Author: Andrew Spearritt    Bharat Vekria   
Judgment Date: 10 October 2017
Citation: Northern Sydney Local Health District v Amaca Pty Ltd (under NSW administered winding up) [2017] NSWCA 251
Jurisdiction: New South Wales Court of Appeal [1]
Principles

A worker who recovers statutory damages and compensation for injuries and subsequently commences proceedings against another tortfeasor for the same injuries will not be considered to have been compensated twice.

Background

The worker applied for statutory benefits under the Workers’ Compensation and Rehabilitation Act 2003 (Qld) (the WCR Act) for his injury. He alleged that he was exposed to asbestos dust and fibre in the course of his employment at Royal North Shore Hospital, Hornsby Hospital, Newcastle Mater Hospital, and Princess Alexandra Hospital. Each exposure caused or materially contributed to his contraction of mesothelioma, with which he was diagnosed in April 2014.

WorkCover was responsible for the liability of Princess Alexandra Hospital. In June 2014, WorkCover accepted the claim and paid the worker $627,407. Section 207B of the WCR Act applied to those benefits.

An agreement was reached between the worker and WorkCover in which the worker would commence proceedings against Amaca Pty Ltd (Amaca), having been exposed to Amaca products. Those proceedings were to be commenced in the Dust Diseases Tribunal of New South Wales (the DDT). WorkCover would permit the worker to retain all the statutory benefits already paid to the worker, together with 20% of the proceeds of the proceedings for damages in the DDT and any proceeds in excess of $627,407.

Proceedings were issued by the worker against Amaca in the DDT. Amaca filed cross‑claims against Northern Health and Hunter Health (the appellants), as well as the State of Queensland seeking contribution or indemnity for any amount Amaca was required to pay to the worker pursuant to s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW).

In their defence, the appellants argued that as the worker had been fully compensated for his loss and was being over compensated by the amount of 20%, any payment of damages to the worker, where the damages did not exceed the amount of statutory compensation payment already made, would amount to double recovery, which the law did not permit.

At first instance Kearns J rejected this argument and concluded that Amaca was entitled to a contribution from the appellants. The appellants appealed this decision in the New South Wales Court of Appeal (the Court of Appeal).

Decision

The Court of Appeal dismissed the appellants’ appeal and agreed with the reasoning of Kearns J. While the rule against double compensation will not permit a plaintiff, whatever procedural device is used, to recover more than the damages which have been suffered, no matter what the cause of action upon which he proceeds against the various defendants, the critical question in this instance was how the payment to the worker should be characterised.

The leading judgment was delivered by McColl JA. Her Honour endorsed the approach outlined by Windeyer J in National Insurance Company of New Zealand Ltd v Espagne[2] to the effect that in assessing damages for personal injuries, if a plaintiff receives a payment by way of bounty then it can be enjoyed in addition to and not in diminution of any claim for damages. Her Honour emphasised that it is critical to determine the character of the payment and that is best determined by the intent of the person conferring the benefit, which in this case was the insurer.

Basten JA said that, in this instance:

“The purpose of the payment was to provide an incentive to the plaintiff to litigate in circumstances where both parties recognised that he might not recover more than the compensation payments, but that any amount he did recover would provide a benefit to the insurer. The insurer, in turn, was saved the expense and inconvenience of bringing its own proceedings pursuant to its right of subrogation. Neither party viewed the payment to the plaintiff as recovery from a tortfeasor for some particular loss or head of damage”

In agreeing with Basten JA’s reasons, Sackville AJA said the difficulty with the appellants’ argument was that the worker’s entitlement to payment arose pursuant to his agreement with WorkCover. That entitlement was not an award of common law damages.

It was ultimately found that the DDT was correct to dismiss the appellants’ ‘double recovery’ defence.

Why this case is important

The Court of Appeal has affirmed that in matters in which the worker seeks damages against a tortfeasor and the worker has received a benefit from another source, in order to consider whether the worker has received ‘double compensation’ it is necessary to consider the basis upon which that benefit was received by the worker.

 

[1] McColl and Basten JJA and Sackville AJA.
[2] [1961] HCA 15.

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