AUSTRALIAN BRAIN FOUNDATION LTD v HYTECO (NSW) PTY LTD [2000] NSWCA 301

New South Wales Court of Appeal

CITATION : AUSTRALIAN BRAIN FOUNDATION LTD v HYTECO (NSW) PTY LTD [2000] NSWCA 301 FILE NUMBER(S) : CA 40405/99 HEARING DATE(S) : 3 October 2000 JUDGMENT DATE : 27 October 2000

PARTIES : AUSTRALIAN BRAIN FOUNDATION LTD v HYTECO (NSW) PTY LTD JUDGMENT OF : Mason P at 1; Powell JA at 37; Giles JA at 38

LOWER COURT JURISDICTION : Compensation Court LOWER COURT CC 8846/95 FILE NUMBER(S) : LOWER COURT Moran J JUDICIAL OFFICER :

COUNSEL : Appellant: A S Morrison SC Respondent: P M Hall QC; D A Priestley SOLICITORS : Appellant: Stacks - The Law Firm Respondent: Hunt & Hunt CATCHWORDS : Workers compensation - award of expenses to worker - dispute re quantum - delayed claim by service provider - interest refused on discretionary grounds - whether interest recoverable after principal paid. ND DECISION : Appeal dismissed.

THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40405/99 CC 8846/95 MASON P POWELL JA GILES JA

