Hampton v Exact Mining Group Pty Ltd
[2016] WADC 172
•13 DECEMBER 2016
HAMPTON -v- EXACT MINING GROUP PTY LTD [2016] WADC 172
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2016] WADC 172 | |
| Case No: | CIV:2215/2015 | 14 OCTOBER 2016 | |
| Coram: | SCOTT DCJ | 13/12/16 | |
| PERTH | |||
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Notional residual entitlements and child allowances to be deducted from judgment in Fatal Accidents Act claim pursuant to s 92(b) | ||
| PDF Version |
| Parties: | AYA HAMPTON DYLAN JOHN HAMPTON by his next friend AYA HAMPTON KARINA TERESE HAMPTON by her next friend AYA HAMPTON AMY LOUISE HAMPTON by her next friend AYA HAMPTON EXACT MINING GROUP PTY LTD |
Catchwords: | Determination of preliminary question of law Supreme Court Rules 1971 O 31 r 1 Whether notional residual entitlement and child allowances paid to plaintiffs pursuant to the Worker's Compensation and Injury Management Act 1981 to be deducted in assessing dependency entitlements in a claim pursuant to the Fatal Accidents Act 1959 |
Legislation: | Fatal Accidents Act 1959, s 4(1), s 5(2), s 6 Workers' Compensation and Injury Management Act 1981 s 5(1), s 18, s 92(a), s 92(b), sch 1 cl 1(1) and (1A) |
Case References: | Cramer v Geraldton Building Co (2004) 29 WAR 410 De Sales v Ingrilli (2002) 212 CLR 338 Dionisatos (for Estate of the Late George Dionisatos) v Acrow Formwork & Scaffolding Pty Ltd [2015] NSWCA 281 Geraldton Building Co v Cramer [2001] WASCA 244 Haines v Bendall (1991) 172 CLR 60 Harris v Commercial Minerals Ltd (1998) 186 CLR 1 Loongana Lime Pty Ltd v Worth [2006] WASCA 183 Manser v Spry (1994) 181 CLR 428 Nottingham v BHB Engineering Pty Ltd [1984] WAR 25 The Motor Vehicle Insurance Trust v Forbes [1985] WAR 50 Vanguard Press Pty Ltd v Baxter (1995) 14 SR (WA) 190 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CIVIL
- First Plaintiff
DYLAN JOHN HAMPTON by his next friend AYA HAMPTON
Second Plaintiff
KARINA TERESE HAMPTON by her next friend AYA HAMPTON
Third Plaintiff
AMY LOUISE HAMPTON by her next friend AYA HAMPTON
Fourth Plaintiff
AND
EXACT MINING GROUP PTY LTD
Defendant
Catchwords:
Determination of preliminary question of law - Supreme Court Rules 1971 O 31 r 1 - Whether notional residual entitlement and child allowances paid to plaintiffs pursuant to the Worker's Compensation and Injury Management Act 1981 to be deducted in assessing dependency entitlements in a claim pursuant to the Fatal Accidents Act 1959
Legislation:
Fatal Accidents Act 1959, s 4(1), s 5(2), s 6
Workers' Compensation and Injury Management Act 1981 s 5(1), s 18, s 92(a), s 92(b), sch 1 cl 1(1) and (1A)
Result:
Notional residual entitlements and child allowances to be deducted from judgment in Fatal Accidents Act claim pursuant to s 92(b)
Representation:
Counsel:
First Plaintiff : Mr B L Nugawela
Second Plaintiff : Mr B L Nugawela
Third Plaintiff : Mr B L Nugawela
Fourth Plaintiff : Mr B L Nugawela
Defendant : Mr T Lampropolis SC
Solicitors:
First Plaintiff : Carter Capner Law
Second Plaintiff : Carter Capner Law
Third Plaintiff : Carter Capner Law
Fourth Plaintiff : Carter Capner Law
Defendant : Kott Gunning
Case(s) referred to in judgment(s):
Cramer v Geraldton Building Co (2004) 29 WAR 410
De Sales v Ingrilli (2002) 212 CLR 338
Dionisatos (for Estate of the Late George Dionisatos) v Acrow Formwork & Scaffolding Pty Ltd [2015] NSWCA 281
Geraldton Building Co v Cramer [2001] WASCA 244
Haines v Bendall (1991) 172 CLR 60
Harris v Commercial Minerals Ltd (1998) 186 CLR 1
Loongana Lime Pty Ltd v Worth [2006] WASCA 183
Manser v Spry (1994) 181 CLR 428
Nottingham v BHB Engineering Pty Ltd [1984] WAR 25
The Motor Vehicle Insurance Trust v Forbes [1985] WAR 50
Vanguard Press Pty Ltd v Baxter (1995) 14 SR (WA) 190
1 SCOTT DCJ: On 4 December 2013, whilst working as an employee of the defendant, Stephen Hampton (deceased) was killed.
2 The first plaintiff is the widow of the deceased and the second, third and fourth plaintiffs (children) are his children.
