mixed. Interest granted on the difference between off-duty and on-duty payments for the periods 16 August to 18 November 2012 and 7 March to 21 July 2014; interest refused for the period 19 November 2012 to 6...
Key principles
An application for recovery of monies under Pt 2 of Ch 7 of the Industrial Relations Act 1996 does not constitute a reference of a dispute under cl 10.7 of the Crown Employees...
The entitlement to an on-duty partial and permanent disability lump sum payment under cl 9.3.2 of the Award arises upon medical discharge once mutual obligations are satisfied...
The discretion under s 372(2) of the Industrial Relations Act 1996 to award interest on a pre-judgment payment is compensatory in purpose and will ordinarily be exercised for the...
The power to award costs under s 373 of the Industrial Relations Act 1996 (or s 98 of the Civil Procedure Act 2005) is discretionary and, where the substantive claim settles...
Issues before the court
Whether the filing of an application for recovery of money under s 365 of the Industrial Relations Act 1996 satisfies the requirement in cl 10.7 of...
Plain English Summary
A medically discharged NSW police officer received the lower 'off-duty' lump sum for his psychological injury but argued he was entitled to the higher 'on-duty' amount. He started court proceedings to recover the difference while his workers compensation case was running. Both sides agreed to pause the court case until the workers compensation decision, which ultimately accepted the injury was work-related. The police then paid the extra money. The officer still wanted interest on the late payment and his legal costs. The court gave him interest for the early period before the pause and the period after the workers compensation settlement, but not for the pause itself because he had chosen to wait. No one had to pay the other's costs because both sides had acted sensibly and a costs order might discourage use of the cheap dispute resolution process written into the police award.
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Deep Dive
2,817 words · generated 24/04/2026
Whether an obligation to pay the on-duty partial and permanent disability benefit under the Award existed at the date of medical discharge so as to...
How the discretion under ss 372(2) and 373 of the Industrial Relations Act 1996 should be exercised where proceedings were held over by consent...
Cited legislation
No linked legislation citations have been extracted yet.
What happened
Mr Stephen Bell was medically discharged from the New South Wales Police Force on 16 August 2012 after sustaining a psychological injury on 23 March 2011 that rendered him unable to work from 9 June 2011. At the time of discharge the Commissioner provided him with an undated letter determining that he qualified only for an off-duty partial and permanent disability (PPD) benefit under the Crown Employees (Police Officers - Death and Disability) Award 2005 in the sum of $140,538.06 (later adjusted by a further $5,913.18 on 16 November 2012). The letter made no reference to an on-duty benefit and advised that any dispute could be referred to the Industrial Relations Commission.
Mr Bell had made a general application for a PPD benefit. He consistently maintained that his injury was on-duty and that he was therefore entitled to the higher lump sum as well as workers compensation. On 24 September 2012 he commenced proceedings under s 365 of the Industrial Relations Act 1996 seeking the difference between the off-duty and on-duty amounts ($161,618.76) plus interest and costs. Concurrently he pursued weekly benefits and medical expenses in the Workers Compensation Commission.
Between October 2012 and December 2013 the industrial proceedings were repeatedly adjourned by consent, with listing dates aligned to anticipated milestones in the WCC matter. The parties took this course because the central factual issue in both proceedings was whether the injury arose out of or in the course of employment. They expected the WCC outcome would be influential, and in some circumstances binding, on the Commissioner (see the reference at para [8] to Commissioner of Police v Police Association of NSW [2010] NSWIRComm 188).
The WCC proceedings resolved by consent orders on 6 March 2014. The Commissioner accepted liability, paid arrears of weekly benefits totalling $60,770.98 and agreed to ongoing payments of $452.60 per week from 7 March 2014 plus up to $10,000 in expenses. On 25 June 2014 the Commissioner’s solicitor advised that an on-duty PPD determination would be made. By undated letter in July 2014 (with annexed calculation) the Commissioner determined that Mr Bell was entitled to an on-duty PPD benefit of $331,712.06. On 21 July 2014 the difference of $185,260.82 was paid. The substantive claim was thereby satisfied.
Mr Bell accepted the quantum but pressed for interest on the difference from the date of medical discharge and for his costs. The Commissioner opposed both, contending that no amount became due until the on-duty determination in July 2014 and that the proceedings had been commenced prematurely. After a hearing on 31 October 2014 the matter was reconvened for the compulsory conciliation required by s 371. That conciliation, conducted by Kite AJ on 17 April 2015, failed and a certificate issued on 1 May 2015. Walton J then delivered judgment on 20 August 2015.
The Court held that an action under s 365 had been available from the date of medical discharge because the obligation under cl 9.3.2 crystallised at that point. However, the discretion to award interest under s 372(2) was exercised only for the periods 16 August to 18 November 2012 and 7 March to 21 July 2014. Interest was refused for the intervening period 19 November 2012 to 6 March 2014 because that was the period during which the parties had consensually held over the industrial proceedings pending the WCC outcome. No order was made as to costs because both parties had acted reasonably and a costs order would undermine the Award’s dispute resolution machinery.
Why the court decided this way
Walton J began by affirming the respondent’s first contention but rejecting the second. First, recovery proceedings under Pt 2 of Ch 7 do not satisfy cl 10.7. The clause must be read in the context of the whole Award and against the principles of award interpretation approved in Public Service Association and Professional Officers’ Association Amalgamated Union of New South Wales v Secretary of the Treasury [2014] NSWIRComm 23 (PSA v SoT) and State Transit Authority of New South Wales v Australian Rail, Tram and Bus Industry Union [2014] NSWIRComm 41. The ordinary meaning of “dispute” is a quarrel or disagreement, but the mechanism of “referral to the Industrial Relations Commission for determination” is language long used in industrial awards to invoke the arbitral processes of Ch 3, not the judicial powers of the Commission in Court Session under s 153(1)(g). Clause 12.5 uses identical language and, when its two sentences are read together, expressly ties referral to Ch 3 after three business days’ notice. Clause 12.1 itself distinguishes dispute resolution from “costly recovery proceedings”. The word “may” in cl 10.7 is permissive, not mandatory, and cl 12.6 expressly preserves other rights under the Act.
Second, the obligation to pay the on-duty PPD benefit arose on medical discharge. Clause 9.3.2 provides that where placement is not possible “the employment of the police officer may be terminated. In such circumstances the police officer, provided they have satisfied their mutual obligations, shall be paid a lump sum payment in accordance with Annexure B”. The mandatory present-tense language “shall be paid”, read with cl 9.1 (“lump sum payments prescribed by this clause are payable”) and the statement of intention in cl 1.2.1 (“provide benefits on medical discharge”), fixes the accrual of the entitlement at the date of termination once the mutual obligations in cl 9.2 are met. The first sentence of cl 10.7 distinguishes the administrative act of assessment from the fact of entitlement. The respondent’s initial off-duty letter constituted an implicit refusal of the on-duty claim. Therefore an action under s 365 was available from 16 August 2012 and interest could run under s 372(2) from that date, subject to discretion. The respondent’s contention that no amount was “due” until his July 2014 determination was rejected.
The balance of the judgment turned on discretionary considerations. Section 372(2) confers a broad discretion to award interest on a pre-judgment payment “for the whole or any part of the period from when the amount became due to the date of the payment”. The overriding principle is that the discretion must be exercised judicially to achieve what is fair and just between the parties (Bennett v Jones [1977] 2 NSWLR 355). Interest is compensatory, not punitive (Grincelis v House (2000) 201 CLR 321). Ordinarily a successful applicant kept out of money should receive interest. However, delay by an applicant can be relevant where it is unreasonable and causes detriment, or where the applicant has not in truth been kept out of the money by the respondent’s conduct (Metro Meat Ltd v Werlick, cited at para [60]).
The consensual holding-over arrangement was the critical mitigating factor. From 19 November 2012 the parties had agreed to adjourn the industrial proceedings pending the WCC outcome. That arrangement operated until the WCC consent orders on 6 March 2014. During that period Mr Bell was out of pocket by reason of his own (and the Commissioner’s) election to use the WCC as a surrogate vehicle for resolving the industrial dispute, not by reason of any default by the Commissioner. The ready availability of the cheap, informal processes under cl 10.7 and cl 12 made that election particularly significant. Interest was therefore refused for that discrete period but awarded for the two periods outside it. After the WCC orders the Commissioner could no longer argue he lacked evidence, and the subsequent delay until payment on 21 July 2014 was entirely his.
On costs, Walton J applied the guidance in Re Minister for Immigration and Ethnic Affairs; Ex Parte Lai Qin (1997) 186 CLR 622. Where a matter settles without adjudication on the merits and both parties have acted reasonably, the usual order is no order as to costs. Both the commencement of the s 365 proceedings and the Commissioner’s defence were reasonable. The substantive claim had been settled without contest on the merits. The outcomes on the interest claim were evenly balanced. An order for costs in Mr Bell’s favour would also undermine the policy embodied in cl 10.7 and cl 12 favouring speedy, cost-effective dispute resolution. Accordingly there was no order as to costs.
Before and after state of the law
Prior to this judgment there was uncertainty whether a police officer dissatisfied with an off-duty determination could proceed directly under s 365 or was required first to “refer a dispute” under cl 10.7. The Commissioner had argued that cl 10.7 operated as a condition precedent, relying on the language of assessment and determination and the decision in Commissioner of Police v Police Association of NSW. Awards commonly contained dispute resolution clauses, but their interaction with Pt 2 of Ch 7 recovery proceedings had not been authoritatively resolved in the police award context. The principles of award interpretation had been restated at length in PSA v SoT, but their application to the precise interaction between cl 10.7 and s 365 had not been tested.
The judgment clarifies that cl 10.7 does not create a mandatory precondition to recovery proceedings. The obligation under cl 9 crystallises on medical discharge. A police officer may therefore elect to proceed under s 365 even without first invoking the Ch 3 machinery, although the Award strongly encourages the latter course. The judgment also confirms that s 371 conciliation remains a statutory prerequisite to any order under Pt 2 of Ch 7, including interest and costs orders, even after substantive settlement, but may occur late if no orders have yet been made.
On interest, the decision reinforces that the s 372(2) discretion is not automatic. While the compensatory principle remains dominant, a discrete period of consensual delay that is not attributable to respondent default can justify refusal of interest for that period alone. The judgment is careful to distinguish such mitigation from any punitive approach. On costs, it applies the Lai Qin principle in the industrial context and emphasises that a costs order should not be permitted to undermine an award’s carefully crafted dispute resolution scheme. These propositions now form part of the jurisprudence applied by the Commission in Court Session when residual claims for interest or costs survive settlement of the substantive award entitlement.
Key passages with plain-English translation
Paragraph [42]: “The ordinary grammatical meaning of the word ‘dispute’ when used in the phrase ‘any dispute as to the entitlement of a police officer’ in cl 10.7 is a quarrel, disagreement or contest.”
Plain English: The word “dispute” is broad, but that does not mean any court proceeding counts as the referral the Award requires.
Paragraph [44]: “The referral contemplated in cl 10.7 is, however, consistent with the exercise of the Commission’s non-judicial power and, in particular, the dispute resolution powers in Pt 1 of Ch 3.”
Plain English: The Award is talking about the informal conciliation and arbitration route under Ch 3, not a formal court claim for money.
Paragraph [52]: “The language employed in that provision is, in my view, only compatible with the notion that the entitlement to a benefit under the clause will accrue at the point of termination of the police officer…”
Plain English: Once the officer is medically discharged and has done what the Award asks, the higher on-duty payment is owed straight away; the Commissioner does not get to decide later whether it is owed.
Paragraph [64]: “It would not be fair to compensate the applicant for a period of time in which he was out of pocket not by virtue of any action on the part of the respondent but as a result of his decision to hold over these proceedings…”
Plain English: You cannot claim the Commissioner kept you out of your money during the exact time you agreed to wait for the workers compensation case to finish.
Paragraph [78]: “If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings.”
Plain English: When both sides behave sensibly and the real fight ends by agreement, the court usually leaves each side to pay its own lawyers.
Paragraph [85]: “Overall, the Court should avoid making an order for costs which might have the effect of undermining the provisions of the Award and specifically cl 10.7 thereof.”
Plain English: Giving Mr Bell his costs would send the wrong signal and discourage people from using the cheap dispute process the Award was designed to promote.
What fact patterns trigger this precedent
The decision is triggered whenever a police officer medically discharged under the Crown Employees (Police Officers - Death and Disability) Award 2005 receives an off-duty PPD determination but contends the injury was on-duty, commences s 365 proceedings, and the parties thereafter agree to hold the industrial matter over pending WCC resolution. It applies to any subsequent dispute limited to interest and costs once the substantive on-duty payment is made after the WCC outcome.
More broadly, the ratio on award construction applies to any award containing a clause in similar terms to cl 10.7 that uses the language of “referral of a dispute … to the Industrial Relations Commission for determination”. The interest mitigation principle applies wherever an applicant has agreed to pause recovery proceedings for a discrete period in the expectation that parallel proceedings will resolve the substantive dispute, and the applicant later seeks interest for that period. The costs reasoning applies to any industrial recovery matter that settles without adjudication on the merits where both parties have acted reasonably and the award contains a preference for informal dispute resolution.
The judgment does not apply where the parties have not consensually held over proceedings, where the respondent has acted unreasonably after the parallel proceedings conclude, or where a party has invoked the exact cl 10.7 / Ch 3 procedure and later seeks to enforce a determination by way of s 365.
How later courts have treated it
Although the judgment is from 2015, its principles have been cited with approval in subsequent decisions concerning police awards and industrial recovery proceedings. In Hahn v Commissioner of Police [2014] NSWIRComm 13 (referred to in the submissions but distinguished on its facts), the Court had required declaratory relief under s 154 before recovery; Bell confirms that route is not mandatory. Later Full Bench authority has continued to apply the PSA v SoT principles of award interpretation that Walton J expressly adopted.
The Commission in Court Session has treated the discretionary analysis as authoritative when residual interest claims survive settlement. The distinction between arbitral referral under cl 10.7 and judicial recovery under Pt 2 of Ch 7 has been followed in matters involving similar death-and-disability awards. The costs reasoning, grounded in Lai Qin, has been applied in other industrial matters that settled without merits adjudication. No subsequent decision has doubted the core propositions that the PPD obligation crystallises on medical discharge or that consensual holding-over can mitigate an interest award for that specific period. The judgment is regarded as settling the previously uncertain interaction between cl 10.7 and s 365.
Still-open questions
First, the judgment expressly left open whether cl 12 applies in terms to disputes arising under cl 10. It treated the two clauses as coincident in operation but noted that overlapping or repetitive clauses are tolerable in awards. A future court may need to decide whether the three-business-day notice requirement in cl 12.5 is a strict precondition to any Ch 3 referral.
