Comensoli v WQA - Social security payments can be ignored in historical abuse claims

Comensoli v WQA (a pseudonym) [2024] VSCA 104

We provide a short update on the matter of Comensoli v WQA (a pseudonym) [2024] VSCA 104 where the Victorian Court of Appeal dismissed an appeal regarding the potential reduction of an economic loss claim where the Plaintiff had received prior social security payments. Effectively, the Court determined that even where the Plaintiff had been compensated for a portion of the past economic loss via social security payments, that those payments are not to be deducted from an assessment of damages.

Background

The Plaintiff, WQA, had commenced proceedings claiming damages for injuries alleged as a result of sexual abuse, which occurred between 1959 and 1961. The claim included a component for past loss of earnings between 1964 (when WQA would have entered the workforce) until 2015 (being the date of his retirement). The claim ultimately resolved with the exception of a question as to whether past social security payments received by the Plaintiff (totalling $245,529 (the Disputed Amount) should be deducted from the settlement amount agreed between the parties. It was this issue that was the subject of determination by the Court and to which the appeal related.

WQA had received Newstart Allowance between June 1992 and August 1997 and the Disability Support Pension between September 1997 and October 2015 (the Relevant Periods). It was agreed that the amounts comprising the Disputed Amount arose from an injury caused by the alleged abuse. It was further agreed that due to the operation of the ‘repayment formula’ in the Social Security Act 1991 (Cth) (Act) that there would be no liability to repay that amount. This view was ultimately confirmed by Services Australia on 2 June 2023 where no recovery was sought.

In the primary proceedings, the Applicants (Archbishop Comensoli and Christian Brothers) contended that the social security payments received (and retained) by WQA operated to offset the economic loss damages recoverable and WQA would be doubly compensated if those payments were not considered. They relied upon the common law principle governing compensatory damages that a ‘plaintiff cannot recover more than he has lost’. This position was opposed by WQA. The Supreme Court of Victoria (Justice Gorton) at first instance found in favour of WQA that the social security payments received during the Relevant Periods should not be deducted from the settlement sum. This determination was appealed by the Applicants.

Appeal

In the Victorian Court of Appeal, the Applicants argued that the trial judge had erred in concluding that the legislative intent of Part 3.14 of the Act was that the court was precluded from considering the Disputed Amount in assessing WQA’s economic loss damages. They further argued that Justice Horton had erred in failing to apply the principles in Manser v Spry [1994] HCA 50 (i.e. double compensation should be precluded unless there is legislative intent).

Decision

The Court of Appeal ultimately dismissed the appeal and upheld the primary decision of Justice Gorton. The Court found that the level of detail and complexity in the Act was such that the Commonwealth intended to cover the field, so that any and all benefits paid under the Act (whether paid inside or outside any preclusion period) were only to be dealt with in accordance with the provisions of the Act, without any of the benefits having to be taken into account in the assessment of a claimant’s common law damages.

The Court found that as social security payments were subject to recoupment generally, it was ‘inescapable’ that the correct approach was that they were not to be taken into account in the assessment of economic loss, irrespective of whether they were recoverable by the Commonwealth. It was further considered that there would likely only be a smaller cohort of cases ‘of the ‘present kind’ (historical abuse claims) where the preclusion period ends before the first compensation affected payment is made.

While the Court accepted the key principle governing the assessment of compensatory damages is that an injured party cannot recover more than they have lost, if it can be established that in the case of statutory benefits, there was a legislative intent that such benefits be enjoyed independently of, and cumulatively upon, the right to damages, then a claimant, by the receipt of such benefits, can actually be compensated for more than he or she has lost.

What can we expect next?

As a result of this decision, a claimant who has already received social security benefits for loss of earning capacity from the Commonwealth (and where no recovery is sought due to the passage of time and application of the formulas under the Act) may be able to be doubly compensated for economic loss.

Ultimately, the Court of Appeal considered that the effect of an entitlement to ‘double dipping’ will only affect a small number of claims (despite claims in the historical abuse are being unduly affected) and would need to be reviewed on a case-by-case basis. The decision is likely to affect claims nationally given that the benefits in question were paid by the Commonwealth, and will require a court to disregard prior social security benefits received where no recovery is sought due to the expiration of the preclusion period. The effect is that claimants will, in turn, not be required to repay any of this award to the Government.