Amelia Proudlove

Entitlement to Section 38A Benefits

Hee v State Transit Authority of New South Wales [2019] NSWCA 175

Background

On 17 October 2013, the Applicant, Mr Hee, sustained injury to his cervical spine in the course of his employment with the State Transit Authority of NSW.

On 24 January 2014, Mr Hee underwent an urgent cervical laminectomy. He did not work from 24 January 2014 to 31 May 2014, returning to his pre-injury duties on 1 June 2014.

The Applicant was paid weekly compensation for the closed period in 2014 and was awarded lump sum compensation for 34% WPI.

On 17 March 2017, the Applicant made a further claim for weekly compensation pursuant to Section 38A on the basis that he was a worker with highest needs.

Section 38A(1) of the Workers Compensation Act 1987 (‘the 1987 Act’) states:

‘(1) If the determination of the amount of weekly payments of compensation payable to a worker with highest needs in accordance with this Subdivision results in an amount that is less than $788.32, the amount is to be treated as $788.32.’

The claim was disputed by the Insurer and proceeded to the Commission.

On 17 May 2017, a Work Capacity Decision was issued by the Insurer, stipulating that the Applicant had no further entitlement to weekly compensation on the basis that he had no incapacity and had returned to full pre-injury duties. The Insurer submitted that this was irrespective of his level of impairment and the operation of Sections 32A and 38A.

The Respondent submitted that the Commission had no jurisdiction to deal with the dispute pursuant to Section 43(3) of the 1987 Act because the Insurer had made a Work Capacity Decision.

Senior Arbitrator Glenn Capel determined that the Notice issued by the Insurer on 17 May 2017 was not a Work Capacity Decision relying on the decision of Sabanayagam v St George Bank Ltd [2016] NSWCA 145, wherein it was determined that it was a crucial requirement of a Work Capacity Decision for the Insurer to assess the Applicant as having “no current work capacity” or having a “current work capacity” and fit for “suitable employment”. In Hee, the decision that was conveyed to the Applicant was in keeping with a liability dispute rather than a work capacity decision.

Notwithstanding the above, the Arbitrator found that the Applicant was not earning less than his pre-injury wages and was therefore not entitled to any ordinary weekly benefits pursuant to Section 37 In his view, it followed that the operation of Section 38A was not triggered.

The Applicant appealed the Arbitrator’s decision which was dismissed by President Keating, who rejected the Applicant’s proposition that a calculation of a weekly entitlement in the amount of zero constitutes a ‘determination of an amount payable’ and should invoke Section 38A.

The Applicant appealed to the Court of Appeal.

Court of Appeal

The finding that the Respondent had not issued a Work Capacity Decision was not in dispute on appeal.

The Applicant/Appellant advanced the position that, despite returning to his usual rostered shifts he was no longer able to perform overtime work to the same extent as before his injury. This, in the Applicant’s submission, amounted to partial incapacity for work within the meaning of the 1987 Act.

On appeal, Simpson AJA discussed that in order to determine the Applicant’s case, whether he was able to return to his pre-injury employment was an essential question of fact. That finding was also necessary for a determination whether the Applicant had “current [that is, diminished] work capacity” in order to permit a quantification of any weekly amounts “payable” under Section 37(2).

His Honour Simpson AJA summarised the critical error of the Senior Arbitrator in his original decision:

‘It appears to have been assumed by the arbitrator that, because Mr Hee had returned, essentially, to his pre-injury work regime, he had returned to his “pre-injury employment”. Contrary to the STA’s submissions, that was not the finding the arbitrator made. That finding was that Mr Hee had “resumed his full pre-injury duties”. The distinction is, in this case, significant. The arbitrator’s assumption failed to take into account Mr Hee’s claim that he was working less overtime than he had pre-injury, and had therefore not returned to his “pre-injury employment”.’

Accordingly, it followed that if the Applicant had diminished work capacity, the Commission would be obliged to determine in his favour that he was entitled to compensation under Section 37(2) (even if that entitlement is nil), which would then trigger the application of Section 38A.

In a two-to-one decision, the Court of Appeal found in favour of the Applicant and accepted the proposition that, if the amount of weekly benefits is nil then it followed that because zero is ‘less than $788.32’ as stated under Section 38A(1), the Applicant would also be entitled to the minimum weekly amount of $788.32 as indexed.

At paragraph 90 of the decision, White JA notes:

‘…Zero, or an amount less than zero, is less than $788.32. Section 35(2) expressly provides that an amount less than zero is to be taken to be zero. If zero is an amount then the “amount payable” under s 38A(1) can be zero. A zero amount can be the amount of weekly compensation “payable” under s 33 if the worker is not entitled to weekly compensation under s 36 or 37. That is less than $788.32.’

