Neilson v Garry Neilson Buildings Pty Ltd (WorkCover)
[2014] VMC 10
•21 MAY 2014
IN THE MAGISTRATES COURT OF VICTORIA AT LATROBE VALLEY
WORKCOVER DIVISION Case No. D13585275
GARRY NEILSON Plaintiff v
GARRY NEILSON BUILDINGS PTY LTD Defendant
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| MAGISTRATE: | S GARNETT |
| WHEREHELD: | LATROBE VALLEY |
| DATEOFHEARING: | 8 MAY 2014 |
| DATEOFDECISION: | 21 MAY 2014 |
| CASEMAYBECITEDAS: | NEILSON v NEILSON |
REASONS FOR DECISON
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Catchwords: S 96 & 97 Accident Compensation Act 1985: worker received payments under a private injury policy – issue as to whether those payments can be categorised as a
‘disability pension’ for the purposes of s 96 and taken into account when calculating an entitlement to weekly payments under Act.
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APPEARANCES: | Counsel | Solicitors |
For the Plaintiff | Mr Horner | Maurice Blackburn |
For the Defendant | Mr Richards | Minter Ellison |
HIS HONOUR:
1Mr Neilson is aged 58 years and was a self employed building supervisor as at the date he sustained left and right shoulder injuries on 5 October 2009 when lifting heavy beams with two other employees in the course of his employment.
2Mr Neilson lodged a workcover claim on 15 June 2010 for which liability was accepted by CGU Workers Compensation in accordance with the provisions of the Accident Compensation Act 1985 and he began to receive weekly payments from when his incapacity commenced on 1 June 2010. On 27 July
2012, Mr Neilson informed CGU that his pre-injury average weekly earnings had been incorrectly calculated ($700 gross per week) on the basis that he had been promoted 4 months prior to his injury. CGU refused to increase the amount of weekly payments pursuant to S 5AA(3) of the Act. On 20
November 2012, CGU gave notice to Mr Neilson that they would terminate his entitlement to weekly payments as from 2 March 2013 on the basis that he had received 130 weeks of weekly payments and had a current work capacity or if he had no current work capacity, it was unlikely to last indefinitely.
3Mr Neilson issued proceedings in this court (D10140192) on 15 January 2013 and the matter was ultimately listed for hearing on 19 August 2013. On 21
August 2013, the parties resolved the dispute with the proceedings being dismissed by consent and an Order made that the; ‘Defendant pay the plaintiff’s costs on Magistrates’ Court Scale “E” including reserved costs, certifying a Latrobe Valley Circuit fee at $404, such costs to be set by the Costs Court in default of agreement”. On the basis of such Orders being made, Counsel signed Terms of Settlement whereby it was agreed that “the defendant with a denial of liability agrees the plaintiff’s PIAWE at $930 gross per week and to recalculate weekly payments of compensation paid over the
130 week past period and to pay arrears for that period in full and final settlement of all matters in issue including interest and the plaintiff hereby
As a consequence of the failure of the defendant to pay arrears of weekly payments by reference to the agreed PIAWE of $930 gross per week, the plaintiff issued debt recovery proceedings in this court. The defendant in its Defence, as amended on 8 May 2014, alleges that subsequent to the terms of settlement being entered into, CGU became aware of Mr Neilson receiving benefits pursuant to an Elders Injury, Illness and Insurance Policy which became subject to the operation of s 96 of the Act.
It was agreed between the parties that Mr Neilson began to receive weekly payments under the Policy from 6 September 2010 to 2 September 2012. It was also agreed that CGU paid Mr Neilson weekly payments at the re- calculated PIAWE from 3 September 2012 to 2 March 2013 being the expiry of the 2nd entitlement period under the Act. Accordingly, the missing period of claimed re-calculated entitlement is from 1 June 2010 to 2 September 2012, the amount not being quantified. It is not in dispute that Mr Neilson received benefits under the Policy for the same injury/condition for which he received weekly payments under the Act.
The issue to determine is whether the payments received by Mr Neilson under the Policy are to be taken into account by virtue of s 96 and s 97 of the Act (as it existed at the date of injury) when determining his entitlement to weekly payments for the relevant period. S 96 has been amended on a number of occasions, the most recent being by s 40 of Act 9/2010 operative from 5 April
2010 following the Hanks Review. At the relevant time, s 96 provided (Reprint
15);
(1) The amount of any weekly payment payable to a worker under this Part must be reduced by the weekly amount of-
(a) any disability, retirement or superannuation pension received by the worker; and
which relates to the worker’s retirement from, or the cessation or termination of, the employment out of, or in the course of which, or due to the nature of which, the injury arose.
