Turkalert taylor v the owners

Paul Angus | April 2014 | Insurance & Financial Services

Summary

Background

On 2 April 2014 the High Court in Taylor v The Owners - Strata Plan No 11564 [2014] HCA 9 overturned a decision of the New South Wales Court of Appeal which had applied the damages cap on economic loss under the Civil Liability Act 2002 (NSW) to claims for loss of financial support brought pursuant to the Compensation to Relatives Act 1897 (NSW).

Susan Taylor commenced proceedings in the Supreme Court of NSW seeking damages under ss3 and 4 Compensations to Relatives Act for loss of financial support provided by her deceased husband. Mrs Taylor’s husband was killed when a shop awning collapsed on him during heavy rain.

The decision will have a significant impact on the assessment of damages in Compensation to Relatives claims and may prompt an amendment to s12 of the Civil Liability Act to bring that section in line with similar provisions in the Motor Accidents Compensation Act 1999 (NSW) and Workers Compensation Act 1987(NSW).

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High Court says no restriction to Compensation to Relatives claims for loss of economic support - Taylor v The Owners - Strata Plan No 11564 [2014] HCA 9

As the late Mr Taylor’s weekly earnings prior to the accident were significantly greater than three times the amount of average weekly earnings, it was necessary for the Court to consider whether any award of damages would be limited by the operation of s12(2) of the Civil Liability Act. It was agreed this question would be the subject of a separate determination by the Court in advance of the trial.

S12 Civil Liability Act relevantly provides: (1) This section applies to an award of damages: … (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 3 times the amount of average weekly earnings at the date of the award.

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At first instance and on appeal, the Court held that the reference to ‘the claimant’ s earnings’ should be interpreted as including the earnings of the deceased person whose death has given rise to the claim.

As a result, any damages recovered by Mrs Taylor for loss of financial support would be effectively capped at three times average weekly earnings.

McColl JA (with whom Hoeben JA agreed) had held that a literal construction of s12 would produce a result that was inconsistent with the purpose of the provision and that in these circumstances the Court was entitled to depart from the literal interpretation of the section.

The Court of Appeal interpreted s12 as if it contained the additional words ‘or the deceased person’s’ after the word ‘claimant’s’, in order to give effect to the legislative intent of the section.

High Court Decision 2 April 2014 Mrs Taylor’s appeal was upheld by the High Court (by a 3-2 majority).

The High Court found that s12(2) did not operate to limit Mrs Taylor’s entitlement to damages under the Compensation to Relatives Act, as the reference in s12(2) to the earnings of ‘the claimant’ could not be properly construed as including that of ‘the deceased’ in the context of a Compensation to Relatives claim.

Section 12(2) of the Civil Liability Act is now somewhat of an anomaly, given that similar provisions in the Motor Accidents Compensation Act 1999 (NSW) and Workers Compensation Act 1987(NSW) limit damages by reference to the earnings of the deceased person whose financial support has been lost.

This decision may be the catalyst for amendments to s12 of the Civil Liability Act to bring that section in line with the position under the Motor Accidents Compensation Act and Workers Compensation Act. At least for the time being however, claims for loss of financial support under the Compensation to Relatives Act will not be limited, provided that the earnings of ‘the claimant’ (as opposed to the deceased person) do not exceed the limits set out in s12 of the Civil Liability Act.

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Paul Angus | April 2014

For more information, please contact: Paul Angus Partner T: 02 8257 5780 M: 0408 188 808 paul.angus@turkslegal.com.au

Implications This decision will have a substantial impact on the assessment of damages in claims brought pursuant to the Compensation to Relatives Act.

Alexzandra Harvey Lawyer

The damages cap imposed by s12(2) of the Civil Liability Act, which is applied to claimants who are still living, will not be able to be applied to claims by surviving dependent relatives, except where the claimant themselves earns in excess of three times the average wage.

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