Melba Dina Rojas v Ivan Antonio Figueroa [1994] ACTSC 14 (1 March 1994)

SUPREME COURT OF THE ACT

MELBA DINA ROJAS v. IVAN ANTONIO FIGUEROA
No. SC485 of 1989
Number of pages -14
Compensation to Relatives

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
MASTER A HOGAN

CATCHWORDS

Compensation to Relatives - Assessment - Superannuation received by widow - No reduction of damages - Relevant to calculation of interest - Dependants with own income - AUSTUDY benefits received by children - Method of taking benefits into account

HEARING

CANBERRA, 22-23 September 1993
1:3:1994

Counsel for the Plaintiff: R L Crowe

Instructing Solicitors: Maliganis Edwards Johnson

Counsel for the Defendant: P O'Connor

Instructing Solicitors: Abbott Tout Russell Kennedy

ORDER

THE COURT ORDERS THAT:
Judgment be entered for the plaintiff for $263,332, apportioned $190,332 to the plaintiff, $22,000 to Mitchell Canas and $51,000 to Claudio Canas.

DECISION

MASTER A HOGAN This is an action brought pursuant to the Compensation (Fatal Injuries) Act 1968. It is brought by the widow of Nelson Canas, on her own behalf, and on behalf of two children of the deceased, Mitchell and Claudio. Liability is not in issue.

2. The deceased was born on 2 April 1943. He died on 12 November 1988. The plaintiff was born on 1 April 1941. Mitchell was born on 16 March 1971. Claudio was born on 18 March 1973.

3. Both the plaintiff and the deceased were born in Chile. The plaintiff married there in 1964 and gave birth to a daughter in 1965.

4. She had known the deceased in Chile, where he also married and then emigrated to Australia.

5. Many years later she again met him in Chile and in about 1985 he contacted her again and told her that his marriage was over. He asked her to join him in Australia. She arrived in Australia in March 1987. Just as she was arriving a son of the deceased died tragically. They were married on 10 April 1987.

6. The deceased was then working in the Public Service, in ACT Administration. He was emotionally distressed and under financial strain. The finances of the family were very tight. The deceased did not tell the plaintiff details of how much he earned, or what his debts amounted to, or how much he was supposed to pay in reduction of them periodically.

7. In 1988 he was convicted of the theft of $1,816 from parking meters which it was his duty to clear. He was fined $2,000 and given a 3 year good behaviour bond. Submissions made on his behalf to the administration were received with sensitivity, and instead of being dismissed he was transferred to a position in the Building Section as an Administrative Services Officer Class 1. That appointment took effect from 25 October 1988.

8. Shortly before that date the plaintiff's daughter arrived in Australia and joined the family. The emotional well-being of the deceased improved after the decision not to dismiss him had been made.

9. In Chile the plaintiff had obtained a university qualification in the care of handicapped people. Her qualification was not recognised in Australia. During 1988 she began to study to improve her English. She intended to pursue further studies, to build on the knowledge and skill that she already had, but there was no clearly defined course of studies or career path to which she was committed. After her language skills had improved sufficiently, she might have been able to do a post-graduate course, for example in psychology, but obviously some years would have passed before she would have been able to contribute significantly to the family income.

10. When her husband was killed she was forced to accelerate that process, and perhaps to choose an occupation other than that which she would have chosen had he lived. From October 1989 to March 1990 she worked at the Spanish Embassy, where lack of facility in English may not have been important. In June 1990 she obtained a clerical job in the office of BBC Hardware. At the hearing she gave her evidence in English, which was adequate though not completely idiomatic. She would still have difficulty, I think, with study at a tertiary level in Australia.

11. At the time of the deceased's death in a motor vehicle accident in November 1988 Claudio was 15 years of age. He intended to become a physical education teacher. In fact he completed his secondary schooling in 1992 and at the time of the hearing in September 1993 he was studying for an Associate Diploma of fitness and recreational leadership at Bruce TAFE. He intended then to transfer to Canberra University to complete his studies in physical education. To complete his qualifications would take until the end of 1998.

