Zhang v Universe Investments Pty Ltd t/as Kings Seafoods
[2021] NSWPIC 128
•20 May 2021
| CERTIFICATE OF DETERMINATION OF MEMBER | |
| CITATION: | Zhang v Universe Investments Pty Ltd t/as Kings Seafood [2021] NSWPIC 128 |
| APPLICANT: | Yuling Zhang |
| FIRST RESPONDENT: | Universe Investments Pty Ltd t/as Kings Seafood |
| SECOND RESPONDENT: | Zi Xi Shen |
| THIRD RESPONDENT: | Zhang Wenato Lun |
| FOURTH RESPONDENT: | Zu Yu Chan (Yuk Sium Chu) |
| MEMBER: | Mr Brett Batchelor |
| DATE OF DECISION: | 20 May 2021 |
| CATCHWORDS: | WORKERS COMPENSATION- Liability for payment of lump sum death benefit and apportionment and interest on sums apportioned pursuant to Certificate of Determination dated 23 March 2021; The first respondent (employer) sought reconsideration of the award of interest pursuant to section 350(3) of the 1998 Act; reconsideration allowed; review of when the claims of the dependants were ‘duly made’ and the rate of interest that should be awarded on the sums apportioned to those dependants; Held- orders for the payment of interest and the Certificate of Determination and Statement of Reasons revoked and new orders made; Certificate of Determination and Statement of Reasons otherwise confirmed. |
| DETERMINATIONS MADE: | 1. Order [8] in the Certificate of Determination dated 23 March 2021 and order [106] in the attached Statement of Reasons are revoked. 2. The respondent is to pay interest on the lump sum death benefit at the rate of 2.5% pa as follows: (a) on the sum of $430,045 apportioned to the applicant from 20 March 2020 to the date of payment of such sum; (b) on the sum of $132,923 apportioned to the second respondent from 20 March 2020 to the date of payment of such sum; (c) on the sum of $187,656 apportioned to the third respondent from 20 March 2020 to the date of payment of such sum, and (d) on the sum of $31,726 apportioned to the fourth respondent from 20 October 2020 to the date of payment of such sum. 3. The determinations and orders in the Certificate of Determination dated 23 March 2021 and orders in the attached Statement of Reasons are otherwise confirmed. |
STATEMENT OF REASONS
BACKGROUND
On 23 March 2021, the Personal Injury Commission issued a Certificate of Determination (COD) and Statement of Reasons (Reasons) in this matter pursuant to a determination by me as a Member of the Commission.
The claim of Yuling Zhang (the applicant) was for payment of the lump sum death benefit payable by Universe Investments Pty Ltd t/as Kings Seafood (the first respondent) pursuant to s 25(1)(a) of the Workers Compensation Act 1987 (the 1987 Act) as a result of the death of her husband Hai Yuan Lun (the deceased) on 18 March 2018 from an injury arising out of or in the course of his employment by the first respondent. Zi Xi Shen (the second respondent) is the infant son of the applicant from a former relationship. Zhang Wenato Lun (the third respondent) is an infant son of the applicant and the deceased. Zu Yu Chan (also known as Yuk Sium Chu) (the fourth respondent) the deceased’s mother.
After consideration and determination of the issue of the liability of the first respondent to pay the lump sum death benefit to the dependants of the deceased, orders were made for the apportionment of such benefit between the applicant and the second, third and fourth respondents, and payment either to those persons or to the NSW Trustee and Guardian (the NSW Trustee) in the case of the second and third respondents. The first respondent was also ordered to pay interest on the lump sum death benefit at the rate of 4.10% from 7 October 2019 to the date of the COD, apportioned between the applicant and the second, third and fourth respondents pro-rata according to the apportionment of the lump sum death benefit.
