Comcare v Starkey
[2017] FCAFC 151
•21 September 2017
FEDERAL COURT OF AUSTRALIA
Comcare v Starkey [2017] FCAFC 151
File number: NSD 381 of 2017 Judges: KENNY, COLLIER AND FLICK JJ Date of judgment: 21 September 2017 Catchwords: WORKERS’ COMPENSATION – appeal from Administrative Appeals Tribunal – whether dependant previously recovered state workers’ compensation for same injuries – whether Tribunal erred in its interpretation of ss 48 and 118 Safety, Rehabilitation and Compensation Act 1988 (Cth) – whether Tribunal incorrectly identified the injury suffered Legislation: Administrative Appeals Tribunal Act 1975 (Cth) s 44
Asbestos-related Claims (Management of Commonwealth Liabilities) Act 2005 (Cth) s 5
Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 4(1), 5, 5A, 5B, 17, 17(1), 48, 48(1), 48(1)(a), 48(4), 118, 118(1), 118(1)(a), 118(1)(b)
Civil Liability Act 2002 (NSW) s 15B(2)
Dust Diseases Tribunal Act 1989 (NSW) s 11A
Workers’ Compensation (Dust Diseases) Act 1942 (NSW) ss 8(2B)(b)(i), 8(2B)(b)(ii)
Cases cited: Hadfields Steel Works v Meyer [1962] HCA 34; (1962) 108 CLR 171
Meyer v Hadfields Steel Works Ltd (1961) 79 WN (NSW) 322; [1962] NSWLR 645
Telstra Corporation Ltd v Worthing [1999] HCA 12; 197 CLR 61
Withenshaw and Department of Defence [1999] AATA 37; 28 AAR 416
Date of hearing: 14 August 2017 Registry: New South Wales Division: General Division National Practice Area: Administrative and Constitutional Law and Human Rights Category: Catchwords Number of paragraphs: 38 Counsel for the Applicant: Mr PE Hack QC with Mr PG Woulfe Solicitor for the Applicant: Lehmann Snell Lawyers Counsel for the Respondent: Mr M Joseph SC with Mr S Tzouganatos Solicitor for the Respondent: Turner Freeman Lawyers ORDERS
NSD 381 of 2017 BETWEEN: COMCARE
Applicant
AND: ROSLYN STARKEY
Respondent
JUDGES:
KENNY, COLLIER AND FLICK JJ
DATE OF ORDER:
21 SEPTEMBER 2017
THE COURT ORDERS THAT:
1.The appeal under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) filed on 17 March 2017 be dismissed.
2.The applicant pay the respondent’s costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
THE COURT:
This is an appeal under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) from a decision of a Judge of this Court sitting as Deputy President in the Administrative Appeals Tribunal (AAT).
On 11 December 2014, Mrs Roslyn Starkey, the respondent in this matter, submitted a claim to Comcare, the applicant in this matter, under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act) as a dependant of her late husband, Mr Graeme Walter Starkey. Mr Starkey died on 28 July 2014 from asbestosis. It is common ground that Mr Starkey was exposed to asbestos during the course of his employment for various employers, including the Commonwealth. On 10 March 2015, Comcare denied Mrs Starkey’s claim and affirmed this decision on 29 April 2015.
Mrs Starkey applied to the AAT for a review, where his Honour set aside Comcare’s decision of 29 April 2015 and remitted the matter for reconsideration.
Background facts
The facts of the matter are set out in [11]-[31] of his Honour’s reasons for decision and are not in dispute. Relevantly, Mr Starkey worked in the private sector in New South Wales between 1960 and 1965, and again between 1968 and 1969. He worked as a Commonwealth employee at the Garden Island Dockyard in New South Wales for a period between 1969 and 1970, and on a full-time basis between 27 July 1981 and 5 November 2012. During these periods Mr Starkey was exposed to asbestos. It is not in dispute that he was subject to very significant exposure to asbestos in the period 1981-2012.
Based on the evidence before the AAT, his Honour found that, of Mr Starkey’s total exposure, 60% occurred while working at Garden Island Dockyard, with the remaining 40% occurring while he worked in the private sector (at [14]).