12. It is probable that he would have followed very much the same course had his father not died and that he would have been dependant on his father, with supplementation from AUSTUDY, for a period of about ten years. He could be expected to have taken some vacation employment, but I do not think that in this case it would have made much difference to the degree of maintenance that he would have received from his father.

13. Mitchell was 17 when his father died. He had musical ambitions, the plaintiff said. However, he in fact went to live with his mother and began a course in accountancy. That was not to his liking and after a year he transferred to a course in hospitality at the beginning of 1991. He completed that course at the end of 1992 and has been looking for work since that time.

14. It is probable that he would have been dependent on his father for about four or five years, also with assistance from AUSTUDY.

15. The plaintiff's daughter was injured in the same accident as the deceased. After recovery from her injuries she obtained employment at Grace Brothers. Her English is better than her mother's. She is not a claimant, but I think it is probable that she would have continued to live at home with the plaintiff and the deceased and his two sons, at least until now, and would have contributed something to the family finances.

16. She would not have been directly contributing to the support of the two sons, or even to that of her mother, to any measurable extent, but the addition of her earning capacity to the family unit may well have made it more possible for the deceased to meet his obligations to the claimants, despite his own meagre resources and his debts.

17. The deceased had worked constantly in a number of occupations before joining the public service in 1985. His personnel assessments were favourable. In 1986 and 1987 he had sometimes performed higher duties at ASO4 level. The evidence in support of his application for clemency following his conviction included evidence from a social worker, a psychologist and a psychiatrist.

18. It is reasonable to expect that he would probably have continued in his position in the public service, without significant promotion, for the rest of his working life.

19. The state of the family finances is exemplified by a document produced from the records of the personnel office, which concerned the rate at which he should be paid. It set out two bases of payment. The first was the actual pay he received during the fortnight ending 12 May 1988.

20. That showed his gross salary as $16,063 a year, or $615.83 a fortnight. With allowances and overtime that gave a net pay, after tax, superannuation and rent, of $589.69 a fortnight.

21. The second basis was calculated by reference to his normal pay, without overtime. The net pay then was $461.51 a fortnight.

22. The submission indicated that his living expenses would completely dispose of the $461.51. But he also had loan repayments to make totalling $485.50 a fortnight.

23. The evidence does not disclose with certainty whether the decision was made to provide the overtime. I think it probably was, on grounds of hardship. His 1988 group certificate shows a gross salary of $20,554 and tax of $3,923, which would give a net figure of about $640 a fortnight. After deducting $152 for superannuation and rent, that would leave $488 a fortnight.

24. Those figures related to the period before he was dealt with by the Court and then transferred to another position. The Personnel Officer supplied details of potential earnings between 12 November 1988 and 30 June 1993, which ranged from $555.21 net at the beginning to $768.21 at the end of that period. The tax was calculated including the dependent spouse rebate.

25. In June 1993 the plaintiff's solicitors included among documents served on the defendant in support of the Statement of Particulars a schedule of fortnightly expenses for the deceased as at 27 June 1988. It is not clear what was the source of the information in it. But it is broadly consistent with the other evidence. It shows a net income, including family allowances and AUSTUDY, of $752, and living expenses of $729, but a need to service debts totalling $26,900 by instalments totalling $411 a fortnight over and above the living expenses.

26. The living expenses which might be considered as being shared among the family members were listed as:-
Rent $130

Electricity $ 42
Telephone $ 23
Education $ 48
Food $300
Clothes $ 20
Public Transport $ 24

27. They would total $587 as at June 1988. There were other expenses related to a motor vehicle, but there is no evidence as to who used it, or for what purpose.

28. These are not the sort of materials that enable accurate calculations to be made. But they illustrate the realities that underlay a number of the submissions made by counsel.

29. The first is that the family finances were probably in a 16 parlous condition at the time of the death of the deceased. The plaintiff's daughter would have obtained employment very soon and her presence as part of the family unit may be considered as neutral - she would probably have contributed at least as much as her maintenance cost.