Friday 27 October 2000

AUSTRALIAN BRAIN FOUNDATION LIMITED v HYTECO (NSW) PTY LTD JUDGMENT 1 MASON P: In 1985, Dimitri Mamolea (the worker) suffered severe brain damage in a motor vehicle accident on his way home from his place of employment. 2 On 31 May 1990 Judge McGrath CJ entered an award against the employer, Hyteco (NSW) Pty Ltd, the present respondent. The award included an order that the respondent pay the worker's medical and hospital expenses under s60 of the Workers Compensation Act 1987 (the Act). The application was stood over part heard with liberty to apply. 3 Following intensive hospital treatment, the worker had been moved from Westmead Hospital in February 1986 to St Edmund's Hospital Eastwood. The latter hospital had an adjacent Brain Injury Therapy Centre (BITC) under the direction of Dr E A Freeman. 4 During the four year period when he was at St Edmund's Hospital, the worker was taken by wheelchair each weekday to the adjacent BITC, spending between 9.30am and 4.30pm at that Centre. Whether his therapy treatment occupied one hour or several hours each day, he was charged a full daily rate of $150 per day in 1986 rising to $450 per day in 1990. This treatment had come to an end before Judge McGrath's award. 5 Throughout the relevant period, the respondent's insurer paid the hospital fees for St Edmund's, but it refused to pay the additional daily fees claimed for the treatment at BITC. By the time that the final sum was calculated, the amount at issue was $270,550. 6 It is not clear when or indeed by whom the claim for these expenses was first made. What is clear is that no attempt was made to litigate the dispute about the expenses in its obvious procedural context, ie through taking up the liberty to apply reserved in and/or resuming the part-heard proceedings which were the subject of Judge McGrath's 1990 award. This becomes all the more curious when it is observed that the same solicitors have represented the worker and the bodies which at various times have claimed entitlement for remuneration for the services rendered at BITC. 7 No attempt was made to litigate the dispute in a common law action between the service-provider and the worker. I am not suggesting that matters had to proceed in this manner. But had this occurred, the District Court would have had undoubted jurisdiction to determine the cost to the worker of these services, and to award interest, subject to any relevant provisions of the Act. The worker would then have been given a statutory indemnity in relation to those costs as determined, pursuant to s60 of the Act (see Coyle v Government Dockyard, Walsh Island (1929) 29 SR(NSW) 539, New South Wales Sugar Milling Co-Operative Ltd v Manning (1998) 44 NSWLR 442). 8 In 1993 Australian Brain Injury Institute Limited (in liq), filed an Application in the Compensation Court claiming an award against the respondent employer with respect to the disputed treatment expenses. The company invoked s61(8) of the Act which provides: Any amount for which an employer is liable under this Division in respect of medical or related treatment may be recovered from the employer by the person who gave the treatment. 9 The claim was disputed by the respondent, acting through its insurer. It was contended that the worker's treatment was not "reasonably necessary" (cf s60(1)) and that the rates charged were excessive in any event. 10 The 1993 Application came on for hearing before Judge Moran in May 1995. During that hearing, counsel for the applicant conceded that his client was not "the person who gave the treatment" within s61(8). The matter was adjourned part-heard to 25 May 1995. On that day three further Applications for Determination were filed against the respondent. One was filed by the worker by his tutor Runa Mamolea, claiming $270,550 (8844/95). The second was filed by a company called National Brain Injury Services Pty Ltd claiming expenses of $28,800 incurred between 23 January 1990 and April 1990 (8845/95). The third was filed by the present appellant, claiming expenses totalling $241,750 for the period between 1 July 1988 and 22 January 1990 (8846/95). 11 The respondent filed Answers to each Application. First, it required proper verification that the costs were incurred (cf s60(3)) and it put each applicant to proof that the amount claimed was "such amount as is reasonably appropriate to the treatment given, having regard to the reasonable necessity for the treatment and the customary charge made in the community for the treatment to persons other than workers" (cf s61(1)). 12 Secondly, the respondent invoked s61(3) which capped its liability for medical or related treatment in respect of the injury at $50,000. That capping was however capable of being lifted by a direction of the Compensation Court. The relevant provisions are found in s61(4) and (4A) which provide: (4) Subject to the regulations, a direction may be given that the employer of a worker is liable for an amount additional to that fixed by subsection (3). (4A) If proceedings relating to the worker's claim for compensation are before the Compensation Court and those proceedings relate to, or include matters relating to, the provision of medical or related treatment for the worker, such a direction may be given by the Court. If no such proceedings are before the Compensation Court, such a direction may be given by the Authority on application made in respect of the worker from time to time. 13 A direction lifting the cap to $1 million was first sought on 22 May 1995. It was granted on 3 June 1996. 14 The hearing of the four Applications took place in May 1998 before Judge Moran. The evidence taken in each of the four applications filed in 1993 and 1995 was treated as evidence in each other application. His Honour handed down a reserved judgment on 29 May 1998. 15 Judge Moran was not satisfied that National Brain Injury Services Pty Ltd gave treatment to the worker in 1990 as it claimed. An award for the respondent was made in that Application. 16 The Application of the Australian Brain Injury Institute Pty Ltd (in liq) also resulted in an award for the respondent, for reasons that are no longer relevant. 17 Judge Moran held that the appellant was the person who gave the treatment to the worker at the BITC between 1 July 1986 and 23 January 1990. 18 His Honour then addressed the s61(1) issue as to whether the amount claimed by the appellant for such services was "reasonably appropriate". This involved issues of fact which are not and could not be the subject of appeal to this Court. Judge Moran concluded that it was reasonably necessary for the worker to have medical or related treatment in the form of physiotherapy, occupational therapy, speech therapy and hydro-therapy over and above that which would have been available to him in a nursing home or hospital if accommodated on a full time basis between 1986 and 1990. However, the basis of charging at the BITC advanced by the appellant was rejected. His Honour was not satisfied that it was reasonably necessary for the respondent or its insurer to be asked to pay a contribution to the cost of the Centre based on a proportion of the costs per patient at a Centre which conducted research as well as providing treatment. The idea of charging on a per diem basis regardless of the numbers of hours of actual treatment was also rejected as unreasonable. 19 Judge Moran found that, in addition to the hour or so therapy treatment usually provided by nursing homes or hospitals, it was reasonably necessary that the worker have an additional one and a half hours per weekday from 1 July 1986 to 30 June 1988 and one hour per weekday from 1 July 1988 to 17 April 1990. He added that: In reaching this conclusion I have not been satisfied on the whole of the evidence that the length of time and the number of hours of therapy each day given to the worker at BITC under supervision of Dr EA Freeman was reasonably appropriate for the treatment given.