The issue of the rate at which and the period during interest should be paid on the lump sum death benefit is dealt with at [83]-[94] of the Reasons. A finding was made at [84] that the claim for the lump sum benefit was made on 7 June 2018. For the reasons set out in [90]-[91], a finding was made that the first respondent should be ordered to pay interest for one half of the period that elapsed between that date and the date on which the lump sum death benefit was to become payable pursuant to the award in the COD.
The issue of the rate at which interest should be paid was discussed at [86]-[89] and [94] of the Reasons. Paragraph [94] is as follows:
“In the absence of any other submissions on the question of interest, there will be an order that the first respondent pay interest on the lump sum death benefit from 7 October 2019 to the date of the Certificate of Determination issued in these proceedings at 4% above the cash rate last published by the Reserve Bank of Australia for the period 1 July 2020 to 31 December 2020. This was 0.10%. The interest is to be apportioned between the applicant and the second, third and fourth respondents pro-rata according to the apportionment of the lump sum death benefit.”
On 12 April 2021 the first respondent lodged with the Commission an application for reconsideration of my decision in respect of the award of interest pursuant to s 350(3) of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act), given that the proceedings were commenced in the former Workers Compensation Commission of NSW which ceased to exist on 1 March 2020 by virtue of the commencement of the Personal Injury Commission Act 2020 (the PIC Act) on that day. Alternatively, the application for reconsideration was made pursuant to s 57 of the PIC Act. The grounds for reconsideration accompanied the application for reconsideration. Submissions in response to the first respondent’s application have been received from the applicant and the second, third and fourth respondents.
ISSUES FOR DETERMINATION
The following issues remain in dispute:
(a) Should the Commission reconsider its decision in respect of the awarding of interest?
(b) Should interest be awarded on the lump sum death benefit?
(c) If interest is to be awarded on the lump sum death benefit, over what period and at what rate should such interest be awarded?
PROCEDURE BEFORE THE COMMISSION
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. In view of the nature of the application by the first respondent, there has been no attempt to resolve the issue of interest on the lump sum death benefit. It requires determination by the Commission.
The parties have not suggested in their submissions that a conference or formal hearing is required for determination of the current dispute. I am satisfied that sufficient information has been supplied in connection with the proceedings to enable the determination of the matter without a conference or formal hearing.
EVIDENCE
Documentary Evidence
The following documents were in evidence before the Commission and considered in making this determination:
(a) all of the evidence that was before the Commission in the determination of the proceedings culminating in the issue of the COD and Reasons on 23 March 2021;
(b) the submissions of the first respondent dated 12 April 2021 in support of the application for reconsideration;
(c) the applicant’s submissions dated 30 April 2021;
(d) the second respondent’s submissions dated 5 May 2021;
(e) the third respondent’s submissions dated 20 April 2021, and
(f) the fourth respondent’s submissions dated 3 May 2021.
SUBMISSIONS
First respondent
The first respondent submits that no claim for interest has been made by the applicant and this was not raised at any of the telephone conferences or at the conciliation/arbitration.
The first respondent did not have the opportunity to address a claim for interest as no such claim had been made.
In paragraph [85] of the Reasons reference is made to the fact that the first respondent made no submissions on apportionment, which is correct, which the first respondent observes is appropriate. The first respondent submits that it would have addressed interest in submissions had such a claim been made.
The first respondent notes that the submissions of the fourth respondent dated 12 January 2021 (which address apportionment and interest) referred to by the Member note that the power to award interest is discretionary. The submissions appear to make the assumption that a claim for interest had been made.
The submissions of the second respondent dated 6 January 2021 solely relate to apportionment. The further submissions dated 6 March 2021 relate to liability. There is no reference to interest in either submission.
The first respondent submits that, absent a claim for interest having been made at this point in the proceedings, and after conclusion of the arbitration, there ought be no award for interest, and leave to add a claim for interest should be refused (see Pasminco Ltd v Walters[1] and Canham v Kenna Investments Pty Ltd).[2]
[1] [2005] NSWWCCPD 30 (Pasminco) at [76]-[78].