This decision appears to have been made reluctantly by the Court of Appeal, at paragraph 170 Simpson AJA states: ‘I appreciate that this result may well note what the legislature intended. It is the consequence of what has been enacted.’

In paragraph 107, the result was described by Simpson AJA as being ‘perverse’ but ‘consistent with the perversity inherent in the statutory scheme’.

This brings about an interesting circumstance where there appears to be an inverse relationship between a worker’s capacity and their entitlement to compensation.

Practical Examples

At paragraphs 100 – 103 of the judgment, White JA provides examples of the impact of the construction of Section 38A.

Example One

If a worker with highest needs was previously earning $1,000 per week and returned to work earning $800 per week, under Section 37(2) the worker would be entitled to benefits of $950 – $800 = $150 per week. These would be increased under Section 38A to $788.32, giving the worker a weekly income of $1,588.32.

Example Two

If a worker with highest needs was previously earning $1,000 per week and returned to work earning $500 per week, He or she will be entitled to benefits under Section 37(2) of $950 – $500 = $450 per week. This would be increased under s 38A to $788.32, giving the worker a weekly income of $1,238.32.

Example Three

Conversely, if the same worker was seriously incapacitated and had no capacity to work, they are entitled to the statutory rate of 80%, which would be $800 per week. As this entitlement in in excess of the Section 38A amount, no further entitlement under this section arises, giving the worker a weekly income of $800.00.

Conclusion

Accordingly, you can see that a more injured worker is going to be receiving less in weekly compensation than a Worker that can return to work. This occurs because the benefits payable under Section 38A are not adjusted by reference to an injured worker’s other earnings but by reference to the amount of weekly payments of compensation payable to the worker.

At paragraph 104, White JA summarises: ‘…the less compensation payable, because of higher post-injury earnings, the greater are the benefits available under s 38A to a worker with highest needs. The result contended for by Mr Hee is consistent with that outcome.’

The practical effect of this is that a Worker can return to full time work and accordingly have an entitlement of nil per week but still invoke the entitlement under Section 38A. As nil is less than $788.32, Section 38A requires that nil is related as $788.32 and the Worker will receive their normal income and the Section 38A entitlement.

In our view, it would be logical to amend the legislation account for the Worker’s actual earnings in Section 38A to prevent this disconnect between a worker’s actual loss and their subsequent entitlement.

Prepared by Andrew J Kemp, Principal Solicitor and Alisha Dyson, Solicitor.

For further information please contact:

Andrew Kemp
Kemp & Co Lawyers

Post: Level 3, 7 Bridge Street
SYDNEY NSW 2000
Phone: 9241 7799
Email: info@kempandco.com.au

Damages for future loss of capacity to provide domestic services

Case Law Update

Piatti v ACN 000 246 542 Pty Ltd [2020] NSWCA 168

Decision date: 28 August 2020

Re: section 15B of the Civil Liability Act 2002 (NSW) 

Background

Charles Rene Abegglen (‘the Plaintiff’) died from Mesothelioma on 22 April 2018 after being exposed to asbestos dust for over 20 years during his employment by the two respondents. The Plaintiff commenced proceedings seeking damages for negligence against ACN 000 246 542 Pty Ltd (‘First Respondent’) and Amaca Pty Ltd (‘Second Respondent’) in the Dust Diseases Tribunal. Roland Leon Piatti was appointed as Legal Personal Representative of the Estate of the late Charles Rene Abegglen.

His mesothelioma became apparent in mid-2016 and this was taken to be the time when the Respondent’s liability for the disease arose. At this time, Mr Abegglen was providing care and supervision to his wife for 16 hours each day. By the time damages were assessed, Mr Abegglen had died and Mrs Piatti required 24-hour care.

On 23 August 2019, Judge Russel DCJ found that Mr Abegglen was exposed to causally-significant levels of carcinogenic asbestos dust by each respondent, that negligence was established and that there should be judgment for the Plaintiff against each Respondent: Piatti v ACN 000 246 542 Pty Ltd [2019] NSWDDT 7 at [27]-[28]. Russell DCJ gave judgment for the Plaintiff (on behalf the deceased’s estate) in an amount of $1,058,748.84.00.

A substantial component of the damages ($611,719.00) awarded was for loss of Mr Abegglen’s capacity to care for his long-term partner, Mrs Piatti, who suffered from Alzheimer’s disease and vascular dementia. The damages were assessed pursuant to s 15B of the Civil Liability Act 2002 (NSW).

The judge in the Dust Diseases Tribunal held that the calculation of damages was limited to the lower level of services being provided at the time liability for the disease arose in mid-2016.

