Starkey and Comcare (Compensation)
[2017] AATA 200
•17 February 2017
Starkey and Comcare (Compensation) [2017] AATA 200 (17 February 2017)
Division:GENERAL DIVISION
File Number: 2015/3107
Re:Roslyn Starkey
APPLICANT
AndComcare
RESPONDENT
DECISION
Tribunal:The Honourable Justice A Robertson, Deputy President
Date:17 February 2017
Place:Sydney
1.The decision under review is set aside and the matter remitted for reconsideration by the respondent.
2.Pursuant to s 67(9) of the Safety, Rehabilitation and Compensation Act 1988 (Cth), the respondent pay the costs of the proceedings incurred by the applicant, as agreed or taxed.
...................[sgd].....................................................
The Honourable Justice A Robertson, Deputy President
CATCHWORDS
COMPENSATION - asbestosis resulting in employee’s death - employee employed at different times by companies in New South Wales and by the Commonwealth and exposed to asbestos during those times - all periods of asbestos exposure contributed materially to the development of employee’s asbestosis - common law damages recovered by employee against companies and against Commonwealth (Comcare) - compensation paid to employee under Workers’ Compensation (Dust Diseases) Act 1942 (NSW) (Dust Diseases Act) - after the employee’s death, the deceased’s wife was awarded a lump sum in accordance with s 8(2B)(b)(i) of the Dust Diseases Act and fortnightly compensation in accordance with s 8(2B)(b)(ii) - because the asbestosis was only 20% attributable to exposure “in New South Wales” the deceased’s wife received only 20% of what would otherwise have been her entitlements under the Dust Diseases Act - whether s 118 or s 48 of the Safety Rehabilitation and Compensation Act 1988 (Cth) precluded claim for compensation by the deceased’s dependant wife under s 17(3)
LEGISLATION
Asbestos‑related Claims (Management of Commonwealth Liabilities) Act 2005 (Cth) Compensation (Commonwealth Government Employees) Act 1971 (Cth)
Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 13AA, 17(3), 48(4), 118
Civil Liability Act 2002 (NSW) s 15B
Dust Diseases Tribunal Act 1989 (NSW) s 11AWorkers’ Compensation (Dust Diseases) Act 1942 (NSW) s 8
CASES
Comcare v Fyfe [1999] FCA 1368
Dionisatos (for Estate of Late Dionysatos) v Acrow Formwork and Scaffolding Pty Ltd [2015] NSWCA 281; 91 NSWLR 34
Lennon v TNT Australia Pty Ltd [2013] NSWCA 77; 84 NSWLR 161
Re Scott and Commissioner for Superannuation (1986) 9 ALD 491
Slattery v Comcare (1996) 70 FCR 131
Telstra Corp Ltd v Barrow (1994) 19 AAR 523
Telstra Corporation Ltd v Worthing [1999] HCA 12; 197 CLR 61
Withenshaw and Department of Defence [1999] AATA 37; (1999) 28 AAR 416Workers’ Compensation Dust Diseases Board of NSW v Cook [2015] NSWCA 270
REASONS FOR DECISION
The Honourable Justice A Robertson, Deputy President
17 February 2017
INTRODUCTION
On 11 December 2014, Mrs Roslyn Starkey submitted a claim under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the SRC Act) for a work-related death, being the death of her husband the late Mr Graeme Walter Starkey on 28 July 2014 from asbestosis (end stage) as a result of his employment at Garden Island. She claimed a lump sum payment as a dependant of the deceased Mr Starkey. Mrs Starkey applies to the Tribunal for review of the decision made on 29 April 2015 by the respondent, Comcare, affirming the determination made on 10 March 2015 denying her claim.
Section 17 of the SRC Act was in the following terms, so far as relevant:
17 Compensation for injuries resulting in death
(1)This section applies where an injury to an employee results in death.
(2)…
(3)Subject to this section…, if the employee dies leaving dependants some or all of whom were, at the date of the employee’s death, wholly dependent on the employee, Comcare is liable to pay compensation in respect of the injury of $400,000 and that compensation is payable to, or in accordance with the directions of, Comcare for the benefit of all of those dependants.
…
(7)An amount of compensation paid or payable under this Act before the death of an employee:
(a)…;
(b)shall not be deducted from the compensation payable under subsection (3);…
…
It appears that the maximum amount of compensation under s 17(3) is indexed by virtue of s 13AA: see the definition in s 13AA(1) of “relevant amount”.
Comcare’s primary decision centred on Mrs Starkey, as the spouse and a dependant of the late Mr Starkey, having applied to the New South Wales Dust Diseases Board (the DDB) and being awarded a lump sum of $58,401.00 and fortnightly compensation of $98.40 by the DDB. It was said that this compensation was awarded under s 8(2B)(b) of the Workers’ Compensation (Dust Diseases) Act 1942 (NSW) (the Dust Diseases Act).