[2] [2006] NSWWCCPD 202 (Canham) at [27].
The first respondent refers to Eather v Skillset Limited[3] in which it was specifically noted that that no claim had been made for interest in the Application to Resolve a Dispute (ARD) and the application was subsequently amended (see [3] of the decision). No such amendment was sought in the current proceedings.
[3] [2020] NSWCC 161 (Eather).
If the submission in relation to the non-award of interest is rejected, and leave is granted to the applicant or other respondents to make a claim for interest, the following submissions are made by the first respondent.
Section 109 of the 1998 Act is referred to, noting that the Commission’s power to award interest is discretionary. A chronology of relevant dates in the proceedings is set out which, with some minor corrections, is correct. The date of death of the deceased was 18 March 2018 and the Application in Respect of Death of Worker (not the ARD) was filed on 28 February 2020.
Of most significance according to the first respondent is the fact that it has not been legally possible for the insurer to pay any part of the s 25(1)(a) lump sum, and that a payment would not be possible until the Commission had:
(a) made a determination of those persons who were dependent for support upon the deceased;
(b) made a determination apportioning the lump sum as between the dependants pursuant to s 29 of the 1987 Act, and
(c) made the order(s) under s 85(1)(a) and/or s 85A(1) of the 1987 Act for the payment(s) consistent with the apportionment.
The first respondent submits that further, despite the denial of liability, had the lump sum been paid immediately to the NSW Trustee, no payment would have been made to any dependant until the determination by the Commission of liability, dependency and apportionment followed by the order(s) for payment.
The first respondent submits that whilst it is well established by the decisions on interest claims under s 109 of the 1998 Act that a paramount consideration in the exercise of the discretion on whether or not to award interest is the fact that the insurer has had the use of the compensation, and the person entitled to the compensation was denied the use of the compensation during the relevant period, this should not be so in claims arising out of the death of a worker for the reasons outlined by the first respondent.
The first respondent submits that in such claims, a factor that is far more relevant to the exercise of the discretion, and which outweighs the relevance of the fact that the insurer has had the use of the lump sum, is the inability on the part of the insurer to pay the lump sum without the determination of the Commission.
For the foregoing reasons, there should be a reconsideration of the decision to award interest and no allowance should be made.
Alternatively, the first respondent submits that if it is determined that interest should be awarded, the two remaining issues are:
(a) the period or periods which should be the subject of an order for interest, and
(b) the rate or rates at which interest should be ordered.
The first respondent submits that the claim was not ‘duly made’ within the meaning of
s 109(2)(b) of the 1998 Act until the claims for dependency were made.
The first respondent cites what was said by Keating DCJ in Kaur v Thales Underwater Systems Pty Ltd[4], namely:
“Section 109(2)(b) ... prohibits interest on any award of compensation payable under the Act for any period before a claim for the compensation was duly made. I accept the submission that the claim for compensation on behalf of the appellants was not duly made until the day of the arbitration. I therefore accept Thale’s submission that, as at the arbitration, the appellants could not be entitled to interest pursuant to Section 109. ..."
and a number of other decisions of Arbitrators of the Workers Compensation Commission on this issue. These decisions are to the effect that the words ‘duly made’ do not refer to the date on which a letter of claim is issued but, rather, to the date on which particulars are provided.
[4] [2011] NSWWCCPD 6 at [139].
The first respondent submits that the particulars were not provided until January 2021, and that in the event that it is determined that an order for the payment of interest under s 109 should be made, interest should be ordered to be paid until full particulars were provided as per the following dates:
(a) applicant - 12 January 2021
(b) second respondent - 6 January 2021
(c) third respondent - 7 January 2021
(d) fourth respondent - 12 January 2021.
In respect of the rate at which interest should be ordered, if so ordered notwithstanding the first respondent’s primary submission that there should be no such order, the first respondent refers to the Supreme Court rate of interest over the periods from 1 January 2019 until 31 December 2020.
