DOUBLE COMPENSATION FROM OVERSEAS COMPENSATION BENEFITS

Legal Directions

Single v Workers Compensation Nominal Insurer – NSW Dust Diseases Tribunal, 30 November 2018

Introduction

In Single, Russell SC DCJ of the NSW Dust Diseases Tribunal considered the impact of the receipt of no-fault compensation payments paid under New Zealand legislation on the entitlement to damages in Australia for mesothelioma.

His Honour decided that it was proper to reduce the entitlement to damages by the quantum of the New Zealand no-fault compensation payment to avoid double compensation.

This gives rise to an as yet unargued question of whether a decision by a claimant to eschew the entitlement to no-fault compensation payments under an overseas scheme for which the claimant is qualified amounts to a failure to mitigate loss so as to operate to reduce the entitlement to damages awarded in Australia.

Background

The claimant was first exposed to asbestos dust and fibre when working in the building industry in New Zealand between 1950 and about 1987 and, after migrating to Australia in 1987, was exposed to asbestos dust and fibres in the course of employment by Omar as a carpenter and labourer between 1989 and about March 1992. The claimant developed mesothelioma.

He successfully made a claim for no-fault compensation benefits under the Accidents Compensation Act 2001 (NZ) (the Compensation Act) and was awarded NZ$136,705.79 in accordance with that Act (the Benefit).

Thereafter he commenced proceedings in the Dust Diseases Tribunal in Australia against Omar’s insurer, claiming damages in respect of Omar’s breach of duty, breach of contract, and breach of statutory duty in permitting him to be exposed to asbestos dust and fibre in the course of work in Australia.

Liability by Omar was admitted and an agreement was reached between the claimant and Omar that the quantum of his damages was appropriately assessed at AU$415,000, subject to determination of whether it was appropriate to reduce that figure by the quantum of the Benefit.

That question turned upon whether receipt of both the Australian damages and the Benefit would amount to double compensation under Australian law. That question, in turn, required assessment of the intention of the Compensation Act and, further, whether that legislation required the claimant to repay the Benefit upon recovering damages in Australia.

Consideration – Double compensation

Russell SCDCJ applied the leading Australian authority of Manser v Spry, in which the High Court held that it was necessary to consider the character of the no-fault compensation payment by reference to its governing statute to assess whether the intention of Parliament was to permit the claimant to have both damages at common law and the no-fault compensation payment.

His Honour considered the purpose of the Compensation Act and, noting the absence of any wording permitting the recovery of common law damages in addition to a compensation payment of the same character as the Benefit (indeed, the legislation effectively exchanged the common law entitlements of a New Zealand resident for no-fault compensation benefits under the Compensation Act), held that the intention of the legislation was inconsistent with the claimant’s submission that it operated to entitle him to retain both the Benefit and common law damages.

The plaintiff then argued that the Compensation Act required the repayment of the Benefit in the event of a recovery of common law damages.

His Honour identified that there were some mechanisms preserved by the Compensation Act to pursue damages pertaining to a New Zealand personal injury but, if a claimant took that course, upon successfully recovering the damages, the claimant would be required by the compensation payer to repay the no-fault compensation. The Compensation Act was silent as to the position in the event that the entitlement to damages arose other than as a consequence of a non-New Zealand personal injury.

His Honour accepted Omar’s submission that the damages contemplated by the Compensation Act were limited to damages arising as a consequence of the personal injury originating in New Zealand – that is, the exposure to asbestos dust and fibre that occurred during the course of employment in New Zealand. That is different to the personal injury arising as a consequence of exposure to asbestos dust and fibre in Australia, regardless of the fact that the two separate personal injuries gave rise to the same disease: the claimant’s mesothelioma.

That is, as the Australian damages arising in the common law claim were the result of the Australian personal injury, His Honour held that it accordingly followed that the Compensation Act did not provide a basis for the New Zealand compensation payer to recover the Benefit from the claimant.

Further issues

Given that a large part of Australia’s population are immigrants and there is a significant number of claimants who develop latent disease as a consequence of exposure to carcinogens such as asbestos in circumstances where they have also been exposed to the carcinogen before migrating to Australia, careful consideration of the availability of no-fault compensation payments – and the character of the legislation governing that entitlement – is necessary to assess whether the plaintiff suing in Australia has an entitlement to no-fault compensation payments which, regardless of whether claimed, could be appropriately applied to reduce the entitlement to damages in Australia.

The question of failure to mitigate in a toxic tort sense was considered by the NSW Court of Appeal in CSR Limited v D’Arcy. That case concerned a plaintiff who eschewed the entitlement to weekly benefits of compensation under a non-refundable NSW no-fault compensation scheme. The NSW Court of Appeal held that applying the appropriate ‘objectively reasonable’ test, the plaintiff’s conduct failed to mitigate his loss; the Court therefore reduced his entitlement to damages to the extent of his entitlement to the no-fault compensation payments.

The outcome in matters such as Single may see an analogous argument arise in claims for international no-fault compensation payments. However, there will need to be careful consideration of the legislative scheme giving rise to those payments so as to clarify, first, the availability of the payments in the event of an entitlement to damages outside the relevant country (being an entitlement to either no-fault compensation benefits or common law damages in Australia), whether the statutory scheme entitles recovery of the no-fault compensation payment in the event of recovery of common law damages out of the overseas country (being common law damages of Australia), and indeed, whether the scheme objectively contemplates the plaintiff retaining both the no-fault compensation payments and the common law damages to assess the viability of a failure to mitigate argument.

Practically speaking, the quantum of the no-fault compensation payments is potentially relevant to the extent of the legal costs and disbursements appropriately incurred in investigating and maintaining the argument.

Further information / assistance regarding the issues raised in this article is available from the author, Stephen Taylor-Jones, Partner or your usual contact at Moray & Agnew.


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