Withenshaw and Department of Defence [1999] AATA 37 (22 January 1999)

Last Updated: 2 July 2009

Administrative
Appeals
Tribunal

DECISION AND REASONS FOR DECISION [1999] AATA 37

ADMINISTRATIVE APPEALS TRIBUNAL )
) No N98/1041
GENERAL ADMINISTRATIVE DIVISION )

Re KAYLYN WITHENSHAW
Applicant

And DEPARTMENT OF DEFENCE
Respondent

DECISION

Tribunal Mr BJ McMahon (Deputy President)

Date 22 January 1999

Place Sydney

Decision 1. The decision under review is set aside and the matter is remitted to the respondent for reconsideration with the direction that the operation of section 48 of the Safety, Rehabilitation and Compensation Act 1988 does not preclude the applicant from pursuing her claim for compensation under sections 17 and 18 of that Act.

2. The respondent is to pay the applicant’s costs.

(Sgd) BJ McMahon
.........................................
Deputy President
CATCHWORDS

COMPENSATION - injuries resulting in death - funeral expenses - common law damages - whether s 48 Safety Rehabilitation and Compensation Act 1988 precludes claim for compensation by deceased’s wife

STATUTORY INTERPRETATION - grammatical construction of provisions - s 48 Safety Rehabilitation and Compensation Act 1988

Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 4, 17, 18, 44, 45, 48, 67(9)

Dust Diseases Tribunal Act 1989 (NSW) ss 10, 11

Administrative Appeals Tribunal Act 1975 s 35(2)(b), 43(1)(c)(ii)

     

REASONS FOR DECISION

22 January 1999 Mr BJ McMahon, Deputy President      

1. This is an application to review a reviewable decision of 27 July 1998 made under the Safety, Rehabilitation and Compensation Act 1988 (‘the SRC Act’) rejecting a claim by the applicant under sections 17 and 18. Section 17 applies, in its own terms, where an injury to an employee results in death. In that event, if the employee dies leaving dependants, some or all of whom were at the date of the employee’s death wholly dependent on the employee, then Comcare (or in this case, the Department of Defence) is liable to pay compensation in respect of the injury in a stipulated amount for the benefit of all of those dependants. The section goes on to provide for variations in the extent of the respondent’s liability in case of partial dependency and in other events not here material.
2. Section 18 provides for liability on the part of the respondent to pay compensation amounting to the cost of the employee’s funeral, where an injury to an employee results in death. This amount of compensation is payable to the person who paid the cost of the funeral or if that cost has not been paid, to the person who carried out the funeral. Accordingly, compensation under section 18 is not necessarily payable to a dependant. Criteria for entitlement to compensation under section 18 are therefore different from that applicable in establishing a claim under section 17.
3. Two features of these sections should be noted at the outset. Firstly, the right or rights to make claims under the sections do not arise when the injury is suffered. They arise only upon the death and funeral of the employee. The second feature is that an applicant for compensation under these sections is under no obligation to prove negligence or other breach of duty on the part of the respondent. If there is an injury as defined in section 4, and that injury results in the death of the employee who suffered the injury, then the rights of the dependants and the funeral provider thereupon arise without further inquiry.
4. Mr Withenshaw was employed by the Royal Australian Air Force. According to a history taken by Dr Harris, a consultant physician, Mr Withenshaw had an exposure to asbestos during the course of his employment. Dr Harris reported as follows:

“Mr Withenshaw tells me he had exposure to asbestos during his employment with the Royal Australian Air Force. The most significant exposure was while he was stationed in Malaysia during 1971 through to 1973 and then again in 1976 and 1978. He tells me his duties included the testing and maintaining [of] electronic equipment that was used on board the Mirage Fighters. Some of the hot valves were thermally isolated by asbestos gloves and part of his maintenance procedure would be to remove these gloves and inspect them for fraying. As they deteriorated, the asbestos gloves would fray and crumble and would be replaced. During 1978 he was also called upon to remove the asbestos fire proofing to one of the cabinets in his work place. Apparently, no special guidelines were provided and this task was achieved with the use of implements such as screw drivers leading to fragmentation and powdering of the asbestos.”

