McDowell v Baker

High Court of Australia|1979-07-01|Before: Aickin JJ, Douglas J, Gibbs J

For the reasons I have given, I conclude that the present case is governed by s. 9A (1) and that the damages should have been reduced by the total amount of compensation payable in respect of the injury.

I would allow this appeal for the reasons stated by Aickin J.

I would allow this appeal for the reasons given by Aickin J.

The respondent's husband, one Eric George Baker, was injured in an industrial accident on or about 18th June 1971. He suffered severe injuries as a result of which he died on 22nd July 1974. In the period between the date of the accident and the date of his death he received various amounts of workers' compensation from the Workers' Compensation Fund created under the Workers' Compensation Act, 1916-1966, as amended from time to time, now the Workers' Compensation Act, 1916-1974 Q. ("the Act"). The payments so received as workers' compensation from the Fund totalled $12,680, being the maximum amount then payable under the Act. If he had been killed in the accident his dependants would have been entitled to receive that sum as compensation under the Act.

After his death the respondent, as administratrix of his estate, instituted proceedings against the appellant, his employer, claiming $80,000 as damages for and on her own behalf as his widow and for and on behalf of his children caused by negligence and/or breach of statutory duty by the appellant. This claim was made under s. 12 of the Common Law Practice Acts 1867-1974 (Lord Campbell's Act). Douglas J. held that she was entitled to succeed and awarded the sum of $55,000 together with interest since the date of issue of the writ. It was contended before him that the amount of workers' compensation received by the deceased should be deducted from the damages assessed by reason of s. 9A of the Act.

The questions arising in this appeal turn on certain specific provisions of the Act, which it is necessary to set out in full. It is first necessary to note the extended meaning given to the word "worker" by s. 3 (4) of the Act which is as follows:

Any reference to a worker who has been injured, where the worker is dead, includes a reference to his legal personal representative or to his dependants or other person to whom or for whose benefit compensation is payable. Section 8 (1) requires each employer to insure against liability for workers' compensation and against liability for claims at common law arising out of injury to any worker. Section 9 (1) provides that each worker who receives a relevant injury " shall receive out of the Workers' Compensation Fund compensation in accordance with this Act "

Section 9A, which was introduced in 1962 so far as material, provides as follows:

Where an injury in respect whereof a worker is entitled under sub-section (1) or (2) of section nine of this Act to receive compensation from the Workers' Compensation Fund was received by the worker under circumstances creating also, independently of this Act, a legal liability in the employer to pay damages in respect of that injury (except an injury in respect whereof the employer is required by some other Act to provide against such liability as prescribed by such other Act) -

(a) the amount of such damages which the employer is legally liable to pay shall, notwithstanding any other Act or law, be reduced by the total amount of the compensation (which shall include medical, hospital, travelling and other expenses) prescribed by this Act to be made from the Fund in respect of the injury in question; and

(b) subject to this section, the worker or his dependents shall receive from the Worker's Compensation Fund such reduced amount.

The Court by which damages are awarded in respect of an injury to which this section applies, or out of which moneys paid into Court in an action brought in respect of any such injury are ordered to be paid, shall upon the application of the Office, worker or employer determine the total amount of compensation prescribed by this Act that is to be paid from the fund in respect of such injury and that determination shall be binding upon the Office and the worker.

Where in respect of an injury to which sub-section (1) of this section applies, a worker claims, by or in any action or other proceedings whatsoever in any Court, against his employer any sum for damages which the worker alleges the employer is legally liable to pay in respect of such injury, then the worker shall serve upon the Office a copy of the writ of summons, summons, notice, order, counter-claim or other process by which that claim is made and shall before any other step is taken by him in such action or other proceedings file in the Court concerned an affidavit as to such service.

The Office may at any time during the proceedings taken or had to enforce the claim elect to be joined with the employer by filing in the Court concerned a notice in writing to that effect.

(a) where the action or other proceedings is or are taken outside Queensland; or

(b) to any application for the leave of the Court concerned to issue any process a copy whereof is required by this subsection to be served upon the Office.

