WorkCover Queensland v Amaca Pty Ltd

• Jurisdiction: Australia Federal only
• Court: High Court
• Judge: French CJ,Gummow,Crennan,Kiefel,Bell JJ
• Judgment Date: 20 October 2010
• Neutral Citation: [2010] HCA 34,2010-1020 HCA A
• Docket Number: B10/2010
• Date: 20 October 2010

[2010] HCA 34

HIGH COURT OF AUSTRALIA

French CJ, Gummow, Crennan, Kiefel and Bell JJ

B10/2010

Workcover Queensland

Appellant

and

Amaca Pty Ltd & Anor

Respondents

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)

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.

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’.

ORDER

Appeal allowed with costs.

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.

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) (‘the Compensation Act’) to recover the quantum of compensation previously paid by it to Mr Rex Noel Thomson. Mr Thomson was a carpenter and builder, and ‘worker’ within the meaning of the Compensation Act, who had died on 20 June 2006 from malignant mesothelioma contracted as a result of inhaling asbestos contained in building products manufactured by the respondents. WorkCover now sought to recover by indemnity from the respondents the payments made by it to Mr Thomson under the Compensation Act. It will be necessary to refer further to the relevant facts later in these reasons.

2 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.

The facts

3 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.

4 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.

5 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

6 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)

7 There was no issue between the parties that the threshold in s 207B(1) had been met. The appeal turns upon the interaction, if any, between s 207B(7) of the Compensation Act and s 66 of the Succession Act. The heading to s 66 reads ‘Survival of actions’, and the section relevantly provides:

The opening words of sub-s (2), with their reference back to sub-s (1), and the following words ‘in any action brought’ are significant for this appeal. In short, when read together they identify the subject of the qualifications upon heads of damages recoverable as those recoverable in an action which survives for the benefit of the deceased estate, and they do not speak to recovery in any action otherwise arising, including that between WorkCover and the respondents.

• ‘(1) Subject to the provisions of this section and with the exception of causes of action for defamation or seduction, on the death of any person after the 15 October 1940 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.

• (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) where the death has been caused by the act or omission which gives rise to the cause of action — shall be calculated without reference to —

    • (i) loss or gain to the estate consequent upon the death save that a sum in respect of funeral expenses may be included; or

    • (ii) future probable earnings of the deceased had the deceased survived.’ (emphasis added)

The Court of Appeal

8 It is necessary first to refer to the text of s 207B(7). The majority of the Court of Appeal held that s 207B(7)(a) contains two distinct subject matters. The first is the existence of the indemnity. The second is the calculation of damages to determine how far that indemnity extends. The calculation of the extent of the right of indemnity is determined by ‘the extent of [the wrongdoer's] liability for the damages [for the injury] so far as the amount of damages payable for the injury by [the wrongdoer] extends’ (s 207B(7)(a)). The majority held that the extent of the indemnity is to be determined by the damages that would be recoverable by the worker, or his estate in the event of death, in an action brought against the wrongdoer, as at the date of judgment in the indemnity proceedings 3. The finding that the damages are to be calculated as at the date of judgment in the indemnity proceedings is not the subject of an appeal to this Court.

9 Mr Thomson having died on 20 June 2006, the majority found that the calculation of damages in the subsequent indemnity proceedings brought by WorkCover necessarily would be subject to the limitations found in s 66(2) of the Succession Act. Section 66(2) would have limited the damages payable by the wrongdoer to the estate of the worker had the estate sued.

10 McMurdo P, dissenting, concluded that as an insurer would not need to rely on s 66(1) of the Succession Act to bring a claim for indemnity under s 207B(7)(a) of the Compensation Act, the limitations on damages found in s 66(2) would not apply; rather, s 207B(7)(a) requires a hypothetical assessment of damages as at the date of judgment which is not dependent on...