THE STATUTORY PROVISIONS
As will appear, at the forefront of Comcare’s response was the following provision of the SRC Act:
118 Double benefits
(1)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.
(2)If, after any compensation has been paid by a relevant authority under this Act:
(a)to an employee in respect of an injury or the loss of, or damage to, property used by the employee; or
(b)to, or for the benefit of, a dependant of a deceased employee;
any State workers’ compensation is recovered by the employee in respect of that injury, loss or damage or to, or for the benefit of, the dependant in respect of the injury that resulted in the death, as the case may be, the relevant authority may recover the amount of compensation paid by it from the person to whom it was paid in a court of competent jurisdiction as a debt due to the authority.
…
(6) In this section:
State workers’ compensation means compensation recoverable under a law of a State or of a Territory, or of a foreign country, relating to workers’ compensation.
Comcare relied in the alternative on s 48(4) of the SRC Act. Section 48, so far as relevant, 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.
…
(7)Where an employee, or a dependant of an employee, establishes to the satisfaction of Comcare that a part of the damages referred to in subsection (1) did not relate to an injury, loss or damage in respect of which compensation is payable under this Act, subsection (3) applies in relation to that employee or dependant as if the amount of the damages were an amount equal to so much of the amount of the damages as did relate to an injury, loss or damage in respect of which compensation is payable under this Act.
…
Comcare accepted that the decision of Deputy President McMahon in Withenshaw and Department of Defence [1999] AATA 37; (1999) 28 AAR 416 stood in the way of its success on the s 48(4) submission.
Section 8 of the Dust Diseases Act was relevantly as follows:
8 Certificate of Medical Assessment Panel and rates of compensation
(1)Subject to this Act:
(a)where the Medical Assessment Panel certifies that a person is totally or partially disabled for work from a dust disease and that the person’s disablement was reasonably attributable to the person’s exposure to the inhalation of dust in an occupation to the nature of which the disease was due, such person shall, if the Authority finds:
(i)…, or
(ii)that such person was a worker during only part of the time the person was engaged in such occupation, and, on the report of the Medical Assessment Panel, further finds that the person’s disablement was reasonably attributable to the person’s exposure to the inhalation of dust in such occupation during the time that the Authority has found that the person was a worker in such occupation,
be entitled to an award from the Authority, and to receive compensation at the prescribed rates from the Fund,
…
(2B)
(a)This subsection applies to every award of the board made, after the commencement of Part 2 of the Workers’ Compensation (Dust Diseases) Amendment Act 1967, pursuant to subsection (1) (b) or (c) in respect of the death before or after that commencement of a person (in this subsection and in subsections (2C) and (2D) referred to as the worker) upon whom there was dependent for support, immediately before the worker’s death, the following and no other person or persons:
(i)a prescribed relative of the worker, or
(ii)a surviving spouse and a child or children of the worker.
(iii)(Repealed)
(b)Where the dependent person referred to in paragraph (a) (i) was wholly dependent for support on the worker and an award to which this subsection applies is made by the board under subsection (1) (b), the prescribed rates of compensation payable shall be:
…
The subsection then set out a number of rates.
Section 8AA of the Dust Diseases Act provided that compensation was not payable in certain circumstances centring on “prescribed engagement” as defined. That “prescribed engagement” was in an occupation as an employee covered by the SRC Act. In effect it relevantly provided, in relation to such an occupation, that any person who had received compensation under that Act in respect of the death of another person from a dust disease contracted in the course of that occupation shall not be entitled to compensation from the Fund where the deceased employee had the “prescribed engagement” as that person’s last work.
Section 15B(2) of the Civil Liability Act 2002 (NSW) provided that in certain circumstances damages may be awarded to a claimant for any loss of the claimant’s capacity to provide gratuitous domestic services to the claimant’s dependants.
THE FACTS
For the purpose of reviewing the primary decision I find the following facts, which I address in chronological order so far as possible.
Between 1960 and 1965, Mr Starkey worked at Beecraft Engineering Company at Balgowlah, New South Wales. He also worked there again for nine months in 1969. In each period Mr Starkey was exposed to asbestos.
Between 1968 and 1969, Mr Starkey worked for WJ Manufacturing Co Ltd at Brookvale, New South Wales. He was exposed to some asbestos in that work.
Mr Starkey was formerly employed by the Department of Navy and the Department of Defence Support and was therefore a former Commonwealth employee. He was employed at Garden Island Dockyard, New South Wales on a full-time basis from 27 July 1981 to 5 November 2012. He had also had a brief period working at Garden Island between 1969 and 1970. In the earlier period there was some asbestos exposure and in the later period there was very significant asbestos exposure through his being close by to laggers, although it is likely that asbestos was no longer used after the mid-1980s.
Of Mr Starkey’s total asbestos exposure, 60% occurred while working at Garden Island, 25% occurred with WJ Manufacturing and 15% with Beecraft Engineering.