(3) If the Office files in the Court concerned the notice of election referred to in subsection (2) of this section in respect of a claim to which that subsection applies -

(a) the Office shall be entitled to the conduct on behalf of the employer of all proceedings had or taken to enforce the claim, and for the settlement of any question arising with respect thereto, unless the Office, by writing, permits the employer to conduct such proceedings;

(b) the employer shall immediately when required by the Office so to do sign and execute all such documents as the Office may from time to time consider necessary to enable the proceedings as aforesaid to be conducted by the Office:

Provided that if the employer is absent from Queensland, or cannot be found by the Office, or fails, by refusing or being unable so to do or by any reason otherwise soever, to sign or execute all or any documents so required to be signed or executed by him, all such documents as are required by the Office to be signed or executed and which are not signed or executed may be signed and executed on behalf of that employer by the Office.

(4) Every claim to which subsection (2) of this section applies, made by or in an action or other proceedings in the Supreme Court of Queensland or a District Court in Queensland shall be heard and determined by a Judge without a jury.

(4a) In respect of a claim to which subsection (2) of this section applies, the Court concerned may, upon the application of any party to the action or proceedings by which the claim is made and upon such terms as the Court deems just, order the worker to submit himself to a personal medical examination by the duly qualified medical practitioner or practitioners named in the order.

The Court concerned may discharge or vary any such order.

The Court concerned may adjourn the action or proceedings as it deems necessary or expedient to enable compliance with the order.

If, in the opinion of the Court concerned, the worker has persistently and wilfully refused to comply with the order without reasonable excuse, the Court may enter judgment against the plaintiff in the action or proceedings upon such terms as it deems fit.

(5) The provisions, other than this section of this Act relating to the recovery by a worker from his employer of damages for which the employer is, independently of this Act, legally liable in respect of injury to such worker, shall apply subject to this section.

(6) Section sixteen and clause 24a of the Schedule to this Act do not apply to an injury in respect whereof the provisions of this section apply.

Section 14 (1) (A) (i) deals with the amount of compensation where death results from injury as follows:

If the worker leaves any dependants wholly dependent upon his earnings at the time of his death the sum of $15,000.

In addition, if the dependants of the worker consist of or include either of the following persons wholly dependent upon his earnings, namely a widow or a woman who has lived in a connubial relationship with him for a continuous period of three years at the least terminating on his death, there shall be payable the sum of $400 in respect of -

(a) each child or step-child of the worker or each child or step-child of the woman referred to in this paragraph;

who in any case was at the time of death of the worker totally or mainly dependent upon the earnings of the worker and who is under sixteen years of age or, being of or over the age of sixteen years but under the age of twenty-one years is receiving full-time education at a school, college, university or similar institution:

The figures quoted are from the Act as amended to 1974.

When the injury for which compensation is payable by the Office under this Act was caused under circumstances creating also a legal liability in some other person to pay damages in respect thereof -

(i) The worker may both take proceedings against that person to recover damages and may apply for compensation under this Act, but is not entitled to recover both damages and compensation; and

(ii) If the worker has recovered compensation under this Act, the Office shall be entitled to be indemnified by the person so liable to pay damages as aforesaid, and all questions as to the right to and amount of any such indemnity shall in default of agreement be settled by action or, if the parties consent, by an Industrial Magistrate under this Act.

This clause applies subject to clause 24a of this Schedule.

(1) Subject to this clause, in respect of an injury received under circumstances creating both -

(a) Independently of this Act, a legal liability in some person, whether the employer or a person other than the employer, to pay damages in respect of that injury; and

a worker may both take proceedings to recover those damages and apply for compensation under this Act according to his entitlement thereto, but such a worker is not entitled to receive compensation under this Act at any time (or in the case of compensation under provision (B) of subsection one of section fourteen of this Act, in respect of any period of time) after those damages become recoverable by him.

