Logan v Hankook Tire Co Ltd

Supreme Court of NSW|2013-05-03|Before: Garling J

Judgment 1On 23 April 2007, Simon Donald Munnerley, whilst driving a truck owned by Munnerley's Bulk Haulage Pty Ltd, lost control of the vehicle, apparently due to a tyre failure, and was killed when the truck left the road and crashed. 2The circumstances surrounding the crash have been extensively investigated, and the subject of a lengthy coronial inquest. 3There are a number of proceedings on foot in this Court, which are due to be heard in October 2013. The proceedings involve, respectively, claims by: (a)Munnerleys Bulk Haulage Pty Ltd for property damage; (b)Rosemary Logan; and (c)claiming by the parents and a sibling of the deceased for damages for nervous shock. 4Each of the claims nominate the manufacturers and importer of the tyre - the Hankook companies, and two other companies associated with the wholesale and retail supply of the tyre, namely, Riverina Tyre Power, and Marathon Tyres Pty Ltd. 5These proceedings are a claim by Rosemary Logan, who was the partner of the deceased, Simon Munnerley, for damages pursuant to the Compensation to Relatives Act 1897. 6As part of those proceedings, Ms Logan filed a motion on 18 January 2013, in which she seeks the following orders: "1. Leave be granted to the plaintiff to join Rachel Munnerley and Nathan Munnerley as the fifth defendants. 2. The Court appoint a tutor to represent Rachel Munnerley and Nathan Munnerley as the fifth defendants for the purpose of these proceedings. 3. Costs to be costs in the cause." 7This judgment deals only with Ms Logan's motion of 18 January 2013.