On 2 December 2010, the Medical Authority of the DDB constituted under the Dust Diseases Act certified that Mr Starkey had the dust disease asbestosis; the level of disablement due to this disease was 40%; the disablement was reasonably attributable to his exposure to the inhalation of dust; 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%; and such disablement was deemed to have commenced from 10 May 2010.
On 5 April 2011, the Medical Authority reviewed Mr Starkey’s level of disablement caused by the asbestosis and said that his level of disablement so caused had increased from 40% to 50%. The Medical Authority said that Mr Starkey’s “entitlement as a worker under the Act in NSW will remain at 20%.” The Medical Authority said that since it appeared that Mr Starkey was still employed, no compensation was payable at that stage.
Mr Starkey claimed common law damages in the Dust Diseases Tribunal in proceedings DDT 123/2013. These proceedings were filed on 18 April 2013. Comcare was the second defendant: see s 5 of the Asbestos‑related Claims (Management of Commonwealth Liabilities) Act 2005 (Cth). Mr Starkey claimed provisional damages pursuant to s 11A of the Dust Diseases Tribunal Act 1989 (NSW) in respect of asbestosis.
In his statement of particulars, filed on 10 May 2013 in the Dust Diseases Tribunal, Mr Starkey estimated that 10-15% of his exposure to asbestos occurred whilst he was working for New South Wales employers, 5 to 10% while he was working for South African employers and 80 to 90% whilst employed by the Commonwealth. Mr Starkey said that his heaviest exposure to asbestos dust occurred whilst he was working at Garden Island Dockyard in all periods up to about 1989.
Mr Starkey also claimed damages under s 15B(2) of the Civil Liability Act for loss of his capacity to provide gratuitous domestic services to his wife. More particularly, he claimed damages for services provided to third parties and specified that his wife suffered from osteoarthritis and referred to other disabilities suffered by her. Mr Starkey said in those particulars that he normally spent about 12 hours per week doing tasks for his wife’s benefit that she could not do because of her disability.
At the time of his application to the Dust Diseases Tribunal, 18 April 2013, Mr Starkey was receiving a weekly payment of compensation from the DDB in the sum of $226.30 per fortnight “including a small payment for Roz.” Although not specified, it appears that this compensation was payable under s 8(1)(a) of the Dust Diseases Act.
There were three verdicts and judgments handed down in favour of Mr Starkey, by consent and without admission of liability, on 6 September 2013: one as against the first defendant in the sum of $15,300, another against Comcare in the sum of $793,700, and a third against AAI Ltd in the sum of $85,000. Each judgment was inclusive of the plaintiff’s costs in respect of the claim for provisional damages. The consent judgment specified the dust related conditions in respect of which Mr Starkey could seek further damages.
On 28 July 2014 Mr Starkey died. As at that date and immediately before that date, Mrs Starkey lived with (the employee) Mr Starkey and was his spouse.
On 18 August 2014, Mrs Starkey made an application for compensation to the DDB as the spouse and dependant of the late Mr Starkey.
On 21 August 2014, the Medical Authority of the DDB certified that Mr Starkey had died from asbestosis; his death was reasonably attributable to his exposure to inhalation of dust; and the proportion of his total exposure to dust that was reasonably attributable to occupational exposure in New South Wales was 20%.
On 18 September 2014, Mrs Starkey was awarded a lump sum of $58,401.00 in accordance with s 8(2B)(b)(i) of the Dust Diseases Act and fortnightly compensation in accordance with s 8(2B)(b)(ii), at a rate of $98.40, commencing on and from 29 July 2014.
It was common ground that because the disease was only 20% attributable to exposure “in New South Wales”, Mrs Starkey only received 20% of what would otherwise have been her entitlements under the Dust Diseases Act.
As I have said, on 11 December 2014, Mrs Starkey submitted a claim under the SRC Act for a work-related death, being the death of the late Mr Starkey on 28 July 2014 from asbestosis (end stage) as a result of his employment at Garden Island. She claimed a lump-sum payment as a dependant of the deceased Mr Starkey.
I accept the unchallenged evidence of Professor ABX Breslin, consultant thoracic physician, whose report dated 3 November 2016 was received by the Tribunal without objection. Professor Breslin wrote, omitting footnotes:
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.
…
In the same report, Professor Breslin was asked and answered the following questions:
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.
I accept the opinion of Professor Breslin that all periods of asbestos exposure, Beecraft Engineering Company, WJ Manufacturing and Mr Starkey’s employment by the Commonwealth Department of Navy and the Department of Defence Support, contributed materially to the development of Mr Starkey’s asbestosis and all three of the periods occurred in Australia.
The respondent accepts that Mr Starkey’s asbestosis was caused, at least in part, by exposure to asbestos in the course of his employment with the Commonwealth and a Commonwealth Authority (Australian Defence Industries).
