High Court provides further guidance on dependency claims arising from asbestosis

Legal Directions

Comcare v Starkey [2017] FCAFC 151

Introduction

On 21 September 2017, the Full Court of the Federal Court of Australia published its reasons in Comcare v Starkey [2017] FCAFC 151, an appeal by Comcare against a decision made by the Administrative Appeals Tribunal (the Tribunal). The Full Court dismissed Comcare’s appeal.

Comcare applied for special leave to apply to the High Court of Australia. That application was dismissed on 23 March 2018.

The case is significant as it provides further guidance to applicants, employers and insurers on the interpretation of sections 118 and 48 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the SRC Act), in circumstances where an employee dies from asbestosis and a dependant makes a claim pursuant to section 17 of the SRC Act.

Facts

Graeme Walter Starkey contracted asbestosis as a result of exposure to asbestos while working in the private sector in New South Wales from 1960 to 1965, and then from 1968 to 1969. He was also exposed while working as a Commonwealth employee at the Garden Island Dockyard from 1969 to 1979, then again from 1981 to 2012.

In 2013, Mr Starkey obtained judgments in common law proceedings in the Dust Diseases Tribunal of NSW for provisional damages of $15,300 against Warringah Industrial Park Ltd, $793,700 against Comcare, and $85,000 against AAI Ltd.

Mr Starkey died from asbestosis on 28 July 2014. On 18 August 2014, his widow
(Mrs Rosyln Starkey) applied to the Dust Diseases Board for no fault compensation benefits in her own right as the spouse and dependant of Mr Starkey pursuant to the Workers Compensation (Dust Diseases) Act 1942 (NSW) (the Dust Diseases Act). On 18 September 2014, Mrs Starkey was awarded a lump sum of $58,401 and fortnightly compensation. It was common ground that Mrs Starkey received only 20% of what would otherwise have been her entitlement under the Dust Diseases Act, because Mr Starkey’s asbestosis was only 20% attributable to exposure received as a ‘state worker’ in New South Wales.

Mrs Starkey subsequently claimed a lump sum payment from Comcare in her own right as a dependant under section 17 of the SRC Act in respect of the proportion of Mr Starkey’s asbestosis attributable to his employment by the Commonwealth at Garden Island Dockyards.

On 10 March 2015, Comcare denied Mrs Starkey’s claim and affirmed its decision on 29 April 2015, on the basis that compensation had already been received in respect of an injury.

Relevant legislation

Section 118(1) of the SRC Act states:

If:
(a) an employee recovers State workers’ compensation in respect of an injury or the loss of, or damage to, property used by the employee; or
(b) State workers’ compensation is recovered by, or for the benefit of, a dependant of a deceased employee;

Compensation is not payable under this Act to that employee in respect of that injury, loss or damage, or to, or for the benefit of, that dependant in respect of the injury that resulted in the death.

The relevant parts of section 48 of the SRC Act state:

(1) This section applies where:

(a) an employee recovers damages in respect of an injury to the employee or in respect of the loss of, or damage to, property used by the employee, being an injury, loss or damage in respect of which compensation is payable under this Act; or

(b) damages are recovered by, or for the benefit of, a dependant of a deceased employee in respect of the death of the employee and compensation is payable under this Act in respect of the injury that resulted in that death.

(4) Compensation is not payable under this Act to the employee in respect of the injury, loss or damage, or to, or for the benefit of, the dependant in respect of the injury that resulted in the death of the employee, after the date on which the damages were recovered by the employee or by, or for the benefit of, the dependant, as the case may be.

Issues

The two key issues to be decided in this matter were:

  • For the purposes of section 118(1), whether Mr Starkey’s injury for which compensation was paid to Mrs Starkey under the Dust Diseases Act was the same injury as that which Mrs Starkey sought compensation from Comcare?
  • Whether section 48 precluded Mrs Starkey from seeking compensation under the SRC Act where the Dust Diseases Tribunal had awarded damages to
    Mr Starkey for the said injury?