5. Dr Harris added that Mr Withenshaw’s exposure to asbestos was sufficient to lead to malignant mesothelioma, a condition which was subsequently diagnosed. In these proceedings, it was alleged by way of submission that as a result of inhaling asbestos dust and fibre, Mr Withenshaw suffered an “injury” in or about late 1994 and early 1995.
6. He commenced proceedings against the Commonwealth of Australia in the Dust Diseases Tribunal of New South Wales by statement of claim dated 9 June 1995. As a result of the High Court’s judgment in Georgiadis v Australian and Overseas Telecommunications Corporation [1994] HCA 6; (1994) 179 CLR 297, these proceedings were tenable, notwithstanding the prohibition contained in section 44 of the SRC Act against actions for damages against the Commonwealth in certain circumstances, provided that the injury had occurred prior to 1 December 1988, the commencement date of the SRC Act. Although in submissions made on behalf of the applicant it was alleged that the injury was suffered in late 1994 and early 1995, in fact, the view therefore must have been taken that the injury was suffered some time after the dates of exposure but before 1 December 1988. As far as I am aware from the evidence put before me, no objection was taken to the action in the Dust Diseases Tribunal based upon the provisions of sections 44 and 45 of the SRC Act. In argument before me, some attempt was made by the applicant to fit the proceedings into section 45 so as to take advantage of the exception contained in paragraph 48(5)(c). Such an argument, it seems to me, is doomed to failure.
7. The statement of claim is not formulated as an action under section 45 of the SRC Act. There was no election as required by subsection 45(1) and the amount subsequently recovered was far in excess of the amount provided for in subsection 45(4). The action, in my view, was based upon common law liabilities. Sections 10 and 11 of the Dust Diseases Tribunal Act 1989 (NSW) vest jurisdiction in that Tribunal to hear claims for damages arising from a dust-related condition where there has been a breach of duty owed to the plaintiff.
8. In his statement of claim, Mr Withenshaw alleged the following:

1. “At all material times the Defendant is able to be sued pursuant to the Judiciary Act (Commonwealth).
2. At all material times the Defendant employed the Plaintiff in its Department of Defence at Butterworth in Malaysia between 1971 and 1973 and 1976 and 1978.
3. In the above mentioned period the Plaintiff inhaled asbestos dust and fibre whilst working with, upon or near heat gloves composed of asbestos and/or whilst opening and closing fire proof cabinets which were lined and sealed with asbestos.
4. As a result of the above mentioned circumstances the Plaintiff suffered injury, loss and damage.
5. The cause of the Plaintiff’s injury, loss and damage was the negligence of the Defendant, its servants and agents, or in the alternative breach by the Defendant of its contract of employment with the Plaintiff and its implied terms to act reasonably and/or provide the Plaintiff with a safe place of work and/or provide safe equipment with which to work.”

9. Particulars of economic loss were set out in the statement of claim in these terms:

• (a) “The Plaintiff is employed by Serco (Australia) Pty. Ltd. managing the supply of technical bodies to Defence Department and writing proposals for defence projects. The Plaintiff receives $50,000 per year gross together with other benefits, including paid motor vehicle for private and business purposes, paid Golden Wing subscription, together with superannuation benefits paid 5% of his gross weekly earnings, all these benefits paid by his employer.
• (b) The Plaintiff will at some stage in the not too distant future have to cease work and will be claiming the loss of these benefits until the end of his working life at aged 70.
• (c) Additionally the Plaintiff receives a service pension of $16,000 gross per year, and the Plaintiff claims this loss from his date of death until the end of his natural life.
• (d) The Plaintiff additionally claims increases in the present benefits paid by his employer that he is likely to receive in the future, including the gross salary and other benefits as his salary package was reviewed on an annual basis. Particulars of this will be provided in due course.
• (e) The Plaintiff has incurred medical and hospital expenses, having had operative treatment at the Hills Private Hospital on 28th November, 1994 as well as a biopsy and an aspiration. Further the Plaintiff claims future medical and hospital expenses.
• (f) The Plaintiff claims future Griffiths v Kerkemeyer care to be provided as a result of his injuries and disabilities.
• (g) The Plaintiff claims the replacement costs of service he provides to his wife and the replacement costs of services he provides in caring, maintaining his garden, home and car. This claim is made until the end of his natural life but for his injury.”