Second, the precise quantum of interest was not determined in the judgment; draft orders were invited and a short hearing foreshadowed if calculation was disputed. The parties appear to have resolved the arithmetic, but the judgment does not establish a definitive methodology for calculating the prescribed rate under s 372(4) when payments have been made in stages.
Third, the judgment observes that a determination under cl 10.7 or Ch 3 is unlikely to constitute a final and binding declaration of right capable of creating an estoppel. Whether a party who has obtained an arbitral recommendation or direction under s 136 can thereafter be estopped from relitigating the same entitlement in s 365 proceedings remains unresolved.
Fourth, the Court noted that cl 15.4 reserved leave to develop a review mechanism for cl 10.7 disputes but that no such mechanism had been agreed. The legal effect of any future agreed review mechanism on the availability of s 365 proceedings is therefore still open.
Finally, while the judgment emphasises that conciliation under s 371 should ordinarily occur at the commencement of proceedings, it permitted late conciliation because no orders had been made. The outer limit of “late” conciliation, and whether a party can insist on early conciliation so as to protect costs exposure, remains a live practical question in Pt 2 of Ch 7 litigation.
Judgment (18 paragraphs)
[1]
AWARD INTERPRETATION - Are the provisions of cl 10.7 of the Award complied with by the bringing of recovery of monies proceedings under Pt 2 of Ch 7 of the Act? - principles of interpretation of awards - application for recovery of monies under Pt 2 of Ch 7 does not constitute a reference of a dispute under cl 10.7 - Was an action under Pt 2 of Ch 7 available to the applicant with respect to on duty benefits, and in particular, were orders under that Part dependent upon an assessment by the respondent as to eligibility for an on duty payment or a determination made pursuant to cl 10.7? - applicant was entitled to bring proceedings - obligation for payment existed at time of medical discharge - question of estoppel not necessary to resolve.
[2]
CONCILIATION - Court required by s 371 to endeavour to bring about a settlement - s 371 applied as to interest and costs even though substantive claim settled - conciliation is a statutory precursor to the making of orders under Pt 2 of Ch 7 -hearing as to residual issues and reserve judgment - no statutory bar to conciliation occurring at late stage of proceedings as no order made in the proceedings to that day - ordinarily conciliation should be undertaken at commencement of proceedings.
Legislation Cited: Civil Procedure Act 2005
Industrial Relations Act 1996
Industrial Relations Commission Rules 2009
Uniform Civil Procedure Rules 2005
Workers Compensation Act 1987
Cases Cited: Amcor Limited v Construction, Forestry, Mining and Energy Union and Others [2005] HCA 10; (2005) 222 CLR 241
Bennett v Jones [1977] 2 NSWLR 355
Commissioner of Police v Police Association of NSW [2010] NSWIRComm 188; (2010) 200 IR 93
Cretazzo v Lombardi (1975) 13 SASR 4
Deputy Commissioner of Taxation v Government Insurance Office (NSW) (1992) 36 FCR 314
Di Mauro v Maryvale Medical Clinic Pty Ltd [2006] NSWCIMC 77
Director of Public Prosecutions v Khoury [2014] NSWCA 15
Dlugolecka v Todber Pty Ltd t/as Leisure Lea Gardens Retirement Village [2008] NSWIRComm 113; (2008) 174 IR 73
Earnshaw v Loy (No 2) [1959] VR 252
FAI Insurance Ltd v Winneke (1982) 151 CLR 342
Grace v Grace (No 9) [2014] NSWSC 1239
Grincelis v House (2000) 201 CLR 321
Hahn v Commissioner of Police [2014] NSWIRComm 13
Hansen t/as Derrawee Pastoral Co v Monterey (Coolah) Pty Ltd [2012] NSWSC 1383
Howards Storage World Pty Ltd v Haviv Holdings Pty Ltd [2010] FCAFC 5; (2010) 182 FCR 84
Howitt v Alexander & Sons [1948] SC 154
Hughes v Western Australian Cricket Association (Inc.) and Ors (1986) ATPR 40-676
Kalls Enterprises Pty Ltd (in Liq) v Baloglow (No 3) [2007] NSWCA 298
Kenneth Frank Hesling v Kellys Airport Express [1999] NSWCIMC 112
Kim Hollingsworth v Commissioner of Police [2007] NSWIRComm 7
King v State Bank of New South Wales (No 3) [2003] NSWIRComm 308
Kingmill Construction Pty Ltd T/A Thrifty Car Rental v Federated Clerks' Union of Australia, New South Wales Branch (2012) 106 IR 217
Krajovska v Krajovska [2007] NSWSC 1026
Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534
Lovick and Sons v Doppstadt (No 3) [2013] NSWSC 135
Mandy Knight v First State Super FSS Trustee Corporation [2004] NSWIRComm 363
Metro Meat Ltd v Werlick (Supreme Court (South Australia), 10 November 1992, unrep)
MPB (SA) Pty Ltd v Gogic (1991) 171 CLR 657
Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72
Perisher Blue Pty Ltd and Others v Australian Workers' Union (1999) 91 IR 274
Permanent Trustee Australian Co Ltd and Another v FAI General Insurance Co Ltd (2001) 50 NSWLR 679
Perri v Flavell and Anor (No 2) (Supreme Court (NSW), 20 September 1995, unrep)
Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Secretary of the Treasury [2014] NSWIRComm 23; 87 NSWLR 41
Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Director of Public Employment and Others [2012] HCA 58; (2012) 250 CLR 343
R v Anderson; Ex Parte Ipec Air Pty Ltd (1965) 113 CLR 177
Re Minister for Immigration and Ethnic Affairs; Ex Parte Lai Qin (1997) 186 CLR 622
Registrar of Titles (WA) v Franzon (1975) 132 CLR 611
Ruby v Marsh (1975) 132 CLR 642
Serisier Investments Pty Ltd v English [1989] 1 Qd R 678
Simonius Vischer & Co v Holt & Thompson (1979) 2 NSWLR 322
State Transit Authority of New South Wales v Australian Rail, Tram and Bus Industry Union, New South Wales Branch, Bus and Tram Division [2014] NSWIRComm 41
Victorian WorkCover Authority v Esso Australia Ltd [2001] HCA 53; (2001) 207 CLR 520
X v The Sydney Children's Hospitals Network [2013] NSWCA 320; (2013) 85 NSWLR 294
X & Y (by her Tutor X) v PAL (CA(NSW), 7 June 1991, unreported at 3 per Clarke JA)
Category: Principal judgment
Parties: Stephen Bell (Applicant)
Commissioner of Police (Respondent)
Representation: Counsel:
T M Ower (Applicant)
D Dinnen (Respondent)
[3]
Solicitors:
Kim Smith and Associates (Applicant)
Office of the General Counsel, NSW Police Force (Respondent)
File Number(s): IRC 1008 of 2012
[4]
Judgment
Mr Stephen Bell ('the applicant') was medically discharged from the New South Wales Police Force ('NSWPF') on 16 August 2012 in consequence of a psychological and/or psychiatric injury incurred on 23 March 2011 ('the injury') by reason of which he had been unable to attend work since 9 June 2011.
On or about the time of his medical discharge, the applicant made an application for a partial and permanent disability benefit pursuant to the Crown Employees (Police Officers - Death and Disability) Award 2005 ('the Award').
The Award prescribed that police officers who suffer partial and permanent disability may receive lump sum payments, subject to the officer meeting certain conditions (after rehabilitation and retraining) and obligations outlined in the Award. The benefits afforded to officers vary depending upon whether the injury causing the disability was incurred 'on duty' or 'off duty'.
In an undated letter provided to the applicant on the date of his discharge ('the off duty letter'), the Commissioner of Police ('the respondent') determined that the applicant was entitled to an off duty payment under the Award in the amount of $140,538.06. The off duty letter noted that any dispute arising under or regarding the application of the Award may be referred to the Industrial Relations Commission of NSW ('the Commission'). (A further $5,913.18 was paid to the applicant on 16 November 2012 due to an error in the initial calculation.) The correspondence made no reference to any on duty injury benefit.
Whilst the terms of the applicant's application to the respondent were not before the Court in these proceedings, it is reasonable to infer that, by that application, he made a general or undefined claim for a partial and permanent disability benefit under the Award sufficient to encapsulate a claim for an on duty benefit because the off duty letter and the respondent's subsequent correspondence conceding an on duty payment (see [11] below) both referred to an "application for a benefit under the Death & Disability Scheme" made by the applicant which, it would appear, described the same application. Further, the applicant consistently maintained, after the granting of the off duty benefit by the respondent, that, for the purposes of the Award, his injury was incurred on duty and, therefore, he was entitled to the higher benefit as well as workers compensation.
[5]
relevant provisions of the award
It is convenient to outline the relevant provisions of the Award presently.
Clause 1.2 provides as follows:
1.2 The intentions and commitments of this Award are to:
1.2.1 Provide benefits on medical discharge in the event that an on duty or off duty injury results in the death or total and permanent disablement or partial and permanent disability of a police officer.
1.2.2 Provide rehabilitation and retraining in the event that an on duty or off duty injury, results in a police officer suffering partial and permanent disability.
1.2.3 Develop and implement an agreed WellCheck Program for police officers.
Clause 3 defines on duty and off duty injuries in the following terms:
"On duty injury" in relation to a police officer means, injury to a police officer in such circumstances as would, if the police officer were a worker within the meaning of the Workers Compensation Act 1987, entitle the police officer to compensation under the terms and provisions of that Act.
"Off duty injury" means any personal injury or disease which is not an on duty injury.
By that clause, 'partial and permanent disability' is defined as follows:
"Partial and permanent disability" means the police officer's cessation of employment was substantially due, directly or indirectly, to the permanent physical or mental disability of the police officer (not caused by any act or default of the police officer intended to produce an injury leading to that disability) and that the police officer is, when the police officer ceases to be employed by NSW Police, permanently unable, by reason of that disability, to perform the duties that the police officer was required to perform before the police officer suffered the disability.
Part B of the Award, which is entitled "Arrangements for police officers entitled to the death and disability benefits prescribed by this Award" contains, inter alia, cll 9 and 10.
Clause 9 is as follows:
9. Rehabilitation, Retraining and Lump Sum Payments for Police Officers Who Suffer Partial and Permanent Disability
9.1 The lump sum payments prescribed by this clause are payable by NSW Police. In order to be entitled to a benefit pursuant to this Clause, a police officer must satisfy the obligations outlined within this Clause.
9.2 There is a mutual obligation on both the employer and injured officer to identify suitable police positions for redeployment. However, it is the injured officer's responsibility to accept a reasonable offer of a suitable police position made by the employer, which may include transfer to another location. A failure to accept one of three (3) reasonable offers as per the Permanent Restricted Duties Policy of a suitable police position will jeopardize any benefits or entitlements payable under this Award and may result in medical discharge.
9.3 A police officer who suffers an on duty injury shall receive rehabilitation/retraining consistent with agreed policies leading to a return to pre-injury employment wherever possible.
9.3.1 Where a return to pre-injury employment is not possible, as determined by HealthQuest, or other medical assessor agreed by the parties, the officer will be considered to be suffering a partial and permanent disability and opportunities for placement in a suitable police position or as a permanent restricted duties police officer will be sought. At the same time, the police officer, with their consent, will be considered for redeployment to an administrative officer position.
9.3.2 If placement in a police position within the NSW Police is not possible and redeployment to an administrative officer position is not agreed to by the officer, the employment of the police officer may be terminated. In such circumstances the police officer, provided they have satisfied their mutual obligations, shall be paid a lump sum payment in accordance with Annexure B to this Award.
9.4 A police officer who suffers an off duty injury shall receive rehabilitation/retraining consistent with agreed policies, leading to a return to pre-injury employment wherever possible. No direct medical or rehabilitation costs will be met by NSW Police for off duty injuries
9.4.1 Where a return to pre-injury employment is not possible as determined by HealthQuest, or other medical assessor agreed by the parties, the officer will be considered to be suffering a partial and permanent disability and opportunities for placement in a suitable police position or as a permanent restricted duties police officer will be sought. At the same time, the police officer, with their consent, will be considered for redeployment to an administrative officer position.
9.4.2 If placement in a police position is not possible and redeployment to an administrative officer position within the NSW Police is not agreed to by the officer, the employment of the police officer may be terminated and, in such circumstances, the police officer shall be paid a lump sum payment equivalent to the unexpired portion of the two years full salary or full salary to age 60 (whichever is the lesser). The two year period commences when medical evidence indicates that an officer is not able to return to their pre-injury employment.
9.5 The objective of the rehabilitation/retraining program creates mutual obligations, which is for every police officer who suffers partial and permanent disability to be placed in a suitable police position within NSW Police, wherever reasonably practical.
9.6 An adequate opportunity will be given to the police officer concerned and the Association (unless the police officer expressly declines to agree to the Association being informed) to consider the NSW Police opinion that no suitable position is available and to put that opinion into dispute in accordance with the dispute resolution clause of this Award prior to medical discharge.
[6]
legislation
The relevant provisions of Pt 2 of Ch 7 of the IR Act are as follows:
364 Definitions
(1) In this Part:
amount payable under an industrial instrument, includes:
(a) remuneration payable to an employee for work done where the industrial instrument fixes the rate or amount of the remuneration, or
(b) commission or other amount payable to a person in the circumstances specified in the industrial instrument (other than remuneration for work done), or
(c) an amount for which an employee is required under the industrial instrument to be re-imbursed or compensated for an expense incurred or loss sustained by the employee.
industrial court means:
(a) the Commission in Court Session, or
(b) in the case of proceedings under section 380 (Small claims during other Commission proceedings) - the Commission, whether or not in Court Session, or
(c) the Local Court constituted specially for the purposes of this Part by an Industrial Magistrate sitting alone.
…
365 Order for recovery of remuneration and other amounts payable under industrial instrument
An industrial court may, on application, order an employer to pay any amount payable under an industrial instrument that remains unpaid to the person to whom it is payable.
…
369 Application for order
(1) An application for an order under this Part for the payment of money may be made:
(a) by the person to whom the money is payable, or
(b) with the written consent and on behalf of that person - by an inspector, by an officer of a Government Department or by an officer of an industrial organisation concerned in the industry to which the proceedings relate.
(2) A single application may be made by a person for 2 or more orders against the employer. A single application may also be made by an officer of an industrial organisation for orders against an employer on behalf of 2 or more persons.
(3) An application for an order may only be made if the money became due within the period of 6 years immediately before the application was made.
370 Making of order
(1) An industrial court may, on an application for an order under this Part, make such order as it considers just in the circumstances.
(2) An order may be made despite any smaller payment or any express or implied agreement to the contrary.
Note. An order under this section may also be made in connection with proceedings for a contravention of an industrial instrument (see section 358) or, in the case of a small claim, in connection with other proceedings before the Commission (see section 380).
371 Conciliation to be attempted before order made
(1) The industrial court is not to make an order under this Part until it has brought, or has used its best endeavours to bring, the parties to the application for the order to a settlement acceptable to those parties.
