Workers Compensation (Dust Diseases) Authority v Cunha

[2017] NSWCA 111

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:	Workers Compensation (Dust Diseases) Authority v Cunha [2017] NSWCA 111
Hearing dates:	18 April 2017
Decision date:	25 May 2017
Before:	Meagher JA at [1]; Leeming JA at [2]; Simpson JA at [67]
Decision:	1. Appeal allowed. 2. Set aside orders 1, 2, 3 and 4 made by the District Court on 4 August 2016. 3. Cross-appeal dismissed. 4. Remit the matter to the District Court for decision in accordance with law. 5. The Authority to pay Ms Cunha’s costs of the appeal.
Catchwords:	WORKERS COMPENSATION – worker injured by exposure to dust – surviving spouse dependent upon worker – whether surviving spouse wholly or partially dependent on worker immediately before worker’s death – primary judge disregarded spouse’s receipt of federal age pension and found spouse wholly dependent – appeal allowed and matter remitted – Workers’ Compensation (Dust Diseases) Act 1942 (NSW) s 8(2B) considered
Legislation Cited:	District Court Act 1973 (NSW), s 142N Regulatory and Other Legislation (Amendments and Repeals) Act 2016 (NSW), item 4.1 of Sch 4 Social Security Act 1991 (Cth), s 37; Module G of Pt 3.2 of Ch 3 Workers’ Compensation (Dust Diseases) Act 1942 (NSW), s 8(2B)
Cases Cited:	Allianz Australia Insurance Ltd v Bluescope Steel Ltd (2014) 87 NSWLR 332; [2014] NSWCA 276 B & L Linings Pty Ltd v Chief Commissioner of State Revenue (2008) 74 NSWLR 481 Claydon v Jayton Pty Ltd t/as Stocktrans (1999) 18 NSWCCR 381 Daley v SAS Trustee Corporation (2016) 91 NSWLR 525; [2016] NSWCA 111 Dionisatos (For the Estate of the late George Dionysatos) v Acrow Formwork & Scaffolding Pty Ltd (2015) 91 NSWLR 34; [2015] NSWCA 281 Fatovic v Standard Telephones & Cable Pty Ltd (unreported, 4 March 1991, Burke J) Kauri Timber Co (Tas) Pty Ltd v Reeman (1973) 128 CLR 177 Lembcke v SAS Trustee Corporation (2003) 56 NSWLR 736; [2003] NSWCA 136 Miles v SAS Trustee Corporation [2017] NSWCA 86 North Broken Hill Ltd v Tumes (1999) 18 NSWCCR 412; [1999] NSWCA 309 Patrick Operations Pty Ltd v Comcare (2006) 68 NSWLR 131; [2006] NSWCA 142 SAS Trustee Corporation v Woollard (2014) 86 NSWLR 367; [2014] NSWCA 75 Workers’ Compensation (Dust Diseases) Board v Veksans (1993) 32 NSWLR 221 Workers’ Compensation Dust Diseases Board of NSW v Cook [2015] NSWCA 270
Category:	Principal judgment
Parties:	Workers Compensation (Dust Diseases) Authority (Appellant / Cross Respondent) Maria Cunha (Respondent / Cross Appellant)
Representation:	Counsel: M Allars SC (Appellant) G J Parker SC / J L Sharpe (Respondent)   Solicitors: Insurance & Care NSW (Appellant) Taylor & Scott Lawyers (Respondent)
File Number(s):	2016/259179
Decision under appeal	Court or tribunal: District Court of New South Wales Jurisdiction: Residual jurisdiction Citation: [2016] NSWDC 227 Date of Decision: 04 August 2016 Before: Neilson DCJ File Number(s): RJ00043/2016

Judgment

1. MEAGHER JA: I agree with Leeming JA.

2. LEEMING JA: Ms Maria Cunha is the widow of the late Jose Henrique Cunha, who suffered from asbestosis and lung cancer. He died on 29 September 2015, aged 79. Before his retirement, he had worked for many years as a boilermaker in New South Wales.

Procedural background

3. In a determination made on 20 November 2015, the Workers Compensation (Dust Diseases) Authority noted that a Medical Assessment Panel had found that Mr Cunha’s death was reasonably attributable to the inhalation of dust in an occupation which caused a dust disease, and that the disease was totally attributable to exposure in New South Wales. Neither of those matters is in issue. The Authority also found that:

“[Ms Cunha] is in receipt of $425.70 per fortnight from an Age Pension and Investment Income and is therefore partially dependent on the deceased.”

