England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE SOUTHAMPTON COUNTY COURT
HIS HONOUR ANTHONY THOMPSON QC
Case 4SO 03740

		Royal Courts of Justice Strand, London, WC2A 2LL
		28/03/2006

Lord Justice Buxton :

1. This appeal raises a short but far from easy point on Fatal Accident Act damages, on which we have been much assisted by the able and mercifully succinct arguments of Mr Stuart-Smith and Mr Braslavsky.
2. Mr Duncan McIntyre died from malignant mesothelioma resulting from tortious exposure to asbestos many years previously while in the employ of the defendants. At his death, Mr McIntyre had been married for many years to the claimant, his only dependant. From 1978 onwards he worked in Libya. At the beginning of 2002 the intentions of the couple were that Mr McIntyre would retire on the claimant's 60^th birthday, in 2008. There were no counterindications to that course in the known state of health of either partner. However, in May 2002 Mr McIntyre was diagnosed with mesothelioma, with a very limited prognosis. He chose not to return to Libya, but to spend his last months in England with his family. On 5 September 2002 his employers terminated his employment because of his continuing absence. Mr McIntyre died on 10 October 2002.
3. The only item of damages that is in dispute concerns a payment made to Mr McIntyre under his employers' Provident Fund scheme of which he was a member, and also a payment by his employers of termination pay under Libyan labour law. The payments accrued to Mr McIntyre before his death, but were not in fact made until after his death, when they passed into his estate, of which the claimant was the sole beneficiary. The argument before the judge was that the claimant could not recover in respect of her dependency on her husband's expectation of such payments because that would be double recovery: she had already received the same sums separately as part of his estate. The claimant countered by saying that the case was caught in her favour by section 4 of the Fatal Accidents Act 1976:

"In assessing damages in respect of a person's death in an action under this Act, benefits which have accrued or will or may accrue to any person from his estate or otherwise as a result of his death shall be disregarded"