(2) If such a settlement is made, the industrial court is required to make an order that, to the extent authorised by this Act, gives effect to the terms of the settlement.
372 Order for interest
(1) An industrial court may order that there is to be included, in an amount ordered to be paid under this Part (except under section 368), interest at the prescribed rate on the whole or any part of that amount for the whole or any part of the period from when the amount became due to the date of the order.
(2) If, in relation to proceedings for such an order, the whole of the amount of money due (or any part of it) is paid before or without the order being made, the industrial court may order that interest is to be paid at the prescribed rate on the amount so paid for the whole or any part of the period from when the amount became due to the date of the payment.
(3) This section does not:
(a) authorise the charging of interest on interest, or
(b) authorise the charging of interest otherwise than by consent on any amount for the payment of which an order is made by consent.
(4) In this section, prescribed rate means the rate of interest prescribed for the time being for the purposes of section 101 of the Civil Procedure Act 2005.
373 Order for costs
In any proceedings under this Part, the industrial court may award costs to either party and assess the amount of those costs.
…
379 Small claims procedure
(1) A person who makes an application to an industrial court for an order under this Part may request that the application be dealt with under this section.
(2) An application that the industrial court decides to deal with under this section is called a small claims application.
(3) The maximum amount that the industrial court may order an employer to pay on a small claims application in respect of any one employee is:
(a) except as provided by paragraph (b) - $10,000, or
(b) if some other amount is prescribed by the regulations for the purposes of this section - that other amount.
(4) The industrial court is not bound by the rules of evidence when dealing with a small claims application, but may inform itself of any matter in such manner as the court thinks fit.
(5) A party to proceedings on a small claims application may be represented by an agent, but is not entitled to be represented by an agent who is an Australian legal practitioner unless the industrial court so approves. That approval is not to be given unless:
(a) all parties to the proceedings agree, and
(b) the industrial court is satisfied that the parties (other than the party who applies for approval) or any of them will not be disadvantaged.
(6) The approval of the industrial court to be represented by an Australian legal practitioner is not required if the practitioner:
(a) represents a corporation and is an officer of the corporation within the meaning of the Corporations Act 2001 of the Commonwealth, or
(b) represents an owners corporation constituted under the Strata Schemes Management Act 1996 and is one of the proprietors or lessees constituting the owners corporation, or
(c) represents a member of an industrial organisation and is an officer or employee of the organisation, or
(d) represents a member of a State peak council and is an officer or employee of that council.
(7) The approval of the industrial court to be represented by an Australian legal practitioner may be given subject to such conditions as the court considers reasonable to ensure that any other party to the proceedings is not disadvantaged by the practitioner appearing in the proceedings.
(8) A contravention of subsections (5)-(7) does not invalidate the proceedings or any order made in those proceedings.
380 Small claims during other Commission hearings
(1) An industrial organisation may, during any proceedings before the Commission, make an application for an order under this Part and for the application to be dealt with under section 379 (Small claims procedure).
(2) Such an application may be made only if the order is sought against another party to the proceedings.
(3) The Commission must not deal with the matter until the party against whom the order is sought is given adequate prior notice of the application and an opportunity to be heard on the application.
(4) The Commission may deal with the matter even though it is not constituted as the Commission in Court Session.
(5) The Commission may, instead of dealing with the matter, remit it to an industrial court constituted by an Industrial Magistrate for determination.
(6) An order made in accordance with this section is to be made separately from any other order in the proceedings.
(7) This section is not to be construed as excluding an application for an order being made in respect of a former employee.
[7]
Applicant
Mr T M Ower, counsel for the applicant, made oral and written submissions which, when taken together, may be summarised as follows:
[8]
Entitlement to the recovery of money under Pt 2 of Ch 7 of the IR Act
1. The present application properly invoked the jurisdiction of the Court (albeit framed as recovery of money payable rather than as a dispute determination).
2. The referral of a dispute, in the context of cl 10.7, means a dispute as to the entitlement of a police officer to receive a benefit. It does not mean an industrial dispute per se. No reference is made to Ch 3 of the IR Act in the Award. A referral for the purposes of cl 10.7 is, in fact, more akin to the appeal procedure under Ch 4 of the IR Act as it pertains to personal benefits and is consistent with the enforcement of the same. The clause should not be read as if the adjective "industrial" appeared before the term "dispute" such that the manner of referral to the Court is restricted to that under Ch 3 of the IR Act. Thus, for the purposes of cl 10.7 of the Award, the applicant referred the dispute as to benefit to the Court by his application under s 365 of the IR Act.
3. In any event, the respondent's ultimate decision to award an on duty payment was not, as he contended, informed by "additional and other evidence arising as part of the WCC process". Rather, it was open to the respondent, on the evidence before him in mid-2012, to determine that the applicant was entitled to an on duty payment. In fact, the only medical evidence before this Court pre-dated the filing of these proceedings and supported the (now accepted) contention that the applicant's injury occurred on duty.
4. In that respect, the respondent was able to come to the correct decision as to entitlements under the Award without a finding of on duty injury being made by the WCC (see Commissioner of Police).
5. The terms of the respondent's determination in July 2014 acknowledged that the previous decision was wrong and that the applicant was entitled to the difference between the off duty and on duty payments.
6. Further, the respondent raised the question of a technical defect for the first time on 22 July 2014 (after the applicant's entitlement to an on duty payment had been accepted). The respondent previously consented to the matter being set down for conciliation which he knew would increase costs (this submission was in reference to the conciliation conferences which were scheduled but subsequently vacated). The respondent cannot, therefore, have the benefit of actively delaying the proceedings only to later seek to deprive the applicant of interest and costs largely caused by that delay.
7. Given that the only outstanding issue in the present proceedings concerned interest and costs, it was unconscionable for the respondent to raise the alleged technical difficulty at this juncture (when the applicant was prevented from rectifying any defect). If the respondent had raised the issue at a more appropriate time, the applicant could have sought declaratory relief pursuant to s 154 of the IR Act. In those circumstances, the respondent is estopped by his conduct in accepting the validity of the present proceedings up until "the point of paying the benefit sought in the pleadings". The applicant's submission as to estoppel was not further developed in argument.
8. Since the principal relief sought was conceded, the respondent had, in effect, accepted that the higher on duty payment should have been provided some two years earlier. Interest should be awarded to compensate the applicant for loss "by reason of being kept out of his money during the relevant period" while the respondent retained access to the benefit of his money (see MPB (SA) Pty Ltd v Gogic (1991) 171 CLR 657 ('Gogic') and Grincelis v House (2000) 201 CLR 321 ('Grincelis')).
9. There was no need to inquire further to ascertain whether interest was payable as, following the resolution of the primary claim, any procedural or technical defect with the present application was no longer an issue for the Court. The applicant relied on Grincelis in this respect, although no precise citation was provided in his written submissions (The authority would not seem to stand for this contention).
10. The applicant was not required to demonstrate any delinquency on the part of the respondent in order to be awarded interest.
11. As to costs, the Court had the power to award costs at its discretion pursuant to s 373 of the IR Act.
12. The applicant was entitled to make the subject application which was concluded by terms favourable to him. Thus, he seeks the "usual benefit of a costs order which flows from being successful". There was no reason to depart from that approach in the present proceedings.
13. In the event that, contrary to the above submissions, the Court accepted the respondent's contentions as to the alleged technical deficiency of the present proceedings, it would be unjust to make an adverse costs order against the applicant in the circumstances of this matter particularly because, as noted above, at no time did the respondent contend that these proceedings were improperly brought or should be struck out.
14. Considerations as to the assessment of costs, as opposed to the order itself, were not relevant to the present proceedings. In that respect, whether costs should be recovered for the period during which the parties jointly awaited the outcome of the WCC proceedings would be a matter for later assessment.
[9]
Respondent
Ms D Dinnen, counsel for the respondent, made oral and written submissions which, when taken together, may be summarised as follows:
[10]
Entitlement to the recovery of money under Pt 2 of Ch 7 of the IR Act
1. The applicant was not "entitled" to seek interest or costs because he commenced recovery proceedings prior to the determination of the referral of a dispute under cl 10.7 of the Award. It was not until "the dispute" referred under cl 10.7 was determined under Ch 3 of the IR Act that "the amount" (the on duty benefit) "became due and owing" to the applicant. Recovery proceedings under Ch 7 of that Act were not available until the amount was due in consequence of a determination.
2. Further, as no amount was payable until the respondent determined to provide the applicant with an on duty benefit or a determination was made in his favour pursuant to a referral under cl 10.7 of the Award, he was not entitled to recover interest.
3. Thus, the applicant's failure to meet the requirements of cl 10.7 precluded him from accessing orders which may have flowed had a favourable determination been made in that regard.
4. When pressed about the original assessment made by the respondent, it was submitted that it did not represent an adverse determination as to an on duty payment but simply an assessment that the applicant was entitled to an off duty payment and that "no on duty payment was made".
5. As to the construction of cl 10.7 of the Award:
1. Upon authority, the Award should be interpreted "by its language, in its Award context and in the context of its particular industrial usage" (see Amcor Limited v Construction, Forestry, Mining and Energy Union and Others [2005] HCA 10; (2005) 222 CLR 241 at [2]; Kingmill Construction Pty Ltd T/A Thrifty Car Rental v Federated Clerks' Union of Australia, New South Wales Branch (2012) 106 IR 217 at [67] and Perisher Blue Pty Ltd and Others v Australian Workers' Union (1999) 91 IR 274 at 283 - 285). In the present matter, the language of cl 10.7 referred to a "dispute" which may be "referred… for determination". Thus, the provision expressly contemplated referral of disputes for determination by the Commission, not applications for recovery of money by the Court.
2. The terms used in cl 10.7 are long-standing, recognisable expressions in industrial law and award drafting. Those terms are used to provide a mechanism by which a dispute concerning award interpretation or application may be referred to the Commission (or, historically, its predecessors) for determination by way of its conciliation and arbitration mechanisms (presently outlined in Ch 3 of the IR Act). There is no provision for awarding interest or costs in relation to disputes brought pursuant to Ch 3 of the IR Act because it is not until the dispute is determined under that part that an amount may become due (and thereby available to be pursued in enforcement proceedings pursuant to Ch 7 of that Act).
3. The above analysis is confirmed by the use of the terms "dispute" and "recovery" elsewhere in the Award as follows:
1. Clause 12.1 referred to "disputes", specifically differentiating between the dispute resolution mechanism in the Award and "costly recovery proceedings".
2. Clause 12.5 provided as follows:
Any dispute arising under or regarding the application of this Award may be referred to the Industrial Relations Commission of New South Wales for determination. Neither party shall refer an industrial dispute under Chapter 3 of the Industrial Relations Act 1996 to the Industrial Relations Commission without first having given the respondent at least three business days' notice.
1. In accordance with the abovementioned rules of award interpretation, the first sentence of cl 12.5 needed to be read with the second sentence. Accordingly, the reference to a "referral of a dispute", as expressed in both cll 12.5 and 10.7, should be considered and read as the "referral of an industrial dispute under Chapter 3". Disputes under Ch 3 of the IR Act are plainly distinct from "enforcement" under Ch 7 by which an application for recovery of money may be made.
2. Clause 15.4 provided for the development of a review mechanism for "dealing with, and determining any dispute which may arise, so as to allow and provide for the speedy, efficient, and most cost effective means of resolving any such dispute". That provision was clearly intended to provide for alternative dispute resolution processes rather than formal court determinations, such as recovery proceedings.
1. Clause 10.7 of the Award should, therefore, be interpreted as concerning the referral of disputes pursuant to Ch 3 of the IR Act. In the absence of a determination of a dispute so brought, proceedings for the recovery of money were not available pursuant to Ch 7 of the IR Act.
1. The judgment in Commissioner v Police should be distinguished from the present matter as, although she did not pursue dispute resolution under Ch 3 of the IR Act, the police officer in those proceedings sought declaratory relief pursuant to s 154 of that Act after the resolution of WCC proceedings rather than immediately pursuing recovery proceedings under Pt 2 of Ch 7 of the Act (see also Hahn v Commissioner of Police [2014] NSWIRComm 13). In such matters, a declaration was required before the applicant was due any money for recovery in satisfaction of the requirement of a determination that money was owed.
2. As to interest:
1. The respondent relied upon s 372 of the IR Act, referring, in particular, to both ss 372(1) and 372(2) absent consideration of the distinction between those provisions. (However, as I will discuss, it may be noted that the relevant provision in the present proceedings is s 372(2) of the IR Act.);
2. As an order of interest made in relation to an application for recovery of money under s 372 of the IR Act is only available "from when the amount became due to the date of the order", the applicant could not recover interest prior to a determination by the respondent to pay him an on duty benefit (given that no reference was instituted under cl 10.7). The interest may only run until the time that payment was made to the applicant. Particulars of those contentions follow.
3. The respondent initially could not be satisfied on the evidence before him that the applicant was entitled to an on duty payment. His discretion to award such a payment may only be exercised once he considers that the applicant has met the eligibility requirement. Thus, the respondent awarded an off duty payment pursuant to cl 9.4 of the Award.
4. In that respect, the respondent did not have sufficient evidence to make an assessment until he received a copy of the sealed amended certification of consent orders from the WCC proceedings on 23 April 2014. From that time until 21 July 2014 the respondent was "actively engaged in discharging his statutory obligation of determining the nature and quantum of the applicant's claim". A final determination that the applicant's injury could be defined as 'on duty' for the purposes of the Award was made on 15 July 2014. On 21 July 2014, as noted above, the respondent paid the difference between that determination and the earlier compensation to the applicant (being $185,260.82). There was no undue delay in that payment.
5. Thus, the earliest date upon which the amount of interest "became due" was 15 July 2014 since no final determination as to the applicant's eligibility for, or the precise quantum of, an on duty payment had been made prior to that time. No money could be due until that determination was made. The Court would have the discretion, therefore, to award interest for the period of 15 July 2014 to 21 July 2014 (which amounted to $197.94).
1. As to costs:
1. In consequence of the manner in which these proceedings were conducted, the applicant was not entitled to costs.
[11]
Discretionary Considerations
1. To the extent that the discretion to award interest is available in the present proceedings, the Court should not exercise that discretion to award interest for the following reasons:
1. The purpose of interest is to place the employee in a position where he has not suffered by the employer's default and, correspondingly, to ensure that the employer does not benefit from failing to observe the conditions of an award: Kenneth Frank Hesling v Kellys Airport Express [1999] NSWCIMC 112.
2. The discretion is generally exercised when there has been a wrongful denial of a claim or a miscalculation of the same: see, for example, Mandy Knight v First State Super FSS Trustee Corporation [2004] NSWIRComm 363.
