Between: Kauri Timber Co (Tasmania) Pty Ltd
And: Reeman

Judges: Barwick CJ
McTiernan J
Menzies J
Gibbs J

Stephen J

Subject References:
Workers' compensation
Calculation
Total and partial dependency

Legislative References:
Workers' Compensation Act 1927 (Tas) - The Act

Sydney

Judgment by:
Stephen J

The respondent, widow of a deceased employee of the appellant, and a "dependant" of her late husband within the meaning of the Workers' Compensation Act 1927 (Tas.), sought an award of compensation following his death in compensable circumstances.

During the lifetime of her husband she had relied upon his earnings, half of which he gave her each week, for the provision of all ordinary housekeeping expenses and the expenses of her personal maintenance and her application for compensation was made on the footing that she had been wholly dependent on his earnings. She had a small private income which she used in maintaining and meeting the running expenses of a motor car which she owned and which she alone drove, her husband travelling in it occasionally as a passenger. She also used it to buy presents and other small purchases outside the scope of regular family expenditure.

The Tasmanian Act, like the legislation of other States, distinguishes between the case of the dependant of a deceased worker "wholly dependent upon his earnings" and that of a dependant only "in part dependent upon his earnings". If the worker dies in compensable circumstances the former class of dependant is entitled to a substantial lump sum, calculated according to a mathematical formula regardless of the actual pecuniary loss suffered as a result of the worker's death and which, in the present case, would amount to over $11,000; the latter class of dependant, only in part dependent upon the worker's earnings, is entitled to such a sum as is reasonable and proportionate to the injury to that dependant, but not in any event exceeding the amount which would have resulted from the application of the above formula. If, as in the present case, the deceased worker, who was aged sixty-six, is near the end of his working life the pecuniary injury to the respondent flowing from his death will be relatively small if she be regarded as only partly dependent and an award of compensation, calculated on the basis appropriate to partial dependency, will be very much less than the amount produced by the formula calculation applicable to cases of total dependency, which is unrelated to actual pecuniary loss and is unaffected by the age of the worker or of the dependant. This will be so even if the extent of partial dependency is very substantial, as it must be in the present case.

The only matter in issue before the learned primary judge, Burbury C.J., was whether the respondent was wholly dependent or, on the contrary, only in part dependent upon the deceased's earnings. His Honour held  her to be wholly dependent and on this appeal the only ground relied upon by the appellant is that, by reason of her possession of private means of her own, the respondent should have  been held to be no more than in part dependent upon the earnings of the deceased.

The question, then, is whether the possession of private means by this respondent prevents her, in the circumstances, from being wholly dependent for the purposes of the Act; the respondent contends that critical to the answer to  this question is the fact that the use made of her private means was solely for her private purposes and not for housekeeping expenses or for her personal maintenance, for which she relied upon her husband's earnings. Full dependency is unaffected by the possession of private means, it is said, if the dependant continues to rely on the worker's earnings for what may perhaps be described  as her basic maintenance and support.

The question arises both because of the, in one respect, uninformative nature of the definition of "dependants" in the Act, a definition akin to that in corresponding legislation in other States and in the United Kingdom and which Warrington L.J. described in Peart v  Bolckow, Vaughan & Co, ^[F21] as "hardly a definition at all", and also because  the Act contains no definition of "wholly dependent" or "in part dependent". "Dependants" is so defined as to make it  clear enough upon what a member of a worker's family must be dependent, namely his earnings but is silent concerning that for which the member of the family must depend upon those earnings; hence this appeal.