Accordingly, he calculated the damages based on 16 hours of care per day as opposed to the increased level of 24 hours per day. The judge held, however, that he was not entitled to assess damages by reference to a need which had increased since the time liability arose, namely in mid-2016.

The primary judge considered himself bound to adopt that approach by cases previously decided in the New South Wales Court of Appeal: State of New South Wales v Perez (2013) 84 NSWLR 570; [2013] NSWCA 149 and Dionisatos (for the Estate of the late George Dionysatos) v Acrow Formwork Scaffolding Pty Ltd (2015) 91 NSWLR 34; [2015] NSWCA 281.

Appeal – Basten JA, McCallum JA and Simpson AJA

The present appeal, brought on behalf of the estate, concerned a claim for loss of capacity to provide domestic services, being services which the Plaintiff had been providing to his wife.

The parties to the appeal were:

  • Appellant – Roland Leon Piatti (as Legal Personal Representative of the Estate of the late Charles Rene Abegglen)
  • First Respondent – ACN 000 246 542 Pty Ltd
  • Second Respondent – Amaca Pty Limited

The central question on appeal was whether there was an upper limit on the amount of damages that may be awarded under section 15B fixed by reference to the level or kind of services that were being provided by the claimant at the time liability arose [paragraph 30].

Damages for the loss of capacity to provide domestic services are calculated pursuant to section 15B of the Civil Liability Act 2002 (NSW). Generally speaking, section 15B deals with the claimant’s capacity to provide services to others, which is lost as a result of the injury [paragraph 9].

At that time, section 15B read as follows:

15B   Damages for loss of capacity to provide domestic services

 

  • Definitions

In this section:

dependants, in relation to a claimant, means: 

  • such of the following persons as are wholly or partly dependent on the claimant at the time that the liability in respect of which the claim is made arises:
  • the husband or wife of the claimant,
  • a de facto partner of the claimant,

Note. “De facto partner” is defined in section 21C of the Interpretation Act 1987.

  • a child, grandchild, sibling, uncle, aunt, niece, nephew, parent or grandparent of the claimant (whether derived through subparagraph (i) or (ii), adoption or otherwise),
  • any other person who is a member of the claimant’s household, and
  • any unborn child of the claimant (whether derived through paragraph (a) (i) or

(ii), adoption or otherwise) at the time that the liability in respect of which the claim is made arises and who is born after that time.

gratuitous domestic services means services of a domestic nature for which the person providing the service has not been paid or is not liable to be paid.

  • When damages may be awarded

Damages may be awarded to a claimant for any loss of the claimant’s capacity to provide gratuitous domestic services to the claimant’s dependants, but only if the court is satisfied that:

(a)   in the case of any dependants of the claimant of the kind referred to in paragraph

  • of the definition of dependantsin subsection (1) — the claimant provided the services to those dependants before the time that the liability in respect of which the claim is made arose, and
  • the claimant’s dependants were not (or will not be) capable of performing the services themselves by reason of their age or physical or mental incapacity, and
  • there is a reasonable expectation that, but for the injury to which the damages relate, the claimant would have provided the services to the claimant’s dependants:

(i)   for at least 6 hours per week, and

(ii)   for a period of at least 6 consecutive months, and

(d)   there will be a need for the services to be provided for those hours per week and that consecutive period of time and that need is reasonable in all the circumstances.

Note.  Section 18 provides that a court cannot order the payment of interest on damages awarded for any loss of capacity of a claimant to provide gratuitous domestic services to the claimant’s dependants.

Decision

The Court held that damages may be awarded based on the loss of capacity as at the time of judgment.

It was held the proper construction of subs (2) is that, provided the court is satisfied that the four conditions in pars (a)-(d) are met, the Plaintiff is entitled to an award of damages for the entire loss of capacity, past and future, as at the date of assessment of damages (as assessed in accordance with and subject to the balance of section 15B, which imposes other limitations that do not require consideration in the present case) [paragraph 64].

The primary judge was also satisfied that, but for his death, Mr Abegglen would have continued to provide domestic services to Mrs Piatti until one of them died. On that basis, he determined that damages must be calculated by reference to Mrs Piatti’s life expectancy, which his Honour determined to be a period of two years from the date of judgment. The Court of Appeal upheld this aspect of the primary judgment.

Prepared by Andrew Kemp, Solicitor, and Jackson Gilbert, Solicitor.

 

24 September 2020

 

For further information please contact:

Andrew Kemp

Kemp & Co Lawyers

Level 3, 7 Bridge Street

SYDNEY NSW 2000

Phone: 9241 7799

Fax: 9241 1178

Email: info@kempandco.com.au