4. That finding led to the controversial part of the Authority’s award in favour of Ms Cunha, which was that:

“[Ms Cunha] is entitled to an award of:

(a) a lump sum of $99,855.00 being in accordance with the table of lump sum payments approved by the Authority;

(b) a fortnightly payment of compensation at the following rates;

$549.00 commencing on and from 30.09.2015 and increasing to

$553.60 commencing on and from 01.10.2015.”

5. The lump sum and fortnightly payment components of that award derive from s 8(2B)(b)(i) and (ii) of the Workers’ Compensation (Dust Diseases) Act 1942 (NSW), which is reproduced below. The fortnightly payment of compensation ordered by the Authority was the maximum available under this section. However, the $99,855 lump sum represented 30% of the maximum lump sum. The maximum lump sum would have been paid in the event that Ms Cunha was found to have been wholly dependent for support on the deceased immediately before his death.

6. An “appeal” lies from the decision of the Authority to the District Court pursuant to s 8I of the Workers’ Compensation (Dust Diseases) Act 1942 (NSW). It was and is common ground that the “appeal” was a hearing de novo: see Workers’ Compensation Dust Diseases Board of NSW v Cook [2015] NSWCA 270 at [7] and [28]; Workers’ Compensation (Dust Diseases) Board v Veksans (1993) 32 NSWLR 221.

7. Ms Cunha’s appeal was confined to the lump sum component of the award; understandably she made no challenge to the fortnightly payment component. She challenged the Authority’s finding that she was partially dependent on her deceased husband for support, claiming instead that she was wholly dependent for support on him.

8. The primary judge allowed Ms Cunha’s appeal and found that she was wholly dependent for support on the deceased: Cunha v Workers Compensation (Dust Diseases) Authority [2016] NSWDC 227. His Honour was exercising the so-called “residual jurisdiction” of the District Court, pursuant to Part 3, Division 8A of the District Court Act 1973 (NSW). Subsequently, the statute has been amended and this jurisdiction is described as the “Compensation jurisdiction”: see item 4.1 of Sch 4 to the Regulatory and Other Legislation (Amendments and Repeals) Act 2016 (NSW).

9. A further appeal to this Court lies pursuant to s 142N of the District Court Act 1973 (NSW). The nature of that appeal is quite different. Relevantly for present purposes, the appeal is available where a party is aggrieved by an award of the Court “in point of law”. Neither party suggested that any of the unusual features of the jurisdiction being exercised by the District Court affected this Court’s determination of an appeal in point of law; cf Daley v SAS Trustee Corporation (2016) 91 NSWLR 525; [2016] NSWCA 111 at [92]-[107].

10. The Authority has appealed, and Ms Cunha has cross-appealed. The cross-appeal is entirely contingent upon the success of the appeal. It challenges aspects of the reasoning in the alternative, as to the lump sum his Honour would have awarded in the event that, contrary to his finding, Ms Cunha were only partially dependent upon her deceased husband.

Section 8(2B)

11. Section 8(2B) of the Workers’ Compensation (Dust Diseases) Act 1942 (NSW) relevantly provides as follows:

“(a) This subsection applies to every award of the Authority made, after the commencement of Part 2 of the Workers’ Compensation (Dust Diseases) Amendment Act 1967, pursuant to subsection (1) (b) or (c) in respect of the death before or after that commencement of a person (in this subsection and in subsections (2C) and (2D) referred to as the worker) upon whom there was dependent for support, immediately before the worker’s death, the following and no other person or persons:

(i)   a prescribed relative of the worker, or

(ii)   a surviving spouse and a child or children of the worker.

(iii)   (Repealed)

(b)   Where the dependent person referred to in paragraph (a) (i) was wholly dependent for support on the worker and an award to which this subsection applies is made by the Authority under subsection (1) (b), the prescribed rates of compensation payable shall be:

(i)   one of the following amounts:

(A)   during the period of 12 months starting on the commencement of the Workers’ Compensation (Dust Diseases) Amendment Act 2010 (the first 12 months)—the amount of $268,375, or

(B)   during the period of 12 months (the second 12 months) that starts at the end of the first 12 months—the amount of $291,040, or

(C)   after the end of the second 12 months—the amount of $311,050, and

(ii)   in the case of a surviving spouse—a weekly payment of $137.30 per week, to continue until the marriage or death, whichever event first occurs, of that person, and

(iii)   in the case of a surviving spouse and subject to paragraph (ba)—a weekly payment of $69.40 per week in respect of each child who was wholly or partly dependent on the worker for support, to continue until the death of that child.

…

(d)   Where the dependent person referred to in paragraph (a) (i) was partially dependent on the worker for support the prescribed rate of compensation payable shall be such payments, not exceeding in any case the amount that would have been payable as compensation under the award had that person been wholly dependent on the worker for support, as may be determined by the Authority to be reasonable and proportionate to the injury to that person.