On 2 December 2010, the Medical Authority of the Dust Diseases Board of New South Wales constituted under the Workers’ Compensation (Dust Diseases) Act 1942 (NSW) (Dust Diseases Act) certified, among other things, that Mr Starkey had developed the disease asbestosis, that his condition was reasonably attributable to his exposure to the inhalation of dust, and that the proportion of his total exposure to dust reasonably attributable to occupational exposure in New South Wales within the meaning of the Dust Diseases Act was 20%.
In 2013 Mr Starkey sought damages pursuant to s 11A of the Dust Diseases Tribunal Act 1989 (NSW) in the Dust Diseases Tribunal, against Warringah Industrial Park Pty Ltd as the first defendant, Comcare as the second defendant and AAI Limited as the third defendant. We note that Comcare was joined to the proceeding in that Tribunal pursuant to s 5 of the Asbestos-related Claims (Management of Commonwealth Liabilities) Act 2005 (Cth). In those proceedings, Mr Starkey also claimed damages under s 15B(2) of the Civil Liability Act 2002 (NSW) for loss of his capacity to provide gratuitous domestic services to his wife, referable to identified disabilities of Mrs Starkey.
Three verdicts and judgments were handed down by the Dust Diseases Tribunal on 6 September 2013 in favour of Mr Starkey. They were by consent and without admission of liability on the part of the defendants. Inclusive of costs, Mr Starkey recovered:
·a judgment in the sum of $15,300 against Warringah Industrial Park Ltd;
·a judgment in the sum of $793,700 against Comcare; and
·a judgment in the sum of $85,000 against AAI Ltd.
Mr Starkey died on 28 July 2014. On 18 August 2014, Mrs Starkey applied for compensation to the Dust Diseases Board in her own right as the spouse and dependant of Mr Starkey under the Dust Diseases Act.
The Medical Authority of the Dust Diseases Board certified on 21 August 2014 that Mr Starkey had died from asbestosis, that his death was reasonably attributable to his inhalation of dust, and that the proportion of his total exposure to dust reasonably attributable to occupational exposure in New South Wales within the meaning of the Dust Diseases Act was 20%.
On 18 September 2014, Mrs Starkey was awarded a lump sum of $58,401 and fortnightly compensation pursuant to ss 8(2B)(b)(i) and 8(2B)(b)(ii) of the Dust Diseases Act. It is common ground that because Mr Starkey’s asbestosis was only attributable in the proportion of 20% to exposure “in New South Wales”, Mrs Starkey received only 20% of what would otherwise have been her entitlement under the Dust Diseases Act.
Mrs Starkey subsequently claimed a lump-sum payment from Comcare in her own right as a dependant of Mr Starkey under s 17 of the SRC Act. Her claim was for the work-related death of Mr Starkey as a result of his employment by the Commonwealth at Garden Island Dockyards. As we have already noted, Comcare denied her claim on 10 March 2015 and affirmed that decision on 29 April 2015.
Materially, in its decision of 29 April 2015, Comcare informed Mrs Starkey as follows:
Ms Lake [solicitor for Mrs Starkey] disputed that section 118 of the SRC Act applied as the compensation awarded by the DDB only related to the late Mr Starkey’s death from his non-Commonwealth employment and the amount of compensation was adjusted accordingly. Ms Lake stated at the date of Mr Starkey’s death, the maximum amount of compensation payable by the DDB to a dependant relative for the death of a worker was $324,450.00 and the fortnightly payment to a dependant spouse was $535.20.
Ms Lake contended section 118 of the SRC Act does not preclude recovery by you as you did not receive a NSW Workers’ Compensation in relation to the death of your husband caused by his exposure to asbestos in the course of his Commonwealth employment.
I note section 118 of the SRC states:
‘If:
(a)an employee recovers State workers’ compensation in respect of an injury or the loss of, or damage to, property used by the employee; or
(b)State workers’ compensation is recovered by, or for the benefit of, a dependant of a deceased employee;
Compensation is not payable under this Act to that employee in respect of that injury, loss or damage, or to, or for the benefit of, that dependant in respect of the injury that resulted in the death’.