10. Paragraph (g) above does not refer to claims by his wife (even if this were permissible) but is explained in a further document of particulars provided in accordance with the Tribunal’s Rules to mean the cost of Mr Withenshaw’s labour in undertaking tasks in and around his home, including gardening and maintenance of his home. The statement of claim defines the heads of damages for which Mr Withenshaw said he should be reimbursed. It is possible, as was stated from the bar table, that some of these claims were “ambit claims” and that had the matter gone to hearing, the breadth of these claims may have been narrowed. Nevertheless, it is clear that any damages recovered would not have been in relation to claims going beyond those set out above. These are designed only to restore Mr Withenshaw to the financial position he would have been in had it not been for the alleged negligence of the defendant. There is no reference in the statement of claim to any loss or damage suffered by any person other than Mr Withenshaw.
11. The claim was settled on 11 August 1995. By consent, there was a verdict and judgement for the plaintiff for a substantial sum of money on terms not to be disclosed. Although Mr Withenshaw was the sole plaintiff a deed was entered into, as part of the terms of settlement, between Mr Withenshaw, his wife (the present applicant), his two children and the Commonwealth of Australia. The terms of the deed are not to be disclosed both because of the agreement embodied in the terms of settlement, and because of an order made by this Tribunal under section 35 of the Administrative Appeals Tribunal Act 1975. I can say, however, having examined the deed and the terms, that there is nothing in those documents which would contractually preclude the present applicant from bringing these proceedings, nor was any such contention made by the respondent in argument before me.
12. Mr Withenshaw died on 22 June 1996. His death certificate shows the cause of death and duration of last illness as “pleural mesothelioum 1½ years”. The applicant now alleges that her late husband suffered an injury in the form of mesothelioma and that it resulted in his death. Accordingly, she made her claim under sections 17 and 18 of the SRC Act.
13. Both the primary decision maker and the reviewing officer considered only the previous action brought by her husband and its result. No examination was made of any other aspect of the applicant’s claim. The decision makers took the view that subsection 48(4) of the SRC Act “was relevant to the claim” and that, as a result, the present applicant had no entitlement to compensation for the death of her husband. The claim was rejected on this ground alone. The present application to this Tribunal is brought to review that decision.
14. The relevant parts of section 48 of the SRC Act are as follows:

“48(1) This section applies where:

(a) an employee recovers damages in respect of an injury to the employee or in respect of the loss of, or damage to, property used by the employee, being an injury, loss or damage in respect of which compensation is payable under this Act; or
(b) damages are recovered by, or for the benefit of, a dependant of a deceased employee in respect of the death of the employee and compensation is payable under this Act in respect of the injury that resulted in that death.

• (2) The employee or dependant shall, not later than 28 days after the day on which the damages were recovered, notify Comcare in writing of the recovery of the damages and the amount of damages.

Penalty: $1,000
(3) If, before the recovery of the damages by, or for the benefit of, the employee or dependant, any compensation under this Act was paid to the employee in respect of the injury, loss or damage, or to, or for the benefit of, the dependant in respect of the injury that resulted in the death of the employee, as the case may be, the employee or dependant is liable to pay to Comcare an amount equal to:

• (a) the amount of that compensation; or
• (b) the amount of the damages;

whichever is less.
(4) Compensation is not payable under this Act to the employee in respect of the injury, loss or damage, or to, or for the benefit of, the dependant in respect of the injury that resulted in the death of the employee, after the date on which the damages were recovered by the employee or by, or for the benefit of, the dependant, as the case may be.
(4A) Subsection (3) does not apply where the damages were recovered in proceedings instituted by the employee as a result of an election by the employee under section 45, or by way of a settlement of such proceedings.
(5) Subsection (4) does not apply where the damages were recovered:

• (a) as a result of proceedings, or fresh proceedings, instituted by Comcare under section 50;
• (b) as a result of proceedings the conduct of which is taken over by Comcare under that section;
• (c) as a result of proceedings instituted by the employee as a result of an election by the employee under section 45; or
• (d) by way of a settlement of those proceedings.”