…”

12. It was common ground that Ms Cunha was a “prescribed relative” of the deceased for the purposes of s 8(2B)(a)(i). It was also common ground that she was dependent on her husband for support immediately prior to his death. Accordingly, either paragraph (b) or (d) applied, depending on whether she was wholly or partially dependent upon her husband immediately before his death. The Act contains no definition of “dependent”, “wholly dependent” or “partially dependent”.

Reasons of the primary judge

13. His Honour made findings of fact which were not (nor could they be) challenged in this Court. Those findings included that the deceased was born on 1 June 1936, and that Ms Cunha was born on 18 February 1940. They married in August 1961 and migrated to Australia 10 years later, arriving in August 1971. Ms Cunha worked for 25 years in Australia in a factory, on a full-time basis, stopping in 2000 when suffering from angina. She was granted an age pension on 9 March 2004. The primary judge found further that, after working for many years, “it seems likely to me that the deceased also commenced to receive the age pension on 9 March 2004” (at [4]).

14. Various payments were made by the Authority to the deceased during his lifetime, which included funds held by the couple in a joint bank account in the amount of $204,150, from which was derived annual interest of some $4,150, or approximately $79 per week. The primary judge found that the interest accruing on those funds became part of the income of the deceased and Ms Cunha: at [8].

15. The primary judge found, according to the documentary evidence before him, that “the total income of the plaintiff and her late husband was $1022 per week. None of that money was earned in any way by the plaintiff”: at [10]. That sum was derived by reference to:

1. workers’ compensation payments from the Dust Disease Authority, in the amount of $360 per week;

2. Department of Social Security pension: $532 per week;

3. Family Payment Carer Allowance: $51 per week; and

4. investment income of $79 per week.

The first and third components of that income ceased, and the second component altered, upon the death of Mr Cunha.

16. The primary judge reproduced the material parts of a policy made by “Insurance and Care NSW” (a body corporate established under the State Insurance and Care Governance Act 2015 (NSW)) which was said to have been adopted by the Authority concerning the computation of dependants’ benefits under the Act. The document stated that:

“The dependants of a deceased worker who were wholly dependent on the worker at the time of the worker’s death are to receive the lump sum in accordance with the Act.”

17. However, in the case of a spouse who was partially dependent on the worker at the time of the worker’s death, the policy relevantly provided that the lump sum payment was to be determined in accordance with a table. The table was to the effect that if the deceased worker was aged 65 or younger, the partially dependent surviving spouse would receive 100% of the lump sum (the same amount as if he or she had been wholly dependent upon the deceased worker). However, if the deceased worker were aged 66 or older, then the partially dependent surviving spouse would receive a diminishing proportion of the lump sum, declining from 98% (in the case of a deceased worker aged 66) to 10% (in the case of a deceased worker aged 86 or older). Mr Cunha died when he was 79, and the table provided that a partially dependent surviving spouse of a 79 year old deceased worker would receive 30% of the lump sum applicable. Hence the finding by the primary judge at [19]:

“For its own reason, the defendant paid the plaintiff the weekly payment as if she were totally dependent upon her late husband for support, but only thirty per cent of the lump sum payable to her if she were totally dependent upon him for support, but one can glean that the reason for the choosing of thirty per cent of the total lump sum was the fact that when the deceased died he was 79 years of age and the percentage is set out in the table set out in exhibit 2 which I have quoted above.”

18. The primary judge then asked whether Ms Cunha was wholly or partially dependent upon the deceased for support at the time of his death (at [20]) and addressed a number of authorities on cognate legislation, which need not be reproduced here, save to note that at [33] the primary judge reproduced part of the decision of Walker CCJ in Claydon v Jayton Pty Ltd t/as Stocktrans (1999) 18 NSWCCR 381, at [78]-[84], as follows:

“78 The respondent submits that because both the applicant and his partner are on Social Security benefits she cannot be totally or mainly dependent upon him within the meaning of s 37(4).

79 This is a popular submission but finds no favour that I can determine in the decided cases on the matter. In Fatovic v Standard Telephones & Cable Pty Ltd, NSWCC, No. 2892/89, 4 March 1991, unreported, his Honour Judge Burke dealt with a submission that an increment to an invalid pension to include a benefit for children had changed the dependency in respect of the children.

80 Judge Burke pointed out that there was a long line of authority to the effect that benevolence from relatives, friends or the State after injury to a worker does not derogate from dependency. He was referring of course to cases such as Aafjes v Kearney [1976] HCA 5; (1975) 180 CLR 199; TNT Group 4 Pty Ltd v Halioris (1987) 8 NSWLR 486 and McCafferty's Management Pty Ltd v Pimlott (1995) 12 NSWCCR 360.

