Trustees of the Sydney Grammar School v Winch [2013] NSWCA 37

Legal Directions

Introduction

On 27 February 2013 the NSW Court of Appeal overturned its 1990 decision of Mangion v James Hardie & Co Pty Limited and decided that claims for actionable psychiatric illness (colloquially ‘nervous shock claims’) do not fall within the exclusive jurisdiction of the Dust Diseases Tribunal.

The decision gives rise to a potential inconsistency in the quantum of recoverable damages for Nervous Shock depending upon whether the circumstances of the particular case permit the claimant to commence in the Tribunal via its ancillary jurisdiction as distinct from in the District or Supreme Courts in which courts assessment of damages is subject to the Civil Liability Act 2002 (‘CLA’) which limitations do not generally impact on cases pursued in the Tribunal.

Jurisdiction of the Tribunal

The Tribunal was created in 1989 to hear common law claims for damages maintained by persons suffering a ‘dust-related condition’. The jurisdiction of the Tribunal is prescribed in s10 and s11 of the Dust Diseases Tribunal Act 1989. Section 10 provides the Tribunal with jurisdiction in respect of the claims prescribed by s11.

Section 11 relevantly provides the Tribunal with jurisdiction to hear a claim:

‘11(1)    If –

(a)     A person is suffering, or has suffered, from a dust-related condition or a person who has died was, immediately before death, suffering from a dust-related condition

(b)     It is alleged that the dust-related condition was attributable or partly attributable to a breach of duty owed to the person by another person

(c)     The person who is or was suffering from the dust-related condition or a person claiming through that person would, but for this Act, have been entitled to bring an action for the recovery of damages in respect of that dust-related condition or death:

Proceedings for damages in respect of that dust-related condition or death may be brought before the Tribunal and may not be brought or entertained before any other court or Tribunal [the exclusive jurisdiction of the Tribunal]…

(4)      Any matter that is ancillary or related to a matter that is the subject of proceedings to be brought under subsection (1) or (1A) may also be included in those proceedings. [The ancillary jurisdiction]. ……..’ [editorial additions made].’

Thus the Tribunal has exclusive jurisdiction to hear and determine claims falling within s11(1) and may also hear a claim that is ancillary or related to a claim brought by a person suffering from a dust-related condition under s11(4).

Facts

Winch commenced proceedings in the Tribunal claiming damages from the School for Nervous Shock allegedly caused by her father’s death from mesothelioma. She alleged her father had been negligently exposed to asbestos dust when employed by the School as an art teacher. The father had commenced and settled proceedings against the School before Winch commenced proceedings.

Winch, relying on Mangion, asserted that the Tribunal had exclusive jurisdiction to hear her claim. The School unsuccessfully applied to the Tribunal for an order dismissing Winch’s proceedings for want of jurisdiction. The School argued that Mangion was wrongly decided.

Mangion

In Mangion the Tribunal first considered its jurisdiction to hear claims pursuant to the Compensation to Relatives Act 1897 and for Nervous Shock. O’Meally DDTJ determined the Tribunal did not have jurisdiction to hear either of those classes of claim narrowly construing the provisions of s11(1) to be in respect of only claims for damages by persons directly suffering a dust-related condition or their estates in the event of death.

The Court of Appeal overturned that decision holding that the phrase ‘a persons claiming through’ in s11(1)(c) should be broadly construed to include claims pursuant to the CRA and, with a more strained construction of the legislation, claims for Nervous Shock. The Court of Appeal was influenced by what it perceived to be ‘public policy’ considerations that the Tribunal should determine all claims ‘arising from’ dust diseases and as such construed the legislation with that objective in mind.

Court of Appeal

The Court of Appeal unanimously upheld the School’s appeal and overruled Mangion.

Noting that Winch’s sole argument was that her claim fell within the jurisdiction provided by s11(1)(c) [because she was relevantly ‘claiming through’ her father who suffered from a dust-related condition] the court accepted the School’s submission that there was a relevant difference between the claim for damages for a dust-related condition and a claim for a non-dust related psychiatric illness arising from the death of a person suffering a dust-related condition.

The court unanimously held that Mangion was wrongly decided in that the object of s11(1) was specifically related to the damages for a dust-related condition or a derivative action either by the legal personal representative of a person who had died from a dust-related condition or by dependants under the CRA.

