Compensation circumstances relevant

Compensation circumstances relevant

Nelson & Ashcroft [2016] FCCA 1322 (2 June 2016)

Compensation: for full case:

FAMILY LAW – Property – De facto relationship – where the relationship is short – where one party has sustained serious physical and psychological injuries as a result of a workplace accident just prior to the commencement of cohabitation – where the other party has provided care and support during the period of the relationship and that provision of care and support has placed some restriction upon that party’s full employment during the relationship – where compensation has been paid pursuant to a statutory entitlement and the amount received by the injured party has been increased as a result of an acceptance that the children of the other party properly constitute dependents or an eligible young person for the purposes of any calculation of compensation – where the injured party has to some extent dissipated the compensation received reducing the pool available for distribution to the parties – where future needs of the injured party must be balanced against the positive future prospects of the other party – where adjustments must be considered in respect of financial and non-financial contributions as well as in light of future prospects.


    1. It should be noted that the situation relating to the position of one of the parties thereafter changed significantly. In summary, it was noted in the case outline, filed on the part of the applicant on 4 May 2016, that the applicant then proposed that both of the properties at Property M and Property C be sold and that the net proceeds of sale be divided, 20 per cent to the respondent and 80 per cent to the applicant. Thereafter, there was a proposal that each party should then retain the property in their possession or control, including bank accounts, as previously mentioned, as well as superannuation and other property and that each indemnify the other in relation to any liabilities attaching to any property that might be retained by them.
    2. The position of the respondent remained unchanged.
    3. The change with regard to the applicant’s position, in relation to the matter, on 4 May 2016, was an understandable one. The applicant, who was a (occupation omitted) with the (employer omitted), had a workplace accident on (omitted) 2012. As a result of that accident, he suffered permanent injuries which gave rise to serious physical disabilities for the applicant but also, unfortunately, had given rise to serious concerns with regard to the applicant’s mental health.
    4. The indications contained within the affidavits provided in relation to the matter are to the effect that the applicant, as a result of the workplace injury, was diagnosed with interstitial lung disease, depression, PTSD, alcohol abuse/dependence, panic disorder, agoraphobia, acquired brain injury with global cognitive deficits and general difficulties in relation to the control of his behaviour.
    5. As a result of those circumstances, both physical and mental, concerns arose with regard to the behaviours of the applicant such that, unfortunately, in May of 2013, some seven months or thereabouts after the workplace incident occurred, the applicant attempted suicide. Far more significant in relation to these proceedings, however, is that on or about 23 or 25 April 2016, only a matter of some two weeks prior to the hearing of the proceedings, the applicant again attempted suicide.
    6. He was initially admitted to the (omitted) Hospital and at the time of trial was an inpatient at the (omitted) Hospital at the (omitted) Hospital in Brisbane. The applicant’s treating psychiatrist, Dr D, informed the solicitors for the husband of the following:
        <li “=””>(a) Mr Nelson has been readmitted to the (omitted) Hospital…in the context of acute suicidality and will continue to need inpatient care for the next several weeks and;

<li “=””>(b) Given the acute nature of his currently disturbed mental state, along with the potential cognitive side effects of new medication, it is reason to suggest that Mr Nelson is currently not capable of adequately conducting or giving appropriate instructions for the conduct of the proceedings.

  1. It was in the light of that circumstance that an urgent application in a case was also filed by leave on the morning of hearing. That application in a case sought an order to the effect that Mr C Nelson be appointed as litigation guardian for the applicant in the proceedings before the Court. There was no objection taken in respect of that course and it was, of course, specifically noted that it was essential for a number of reasons, not the least of which related to the ongoing mental health of the applicant, such that these proceedings needed to be brought to a close.
  2. An order was made for the appointment of Mr C Nelson as the litigation guardian of the applicant. In the material accompanying the application in a case for the appointment of a litigation guardian, under the hand of the applicant’s solicitor, Mr Edward Luigi Anthony Lago, is attached a brief report from the (omitted) Clinic under the hand of Dr D. Dr D noted, in the third paragraph on page 1 of his report of 2 May 2016, the following:
    1. … it is reasonable to suggest that Mr Nelson is currently not capable of adequately conducting or giving appropriate instruction for the conduct of the proceedings.
  3. On the second page, Dr D continues:
    1. Were there an appropriate proxy or litigation guardian able to be sourced (such as a family member with an appropriate ongoing relationship) I think it would be in Mr Nelson’s best interests to have such a guardian appointed and for these Court proceedings to continue in his absence, so as to enable their timely resolution and reduce his degree of distress during the recovery process from this episode of illness.


