Amaca Pty Limited v Latz; Latz v Amaca Pty Limited

[2018] HCATrans 66

[2018] HCATrans 066

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Adelaide  No A8 of 2018

B e t w e e n -

AMACA PTY LIMITED (UNDER NSW ADMINISTERED WINDING UP)

Appellant

and

ANTHONY LATZ

Respondent

Office of the Registry
  Adelaide  No A7 of 2018

B e t w e e n -

ANTHONY LATZ

Appellant

and

AMACA PTY LIMITED (UNDER NSW ADMINISTERED WINDING UP)

Respondent

KIEFEL CJ
BELL J
GAGELER J
KEANE J
NETTLE J
GORDON J
EDELMAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 17 APRIL 2018, AT 10.15 AM

Copyright in the High Court of Australia

____________________

MR J.T. GLEESON, SC:   May it please the Court, I appear with MR D.F. VILLA and MS C.G. WINNETT, for Amaca, which is the appellant in A8/2018 and the respondent in A7/2018.  (instructed by Holman Webb)

MR D.F. JACKSON, QC:   If the Court pleases, I appear with my learned friend, MR S. TZOUGANATOS, for Mr Latz, the respondent in A8/2018 and the appellant in A7/2018.  (instructed by Turner Freeman Lawyers)

KIEFEL CJ:   Yes, Mr Gleeson.

MR GLEESON:   Your Honours, the appeal concerns the principle for assessment of damages in tort in two relevant circumstances.  The first is that a negligently inflicted personal injury has shortened the plaintiff’s life by a considerable period of time, 16 years, and the second is that, by reason of the plaintiff not being alive in those years ‑ referred to as the “lost years” ‑ he will fail to receive two forms of financial benefit that would otherwise have accrued to him, the first being the age pension, under the Social Security Act 1991 (Cth), and the second being pensions under a contributory scheme established by the Superannuation Act 1988 (SA).

KIEFEL CJ:   Mr Gleeson – this is also for Mr Jackson – would it be possible for you to refer to the state pension as “the superannuation”, just so that we can distinguish between which pensions we are talking about. 

MR GLEESON:   That is convenient, your Honour, yes.

KIEFEL CJ:   Thank you.

MR GLEESON:   Mr Latz is terminally ill.  We are told from the information last week that he remains alive in palliative care. 

Your Honours, the order we proposed to take was to identify upfront our four or five main propositions in general terms, then to identify two core matters.  The first being the way in which the assessment of damages occurred and the second being the key terms of the Commonwealth and the State statute creating the aged pension and the superannuation rights and then to develop the body of our argument, if that is convenient. 

Your Honours, our first general proposition at the highest level is that recovery for foregone economic gains where they are unconnected with an impairment of earning capacity fall outside the scope of compensable loss, inactions for negligently inflicted personal injury.  The second proposition, which is slightly narrower, is that those foregone economic gains fall outside compensable loss at least where they relate to the lost years. 

The third proposition is a more general one about the lost years, which is that the failure of the injured plaintiff to survive into the lost years, has never been treated as compensable in negligence and should not be so treated.  The fourth and the narrowest proposition is that there are particular features of, firstly, the aged pension and then, secondly, the superannuation benefit which would take them outside the categories of compensable loss.  And finally in reply, we will deal with Mr Jackson’s appeal on the question of the reversionary pension. 

Your Honours, in relation to the core facts, if you could have the joint court appeal book please at page 26.  The assessment of damages by the trial judge produced a figure of $1,032,000.  Of those elements, the ones that are in issue here are covered by the expression “future economic loss of $500,000”.  With the balance of them, your Honours will see they cover traditional categories, noting that the past and future gratuitous services are the Griffiths v Kerkemeyer damages and the past and future Sullivan v Gordon damages and interest represent as per the statute set out at page 19 a statutory reversal of CSR v Eddy in the Dust Diseases context.

On appeal at page 85, the Court of Appeal made three adjustments, one of them was a substantial increase in the exemplary damages.  In terms of the compensatory damages, they went down largely because of the view of the reversionary pension but with a small increase in respect to the expenses in the future period and that produced the judgment which is at page 124 for $864,174 that we appeal against.

For the convenience of the Court, could I indicate that in terms of the orders which will not be controversial once the appeal is resolved, at page 133, if we were successful, the amount of the judgment under order 5 would be $782,000.

GORDON J:   Could you give me that figure again please, Mr Gleeson.

MR GLEESON:   $782,000, and at pages 138 to 139, if Mr Jackson were successful, we agree that they are the correct orders.  Including to the extent that they refer to indemnity costs, they are matters your Honours do not need to be concerned with.  We accept that they would be the correct orders.  So there is no dispute about the orders.

Could I then go to the two statutory schemes, first commencing with the superannuation scheme.  I will deal with the Superannuation Act 1988 (SA) recognising the Mr Latz originally acquired his rights under the 1974 Act. They were continued under this Act and this Act is sufficient for the purposes of the case.

There are a few relevant definitions.  On page 14 of volume 1 of the joint book there is the age of retirement ‑ in Mr Latz’s case, 60 years.  Importantly, on page 15 there is a definition of “contributor”.  Your Honours will see within that definition the concept of derivative rights, which we place emphasis on, that a contributor is defined by:

a person accepted as a contributor . . . and includes such a person who has ceased making contributions unless his or her rights . . . have been exhausted and no derivative rights exist in relation to that person.

