FRENCH CJ, CRENNAN AND BELL JJ. Section 12(2) of the Civil Liability Act 2002 (NSW) ("the Liability Act") directs a court, when awarding damages relating to the death of or injury to a person, to disregard the amounts (if any) by which the claimant's gross weekly earnings would, but for the injury or death, have exceeded three times the amount of average weekly earnings at the date of the award ("the s 12(2) limitation"). The s 12(2) limitation applies to awards of damages for past and future economic loss due to the deprivation or impairment of earning capacity, for past economic loss due to loss of earnings, and for "the loss of expectation of financial support". The latter expression is apt to describe an award of damages under the Compensation to Relatives Act 1897 (NSW) ("the Relatives Act"). The issue presented by the appeal is whether, in the case of an award of damages for the loss of expectation of financial support, the s 12(2) limitation is to be construed as applying to the deceased's gross weekly earnings.
Background
The appellant is the widow of the late Mr Craig Taylor. Mr Taylor was killed when an awning outside a shop collapsed on him. The appellant commenced proceedings in the Supreme Court of New South Wales against the first to sixth respondents claiming damages under ss 3 and 4 of the Relatives Act. The action is a representative proceeding brought for the benefit of the appellant and any entitled children of the deceased.
The deceased was a land surveyor in private practice. It was accepted for the purpose of present proceedings that had the deceased lived he would have earned income substantially in excess of three times the amount of average weekly earnings. The appellant claims damages for the loss of benefits that she and the children expected to receive had the deceased lived, derived from his personal exertion, investment, creation and maintenance of capital assets and services. No component of the damages claimed is based upon any loss of the appellant's, or the children's, earnings.
The trial of the appellant's representative action is yet to take place. With the consent of the parties, the primary judge (Garling J) agreed to the separate determination of one question:
"Insofar as the [appellant] claim[s] damages pursuant to ss 3 and 4 of the Compensation to Relatives Act 1897, is any award of damages limited by the operation of s 12(2) of the Civil Liability Act 2002?"
Garling J answered the separate question adversely to the interests of the appellant, holding that insofar as the damages claimed include damages for the loss of an expectation of financial support provided by the deceased, the court is to disregard the amount (if any) by which the deceased's gross weekly earnings would (but for his death) have exceeded an amount that is three times the amount of average weekly earnings at the date of the award.
The appellant appealed by leave to the Court of Appeal of the Supreme Court of New South Wales (McColl, Basten and Hoeben JJA). By majority (McColl JA, Hoeben JA agreeing) the appeal was dismissed. On 6 September 2013 the appellant was granted special leave to appeal. For the reasons to be given, the appeal should be allowed and the separate question answered in the negative.
The statutory scheme
Section 12 of the Liability Act, relevantly, provides:
"(1) This section applies to an award of damages:
(a) for past economic loss due to loss of earnings or the deprivation or impairment of earning capacity, or
(b) for future economic loss due to the deprivation or impairment of earning capacity, or
(c) for the loss of expectation of financial support.
(2) In the case of any such award, the court is to disregard the amount (if any) by which the claimant's gross weekly earnings would (but for the injury or death) have exceeded an amount that is 3 times the amount of average weekly earnings at the date of the award."
Section 12 is in Pt 2 of the Liability Act, which governs the award of "Personal injury damages". That phrase is defined to mean damages that relate to the death of or injury to a person. Part 2 applies to the award of personal injury damages regardless of whether the claim is brought in tort, in contract, under statute or otherwise. Damages awarded under the Relatives Act for the injury occasioned by the death of the deceased are personal injury damages to which Pt 2 applies. A court cannot award damages contrary to Pt 2.
"Claimant" is not defined in the Liability Act. As enacted, s 3 in Pt 1 of the Liability Act defined a number of terms used in Pt 2. These included "claimant", which was defined to mean "a person who makes or is entitled to make a claim for personal injury damages". Section 10 in Pt 2 of the Liability Act as enacted precluded a court from awarding damages to a claimant contrary to Pt 2. The Civil Liability Amendment (Personal Responsibility) Act 2002 (NSW) effected extensive amendments to the Liability Act, inserting Parts dealing with negligence, mental harm, proportionate liability, the liability of public and other authorities, intoxication, self-defence and recovery by criminals, good samaritans, volunteers, and apologies. New sections were inserted in Pt 2 dealing with damages for loss of superannuation entitlements, tariffs for damages for non-economic loss, and structured settlements. Defined terms relating to personal injury damages were removed from Pt 1 and some were inserted in s 11 in Pt 2. The word "claimant" then also appeared in Pt 5, which dealt with the liability of public authorities. The definition of "claimant", which it will be recalled was confined to persons making, or who were entitled to make, a claim for personal injury damages, was repealed. Section 10, which precluded the award of damages to a claimant otherwise than in accordance with Pt 2, was also repealed. Section 11A(3) was inserted in Pt 2 and precluded the court from awarding damages contrary to the Part. Nothing in the structure of the Act or the legislative history suggests that the repeal of the definition was intended to alter the meaning of "claimant" in s 12(2) from its ordinary meaning of a person who makes or is entitled to make a claim.
