(e) The claim for interest has never been properly put before the Commission and it was not open for the Arbitrator to award any interest under the workers compensation legislation;
(f) Should the Commission be inclined to award interest to either or both of the appellants under the workers compensation legislation, such interest should only be payable from the date the appellants’ claim was duly made at the earliest. The appellants’ claim for compensation was not fully particularised until the time the Application in Respect of the Death of a Worker was filed on 13 October 2010 on behalf of the second, third and fourth respondents, and therefore any award of interest should only be payable from this date, if at all, and
(g) Significant efforts were made by the parties and by the Commission to inform Babiljeet of her potential entitlement to compensation. However, the appellants’ claim was not made and their involvement in proceedings did not occur until the arbitration. In respect of Gurmeet, the parties had no knowledge of any claim being made by her until the day of the arbitration.”
It can be seen that President Judge Keating was referring to subparagraph (f) when he accepted the submission made by the employer (Thale). Logically, this should have resulted in an order that no interest was payable, as His Honour found that as at the day of arbitration the appellants “could not be entitled to interest pursuant to s 109...” The section provides that interest can only be ordered during the period before the lump sum is payable. The lump sum becomes payable when the Orders are made, which was following the Arbitral hearing. (There was a discrepancy in that orders were issued in a reserved decision of 28 September 2010, but nothing turns on that for present purposes).
The Orders made following His Honour’s finding at [139] appeared to be incongruous. At [165] he said:
“For the reasons given at [137]–[140], I direct that such interest as has accrued on the lump sum by virtue of its investment by the Public Trustee since 17 June 2008 be divided pro rata between the dependants in accordance with the apportionment of the lump sum.”
Moreover, at [140] His Honour said:
“140. The Arbitrator’s reasons for not distributing the interest on the capital sum in accordance with the apportionment are not clear. Given that the funds have been invested by the Public Trustee and have earned interest since the capital sum of $307,100 was paid into the Public Trustee on 17 June 2008, as a discretionary matter, I consider it appropriate that the interest earned on that fund should be distributed, pro rata, between the dependants in accordance with the apportionment orders.”
It is also relevant to note that the formal Orders issued at [166] included the following:
“1(A). All interest accrued from the investment of the lump sum since 17 June 2008 be distributed between the abovementioned dependants on a pro rata basis according to their proportionate entitlement to the lump sum.
1(B). Leave is granted to the parties to re-apply in the event that further orders are required to give effect to the decision in respect of interest.”
The facts in Kaur were complicated by cross claims for dependency, some of which had been allowed during the arbitration itself, and the majority of the determination was concerned with that aspect of the claim. The content of Order 1(B) would indicate that there was some uncertainty regarding the effect of the Order regarding payment of interest.
In any event, the ratio decidendi is contained in [139], and has been followed in a number of Arbitral decisions, as indicated by counsel. The phrase has been held to mean “fully particularised” and has been applied in Kratz, Cooper, Lavelle, A1 Arbor, Alexander and Lindsay v City Clean Payroll Pty Ltd[9].
[9] Unreported no. 6364/20 decision dated 14 January 2021 (Lindsay).
In Cooper, Alexander, Lindsay and A1 Arbor the claim was found to be fully particularised when the claim for dependancy was made, whilst in Lavelle it was found to be when the submissions regarding apportionment and interest had been filed.
I am persuaded that the appropriate date when the claim was fully particularised was when the claim for dependancy was made. The applicant has supplied those dates in relation to each dependant, and Orders will be made accordingly.
This finding is in accord with the ratio decidendi in Kaur as applied within the Commission. I acknowledge the force of Mr McEnaney submissions, but am bound by the principles of stare decisis in any event.
As to the appropriate rate, as noted by Arbitrator Harris in Shashati at [91], there is no standard interest rate applicable to these claims within the Commission, and a determination of the appropriate rate is discretionary. I have read with interest the submissions regarding the appropriate rate. I do not accept Mr McEnaney’s submission that either the District Court rate or the Supreme Court rate, which he variously referred to, are appropriate, nor do I accept that it should be calculated at the rate suggested for the most successful investment fund operated by the Public Trustee.
Mr McEnaney’s submissions regarding both the rates applicable and the deductible fees I regard as being matters for evidence and not appropriate to submissions. For the same reason the application for an order that the first respondent produce its files was not appropriate as part of counsel’s submissions.
I agree with the approach taken by Arbitrator Isaksen in Cameron v Enviro Pallets Pty Ltd[10] when he said, as reproduced by the insurer:
“The rate of interest provided by Rule 36.7(1) of the Uniform Civil Procedure Rules 2005 is 4% above the cash rate set by the Reserve Bank, but the Commission is not bound by that. I consider regard must be had for the economic circumstances that the nation as a whole is now facing and that 2% above the cash rate is a more reasonable and realistic rate that should be paid on the lump sum death benefit for the period that I have allowed”.
[10] Unreported no 2070/20 decision dated 8 April 2020 (Cameron)
The applicant referred to a number of Arbitral decisions where the rate of 2% has been applied, and I find that figure to be the appropriate rate, the Reserve Bank cash rate currently being 0.10%.
Finally, I reject the submission by the applicant that the provisions of s 109(2)(c) apply in this case. The purpose of that provision would seem to prevent a claimant from obtaining an order for interest after judgement, when the lump sum becomes “payable”, after which, pursuant to subs (1) no interest is payable. My orders of 12 January 2021 had the effect of making the sum awarded pursuant to ss 25 and 29 of the 1987 Act payable on that date.
The dates on which particulars of dependancy were served were:
(a)    The first respondent on 23 December 2020
(b)    The second respondent on 21 December 2020
(c)    The third respondent on 11 January 2021

Accordingly, for these reasons I order that interest is to be paid on a pro rata basis to the apportionment agreed on 12 January 2021 at the rate of 2% per annum as follows:
(a)    with regard to the first respondent from 23 December 2020 to 12 January 2021;

(b)    With regard to the second respondent from 21 December 2020 to 12 January 2021, and

(c)    With regard to the third respondent for the one day, 11 January 2021 to 12 January 2021.

John Wynyard
MEMBER
23 March 2021