30. There would have been some pressure on the plaintiff to find some sort of employment. Her evidence that she intended to do so by pursuing a course or courses of education was not challenged. Some years would have passed before she qualified. The evidence does not justify a finding that she would probably have gained qualifications to enable her to gain employment or enter into business caring for disabled people. Nor is there any evidence of the amount of money that she could have expected to earn.

31. All that can be said with confidence is that after some years she might well have obtained employment, and to the extent that her income made it possible in the context of their overall finances, she would have been thereafter less than totally dependent upon his income.

32. I think also that it is relevant to take into account the AUSTUDY allowance that the two sons received, but not by simply deducting the amount from what would otherwise have been the extent of their dependency.

33. The actuary's report tendered by the defendant, as finally developed, was based on a number of assumptions.

34. Those listed as 2.1 to 2.6 are conceded to be in accordance with the evidence.

35. At 2.7 there are set out the actual amounts received as AUSTUDY benefits by Mitchell and Claudio from 1989 to 1993 inclusive. I think that assumption was rightly criticised by counsel for the plaintiff on two counts. One was that, since it was a means-tested benefit, it might not have been paid to both of them at the same rate, as their father's income improved. The other was that in 2.5 the assumption was made that the plaintiff would have been earning income at her present rate from 1 January 1993, and AUSTUDY would not have been payable at all on that basis.

36. Paragraph 2.8 of the report sets out estimates of the average percentages of dependency of children in families of varying gross income ranges. The greater the gross income the less the percentage of dependency. It is in applying the percentages from this table that the possible overstatement of AUSTUDY benefits may have reduced the percentage of dependency, and therefore the result calculated by the actuary.

37. I would add the general comment that the table sets out averages, which like all averages may give a spurious aura of calculation, rather than estimation, to conclusions founded upon them. But the resulting calculations are useful as indicating the likely area of discourse, and as providing a check against estimates made on other bases.

38. In calculating the distribution of loss of support, the actuary also assumed that the plaintiff would have derived twice as much maintenance as each of the two sons. As a rule of thumb and in the absence of any evidence on which to base any other apportionment that assumption seems reasonable to me.

39. In paragraph 3 the basis for the actuarial calculations are set out. They are all appropriate, except that the rates of interest used pursuant to the Practice Direction should have been reduced to ten per cent from 1 July 1993.

40. The calculations were made as at 22 September 1993, when the action was listed for hearing.

41. After an adjustment was made for a dependent spouse rebate over the period 12 November 1988 to 31 December 1992, the report calculated the past loss of maintenance at a total of $70,487, distributed as to the plaintiff: $47,306; to Mitchell: $9,716; and to Claudio: $13,265.

42. Counsel for the defendant submitted that interest should not be awarded in full, because of the amounts that the plaintiff in fact received after the death of the deceased in superannuation payments.

43. Section 10(4)(b) of the Compensation (Fatal Injuries) Act 1968 provides that in assessing damages in respect of liability under the Act, there should not be taken into account by way of reduction of damages -

"(b) a sum paid or payable out of a superannuation,

provident

or like fund, or by way of benefit from a friendly society,
benefit society, lodge or trade union."

44. Counsel submitted that his proposal did not run counter to that enactment because the effect of taking the superannuation payments into acount would not be to reduce the damages payable in respect of liability under the Act, but only to reduce the amount of interest payable on those damages.

45. Section 69 of the Supreme Court Act 1933 requires the Court, in the absence of good cause to the contrary, to include in the sum for which judgment is given interest on the whole or any part of the money recovered by the judgment, for the whole or any part of the period from the time when the cause of action arose until judgment, or a lump sum instead of such calculated interest.

46. That section was inserted into the Supreme Court Act 1933 by the Statute Law (Miscellaneous Amendments) Act No. 176 of 1981. At that time the circumstances in which, at common law, interest could be awarded as part of the damages awarded in actions in contract and tort were quite restricted.

47. In Hungerfords v Walker [1989] HCA 8; (1990) 171 CLR 125 the High Court declared that for Australia the common law was not so restricted. Damages by way of compound interest could be awarded as part of the compensation to which the injured party was entitled. The history of the application of common law principle to awards of interest is set out in the reasons of Mason CJ and Wilson J at 136 to 147.

