Australia: How much support can you get from beyond the grave? Construction of s 12(2) of the Civil Liability Act and the relevance of the deceased's income in Compensation to Relatives Act claims

Curwoods Case Note
Last Updated: 13 April 2013
Article by Renae Hamilton

Taylor v Owners – Strata Plan 11564 [2013] NSWCA 55

Judgment date: 18 March 2013
Jurisdiction: New South Wales Court of Appeal1

In Brief

  • Part 2 – Personal Injury Damages of the Civil Liability Act 2002 (NSW) applies to claims made under the Compensation to Relatives Act 1897.
  • Specifically, the word "claimant" in s 12(2) can be construed as including a "deceased person" such that a calculation of damages for the loss of expectation of financial support will be subject to the limit imposed by that section.
  • Whilst this should be done with caution, it is appropriate, in certain circumstances, for the court to depart from the literal interpretation of a legislative provision when such an interpretation does not conform to the legislative intent. This can extend to reading words into legislation if the conditions identified by Lord Diplock in Jones v Wrotham Park Settled Estates2 are satisfied.

Background

On 7 December 2007, Mr Craig Taylor (the deceased) was killed when an awning outside a shop on Sydney Road, Balgowlah, collapsed on him. A claim was brought by his widow, Ms Susan Joy Taylor, on her own behalf and on behalf of the dependants of the deceased under the Compensation to Relatives Act 1897 (NSW). The claim included an amount for the loss of expectation of financial support.

In such a claim for personal injury damages under the Civil Liability Act 2002 (NSW) (CLA), a court is required to disregard any amount of gross weekly earnings in excess of 3 times the average weekly earnings at the date of the award (s 12(2) of the CLA). The deceased in this case had a weekly income in excess of that limit.

On 30 March 2012, the Supreme Court ordered that a separate determination be made of the following question:

"Insofar as the plaintiffs claim damages pursuant to ss 3 and 4 of the Compensation to Relatives Act 1897, is any award of damages limited by the operation of s 12(2) of the Civil Liability Act 2002?"

For ease of reference, s 12 of the CLA provides as follows:

  1. "This section applies to an award of damages:
    1. for past economic loss due to loss of earnings or the deprivation or impairment of earning capacity, or
    2. for future economic loss due to the deprivation or impairment of earning capacity, or
    3. for the loss of expectation of financial support.
  1. In the case of any such award, the court is to disregard the amount (if any) by which the claimant's gross weekly earnings would (but for the injury or death) have exceeded an amount that is 3 times the amount of average weekly earnings at the date of the award."

Supreme Court

On 27 July 2012, Justice Garling determined the above question in Taylor v The Owners – Strata Plan 11564 3 . He held that:

"The claim ... for damages pursuant to the Compensation to Relatives Act ..., is, insofar as it includes damages for the loss of an expectation of the financial support provided by the late Mr Taylor, to be determined in accordance with s 12(2) of the Civil Liability Act 2002, by the court disregarding the amount (if any) by which the late Mr Taylor's gross weekly earnings would (but for his death) have exceeded an amount that is 3 times the amount of average weekly earnings at the date of the award."

His Honour accepted the respondents' submissions that the word "claimant" included a deceased person, the deceased person being the entity whose earnings are relevant in a claim for loss of expectation of financial support under the Compensation to Relatives Act. It followed, therefore, that the respondents' case required the substitution of other words for the statutory term "claimant" which would essentially result in s 12(2) being construed as follows:

"In the case of any such award, the court is to disregard the amount (if any) by which:
  1. in the case of an injury, the claimant's; or
  2. in the case of death, the deceased's


gross weekly earnings would (but for the injury or death) have exceeded an amount that is 3 times the amount of average weekly earnings at the date of the award."

In coming to that conclusion, his Honour relied, inter alia, on the following propositions:

  • In most cases, the calculation of damages in a fatal accident claim will be made with reference to the earnings of the deceased and not the claimant;
  • Both s 12(1)(c) and subs (2) demonstrate an intention that the section applies to fatal accident claims;
  • If the earnings of the deceased were not the reference point for the calculation, the family would arguably be better off if a high income earner died rather than survived, but with little or no residual earning capacity, because the claim of a surviving victim would be capped, unlike that brought by the relatives of a deceased victim.

His Honour also considered that the contextual indications in the CLA suggested that Part 2 of the CLA was intended to apply to Compensation to Relatives Act claims.

Having answered the said question in the affirmative, the plaintiffs appealed to the Court of Appeal. Being an interlocutory matter, leave was required and was ultimately granted.

Court of Appeal

The issues for determination on appeal were twofold, namely:

  1. Whether Part 2 of the CLA applies to Compensation to Relatives Act claims; and
  2. If so, whether s 12(2) of the CLA limits damages payable under the Compensation to Relatives Act.

The appeal was heard on 6 December 2012. The court unanimously held that Part 2 of the CLA applies to Compensation to Relatives Act claims. Her Honour McColl JA (with Hoeben JA agreeing) dismissed the plaintiffs' appeal on the second issue. Basten JA was in dissent.

McColl and Hoeben JJA upheld the decision of Garling J and determined firstly that in a typical Compensation to Relatives Act claim, the gross weekly earnings of a Compensation to Relatives Act claimant are prima facie not relevant to the assessment of damages and that the relevant income is that of the deceased.