As previously stated, your compensation payments were made under provisions of the NSW Act. It is noted section 8(1) of the NSW Act states that the Dust Disease Board may award compensation payments where ‘a person is totally or partially disabled for work from a dust disease and that the person’s disablement was reasonable [sic] attributable to the person’s exposure to the inhalation of dust in an occupation to the nature of which the disease was due’.
I dispute Ms Lake’s claim that the compensation awarded only related to Mr Starkey’s death from exposure to asbestos during the course of his non Commonwealth employment. I consider the compensation related to the late Mr Starkey’s death from his exposure to asbestos as a whole and not just his exposure from his non Commonwealth employment.
I consider the compensation from the DDB are for the purposes of section 118 of the SRC Act are state workers’ compensation payments. Therefore under, section 118(1) of the SRC Act states ‘compensation is not payable under this Act to, or for the benefit of, that dependant in respect of the injury that resulted in the death.’
I further consider the concept of divisible disease exists to allow the common law damages to be divided between liable parties. It is not to allow a party to claim statutory entitlements for the same condition through multiple parties. There is only one ailment for the purposes of section 5B of the SRC Act that resulted in death of the Late Mr Starkey, and the death resulting from that ailment can be only compensated once.
Accordingly, I find by receiving the DDB payments, which were paid in relation to the death of the late Mr Starkey, your claim for death benefits under sections 14 and 17 of the SRC Act by the operation of section 118 [sic].
(Original emphasis.)
It is this decision which was the subject of his Honour’s decision.
AAT decision
In examining material relevant to Mr Starkey’s condition, his Honour relied on unchallenged expert evidence of Professor ABX Breslin, a consultant thoracic physician. In particular his Honour cited (at [28]-[29]) the following comments of Professor Breslin:
Diffuse pulmonary fibrosis (or scarring) caused by the inhalation of asbestos fibres is referred to as asbestosis. Asbestosis is defined as diffuse interstitial fibrosis of the lung resulting from the inhalation and retention of considerable numbers of asbestos fibres usually after prolonged exposure. Asbestosis usually requires lifetime exposures of 20-25 fibre/ml years in total although much lower doses have been reported to be associated with the development of asbestosis. Interestingly, only 50% of people heavily exposed to asbestos develop asbestosis and the reason for this is not known. All periods of exposure contribute to the development of the asbestosis and this occurs not so much because of an interaction between the separately inhaled fibres but rather because of separate reactions dealing with each fibre contributing reactive oxygen species which added together may produce asbestosis. Thus, where an individual works in a number of industries, it is the cumulative effect of the asbestos fibres so inhaled in those industries which may lead to the development of asbestosis; were for example the individual not to work in one or other of those industries total inhaled asbestos may not be sufficient to cause asbestosis. In Mr Starkey’s case, if he had not worked at the dockyards it is more probable than not that he would not have developed asbestosis as both myself and Mr Starkey estimate that his exposure at the dockyard was the heaviest and it certainly went on for the longest time of all the individual periods of exposure. As indicated above, lifetime exposure levels of 20-25 fibre/ml years are generally considered to be needed before asbestosis is at risk of developing but lower levels of total exposure have been associated with the development of asbestosis, down to as low as 4.5 fibres/ml years.
Thus each fibre that is inhaled causes toxicity both directly and through the cellular mediators liberated by that exposure and these reactions are working independently of one another. It is the totality of the reactions that may lead to the development of asbestosis. Not all heavily exposed individuals develop asbestosis.
…
Can it be said that each exposure to asbestos fibre causes its own independent damage from those fibres from that exposure which remain in the lung and which then engage in the development of fibrosis? In this sense do you consider the condition of asbestosis divisible from each exposure a victim may suffer?
Each exposure to asbestos fibre causes its own independent damage and it is the cumulative effect of the fibres and the chemical reactions associated with each fibre which then may result in the development of fibrosis or asbestosis. Whilst divisible and indivisible are a legal term and not a medical one asbestosis in my view is a divisible disease and the disease results from each exposure.
…
Thus can it be said that any physical damage or pathological changes (short or long term) caused from one exposure to asbestos fibre is separate and distinct from the physical damage or pathological changes (short or long term) caused to the lung from another and subsequent exposure?