81 Judge Burke held that in situations where a relative was dependent prior to injury there was a presumption of continuance with an evidentiary onus on the respondent to establish change. In the circumstances he found the onus had not been discharged.

82 His Honour Judge O'Meally in Warrender v Orange City Council, NSWCC, No. 3390/87, 29 September 1997, unreported, took the view that Social Security payments in themselves are not sufficient to alter a wife's status as a dependant. He took the same view in Bishop v Bucciarelli, NSWCC, No. 8711/82, 11 March 1998, unreported.

83 His Honour Judge Moran in Dunn v Sydney City Council, NSWCC, No. 6169/92, 7 June 1993, unreported, rejected the suggestion that, because the applicant's wife received a Social Security benefit for herself and two children whilst the husband only received the benefit for himself, the Court should draw the conclusion that the wife and children were not mainly dependent.

84 I agree with my colleagues' approach to the interpretation of s 37(4) and taking all the evidence into consideration determine on the balance of probabilities that the applicant's de facto spouse was mainly dependent upon him at all relevant times.”

19. At [35], the primary judge identified various propositions which he said could be drawn from the case law he had cited, including:

“(4) the receipt by the spouse of some income does not necessarily preclude a finding of total incapacity: Kauri Timber Co (Tas) Pty Ltd v Reeman;

(5) this principle extends to support given by relatives and friends, including siblings, who are under no legal obligation to provide support; it also extends to charity, that is, to public benevolence.”

20. The primary judge made a finding at [36] that “the plaintiff must be seen as having been totally dependent upon the deceased during the period in which she was not working but the deceased was … from the date of her cessation of work in 2000 until the retrenchment of the deceased in June 2003”. His Honour then observed that “the only thing that occurred after that time was the grant of the age pension”.

21. His Honour put to one side the carer allowance which was paid to Ms Cunha but which ceased on the death of the deceased, and seems also to have put to one side the very modest investment income derived from the lump sum which had been paid to the deceased worker. The dispositive reasoning of the primary judge was found at [39], as follows:

“We come back to the primary position, therefore, of whether the payment of the age pension ought be seen to deprive the plaintiff of the otherwise appropriate finding that she was totally dependent upon the deceased for support at the time of his death. Consonant with the authorities collected by Walker CCJ in Claydon I am of the view that the payment of the social security benefit should not be taken into account in determining the question of dependency. I acknowledge, however, that the situation in the current case is different to the cases quoted by Walker CCJ because they all appear to deal with a living worker who was seeking to claim others in receipt of social security as being dependent upon him. If the worker is still living, it is well known and accepted that a weekly payment of workers compensation to the worker will reduce pro tanto his entitlement to unemployment relief, sickness benefits and, for example, the former invalid pension, now called the disability support pension. It would of course be erroneous to reduce a workers compensation entitlement because of a social security benefit when in fact the payment of the workers compensation benefit is supposed to reduce the entitlement to the social security benefit.”

22. At [40], his Honour observed that any lump sum payable under the Act would be regarded by the Commonwealth Department of Social Security as a sum included in Ms Cunha’s assets for the purposes of applying the assets test to the age pension. His Honour found that:

“In other words, there may be an effect. The payment of benefits under the Act can or could affect the payment of the age pension. In those circumstances it appears to me to be erroneous factually, if not legally, to take into account the payment of the age pension in determining the extent of dependency.”

23. At [41]-[42], his Honour referred to what he described as “other pertinent considerations”, including hypothetical scenarios in which the deceased had died aged 64, and in which Ms Cunha had substantial superannuation entitlements. At [43], his Honour said:

“One does not ‘earn’ an entitlement to the age pension. The entitlement arises under the Federal legislation and it is, in essence, a public charitable scheme. It is eleemosynary in nature. The payment of the age pension can be seen to be equivalent to public charity and should be seen in that nature in determining cases of this nature.”

24. His Honour concluded at [44], saying that “it seems to me that the plaintiff is entitled to a finding that she was totally dependent upon the deceased at the time of his death”. His Honour made orders accordingly, making a lump sum award of $332,850.

25. At [45]-[69], his Honour made findings in the alternative, supporting a partial dependency lump sum amount, after applying a 5% discount rate and reducing the “weekly dependency amount” of $645.50 by a further $274.50, being the weekly equivalent of the fortnightly compensation payment awarded to Ms Cunha. This contingent aspect of the award was the subject of Ms Cunha’s cross-appeal.