Additional Factual Background 8At the time Simon Munnerley died, he was living with Rosemary Logan. He had previously been married to Nicole Munnerley, but that marriage had been dissolved. 9However, from his first marriage, there were two children, Rachel Munnerley born in 1996, and now 16 years old, and Nathan Munnerley born in 1998 and now nearly 15 years old, who were dependent upon him. The children resided with their mother, but the deceased, Simon Munnerley, at the time of his death, made regular financial contributions by way of support for his dependent children. 10Because the deceased, Simon Munnerley, was killed whilst he was engaged in his employment, the plaintiff Rosemary Logan, his de facto spouse, and both of the dependent children, were entitled to benefits under the Workers Compensation Act 1987. 11To that end, on 5 February 2008, the Workers Compensation Commission issued a Certificate of Determination which was in the following terms: "Having considered the matters submitted, the Commission: 1. NOTES (1) The deceased worker, Simon Donald Munnerley, died on 23 April 2007 as a result of an injury arising out of or in the course of his employment. (2) The sum of $325,400.00 has been paid to the Public Trustee of New South Wales by or on behalf of the employer and weekly amounts pursuant to section 25(1)(b) of the Workers Compensation Act 1987 are being paid. 2. DECLARES (1) The following persons were dependent for support upon the deceased worker at the time of his death: (a) The child, Rachel Margaret Munnerley, born on [XXX] 1996. (b) The child, Nathan Donald Munnerley, born on [XXX] 1998. (c) The de facto, Rosemary Lois Logan. (2) There were no other persons dependent for support upon the deceased worker at the time of his death." 12Pursuant to the Certificate of Determination, the workers compensation insurer of Munnerley's Bulk Haulage Pty Ltd has paid monies to the dependent children. Firstly, a lump sum of $171,000 has been paid to the Public Trustee of NSW to hold on behalf of the two children. In addition, weekly payments initially in the sum of $102.30 per week per child, have been paid to the Public Trustee and then to Nicole Munnerley, who has received the monies on behalf of her children. The latest payments being made are in the sum of $122.50 per week per child. The payments have been indexed. 13In total, as at 22 June 2012, a sum slightly in excess of $385,000 has been paid by the workers compensation insurer to, or for the benefit of, the dependent children. 14Ms Logan is the administrator of the Estate of the late Simon Munnerley. In that capacity, in 2010, she commenced proceedings against the parties allegedly liable for damages pursuant to the Compensation to Relatives Act. 15At or about that time, there was correspondence between Ms Logan's lawyers, Phillip Gengos & Co, and Nicole Munnerley. On 15 April 2010, Gengos wrote in the following terms: "We act for Rose Lois Logan who has instructed us to commence proceedings for compensation arising out of the death of your former husband, Simon Munnerley, on 23 April 2007. Under the Compensation to Relatives Act 1897, only one action can be made by the administrator of the estate of the deceased. Our client has instructed us to write to you (as you are the mother of Simon's children) to ascertain whether they wish to be included in an action against the defendants, who we anticipate to be the proper entities of Hankook Tyres, Marathon Tyres and Riverina Tyres. Any action will be commenced before 23 April 2010, and we would like you to notify us of any party (including the children) who may be entitled to participate in the proceedings." 16On 24 November 2010, Gengos wrote a further letter which, in relevant part, included the following: "Our client has commenced proceedings for compensation arising out of the death of Simon Munnerley on 23 April 2007. Under the Compensation to Relatives Act 1897, only one action can be made by the administrator of the estate of the deceased. But this action can also include a claim by the administrator on behalf of your children. We have been instructed to write to you to ascertain whether you wish your children included in the action against the defendants." 17It does not seem that any response was received to these letters. However, by April 2012, it appears that John Maguire & Associates, solicitors of Nowra, had received instructions to provide some advice to the children. In a letter of 23 April 2012, Maguire said: "As you would be aware, the children have received lump sum benefits and an ongoing dependency allowance under the no fault Workers Compensation legislation. If the children agree to join in the common law proceedings, there are obviously implications concerning payback of the lump sum benefits and finalisation of their ongoing dependency allowance. Before advising the children as to whether they should be part of the action, we would need to consider the following: (a) the merits of the claim so far as assessment of damages is concerned; (b) liability issues and the operation of s 151Z of the Workers Compensation Act; (c) the appropriate apportionment of damages between the respective dependents. In the circumstances, we request that you seek instructions from the plaintiff as to payment of the children's reasonable legal costs in providing this advice. It may well be that the children are advised not to join in the action so as to protect their workers compensation entitlements. This would result in a larger pool of damages for the remaining dependent, Ms Logan. However, it is simply not possible to provide any sensible advice to the children and their mother until careful consideration of the presumably voluminous documents has taken place." 18This letter was responded to by Gengos on 1 May 2012 in the following terms: "Whether or not Rachel and Nathan join in the proceedings as plaintiffs are matters for their tutor and yourself if you so choose to accept instructions. To assist in this regard we enclose a copy of the statement of claim and statement of particulars. We are instructed that Simon Munnerley made support payments of around $400 per month for each of his children and no doubt this can be confirmed with their mother. In addition, presumably Simon Munnerley would have contributed to their lives as a father in the ordinary course, and there may be a basis for entitlement in respect of that loss of support. However, and in any event, as we apprehend the UCPR, Part 6 of those Rules require of the plaintiff to join any interested party to the proceedings and in the case of Rachel and Nathan have a tutor. In this event, Rachel and Nathan by their tutor would be defendants and in the event of the plaintiff succeeding, there would be no judgment entered in their favour. Moreover, there would be no receipt of judgment monies so as [to] trigger the repayment provisions in s 151Z. Further, our client's entitlement would be unaffected by Rachel and Nathan becoming plaintiffs as their entitlement, as with our clients, is determined by the level of dependency and reasonable expectation of support. In the circumstances then, the question of our client funding an advice is unnecessary, but also impractical given the straightened financial circumstances as a consequence of Simon Munnerley's death. What we are instructed to seek instructions on is whether Nicole Munnerley will act as the children's next friend to enable a notice of motion to proceed to have the children joined as defendants." 19On 30 May 2012, Maguire responded in the following terms: "As discussed, we simply do not have enough information to properly advise Ms Munnerley and the children as to whether they should be part of the dependency claim. It is a matter for the plaintiff whether she wishes to join the children as defendants. As this now finalises our involvement in the matter, we suggest you correspond directly with Ms Munnerley in the future."