The physical damage and pathological changes caused from one exposure to asbestos fibres is separate and distinct from the physical damage and/or pathological changes caused to the lung from another and subsequent exposures. In this connection as I indicated above, if this man had not worked at the dockyards it is more probable than not that he would not have developed asbestosis because his cumulative exposure is unlikely to have been sufficient from the other employments.
(Original emphasis.)
After examining the submissions of the parties, his Honour turned to relevant provisions of the SRC Act, in particular ss 17 and 118, and the definitions of “damages” and “dependant” in s 4(1), “employee” in s 5, “injury” in s 5A and “disease” in s 5B. It was not in dispute that Mrs Starkey was wholly dependent on Mr Starkey at the date of his death.
His Honour examined s 118 of the SRC Act. His Honour noted the decision of the High Court in Telstra Corporation Ltd v Worthing [1999] HCA 12; 197 CLR 61, particularly at [37] where the Court observed that the apparent purpose of s 118 was to prevent double recovery in cases involving the workers’ compensation laws of a foreign country or State or Territory workers’ compensation laws. To that extent, s 118(1)(a) was satisfied, at least in part, because Mr Starkey had recovered compensation under the Dust Diseases Act in respect of an injury – accordingly compensation was not payable under the SRC Act to him in respect of that injury. His Honour noted, however, that that was not the claim pursued by Mrs Starkey.
His Honour found at [76] that the words “compensation is not payable under this Act to that employee in respect of that injury…. or to, or for the benefit of, that dependant in respect of the injury that resulted in the death” in s 118(1) had a distributive operation, so that the words preceding “or” applied to circumstances described in s 118(1)(a), and the words following the word “or” applied to circumstances described in s 118(1)(b).
His Honour considered (at [77]) that s 118(1)(b) was satisfied in this case, because State workers’ compensation had been recovered by a dependant of a deceased employee when Mrs Starkey had recovered compensation under the Dust Diseases Act.
The next issue for consideration by his Honour was whether compensation had been paid to or for the benefit of Mrs Starkey in respect of the injury that had resulted in Mr Starkey’s death. His Honour described the competing submissions of the parties as being:
·On the part of Mrs Starkey: the asbestosis of Mr Starkey was caused by a series of injuries. The compensation she recovered under State legislation was only in respect of the injuries occasioned to Mr Starkey during the course of his employment by employers subject to State legislation. The injuries for which Mrs Starkey claimed compensation under the SRC Act were not the same injury or injuries for which she had received compensation under the State legislation.
·On the part of Comcare: that the claim throughout, including under the Dust Diseases Act, was in respect of the single injury of asbestosis for which Mrs Starkey had already received compensation.
His Honour accepted the submission of Mrs Starkey. In doing so, his Honour relied on the evidence of Professor Breslin to which we have referred. In particular, his Honour observed:
[80]On the evidence, each exposure to asbestos fibre causes its own independent damage and the physical damage and pathological changes caused from one exposure to asbestos fibres is separate and distinct from the physical damage and/or pathological changes caused to the lung from another and subsequent exposures.
[81]Put in terms of s 118, the injury for which State workers compensation was recovered was not the injury in respect of which the dependant, Mrs Starkey, seeks compensation under the SRC Act.
Finally, his Honour considered whether s 48(4) of the SRC Act applied to Mrs Starkey’s claim and concluded that it did not. This was because, in summary:
·section 48(1)(a) did not apply because s 48(4) should be read distributively, similarly to the proper construction of s 118;
·section 48(1)(b) was not engaged because damages, as distinct from compensation, were not recovered by Mrs Starkey;
·in light of the evidence of Professor Breslin, it was clear that each exposure to asbestos fibre caused its own independent damage, and the physical damage and pathological changes caused from one exposure to asbestos fibres were separate and distinct from the physical damage and/or pathological changes caused to the lung from another and subsequent exposures; and
·it followed that, contrary to the submission of Comcare, the earlier AAT decision in Withenshaw and Department of Defence [1999] AATA 37; 28 AAR 416, which interpreted s 48 in the same way, was not wrongly decided.
