State of New South Wales (Fire and Rescue NSW) v Pinsak

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	State of New South Wales (Fire and Rescue NSW) v Pinsak & Anor [2024] NSWPIC 365
APPLICANT:	State of New South Wales – Fire and Rescue NSW
FIRST RESPONDENT:	Sally Jane Pinsak
SECOND RESPONDENT:	Christian Lee Green Pinsak
SENIOR MEMBER:	Kerry Haddock
DATE OF DECISION:	8 July 2024
CATCHWORDS:	WORKERS COMPENSATION - Workers Compensation Act 1987; apportionment of lump sum death benefit pursuant to section 25(1) and claim for interest; liability accepted; concerns as to ability of second respondent to manage funds once released by the trust to him; second respondent not under intellectual disability and no evidence of mental health issues; TNT Group 4 Pty Ltd v Halioris, Wratten v Kirkpatrick, Haidary v Wandella Pet Foods Pty Limited, Dynamix Pty Ltd and Burrangong Pet Foods Pty Ltd, Kaur v Thales Underwater Systems Pty Ltd, Powell v McClenahan & Ors, Kathryn Ann Kratz as executrix of the estate of the late Owen Beddall v Qantas Airways Limited, Bennett v Jones, Beves v Patrick Stevedores No 2 Pty Ltd & Anor considered; Held – lump sum death benefit apportioned as to 78% to first respondent and 22% to second respondent; no interest awarded during period that the matter was adjourned at respondents’ request; matter certified as complex and costs subject to 10% increase; matter listed for further conference for orders to be made with respect to amount apportioned to second respondent once trust established on his behalf.
DETERMINATIONS MADE:	The Commission determines: 1. The applicant is to pay to the first respondent, pursuant to s 85A(1)(a) of the Workers Compensation Act 1987, the sum of $672,633. 2. The applicant is to pay, pursuant to s 109(1) of the Workplace Injury Management and Workers Compensation Act 1998, interest on the lump sum payable to the first respondent as follows: (a) From 21 June 2023 to 7 November 2023 at the rate of 6.1% per annum, in the amount of $15,737.40; (b) From 8 November 2023 to 14 December 2023 at the rate of 6.35% per annum, in the amount of $4,329.37, and (c) From 11 April 2024 to 4 July 2024 at the rate of 6.35% per annum, in the amount of $9,919.50. 3. The applicant is to pay the respondents’ costs as agreed or assessed, and the costs of all parties are to be increased by 10%, due to the complexity of the matter, in accordance with Table 4 of Part 2 of Schedule 6 of the Workers Compensation Regulation 2016. 4. The matter is listed for further conference for orders to be made with respect to payment of the lump sum apportioned to the second respondent, and interest on the lump sum, to a trust established on his behalf.