  1. It was acknowledged that the real issue here was the consideration of how certain compensation payments received by the applicant was to be categorised. In particular, there was a concern as to whether it was to be categorised as a contribution on the part of the applicant, a contribution on the part of the respondent or, as was emphasised on the part of the respondent if not a contribution directly attributable to her then a joint contribution.
  2. That particular argument arises from the agreed fact at point (19) of the agreed facts. It is noted there that prior to separation, on 9 April 2014, the applicant received $406,837, being five payments of $81,367 for each of the five children who were deemed, pursuant to the Military Rehabilitation and Compensation Act 2004, to be dependent children.
  3. In that respect, I was provided with copies of the Military Rehabilitation and Compensation Act. It should be noted in respect of that legislation that there are additional amounts payable if the maximum compensation able to be made payable to a person has been paid. It is necessary here only to note that there is a points assessment system utilised for the purposes of a determination of compensation and if the points attributable to the injuries which have arisen from a workplace accident are greater than 80 points, then the person is entitled to the maximum compensation to be paid.
  4. Section 80 of the Military Rehabilitation and Compensation Act notes, at subsection (1) as follows:
    1. (1) This section applies to a person (the impaired person) who has been paid, or is entitled to be paid, compensation under this Part if the Commission has determined that the degree of impairment suffered by the person as a result of one or more service injuries or diseases constitutes at least 80 impairment points.
  5. It is simply to be noted that the applicant is assessed as having a degree of impairment of 82 impairment points. As a result of that, the further provisions of section 80 become relevant and in particular subsections (2) and (3) of section 80 of the Military Rehabilitation and Compensation Act. Subsections (2) and (3) are in these terms:
    1. (2) The Commonwealth is liable to pay the impaired person $60,000 for each person who is both a dependant of the impaired person and an eligible young person at the later of:
          1. (a) the date determined by the Commission to be the date on which the impairment suffered by the impaired person constitutes at least 80 impairment points; or
          2. (b) either:
                <li “=””>

            (i) if the person has a single service injury or disease-the date on which a claim was made under section 319 for acceptance of liability for the injury or disease; or

      <li “=””>

      (ii) otherwise-the date on which the most recent claim was made under section 319 for acceptance of liability for one of the service injuries or diseases concerned.

