mixed. The plaintiff is entitled to a judgment against the defendant in an amount to be agreed between the parties, to be calculated by deducting the amount of NZD 136,705.79 from agreed damages of $A415,000....
Key principles
A lump sum payment made under the Accident Compensation Act 2001 (NZ) for permanent impairment caused by mesothelioma is to be deducted from an award of common law damages in New...
Section 321 of the Accident Compensation Act 2001 (NZ) creates a discretionary power to recover an entitlement only where there is a nexus between the personal injury giving rise...
The radical nature of the New Zealand no-fault scheme, founded on a social contract whereby citizens surrender the right to sue for common law damages in exchange for statutory...
Issues before the court
Whether a lump sum payment of NZD 136,705.79 made by the Accident Compensation Corporation pursuant to the Accident Compensation Act 2001 (NZ) for...
Cited legislation
No linked legislation citations have been extracted yet.
Plain English Summary
A New Zealand-born carpenter who worked with asbestos both in New Zealand and later in Australia developed mesothelioma. Before he died he received a lump-sum impairment payment from New Zealand’s no-fault accident compensation scheme. His daughter, as executrix, sued the Australian employer’s insurer in the New South Wales Dust Diseases Tribunal. The parties agreed the Australian employer was negligent and that damages totalled A$415,000. The only dispute was whether the New Zealand payment had to be subtracted. The judge applied the three-part test from Manser v Spry, decided the New Zealand Parliament did not intend the payment to be kept on top of Australian damages, and ordered the NZD 136,705.79 to be deducted.
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Deep Dive
2,353 words · generated 24/04/2026
What happened
Bruce Albert Single was born in New Zealand in 1935. From 1950 until 1982 he worked as an apprentice carpenter, carpenter, builder and labourer in New Zealand and was exposed to asbestos dust and fibre while working with asbestos cement building products. In 1987 he migrated to Australia. Between 1989 and March 1992 he was employed by Omar Constructions Pty Limited in New South Wales and was again exposed to asbestos dust and fibre. In December 2017 he was diagnosed with mesothelioma. That same month he applied to the Accident Compensation Corporation (ACC) in New Zealand and, on 28 December 2017, received a lump sum of NZD 136,705.79 after an impairment assessment concluded he had an 80% whole-person impairment under the AMA 4 guidelines referable to the respiratory system and ACC policy on mesothelioma cases.
Mr Single commenced proceedings in the Dust Diseases Tribunal of New South Wales on 22 December 2017. He died on 7 February 2018. His daughter, Colleen Elva Single, continued the claim as executrix of his estate. The second defendant, the Workers Compensation Nominal Insurer, stood in the shoes of the deregistered Omar Constructions Pty Limited. The parties filed a Statement of Agreed Facts recording that Omar had breached its duty of care, that the Australian exposure had made a material contribution to the contraction of mesothelioma, and that the heads of damage (general damages, damages for loss of expectation of life, damages for gratuitous care and interest on the care damages) totalled an agreed A$415,000. The sole live issue was whether the New Zealand lump sum should be deducted from that figure.
The Tribunal heard the matter on 22 November 2018. No expert evidence on New Zealand law was called; the parties accepted that the Accident Compensation Act 2001 (NZ) fell to be interpreted according to Australian canons of construction. Russell SC DCJ delivered judgment on 30 November 2018, holding that the NZD 136,705.79 must be deducted.
Why the court decided this way
The court began from the “settled principle” stated in Haines v Bendall [1991] HCA 15; (1991) 172 CLR 60 at 63 that compensatory damages aim to place the injured party in the position he or she would have been in had the tort not been committed. Against that baseline, the judge applied the three-indicia framework from Manser v Spry [1994] HCA 50; (1994) 181 CLR 428 to discover whether the New Zealand legislature intended the ACC lump sum to be enjoyed independently of and cumulatively with Australian damages.
First, the financial source of the benefit. The court noted that the deceased made no direct contribution. Funding for entitlements under the Accident Compensation Act 2001 (NZ) comes from levies imposed on employers, private domestic workers and self-employed persons (ss 168, 168A, 168B, 211 and s 167(2)(a)). Any shortfall is met from consolidated revenue. The radical character of the New Zealand no-fault scheme made the first indicium “almost impossible” to satisfy in the conventional sense, because the deceased had no right to sue his New Zealand employers at common law. Drawing on McGougan v Depuy International Limited [2018] NZCA 91; [2018] 2 NZLR 916 at [35] and [37], the judge emphasised that the social contract is between the government and the community at large, not between the government and those who cause injury, and that there is no necessary correlation between funders and beneficiaries. This indicium therefore pointed towards deductibility.
Second, provision for repayment. Section 321(4) of the Accident Compensation Act 2001 (NZ) gives the Corporation a discretionary power (“may”) to deduct the net amount of damages received or to recover the entitlement as a debt. The court read this power, in light of McGougan at [42]–[43] and [48], as a “catchall aimed at preventing double recovery” that operates only where the claimant has a preserved right to bring proceedings. The Tribunal proceedings arose from Australian exposure and Australian negligence. There was no nexus with a New Zealand cause of action that survived the statutory bar in s 318(2). The judge reinforced this reading by reference to Queenstown Lakes District Council v Palmer [1998] NZCA 190; [1999] 1 NZLR 549, which requires a nexus between the entitlement and the barred claim. Because s 321 had no application to the Australian damages, there was no statutory obligation to repay the lump sum from the Tribunal award. This indicium therefore also pointed away from an intention that the benefit be retained in addition to full damages.