Hearing of Motion 20On the hearing of the motion, Rosemary Logan was represented by counsel, and counsel also appeared for the children. The motion, as is apparent, sought to join the children as defendants in the proceedings. Counsel for the children opposed their joinder. 21The first basis upon which counsel relied to oppose their joinder, was a submission that the children would be financially worse off if they were joined into the proceedings. Counsel submitted that the lump sums paid to the children, namely: (a)$77,000 in the case of Rachel; and (b)$94,000 in respect of Nathan, would significantly exceed any damages which they would receive if they made a claim in these proceedings. The logic of that was plain, since counsel, speaking broadly, equated the past and on-going weekly payments of compensation received by the children, to be approximately equal to that which their late father had provided. It is clear then that the lump sum well exceeded the level of financial support that they would have received from their father. 22Accordingly, counsel submitted in broad terms that by about the equivalent of the capital sums, the children were far better off not to be forced into a position where they would be required, pursuant to the provisions of s 151Z of the Worker Compensation Act, to lose the benefit of these past payments. 23The second basis upon which counsel submitted that the Court would not make the orders sought, was that the children were under-age, and would need to have a tutor appointed: r 7.17 of the Uniform Civil Procedure Rules 2005. Counsel submitted that there was no person willing to accept such appointment, thereby exposing themselves to legal costs. 24The third reason that counsel submitted, was that there was no undertaking proffered by Ms Logan to pay the legal costs of the children or to provide any indemnity with respect to such legal costs which may be incurred either in paying lawyers to appear in the proceedings, or, if the proceedings went adversely, in paying any costs which were ordered.

Compensation to Relatives Act 25In considering the submissions, it is necessary to examine some of the provisions of the Compensation to Relatives Act. Section 3(1) of the Act provides for the right to recover damages whenever the death of a person is caused by "...a wrongful act, neglect or default ..." provided that such a wrongful act would, if the death had not been occasioned, "... have entitled the party injured to maintain an action and recover damages in respect thereof". 26Section 5 of the Act, provides that only one action shall lie "... for and in respect of the same subject matter of complaint". 27The important provision for the purposes of the motion is s 4. It is in the following terms: "4. By whom and for whom action may be brought (1) Every such action shall be for the benefit of the spouse, brother, sister, half-brother, half-sister, parent and child of the person whose death has been so caused, and shall be brought by and in the name of the executor or administrator of the person deceased, and in every such action the jury may give such damages as they may think proportioned to the injury resulting from such death to the parties respectively for whom and for whose benefit such action is brought, and the amount so recovered, after deducting the costs not recovered from the defendant, shall be divided amongst the before-mentioned parties in such shares as the jury by their verdict find and direct. (2) If there is more than one spouse of the person whose death has been so caused, the action is (without limiting the application of subsection (1) to other persons) for the benefit of each of the spouses, who are to be separate parties to the actions." 28Section 6 of the Act requires that a plaintiff is to deliver to the defendants or their lawyers, "... a full particular of the persons for whom and on whose behalf such action is brought ...". 29Section 6D makes s 4 applicable, in like terms, to a judge hearing a claim without a jury. 30The provisions of s 6A also cast light on the nature of proceedings under this Act. It is in the following form: "6A Payment into court (1) In every such action the defendant may pay money into court as a compensation in one sum to all persons entitled under this Act for the wrongful act, neglect or default without specifying the shares into which the sum is to be divided by the jury. (2) If the sum paid in is not accepted, and if an issue is taken by the plaintiff as to its sufficiency, and the jury think the same sufficient, the defendant shall be entitled to the verdict upon that issue. (3) No portion of the sum paid in shall be paid out of court except under the order of a judge."