Loss of expectation of financial support
The only personal injury damages that may be characterised as compensation for the loss of expectation of financial support within the meaning of s 12(1)(c) are damages under the Relatives Act.
The Relatives Act is a derivative of the Fatal Accidents Act 1846 (UK) (9 & 10 Vict c 93), commonly referred to by the name of its proponent as Lord Campbell's Act. The Relatives Act gives a right of action against a person whose wrongful act, neglect or default caused the death of another in such circumstances as would have entitled the deceased to maintain an action and recover damages. The action is brought by and in the name of the executor or administrator and is for the benefit of specified classes of relatives of the deceased. Where there is no executor or administrator or where the executor or administrator does not bring an action under the Relatives Act within six months of the death, the action may be brought by any of the relatives entitled to benefit by the proceedings.
In a Relatives Act action the jury, or, where the action is tried without a jury, the judge, is to assess damages "proportioned to the injury resulting from such death to the parties respectively for whom and for whose benefit such action is brought". This somewhat imprecise statutory formulation has acquired a well-settled meaning as the result of judicial exegesis. From shortly after the enactment of Lord Campbell's Act it was determined that no component of damages in the statutory action was to be awarded by way of solatium for injury to the feelings of the relatives. Damages are compensation for pecuniary loss, the assessment being "a hard matter of pounds, shillings and pence". Barwick CJ explained the principle in contemporary language in Ruby v Marsh:
"[Q]uite clearly, the damages, the right to which the statute gives, are to compensate for the loss by death of the financial support reasonably expected to have been given by the deceased, had he continued to live. Thus the situation in relation to that financial support, or to its expectation as at the date of death, will be definitive of the loss which has been suffered." (emphasis added)
It is the loss of the chance of obtaining a financial benefit from the continuance of the life of the deceased that is the subject of the action. The money value of the injury occasioned by the death is the product of the loss of the expectation of material benefits less any gains accruing from the death. The assessment of the former takes into account not only the expectation of support derived from the deceased's income and capital but also the value of any services that the deceased would have provided had life continued. A surviving spouse (or other eligible relative) may reasonably choose to give up or alter his or her employment in order to provide the services that were formerly provided by the deceased. One means of valuing the loss of the expectation of the services in such a case is to have regard to the claimant's lost earnings. In some cases the deceased's services may have generated income directly in the hands of a Relatives Act claimant and the loss of that income may be taken into account in estimating the pecuniary injury resulting from the death.
The paradigm Relatives Act claim, styled a "dependency" claim, has been said to be one brought on behalf of the wife for the loss occasioned by the death of her husband, the breadwinner. In De Sales v Ingrilli, Gleeson CJ noted that it is now common for both parties to a legal or de facto marriage to have income‑producing occupations and for each to have an expectation of obtaining financial advantage from the other. In a marriage in which each partner is in paid employment the provision of household services and the responsibility for raising children will often be shared. The injury occasioned by the wrongful death of either spouse in such a marriage is likely to include the loss of his or her services. That loss may come more frequently to be estimated by reference to a reduction in the claimant spouse's income occasioned by the reasonable need to assume increased parenting responsibilities.
The constructions at first instance and in the Court of Appeal
The primary judge identified the purpose of s 12 of the Liability Act as being "to limit claims for tortiously caused damage, and to restrict financial loss claims for high earning individuals". His Honour considered that the typical or paradigm Relatives Act claim is one arising out of the death of the principal income earner. His Honour acknowledged that there may be cases in which the income of the claimant is relevant to the assessment but he considered such cases to be "very rare indeed". His Honour determined that it is consonant with the purpose of the scheme to apply the s 12(2) limitation to the deceased's income. He held that in order to give the provision operative effect in the case of an award for the loss of expectation of financial support, "claimant" in s 12(2) is to be construed as meaning "the deceased upon whose earnings the claim depends".
The primary judge's construction reads s 12(2) as if it provided:
"In the case of any such award, the court is to disregard the amount (if any) by which:
(a) in the case of an injury, the claimant's; or
(b) in the case of death, the deceased's
gross weekly earnings would (but for the injury or death) have exceeded an amount ..."
