Stewart v Mayne Nickless Ltd [2001] NSWCC 3 (13 March 2001)

Last Updated: 5 September 2001

NEW SOUTH WALES COMPENSATION COURT

CITATION: Stewart v Mayne Nickless Ltd [2001] NSWCC 3


PARTIES:
Kevin Eric Stewart
v
Mayne Nickless Ltd


CASE NUMBER: 31187 of 1995 of 2001.00


CATCH WORDS: Elements of Workers Compensation


LEGISLATION CITED:


CORAM: Neilson J

DATES OF HEARING: 13/03/01

EX TEMPORE DATE: 13/03/2001


LEGAL REPRESENTATIVES

FOR APPLICANT:
Mr D Priestley instructed by Moroney Rutter & Mantach appeared for the applicant.
FOR RESPONDENT:
Mr G Hickey instructed by Sparke Helmore appeared for the respondent.



JUDGMENT:

1. On 26 November 1997 I made an award in favour of the applicant for weekly payments of compensation at the maximum statutory rate pursuant to the s 11(1) of the former Act commencing on 1 May 1982 to date and continuing. I also made an award for the applicant for 14.6 binaural loss of hearing, the deemed date of injury: 5 January 1982. On the following day I entertained an application for interest. I ordered the respondent to pay interest on the lump sum awarded under s 66 at the rate of 6 per cent per annum from 18 May 1995 to that date. I also granted the applicant liberty to apply for interest on the award for weekly payments in the event of any net benefit to the applicant.

2. By motion filed on 15 February 2001 the applicant sought various orders. The first order sought was that the respondent pay interest on the arrears of weekly compensation from 1 May 1982 to 26 November 1997 at either the Supreme Court rate or pursuant to the Jamboree schedule. The second prayer for relief was withdrawn, its being otiose. The third prayer for relief was that the weekly payments of compensation from 1 April 1998 be indexed or increased to the maximum statutory rate at all material times from 1 April 1998. When the motion came before me on 19 February 2001 the respondent agreed to pay weekly compensation pursuant to s 11(1) of the former Act at the maximum statutory rate at all material times since 26 November 1997.

3. The relief currently claimed is for interest on the arrears of weekly compensation under the award that was pronounced on 26 November 1997. The order sought, as I have indicated, seeks interest from 1 May 1982. However, that is a legal impossibility. Interest cannot be awarded for any period prior to 3 December 1984 by reason of Sch 6, Pt 11, cl 2 of the Workers Compensation Act 1987. As advanced by counsel this morning, the applicant's claim is for interest on the arrears of weekly payments of compensation for the period from 3 December 1984 to 13 March 2001, a period of some 16 years and 3 months. Applying the Jamboree Schedule would entitle the applicant to interest in the sum of $39,081.25.

4. The respondent's submission is that interest should only be awarded to the applicant from the date on which I ordered interest payable on the lump sum under s 66, namely from 18 May 1995 when the proceedings now in question had been commenced. The period from 18 May 1995 to 13 March 2001 is a period of 6 years and 10 months, and the interest during that period amounts to $14,021.15.

5. The applicant had since 3 December 1984 a right to the payment of interest on the arrears of weekly payments under any award that might be pronounced in his favour. The respondent says that I ought not to award interest from that date because of the delay on the applicant's part in prosecuting his claim for compensation. As is clear from the deemed date of injury, the applicant last worked on 5 January 1982. As is clear from my reasons given on 27 November 1997 the applicant had commenced earlier proceedings namely Matter 6268 of 1983 - obviously filed in 1983.

6. That matter was part-heard before her Honour, Judge O'Toole but the applicant did not prosecute it. The matter was struck out by the Registrar for want of prosecution on 20 February 1987. The applicant did not seek leave to restore that matter to the List, for which leave was granted by the Registrar - who struck the matter out on 20 February 1987. The applicant, as I indicated in my reasons on 27 November 1997, delayed commencing the current proceedings until 18 May 1995, a period of over seven years. However, the applicant has filed evidence which indicates why there was delay. The applicant's affidavit indicates that the matter was before the Court on 18 February 1986. The applicant averred that his then counsel, Mr Ryman, said words to the effect 'this case is a no-win situation and the case will need to be adjourned'.

7. A conference was held with the applicant by his then counsel and solicitor on 29 May 1986. Counsel told the applicant that his case had "run into a brick wall" unless a medical practitioner could be found who said that the applicant was incapacitated by reason of his binaural hearing loss. Counsel indicated to the applicant that there was no problem recovering lump sum compensation - the problem was with weekly payments during incapacity. The applicant told his counsel and solicitor that he had been to Dr Vago and another lawyer who were unable to see any problem in presenting the case. The applicant's then solicitor told the applicant that he would be better off using that other solicitor and that he was prepared to hand over his file provided that he was "protected as far as the costs incurred were concerned".

8. That quotation is from contemporaneous file note made by the applicant's then solicitor - but that solicitor clearly did not forward his file to the other firm of solicitors because that file was produced on subpoena by the applicant's former solicitor today. Attempts were made by Messrs Boyd House to obtain the file but those attempts appear not to have met any success. According to the applicant's affidavit, when he went to Messrs Boyd House he was advised by them that they would have to obtain the papers from the applicant's former solicitors.

