Zickar v Mhg Plastics Industries Ltd [1998] NSWCC 58; (1998) 17 NSWCCR 368 (18 December 1998)

[1998] NSWCC 58; (1998) 17 NSWCCR 368

ZICKAR v MHG PLASTICS INDUSTRIES LTD

[Subject to appeal - Ed]

Compensation Court of New South Wales: Geraghty J

12 October, 14 December 1998 (H)

18 December 1998 (J)

Workers compensation - Proceedings to obtain compensation - Determination of claims - Interest - On lump sum for permanent loss - Proceedings commenced before 1 January 1996 - Power of Court to order interest - Compensation Court Act 1984 (NSW), Sch 4, Pt 4, cl 7

Workers compensation - Proceedings to obtain compensation - Determination of claims - On lump sum for permanent loss - Interest - Injuries received before 1 January 1996 - Power of Court to order interest - Power does not extend to period before claim duly made or before sufficient particulars given to enable employer to ascertain nature and amount of compensation claimed - Workers Compensation Act 1987 (NSW), Sch 6, Pt 11, cl 1 - Workplace Injury Management and Workers Compensation Act 1998 (NSW), s 109 - Workers Compensation (General) Regulation 1995 (NSW), cl 73H

Words, phrases and maxims - "sufficient" - Workers Compensation Act 1987 (NSW), Sch 6, Pt 11, cl 1

Words, phrases and maxims - "ascertain" - Workers Compensation Act 1987 (NSW), Sch 6, Pt 11, cl 1

M.F.G. Batten, for the applicant

S.G. Campbell, for the respondent

Cur adv vult

1 GERAGHTY J: By notice of motion Darrin Zickar seeks interest, pursuant to s 19 of the Compensation Court Act 1984, on the lump sum compensation which was awarded by consent to the maximum amounts by order of 4 September 1997.

2 This is a complicated and difficult claim which involves the interpretation and application of s 19 of the Compensation Court Act 1984 (the Court Act) (now repealed); the saving provisions of Sch 4, Pt 4, cl 7(1) to the Court Act [which were inserted by item [29] of Sch 3 to the WorkCover Legislation Amendment Act 1995 (the Amending Act) and commenced on 1 February 1996] and of Sch 6, Pt 11, cl 1 to the Workers Compensation Act 1987 (the Compensation Act) [which were inserted by item [108] of Sch 1 to the Amending Act, commenced on 1 January 1996, and were amended by cl 1.19 [10] of Sch 1 to the WorkCover Legislation Amendment Act 1996 which in turn commenced on 12 January 1997]; s 106E and s 92 of the Compensation Act dealing with claims properly made; s 113 of the Compensation Act [which was inserted by item [60] of Sch 1 to the Amending Act] (now repealed); s 109 of the Workplace Injury Management and Workers Compensation Act 1998 (the WIM & WC Act which commenced on 1 August 1998), and cl 73H of the Workers Compensation (General) Regulation 1995 (the Regulation), which prescribes:

Chapter 4 (Workers compensation) of the 1998 Act extends to an injury received before the commencement of that Part, subject to this Part.

and is one of the clauses in Pt 19C - Saving and Transitional Provisions, which also commenced on 1 August 1998.

3 The interpretation and application of these sections and Schedules have in part at least been addressed by the Court of Appeal in St Vincent's Private Hospital v Maher (1996) 13 NSWCCR 118 and by Neilson J in Griffiths v Wakeling Plumbing Pty Ltd [1998] NSWCC 36; (1998) 16 NSWCCR 675.

4 Zickar is a name well-known in this jurisdiction and in the superior jurisdictions as far as to the High Court. He now claims interest on his lump sum payments, those being $82,300, the maximum amount under s 66, (the claim being for an interest rate at 6 per cent, though in the midst of submissions it was agreed that the appropriate amount would be 8 per cent) and on part of $41,150, the maximum awardable amount under s 67, a claim being made at 3 per cent (though, again during submissions, it was agreed that once an apportionment between past and future pain and suffering had been made, if appropriate, the proper rate would be 4 per cent). These sums were paid on 11 September 1997, pursuant to a consent order, on 4 September 1997.

