Damages For A Risk Of Injury Where Damages Already Paid

In Muscat v Comcare [2008] AATA 872, the Administrative Appeals Tribunal (AAT) considered whether an employee was entitled to compensation under the Safety, Rehabilitation and Compensation Act 1988 (SRC Act) in circumstances where he had settled an action for damages against the Commonwealth in the Dust Diseases Tribunal of NSW (DDT).

In making its decision, the AAT looked at the nature of the settlement of the damages action and considered the concept of ‘injury’ for the purposes of the SRC Act.

PREVIOUS ACTION FOR DAMAGES

Mr Muscat had filed a statement of claim in the DDT on 25 August 1999 claiming damages for a number of injuries including, relevantly, asbestosis and increased risk of developing lung cancer.

As part of Mr Muscat’s claim, he sought an order for further damages pursuant to section 11A of the Dust Diseases Tribunal Act 1989 (DDT Act). Section 11A was noted to be a provision peculiar to the DDT which allowed Mr Muscat to re-open his claim for damages without having to re-visit the issue of liability if he developed certain nominated diseases, including lung cancer, in the future.

On the day of settlement of the damages action, in which judgment was entered against the Commonwealth in the sum of $165,000 inclusive of costs, an amended statement of claim was filed, which omitted any claim pursuant to section 11A of the DDT Act.

ISSUE BEFORE THE AAT

There was no dispute that Mr Muscat had developed lung cancer and that his exposure to asbestos, whilst employed by the Commonwealth, was a material contributing factor.

Comcare argued, however, that the settlement entered into by Mr Muscat in the DDT resulted in his receiving damages in respect of lung cancer and therefore section 48 of the SRC Act operated to prevent the payment of compensation under that Act.

Mr Muscat argued that any damages awarded for the increased risk of developing lung cancer were not damages ‘in respect of an injury in respect of which compensation was payable’.

The AAT was therefore required to consider whether Mr Muscat did recover damages in respect of an injury, lung cancer, in respect of which compensation was payable under the SRC Act.

AAT’S DECISION

The AAT noted that the SRC Act defined ‘injury’ as:

• A disease suffered by an employee; or
• An injury (other than a disease) suffered by an employee, that is a physical or mental injury arising out of, or in the course of, the employee’s employment.

The AAT referred to the High Court decision in Canute v Comcare (2006) 225 CLR 535 at 540 regarding the concept of ‘an injury’:

‘At this juncture, three things may be observed about the concept of ‘an injury’. First, the Act does not oblige Comcare to pay compensation in respect of an employee’s impairment; it is liable to pay compensation in respect of ‘the injury’. Secondly, the term ‘injury’ is not used in the Act in the sense of ‘workplace accident’. The definition of ‘injury’ is expressed in terms of the resultant effect of an incident or ailment upon the employee’s body. Further, the term ‘injury’ is not used in a global sense to describe the general condition of the employee following an incident. The Act refers disjunctively to ‘disease’ or ‘physical or mental’ injuries and, at least to that extent, it assumes that an employee may sustain more than one ‘injury”.

The AAT accepted that, at common law, damages could not be assessed until actual loss or damage was suffered: Scarcella v Lettice and Anor (2000-01) 51 NSWLR 302 at 306.

The AAT also considered the phrase ‘in respect of’, which was held by Justices Deane, Dawson and Toohey in Workers’ Compensation Board of Queensland v Technical Products Pty Ltd (1988) 165 CLR 642 at 653 to ‘[gather] meaning from the context in which it appears and it is that context which will determine the matters to which it extends’. The AAT quoted the following passage from that decision:

‘The most that can be drawn from these decisions dealing with differently worded provisions is that the use of the phrase ‘in respect of’ does not, of itself, extend the meaning of an expression such as ‘damages in respect of injury to any worker’ so as to include damages payable to a person other than the worker’.

The AAT considered that the passage could be rephrased to state that the phrase ‘in respect of’ does not of itself extend the concept of injury as a result of one disease, for example, asbestosis to another disease, namely lung cancer, although both had the same cause, being exposure to asbestos.

It was held that the head of damage in the statement of claim, the risk of developing lung cancer, was peculiar to the DDT and could not affect the definition of ‘injury’ under the SRC Act.

The AAT found that the decision in Canute made it clear that ‘injury’ in the terms of the SRC Act means ‘the resultant effect of an incident upon an employee’s body’ and that in Mr Muscat’s case the injuries were asbestosis and lung cancer. The AAT was not satisfied that the damages received by the employee in the DDT for a head of damage otherwise unquantifiable, being a risk of injury, did not result in part of the damages being awarded ‘in respect of’ the actual injury when it did occur.

The AAT therefore determined that Mr Muscat was entitled to compensation for permanent impairment resulting from the disease of lung cancer, assessed at 70% whole person impairment, and that he was also entitled to weekly compensation pursuant to section 19 on the basis of a total incapacity for work (and that section 23(1A) of the SRC Act applied).