STATEMENT OF REASONS

BACKGROUND

Dean Lewis Pinsak (the worker) was employed by the applicant, State of New South Wales – Fire and Rescue NSW (Fire and Rescue) as a first responder.
The worker died on 2 July 2022, as a result of injury arising out of or in the course of his employment with the applicant, deemed to have occurred on 4 July 2021.
The first respondent in this matter, Sally Pinsak (Ms Pinsak), is the worker’s widow. The second respondent, Christian Lee Green Pinsak (Mr Pinsak), is the son of the worker and
Ms Pinsak.
By letter dated 22 July 2022, the applicant’s insurer, Employers Mutual Limited (EML), advised Ms Pinsak that she may be eligible for compensation if it was determined that the worker’s passing was a result of his employment with Fire and Rescue. EML advised that it would be requesting further information to assess Ms Pinsak’s eligibility. She provided her authority to allow EML to obtain access to the worker’s medical records.
On 14 December 2022, the solicitors for the applicant wrote to Ms Pinsak’s solicitors. They advised that they understood Ms Pinsak had made a claim for the lump sum death benefit; and requested particulars of the claim, including details of any dependants.
On 7 February 2023, the solicitors for the applicant sent an email to the first respondent’s solicitors, noting that particulars remained outstanding, and requesting a response. The email was re-sent later that day, as it had been sent to an incorrect email address.
By letter dated 4 April 2023, Ms Pinsak’s solicitors provided some documents and advised that they would be in further touch once certified copies of relevant documents were available.
On 18 April 2023, the solicitors for the applicant sent to Ms Pinsak’s solicitors a request for further particulars of potential dependants. They also asked whether the second respondent and/or any other potential dependant had retained legal representation.
On 2 May 2023, Ms Pinsak’s solicitors sent an email to the applicant’s solicitors, advising that they were instructed that Ms Pinsak would be the only dependant and asking if the applicant’s solicitors still required probate.
On 3 May 2023, the applicant’s solicitors sent an email to Ms Pinsak’s solicitors, requesting that they advise the basis on which Mr Pinsak was not a dependant, and whether he had separate legal representation. They also requested a statutory declaration from each of the adult children of the marriage, confirming that they were not dependent on the worker.
By letter dated 21 June 2023, Ms Pinsak’s solicitors provided further particulars, including that Mr Pinsak was dependent on both the worker and Ms Pinsak, and enclosing a certified copy of the worker’s and Ms Pinsak’s marriage certificate.
On 22 June 2023, the applicant’s solicitors sent an email to Ms Pinsak’s solicitors advising that there appeared to be conflicting information about dependency, and again requesting statutory declarations from the adult children of the marriage. They also asked whether any claim was made for funeral expenses, and, if so, particulars of same.
On 23 June 2023, the applicant’s solicitors sent an email to Ms Pinsak’s solicitors asking whether Letters of Administration had been requested or granted, and, if the latter, requesting a copy.
On 23 June 2023, Ms Pinsak’s solicitors sent an email to the applicant’s solicitors advising that they had not yet applied for Letters of Administration, for which they would apply if it was decided that the funds from the claim were to be paid into the worker’s estate. They were able to provide a statutory declaration from one of the adult children and would provide the others once they were received.
On 26 June 2023, Ms Pinsak’s solicitors sent an email to the applicant’s solicitors, attaching statutory declarations from two adult children, and advised that they would forward the outstanding declaration once it was received.
On 29 June 2023, Ms Pinsak’s solicitors sent an email to the applicant’s solicitors, attaching the statutory declaration of the last adult child. They advised they would provide the additional information that had been requested once they heard from Ms Pinsak.
On 5 July 2023, the applicant’s solicitors wrote to each of the adult children, advising that they had received his/her statutory declaration, and would proceed on the basis that they did not intend making a claim.
By letter dated 2 August 2023, Ms Pinsak’s solicitors sent to the applicant’s solicitors receipts for funeral expenses incurred by Ms Pinsak, seeking reimbursement to her.
On 4 August 2023, the applicant’s solicitors sent Ms Pinsak’s solicitors an email requesting that they advise whether Mr Pinsak was or was not a dependant, and, if not, the basis for same, and details of his legal representatives.
By letter dated 10 August 2023 to Ms Pinsak’s solicitors, EML confirmed that it had accepted liability and was moving forward with the claim. This letter was forwarded by the applicant’s solicitors by email on the same date.
The solicitors for the applicant requested particulars of any claim for weekly benefits in respect of the second respondent. They confirmed that particulars in relation to the dependants were outstanding and requested details of Mr Pinsak’s legal representatives.
The applicant lodged an Application in Respect of Death of Worker (the Application) on
21 August 2023. Ms Pinsak was named as the first respondent and Mr Pinsak as the second respondent.
The first respondent lodged her Reply on 11 September 2023.
The second respondent has not lodged a Reply.

ISSUES FOR DETERMINATION

The parties agree that the following issues remain in dispute:
(a)    the apportionment of the lump sum death benefit between the first respondent and the second respondent;
(b)    whether interest should be awarded on the lump sum, and, if so, the period/s during which interest should be paid, and the rate/s at which it is to be paid, and
(c)    whether the matter should be certified as complex, so that the costs awarded are subject to an increase, and, if so, the percentage increase to be applied.

PROCEDURE BEFORE THE PERSONAL INJURY COMMISSION (COMMISSION)