The Authority’s appeal

26. The Authority identified six grounds of appeal in its notice of appeal, but during argument accepted that the sixth ground added nothing to the preceding five. It is convenient to commence with ground two, which both parties recognised was the primary ground. It was framed as follows:

“the Court erred in point of law in:

…

2. asking whether receipt of a Commonwealth age pension deprived the respondent of a finding that she was wholly dependent on the deceased worker for support immediately before his death, when the correct question to be asked was a factual one as to whether the respondent was wholly dependent on the deceased worker for support immediately before his death within s 8(2B)(a) and (b), or whether she was partially dependent on him for support immediately before his death within s 8(2B)(a) and (d) of the DD Act”.

27. A great deal of attention was given in the submissions from both parties to decisions establishing that under this and cognate legislation the mere fact that a person might be in receipt of income from other sources did not of itself stand in the way of a finding that he or she was wholly dependent on a deceased spouse. Instead, the question in every case was one of fact. It is not necessary to traverse the decisions. Illustrative of the point (which was not in issue) is the statement in Kauri Timber Co (Tas) Pty Ltd v Reeman (1973) 128 CLR 177 at 189 by Gibbs J that:

“The principle underlying these authorities is that it is the actual fact of dependence or reliance on the earnings of another for support that is the test. It follows that the fact that a woman has some property and income of her own does not prevent her from being wholly dependent upon the earnings of her husband, if in fact she wholly depends on those earnings for her support, and does not partly support herself out of her own resources.”

28. This was also one of the propositions (proposition (4)) which the primary judge had drawn from the case law.

29. The Authority’s principal submission was that it was wrong to approach the question posed by s 8(2B)(b) and (d) by looking back in time to the period between 2000 and 2003 when Ms Cunha was wholly dependent upon her spouse, and then to ask whether the receipt of the age pension altered that status. According to the Authority, the question was one of fact, and should have been addressed directly.

30. Ms Cunha maintained that the primary judge had correctly framed the test to be applied at [20], and that because it was at all times common ground that she was dependent upon her husband, the application of that test resolved to whether her receipt of an age pension altered the position. That is to say, Ms Cunha maintained that the language used by the primary judge reflected the way in which the issues had been contested before him, and did not reflect any misapplication of the test posed by statute.

31. In further support of the primary judge’s reasoning that the receipt of the pension ought not to make a difference to her dependency, Ms Cunha submitted that:

“if the age pension is reduced, because of the lump sum payment, or may be reduced because of the lump sum payment, under the social security legislation, it can’t be and shouldn’t be taken into account, in relation to the Board, under the Dust Diseases Act, and to do so would be grossly unfair.”

32. That submission reflected and elaborated upon the reasons of the primary judge at [40], stating that it appeared to be “erroneous factually, if not legally”, to take into account the payment of the age pension. Three points may be made in response.

33. First, the nature of the gross unfairness for which Ms Cunha contended was not clearly articulated. So far as I can see, the gravamen of the complaint was that receipt of a larger amount under the Act might result in a smaller age pension. It is scarcely surprising that there is some interaction between the benefits available under the State and federal schemes. In both cases, the amount of money paid is determined, in part, by the extent of the recipient’s need. Thus, a larger amount is awarded under the State regime to a surviving spouse who was wholly, as opposed to partially, dependent for support upon the deceased worker. Thus also, a larger amount may be paid under the age pension to a person with fewer assets. In these circumstances, it is difficult to identify “unfairness” in the consequence that a payment under one scheme may have an effect upon payments under the other.

34. Secondly, and in any event, there was no evidence as to what, if anything, the effect of receipt of some $332,850, as opposed to $99,855, would be on Ms Cunha’s pension. That is not to be critical; the position seems to be moderately complex, as follows.

1. The materials in evidence from Centrelink suggested that Ms Cunha was receiving, prior to her husband’s death, fortnightly payments of $342.34 (age pension), $10.60 (energy supplement) and $48.20 (pension supplement), totalling $401.14, plus a carer allowance of $121.70. The Centrelink income statement dated 10 November 2015 containing those rates stated that at that point in time, Ms Cunha was not receiving the maximum rate age pension.

2. After her husband’s death, Ms Cunha was receiving fortnightly amounts of $784.67 (age pension), $14.10 (energy supplement) and $64.50 (pension supplement), totalling $863.27, and no longer receiving the carer allowance. The Centrelink income statement dated 19 November 2015 containing those rates stated that Ms Cunha was receiving the maximum rate age pension.

35. It seems probable that if the assets on which Ms Cunha’s entitlement to a pension was determined included an additional $232,995, then her pension would be reduced, but not reduced to zero. However, it is unclear (if this be relevant) whether the reduction would leave her in a position which was worse off than she was on the partial pension she had been receiving prior to her husband’s death.