Findings made

For the purposes of subsection 118(1), whether Mr Starkey’s injury for which compensation was paid to Mrs Starkey under the Dust Diseases Act was the same injury as that which Mrs Starkey sought compensation from Comcare?

Mrs Starkey contended that Mr Starkey’s asbestosis was caused by a series of injuries such that:

  • the compensation she recovered under the Dust Diseases Act was only in respect of injuries occasioned to Mr Starkey during the course of his employment by employers subject to the NSW legislation; and
  • the injuries for which Mrs Starkey claimed compensation under the SRC Act were not the same injury or injuries for which she had received compensation under the Dust Diseases Act, but instead a separate injury or injuries that he sustained in the course of his employment by the Commonwealth employer.

In contrast, Comcare contended that the claim throughout was in respect of the single injury of asbestosis for which Mrs Starkey had already received compensation under the Dust Diseases Act,.

The Tribunal accepted Mrs Starkey’s submission. In doing so, it accepted the evidence of Professor ABX Breslin, consultant thoracic physician, in relation to the divisible character of asbestosis, most relevantly that any physical damage or pathological changes caused from one exposure to asbestos fibres is separate and distinct from the physical damage and/or pathological changes caused to the lung from another and subsequent exposures.

The Full Court of the Federal Court likewise did not accept Comcare’s argument that Mrs Starkey received compensation from the Dust Diseases Board in respect of a single injury. Rather, it held that Mrs Starkey received compensation referrable only to the injuries received by Mr Starkey while he was working for private employers in
New South Wales from the Board. As such, in circumstances where it had been found that Mrs Starkey had not already received compensation in respect of the separate injury or injuries particularly attributable to the Commonwealth employment, section 118(1) did not apply.

Whether section 48 precluded the respondent from seeking compensation under the SRC Act where the Dust Diseases Tribunal had awarded damages to Mr Starkey for injury?

Comcare contended that the effect of section 48 was that where an employee recovers damages in respect of an injury, section 48(4) is engaged so as to prevent recovery by a dependant.

The Tribunal considered this issue in detail in the context of section 118(1), which was similarly worded to section 48. It noted that the words ‘compensation is not payable under this Act to that employee in respect of that injury…. or to, or for the benefit of, that dependant in respect of the injury that resulted in the death’ in section 118(1) had a distributive operation, so that the words preceding ‘or’ applied to circumstances described in s 118(1)(a), and the words following the word ‘or’ applied to circumstances described in s118(1)(b).

The Full Court of the Federal Court held that the provision should be read in a distributive manner and stated that:

Rather, to give proper effect to s 48(4) the section must be interpreted as meaning that:

where an employee recovers damages in respect of an injury, compensation is not payable under the SRC Act to him or her in respect of the injury (ss 48(1)(a) and 48(4)); and

where damages are recovered by or for the benefit of a dependant of a deceased employee in respect of the injury that resulted in the death of the employee, compensation is not payable under the SRC Act to or for the benefit of the dependant in respect of that injury.

The Court held that Mr Starkey’s recovery of common law damages did not extinguish Mrs Starkey’s personal entitlement to compensation relating to Mr Starkey’s death independently available under the SRC Act.

Comments

This case confirms that the divisible nature of asbestosis (in contrast to mesothelioma and some other lung diseases) impacts on the entitlement to recover no fault compensation benefits under legislation such as the SRC Act. In particular, in such a case, section 118 does not preclude a dependant from obtaining compensation pursuant to the SRC Act for the proportion of the disease attributable to Commonwealth employment, despite the dependant having already received compensation under state legislation for the proportion of the disease attributable to exposures to asbestos as a result of work for non-Commonwealth entities.

In relation to the construction of section 48 (and section 118), the Full Federal Court upheld that the ‘distributive approach’ taken by the Tribunal in Withenshaw and Department of Defence [1999] AATA 37; 28 AAR 416 as the correct approach and rejected Comcare’s submission that Withenshaw was incorrect.

Further information / assistance regarding the issues raised in this article is available from the authors, Rosemary Waldron-Hartfield, Partner and Amanda Danti, Senior Associate or your usual contact at Moray & Agnew.


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