The first respondent refers to a decision given by me in Cameron v StateCover Mutual Ltd[5] and a decision of Arbitrator Dalley in Riverdene Equine Hospital Pty Ltd v Tupani[6] in which interest was awarded at 4% pa for periods during which the Supreme Court rates ranged between 7.5% pa to 6.5% pa and 6.5% pa to 6% pa, respectively. The first respondent submits that these decisions were given at a time when interest rates offered by banks on deposits were considerably greater than at present.
[5] [2015] NSWWCC 325 (Cameron).
[6] [2015] NSWWCC 240 (Tupani).
The first respondent also refers to a number of more recent decisions given by other Arbitrators in which interest was awarded at between 2% pa and 3% pa, and in which reference was made to the low cash rate prevailing at the time.
The first respondent submits that if interest is awarded, it should be at the rate of 2%.
Applicant
The applicant adopts the submissions of the third respondent (referred to hereunder) with the following additions.
Section 109 of the 1998 Act provides the statutory basis for the claim being made. The awarding of interest is discretionary but limited b s 109(2). In this case the only possible fetter on the award of interest is the date the claim was duly made.
The section does not mandate the claiming of interest in the ARD nor does the ARD form invite such a claim to be recorded. However, it is accepted as a practical proposition that some notification is required to enable the matter to be considered. As the third respondent has observed, submission(s) on apportionment certainly raised the issue of interest, and put the first respondent on notice that it would be claimed.
The applicant submits that if something more is required, the applicant seeks leave to amend the ARD to claim interest from the date of the s 78 notice dated 17 September 2019.
The applicant submits that controversy surrounds the meaning of the phrase “claim duly made” which is not defined in the legislation. However the claim must have been duly made by the time that the insurer issued its s 78 notice. Thereafter distribution of the amounts payable pursuant to s 25 of the 1987 Act could not be effected until the issue of liability had been resolved by the Commission. The applicant submits that at the very least, interest was payable from the date of the s 78 notice until date of determination.
The applicant notes that the rate at which interest is awarded is discretionary. Generally the Commission has looked to the prevailing Reserve Bank rates and to the statutory rates prescribed in the common law jurisdictions. For the most part it has awarded interest at a lower rate than has been available elsewhere. The applicant submits that this is what occurred in the current proceedings.
The applicant submits that if the first respondent can persuade the Commission that it was denied the opportunity to be heard on the question, the applicant accepts that reconsideration is an appropriate means of remedying any perceived injustice. However the applicant submits that there is no basis upon which interest should be awarded other than at 4%.
Second respondent
The second respondent adopts the submissions of the applicant, the third respondent and the fourth respondent.
The second respondent notes that it is difficult to make a claim for interest on the ARD that is filed through the Portal, both in the Workers Compensation Commission, where the current ARD was filed, and in the Personal Injury Commission. It is submitted that the absence of the claim in the ARD is not fatal and, as the third respondent has submitted, submissions made regarding the apportionment of the award monies to the deceased’s beneficiaries [sic, dependants] certainly raised the issue of interest, and put the first respondent on notice that it would be claimed.
The second respondent submits that if the Commission decides that the first respondent was denied an opportunity to be heard on the question of interest, it accepts that reconsideration is an appropriate means of remedying any loss of opportunity for the first respondent to be heard on whether interest is awarded, and at what rate.
Third respondent
The third respondent submits that the assertion that there was no claim for interest made ignores:
(a) Section 3.0 of the written submissions of the fourth respondent which sought pro-rata interest from when the claim was duly made, and
(b) Section 5.3 of the submissions of the third respondent which sought a proportion of any interest payable.
Fourth respondent
The fourth respondent adopts the submissions of the applicant and the third respondent and submits that the claim was made in this case on 7 June 2018.
The fourth respondent refers to Rule 36.7(1) of the Uniform Civil Procedure Rules 2005 which provide that interest ought to be at 4% above the cash rate set by the Reserve Bank. As the cash rate is .01% [sic, 0.10%], it is submitted that the rate of interest awarded be 4.1%, which is precisely what was awarded.