9. The applicant averred to being under treatment by Dr Jeffrey Coffee, a neurologist, for severe stress resulting from a number of conditions: his medical condition involving tinnitus, his financial situation where he had depleted his personal savings and depression following the 'impression' that he was unable to win his Court case. Dr Coffee advised the applicant to move away to a new environment. The applicant, in October 1986, sold the family home at Bondi Junction and rented a house in Caringbah for a short period prior to moving to Cairns in the State of Queensland where he had purchased a block of land. The applicant did not hear from Messrs Boyd House prior to moving to Queensland and he assumed the case was "not proceeding".

10. When the applicant arrived in Queensland he was advised by the Department of Social Security that his assets exceeded the maximum threshold and he lost his pension for 12 months. He lived in Cairns until April 1988 and returned to New South Wales where he eventually bought a house in Newcastle. Between April 1988 and September 1994 he did not seek any legal advice in relation to his workers compensation claim because "I did not think that I had a claim". The applicant avers that between 1988 and 1994 he was depressed, that he had trouble sleeping, that he was angry and violent and his life was almost unbearable due to his tinnitus.

11. He was seen in May 1993 by Dr G W Eather, a staff specialist at the Royal Newcastle Hospital. It is clear that the applicant was upset about a number of problems - inter alia, his tinnitus, the inability of the medical profession to treat that condition and about his familiar history involving cerebrovascular accidents and cancer. Amongst other things, the applicant told the doctor that "a five year court case denied [him] compensation". Clearly, the applicant's view - then was that his claim had been unsuccessful.

12. In October 1994 the applicant saw Dr Finlay-Jones, an otorhinolaryngologist, who told the applicant to see a solicitor regarding his hearing loss claim as it was definitely work-related. The inference to be drawn is that shortly thereafter the applicant consulted his current solicitors, Messrs Moroney, Rutter & Mantach of Newcastle who commenced the proceedings that came on for hearing and determination before me.

13. The failure of the applicant to prosecute the claim is largely explained by the inability of his two former sets of solicitors to press on with the matter and obtain appropriate evidence and by the applicant's own medical condition which was causing him a depressive illness as well as interfering with the normal conduct of his life and causing him financial worries which no doubt in themselves inhibited his approaching lawyers with a view to prosecuting his claim for workers compensation.

14. The delay, as I have said, is largely explained. The respondent's submission is that the applicant should not be "rewarded" for delaying and that there was some economic prejudice to the respondent. What that 'economic prejudice' is, the evidence does not disclose. A prudent insurer would of course raise an estimate when proceedings were commenced in 1983 - that those proceedings were struck out would not, in my view, in a prudent insurer cause him to finalise the matter and reduce the estimate to zero, because it is always possible for a person to come back especially where it is clear the applicant's claim for a lump sum compensation at least was good. There is no evidence that the applicant did anything to inhibit the respondent in making appropriate reserves for the applicant's outstanding workers compensation claim.

15. The applicant was entitled to certain moneys and has been kept out of them and I do not see why I should exercise my discretion to deny the applicant that which he would otherwise be entitled to. However, the applicant says that he is entitled to interest on the arrears of compensation - namely, interest on $175,927.74. However, during the same period the applicant was paid $135,834.2 by the Department of Social Security. In other words, if he had received compensation to which he was entitled he would have obtained a greater benefit of $40,083.72. The applicant is only entitled interest on the money which has been kept from him. That sum is $40,83.72 and hence he is entitled interest on that sum from 3 December 1984 to 13 March 2001 which amounts to the sum of $39,081.25.

16. The respondent raised another submission which was that interest ought not be payable because the applicant was not required by the Department of Social Security to refund to it the sum of $135,834.02 so that although the applicant was only entitled to $175,927.74 during the period with which I am dealing, the applicant was in fact paid the sum of $311,761.76. However, I consider that to be an inappropriate submission. The applicant might have won the state lottery and received, say, $150,000 in lottery earnings. The fact that the applicant had another source of income is irrelevant in determining the interest to which he is entitled. He was still kept out of $40,083.72 on which he is now entitled to interest. The analogy I put to counsel was that of winning the state lottery. Here the applicant merely won the lottery conducted on behalf of the Commonwealth of Australia by the Department of Social Security. That the applicant had a windfall from the Department is, in my view, beside the point and an irrelevant consideration.

17. Accordingly, in my view the applicant is entitled to interest on the net arrears under the award which is the sum of $40,083.72 from 3 December 1984. On my calculation that amounts to $39,081.25.

18. I order:

The respondent to pay the applicant by way of interest on the arrears of weekly payments under the award:

The sum of $39,081.25.

19. I order the respondent to pay the applicant's costs of notice of motion filed on 15 February 2001.

20. I certify fee for counsel on the motion.

21. It has now been drawn to my attention that the applicant was in fact paid the arrears of weekly payments on 17 June 1998. I revoke the order I announced earlier.

22. I order the respondent to pay interest on the sum of $40,083.72, being the net arrears under the award of weekly payments pronounced on 26 November 1997 at the rate of 6 per cent per annum from 3 December 1984 to 17 June 1998.

23. I order the respondent pay the applicant's costs.

24. I certify for counsel on the motion.
Mr D Priestley instructed by Moroney Rutter & Mantach appeared for the applicant.
Mr G Hickey instructed by Sparke Helmore appeared for the respondent.