THE PARTIES’ SUBMISSIONS
The applicant submitted that s 118 of the SRC Act was of no relevance as the applicant had not recovered any compensation for the injury to which that section applied. Alternatively, the amount that the applicant had recovered should be deducted from her entitlement under the SRC Act.
In relation to s 118, the applicant submitted that, both factually and legally, the Dust Diseases Act only triggered an entitlement if the New South Wales (and not Commonwealth) employer caused injury/disease. The applicant referred to Telstra Corporation Ltd v Worthing [1999] HCA 12; 197 CLR 61 for the proposition that there was no room for the application of State laws in respect of injuries/deaths covered by the SRC Act. It was plain that the amount “recovered” by the applicant was “reduced” to the level of New South Wales employers’ material contribution to the injury. Thus the “injury” for which the applicant received benefits was a different injury to that referred to in s 118, even if the outcome was the same. Section 118 was only triggered if the “injury” was the same. Professor Breslin’s report supported the applicant’s proposition that she did not recover compensation for the Commonwealth “injuries”. For that reason it was submitted that there had been no double benefit and thus nothing was to be deducted from the applicant’s dependency claim for compensation.
The applicant submitted that if her primary submissions were wrong, Comcare was entitled pursuant to s 118 only to deduct from its liability that which she had received from the DDB, whilst remaining liable for the balance. Section 118 was a “set-off” provision not a total defence.
The applicant submitted that the respondent bore the onus of proof to demonstrate why and for what the DDB made its payment, and it being the “same loss” for which the Commonwealth was being asked to pay. That onus had not been discharged.
The applicant submitted that s 48(4) of the SRC Act was of no relevance where the dependant had not recovered damages. Withenshaw should be followed in that the section identifies two separate scenarios, causes of action for damages by an employee and a claim for damages by the dependants of the deceased employee.
In any event, the applicant submitted, Withenshaw should be followed as a matter of comity unless manifestly wrong, which it was not. The applicant referred to Re Scott and Commissioner for Superannuation (1986) 9 ALD 491 at 499 [21]:
[W]here a matter has been decided by the Tribunal after full consideration of competing arguments, the decision is one which is reasonably tenable and there have been no changes to the legislation and no new decisions of the High Court of Australia or the Federal Court which may be relevant, it seems to us that it would be extremely unhelpful for the Tribunal in subsequent proceedings to decide the matter in a manner inconsistent with that decision, particularly when the arguments advanced are substantially the same as those advanced in the previous case.
Additionally, the applicant referred to other matters which should be considered before departing from Withenshaw, including: first, the decision has stood unchallenged for nearly 20 years and, second, despite amendments to the SRC Act over the years, including to s 48, s 48(4) had relevantly remained unchanged since Withenshaw was decided.
The applicant submitted Withenshaw was right and not plainly wrong and should be followed. She submitted that the SRC Act had a beneficial object and should be construed accordingly. The deceased employee was awarded damages for the repetitive injuries to his lung from asbestos fibres. The dependant’s claim for compensation is the economic “injury”. The liability arises from the death of the employee.
The applicant submitted that asbestosis was divisible in the sense that it was possible to attribute cause to the proportion of a person’s exposure to asbestos: it was possible to divide up asbestosis in terms of a contribution and that was what was meant by divisibility.
The applicant submitted that at no stage had Mrs Starkey ever received compensation for the Commonwealth injuries, for the asbestos fibres it caused to be lodged in the lungs of the deceased. They were not the same injuries. The submission was that Mrs Starkey had not received compensation for the injuries caused by Mr Starkey’s exposure to asbestos in the course of his employment by the Commonwealth.
The applicant relied on Workers’ Compensation Dust Diseases Board of NSW v Cook [2015] NSWCA 270 for the submission that there was a fundamental difference between legislation such as the SRC Act, dealing with rights to compensation from employers, and the DDB dealing with a right to compensation from a fund created by the industry which creates dust in occupations. The applicant also relied on Cook at [21] for the proposition that statements of principle in cases dealing with common law damages do not assist. The applicant referred in particular to the reasoning at [47]-[52] of the judgment in support of the conclusion that the DDB was not entitled to resist a claim for compensation under s 8(1) of the Dust Diseases Act on the basis that to allow the claim would, in light of the claimant’s recovery of common law damages, amount to double recovery.
The applicant also relied on Dionisatos (for Estate of Late Dionysatos) v Acrow Formwork and Scaffolding Pty Ltd [2015] NSWCA 281; 91 NSWLR 34. There the critical issue arose from the receipt by Mrs Dionysatos, the widow of the deceased worker, of compensation paid pursuant to s 8(2B)(d) of the Dust Diseases Act. The question was whether that statutory entitlement should be deducted from any damages payable to the worker’s estate. The New South Wales Court of Appeal held that it should not, reasoning, per Gleeson JA at [209], that the subject of Mrs Dionysatos’ dependency claim under the Dust Diseases Act was not the “same loss” as suffered by Mr Dionysatos, and on his death, by his estate.