5 I should turn firstly to the judgment in St Vincent's Hospital v Maher which addressed itself to interest considerations in the light of the Court Act 1984, s 19, the Compensation Act, s 113 and the Amending Act, which commenced the operation of the relevant sections on 1 January 1996.

6 S 19 of the Court Act, empowered this Court to award interest. S 19 was repealed by item [5] of Sch 3 to the Amending Act. However, item [29] of Sch 3 to the Amending Act inserted a saving clause which, in certain limited circumstances, preserved the power under s 19. That saving clause appears in Sch 4, Pt 4, cl 7 to the Court Act.

7 Pursuant to this saving clause, the repeal of s 19 did not apply to proceedings commenced before 1 January 1996. A new power to award interest was introduced into the Compensation Act by the Amending Act, being s 113. Item [108] of Sch 1 to the Amending Act inserted Sch 6, Pt 11, cl 1 into the Compensation Act, which deals with the limited circumstances under which interest may be awarded, that is, interest can be awarded for proceedings commenced before 1 January 1996 in circumstances in which the insurer has been placed in a position where it can ascertain the nature and amount of compensation claimed with an appropriate medical report attached, or in circumstances when a claim has been "duly made".

8 The decision in Maher (supra) analysed the amendments and the interlocking schedules, the saving provisions, and concluded that in certain limited cases, to which Zickar's claim applies, and in certain circumstances, interest may be awarded--and I refer particularly to the four observations made by Clark JA at 125 - 6 and to the conclusion he drew at the end, namely:

Consequently, item [108] of Sch 1 and item [29] of Sch 3 to the Amending Act can be reconciled in this way--s 19 of the Court Act continues to apply to proceedings which had been commenced prior to the amendments coming into force but, insofar as any such proceedings must necessarily involve claims for compensation for injuries received prior to the new provisions becoming law, the Court, in considering the award of interest on compensation in respect of those injuries, is bound to observe and apply the instruction in cl 1(a) of Pt 11 of Sch 6 to the Compensation Act. In effect, the latter provision modifies the continued operation of s 19 of the Court Act.

9 However, the Maher decision has been further complicated (if that be possible) by the WIM & WC Act, by the repeal of s 113 and its replacement in exactly the same terms by s 109. S 109 became operative on 1 August 1998 and, when interpreted in the light of cl 73H, it would seem on one reading that it now covers the field and therefore removes from this Court any power to make an order for interest in respect of s 66 and s 67.

10 I turn now to this question and to the submissions of Mr Campbell for the respondent.

11 The respondent has consistently refused to pay interest on the s 66 amount and the amount for past pain and suffering under s 67. The lump sum claims were settled but the question of interest was reserved, and now falls for a decision.

12 Mr Campbell submitted for the respondent that s 109 now governs the situation. This submission was contained in par (13) of his helpful written submissions dated 14 December 1998. He simply stated that s 113 of the Compensation Act was repealed by the 1998 legislation, and an identical provision was re-enacted as s 109 of WIM & WC Act. He further said that cl 73H of the Regulation prescribes in effect, that s 109 applies to injuries received before the commencement of the 1998 Act.

13 He then examined the decision in Griffiths (supra), in which Neilson J looked at the interaction between s 109 of the new Act, s 113 of the Compensation Act, concluding at 679 [23] that he was obliged to read the two Acts together. He said that since Sch 6, Pt 11 of the 1987 Act has not been repealed, some operation of that Schedule must be found to apply. He found that while the Schedule refers to s 113, which is repealed, s 113 was re-enacted in identical terms in s 109:

Reading the two Acts together I should construe the reference in Sch 6, Pt 11, cl 1 to s 113 of the 1987 Act, as a reference to s 109 of the 1998 Act, and I do so construe it.

14 In the light of his interpretation, he concluded that the Court, in limited circumstances, still has the power to award interest on s 66 and s 67 amounts for proceedings that were commenced before 1 January 1996, and he did so.

15 However, Mr Campbell submitted firstly, his Honour's judgment at 679 [23] was wrong and should be found to be wrong. He said it was not appropriate to read two Acts together, and to replace one section with another in Sch 6, Pt 11, cl 1. There is no legislative justification for replacing s 113 by s 109.

16 Mr Campbell submitted further that if s 113 was replaced by s 109, there would be some consequential anomalous readings. As a result, there would be no interest after 1 August 1998, when s 109 took effect, rather than from 1 January 1996, when s 113 came into effect. So there would be a further period when interest can be awarded--which is clearly contrary to the intention of the legislature.

