Arnup v MW White Ltd
| Jurisdiction | England & Wales |
| Judge | Lady Justice Smith,Lord Justice Dyson,Lord Justice Ward |
| Judgment Date | 07 May 2008 |
| Neutral Citation | [2008] EWCA Civ 447 |
| Docket Number | Case No: B3/2007/0740 |
| Court | Court of Appeal (Civil Division) |
| Date | 07 May 2008 |
[2008] EWCA Civ 447
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEENS BENCH DIVISION
His Honour Judge Seymour QC
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Ward
Lord Justice Dyson and
Lady Justice Smith
Case No: B3/2007/0740
6CB01056
Mr Robert Weir (instructed by Kester Cunningham John) for the Appellant
Mr Christopher Purchas QC (instructed by Fox Hartley) for the Respondent
Hearing date: 22 April 2008
Introduction
This appeal and cross-appeal are concerned with the meaning and construction of sections 3 and 4 of the Fatal Accidents Act 1976 as amended.
In March 2006, a claim was brought by Mrs Melanie Jane Arnup for damages for the death of her husband Kevin Arnup, who was killed at work on 22 December 2003, in the course of his employment with M. W. White Ltd. Shortly after the death, Mrs Arnup received two substantial payments. On 24 January 2004, she received a cheque for £129,600 and signed a receipt acknowledging that it was a payment 'in respect of M.W. White's death benefit scheme'. On 16 February 2004, she received a cheque for £100,000 and signed a receipt acknowledging that the payment had been made 'in respect of benefits received from M.W. White Employee Benefit Trust'. Later, when she had begun her action for damages and primary liability had been admitted, the defendant employer contended that the two payments should be brought into account when assessing Mrs Arnup's entitlement to damages. She responded that, pursuant to section 4 of the Fatal Accidents Act 1976, both such payments should be left out of account.
On 17 November 2006, District Judge Pelly directed that the deductibility of these two payments should be decided as preliminary issues. The issues were determined on 27 March 2007 by His Honour Judge Seymour QC, sitting as a deputy High Court Judge. He held that the payment of £129,000 must be deducted. Mrs Arnup appeals against that decision with the permission of Dyson LJ. The judge also held that the payment of £100,000 should not be deducted. M.W. White Ltd cross-appeals against that decision pursuant to the permission of Rix LJ.
The Two Payments
Mr Arnup's employer M.W. White Ltd operated a death in service benefit scheme which had been set up in 1998. Benefits were secured to members of the scheme by means of an insurance policy, the premiums of which were paid by the employer. All employees were members of the scheme and membership of the scheme was a term of the employees' contract of employment. The employer was the trustee and administrator of the scheme. In the event of the death in service of a member, a lump sum was to be paid, equal to four times the member's annual salary. The sum was payable to the employer who had the power to pay it either to the estate of the deceased member or to apply it for the benefit of his dependants or relations or to such persons or bodies as the member may have notified to the employer. The employer had to have regard to but was not bound by any wishes notified by the member. In short, the employer had a discretion as to whom the payment was to be made. When Mr Arnup died, Mr White, the managing director of the employer paid the benefit to Mrs Arnup.
In 2001, the employer had also set up a trust fund. It settled a sum of money upon a company called Bridgwater Corporate Services Ltd as trustees for the benefit of various people including employees and their spouses, children and remoter issue. The trustees were empowered to apply money to the purchase of an insurance policy on the life of any person and were to have the powers of an absolute beneficial owner in relation to any such policy. The trustees entered into a policy of insurance in respect of the lives of 27 named employees of M.W. White. Mr Arnup was one of them. Each life was assured for £100,000. The trustees had a discretion as to the application of the trust funds. When Mr Arnup died, the trust received £100,000 and, at the suggestion of Mr White, the trustees decided to pay that sum to Mrs Arnup.