The matter has had a protracted history.
The matter was listed for preliminary conference on 13 November 2023. Ms Dyson appeared for the applicant, instructed by Mr “RB” of EML. Ms Berzins appeared for the first respondent. The second respondent was unrepresented.
I spoke to Mr Pinsak by telephone. He indicated that he did not wish to make a claim, as he did not wish to “fight” his mother and did not wish to obtain legal advice. I explained that his interests needed to be protected, and the Commission had a duty to ensure that the lump sum death benefit was apportioned appropriately.
It was agreed that the solicitors for the first respondent would brief counsel to advise each respondent, and Mr Pinsak’s sister, Lauren Meredith, would act as his “tutor” and provide support for him.
The matter was again listed for preliminary conference on 15 December 2023. Ms Dyson appeared for the applicant. Ms Lazaris appeared for the first and second respondents and mentioned the appearance of Mr Tanner of counsel for the first respondent. Mr Stockley of counsel appeared for the second respondent. Due to technical issues, neither respondent nor the EML representative was able to join the conference.
I was informed that both the first respondent and the second respondent had concerns about Mr Pinsak obtaining access to the funds apportioned to him when he attains the age of 18 years. It was proposed to set up a trust for Mr Pinsak, but this would take some time. The respondents therefore requested a further preliminary conference in February 2024.
The applicant’s solicitor was concerned at the potential delay and advised that the applicant “strenuously” opposed any claim for interest.
I had available dates in February 2024 that suited both counsel. However, the applicant’s solicitor was not available on those dates. She was asked if another solicitor from her office could appear in her place but advised she would need to appear.
The matter was therefore listed for further preliminary conference on 1 March 2024.
Ms Dyson appeared for the applicant, instructed by Mr “RB” from EML. Mr Tanner, instructed by Ms Lazaris, appeared for the first respondent. Mr Stockley, also instructed by Ms Lazaris, appeared for the second respondent. Ms Meredith also attended.
I was informed that the first respondent and Ms Meredith had an appointment with an accountant on 11 March 2024, with a view to setting up a trust for the second respondent. Ms Meredith would be a trustee.
The parties were asked if apportionment could be agreed and advised that they had not reached an agreement. It was suggested that they would provide written submissions, but they agreed the first priority was to set up the trust for Mr Pinsak. They therefore requested a further preliminary conference.
The matter was listed for further preliminary conference on 10 April 2024. Ms Dyson appeared for the applicant, instructed by Ms “G” of EML. Mr Tanner, instructed by
Ms Magyar, appeared for the first respondent. Mr Stockley appeared for the second respondent, also instructed by Ms Magyar. Ms Meredith also attended.
I was informed that the trust for the second respondent had not been set up, as it had been met with “roadblocks”. Ms G confirmed that EML was able to assist in setting up a trust, and this could be done relatively quickly.
The parties had not agreed on a proposed apportionment of the lump sum death benefit. A timetable for written submissions was set. The parties were directed to include submissions on any award of interest, and on costs.
There has been some adjustment to the timetable for the provision of submissions, which have now been received.
I am satisfied that the parties to the dispute understand the nature of the application and the legal implications of any assertion made in the information supplied. I have used my best endeavours in attempting to bring the parties to the dispute to a settlement acceptable to all of them. I am satisfied that the parties have had sufficient opportunity to explore settlement and that they have been unable to reach an agreed resolution of the dispute.

EVIDENCE

Documentary evidence

The following documents were in evidence before the Personal Injury Commission (Commission) and considered in making this determination:
(a)    Application and attached documents;
(b)    Reply by first respondent and attached documents;
(c)    Application to Admit Late Documents (AALD), filed by the first respondent, dated
1 March 2024, and attached document, and
(d)    AALD filed by the first respondent, dated 18 April 2024, and attached document.

FINDINGS AND REASONS

Evidence of the first respondent, Sally Pinsak

The first respondent submitted a letter from the NSW Trustee and Guardian dated
11 August 2023, advising that a search of its Index of Wills had resulted in no record of a will made by the worker, or any other documents being found.
The Application attached an unsigned and undated statement of the first respondent, in reply to questions posed by the applicant’s solicitors.
The first respondent stated that Christian, her and Dean’s adopted child, resided with them at the date of the worker’s passing and was fully financially dependent on them both. Their combined income paid for his living and schooling expenses.
At the time of Dean’s passing, she was financially responsible for the family, as his enduring guardian and enduring power of attorney. She paid all expenses from their joint account.
She and Christian depended on both her and Dean’s income to pay the mortgage, rates, house insurance, power, car expenses, phone, internet, food, and general living expenses.
Christian was enrolled in and attending high school, details of which were provided. He would be in Year 10 as of January 2023.
She provided the names and details of her and Dean’s other children. They were all married and living independently at the time of Dean’s death. Regular contributions towards their mortgages were made by direct debit from her and Dean’s account.
The Commission received an AALD dated 18 April 2024, which attached an email from
Ms Pinsak to her solicitors, dated 11 April 2024, containing her “thoughts” as to the submissions to be made on her behalf.
As I was uncertain as to whether it was the intention of Ms Pinsak’s solicitors to rely on this evidence, or whether it had been lodged in error, I caused enquiries to be made of the solicitors.
The only response received was a request for an extension of time to provide the first respondent’s submissions. However, as she has referred to this evidence in her submissions, I have considered it.
Ms Pinsak stated that she and the worker were married in 1988. They “worked as a team to raise kids, buy a house and work on paying it off and create a home for our family.”
Christian came into their home through foster care when he was six. They loved him as their own, and were able to adopt him, with orders made in 2020.
When Christian came to them, she was working full-time as a teacher. He needed extra support, so she dropped back to three days per week when he was eight. This had a noticeable financial impact on their family, but she was happy to do it for his sake.
By his fifth year at the school, Christian’s behaviour had such an impact on her relationship with the Deputy who was in charge of welfare and the hire of teachers on temporary contracts that her contract was not renewed, although she had been there 10 years. This was a direct result of Christian’s misbehaviour.
She took a contract at a new school, where she worked for two years before they moved to Coffs Harbour. Her employees [sic] held her in high regard and helped her secure employment.
When Dean became sick, she again reduced her hours and took a lot of leave to take him for treatment, as he was not permitted to drive. The result was that her contract was not renewed at the end of the year, and she had to search for a new job in the midst of Dean’s illness.
She found a part-time role and eventually needed to stop work to care for Dean. The impact of his illness and death also made it difficult to return to work. She spent two years working only two days per week, and also spent six months on leave. Although she was paid, she used all her accrued sick leave and long-service leave. At the end of this time, her contract was not renewed.
In 16 years working with annual contracts, she was always one of the first to be offered work for the following year. As a result of Dean’s illness, she was considered less reliable and not as desirable as an employee. Because she was temporary, she had no right of return or job security.
In the 2024 school year she had not been teaching at all. It had been too stressful to find a new job, as she tried to manage the challenges of Christian’s behaviour and maintain the 25 acre farm they bought in 2020.
Dean desired to engage in meaningful work once he retired from Fire and Rescue. They bought the farm largely because he intended to work on it.
In 2023, she hired a farmhand to help her. He worked three days per week, and she paid him award wages. Her teaching work paid for him, so they could stay on the farm. She was determined that she and Christian would not lose their home.
As she was no longer teaching, she had not been able to employ anyone and was attempting to work the farm herself. She worked an average of 50 to 60 hours per week. The farm sales had been $9,354 in the first quarter, not taking into account expenses and the cost of sales.
There was some rental income from the property, which paid for the insurance and some of the mortgage. It seemed she was working for less than $20 per hour. It was likely that she would need to sell the property, as the work was too physically demanding on her own.
The farm needed considerable work to be prepared for sale, as it seriously declined during Dean’s illness. The previous owners took two years to sell it. She expected it would not be a quick sale if she decided to sell.
She is 55, with limited working years left. Instead of advancing her career, she was impacted by the circumstances of Dean’s death and trying to manage a farm.
She believed she was much more significantly impacted than Christian, who has his whole working life ahead of him, should he choose to engage in it. He had minimal expenses, and some were by his own choice. She was paying the ongoing expense of a venture they went into together. He was not there to carry the bulk of the effort and she was no longer in a position to pursue educational leadership, which would give her job security and increased income until retirement age.
Dean said many times that when he was gone, she would be looked after by his work’s insurance policy. She never heard him say the kids would be looked after by it, because he assumed she would be caring for them and the money would go to her.

