Compensation, Damages, Damages, Compensation – is there a right of recovery to WorkCover?

10 September 2020

A worker sustains an injury during the course of his employment. He does not claim compensation for that injury pursuant to the Workers’ Compensation and Rehabilitation Act 2003 (Act). He, instead, claims damages for his injury against a third party independent of the Act. Before his case is determined, he passes away. His injury significantly contributed to his death. His widow negotiates a settlement of his damages claim in her capacity as executor of his estate. The widow subsequently applies for statutory compensation pursuant to Chapter 3, Part 11 of the Act1 and is paid compensation accordingly. Is the widow entitled to the compensation paid to her or has she ‘double-dipped‘? That was the issue the Court of Appeal had to determine in WorkCover Queensland vs Turner Freeman & Anor [2020] QCA 194.

The facts of the matter can be summarised as follows.

Mr Bolt contracted an asbestos-related disease during the course of his employment2. In early 2018, he commenced proceedings in the District Court claiming damages for personal injuries against Amaca, as the entity that manufactured the asbestos products. Mr Bolt passed away on 23 July 2018, prior to the determination of his claim. His widow, Mrs Bolt, subsequently negotiated a settlement of his damages claim in her capacity as the executor of his estate.

On 4 January 2019, Mrs Bolt lodged an application for compensation with WorkCover Queensland (WorkCover) pursuant to s201A of the Act3. On 18 February 2019, WorkCover paid Mrs Bolt compensation, as claimed, pursuant to s201A of the Act.

On 25 February 2019, WorkCover claimed, as a charge, the compensation payments it made to Mrs Bolt ‘over the settlement moneys received from Amaca‘ pursuant to s207B of the Act4. On 24 June 2019, it commenced District Court proceedings seeking a declaration it was beneficially entitled to the compensation paid to Mrs Bolt ‘by way of restitution for compensation mistakenly paid‘ or, alternatively, by way of a refund of compensation pursuant to s207B of the Act.

The District Court dismissed WorkCover’s application. WorkCover sought leave to appeal to the Court of Appeal. The Court granted leave to appeal. The matter involved a point of law of general importance in respect of the operation of the Act. There was also evidence before the Court that a number of matters having a similar issue had previously arisen or were likely to arise in the future. Consideration of the matter at the appellate level would clarify the operation of the legislative scheme5. However, the Court of Appeal dismissed WorkCover’s appeal.

On appeal, WorkCover submitted the purpose of s119 of the Act was to prevent ‘double recovery’ of compensation and damages6. WorkCover submitted there was only one injury, for which Mr Bolt or, more correctly, his estate received damages and Mrs Bolt subsequently received compensation. Such argument fastened upon the word ‘includes‘ at the commencement of s32(3) of the Act7. However, the Court found WorkCover’s argument ‘misstates the effect of the word “includes” in…s 32‘. The effect of s32(3) of the Act was to enlarge the meaning of the term ‘injury’ in s32(1) of the Act to also include a disease or death. It was not to deem an injury or a disease or a death to which the injury or disease has significantly contributed, one and the same.

The Court further determined Mr Bolt had an entitlement to damages, for which he sued. His entitlement was to be compensated for the loss and damage he suffered during his lifetime. He did not claim damages for his own death. His claim was continued by his estate upon his passing. Those proceedings were ultimately in the name of Mrs Bolt, as executor of her husband’s estate, but ‘that was merely facilitative‘ and ‘the claim was not in respect of her or any of her rights personally as a result of Mr Bolt’s death‘.

In contrast, a claim for compensation pursuant to Chapter 3, Part 11 does not provide for a person to be paid compensation to which the worker had been entitled during their lifetime. The Part does not provide for an entitlement in the ‘worker’. Rather, Mrs Bolt had a separate entitlement to compensation as a non-dependent spouse as a result of the death of her husband, ‘being the injury to the worker‘, pursuant to s201A of the Act.

At paragraph [30], the Court of Appeal said:

Consequently, the argument that the entitlement to compensation and the entitlement to recover damages were for the same injury cannot be accepted. WorkCover accepts, correctly, that this was necessary for the engagement of s 119. It follows that s 119 did not affect the entitlement to compensation under s 201A.

As noted above, in granting leave to appeal, the Court was informed that a number of matters having a similar issue had previously arisen or were likely to arise in the future and consideration of the matter at the appellate level would clarify the operation of the legislative scheme. Now that the Court of Appeal has considered the issue, it follows that those claims that arise in the future will be determined in accordance with this decision. In other words, both damages and compensation will be payable.

This article was written by Tony Scott, Partner, Graeme Traves, Partner and Kyle Norton, Special Counsel.

1 Chapter 3, Part 11 of the Act provides for the payment of compensation on a worker’s death
2 For many years, Mr Bolt worked in premises beside asbestos factories
3 Section 201A of the Act provides for the payment of compensation where a deceased worker leaves no dependants but is survived by a spouse
4 Mrs Bolt’s solicitor, Turner Freeman, held the compensation payments to Mrs Bolt in trust pending the resolution of the matter
5 WorkCover also agreed to a condition that it would pay the respondents costs in any event
6 In the District Court, WorkCover referred to s207B of the Act but only on the premise the compensation was mistakenly paid to Mrs Bolt, because pursuant to s119 of the Act, the entitlement to compensation ended when her husband’s damages claim resolved. The District Court confined their reasoning to s119 of the Act. There was no complaint to that course. WorkCover’s submissions on appeal did not address s207B of the Act.
7 Section 32 of the Act is a definition section. It defines an ‘injury’ within the meaning of the Act.

Tony Scott

Special Counsel | Brisbane


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