17 Having made these observations about Neilson J's judgment in Griffith, Mr Campbell submitted said that cl 73H should be given its clear meaning, that is, that the interest provisions of s 109 should apply to injuries before and after 1 August 1998, that is, that there should be no interest awarded on s 66 and s 67 lump sum entitlements, because of the provisions of s 109 and the cl 73H.

18 There is a perilous middle course between these two positions.

19 I consider that since s 113 has been repealed, and Sch 6, Pt 11, cl 1 has not, one should read the Schedule as excluding s 113 (since it no longer exists) and continue with cl 1 of the Schedule. The phrase that "s 113(2)(1) (as inserted by the Amending Act) does not apply to the ordering of interest on compensation for injuries received before the insertion of that provision" can be dropped out, since it simply provides that a s 113 does not apply. It now does not apply for two reasons: (1) because it says it does not apply; and (2) because there is no longer any s 113. It does not operate; it has been repealed. So one can start reading from the word "but", omitting that word also, and cl 1 of the schedule would then read, something like:

...the following provisions do apply to the ordering of that interest [My emphasis.]

namely, the interest on compensation for injuries before the insertion of s 113, that is, before 1 January 1996. So cl 1, in my opinion, should be read in this way. This would result in the conclusion that cl 73H applies to injuries before and after 1 August 1998 (that remains true), but does not apply to injuries before 1 January 1996. The limited operation of s 19 of the Court Act, as established in Maher, applies to injuries before 1 January 1996. Cl 73H in effect applies to injuries both before and after 1 August 1998, but not to injuries received before 1 January 1996. In other words and with respect, I consider that Neilson J may not have been correct in his reasoning, but was correct in his conclusion. He came to the correct conclusion, in my estimation, but for the wrong reason. I myself have concluded that interest can be awarded because of the preserved power of s 19, which continues to have limited operation, as referred to above, where proceedings have been commenced before 1 January 1996.

20 Now I turn to the second bank of submissions made by Mr Campbell.

21 On behalf of the respondent he submitted that no interest should be awarded, at the least until the conditions in Sch 6, Pt 11, cl 1 had been complied with. It was agreed between the parties that no claim was properly made in accordance with s 92. So I should immediately go to the alternative. Cl 1 provides:

[I]nterest must not be ordered on any compensation payable under this Act for any period ... before the worker gave the employer particulars (including, in the case of a claim for compensation under section 66, a supporting medical report) sufficient to enable the employer to ascertain the nature and amount of compensation claimed, ...

22 Mr Campbell submitted that no such particulars sufficient to ascertain the nature and amount of the claim were ever given. He said that particulars are particulars, and must consist of a clear formulation of the claim and should be given on request, or at least after proceedings have commenced. The applicant's duty was to address the respondent, to tell it exactly what the applicant was claiming in terms which allowed the respondent to ascertain clearly and precisely the nature and the amount of the compensation claimed. Mr Campbell submitted that it did not matter that this was a case in which the applicant was claiming the maximum amount, and was awarded by consent the maximum amount. He said the legislation is meant to govern all types of claims: claims for 16 per cent loss of the leg at or above the knee; claims for 10 per cent loss of the little finger; claims for a precise percentage loss of the use of the hand, and a claim for maximum sums.

23 Mr Campbell submitted that the applicant never placed the respondent in a position where it could pay and settle, or determine the claim until he had undergone a final examination and assessment by Dr Mowbray. He agreed that the claim would clearly be a substantial amount, which was clear from the beginning. He said that it had been a very dramatic and tragic event which had taken place and in which the applicant had been injured, but the question was not whether the applicant would receive a substantial amount; it was, what would the amount be? Would he be able to claim and receive the maximum entitlement?

24 On the other hand, the applicant agreed that he did not make a proper claim in the form required and in accordance with the regulations, but he submitted that he did take active steps which would have allowed the respondent to determine precisely how much should be paid. To ascertain implies that the respondent itself must also make some effort. It is not sufficient to give information that would allow the respondent to guess or divine the amount, but sufficient information should be provided to allow the respondent to find out and to learn for a certainty how much should be paid. To ascertain means to get to know, to inform, to apprise, to establish as a certainty. It involves some positive involvement and contribution by the person who is ascertaining.