48. At 147 they held that the South Australian section corresponding to section 69 was:

"not intended to erect a comprehensive and exclusive code
governing the award of interest. It is a provision intended
to provide a plaintiff with some protection against the late
payment of damages. The section does not attempt to

regulate

the measure of compensation to be awarded for a particular
head of loss."

49. I think that the distinction contended for by counsel, between the damages on the one hand and the interest awarded on those damages pursuant to the Act to compensate the plaintiff for the delay in awarding them on the other, is a valid one.

50. Were it not for the statutory prohibition, the superannuation received would be taken into account in reduction of damages. See Luntz (3rd edition) paragraph 9.5.12 and cases there cited and discussed. It is the statute which prevents the superannuation from being taken into account in reduction of damages. The statute does not prevent it from being taken into account in reduction of interest.

51. However, section 69 allows for a degree of discretion in the manner in which interest is awarded. I do not have available the spreadsheet used by the actuary to make his calculations. The amount of interest calculated strictly in accordance with the practice direction, on a loss of $47,506, was $17,587 for the plaintiff. An amount derived by applying a rough rule of thumb of eight per cent gives $18,492, which is of the same order. The plaintiff received by way of superannuation payments $35,427 net over the relevant period, if my understanding of Exhibit 3 is correct. That leaves a difference of $12,080. The interest on that sum at eight per cent amounts to $4,671. An award to the plaintiff of $4,500 for interest would therefore be appropriate, if the actuary's approach to the calculation of the loss were the approach to be adopted.

52. I am not sure that it is the only approach that should be considered.

53. For example, the Percentage of Dependency table used in the report gives a dependency ratio of 105.4 per cent for the lowest range of incomes. I understand that the extra 5.4 per cent may be expected to come from sources other than the breadwinner's income, but it still remains false to assume that the dependants lost as the result of the death of the deceased more than his total income. It may be that since the ratio decreases to 62.6 per cent in the highest bracket, everything evens out in the end, but I would prefer to test the hypothesis by some broader approaches before making a decision.

54. The table from the second edition of Luntz, used by Miles CJ in Flynn v Commonwealth (1987) 6 MVR 186 at 197, gives some statistical basis for a more commonly used, and simpler, approach. For a household of two adults and two children the range of dependency of the wife and children is 74 to 77 per cent. For ease of calculation I use 75 per cent.

55. It follows that I do not agree with the submission of counsel for the plaintiff that while the father's salary was in the lowest range the dependency of the wife and children upon him was 100 per cent of his income. It is obvious that, for example, some part of the rent must be apportioned to him, and he probably ate some of the food.

56. Counsel for the plaintiff submitted calculations based on an assumption that the plaintiff would not have been working until 1993, but that from 1 January 1993 up until the date of the hearing and for the future she would have earned income at her present rate. I do not think that the plaintiff's case should be bound by that assumption.

57. The family income, as detailed in accordance with that assumption in the actuary's report, Exhibit 2, was as follows.

Period Father's Mitchell's Claudio's Plaintiff's
net income net income net income net income
12/11/88
to
30/6/89 8,810 949 949
1/ 7/89
to
30/6/91 32,429 5,756 5,955
1/ 7/91
to
30/6/92 18,034 3,342 3,954
1/ 7/92
to
30/11/92 8,780 2,637 2,091
1/12/92
to
31/12/92 1,742 0 424
1/ 1/93
to
22/9/93 14,523 0 3,625 13,018
TOTALS 84,318 12,684 16,998 13,018

58. The report does not explain why the particular periods were chosen, but I have used them also for ease of calculation.