In the Court of Appeal McColl JA, writing for the majority, said that the ordinary meaning of "claimant" is "someone who makes a claim" or "[o]ne who makes or enters a claim; one who has a claim upon anything". Her Honour observed that the person killed by the defendant's wrongful conduct giving rise to a Relatives Act claim is neither the person who makes the claim nor the person who is entitled to do so. The Court of Appeal was unanimous in concluding that the literal meaning of s 12(2) does not apply the limitation to the gross weekly earnings of the deceased.
McColl JA considered that the primary judge was right to find that a literal construction of s 12(2) produces a result that is inconsistent with the provision's purpose. Her Honour proceeded to consider the circumstances in which a court may construe a provision as if the provision contains additional words to give effect to its evident purpose. Her Honour concluded that the court may only do so if three conditions stated by Lord Diplock in Wentworth Securities Ltd v Jones and an additional condition are satisfied. Her Honour was satisfied that all four conditions are met in the case of s 12(2) of the Liability Act. Her Honour's conclusion took into account three other statutory schemes that impose a limitation on the award of damages for injury or death calculated by reference to earnings: s 9 of the Health Care Liability Act 2001 (NSW) ("the HCL Act"); s 151I of the Workers Compensation Act 1987 (NSW) ("the WC Act"); and s 125 of the Motor Accidents Compensation Act 1999 (NSW) ("the MAC Act").
Section 151I(1) of the WC Act, which is contained in Div 3 of Pt 5, dealing with modified common law damages, directs the court in awarding damages to "disregard the amount (if any) by which the injured or deceased worker's net weekly earnings would (but for the injury or death) have exceeded" a specified amount (emphasis added). The section applies to awards of damages including for the loss of expectation of financial support.
Section 125 of the MAC Act applies to an award for past or future economic loss due to loss of earnings, or the deprivation or impairment of earning capacity, or for the loss of expectation of financial support. Section 125(2) of the MAC Act provides that "[i]n the case of any such award, the court is to disregard the amount (if any) by which the injured or deceased person's net weekly earnings would (but for the injury or death) have exceeded $2,500" (emphasis added).
Section 9 was in Pt 2 of the HCL Act, which governed the award of damages in health care claims. Part 2 of the HCL Act was repealed by the Liability Act. McColl JA observed that s 12 of the Liability Act appears to have been transposed from s 9 of the HCL Act. Her Honour considered that the omission of a reference to the deceased's gross weekly earnings in s 12 of the Liability Act was a clear drafting error.
The first of Lord Diplock's conditions requires the identification of the precise purpose of the provision. McColl JA said that s 12 of the Liability Act and s 125 of the MAC Act evince the same legislative purpose. Her Honour adopted Hodgson JA's description of the latter as demonstrating:
"a clear legislative intention that there be an effective limit put on claims by dependants of persons whose efforts would have produced very high financial benefits to those dependants".
The second of Lord Diplock's conditions requires satisfaction that the drafter and the Parliament inadvertently overlooked an eventuality that must be dealt with if the provision is to achieve its purpose. McColl JA considered it plain the drafter of s 9 of the HCL Act had failed to appreciate the irrelevance of the claimant's earnings to a damages award falling within the equivalent to s 12(1)(c) and that this omission had been carried over to s 12(2).
The third of Lord Diplock's conditions requires the court to identify the words that the legislature would have included in the provision had the deficiency been detected before its enactment. McColl JA was satisfied that had the deficiency been identified the legislature would have included the words "or deceased person's" after the word "claimant's" consistently with the drafting of s 125 of the MAC Act and s 151I of the WC Act.
The fourth condition which McColl JA held to be necessary of fulfilment before a court is justified in reading words into a provision is taken from Dawson J's statement of the principles (dissenting in the result) in Mills v Meeking. His Honour said that the modification "must be consistent with the wording otherwise adopted by the draftsman".
McColl JA's construction reads s 12(2) as if it provided:
"(2) In the case of any such award, the court is to disregard the amount (if any) by which the claimant's or deceased person's gross weekly earnings would (but for the injury or death) have exceeded an amount that is 3 times the amount of average weekly earnings at the date of the award." (emphasis of McColl JA)
Before the primary judge and the Court of Appeal there was an issue as to whether damages awarded in a Relatives Act action are personal injury damages within Pt 2 of the Liability Act. The appellant submitted that the damages in such a claim are not damages that relate to personal injury or death. That issue was correctly decided against her and is not challenged on the appeal. The first to fourth and sixth respondents' contention below was that the phrase "loss of expectation of financial support" in s 12(1)(c) refers to damages awarded in a Relatives Act action.
