Australia: Quantum of indemnity recoverable by a worker's employer not reduced due to worker's death - WorkCover Queensland v Amaca Pty Limited & Anor [2010] HCA 34

Last Updated: 29 October 2010
Article by Andrew Spearritt and Helen Woods

Judgment date: 20 October 2010

WorkCover Queensland v Amaca Pty Limited & Anor [2010] HCA 34

High Court of Australia1

In Brief

  • The quantum of the indemnity a worker's employer, or other person liable to pay damages to a worker in respect of an injury, is entitled to recover from a third party is not reduced by virtue of the operation of s 66(2)(a) of the Succession Act 1981 (Qld).
  • The limitations found in s66(2) of the Succession Act apply to limit damages which would be recoverable by the worker's estate upon an action brought "for the benefit of his estate", and do not apply to an action brought by a worker's employer seeking indemnity.
  • The amount to which the worker's employer is entitled, is to be assessed by reference to the amount for which the third party would be liable at the time of judgment in the indemnity proceedings. It is not to be assessed by reference to the amount of damages that would be recovered in a hypothetical action brought by the worker or his estate upon his death.

Background

During the course of his employment in the Queensland building industry from 1947 to 1983, Mr Thomson was exposed to asbestos manufactured and supplied by the respondents, Amaca Pty Limited and Seltsam Pty Limited. As a consequence, he contracted mesothelioma and was awarded $340,000 by way of compensation under the Workers Compensation and Rehabilitation Act 2003 (Qld) (the Compensation Act).

Before his death, Mr Thomson had not instituted any proceedings against the respondents. That circumstance entitled WorkCover Queensland (WorkCover) to pursue its rights of indemnity pursuant to s 207B(7)(a) of the Compensation Act. The Supreme Court found that the amount WorkCover was entitled to was limited by the operation of s 66(2)(a) of the Succession Act 1981 (Qld) (the Succession Act), which stipulates that damages recoverable for the benefit of the estate of a deceased worker shall not include damages for pain and suffering or reduced life expectancy. WorkCover appealed.

The Law

Section 207B(7)(a) of the Compensation Act provides as follows:

" (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 s 10. " (emphasis added)


The appeal turned upon the interaction, if any, between s 207B(7) of the Compensation Act and s 66 of the Succession Act. That section relevantly provides:

" (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" (emphasis added)


Judgment

In the High Court the respondents submitted that if they had been sued by Mr Thomson's estate, the damages the estate was entitled to would have been limited by the Succession Act and WorkCover would then have been obliged to recover this limited amount from the respondents. The respondents further argued that the legislature would not have intended an outcome whereby WorkCover would recover from a wrongdoer amounts which differed as a consequence of the time at which the wrongdoer was sued.

After considering the legislative and common law history behind s 66 of the Succession Act, the High Court noted that it was apparent that the limitations on recovery provided by that section are directed to a particular problem: that the recovery by the estate of damages for heads of loss it had not, or would not, suffer was contrary to the rationale of compensatory damages. In an action under s 207B(7) of the Compensation Act on the other hand, there is no apprehension about the recovery of damages for heads of loss not suffered. To the contrary, the policy of the Compensation Act, indicates that WorkCover is entitled to be indemnified for monies it paid in compensation to Mr Thomson. That he had since died was not to the point.

In the Court of Appeal, McMurdo P, dissenting, had 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 the operation of s 66(1)2. McMurdo P further noted that s 66(2) in its terms specifically relates to a cause of action which survives under s 66(1) for the benefit of the estate of a deceased person and that a plaintiff insurer's claim under s 207B(7) was not such a cause of action.

In holding that McMurdo P's construction of the legislation should be accepted, the High Court noted that the point made by McMurdo P could be expressed by asking whether s 66(2), in light of the words "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...", is concerned not with imposing limitations on the cause of action of the deceased, but only with imposing limitations "in any action brought" for the benefit of the estate. The fact that WorkCover might recover from the respondents an amount which differs from what Mr Thomson's estate might recover is simply a reflection of the operation of the different policies of the two Acts. Further, it was not in contention that s 207B(7)(a) creates a cause of action separate to that vested in the deceased worker.

In holding that McMurdo P's construction of the legislation should be accepted, the High Court noted that the point made by McMurdo P could be expressed by asking whether s 66(2), in light of the words "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...", is concerned not with imposing limitations on the cause of action of the deceased, but only with imposing limitations "in any action brought" for the benefit of the estate. The fact that WorkCover might recover from the respondents an amount which differs from what Mr Thomson's estate might recover is simply a reflection of the operation of the different policies of the two Acts. Further, it was not in contention that s 207B(7)(a) creates a cause of action separate to that vested in the deceased worker.

Implications

In holding that McMurdo P's construction of the legislation should be accepted, the High Court noted that the point made by McMurdo P could be expressed by asking whether s 66(2), in light of the words "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...", is concerned not with imposing limitations on the cause of action of the deceased, but only with imposing limitations "in any action brought" for the benefit of the estate. The fact that WorkCover might recover from the respondents an amount which differs from what Mr Thomson's estate might recover is simply a reflection of the operation of the different policies of the two Acts. Further, it was not in contention that s 207B(7)(a) creates a cause of action separate to that vested in the deceased worker.

1 French CJ, Gummow, Crennan, Kiefel and Bell JJ
2 WorkCover Queensland v Amaca Pty Ltd [2009] 2 QdR 181 at 198

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