Nature of a Compensation to Relatives Action 31An action under the Compensation to Relatives Act is a derivative action which is dependent on, or secondary to, rights of action which were vested in a deceased person immediately before their death: Mangion v James Hardie & Co Pty Ltd (1990) 20 NSWLR 100 at 104 per Samuels AP, Clarke JA agreeing. 32The action did not exist at common law, but relies entirely upon the statute that creates it. Here, the statute is in similar terms to other statutes around Australia, and originates from the United Kingdom in 1846 with Lord Campbell's Act (9 & 10 Vict c 93): De Sales v IngrilIi [2002] HCA 52; (2002) 212 CLR 338 at [7] per Gleeson CJ. 33An action under the Compensation to Relatives Act is one for "damages ... proportioned to the injury": s 4. The Act does not contain any definition of injury. The nature of the compensable damages are to be found in the common law. 34Windeyer J explained in Parker v The Commonwealth [1965] HCA 12; (1965) 112 CLR 295 at 308, that the governing principles for the awarding of damages were twofold, namely that: (a)damages should be calculated by reference to a "reasonable expectation of pecuniary benefit, as of right or otherwise, from the continuance of life": Franklin v The South Eastern Railway Company [1858] Eng R 669; (1858) 3H & N 211 at 214 per Pollock CB; and (b) damages are calculated having regard to "... a balance of gains and losses for the injury sustained by the death: Davies v Powell Duffryn Associated Collieries Ltd (1942) AC 601 at 623 per Lord Porter. 35This explanation of the governing principles was adopted with approval by the High Court of Australia in De Sales: Gleeson CJ at [11], Gaudron, Gummow and Hayne JJ at [57]. 36McHugh J noted with succinctness and clarity the fundamental nature of an action under the Compensation to Relatives Act when he said in De Sales at [91] ff (omitting footnotes): "91. The Fatal Accidents Act is based on Lord Campbell's Act 1846 (UK). Before Lord Campbell's Act, no action for damages for or arising out of the killing of a person could be maintained in a civil court. That Act gave a right to the relatives to recover damages "proportioned to the injury resulting from the death". But from the beginning the term "injury" was read as confined to pecuniary loss. And Justices of this Court have accepted that that is so. In Davies v Taylor, Lord Reid said that the "injury" "must be of a financial character" and that it meant the "loss of a chance". That is to say, damages are awarded under Lord Campbell's Act for the chance that the deceased would have provided the relative with financial support or its equivalent in the future. The damages are "for the loss of the expectation of financial support by the deceased". Thus, the tribunal of fact in assessing damages must value the chance that each relative had of obtaining a financial benefit from the deceased if that person had not been killed by the defendant. 92. In determining the extent of the "injury", financial gains as well as losses resulting from the death must be taken into account. 93. Sentiment has no place in the action. The relatives are not compensated for grief, sorrow or bereavement. "It is," said Lord Wright, "a hard matter of pounds, shillings and pence". So pervading is the notion that "injury" is concerned with the loss of the chance of financial support that the funeral expenses of the deceased were not recoverable by the relatives in an action under the Act until the legislature intervened in England and some Australian States." 37Gleeson CJ noted in De Sales at [12]-[13], that in modern claims, the existence of financial dependency was not an essential element of an action under the Compensation to Relatives Act, and further that the loss of an expected benefit was not restricted to a loss of direct financial support. Such a loss may include the value of services which a deceased may provide around the home. 38Sir John Latham CJ, said of these actions, in Woolworths v Crotty [1942] HCA 35; (1942) 66 CLR 603 at 618: "Lord Campbell's Act deals only with the case of death, not with personal injuries not resulting in death, or damages for such personal injury, such as pain and suffering, even where death resulted. It created an entirely new cause of action in the representatives of a deceased person. The action was for the benefit of specified dependents who had suffered pecuniary loss by his death, but who could not complain that the defendant had committed a tort as against them, or that he had broken any contract with them. It was a condition of the right of action that the deceased would have had a right of action, if death had not ensued, to recover damages in respect of the wrongful act, neglect, or default which was the cause of the dearth. But the right of action given to his executors is quite distinct from any right of action that the deceased would have had. It is a purely statutory creation for the purpose of filling what was regarded as a gap in the law ... " 39It has been necessary to discuss the nature of a claim under the Compensation to Relatives Act because there seemed to be a common assumption underlying the submissions of counsel for the applicant, Ms Logan, and counsel for the children, Rachel and Nathan Munnerley, that a dependent of a deceased who fell within the description set out in s 4 of the Act, as did Rachel and Nathan Munnerley, could voluntarily opt out of an action under the Compensation to Relatives Act. This common assumption seems also to have been expressed throughout the correspondence to which earlier reference has been made. 40In short, it seems to be thought that a plaintiff who brings a compensation to relatives action, can decide for themselves whether to include or exclude individual potential beneficiaries from that cause of action. Equally, counsel for the children takes and expresses the view that his clients are not part of the action, and do not have any interest in participation in it. He reasons that if they are not part of the action, they will be entitled to retain the monetary benefits and payments which they have received under the Workers Compensation Act, and not be obliged to repay them, and equally, they will be entitled to continue to receive their weekly benefits under the Workers Compensation Act. 41This question, which is of some complexity, is one in which the employer, or else its workers compensation insurer, is undoubtedly interested. They were not present during the arguments and submissions made on this motion. The workers compensation insurer is not a party to the proceedings. 42The mutual assumption is probably unsurprising if one merely concentrates on the modern notion of a representative action incorporated in various provisions of the Civil Procedure Act 2005 and the Uniform Civil Procedure Rules. There, in modern practice, although a representative action is brought, usually in the name of a single plaintiff, but on behalf of all of the members of a group described in the pleading, a member of the group can, in accordance with the procedure fixed by the Court in the particular claim, choose to opt out of the action. If they do so, then they are not bound by any judgment delivered in the action. On the other hand, if they choose not to opt out, then their claims are dealt with as a member of the group. 43However attractive that modern procedure is, it is necessary for me to record that although in 1897 the Parliament had in mind an early statutory form of representative action in the particular circumstances covered by the Compensation to Relative Act, the Act contains no specific reference to any procedure whereby a person may opt out of proceedings brought under the Compensation to Relatives Act. 44And as well, having regard to the specific provision of s 151Z of the Workers Compensation Act 1987, it may be in circumstances where compensation payments have been made, the entirety of those payments have to be repaid to the employer's insurer, regardless of whether particular dependents regard themselves as participating in the action or not. 45It is not necessary for the determination of this Motion for me to express any concluded view on whether the common assumption to which I have earlier referred, is in fact correct. It is preferable that I do not, given that there is no representation by other parties who may be interested. However, if I may say with respect to those who have made the common assumption, I do not presently share that assumption. At least in the absence of further argument, and detailed consideration of the issues, I would not be prepared to proceed on a hearing of this Motion by adopting the same assumption as the parties have. It would be unsafe so to do.

