WorkCover Queensland v Amaca Pty Ltd & Anor

[2010] HCATrans 160

[2010] HCATrans 160

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B10 of 2010

B e t w e e n -

WORKCOVER QUEENSLAND

Appellant

and

AMACA PTY LTD (ACN 000 035 512)

First Respondent

SELTSAM PTY LTD (ACN 000 003 734)

Second Respondent

FRENCH CJ
GUMMOW J
CRENNAN J
KIEFEL J
BELL J

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON TUESDAY, 22 JUNE 2010, AT 12.00 PM

Copyright in the High Court of Australia

MR W. SOFRONOFF, QC (Solicitor‑General of the State of Queensland):   May it please the Court, I appear with my learned friend, MR K.F. HOLYOAK, for the appellant.  (instructed by Bruce Thomas Lawyers )

MR D.F. JACKSON, QC:   If the Court pleases, I appear with my learned friend, MR R.C. MORTON, for the respondents.  (instructed by Holman Webb Lawyers and CLS Lawyers)

FRENCH CJ:   Yes, Mr Sofronoff.

MR SOFRONOFF:   Your Honours, this was a case stated, which appears at page 46 of the appeal book.  We have discovered that the appeal book is deficient in that it omits some pages of the reasons of the Court of Appeal.  Could I hand up a set of the reasons of the Court of Appeal so your Honours have it completely.  Mr Thomson was a worker and he contracted mesothelioma.  That was an injury for the purposes of the Workers’ Compensation and Rehabilitation Act 2003. In April 2006 he received a compensation payment in respect of that injury. He died two months later not having sued anybody at common law for his injury. The appellant sued the defendants to recover the sum it had paid as compensation. It has a right to sue to recover the sum under section 207B(7) of the Act and the section provides that for that purpose it is subrogated to the rights of the worker.

Section 66 of the Succession Act 1981 (Qld) deals with the abolition of the rule that a cause of action such as this dies when the plaintiff dies and it provides that the cause of action survives for the benefit of the estate. However, it goes on to limit the damages recoverable by the estate in such an action. No damages can be recovered relevantly for pain and suffering and no damages can be recovered for future earnings. The question in this case is whether those limitations in section 66 of the Succession Act apply to limit the insurer’s right of indemnity conferred by section 207B(7) of the Workers’ Compensation and Rehabilitation Act 2003.

GUMMOW J:   Did section 66 replace an earlier Queensland statute?

MR SOFRONOFF:   Did it replace an earlier Queensland statute?

GUMMOW J:   Yes.  What is the magic of 15 October 1940?

MR SOFRONOFF:   I will have to look at that over lunch, your Honour, and tell you the history of section 66.  If I can take your Honours to 207B, I have handed up to your Honours’ associates a bundle of provisions from the Workers’ Compensation and Rehabilitation Act which contains 207B.  That section provides for, broadly, two kinds of cases.  The first case is where a worker has been injured, compensation has been paid, or it may be a worker has been injured and compensation has been paid to a dependant and the first case is where damages have been claimed by the worker or by the dependants.  In that case, damages, once awarded, will be subject to a charge in favour of the insurer for the amount paid by way of compensation. 

There is additional protection in respect of settlement sums.  A settlement cannot be entered into without the consent of the insurer for less than the amount of the first charge, but if that happens, then nevertheless the insurer has other remedies.  The second category of case concerns those where the worker has received compensation or the dependants have received compensation but no action has been commenced, no claim has been made.  Subsection (7) deals with that.  It confers a right upon the insurer, a right of indemnity, a right of subrogation, and permits the insurer to sue directly the tort feasor.

If one then goes through the provisions of 207, subsection (1) contains the triggering provisions; there has to be an injury sustained by a worker.  “Injury” is defined in section 32, a copy of which we have given your Honours in the bundle.  It must be sustained in circumstances creating an entitlement to compensation.  “Compensation ” is defined in section 9, which we have put into the bundle, and section 108 confers a compensation entitlement.  There must be a legal liability in some person to pay damages for the injury independently of the Act, and we can ignore subparagraph (b).  Once those facts emerge, the section is triggered.

