Workers' Compensation Dust Diseases Board of NSW v Cook

[2015] NSWCA 270

Court of Appeal

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:	Workers’ Compensation Dust Diseases Board of NSW v Cook [2015] NSWCA 270
Hearing dates:	17 July 2015
Decision date:	09 September 2015
Before:	Basten JA at [1]; Macfarlan JA at [25]; Sackville AJA at [61]
Decision:	Appeal dismissed with costs.
Catchwords:	STATUTORY INTERPRETATION – application of general law principles to statutory compensation scheme – construing two statutes of the same legislature conformably – whether provisions of one statute picked up by second statute   WORKERS’ COMPENSATION – dust diseases – whether qualified claimant entitled to payment of benefit – whether Dust Diseases Board entitled to refuse claim where damages recovered – whether general law prohibition on double recovery applies to a claim for compensation under Workers’ Compensation (Dust Diseases) 1942 (NSW)
Legislation Cited:	District Court Act 1973 (NSW), ss 142G, 142J, 142N Workers Compensation Act 1987 (NSW), ss 4, 9, 33, 46, 151Z; Sch 6 Workers’ Compensation (Dust Diseases) Act 1942 (NSW), ss 1, 5, 6, 8, 8E, 8I, 12D; Sch 1A, cl 4
Cases Cited:	Annetts v McCann (1990) 170 CLR 596 Downes v Amaca Pty Ltd [2010] NSWCA 76; 78 NSWLR 451 Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; 250 CLR 503 Federal Commissioner of Taxation v Unit Trend Services Pty Ltd [2013] HCA 16 250 CLR 523 Franklins Self Serve Pty Ltd v Wyber (1999) 48 NSWLR 249; [1999] NSWCA 390 Harris v Commercial Minerals Ltd [1996] HCA 49; 186 CLR 1 Kuenzel v Workers Compensation (Dust Diseases) Board of New South Wales [2012] NSWDC 243 Lacey v Attorney General for the State of Queensland [2011] HCA 10; 242 CLR 573 Parry v Cleaver [1970] AC 1
Texts Cited:	Stephen Gageler, “Common Law Statutes and Judicial Legislation: Statutory Interpretation as a Common Law Process” (2011) 37 Monash UL Rev 1 at 12-13   Harold Luntz, Assessment of Damages for Personal Injury and Death (4th ed, Butterworths, 2002), Ch 8 at pp 423-430
Category:	Principal judgment
Parties:	Workers’ Compensation Dust Diseases Board of NSW (Appellant) Grace Cook as Executrix of the Estate of the late Leonard Arentz (Respondent)
Representation:	Counsel: G M Watson SC/J C Sheller (Appellant) D J Russell SC (Respondent)   Solicitors: Safety, Return to Work & Support (Appellant) Maurice Blackburn Lawyers (Respondent)
File Number(s):	CA 2014/280635
Publication restriction:
Decision under appeal	Court or tribunal: District Court Jurisdiction: Residual jurisdiction Citation: [2014] NSWDC 205 Date of Decision: 15 August 2014 Before: Neilson DCJ File Number(s): DC RJ00064/14

HEADNOTE

[This headnote is not to be read as part of the judgment]

Mr Leonard Arentz contracted pleural mesothelioma from exposure to asbestos in the course of his employment in Tumut, New South Wales, between 1969 and 1973. The exposure largely resulted from his contact with, or proximity to, products of James Hardie & Co Pty Ltd, now known as Amaca Pty Ltd (“Amaca”).

Mr Arentz sued Amaca in the Supreme Court of Victoria for common law damages for negligence. On 29 April 2013 he accepted an Offer of Compromise served by Amaca after earlier settlement negotiations.

Prior to that settlement, on 30 January 2013, Mr Arentz had applied to the Workers’ Compensation Dust Diseases Board of New South Wales (the “DDB”) for an award of compensation under s 8 of the Workers’ Compensation (Dust Diseases) Act 1942 (NSW) (the “DD Act”). The DDB refused the application on the basis, relevantly, that awarding Mr Arentz compensation under that Act would, in light of his recovery of common law damages from Amaca, “amount to a double recovery” of compensation for his dust disease.

Mr Arentz appealed to the District Court against that refusal. Mr Arentz died prior to the delivery of judgment in the District Court appeal, which his widow as executrix of his estate continued thereafter. By judgment of 15 August 2014 the District Court allowed the appeal and made awards under the DD Act for weekly payments for total disablement from 30 October 2012 until Mr Arentz’s death, and for medical and similar expenses.

The DDB appealed on the basis that that the primary judge erred:

(a) in determining that the DDB bore the onus of demonstrating that the deceased would be double compensated if he received benefits under the DD Act, and

(b)   in determining that the deceased was entitled to such benefits when he failed to prove he would not be double compensated.

