Loss of the ability to receive the age pension is not a recognised head of damage – Dib v Amaca Pty Limited [2017] NSWDDT 6 and Londos v Amaca Pty Limited [2017] NSWDDT 7

A claim for loss of the ability to receive the age pension is not a recognised head of damage at common law.

Both plaintiffs were diagnosed with terminal malignant mesothelioma. Bringing separate causes of action against Amaca Pty Ltd (the defendant) as the successor to James Hardie and Coy Pty Ltd (James Hardie), they alleged that they contracted their disease as a result of exposure to asbestos that was manufactured and supplied by James Hardie.

Issues in dispute

In both matters the defendant put the issue of exposure and damages in dispute. The defendant accepted that if exposure to James Hardie products was proved in both matters, then the existence of duty of care, breach of duty and causation was admitted in both. Upon considering the facts, Russell J accepted both plaintiff's evidence and found in favour of the plaintiff on the issue of exposure. His Honour went on to consider damages.

General damages

In both matters, Russell J considered the detailed expert evidence concerning the progression and consequences of mesothelioma. Both of the plaintiffs relied upon the recent decision of Zanetic v Amaca Pty Limited [2017] NSWDDT 5 (Zanetic) in which Russell J awarded the plaintiff $350,000 for general damages. The medical evidence of an oncologist in Zanetic was tendered by both plaintiffs in the present cases pursuant to s 25(3) of the Dust Diseases Tribunal Act 1989 (NSW).

In both matters Russell J allowed $350,000 for general damages.

Loss of receipt of the age pension

Both plaintiffs sought damages for future economic loss on the basis that as they will die from mesothelioma, they had both lost the receipt of the age pension during the years they would have survived if they had not contracted the disease.

Russell J observed in his judgment that both cases required consideration of a novel issue for decision, namely whether loss of the ability to receive the age pension is a recognised head of damage under Australian common law. Russell J analysed a large number of Australian and English authorities, but did not find much assistance in the English authorities given the divergence in approach between England and Australia.

The plaintiffs in both cases made submissions focusing upon the judgment of Windeyer J in Skelton v Collins [1996] HCA 14 (Skelton), in which his Honour said that what flows from the compensatory principle is "that anything having a money value which the [p]laintiff has lost should be made good in money".

Russell J noted that the sentences after this quote in the judgment refer in terms to a claim for loss of earning capacity, rather than any other kind of claim for economic loss. Russell J observed that:

"If the compensatory principle as set out by Justice Windeyer demands that loss of a future age pension be compensated, one would expect to find cases, since Skelton v Collins was decided in 1966, where such a loss was awarded. According to the researches of counsel, and my own researches, such a loss has never been awarded in this Tribunal, or in any of the courts of this state, or until recently, in any Australian courts." ¹

Russell J considered Australian authorities where a loss of the ability to receive the age pension was awarded and distinguished those decisions from Skelton. In the matter of Latz v Amaca Pty Limited [2017] SADC 56 (Latz), which Russell J noted was presently the subject of an appeal, Gilchrist J recited that the fundamental purpose of an award of damages in an action for tort is to place the victim of the tort, so far as money can achieve it, into the position that he or she would have been in but for the tort. However, Russell J noted that in the matter of Latz the claim for loss of the state pension raised different issues, in that it arguably related to loss of earning capacity, since the state pension was 'earned' by the plaintiff through his years of employment services.

Russell J also distinguished the decision of Curtis J in Roberts v Amaca Pty Limited [2009] NSWDDT 28 (Roberts). In Roberts, the plaintiff had worked as a dentist in the United Kingdom. During his employment he made compulsory contributions to the National Health Superannuation Scheme of the United Kingdom. He was entitled to receive a pension when he retired in the future. The loss was awarded.

In Roberts, Curtis J referred to the decision of Windeyer J in Skelton and to the compensatory principle. Upon consideration of Roberts, Russell J found that such a pension is to be distinguished from the age pension in Australia. The United Kingdom pension was payable in the future because of the plaintiff’s earning capacity being diminished. Different considerations apply to such a pension, as opposed to an age pension, which is paid under the social security legislation simply because a person reaches a certain age and satisfies a means test. In Australia, the age pension is received without reference to the ability of a person to earn income, or without reference to whether there has been some interference with any ability to earn income.

Russell J found that the Australian authorities recognised a head of damages, where income has been lost as a result of a tort, to the effect that a claim can be made for diminution in earning capacity, where such diminution is or may be productive of financial loss.

Russell J observed that damages are not awarded simply because the compensatory principle is satisfied, rather those damages must be recognised heads of damage at common law.

Russell J held that the plaintiffs' claim for loss of a pension is not available as a matter of law and no damages were allowed for that claim.

The DDT has held that there is no authority in Australia supporting the view that loss of the ability to receive an age pension is a recognised head of damage. It has distinguished the Latz decision of the District Court of South Australia (which is currently on appeal due to be heard on 11 September 2017) in that loss of the state pension in that case arguably related to loss of earning capacity.

It remains to be seen whether the plaintiffs will appeal Russell J's decision regarding the loss of ability to receive the age pension, noting that in the event that the plaintiffs' appeal was successful on that point, their award for damages for future economic loss has been assessed by the primary judge as being nil.

The outcome of the appeal in the Latz decision and the potential appeals in these cases will clarify whether loss of the ability to receive the age pension is in fact a recognised head of damage under the Australian common law.