Evidence of Charles Hendricks Pinsak

Mr Charles Pinsak, the worker’s son, made a statutory declaration on 16 June 2023 that he was not dependent on the worker and did not seek payment from any funds due to the worker.

Evidence of Lauren Joan Meredith

Ms Meredith made a statutory declaration on 19 June 2023 that she was not dependent on the worker and did not seek payment from any funds due to the worker.

Evidence of Erica Jane Franklin Beveridge

Ms Beveridge, the worker’s daughter, made a statutory declaration on 22 June 2023 that she was not dependent on the worker and did not seek payment from any funds due to the worker.

Evidence of Rachel Lynda Thitchener

Ms Thitchener, the worker’s daughter, made a statutory declaration on 22 June 2023 that she was not dependent on the worker, and did not seek payment from any funds due to the worker.

Medical evidence

Dr Phil Godden – general practitioner

Dr Godden has provided a report dated 13 December 2023.
Dr Godden reported having known Mr Pinsak since he came to the Pinsak’s home at about the age of five or six. He was their GP (general practitioner) and a family friend.
Mr Pinsak had always had a difficult personality, with poor impulse control, tendency for defiance and getting into trouble, and poor school performance.
Mr Pinsak had “tended to attract trouble”; and Dr Godden did not believe he had yet gained significant insight into his behaviour or the ability to plan for the future.
Dr Godden believed that if Mr Pinsak received a significant amount of money, it was likely to be spent recklessly and possibly dangerously, with little understanding of the long term consequences. He would also be concerned that advantage may be taken of Mr Pinsak by his associates.
Dr Godden believed that Ms Pinsak was a wise and loving mother. Despite the abuse
Mr Pinsak often loaded her with, she continued to patiently and wisely care for him.
Dr Godden was hopeful that, with support, Mr Pinsak would mature and do well, but at this stage believed that others should be responsible for his care, and spending finances on his behalf.

SUBMISSIONS

The parties have provided written submissions. I will therefore refer to them only briefly.