The applicant also referred to Comcare v Fyfe [1999] FCA 1368. That case relevantly concerned s 48(3) of the SRC Act: referring to payment to Comcare, from the damages recovered, the amount of compensation “paid to the employee in respect of the injury ... or to, or for the benefit of, the dependant in respect of the injury” that resulted in the employee's death. The unsuccessful respondent contended that the word “to” excluded payments made to third parties, whether at the employee's direction or otherwise; it related only to payments to the employee. The present applicant relied on the following paragraph in the judgment of Finn J at [22]:
In my view, the construction propounded by Comcare is to be preferred. First, Part IV has a quite distinct policy and purpose from that of Part II and Part III in which sections such as s 16 and s 29 are to be found. It is a purpose designed, inter alia, to prevent "double benefit" to employees in respect of the same injury in the event of a successful damages claim relating to that injury.
The applicant submitted, that on any view of the facts, be it injury, be it the lack of loss, be it the lack of commonality of claimants, be it the DDB Rules, and be it the failure of the Commonwealth to discharge its onus to show what was the loss which had been compensated so far, there was no trigger for s 118 or ss 46 – 48 of the SRC Act to justify the refusal on the Commonwealth’s part to pay for its liability that s 17 required.
The respondent submitted there were only three factual findings necessary to be made for present purposes. The first was that Mr Starkey made a successful State compensation claim, and that was expressed to include “a small payment for Roz”. The second factual finding was that Mr Starkey successfully claimed common law damages. That successful claim included an economic loss claim and a claim for services to Mrs Starkey under s 15B of the Civil Liability Act. The third relevant finding was that Mrs Starkey made a successful State compensation claim as a consequence of which she received both a lump sum payment and a fortnightly pension payment.
The respondent submitted that at every point at which this claim had been advanced, whether by Mr Starkey at State level or in common law or by Mrs Starkey at State level or in the present claim itself, the injury relied upon had always been asbestosis. The reference to the medical evidence, while no doubt helpful in understanding the aetiology of a complex disease like asbestosis, had nothing to do with explaining away how asbestosis was not the injury that resulted in death. It was one thing.
The respondent submitted that s 118 dealt with the circumstances where the worker was (or the worker’s dependants were) entitled to compensation under a State no-fault compensation scheme as well as under the SRC Act. In short, it required the person seeking the compensation to make a choice. The respondent submitted there was no ambiguity in the words of s 118 and the terms of the section clearly applied to pick up the present circumstances where the applicant and Mr Starkey himself sought and received compensation from the DDB.
The respondent submitted that s 118 of the SRC Act applied as Mr Starkey was an employee who had recovered State workers’ compensation in respect of the injury asbestosis, and thus s 118(1)(a) was satisfied. Further, State workers’ compensation had been recovered by, or for the benefit of, Mrs Starkey, a dependant of the deceased employee Mr Starkey and thus s 118(1)(b) was satisfied. It followed that compensation was not payable under the SRC Act to or for the benefit of that dependant, Mrs Starkey in respect of the injury that resulted in Mr Starkey’s death.
The respondent submitted that the scope of the preclusion was absolute and no concession was granted because two competing compensation schemes were not identical, or because the payments may be triggered by considerations which were not identical. It was very unlikely that two compensation schemes would operate similarly. Also, there was a substantial overlap in practical terms between the compensation recovered from the DDB and the compensation sought under the SRC Act.
If that argument succeeded, it would not be necessary for the Tribunal to go further. In the alternative the respondent’s case on s 48 of the SRC Act was as follows.
The respondent submitted that s 48 dealt with the position where the worker (or the worker’s dependants) made a common law claim for damages.
The respondent relied on s 48(1)(a) and not on s 48(1)(b). The respondent submitted that s 48(1)(a) applied because Mr Starkey, the employee, recovered damages in respect of an injury to him, being an injury, loss or damage in respect of which compensation was payable under the SRC Act. The submission then moved to s 48(4) and was that compensation was not payable under the SRC Act to or for the benefit of Mrs Starkey, the dependant, in respect of the injury that resulted in the death of Mr Starkey, the employee, after the date on which the damages were recovered by Mr Starkey the employee or by, or for the benefit of, the dependant, as the case may be. The respondent submitted it would be strongly arguable on the face of it that a claim for damages which was based upon the services that Mr Starkey would have provided to Mrs Starkey were for the benefit of Mrs Starkey. It would similarly be strongly arguable that, when Mr Starkey made a full claim for economic loss, everything that he would earn into the future but for his illness, to some extent, was for the benefit of Mrs Starkey. So either of those circumstances could apply.