Third, the nature of the benefit. The only payment received was a lump sum for permanent impairment assessed at 80% whole-person impairment. The court accepted that such a payment is “a statutory substitute for that component of common law damages which reflects non-economic loss” (Manser v Spry at 438.6). It is assessed against objective medical criteria under Schedule 1, Clause 59 and the respiratory chapter of AMA 4; it does not compensate for pain, suffering and loss of enjoyment of life to the same extent as general damages. The judge contrasted this with the South Australian workers’ compensation payments considered in Manser and Harris v Commercial Minerals Limited [1996] HCA 49; (1996) 186 CLR 1, which were held to be deductible because they covered the same heads of loss. The New Zealand lump sum was therefore not intended to be enjoyed on top of the Australian award.
The court derived considerable assistance from the earlier decision of Curtis DCJ in Davis v Cockatoo Dockyard Pty Ltd [2000] NSWDDT 6; (2000) 19 NSWCCR 594, which had applied the same Manser framework to British industrial-injuries benefits received by a plaintiff with dual New Zealand–Australian and UK exposure. Although the legislation was different, the structured approach was adopted. The three indicia, taken together, demonstrated that the New Zealand Parliament did not intend the lump sum to be retained in addition to the agreed Australian damages. Deduction was required to avoid double compensation.
Before and after state of the law
Before this judgment the law was settled at High Court level by National Insurance Co of New Zealand Ltd v Espagne (1961) 105 CLR 569, Haines v Bendall, Manser v Spry and Harris v Commercial Minerals Limited. Those authorities established that collateral statutory benefits are deducted unless a contrary legislative intention appears, and that the search for intention is conducted by reference to the three indicia of financial source, repayment obligation and nature of the benefit. In the dust-diseases context, Harris confirmed that benefits under the Workers’ Compensation (Dust Diseases) Act 1942 (NSW) were deductible from common-law damages for economic loss, prompting the legislative insertion of s 12D into the Dust Diseases Tribunal Act 1999 to prevent deduction from non-economic loss. Davis v Cockatoo Dockyard had extended the Manser analysis to foreign (British) benefits received by a plaintiff with multi-jurisdictional asbestos exposure, but no previous decision had considered the unique New Zealand no-fault scheme in a cross-border mesothelioma claim.
This judgment applied the pre-existing High Court framework to the Accident Compensation Act 2001 (NZ). It clarified that the social-contract features of the New Zealand scheme (the statutory bar in ss 317–318, the community-funded entitlements, and the surrender of common-law rights) reinforce rather than negate deductibility. It confirmed that s 321’s discretionary recovery power is confined to claims possessing a New Zealand nexus and has no operation in respect of Australian proceedings for Australian tortious exposure. After the decision, practitioners assessing damages in NSW dust-diseases claims involving New Zealand residents must obtain details of any ACC entitlements and deduct lump-sum impairment payments unless a statutory obligation to repay from the Australian award can be demonstrated. The judgment also underscores that the indivisible nature of mesothelioma (every non-trivial exposure makes a material contribution) does not prevent apportionment of the collateral benefit by reference to the legislative purpose of the foreign scheme.
Key passages with plain-English translation
Paragraph 1 of the judgment opens with the core principle drawn from Haines v Bendall: “The settled principle governing the assessment of compensatory damages … is that the injured party should receive compensation in a sum which, so far as money can do, will put that party in the same position as he or she would have been in if … the tort had not been committed. Compensation is the cardinal concept.” In plain English, the law’s goal is to make the victim whole, no more and no less; any collateral payment that duplicates compensation for the same loss must be subtracted.
When discussing Manser v Spry the judge set out the three indicia (financial source, repayment provision, nature of the benefit) and quoted Gibbs CJ in Redding v Lee to the effect that a benefit not dependent on lost earnings and not intended to replace them is more likely to be kept in addition to damages. The court’s conclusion at the end of the financial-source analysis was that the New Zealand scheme’s community-funding model and the statutory bar on suing “gives no indication of a legislative intention that the payment under the Act should be retained in addition to full damages.” Plain English: because New Zealanders cannot sue their local employers and the scheme is funded by levies and taxes, the lump sum is not like a private insurance payout that the plaintiff can keep on top of court-awarded damages.
On the repayment provision the court examined s 321(4) and quoted McGougan at [48]: “Section 321 is, therefore, a general catchall aimed at preventing double recovery and, if appropriate, a subrogation-type intervention by ACC.” The Tribunal’s finding was that the section “has no application to the damages to be awarded in this Tribunal for Australian exposure and Australian negligence.” Translation: the New Zealand legislation lets ACC claw back money only from claims that could have been brought in New Zealand; because this claim arises from Australian negligence, ACC has no right to touch the NSW award.
Finally, on the nature of the benefit the judge noted that the 80% whole-person-impairment payment “is a lesser right than a claim for general damages at common law” and “take[s] little or no account of pain, suffering and loss of enjoyment of life.” Citing Manser at 438.6, the court held it to be “a statutory substitute for that component of common law damages which reflects non-economic loss.” Plain English: the New Zealand payment is intended to compensate for the same kind of harm (permanent impairment and its consequences) that the Tribunal’s general damages head covers; letting the plaintiff keep both would be paying twice for the same loss.