First respondent

The first respondent submitted that she was substantially dependent on the worker and was his primary dependant. There was a relationship of mutual support and dependency. This involved contribution of remuneration from their respective jobs, and the value of activities dedicated to maintenance of their home, and their subsistence, health, security, recreation, and social functioning.
The second respondent was a beneficiary of the contribution of his parents to the family unit and remained dependent on Ms Pinsak.
The second respondent’s circumstances were unique. They did not lend themselves to an award based upon common assumptions that would apply to the anticipated trajectory and interests of a 17 year old.
The first respondent referred to her evidence that the second respondent’s behaviour had had a direct and adverse impact upon her security of employment and income. She submitted that as a consequence, she became less self-sufficient and more dependent upon the worker.
The first respondent submitted that it would follow that the severe financial consequences for her were inextricably linked to the second respondent's role in impairing her employment security and income. Her financial self-sufficiency was compromised further, given her need to reduce her work hours to care for the worker.
The first respondent submitted that she was in dire financial circumstances as a result of the illness and loss of her spouse, and the adverse impact of the second respondent’s behaviour on her career.
The first respondent had valid concerns regarding the consequences of a substantial award to the second respondent. She referred to Dr Godden’s evidence. Her concerns involved the real risk of funds being squandered by the second respondent, and the likelihood of others taking advantage of him.
The first respondent was concerned that if the second respondent was presented with the distraction of funds, he would have no focus upon, and incentive to undergo, education or training, for as long as such funds were available.
The first respondent’s further concerns related to her need to ensure that funds were available for her to responsibly and adequately provide for the second respondent. The resources of the family unit were best managed by her.
The first respondent submitted that it was appropriate that the benefit be distributed in a manner that acknowledged:
(a)    the second respondent’s circumstances;
(b)    the risks of distribution of funds to the second respondent and the need to avoid adverse consequences to him;
(c)    the interests of the family unit and promotion of distribution that would enhance its capacity to ensure the wellbeing of both respondents, and
(d)    the first respondent’s need and responsibility to manage the affairs of the family unit to the benefit of both respondents.
The first respondent submitted that the appropriate distribution would be:
(a) 90% to the first respondent, and
(b) 10% to the second respondent, to be paid to a trust managed on his behalf.
The first respondent submitted that interest should be paid at the rate of 2% above the RBA (Reserve Bank of Australia) cash rate, as determined in Powell v McClenahan & Ors,[1] with effect from the date on which particulars of the claimants were provided.
[1] [2024] NSWPIC 139 (Powell).
The first respondent submitted that the matter should be certified as complex, given the unique issues relating to the second respondent’s circumstances, the additional legal work involved, the need for several conferences, and the requirement for written submissions. The complexity uplift should be 30%.
In reply to the second respondent, the first respondent submitted that the first respondent’s submissions proceeded on the basis that his challenges raised a strong expectation that he would have been reliant on the worker well into adulthood; and that equally applied to the support the second respondent could expect to receive from her.
The first respondent submitted that funds spent on the second respondent would be in accordance with his needs, as determined by his parents. He would have an expectation of support in relation to accommodation, subsistence, education, and the other needs of a teenager and young adult.
The first respondent submitted that an anticipated period of dependency but for the worker’s death would have involved support of the above kind, not a lump sum of $250,000, to be spent without parental management and guidance.
The first respondent submitted that the second respondent’s submissions as to the age at which young men achieve maturity was an anecdotal generalisation and had no bearing on what was objectively in the respondents’ mutual interests.
The first respondent submitted that a windfall of $246,386 to the second respondent could not reasonably be in his interests, given the evidence of the family GP and the prospect of reckless and dangerous use of such funds. It would also reduce her ability to responsibly manage the benefits in a manner that would be in the interests of the family and provide for funds to be spent in a manner that would foster and promote the second respondent’s best interests.

Second respondent

The second respondent submitted that the worker was 63 years old at the date of his death. Assuming a retirement age of 67, he would have continued to earn a salary for approximately four years.
The second respondent submitted that the only evidence of the first respondent’s personal and financial circumstances was to be found in her draft statutory declaration, attached to her Reply, and her account at “ARD 7”. They were mostly directed to the second respondent’s circumstances and her concerns about his ability to handle money. While it said little about the first respondent’s financial circumstances, it was reasonable to assume a conventional family unit.
The first respondent would have been expected to be at least partly dependent on the worker during the remainder of the worker’s working life and beyond.
The second respondent was aged 17. The first respondent’s description of his challenges raised a strong expectation that he would have been reliant on the worker both financially and otherwise, well into adulthood. It was often a shared experience and observation that young men achieve maturity only after the age of around 25. This was even more in the second respondent’s case.
The second respondent’s calculation of apportionment had been undertaken on the basis that he would have remained dependent for 10 years from the date of the worker’s death, that is to age 25.
The second respondent had calculated the duration of the first respondent’s dependency based on the worker’s life expectancy from age 63 of approximately 25 years.
The second respondent calculated that the total years of dependency were 10 + 25 = 35. A strict arithmetical apportionment would result in the following:
·        First respondent: 25/35 = 71% = $615,964 (I have calculated this as $612,268.50)
·        Second respondent: 10/35 = 29% = $246,386 (I have calculated this as $250,081.50)
·        Total: 100% = $862,350
The second respondent submitted that the sound discretionary range of apportionment in his favour was 25% to 30%.
As regards the first respondent’s submissions, the second respondent acknowledged that the primary facts were not in issue. Two questions arose. Were the first respondent’s concerns a legitimate and relevant consideration for the Commission in the exercise of its discretion? If so, how should that discretion be exercised?
The second respondent submitted that, unless his legal capacity was diminished by intellectual or psychiatric disability, he should be permitted to deal with his entitlement as he saw fit, once he reached his majority.
The second respondent submitted that the conciliation phase was postponed in an attempt to provide a trust mechanism to protect his fund beyond the age of 18. This arrangement appeared to be acknowledged, but not elaborated on, in the first respondent’s submissions. If a trust was to be managed on the second respondent’s behalf, this would presumably answer the first respondent’s concerns and there would be no reason to limit his apportionment to 10%.
The second respondent submitted that, absent the installation of a trust instrument, the allocation of any of his entitlement to the first respondent simply put it beyond his reach but did not reserve to him any legal entitlement.
The second respondent submitted that one could only speculate as to the possible adverse financial consequences to his interest should the first respondent lose or dissipate his allocated entitlement, through misfortune or change of circumstances, such as debt, remarriage, or premature death. Absent a trust being created for his benefit, his portion of the lump sum allocated in such a manner remained at risk.
The second respondent submitted that interest would date from the date the claim was duly made.
The competing dates were:
(a)    4 April 2023: particulars provided by the respondents’ solicitors to the applicant’s solicitors;
(b)    21 June 2023: particulars provided by the respondents' solicitors to the applicant’s solicitors, and
(c)    10 August 2023: EML accepted liability.
The second respondent submitted that interest should be paid at the rate of 2% above the RBA cash rate.
The second respondent made no submissions as to costs.