Subsection (2) then confers a first charge upon any amount of damages recovered by the person who receives the compensation, which could be the worker or a dependant.  Subsection (3) obliges the defendant tortfeasor to pay the insurer the amount of the first charge or up to the limit of the damages.  Subsection (4) provides for release to that extent.  Subsection (5) contains the prohibition against settlement for less than the amount of compensation without consent.  Subsection (6) provides for consequences in that event and subsection (7) is the one that your Honours are concerned with in this case.

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.

CRENNAN J:   Do those provisions not indicate a legislative intention that the statutory indemnity is not about recouping compensation?  It is rather an indemnity against a particular person and the extent of that person’s liability affects the statutory indemnity?

MR SOFRONOFF:   We submit that its purpose is indeed to recoup the amount of compensation from the tortfeasor but only to the limit of the tortfeasor’s liability in damages.  It is possible that the level of compensation might exceed the level of damages but the tortfeasor being only legally responsible for the damages caused, will have liability limited to that extent.  The section, in our submission, is concerned directly with ensuring that the insurer is able to recover the amount of compensation from the person ultimately responsible for the need to pay the compensation, the tortfeasor.

I said at the beginning, your Honours, that subsection (1) is the triggering section which, once the matters in it are satisfied, the section becomes applicable.  That is important in this context.  It has been held repeatedly that once a worker under similar legislation has been injured, giving rise to a legal liability in another person for damages and giving rise to an entitlement in the worker to compensation, it does not matter if thereafter the worker loses the right to sue for the damages.

The leading Australian case on that is Tickle v Hann (1973) 130 CLR 321 at 333, where a man was killed, his widow had a limited time to sue, she did not sue. The estate had a limited time to sue. It sued after the limitation period expired and then entered into a release. The question was, there being nobody who could sue, was there any possibility of the insurer vindicating its right of indemnity? The High Court held, this Court held, that indeed there was. The only passage it is necessary to take your Honours to in that case, which is No 4 on our list of authorities, is at page 333 in the reasons of the Chief Justice where he summarised his reasoning for his conclusion that once there has been liability to pay damages, it does not matter if the liability ceases. At about point 2 on page 333:

The section supposes a legal responsibility in another person for the compensable injury or death.  Given the existence of that legal responsibility at the time of the occurrence of the compensable injury or death, the wrongdoer is “that person” in par (a) and “the person liable to pay the damages” in par (d).  As this Court pointed out in Tooth and Co Ltd v Tillyer, as I read the passage cited aided by the discussion, the section does not require the continuance or persistence of the liability.  Granted initial responsibility at the time of the receipt of the injury or death, the section provides its own remedy to the employer by the creation of a right of indemnity by the person responsible for the injury or death.

The section in that case is set out at page 323 in the reasons of the Chief Justice and it is in different terms but relevantly similar:

“If an injury in respect of which compensation is payable under this Ordinance is caused under circumstances which appear to create a legal liability in some person other than the employer ‑

then certain things follow and the question was whether the right conferred by subparagraph (d) continued even though the right to take action for damages in respect of the injury had ceased.  The reasoning of the Chief Justice led to his conclusion at page 333 that I have taken you to.

FRENCH CJ:   So in the context of 207B(1)(a)(ii), the legal liability referred to is the legal liability created at the time of the injury?

MR SOFRONOFF:   Yes.

FRENCH CJ:   It is that that is referred to in subsection (7)?

MR SOFRONOFF:   In our submission, yes.  If I can put our submissions in a nutshell it is this.  The Act is concerned with rights of compensation enjoyed by workers.  Section 207B is concerned with the recovery of money paid by way of compensation by the insurer to the worker from a tortfeasor.  That is the subject matter of the Act and of the section.  The Succession Act, to which we will come in due course, is concerned with matters of succession and is concerned with abolishing the rule that a cause of action dies when the plaintiff dies and it provides a statutory right in the estate to sue in respect of that liability, subject to some strictures.  The two Acts deal with entirely different subject matters and, in our respectful submission, neither Act speaks to the other.  I will need to develop our argument for why we submit that is the correct conclusion.