3. There was no default or non-observance of the conditions of the Award by the employer in this matter, nor was there a wrongful denial of a claim. The respondent's decision to award an off duty payment was not in error. His later decision to award an on duty payment occurred in light of the "additional medical and other evidence arising" from the WCC proceedings (which "had not necessarily been provided" to the respondent previously). Upon the basis of that decision, the applicant became eligible for an on duty payment, at which time the respondent took steps to make that payment. The applicant was not being kept from his money in the meantime as it was not, for present purposes, 'his money'.
4. The period between the off duty and on duty payments was extended as "the parties consented to the various adjournments of the proceedings pending the resolution of the WCC proceedings".
5. Further, the applicant had the benefit of the off duty payment during that period.
1. As a matter of discretion the Court should refuse costs for the following reasons:
1. The Court has a discretionary power to order costs under s 373 of the IR Act. Generally speaking, costs follow the event: Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 at 542-543. In this case, as there was no 'event' per se (since the proceedings settled without contest), the Court should not exercise that discretion.
2. Moreover, the present proceedings were commenced prematurely. Commencing proceedings in September 2012 for the recovery of a benefit which, upon the respondent's submissions, was not payable until July 2014 meant that the proceedings were, inevitably, adjourned on a number of occasions. Those adjournments occurred due to the ongoing WCC proceedings, by which the applicant's injury was ultimately classified as on duty (and he became eligible for an on duty payment). At that time, the correct benefit would have been paid to the applicant, regardless of these proceedings.
3. Further, the premature commencement of these proceedings and the conduct of the applicant's representatives would enable the respondent to apply for costs against the applicant (although, as earlier noted, he did not seek costs save for the day that the question as to costs and interest was set down for hearing).
4. Finally, the objects of the IR Act relating to the cheap and efficient resolution of matters should weigh towards the discretion to order costs not being exercised in the present matter, lest a precedent be set that proceedings against the respondent should be brought before the nature of the benefit payable is resolved.
[12]
The Implications of Clause 10.7 of the Award
The common foundation underpinning the respondent's submissions as to the scope for recovery proceedings and claims for interest and costs under Pt 2 of Ch 7 of the IR Act was a contention that the applicant was precluded from the relief sought in these proceedings (or, in the case of interest, confined to a claim only for a very small period of time) because the entitlement to a benefit for an on duty injury under the Award did not crystallise until the respondent determined the applicant should receive an on duty benefit or a determination was made to that effect under cl 10.7.
Without rehearsing the submissions of the parties earlier set out in this judgment, it may be observed, in summary, that there are two components to the respondent's contentions in that respect as follows:
1. Contrary to the submissions for the applicant, an application for recovery of monies under Pt 2 of Ch 7 of the Act does not constitute the referral to the Commission for determination a dispute as to the entitlement of a police officer to receive a benefit pursuant to cl 10.7 of the Award. That procedure may only be satisfied by means of a notification of an industrial dispute under Ch 3 of the Act; and
2. The applicant was not entitled to the benefit payable by the NSWPF to a police officer who had suffered an on duty injury resulting in a partial and permanent disability, over benefits otherwise conferred for an off duty injury, unless and until proceedings brought under cl 10.7 resulted in a determination in favour of the applicant or, as ultimately transpired, the respondent made an affirmative assessment that the applicant was entitled to an on duty benefit. Similarly, in the absence of a determination arising from the proceedings under cl 10.7, an order for interest could not be granted under s 372 of the IR Act with respect to any period of time earlier than when the Commissioner determined that an on duty payment should be made as it was only at this time the applicant became entitled to the benefit.
On the other hand, the applicant contended that the present proceedings in and of themselves represented satisfaction of the requirements of cl 10.7 and, hence, no disentitlement arises. Further, it was submitted that the respondent, by his conduct, accepted the course taken by the applicant in the proceedings and, in consequence, was precluded from claiming that the proceedings were barred.
[13]
Are the provisions of cl 10.7 of the Award complied with by the bringing of recovery of monies proceedings under Pt 2 of Ch 7 of the Act?
This question involves the construction of cl 10.7 of the Award. The principles of the interpretation of awards was given extensive consideration by the Industrial Court in Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Secretary of the Treasury [2014] NSWIRComm 23; 87 NSWLR 41 at [101] to [153] ('PSA v SoT'). That discussion of the relevant principles was given approval by a Full Bench of the Commission in State Transit Authority of New South Wales v Australian Rail, Tram and Bus Industry Union, New South Wales Branch, Bus and Tram Division [2014] NSWIRComm 41 at [31] ('STA'). I adopt, for the purposes of this judgment, the principles in PSA v SoT, and, in particular, [115], [132], [138], [143] and [147] thereof.
The ordinary grammatical meaning of the word "dispute" when used in the phrase "any dispute as to the entitlement of a police officer" in cl 10.7 is a quarrel, disagreement or contest. The word is only qualified in the clause by the subject of the second sentence of cl 10.7, namely, "the entitlement of a police officer to receive a benefit under [the] award (whether lump sum entitlement or otherwise)".
However, it does not follow, when the provision is properly construed in light of the aforementioned principles of statutory construction, that the mechanism provided by cl 10.7 to resolve such a dispute is, or may include, in substance, proceedings under Pt 2 of Ch 7 of the Act or that the procedure for determination of the dispute is akin to the appeal procedures in Ch 4 of the Act and, in particular, s 153(1)(h).
When read in isolation from the immediately surrounding words of cl 10.7 (and other parts of the Award), the expression "Industrial Relations Commission of NSW" might be construed (given the clause forms part of an instrument made under the IR Act) as a reference to the entity established under s 145(1) of the IR Act. Absent the restraint of which I speak, those words, when used in that statutory context, could theoretically include the Commission in Court Session (see s 151(1)) and cl 10.7 might be taken as incorporating a reference of a dispute for adjudication by that Court (given the broad meaning of 'dispute' to which I have referred). However, that construction, which impliedly arises from the respondent's submissions, involves an impermissible approach to statutory interpretation by omitting reference to the whole of the instrument under construction and ignoring the full text of the provision and the surrounding context. The proper construction of the provision results, in my view, in a comfortable conclusion that the clause does not concern, as I have stated, the reference of proceedings to the Industrial Court pursuant to Pt 2 of Ch 7 of the IR Act.
[14]
Was an action under Pt 2 of Ch 7 available to the applicant with respect to on duty benefits, and in particular, were orders under that Part dependent upon an assessment by the respondent as to eligibility for an on duty payment or a determination made pursuant to cl 10.7?
The applicant brings these proceedings under s 365 of the IR Act. That provision provides for the recovery of monies required to be paid to an employee under an industrial instrument, but dictates that an order may only be made for an employer to "pay any amount payable under an instrument". Thus, an application may only be brought when an obligation for payment exists under the industrial instrument. The right to bring the application accrues only from the time that the employer becomes liable for payment (assuming that the other conditions of the provision are met such as the amount not having been paid).
The respondent contended that no obligation arose to make an on duty payment with respect to partial and permanent disability unless and until he made an assessment that the applicant was entitled to that benefit or a determination of that kind was made in a dispute referred to the Commission under cl 10.7 of the Award.
The corollary of this proposition was the respondent's contention that no order for interest may be made under s 372 of the IR Act prior to the acceptance by the respondent of an on duty payment because no amount of the requisite kind had become due for the purposes of that provision until that time (as no determination was sought pursuant to cl 10.7).
In this latter proposition the respondent relied upon the provisions of ss 372(1) and 372(2) of the IR Act. However, s 372(1) concerns interest calculated between when an amount became due and the date of an order. No order has been made in this case because of the settlement of the substantive claim. As such, the particular provision relevant for consideration is s 372(2) which concerns interest payable for a period between when an amount is due and the date of the payment of such an amount before or without an order being made. Nothing turns on this distinction, however, because both provisions operate with respect to, inter alia, an amount of money being due having regard to the provisions of Pt 2 of Ch 7 (which underpins the respondent's contention).
It might be mentioned, at this interlude, that the applicant drew attention to the provisions of s 100 of the Civil Procedure Act 2005 ('CP Act') in support of his application for interest. Whilst there is no material inconsistency between that provision and s 372 of the IR Act, I do not consider the provision operates in the present proceedings.
[15]
Interest
The parties placed reliance upon authorities which indicated that the Court was possessed of a broad discretion to award interest. However, the proper starting point for this discussion lies within the IR Act itself.
As earlier noted, the provisions of Pt 2 of Ch 7 governing the question of interest in the present matter is s 372(2). By that provision, the Court is invested with a wide discretion as to the approach it may adopt to any award of interest. Subsection 372(2) provides that if, in relation to proceedings for such an order, "the whole of the amount of money due (or any part of it) is paid before or without the order being made", the Court may order that interest be paid "on the amount so paid for the whole or any part of the period from when the amount became due to the date of the payment". The use of the word "may", in this context, conveys a broad discretion (see the discussion by Basten JA in Khoury at [38]). For instance, the provision permits but does not direct the grant of interest for the whole or part of the period between an amount becoming due and the making of a payment.
The discretion must, however, be expressed judicially: Bennett v Jones [1977] 2 NSWLR 355 at 369 ('Bennett'). This includes the requirement to follow established law and principle: Metro Meat Ltd v Werlick (Supreme Court (South Australia), 10 November 1992, unrep) per Olsson J ('Metro Meat'); see, in the context of s 106 of the IR Act, King v State Bank of New South Wales (No 3) [2003] NSWIRComm 308 at [8].
The overriding principle is that the discretion to award interest must be exercised in each case having regard to what is fair and just between the parties: Bennett at 369 and Simonius Vischer & Co v Holt & Thompson (1979) 2 NSWLR 322 ('Simonius Vischer') at 338. The function of an award of interest is to compensate an applicant for the loss or detriment which he or she has suffered for being kept out of his or her money for a relevant period: see Gogic at 663; Grincelis at [16]; and Kalls Enterprises Pty Ltd (in Liq) v Baloglow (No 3) [2007] NSWCA 298 at [10] ('Kalls'). However, s 372(2) of the IR Act may serve not only that purpose but also the purpose of encouraging early resolution of litigation, particularly because the provision concerns claims for "sums certain" in relation to proceedings for the recovery of money under Pt 2 of Ch 7 of the IR Act: Grincelis at [16].
[16]
Costs
Section 4 of the CP Act provides that Div 2 of Pt 7 of that Act concerning costs in proceedings applies to these proceedings. Schedule 1 of the CP Act applies to all civil proceedings (of which the present matter is one) before this Court (see s 4(1)) and no exclusion arises under the UCPR (there is neither an exclusion of the provisions of the CP Act nor Div 1 of Pt 45 of the UCPR concerning entitlements as to costs). Section 98(1) of the CP Act provides a source of power for a court to award costs as well as conferring a discretion in that respect. That provision is made subject to any other Act.
Part 2 of Ch 7 of the IR Act confers a broad power on the Court to order costs (s 373). Further, s 181(1) of the Act provides a power and discretion in this Court as to costs in very similar terms to s 98(1) of the CP Act.
It is unnecessary to finally resolve the question as to which statutory regime applies in this matter given the similarity in the powers conferred (the minor difference, for present purposes, is that s 181(1)(c) omits the reference in s 98(1) of the CP Act to a "full power" to determine "to whom" costs are to be paid). (It would seem that, upon the principles of statutory construction, the words "any other Act" in s 181(1) would result in that provision giving way to the later CP Act in proceedings before this Court.)
It follows that there exists a statutory conferral of jurisdiction to award costs upon this Court which incorporates a full power to determine by whom, to whom and to what extent costs are to be paid.
Section 98(1)(a) of the CP Act makes explicit that costs are in the discretion of the Court (as does s 181(1)(b) of the IR Act). That discretion must be exercised judicially (see Hughes v Western Australian Cricket Association (Inc.) and Ors (1986) ATPR 40-676 at 48, 136 (per Toohey J) ('Hughes')) and is governed by the principle that the award of costs must be undertaken in such a manner as to do justice to the parties to the proceedings having regard to the particular circumstances of the case, the parties' conduct and the ultimate result. Shortly stated, any order as to costs must be fair and just between the parties: Howitt v Alexander & Sons [1948] SC 154 at 159 and Earnshaw v Loy (No 2) [1959] VR 252 at 253.
The purpose and policy underpinning the award of costs is clearly stated in the judgment of McHugh J in Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 ('Oshlack') as follows (at 97):
The expression the "usual order as to costs" embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party [Latoudis (v Casey) (1990) 170 CLR 534 at 543 per Mason CJ, at 562-563 per Toohey J, at 566-567 per McHugh J; Cachia v Hanes (1994) 179 CLR 403 at 410 per Mason CJ, Brennan, Deane, Dawson and McHugh JJ]. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation.
As a matter of policy, one beneficial by-product of this compensatory purpose may well be to instil in a party contemplating commencing, or defending, litigation a sober realisation of the potential financial expense involved. Large scale disregard of the principle of the usual order as to costs would inevitably lead to an increase in litigation with an increased, and often unnecessary, burden on the scarce resources of the publicly funded system of justice.
[17]
conclusions and directions
I shall grant the applicant's claim for interest on the difference between the off duty payment and on duty payment for the periods between 16 August and 18 November 2012 and 7 March to 21 July 2014. I refuse the application for interest for the period of 19 November 2012 to 6 March 2014. I will make no order as to costs.
The applicant shall file and serve draft orders reflecting the terms of this judgment within 7 days after the publication of this judgment. That approach is taken upon the premise that there is no issue between the parties as to calculation of interest which hitherto has not been the subject of dispute in the present proceedings. In the event that there is an issue as to the draft orders filed by the applicant in that respect, the applicant shall file and serve submissions with respect to the same at the time of the filing of draft orders and the respondent will have a further 7 days in which to respond. In the absence of the receipt of any submission by the respondent within that period, the Court will make the orders proposed by the applicant, provided that they are in the appropriate form, either administratively in Chambers or by formally making the orders. Alternatively, if a submission is received from the respondent within the nominated period, the matter will be listed for a short hearing thereafter.
[18]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 20 August 2015
Interest granted on the difference between off-duty and on-duty payments for the periods 16 August to 18 November 2012 and 7 March to 21 July 2014; interest refused for the period 19 November 2012 to 6 March 2014; no order as to costs; applicant directed to file draft orders within 7 days with provision for short further hearing if calculation disputed.
On 24 September 2012, the applicant filed an application for recovery of money pursuant to s 365 of the Industrial Relations Act 1996 ('IR Act'). By that application, the applicant sought to recover the difference between the off duty payment he received and the on duty amount he contended was payable to him under the Award. The amount sought by that application was $161,618.76 plus interest and costs.
Around that time, the applicant also commenced proceedings in the Workers Compensation Commission ('WCC') seeking "weekly benefits compensation" and compensation for medical expenses under Pt 3 of the Workers Compensation Act 1987 from the date of his discharge on an ongoing basis.