Applicant

The applicant’s submissions were limited to the issue of the claims for interest.
The applicant submitted that an order for interest is discretionary. In the circumstances, where there was a delay in providing particulars, conflicting particulars were provided, and the proceedings were delayed due to the respondents’ conduct, the applicant’s primary submission was that there should be no order for interest.
If an award of interest is to be made, the applicant relied on the following submissions.
In accordance with s 109(b) [sic: s 109(2)(b)] of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act), and the decision in Kaur v Thales Underwater Systems Pty Ltd,[2] interest should not be awarded for the period before the claim was duly made.
[2] [2011] NSWWCCPD 6 (Kaur).
The applicant provided a chronology, which I will not reproduce.
The applicant submitted that “duly made” refers to when a claim is “fully particularised”, and claims can be “duly made” at different times, in accordance with decisions including Powell.
The applicant noted the respondents’ submissions.
The applicant submitted that full particulars of the claim were not provided until the first teleconference [sic] on 13 November 2023, when a concession was made by the first respondent that the second respondent was a dependant. In the alternative, the applicant submitted that the first respondent’s claim was not particularised until she provided the response to [the request for] particulars on 21 June 2023.
The applicant submitted that, pursuant to s 109(c) [sic: s 109(2)(c)] of the 1998 Act, interest should not be ordered for the following periods:
(a)    12 September 2023 to 13 November 2023 – the proceedings were delayed due to the second respondent’s failure to file a Reply (as the first respondent did not concede that he was a dependant and therefore a proper party to the proceedings);
(b)    13 November 2023 to 10 April 2024 – the respondents sought adjournments at the various teleconferences [sic]. Had the matter been prepared on receipt of the Application, the respondents should have been in a position to request a timetable for submissions at the first teleconference [sic], which should have taken place in September 2023, had the second respondent filed a Reply in accordance with the timetable, and
(c)    17 April 2024 to 31 May 2024 – noting the delay in the respondents filing submissions in accordance with the initial orders.
The applicant conceded that any award for interest should be made at 2% above the RBA cash rate.
The applicant conceded that an order for costs should be made for the respondents. It made no submissions as to whether the matter should be certified as complex.

SUMMARY

Section 25 of the Workers Compensation Act 1987 (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 dependent 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 dependent child of the worker under the age of 16 years, and
(ii) each dependent 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 dependent 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 dependent 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.
‘dependent child of the worker’ means a child of the worker who was wholly or partly dependent for support on the worker.
‘student’ means a person receiving full-time education at a school, college or university.”
Section 109 of the 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.”