The relevant statutory provisions
It is convenient at this stage to set out the relevant provisions of the Fatal Accidents Act 1976, as amended. Section 3(1) of the Administration of Justice Act 1982 substituted new sections 1 to 4 of the 1976 Act. Section 1 provides a right of action for a wrongful act causing death. The action is for the benefit of dependants, who are defined. Section 2 provides who is entitled to bring the action. Section 3, entitled 'Assessment of Damages' provides:
“(1) In the action such damages …. may be awarded as are proportioned to the injury resulting from the death to the dependants respectively.”
The other provisions of section 3 are not relevant to this appeal but section 4 lies at its heart. It is entitled 'Assessment of damages: disregard of benefits' and it provides:
“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.”
The Submissions below
Mr Christopher Purchas QC who appeared for M.W. White Ltd below and in this Court submitted that section 4, as properly construed, did not provide that all benefits received by the claimant after the death were to be left out of account in the assessment of damages. The section did not cover payments made by a defendant which were intended to assist the dependants after the death. They were not to be disregarded but were to be deducted from the loss of dependency. Section 4 was intended to cover only benefits received from the deceased's estate or from some other source independent of the defendant. The purpose of the section was to prevent the tortfeasor taking advantage of charitable donations by third parties and the proceeds of insurance paid for by the deceased. The provision was intended to mirror (in fatal accident claims) the common law position for personal injury claims. This construction would be consistent with the public policy of encouraging employers to set up funds or trusts for the benefit of their employees and of making voluntary payments to the dependants of a deceased employee. If his submission were to be accepted that section 4 does not require that the payments in this case be disregarded, the common law rules of deductibility in personal injury cases must be applied, with the result that both payments should be deducted from Mrs Arnup's damages. In his oral submissions it appears that Mr Purchas submitted that section 4 did not apply because the two payments did not 'accrue' to Mrs Arnup as a result of her husband's death. They accrued as the result of the benevolence of the employer or as the result of the decision of Mr White (in the case of the £129,600) or the trustees (in the case of the £100,000) to pay the money to Mrs Arnup. The death of Mr Arnup was no more than the occasion of the making of the payments; it was not what caused the payments to accrue.
Mr Robert Weir, who appeared for Mrs Arnup both below and in this Court, submitted that both payments were plainly caught by section 4. They were benefits which had accrued to Mrs Arnup, not from her husband's estate but 'otherwise' as a result of her husband's death. They should be disregarded in the assessment of damages.
The Judge's decision
After a lengthy consideration of authority, the judge rejected Mr Purchas's first submission that section 4 must be construed so as to exclude from 'disregard' any payment made by a defendant tortfeasor. He accepted Mr Purchas's submission that these two payments had not accrued to the claimant as a result of the death. He held that in each case the monies had been paid as the result of an independent decision by Mr White (in respect of the £129,600) and the trustees (in respect of the £100,000). These independent decisions had broken the chain of causation between the death and the accrual of the money to Mrs Arnup. The death was merely the occasion for the making of the payments, not what caused the payments to be made to her. It followed that section 4 did not require either payment to be disregarded in the assessment of damages.
The judge then sought to apply the common law exceptions to deductibility in personal injury cases. He considered 'the insurance exception' and 'the benevolence exception'. After further consideration of authority, he held that neither payment fell within the insurance exception because Mr Arnup had not contributed to the premiums for the insurance policies. He then considered the benevolence exception and held that the £100,000 payment from the trustees fell within that exception and must therefore be disregarded. The £129,600, did not fall within that exception and must therefore be brought into account and deducted from Mrs Arnup's loss of dependency.
The Appeal and Cross-Appeal
The main issue is the same in both the appeal and cross-appeal. Were these payments caught by section 4, so that they fell to be disregarded in the assessment of damages? Mr Weir, whose written and oral submissions were a model of clarity and economy, argued that they plainly were. He submitted that the judge's holding that the payments did not accrue to Mrs Arnup as a result of the death was highly artificial. Issues of causation in fatal accident claims should be approached in a common sense way. Such issues had originally been questions for the jury, although they no longer were. A decision on causation should not be...
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