Proceedings in this Court
The grounds of appeal before this Court were as follows:
1.The [AAT] erred in law at [84] in that:
a.it construed s 48 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) to operate “distributively”, in the sense described by the [AAT] at [84]; whereas
b.the effect of s 48, on its proper construction, is that where an employee recovers damages in respect of an injury, as described in s 48(1)(a), a result is that s 48(4) is engaged so as to prevent recovery to, or for the benefit of, the dependant in respect of the injury.
2.The [AAT] erred in law in failing to hold that the construction given to s 48 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) in the decision of Withenshaw and Department of Defence [1999] AATA 37; 28 AAR 416 was incorrect.
3.The [AAT] erred in law at [76] in that:
a.it construed s 118 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) to operate “distributively”, in the sense described by the [AAT] at [76]; whereas
b.the effect of s 118, on its proper construction, is that if an employee recovers State workers’ compensation in respect of an injury, as described in s 118(1)(a), a result is that s 118(1) is engaged so that compensation is not payable under the Safety, Rehabilitation and Compensation Act 1988 (Cth) to, or for the benefit of, a dependant in respect of the injury that resulted in the death of the employee.
4.The [AAT] erred in law at [87] in that, necessary to the [AAT]’s conclusion at [87], finding that the award of common law damages to Mr Starkey by the Dust Diseases Tribunal on 6 September 2013 did not take into account Mr Starkey’s exposure to asbestos while employed by the Commonwealth.
5.The [AAT] erred in law in that, in making its decision, it failed to identify, or otherwise incorrectly identified, the “injury”, for the purpose of s 17(1) of the Safety, Rehabilitation and Compensation Act 1988 (Cth), that resulted in the death of Mr Starkey.
Consideration
At the hearing of the appeal it quickly became apparent that the primary issues for determination by the Court were:
(1)the nature of the injury suffered by Mr Starkey for which compensation was paid to Mrs Starkey under the Dust Diseases Act (being relevant State workers’ compensation legislation), and whether that injury suffered by Mr Starkey was the same as the injury for which Mrs Starkey sought compensation from Comcare in these proceedings (grounds 3 and 5); and
(2)in circumstances where Mr Starkey had been awarded common law damages by the Dust Diseases Tribunal in respect of his injury, whether s 48 operated to preclude Mrs Starkey from seeking compensation under the SRC Act (grounds 1 and 2).
No submissions were made by Comcare specific to ground 4. In any event we have difficulty understanding this ground in circumstances where:
·the multiple references to [87] of his Honour’s AAT decision are unclear;
·it was common ground – and his Honour accepted – that damages had been awarded in favour of Mr Starkey against Comcare in the Dust Diseases Tribunal;
·the ground does not explain the necessary assumption on which his Honour proceeded in [87], and in respect of which his Honour allegedly erred; and
·no light is cast on this ground by reference to subsequent paragraphs of his Honour’s decision.
Before this Court, like before his Honour, Comcare argued that Mr Starkey had not died from “injuries” but rather the single injury of “asbestosis” and that Mrs Starkey had already been compensated by the Dust Diseases Board in respect of Mr Starkey’s death from that injury. Comcare argued further that it was irrelevant that Mrs Starkey had received only 20% of the compensation to which she may have been entitled. This was because, in Comcare’s submission, s 118(1) precluded further claims by her relating to the injury from which Mr Starkey had died.
However, as Professor Breslin explained in his report (and as his Honour accepted), asbestosis is a “diffuse interstitial fibrosis of the lung resulting from the inhalation and retention of considerable numbers of asbestos fibres”, usually after prolonged exposure (see [28]; emphasis added). The evidence before the AAT was that Mr Starkey’s asbestosis was the outcome of various injuries received by Mr Starkey while working for the Commonwealth, and for private companies in New South Wales. The injuries to Mr Starkey resulting in his death for the purposes of s 17 of the SRC Act were the inhalation and retention of asbestos fibres. It is not in dispute that 80% of Mr Starkey’s injuries were received while he was working for the Commonwealth.