GUMMOW J:   So you say there is no question of – “implied repeal” is not the right word – but there is no destructive interaction.

MR SOFRONOFF:   No, correct.  If I can take your Honours then to ‑ ‑ ‑

FRENCH CJ:   Incidentally, is compensation payable to dependants under the legislation?

MR SOFRONOFF:   Yes, it is capable of being paid.

FRENCH CJ:   It can extend to a situation where you have death as the relevant injury?

MR SOFRONOFF:   Injury, yes.

FRENCH CJ:   What is the limit then?  It is defined by the Succession Act?

MR SOFRONOFF:   No, in that case the cause of action would be a fatal accident, a Lord Campbell’s Act action by the dependants, or by the estate on behalf of the dependants.

FRENCH CJ:   The liability would be limited to the recovery available under the Lord Campbell’s Act?

MR SOFRONOFF:   Correct.  So could I give your Honours the sections in the bundle that we have given your Honours?  Relevantly, section 108 confers an entitlement to compensation upon a worker.  There are complicated provisions defining that.  Section 196 provides:

(1)      Compensation for the death of a worker is payable ‑ ‑

(a)     to the worker’s legal personal representative; or

(b)     if there is no legal personal representative ‑ ‑

 . . . 

to the dependants entitled to compensation.

We can see from the language of 207 that it contemplates the possibility that the compensation is paid not to the worker but to a dependant and that the right of action spoken about might be the right of action of the dependant against the tortfeasor for the death of a relative and not an action by the worker himself or herself.

If I can take your Honours then to subsection (7)?  We assume that there has been an injury sustained by a worker, that that creates an entitlement to compensation, but your Honours will note 207B(1)(a)(i) does not speak of an entitlement to compensation by the worker, it is an entitlement to compensation by anybody, and a legal liability in a person to pay damages, and again it does not speak of a liability to the worker, it is to the worker or to somebody else.  Assuming that has been triggered, we then come to subsection (7):

If a person who has received compensation –

that might be the worker or the dependant –

has not recovered, or taken proceedings to recover, damages for the injury –

the injury will be the worker’s claim for personal injury or the dependant’s claim for death –

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 –

the tortfeasor –

to the extent of that person’s liability for the damages –

Would your Honours notice the use of the definite article?  The damages must be a reference to the damages in the second line of subsection (7), the damages recoverable by the person who has a right to recover damages, and “the insurer is subrogated to the rights of the person”.

Two cases might then ensue:  either injury to the worker, entitlement to compensation by the worker, or injury to the dependant by the death of the worker, entitlement to compensation by the dependant, or both indeed.  Could I take the case of the dependant first because it illustrates the point more clearly?  The amount paid as compensation to the dependant is paid because the injury was death.  The insurer is indemnified by the tortfeasor to the extent of liability for the damages, so far as the amount of damages payable for the injury by that person, the tortfeasor, extends.  The insurer is subrogated to the rights of the person, the dependant.  The damages are the damages payable for the injury by that person to the dependant by reason of the death of the worker. 

In short, the damages are quantified by the amount payable to the dependants in an action by them under the fatal accidents legislation.  That is limited to pecuniary loss only.  Indeed, the action is a statutory right of action, not a common law right of action.  It is limited, in the terms of the statute, conferring the right to pecuniary loss only, and of course, to the chance of maintenance and support.

FRENCH CJ:   What is the name of the fatal accident statute here?

MR SOFRONOFF:   The Supreme Court Act 1995 (Qld). I will tell your Honour the section in a moment.

FRENCH CJ:   Yes, all right.