Discussion 46However, this Motion can be resolved without reaching any final conclusion on that common assumption. 47The plaintiff submits that the provisions of the UCPR, in particular r 6.20, require all interested parties to be joined. The plaintiff submits that this rule compels the joinder of the children, as defendants since they do not consent to be plaintiffs. 48I do not agree. 49Rule 6.20 of the UCPR provides for the joinder of all persons, jointly entitled to the same relief, either as a plaintiff, or else a defendant. However, the provisions of that rule are not intended to override any other Act or law which suggests that joining such a party would be inappropriate. Rule 6.24 of the UCPR permits the joinder of a person where a court considers that they ought to have been joined or else it is necessary for them to have been joined. 50However, as it seems to me, at present, the provisions of the Compensation to Relatives Act may contravene the provisions of r 6.20, and the interpretation of r 6.24 needs to accommodate the provisions of that Act within the interpretation of the phrase "necessary", or else, generally, in considering whether a party ought to be joined. 51The question of the joinder of additional parties is ultimately a matter of discretion. The plaintiff, Ms Logan, has, so it seems to me, under the Compensation to Relatives Act, a responsibility to mount the action on behalf of all available beneficiaries. Whether she can exclude from that obligation specific beneficiaries is a matter upon which I express no opinion. However, to the extent that the children have any interest in the proceedings, then, under the Compensation to Relatives Act, they are represented by Ms Logan. She has such obligations as that Act imposes upon her, and such duties as would arise, if any, from being a litigant in the proceedings. 52The proposed defendants whom she wishes to add are both less than 18 years old. There is no person who has volunteered to be a tutor. There is no evidence available to the Court which would identify an available tutor, whom the Court could appoint under r 7.18 of the UCPR. There is no indemnity proffered as to any costs to which the children or any proposed tutor may be exposed. 53The children, apparently properly advised, express the view that they do not wish to be a party. Whether that is a prudent course is not a matter for this Court to determine on this application. 54In all of those circumstances, I am not prepared to exercise my discretion to join two unwilling parties, thereby exposing them to the costs of the proceedings in circumstances where, they, having received what they regard as appropriate advice, have said that they do not wish to be a party. This is particularly so when the UCPR does not mandate their joinder, and there is no person who can be appointed as a tutor. 55In those circumstances, it is appropriate that the motion be dismissed.

Orders 56I make the following orders: (1)Motion filed on 18 January 2013 be dismissed. (2)Plaintiff to pay the costs of Rachel and Nathan Munnerley.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 May 2013

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