CAE v OEL [No 2] - [2014] WADC 167

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: CAE -v- OEL [No 2] [2014] WADC 167

CORAM: DAVIS DCJ

HEARD: 11 & 24 NOVEMBER 2014

DELIVERED : 5 DECEMBER 2014

FILE NO/S: CIV 2144 of 2010

BETWEEN: CAE
Plaintiff
AND
OEL
Defendant

Catchwords:

Fatal Accidents Act claim – Assessment of damages – Allocation to a deceased child – Interest on Past Losses – Costs of obtaining Letters of Administration not recoverable – Calculation of dependency – Workers' Compensation and Injury Management Act charge to employer

Legislation:

Administration Act 1903
Fatal Accidents Act 1959
Workers' Compensation and Injury Management Act 1981 s 92

Result:

Damages assessed in the sum of $924,686

Representation:

Counsel:

Plaintiff:     Mr T H Offer
Defendant:     Mr C C Rimmer
Amicus Curiae                   :    Ms B A Mangan for the Department of Child Protection and Family Support

Solicitors:

Plaintiff:     Vertannes Georgiou
Defendant:     Jarman McKenna
Amicus Curiae                   :    Department of Child Protection and Family Support

Case(s) referred to in judgment(s):

Blaine v The Owners of Duesburys House Strata Plan 7239 [2010] WADC 81
Josifovski v Velevski [2013] NSWSC 1103
ODG Properties (WA) Pty Ltd v Middler Nominees Pty Ltd [1990] WAR 235
Riddle v McPherson (1995) 37 NSWLR 338
Watts v Turpin [1999] WASCA 216; (1999) 21 WAR 402
Wiggins as Administrix of the Estate of Daniel Owen Williams (Dec) v Barrick (Kalgoorlie) Ltd [2013] WADC 138

DAVIS DCJ: In my judgment delivered in this matter on 10 October 2014, CAE -v- OEL [2014] WADC 137 ('my initial decision'), I made findings in relation to the defendant's liability to the plaintiff and other findings relevant to the assessment of damages. I was, however, unable to assess quantum because there were a number of outstanding issues.
Following further hearings and submissions from the parties, I am now in a position to assess damages and provide further written reasons on the particular issues which I raised in my initial decision [275] ‑ [278].

The allocation to K

As explained in my initial decision [275], an issue arose as to the allocation to K, given that she is now deceased and was a minor when she died. She is not alive to receive the benefit of any sum which would otherwise be held on trust for her.
There is no case, reported or unreported, which has dealt with this situation, to my knowledge. I requested the parties to review this and make submissions.
Counsel for the plaintiff has filed helpful submissions as to why I should make the allocation. I have since received advice from the defendant's lawyers that they agree with these submissions.
I am satisfied that I should make the allocation to K for the following reasons.
K is a relative, for whose benefit this action has been brought, within the meaning of s 6(1A) of the Fatal Accidents Act 1959. Pursuant to s 6(1A) every action brought under the Act 'shall be for the benefit of relatives' of the deceased and pursuant to s 7, only one action lies for and in respect of the same subject matter of complaint.
There is also only one judgment for one sum of money which, having been so recovered, is to be 'divided amongst the persons for whose benefit the action was brought in such shares as the Court finds and directs': s 6(4).
The present action was commenced by the plaintiff in 2010 'for the benefit of', inter alia, K.
K did not die until 2013. As at the date of K's death, she had a right which had accrued in the form of a claim for a share in any judgment obtained in this action based on her dependency on the deceased.
I accept the plaintiff's submission that 'for the benefit of relatives' in s 6(1A) of the Fatal Accidents Act should be interpreted to include the benefit of their estate should they die after commencement of the action but prior to judgment. In this regard it is relevant that:
(a)pursuant to s 9(2) of the Act, had the plaintiff not commenced this action, K would have had the right to commence proceedings through the assistance of a next friend;
(b)section 4(3) of the Law Reform (Miscellaneous Provisions) Act 1941 provides that a cause of action vested in a deceased survives for the benefit of his or her estate, subject only to some limitation of the damages recoverable for the benefit of the estate (which do not apply here); and
(c)a child may be a beneficiary and die intestate: Josifovski v Velevski [2013] NSWSC 1103 [36] ‑ [40].
Accordingly damages should be assessed for K's loss of dependency from the date of the deceased's death until K's death, with such moneys to be paid to her estate to be dealt with according to law. That law, as there is an intestacy, is pursuant to the Administration Act 1903.
At the hearing of this matter on 11 November 2014, I was advised by counsel for the plaintiff there is as yet no administrator appointed to the estate of K. The Public Trustee has agreed that it would hold that money pending the appointment of an administrator.
Pending the appointment of an administrator, K's share should be paid to the Public Trustee. It would be sensible if the application for letters of administration was made by the Public Trustee in the particular circumstances of this case and as soon as possible.