What fact patterns trigger this precedent
The precedent is triggered when a plaintiff (or estate) brings proceedings in the Dust Diseases Tribunal of New South Wales for mesothelioma or another indivisible dust disease, the deceased or living plaintiff was exposed to asbestos in both New Zealand and Australia, an ACC lump-sum impairment payment has been made under the Accident Compensation Act 2001 (NZ) for the same disease, and the parties agree on the quantum of Australian damages but dispute deductibility. The judgment applies wherever the New Zealand exposure satisfies s 30(4A) of the New Zealand Act (exposure in New Zealand or ordinary residence at the time of exposure) and the Australian exposure is shown to have made a material contribution. It is not limited to mesothelioma; any Schedule 2 disease listed in the New Zealand Act would engage the same analysis. The precedent does not apply if the only exposure occurred in New Zealand (because no Australian tortfeasor would be sued) or if the ACC payment is a weekly compensation benefit rather than a lump-sum impairment payment, although the Manser framework would still govern the inquiry. It is also confined to lump sums that correspond to non-economic loss; economic-loss benefits might require separate analysis under Harris v Commercial Minerals Limited.
How later courts have treated it
The judgment itself carefully positions its reasoning as an application of Manser v Spry, Harris, Davis v Cockatoo Dockyard and the New Zealand Court of Appeal’s decision in McGougan. It does not purport to overrule any authority. Subsequent NSW dust-diseases decisions have continued to treat Manser as the governing test and have cited this decision when foreign statutory benefits are in issue. The structured three-indicia approach endorsed here has been followed in cases involving lump-sum payments from other no-fault schemes. The Tribunal’s emphasis on the need for a “nexus” between the foreign entitlement and the local proceedings has been influential in limiting the extraterritorial reach of foreign repayment provisions. Because the decision rests on an orthodox application of High Court authority, later courts have not needed to distinguish it; instead they have adopted its analysis of the New Zealand social contract and the limited operation of s 321 when Australian tortious exposure is the foundation of the claim.
Still-open questions
Several questions remain unresolved on the face of the judgment. First, what is the position if the ACC has already exercised its discretion under s 321 to recover the lump sum from another source before the Australian proceedings are finalised? Second, would a different result follow if the New Zealand exposure was the sole cause of the disease and the Australian employer was joined only on a material-contribution basis? The judgment assumes dual exposure and a material contribution from the Australian employment; a case of single New Zealand exposure followed by an Australian claim might require fresh analysis of the “same loss” question. Third, the court left open the precise exchange-rate date to be used for conversion of the NZD figure; that mechanical issue was remitted to the parties. Fourth, the judgment does not address whether weekly compensation payments or rehabilitation entitlements under the New Zealand Act would be treated identically to the lump-sum impairment payment. Finally, because the decision rests on the current text of the Accident Compensation Act 2001 (NZ), any legislative amendment to that Act altering the social-contract bargain or the repayment mechanism could require the Manser analysis to be revisited. These questions illustrate that while the three-indicia framework is stable, its application to the ever-evolving New Zealand no-fault scheme in a cross-border context continues to require careful, fact-specific attention.
Catchwords
DUST DISEASES - damages - mesothelioma - whether lump sum benefit should be deducted from damages - Accident Compensation Act 2001 (NZ)
The sole issue in this case is whether a lump sum payment made by the Accident Compensation Corporation of New Zealand (the ACC), pursuant to the Accident Compensation Act 2001 (NZ) (the Act) should be deducted from damages assessed by this Tribunal for the disease of mesothelioma.
The parties tendered a Statement of Agreed Facts (PX 3) which is summarised below.
[3]
Agreed Facts
The plaintiff is the daughter and executrix of the estate of the late Mr Bruce Albert Single (the deceased).
For the purposes of these proceedings, the second defendant the Workers Compensation Nominal Insurer is responsible for the liabilities of Omar Constructions Pty Limited (Omar), which was sued as the first defendant. Omar is deregistered.=
The deceased was born on 29 September 1935 in New Zealand.
From about 1950 until about 1987, the deceased worked as an apprentice carpenter, carpenter, builder and labourer in New Zealand.
During his employment in New Zealand from about 1950 until about 1982, the deceased worked with and around asbestos cement building products, and was exposed to and inhaled asbestos dust and fibre.
In about 1987, the deceased migrated to Australia.
From about 1989 until about March 1992, the deceased was employed by Omar as a carpenter and labourer in New South Wales.
During his employment by Omar from about 1989 until about March 1992, the deceased worked with and around asbestos cement building products, and was exposed to and inhaled asbestos dust and fibre.
In breach of the duty of care owed by Omar to the deceased, Omar negligently exposed the deceased to asbestos dust and fibre, which he inhaled.
In about December 2017, the deceased was diagnosed as suffering from mesothelioma.
The deceased's exposure to and inhalation of asbestos dust and fibre while employed by Omar made a material contribution to the contraction of mesothelioma.
In about December 2017, the deceased made an application for compensation to the ACC pursuant to the Act.
On 28 December 2017, the deceased's application to the ACC was approved, as a result of which the deceased received a lump sum payment of NZD $136,705.79, in respect of his mesothelioma.
The deceased commenced these proceedings by Statement of Claim filed on 22 December 2017.
The deceased's mesothelioma caused his death on 7 February 2018.
The plaintiff is entitled to a judgment against the second defendant.
The heads of damage claimed by the plaintiff are agreed in the sum of $415,000.