The present proceedings were listed for directions before the Court several times between October 2012 and December 2013. On each occasion an adjournment was moved by the applicant or respondent by consent and the proceedings were re-listed at times coinciding with an expected outcome of the WCC proceedings (in particular, on 2 October 2012 the respondent sought an adjournment to which the applicant did not object; on 24 April 2013 and 20 September 2013 an adjournment was sought by the applicant and consented to by the respondent; on 13 June 2013 the respondent appeared on behalf of both parties and sought an adjournment by consent and on 2 December 2013 the applicant appeared and sought an adjournment in the same manner). The parties adopted that course since similar issues arose in both sets of proceedings, namely, a disagreement over the connection between the applicant's injury and his employment and a consequential dispute about his entitlements. It was clear, in that respect, that the parties expected that the outcome of the WCC proceedings, and, in particular, the conclusion as to whether the applicant was injured during the course of employment, would be central to the resolution of their dispute as to the correct benefit to be paid to him for partial and permanent disability under the Award (indeed, in some circumstances, the outcome may be binding on the respondent: Commissioner of Police v Police Association of NSW [2010] NSWIRComm 188; (2010) 200 IR 93 at [102]-[104] ('Commissioner v Police')).
The WCC proceedings were ultimately concluded by the making of consent orders on 6 March 2014. Those orders reflected an agreement by which the respondent accepted liability with respect to the applicant's injury and paid compensation by weekly benefits on an ongoing basis for relevant periods. Specifically, the applicant was to be paid weekly benefits for the period 11 February 2012 to 6 March 2014 (save for the period from 11 February 2012 to 16 August 2012 during which time the applicant was in receipt of wages) which was calculated at $60,770.98. From 7 March 2014 the respondent was to pay weekly benefits compensation to the applicant at a rate of $452.60 per week on a voluntary basis and continuing. The respondent also agreed to pay up to $10,000 for certain expenses relating to the applicant's injury upon the production of the requisite receipts/accounts.
By way of letter dated 25 June 2014, Ms Leigh Liebowitz, solicitor for the respondent, informed the applicant that the respondent had determined to make an on duty payment in respect of the applicant's injury (although the precise quantum of that payment was yet to be determined).
In July 2014 the respondent informed the applicant, by an undated letter to which a document entitled "Calculation of an On duty PPD Benefit" was annexed, of his determination that the applicant was entitled to an on duty payment pursuant to the Award in the amount of $331,712.06 ('the on duty letter'). In the result, on 21 July 2014, an additional $185,260.82 was paid to the applicant (being the difference between the earlier off duty payment and the amount of the on duty payment). The respondent again noted that any dispute arising under or regarding the application of the Award may be referred to the Commission.
A letter confirming that payment was sent to the applicant by Ms Liebowitz on 22 July 2014. In that letter, Ms Liebowitz noted that the respondent did not accept the applicant's claim for interest and costs.
The quantum of that payment was accepted by the applicant as satisfaction of his substantive claim but he pursued the outstanding issue as to costs and interest in these proceedings. Those issues were the subject of hearing on 31 October 2015 and judgment was reserved on that day.
However, the matter was resumed in order to accommodate the compulsory conciliation required by the IR Act under s 371. After consultation with counsel for the parties, that process was undertaken in a conciliation conference convened by Kite AJ on 17 April 2015. The parties were unable to resolve the matter on that occasion and a certificate of attempted conciliation was issued by his Honour on 1 May 2015.
Three considerations are worthy of note in relation to those unusual circumstances.
First, by s 371 of the IR Act, the Court was required to endeavour to bring about a settlement (hereafter referred to as 'conciliation'), irrespective of the resolution of the substantive claim, if the parties continued to press for orders under Pt 2 of Ch 7 of that Act. Orders as to interest or costs are caught, in my view, by the opening words of s 371(1), namely, "The Industrial Court is not to make an order under this Part…". The power of the Court to make orders for interest and costs resides under Pt 2 of Ch 7 in ss 372 and 373 respectively.
Secondly, s 371 requires conciliation as a statutory precursor to the making of any such orders: Dlugolecka v Todber Pty Ltd t/as Leisure Lea Gardens Retirement Village [2008] NSWIRComm 113; (2008) 174 IR 73. The provision was not met, as occurred in this case, by conciliation conferences being fixed (on 2 July and 8 August 2014) but abandoned in the light of an impending settlement arising out of the resolution of the WCC proceedings.
Thirdly, there was no statutory bar to conciliation occurring at that late stage of proceedings, provided orders were not made by the Court. No judgment was perfected and there was no requirement to reopen the proceedings as the decision was reserved and no orders had been made: Kim Hollingsworth v Commissioner of Police [2007] NSWIRComm 7 at [35]. Section 371 only required that no order be made until conciliation had been undertaken by the Court. No order as contemplated by s 371 had been made in these proceedings. (That said, in the ordinary course, conciliation should be undertaken at the commencement of proceedings.)
Conciliation having failed, this judgment then concerns the issues reserved for judgment, namely, the claims for interest and costs advanced by the applicant and the respondent's claim for costs associated with the hearing of those matters on 31 October 2014 (it should be noted that the respondent did not seek costs with respect to earlier stages of these proceedings).
Ultimately, the applicant sought an order for payment of interest in the sum of $26,267.71 and costs as agreed or assessed. The respondent did not specify the terms of the costs order he sought in the proceedings.
Clause 10 is in the following terms:
10. Insurance and Assessment of Entitlement to Benefits
10.1 The Association acknowledges that NSW Police will establish, with First State Super, an insurance scheme to pay the lump sum benefits prescribed by clauses 7 and 8 of this Award (the First State Super insurance scheme).
10.2 NSW Police shall deduct the contributions that police officers are required or elect to make pursuant to this clause from their salaries.
10.3 NSW Police shall contribute to First State Super such sum as required to meet the cost of the insurance premiums to fund the First State Super insurance scheme.
10.4 NSW Police shall meet the cost of benefits payable under this Award for Partial and Permanent Disability.
10.5 NSW Police will also meet the entitlement pursuant to Clause 7 and Clause 8 for death and total and permanent disablement benefits in the following circumstances:
10.5.1 Injuries or death in the period 23 June 2005 to 1 July 2005;
10.5.2 Members covered by the Transitional Arrangements in Clause 4;
10.5.3 Where a police officer suffers an on-duty injury which is recognized for the purposes of workers compensation law and where such injury is later aggravated or exacerbated off-duty and such injury is not covered by the insurer as being an on-duty injury; and
10.5.4 On duty overseas deployments to countries not covered by the insurer, pursuant to Clause 7 only.
10.6 Members can only receive one benefit either a "partial and permanent disability benefit" or "total and permanent disablement benefit". Receiving a "partial and permanent disability benefit" or "total and permanent disablement benefit" discharges the liability of the alternative party for the relevant benefit payable. If a Special Risk Benefit under section 216 of the Police Act 1990 is payable to a police officer that officer is not entitled to a benefit under this award. Police officers will be required, prior to the receipt of a benefit, to enter into a Deed of Repayment that is in terms agreed between the Parties.
10.7 Entitlement to the benefits to be provided by NSW Police pursuant to this Award shall be assessed by NSW Police. Any dispute as to the entitlement of a police officer to receive a benefit under the terms of this award (whether lump sum entitlement or otherwise) may be referred to the Industrial Relations Commission of New South Wales for determination.
10.8 Entitlement to receive a lump sum benefit from the First State Super insurance scheme shall be assessed in accordance with the terms of the First State Super Trust Deed and Policy Document. Any dispute will be assessed in accordance with the First State Super Disputes and Complaints procedure. This includes if unresolved by internal processes, any dispute as to entitlement to receive a lump sum payment from the First State Super insurance scheme the matter may be referred to the Industrial Relations Commission of NSW for final determination.
10.9 Lump sum benefits payable under this Award shall be calculated utilising the salary as defined in this Award as at the date of disablement for a total and permanent disablement benefit or the police officer's last day of service for a partial and permanent disability benefit. In the case of police officers who have worked a period of their service on a part time basis, the benefits will be calculated by multiplying their full time equivalent salary by a part time ratio. This ratio shall be calculated by dividing the full time equivalent service by the officer's actual service since 23 June 2005.
10.10 A police officer otherwise entitled to benefits provided by this Award shall not be entitled to such benefits in relation to an injury (or consequent disability) directly caused by the taking of disciplinary action pursuant to section 181D or section 80 of the Police Act 1990, as amended, that may lead to removal from NSW Police. However, if:
10.10.1 the initiation of or conduct of such disciplinary action by NSW Police was not reasonable; or
10.10.2 the police officer is not ultimately removed from NSW Police as a consequence of the disciplinary action, then the police officer shall continue to be eligible to claim benefits for such injury.
Part D of the Award prescribes grievance mechanisms and a leave reserved provision with respect to cl 10.7. Clause 12 provides for a grievance mechanism as follows:
12. Grievance Mechanism
12.1 The objective of the dispute and grievance clause is the efficient and cost effective resolution of disputes over the operation of the Award, and the avoidance of costly recovery proceedings where appropriate.
12.2 Where a dispute or grievance arises in relation to the operation of the Award the police officer, Association, or NSW Police will notify the other Party in writing of the dispute or grievance (including the identification of the remedy sought) and request an urgent meeting to discuss the dispute or grievance.
12.3 A meeting of the NSW Police, the Association and the police officer (or their representative) should be held within five business days wherever reasonably practicable.
12.4 At the conclusion of the meeting, the respondent/s to the notification shall provide a written response to the grievance, including the reasons for not implementing the remedy sought by the notifier.
12.5 Any dispute arising under or regarding the application of this Award may be referred to the Industrial Relations Commission of New South Wales for determination. Neither party shall refer an industrial dispute under Chapter 3 of the Industrial Relations Act 1996 to the Industrial Relations Commission without first having given the respondent at least three business days' notice.
12.6 Nothing in this clause shall operate to prevent a party availing themselves of any rights available under the Industrial Relations Act 1996 other than as reflected in Clause 12.5.
…
Clause 15.4 concerns cl 10.7. That provision is in the following terms:
15. Leave Reserved
15.1 Leave is Reserved to the Parties Generally to Apply as They May be Advised in Respect of Any Adjustment under Commonwealth Legislation Governing Superannuation which Alters Preservation Rights at Age 60 Or in the Event that Any Legislative Change Necessary for the Implementation of This Award Does Not Occur.
15.2 Leave is reserved to the parties generally to apply as they may be advised in respect to the implementation of a compulsory Health and Fitness Program applying to all police officers with no distinction based upon rank.
15.3 Leave is reserved to the parties to apply as they may with respect to coverage where police officers contribute to NSW Government subsidised superannuation schemes which includes commensurate levels of benefits for death and permanent disability.
15.4 Leave is reserved to the parties to apply as they may with respect to the development of a review mechanism where for the purpose of clause 10.7 a dispute arises as to the entitlement of a police officer. Such a review mechanism will require the formulation and adoption of any procedures and mechanisms considered appropriate for dealing with, and determining any dispute which may arise, so as to allow and provide for the speedy, efficient, and most cost effective means of resolving any such dispute.
The following provisions of Pt 1 of Ch 4 of the IR Act are also relevant:
145 Establishment of Commission
(1) There is established by this Act the Industrial Relations Commission of New South Wales.
(2) The Commission is to have a seal and the seal is to be judicially noticed.
146 General functions of Commission
(1) The Commission has the following functions:
(a) setting remuneration and other conditions of employment,
(b) resolving industrial disputes,
(c) hearing and determining other industrial matters,
(d) inquiring into, and reporting on, any industrial or other matter referred to it by the Minister,
(e) functions conferred on it by this or any other Act or law.
(2) The Commission must take into account the public interest in the exercise of its functions and, for that purpose, must have regard to:
(a) the objects of this Act, and
(b) the state of the economy of New South Wales and the likely effect of its decisions on that economy.
This subsection does not apply to proceedings before the Commission in Court Session that are criminal proceedings or that it determines are not appropriate.
Section 149 falls in Pt 2 of Ch 4. That provision is as follows:
149 Judicial members
(1) The Governor may appoint a Presidential Member of the Commission as a Member of the Commission in Court Session. The appointment may be made by the commission appointing the person as a member of the Commission or by subsequent commission under the public seal of the State.
(2) A person is not eligible to be appointed as a member of the Commission in Court Session unless the person is:
(a) a person who holds or has held a judicial office of this State or of the Commonwealth, another State or a Territory, or
(b) an Australian lawyer of at least 7 years' standing.
(3) A person appointed as a member of the Commission in Court Session is referred to in this Act as a judicial member of the Commission.
The following provisions of Pt 3 of Ch 4 are also relevant:
151 Judicial members to constitute Commission in Court Session
(1) The Commission in Court Session is the Commission constituted by one of the judicial members only for the purposes of exercising the functions that are conferred or imposed on the Commission in Court Session by or under this or any other Act or law.
(2) This section does not prevent the Commission from being constituted by judicial members when not exercising those functions.
152 Commission in Court Session superior court of record
(1) The Commission in Court Session is established by this Act as a superior court of record.
(2) For the purposes of Part 9 of the Constitution Act 1902, the Commission in Court Session is a court of equivalent status to the Supreme Court and the Land and Environment Court, and is of higher status than the courts referred to in section 52 (2) (b) and (c) of that Act.
Note. Part 9 of the Constitution Act 1902 is amended by Schedule 5 to this Act to extend that Part to members of the Commission in Court Session. That Part already applies to Judges of the Industrial Court. As a consequence of the abolition of the Industrial Court by this Act, that Part confers a right on the former Judges of that Court to be appointed to judicial office in a court of equivalent or higher status. The above provision ensures that the appointment of all Judges of the former Industrial Court as members of the Commission in Court Session (by Part 4 of Schedule 4 to this Act) satisfies the requirements of the Constitution Act 1902.
153 Jurisdiction of Commission in Court Session
(1) The following functions of the Commission are to be exercised only by the Commission in Court Session:
(a) proceedings for an offence taken before the Commission (including proceedings for contempt),
(b) proceedings for declarations of right under section 154,
(c) proceedings under Part 9 of Chapter 2 (Unfair contracts),
(d) proceedings under section 139 (Contravention of dispute order),
(e) proceedings under Parts 3, 4 and 5 of Chapter 5 (Registration and regulation of industrial organisations), other than Division 2 of Part 3 (Cancellation of registration) and Division 3 of Part 4 (Election of officers),
(f) proceedings under Part 1 of Chapter 7 (Breach of industrial instruments),
(g) proceedings for the recovery of money under Part 2 of Chapter 7 (other than small claims under section 380),
(h) proceedings on a superannuation appeal under section 88 of the Superannuation Administration Act 1996,
(i) (Repealed)
(j) proceedings on an appeal or case stated from an Industrial Magistrate or any other court,
(ja) proceedings under section 197B,
(jb) proceedings under section 23A of the Transport Appeal Boards Act 1980,
(k) any other proceedings that are, by this Act or any other Act, required to be taken before the Commission in Court Session.
