The Parties and the Proceedings at First Instance
3 A M Hoipo Pty Limited (Hoipo) was the employer of Colin Edward Banville who died in a work related accident on 4 August 1997. He was survived by his wife Helen Banville and several dependent children and step-children (the claimants). Helen Banville was totally dependent on the deceased. Of the seven children, three were the children of the deceased and Helen Banville. Three were the deceased's step-children and one was the deceased's child from an earlier marriage. The claimants were entitled to claim compensation pursuant to s 25 of the Workers Compensation Act 1987 (NSW) (the WCA), as dependents of the deceased.
4 Compensation payable under s 25 has two components (i) a statutorily determined lump sum which at the relevant date of the determination was approximately $230,000: s 25(1)(a); and (ii) weekly payments: s 25(1)(b). That compensation must be paid to the Public Trustee in trust for the benefit of the persons entitled: s 85(1)(a). The lump sum component was required to be apportioned between the claimants: s 29. Two of the stepchildren were partially dependent on the deceased. Although this did not disentitle them to compensation under either s 25(1)(a) or (b) (see definition of "dependent child of the worker": s 25 (5)), it was relevant to the question of apportionment.
5 Hoipo at all times acted reasonably and responsibly in relation to the statutory rights of the claimants and subject to being satisfied as to dependency, paid the claim. It was not its function to apportion the lump sum payment amongst the claimants. That function is performed either by the Compensation Court or the Public Trustee: ss 29(1) and (2).
6 In this case the Public Trustee declined to apportion the fund, as it was entitled to do: s 29(3). It informed the Court during the course of the costs application (to which I refer below) that it had declined to exercise its powers under s 29(2) "[i]n view of the different relationships and varying degrees of dependency of the children". It is pertinent to observe that the Public Trustee informed this Court that it usually exercises the powers of apportionment and that this matter was the first time it had declined to do so because of its complexity
7 The Public Trustee having declined to exercise its powers, the matter came into the court system. Helen Banville commenced proceedings in the Compensation Court for an order of apportionment. Hoipo was joined as a respondent to the proceedings and the other claimants, the dependent children and step children, were also joined as respondents.
8 The application for apportionment came before O'Meally CCJ on 5 August 1998. The matter was adjourned to allow separate representation for the various groups of dependents to be organised. Hoipo was "excused from further attendance" and his Honour ordered that the Public Trustee be joined as a respondent.
9 On 24 February 1999, Helen Banville filed a notice of motion seeking an order that the order of O'Meally CCJ that Hoipo be excused from further attendance be rescinded because there was "no entity to pay the legal costs of these proceedings". The notice of motion was heard by Walker CCJ on 2 March 1999 and his Honour rescinded O'Meally J's order.
10 The apportionment application was listed for hearing before Curtis CCJ on 15 March 1999. Four different legal representatives appeared for the different categories of claimants. Hoipo and the Public Trustee were also represented by their respective legal advisers. The proceedings were resolved between the groups of claimants without the necessity for a hearing. Consent orders were duly made. Neither Hoipo nor the Public Trustee played any role in the resolution of the proceedings.
11 The question of costs then arose.
12 Curtis CCJ ordered that the costs of the claimants (being Helen Banville as applicant and the dependent children as respondents) be borne by the Public Trustee and Hoipo in equal portions. His Honour's reasons for making that order were threefold: (i) it was unfair for the claimants to pay the costs as none had acted unreasonably; (ii) the Public Trustee, who profited from its office had acted unreasonably in declining to make the apportionment under s 29; (iii) however, given the number of parties involved and their representation by four groups of solicitors, it was unreasonable to require the Public Trustee to pay all of the costs. Hoipo should therefore bear half of the costs.
13 There was some debate in this Court as to whether Mrs Banville had made an application to the Public Trustee to apportion the fund. The impetus for that debate was to avoid the trial judge's finding that the Public Trustee had acted unreasonably in declining to apportion. If there had been no application, there was no basis for the trial judge's finding that the Public Trustee had acted unreasonably. In my opinion, Mrs Banville had made an application to the Public Trustee. Although her approach to the Public Trustee was more in the form of an inquiry as to whether the Public Trustee intended to apportion, the Public Trustee treated it as an application but "formally decline[d] to apportion". I should add that the Public Trustee did not suggest to the trial judge that no application had been made to it to apportion.
14 Both the Public Trustee and Hoipo dispute their liability to pay the costs. Each points to the other as the party which should be liable for the costs.
15 The Public Trustee, conscious of the restriction on its right to appeal except on a matter of law, challenged Curtis CCJ's order on two bases: first it submitted that his Honour had taken into account an irrelevant consideration, namely, that it made a profit from its office; and secondly, that there was no evidence to support his Honour's finding that it had acted unreasonably in declining to apportion. In my opinion, both these grounds of appeal are made out.