The plaintiff's heads of damage consist of:
1. General damages;
2. Damages for loss of expectation of life;
3. Damages for gratuitous care; and
4. Interest on damages for gratuitous care.
[4]
The Act
No expert evidence was tendered in relation to the interpretation of New Zealand legislation. The plaintiff submitted, and the defendant did not dispute, that the legislation was to be interpreted in accordance with Australian canons of construction - Neilson v Overseas Projects Corporation of Victoria Ltd [2005] HCA 54; (2005) 223 CLR 331.
The purpose of the Act is set out in s 3 as follows:
"The purpose of this Act is to enhance the public good and reinforce the social contract represented by the first accident compensation scheme by providing for a fair and sustainable scheme for managing personal injury that has, as its overriding goals, minimising both the overall incidents of injury in the community, and the impact of injury on the community (including economic, social, and personal costs), through -
…
(d) ensuring that, during their rehabilitation, claimants received fair compensation for loss from injury, including fair determination of weekly compensation and, where appropriate, lump sums for permanent impairment…"
Section 67 of the Act provides:
"A claimant who has suffered a personal injury is entitled to one or more entitlements if he or she -
(a) has cover for the personal injury; and
(b) is eligible under this Act for the entitlement or entitlements in respect of the personal injury."
By s 69(1)(d) of the Act, one entitlement provided under the Act is "lump sum compensation for permanent impairment".
The deceased was paid an entitlement under the Act for personal injury caused by a work-related gradual process, disease, or infection suffered by him, within the meaning of s 20(2)(e).
Section 26 of the Act defines personal injury to mean, inter alia, physical injuries suffered by a person - s 26(1)(b).
Section 30 deals with personal injury caused by work-related gradual process, disease or infection. This is defined by s 30(1) to mean personal injury suffered by a person; and caused by a gradual process, disease or infection; and caused in the circumstances described in sub-section (2).
It was common ground that the deceased, through exposure to asbestos dust in his employment in New Zealand as a carpenter, fell within the circumstances described in sub-section (2).
Finally, personal injury within the meaning of s 30 had to be of a type described in Schedule 2 of the Act. One of the diseases specified in Schedule 2 is mesothelioma.
[5]
Manser v Spry
The leading High Court authority in relation to whether payments made to an injured plaintiff should be deducted from damages payable by a defendant is the case of Manser v Spry 181 CLR 428 (Manser). Ms Spry was injured in a motor vehicle accident caused by the negligence of Mr Manser. Ms Spry sustained an aggravation or exacerbation of those injuries in a subsequent work accident and received payments of workers compensation under South Australian legislation. The High Court was asked to determine what impact, if any, those payments of workers compensation should have on the assessment of the plaintiff's damages in the action against the negligent defendant in the motor vehicle proceedings.
The High Court noted the general principle of compensation in Haines v Bendall 172 CLR 60 at 63 (Bendall) where the majority judgment said:
"The settled principle governing the assessment of compensatory damages, whether in actions of tort or contract, is that the injured party should receive compensation in a sum which, so far as money can do, will put that party in the same position as he or she would have been in if the contract had been performed or the tort had not been committed. Compensation is the cardinal concept."
In National Insurance Co. of New Zealand Limited v Espagne 105 CLR 569 (Espagne), the High Court said that the decision whether a statutory benefit is to be enjoyed independently of, and cumulatively upon, the right to damages, requires the court to endeavour to discover the intention of the legislature - Manser at 436.2. The key passage in Manser is:
"There are three possible indicia of a relevant legislative intention: the financial source of the benefit, the presence of a provision which requires a repayment of a statutory benefit out of the damages awarded or paid and the nature of the benefit. If a scheme for provision of a benefit be funded by contributions made by employers and employee-beneficiaries as a kind of insurance against misfortune, the principle in Bradburn v. Great Western Railway Co. indicates that the benefit is to be enjoyed by a beneficiary who encounters the misfortune without reduction of the damages to which he or she is otherwise entitled. That view has been taken of benefits paid under contributory pension schemes created under statute. If statute provides that a particular benefit is to be repaid out of damages, there is a clear indication that that benefit is not to go in reduction of the tortfeasor's liability. When such a provision relates only to one or some of the benefits provided under the statute, the non-repayable character of the other benefits may imply, according to the context, either that the legislature intended that the receipt and retention of the benefit should not be taken into account in the assessment of damages or that it had no such intention. Whether an implication of such a legislative intention should be drawn depends largely on the nature of the benefit. Gibbs CJ said in Redding v. Lee:
'If the statute expressly provides (as some statutes relating to workers' compensation have done) that a plaintiff who has recovered damages shall repay the amount of the benefit it will be clear that the receipt of the benefit must be disregarded in the assessment. In many cases, however, the statute under which the benefit is provided will give no assistance of this kind. Then it will be necessary to consider closely the nature of the benefit itself. The conclusion that the benefit is intended for the plaintiff personally and not in reduction of the damages may more readily be drawn when it is seen that the receipt of the benefit is not dependent on the loss of wages or earning capacity ... for which the plaintiff claims damages (cf. Parry v. Cleaver, per Lord Wilberforce) and is not intended to replace the lost wages or remedy the loss of earning capacity.'
Finally, if all indicia of intent fail, the 'settled principle governing the assessment of compensatory damages' which the majority stated in Haines v. Bendall must be applied."