Any amount of compensation (which shall include medical, hospital, travelling, and other expenses) under this Act paid in respect of an injury to a worker to whom this clause applies at a time or in respect of a period of time before damages become recoverable by him from the employer or, as the case may be, other person legally liable therefor, shall be a first charge upon those damages.

The employer or other person from whom those damages are recoverable shall pay to the Office any sum charged thereon by virtue of this subclause or, if those damages are insufficient to meet that charge, the whole of those damages, and that payment shall, to the extent thereof, satisfy the liability of that employer or other person for payment of those damages.

If a worker to whom this clause applies who has received compensation under this Act has not, independently of this Act, recovered any damages from the employer or, as the case may be, other person legally liable therefor, the Office shall be entitled to be indemnified by that employer or other person to the extent of his liability.

If, subsequently to that employer or other person paying under such indemnity, the worker recovers damages against him, the payment under the indemnity shall to the extent thereof, satisfy the liability of that employer or other person.

Douglas J. held that the respondent was not a "worker" within the extended definitions in s. 3 (4) because she was not a person "to whom or for whose benefit compensation is payable" and that therefore s. 9A did not apply.

The Full Court agreed with the reasons of Douglas J. and did not deliver any separate reasons for judgment. It appears that his reason for that conclusion was the fact that the deceased had already been paid the maximum entitlement under the Act and that that payment exhausted any amount which would otherwise have been available to his dependants including the appellant (his widow). The only passage in his judgment dealing with this matter is as follows:

In this case the deceased had received his full entitlement of workers' compensation before he died. None of it under the statute was payable to or recoverable by the plaintiff. To be a "worker" she had to be a person "to whom or for whose benefit compensation is payable". She did not answer this description. In my opinion that is the simple answer to the submission. With due respect that appears to me to overlook the latter part of the proviso to s. 14 (1) (A) (i).

Section 14 (1) (A) deals with payments on the death of a worker leaving dependants and fixes the amounts payable to them.

Provided that the amount of any weekly payments made under this Act and any lump sum in redemption thereof and any lump sum paid as compensation under this Act shall be deducted from such sum; but no such deduction shall be made so as to reduce the amount payable in respect of the dependants of the worker under this subsection below $2,500; Notwithstanding the fact that the payments to the deceased equalled the maximum then payable under the Act, that proviso would not result in the dependants not being entitled to compensation because $2,500, or its equivalent at the relevant time, would have been payable to the dependants. The dependants who would have been entitled to that sum are those on whose behalf the present proceedings were brought by the widow as administratrix of the estate of the deceased, namely the widow herself and her children. The fact that the action under Lord Campbell's Act is brought by the legal personal representative can make no difference because she is suing, not on behalf of the estate, but on behalf of the dependants. A claim under Lord Campbell's Act is in substance, though not in form, a claim by each of the individual dependants on whose behalf it is brought.

It is necessary to consider the decision in State Government Insurance Office (Q.) v. Public Curator of Queensland [21] . That case, though relied on by the respondent, throws no light on the present problem. It was argued for the respondent that the "legal liability" of the employer referred to in s. 9A (1) is one in respect of the injury by reason of which compensation was paid, whereas on the death of the worker a new and different cause of action arose enabling his dependants to recover. This involves equating the phrase "legal liability" with "cause of action" and concluding that the proviso had nothing whatever to say in respect of claims by dependants, notwithstanding that par. (b) of s. 9A (1) obviously contemplates situations where the worker has died as a result of the injury.

In my opinion the section is not directed to causes of action but to the simpler conception of liability for a compensable injury, that is to say, all liabilities which may arise therefrom. It uses general language when it speaks of "the amount of such damages which the employer is liable to pay", thus concentrating on the liability of the employer to pay otherwise than under the Act, and not upon the recipient of the payment. Circumstances "creating independently of this Act, a legal liability in the employer to pay damages in respect of that injury " may be either negligence or breach of a relevant statutory duty, each giving rise to a liability to pay damages. The damages may be payable to the worker or to his dependants, depending on the circumstances, and I can see nothing in the language or the apparent policy of the section to suggest that it is confined to damages payable to the worker. Both those damages and damages payable to dependants under Lord Campbell's Act are properly described as "in respect of that injury".