Interest on past losses

Calculations of interest on past losses for each of the plaintiff and the children have now taken into account the workers' compensation benefits which have already been received, which were the subject of orders made under the Workers' Compensation and Injury Management Act 1981 (exhibit 95).
The interest rate claimed by the plaintiff, however, is 6%. I will only allow interest on past losses at the rate of 3%, which is the rate usually applied in this court for interest on past losses in personal injuries claims, and is half of the Supreme Court Act rate of 6%. This is because in a personal injuries case where a loss occurs over a period of time, as is the case with past loss of earnings, an appropriate formula is: Interest = ½ Interest Rate x Principal x Time: Riddle v McPherson (1995) 37 NSWLR 338, 342; Watts v Turpin [1999] WASCA 216; (1999) 21 WAR 402 [90].

Funeral expenses and headstone costs

The defendant has agreed the amount for funeral expenses of $7,183 and the costs of a headstone of $5,000.
No interest is claimed by the plaintiff for these two amounts.

Costs of obtaining letters of administration

There was pleaded a claim for the costs of the plaintiff obtaining letters of administration for the deceased's estate. The plaintiff no longer pursues these costs, counsel for the plaintiff having conceded that they are not recoverable. That is a concession properly made in light of the decision of Herron DCJ in Wiggins as Administrix of the Estate of Daniel Owen Williams (Dec) v Barrick (Kalgoorlie) Ltd [2013] WADC 138 [149]. There is no express provision in the Fatal Accidents Act by which a person entitled to claim damages under the Act is entitled to be reimbursed in respect of legal fees incurred in the administration of the deceased's estate.

