In brief - High Court overturns decisions of Supreme Court and Court of Appeal

The High Court's April 2014 decision in Taylor v The Owners – Strata Plan 11564 [2014] HCA 9 reviewed the relationship between section 12 of the Civil Liability Act 2002 (CLA) and section 3 and section 4 of the Compensation to Relatives Act 1897 ("Relatives Act").

Approaching the matter as one of statutory interpretation and declining to import words into the CLA which would make the relevant section applicable to the operation of the Relatives Act, the High Court overturned the decisions of the primary judge in the NSW Supreme Court and NSW Court of Appeal.

Widow commences legal action after husband killed by collapsing awning

Susan Joy Taylor is the widow of the late Mr Craig Taylor. Mr Taylor was killed when an awning outside a shop in Balgowlah collapsed. Mrs Taylor commenced proceedings in the NSW Supreme Court seeking damages under sections 3 and 4 of theRelatives Act.

The Relatives Act provides an avenue to compensation for close relatives who previously relied on the financial or other support of the deceased person where that person’s death is caused by negligence.

Section 12 of the Civil Liability Act

Section 12 of the CLA provides:

1. This section applies to an award of damages:

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

(b) for future economic loss due to deprivation/impairment of capacity, or

(c) for 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.

Prior to his death, Mr Taylor was a land surveyor working in private practice. It was accepted that his earnings would have far exceeded an amount being three times the amount of average weekly earnings. The question for determination by the courts was whether the statutory limitations of section 12(2) of the CLA applied to the claim made by Mrs Taylor under the Relatives Act.

Supreme Court determines that CLA restriction should apply and "claimant" includes the deceased

At first instance, Justice Garling of the NSW Supreme Court held that the CLA restriction should apply to the claim under theRelatives Act so as to disregard amounts by which the deceased's gross weekly earnings would, but for his death, have exceeded an amount that is three times the amount of average weekly earnings at date of the award.

Justice Garling considered that the legislative purpose of section 12 of the CLA was to limit claims for damages and to restrict financial loss claims for high earning individuals. Further, he considered the definition of "claimant" as provided by the CLA should be construed as including the deceased upon whose earnings the Relatives Act claim was based.

Court of Appeal changes interpretation of Section 12(2) of the Civil Liability Act

The Court of Appeal (comprising Justices McColl, Basten and Hoeben) considered that the deceased was neither the person who was making the claim nor the person entitled to do so. The court considered that the literal meaning of section 12(2) did not apply to limit the amount that could be claimed by Mrs Taylor.

However, the majority of the court (McColl and Hoeben JJA) considered that the literal construction was inconsistent with the general purpose of the provision and determined that section 12(2) should be construed to read:

In the case of any such award, the court is to disregard the amount (if any) by which the claimant’s or deceased person’sgross weekly earning 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.

High Court critical of approach of Court of Appeal and determines that deceased could not be the claimant

The majority of the High Court (Chief Justice French, Justices Crennan and Bell) was critical of the Court of Appeal's approach of adding words to section 12(2) of the CLA. In this case the addition was more than words being added to construe a statute to avoid a simple grammatical or drafting error.

The majority disagreed with the addition of the words "or deceased person’s" to section 12(2), given that the result of such addition would be to limit the operation of the Relatives Act in a way not specifically addressed by the legislature.

The majority of the High Court also determined that the primary judge's construction of the "claimant" to include the deceased (so as to enliven section 12(2)) was incorrect. They considered that on no view could the deceased be the claimant.

High Court allows widow's appeal

Mrs Taylor's appeal was allowed - the High Court finding was that section 12(2) of the CLA did not limit Mrs Taylor’s (or other relevant dependants') claim for damages pursuant to sections 3 and 4 of the Relatives Act.

It is now a question for the NSW parliament as to whether either the CLA or Relatives Act is amended to permit courts to apply the limitation in section 12(2) to claims arising from the Relatives Act.