WorkCover Queensland v Amaca Pty Ltd

Case [2010] HCA 34

HIGH COURT OF AUSTRALIA

FRENCH CJ,
GUMMOW, CRENNAN, KIEFEL AND BELL JJ

WORKCOVER QUEENSLAND  APPELLANT

AND

AMACA PTY LTD & ANOR  RESPONDENTS

WorkCover Queensland v Amaca Pty Ltd [2010] HCA 34
20 October 2010
B10/2010

ORDER

1.        Appeal allowed with costs.

2.Set aside the answers to questions 4 and 5 in the order of the Court of Appeal of the Supreme Court of Queensland made on 27 March 2009, and in their place order that questions 4 and 5 of the amended case stated be answered as follows:

(a)Question 4:  No.

(b)Question 5:  The respondents should pay the costs of the plaintiff WorkCover Queensland in the amended case stated before the Court of Appeal.

On appeal from the Supreme Court of Queensland

Representation

W Sofronoff QC Solicitor-General of the State of Queensland with K F Holyoak for the appellant (instructed by Bruce Thomas Lawyers)

D F Jackson QC with R C Morton for the respondents (instructed by Holman Webb Lawyers and CLS Lawyers)

Notice:  This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

WorkCover Queensland v Amaca Pty Ltd

Practice and procedure – Action – Death of worker – Survival of cause of action – Section 66(1) of Succession Act 1981 (Q) ("Succession Act") provided causes of action vested in deceased person shall survive for benefit of person's estate – Section 66(2) limited damages recoverable "in any action brought" where cause of action survives under s 66(1) – Whether s 66(1) creates new cause of action – Discussion of history of survival of causes of action.

Workers' compensation – Insurance – Statutory scheme – Insurer's right of indemnity against third party for compensation paid – Insurer paid compensation to worker exposed to asbestos manufactured and supplied by respondents – Worker died and no proceedings instituted by worker or estate against any persons – Section 207B(7) of Workers' Compensation and Rehabilitation Act 2003 (Q) ("Compensation Act") gave insurer, in these circumstances, right of indemnity against third party up to amount of compensation paid to worker, but only "to the extent of that person's liability for the damages" – Whether s 66(2) of Succession Act limits amount recoverable under right of indemnity in s 207B(7) of Compensation Act – Nature of cause of action created by s 207B(7) – Difference between liability and damages recoverable – Relevance of history of s 66(2) of Succession Act.

Words and phrases – "in any action brought", "liability", "to the extent of that person's liability for the damages".

Common Law Practice Act 1867 (Q), s 15D. 
Succession Act 1981 (Q), s 66.
Workers' Compensation and Rehabilitation Act 2003 (Q), s 207B.
Law Reform (Miscellaneous Provisions) Act 1934 (UK), 24 & 25 Geo V c 41, s 1. 

  1. FRENCH CJ, GUMMOW, CRENNAN, KIEFEL AND BELL JJ. On 22 June 2007 the appellant ("WorkCover") commenced proceedings in the Supreme Court of Queensland pursuant to s 272(7)[1] of the Workers' Compensation and Rehabilitation Act 2003 (Q)…

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Details
AGLC
WorkCover Queensland v Amaca Pty Ltd [2010] HCA 34
Case
[2010] HCA 34
Decision Date

CaseChat Overview and Summary

WorkCover Queensland appealed to the High Court of Australia against a decision of the Court of Appeal of Queensland concerning the quantum of indemnity recoverable by WorkCover from third parties. WorkCover had paid $340,000 in compensation to a worker, Mr Thomson, who had contracted mesothelioma due to asbestos exposure from products manufactured and supplied by the respondents. Mr Thomson died before initiating any legal proceedings. WorkCover sought to recover the compensation paid from the respondents pursuant to section 207B(7) of the *Workers' Compensation and Rehabilitation Act 2003* (Qld) (the Compensation Act), which grants an insurer a right of indemnity against a third party to the extent of that party's liability for damages.