A further question emerged during the hearing of the appeal. That was whether the DDB could refuse a claim for compensation under the DD Act on the basis that the claimant had already recovered common law damages in respect of his or her loss and would therefore obtain double recovery if he or she also received compensation under the DD Act.

Held, dismissing the appeal, that the DD Act did not permit the DDB to refuse a claim for compensation because the claimant had recovered damages.

Judgment

1. BASTEN JA: The appellant board contends that the respondent is not entitled to benefits under the Workers’ Compensation (Dust Diseases) Act 1942 (NSW) (“the Dust Diseases Act”) with respect to the disability suffered by her husband (now deceased) from a dust disease. The appellant says that the worker (and now his estate) was fully compensated by an award of common law damages in negligence for any loss suffered as a result of his disability.

2. The case raises fundamental issues of approach in two areas of law. The first is the inter-relationship between the general law and a specific statutory scheme; the second is the inter-relationship between two statutes of the same legislature.

3. Part of the difficulty lies in the pragmatic approach of the common lawyer, which seeks to identify legal principles from past authorities and apply them, adapting so far as necessary to deal with modern conditions, to a new set of facts. That methodology requires adaptation in answering the questions identified above.

4. The first question is unusual: the more usual cases involve the application of statute to established general law principles. This case involves an attempt to import into a specific statutory scheme for payment of benefits some broad principle derived from the general law. An analogy may be seen in the establishment of a new statutory tribunal, with its own defined procedures, to which, nevertheless, general law principles of procedural fairness are found to be applicable. [1] The problem in the present case is not, however, procedural; the question is whether an entitlement to payment of benefits is limited in a manner not expressly identified by the statute, namely a broadly identified prohibition on double recovery. Nor is this a case where fundamental common law principles are at stake, which will not be taken to be excluded, except by clear language. The so-called principle against double recovery, in relation to the receipt of benefits intended to relieve the effects of injury or disease, is a fraught area of the law which is addressed in different ways in different contexts and times. [2]

   1. See generally, Stephen Gageler, “Common Law Statutes and Judicial Legislation: Statutory Interpretation as a Common Law Process” (2011) 37 Monash UL Rev 1 at 12-13 referring to Annetts v McCann (1990) 170 CLR 596.

   2.    See Harold Luntz, Assessment of Damages for Personal Injury and Death (4th ed, Butterworths, 2002), Ch 8 at pp 423-430.

5. The nature of the second problem is quite different: it is purely a question of statutory interpretation. It is one which arises from time to time when the Parliament seeks to add to, or replace part of, an existing statutory scheme, intending that the result will be a coherent whole. Thus, the Dust Diseases Act states that it “shall be construed with” the Workers Compensation Act 1987 (NSW). [3]

   3. Dust Diseases Act, s 1(1).

6. I agree with Macfarlan JA that, with respect to the first question, the implied general law limitation on the statutory scheme is not available. With respect to the second question, I agree that specific provisions of the Workers Compensation Act are not to be imported into the Dust Diseases Act. In the result, the appeal must be dismissed with costs.

Jurisdiction

7. The jurisdiction of the District Court involved an “appeal” under s 8I of the Dust Diseases Act. Such appeals originally went to the Compensation Court, the jurisdiction of that Court being treated as original jurisdiction, permitting a fresh hearing by the Court without the need to identify error on the part of the board. [4] Following the abolition of the Compensation Court in 2002, such appeals fell within the “residual jurisdiction” of the District Court. [5] The District Court Act, s 142N, provides an appeal to this Court by a party aggrieved by an award of the District Court “in point of law”. The issues of statutory construction considered below involve points of law fundamental to the resolution of the proceedings in the District Court.

   4. Workers’ Compensation (Dust Diseases) Board v Veksans (1993) 32 NSWLR 221.

   5. District Court Act 1973 (NSW), s 142G.

Implied general law limitation

8. The relevant statutory provisions have been set out in the reasons of Macfarlan JA and need not be repeated. Because the appellant relied on a passage in my reasons in Downesv Amaca Pty Ltd,[6] albeit not one central to the reasoning supporting the outcome, nor adopted by other members of the Court, I prefer to express my own reasons for agreeing with the result in the present case.

   6. (2010) 78 NSWLR 451; [2010] NSWCA 76 at [41].