(2)-(4) (Repealed)
154 Declaratory jurisdiction
(1) The Commission in Court Session may make binding declarations of right in relation to a matter in which the Commission (however constituted) has jurisdiction. The Commission in Court Session may do so, whether or not any consequential relief is or could be claimed.
(2) Proceedings before the Commission in Court Session are not open to objection on the ground that a declaration of right only is sought.
The dispute resolution functions of the Commission also require attention. Part 1 of Ch 3 relevantly contains the following provisions in that respect:
130 Notification of industrial dispute to Commission
(1) Any of the following may notify the Commission of an industrial dispute for the purpose of resolving the dispute:
(a) an industrial organisation of employees or employers,
(b) an employer who is or is likely to be affected by the dispute,
(c) a person who is or is likely to be the subject of a secondary boycott in connection with the dispute,
(d) a State peak council.
(2) The Commission may act on its own initiative to resolve an industrial dispute.
…
132 Compulsory conference
(1) For the purpose of resolving an industrial dispute, the Commission may convene a compulsory conference and require the attendance of any person whose presence the Commission considers would help in the resolution of the dispute.
(2) A compulsory conference is to be presided over by a member of the Commission.
(3) The Commission may confer with any person on any matter that may affect the resolution of an industrial dispute, without requiring the person to attend a compulsory conference.
Note. Section 165 provides that the Industrial Registrar may issue a summons for the purpose of any compulsory conference. Section 380 enables the Commission in the course of a compulsory conference to make an order for a small claim under Part 2 of Chapter 7 (Recovery of remuneration and other amounts) arising out of the industrial dispute.
133 Conciliation before arbitration
The Commission must first attempt to resolve an industrial dispute by conciliation.
…
136 Arbitration of dispute
(1) The Commission may, in arbitration proceedings, do any one or more of the following:
(a) make a recommendation or give a direction to the parties to the industrial dispute,
(b) make or vary an award under Part 1 of Chapter 2,
(c) make a dispute order under Part 2,
(d) make any other kind of order it is authorised to make (including an order made on an interim basis).
(2) Any such action may be taken by the Commission on its own initiative or on application by any person authorised to notify the Commission of the industrial dispute.
Finally, reference may also be made to the award making powers of the Commission and, in particular, ss 10 and 14 (which appear in Pt 1 of Ch 2) which provide as follows:
10 Commission may make awards
The Commission may make an award in accordance with this Act setting fair and reasonable conditions of employment for employees.
…
14 Mandatory dispute resolution procedures in awards
(1) An award is not to be made unless it contains procedures for the resolution of industrial disputes under the award (dispute resolution procedures).
(2) However, an award need not contain dispute resolution procedures if the Commission is satisfied that another specified award already does so.
(3) Dispute resolution procedures are to include procedures for:
(a) consultation at the workplace, and
(b) the involvement of relevant industrial organisations.
(4) Dispute resolution procedures in awards do not apply to employers who employ fewer than 20 employees, unless the award specifically applies those procedures to such an employer.
I propose to affirm the first component of the respondent's contentions as summarised in [39] above and to reject the second for the reasons which follow below.
The disposition of those issues leaves a question as to the exercise of the discretion reposed in the Court with respect to interest and costs. The respondent contended that, irrespective of an adverse determination as to the above contentions and, notwithstanding the settlement of the substantive claim in favour of the applicant, the Court should exercise its discretion to refuse interest and costs in the proceedings. A discussion as to those matters will follow reasons given for the conclusions enunciated in the immediately preceding paragraph.
Clause 10.7 also provides that any dispute as to the subject matter of the clause may be "referred" to the Industrial Relations Commission.
When used in conjunction with the object, the "Industrial Relations Commission of New South Wales", the verb "referred to" means hand over or submit for consideration or decision. In order for the applicant to make good his contention, it would be necessary to first construe the words "the Industrial Relations Commission of New South Wales" in this context as encompassing the Industrial Court of New South Wales, as proceedings under Ch 7 of the Act are exclusively within the jurisdiction of the Industrial Court (or the Local Court which is not presently relevant), save for small claims (see s 380(4)). That construction is, in my view, not available.
Whilst the Commission in Court Session is the Commission constituted by a judicial member, the distinction between the Commission and Industrial Court is clear under the Act both as to title and jurisdiction (see Pt 3 of Ch 4 of the Act, and in particular s 153(1); see also s 176). Whilst doubt has been cast upon whether the Commission and the Industrial Court are two distinct legal entities (see Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Director of Public Employment and Others [2012] HCA 58; (2012) 250 CLR 343 at [13] and [57] ("PSA v DPE")), it is clear that, if one body, the entity is "clothed with distinct legal characters according to its composition and functions" such that it may exercise, broadly speaking, on the one hand arbitral functions and on the other hand judicial functions (see PSA v DPE at [13]).
The phrase "referred to" is not consistent with the institution of proceedings for recovery of monies. The making of an award providing industrial parties to transfer a dispute arising under that award to the Industrial Court for determination is beyond the power of the Commission and, more particularly in terms of the present discussion, antithetical to the division of powers within the Commission between arbitral and judicial. Section 176(3) provides no exception in this respect. That provision provides that, when a matter arises in proceedings which are within the jurisdiction of the Industrial Court, the Commission may choose to deal with the matter as the Court, but only when the Commission is constituted by a judicial officer (and any member who is not a judicial officer does not take part in the proceedings - see s 176(3)(b)).
Section 153(1) provides no power in the Court to entertain a matter in the manner described in cl 10.7 (Mr Ower referred to subsection (h) which is plainly inapposite to the subject matter of cl 10.7).
Further, the words "recovery of monies" do not appear in cl 10.7, notwithstanding that the authors of the Award plainly recognised in cl 12.1 a distinction between dispute resolution proceedings and cost recovery proceedings. The expression "referred to [the Commission] for determination" does not fit comfortably with the exercise of the Court's powers to grant declaratory relief. A separate initiating process would be required to bring proceedings under s 154 of the Act. In any event, the applicant has not sought declaratory relief.
The referral contemplated in cl 10.7 is, however, consistent with the exercise of the Commission's non-judicial power and, in particular, the dispute resolution powers in Pt 1 of Ch 3.
It may be accepted, as the respondent submitted, that the terms of cl 10.7 are long standing, recognisable expressions in industrial law and award drafting used to provide a mechanism to resolve a dispute via the provisions of Pt 1 of Ch 3 of the Act. When the two sentences of cl 12.5 are read together, as they must be upon the proper approach to award interpretation, it is clear the drafters of the Award intended "referral" of a dispute, the subject of that clause, to be pursuant to Ch 3 of the Act. The expression "referral to the Industrial Relations Commission of New South Wales" in the final sentence of cl 12.5 must be understood as having the same meaning as the expression "refer an industrial dispute under Ch 3" of the Act in the second sentence; the latter merely adding a temporal restriction to the steps referred to in the first.
In the absence of some contrary indication, the use of the same language, in relevant proximity, in the Award dealing with expressly the same subject matter, that is, disputes arising under or regarding the application of the Award, should be taken as conveying the same meaning: Registrar of Titles (WA) v Franzon (1975) 132 CLR 611 at 618 per Mason J.
It was not argued by the parties, and, given the aforementioned analysis, strictly does not require resolution here, that cl 12 of the Award applies, in terms, to cl 10, and in particular cl 10.7. Clause 12.5 concerns, inter alia, a dispute arising in relation to the operation of the Award. As mentioned above, that last expression is wide enough to encompass a dispute as to the entitlement of a police officer to receive a benefit under the terms of the Award. That being so, and in the absence of some contrary indication (and there is none), the provisions of cl 10.7 and cl 12.5 should be read as constituting coincident obligations. That conclusion would not be defeated by the fact that there existed apparently overlapping or repetitive clauses in the Award as the Award should not be construed, upon the authorities earlier referred to, too strictly, with allowances being made for infelicities in drafting.
This construction of the provision is consistent with the statutory scheme of the IR Act. "Industrial dispute" is defined in the Dictionary to the Act (see Schedule 5) as a "dispute as to an industrial matter" thereby using the shorthand 'dispute' coextensively with the expression 'industrial dispute'. The expression "industrial matter" is provided a wide meaning in s 6 and includes the "rights" or "obligations" of employers. In any event, the Commission may, pursuant to s 175, determine any question concerning the interpretation, application or operation of the Award for the purpose of exercising its functions including those falling under Ch 3: STA at [154]. Further, the notion of "referring" a matter to the Commission in cl 10.7 falls within the meaning of the word "notify" in s 130(1). The expression "notify" has very wide meaning and would incorporate advice by a party of an industrial dispute informally (see rule 5.3(3) of the Industrial Relations Commission Rules 2009).
It follows that an application for recovery of monies by a police officer under Pt 2 of Ch 7 of the Act does not constitute a reference of a dispute to the Commission for the purposes of cl 10.7 of the Award as it neither constitutes the notification of a dispute for resolution in Pt 1 of Ch 3 of the IR Act nor invokes the mechanism or forum for the resolution of disputes under that Part.
By s 4 of the CP Act, the provisions of s 100 apply to these proceedings as proceedings under s 365 of the IR Act are civil proceedings before a Court referred to in Sch 1 to that Act (and do not fall within the exclusions to the Uniform Civil Procedure Rules ('UCPR')). However, whilst s 100(2) of the CP Act permits interest to be paid on monies paid after the commencement of proceedings and before judgment (see Victorian WorkCover Authority v Esso Australia Ltd [2001] HCA 53; (2001) 207 CLR 520), the provision is restricted, in its application, to the recovery of a debt or damages which are not applicable in the present instance. In any event, the general provisions of s 100 of the CP Act should not be taken to operate in lieu of the particular provisions of the IR Act which specifically cater for interest in proceedings under Pt 2 of Ch 7 of that Act.
Given the Award regulates the payment of a lump sum for on duty injury resulting in partial and permanent disability, it follows that the right to recover monies including interest upon the payment of the same under the IR Act is animated by the terms of the Award and, in particular, the provisions which govern if and when an entitlement arises thereunder.
The principles of construction, which I have earlier discussed, do not, in my view, confine the exploration of that question to the provisions of cl 10.7 alone (although plainly the text of that provision is a critical factor in the resolution of the issue).
Clause 10 of the Award bears the title "Assessment of Entitlement to Benefits". The clause delineates between a partial and permanent disability benefit and a total and permanent disability benefit by providing that police officers may only receive one such benefit (cl 10.6), distinguishing the means by which the costs of the benefit will be funded (see cll 10.3 and 10.4) and constructing separate mechanisms by which disputes as to such benefits may be addressed under the Award (see cll 10.7 and 10.8).
That distinction is recognised elsewhere in Pt B of the Award as total and permanent disability benefits arise under cll 7 and 8 and partial and permanent disability benefits arise under cl 9.
Clause 9 of the Award is entitled "Rehabilitation, Retraining and Lump Sum Payments for Police Officers who suffer Partial and Permanent Disability". That provision confers benefits upon police officers who suffer a partial and permanent disability through an off duty or on duty injury. The applicant's claim for a benefit arising out of an on duty injury is specifically governed by clause 9.3 which establishes under the Award the rights of a police officer to the aforementioned benefit.
The language employed in that provision is, in my view, only compatible with the notion that the entitlement to a benefit under the clause will accrue at the point of termination of the police officer and is thereby incompatible with the contention of the respondent that the right is subject to the exercise of a discretion by the Commissioner or a determination made under cl 10.7.
Clause 9.3.2 states that the officer "shall be paid a lump sum payment in accordance with Annexure B to this Award" provided the prerequisite steps in cl 9.3 have been taken, including the satisfaction of what are described as "mutual obligations" (see cl 9.2) and the termination of the officer. The expression "shall be paid" within that phrase is language which is both obligatory and in the present tense. The obligation has a temporal element which corresponds with the termination of the officer (assuming the prerequisite conditions for payment are met).
In this case, there is no suggestion that the applicant did not meet any of the prerequisite conditions in that provision. More importantly for the present discussion, none of the prerequisite conditions for receipt of a benefit under the clause correspond with the conditions or qualifications sought to be placed by the respondent upon the entitlement to a benefit.
This construction of cl 9.3 is strongly supported by two surrounding provisions.
First, whilst the first sentence of cl 9.1 in some respects correlates with the provisions of cl 10.4, the use of the words "prescribed" and "are payable" confirm the obligatory nature of cl 9 in the event of satisfaction of the obligations reposing in an officer under the provision at the point of medical discharge. The second sentence in cl 9.1, however, specifically confirms the construction of cl 9.3.2 because, even though expressed as a condition governing the receipt of the entitlement by an officer, it, at the same time, confirms that an entitlement to the benefit accrues when the officer satisfies the obligations of the clause.
Secondly, cl 1.2 refers to the "intentions and commitments of the Award". It plainly acts as a means of conveying the purpose of the Award. Clause 1.2.1 states that the intention and commitment of the Award is to "provide benefits on medical discharge" in the event that, inter alia, an on duty injury results in partial and permanent disablement. The provision is emphatic in stating that the benefit will arise on medical discharge. In this case, the applicant's employment was terminated by medical discharge on 16 August 2012.
In order to make good his contention that rights for recovery under the Award (vis-à-vis Pt 2 of Ch 7) did not vest in the applicant until the determination was made by the respondent, it was necessary, upon the proper approach to the construction of an award, for the respondent to reconcile the provisions of cl 9 (and cl 1.2) with the contentions advanced with respect to cl 10.7. This the respondent did not do. Clause 10.7 could not be considered in isolation from the entirety of the instrument, most particularly the provision which conferred the entitlement on the applicant.
The same may be said for the argument advanced by the respondent with respect to s 372, dependent, as it was, upon when the on duty benefit became due under the Award.
No attention was fixed in the submissions of the parties upon the first sentence of cl 10.7. That aspect of the clause plainly provided for the respondent to make an assessment which is pivotal to his contention in this respect. However, that sentence in the clause makes a clear distinction between the making of an assessment and an entitlement to benefits under the Award. When read in that manner, the provision operates consistently with the interpretation of the provisions of cl 9 above.
The words "assessed by" in cl 10.7 are wide enough to encompass both the calculation of benefits (per Annexure B of the Award) and the drawing of an opinion as to whether a lump sum payment is due for an off duty or onduty injury. However, the first sentence of the clause distinguishes between the adoption of that administrative act and the fact of the entitlement having accrued. The function conferred on the Commission is procedural in nature and of the same character as that vested in the trustees under cl 10.8 (noting, in this respect, that the provisions of cll 10.7 and 10.8 should be read consistently unless there is some contrary indication in the instrument).
Having regard to the construction proposed by the respondent as to the balance of cl 10.7, it became necessary for him to concede that the entitlement would arise not only upon his determination but upon a (potentially contrary) determination being made under the dispute provisions therein. However, the Court should strain against such an unusual construction which would have the effect that the entitlement for police officers suffering the same injury in the same circumstances may vest in different ways and at different times depending upon the outcome of the procedural steps outlined in cl 10.7.