It was also determined that there was a real and relevant connection between a Compensation to Relatives Act claim so as to satisfy the term "relate to" contained in s 11 of the CLA which defined "personal injury damages" as "damages that relate to the death of or injury to a person".

Moreover, McColl JA referred to the "many other contextual indications in the Liability Act that it is intended to apply to Compensation to Relatives Act actions". These indications included the fact that Compensation to Relatives Act claims are not specifically excluded by s 3B; the express reference to "a claim for damages brought under the Compensation to Relatives Act 1897" in s 5T and the inclusion of the phrase "the loss of expectation of financial support" in s 12(1)(c).

Indeed, her Honour expressed her agreement with Garling J that "the words in s 12(2) which appear in parenthesis, namely "(but for the injury or death)" clearly suggest that the relevant compilation of the gross weekly earnings are those of the deceased person, upon whose earnings, the loss of expectation and financial support is based". Finally, her Honour referred to the fact that the earnings of the executor or administrator of the deceased's estate are completely irrelevant to the calculation of damages.

As to the construction of s 12(2) of the CLA, her Honour agreed with Basten JA that the literal meaning of the section does not permit a limitation being placed on the calculation of the award being based on the deceased's gross weekly earnings.

The appellants submitted that giving the word "claimant" its natural and ordinary meaning, s 12(2) of the CLA could not be construed to apply to the earnings of the deceased person. In response, the respondents argued that the appellants' literal construction of s 12(2) of the CLA "leads to an interpretation manifestly inconsistent with the purpose" of the CLA.

Her Honour referred to comparable wordings in s 151I of the Workers Compensation Act 1987 (WCA) and s 125 of the Motor Accidents Compensation Act 1999 (MACA) each of which refer to the "injured or deceased person" when dealing with damages for economic loss.

Reference was also made to s 9 of the Health Care Liability Act 2001 (HCLA) where no such distinction was made. However, her Honour noted with relevance that s 9 of the HCLA was repealed on the enactment of the CLA, the legislative intent being to limit damages for economic loss. In her Honour's view, "the legislative purpose emerges from the plain text" of the CLA.

Her Honour articulated that the relevant question was whether, in applying principles of statutory interpretation, it was open to the court to give effect to the statutory purpose, notwithstanding the literal or grammatical construction of s 12(2). In her view, the admission from s 12(2) of a reference to "the deceased's gross weekly earnings" was a drafting error.

Her Honour determined that, in certain circumstances, the court can depart from the literal interpretation of a legislative provision when "the operation of the statute on a literal reading does not conform to the legislative intent as ascertained from the provisions of the statute, including the policy which may be discerned from those provisions" - (Cooper Brookes (Wollongong) Pty Limited v Commissioner of Taxation (Cth)) 4 .

McColl JA indicated that such a departure could extend to reading words into legislation if the conditions identified by Lord Diplock in Jones v Rothman Park Settled Estates were satisfied. Those conditions are described as follows:

  1. The court must know the "mischief" with which the Act was dealing;
  2. The court must be satisfied that Parliament inadvertently overlooked an eventuality which must be dealt with to give purpose to the Act;
  3. the court must be able to state with certainty the words that Parliament would have used had the omission or defect been brought to its attention.

Her Honour also referred to a fourth requirement, namely that before words are to be read into a statute, the court must be satisfied that the modification is consistent with the wording otherwise adopted by the draftsmen (Mills v Meeking) 5 .

In her Honour's view, the 4 pre-conditions were satisfied in this case and, as such, it was appropriate for Garling J to construe s 12(2) as he did. Specifically, her Honour commented that s 12(2) should properly be read as follows:

"In the case of any such award, the court is to disregard the amount (if any) by which the claimant's or deceased person's gross weekly earnings would (but for the injury or death) have exceeded an amount that is 3 times the amount of average weekly earnings at the date of the award."

Dissenting Judgment

As indicated above, Basten JA provided the dissenting judgment. Whilst he agreed that the CLA applied to Compensation to Relatives Act claims, his dissent was in relation to the ability of the court to add words to the statute in circumstances where, in his view, it was not unequivocally clear that the legislative intent was to limit the compensation payable to the relatives of a deceased in circumstances where the only right of recovery related to that loss of financial support.

His Honour went on to state that "broad statements that the Bill was intended to limit awards of damages because of rising premiums for insurance [companies], do not mean that the court is either required or entitled to stretch the language used by Parliament to cover particular cases which, on a literal reading, do not fall within its terms."

His Honour cautioned as to the danger of "concentrating on a general legislative intention to override the ordinary meaning of a statutory text".

He also used the examples of the WCA and MACA and suggested that if the legislature had intended to limit the claim for damages for loss of financial support in this way, it would have done so given the express reference to deceased persons in the WCA and MACA.

Implications

Provided the conditions enunciated by Lord Diplock are met, a court can add words to a statute to give it meaning and effect consistent with the legislative intent.

Contextual indicators within the statute are relevant as is the legislative intent of Parliament.

This case also confirms the application of the CLA to Compensation to Relatives Act claims, specifically in relation to the operation of s 12(2).

In assessing damages for the loss of expectation of financial support in a Compensation to Relatives Act claim, the court will disregard the amount by which the deceased's gross weekly earnings would have exceeded an amount that is 3 times the amount of average weekly earnings at the date of the award.

Footnotes

1 McColl, Hoeben and Basten JJA

2 [1980] AC 74

3 [2012] NSWSC 842

4 [1981] HCA 26)

5 [1990] HCA 6

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