25 Furthermore, the word sufficient would indicate that the information does not have to be perfect--it just has to be enough. The applicant submitted that he did provide details sufficient, and he pointed to, firstly, the claim form which was served and which is Exhibit G annexed to an affidavit sworn on 13 November 1998. This claim form states that on 15 October 1987, Mr Zickar suffered a cerebral haemorrhage, and a statement annexed to that claim, signed by J. Todd on behalf of Darrin Zickar since he was so disabled, states that:

Darrin's left side is paralysed. Therefore he is unable to walk and he cannot talk.

26 Mr Batten, for the applicant, submitted that this in itself was sufficient information for the respondent to be able to find out and apprise itself that this claim was going to be for a maximum amount. But the applicant's submissions did not stop there. He referred secondly, to the application for determination filed on 17 October 1989 and containing a claim under s 16 (should be s 66 of the Compensation Act), which was referred to as "NYA", (which I understand to be not yet ascertained or assessed), in respect of loss of function of the left arm and left leg.

27 Mr Batten then pointed out that the respondent filed an answer to the claim in January 1990, placing in issue that the applicant's permanent disability, which had been claimed:

Did not result from injury arising out of or in the course of the employment.

28 No issue was made as to the extent of the disability. The difficulty with this submission is that the extent of the disability had not been quantified nor claimed at that point. It had been asserted in a claim form; it had been stated that an assessment would be made, and a s 16 claim made, but the respondent at that point was not placed in a position of agreeing, disagreeing, questioning, putting the applicant on notice that he would have to prove the extent of his loss and disability.

29 Mr Batten then referred to the transcript of evidence before Judge Thompson, on 3 October 1990 at 10, submitting that these particulars, provided at the hearing, were sufficient for the respondent to ascertain the nature and extent of the claim made.

Q. You have a lot difficulties now?

A. Yes, I wet the bed and my left arm doesn't work and my left leg doesn't work.

Q. Sorry, I didn't hear that.

A. I wet the bed and my left arm--it's paralysed and my left ankle's paralysed.

Q. What about your legs, how are they?

A. Well, my left leg--left ankle's paralysed.

Q. You have a lot of difficulty walking and--?

A. Yes, that's why I need a walking stick.

Q. And you have to use a walking stick?

A. And I've--I have a sleep disorder called "sleep apnoea".

30 The applicant then pointed to the transcript of evidence on 19 June 1991, again at 10, where further particulars were provided sufficient for the respondent to ascertain the nature and extent. I note that, at 15, the reports of Dr Somerville, Dr Lawson and Dr Mellick were tendered and exhibited as Exhibit 2.

31 Judge Thompson gave judgment in this matter on 12 September 1991. He did not make an award pursuant to s 66 and s 67. He granted liberty to apply in that respect, subject to a stay of proceedings. It is clear from his judgment, and from the pleadings, that Judge Thompson was invited, or at least on his own motion decided the substantial and preliminary question as to whether the applicant was injured in an incident which arose out of or in the course of his employment. This was the matter that was hotly debated and contested, and Judge Thompson made an award for total incapacity--I presume on the basis of medical evidence and the applicant's evidence himself.

32 The Judge stated at 2:

The applicant said he now has a lot of difficulty. His left arm and ankle are paralysed and he needs to use a walking stick. He wets the bed. He said prior to 15 October 1987 he was fit and healthy and thrived on activity.

33 It may be thought that the Judge's conclusions had been drawn from information which was equally available to the respondent, and that therefore it should have been able to draw exactly the same conclusions, which seem to me to have been uncontested, that the applicant was not only totally incapacitated, but that he would undoubtedly and without any danger, surpass the maximum awards under s 66 and s 67. However, it seems to me that the strongest case for the applicant in his claim for interest is the series of medical reports annexed to Michael Faulkiner's affidavit and which were served on the respondent on the following dates:

Dr Stenning 17 September 1990;

Dr Kendall 19 November 1990;

Dr Lawson 5 November 1990;

Dr Somerville 24 May 1990 (a respondent's report, re-served on the respondent, which addresses the question of liability and nexus, and which was obviously served and put in evidence on that basis, but re-served by the applicant on the respondent on the question of incapacity and impairments);

Dr Prior 19 November 1990; and

Dr Mellick 8 February 1991.