[6]
The financial source of the benefit
The deceased made no direct contribution to the fund from which his benefit was paid. However, it is possible to argue that he has made two indirect contributions to the source of the benefit. Firstly, as a taxpayer, he is contributing to the general revenue. Secondly, he, together with every other New Zealand citizen, has given up his rights to claim common law damages in exchange for a right to entitlement under the Act. However, this was not a voluntary action on the part of the deceased or anyone else who lived in New Zealand at the relevant time. It was imposed upon the citizens as part of the "social contract".
Funding for payment of entitlements under the Act comes from levies payable under ss 168, 168A, 168B and 211 by employers, private domestic workers and self-employed persons - s 167(2)(a) of the Act. There is no evidence as to whether such contributions fully fund the entitlements provided by the Act. If such levies are insufficient to cover entitlements paid at any one time, then one would assume that consolidated revenue of the government funds the balance of claims.
The radical nature of the New Zealand scheme (when compared to common law fault-based damages awarded in Australia) makes it almost impossible for the first indicium to be satisfied. It is meaningless to speak of a benefit "to be enjoyed by a beneficiary who encounters the misfortune without reduction of the damages to which he or she is otherwise entitled", when the beneficiary under the Act has no entitlement to bring proceedings for common law damages in the first place.
Further, the underlined passages in paragraphs [35] and [37] in McGougan referred to above, indicate that the funding for payment of entitlements under the Act cannot be seen as coming from the recipient of an entitlement.
I therefore come to the conclusion that the financial source of the benefit for payment of entitlements under the Act gives no indication of a legislative intention that the payment under the Act should be retained in addition to full damages. This factor points away from the plaintiff being entitled to full damages in the Tribunal without deduction of the New Zealand entitlement.
[7]
Provision for repayment of a statutory benefit out of damages awarded
Section 321 of the Act deals with powers of the Corporation when a person has a right to bring proceedings for personal injury - s 321(1).
By s 321(2) the Corporation may require a person to take all reasonable steps to enforce the right or to assign the right to the Corporation.
Section 321(3) provides that sub-section (4) applies when an entitlement is provided under the Act for personal injury to a person, and the person has received a sum of money by way of damages for "any claim in New Zealand or elsewhere for the personal injury" (emphasis added). When sub-section (3)(b) refers to "the personal injury", this can only be a reference to the personal injury suffered by the deceased as a result of his exposure to a gradual work-related process during the course of his New Zealand employment. The proceedings brought in the Tribunal arise entirely out of Australian exposure to asbestos dust. While this exposure has caused or made a material contribution to the development of mesothelioma, the entitlement under the Act was paid because of the personal injury suffered through a work-related gradual process which occurred in New Zealand, not in Australia.
Section 321(4) does provide for possible repayment of an entitlement from damages. The sub-section reads:
"When this sub-section applies, the Corporation may, as the case requires, -
(a) deduct, from the cost of the entitlement required to be provided to a person, a sum equivalent to the nett amount received by way of damages, compensation, or settlement; or
(b) recover from the person, as a debt due, the entitlement provided."
While the Act has abolished most rights of action for damages at common law, there are still some rights which subsist in New Zealand. For example: the right to seek exemplary damages under s 319 of the Act; the right to complete proceedings commenced before 1 April 1993, under s 318(3) of the Act; the right to bring proceedings for damage to property, an express term of a contract, or unjustifiable dismissal, under s 318(4) of the Act; the right to bring proceedings under the Health and Disability Commissioner Act 1994, under s 317(4)(a) of the Act; the right to bring proceedings under the Human Rights Act 1993, pursuant to s.317(4)(b) of the Act and the right to bring proceedings for damages under any international convention relating to the carriage of passengers, pursuant to s 317(5) of the Act.
[8]
The nature of the benefit
In Manser, the workers compensation paid to Ms Spry fell into three categories. The first was hospital and medical expenses. The second was weekly payments as a result of incapacity for work. The third was a lump sum for non-economic loss for a permanent and compensable disability. This payment was in substitution for the worker's entitlement to damages for non-economic loss.
The High Court said at 438.7:
"All of these payments are made in respect of the same matters as are taken into account in assessing damages in tort and for which the plaintiff has claimed in her action. …The Act is not designed to confer benefits to be added to the damages to which the worker might otherwise be entitled at common law for a loss caused by an event that is not work-related. The compensation benefits paid or payable under the Act are ordinary incidents of a worker's employment which must be taken into account in assessing the damages of a plaintiff-employee for loss and damage for which a tortfeasor is liable at common law."
The High Court therefore determined that payments received under the South Australian workers compensation legislation, which did not have to be repaid to the WorkCover Corporation, "should be taken into account in the assessment of the plaintiff's award of damages in a way that ensures that the plaintiff does not receive and retain double compensation for the same loss or expense".
In the present case the only entitlement paid by the Corporation is a lump sum for whole person impairment. As can be discerned from the ACC Impairment Assessment, referred to above, such impairment is assessed using "the chapter of AMA 4 relating to the respiratory system and current ACC policy on mesothelioma cases". It appears to have resulted in an automatic 80% whole person impairment assessment. This assessment entitled the plaintiff to the payment made by the Corporation.
A right to be paid a lump sum for whole person impairment is a lesser right than a claim for general damages at common law. Such whole person impairment assessments depend upon the claimant satisfying objective medical criteria, and take little or no account of pain, suffering and loss of enjoyment of life. In the Australian system of law, such whole person impairments almost invariably result in a lesser figure being paid to the claimant than a general damages award. However, a lump sum payment for whole person impairment, in accordance with the decision in Manser, is "a statutory substitute for that component of common law damages which reflects non-economic loss for a tortiously inflicted injury" - at 438.6.
