Reilly v Central Coast Area Health Service [1998] NSWCC 1; (1998) 16 NSWCCR 35 (3 February 1998)

[1998] NSWCC 1; (1998) 16 NSWCCR 35

REILLY v CENTRAL COAST AREA HEALTH SERVICE

Compensation Court of New South Wales: Neilson J

27 November 1997 (H)

3 February 1998 (J)

Proceedings to obtain compensation - The determination of claims - Interest - On sum for period before sum payable - No order for interest on lump sum compensation - No order for interest on any other compensation during adjournment pursuant to s106E - Workers Compensation Act 1987, s113(2)

B.A. Batchelor, for the applicant

L.G. Stone, for the respondent

Cur adv vult

1 NEILSON J: On 27 November 1997 I heard and determined the applicant's substantial claims which were for lump sum compensation under ss66 and 67 and for weekly payments. I awarded to the applicant lump sums for:

(a) 10 per cent permanent impairment of the back,

(b) 2.5 per cent loss of efficient use of the right leg at or above the knee,

(c) 5 per cent loss of efficient use of the left leg at or above the knee, and

(d) $18,000 pursuant to section 67.

2 The parties had agreed that the claims for lump sum compensation had been "duly made" on 20 December 1996. The applicant's injury had occurred on 7 July 1996. I went on to make the following orders for interest on the lump sum compensation:

I order the respondent to pay interest on the lump sums awarded under s66 at the rate of 6 per cent per annum from 20 December 1996 to date. I order the respondent to pay interest on $5,000 of the sum awarded under s67 at the rate of 3 per cent per annum from 20 December 1996 to date.

3 After I had finished giving judgment, Mr Stone, who appeared for the respondent, submitted that I had erred in making those orders for interest and asked me to revoke them. My initial judgment continues thus:

The respondent has submitted that I am prevented from ordering interest on the lump sums awarded under s67 because of certain provisions of s113, subs(1) and (2) and this is a submission that has not previously been put before me. However, there appears to be an inconsistency in s113(2) between pars(a) and (c). I will reconsider the award for interest under s17(4) of the Compensation Court Act. I order the respondent to file and serve written submissions within 14 days. Applicant to file and serve written submissions in reply within 14 days thereof.

4 I have received those written submissions, but I have not been greatly assisted by either of them.

5 Prior to 1 January 1996, a worker's entitlement to interest accrued under s19 of the Compensation Court Act 1984. That provision was repealed by the WorkCover Legislation Amendment Act 1995, No 89, which received the Royal Assent on 20 December 1995. The former s19 still has continuing effect for injuries occurring before 1 January 1996, subject to the provisions of Sch6, Pt11, cl1 of the Workers Compensation Act 1987 as inserted by Act No 89 of 1995: see Ogilvie v JL Smith Engineering Pty Ltd [1996] NSWCC 1; (1996) 12 NSWCCR 623 and St Vincent's Private Hospital v Maher (1996) 13 NSWCCR 118. However, for injuries occurring on or after 1 January 1996 a worker's entitlement to interest is governed by the Workers Compensation Act 1987, s113 which was inserted by Act No 89 of 1995. The section is in the following terms:

113 Interest before order for payment

(1) In any proceedings in the Compensation Court, the Court may order that there is to be included, in any sum to be paid, interest at such rate as it 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, 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 Court were adjourned on

the application of the claimant for the compensation or pursuant to section 106E.

(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.

6 Div4 of Pt3 of the Workers Compensation Act 1987 (the Act) concerns "Compensation for non-economic loss" and deals with claims under ss66 and 67. S113(2)(a) appears ex facie to deny any entitlement to interest on awards under ss66 and 67. The question which arises is whether any inconsistency arises between pars(a) and (c) of s113(2).

7 S106E is entitled "Restrictions on commencing court proceedings for lump sum compensation". The subsections of that provision which refer to adjournments are as follows:

(3) When a claim that is the subject of court proceedings is amended to include a claim (or further claim) for compensation under section 66, the proceedings are to be adjourned until:

(a) 12 weeks after the claim was amended, or

(b) 12 weeks after the worker has provided the employer with particulars (including a supporting medical report) sufficient to enable the employer to ascertain the nature and amount of the compensation to which the amendment relates,

whichever is the later.

(4) The parties to proceedings can agree, or the Compensation Court can order, that there be no adjournment or a shorter adjournment of the proceedings under subsection (3).