The central legal issues before the High Court were whether section 66(2) of the *Succession Act 1981* (Qld) limited the amount recoverable by WorkCover under its statutory right of indemnity, and the nature of the cause of action created by section 207B(7) of the Compensation Act. Specifically, the Court had to determine if the limitation on damages recoverable in an action brought for the benefit of a deceased person's estate under section 66(1) of the Succession Act also applied to an insurer's claim for indemnity under section 207B(7) of the Compensation Act, particularly when the worker died before commencing proceedings.

The High Court reasoned that section 66(2) of the Succession Act limits damages recoverable in an action brought for the benefit of a deceased person's estate. However, the right of indemnity conferred by section 207B(7) of the Compensation Act is a statutory cause of action distinct from any cause of action the deceased worker might have had. The Court held that the liability of the third party under section 207B(7) is to be assessed by reference to the amount for which they would be liable at the time of judgment in the indemnity proceedings, taking into account all relevant limitations, rather than the amount of damages that would have been recovered in a hypothetical action brought by the deceased or their estate. Consequently, the limitations imposed by section 66(2) of the Succession Act, which apply to actions brought for the benefit of an estate, do not apply to an action brought by WorkCover seeking indemnity under section 207B(7) of the Compensation Act.

The High Court allowed the appeal, setting aside the answers of the Court of Appeal to questions 4 and 5 of the case stated. The Court ordered that question 4 be answered "No," meaning that the quantum of indemnity WorkCover is entitled to recover is not reduced by the operation of section 66 of the Succession Act. The respondents were ordered to pay WorkCover's costs of the appeal.

Orders

Orders of the court

1. Appeal allowed with costs.

2. Set aside the answers to questions 4 and 5 in the order of the Court of Appeal of the Supreme Court of Queensland made on 27 March 2009, and in their place order that questions 4 and 5 of the amended case stated be answered as follows:

(a) Question 4: No.

(b) Question 5: The respondents should pay the costs of the plaintiff WorkCover Queensland in the amended case stated before the Court of Appeal.

Background

Background to the litigation

From the pleadings four broad issues emerged. On 2 September 2008, Dutney J ordered the referral of a case stated to the Court of Appeal pursuant to r 483(2) of the Uniform Civil Procedure Rules 1999 (Q). The appeal by WorkCover to this Court, from the decision of the Court of Appeal (de Jersey CJ and Muir JA; McMurdo P dissenting)[2], concerns the fourth question in the case stated:"Is the quantum of the indemnity [WorkCover] is entitled to recover pursuant to [s 207B(7) of the Compensation Act] reduced by the operation of [s 66 of the Succession Act 1981 (Q) ("the Succession Act")] if the worker dies after compensation is paid and before the trial of [WorkCover's] action to recover the indemnity?" Contrary to the decision of the majority of the Court of Appeal, that question should be answered "no" and the appeal by WorkCover should be allowed. We turn to explain why this is so.[2]WorkCover Queensland v Amaca Pty Ltd [2009] 2 Qd R 181. The facts Mr Thomson had been born on 30 June 1931 and had worked for various employers in the State of Queensland between 1947 and 1983. Throughout that time he was a "worker" for the purposes of the Workers' Compensation Act 1916 (Q), the Workers' Compensation Act 1990 (Q), the WorkCover Queensland Act 1996 (Q) and, finally, the Compensation Act. During the course of his employment, Mr Thomson was exposed to asbestos manufactured and supplied by the respondents. As a consequence he contracted mesothelioma and applied to WorkCover for payment of compensation. On 18 April 2006, WorkCover paid to Mr Thomson the sum of $340,000 by way of compensation to which he was entitled under the Compensation Act for his contraction of mesothelioma. Before his death, Mr Thomson had not instituted any proceedings upon any cause of action he may have had against persons who may have been liable for his injury. That circumstance entitled WorkCover to pursue its right of indemnity under s 207B(7)(a) of the Compensation Act. The relevant legislative provisions Section 207B, formerly s 272, of the Compensation Act relevantly provides:"(1) This section applies to –(a) an injury sustained by a worker in circumstances creating –(i) an entitlement to compensation; and (ii)a legal liability in the worker's employer, or other person, to pay damages for the injury, independently of this Act ……(7)If a person who has received compensation has not recovered, or taken proceedings to recover, damages for the injury from another person, other than the worker's employer –(a)the insurer is entitled to be indemnified for the amount of the compensation by the other person to the extent of that person's liability for the damages, so far as the amount of damages payable for the injury by that person extends; and (b)to that end, the insurer is subrogated to the rights of the person for the injury. …(10) In this section – damages includes damages under a legal liability existing independently of this Act, whether or not within the meaning of section 10." (emphasis added)