9. The Dust Diseases Act provides that where the medical authority certifies that a person is totally or partly 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 (qualifications not in dispute in the present case), that person “shall [subject to a finding of the board, also satisfied in the present case] be entitled to an award from the board, and to receive compensation at the prescribed rates from the Fund”. [7] Similarly, where a person dies from such a disease in such circumstances, the dependants of the person “shall … be entitled to an award from the board, and to receive compensation at the prescribed rates from the Fund”. [8]

   7. Dust Diseases Act s 8(1)(a).

   8. Dust Diseases Act, s 8(1)(b).

10. The medical authority certified that the worker had suffered from mesothelioma and was totally disabled as a result of that disease. The only basis upon which the Board declined to provide the benefits to which he would otherwise have been entitled under s 8(1) was that such a payment would involve “double recovery” because he had recovered damages from Amaca Pty Ltd, the manufacturer of the relevant product, being the source from which he inhaled asbestos dust.

11. The Dust Diseases Act provides for certain relief to the Board in circumstances where compensation is paid or payable by a negligent third party tortfeasor. Section 8E states that its purpose is to “provide the board with rights to be reimbursed for compensation paid or payable by it where damages are recovered or recoverable”. [9] Those rights are said to “correspond in certain respects” to those available to an employer under s 151Z of the Workers Compensation Act. The operative provision, s 8E(3), provides that where the worker or a dependant recovers damages from the tortfeasor, and there is a deduction from the damages of an amount of compensation, then the tortfeasor is liable to pay the Board the amount of the deduction. There is no provision for recoupment from the worker, nor is there provision for reimbursement unless a relevant amount has been deducted from the damages. That section did not operate in the present case because, whether or not there was a deduction from the damages, the Board was not seeking to recover any amount from Amaca, but rather to decline the worker’s application for an award of compensation.

    9. Dust Diseases Act, s 8E(1).

12. The only other relevant provision in the Dust Diseases Act was to be found in Sch 1A, cl 4. That provided for the case where the relevant amount of the deduction is not “apparent or readily ascertainable from the terms of any judgment or award in respect of the damages”, in which case the Board is entitled to make an assessment of the amount of compensation paid by the Board and the present value of future benefits payable by the Board and recover that as the amount deducted. That provision does not assist the Board in the present case, but merely provides a basis upon which it might make a claim against Amaca.

13. Subject to the possible operation of the Workers Compensation Act, there is, therefore, nothing in the carefully constructed scheme under the Dust Diseases Act which would derogate from the entitlement conferred on the worker (the relevant contingencies being satisfied) under s 8(1) of the Dust Diseases Act.

14. The appellant relied upon two aspects of the Workers Compensation Act. First, it noted that the Dust Diseases Act provided that the benefits payable were calculable by reference to “the weekly compensation payments prescribed by Division 2 of Part 3 of, and Schedule 6 to, the [Workers Compensation Act]”. [10] Part 3, Div 2 of the Workers Compensation Act, the appellant noted, included the following provision:

46   Reduction of weekly payments to prevent dual benefits

(1)   The Commission may, on the determination of an application for any weekly payment of compensation or on a review under this Act of any weekly payment of compensation, order that the weekly payment be reduced to prevent dual benefits of the same kind being payable by the employer during and in respect of the incapacity for work.

(2)   Any such order shall have effect according to its tenor.

(3)   This section does not affect the operation of section 49 or 50.

10. Dust Diseases Act, s 8(2)(a).

15. Section 8(2)(a) identifies the “prescribed rates of compensation payable under an award of the board”; that provision does not incorporate into the Dust Diseases Act all provisions of Pt 3, Div 2 of the Workers Compensation Act. Rather, it has a more limited effect. Section 46, being a section conferring power on the Commission to reduce payments under the Workers Compensation Act, is not a provision prescribing rates.

16. Further, s 46 refers to “dual benefits of the same kind”, not to the payment of compensation and damages. The benefits are to be payable “by the employer”, which does not engage the present case. Nor did the submission consider the operation of Sch 6 and the benefits payable in respect of coal miners, being an important qualification to the operation of the Workers Compensation Act under s 8(2) of the Dust Diseases Act.

17. Secondly, the appellant sought to achieve a similar result by noting that the Dust Diseases Act was required to be “construed with” the Workers Compensation Act, which is referred to in the Dust Diseases Act as "the Principal Act.”[11]

    11. Dust Diseases Act, s 1(1).

18. Such provisions may have one of a number of effects, though none of them were discussed in the submissions. Thus, state laws should be read harmoniously with each other, so as to avoid inconsistency and the possibility of implied repeal, where that is possible. Section 1(1) may well have such an effect. It may also seek to ensure consistency of operation by allowing words undefined in the Dust Diseases Act to be construed according to a relevant definition in the Workers Compensation Act. [12] However, there is no warrant in this language for incorporating into the Dust Diseases Act, provisions of the Workers Compensation Act which are not expressly incorporated, particularly where the effect would be to change the meaning and operation of the Dust Diseases Act.

    12. See, eg, West v Workers Compensation (Dust Diseases) Board [1999] NSWCC 3; Kuenzel v Workers Compensation (Dust Diseases) Board of New South Wales [2012] NSWDC 243 (Gibson DCJ) at [11].