The court found a relevant difference between the damages sought to be recovered in a derivative action by dependants where the foundation of the claim was the loss of economic capacity which arose as a direct consequence of impact of the dust-related condition on the deceased provider and the personal losses independently suffered as a consequence of the breach of a duty owed to a person who developed a Nervous Shock. Thus the Court held that Winch was not relevantly ‘claiming through’ her father.

The court specifically considered that policy did not support the view that the substantial procedural benefits available to a claimant with the dire prognosis common in a dust disease should be conveyed upon a person suffering from a psychiatric illness.

Proviso and quantum aspects

The court of appeal recognised the potential for a claim for psychiatric illness to fall within the ancillary jurisdiction of the Tribunal provided by section 11(4). Bathurst CJ, Allsop P and Meagher JA held that it was arguable that the phrase ‘related to a matter’ within the jurisdiction of the Tribunal could include a claim in which factual circumstances were sufficiently similar to a claim on foot and within the Tribunal’s excusive jurisdiction.

Proceedings pursuant to s11(4) can only be commenced in the Tribunal as ancillary to existing proceedings within the jurisdiction or if an application for leave to file proceedings within s11(4) is made during a period when proceedings properly within s11(1) are on foot. [This explains why Winch did not seek to argue the alternative that her claim for damages was within the jurisdiction conveyed by s11(4). Her father’s claim, which was within the jurisdiction provided by s11(1), had long been completed prior to her commencing her proceedings and thus s11(4) does not operate.]

Thus, as the claim for Nervous Shock requires proof of the breach of duty owed to the person suffering the dust-related injury, the facts of the case within the exclusive jurisdiction and for psychiatric illness are arguably ‘related’ sufficiently to facilitate the triggering of the ancillary jurisdiction if a case within the exclusive jurisdiction remains current in the Tribunal.

Accordingly there is potential for proceedings for Nervous Shock to be maintained either in the general common law courts or in the Tribunal depending upon whether the circumstances permit the triggering of the Tribunal’s jurisdiction.

This quirk potentially has significant consequences to the quantum of damages.

A claim for psychiatric illness maintained within the Tribunal’s jurisdiction is not subject to the majority of the thresholds and limitations contained within the CLA. A claim maintained in the District or Supreme Courts is subject to all such provisions. The difference in entitlement to damages could be very substantial particularly taking into account CLA limitations on the damages available for care and assistance.

This quirk arises because s4 of the CLA excludes operation of most of the provisions of the CLA to claims within s11 of the DDT Act generally [that is cases within the exclusive and ancillary jurisdiction], not just in relation to claims for ‘dust-related conditions’.

It appears unlikely that any direct parliamentary consideration was given to the issue. The potential inconsistency could be resolved either by amendment to limit the exclusion of the CLA to claims for damages for dust-related conditions [claims within the exclusive jurisdiction conferred by s11(1)] thus making all Nervous Shock claims subject to the CLA regardless of the court in which they are litigated, or, in the alternative, amending s11 to include claims for Nervous Shock in which case the CLA would not apply to relevant claims for Nervous Shock.

Conclusion

The decision discloses that a jurisdictional choice has the potential to result in inconsistent results in quantum of identical claims. Defendants should be aware of the potential so as to ensure that the case is litigated before the correct forum so as to minimise exposure to damages.

Authored by Stephen Taylor-Jones, Partner, Sydney.


Related Articles

Professional liability: incorporating unsigned and unsighted documents into contracts of service

Legal Directions

Surfstone Pty Ltd & Anor v Morgan Consulting Engineers Pty Ltd [2015] QSC 290 A contractual limitation of liability clause contained…

Continue reading

APPEAL DISMISSED IN SOAP DISH CASE

Legal Directions

Taylor v Fisher [2018] WASCA 126 Background In our Legal Directions dated 22 March 2017, we reported on the decision of…

Continue reading

SA DECISION IS A WARNING TO CO-DEFENDANTS UNWILLING TO NEGOTIATE ON SETTLEMENT OFFERS

Legal Directions

Oliver v ACN 007 870 484 Pty Limited & 7 Ors (No.3) [2017] SADC 52 (His Honour Judge Gilchrist – District…

Continue reading