The primary judge and the Court of Appeal proceeded upon the correctness of that assumption. The primary judge and McColl JA each adopted a purposive construction requiring that s 12(2) be read as if it contained additional words. Their Honours differed with respect to the words to be added with the result that they gave differing operation to the s 12(2) limitation. McColl JA did not explain the basis of her satisfaction that the addition of the words "or deceased person's" after "claimant's" in s 12(2) is consistent with the language otherwise used by the drafter. However, it will be observed that unlike the construction proposed by the primary judge, her Honour's construction does not result in the s 12(2) limitation having no application to the claimant's gross weekly earnings in a Relatives Act action in which the court has regard to those earnings.
The submissions
The appellant submits that McColl JA erred by not giving s 12(2) its ordinary grammatical meaning. She submits that her Honour exceeded the proper limits of statutory implication by re-writing s 12(2). The submission is supported by reference to Spigelman CJ's analysis of the principles in R v Young and R v PLV. Aspects of his Honour's analysis were rejected by the Victorian Court of Appeal in Director of Public Prosecutions v Leys. The appellant submits that McColl JA erred in following Leys.
The first to fourth respondents and the sixth respondent, the active respondents to the appeal, submit that consideration of the principles stated in Wentworth Securities and the more recent discussion of those principles in Young and Leys is a distraction. In the first to fourth respondents' submission, the Wentworth Securities restrictions on "reading in" words to a statutory text apply in a case in which the court is asked "to add words that are quite beyond any tenable view of the contextual meaning". They contend that "claimant" in s 12(2) has the contextual meaning of "the impaired person": an expression that accords with the conceptual basis of the three awards that are the subject of the s 12(2) limitation.
The sixth respondent in written submissions supported McColl JA's construction of s 12(2), contending that the addition of the words "or deceased person's" after "claimant's" is the correction of an obvious drafting error of a kind that does not invoke Lord Diplock's conditions.
Before addressing these submissions, it is necessary to refer to a contention, not agitated below, respecting the scope of s 12(1)(c). The active respondents contend that the words "expectation of financial support" in s 12(1)(c) refer to the expectation of benefit to be derived from the deceased's income or capital ("direct financial support") and not to the expectation of other pecuniary benefit in a Relatives Act award. On this analysis the s 12(2) limitation can have no application to an award of damages under s 12(1)(c) unless the words "claimant's gross weekly earnings" are given an extended, ungrammatical meaning.
On the hearing of the appeal the active respondents embraced a further construction of s 12(2) posited on acceptance of s 12(1)(c) as being confined to direct financial support. The phrase "the claimant's gross weekly earnings", they submit, is to be understood as meaning the gross weekly earnings on which the claimant relies.
The active respondents differ on the question of whether, in a Relatives Act award in which the court has regard to the claimant's earnings, the s 12(2) limitation applies. The sixth respondent submits that s 12(1)(b) would engage the s 12(2) limitation in such a case. The submission misconceives the basis of a claim for economic loss under s 12(1)(b). A claimant who reasonably chooses to give up, reduce or change his or her employment in order to perform the services previously performed by the deceased is not awarded damages for the deprivation or impairment of earning capacity. The first to fourth respondents are correct to acknowledge that, on the construction of s 12 for which they contend, the s 12(2) limitation has no application to an award under the Relatives Act in which a component of the loss is calculated by reference to the claimant's gross weekly earnings.
The principles
In Young Spigelman CJ suggested that the authorities do not warrant the court supplying words in a statute that have been "omitted" by inadvertence per se. Construing the words actually used by the legislature in "their total context", Spigelman CJ suggested that the process of construction admits of reading down of general words or giving the words used an ambulatory operation. His Honour cited Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation as an instance of the former and Bermingham v Corrective Services Commission (NSW) as an instance of the latter. In R v PLV his Honour expanded on his analysis in Young, observing:
"The authorities which have expressed the process of construction in terms of 'introducing' words to an Act or 'adding' words have all, so far as I have been able to determine, been concerned to confine the sphere of operation of a statute more narrowly than the full scope of the dictionary definition of the words would suggest. I am unaware of any authority in which a court has 'introduced' words to or 'deleted' words from an Act, with the effect of expanding the sphere of operation that could be given to the words actually used. … There are many cases in which words have been read down. I know of no case in which words have been read up." (emphasis in original)
In Leys the Victorian Court of Appeal was critical of Spigelman CJ's characterisation of purposive construction as a process of construing "the words actually used" (emphasis in original). Their Honours said that the process requires the court to determine whether the modified construction is reasonably open in light of the statutory scheme and against a background of the satisfaction of Lord Diplock's three conditions. Their Honours questioned the utility of the distinction between "reading up" and "reading down" and rejected the proposition that a purposive construction may not result in an expanded operation of a provision.