15. It appears in Part IV of the Act dealing with liabilities which arose outside the provisions of the SRC Act. It was a feature of this Act that common law rights to recover against the Commonwealth were to be severely restricted. Section 45 limits the circumstances under which an employee may take proceedings against the Commonwealth. As a measure of the restriction, it may be noted that the money amount capping possible damages at $110,000 has not been changed since the enactment of the section. In addition to limiting actions against the Commonwealth, the Act seeks to limit compensation rights when damages have been recovered in the circumstances set out in section 48. In return for these restrictions, the legislation proposed additional benefits in other areas.
16. The legislative intent may be partly discerned from a paragraph of the second reading speech as follows:

“Perhaps the most controversial aspect of the new legislation is that common law actions against the Commonwealth will be replaced by the comprehensive benefits which I have described. It is clear to this Government that the common law negligence action which bases its entitlement on proof of fault is a costly, inefficient and inappropriate mechanism for compensating injured workers. Delays in settling these actions act as a positive disincentive for employees to return to work and encourage them to maximise the extent and duration of their injuries. The provision of an adequate level of weekly income, substantially increased lump sum payments on death or impairment, payments for additional expenses for medical costs, aids and appliances and household help, combined with a commitment to rehabilitation and the return to suitable employment, make redundant any need for redress to the courts. Accordingly, it will no longer be possible for an employee to sue the Commonwealth or a fellow employee. Actions against third parties will also be discouraged. Employees or their dependants who sue third parties will not be entitled to receive further benefits under the scheme and will be required to pay back any amount of compensation they have received. The Commission will pursue third parties if necessary by taking over an action in place of the employee.”

17. Section 48 is, therefore, to be construed according to its own terms but having regard to the legislative framework within which it appears and having regard to the purpose and intent of Parliament.
18. Subsection (4) contemplates two classes of persons who are precluded from payment of compensation under the SRC Act. The first class is composed of employees who recover damages in respect of injuries and then claim compensation under the SRC Act. The second class is comprised of dependants who recover damages in respect of the death of a deceased and who then claim compensation under the SRC Act. The respondent submitted that it discerned two further classes as falling within the terms of the subsection being firstly, dependants of employees who claim compensation under the SRC Act subsequent to the employee having recovered damages in respect of the injuries and secondly, employees (or by virtue of section of 55 their personal representatives) who claim compensation under the Act subsequent to the dependant receiving damages in respect of the injury that resulted in the death of the employee. I am unable to see how the terms of subsection (4) can extend to the two last named classes. In my view, the words themselves are restricted to the first two classes to which I have referred.
19. Possible confusion arises because the classes of persons intended to be affected by the subsection are rolled up into one long sentence. It would have been preferable if the drafter had identified the relevant classes seriatim. Nevertheless, on a plain English reading of the words, it seems to me, that only two classes of persons are concerned. In order to fall within the terms of the subsection, the relevant person must have been the same person that recovered the damages either directly, or as a declared dependant sharing in those damages as of right. The words “as the case may be” do nothing to restrict or extend the terms of the subsection. They simply indicate its application relevantly in each case to the persons described by the words. This is not an absurd result. It is consistent not only with ordinary canons of grammatical construction, but also with the legislative intent.
20. There is an evident legislative intention to prevent what might be called “double dipping”. In my view, however, this intention is to prevent “dipping” on two occasions by the same person into the same pot. The damages recovered by the late Mr Withenshaw are different in nature from the statutory claims for compensation made by his widow. There is no double dipping by either party. Each person claimed what he or she was entitled to. The nature of each claim was quite different.
21. Mr Withenshaw’s claim was to be entitled to be indemnified in damages for breach of duty. The measure of his damages is that provided by the common law. “Damages” is defined in section 4 of the SRC Act in an inclusive and unhelpful way. What is clear, however, is that “damages” as defined has no application in describing amounts recoverable under sections 17 and 18. Mrs Withenshaw does not claim to be entitled to damages for breach of a duty owed by her husband’s former employer to him. If she can establish her claim for compensation, she is entitled to be paid an amount provided for by statute. Her legal entitlement did not arise when her husband’s late employer breached its duty. It arose well after that event, namely upon her husband’s death. There is no repetition in the nature of her claim compared with that of her late husband’s and consequently, no double dipping.
22. This view of subsection (4) is consistent with the actual words of the subsection which is directed to compensation payable to the person to whom damages were also paid or, in the case of death, to the survivor to whom damages were previously paid under an equivalent of Lord Campbell’s Act.
23. The respondent submitted that the damages recovered by Mr Withenshaw were not relevantly different to the compensation being sought by the applicant in these proceedings. In my view, they are as different as apples and pears. Reference was made to a number of cases concerning the survival of rights of action under Lord Campbell’s Act. The respondent referred me, in particular, to a speech by Lord Salmon in Pickett v British Rail Engineering Limited [1980] AC 136, at 152, in which His Lordship said:

“... it is generally assumed that should the plaintiff accept a sum in settlement of his claim or obtain judgement for damages in respect of the defendant’s negligence, his dependants will have no cause of action under the Fatal Accidents Act after his death. This assumption is supported by strong authority: see Read v Great Eastern Railway Co (1868) LR 3 QB 555; Williams v Mersey Docks and Harbour Board [1905] 1 KB 804 and Murray v Shuter [1972] 1 Lloyd’s Rep 6,7 ... I think, however, that the assumption which has held the field for upwards of 100 years is probably correct and that, for present purposes, it must be accepted.”

24. Other similar submissions were made by the respondent based upon observations by the text book writers. A submission was made distinguishing the present situation from observations made by the High Court in Nominal Defendant (Qld) v Taylor [1982] HCA 38; (1982) 154 CLR 106, at 109.
25. In my view, none of these authorities are to the point. Mrs Withenshaw does not seek to reactivate a cause of action that has been exhausted in her late husband’s proceedings. She does not seek to claim his rights as a survivor and dependant. Her rights are quite separate and distinct and, indeed, were not in existence during her late husband’s life. They could not have survived his death for that reason alone. If all the elements of her claim are proven, then her rights are discrete and are provided for by a separate statutory provision which is not inconsistent with the general structure of the Act to which I have referred.
26. I was also referred to the judgment of the High Court in Hadfields Steel Works v Meyer [1962] HCA 34; (1962) 108 CLR 171 as authority for the proposition that the fact that an employee has received damages does not bar his dependants from recovering compensation under a statute. This case dealt with the construction of subsection 6(2) and subsection 63(2) of the Workers Compensation Act 1926 (NSW) and could be distinguished on that ground. However, the point raised in the case has no bearing on the resolution of the present question. Mr Withenshaw had a cause of action. Mrs Withenshaw has a right to claim. Her right to claim is not, in my view, inhibited by the exercise on Mr Withenshaw’s behalf of his right to pursue his cause of action.
27. I come to this conclusion not on the basis that the SRC Act is beneficial legislation and should be interpreted, where possible, to the advantage of applicants. In my view, the conclusion is the result of a simple construction of the whole of section 48. Subsection (1) introduces the basis of the preclusion enacted in subsection (4). It is the applicant for compensation who is precluded if that applicant has been the successful litigant elsewhere.
28. The decision makers did not consider the applicant’s claim once they had reached the conclusion, wrongly in my opinion, that subsection 48(4) was “relevant”. In the circumstances, I consider that the proper course to take is to set aside the decision under review and to remit the matter to the respondent for reconsideration with a direction that the operation of section 48 of the Safety, Rehabilitation and Compensation Act 1988 does not preclude the applicant from pursuing her claim for compensation under sections 17 and 18 of that Act.
29. The respondent is to pay the applicant’s costs.
    

I certify that this and the 11 preceding pages are a true copy of the decision and reasons for decision herein of      

Deputy President BJ McMahon

Signed: .....................................................................................

Associate

Date of Hearing 19 January 1999

Date of Decision 22 January 1999      

Counsel for the Applicant Mr M J Joseph SC      

Solicitor for the Applicant White Barnes      

Counsel for the Respondent Mr R V Gyles QC      

Solicitor for the Respondent Barker Gosling