34 I have read each one of these reports and there is nothing substantially different or controversial in any one of them. I refer to two only in this judgment, and they represent the conclusions of all others.

35 Dr Kendall's report was served on the respondent on 19 November 1990. He concluded that at first the applicant had been quadriplegic, but subsequently became hemiplegic. He said that when examined in November 1990, he was still rather slow mentally, had difficulty in finding the right word (dysphasia) and had some slurring of speech (dysarthria). He said he had a left hemiparesis. He had to wear a calliper on the left leg, and used an aluminium stick carried in the right hand.

There is no useful movement in the left upper limb and he can only just briefly jerk it away from his body, basically by shaking his body.

36 Dr Kendall observed the applicant's memory was obviously faulty, and his speech at times so bad that neither the doctor nor his grandfather (who was present) could understand him. As to the central nervous system, Dr Kendall said the dominant and overwhelming disability consisted of, firstly, his diarthria, and secondly, a typical spastic monoplegia of the left upper limb, and monoparesis of the left lower limb. There was poor power, spasticity, local hyperreflexia and an extensive plantar response on the left. He demonstrated "profound disability" as far as walking was concerned, in dressing and undressing, and in mounting and dismounting the examination couch.

37 Dr Kendall concluded that Mr Zickar was clearly "greatly disabled" and would not be able to live by himself. He did not think that Mr Zickar was likely to be ever able to look after himself.

38 The other report is from Dr Ernest Somerville, which was served on 24 May 1990. It is a respondent's report, but was re-served on the respondent by the applicant's solicitor.

39 Dr Somerville concluded the applicant's major problems were left hemiplegia and incontinence. He said that he had no useful function of the left upper limb. He walked with a walking stick held in his right hand. He needed help showering, dressing and cutting up meat. He also needed assistance to get to his feet if he fell over. His speech was slightly rushed and slurred. This was when Dr Somerville examined him on 2 April 1990.

40 Dr Somerville said Mr Zickar had a marked left hemiplegia. He was unable to make any movement with the left hand, and had only limited shoulder movement. The injury had resulted in paralysis of the left side of the body. He had some generalised brain damage. Dr Somerville did not believe that Mr Zickar would regain any useful function in his left arm, and his walking would remain significantly impaired. He did not believe he would ever return to employment.

41 Such is the tone of all the medical reports served from May 1990, through September/November 1990 and in February 1991.

42 Dr Mellick thought Mr Zickar had marked impairment of abstract thought. He was unable to dress himself, or to go out alone.

43 There could be no doubt in the mind of the respondent when armed with these reports, that the applicant's claim would be substantially in excess of the maximum amounts available. There is no doubt that the respondent was armed with sufficient information and particulars to ascertain that the applicant's claim under s 66 and s 67 would surpass, by a significant degree, the maximum amount able to be awarded. From the service of Dr Somerville's report on 24 May 1990, and at least from that date, the respondent could have been in no doubt as to the extent of the applicant's claim, as to the nature and quantity of it.

44 The issue before the courts was always the question of nexus. The claim was not settled or compromised because the issue of nexus was hotly disputed, but the nature and quantum of the lump sum claim was never unascertainable by the respondent, at least since Dr Somerville's report of 24 May 1990 surfaced. I therefore propose to order interest from that date.

45 My final task is to apportion the maximum s 67 compensation, as to past and future pain and suffering as at 4 September 1997, namely the date of the order. Bearing in mind the young age of the applicant, who is still only in his early thirties, and considering he has such a long time to suffer his disabilities and impairments, but bearing in mind the pain and suffering he has already undergone in his rehabilitation and coming to terms with his disability, I cannot see any appropriate apportionment other than on a 50/50 basis. I therefore apportion the $41,150, 50 per cent to past pain suffering before 1 September 1997 and 50 per cent after.

46 I order interest to accrue on $82,300 at 8 per cent from 24 May 1990 to 4 September 1997 and on $20,575 at 4 per cent for the same period.

47 I order the respondent to pay the applicant's costs of this notice of motion, including counsel's costs on a full brief on hearing basis.

Orders accordingly

Solicitors for the applicant: Lewis Wilson

Solicitors for the respondent: Curwood & Partners