  1. Note: The amount of $60,000 is indexed under section 404.
    1. (3) The amount specified in subsection (2) is also payable in respect of a child of the impaired person:
      1. (a) who was born alive on or after the later of those times but who was conceived before that time; or
      2. (b) who was adopted on or after the later of those times but in respect of whom adoption proceedings were begun before that time.
  1. A “dependant” is defined twice under the provisions of section 80(3) to include both a person as defined as a dependant pursuant to the provisions of section 15, and also a person who is dependent upon the impaired person, for economic support. The issue here is not whether the respondent’s three children by a prior relationship were defined as “dependants” for the purposes of the calculation of whether additional payments were to be made in relation to dependants.
  2. Section 15 of the Military Rehabilitation and Compensation Act 2004 defines a dependant. Section 15 of the Act is in these terms:
    1. (1) A dependant of a member means any person mentioned in subsection (2):
      1. (a) who is wholly or partly dependent on the member; or
      2. (b) who would be wholly or partly dependent on the member but for an incapacity of the member that resulted from an injury or disease or an aggravation of an injury or disease.
  3. Note 1: Sections 17 and 18 set out some examples of when a person is wholly dependent on a member.
  4. Note 2: This section also applies to former members (see section 20).
    1. (2) These are the persons who can be a dependant of a member for the purposes of subsection (1):
      1. (a) any of the following persons:
        1. (i) the member’s partner;
        1. (ii) a parent or step-parent of the member;
        1. (iii) a parent or step-parent of the member’s partner;
        2. (iv) a grandparent of the member;
        3. (v) a child or stepchild of the member;
        4. (vi) a child or stepchild of the member’s partner;
        5. (vii) a grandchild of the member;
          1. (viii) the member’s brother, sister, half-brother or half-sister; or
  5. Note: This paragraph is affected by section 16.
    1. (b) a person in respect of whom the member stands in the position of a parent; or
    2. (c) a person who stands in the position of a parent to the member.
  6. There is also a recognition that whilst dependants of a member are defined there is a further definition contained within section 17 of the Military Rehabilitation and Compensation Act, relating to eligible young persons and how they might be considered to be dependent upon a member who has suffered a debilitating injury. Section 17 of the Military Rehabilitation and Compensation Act 2004 is in these terms:
    1. When partners and eligible young persons are wholly dependent on a member
    2. Partners
      1. (1) For the purposes of this Act, the partner of a member is taken to be wholly dependent on the member if:
        1. (a) the partner lives with the member; or
        1. (b) the Commission is of the opinion that the partner would be living with the member but for a temporary absence of the member or partner or but for an absence of the member or partner due to illness or infirmity.
    3. Note: This subsection also applies to former members (see section 20).
    4. Eligible young persons
      1. (2) For the purposes of this Act, an eligible young person is taken to be wholly dependent on a member if:
        1. (a) either:
          1. (i) the young person lives with the member; or
          2. (ii) the Commission is of the opinion that the young person would be living with the member but for a temporary absence of the member or young person or but for an absence of the member or young person due to illness or infirmity; or
        2. (b) the member is liable to provide child support under the Child Support (Assessment) Act 1989 for the young person.
    5. Note: This subsection also applies to former members (see section 20).
  7. What is obvious from those sections and from the assessment that has actually arisen in relation to this matter, is that the respondent’s three children of her prior relationship fall within the definition of a dependant and/or eligible young person and it is for that reason that the additional payments were made to the applicant in these proceedings.
  8. The additional payments as noted were calculated upon the increased entitlement which is now $81,367 for each child, dependant or eligible young person and this led to the further payment being received by the applicant on 9 April 2014 of $406,837.
  9. What is argued from the perspective of the respondent is that the amount received by the applicant was made up of an amount in the vicinity of $243,000, as a result of the assessment of her children being dependants or eligible young persons.
  10. The major argument as I indicated therefore was whether or not the amount received in relation to the compensation proceedings were a contribution by the applicant, a contribution by the respondent, or a joint contribution.
  11. Certainly, in submissions that were made on the part of the respondent, it was contended that at the very least, some consideration should be given to the amount of approximately $240,000, being equally seen as a contribution by each of the parties and therefore if you like, a further contribution by the respondent to the matrimonial pool of $120,000.
  12. It is necessary in this matter to specifically address that issue in relation to the proceedings so as to be able to move forward with the actual assessment of what might or might not be a just and equitable resolution of property between the parties. The writings of the learned authors of the Australian Family Law & Practice Handbooks, at paragraph 37-080, under the heading, “Damages awards”, refer specifically to the assessment or calculation of damages and how they might be seen as forming either a contribution by one party or the other to the matrimonial pool which is the subject of the determination.
  13. At paragraph 37-080, the following is said:
    1. If a party receives a damages award (for instance, as a result of a personal injury) and contributes the damages award towards an asset of the parties, the court has examined whether the other party can claim a contribution to the damages award. The wife in James and James (1984) FLC 91-537 claimed that her contributions to household expenses and earnings enabled the husband to continue his common law damages claim. This argument was rejected.
  14. It is noteworthy that thereafter there have been extensive writings and consideration of the issue of damages and claims. In particular, I am aware of the judgment of Federal Magistrate Brewster, as he then was, in Kostov & Kuslev [2008] FMCAfam 757 where, at paragraph 18, his Honour said the following:
    1. “The first thing to be observed is that the husband’s damages award is a contribution made by the husband and by the husband alone. In her written submissions counsel for the wife pointed out that the settlement would in all probability have included an amount under the principles in Griffiths v Kerkemeyer. She contended that therefore a part of the damages were referable to contributions made by the wife. By way of explanation to the parties, and to any nonlawyer who may read this judgment, I will explain what this means. If a person in the position of the husband suffers injury, and is unable to care for himself, and if a person in the position of the wife provides care for him, then the husband would be entitled to recover damages referrable to the gratuitous care that has been provided by the wife. This is called a Griffiths v Kerkemeyer award after the High Court case which definitively established this principle. However the submissions made on behalf of the wife have three major problems. The first is that there is no evidence that a claim was made for damages under this head. The file of the solicitors who acted for the husband was not in evidence. The second is that even if it were apparent that such a claim was made there is no evidence as to the portion of the settlement that might relate to such a claim. The third is that in any event this aspect of the case is irrelevant as the whole of a damages award, however comprised, is a contribution by the husband alone. See Wrona (Finn J, unreported, 17 December 2004)”.
  15. It is a definitive statement of the position in relation to this matter and whilst I without hesitation acknowledge that the respondent has provided support to the applicant, there is no suggestion other than that the amounts received by the applicant by way of compensation arose entirely as a result of the injury sustained by him at work and are at law a contribution by the applicant.


Related articles

Your passionate team of family lawyers

Let’s work out your next steps together. Book your free consultation to start the process.