19. Of critical importance in this context is that the primary purpose of the Workers Compensation Act is to confer on a worker who has received an injury (being a personal injury arising out of or in the course of his or her employment) a right to receive compensation from the worker’s employer. [13] The Dust Diseases Act does not provide for payments of compensation by an employer, but by the Board, albeit from a fund created under s 6 of the Dust Diseases Act which will include payments by workers’ compensation insurers. [14]

    13. Workers Compensation Act, s 4 and s 9.

    14. Dust Diseases Act, s 6(7A).

Reliance on authority

20. The appellant sought to call in aid a statement by Mason P in Franklins Self Serve Pty Ltd v Wyber:[15]

“The court’s first task is to follow the legislative signposts. If they fully achieve the discerned object of avoiding double compensation then their methodology is to be followed. If they do not apply or fully apply, the court will grapple with common law and equitable principles designed to achieve the same goal. The outcome for the plaintiff may by the same in the long run, but the consequences for employers, tortfeasors and insurers may differ or at least be problematical.”

15. (1999) 48 NSWLR 249; [1999] NSWCA 390 at [50].

21. This case (and other cases relied upon by the appellant) involved the assessment of damages, not the obligations of the Board (or any other statutory body) to pay benefits. Subject to any statutory provisions which were directly applicable, the calculation of damages was a task to be undertaken in accordance with general law principles. Even then, there is a risk of misunderstanding in describing the court’s task as being “to follow the legislative signposts.” The court’s task is to apply the legislation. If in an area where the general law applies, where there is no statutory provision which would appear to supplant it, then no doubt general law principles can continue to operate. However, that is not the case with a statutory scheme for payments of compensation by a statutory body. Statements of principle in cases dealing with common law damages do not assist.

22. That conclusion applies to Downes v Amaca, also a case involving the assessment of damages and the propriety of deducting from an award of damages the cost of past medical treatment and the present value of future medical expenses and domestic assistance. [16] At [32] I said:

“There are two factors which favour the conclusion that a deduction was appropriate in the present case. First, were the appellant to apply for benefits under the Dust Diseases Act (contrary to his present intentions) the Board, once it accepted that he fell within the statutory criteria in s 8(1) would be obliged to make payments of compensation. He would then have obtained double recovery. Secondly, if the deduction were not made from the damages, the statutory rights of the Board either to recover from such damages or, in the absence of proceedings for damages, to obtain an indemnity from the respondent, would be lost. As a result, not only would the appellant obtain double recovery, but the Board would lose its right to recoupment.”

16. Downes at [5].

23. My reasons then identified a number of countervailing considerations, leading to the conclusion set out at [41]:

“Given the countervailing considerations, the two matters identified at [32] above provide an inadequate basis for concluding that the legislature intended to remove the right to an award of damages with respect to matters to which there was no extant entitlement to statutory compensation, but as to which an entitlement might arise in the future. There is no express statutory entitlement (let alone an unqualified entitlement) to make an application to the medical authority or the Board under s 8 of the Dust Diseases Act, nor to have an application accepted. It might properly be inferred that the Board was not required to accept or grant an application where the claimant had already obtained an award by way of damages with respect to the identical disablement for which a benefit was later sought under the Act.”

24. The last two sentences of that passage should be disregarded. They were not part of the reasoning leading to the conclusion; they were not endorsed by either Campbell JA or Handley AJA and find no reflection in their judgments. I no longer think they can be supported on a fair reading of the statute.

25. MACFARLAN JA: Between 1969 and 1973, Mr Leonard Arentz contracted pleural mesothelioma from exposure to asbestos in the course of his employment in Tumut, New South Wales. The exposure largely resulted from his contact with, or proximity to, products of James Hardie & Co Pty Ltd, now known as Amaca Pty Ltd (“Amaca”).

26. Mr Arentz sued Amaca in the Supreme Court of Victoria for common law damages for negligence. On 29 April 2013 he accepted an Offer of Compromise served by Amaca after earlier settlement negotiations.

27. Prior to that settlement, on 30 January 2013, Mr Arentz had applied to the Workers’ Compensation Dust Diseases Board of New South Wales (the “DDB”), established under s 5 of the Workers’ Compensation (Dust Diseases) Act 1942 (NSW) (the “DD Act”) for an award of compensation under s 8 of that Act. The DDB refused the application on a basis that is now not relied upon and also on the basis, relied upon in this Court, that awarding Mr Arentz compensation under the Act would, in light of his recovery of common law damages, “amount to a double recovery” of compensation for his dust disease.