MR SOFRONOFF:   Alternatively, if we assume that the injured person is the worker and compensation is paid to the worker the insurer is indemnified by the tortfeasor under subsection (7) to the extent of the liability for the damages – so far as the amount of damages payable for the injury by that person extends – there is a right to subrogation to the rights of the worker.  The damages are the damages for the injury sustained by the worker.  Would your Honours look at section 10(1) of the Act:

Damages is damages for injury sustained by a worker in circumstances creating, independently of this Act, a legal liability in the worker’s employer to pay damages –

So the damages for the injury sustained by the worker.  That he has died and the action has died with him has been held not to change the right of the insurer to recover fully.  Tickle v Hann is authority for that.  We then come to section 66 in order to ask the question whether section 66 is apt to limit the right of recovery.  Section 66 is contained in a statute which itself is entirely unconcerned with workers compensation or rights of insurers, or indeed statutory rights of indemnity, and section 66 is equally, on its face at least, unconcerned with that subject matter.

It is concerned in subsection (1) with insuring that when a plaintiff dies the estate can nevertheless sue to recover something.  I have expressed it in those terms because subsection (1) speaks of:

all causes of action subsisting against or vested in the person shall survive against, or, as the case may be, for the benefit of, the person's estate.

The use of the expression “survive” might connote that it is the same cause of action which continues, now modified by limiting the right of damages recoverable.  In our submission, it is clear from the terms of section 66 in respects I will seek to demonstrate that section 66 confers a statutory right of action upon the estate of the deceased person to sue for money.  One of the elements of that action is to prove that there was a right of action in the deceased person, but that is an element in the statutory right of action, and otherwise it must be an action conducted in accordance with section 66 by the legal personal representative for the benefit of the person’s estate.  We then see in subsection (2):

Where a cause of action survives pursuant to subsection (1) for the benefit of the estate of a deceased person, the damages recoverable in any action brought –

(a)shall not include damages for pain and suffering, for any bodily or mental harm or for curtailment of expectation of life; and

. . . 

(d) . . . 

(ii)future probable earnings of the deceased -

That there can be no claim for damages for pain and suffering or for future probable earnings of course cuts down the value of the right of recovery substantially, and in terms of the right of an insurer to an indemnity would, if applicable, cut down the value of that right of indemnity substantially.  There are exceptions.  Subsection (2A) is an exception:

damages for pain and suffering . . . may be recovered –

in dust related cases provided –

(b)the deceased person commenced a proceeding in relation to the cause of action before the deceased person died -

That does not apply here because the deceased did not commence any action before he died.  Your Honours will see in subsection (3):

Where damage has been suffered by reason of any act or omission in respect of which a cause of action would have subsisted against any person if that person had not died before or at the same time as the damage was suffered, there shall be deemed, for the purposes of this section, to have been subsisting against that person before his or her death such cause of action in respect of that act or omission as would have subsisted if that person had died after the damage was suffered.

This subsection, in our submission, demonstrates that the whole of section 66 is a statutory construct.  It does not involve the continuation of a common law cause of action for the benefit of the estate.  Rather it provides for a statutory right in the person’s estate to sue subject to its terms and in aid of that ‑ ‑ ‑

GUMMOW J:   Why does this characterisation matter?  I mean, another characterisation is that 66(1) has simply removed the common law rule which provided for the end of rights of action by reason of death.  But the subject matter is the cause of action.  It just continues to subsist rather than come to an end, but it has attached then to it these limitations on damages.

MR SOFRONOFF:   The reason we would wish to put it in the way we do is that if your Honours were to conclude that section 66, while using the word “survives”, in truth has created a statutory right of action in the estate, then it would follow, in our submission, that that could have nothing to do with the language of section 207B which speaks about subrogation to the rights of the worker.  Section 66 is not concerned with the rights of the worker.  It is concerned with the rights of the estate.  It may be that if one construes 66 as simply abolishing the common law rule and permitting the – no, I withdraw that. 

So subsection (3), in our submission, supports the conclusion that this is a statutory right of action because it contains a section to protect the estate against a particular consequence.  Subsection (4) very strongly supports that conclusion because it speaks of the rights conferred by this section for the benefit of the estates of deceased persons and, in our submission, those rights include the statutory right to sue for money subject to the section arising by reason of an injury that had been caused to a dead person.

GUMMOW J:   Why cannot the phrase “the rights of a person” include that person’s deceased estate?

