Zinc Corp v Workcover [1999] NSWSC 111 (24 February 1999)

Last Updated: 24 February 1999

NEW SOUTH WALES SUPREME COURT

CITATION: Zinc Corp v WorkCover [1999] NSWSC 111

CURRENT JURISDICTION: Common Law Division

FILE NUMBER(S): 13330 of 1997

HEARING DATE{S): 19/02/99

JUDGDMENT DATE: 24/02/1999

PARTIES:

Zinc Corporation Ltd (plaintiff)

New Broken Hill Consolidated Limited (plaintiff)

WorkCover Authority of NSW (defendant)

JUDGMENT OF: Hidden J

LOWER COURT JURISDICTION: Not Applicable

LOWER COURT FILE NUMBER(S): Not Applicable

LOWER COURT JUDICIAL OFFICER: Not Applicable

COUNSEL:

W. P Kearns (plaintiffs)

A. J. Candy (defendant)

SOLICITORS:

Austen Brown, Thompson (plaintiffs)

Nick Vrabac, WorkCover Authority

CATCHWORDS:

Compensation Court Act 1984 - s38(4) recovery of weekly payments following successful appeal by employer: Zinc Corp v WorkCover (Hidden J, SC, unreported 9 Dec 1998) - whether interest paid by employer recoverable - meaning of weekly payments.

ACTS CITED:

Compensation Court Act 1984

Workers Compensation Act 1987

Supreme Court Act 1970

DECISION:

Judgment for plaintiffs

JUDGMENT:

- 5 -

THE SUPREME COURT

OF NEW SOUTH WALES

COMMON LAW DIVISION

HIDDEN J

Wednesday 24th February 1999

No: 13330 of 1997 The Zinc Corporation Ltd & Anor v WorkCover Authority

Reasons for judgment

1 On 9 December 1998 I gave a judgment in which I determined that the plaintiffs were entitled to an order that the Uninsured Liability and Indemnity Scheme, administered by the defendant, should meet the whole of their liability to make weekly payments to a worker, following their successful appeal against an award of compensation to that worker under the Workers Compensation Act 1987. Provision for such an order is made by s38(4) of the Compensation Court Act 1984. On 19 February 1999, I heard argument about the orders which should be made to give effect to my decision.

2 For the plaintiffs, it was argued that I should order the Scheme to bear not only the weekly payments specified in paragraph 1 of the award, but also the interest provided for in paragraph 2. That interest was ordered pursuant to s19 (since repealed) of the Compensation Court Act. The total amount of weekly payments paid under paragraph 1 of the award is $135,649.66. The amount of interest paid pursuant to paragraph 2 is $43,776.64.

3 Counsel for the defendant opposed any order in respect of the interest. It is true that the interest formed part of the compensation awarded under the Workers Compensation Act: Westpac Banking Corporation v Tomassian (1992) 32 NSWLR 207, per Mahoney JA at 217 and Meagher JA at 220. However, the critical question is whether it is embraced by the expression "weekly payments of compensation" in s38(4) of the Compensation Court Act. I am persuaded by the submission of counsel for the defendant that it is not.

4 The terms "weekly payment" and "compensation" are not defined in the Compensation Court Act. In the Workers Compensation Act, "compensation" is defined to include "any monetary benefit under this Act" and "weekly payment", in relation to compensation, is defined as "a weekly payment of compensation under Division 2 of Part 3 in respect of a period of total or partial incapacity for work". Division 2 of Part 3 is headed "Weekly compensation by way of income support". This could suggest that the expression in the Compensation Court Act is directed only at the weekly payments and not to any interest which might be ordered, but it is by no means conclusive of the issue.

5 As counsel for the defendant submitted, the answer lies in the scheme of s38 of the Compensation Court Act itself. As observed in my earlier judgment, s38(3) provides that weekly payments of compensation cannot be stayed pending an appeal. I referred in that judgment to Lovett Building Co Pty Ltd v Burns (1991) 7 NSWCCR 265, in which Kirby P examined the background and rationale of the section. His Honour observed (at 274):

At least this much is clear from section 38: that Parliament intended the worker to gain the benefit of the weekly payments ordered under an award (both those due to the past and those payable at present) until the obligation fixed by the award is lawfully terminated on appeal.

6 Viewed in this way, it is clear that the prohibition in s38(3) was not intended to embrace an award of interest under s19 of the Act. Accordingly, it would have been open to the plaintiffs to seek a stay of that part of the award pending the appeal. Section 38(4) was enacted to remedy injustice which an employer might suffer as a result of the inability of the court to stay weekly payments. In the event of a successful appeal, the employer might be relieved of the obligation to make those payments but be unable to recover them from the worker.

7 Accordingly, I am satisfied that the power under s38(4) to order the Uninsured Liability and Indemnity Scheme to bear an employer's liability to make weekly payments does not extend to interest. The plaintiffs are entitled to an order only in respect of the weekly payments, totaling $135,649.66.

8 The plaintiffs also contend that they are entitled to interest pursuant to s94 of the Supreme Court Act on any amount which I order to be paid under s38(4) of the Compensation Court Act. Section 94(1) provides that I may order interest for the period "between the date when the cause of action arose and the date when the judgment takes effect". Counsel for the plaintiffs submitted that the cause of action arose here when the Court of Appeal delivered its judgment against the worker, at which time the right to seek an order under s38(4) arose. Not so, said counsel for the defendant. He submitted that s38(4) established an exceptional statutory procedure for the benefit of employers, which creates no entitlement unless and until an order under the subsection were made. Until such an order, he argued, the Scheme administered by the defendant was not entitled, let alone obliged, to make any payment.

9 Again, I am persuaded by the defendant's submissions. I think there is considerable force in the argument that the Scheme can make no payment to an employer voluntarily, but must abide an order of the court under the subsection. However that may be, the power to award interest under s94 of the Supreme Court Act is discretionary and I do not consider that such an order is appropriate in this case.

10 The plaintiffs are entitled to their costs of the proceedings in this court. The only argument to the contrary put by counsel for the defendant was that they could, and should, have made this application in the Court of Appeal. That is so but, as their counsel pointed out, that would have involved the same exercise as was undertaken before me.

11 Accordingly, pursuant to s38(4) of the Compensation Court Act, I order that the Uninsured Liability and Indemnity Scheme bear the whole of the plaintiffs' liability to make weekly payments to the worker, in an amount of $135,649.66. There will be judgment for the plaintiffs against the defendant in that amount. The defendant is to pay the plaintiffs' costs of this application.

LAST UPDATED: 24/02/1999