28. Mr Arentz appealed to the District Court against that refusal, pursuant to s 8I of the DD Act. Neilson DCJ heard the appeal, exercising the Residual Jurisdiction of the Court under the District Court Act 1973 (NSW) (see s 142G). That Act provides that, in the exercise of such jurisdiction, decisions are to be made “on the real merits and justice of the case” and that “the Court is not bound to follow strict legal precedent” (ss 142J(1)(a) and (b)). It was not suggested, in the District Court or this Court, that these provisions had any impact on the issues between the parties.

29. Mr Arentz died prior to the delivery of judgment on the District Court appeal, which his widow continued thereafter, as executrix of his estate. By judgment of 15 August 2014 Neilson DCJ allowed the appeal and made awards under the DD Act for weekly payments for total disablement from 30 October 2012 until Mr Arentz’s death, and for medical and similar expenses.

30. The DDB now appeals to this Court pursuant to s 142N(1) of the District Court Act, alleging that the primary judge erred as follows:

“1   The trial judge erred in point of law in determining that the Appellant bore the persuasive onus of demonstrating that the deceased would be double compensated if he received benefits under the Workers Compensation (Dust Diseases) Act, 1942 (NSW).

2 The trial judge erred in point of law in determining that the deceased was entitled to benefits under the Workers’ Compensation (Dust Diseases) Act, 1942 (NSW) when he failed to prove he would not be double compensated.”

31. The parties’ arguments focused initially on questions relating to these grounds of appeal, namely, whether the common law damages recovered by Mr Arentz (by way of settlement) had been calculated by deducting such amounts as he could have been expected to be awarded as compensation under the DD Act and, secondly, whether the primary judge had placed the onus on the DDB to prove what had occurred in that respect.

32. After discussion with the Court, two further questions emerged which were the subject of subsequently-provided written submissions. The first was whether, in principle, the DDB could defend a claim for compensation under the DD Act on the basis that the claimant had already recovered common law damages in respect of his or her loss and would obtain double recovery if he or she also received compensation under the DD Act. Secondly, if such a defence is available, who carries the onus of proving the relevant facts? These fundamental questions were not raised before the primary judge but should be permitted to be raised in this Court (see Suttor v Gundowda [1950] HCA 35; 81 CLR 418 at 438).

33. For the reasons that appear below, I consider that the first of these additional questions should be answered in the negative and that the appeal should therefore be dismissed.

THE STATUTORY FRAMEWORK

The DD Act

34. The following provisions of the DD Act are presently relevant:

“6   Constitution of Fund

(1)   There shall be established a Workers’ Compensation (Dust Diseases) Fund which shall consist of:

(a) all balances, investments and moneys of which the Silicosis Fund consisted immediately before the commencement of Part 2 of the Workers’ Compensation (Dust Diseases) Amendment Act 1967 and all moneys that, immediately before that commencement, were owing to the Silicosis Fund and are paid after that commencement,

…

8   Certificate of medical authority and rates of compensation

(1)   Subject to this Act:

(a)   where the medical authority 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 board finds:

(i)   that such person was a worker during the whole of the time the person was engaged in such occupation, 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 authority, 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 board has found that the person was a worker in such occupation, be entitled to an award from the board, and to receive compensation at the prescribed rates from the Fund,

(b)   where the medical authority certifies that a person died from a dust disease and that the person’s death 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, the dependants of such person shall, if the board finds:

(i)   that such person was a worker during the whole of the time the person was engaged in such occupation, 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 authority, further finds that the person’s death was reasonably attributable to the person’s exposure to the inhalation of dust in such occupation during the time that the board has found that the person was a worker in such occupation, be entitled to an award from the board, and to receive compensation at the prescribed rates from the Fund,

…

(2)   The prescribed rates of compensation payable under an award of the board made pursuant to subsection (1), not being an award to which subsection (2B) applies, shall, subject to this section, be:

(a) where the award is made pursuant to paragraph (a) of that subsection—the weekly compensation payments prescribed by Division 2 of Part 3 of, and Schedule 6 to, the Principal Act in respect of workers employed in or about a mine,

…

(d) where medical or related treatment or hospital treatment or occupational rehabilitation service or ambulance service becomes reasonably necessary as a result of the dust disease—the benefits prescribed by Division 3 of Part 3 of the Principal Act.

…

8E   Reimbursement of compensation from negligent third parties

(1)   Purpose of section

The purpose of this section is to provide the board with rights to be reimbursed for compensation paid or payable by it where damages are recovered or recoverable, being rights that correspond in certain respects to those available to an employer (or an employer’s insurer) under section 151Z of the Workers Compensation Act 1987.

(2)   Application of section

This section applies where a worker suffers disablement or death from a dust disease.