FINDINGS AND REASONS
Reconsideration
The first respondent applies for reconsideration pursuant to s 350(3) of the 1998 Act, or alternatively pursuant to s 57(1) of the PIC Act. I note that these two subsections are identical in form except for reference to the Workers Compensation Division of the Personal Injury Commission in s 57(1) if the PIC Act.
Pursuant to Sch 1 Pt 2 Div 4A Subdiv 2 cl 4(c) of the PIC Act, s 350(3) of the 1998 Act governs these proceedings.
Acting Deputy President Roche in Samuel v Sebel Furniture Ltd [7] made the following observations about the power of reconsideration contained in s 350(3) (authorities except Anshun omitted):
[7] [2006] NSWWCCPD 141 (Samuel) at [58].
1. “(T)he section gives the Commission a wide discretion to reconsider its previous decisions;
2. whilst the word ‘decision’ is not defined in section 350, it is defined for the purposes of section 352 to include “an award, order, determination, ruling and direction”. In my view ‘decision’ in section 350(3) includes, but is not necessarily limited to, any award, order or determination of the Commission;
3. whilst the discretion is a wide one it must be exercised fairly with due regard to relevant considerations including the reason for and extent of any delay in bringing the application for reconsideration;
4. one of the factors to be weighed in deciding whether to exercise the discretion in favour of the moving party is the public interest that litigation should not proceed indefinitely;
5. reconsideration may be allowed if new evidence that could not with reasonable diligence have been obtained at the first Arbitration is later obtained and that new evidence, if it had been put before an Arbitrator in the first hearing, would have been likely to lead to a different result;
6. given the broad power of ‘review’ in section 352 (which was not universally available in the Compensation Court of NSW) the reconsideration provision in section 350(3) will not usually be the preferred provision to be used to correct errors of fact, law or discretion made by Arbitrators;
7. depending on the facts of the particular case the principles enunciated by the High Court in Port of Melbourne Authority v Anshun Pty Ltd[1981] HCA 45; (1981) 147 CLR 589 (‘Anshun’) may prevent a party from pursuing a claim or defence in later reconsideration proceedings if it unreasonably refrained from pursuing that claim or defence in the original proceedings (‘Anshun’);
8. a mistake or oversight by a legal adviser will not give rise to a ground for reconsideration, and
9. the Commission has a duty to do justice between the parties according to the substantial merits of the case .”
Item [6] in the above list of matters to be taken into account must now be considered in light of the amendment to s 352 of the 1998 Act by the Workers Compensation Legislation Amendment Act 2010 to restrict appeals from decisions of Arbitrators (now Members of the Personal Injury Commission) to those in which the decision appealed against was or was not affected by any error of fact, law or discretion, and to the correction of such error. The appeal is not a review or new hearing (see s 352(5) of the 1998 Act).
The progress of the proceedings in the Workers Compensation Commission is referred to at [5]-[7] of the Reasons. At the telephone conference on 24 November 2020, at which the fourth respondent was joined as a party, the parties were directed to lodge and serve by 11 January 2021 short written submissions on apportionment of the lump sum death benefit between the applicant and the second, third and fourth respondents, and the matter was stood over for conciliation/arbitration via video conference to 19 January 2021.
The submissions on apportionment received from the parties are dated:
(a) applicant - 12 January 2021;
(b) second respondent – 6 January 2021;
(c) third respondent – 7 January 2021, and
(d) fourth respondent – 12 January 2021.
The submissions of the third and fourth respondents made reference to interest payable on the lump sum death benefit.