...

(6) If a worker joins another person as a party to proceedings in respect of a claim for compensation under section 66 or 67 without having made a claim on that person before commencing the proceedings, the Compensation Court may, if it considers that the failure to make a claim on the person has prejudiced the person in respect of the proceedings, adjourn the proceedings for such period as the Court considers appropriate to enable the person to properly consider the claim.

8 The applicant contends that s113(2)(c) in referring to s106E implicitly concedes that interest may be payable on lump sums under ss66 and 67 and that I should, applying the usual canons of interpretation of workers compensation legislation, use this inconsistency to read down the general provisions of s113(2)(a).

9 A mere reading of s113(2)(a) would appear to abrogate definitively an entitlement to interest on lump sum compensation under ss66 and 67. That appears to be Parliament's intent from the words used in the paragraph. If confirmation of this be needed one may have recourse to the usual extrinsic aids: Interpretation Act 1987, s34. The explanatory notes to the Bill which became Act No 89 of 1995 contain the following material:

1. In the Overview of Bill, under the title of the Act, paragraph (e):

The payment of interest on lump sum workers compensation for non-economic loss (permanent disability and pain and suffering compensation) will be abolished, except for late payment of a Court award or agreed compensation.

2. In the more detailed notes relating to amendments to the Act, the following paragraph:

Abolition of interest on lump sum compensation for non-economic loss

The Bill transfers to the Act as s113 a provision that is currently s19 of the Compensation Court Act 1984. That section currently provides for the payment of interest between the date a cause of action arises and award of compensation. The section is amended by the Bill to abolish interest for that period on lump sum compensation for permanent disability and pain and suffering. S67(3A) is repealed consequentially. (See Sch1[58] and [26] and Sch3 [6]).

10 The Bill which became Act No 89 of 1995 was introduced into Parliament by the Honourable J.W. Shaw (Attorney-General and Minister for Industrial Relations). In his Second Reading Speech he said (Hansard, Legislative Council, 13 December 1995, at 11):

Another proposal in the Bill that relates to lump sums is the partial abolition of entitlements to interest on those claims. The wide discretion that the Compensation Court currently has to order the payment of interest back to the date of injury, is not found in other workers compensation schemes in Australia. Orders for the payment of interest have become a standard feature of awards of the Court, to the point where the total annual payout has grown out of proportion. Under the Bill, interest on lump sums will be removed, except interest for late payment of compensation ordered by the Court or under an agreed settlement. On the other hand, the discretion to order interest on weekly compensation will remain, but only from the date of claim, at the earliest.

11 These extrinsic aids confirm the ex facie meaning which I have attributed to s113(2)(a).

12 Furthermore, there is, in my view, no definite textual inconsistency between pars(a) and (c) of s113(2). An application may be made to the Court that includes claims for weekly payments, medical and hospital expenses and lump sum compensation under ss66 and 67. That whole application may need to be adjourned because of certain provisions of s106E, even though that provision does not relate to weekly payments and s60 expenses. In my view s113(2)(c) would prevent the ordering of interest on any weekly payments whilst the application was adjourned because of a "problem" with lump sum claims and the provisions of s106E. This interpretation arises from the words "on any compensation payable under this Act" in par(c). Such words are applicable not only to lump sum compensation but also to weekly payments and s60 expenses. In my view, reading both pars(a) and (c) of s113(2) together, par(a) abrogates any right to interest on lump sum compensation and par(c) denies any right to interest on any other entitlement to compensation under the Act whenever the application stands adjourned because of the provisions of s106E. This interpretation gives full force and effect to both paragraphs and avoids finding an inconsistency, it is an interpretation ut res magis valeat quam pereat: see Nokes v Doncaster Amalgamated Collieries Ltd [1976] UKHL 6; [1940] AC 1014 per Lord Simon at 1022.

13 As there is no inconsistency between pars(a) and (c) of s113(2), the respondent's contention was correct and I ought not to have made the orders for interest which I set out above.

Order

14 Pursuant to the Compensation Court Act 1984, s17(4), I revoke orders 4(2) and 4(3) of the award of 27 November 1997. Each party will pay her or its own costs incurred as the result of order 7 of the award of 27 November 1997.

Orders accordingly

Solicitors for the applicant: Orchiston Ranzetta Finney

Solicitors for the respondent: PW Turk & Associates