PASALIC v VANA PTY LTD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY, PRIESTLEY and POWELL JJA 6 June 1994, 17 August 1994 [1994] NSWCA 250 Appeal from Compensation Court — Compensation for binaural hearing loss — Effect of Schedule 6 of Workers Compensation Act 1987 CL5 and CL5A — Basis of assessment of hearing loss. Interest — Award of interest — s19A of Compensation Court Act — Principles on which interest to be awarded — Effect of Marsland v Andjelic [No 2] (Court of Appeal, 24 December 1993, unreported). ORDERS 1. Appeal upheld with costs. 2. Judgment not to be entered until after the expiration of fourteen days from this date. 3. Liberty reserved to either party to apply to the Court for such other or different order for interest as in the circumstances may be appropriate. 4. If, by the expiration of that period, no application has been made or if the parties are not in agreement that some alternative order should be made, then the judgment of this Court should be entered accordingly. 5. The respondent to pay the appellant's costs of the appeal and have a certificate under the Suitors' Fund Act, if otherwise entitled. Mahoney JA This appeal concerns the interpretation of the Sixth Schedule of the Workers Compensation Act 1987. The applicant worker was employed by the respondent Co Vana Pty Ltd until a date in 1984. During his employment he suffered hearing loss arising out of the employment. The loss in the left ear was about eleven per cent and the loss in the right ear about eight per cent. His binaural loss was 8.6 per cent. The loss was the result of an injury which, as it is agreed, was deemed to have occurred on the last date of his employment in 1984. In 1984 the then existing legislation, the Workers Compensation Act 1926, made provision for a form of compensation in respect of the loss of hearing: see s16. The worker made no application for compensation under that Act. In 1987, the 1987 Act, by Division 4 of Pt3, made a different provision for compensation for loss of injury. In 1989, the worker claimed compensation for his binaural loss of hearing. Mr Capelin QC for the worker has indicated that it has been assumed that under the legislation as it stood in 1989, the worker was not entitled to compensation. This was because of the view which had then been taken of compensation for binaural loss of hearing and of CL5 of Schedule 6 of the 1987 Act. That view was generally as follows. Prima facie, the 1989 application for compensation would have failed because the legislation in force at the time of the 1984 injury had, in 1987, been repealed. However, the 1987 legislation made provision in relation to compensation for injuries received before its commencement. Schedule 6 CLI of the 1987 legislation provided that "subject to this Schedule" the relevant part of the 1987 Act "applies whether the injury 2 UNREPORTED JUDGMENTS was received before or after the commencement of that Division". However, whatever would otherwise have been the effect of CL1, CLS provided: "5. Compensation is not payable to a worker who has suffered a loss or impairment of a thing mentioned in the Table to Division 4 of Pt3 of this Act if: (a) it resulted from an injury received before the commencement of that Division; and (b) it is not a loss or impairment for which compensation was payable under s16 of the former Act". On the view which apparently was taken of the operation of CL5(b) it was considered that the present worker would, by the operation of CL5, not be entitled to compensation for the binaural hearing loss. The reason for this, as explained by counsel to the Court in the present appeal, was broadly as follows. It had been accepted that a claim for binaural loss of hearing was not a claim for "a loss or impairment for which compensation was payable under s16 of the former Act". This was because it was believed that it had been held by the High Court that under s16 loss of hearing in both ears was compensable only if the loss was total and that no claim lay for a partial loss of hearing in both ears: see The Commissioner for Railways v Bain (1964) 112 CLR 246 at 258 et seq. That, it was considered, applied to binaural hearing loss and accordingly, it was considered, there could be no compensation under s16 where the binaural hearing loss was less than total. Counsel suggested that it was because this view had been adopted that the 1987 Act was amended. By Act No 2 of 1991, the Sixth Schedule was amended to add CLSA. That clause provides: "SA. (1) For the purposes of CL5(b), partial loss of hearing of both ears is to be treated as a loss or impairment for which compensation was payable under s16 of the former Act (even though that section provided compensation only for partial loss of hearing of one ear). (2) A loss of hearing (resulting from an injury received before the commencement of Division 4 of Pt3 of this Act) is, if it involved a partial loss of hearing of both ears, to be treated as a proportionate loss of hearing of both ears for the purposes of: (a) calculating the compensation payable for the loss of hearing (if the worker has not been awarded, and has not received or agreed to receive, compensation for the loss); or (b) calculating the compensation payable for a further loss of hearing (if the worker has been awarded, or has received or agreed to receive, compensation for the previous loss of hearing). (3) If a worker, before the commencement of this clause, has suffered a further loss of hearing (being a partial loss of hearing of both ears) and has been awarded or has received or agreed to receive compensation for that further loss that was (for the purposes of calculating the compensation payable) treated as a loss of hearing of one ear under the Table to Division 4 of Pt3 of this Act, nothing in this clause entitles the worker to additional compensation for that further loss." CLSA(1) accordingly removes the problem caused by CLS(b) insofar as it has deemed a partial loss of hearing of both ears to have been compensable under s16. It has been accepted, for the purposes of this appeal - at least, Mr Shore has indicated that he submits no argument to the contrary - that the effect of CLSA applies to the present application