There is no doubt that no claim for interest was made in the ARD, nor was there any mention of the payment of interest until the lodgement of the submissions of the third respondent dated 7 January 2021. Paragraph [5.3] of those submissions is as follows:
“5.3 It is submitted the proportions of the lump sum death benefit apportioned to the Second and Third Respondents, plus any proportional interest payable, should be paid in accordance wit s,85(1)(a) WCA to the NSW Trustee to hold and invest for them until they attain their majority – as that will ensure it is preserved for them.” (emphasis added)
The fourth respondent in her submissions dated 12 January 2021 specifically addresses the question of interest at [3.0] thereof. She refers to s 109 of the 1998 Act, Rule 36.7 of the Uniform Civil Procedure Rules 2005, and makes the submission that interest awarded ought be divided amongst the dependants on a pre-rata basis.
Interest is discussed in the Reasons at [83]-[94]. The reference to “second” in the first line of [83] is an error; it should be to “third”. It was the third and fourth respondent who claimed interest in their submissions.
The matter was not able to proceed to a hearing via video conference on 19 January 2021, and the directions issued in consequence thereof were issued on the question of liability. These directions are referred to at [11(m)-(p)] of the Reasons. They are dated:
(a) applicant – 29 January 2021;
(b) first respondent – 16 February 2021;
(c) applicant (amended submissions in reply) – 23 February 2021, and
(d) second respondent – 6 March 2021.
The first respondent submits that there was no order for submissions in relation to a claim for interest, as no claim had been made. It is correct that there was no direction for submissions in relation to a claim for interest. It is also correct, unless the reference by the third and fourth respondents in their submissions on apportionment dated respectively 7 and 12 January 2021, could be regarded as a claim for interest. I think that the third and fourth respondents have made claims for interest, albeit very late in the proceedings. In any event, the first respondent did not respond to these claims.
The applicant and the second respondent accept that if the Commission decides that the first respondent was denied the opportunity to be heard on the issue of interest, reconsideration of the issue pursuant to s 350 of the 1998 Act is appropriate. The third and fourth respondents do not make any submissions in this regard.
I accept that the first respondent, in terms of the directions issued in respect of apportionment at the telephone conference on 24 November 2020 and in respect of liability following the aborted conciliation/arbitration on 19 January 2021, have not had the opportunity to place before the Commission submissions on the issue of interest.
In respect of the matters relevant to the current proceedings listed by Roche ADP in Samuel at [48] above, I note:
(a) there has been no delay in the first respondent in bringing the application for reconsideration;
(b) the litigation, which had a somewhat lengthy history in the Workers Compensation Commission since its commencement on 28 February 2020 for the reason referred to in [6] of the Reasons, has been largely finalised with the issue of the Certificate of Determination and Statement of Reasons on 23 March 2021. The question as to whether there should be an award of interest on the lump sum death benefit, and if so, the period during which and the rate at which such interest should be awarded, has now been raised by the first respondent. If the application for reconsideration is granted, it is now the one remaining issue to be decided, and
(c) the Commission has a duty to do justice between the parties according to the substantial merits of the case.
Having regard to these considerations and the conditional acceptance by the applicant and the second respondent referred to in [58] above that reconsideration is appropriate, I accept that the first respondent’s application for reconsideration should be received and considered.
Claim for interest
The first respondent submits that leave to add a claim for interest should be refused, citing Pasminco, Canham and Eather.
The matter of Pasminco involved a claim for interest on compensation for permanent impairment and pain and suffering awarded pursuant to s 66 and the former s 67 of the 1987 Act. The Arbitrator in that case made an award of interest in the absence of any claim for such having been made by the worker, either in the original ARD or at any time before the Arbitrator determined the matter. At [77], Acting Deputy President Michael McGrowdie noted that the question of interest was not raised or dealt with in submissions and was never argued or agreed to. Accordingly, there was nothing before the Commission to invoke the exercise of the discretion to award interest, and the determination of the Arbitrator to award interest was set aside. In this matter, as I have noted, there were (late) claims for interest in the submissions of the third and fourth respondents, to which the first respondent has now responded with submissions.