MR SOFRONOFF:   I am sorry, your Honour, why cannot which phrase?

GUMMOW J:   The phrase in section 207B(7) “the insurer is subrogated to the rights of the person for the injury”, including that person’s estate. On one view, in the eyes of the law deceased estate is a continuation of legal personality of a dead human.

MR SOFRONOFF:   Your Honour, it could bear that complexion.  In our submission, the reason it does not is because it is concerned with a different subject matter and is concerned with identifying a legal liability which existed at the date of injury upon a tortfeasor, the person, and then it confers a right of action by subrogation upon the insurer to stand in the shoes of the worker, not his estate, to sue that person.

FRENCH CJ:   Incidentally, does it matter to your argument how short the duration of time elapsed is between injury and death?

MR SOFRONOFF:   No, it does not matter.

FRENCH CJ:   So if somebody gets injured and then dies an hour later, you can sue as though for personal injury or claim.....

MR SOFRONOFF:   Yes.  But in practical terms, no compensation would have been paid and the substantial amount could only be paid if sufficient ‑ ‑ ‑

FRENCH CJ:   It would be paid to the dependants, of course?

MR SOFRONOFF:   Sorry?

FRENCH CJ:   The compensation in such a case, in practical terms, would be paid to the dependants as compensation for the death.

MR SOFRONOFF:   That is limited, and then their rights of recovery are limited, so we are not speaking here about windfalls or extending liability against any person.  The occasion might arise, your Honours, in this way.  Compensation can be paid from time to time.  Ultimately it might culminate in a lump sum, but it can be paid from time to time.  The effect of 207B is that a right of indemnity will arise in respect of each sum as it is paid.  If a worker suffers an injury and compensation is paid – assume that the worker has not sued for damages and the insurer does, and is subrogated to the rights of the worker, damages are assessed in a figure – the worker is not a party to that action, let us assume – damages are assessed in a figure, say, a million dollars, only 50,000 in compensation has been paid. The insurer would be entitled to recover the $50,000. 

In the event that a further $75,000 were paid, the insurer would be entitled to recover that $75,000, because the right of indemnity extends to the limit of the right of damages that had been vindicated.  So the insurer could continue to pay and keep demanding of the tortfeasor to pay pursuant to the statutory indemnity.

CRENNAN J:   But is the relevant time for the determination of the quantum of the indemnity the time of the proceeding which the insurer brings for the statutory indemnity?

MR SOFRONOFF:   Yes, that is right.

CRENNAN J:   So how would it matter then, that – are you suggesting that the quantum of indemnity prior to death might somehow be different and greater than what might be accessible subsequently?

MR SOFRONOFF:   It might be, your Honour, because for example, irrespective of section 66, if the insurer sues after death and the worker has in the interim died, not as a result of the injury but for some other reason, then the damages for loss of future earnings will be calculated to the date of death because that death will have to be taken into account in that way.

KIEFEL J:   So would pain and suffering, would it not?

MR SOFRONOFF:   So would pain and suffering.

KIEFEL J:   It is just a fact that you know of by the time of trial.

MR SOFRONOFF:   That is right.  Correct.

CRENNAN J:   That is the point of your paragraph 37, I think.

MR SOFRONOFF:   Yes. Assume the insurer sues while the worker is still alive, damages are calculated in the ordinary way at a million dollars, compensation is paid from time to time, the indemnity can be resorted to from time to time up to the limit of the damages assessed once and for all and that the insurer then suddenly dies does not alter that quantum. It should be the same, in our submission, if, before action is brought by the insurer, the worker dies because what is in issue is the liability of the tortfeasor to the worker. What is not in question is the liability of the tortfeasor to the defendants, for example – dependence, for example, under the fatal accidents legislation or to the estate pursuant to the rights in section 66 of the Succession Act.

In our submission, the contrary view offends these propositions.  The action on the indemnity is a statutory right to be indemnified to the extent of damages that would have been payable to the worker, not his estate or dependants.  The action on the indemnity does not depend even upon the continuation of the right of the worker to sue.  We know from the authorities that if that right is lost nevertheless the right of indemnity survives.  Those are our submissions, your Honours.