4. Before us, the argument took a somewhat different shape. But bearing in mind the observation of Beldam LJ in Wood v Bentall Simplex (1992) 1 PIQR at P342 that no aspect of the law of damages has been found in practice to be more dependent on the facts of each particular case than the assessment of loss of pecuniary benefit to dependants under the Fatal Accidents Act, I start with a more accurate account of the facts of this case than is contained in the brief summary set out above. Much depends on the terms of the Provident Fund.
5. The scheme was a contributory one, "savings" by the employee being enhanced by the employer. On termination of service for any reason other than death, permanent disability or retirement the member receives the value of his accrued savings account, together with a 50 per cent addition contributed by the company [rule 9]. He will also receive from his employer, outside the terms of the scheme, the "end of service gratuity" required by Libyan law. On permanent total disability the member receives the rule 9 amounts and also the end of service gratuity required by Libyan labour law. Under the scheme, the total received under those two heads is enhanced if necessary to bring that total up to the equivalent of 12 months annual salary [rule 11]. On retirement, the member receives the rule 9 amounts; plus similar enhancement of the total of those and of the end of service gratuity [rule 13]. On death in service the member's nominated beneficiary receives the rule 9 amounts enhanced as provided for under rule 11 [rule 12].
6. These provisions apply in Mr McIntyre's case as follows. Because his service had been terminated, Mr McIntyre fell under rule 9. He received the rule 9 payment and also, outside the scheme, the end of service gratuity. Had he not been ill and had served on as foreseen he could expect on retirement in 2008 or earlier to receive benefits under rule 13. The claimant says that that expectation is part of her dependency. The appellant's objection is two-fold. First, under the scheme the benefits can only be taken once. In the events that have occurred Mr McIntyre has taken the benefits under rule 9, and thus by the date of his death and a fortiori at the date of his notional future retirement he had exhausted his rights under the scheme, alternatively was no longer a member of the scheme and was thus not qualified for a rule 13 payment. That is one reason why the claimant has suffered no loss in respect of Mr McIntyre's retirement benefits: they do not exist and in the events that occurred could never have existed, and thus could never be part of her dependency. Second, the other reason why she has suffered no loss is that the benefits that she asserts she has lost, that would be paid in 2008, have already been paid in 2002, since the termination of service benefits are the same as the retirement benefits: it not being suggested that Mr McIntyre would have qualified for the enhancement provision that is made in rule 13 but not in rule 9.
7. The first of these arguments addresses the extent of Mr McIntyre's rights, and therefore the content of the claimant's dependency. It has nothing to do with section 4, which is concerned with what rights of the claimant have to be deducted from that dependency in calculating her damages. I was for long much impressed by it. However, Mr Braslavsky reminded us of some fundamental principles of the law of tort, the most conspicuous of which is that the award of damages must put the claimant in the position that she would have been in had the tort not been committed. Had the tort not been committed, Mr McIntyre would, on the evidence, have lived to 2008, and retired then, with his rule 13 benefits. That is what he, and through him the claimant, has lost. On this view, the fact that he was dismissed in 2002 and paid the rule 9 benefits, as the result of a reasonable reaction on his part to the effects of the tort, has simply to be ignored, because none of that would have occurred if the tort had not been committed.
8. Mr Stuart-Smith sought to meet this argument by saying that on the hypothesis that the tort had not been committed, all that Mr McIntyre could expect under the scheme was at some stage to be paid under one but only one of the grounds listed in rules 9-13. That expectation had been fulfilled in the event by the payment under rule 9. Mr McIntyre therefore had not lost anything under the scheme, and by the same token the claimant had in that respect not lost any dependency. This was at first sight a powerful argument, but I do not think that it is right. The court will not speculate, or foresee, where it knows. Here, we know that Mr McIntyre had reached the start of 2002 without any suggestion of dismissal, and no reason to suppose death or disability. The strong balance of probabilities was that he and the claimant were on course to retirement in 2008 and the accrual then of the rule 13 benefits. That is what he and the claimant lost by his premature death.
9. Once that step is taken, it becomes impossible to argue that the fact of the payment in 2002 under rule 9 shows that even if the tort had caused the rule 13 payment not to be made the claimant had suffered no loss thereby. First, it is misleading to say that the rule 9 payment is "the same" as the rule 13 payment. It is not likely to be the case that even the monetary sums will be the same, because they depend on the state of the fund at different dates. More fundamentally, however, the rule 9 payment is made on a different occasion and for a different reason than the rule 13 payment, and simply is not the same thing as a rule 13 payment.
10. Second, therefore, if what the appellants say will be double recovery on the claimant's part is to be avoided, account has to be taken of the fact and amount of the rule 9 payment. But there section 4 does come into operation. The rule 9 payment that occurred was not a payment to the claimant but a payment to Mr McIntyre. What the claimant has in the event obtained is not that payment, but the amount by which his estate is enhanced by having the payment made into it. But that enhancement only benefits the claimant because it forms part of Mr McIntyre's estate: the very item that section 4 says should not be brought into the account and for which credit does not have to be given.
11. That outcome does on one view lead to double recovery, because the claimant obtains not only the value of the rule 9 payment in fact made to her husband but also compensation for loss of the rule 13 payment that would in hypothesis have been made to her husband. But as is very well recognised, it is no objection in itself in a section 4 case that "double recovery" has resulted. That possibility is inherent in the statute itself, because the issue of disregard of a sum cannot arise unless that sum would in a proper computation and without disregard be taken into account as reducing the damages.
12. We were taken to various authorities, but I do not explore them, because they give no specific guidance on the particular and perhaps unusual facts of this case. It may be prudent, however, to record my view that the conclusions that I have reached are not precluded by the decision in Auty v NCB [1985] 1 WLR 784, and in particular by the well-known observations of Oliver LJ in that case. There, the scheme provided benefits for members, inter alia on retirement. It also provided benefits for their widows on the members' death in service or in retirement. When Mrs Popow received her widow's benefits she did not have to give credit for them against her claim for dependency based on loss of his future earnings and assumed retirement pension. That was a straightforward application of section 4 in respect of a payment, the widow's pension, received as a result of the husband's death, as Oliver LJ said at p 804C. The widow however made a further claim, to a dependency based on the widow's pension that she would hypothetically have received under the scheme had her husband lived to normal retirement age but died thereafter. Oliver LJ, at p 806E, saw that claim as dependent on the terms of the scheme. He read those terms as providing that the widow's benefit part of the scheme related to the payment of a single benefit, a widow's pension, on alternative contingencies of death in service or death in retirement. The single condition for the operation of that part of the scheme therefore accrued on the death of the husband in service. The payment to Mrs Popow on the basis of that event therefore exhausted her rights under the scheme, so that she could not be entitled to anything further under that same clause in the hypothetical event of her husband dying after retirement. In the latter event the position would have been the same had the tort not been committed and the husband had died in retirement. Mrs Popow would then still have recovered under the widow's benefit part of the scheme. She lost nothing in that respect by his actual death, because she still recovered under that part of the scheme, but on grounds of death in service rather than death in retirement.
13. That decision is therefore entirely about the loss allegedly suffered by the widow in respect of her own benefit, as provided for by the terms of that scheme. It says nothing about our case, which is concerned not with any personal benefit of the claimant, but with the loss of her dependency on her husband's benefit; and accordingly does not deflect me from dismissing this appeal.

Lord Justice Lloyd:

14. I agree.

Lord Justice Richards:

15. I also agree.