In Canham, Acting Deputy President Michael Snell (as he then was) at [27] dealt with a claim for “interest on the costs outstanding” made in submissions on appeal. The subject matter of the appeal from the Registrar was in respect of the costs of proceedings in the Commission. Citing Pasminco, the Snell ADP noted that in the absence of interest being claimed, there was nothing before the Commission to enliven the discretion to award interest. In that case, there was no claim for interest in the Application for Assessment of Costs nor was a claim made before the Registrar’s delegate dealing with the costs of the proceedings. Therefore there was no error in the delegate not making an order for interest, as the delegate would not have had jurisdiction to award interest.
In Eather, Senior Arbitrator Glen Capel (as he then was) noted in [3] by way of Background that the ARD was amended to include a claim for interest.
As noted above at [57], my finding is that the third and fourth respondent have made claims for interest in the proceedings. The Commission has now received detailed submissions from the first respondent on the issue of interest and submissions have been received from all other parties. In those circumstances I grant leave to the applicant to amend the ARD to include a claim for interest and grant the second respondent leave to make such a claim.
The period or periods which should be the subject of an order for interest
The first respondent “…would argue that particulars were not provided until January 2021.” It submits that until submissions were received from the parties on the dates in January referred to in [51] above, full particulars were not provided and that an order for the payment of interest should be made to the applicant and the second, third and fourth respondents until those dates.
I do not agree with this submission in so far as it relates to the applicant and the second and third respondents. In my view it would have been apparent to the first respondent, which quite properly made no submissions on apportionment, that on the lodgement and service of the Application in Respect of Death of Worker on 28 February 2020 the applicant and the second and third respondents were at least partially dependent upon the deceased for support at the time of his death. Attached to that Application is a statement of the applicant dated 17 December 2019 and a statutory declaration dated 7 June 2018 supplying particulars of the dependency of the applicant and the second and third respondents upon the deceased at the time of his death
The first respondent acknowledges that it is well established by decisions on interest claims under s 109 of the 1998 Act that a paramount consideration in the exercise of the discretion on whether or not to award interest is the fact that the insurer has had the use of the compensation and a person entitled to the compensation was denied the use of the compensation during the relevant period. However the first respondent submits that this should not be so in claims arising out of the death of a worker. I do not agree.
Section 85 of the 1987 Act provides for payments to the NSW Trustee for the benefit of persons entitled to compensation. This includes compensation payable in respect of the death of a worker (unless paid to a worker’s legal personal representative or a particular person in accordance with that Act or an award (s 85(1)(a)). Subsection (2) provides that any money so paid to the NSW Trustee may be invested, applied, paid out or otherwise dealt with by the NSW Trustee in such manner as the NSW Trustee thinks fit for the benefit of the persons entitled to the money.
Section 86 of the 1987 Act sets out the NSW Trustee’s powers of investment. Subsection (1) provides that all amounts held by the NSW Trustee under the 1987 Act are to form part of the common fund under a common fund established under the NSW Trustee and Guardian Act 2009 and are available for investment as provided by that Act. Subsection (2) provides that a power conferred by Division 7 of Part 3 of the 1987 Act on the NSW Trustee to invest money for the benefit of a person includes a power to invest the money in any manner that the NSW Trustee is authorised under the NSW Trustee and Guardian Act 2009 to invest money held in trust by the NSW Trustee.
The first respondent submits that despite the denial of liability, had the lump sum been paid immediately to the NSW Trustee, no payment would have been made to any dependant until the determination on liability, dependency and apportionment followed by the order(s) for payment. That is correct. However in my view the first respondent’s insurer was at liberty to pay the NSW Trustee the lump sum death benefit once it became clear that the applicant and second and third respondents were at least partially dependent for support on the deceased at the time of his death. This would ensure that the insurer did not have the use of the compensation pending the determination of liability, dependency and apportionment. Alternatively, if the insurer did not adopt that course, it could agree to, or in default thereof should be ordered to pay, interest on the parts of the lump sum death benefit apportioned to the applicant and first and second respondent from the time that particulars of their dependency were supplied.