FRENCH CJ:   Yes, thank you, Mr Solicitor.  Yes, Mr Jackson.

MR JACKSON: Your Honours, may we say as a starting point that we accept entirely that the cause of action given to the appellant by section 207B(7) is a separate cause of action and I mean by that that its existence derives from that provision. It is statutorily created. It is not otherwise derivative. Your Honours, that really takes one no further than to say there is a statutorily created right of action. It does not tell one what the ambit of the cause of action is and, particularly, of course, I am referring to the ambit of the cause of action in relation to the quantification of damages. Those matters require one to turn attention to the other provisions of section 207B.

Your Honours, may I go now to the terms of section 207B and start with subsection (7) itself. Subsection (7) starts from an assumption. The assumption is that there is “a person who has received compensation” and that person, and if one speaks for the moment about persons who are injured workers, the person will be alive or dead. The next requirement of section 207B(7) is that that person:

has not recovered, or taken proceedings to recover, damages for the injury from –

a third party.  The statute then provides in subsection (7)(a) that “the insurer” is given a right.  The right so conferred is an entitlement “to be indemnified” and the ambit of the indemnity is – to use the words of the provision, “the amount of the compensation”.  However, the ambit of that indemnity is limited by the extent of the other person’s liability for the damages.  Your Honours will see the words in paragraph (a) “to the extent of that person’s liability for the damages”.

If I could just pause at this point, your Honours, one thing that one notes is that the time at which that is to be assessed is at the time of judgment in the proceedings brought by the insurer and that that is so – there was an issue in the proceedings.  Question 1 was answered in that way, and that is not the subject of any appeal to the Court.      Could I just give your Honours a reference in that regard?  Your Honours will see it referred to in the reasons of the Court of Appeal, first of all at paragraph [20].  The actual decision can be seen in paragraph [48], question 1 and the answer to question 1. 

When one is speaking about the entitlement “to be indemnified” in paragraph (a) “to the extent of that person’s liability for the damages” the amount of that liability is an amount to be assessed at the hearing of the proceedings enforcing the claim for compensation.  Your Honours, one sees also in the concluding part of paragraph (a) the words:

so far as the amount of damages payable for the injury by that person extends–

and then one is again speaking about the time of judgment in the compensation proceedings.  Your Honours, those provisions give rise to the question, namely, what is the extent of the other person’s liability for the damages?  Your Honours, the answer to that question will vary in the case of an injured worker depending on whether the worker is alive or has died at that time.  Your Honours, if one takes the case of an injured but alive worker, the amount of the liability, in our submission, would be assessed by reference to the statutory provisions as they exist from time to time regulating the availability and quantum of damages payable to an injured person. 

Your Honours, in the case of an injured worker who has died, the cause of action, in our submission, absent a statutory provision, will not have survived death and that is why, in our submission, reference to provisions such as section 66 is not only apposite, but it is essential.  It is essential, your Honours, because those provisions not only create any cause of action by reference to which the damages payable might have been assessed but, more relevantly, determine its ambit and they give content, your Honours, to the phrase:

to the extent of that person’s liability for the damages –

in section 207B(7)(a) and also, your Honours, to the other words in the same provision –

so far as the amount of damages payable for the injury by that person extends –

Then, your Honours, one sees in paragraph (b) of section 207B(7) it says that “to the end” referred to in paragraph (a):

the insurer is subrogated to the rights of the person for the injury.

Now, your Honours, the subrogation to the right of the person for the injury in the case of a person who has died, in our submission, can only be a subrogation to the rights of the person as they exist at the time when the judgment is being given and that ‑ ‑ ‑

FRENCH CJ:   It does not matter on your submission that the legal liability contemplated by 207B(1)(a)(ii), on Mr Sofronoff’s submission, is the liability that comes into existence, as it were, at the time of the injury.  You are saying really what we are focusing on here is the entitlement to damages associated with that liability and it has been diminished by virtue of section 66 post mortem – well, sorry, there is a survival of the liability subject to reduced entitlement to damages and that is what we then focus on.