36. It is not possible on the material made available to this Court to determine the exact effect of the lump sum payments on Ms Cunha’s social security entitlements; the following is intended only to be illustrative. The assets test to work out the effect of a person’s assets on their age pension entitlements is located in Module G of Pt 3.2 of Ch 3 of the Social Security Act 1991 (Cth). The best available estimate of Ms Cunha’s assets after her husband’s death is $128,684 (found in the Centrelink income statement mentioned above). Were Ms Cunha to receive a lump sum payment of $332,850, her “pension reduction amount” would have been $13,679.25. Were Ms Cunha to receive a lump sum payment of $99,855, her “pension reduction amount” would have been $4,592, some $9,000 less than if the higher lump sum were paid. It follows that if Ms Cunha were paid the larger lump sum, as opposed to the smaller sum, the net impact upon her age pension would be a reduction in the order of $9,000.

37. (The above amounts were determined in accordance with the steps set out in s 1064‑G1 of the Social Security Act 1991 (Cth) (prior to the amendments to Module G that took effect on 1 January 2017), as follows:

1. Ms Cunha’s “assets value limit” was $110,750 because she was a homeowner but not a member of a couple (s 1064-G3).

2. If Ms Cunha received a lump sum payment of $332,850, her pension reduction would have been $13,679.25 because:

1. her assets would have totalled $461,534, and therefore would have exceeded her assets value limit;

2. an “assets excess” is the value of a person’s assets less the applicable assets value limit (s 1064-G5), which for Ms Cunha would have been $350,784 (rounded down to $350,750 by virtue of s 1064-G7); and

3. applying the formula in s 1064-G4, her pension reduction for assets would have been $350,750 x 9.75 divided by 250, which comes to $13,679.25.

3. If Ms Cunha received a lump sum payment of $99,859, her pension reduction would have been $4,592 because:

1. her assets would have totalled $228,543, and therefore would have exceeded her assets value limit;

2. Ms Cunha’s “assets excess” would have been $117,750; and

3. applying the formula in s 1064-G4, her pension reduction for assets would have been $117,750 x 9.75 divided by 250, which comes to $4,592.)

38. On the view I take, it is unnecessary to take this aspect of the matter any further, save to note that the impact of an award of a lump sum which is included within the assets regard to which is had for the purposes of determining an entitlement to the aged pension may be quite different depending on the particular circumstances of a surviving spouse.

39. Thirdly, in Miles v SAS Trustee Corporation [2017] NSWCA 86, an appeal like this from the District Court exercising its residual jurisdiction, but determined after the decision of the primary judge, Sackville AJA, with whom Payne JA agreed, said at [55]:

“Having regard to the submissions made by STC in the present case, it is important to appreciate that a construction that gives effect to the words of a statute is not to be rejected simply because one party labels the result as ‘perverse’ or, to use a less pejorative term, ‘anomalous’.”

40. The same may be said of the labelling of a result as “grossly unfair”. Substantially similar reasoning was applied by this Court in Lembcke v SAS Trustee Corporation (2003) 56 NSWLR 736; [2003] NSWCA 136 in relation to a construction said to produce a “windfall gain”.

41. It is as well to reiterate what Bathurst CJ said in a not dissimilar context in SAS Trustee Corporation v Woollard (2014) 86 NSWLR 367; [2014] NSWCA 75 at [59]:

“[I]t is not up to courts in construing a statute to consider what is or is not a desirable policy and impute that to the legislature as a matter of construction”.

42. The resolution of this appeal, which turns upon the construction of s 8(2B), is not assisted by submissions which invoke a notion of “grossly unfair” upon the construction for which the Authority contends.

Resolution of the appeal

43. The fact that it was common ground that Ms Cunha was dependent upon her husband meant that the only issue for determination by the primary judge was whether, immediately before his death, she was wholly dependent upon him, or only partially dependent upon him. The position more than a decade earlier, before either of them was receiving the age pension, is potentially relevant to the determination of that issue, although it is difficult to see how it would be more than peripheral. The critical issue of the extent of Ms Cunha’s dependency is to be determined at the relevant time 12 years later, when the income of Ms Cunha and her husband was different and had long been different.

44. The passages of his Honour’s reasons reproduced above, particularly at [36] and [39], confirm that his Honour approached the statutory question not by asking whether Ms Cunha was wholly or partially dependent at the relevant time, but instead by asking whether her receipt of the aged pension was to be disregarded so as to leave in place what his Honour stated was “the otherwise appropriate finding that she was totally dependent” upon her deceased husband. The evident force of the dispositive aspects of his Honour’s reasons is not displaced by the correct formulation of the statutory test at [20] at the outset of his analysis.