For this reason I think that the first respondent should be ordered to pay interest to the applicant and the second and third respondents from a date 21 days after that on which the Application in Respect of Death of Worker was filed on 28 February 2020. Twenty one days is the time within which a response to the Application is required to be lodged with the Commission and served on each other party, that is 20 March 2020. I note that a similar order for the payment of interest was made by Senior Arbitrator Capel in the matter of Eather referred to in the first respondent’s submissions, although in that case the order for the payment of interest was from the date that a second ARD was filed.
In the case of the fourth respondent, particulars of her dependency were not lodged until the lodgement of her Reply dated 29 October 2020 with attachments outlining her dependency on the deceased. This Reply was lodged with the Commission on 30 October 2020. I think that the first respondent should be ordered to pay interest on the portion of the lump sum death benefit apportioned to the fourth respondent 21 days after that date, that is 20 October 2020.
Rate of interest to be awarded
At [93] of the Reasons I acknowledged that the Commission should have cognisance of the low interest rates prevailing in Australia, at least since 2018, in order not to unduly burden the first respondent nor create somewhat of a windfall for the applicant and second, third and fourth respondents.
The first respondent submits that s 109(1) of the 1998 Act requires regard to be had to the actual rates of interest offered by banks which have at all relevant times been significantly less and consistent with the cash rates published by the Reserve Bank of Australia (0.25% up to 3 November 2020 and 0.10% since). I cannot find in s 109 any requirement to have regard to the actual rates of interest offered by banks. Interest is to be paid at such rates as the Commission thinks fit. There is no evidence in these proceedings of the actual rates of interest offered by banks as there was in my decision in Cameron (see [55]). However, I do acknowledge the low interest rate climate prevailing in Australia at present, and the decisions on interest of other Arbitrators of the Workers Compensation Commission referred to in the first respondent’s submissions. I note that Arbitrator Dalley in Tupani who awarded interest on the lump sum death benefit in that case at 4% pa at a time when the interest rate determined in accordance with the prescribed rates pursuant to s 100 of the Civil Procedure Act 2005 was 6.5%.
I note that on 4 May 2021 the Reserve Bank of Australia decided to keep the cash rate at 0.10%. The Supreme Court rate is 4.1%. I do not see any logical reason why those persons who have been denied the use of monies awarded to them in workers compensation proceedings should be entitled to a lesser rate of interest than persons litigating in the Supreme or District Courts. As I noted at [86] in of the Reasons, in Haidary v Wandella Pet Foods Pty Ltd[8], Fleming DP stated at [15] that in her view the Supreme Court interest rate was the most relevant benchmark for setting the base rate of interest. That was at a time when interest rates were higher than at present. It is apparent that recently the Commission has awarded interest at rates of between 2% and 3%, having regard to the prevailing low cash rate.
[8] [2005] NSWWCCPD 9.
Balancing all of these factors I think that interest at the rate of 2.5% pa should be paid by the first respondent on the sums apportioned to the applicant and second, third and fourth respondents for the periods applicable to those parties as indicated above at [73] and [74]. The orders hereunder will reflect this finding.
SUMMARY
Order [106] of the Reasons and order [8] of the COD are revoked.
The first respondent is to pay interest at the rate of 2.5% pa on the lump sum death benefit as follows:
(a) on the sum of $430,045 apportioned to the applicant from 20 March 2020 to the date of payment of such sum;
(b) on the sum of 132,923 apportioned to the second respondent from 20 March 2020 to the date of payment of such sum;
(c) on the sum of $187,656 apportioned to the third respondent from 20 March 2020 to the date of payment of such sum, and
(d) on the sum of $31,726 apportioned to the fourth respondent from 20 October 2020 to the date of payment of such sum.
The orders in the Reasons and determinations and orders in the COD are otherwise confirmed.
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