3 Each of the plaintiffs are dependants of the deceased. The first plaintiff, on her own behalf and on behalf of the children, has brought this action against the defendant pursuant to the Fatal Accidents Act 1959 (WA) (Fatal Accidents Act).
4 Consequent upon the death of the deceased the defendant has paid the notional residual entitlement (NRE) in the sum of $283,418 to the first plaintiff and, as and from 4 December 2013, child allowances by way of periodic payments to or for the benefit of the children (child allowances). The NRE and/or child allowances were paid pursuant to sch 1 of the Workers' Compensation and Injury Management Act 1981 (Workers' Compensation Act).
5 At the pre-trial conference the parties were unable to agree as to whether the NRE and the child allowances ought to be deducted in the assessment of dependency entitlements claimed under the Fatal Accidents Act.
6 As a consequence, the parties agreed that there ought to be a determination of that issue as a preliminary question of law pursuant to O 31 r 1 of the Rules of the Supreme Court 1971 (RSC). To that end, orders were made by consent that, by way of a special case, a question of law be raised for the opinion of the court namely whether in assessing dependency entitlements under the Fatal Accidents Act the NRE paid to the first plaintiff and child allowances paid to the children pursuant to sch 1 cl 1 and 2 of the Workers' Compensation Act ought to be deducted.
Issues to be determined
7 Counsel for the parties agree that the issues which fall to be determined are:
1. Whether, pursuant to s 92(b) of the Worker's Compensation Act, from the amount of any judgment in the Fatal Accidents Act claim, the NRE and/or child allowances ought to be deducted.
2. In the event that I determined that the NRE and/or child allowances are not to be deducted from any judgment pursuant to s 92(b), whether those payments are in any event to be brought to account in the assessment of damages in the Fatal Accidents Act claim.
Deduction under s 92(b) of the Workers' Compensation Act
8 Pursuant to s 5 of the Workers' Compensation Act:
(a) 'Injury' means a personal injury by accident arising out of or in the course of employment.
(b) As to the definition of 'worker': '… any reference to a worker who has suffered an injury shall, where the worker is dead, include a reference to his legal personal representative or to his dependants or other person to whom or for whose benefit compensation is payable'.
(c) NRE in relation to a deceased worker is defined as the sum equal to –
(a) if section 56 or Schedule 5 clause 2 applied to any incapacity resulting from the relevant injury, the aggregate of weekly payments for total incapacity of the worker at a rate calculated and varied in accordance with Schedule 1 as at the date of his death, for a period from that date up to the date when weekly payments of compensation would have ceased by reason of age, less the amount of any lump sum paid in redemption of weekly payments and the amount of any sum paid under Schedule 2, for the injury or impairment resulting from the injury;
(b) the NRE amount as at the date of the worker's death, less the amount of any weekly payments made, the amount of any lump sum paid in redemption of weekly payments, and the amount of any sum paid under Schedule 2, for the injury suffered by the worker or impairment resulting from the injury, …
92. Both damages and workers' compensation not recoverable
Where in respect of an injury an action is brought by a worker for damages independently of this Act against his employer or against some other person (referred to in this section as the defendant) or against both of them —
(a) if the court decides the action should succeed, then after damages have been ascertained but before judgment is entered for the worker in the action, the worker shall be given a reasonable opportunity to elect whether to have judgment or to discontinue the action;
(b) if the action proceeds to judgment, including the acceptance of an offer to consent to judgment, against the employer only or against the employer and the defendant, there shall be deducted from the amount of the judgment and be paid to the employer a sum representing the amount (after apportionment in respect of any contributory negligence of the worker) actually recoverable by the worker by way of weekly or lump sum compensation, medical and other expenses paid pursuant to this Act, but where liability is apportioned between the employer and the defendant the defendant's liability to pay to the worker shall be reduced accordingly; …
18. If an injury of a worker occurs, the employer shall, subject to this Act, be liable to pay compensation in accordance with Schedule 1.