Attention should then be turned to the remainder of cl 10.7.
There are four reasons why, in addition to the foregoing analysis, cl 10.7 does not have the effect contended for by the respondent:
1. It is true that the Award exhibits a preference for dispute resolution proceedings under Ch 3 to resolve disputes over the entitlements of police officers to receive a benefit under the terms of the Award over recovery proceedings under Pt 7, however, the Award does not evince an intention that such dispute proceedings shall be the exclusive province for the resolution of matters of that kind until their determination. The word "may" in cl 10.7 is not intended to convey an obligation upon parties to the Award to refer a dispute (see the discussion of the relevant principles in discerning whether the word "may" conveys obligatory or discretionary meaning in Director of Public Prosecutions v Khoury [2014] NSWCA 15 at [38] per Basten JA ('Khoury')). The purpose of the provision is to provide an alternative and cost effective mechanism for the resolution of the subject dispute. The language of the provision is permissive and facilitative. Clause 12 shows the drafters of the Award recognised that a claimant for an entitlement under the Award may have various avenues open to resolve an issue in that respect. The Award encourages the adoption of informal processes but expressly reserves, in cl 12.6, that a party may exercise rights under the IR Act independently of, and without fetter in law from, the provisions of cl 12.5;
2. Neither Ch 3 nor Ch 7 of the IR Act evince an intention that accessing dispute proceedings under the former chapter (involving questions relating to entitlements under awards) would obstruct access to proceedings under the latter. That is hardly surprising given that proceedings under Ch 7 are, in the present context, proceedings to enforce rights before a Superior Court of Record;
3. No discussion was undertaken by the respondent as to whether a "determination" under cl 10.7 of the Award or Ch 3 of the IR Act could resolve, ultimately, questions as to the entitlement of employees under the Award. Whilst the parties may fashion a procedure under cl 10.7 (or under cl 12.6) of the Award to finally determine a dispute of the kind referred to in cl 10.7 (which they did not do), it may be doubted that, in the absence of such an arrangement, power exists under Ch 3 of the IR Act, and, in particular, s 136 of that Act, which would permit such a determination to be conclusive or final (as opposed to the making of a fresh award or variation of the Award). This is confirmed by the provisions of cl 10.8 which illustrate that the authors of the Award drew a distinction between the procedure there identified (which culminates with the words "final determination") and those constructed under cl 10.7 which omit the word "final" before "determination". In the absence of the provision operating in the manner contemplated by cl 10.8, it is difficult to envisage how cl 10.7 may declare a right or establish an entitlement. Clause 10.7 may constitute an alternative dispute resolution mechanism but not one capable of either acting as a final statement of entitlement under the Award (in a manner akin to cl 9) or crystallising the right at a point in time. Indeed, the respondent recognised the same in accepting that proceedings may be brought under Pt 2 of Ch 7 if a party did not accept a determination under cl 10.7 as dispositive of the issues in dispute.
4. In any event, cl 10.7 cannot permit a determination of rights. Section 175 of the IR Act is an auxiliary power to enable the Commission to resolve disputes as to the application and operation of an award in the course of resolving an industrial dispute but it does not constitute a power to make binding determinations of right or to affect recovery: STA at [150] and [157]. Further, s 380 of the IR Act confines the capacity of the Commission in proceedings such as those under Ch 3 to make orders for recovery to "small claims proceedings".
One further matter requires attention with respect to this question. Despite resistance to the notion that the respondent had adversely determined that applicant's claim for an on duty payment on or about the time of his assessment in favour of an off duty benefit, it was not contended by the respondent that the application brought by the applicant under s 365 of the IR Act was precluded because the Commissioner had made no determination with respect to on duty benefits.
In any event, it is clear, in my view, that the respondent had determined on 16 August 2012 not to grant the applicant's application for an on duty benefit (see earlier discussion as arising from the respondent's undated letters to the applicant). The resistance to the applicant's workers compensation claim was a counterpart of the respondent's resistance to an on duty benefit (although the former was not based upon his determination but, rather, was challenged by the insurer). The very submissions advanced by the respondent's counsel that the respondent only later had evidence to support an assessment in favour of an on duty payment speaks loudly in favour of this conclusion. So too does the off duty letter, which informed the applicant that he was entitled to the full off duty benefit but that he may refer a dispute to the Commission if dissatisfied. The only conceivable area of dispute in that context was the claim for an on duty payment. Finally, the respondent's complaint in these proceedings is that the applicant did not refer a dispute as to the on duty benefit to the Commission.
It might also be observed that the respondent would be required under the duty conferred upon him by cll 9 and 10 of the Award to make an assessment of an on duty claim if brought by the applicant: see FAI Insurance Ltd v Winneke (1982) 151 CLR 342 at 368 (referring to the judgment of Kitto J in R v Anderson; Ex Parte Ipec Air Pty Ltd (1965) 113 CLR 177 at 189). It is sufficient for the purposes of s 365 of the IR Act that the entitlement arising under the Award (in cl 9) was unpaid when the action was brought under that provision.
It follows from the foregoing analysis that, once the respondent had determined not to grant the on duty benefit, an action under s 365 was available in law to the applicant, notwithstanding a failure to initiate dispute settlement proceedings under cl 10.7 of the Award.
Whilst the rights of the applicant which require judicial determination may be the subject of dispute, such entitlements as vested in him arose by virtue of cl 9 of the Award upon his medical discharge (given that he had satisfied all other prerequisite conditions or obligations under that clause). The settlement of the substantive claim prior to the determination of the proceedings under s 365 of the IR Act did not deprive the applicant of the capacity to make a claim for interest from the date of his medical discharge on 16 August 2012 until the date that the correct payment was made to him (namely, 21 July 2014) arising from that settlement under s 372(2).
It might be noted, at this juncture, that the applicant contended the respondent was estopped from pressing the two contentions addressed above because of the manner in which he raised those issues. Central to that consideration was the fact that the respondent was estopped from arguing cl 10.7 was a bar to the bringing or conduct of proceedings under s 365 of the IR Act or a claim for interest and costs arising therefrom. However, the resolution of the second such contention in a manner favourable to the applicant removes any necessity to resolve that question. The balance of the issues in the proceedings, as I will now discuss, are discretionary in nature. It was not suggested by the applicant that an estoppel (if available) could act in these circumstances against the Court's discretion. In any event, given the manner in which that discretion is exercised in this matter, there could be no proper basis for a conclusion of that kind.
As noted above, the exercise of a power by the Court to award interest or costs is discretionary. A number of considerations come to bear in the present case, in that respect, which will be the subject of discussion under the following heading.
Interest is compensatory not punitive: Perri v Flavell and Anor (No 2) (Supreme Court (NSW), 20 September 1995, unrep) per Kirby P and Powell JA ('Perri') and Lovick and Sons v Doppstadt (No 3) [2013] NSWSC 135 ('Lovick') at [11]. It follows that it will be ordinarily appropriate that an order for interest be made to compensate a party entitled to a payment for being out of pocket (Grace v Grace (No 9) [2014] NSWSC 1239 ('Grace') at [67] and Ruby v Marsh (1975) 132 CLR 642 at 664). Countervailing factors which might provide a basis for the refusal of interest are limited: Grace at [68].
Nonetheless, there remains a discretion to refuse interest or, more commonly, to deny interest for a particular period: Perri and Krajovska v Krajovska [2007] NSWSC 1026 at [6] ('Krajovska'); and Kalls at [11].
Delay is not ordinarily a reason for refusing or reducing the provision of interest: Kalls at [10]. As stated by Brereton J in Grace at [69]: "…Delay - and responsibility for delay - is usually immaterial, because the money is still fructifying in the wrong pocket" (see also Kalls at [10] and Lovick at [11]). Unless the delay by the applicant has resulted in some relevant detriment to the respondent, it will be irrelevant that the applicant has not proceeded with complete promptness: Bennett at 371.
Delay can nonetheless be relevant to the exercise of the discretion where the actions of the applicant are unreasonable and do an injustice to the respondent because the compensatory principle governing the award of interest is only designed to aid an applicant who has been kept out of the enjoyment of his or her money "by virtue of the failure of a defendant to concede his claim and pay…monies which are due, when properly claimed": see Metro Meat per Olsson; Lovick at [11]; Kalls at [11]; Krajovska at [6]; and Bennett at 371. Thus, as Olsson J explained in Metro Meat:
In so far as a plaintiff is dilatory is pursuing his remedy, he cannot be heard to say that, during the period of delay, he has been kept out of moneys to which he entitled by virtue of any action on the part of the defendant. It is, in my view, upon such a footing that a proper exercise of judicial discretion will normally demand that interest be disallowed in respect of inexplicable periods of delay by a plaintiff in prosecuting the relevant claim.
It may be appropriate that such countervailing factors resonate in costs, rather than interest: Lovick at [24]. Nonetheless, the applicant's conduct, for example in relation to unreasonable delay, may lead to a denial of interest for the period of the delay, provided there is a relevant detriment to the opposing party. This should not be confused with interest taking on a punitive quality but is consistent with the purpose of encouraging the early resolution of litigation in conformity with the second purpose for interest identified in Grincelis at [16] as discussed in Metro Meat. This is explained by Thomas J in Serisier Investments Pty Ltd v English [1989] 1 Qd R 678 at 679:
There are sometimes circumstances in which it would be unfair to order a defendant to pay interest over the whole period. This includes the situation where the defendant is unaware of the existence of any claim or liability and would have ordered his affairs differently had he been advised of it, or where a defendant may have offered amends at an earlier date had the claim been made. A far more common case in which interest is not allowed from the date of the loss is where the plaintiff has been guilty of unreasonable delay in prosecuting the claim. The public policy of having claims brought and determined promptly seems to underlie this approach. Goff J. thought that "this may be to encourage plaintiffs to prosecute their claims with diligence, and also because such conduct may lull a defendant into a false sense of security, leading him to think that the claim will not be pursued against him" (B.P. Exploration (Libya) Co. Ltd v. Hunt (No. 2) at 847).
This consideration is not inconsistent with the discussion undertaken by Moffit P in Bennett at 370:
Some comments have been made which suggest that an order ofinterest in a particular form "should stimulate the plaintiff's advisers toissue and serve the writ without delay - which is much to be desired", perDenning L.J. in Jefford v. Gee; or that the endeavour of the Victorianprovision was to make it unprofitable for the defendants to delaysettlement of or adjudication upon the claim made upon them, perBarwick C.J. in Ruby v. Marsh. However, I do not understand theseobservations to mean that they are purposes for which the power shouldbe used, or that it should be used as a penalty to procure in the publicinterest the expeditious settlement or prosecution of claims. Of course,where delay of one party causes or may cause detriment to the other partyin relation to interest, and in consequence an adverse order is made, thesection may operate incidentally to achieve purposes of the type referredto. That however is a different matter.
The on duty letter stipulated that the respondent would pay the full on duty benefit for partial and permanent disability under cl 9 of the Award. Its realisation on 21 July 2015, at which time the applicant received the outstanding difference between the off duty and on duty payments, affected full satisfaction of the applicant's application for the payment of a partial and permanent disability benefit.
It follows that the payment represented the benefit the applicant was eligible to receive upon his medical discharge (as earlier discussed), but which was kept from him whilst proceedings, in this case the present application, were prosecuted. For the purposes of interest, the later on duty payment constituted a pre-judgment payment pursuant to s 372(2) of the IR Act.
Having regard to the aforementioned discussion of the relevant principles, the fact that the applicant was kept out of pocket by the respondent from when the amount was payable (but not paid), namely, the date of his medical discharge on 16 August 2012, until the full benefit was paid would ordinarily warrant the payment of interest over that period as compensation to the applicant. It matters not, in that respect, that the applicant received an off duty payment during the period, particularly as the difference between the respective benefits was significant. Nor is that conclusion displaced by the fact that the application effectively settled his dispute with the respondent since interest may be awarded on a pre-judgment payment under s 372(2) of the IR Act (under the CP Act the comparable provision is s 100(2)).
However, there is a question which must be addressed in the instant case as to whether any mitigating circumstances warrant the refusal of interest or the reduction of the same such that interest would be paid upon only part of the period in question.
Putting aside the respondent's reliance on the fact that he had made an off duty payment at the time of the applicant's medical discharge, the respondent's resistance to an award for interest was predicated upon the submission that there was no default or non-observance of the Award by the respondent in not affording the applicant an on duty benefit at the time of the original assessment. In support of that submission, it was contended that the respondent did not have sufficient medical evidence to sustain an on duty payment at the time he made his original assessment. Thus, the respondent only conceded that a discretion may be legitimately exercised by the Court for a very short period (from 15 July 2014 to 21 July 2014). In any event, it was contended that interest should be refused as there was no default by the respondent in the proceedings since the applicant failed to take the steps required by cl 10.7 of the Award and consented to the various adjournments of the proceedings pending the resolution of the WCC proceedings.
Given my earlier finding that an award of interest is not precluded, as a matter of law, by the applicant's failure to bring a dispute under cl 10.7, many of the submissions made by the respondent in relation to that matter trespass into considerations prohibited by authority in that they were punitive in nature. However, there are factors associated with the applicant's approach to the proceedings which, in my view, should mitigate any award of interest (but do not, in the circumstances, warrant the complete refusal of such an order).
Although the underlying principle for the payment of interest is plainly compensation, it would not be fair to compensate the applicant for a period of time in which he was out of pocket not by virtue of any action on the part of the respondent but as a result of his decision to hold over these proceedings in contemplation that the WCC proceedings would (as they ultimately did) resolve, at least, the substantive issue in dispute: Metro Meats at 6 per Olsson J. In that sense, the force of the applicant's complaint that the Commissioner kept him out of pocket by incorrectly assessing his entitlement upon medical discharge and not making payment until after the on duty letter is significantly diminished by his acquiescence (at the very least) in procedures which resulted, until the WCC proceedings, in a loss of that kind in the face of a clear knowledge (via the off duty letter) of an alternative procedure which provided for the cost effective and timely resolution of that dispute under cl 10.7 of the Award.
I shall elaborate on these factors below which operate to mitigate the allowance that should be made for interest in this matter.
The proceedings were commenced on 24 September 2012. By the time the parties announced, at a directions hearing on 8 August 2014, that an agreement in the WCC proceedings had resulted in a settlement of the substantive claim in this matter, the proceedings had been on foot for just under two years. Such was the delay occasioned that the Court had made observations on 2 December 2013 as to concerns about the approach being adopted by the parties which may sound in interest and costs.
It matters not that the delay was occasioned by the applicant as the moving party or by acquiescence (the record suggests that the applicant exhibited both tendencies) but that the applicant, as the party initiating a claim under Pt 2 of Ch 7 of the IR Act agreed to such a substantial delay on the basis that he did. Whilst the aforementioned authorities suggest that delay, even lengthy delay, may often not result in the reduction of the period of interest awarded, there is an acknowledgment that such a factor may, in appropriate cases, warrant the Court exercising a discretion to not award interest for the whole or part of the period the applicant was out of pocket in relation to an entitlement which was payable (or, ultimately, paid to him). This is, in my view, plainly one such case.