7 Relevantly, s 97 provided;
(1) Except as provided in section 96, regard shall not be had, in respect of the entitlement to, or amount of, compensation under this Part, to any sum paid or payable-
(a) under any contract of assurance or insurance (including a contract made with any friendly or other benefit society or association or any trade union);
8The Elders Injury and Illness Insurance Policy taken out by Mr Neilson offered 24 hour cover for losses resulting from an injury or illness. It provided for weekly benefits, in his case, to a maximum of $1,600 for 104 weeks (excluding 1st 4 weeks) which were to be reduced by any statutory workers compensation benefits. The cost of the policy was $2,938.84c per annum and he received varying amounts pursuant to the policy over the relevant period totalling approximately $75,000 after deductions were made for the workcover weekly payments he received from CGU.
9As a result of the Hanks Review, s 96 was amended to include a definition of a ‘disability pension’ and ‘supplemental pension limit’ which did not previously exist. The report noted that; “section 96 was introduced in 1992 to prevent double dipping, that is, workers being compensated for the same injury from multiple sources, and receiving more from those sources than they would
have from employment”.1 Hanks recommended that; “section 96 should have
a broader impact on disability pensions. Where a workplace injury creates an entitlement in a worker to a disability pension from an income insurance policy or insured component of a superannuation fund, the workers weekly benefit should be reduced once the worker’s combined income from workers
1 Hanks Final Report page 213.
compensation and disability pensions exceed the worker’s pre-injury earnings. That impact should apply to all disability pensions whatever their source, and not just those that relate to the cessation of the injury employment”.2
10Mr Neilson submitted that the benefits he received under the Injury and Illness Insurance Policy do not fall within the meaning of ‘disability pension’ as it existed at the time and that the monies received did not relate to his
‘cessation or termination of employment’ but to a temporary absence due to injury. He also submitted that his submission is reinforced by s 97 which provides that regard shall not be had to any sum paid under any contract of assurance or insurance. He submitted that payments under the policy were defined as ‘weekly benefits” not as a “pension” and it in not a case of “double dipping” as his entitlement under the policy was reduced by the benefits he received under the Act.
11 The defendant submitted that the payments Mr Neilson received under the
Elders Injury Policy fall within the meaning of disability pension pursuant to s
96 and that they related to his cessation of employment. The defendant submitted that cessation of employment for these purposes means ceasing work because of the injury for which he received benefits and weekly payments. The defendant submitted that to allow Mr Neilson to receive both weekly payments and the injury payments is a form of “double dipping” which the legislation sought to prohibit.
12The only decision relating to the operation of s 96 and “disability pension” is the matter of VWA & CIC Workers Compensation (Vic) Ltd v Phillips, a decision of McDonald J on 5 September 1994. In that case, the worker’s weekly payments had been reduced pursuant to s 96 (1) because he had been awarded a ‘disability pension’ by the Royal Australian Navy in 1982. It was argued that the ‘pension’ was paid to him for a medical condition that bore no relationship to the injury for which he was receiving weekly payments
2 Page 214.
under the Act. Ultimately, it was held that the pension payable to him under the Defence Force Retirement and Death Benefits Act 1973 (Cth) was not a
‘disability pension’ for the purposes of s 96 (1). It was held that the provision did not apply as there was no “connecting link” between the disability pension received and the injury and incapacity giving rise to an entitlement to weekly payments. In Phillips, His Honour did note that the enactment of s 96 was done for the purpose to eliminate ‘double dipping’. In that case, there was no
‘double dipping’ as such as the worker did not receive a ‘disability pension’ for an incapacity arising out of the work injury.
The question to answer is whether the weekly benefits received under the Injury Policy fall within the meaning of any disability…pension in s 96 (1) which relates to the cessation of his employment. Unlike the situation in Phillips, Mr Neilson did receive weekly benefits under the Elders Policy for the same injury and period of incapacity for which he received weekly payments under the Act. The payments under the policy were of a fixed amount and duration. There is no reference in the policy that the payments represent a
‘disability pension’, nor can they be categorised as such. They are not captured by s 96 (1)(a). The categories of payments referred to in s 96 relate to monies received by workers when they retire or permanently cease employment with the employer with whom they sustained injury. If it were Parliament’s intention for s 96 to apply to personal injury and illness benefits it could have included reference to such policies in s 96. It chose not to do so and furthermore, s 97 (1)(a) specifically excluded regard being had to such policies. There was no “double dipping” as the benefits payable under the policy were specifically reduced by the amount of weekly payment received under the Act.
Accordingly, the payments Mr Neilson received under the Elders Injury and Illness Policy are not to be taken into account when calculating his entitlement to weekly payments pursuant to the Accident Compensation Act.
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