11 Schedule 1 provides relevantly:
Schedule 1 - Compensation entitlements
1. Death - dependants wholly dependent - notional residual entitlement
(1) Subject to subclauses (2) and (3), where death results from the injury and the worker leaves -
(a) a dependant who -
(i) is not of a kind referred to in clause 1A; and
(ii) is wholly dependent upon the worker's earnings;
- or
(b) a child or step-child in respect of whom an election to receive the amount of a provisional apportionment has been registered under clause 1C,
or more than one of those persons, in respect and for the benefit only of all those dependants, a sum equal to the notional residual entitlement of the worker.
…
1A. Death — dependants wholly dependent — child's allowance
Subject to clause 1B, where death results from the injury and the worker leaves any dependants wholly dependent upon the worker's earnings -
(a) in respect and for the benefit only of each of those dependants, if any, who is a child, or step-child, under the age of 16 years, a child's allowance weekly until the child or step-child attains the age of 16 years;
(b) in respect and for the benefit only of each of those dependants, if any, who is a full-time student child, or step-child, and has attained the age of 16 years but is under the age of 21 years, a child's allowance weekly until the child or step-child attains the age of 21 years or ceases to be a full-time student whichever is the sooner;
(c) in respect and for the benefit only of each of those dependants who is a child, or step-child, of any age, whether a full-time student or otherwise who, by reason of circumstances an arbitrator in the arbitrator's absolute discretion decides should receive continued support, a child's allowance weekly until such time as the arbitrator orders or until the child or step-child attains the age of 21 years whichever is the sooner.
13 It is trite to say that the settled principle governing the assessment of compensatory damages is that the injured party should receive compensation in a sum which, so far as money can do, will put that party in the same position as he or she would have been in had the tort not been committed: Haines v Bendall (1991) 172 CLR 60, 63.
14 In that case, the majority observed that compensation is the cardinal concept. A plaintiff cannot recover more than he or she has lost.
15 In Manser v Spry (1994) 181 CLR 428, 435, the court said:
However, as Walsh JA pointed out in Adams v Ascot Iron Foundry Pty Ltd (1968) 72 SR(NSW) 120 at 134 the settled principle does not solve the problem whether a benefit to which a plaintiff is entitled is relevant to – that is, whether it goes in reduction of – the damages which a tortfeasor is to pay for the loss or damage caused by the tort.
16 As Gleeson JA observed in Dionisatos (for Estate of the Late George Dionisatos) v Acrow Formwork & Scaffolding Pty Ltd [2015] NSWCA 281 [203] the issue of whether collateral benefits are deductible from common law damages has been the subject of much authority yet, as the authorities demonstrate, difficulties continue to arise. His Honour said that the general principles are well established and then referred to a number of High Court authorities including Manser.
17 In Manser at (436) the court observed that in order to ascertain whether a statutory benefit is to be enjoyed independently of and cumulatively upon the right to damages the court must endeavour to discover the intention of the legislature.
18 To that end, the court said:
There are three possible indicia of a relevant legislative intention: the financial source of the benefit, the presence of a provision which requires a repayment of a statutory benefit out of the damages awarded or paid and the nature of the benefit. … If statute provides that a particular benefit is to be repaid out of damages, there is a clear indication that that benefit is not to go in reduction of the tortfeasor's liability.
19 In the event that there is no statutory provision which requires the repayment of a statutory benefit if damages are awarded then the court is required to consider the financial source of the benefit and the nature of the benefit.
20 Section 92 is contained in pt IV of the Workers' Compensation Act which deals with civil proceedings in addition to or independent of the Act.
21 It is not controversial that the legislative intent behind s 92 is to defeat a double recovery by a worker from an employer arising from the same injury: The Motor Vehicle Insurance Trust v Forbes [1985] WAR 50, 54; Geraldton Building Co v Cramer [2001] WASCA 244 [20]; Cramer v Geraldton Building Co (2004) 29 WAR 410.
22 In Cramer [76] EM Heenan J said:
… damages recoverable by a worker against an employer for personal injuries and associated loss caused by the employer's negligence, breach of statutory duty or breach of the express or implied terms of the contract of employment are wholly compensatory in nature. It follows from this that there would be an unacceptable duplication of recovery if a successful claimant were to receive in full both damages awarded to him in an action at common law and the workers' compensation entitlements payable to him by his employer in respect to the same injury or disability. Under the Workers' Compensation and Rehabilitation Act, Parliament has made it clear that an' employer should be reimbursed for the workers' compensation paid by deduction of that sum from the damages payable, in the event that the employer is the tortfeasor; or by obliging the defendant found liable (if not the employer) to divert a portion of the damages to the employer to repay the workers' compensation benefits paid by the employer. In other cases, this policy is advanced by granting to the employer a right of action against the tortfeasor who caused the loss and damage, which can be pursued by the employer if the employee himself did not make such a claim. These are the principles which underlie ss 92 and 93 of the Act in this State.