MR JACKSON:   Yes.  Your Honour, the extent of liability for damages varies and I take the simplest case between the situation of a worker who is alive and one who has died.  If one is looking at the case where the worker has died and the provisions are based on the extent of liability of the tortfeasor, the extent of liability of the tortfeasor, rightly or wrongly, has changed from the extent of it at the time of the injury and it has changed because section 66 is a provision which creates or makes the cause of action survive, but it also does so on various terms. 

Your Honours, the views have varied considerably over the years as to the extent to which it is appropriate that the estates of persons who have died should be able to recover for things like damages for loss of expectation of life and pain and suffering and so on and no doubt the views have changed over the years. But the present situation, your Honours, is the one that exists in section 66. So when one is looking at the provisions of section 207B(7), in our submission, the provision is speaking of a liability of damages to be assessed. It works on the assumption that the proceedings have not been brought or not completed and the amount, which is the quantum of the liability for damages, in our submission, will depend on the law applicable at the time the indemnity is sought to be enforced.

KIEFEL J:   The principal difference between the damages assessed if the person were alive, as distinct from under the Succession Act survival provisions is principally with respect to future economic loss.  Is that right?

MR JACKSON:   Usually, your Honour. Your Honours, I will be about 10 minutes. If one goes to section 66, the provisions of it which are potentially germane are section 66(2)(a), that is no:

damages for pain and suffering, for any bodily or mental harm or for curtailment of expectation of life -

and (b),in some cases, “exemplary damages” and then you will see in paragraph (d)(ii), “future probable earnings”.

KIEFEL J:   If recovery was as Mr Sofronoff posits it for the indemnity and damages were assessed at date of trial, putting section 66 to one side, you would have a diminution of the amount allowed for pain and suffering, but the insurer would recover the full amount by subrogation for future economic loss.

MR JACKSON:   That is so, your Honour.  If one is looking at the situation as at the time of judgment in those proceedings, one cannot disregard the fact, of course, that the worker has died.  That being so you have a situation where the insurer is subrogated to the rights of the worker, but the rights of the worker are at the point those of the estate.

KIEFEL J:   But that allows two regimes for an insurer to recover upon posited upon the event of the worker’s death.

MR JACKSON:   Of course.

KIEFEL J:   I know that that logically follows from what you say, but ‑ ‑ ‑

MR JACKSON:   It is also liability, your Honour, the amount of liability.

KIEFEL J:   Yes.  That would not prove an encouragement, perhaps, for insurers to pay more promptly in relation to injured workers who are seriously ill.

MR JACKSON:   Well, your Honour, that, with respect, in our submission, is a possible view of things, but if one takes cases like the present of mesothelioma, when there is death in most cases, it is generally speaking known how long it is likely to take without being able to give an exact day and be heavily represented.

KIEFEL J:   I suppose an insurer might pay by instalments and withhold certain sums until an outcome is more obvious.

MR JACKSON:   Well, your Honour, anything is possible I suppose, I do not ‑ ‑ ‑

CRENNAN J:   I think that those sorts of considerations perhaps lie behind President McMurdo’s observation in paragraph [64] of the judgment that she regards the application of 66(2) in the way that is being contended as having “an incongruous result” she calls it, because:

Tortfeasors who are liable for so severely injuring a worker that death ensues before the worker has brought an action against them, could limit their liability to indemnify the worker’s insurer for compensation for those injuries.

She seems to be touching on policy considerations about the ‑ ‑ ‑

MR JACKSON:   Yes.  Well, your Honour, we would say that the policy is discernable from the words of the provisions, and one does have to look at this from the point of view of the two parties relevantly to it.  One is the insurer, which has payed out compensation and that is part of its business, on the other hand one has to the tortfeasor and, your Honours, it has liabilities which arise under the common law and under statute.  It is not just a question of the insurer’s entitlement, it is a question also of the extent to which there has to be a payment out by the tortfeasor. 