The respondent submitted that Withenshaw should not be followed. In that case, Deputy President McMahon held that s 48 did not preclude the applicant from pursuing her claim for compensation under ss 17 and 18 of the SRC Act.
The application was brought by the widow of Mr Withenshaw, who had been employed by the Royal Australian Air Force. He had successfully brought an action for damages against the Commonwealth (the injury having occurred prior to 1 December 1988), and that claim was settled, there being a verdict and judgment for the plaintiff for a substantial sum of money on terms not to be disclosed.
So far as relevant, two features were noted. First, the right to make a claim under s 17 did not arise when the injury was suffered but arose only upon the death of the employee. The second feature was that an applicant for compensation under s 17 was under no obligation to prove negligence or other breach of duty on the part of the respondent. Deputy President McMahon said that if there was an injury as defined in s 4, and that injury resulted in the death of the employee who suffered the injury, then the rights of the dependants arose without further enquiry.
The Tribunal in Re Withenshaw said, at [18] that two classes of persons were contemplated by s 48(4) as precluded from payment of compensation under the SRC Act. The relevant and second class was comprised of dependants who recovered damages in respect of the death of the deceased and who then claimed compensation under the SRC Act. At [19], the Tribunal said that in order to fall within the terms of this subsection, the relevant person must have been the same person that recovered the damages either directly, or as a declared dependant sharing in those damages as of right.
Deputy President McMahon then set as follows in paragraphs which were criticised before me by senior counsel for the present respondent:
20. There is an evident legislative intention to prevent what might be called “double dipping”. In my view, however, this intention is to prevent “dipping” on two occasions by the same person into the same pot. The damages recovered by the late Mr Withenshaw are different in nature from the statutory claims for compensation made by his widow. There is no double dipping by either party. Each person claimed what he or she was entitled to. The nature of each claim was quite different.
21. Mr Withenshaw’s claim was to be entitled to be indemnified in damages for breach of duty. The measure of his damages is that provided by the common law. “Damages” is defined in section 4 of the SRC Act in an inclusive and unhelpful way. What is clear, however, is that “damages” as defined has no application in describing amounts recoverable under sections 17 and 18. Mrs Withenshaw does not claim to be entitled to damages for breach of a duty owed by her husband’s former employer to him. If she can establish her claim for compensation, she is entitled to be paid an amount provided for by statute. Her legal entitlement did not arise when her husband’s late employer breached its duty. It arose well after that event, namely upon her husband’s death. There is no repetition in the nature of her claim compared with that of her late husband’s and consequently, no double dipping.
22. This view of subsection (4) is consistent with the actual words of the subsection which is directed to compensation payable to the person to whom damages were also paid or, in the case of death, to the survivor to whom damages were previously paid under an equivalent of Lord Campbell’s Act.
23. The respondent submitted that the damages recovered by Mr Withenshaw were not relevantly different to the compensation being sought by the applicant in these proceedings. In my view, they are as different as apples and pears. Reference was made to a number of cases concerning the survival of rights of action under Lord Campbell’s Act. The respondent referred me, in particular, to a speech by Lord Salmon in Pickett v British Rail Engineering Limited [1980] AC 136, at 152, in which His Lordship said:
“... it is generally assumed that should the plaintiff accept a sum in settlement of his claim or obtain judgement for damages in respect of the defendant’s negligence, his dependants will have no cause of action under the Fatal Accidents Act after his death. This assumption is supported by strong authority: see Read v Great Eastern Railway Co (1868) LR 3 QB 555; Williams v Mersey Docks and Harbour Board [1905] 1 KB 804 and Murray v Shuter [1972] 1 Lloyd’s Rep 6,7 ... I think, however, that the assumption which has held the field for upwards of 100 years is probably correct and that, for present purposes, it must be accepted.”
The respondent before me submitted, as to the second sentence in [20], that it was wrong: the reference to the same person must be wrong, as s 48 itself was explicit in distinguishing between an employee and a dependant. And “into the same pot” was not actually the question of substance which arose under the words. The respondent before me also criticised the final sentence of [20]: “The nature of each claim was quite different.” The respondent submitted that that was an observation which was not authorised by the provisions of s 48, nor was it relevant. The section did not say that it did not apply unless the two things being sought and the two things which were recovered were identical. The section was not directed at the type of loss or damage but spoke of injury.
The respondent before me also criticised [21]-[23] of the reasons in Re Withenshaw.
The respondent submitted that the reasoning in Withenshaw was not sound. The underlying premise was that common law damages and compensation under the SRC Act were completely different. The respondent submitted that whilst there were clearly differences between common law damages and the compensation sought, there was also a considerable, if not complete, overlap.
The respondent also referred to Fyfe, although accepting that it concerned s 48(3) of the SRC Act rather than s 48(4).