23 The preamble in s 92 refers to an injury in respect to which an action is brought by a worker for damages independently of the Workers' Compensation Act against his employer and/or against some other person or against both of them.
24 A claim pursuant to the Fatal Accidents Act is a claim for damages (s 4(1)) brought by a worker – having regard to definition of 'worker' to which I have referred. That is so albeit that it is a statutory claim: see Loongana Lime Pty Ltd v Worth [2006] WASCA 183. In this case the claim against the defendant as the deceased's employer is for damages for the death of the deceased caused by the defendant's negligence.
25 In supplementary submissions the plaintiffs say that s 92 only applies to an 'action … brought by a worker in respect of an injury' and that the term 'injury' as it is defined in s 5 of the Workers' Compensation Act does not include death. As such the submission is that the widow's action pursuant to the Fatal Accidents Act is not brought in respect of the 'injury' but in respect of the worker's death.
26 There is no merit in that submission. The deceased's death resulted from an 'injury' as defined in s 5 and the Fatal Accidents Act claim is brought by a worker 'in respect of' that injury.
27 By s 92(b) there is to be deducted from the amount of the judgment in the Fatal Accidents Act claim and paid to the defendant a sum representing the amount actually recoverable by the worker by way of weekly or lump sum compensation, medical and other expenses paid pursuant to the Workers' Compensation Act.
28 Counsel for the plaintiffs correctly conceded during the course of argument that the NRE paid to the first plaintiff constituted lump sum or weekly compensation.
29 Counsel for the plaintiffs however contended that compensation (damages) claimed pursuant to the Fatal Accidents Act could not be said to be any 'sum representing the amount … actually recoverable by the worker by way of weekly or lump sum compensation' because an action under the Fatal Accidents Act is for loss of expectation of pecuniary benefit not dependency. To that end he cited De Sales v Ingrilli (2002) 212 CLR 338 [11] - [13]. Counsel submitted that the sums referred to in s 92(b) and the amount of any judgment obtained in the action pursuant to the Fatal Accidents Act did not represent interchangeable double compensation at the heart of s 92. In that regard counsel contended that the plaintiffs' position was supported by the interpretation of similar New South Wales provisions in Dionisatos.
30 I do not accept that submission for the following reasons:
(a) In Dionisatos the court there dealt with a claim by the estate which was not the recipient of the statutory benefit received by Mr Dionisatos.
(b) In the Fatal Accidents Act claim there will be a judgment for one sum of money representing the damages for which the defendant is liable consequent upon its wrongful act, neglect or default which caused the death of the deceased.
(c) The judgment sum is then to be divided among the persons for whose benefit the action was brought in such shares as the court finds and directs (s 6(4) of the Fatal Accidents Act).
(d) Damages claimed pursuant to the Fatal Accidents Act are calculated by reference to the loss of pecuniary benefit that could reasonably have been expected by the continuance of the life of the deceased had death not occurred. Those damages are calculated on the basis of pecuniary gains and losses consequent upon the death of the deceased: De Sales v Ingrilli [11] - [12].
(e) In determining the amount of a judgment for damages pursuant to the provisions of the Fatal Accidents Act, inevitably the most common benefit is the dependency of the claimant upon the likely future income of the deceased had he not passed away. In De Sales v Ingrilli Gleeson CJ said [14] – [15]:
Calculating damages for the loss of a reasonable expectation of pecuniary benefit usually involves calculating a primary sum and then making such further adjustments or allowances as are necessary to produce a result that gives a true reflex of the loss … . The court assesses what benefits the deceased would have brought to the family, in the form of either income or the provision of services. The court determines the share of that benefit that would have been enjoyed by a relative during the deceased's lifetime. And the court determines the period for which a relative could reasonably have expected to receive the benefit. …
(f) The fact that the character of workers' compensation payments and that of damages payable remain different is not relevant in determining the operation of s 92: see Cramer [80], [81].
31 In supplementary submissions the plaintiffs submit that on the proper construction of s 92(b) and to achieve the underlying purpose of ensuring that a worker does not obtain both double recovery of damages and workers' compensation the word 'recoverable' is intended and ought to be construed to refer to the amount recoverable in the Fatal Accidents Act action.
32 By that submission it is contended that Parliament's use of the phrase 'by way of' ensures parity or correspondence between the amounts actually recoverable in the judgment, with the amounts actually paid 'by way of' compensation under the Workers' Compensation Act, so as to avoid double compensation. Parliament's use of the words 'representing the amount' also achieves the same purpose.