notwithstanding that it was filed prior to the enactment of CLSA. I shall deal with the matter upon that basis. URJ PASALIC v VANA PTY LTD (Mahoney JA) 3 The judge of the Compensation Court, Burke J, accepted the worker's argument to this point. However, it appears that he took the view that compensation was not payable under Div 4 of Pt3 because it had not been proved that, since 1984, there had been a "further loss of hearing". His Honour said: "It seems to me the applicant has a loss of hearing. It is a loss of hearing due to a work injury. It is a pre-1987 Act injury. Prima facie the entitlement would appear to be in respect of the relevant monaural losses unless s5A brings him back in. I tend to accept Mr Shore's argument on that. It probably refers to the subject matter which the heading purports that it refers to (sic), that is 'further losses of hearing' after there has been prior compensation. That is certainly not applicable to this case. So by and large I think the applicant is entitled to compensation m respect of 11% loss in one ear and 8% loss in the other. The problem is at what rate." His Honour accordingly awarded compensation under s66 by reference to the individual losses in individual ears. It is accepted that compensation so awarded is less than compensation assessed upon the basis of a binaural loss of eight per cent. It was submitted that the award was, in this regard, based on a misconstruction of s66. His Honour was, I think, influenced by the notation which appears as a heading to CLSA: "Compensation for further loss of hearing - special provision". But that notation, even if it be referred to, does not lead to the conclusion that only a "further loss of hearing" is compensable. CLSA, and the other clauses in Pt6 of Schedule 6, contemplate or deal with two situations. They deal with the situation in which, before the commencement of the 1987 Act, compensation had been awarded for a hearing loss under s16 and also with the situation where compensation has, after the commencement of the 1987 Act, been awarded. In such circumstances, and in particular in the lastmentioned circumstance, CLSA contemplates that, where a "further" loss of hearing has occurred, the compensation shall be limited only to compensation for the loss "further" to the loss for which compensation had already been given. That, I suspect, was the reason prompting the reference in the heading to "Compensation for further loss of hearing". But, in my opinion, CLSA deals with a third situation, viz, the situation where no compensation has been received, either under the 1926 Act or under the 1987 Act. CLSA(D) provides that, for the purposes of CLS(b), partial loss of hearing in both ears is to be treated as having been compensable under the 1926 Act; the effect of that is that CLS does not operate to exclude binaural loss from the operation of CL1 and so of the 1987 Act. Then CL5A(2) operates to quantify that loss. It deals first with the case where "the worker has not been awarded... compensation for the loss...": CL5A(2)(a); and then with the case where the worker has been awarded such compensation. It provides that in the second of these cases, but not in the first, the compensation relates to "a further loss of hearing". Accordingly, loss of hearing, as an "occupational disease" within s71, may be the subject of compensation under, eg, s66 and s68 of the Act, the compensation to be calculated upon the basis of the actual loss of binaural hearing: see CLSA(2)(a). Mr Capelin QC has submitted and it has not been contested that, on this basis, the amount of compensation for the binaural loss of hearing should be $4472. That in my opinion is the appropriate compensation in this case. 4 UNREPORTED JUDGMENTS It is accepted that this is a case in which interest should be awarded. The learned judge, having awarded $1760 in respect of the left ear loss and $1280 in respect of the right ear loss, awarded compensation - interest - in respect of the period 14 November 1989 to 10 September 1990 at 20 per cent per annum. Mr Shore, for the respondent employer, did not, in the circumstances of this case, call in question the rate of interest or the period for which interest had been awarded. But he submitted that, if interest was to be awarded upon a sum calculated by this Court on a different sum, the parties should have the opportunity to consider and agree upon the quantum of the interest. The ordinary practice of this Court, in setting aside a judgment or an award, is to uphold the appeal, set aside the judgment or award, and direct that the judgment or award which it considers proper to be substituted for the original award, to take effect from the date on which the original judgment or award was given. The applicability of that general practice to awards made by the Compensation Court, and the effect of its rules and practices in that regard, may require consideration in an appropriate case. But prima facie, upon the information now before this Court, such a practice would appear applicable in appeals from the Compensation Court. That practice would lead to the result that, in this case, the Court would direct interest at a specified rate to be paid on the amount of the award from an appropriate date to the date on which the award was given and would then allow interest (from the date of the award to date of payment) to accrue in accordance with the relevant provisions of the Compensation Court Act. In the present case, the trial judge apparently adopted the date of the application for compensation, 14 November 1989, as the appropriate date for commencement of interest and fixed the date on which interest was to end as 10 September 1990. Why that period was chosen does not appear and has not been the subject of consideration in this appeal. I do not think that, in the absence of argument, it is appropriate to interfere with the orders and the assumptions on which they have been made. Accordingly, I would direct that the respondent pay interest on the lump sum award of $4472 at the rate of 20 per cent per annum in respect of the period 14 November 1989 to 10 September 1990. Judgment for the award of the amount of interest may be entered accordingly. The Court has been given to understand that there is agreement as to the quantum of the interest payable in this regard. Mr Shore has not formally contested that rate of interest in this case. He does not consent to it. He has been careful to ensure that, by what is done in this case, no precedent is set against him for the future. It is proper that that be noted. The Court has been given to understand that there is no agreement as to the interest payable from the date of the award. Ordinarily, interest is payable on the amount of the award in accordance with s19A of the Compensation Court Act. However, in an agreed submission, the parties have informed the Court as follows: "2. So far as interest from the date of the Award (2 October 1991) the parties have not been able to agree. There is no dispute, however, as to the relevant facts. 