The particular problem here in question seems seldom to have arisen in the past; however, over the years, in the course of considering quite distinct problems to which the legislation has given rise, courts have described that for which reliance is placed on the deceased's earnings in a variety of ways, ranging from narrow concepts, such as the "necessaries of life": Main Colliery Co  Ltd  v  Davies, ^[F22] through phrases such as "her means of subsistence", "the means of living", and "support and maintenance" to "what the family is in fact spending for the purpose of its maintenance as a family ... not restricted to the ordinary necessaries of life": Leete v  Piccadilly Nu-Fabrics Pty  Ltd. ^[F23]

If dependence refers only to reliance upon a worker's earnings for provision of the necessities of life it will follow that a wife with private means whose husband, from his earnings, provides those essentials, is "wholly dependent" upon those earnings although she may improve her standard of living to a greater or lesser degree by recourse to her own means. This, as I understand it, is an important aspect of the respondent's argument on this appeal. Again it would seem that a wife will be wholly dependent if she subsists on her husband's earnings and either allows her private income, however large, to accumulate or disposes of it to charity; so long as she does not employ it in assisting her husband to maintain her at some minimum or acceptable standard her total dependency will not, it would be contended, be jeopardized.

That legislation directed towards compensating the families of workers for the loss suffered by the death of the worker should produce such results may seem surprising; the well-to-do wife who, on her husband's death, is left with ample means of her own will nevertheless be treated as fully dependent so long, and so long only, as she refrained, in his lifetime, from assisting him in supporting her. Not so the wife who, from her own income from investments or, more probably, from her earnings, regularly contributes to the expenses of family maintenance; by doing so she forfeits the status of a wholly dependent wife in favour of only partial dependency.

Uninstructed by authority, I would not have so interpreted the legislation nor do the authorities, to my mind, compel such a conclusion, rather the reverse.

Since neither the definition of "dependants" in s. 3 of the Act nor the prescription, by r. 2 (2) of the 1st Sch. to the Act, of the different methods of calculating compensation for partial dependency and total dependency cast any light on the matter, recourse must be had to the ordinary meaning of the noun "dependants" and the adjective "dependent". For my part I have been unable to conclude that a wife, who has a modest, but nevertheless not insignificant, private income available to her free of legal and, perhaps, even strong moral claims requiring to be satisfied out of it, is, in any ordinary sense of the word, wholly dependent upon her husband's earnings, and this regardless of what use she makes of her private income.

A wife placed in such a position cannot, to my mind, be regarded as in fact depending in whole upon those earnings. Wholly to depend, or rely (Lord Halsbury treated the two terms as interchangeable in the Main Colliery Case) ^[F24] upon something involves, as I understand the phrase, having no other source to look to upon which reliance may be placed and from which assistance of the relevant kind may be obtained. To say this of a wife's reliance upon her husband's earnings when she has in fact an independent income, large or small, seems to me quite inappropriate.

It has been held in a number of cases that it is inappropriate to so describe a wife who is in regular employment so that her earnings are more than "intermittent earnings ... devoted to specific purposes of the family life": Cockatoo Docks & Engineering Co  Pty  Ltd  v  Walsh ^[F25] per Owen J. The cases of New Monckton Collieries Ltd  v  Keeling, ^[F26] Baird & Co  Ltd  v  Birsztan, ^[F27] O'Grady v  C. G. Wakefield & Co  Ltd, ^[F28] and Borson v  Hine, ^[F29] are all instances, in various jurisdictions, of a wife's earnings affecting her claim  to dependency. In such cases the task of the court was described by Sugerman J. in Hodges v  Scott's Provision Stores Pty  Ltd ^[F30] as follows:

"The factors here, whose effect upon dependency at the time of death requires to be assessed by the tribunal of fact as a matter of degree, include such factors as the enduring or intermittent or casual nature of the wife's employment, the probabilities of it having continued into the future had the husband not died, and the probable duration of its continuance."

Because the court may look to the future: Peart v  Bolckow; Vaughan & Co; ^[F31] Fenton v  Batten per Fullagar J. ^[F32] -it may conclude that earnings would not have long continued had the worker survived, so that the wife's rate of earnings at the date of his death, not forming an enduring part of the pattern of their life together, may not, in all the circumstances, negate dependency: Borson v  Hine & Co  Pty  Ltd; ^[F33] Blum v  Lipski. ^[F34] But if this is not the case her earnings will operate to deny total dependency and, if sufficiently large, will deprive her of all dependency upon the worker.

No different principle should apply if the wife's means are derived from income from property or a pension rather than from her earnings. Indeed the very factors that sometimes enable a court to disregard a wife's own earnings, their temporary character, are less likely to apply if a wife's income is derived, as in the present case, from income-earning assets of an enduring nature. The case, therefore, of a wife having an income from investments is, to my mind, even more clearly one in which total dependency cannot be found. Of course instances may occur, of which a daughter's contributions in Byles v  Pool ^[F35] is an example, in which the income is so small that it may be disregarded in deciding the question of fact as to dependency, but this is clearly not such a case, nor was it decided upon this ground.

It is said that the effect on dependency is different if a wife's earnings or income is spent upon the provision of her necessary maintenance rather than upon what may be classed as luxuries, things clearly in excess of what she requires for ordinary decent living; as I understand it, the distinction is founded upon the view that only in the former case is there a diminution in the extent of the husband's support of his wife, without such a diminution she remains wholly dependent upon his earnings.

Certainly cases where a wife has sought employment so as to provide some new item of capital equipment for the family over and above their daily needs have sometimes been held not to have affected her dependency but this has been because the employment, due to its particular purpose, was inherently likely to be temporary and could therefore be discounted accordingly in looking to the future. As already mentioned this temporary aspect of earnings from employment will not usually apply to income from property.

Again, as already mentioned, a number of the reported cases do refer to that for which reliance is placed upon the worker's earnings in terms suggesting that some minimum standard is in question. These decisions were not, however, in any way concerned with the present problem and the phrases used, appropriate enough in a general way, should not be taken out of context so as to found some rule which treats as relevant to dependency all support up to a certain standard but as quite irrelevant any further support after that standard is achieved. Indeed to so state the matter is to reveal what I regard as one substantial objection to the adoption of the respondent's contention; it necessarily involves the determination in each case of an appropriate standard of living to apply to the circumstances of the particular worker and his family; only then will it be possible to determine whether it is on the worker's earnings that reliance has been placed for the provision of that standard of living. This is the very process which, in the absence of amending legislation such as was enacted in the United Kingdom in 1923, the courts, ever since the Main Colliery Case ^[F36] in 1900, have rejected as forming no part of their task in determining claims for compensation under this workers' compensation legislation. As Fullagar J said in Fenton v  Batten, ^[F37]

"Questions of 'scale of living' do not enter into the matter."

Moreover the authorities do contain passages indicating the inappropriateness of such an approach to dependency, although decisions on the point here in issue are rare, as Burbury C.J. has pointed out. In the Main Colliery Case ^[F38] itself the language of Lord Davey is inconsistent with the concept that dependency is to be determined by the source of part only of a dependant's total support or living standard. He said ^[F39] that the primary judge had put the matter extremely well when he had said that the parents were in part dependent upon their young son's earnings because they "did receive and depend on the son's wages as a part of their income or means of living". His Lordship proceeded:

"Observe, my Lords, the County Court judge says 'as a part of their income or means of living' by which I understand him to  mean their actual income or means of living"

and concluded by agreeing with the Lord Chancellor that to  look at actual income and actual expenditure was the correct way to construe the Act, rather than introducing what he called "some vague and uncertain standard which it is impossible to lay down with precision". His Lordship was not there restricting himself to any particular part of the means of living but was concerned to look at the parents' entire income or means of living to determine whether any of it was provided by the son. Again in Pryce v  Penrikyber Navigation Colliery Co, ^[F40] Stirling L.J. described the test to be applied in determining whether a widow had been wholly dependent upon the worker as being "whether what the workman was earning at the time of his death was the sole source to which the applicant could have looked for maintenance at that time". This passage was adopted by Lord Shaw in Hodgson v  West Stanley Colliery, ^[F41] who referred to the soundness of the view there expressed-see also Maori Trustee v  New Zealand Shipping Co  Ltd. ^[F42]

In the present case Burbury C.J. concluded that, because the test of dependency was one of factual support and not legal entitlement or necessity, the possession by the respondent of a private income did not detract from her status as wholly dependent upon the deceased so long as she used it for purposes outside the normal family budget; he relied upon what was said in that regard by Frazer J. in the New Zealand Court of Arbitration in McFayden v  Gillooly & Brown. ^[F43] The emphasis which the cases, from the decision in the Main Colliery Case ^[F44] onwards, have placed upon factual support has, in my view, not been concerned at all with the present aspect of dependency but rather with denying to an existing legal obligation to maintain any overriding significance and with discounting the suggestion, made in Simmons v  White Brothers, ^[F45] that the courts should embark upon a consideration of what standards of living might be thought appropriate to the dependants of a particular worker so as to determine questions of dependency.

In McFayden's Case ^[F46] it was, on the facts as found by Frazer J., unnecessary for the determination of the case for him to express any view concerning the dependency of a wife who, having some independent means, chooses to live exclusively off her husband's earnings since his Honour had concluded that the applicant there in question had in fact spent some of her own moneys on her maintenance. However, in an unreserved judgment, he did express the view that, had that not been the case, she would have been totally dependent notwithstanding that she had some PD3,000 on fixed deposit, the interest on which was apparently accumulated. He did so in reliance upon the earlier New Zealand case of Young v  Macklow. ^[F47] That was a very different case, in which a father alleged partial dependency upon a son's earnings but failed because his own earnings were shown to be ample to maintain his wife and himself and were in fact the exclusive source of their maintenance, the son's periodic gifts of money not being precisely accounted for but being, apparently, deposited by his mother, together with other regular savings, to the credit of a savings account to which she continued to add further  deposits even after her son's death. In a sense that case is the converse of the view expressed in McFayden's Case; ^[F48] the applicant failed because he failed to prove any dependency, indeed he was shown to be in no way dependant upon his son's earnings; it is not, I think, an authority for the quite different proposition enunciated by Frazer J.

McFayden's Case ^[F49] has recently been cited with approval by Thomson J. in Orr v  Attorney-General (N.Z.), ^[F50] a decision of the New Zealand Compensation Court, but has not, it seems, otherwise been the subject of consideration. Without in any way doubting the correctness of the actual decision in McFayden's Case ^[F51] and the reasons which led Frazer J. to it, I do not consider that the views expressed by him elsewhere in his judgment and applicable to the present case should be regarded as correctly stating the law.

The question of fact as to claimed dependency and its extent having arisen, the whole of the respondent's means at the date of death of her husband should, in my view,  have been taken account of; it appearing that the respondent possessed means of her own apart from reliance upon the worker's earnings, those means should have been taken into account in determining the extent of her dependency. The established principles already referred to, which may, in appropriate circumstances, require that a claimant's means be discounted or disregarded, are inapplicable to the present case. In determining the extent of dependency, it will be irrelevant to determine either to what extent the respondent had recourse to her own means or whether those means were employed to provide a part of the necessities of life or only some additional comforts and pleasures. In so referring to the respondent's means I do not, of course, intend to include any unemployed earning capacity which she may have possessed; its possession will not normally constitute a bar to a finding of full dependency-Simms v  Lilleshall Coal Co  Ltd ^[F52] -although an able-bodied young man who is wholly reliant upon his father's earnings only because of a disinclination to seek available employment  may receive less consideration from the courts-per Lord Ardwall in Moyes v  Dixon, ^[F53] and per Bankes L.J. in Simms' Case ^[F54] -than did the dutiful daughter in Simms' Case. ^[F55]

For the reasons stated I would allow this appeal.