Apportionment

I accept that the first respondent was partly dependent for support on the worker. The second respondent was dependent for support on both the worker and Ms Pinsak. I am satisfied on the evidence that there were no other persons dependent for support on the worker.
In TNT Group 4 Pty Limited v Halioris[3] , McHugh JA said:
“Dependency is a question of fact: Potts v Niddre & Benhar Coal Co Ltd; Aafjes v Kearney. It is concerned with actual and not theoretical support. A person claiming dependency need not be in actual receipt of support at the date of death. It is enough that, as at that date, he or she had a reasonable expectation of support in the future. Dependency may exist at the date of death although actual support cannot or is unlikely to occur until a future time.” (Citations omitted).”
[3] (1987) 3 NSWCCR 10; 8 NSWLR 486.
The factors relevant to the apportionment of compensation among dependants were set out by Egan ACCJ in Wratten v Kirkpatrick.[4] His honour said:
“The exercise of power to determine the correct amount to be apportioned to each dependent requires an examination of all relevant facts including the extent of past dependence, the ages of the dependants, their health, special needs, lifestyle etc.”
[4] [1996] NSWCC 2; (1996) 15 NSWCCR 32 at [34]-[36].
I accept the second respondent’s submission that Ms Pinsak would have been expected to be at least partly dependent on the worker for approximately a further 25 years.
As the first respondent submitted, it is a generalisation to suggest that young men achieve maturity only after about the age of 25. That may be true of some young men (and also of some young women), but not true of others.
It may also be the case that even mature young men and women retain a level of dependence on their parents into early adulthood, particularly if they undertake tertiary studies, or an apprenticeship, or reside in a city such as Sydney, where the cost of living is high. There is evidence in this case, for example, that the worker and Ms Pinsak were assisting their adult children to pay their mortgages.
I do accept that Mr Pinsak may have remained dependent on the worker for a period beyond what would usually be expected in a parent/child relationship. Both the first respondent and Dr Godden have given evidence about his challenges. In my view, it would be appropriate to assume that the second respondent may have remained dependent on the worker until the age of 22 years.

I accept the submission of the second respondent that, unless his legal capacity is diminished by intellectual or psychiatric disability (and there is no evidence of this), he should be permitted to decide for himself how he deals with his entitlement, once it is in his hands. A person’s right to make financial decisions for himself or herself includes the right to make what others may believe are poor decisions, or decisions of which they may not approve. His entitlement will be protected by the trust until he attains his majority.
I accept that Ms Pinsak has Mr Pinsak’s best interests at heart. I have had the opportunity to speak to them both during the course of the proceedings. However, as the second respondent submitted, there may be adverse financial consequences for him should misfortune befall the first respondent or her circumstances change, and he had only been awarded 10% of the lump sum. He had the expectation of continuing support from the worker, which is now not available to him.
Adopting the method of assessment used by the second respondent, the total years of dependency would be 7+25 = 32. An approximate arithmetical apportionment would result in the following:
·First respondent: 78% = $672,633
·Second respondent: 22% = $189,717
·Total: $862,350
In my view, that is an appropriate apportionment of the lump sum, balancing the claims on it of each respondent.