(3)   Reimbursement where damages recovered If:

(a)   a person (the first person) recovers damages from some other person (the second person) in respect of the disablement or death pursuant to the final determination of the relevant proceedings, and

(b)   there is deducted from the damages the amount of any compensation already paid to the first person under this Act, or the present value of future benefits payable to the first person under this Act, or both, the following provisions have effect:

(c)   the second person is liable to pay to the board an amount equal to the amount or amounts so deducted,

(d)   the amount that the second person is liable to pay under this subsection is payable within 42 days after recovery of the damages or within such other period as is provided by Schedule 1A or prescribed by the regulations or as is (subject to the regulations) allowed by the board,

(e)   the amount that the second person is liable to pay under this subsection, or any unpaid portion of it, together with interest as provided by Schedule 1A, is recoverable by the board in a court of competent jurisdiction as a debt owing to the board.

…

(10)   Definitions

In this section and Schedule 1A:

damages means damages whether or not payable under an award or judgment, and includes damages payable under a settlement, but does not include damages of a class excluded by the regulations from this definition.

…

Schedule 1A Reimbursement of compensation from negligent third parties

4   Determination of amount of compensation

In a case in which the deduction from damages referred to in section 8E(3)(b) is not apparent or readily ascertainable from the terms of any judgment or award in respect of the damages, the amount of the deduction is the amount determined in accordance with, and subject to, the following principles:

(a)   Subject to the following paragraphs, the amount of compensation (the deducted compensation) taken to have been deducted from the damages payable by the second person to the first person is the total of the following amounts as assessed by the board:

(i)   the amount of compensation paid by the board to, or on behalf of, the first person up to the date of final determination,

(ii) the present value of future benefits payable by the board to, or on behalf of, the first person after that date (where the assessment of those future benefits is based on the assumption that the medical condition of the worker as to disablement and life expectancy will remain unchanged), less any reduction required by section 8E(6).”

35. The following provisions of the Workers Compensation Act 1987 (NSW) are also presently relevant:

“33   Weekly compensation during total or partial incapacity for work

If total or partial incapacity for work results from an injury, the compensation payable by the employer under this Act to the injured worker shall include a weekly payment during the incapacity.

…

46   Reduction of weekly payments to prevent dual benefits

(1)   The Commission may, on the determination of an application for any weekly payment of compensation or on a review under this Act of any weekly payment of compensation, order that the weekly payment be reduced to prevent dual benefits of the same kind being payable by the employer during and in respect of the incapacity for work.

(2)   Any such order shall have effect according to its tenor.

(3)   This section does not affect the operation of section 49 or 50.

…

151Z   Recovery against both employer and stranger

(1)   If the injury for which compensation is payable under this Act was caused under circumstances creating a liability in some person other than the worker’s employer to pay damages in respect of the injury, the following provisions have effect:

(a)   the worker may take proceedings both against that person to recover damages and against any person liable to pay compensation under this Act for payment of that compensation, but is not entitled to retain both damages and compensation,

(b)   if the worker recovers firstly compensation and secondly those damages, the worker is liable to repay out of those damages the amount of compensation which a person has paid in respect of the worker’s injury under this Act, and the worker is not entitled to any further compensation,

(c)   if the worker firstly recovers those damages the worker is not entitled to recover compensation under this Act,

…”

RELEVANT FACTUAL CIRCUMSTANCES

36. Mr Arentz’s claim for damages in the Supreme Court of Victoria included claims for loss of earnings and earning capacity and for recovery of medical and similar costs. Amaca applied for the proceedings to be transferred to the Supreme Court of New South Wales, relying on an affidavit that stated, inter alia, that Mr Arentz “is potentially entitled to statutory benefits from the Dust Diseases Board in addition to any common law entitlements” (quoted at Judgment [8]). Hollingworth J, who noted that potential entitlement in her Judgment, refused the application.

37. In those Victorian proceedings, Amaca filed and served a report of Ms Tamara Lindsay, a forensic accountant, which estimated the value of Mr Arentz’s potential benefits under the DD Act in respect of both past and future periods. Settlement negotiations culminated in Mr Arentz accepting an Offer of Compromise from Amaca of $1.1 million plus party/party costs.

38. Correspondence with the DDB after this settlement included a letter dated 30 April 2013 from Mr Arentz’s solicitor, Mr Andrew Dimsey, stating that the settlement amount “includes an unquantified component for medical expenses and for loss of earnings and earning capacity. I note that the settlement already contemplates that Mr Arentz has an entitlement to a DDB pension and medical expenses” (quoted at Judgment [19]).