It is true that the worker had a cause of action based on the common law and his dependants had, on his death, one based on a statute, but each arose out of the same "injury". That injury was of the kind described in s. 8 (1) and was the foundation of both his claims and his dependants claims, whether for compensation or for damages.

The word "liability" and the phrase "legal liability" are both very general expressions which take their precise meaning and application from their context and the purpose of the legislation, as the observations of Barwick C.J. in Tickle Industries Pty. Ltd. v. Hann [22] show. Here it seems to me that the purpose of s. 9A is to extend the provision against "double recovery" beyond the area already contained in s. 16 and cll. 24 and 24a and in that context the purpose would be defeated if "legal liability" were construed as referring only to a specific cause of action available only to the worker himself.

I have not so far dealt with the operation of the extended meaning given to the term "worker" by s. 3 (4). It is clear enough, that, although the opening words of s. 3 (1), i.e. " unless the context otherwise indicates ", do not directly apply to sub-s. (4), the latter sub-section can only apply where the context permits and that within a single section a substitution may be made in one place, though not in another. Thus in s. 9A it would seem that the substitution could be made where the word "worker" first appears because dependants may be entitled to receive compensation but that no such substitution can be made where the word "worker" second appears, for it is only the worker himself who can "receive an injury".

The provisions of s. 9A (1) (a) are silent as to the persons to whom the employer is liable to pay damages and no doubt deliberately so. It is unlikely that the draftsman was unaware of the right of dependants to obtain damages under Lord Campbell's Act and that damage would, according to the circumstances, be payable to the worker or to his dependants. In such circumstances it would be natural enough not to elaborate on the expression "such damages which the employer is legally liable to pay", for their operation would be clear to the informed reader, notwithstanding the reference to the two possibilities in par. (b) which refers to "the worker or his dependants" being entitled to receive from the Fund "such reduced amount" of damages. Such damages are payable out of the Fund because by s. 8 the employer must insure with the Office against liability to workers arising independently of the Act.

The words "subject to this section" in s. 9A (1) (b) present a problem of construction for it is not easy to see in what way the balance of the section may qualify that part of s. 9A but it may perhaps be intended to refer to the quantification of the total compensation prescribed by the Act, which may be determined by the Court awarding damages, as it may not have been done prior to the award of damages.

It does not appear to me to matter that the amount that was paid to the deceased was different from that which was payable to the dependants under the Act. That is not inconsistent with the policy that the worker and/or his dependants shall not receive more than the greater of the maximum compensation to which they may be entitled and the damages to which they may be entitled.

If the respondent's argument that s. 9A has no application were accepted it would be necessary to consider whether s. 16 and clauses 24 and 24a would apply. Section 16 and cl. 24a are excluded where s. 9A applies, but there is no express exclusion of cl. 24. It may have been assumed that cl. 24 applies only to claims against defendants other than the employer, as the side note asserts, but the words "some other person" are general and would ordinarily include the employer. Whatever its intended operation, it has at least since 1960 been subject to cl. 24a. Sub-clause (2) of cl. 24a provides as follows:

Damages would "become recoverable" when judgment was entered, and if s. 3 (4) requires that "recoverable by him" be read "recoverable by his dependants" in cases where he has died the result would be that the amount of compensation previously paid would be deducted by the judgment debtor and paid to the Office and payment of the balance to the worker or his dependants, as the case may be, would satisfy the judgment debt, thus achieving the same result as s. 9A.

In the result therefore I am of opinion that this appeal should be allowed.

In lieu of the order made by the Full Court it should be ordered that the appeal to that Court be allowed with costs and that the order of the trial judge be varied by reducing the amount of damages awarded by the total amount of compensation paid to the deceased and that the amount of damages apportioned by the trial judge to each dependant be reduced proportionately.

High Court of Australia Barwick C.J. Gibbs, Stephen, Mason and Aickin JJ. McDowell v Baker [1979] HCA 44

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