33 Having regard to the context and legislative purpose of s 92(b) the ordinary and grammatical sense of the statutory words there appearing do not support that submission.
34 The words 'representing the amount … actually recoverable by the worker by way of weekly or lump sum compensation, medical and other expenses paid pursuant to this Act' clearly refer to amounts to which the worker was entitled under the Act and paid.
35 They bear no reference to any sum recoverable in the action for damages.
36 In the Australian Workers' Compensation Guide (CCH) (49-740) the author observes:
If the amounts paid to the worker by way of 'compensation' should not have been paid in the first place (for example, if the worker was not incapacitated for work as a result of the disability but the worker nevertheless received weekly compensation voluntarily paid by the employer) then such payments were not actually recoverable by the worker and paid pursuant to the Act.
37 That construction of these words in s 92(b) is consistent with observations of this court made in Vanguard Press Pty Ltd v Baxter (1995) 14 SR (WA) 190, 19 and Nottingham v BHB Engineering Pty Ltd [1984] WAR 25, 29 (Olney J).
38 In my view the provisions of s 92(b) are clear. In this case what is required to be deducted from any judgment and paid to the employer (defendant) is the workers' compensation recoverable by and paid to the worker (plaintiffs) pursuant to the Workers' Compensation Act.
39 That compensation includes the NRE and child allowances.
40 It will be a matter for the plaintiffs, pursuant to s 92(a) to elect whether to have the judgment or to discontinue the action.
Whether NRE and child allowances to be brought to account in damages claim
41 Given my determination as to the construction and effect of s 92(b) there is no need to deal with the alternative issue raised by the parties.
42 However I will do so in the event that I am found to be in error in my determination as to s 92(b).
43 In s 5(2) of the Fatal Accidents Act there are a number of defined benefits which are not to be taken into account in the assessment of damages.
44 Whilst this section does not contain an exhaustive list, it is notable that compensation paid to a 'worker' pursuant to the Workers' Compensation Act is not included.
45 Against the loss of a reasonable expectation of benefit there must be taken into account the pecuniary benefits arising on the death of the deceased to which a claimant had a reasonable expectation: Public Trustee v Zoanetti (1945) 709 CLR 266, 277; Lunt, Assessment of Damages for Personal Injury and Death (4th ed) 9.5.1.
46 In Dionisatos at [220] Gleeson JA said:
The reason for the deduction in a dependency claim under the Compensation to Relatives Act is that the compensation awarded to the widow by the Board and the damages that the dependent widow recovers under the Compensation to Relatives Act both address her loss, not her late husband's loss. Authority requires that any benefits flowing to the dependent widow from the death of the deceased are to be brought to account in a claim pursuant to the Compensation to Relatives Act: De Sales v Ingrilli [2002] HCA 52; 212 CLR 338 at [11] (Gleeson CJ). This reflects that damages for the dependant's injury in this context are calculated on a balance of pecuniary gains and losses consequent upon the death of another: Public Trustee v Zoanetti [1945] HCA 26; 70 CLR 266; Nguyen v Nguyen [1990] HCA 9; 169 CLR 245.
47 In Cramer EM Heenan J observed at [78]:
However, even in circumstances where there is no statutory entitlement for an employer to deduct or recover from damages awarded to his employee, the amounts of workers' compensation benefits paid by the employer in respect of the same disability, the approach taken by the courts is to treat the payments of workers' compensation as benefits received by the employee in reduction of his losses and to credit them in reduction of the damages awarded – Manser v Spry (1994) 181 CLR 428; Harris v Commercial Minerals Ltd (1996) 186 CLR 1; Hood Constructions Pty Ltd v Nicholas (1987) 9 NSWLR 60.
48 His Honour's observations in Cramer are consistent with the High Court's analysis with respect to the source and the nature of the benefit in Harris v Commercial Minerals Ltd (1998) 186 CLR 1, 17 – 18, and Manser (436 – 439).
49 In this case and in many or perhaps most claims for damages under the Fatal Accidents Act it is to be expected that in assessing the loss of expected benefit a deceased's earning capacity will be taken into account.
50 The compensation benefits paid under the Workers' Compensation Act to the plaintiffs in the Fatal Accidents Act claim are ordinary incidents of the deceased's employment which must be taken into account in assessing the damages for which, in this case, the employer/defendant is liable at common law. See Manser at 439.
51 In the event that the NRE and child allowances paid to the plaintiffs in this case were not taken into account in the assessment of damages, there would be an unjustifiable windfall.
52 In the premises in assessing the loss and damage in this claim, the NRE and child allowances ought to be brought to account.
53 I will hear counsel as to costs.
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