59. In the following table:-

1 What I have, perhaps inaccurately, described as the
"total dependency" is calculated as 75 per cent of
the sum of the incomes of the father, Mitchell, Claudio and
the plaintiff, shown in the previous table.
2 The widow's net loss is calculated as 50 per cent of the
total dependency, less her own net income.
3 Mitchell's and Claudio's net loss is calculated for
each of them at 25 per cent of the total dependency,
less the net income of each of them.
Total Widow's Mitchell's Claudio's Total loss
Dependency net loss net loss net loss for period
8,031 4,015.50 1,058.75 1,058.75 6,133
33,105 16,552.50 2,520.25 2,321.25 21,394
18,997.50 9,498.75 1,407.375 795.375 11,701.50
10,131 5,065.50 -104.25 441.75 5,403
1,624.50 812.25 406.125 -17.875 1,200.50
23,374.50 -1,330.75 5,843.625 2,218.625 6,731.50
95,263.50 34,613.75 11,131.875 6,817.875 52,563.50

60. That result is too low. The application of a simple mathematical formula results in an assumption that in some periods a dependant not only would not have derived any financial benefit, but would have contributed to the support of other family members. I do not think that such a result accords with the realities of this particular household.

61. The deceased was certainly in financial difficulties. But his creditors did not have many remedies available to them. His wages could not be attached, because of the provisions of the Public Service Act. His superior officer was already allowing him to earn a higher salary on hardship grounds. It is unlikely that any significant amount would have been deducted to pay creditors. It is possible that the car might have been repossessed or taken in execution, but that would merely have cut down a little on the expenditure.

62. The sons would have been perhaps less dependent on their father because of their AUSTUDY allowance, but not by the full extent of their income from that source. They would still have been receiving benefit from payments made on behalf of the whole family, such as the rent, electricity, telephone, food and education expenses listed in Exhibit 4. But they may well have been under some pressure to contribute their allowance, or a large part of it, to the household income in the form of board, as happens in many families.

63. For the reasons set out earlier I am not convinced that the plaintiff would have found a job by the end of 1993. But it is possible that she might have.

64. I think it is better to make calculations on the basis that she would not have earned any income, and then to discount the result to some extent on account of the possibility that she might have done so.

65. Similarly, when dealing with the allowances received by the sons, I think that they should be included as part of the family income, but not deducted directly and wholly from their resulting dependencies. Their loss calculated on that basis should then also be discounted on account of the fact that they were receiving those allowances.

66. I think that this approach accords with the principles as expounded by Luntz (3rd edition) at 9.3.9, with which I agree. The author writes:

Dependants with own income. It was pointed out in n 1 of
Section 2, supra, that a beneficiary under Lord Campbell's

Act

need not have been wholly dependent on the deceased. What

is

required is that the beneficiary should have had a

reasonable

expectation of benefit. The possession of an independent
income - whether from investment or from personal exertion -
may mean that there was no real dependency on the deceased's
earnings, but does not necessarily mean that the expectation
of benefit from the continued existence of the deceased was
any the less (eg Rosetti v GIO (NSW) (NSW CA, 26 July 1977,
unreported); Jany v Penny (NSW CA, 27 April 1979,
unreported)). However, it is obviously
relevant if the dependant's own income would have led to a
lesser proportion of the deceased's earnings being spent for
the benefit of the claimant than would otherwise have been

the

case (eg Flynn v Commonwealth of Australia (1987) 6 MVR 186
(ACT SC); McCullagh v Lawrence (1989) 1 Qd R 163 (FC)).

67. To bring the calculations up to date I have assumed that the net earnings of the deceased would have continued at the rate of $768.21 per fortnight after 30 June 1993 (Exhibit C), and that Claudio would have continued to receive AUSTUDY at $60 a week. Those assumptions are, I think, conservative.

68. The calculation is also based on the assumption that Mitchell would have ceased to be dependent from December 1992, and thereafter the total dependency is distributed two thirds to the widow and one third to Claudio. The percentage of dependency is also reduced to 70 per cent from that date, following the table used by the Chief Justice in Flynn v Commonwealth.