45. The decisions collected by Walker CCJ in Claydon v Jayton Pty Ltd t/as Stocktrans do not assist. His Honour’s decision, and the decisions cited by him, were all authorities on s 37(4) of the Workers Compensation Act 1987 (NSW) in the form it then took, where the question was whether “the person is totally or mainly dependent for support on the worker at the date compensation becomes payable” (emphasis added). That is a materially different statutory test. Quite plainly there may be people who are “mainly” dependent upon a worker who fall short of being “totally” dependent upon the worker. Walker CCJ’s conclusion (at [84]) was expressly stated in terms of “mainly dependent”.

46. The reasoning process reflected in that decision confirms what is uncontroversial, namely, that receipt of amounts of income do not necessarily stand in the way of a finding of dependency, nor indeed a finding that a person is “totally or mainly dependent”. Nor do they necessarily stand in the way of a finding that a person is wholly dependent. But they provide no support for the approach adopted by the primary judge, which was to disregard them without further inquiry.

47. Moreover, the first of those decisions, Fatovic v Standard Telephones & Cable Pty Ltd (unreported, 4 March 1991, Burke J), was a case where the question was whether there were dependent children because an invalid pension received by the applicant’s spouse included a component for children, which was easily resolved on the basis that s 37(5) provided that the fact that a payment was being made under the Social Security Act 1991 (Cth) did not preclude a child from being totally or mainly dependent for support on a worker. The exemption for payments to children also informed the reasoning in Warrender.

48. The reasoning of the primary judge resembles one aspect of Burke J’s reasoning, as summarised by the primary judge, involving a presumption once it be found that at some stage there is the requisite dependency. Unlike the primary judge, whose reasons were delivered immediately after the appeal was heard, I have had the opportunity of reading the reasons of Burke J. His Honour’s reference to a presumption was made in the context of speculation advanced on behalf of the employer as to events which might have happened after the injury, which his Honour, with respect rightly, rejected:

“Dependency does not depend upon speculations of what might have occurred in the past. It depends upon the effects of actual events.”

49. The remaining decisions, with respect, contain nothing that goes beyond an assertion that the receipt of what appear to have been relatively small social security benefits did not deny a spouse the status of being totally or mainly dependent upon the worker. The precise amount of social security payments received is not disclosed in the reasons, but none appears to have been a case where, for many years, such payments had been a substantial source of income. Indeed, none was a case of an age pension.

50. The primary judge was accordingly correct, with respect, to observe at [34] that those decisions were not directly concerned with the issue in the present case. However, contrary to what was said by the primary judge at [40], I cannot agree that it is erroneous, either factually or legally, to take into account the payment of a pension when determining the extent of Ms Cunha’s dependency. The question is one of the construction of the Workers’ Compensation (Dust Diseases) Act 1942 (NSW). There is nothing which is express in that legislation to require or permit the factual assessment of dependency to disregard the receipt of an age pension, and no sound reason has been advanced for any implication to that effect. The authorities to which the primary judge referred, to the effect that the receipt of some income or charitable support does not necessarily preclude a finding of total dependency, do not support the very different proposition that such other income is to be disregarded, irrespective of its significance.

51. True it is that the payment under the State Act may have a consequential effect upon a right to a federal pension. The possibility of its having that effect – without more – is insufficient to warrant a court from assessing dependency on a basis which disregards the federal pension altogether.

52. Much may turn on the particular facts. It may well be that a surviving spouse who has a very small entitlement to payments by way of social security would not be, for that reason, disentitled from a finding that he or she was wholly dependent. That determination may also involve wider questions as to the way in which support was provided to the surviving spouse; support is not limited to financial support: Dionisatos (for the Estate of the late George Dionysatos) v Acrow Formwork & Scaffolding Pty Ltd (2015) 91 NSWLR 34; [2015] NSWCA 281 at [25], [33] and [210]-[212]. Considerations such as those are, in my respectful opinion, a further reason to reject a construction which permits putting to one side all receipts of the age pension in all cases.

53. At [41] and [42] his Honour gave two examples removed from the facts before him. The first was to assume that everything had happened 15 years earlier, before Ms Cunha had qualified for an age pension. The second was to assume that Ms Cunha had substantial superannuation entitlements. Those counterfactual possibilities do not support the conclusion that the question posed by the Act should be determined on an incomplete view of the facts.

54. At [43] his Honour observed that “One does not ‘earn’ an entitlement to the age pension” and that, to the contrary, the pension was essentially a public charitable scheme. That may be so, but once again, I see no reason to construe the Act so as to preclude having regard to that source of income in determining the question of fact presented by s 8(2B). Receipt of federal social security benefits is not determinative, but it is not to be disregarded.

55. For those reasons, error in point of law is made out.

56. The remaining grounds may be determined concisely. All of them overlapped with ground 2. To the extent that it was separate from it, ground 1 claimed there was error of law in considering “whether at any time the respondent had been wholly dependent for support on the deceased worker”. There is no error in so doing, let alone error of law. The conclusion as to the dependency at the time of the deceased worker’s death is one that is informed by what occurred in the period prior to his or her death.