Calculation of damages

The plaintiff and Amicus Curiae had, before and during the trial, provided some calculations of damages. After delivering my initial decision, I invited the parties to re‑calculate damages using the findings that I had made, and to also clarify what the tax rates should be on the deceased's gross income (there being different net earnings proposed to me in schedules prepared by the plaintiff and the Amicus Curiae). I had hoped that the damages could be calculated and agreed, to enable the plaintiff to then go and obtain details of what the Public Trustee's fees would be so that judgment could be pronounced without further delay. Unfortunately there has been no agreement.
Each of the plaintiff and the defendant filed schedules calculating damages in a different way. The defendant also used the opportunity in its schedules to make further submissions on quantum. It is necessary that I deal with the matters raised by the defendant.
The first thing the defendant did in calculations filed 19 November 2014 was to allow no loss of future dependency at all for the plaintiff after the youngest child leaves home. This ignores the matters I discussed in my initial decision, in particular [260], [264] (a) (that while the plaintiff and deceased would live separately, there was a chance of reconciliation, albeit a less than 50% chance), [270] and [271].
The second thing the defendant did when looking at the deceased's earning capacity was to deduct 18% for contingencies, submitting as follows:
As per her Honour's findings at [235] there should be an additional discount for contingencies and she considered the appropriate further deduction to be 10%. Pursuant to Brocx v Mounsey [2010] WASCA 196 [63] we have allowed an 8% discount for ordinary contingencies. The total discount is therefore 18%.
It is necessary to set out not only what was said in Brocx v Mounsey [63] but discussions preceding it in [61] and [62]:
61In Wynn v NSW Insurance Ministerial Corporation (1995) 184 CLR 485, 497, the High Court described the four factors, apart from death, that were relevant in calculating contingencies as sickness, accident, unemployment and industrial disputes. The court observed that not all contingencies are adverse and that any positive considerations (such as advancement in employment) are also to be taken into account. The court pointed out that contingencies are to be considered in terms of their likely impact on the earning capacity of the injured person concerned, not by reference to the workforce generally.
62Professor Luntz in his well-known text, Luntz, Assessment of Damages for Personal Injury and Death (4th ed, 2002) [6.4.14], suggests that the maximum discount for all contingencies should be under 10% in the average case. He notes, however, that that is much less than the standard 15% allowed in New South Wales and some other jurisdictions.
63In this State, in Kember v Thackrah [2000] WASCA 198, Malcolm CJ (with whom Kennedy and Murray JJ agreed) described 15% as 'a very heavy discount' [27]. In Villasevil v Pickering [2001] WASCA 143; (2001) 24 WAR 167 [38], Anderson J (with whom Malcolm CJ and Groves AJ agreed) said that the discount for ordinary contingencies is rarely more than 15% and usually between 5% - 10%.
My finding in my initial decision [235] that there should be an additional discount for contingencies of 10% came after a discussion in [229], [230] and [233] that while the plaintiff's figures for the deceased's likely earnings took into account that he was employed by a labour hire company and there may be periods of unemployment or time without work in-between jobs, other contingencies had not been taken into account. Apart from the general vicissitudes of life, there was an issue relating to the deceased's general working history and health, in particular his pre-existing back injury which I discussed in [234], his pre-existing epilepsy, and his arteriosclerosis and thrombosis.
Taking into account all of the issues I had discussed, as I stated in my initial decision [235], while I would use the plaintiff's figures for earning capacity I considered that there should be some additional discount for contingencies which would be 10%.
In light of my reasons, and also in light of what was stated by Brocx v Mounsey [63], I am unable to accept the defendant's submission that there should be another deduction of 8% to take the discount for contingencies to 18%.
On 25 November 2014 the defendant then filed an Amended Quantum Calculation applying a discount for contingencies of 10%, but making a further submission as follows:
9.However, the above amounts do not take into consideration [264e] of her Honour's findings, to the effect that the available income which the deceased would have to share would be reduced as the deceased would have had his own separate household expenses.
10.For the purposes of recalculating the past loss of financial dependency the defendant contends for $400 per week for the deceased's own living expenses which is 31.7% of his net weekly income.
The defendant then recalculated past loss of financial dependency based on a $400 per week reduction of the income available to the plaintiff and the children.
My reduction of the plaintiff's allocation by 70% takes into account the deceased having his own separate household expenses while living separately from the plaintiff. As I stated in [270] and [271]:
270Taking into account the particular circumstances of this case, when assessing dependency I consider the better method is to do so in the traditional way applying Table 9.1 in Luntz, making an allowance for the dependency of the plaintiff but with her share separately discounted for contingencies due to the break-up of the marriage and other matters as I have found in [264]: McIntosh v Williams (557, 558). The children's shares will be unaltered.
271The discount I will apply to the plaintiff's allocation is 70%.
I will not be further reducing the income available to the plaintiff and the children as submitted by the defendant.
There are six periods for calculation which are:
1.Period One, from the date of the deceased's death until L left home (when all four children were living at home with the plaintiff);
2.Period Two, after L left home until K's death (three children living at home with the plaintiff);
3.Period Three, from the date of K's death until the date of judgment (two children living at home with the plaintiff);
4.Period Four, from the date of judgment until C reaches the age of 21 (future dependency with two children living at home with the plaintiff);
5.Period Five, from the date when C reaches the age of 21 until S reaches the age of 21 (future dependency with one child living at home with the plaintiff);
6.Period Six, from the date S reaches the age of 21 to when the deceased would have reached the age of 67, the applicable retirement age (future dependency of the plaintiff).
When I say the date of judgment, I mean the date of this supplementary judgment.
My calculations for Period One, from 17 July 2007 to 1 October 2008 (a period of 63 weeks) are as follows.

Period One

Dependency - income

The deceased's income of $90,000 per annum equates to $1,731 gross and $1,260 net per week:
$1,260 x 63 = $79,380
Less contingencies 10% = $71,442.
The dependency based on Table 9.1 in Luntz is 81.1% of this figure. The respective shares of the plaintiff and the children are:
(a)The plaintiff – $71,442 x 25.1% x 30% (70% deduction as per initial reasons [271]) = $5,379;
(b)L – $71,442 x 14% = $10,002;
(c)K – $71,442 x 14% = $10,002;
(d)C – $71,442 x 14% = $10,002;
(e)S – $71,442 x 14% = $10,002.

Dependency - superannuation

I calculate loss of superannuation as follows:
$1,731 x 9% x 85% (tax) x 63 = $8,342
Less contingencies 10% = $7,508
The respective shares of the plaintiff and the children in relation to superannuation are:
(a)The plaintiff – $7,508 x 25.1% x 30% (70% deduction as per initial reasons [271]) = $565;
(b)L – $7,508 x 14% = $1,051;
(c)K – $7,508 x 14% = $1,051;
(d)C – $7,508 x 14% = $1,051;
(e)S – $7,508 x 14% = $1,051.