69. Calculations made on that basis give the following results.

Period Father's Mitchell's Claudio's Total
net income net income net income dependency
12/11/88
to
30/6/89 8,810 949 949 8,031
1/ 7/89
to
30/6/91 32,429 5,756 5,955 33,105
1/ 7/91
to
30/6/92 18,034 3,342 3,954 18,998
1/7/92
to
30/11/92 18,998 2,637 2,091 10,131
1/12/92
to
31/12/92 1,742 0 424 1,516
1/1/93
to
22/9/93 14,523 0 3,625 12,704
23/9/93
to
1/3/94 8,725 0 1,363 7,062
TOTALS 93,043 12,684 18,361 91,546
Period Widow's Mitchell's Claudio's Total loss
net loss net loss net loss for period
12/11/88
to
30/6/89 4,016 2,008 2,008 8,031
1/7/89
to
30/6/91 16,553 8,276 8,276 33,105
1/7/91
to
30/6/92 9,499 4,749 4,749 18,998
1/7/92
to
30/11/92 5,066 2,533 2,533 10,131
1/12/92
to
31/12 92 1,011 0 505 1,516
1/1/93
to
22/9/93 8,469 0 4,235 12,704
23/9/93
to
1/3/94 4,708 0 2,354 7,062
TOTALS 49,320 17,566 24,660 91,546

70. Making the discounts referred to above, I would award for past loss of dependency $45,000 to the plaintiff, $15,000 to Mitchell and $22,000 to Claudio.

71. It is impossible for me to calculate accurately interest on those bases in accordance with the practice direction. Making a slight allowance for the different distribution over the period of the loss suffered by Mitchell, I award in lieu of interest $7,000 to Mitchell and $9,000 to Claudio. Taking into account the superannuation received by the plaintiff, I award $4,000 interest to her.

72. The award for past loss is therefore made up as follows.

Plaintiff Loss $45,000
Interest $ 4,000 $ 49,000
Mitchell Loss $15,000
Interest $ 7,000 $ 22,000
Claudio Loss $22,000
Interest $9,000 $ 31,000
Total award
for past $102,000

73. For the future, the first period is that to the beginning of 1999, when it is probable that Claudio would have ceased to be dependent. Mitchell would long since have ceased to be dependent. Claudio may be assumed to have continued to recieve AUSTUDY at $60 a week. The deceased is assumed to have continued to earn $768 a fortnight net. The total disposable family income would therefore be $444 a week. Seventy per cent of that amount is $310. The present value of $1 a week for five years is $243 at three per cent.

74. The total dependency of the plaintiff and Claudio is therefore, in round figures, $75,000. That would be apportioned $50,000 to the plaintiff and $25,000 to Claudio. I would again discount that figure for the same contingencies as before, but with an increased chance that the plaintiff might have found work during the period, and a decreasing reliance by Claudio on his AUSTUDY benefit as the family finances improved, as I think they would.

75. For this period I would award $40,000 to the plaintiff and $20,000 to Claudio.

76. Thereafter, the period for which the deceased could have worked would not have exceeded 9 years. Assuming a dependency of 65 per cent and a continuing income of the deceased of $384, calculation of the loss of the plaintiff begins with the present value of 65 per cent of $384 a week for 9 years, which is $102,835. Allowing for the receipt of that sum now instead of in five years time, the present value is $88,705.

77. That must be discounted for the normal contingencies, regarding both the plaintiff and the deceased, as well as for the increasing chance that the plaintiff's level of dependency would decrease, as it became more and more likely that she would be able to earn a satisfactory income. She might not, however, have chosen to or been able to continue to work until her husband reached the age of 65. I would allow $58,545 for the plaintiff's loss of dependency during that period.

78. The funeral expenses are agreed at $1,332.

79. The total award is therefore made up as follows:-

Plaintiff Mitchell Claudio
Past $ 49,000 $ 22,000 $ 31,000 $102,000
To 1999 $ 40,000 $ 20,000 $ 60,000
To 2008 $ 58,545 $ 58,545
$147,545 $22,000 $51,000 $220,545

Funeral expenses $ 1,332

$221,877

80. I direct the entry of judgment for the plaintiff for $221,877. I apportion that sum as follows:-

Plaintiff $147,545
Mitchell Canas $ 22,000
Claudio Canas $ 51,000
$221,877