16 Costs orders in the Compensation Court are governed by the provisions of s 112 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW). Section 116 of that Act is also relevant. I will deal with those provisions in more detail below. I will merely comment at this point that, in exercising a discretion to order costs, it cannot be sufficient for a party to have a fund or resource out of which it can pay those costs.
17 The only evidence before Curtis CCJ in relation to the Public Trustee's decision to decline to make the apportionment was the correspondence from Helen Banville's solicitor inquiring whether the Public Trustee proposed to apportion and the Public Trustee's letter advising that it declined to do so. There was also the statement, recorded in his Honour's judgment, which presumably was a statement made from the bar table that the Public Trustee declined to apportion because of the "different relationships and varying degrees of dependency". This was not evidence that it had acted unreasonably. It was an explanation as to why it had acted. There was no other evidence of unreasonableness. It is an error of law to making a finding of fact unsupported by evidence. Accordingly, his Honour erred in law in that respect also.
18 Having so concluded, it might be thought that the Court should at this point simply allow the appeal. However, the matter should not be let to rest there. In my opinion, the real error in this matter occurred at a much earlier point in the proceedings, namely when the Public Trustee was joined as a party. For the reasons which follow, I have concluded that the Public Trustee should not have been made a party at all.
19 The function of the Public Trustee in relation to the apportionment of lump sum compensation arises because of the statutory provisions of s 85 and s 29 of the WCA. I have earlier referred to s 85, which provides that compensation payable under s 25 must be paid to the Public Trustee to hold on trust for the persons entitled. Section 29 provides, relevantly:
"(1) The compensation payable under this Division to each dependent of a deceased worker may be apportioned by the Compensation Court or by the Public Trustee.
(2) Application for apportionment may be made by or on behalf of a person entitled to the compensation:
(a) to the Public Trustee, or
(b) to the Compensation Court (whether or not an application has been made to the Public Trustee or the Public Trustee has made a decision)
(3) The Public Trustee may decline to deal with an application for apportionment and advise the parties to apply to the Compensation Court.
(4) The Public Trustee shall not deal with an application for apportionment of compensation if an application for apportionment of the same compensation is before the Compensation Court.
(5) A decision by the Public Trustee to apportion compensation under this Division is subject to any decision made by the Compensation Court with respect to the matter.
…"
20 Section 29 operates where there is more than one person entitled to the lump sum compensation payable under s 25(1)(a) which must then be apportioned amongst the dependents. A person so entitled has an option to apply to the court or the Public Trustee for apportionment of the lump sum. No particular form of application is required for an application to the Public Trustee. If an application is made to it, the Public Trustee may either apportion or decline to apportion. If the Public Trustee declines to make the apportionment, the person must apply to the court. The decision of the court in either of these circumstances, as matter of clear statutory implication, binds the Public Trustee. Although the section does not expressly say so, it is apparent that subs (5) operates where a person entitled to an apportionment of the s 25(1)(a) lump sum is dissatisfied with the Public Trustee's decision. That person could be the applicant or any other person entitled under s 25. The dissatisfied person is entitled to make an application to the court for apportionment. Subsection (5) provides in that case that the court's apportionment binds the Public Trustee.
21 In the ordinary course, the parties to an application for compensation are the persons entitled to compensation and the employer. In this case, had it been necessary for any of the claimants to bring an application for compensation to which they were entitled under s 25, Hoipo would have been joined as a respondent. An application for apportionment is a concomitant part of an application for compensation under s 25 and as such, Hoipo was a proper respondent to that application. The fact that it was excused from attendance supports, rather than detracts from the fact that the application was originally properly constituted.
22 When the Public Trustee either declines to make an order, or a person decides to apply to the court notwithstanding that the Public Trustee had made an order, the application to the court is an original application under s 29(2). As such the parties to such an application would be the same parties as if no application had been made to the Public Trustee. It is not an application for a review or reconsideration of the Public Trustee's decision.
23 There is nothing in s 29 which requires or even makes it desirable that the Public Trustee be joined as a party to such an application. Indeed, the whole tenor of the section suggests that the Public Trustee is not a proper party to such an application. It has no contribution to make to the proceedings. The factual input to the application can only come from the persons entitled to compensation (or those who represent their interests). It is not a contradictor to any party. It has no interest in the outcome of the proceedings and therefore has no relevant submission to make to the court in relation to the apportionment which ought to be made. No order is or can be made against the Public Trustee under the section. As I have already stated, it is bound by the order of apportionment made by the court, in whatever circumstance that order is made either by clear statutory implication or expressly under subs (5).
24 Strictly, the Public Trustee should have applied to the court to be removed as a party. There were understandable reasons why it did not do so, not the least of which was that the joinder had been ordered by a senior judge of the court of his own motion. The Public Trustee also ventured the reason that it would not have been worth the costs of such an application. That was a doomed prediction. Had the Public Trustee applied to be removed, this matter may not have proceeded on the erroneously conceived basis that it did.
25 Having said that, it is apparent that the order for costs against the Public Trustee cannot stand. The appeal should be allowed with costs.