Services

Following my initial decision [273], services will be allowed at eight hours per week x $25 per hour. The allocation is as follows:
(a)The plaintiff – 1 hour per week x $25.00 per hour x 63 weeks = $1,575;
(b)L – 1.75 hours x $25 per hour x 63 weeks = $2,756;
(c)K – 1.75 hours x $25 per hour x 63 weeks = $2,756;
(d)C – 1.75 hours x $25 per hour x 63 weeks = $2,756;
(e)S – 1.75 hours x $25 per hour x 63 weeks = $2,756.
The total for past dependency and services for Period One for the plaintiff is $7,519 ($5,379, $565 and $1,575) and for each child is $13,809 ($10,002, $1,051 and $2,756).
My calculations for the remaining periods are in a separate Schedule, the publication of which, in accordance with the suppression order I have made and because it reveals the dates of birth of the children, will be limited to the parties and their legal advisers.
However, there are some matters I need to record in relation to my assessment of future services.
For future services there should be a reduction for contingencies. In my view, the provision of services is not affected in the same way or to the same degree by the matters I have taken into account when considering the appropriate rate for contingencies applicable to the deceased's earning capacity. I consider, therefore, that it is appropriate to apply a discount rate for contingencies of 5% and to apply this only to future loss of services.
Further, for Period Six, in the plaintiff's Schedule of Calculation of Damages dated 27 May 2014 (par 48) an amount for services of $66,412 was claimed on the basis that the deceased would provide services to the plaintiff for seven hours a week until the age of 75.
When I delivered my initial decision I indicated to the parties that there should be no allowance for future services to the plaintiff. This is because the provision of services by the deceased to the plaintiff would in all likelihood cease once the children ceased living with her (given the findings in my initial decision, in particular [264](h)).
Upon review, however, particularly in light of the matters I have discussed in [22] above and in order to be consistent, I consider I should made some allowance for future services to the plaintiff. This must be heavily discounted from the amount claimed by the plaintiff for a number of reasons. First there must be an allowance for contingencies for this future loss. Secondly, there needs to be a reduction to reflect the less than 50% chance of reconciliation with the deceased, as I have found. Thirdly, I am not satisfied that the deceased would have provided as much as seven hours a week services to the plaintiff, even if they had reconciled. I will therefore make a small global allowance for future services for the plaintiff in the sum of $12,500.
The award of damages I make is a total of $924,686 allocated as follows:
(a)The plaintiff - $266,878;
(b)L – $15,210;
(c)K – $93,699;
(d)C – $226,401;
(e)S – $322,498.

Issues relating to s 92 of the Workers' Compensation and Injury Management Act

Pursuant to s 92(c) of the Workers' Compensation and Injury Management Act, there will be a first charge for the compensation and expenses which the deceased's employer has paid to the plaintiff and the children. This should be paid to the employer before the plaintiff and the children receive any part of the judgment sum: ODG Properties (WA) Pty Ltd v Middler Nominees Pty Ltd [1990] WAR 235, 242 and 245; Blaine v The Owners of Duesburys House Strata Plan 7239 [2010] WADC 81 [176], [177]. Counsel for the plaintiff at the hearing on 11 November 2014 acknowledged that there will be this first charge (ts 549).
The amounts paid by the employer to the plaintiff and the children were as follows:
(a)The plaintiff – $59,734.21 plus funeral expenses of $7,183;
(b)L – $7,500;
(c)K –$14,518.32;
(d)C – $18,942.87;
(e)S – $18,942.87.
Each of these amounts will need to be deducted before the balance of the amounts allocated are paid, either direct to the plaintiff and L, to K's estate or to the Public Trustee for investment for C and S. For C the balance after the charge to the employer which will be invested is $207,458.13; for S the balance which will be invested is $303,555.13.
That will have an affect on the Public Trustee's fees.

Public Trustees fees

The plaintiff will now need to ascertain the fees which will be charged by the Public Trustee in respect of the administration of the sums to be invested and managed by it on behalf of the children.

Given the matters I have discussed regarding both K's intestacy and also the inability of a person to recover the costs of letters of administration in a Fatal Accidents Act claim, it is my view that in respect of K's share, neither the costs of obtaining letters of administration of K's estate nor the costs of administering K's estate are recoverable in this action.
The defendant is liable only for the costs of the Public Trustee's investment of the shares of the surviving children, C and S and managing those investments until they attain the age of 18. So far as C and S will receive any part of K's share pursuant to the provisions of the Administration Act, my view is that the costs of investment and management of those particular shares received on K's intestacy fall within the provisions of that Act and outside the defendant's liability and responsibility in this action.
I will adjourn the issue of the Public Trustee's fees, the final judgment and orders to be made (including the orders which should be made to reflect the first charge under s 92(c) of the Workers' Compensation and Injury Management Act) and the matter of costs to a further hearing date to be fixed.