Evidence

Evidence Before The Court

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Decision

Reasons for decision

FRENCH CJ, GUMMOW, CRENNAN, KIEFEL AND BELL JJ (dissent)
The respondents rely on a statement by Latham CJ in Woolworths Ltd v Crotty[64], namely, that"a person who has died cannot bring an action for his own death, simply because he is dead and cannot bring an action for anything, and not by reason of the application of any rule of law". From that apparent statement of the obvious, the argument for the respondents proceeds. The damages payable by the wrongdoer to the person who has received compensation could only be paid, when that person has died, to the estate of the person upon the estate bringing an action pursuant to s 66(1) yet subject to the limitations in s 66(2). It must therefore follow, it is said, that the damages payable to WorkCover under par (a) of s 207B(7) are also so limited. If these submissions were to be accepted, it would follow that, had there been no equivalent to s 66 in existence, no damages would be recoverable by WorkCover. As explained already in these reasons, such a construction would be inconsistent with the policy of the Compensation Act and should be rejected. That construction also ignores the critical distinction between liability for damages and the damages that would be payable upon a person, or their estate, bringing an action.[64](1942) 66 CLR 603 at 611‑612.Conclusion Upon an action brought by WorkCover pursuant to its right of indemnity under par (a) of s 207B(7) of the Compensation Act, it is entitled to be indemnified by the respondents "to the extent of" their liability to Mr Thomson. The amount to which WorkCover is entitled is to be assessed by reference to the amount for which the respondents would be so liable at the time of judgment in the indemnity proceedings, taking into account all limitations at common law or by statute on that liability. It is not to be assessed by reference to the amount of damages that would be recovered in a hypothetical action brought by Mr Thomson, or his estate upon his death, against the respondents. In the passage from Esso, referred to earlier in these reasons, it was pointed out that the statutory right of indemnity is not to be equated with the cause of action which the worker would have had. The claim to enforce the entitlement is a cause of action created by statute for an indemnity against a person liable to pay damages to another. That liability is best understood as an ingredient of the statutory right. The limitations found in s 66(2) of the Succession Act apply to limit damages which would be recoverable by Mr Thomson's estate upon an action brought "for the benefit of" his estate, and do not apply to an action brought by WorkCover seeking indemnity from the respondents under s 207B(7)(a). This follows as a matter of construction of s 66(2) and is consistent with the underlying policies to which that provision gives effect. Those policies have no application to the right of indemnity given by s 207B(7)(a) of the Compensation Act. Indeed they would be in conflict with it. The respondents pointed to what was a perceived incongruity if it were concluded that s 66(2) did not apply to an action brought under s 207B(7). Relevantly for this submission, ss 207B(2)‑(4) provide:"(2)An amount paid as compensation to a person for an injury, to which there is an entitlement to payment of damages at a time or for a period before the person becomes entitled to payment of damages by an employer or another person, is a first charge on any amount of damages recovered by the person to the extent of the amount paid as compensation to the person. (3)An employer or other person from whom the damages are recoverable must pay the insurer the amount of the first charge or, if the damages are not more than the amount of the first charge, the whole of the damages. (4)Payment to the insurer under subsection (3), to the extent of the payment, satisfies the liability of the employer or other person for payment of the damages."

Ratio Decidendi

Legal Principle Established

Established by:

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