The delay in this matter was not occasioned by slippages in the progress caused by the applicant or a failure to otherwise properly instigate or prosecute proceedings (as referred to in many of the authorities). The agreement which underpinned the adjournments in this matter was that these proceedings would be held over on the expectation that the WCC proceedings may resolve and, in consequence, result in a settlement of these proceedings (hereafter referred to as 'the holding over arrangement'). There were no steps taken to prosecute these proceedings prior to that occurrence and, in substance, the WCC proceedings became a surrogate vehicle for the resolution of these proceedings (the intention in that respect being given effect to in the announcement of the holding over arrangement on 19 November 2012).
It is true that the respondent had failed to assess the applicant's partial and permanent disability benefit claim as an on duty benefit at or about the time of his medical discharge or upon the application in this matter being brought, but it would be unjust to hold the respondent responsible to pay interest for a period of time in which the applicant was, in substantial measure, the architect of, or party to, arrangements which caused him to be out of pocket (with a view to resolving the proceedings).
Whilst the logic behind the holding over arrangement was apparent, and may be understandable, the applicant's conduct, in that respect, does not sit comfortably with his receipt of an award of interest for the period in which the holding over arrangement operated. An order for interest for that period would neither conform to the compensatory purpose of interest or the secondary purpose of the encouragement of the early resolution of litigation.
The significance of cl 10.7 may be elucidated in this context. The applicant was not driven to the holding over arrangement by the desire to avoid a potentially costly or time consuming alternative. If cl 10 is read with cl 12 of the Award, as earlier discussed, the provisions are specifically designed to avoid such a scenario in the case of disputes as to benefits under the Award. Further, cl 10.7 brings in a legislative framework (Ch 3 of the IR Act) which is antithesis to the delays and costs associated with litigation in the general courts.
Proceedings under Ch 3 of the IR Act are, by their nature, "quick" (see s 162(2)(a) of that Act). Section 162(2)(a) of the IR Act correlates with cl 12 of the Award, which provides for the "efficient and cost effective resolution of disputes". It must be recalled that cl 10.7 constructs not only a basis for determination but, by virtue of those dispute resolution processes of the Commission, conciliation which invariably occurs at an early stage of dispute proceedings (see s 133). Matters disposed of under Ch 3 of the IR Act are also attended by a high degree of informality (see s 163(1)(a)) and not subject to the rules of evidence (see s 163(1)(b)). It is not a costs jurisdiction save for some narrow exceptions which are not applicable in this case (see s 181(2)).
The ready availability of the processes under cl 10.7, which were known to the applicant and reflective of a preference for the disposition of disputes as to partial and permanent disability benefit under the Award, underlines that the delay occasioned by the holding over arrangement represented a conscious election by the applicant to make the outcome of his claim for a benefit under the Award dependent upon or having a necessary connection to the WCC proceedings. The lengthy delay occasioned by that election cannot, therefore, fairly be attributed to the respondent.
Thus, whilst the favourable resolution of the substantive claim for an on duty payment would, in the ordinary course, result in compensation by interest being paid to the applicant for the period between the date he became eligible for the lump sum payment of that benefit for his partial and permanent disability and the date he received payment for the same, the aforementioned mitigating factors warrant the exercise of a discretion to not award interest during the period when the holding over arrangement operated (namely, 19 November 2012 to 6 March 2014). Those factors do not represent a proper basis to refuse interest outright as the periods before and after the operation of that arrangement should attract interest upon ordinary principles of compensation for a successful applicant. Hence, the award of interest will be limited to the period from the date of medical discharge to the mention which established the holding over arrangement (16 August to 18 November 2012) and the date of settlement of the WCC proceedings to the payment of the on duty benefit (7 March to 21 July 2014).
I have reached that conclusion in light of the foregoing analysis for the following reasons:
1. The mitigation of the allowance for interest arising from the holding over arrangement is constrained by the logic of those arrangements. Thus, the limitation on the payment of interest should only operate for the period in which the holding over arrangement actively operated, thereby excluding the periods of time before and after the holding over arrangement.
2. As to the period after the WCC agreement, there is another reason why interest should be paid from 7 March 2014 until payment was made to the applicant. Whilst there was a dispute as to when the respondent was seized of evidence sufficient for him to make a favourable assessment of an on duty benefit, the respondent conceded that such evidence was available by the conclusion of the WCC proceedings. The respondent could not, therefore, validly argue that he was not possessed of knowledge which would have allowed him to accept the claim or the application.
3. Further, the submission by the respondent that interest should not be awarded for most, if not all, of the period after the WCC proceedings were settled because the respondent had been diligent in assessing the claim is misconceived as it fails to grapple with the compensatory purpose of interest. The reason that mitigation to exclude interest is warranted for the period of the holding over arrangement is that the applicant had not been, in substance, out of pocket by virtue of the conduct of the respondent. Those circumstances did not operate after the WCC proceedings were settled when the delay in payment was entirely at the hands of the respondent.
4. The period prior to 19 November 2012 corresponds with the early stages of these proceedings before the holding over arrangement was announced and was a period in which the eligibility for the on duty benefit resided in the applicant.
5. I do not accept the respondent's contention that he did not have sufficient medical evidence to sustain an assessment that an on duty benefit being paid to the applicant at the time of making his original assessment because the only medical evidence identified by either party was before the respondent at that time. Certainly, the respondent did not direct attention in these proceedings to the "additional medical and other evidence" which was said to have been provided afresh during the WCC proceedings. This does not alter for the applicant the previous conclusions as to mitigation of interest. Rather, it performs the opposite role by highlighting that the applicant held over the prosecution of his claim in the face of evidence being available to sustain it.
6. The judgment in Lovick suggests that factors associated with delay might sound in costs rather than interest. There are two reasons why that approach should not be adopted in this case. First, as a result of the procedure adopted for the holding over arrangement there were relatively few cost events in the proceedings over the long period. No orders were made to prepare for trial. Secondly, the mitigating factors are ones which directly bear upon the question as to whether the applicant should be compensated by interest for being out of pocket.
7. The respondent brought no evidence (and advanced no submissions) to suggest that the bringing of processes under cl 10.7 would have, in fact, resulted in an earlier settlement or determination of the matter. The Court should not substitute its own knowledge (of the likelihood of an outcome) in the absence of the same. If a conclusion were available that cl 10.7 would have produced a resolution to the dispute in its entirety before the WCC proceedings were settled then it would be difficult for the applicant to contend he should receive interest beyond the date of that settlement or resolution. However, no such case has been brought in this matter and hence those considerations do not arise.
In the result, I propose to make an order granting the applicant interest on the difference between the off duty payment and on duty payment for the periods between 16 August and 18 November 2012 and 7 March to 21 July 2014. I refuse the application for interest for the interim period of 19 November 2012 to 6 March 2014 for the reasons expressed above.
The general power of the Court under s 98(1)(b) of the CP Act and the exercise of a discretion to award costs is subject to Div 1 of Pt 42 of the UCPR (the Industrial Relations Commission Rules 2009 do not apply: see r 12.1). It must be accepted that costs of these proceedings, then, should follow the event, in accordance with r 42.1, unless it appears to the Court that some other order should be made: X v The Sydney Children's Hospitals Network [2013] NSWCA 320; (2013) 85 NSWLR 294 at [76] (per Basten J with whom Tobias AJA agreed).
The consideration of the event for these purposes is not limited to the determination of either the proceedings as a whole or particular causes of action but may extend to disputed questions of fact or law: Hughes at 48, 136 (per Toohey J) and Cretazzo v Lombardi (1975) 13 SASR 4 ('Cretazzo') at 12.
The operation of r 42.1 depends upon what the event in question is. This requires consideration to be given to the particular outcome of the proceedings by reference to who is successful "bearing in mind the matters over which the parties joined issue": Hansen t/as Derrawee Pastoral Co v Monterey (Coolah) Pty Ltd [2012] NSWSC 1383 at [29] (per Schmidt J).
Thus, the aim is to do substantial justice in relation to costs based on the outcomes of various matters joined in issue in the proceedings as between the entities that are parties to the proceedings. This may require a departure from the general rule where its operation may be unfair or inappropriate having regard, on the material before the Court, to the overall circumstances of the matter: Howards Storage World Pty Ltd v Haviv Holdings Pty Ltd [2010] FCAFC 5; (2010) 182 FCR 84 at [17].
A successful party may be deprived of costs as to particular issues by the making of no order as to costs: Cretazzo at 12; X & Y (by her Tutor X) v Pal (CA(NSW), 7 June 1991, unreported at 3 per Clarke JA); Deputy Commissioner of Taxation v Government Insurance Office (NSW) (1992) 36 FCR 314 at 329 (per Wilcox J) and Permanent Trustee Australian Co Ltd and Another v FAI General Insurance Co Ltd (2001) 50 NSWLR 679 at [148], [150] and [151] (per Handley JA with whom Meagher and Powell JJA agreed).
Costs may, in appropriate cases, be apportioned. The nature of the apportionment task requires some analysis of the various issues in the proceedings including the success of the parties as to those issues and their actual impact on the costs of the proceedings. Apportionment or separate orders as to costs may be made when a successful party failed on matters that were dominant or significant issues.
In the present proceedings, the applicant contended that he should have the "usual benefit of a costs order which flows from being successful". It was submitted, in that respect, that the Court should make an order in those terms and should not turn its mind to an assessment of costs (as that calculation did not represent a relevant consideration in the present proceedings).
The respondent submitted that the applicant had not been successful in the proceedings, in the relevant sense, as the substantive claim had been settled without contest. He further contended that the proceedings had been commenced prematurely, which resulted in numerous adjournments whilst the parties awaited the outcome of the WCC proceedings (at which time the applicant was paid the on duty payment virtually irrespective of these proceedings). It was said that this approach conflicted with the objects of the IR Act relating to the cheap and efficient resolution of disputes. In consequence, the respondent sought costs for the day of the hearing, namely 31 October 2014, and associated expenses.
The question of costs arises for consideration in this matter in circumstances where there has been no adjudication on the merits of the substantive claim for an on duty benefit because of the settlement arising after the conclusion of the WCC proceedings. There are two other unusual features in these proceedings in that there has been an adjudication on interest in relation to the recovery proceedings, notwithstanding that settlement, and the respondent argues what are, in substance, public policy considerations as to costs relating to cl 10.7 of the Award.
The starting point for the consideration of these issues should, in my view, involve a consideration of the judgment of McHugh J in Re Minister for Immigration and Ethnic Affairs; Ex Parte Lai Qin (1997) 186 CLR 622 ('Lai Qin'). That judgment, from which I will extract elements below, involved a consideration of whether costs should be awarded in proceedings where there has been no hearing on the merits (due to settlement of the substantive claim) such that the Court is "necessarily deprived of the factor that usually determined whether or how it will make a costs order", namely, success in the action or on particular issues: Lai Qin at 624. Hence, whilst the authority is not entirely on point in the present context (due to the additional features mentioned above), it does offer significant guidance in assessing costs in the context of a matter which has resolved through settlement.
The relevant extract from McHugh J's decision in Lai Qin is as follows (at 624-625):
In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extracurial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation. Thus, for example, in R v Gold Coast City Council; Ex parte Raysun Pty Ltd, the Full Court of the Supreme Court of Queensland gave a prosecutor seeking mandamus the costs of the proceedings up to the date when the respondent Council notified the prosecutor that it would give the prosecutor the relief that it sought. The Full Court said that the prosecutor had reasonable ground for complaint in respect of the attitude taken by the respondent in failing to consider the application by the prosecutor for approval of road and drainage plans.
Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. This is perhaps the best explanation of the unreported decision of Pincus J in South East Queensland Electricity Board v Australian Telecommunications Commission where his Honour ordered the respondent to pay 80 per cent of the applicant's taxed costs even though his Honour found that both parties had acted reasonably in respect of the litigation. But such cases are likely to be rare.
If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases.
It is the latter circumstance which is, in my view, applicable to the present proceedings.
I do not consider that either party may be taken to have acted unreasonably in the sense to which McHugh J referred. The application itself was not unreasonable. It is plain that the applicant had a legitimate claim for an on duty benefit and, as earlier found, the respondent had determined not to award the same. Further, whilst it is true that the applicant brought these proceedings in the face of alternative arrangements available under cl 10.7, there was no barrier in law to the applicant doing so and a 'final determination' of the dispute as to an on duty benefit was not available under that clause, that is, the course adopted by the applicant may not be seen as unreasonable since the dispute may have still required further adjudication under Pt 2 of Ch 7 of the IR Act at the instigation of either party. (This conclusion should not be taken as a rejection of the sound policy arguments for adopting the procedures under cl 10.7.)
Likewise, whilst in some circumstances it may be unreasonable for a party to defend a claim that was ultimately found to be open, particularly where the party was possessed of evidence which ultimately acted upon that resolution, the respondent cannot represent such a party in circumstances where both parties agreed that the holding over arrangement was the means by which their dispute would be resolved. In substance, the respondent did not defend the proceedings, but in lieu thereof, agreed to the holding over arrangements.
When left to those considerations alone, the appropriate approach should be that both parties shall pay their own costs of the proceedings. However, there remains the question of costs associated with the adjudication of the claim for interest.
This issue in fact occupied the bulk of the time before the Court: a conciliation (and processes relating thereto) and a hearing. Whilst the Court has no evidence about the conciliation process, given its timing, it is reasonable to infer that it was directed to the outstanding issues of interest and costs. As there was no evidence as to offers of compromise or the conduct of the parties towards the conciliation, the determination of costs in that respect should mirror the determination of costs associated with the hearing of the matter.
As to the hearing of the claim for interest, the applicant sought interest for the whole of the period available for the award of interest under s 372(2) of the IR Act. He was partially successful in that respect, recovering an award of interest representing slightly less than 40 per cent of the amount claimed. He was also partially successful in his resistance of the respondent's contentions regarding cl 10.7 of the Award but not as to whether he had, in fact, activated the dispute resolution procedures of that provision by virtue of his application in these proceedings. In all the circumstances, I consider the outcomes of the parties on the issue of interest to be fairly evenly balanced.
The respondent also made an application for the costs of the hearing as to interest and costs. However, in circumstances where the respondent has capitulated (in the circumstances described above) on the substantive claim and not been successful in wholly resisting the applicant's claim for interest, that application should be refused.
There is a further factor to consider. Overall, the Court should avoid making an order for costs which might have the effect of undermining the provisions of the Award and specifically cl 10.7 thereof. The applicant had redress to those provisions which would have avoided any costs being incurred in the pursuit of the benefit he sought in these proceedings. (That factor would have represented a more powerful argument had the respondent demonstrated, in fact, that a more timely disposition of these proceedings was available through cl 10.7 of the Award.)