Consistently with this Court's rejection of the adoption of rigid rules in statutory construction, it should not be accepted that purposive construction may never allow of reading a provision as if it contained additional words (or omitted words) with the effect of expanding its field of operation. As the review of the authorities in Leys demonstrates, it is possible to point to decisions in which courts have adopted a purposive construction having that effect. And as their Honours observed by reference to the legislation considered in Carr v Western Australia, the question of whether a construction "reads up" a provision, giving it an extended operation, or "reads down" a provision, confining its operation, may be moot.
The question whether the court is justified in reading a statutory provision as if it contained additional words or omitted words involves a judgment of matters of degree. That judgment is readily answered in favour of addition or omission in the case of simple, grammatical, drafting errors which if uncorrected would defeat the object of the provision. It is answered against a construction that fills "gaps disclosed in legislation" or makes an insertion which is "too big, or too much at variance with the language in fact used by the legislature".
Lord Diplock's three conditions (as reformulated in Inco Europe Ltd v First Choice Distribution (a firm)) accord with the statements of principle in Cooper Brookes and McColl JA was right to consider that satisfaction of each could be treated as a prerequisite to reading s 12(2) as if it contained additional words before her Honour required satisfaction of a fourth condition of consistency with the wording of the provision. However, it is unnecessary to decide whether Lord Diplock's three conditions are always, or even usually, necessary and sufficient. This is because the task remains the construction of the words the legislature has enacted. In this respect it may not be sufficient that "the modified construction is reasonably open having regard to the statutory scheme" because any modified meaning must be consistent with the language in fact used by the legislature. Lord Diplock never suggested otherwise. Sometimes, as McHugh J observed in Newcastle City Council v GIO General Ltd, the language of a provision will not admit of a remedial construction. Relevant for present purposes was his Honour's further observation, "[i]f the legislature uses language which covers only one state of affairs, a court cannot legitimately construe the words of the section in a tortured and unrealistic manner to cover another set of circumstances."
Lord Diplock's speech in Wentworth Securities laid emphasis on the task as construction and not judicial legislation. In Inco Europe Lord Nicholls of Birkenhead observed that even when Lord Diplock's conditions are met, the court may be inhibited from interpreting a provision in accordance with what it is satisfied was the underlying intention of Parliament: the alteration to the language of the provision in such a case may be "too far-reaching". In Australian law the inhibition on the adoption of a purposive construction that departs too far from the statutory text has an added dimension because too great a departure may violate the separation of powers in the Constitution.
Conclusion
The primary judge's construction and that proposed by the active respondents on the appeal each require that the phrase "claimant's gross weekly earnings", in the case of an award of damages under s 12(1)(c), be read as referring to the gross weekly earnings of the deceased. On no view can the deceased be "the claimant". To read s 12, in the case of an award under s 12(1)(c), as applying the s 12(2) limitation to the deceased's gross weekly earnings cannot be reconciled with the language that the Parliament has enacted. The phrase "the claimant's gross weekly earnings" is incapable of identifying the gross weekly earnings of the deceased.
The phrase "loss of expectation of financial support" in s 12(1)(c) is susceptible of the construction proposed by the active respondents and that given to it by McColl JA. Her Honour described the phrase as a reflection of this Court's characterisation of Relatives Act damages. On this view "expectation of financial support" is apt to encompass any material benefit having a money value. Construed in this way s 12(1)(c) and s 12(2) operate harmoniously. It is a construction to be preferred to one that gives s 12(2) no work in the case of an award under s 12(1)(c).
There is no warrant for the conclusion that the s 12(2) limitation has the same purpose as the limitation in s 125 of the MAC Act. Relatives Act claims arising from motor accidents, by reason of their number or otherwise, may have called for a different legislative response to Relatives Act claims arising from other wrongful acts. And as Basten JA observed, the circumstance that the legislature chose to depart from the language used in s 125 of the MAC Act (and s 151I of the WC Act) does not provide a foundation for the assumption that the different words enacted in s 12 of the Liability Act (and its predecessor, s 9 of the HCL Act) are directed to the achievement of the same object.
The purpose of s 12 may be identified as the limitation of the component of the award that is assessed by reference to a claimant's high earnings, in claims for personal injury damages brought by or on behalf of high-earning individuals. The fact that the occasions for the application of the s 12(2) limitation in Relatives Act awards may be infrequent is not a reason for identifying some different legislative purpose outside the terms of the statute.
For these reasons the following orders should be made: