Pension claims go to High Court

On 16 February 2018, the High Court granted special leave for Amaca v Latz to proceed to a full High Court hearing, which will take place on 17 April 2018.

Mr Latz, who has mesothelioma, sued Amaca Pty Limited as the manufacturer of the asbestos products he was using. If not for the mesothelioma, Mr Latz would have been expected to live another 16 years. He claimed future economic loss based on both an employment-related superannuation pension, and the Centrelink age pension. That is, he claimed he was entitled to recover the value of the pensions he would not receive because his life had been shortened.

In 2017 the Full Court of the South Australian Supreme Court held that Mr Latz was entitled to recover damages for the loss of his pensions, partly on the basis he should be placed in the economic position he would have been if the negligence of Amaca had not shortened his life.

However, the Court said that a sum for Mr Latz’s living expenses in the lost years had to be deducted, and also that the reversionary interest in the pension, which would pass to his de facto wife on his death, had to be deducted from the damages.

There was some discussion from the judges as to whether the age pension was not contributory, in that it simply arose from an age and means test, whereas Mr Latz’s superannuation pension should be regarded as contributory, being calculated as part of his salary. In the end, the court thought there was no relevant difference between the two.

Both Amaca and Mr Latz sought leave to appeal to the High Court: Amaca trying to have the pensions disallowed, and Mr Latz trying to avoid the reduction for the reversionary pension.

At the special leave application on 16 February 2018, the various legal arguments were fairly briefly discussed. The two judges hearing the application had little trouble in granting special leave to both parties, so this difficult issue will now be decided by the High Court.

The hearing in April will have potentially substantial consequences for much personal injury litigation. The judges in the South Australian Full Court were divided about whether this decision to award Mr Latz his two pensions extends, or simply adopts, existing principles of law. The judgment of the High Court will give a clear indication as to how apparently conflicting views of the same general principles should be resolved, and whether plaintiffs whose lives are shortened as a result of a defendant’s negligence can recover economic loss based on the loss of pension entitlements.

If you have any questions regarding this article, please contact Lian Chami.

Author: David Greenhalgh