3. They are that on 3 December 1991 the solicitors for the Respondent wrote to the solicitors for the Appellant relevantly enclosing 'our client's cheque payable to your client in the sum of $3,539 representing award money.' 4. The Appellant did not accept those monies and returned them on 10 December 1991. This cheque was not presented for payment by the Appellant. URJ PASALIC v VANA PTY LTD (Mahoney JA) 5 5. On 13 January 1993 the solicitors for the Respondent wrote in similar terms enclosing a cheque in the same amount which was then accepted. 6. The Respondent argues that interest should run from the date of the Award (2 October 1991) only upon the excess over the amount tendered from 3 December 1991. That would require the Court to otherwise order pursuant to s95(1) of the Supreme Court Act 1970. The Respondent contends that by 3 December 1991 the Respondent had done all within its power to pay the amount pursuant to the Award. It was no fault of the Respondent that it was not accepted for whatever reason. 7. The Appellant contends that he should have interest on whole of the Award from the date of the Award to 13 January 1993 notwithstanding the tender because the Respondent has had the benefit of the monies in the meantime. Further after the money was returned by the Appellant to the Respondent on 10 December 1991, it was not actually paid to the Appellant until 13 January 1993. 8. There is no dispute between the parties as to interest after 13 January 1993 where it is accepted that interest would run only on the balance. This is provided for by Pt40 R7." The issue is, in effect, whether, in the calculation of post award interest, the respondent should be treated as having paid to the worker on 3 December 1991, the amount of the cheque then forwarded by it, viz, $3539. The amount of the cheque tendered on 3 December 1991 was, as the appeal has shown, less than the worker was entitled to have. In Marsland v Andjelic [No 2] (Court of Appeal, 24 December 1993, unreported) I set forth my views as to the course of the decisions as to interest and the principles on which, in the Supreme Court, it should be awarded. Those principles are relevant for present purposes. As I there indicated, the Court has, as a general principle, held interest to be awarded on (as I shall describe it) the "out of his money" basis. But it will depart from that principle if reason be shown for that departure. In Marsland, the difference between the majority of the Court and myself was, I believe, based upon whether reason had been shown in that case. In this case, the worker did not have the relevant part of the award ($3539), but the reason he did not have it was because he refused the tender of it. It is not clear beyond contest why the tender was refused: at least, I do not conclude that this refusal was so unreasonable that the general principle should be departed from. If it had been refused for quite unreasonable reasons and the respondent was disadvantaged by that refusal, that might well have constituted a sufficient reason for departure from the general principle. But that does not appear in this case. In the special circumstances of this case, as they appear and perhaps do not appear before the Court, I would not treat the worker as having had the amount tendered as from 3 December 1991 but only from 13 January 1993. Nothing that is decided in this case should qualify the desirability of amounts which are plainly due being paid as soon as they conveniently may be. Where a substantial part of an award is not in contest in a pending appeal, the employer should be encouraged to pay what (after all proper reductions or qualifications) will have to be paid; the worker should be encouraged to accept it. As I have indicated the decision in this matter turns upon the circumstances of this case. As arranged during argument, I would propose that that judgment be not entered until after the expiration of fourteen days from the date of delivery of this judgment. Liberty should be reserved to either party to apply to the Court for such other or different order for interest as in the circumstances may be 6 UNREPORTED JUDGMENTS appropriate. If, by the expiration of that period, no application has been made or if the parties are not in agreement that some alternative order should be made, then the judgment of this Court should be entered accordingly. The respondent should pay the appellant's costs of the appeal and have a 5 certificate under the Suitors' Fund Act, if otherwise entitled. Priestley JA I agree with Mahoney JA. Powell JA I agree with Mahoney JA. 10 1. Appeal upheld with costs. 2. Judgment not to be entered until after the expiration of fourteen days from this date. 3. Liberty reserved to either party to apply to the Court for such other or different order for interest as in the circumstances may be appropriate. 15 4. If, by the expiration of that period, no application has been made or if the parties are not in agreement that some alternative order should be made, then the judgment of this Court should be entered accordingly. 5. The respondent to pay the appellant's costs of the appeal and have a certificate under the Suitors' Fund Act, if otherwise entitled. Counsel for the Appellant: PR CAPELIN QC/J PEARCE Instructed by: MORONEY RUTTER AND MANTACH 25 Counsel for the Respondent: HG SHORE Instructed by: HUNT AND HUNT3545