Taylor v The Owners – Strata Plan No 11564 [2012] NSWSC 842

Legal Directions

On Friday 27 July 2012, Garling J determined that the restrictions on damages for loss of earnings in s12(2) of the Civil Liability Act (‘CLA’) apply when assessing claims for loss of support in Compensation to Relatives Act (‘CRA’) claims.

Facts

Craig Taylor (the deceased) was killed by an awning which collapsed on him as he stood underneath it after a heavy rain storm in December 2007. He left a widow, three step children, and three adult children from a prior marriage.

His widow (the plaintiff) brought a claim for loss of financial support under the CRA. Some of the children brought claims for pure mental harm.

At the time of his death, the deceased was a high earner, running his own surveying business, and also being involved in property development. His pre accident earnings are not disclosed in the judgment, but it may be assumed they exceeded three times average weekly earnings.

The parties asked Justice Garling of the NSW Supreme Court to determine, as a separate question, whether s12(2) of the CLA applies to the plaintiff’s claim to limit recovery for the loss of the deceased’s financial support, to a maximum sum calculated by reference to three times average weekly earnings.

Section 12

The section relevantly provides as follows:

(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 three times the amount of average weekly earnings at the date of the award. [emphasis added]

The Argument

The plaintiff contended on two bases that the section didn’t apply to limit damages in her claim.

Firstly, she contended that her claim was a claim for pure economic loss, and was not one ‘… in respect of damages that relate to the death or injury to a person’.

Garling J disagreed, noting that an action under the CRA is a derivative action which is dependent on, or secondary to, rights of action which were vested in the deceased immediately before their death. He also noted that the plaintiff was claiming damages for the loss of expected financial support from the income of the deceased. He noted that ‘damages’ was defined in the CLA to mean any claim for monetary compensation, including pure economic loss, and that properly characterised, the plaintiff’s claim under the CRA is one which is for ‘damages that relate to the death of a person’.

Secondly, the plaintiff contended that she was the ‘claimant’ in the proceedings, not the deceased, and as the section refers to the earnings of ‘the claimant’, consideration of the deceased’s earnings was irrelevant.

The plaintiff argued that had Parliament intended for the restriction on damages to apply in claims like hers, it could and should have drafted the section differently to make that intention clear.

We observe that the counterpart provision in the Motor Accidents Compensation Act 1999 (s125 MACA) provides:

(1)    This section applies to an award of damages:

(a)     For past or future economic loss due to loss of earnings or the deprivation or impairment of earning capacity, or

(b)     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 injured or deceased person’s net weekly earnings would (but for the injury or death) have exceeded $2,500[1]. [emphasis added]

There can be no doubt from the way s125 is worded that the restrictions apply in death claims.

While Garling J acknowledged that s12 could have been better worded (and indeed invited Parliament to consider an amendment) he rejected the plaintiff’s argument.

His Honour noted that the phrase ‘damages … for the loss of expectation of financial support’ is only capable of applying to an action for damages made pursuant to the CRA, and so the word ‘claimant’ has to be interpreted as including the deceased upon whose earnings the claim depends when a claim for loss of expectation of support is made. The words in brackets in the section, namely ‘(but for the injury or death)’ make clear that it is the deceased’s earnings upon which the loss of expectation and financial support is based, which are the relevant earnings.

His Honour also pointed out that if the section did not apply to death claims, but only applied to personal injury claims brought by claimants who survived their injuries (the plaintiff’s contention), it would ‘lead a family of an individual to hope and pray for death, rather than the individual’s continued life, because of the more beneficial financial consequence’ and this result was ‘unappealing’.

Only one action can be brought under the CRA, and it will frequently be the case that a plaintiff sues on behalf of a number of potential beneficiaries. In order to obtain an award, his Honour remarked that it was not essential to show that any of the persons on whose behalf an action is brought were financially dependent upon the deceased, simply that they had an expectation of financial support. Defining ‘claimant’ to mean the representative of the estate of the deceased who brings the action makes no sense in that context. The cause of action is not concerned, in any event, with the earning capacity of those who claim to have lost the deceased’s financial support.

Obviously, it is the earnings of the deceased which are relevant to determining the extent to which all potential beneficiaries have lost an expectation of financial support.

His Honour therefore determined the separate question against the plaintiff’s contentions, and held that the restrictions of s12 apply to assessment of her claim for loss of financial support flowing from her husband’s tragic death. He ordered that the plaintiff pay the defendants’ costs.

Comment

Although, with respect to Garling J, his interpretation appears to be obviously correct and a matter of common sense, this is not the only current claim of which we are aware in which it is contended that the s12 restrictions do not apply in Compensation to Relatives cases. Perhaps Parliament might take his Honour’s invitation to redraft the section to remove all doubt.

Authored by Judith Waldock, Partner, Sydney.

 


[1] NB: the amount is indexed annually and now stands at $4,129


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