Your Honours, could we just say that that is why one sees in the provisions to which we have referred the emphasis on the limitation provided for by the words to which I have referred in subsection (7)(a) and to the question of subrogation.  Your Honours will see in subsection (8) that payment made as indemnity satisfies the person’s liability to the extent of the payment on a judgment for damages for the injury.

KIEFEL J:   Given that the purpose of section 207B is an indemnity to the insurer to the extent of the other person of the tortfeasor’s liability, are not the damages in question, the damages for injury, for the injury in respect of which compensation has been paid?

MR JACKSON:   Yes, of course. Yes, they are. Your Honours will see that is so, but the ambit of the amount payable is to the extent of that person’s liability for the damages, and the liability for the damages diminishes on death. Your Honours, one cannot really take away the words “to the extent of the liability”. Your Honours, in relation to section 66, if I could just say two things about it. One is that we would submit that the position that your Honour Justice Gummow was suggesting to our learned friend about the effect of section 66(1) is correct, that is, there is a survival of a former cause of action and the terms on which it survives is set out in section 66(2).

Section 66 is part of a succession Act which is headed “Miscellaneous” and it deals with a number of differing matters, but could we also note, your Honours, and this is will not, I think, be amongst the papers that your Honours have, but section 66 has been – but in the transitional provisions to the Civil Liability (Dust Diseases) and Other Legislation Amendment Act 2005, section 66 was legislated to be applied to

all proceedings surviving for the benefit of a deceased person’s estate whether commenced before or after the commencement of this section –

Can we send your Honours a copy?

GUMMOW J:   Do we have that provision?

MR JACKSON:   Yes, I will get it sent to your Honours.

FRENCH CJ:   I think it appears at the back of the current print, does it not?

MR JACKSON:   Yes.  Your Honours, could I just say that we provided a – I will perhaps give your Honours a reference to this provision also, but provided a worker submits an application for compensation to the insurer before death, the worker will be paid some statutory compensation whether alive or dead.  I put that badly, but your Honours will know what I mean.  An insurer is not permitted to delay payment and the Act requires claim to be processed in a particular number of days.  Can we give your Honours the provisions in relation to that also.  Your Honours, those are our submissions.

FRENCH CJ:   Thank you, Mr Jackson.  Yes, Mr Solicitor.

MR SOFRONOFF:   Your Honours, a question was raised as to the respects in which the right to recovery is cut down by section 66 and our learned friend made the submission that over the years policy has shifted in relation to what heads of damage would be unrecoverable by an estate suing pursuant to a provision like section 66.  That demonstrates, in our submission, that what section 66 is directed to is not to protect a tortfeasor against liability, nor does it have anything to do with what the worker’s rights might have been when the worker was still alive.  It is concerned to ensure that dependants or, indeed, beneficiaries who are not dependants are limited in the benefit that they receive from the personal representatives suing in respect of a cause of action which survives.

Thus the dependants, if they are beneficiaries as well, can themselves sue for that which they themselves have lost in terms of the financial component of what the worker was bringing into the home and sue in respect of the loss that might have been suffered if the worker was a great supporter in terms of being handyman or, more importantly, the value that a mother brings to a house in terms of unpaid work.  Section 66 is concerned to ensure – it has nothing to do with the rights of a worker – it is concerned to ensure that the estate does not get a windfall to the detriment of insurers by reason of a worker having been killed, young for example, and thereby having suffered a huge loss of earning capacity.

That was something the worker suffered and if the worker had survived, could have sued for it.  The compensation would have been personal to the worker.  The estate is limited to getting, as 66 shows, simply actual economic loss, actual expenses and matters of that kind.  That demonstrates, in our submission, that the two statutes have nothing to do with each other.  The other matters, your Honours, is, my learned junior has been away to get the relevant provisions applicable in Queensland concerning fatal accidents claims and could I had those up your Honours.  They are from the Supreme Court Act 1995. Thank you. Those are our submissions, your Honour.

FRENCH CJ:   Yes, thank you, Mr Solicitor.  The Court will reserve its decision.  The Court adjourns until 10.15 tomorrow morning.

AT 12.53 PM THE MATTER WAS ADJOURNED