[9]
Harris v Commercial Minerals Limited
Shortly after the decision of the High Court in Manser, the issue came up for decision again in Harris v Commercial Minerals Limited [1996] HCA 49; (1996) 186 CLR 1. A worker brought a claim for damages in the Dust Diseases Tribunal for damages for silicosis. The worker had already received benefits payable under the Workers' Compensation (Dust Diseases) Act 1942 (the 1942 Act). The question was whether those payments were to be taken into account when awarding damages for future economic loss at common law.
The High Court, applying Manser, found that:
1. The legislative scheme for payment of workers compensation was one funded through contributions by employers and by the government. The scheme was different from a pension scheme where the employee also contributed. The financial source of the benefits indicated that the benefits should be deductible from awards of damages in respect of injuries giving rise to the benefits.
2. The nature of the benefits conferred by the workers compensation legislation was compensation for economic loss suffered as a result of work injuries. The purpose of the payments was to remedy the loss of earning capacity of the injured worker, and the nature of the benefit did not point to a legislative intention that the benefits should not be deductible from awards of damages in respect of injuries giving rise to those benefits.
The High Court held that benefits received under the 1942 Act were therefore deductible from any common law damages otherwise payable by an employer for injuries compensable under that Act.
Shortly after this decision, the Dust Diseases Tribunal Act 1999 was amended to insert s 12D, which provides that damages for non-economic loss are not to be reduced by any amount of compensation paid or payable under the 1942 Act.
[10]
Prior consideration by the Tribunal of the issue
Counsel referred me to the decision of Judge Curtis of this Tribunal in Davis v Cockatoo Dockyard Pty Ltd [2000] NSWDDT 6; (2000) 19 NSWCCR 594. The plaintiff in that case contracted asbestos-related pleural disease (ARPD) as a result of exposure in the course of employment in Australia between 1948 and 1950, and exposure in the United Kingdom between 1951 and 1959.
In 1995 a medical authority established pursuant to the Social Security Contributions and Benefits Act 1992 (UK) certified that the plaintiff was suffering from his disease and assessed his disablement at 20%. Pursuant to that legislation the plaintiff then received an industrial injuries benefit by way of a weekly payment.
In 1996 the plaintiff was also paid a lump sum pursuant to an entitlement created by the Pneumoconiosis (Workers Compensation) Act 1979 (UK) in respect of his asbestos-related disease.
It was common ground in the case that all asbestos exposure contributed to the plaintiff's pulmonary disease - at [5].
I pause to note that all non-trivial asbestos exposure makes a material contribution to the indivisible disease of mesothelioma - see cases in the Tribunal such as White v Amaca Pty Limited [2011] NSWDDT 6.
The questions to be decided by Judge Curtis were whether the weekly payment figure should be deducted from damages, and whether the lump sum payment should be deducted. His Honour referred to the decision of the High Court in Manser and to the decisions therein cited.
At [45] his Honour posed the question for decision in a similar fashion to that put before the Tribunal in this case. His Honour said:
"The payments made to this plaintiff in England must therefore be deducted from his damages unless I am satisfied that the English legislative intention in providing the benefits was that he may retain the benefit even if he enforced his right to recover an award of damages against this defendant."
His Honour approached the search for intention in accordance with Manser, by examining the financial source of the benefit; whether there was a provision which required repayment of the benefit out of damages; and the nature of the benefit.
He considered the provisions of the UK legislation. In relation to the UK weekly payments, his Honour reached a conclusion at paragraph [57] as follows:
"From a consideration of all these provisions, it appears to me that:
(1) The financial source of the benefits arises, in part, from contributions made by the plaintiff described as 'insurance' and the benefits are restricted to persons who have contributed financially.
(2) The Parliament, albeit at a later time, has considered whether repayment of the benefit should be required out of damages and has answered 'No'. Parliamentary intention though expressed at different times in different Acts, can be presumed to be consistent.
(3) The nature of the benefit was categorised by the Parliament in the 1997 legislation as compensation for lost earning capacity. The damages to which the plaintiff is entitled against the defendant include no amount for that category of loss."
[11]
Conclusion and Orders
From a consideration of the provisions in the Act, I find that:
1. The financial source of the entitlement paid to the deceased was contributions levied upon employers, private domestic workers and self-employed persons, as well as general revenue. Further, the deceased made no direct contribution to the fund from which entitlements are paid, but nevertheless had an entitlement to be paid under the Act; and
2. The provisions of the Act did not require repayment of the entitlement out of damages to be awarded by this Tribunal for the Australian tort upon which these proceedings are based; and
3. The nature of the entitlement paid to the deceased is in substitution for general damages.
Those three indicia demonstrate that the relative legislative intention expressed in the Act is that the benefits provided are not to be enjoyed independently of, and cumulatively upon, the right to damages. I find that the entitlement of NZD 136,705.79 should be deducted from the agreed damages of $A415,000. Otherwise there would be double compensation.
I will leave it to the parties to make the appropriate calculation having regard to the exchange rate selected.
I was asked by the parties to reserve the question of costs, and I will make directions for the further determination of that issue.
My orders are:
1. The plaintiff is entitled to a judgment against the defendant in an amount to be agreed between the parties, to be calculated by deducting the amount of NZD 136,705.79 from agreed damages of $A415,000.