As Professor Breslin further explained, “all periods of exposure contribute to the development of asbestosis and this occurs not so much because of an interaction between the separately inhaled fibres but rather because of separate reactions dealing with each fibre contributing reactive oxygen species which added together may produce asbestosis” (see [28]). We do not accept Comcare’s argument that Mrs Starkey received compensation from the Dust Diseases Board in respect of a single “injury”, namely asbestosis, suffered by Mr Starkey. Rather, Mrs Starkey received compensation referable only to the injuries received by Mr Starkey while he was working for private employers in New South Wales.
We also reject Comcare’s submission that the evidence that only 50% of persons heavily exposed to asbestos eventually develop asbestosis was relevant to the question of “injury”. It is irrelevant in this case because Mr Starkey developed asbestosis as a result of exposures to asbestos. Comcare did not seek to contest that the inhalation of asbestos fibres by a certain class of people causes cellular and chemical reactions in their lung tissue. These reactions were the injuries to Mr Starkey and the ultimate cause of his death.
We can identify no error on the part of his Honour in his analysis of the injuries suffered by Mr Starkey. His Honour’s findings were open on the evidence before the AAT. Section 118(1) SRC Act was only relevant if the injury in respect of which Mrs Starkey received compensation from the Dust Diseases Board was the injury for which she was seeking compensation under the SRC Act. It was not.
In relation to the second issue, relevantly s 48 of the SRC Act provides:
48 Compensation not payable where damages recovered
(1)This section applies where:
(a)an employee recovers damages in respect of an injury to the employee or in respect of the loss of, or damage to, property used by the employee, being an injury, loss or damage in respect of which compensation is payable under this Act; or
(b)damages are recovered by, or for the benefit of, a dependant of a deceased employee in respect of the death of the employee and compensation is payable under this Act in respect of the injury that resulted in that death.
…
(4)Compensation is not payable under this Act to the employee in respect of the injury, loss or damage, or to, or for the benefit of, the dependant in respect of the injury that resulted in the death of the employee, after the date on which the damages were recovered by the employee or by, or for the benefit of, the dependant, as the case may be.
Mr Starkey recovered common law damages on his own behalf against Comcare and the private employers in the Dust Diseases Tribunal on 6 September 2013. Comcare argued that:
·section 48(1)(a) of the SRC Act applied because Mr Starkey had recovered damages; and
·compensation was therefore not payable to Mrs Starkey as his dependant because of the operation of s 48(4) of the SRC Act.
Comcare submitted that, properly construed, where an employee recovers damages in respect of an injury, s 48(4) is engaged to prevent recovery to, or for the benefit of, a dependant in respect of the injury.
His Honour rejected this construction of s 48. We do as well.
Rather, to give proper effect to s 48(4) the section must be interpreted as meaning that:
·where an employee recovers damages in respect of an injury, compensation is not payable under the SRC Act to him or her in respect of the injury (ss 48(1)(a) and 48(4)); and
·where damages are recovered by or for the benefit of a dependant of a deceased employee in respect of the injury that resulted in the death of the employee, compensation is not payable under the SRC Act to or for the benefit of the dependant in respect of that injury.
His Honour described this interpretation as distributive in the operation of ss 48(1) and 48(4), with particular emphasis on the conjunction “or” in both ss 48(1) and 48(4). In the absence of contrary statutory intent, we agree with his Honour that this construction constitutes the plain reading of the text of ss 48(1) and 48(4). The fact that Mr Starkey had recovered damages did not preclude Mrs Starkey in her own right from seeking compensation relating to Mr Starkey’s death. To find otherwise would be to ignore the plain language of the legislation, and also the long held legal principle which gives dependants of employees who die as a result of injuries a remedy in their own right (Meyer v Hadfields Steel Works Ltd (1961) 79 WN (NSW) 322; [1962] NSWLR 645 and on appeal Hadfields Steel Works v Meyer [1962] HCA 34; (1962) 108 CLR 171). The interpretation advanced by Comcare is inconsistent with this principle.
The appeal under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) should be dismissed.
The respondent has sought her costs of the application. In our view costs should follow the event.
I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Kenny, Collier and Flick. Associate:
Dated: 21 September 2017
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