INSIGHTS: Taking the ‘literal’ or ‘intended’ meaning: High Court reserves judgment

February 11, 2014

Meridian Lawyers is advising in relation to the following litigation which will have ramifications for the way that dependency claims may be quantified at least in New South Wales and Victoria.

Taylor v Owners – Strata Plan No. 11564 in the High Court of Australia No. S179 of 2013:

In 2007, during a violent storm, Mr Taylor died after an awning under which he was standing collapsed. In December 2010, Mr Taylor’s wife commenced proceedings seeking, amongst other things, damages under the Compensation to Relatives Act 1897 (NSW). For the purpose of quantifying her claim for loss of expectation of financial support, Mr Taylor’s wife alleged that the late Mr Taylor’s gross weekly earnings were in excess of three times the average weekly earnings.

The legislation

Section 12(2) of the Civil Liability Act 2002 (NSW) (“CLA”) directs the Court 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 three times the amount of average weekly earnings.

By contrast, similar provisions in the Motor Accidents Compensation Act 1999 (NSW), the Workers Compensation Act 1987 (NSW) and Civil Liability Acts in other States (except Victoria), direct the Court to consider the gross weekly earnings of the injured or deceased.

The separate question

Mrs Taylor sought an order that the Supreme Court of NSW determine, as a separate question, whether damages awarded under the Compensation to Relatives Act were capped by section 12(2) of the CLA. If the question was determined in the affirmative, the Court would disregard any amount of the late Mr Taylor’s gross weekly wage that exceeded three times the average weekly earnings.

On 27 July 2012, Justice Garling of the Supreme Court of NSW determined that section 12(2) of the CLA restricted the damages available to Mrs Taylor under the Compensation to Relatives Act. His Honour held that the reference to “claimant” in section 12(2) of the CLA included a reference to the deceased person, namely, the late Mr Taylor.

Court of Appeal

Mrs Taylor appealed Justice Garling’s decision. On 6 December 2012, the Court of Appeal (McColl JA and Hoeben JA in agreeance, Basten JA in dissent) dismissed the appeal and answered the question in the affirmative. The Justices were unanimous in determining that Part 2 of the CLA applied to claims brought under the Compensation to Relatives Act. However, the Justices diverged in opinion as to the construction of section 12(2) of the CLA. Mrs Taylor submitted that the word “claimant” in section 12(2) of the CLA, when read in its ordinary sense, did not require the Court to consider the late Mr Taylor’s gross weekly earnings as he was not the “claimant” to the claim. The respondents argued that such a literal construction of section 12(2) would lead to an “interpretation manifestly inconsistent with the purpose of the CLA” and therefore should be read to require the Court to consider the earnings of the deceased.

The Court of Appeal held that section 12(2), read literally, did not permit the limitation contended for by the respondents. However, the majority held that section 12(2), when properly constructed, required the Court to consider the claimant’s “or deceased person’s” gross weekly earnings as to do otherwise was inconsistent with the legislative intent of the CLA.

Basten JA, in dissent, did not consider that the legislative intent for section 12(2) contended for by the respondents was “unequivocally clear”, and therefore did not consider the literal meaning of the word “claimant” should be deviated from.

The High Court Hearing

Mrs Taylor sought, and was granted, special leave to appeal to the High Court of Australia. The appeal came before the High Court for hearing on 7 February 2014. The Bench consisted of Chief Justice French and Justices Bell, Crennan, Gaegler and Keane. Mrs Taylor’s principal submission was that as the literal, or ordinary and grammatical, meaning of the word “claimant” in section 12(2) of the CLA was clear and unambiguous, it must be given its literal effect and there was no need to look beyond the text to interpret the section.

Mrs Taylor further submitted that the Court can only “read in” words to section 12(2) if the four steps of statutory construction outlined by Lord Diplock in Wentworth Securities v Jones [1980] AC 74, and restated by Lord Nicholls of Birkenhead in Inco Europe v First Choice Distribution (2000 [WLR 586]), are satisfied. Mrs Taylor submitted that the Court could only “correct obvious drafting errors” in “cases of plain drafting mistakes” if the Court was “abundantly sure”:

  • of the intended purpose of the Statute or provision;
  • that the draftsman and Parliament had, by inadvertence, failed to give effect to that purpose; and
  • what additional words would have been inserted by the draftsman if the error had been noticed.

Further, even if those conditions were met, Mrs Taylor submitted that any alteration in language should not be too far reaching and the Court must “abstain from any course which might have the appearance of judicial legislation” (Appellant’s submissions at paragraph 68).

The respondents argued that the Court was not limited to giving a Statute its literal meaning when another meaning, which is reasonably consistent with the statutory context and more consistent with the apparent purpose of the Statute, was available. In particular, the respondents argued that Cooper Brooks (Wollongong) Pty Limited v FCT (147 CLR 297, at 321 per Mason & Wilson JJ), permitted the Court to have regard for the intended legislative purpose and intention of section 12(2) of the CLA. That purpose and intention was to be determined by the language and context of the section and on the basis of the probably intended meaning; and not by a mere deference to an apparently tenable literal interpretation and compliance with the conditions outlined in Wentworth Securities.

The respondents submitted that, in the context of an award for loss of expectation of financial support under section 12(1)(c) being only possible when the injured person had died, the reference to “claimant” in section 12(2) must mean the deceased person.

The High Court has reserved its Judgment. The Judgment will be instructive not only in relation to how section 12(2) of the CLA applies to damages under the Compensation to Relatives Act in NSW and Victoria but also in relation to principles of statutory interpretation generally.

The Supreme Court proceedings are listed for hearing in July 2014 in relation to both issues of liability and quantum. We will provide a further update once finalised.

Meridian Lawyers acted for the First and Fourth Respondents in the High Court Hearing. If you have any questions, please do not hesitate to contact: Rob Minc, Principal or Julie Somerville, Principal.