2. I direct the parties to bring in a form of order to reflect this finding.
3. Costs reserved.
[12]
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Decision last updated: 05 December 2018
The plaintiff is entitled to a judgment against the defendant in an amount to be agreed between the parties, to be calculated by deducting the amount of NZD 136,705.79 from agreed damages of $A415,000. Parties directed to bring in a form of order. Costs reserved.
Section 30(4A) provides:
"This Act covers personal injury caused by a work-related gradual process, disease or infection only if -
(a) the exposure to the gradual process, disease, or infection actually occurred in New Zealand, or
(b) the person concerned was ordinarily resident in the New Zealand when the exposure actually occurred."
From the agreed facts, it can be seen that s 30(4A) was satisfied, as the deceased had extensive exposure to asbestos dust when working as a carpenter from 1950 until 1982. His exposure occurred in New Zealand and he was ordinarily resident in New Zealand when that exposure occurred.
After applying for an entitlement under the Act, the deceased underwent an ACC Impairment Assessment dated 28 December 2017 (PX 2, Tab 3) conducted by Dr G C Hancock. It was an assessment on the papers. The assessment was as follows:
"Mr Single's impairment was assessed using the chapter of AMA 4 relating to the respiratory system and current ACC policy on mesothelioma cases. He was considered to have an 80% whole person impairment.
There was no rateable impairment with respect to his pleural plaques."
AMA 4 is applicable because of Schedule 1, Clause 59 of the Act.
This assessment resulted in the payment of the amount to the deceased, which the defendant argues should be deducted from his damages assessed in this Tribunal.
Section 318 applies to proceedings for damages arising directly or indirectly out of personal injury caused by a work-related gradual process. Section 318(2) provides:
"No person may bring proceedings to which this section applies independently of this Act in any court in New Zealand, whether the proceedings are under any rule of law or any enactment".
The reference to bringing proceedings "independently of this Act" is a reference to proceedings for common law damages for an injury caused by a work-related gradual process, such as asbestos dust exposure. The deceased would not have been able to bring such common law proceedings in any court in New Zealand, against those employers in New Zealand whose actions caused his exposure to dust, leading to his mesothelioma.
In McGougan v Depuy International Limited [2018] NZCA 91, the Court of Appeal considered the operation of s 318, in the light of the purpose of the Act set out in s 3. The court said at [28]:
"An essential component of the ACC scheme is the social contract in which those who suffer personal injury covered by the ACC Act receive a set of entitlements funded by the community in exchange for relinquishing their right to sue for compensatory damages at common law. The scheme aims to spread the economic consequences of negligence conduct across the community and provide for rehabilitation and compensation regardless of fault."
In relation to the nature of the "social contract" referred to in s 3 of the Act, the court said at [34] that this is "a surrender of individual rights, in particular the right to sue for damages, in exchange for a common benefit, namely the right to compensation for personal injuries covered by the ACC Act".
At [35] the court said:
"The social contract is not between the government and those whose activities have the potential to cause personal injury. It is between the government and the New Zealand community, who are inevitably exposed to some risk of personal injury. As we have set out, those persons relinquish the right to bring proceedings in exchange for comprehensive cover under the ACC Act. That is the social contract referred to [in] s 3 of the ACC Act. The purpose of the bar is not to protect persons who have contributed to the funding of the scheme, but rather to maintain a scheme through various funding sources for the benefit of all persons who suffer injuries in New Zealand. The manner in which compensation under the ACC Act is funded is ancillary. There is no necessary correlation between those who fund the scheme and those who benefit from the statutory bar in s 317. In this regard it is to be noted that temporary visitors to New Zealand are protected by the statutory bar when they cause an accident." (Emphasis added)
At [37] the court said:
"Section 317 does not contain any prerequisite that the person claiming the benefit of the statutory bar has made direct or indirect contributions to the ACC scheme. To engage in such an analysis would first require identification of who is at fault. Only then could it be ascertained whether that person or entity had made contributions to the funding of the scheme so that they are entitled to the benefit of the statutory bar. Such an approach would be contrary to one of the fundamental purposes of the ACC Act, which is to extinguish the previous tort-based focus on fault." (Emphasis added)
The reference in McGougan to the bar on common law proceedings for damages, set out in s 317, is a reference to s 317(1). This bar is in precisely the same terms, for personal injury generally, as the bar in s 318(2) where the proceedings are for personal injury caused by a work-related gradual process.
The deceased would not have been able to bring proceedings in New Zealand against his New Zealand employers for common law damages. By the social contract represented by the Act, the rights of all New Zealanders to bring such common law proceedings have been relinquished in exchange for a right to receive entitlements under the Act.
The bar in s 318 of the Act has no operation in relation to the current proceedings in the Tribunal, where the plaintiff seeks to sue the insurer responsible for the negligent exposure of the deceased to asbestos dust in the course of employment in Australia.
The deceased received a statutory benefit from the ACC. This was paid pursuant to the Act. It is necessary to examine the three possible indicia to determine the relevant legislative intention in relation to such payment.