In reply the applicant referred to Slattery v Comcare (1996) 70 FCR 131. In that case, which in substance concerned s 99 of the Compensation (Commonwealth Government Employees) Act 1971 (Cth), Merkel J held, at 137:
Section 99(2) of the 1971 Act and its counterpart s 48 of the 1988 Act are concerned with preventing “double dipping” in respect of the injury which gave rise to the entitlement to compensation as a result of supervening incapacity rather than with the supervening incapacity which crystallised the entitlement to payment of compensation: see Fisher v Hebburn [(1960) 105 CLR 188] at 203.
Merkel J cited the earlier decision of Carr J in Telstra Corp Ltd v Barrow (1994) 19 AAR 523 for the proposition that s 48(4) of the SRC Act had as its focus double dipping in respect of an injury and not double dipping in respect of incapacity resulting from injury.
CONSIDERATION
The starting point must be the relevant provisions of the SRC Act. It is that Act under which Mrs Starkey claims and under which the primary decision was made. I note that the primary decision was made with reference only to s 118, and not with reference to s 48.
By reason of the terms of s 17 of the SRC Act, it is necessary to consider the word “injury” and the word “employee”. Where there is an injury to an employee resulting in death then the section applies. Then by s 17(3), it will be necessary to consider the word “dependant” and whether that “dependant” was, at the date of the employee’s death, wholly dependent on the employee. In those circumstances, ordinarily Comcare is liable to pay compensation in respect of the injury of $400,000 (indexed) for the benefit of all of those dependants. Although there was no dispute about its application, it will also be necessary to refer to the definition of “damages” in s 4(1) of the SRC Act.
As to the term “injury”, it is defined in s 5A of the SRC Act to mean, relevantly, (a) a disease suffered by an employee; or (b) an injury (other than a disease) suffered by an employee, that is a physical or mental injury arising out of, or in the course of, the employee’s employment; or (c) an aggravation of a physical or mental injury (other than a disease) suffered by an employee (whether or not that injury arose out of, or in the course of, the employee’s employment), that is an aggravation that arose out of, or in the course of, that employment.
The word “disease” is defined in s 5B of the SRC Act to mean an ailment suffered by an employee; or an aggravation of such an ailment; that was contributed to, to a significant degree, by the employee’s employment by the Commonwealth or a licensee.
As to the term “employee”, it has the meaning given by s 5 of the SRC Act. The first definition is that “employee” means (a) a person who is employed by the Commonwealth or by a Commonwealth authority, whether the person is so employed under a law of the Commonwealth or of a Territory or under a contract of service or apprenticeship; or (b) a person who is employed by a licensed corporation. By s 5(9), a reference to an employee in a provision of the SRC Act relevantly includes a reference to a person who has ceased to be an employee.
As to the term “dependant”, it is defined in s 4(1) of the SRC Act as including the spouse of the employee, being a person who was wholly or partly dependent on the employee at the date of the employee’s death. Section 4(5) of the SRC Act provides that for the purposes of that Act, a person who immediately before the date of an employee’s death lived with the employee and was the spouse of the employee shall be taken to be a person who was wholly dependent on the employee at that date.
As to the definition of “damages”, it is defined in s 4(1) of the SRC Act to include any amount paid under a compromise or settlement of a claim for damages, whether or not legal proceedings have been instituted, but does not include the amount paid in respect of costs incurred in connection with legal proceedings. As I have indicated, there was no dispute that the late Mr Starkey received damages within that definition.
For the purposes of the SRC Act, Mrs Starkey was wholly dependent on Mr Starkey because immediately before the date of his death she lived with him (the employee) and was his spouse. This was conceded by Comcare.
I turn then to consider the terms of s 118 of the SRC Act. For convenience I set out again the terms of s 118(1):
118 Double benefits
(1)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.
In Telstra Corporation Ltd v Worthing, the High Court explained, in the context of s 109 of the Constitution, the purpose of s 118 as follows, at [37]:
The apparent purpose of this provision is to prevent what might be called double recovery in cases involving recovery under the workers' compensation laws of a foreign country or recovery under a State or Territory workers' compensation law in respect of a valid operation of that law. Various examples were given in argument. Injury may have been incurred progressively while the worker was in the employment of successive employers who were themselves subjected to different statutory regimes. The result could be what Hope JA in Russo v World Services & Constructions Pty Ltd [[1979] 1 NSWLR 330 at 335] identified as the anomaly that the worker could obtain some duplication of compensation. Section 118(1) protects the operation of the Commonwealth law in such a situation by denying payment under it. The section is concerned with avoidance of duplication of recovery rather than protection of concurrent rights to recovery.
Considering first the operation of the section so far as concerns an employee, in the present case s 118(1)(a) is satisfied in part at least because Mr Starkey, an employee, recovered compensation recoverable under the Dust Diseases Act, being a law of the State relating to workers’ compensation, in respect of an injury. It follows that compensation is not payable under the SRC Act to that employee in respect of that injury. But that is not the present claim by Mrs Starkey.