39. It also included a letter of 20 May 2013 from Ms Barbara de Brouwer, of Amaca’s solicitors, stating that “I also confirm that the above [settlement] Offer did not include any amount that Mr Arentz may be entitled to receive in accordance with the Workers Compensation (Dust Diseases) Act 1942” (quoted at Judgment [19]). The primary judge found, and it was not challenged on appeal, that this statement conveyed that Amaca’s settlement offer had been reduced to take into account Mr Arentz’s potential entitlements under the DD Act (ibid). When requesting particulars on 19 February 2013, Ms de Brouwer had asked Mr Dimsey:

“Please advise whether your client has applied to the [DDB] for any benefits, whether his application has been accepted and, if so, what benefits he is receiving” (quoted at Judgment [27]).

40. Both Mr Dimsey and Ms de Brouwer gave evidence before the primary judge but Ms de Brouwer declined, on the basis of solicitor/client privilege, to answer any questions about how her client’s settlement offer had been calculated.

THE JUDGMENT AT FIRST INSTANCE

41. The primary judge commenced his consideration of the appeal to the District Court by stating: “I am hesitant about my jurisdiction” to answer questions concerning double recovery (Judgment [26]). By this, I take his Honour to have been referring to the question of whether double recovery could preclude a claim under s 8 of the DD Act. His Honour noted that neither party had addressed him about, or even adverted to, this question.

42. In dealing with the issues that the parties had presented, the primary judge said: “I am not persuaded on the balance of probabilities that Amaca did not take into account in forming its offer of compromise that the plaintiff might be entitled in future to benefits from the DDB” (Judgment [27]). His Honour referred, inter alia, to Ms Lindsay’s expert accounting report and to Ms de Brouwer’s letters of 19 February, 30 April and 20 May 2013 (see [37]-[39] above).

43. This led his Honour to conclude that he was unable to “find that if the plaintiff be paid statutory benefits by the DDB that there will be a double recovery” (Judgment [28]).

DISPOSITION OF THE APPEAL

44. A principle against permitting double recovery is undoubtedly ingrained in the general law (see for example Parry v Cleaver [1970] AC 1 at 13 per Lord Reid). However, applications of it have largely, if not wholly, been in the context of claims, such as common law claims for damages for negligence, under which the plaintiff must prove that he or she has suffered a loss. That loss cannot be established if the plaintiff has already been compensated for it by some other means.

45. Thus, in Harris v Commercial Minerals Ltd [1996] HCA 49; 186 CLR 1 the High Court held that a plaintiff’s common law damages should be reduced by the amount of compensation payments he had received under the DD Act because those payments were made as compensation for injury and as a substitute or partial substitute for lost wages (at 18). Indeed, in some circumstances it is appropriate to make a deduction from common law damages in respect of DD Act payments for which entitlement has not been established but which may become payable in the future (Downes v Amaca Pty Ltd [2010] NSWCA 76; 78 NSWLR 451). This position may of course be varied by statute (see for example s 12D of the DD Act).

46. Consideration of the issue of double recovery must however be approached differently where the injured person’s claim is not one for common law damages, alleging the suffering of loss, but is instead a statutory claim such as that of Mr Arentz (or now, his estate) under s 8 of the DD Act. A conclusion that the DDB is entitled to resist a claim for compensation under s 8 of the DD Act on the basis of an allegation of double recovery would require a finding that, taking into account its general purpose and policy, the Act manifests a legislative intention that that be the case (see Lacey v Attorney General for the State of Queensland [2011] HCA 10; 242 CLR 573 at [43]). The process of statutory construction involved in determining this issue must begin and end with the text of the statute but context and purpose must also be considered (Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; 250 CLR 503 at [39] quoted in Thiess v Collector of Customs [2014] HCA 12; 250 CLR 664 at [22]; Federal Commissioner of Taxation v Unit Trend Services Pty Ltd [2013] HCA 16; 250 CLR 523 at [47]).

47. The ingrained general law principle against double recovery to which I have referred would no doubt be relevant to the task of construction if the statutory language were amenable to more than one interpretation. For the reasons that follow, I do not however consider this to be the case.

48. First, there is no express provision in the DD Act entitling the DDB to resist a claim on the basis that the claimant would receive double recovery if it were accepted.

49. Secondly, unlike a claimant of common law damages for negligence, a claimant of compensation under s 8 of the DD Act does not have to prove that he or she has suffered a loss. Entitlement to an award under s 8 depends, according to the statutory words, solely upon proof of disablement for work from a dust disease which is reasonably attributable to the person’s exposure to the inhalation of dust in an occupation to the nature of which the disease was due. No question of proof of loss arises. Compensation is payable at the “prescribed rates of compensation” identified in s 8(2) which in turns refers to Division 2 of Part 3 of, and Schedule 6 to, the Workers Compensation Act upon proof of entitlement. Those provisions require regard to be had to the worker’s earnings prior to his or her disablement and, in the case of medical and other related expenses, limit the amount that can be recovered. However, again no proof of loss is required.