Interest

An award of interest is discretionary. It is subject to the limitations in ss 109(2) and 109(3) of the 1998 Act. Sub-section (2)(b) provides that interest cannot be ordered on any compensation payable for any period before a claim for compensation was duly made.
In Haidary v Wandella Pet Foods Pty Limited, Dynamix Pty Ltd and Burrangong Pet Foods Pty Ltd,[5] Deputy President Fleming said:
“The award of interest by the Commission, pursuant to section 109 of the 1998 Act is discretionary. Mr Haidary will only be entitled to interest, if awarded, on those amounts of his weekly entitlement that were unpaid, and only from the date that his claim ‘was duly made’. …The purpose of ordering interest on an award is to compensate the worker for the loss of his or her income, not to penalise the employer (Virag v James N Kirby t/as Betts Electric Motors[6]; Healey v McPherson Binding Pty Ltd).[7]”
[5] [2005] NSWWCCPD 9 (Haidary).
[6] [1990] NSWCC 1; (1990) 6 NSWCCR 86.
[7] (1989) 5 NSWCCR 139.
President Keating’s decision in Kaur has consistently been applied in the Commission. His Honour said, at [139]:
“Section109(2)(b) of the 1998 Act 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 Thales’s submission that, as at the arbitration, the appellants could not be entitled to interest pursuant to s 109 of the 1998 Act.”
“Duly made” has been held to mean “fully particularised” – Kathryn Ann Kratz as executrix of the estate of the late Owen Beddall v Qantas Airways Limited[8] and the cases discussed therein.
[8] [2020] NSWWCC 36.
The claim was not fully particularised until each respondent had provided evidence in support of his or her claim. As the applicant submitted, this may be on different dates.
The applicant’s primary submission was that interest should not be awarded, due to delays that it attributed to the respondents’ conduct. The submission is rejected.
As was held in Haidary, an award of interest is intended to compensate the worker, or as the case may be, the dependants, not to punish the employer.
In Bennett v Jones,[9] Moffitt P said (at 367):
“A number of questions arise. Is the power to award interest such that it should be used punitively, so a plaintiff or defendant is penalised for delay or failure to observe court procedures; or is it entirely compensatory, so as to do no more than that which is fair in a pecuniary sense between the parties? Is the jurisdiction to be exercised, or not exercised, simply by inquiry whether the defendant ought to have paid money to the plaintiff at some earlier date; or is it to be awarded on some more neutral basis, as that, for some reason, the money has been outstanding for a period, in which the defendant had the benefit of not paying it and the plaintiff the detriment of not having it, and that delay and the conduct of a party is relevant, only so far as by reason of it, there is, or may be, economic disadvantage to the opposing party by an award of interest being, or not being, made? For reasons I will indicate, in my view the approach last mentioned in each of the two foregoing queries is that which is in conformity with the statute.”
[9] [1977] 2 NSWLR 355 (Bennett).
His Honour continued, at 370:
“I see no reason why the simple fact that a defendant does not have to pay money when his liability arises, and has the benefit of non-payment for a period, should not provide a basis to make a discretionary order for payment of interest for the whole period. One had the money, and the other not. If it is not a commercial setting, the gain and loss may not be measured by a commercial rate of interest.”
Arbitrator Sweeney, as he then was, said in Beves v Patrick Stevedores No 2 Pty Ltd & Anor[10], that in a “death claim”, where the compensation has not been paid, the insurer/scheme agent has been in possession of the award monies, and the worker [sic] has been deprived of their use.
[10] [2014] NSWWCC 176 (Beves).
Arbitrator Sweeney went on to note that what had transpired in Beves was beyond the control of the insurer, but:
“Nevertheless, the insurer has had the compensation moneys throughout this period and presumably invested it to its advantage. To paraphrase Bennett, interest is not to be awarded simply on the basis that the respondent ought to have paid the money earlier, but on the more neutral basis that ‘the money has been outstanding for a period during which the defendant has had the benefit of not paying it, and the plaintiff the detriment of not having it.’”
I have noted above the attempts by the applicant to obtain particulars of the claim/s. it was the applicant’s solicitors who pointed out that Mr Pinsak was only 15 years old when his father died and may have been dependent on the worker. However, regardless of the steps taken by the insurer to progress the matter, as Moffitt P said in Bennett, “One had the money, and the other not.” I am therefore prepared to exercise the discretion to award interest on the lump sum.
As Arbitrator Sweeney said in Beves, the common law principles must be considered in the light of s 109 of the 1998 Act.
There is a paucity of evidence adduced on behalf of either respondent.
On one view of the matter, neither claim was “duly made” until the first respondent provided her “thoughts” in an email to her solicitors dated 11 April 2024, attached to a AALD dated
18 April 2024. However, the applicant has not submitted that that was the case. I will therefore consider the alternate dates.
The second respondent submitted that the competing dates that may apply are 4 April 2023, 21 June 2023, or 10 August 2023.
The applicant submitted that the competing dates that may apply are 21 June 2023 and
13 November 2023.
As the respondents’ solicitors advised on 21 June 2023 that the second respondent was dependent on both the worker and the first respondent, and matters were taken little further at the preliminary conference on 13 November 2023, I have determined that the claim was “duly made” on 21 June 2023.
I determined on 13 November 2023 that the matter should be adjourned, as I was concerned that the second respondent was not separately represented and was under the misapprehension that if he made a claim, it meant he was “fighting” his mother.
The matter was adjourned on 15 December 2023 and on 1 March 2024 at the respondents’ request. In my view, pursuant to s 109(2)(c) of the 1998 Act, interest cannot be ordered for the period from 15 December 2023 to 10 April 2024, when the direction for written submissions was made.
The first and second respondents are therefore entitled to interest on the lump sum death benefit from 21 June 2023 to 14 December 2023; and from 11 April 2024 to 4 July 2024.
There is agreement by all parties that the appropriate rate of interest is a rate that is 2% above the RBA cash rate, and therefore interest will be awarded at those rates. There is no reason why interest should be awarded otherwise than in accordance with the apportioned amount to each respondent.

Costs

In my view, this matter was not so complex as to justify the maximum uplift for complexity. Liability was accepted by the applicant. Much of the “complexity” and delay may have been avoided had the respondents’ solicitors responded promptly and fully to the applicant’s solicitors’ requests for particulars and briefed separate counsel to represent the second respondent’s interests at the beginning.
I am prepared to certify the matter as complex and allow a 10% uplift of costs for each party.

Findings and orders

I find as follows:
(a)    the worker, Dean Lewis Pinsak, died on 2 July 2022 as a result of injury deemed to have happened on 4 July 2021, arising out of or in the course of employment with the applicant;
(b)    the first respondent was partly dependent for support on the worker;
(c)    the second respondent was dependent for support on the worker;
(d)    there were no other persons dependent for support on the worker, and
(e) the applicant is liable for payment, pursuant to s 25(1)(a) of the 1987 Act, of the lump sum death benefit of $862,350.
At this stage, the trust for the second respondent has not been established, as it had to await the apportionment of the lump sum. I will accordingly list the matter for further conference, when an order will be made for payment of the amount apportioned to the second respondent, and interest, to the trust established on his behalf.
The orders are set out in the Certificate of Determination.

[2024] NSWPIC 365

8 July 2024