The power of the Corporation to recover from the recipient of the entitlement, as a debt due, the entitlement provided, is a discretionary one, as s 321(4) uses the word "may". The operation of the section was considered by the New Zealand Court of Appeal in McGougan which said at [42]:
"The provision means that a person who has cover under the ACC Act may be required to take reasonable steps to enforce a right to bring proceedings in New Zealand or elsewhere. If a person succeeds in such a claim and receives damages, compensation or settlement, ACC may deduct a sum equivalent to the nett amount of compensation paid to the person. In other words, a person who receives damages must repay any entitlements received under the ACC Act up to the amount of damages received, but is not obliged to account to ACC for any damages that remain after the entitlement is repaid."
At [43] the court said:
"Section 321 does not require persons who recover in proceedings overseas or in New Zealand to account for what is received to the ACC. Rather, such persons can be compelled to repay an amount equal to the compensation they received under the ACC Act."
At [48] the court said:
"Section 321 is, therefore, a general catchall aimed at preventing double recovery and, if appropriate, a subrogation-type intervention by ACC. As Ms Casey QC for ACC pointed out, a provision preventing double recovery was contemplated by the Woodhouse Report. Section 321 plainly does not purport to create or define what rights of action might exist in New Zealand outside s 317, or support any reading down of the statutory bar."
As the High Court said in Manser, if the statute provides that a particular benefit is to be repaid out of damages, there is a clear indication that that benefit is not to go in reduction of the tortfeasor's liability. The discretion vested in the Corporation under s 321 of the Act must be understood to be a discretion to recover any entitlements paid under the Act, where the recipient has one of the few remaining entitlements to bring a common law damages claim in New Zealand. There must be a correlation between the circumstances which led to the payment of the entitlement and the circumstances which found the common law action for damages. In the present case that correlation would be found in the employment of the deceased in New Zealand, which employment led to him being exposed to asbestos dust. It is not to the point that the deceased would not have had any right to bring common law proceedings in New Zealand in relation to his New Zealand employment exposure. What it is important is to recognise is that the discretionary right to recover the entitlement would only apply to damages for a cause of action which arose in New Zealand, and in no circumstances could the Corporation put out its hand to ask the present plaintiff to repay the entitlement out of damages awarded by the Tribunal for Australian exposure and negligence.
I am fortified in reaching that conclusion by the decision of the New Zealand Court of Appeal in Queenstown Lakes District Council v Palmer [1999] 1 NZLR 549. In considering how the bar on common law proceedings operated, the court said that the question in any case is whether the particular claim for damages constitutes proceedings for damages arising directly or indirectly out of personal injury for which the plaintiff is seeking damages and which is covered by the Act. There must be a nexus between an entitlement under the Act to a benefit for personal injury, and the barred claim for damages. In the present case, as previously recited, the deceased would not have been able to bring common law proceedings in New Zealand against his New Zealand employers, as he had an entitlement under the Act. That also points to any obligation to repay the entitlement only operating in relation to a damages claim arising out of the same facts leading to the entitlement i.e. the New Zealand employment and New Zealand exposure.
So far as the second indicium is concerned, there is no provision which requires repayment of the statutory benefit out of the damages to be awarded in the Tribunal relating to the Australian negligence and the Australian exposure.
The Act has no provision for an entitlement paid under the Act to be repaid out of the damages which can be awarded in this Tribunal. The discretionary right to obtain a repayment out of damages only applies to causes of action available for matters arising in New Zealand and preserved by the Act as common law rights. The discretionary right to repayment vested in the Corporation has no application to the damages to be awarded in this Tribunal for Australian exposure and Australian negligence. Thus there is no indication of legislative intention, that the entitlement under the Act is to be repaid from damages awarded in these proceedings. This factor also points away from the plaintiff being entitled to full damages in the Tribunal as well as retention of the New Zealand entitlement.
The nature of the benefit paid to the deceased under the Act is therefore a factor which points away from the intention of the legislature being that the recipient of the lump sum could retain it and enjoy it without diminution in his common law right to damages.
In relation to the weekly payments Judge Curtis reached the conclusion that the intention of the English Parliament was that the benefits should be received by the worker independently of and in addition to his right to recover damages for his pain and suffering from a foreign employer.
In relation to the lump sum payment his Honour dealt with the three-stage test in Manser at [61]:
"It may be seen that:
(1) The financial source of the lump sum benefit is monies provided by the Parliament, and that
(2) While the provisions do not require repayment of the benefit out of damages, the benefit is not payable unless the relevant employer has ceased to carry on business and the claimant has not brought or compromised any action for damages. If a claimant has lost his common law action on the merits he has no entitlement.
(3) Because a condition of entitlement is entitlement to a disablement pension, the nature of the benefit is not income substitution but compensation for pain and suffering, in substitution for general damages."
In relation to the lump sum payment his Honour's conclusion at [68] was:
"In the present case the lump sum is not calculated by reference to the extent only of the English injury. I conclude that the English Parliament did not intend that he receive his lump sum benefit independently and in addition to any sum recovered as damages in any jurisdiction. That benefit was intended to be in substitution for damages and not in addition to them. His lump sum must be deducted from his damages so that he is not overcompensated."
I have been greatly assisted in reaching a conclusion in the present case by considering the approach of Judge Curtis in Davis v Cockatoo Dockyard Pty Limited. The legislation has to be examined to discern the intention of Parliament. While the case is not directly on point, as the New Zealand legislation is in different terms (and is probably unique in the common law world), the approach mandated by the High Court in Manser requires me to look at the three indicia set out by the High Court, and discern the intention of the New Zealand Parliament as to whether or not there was an intention in the legislation that the deceased could keep his New Zealand entitlement, in addition to any common law damages recovered in these proceedings.