50. Thirdly, s 8(6)(a) of the DD Act precludes the recovery of compensation where the worker has claimed, or is receiving, compensation under the Workers Compensation Act. This section precluding identified double recovery says nothing as to the present situation where the worker has recovered common law damages.

51. Fourthly, section 8E(1) of the DD Act (see [34] above) indicates that the purpose of s 8E is to confer rights that correspond “in certain respects” to those available under s 151Z of the Workers Compensation Act. Section 151Z(1)(c) provides that a worker is not entitled to recover compensation under the Workers Compensation Act if he or she recovers damages first. It is notable that despite s 8E’s specific recognition of the terms of s 151Z of the Workers Compensation Act, the legislature chose not to include a provision corresponding to s 151Z(1)(c) in the DD Act. This is consistent with the statement in s 8E of the DD Act that the rights conferred under that section only correspond “in certain respects” with those under s 151Z.

44. Fifthly, it can be expected that a defendant to proceedings for common law damages will usually, if not invariably, exercise its right to have the plaintiff’s actual or potential entitlement to compensation under the DD Act deducted from the plaintiff’s common law damages (see [45] above). This will avoid double recovery. Although obliged to pay compensation to the worker, the DDB will not ultimately bear the burden of that payment because it is entitled to recover its amount from the common law defendant under s 8E(3) of the DD Act. That defendant will therefore only pay the amount of the compensation once because the amount will have been deducted from the worker’s common law damages that it paid.

45. As I determine this appeal on the basis that the DDB cannot resist payment of compensation under s 8 of the DD Act by reason of potential double recovery by the claimant, it is unnecessary to determine whether the evidence proved that such a deduction from common law damages was made in the present case. The conclusion that it was is however hard to resist in light of the evidence to which the primary judge referred and Amaca’s undoubted familiarity (as a frequent defendant in dust disease proceedings) with the principles applicable to calculation of common law damages and with the terms of s 8E of the DD Act.

46. I note that s 8E(8) of that Act provides that where it is not apparent or readily ascertainable from the terms of any judgment (which would include a consent judgment) whether an amount has been deducted in respect of the plaintiff’s DD Act entitlements, the amount is to be determined in accordance with Schedule 1A to that Act, effectively by reference to what those entitlements are or will be. This section thus assumes that a common law damages claim defendant will have exercised its right to deduct DDB entitlements. Such a defendant risks having to pay twice if it does not conform with this assumption.

47. Sixthly, contrary to the DDB’s submissions, s 46(1) of the Workers Compensation Act does not assist it. That section entitles the Workers Compensation Commission to order that weekly payments under that Act be “reduced to prevent dual benefits of the same kind being payable”. The DDB submitted that s 46 was applicable to the present case because s 1 of the DD Act requires that Act to be “construed with” the Workers Compensation Act. It submitted that, in relation to DD Act claims, the words “Commission” and “employer” in s 46 were to be read as though each was the DDB.

48. There are many reasons why this submission fails. It is sufficient to say that the requirement to construe the DD Act with the Workers Compensation Act does not mean that the provisions of the latter are to be treated as operative provisions of the former. Particularly is that so where, as with s 46, entities other than the DDB (the “Commission” and the “employer”) are referred to. Moreover, the reference to “dual benefits” is, in its context, a reference to duplicated Workers Compensation Act benefits and does not refer to common law damages. The presence of s 46 in the Workers Compensation Act in fact highlights, as do the other matters to which I have referred above, the absence of any presently applicable provision in the DD Act precluding double recovery.

49. Seventhly, case authority does not provide any binding answer to the present question. Nevertheless, a number of observations in Downes v AmacaPty Ltd are consistent with my approach (see [32], [51], [118] and [136]; compare [41]). As Basten JA noted in that case, it was not necessary there to determine the present question (at [53]).

CONCLUSION

58. For these reasons, the DDB is not entitled to resist a claim for compensation under s 8(1) of the DD 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 DD Act does not provide expressly for such a defence and, for the reasons above, does not in my view impliedly do so. Indeed, the DD Act’s provisions, and a comparison of them with those of the Workers Compensation Act, indicate a legislative intention that there be no such defence. Moreover, the principles applicable to quantification of common law damages and the provisions of s 8E of the DD Act in any event ensure that, in a practical sense, double recovery is highly unlikely to occur (see [51] above).

59. Given that a double recovery defence is not available to the DDB, it is unnecessary to determine on whom the onus of proving such a defence, if it existed, would rest and whether the primary judge misapplied that onus. His Honour’s decision is supportable on the basis, not argued before him, that as a matter of principle the DDB is not able to avail itself of a double recovery defence.

60. In these circumstances, the appeal should be dismissed with costs.

61. SACKVILLE AJA: I agree with Macfarlan JA.

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Endnotes

Decision last updated: 09 September 2015