In my opinion, the better construction is 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” have a distributive operation so that the words preceding “or” apply to the circumstances described in s 118(1)(a) and the words following the word “or”, the alternative, apply to the circumstances described in s 118(1)(b). This construction makes better sense of the words “in respect of the injury that resulted in the death” which could only be referable to the circumstances of a dependant of a deceased employee in s 118(1)(b).
Then the question becomes, under s 118(1)(b), first whether State workers’ compensation is recovered by a dependant of the deceased employee, Mr Starkey. In my view it was, as Mrs Starkey recovered compensation under the Dust Diseases Act. I am not persuaded that, apart from that claim, State workers’ compensation was recovered for the benefit of Mrs Starkey as, in the absence of specific facts, the possible benefit seems to me to be too indirect.
The second question, where the circumstances in s 118(1)(b) obtain, is whether “compensation is not payable under the [SRC] Act to [Mrs Starkey] in respect of the injury that resulted in the death.”
The competing submissions are, on the part of the applicant, that the asbestosis was caused by a series of injuries and that her State workers’ compensation was recovered only in respect of the asbestosis caused by the injuries during the course of Mr Starkey’s employment by employers subject to the State legislation, the Dust Diseases Act, and thus “the injury” is not the same injury. The respondent contended that the claim throughout, including under the Dust Diseases Act, was in respect of asbestosis.
In light of the unchallenged evidence of Professor Breslin at [28] and [29] above, which I have accepted, I accept the applicant’s submission. 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.
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.
I turn then to consider s 48(4) of the SRC Act. For convenience I set out again it is terms.
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.
As I have said, the respondent relied on s 48(1)(a) and not on s 48(1)(b), but I shall consider both provisions.
I do not accept that s 48(1)(a) applied. Although Mr Starkey, the employee, recovered damages in respect of an injury to him, being an injury, loss or damage in respect of which compensation was payable under the SRC Act, I read s 48(4) distributively so as to apply to prevent compensation to the employee in respect of the injury where s 48(1)(a) is engaged. See the equivalent analysis of s 118 in [76] above.
Section 48(1)(b) is not engaged because damages, as distinct from compensation, have not been recovered by the dependant, Mrs Starkey. I do not accept the respondent’s suggestion that Mr Starkey’s claim for damages which was based upon the services that Mr Starkey would have provided to Mrs Starkey were for the benefit of Mrs Starkey, within the meaning of the provision. Neither do I accept the respondent’s proposition that when Mr Starkey made a full claim for economic loss, everything that he would earn into the future but for his illness was for the benefit of Mrs Starkey, within the meaning of the provision. In each case, as with the equivalent submission in relation to s 118, in the absence of specific facts, the possible benefit seems to me to be too indirect.
For these reasons, with respect, I would not regard Withenshaw as wrongly decided.
In my view, a further reason why s 48 does not apply is in light of the evidence of Professor Breslin: see [80] above. 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.
Since they dealt with the terms of the State law, I was not assisted by the decisions in Cook or Dionisatos on which the applicant relied.
Although not referred to in submissions, Lennon v TNT Australia Pty Ltd [2013] NSWCA 77; 84 NSWLR 161 at [36ff] stands for the proposition that the term “employer” in the Workers Compensation Act 1987 (NSW) does not extend to “the Crown in right of the Commonwealth”. By s 1(1), the Dust Diseases Act is to be construed with the Workers Compensation Act.
Neither was I assisted by the decision in Fyfe. Although it dealt with the SRC Act, it concerned s 48(3) and with the question of double recovery by the employee himself.
I do not accept the applicant’s submission that Comcare was entitled pursuant to s 118 only to deduct from its liability that which she had received from the DDB, whilst remaining liable for the balance or that s 118 was a “set-off” provision and not a total defence. This submission was not developed. I was not taken to any statutory basis for it. The submission does not sit comfortably with s 118(2) of the SRC Act which provides in substance that if any State workers’ compensation is recovered after any compensation has been paid by a relevant authority under the SRC Act, the relevant authority may recover as a debt due to the authority the amount of compensation paid by it under the SRC Act from the person to whom it was paid.
CONCLUSION AND DECISION
For these reasons, the decision under review is set aside and the matter remitted for reconsideration by the respondent. I will hear the parties on costs.
I certify that the preceding 92 (ninety -two) paragraphs are a true copy of the reasons for the decision herein of The Honourable Justice A Robertson, Deputy President
.....................[sgd]...................................................
Associate
Dated: 17 February 2017
Date of hearing: 31 January 2017 Counsel for the Applicant: Mr M Joseph SC with Mr S Tzouganatos Solicitors for the Applicant: Turner Freeman Lawyers Counsel for the Respondent: Mr GM Watson SC with Mr D Habashy Solicitors for the Respondent: Lehmann Snell Lawyers
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