57. Grounds 3, 4 and 5 made complaints about the reasoning in [40], [42] and [43], which have been addressed above. The observations made by the primary judge as to the nature of the age pension and the effect of receipt of an award upon it may have distracted from the question posed by statute. No separate argument was addressed as to whether they amounted to error in point of law within the limited grant of appellate jurisdiction enjoyed by this Court, and it is not necessary to express a view on that point, on which nothing turns.

58. Ms Cunha invited this Court to express the view that the policy statement drafted by Insurance and Care NSW and seemingly applied by the Authority in the present case was inconsistent with statute. Contrary to one of the Authority’s submissions, that was a submission that had been made to the primary judge. However, in accordance with the balance of the Authority’s submissions, it would be wrong for this Court, in this appeal, confined to points of law in the decision of the primary judge exercising a de novo jurisdiction to determine Ms Cunha’s appeal, to do so.

59. Ms Cunha’s cross-appeal complained of two aspects of the award which the primary judge said he would have made in the event that he had found partial dependency. The scope of the appeal to this Court is confined to cases where a person “is aggrieved by an award of the Court in point of law”. There is no such partial dependency award, nor has there ever been such an award. The cross-appeal must be dismissed.

Orders

60. The Authority’s notice of appeal sought orders setting aside those made by the primary judge and, in lieu thereof, dismissing Ms Cunha’s appeal from the decision of the Authority. The orders of the primary judge should be set aside, but, as the Authority at one stage appeared to acknowledge during the hearing of the appeal, it is necessary to remit the appeal for determination in accordance with law by the District Court. All of the authorities to which both parties pointed confirm that the mere fact of receipt of income from another source cannot of itself preclude a finding of a surviving spouse being wholly dependent for support on the deceased worker: this is a question of fact.

60. The parties were granted leave to provide further written submissions on this issue after judgment was reserved. That occurred on 19 and 24 April 2017.

61. In those submissions, the Authority renewed its submission that the only possible result is that Ms Cunha was partially dependent upon the deceased at the time of his death, and that this Court has power to make that finding and reinstate the award made by it. The question of the power to make findings of fact in an appeal of this nature is not free from difficulty: without being exhaustive, see North Broken Hill Ltd v Tumes (1999) 18 NSWCCR 412; [1999] NSWCA 309 at [25]; Patrick Operations Pty Ltd v Comcare (2006) 68 NSWLR 131; [2006] NSWCA 142 at [56] but cf at [72] and, more generally, B & L Linings Pty Ltd v Chief Commissioner of State Revenue (2008) 74 NSWLR 481 and Allianz Australia Insurance Ltd v Bluescope Steel Ltd (2014) 87 NSWLR 332; [2014] NSWCA 276 at [330]-[332].

62. However, contrary to the Authority’s submission but in accordance with those of Ms Cunha, this is not a case where only one finding is available. As previously mentioned, “support” is not limited to financial support, and “wholly dependent” does not preclude contributions from other sources. Ms Cunha is entitled to be heard on how, for example, her various medical conditions, her inability to drive and the fact (if it be the fact) that Mr Cunha was in control of the couple’s finances, engage the statute. Consistently with the course taken in Allianz at [335], the matter should be remitted to the District Court to be decided in accordance with law.

63. The Authority undertook that it would pay Ms Cunha’s costs of the appeal in any event, and such an order should be made. Ms Cunha did not seek an order for costs of her cross-appeal, and the Authority’s undertaking did not extend to the cross-appeal. Instead, the Authority simply submitted that the cross-appeal should be dismissed, with the intention that the parties bear her and its own costs of the cross-appeal. That is the appropriate course.

64. Following the decision of the primary judge, orders were made by consent on 2 September 2016 involving a partial payment to Ms Cunha and (by order 3) an agreement by her of restitution of such monies “in the event that the Court of Appeal sets aside the orders made by the Court on 4 August 2016”. There is no need to vary that order, although it is convenient to note that the Authority acknowledged in paragraph 3.11 of its submissions dated 24 April 2017 that any restitution should only be made after the District Court has heard and determined the remitted matter, and should conform to that Court’s award.

65. I propose the following orders:

1. Appeal allowed.

2. Set aside orders 1, 2, 3 and 4 made by the District Court on 4 August 2016.

3. Cross-appeal dismissed.

4. Remit the matter to the District Court for decision in accordance with law.

5. The Authority to pay Ms Cunha’s costs of the appeal.

67. SIMPSON JA: I agree with Leeming JA.

**********

Decision last updated: 25 May 2017