When we come to the character of the superannuation benefits, we submit that their central composite character is revealed by this and other provisions and, in essence, Mr Latz bought security for himself and his dependants and to a limited extent his estate during his retirement years.  Your Honours, on page 18:

spouse includes a putative spouse ‑

And we also see there the standard contribution rate of 6 per cent.  The relevance of the putative spouse on page 22 is that there can be more than one spouse during the period in which the derivative benefits arise and the Act makes sure that there is never duplication of benefit.  It is a sequential framework.  If the contributor is entitled to a benefit, he or she takes it.  If not, derivative rights arise and they can arise between multiple spouses.

On page 28, section 17 creates the fund. Page 29, section 20A establishes the contributor accounts. Page 34, section 23, the contribution rates. Then we come to the key provisions for this case at page 64, which is Part 5 dealing with old scheme contributors. The key provision creating the right to the pension is section 34 and the pension only arises if the person reaches that retirement age of 60 and it sets out the appropriate formula. Section 34(1) is where Mr Latz obtains his pension and under subsection (4), it is indexed.

What then follows are a series of provisions governing lesser payments in circumstances where a person does not reach the age of 60. They can be seen through sections 35 to 37, and then a very important provision in section 38, that where the contributor dies there are, in the first instance, four possible reversionary rights that can be created. The first is if there is only a spouse it will be a – the spouse becomes entitled to a pension of “two‑thirds of the deceased contributor’s notional pension”.

If there is a spouse and eligible child, then the eligible children may also receive pensions as per subsection (2), and your Honours will see in subsection (2) that the two‑thirds which the spouse is entitled to can be topped up by various shares for children, depending on how many children there are, and in certain circumstances it may be the full amount of the pension payable.

For instance, under (2)(a)(ii), where there are three or more children there is an additional one‑third pension divided between them which added to the two‑thirds means the full pension is paid but in these different destinations. So that is section 38(1)(a), and we would apprehend, although the statute does not say it in terms, that the underlying rationale for the two‑thirds is to match a proposition which originally was derived from English common law principles but is reflected in many Australian common law principles that a third, a third, a third, which is that the deceased person’s entitlements might be regarded as a third spent on the deceased, a third spent on joint expenses and a third spent on the spouse. So, once the deceased is no longer here, the two‑thirds represents the money available for the joint contribution plus the separate needs of the spouse.

So that is 38(1)(a). Section 38 (1)(b) deals with spouse and children; 38(1)(c) no spouse but children; and then, finally, 38(1)(d) is an example of where the estate may receive a lump sum. It will not be a circumstance that applies to Mr Latz, but one of the broad propositions we put about the nature of this scheme is not only are these rights derivative upon the primary rights of the contributor but the scheme has created an interlocking, interwoven framework to recognise the appropriate need, once the person has gone on to the pension or superannuation phase, and then once the person dies.

What the contributor has purchased is the financial security that, in the retirement phase, he or she will get the agreed pension and, if he or she were to die, dependants will be looked after in a defined fashion, and in certain circumstances the estate will receive something.  Your Honours, over the page, 77, subsection (4) defines the contributor’s notional pension.  I will not take your Honours to every provision which indicates reversionary benefits to the estate but there are many. 

Then, if we come over to section 40 on page 89, that is the right to commute the whole or part of the pension.  We rely upon that as part of the character of the rights created by the scheme that the contributor can either commute, take a lump sum, have the certainty that that lump sum got into his or her assets, or the contributor can rely upon the security obtained by the pension and the derivative pensions as a different way of protecting the contributor and the dependants.

Your Honours will see under section 40 there is no time limit, but the regulations, which are at tab 9, in regulation 19, creates a time limit to exercise the commutation right with a limited ability to extend that election.  Then, if I could go to section 42A, on page 93, subsection (4), another indication that the rights of the dependants are derivative rights and elections made by the contributor will impact upon the position of the dependants.

I should have made the point under commutation that any person entitled to a pension can commute.  A person who receives a derivative pension also has the choice to commute all or part of that once they go on that phase.  The final provision, section 46, explains the division of the benefit between the lawful and the putative spouses. 

Section 48 is an important provision.  The heading captures it.  It is “Repayment of contribution account balance and minimum benefits”.  It is designed, under subsection (1), to say that you can never do worse than the contributions you have made and that will be paid to you or your estate if you are not otherwise entitled to pensions or benefits under the Act.

And your Honours see the way section 48(1) is constructed, that that residual refund covers pension “no pension . . . to or in relation to the contributor” and “no benefit is payable” under any other provision.  So it is only if you get nothing and the derivative beneficiaries get nothing that the refund arises.  Again emphasising the interlocking manner in which the entire scheme has been constructed, you cannot, we would submit as a statutory scheme, take any one part and say I will sever it from the context in which it has been located.

Then subsection (2) of section 48, this falls into the minimum benefits category.  It has the effect that if you go on the pension phase ‑ the superannuation pension phase and you lose that within 4.5 years, e.g. with death, then you can be topped up to get at least 4.5 years of that stream. 

And then there are certain further situations in the rest of that provision where minimum benefits are guaranteed and your Honours will see that with subsection (3) for example, the excess is paid either to the contributor or the estate, so again it is one of the provisions that brings the estate in for certain limited purposes. 

Section 50, the rights are not assignable, that is the right to a pension, and section 50A(3) has the same concept, that your account is closed when your rights are exhausted and no derivative rights in relation to you exist.  So, again, that is the interrelated nature of the entire scheme.  Page 116 continues the old contributors. 

Your Honours, they were the main features of the superannuation scheme.  The aged pension can be dealt with more quickly.  It is at tab 6, under the Social Security Act 1991 and the broad elements are quite clear. Section 43 on page 262, there is a qualification of 10 years Australian residence. Section 44 indicates how much in total you could be paid. Section 55 on page 267 indicates the amount and we have drawn attention on page 268 to section 82. These are the very limited circumstances under the Commonwealth Act in which the death of one person may see the partner continue to receive a modest pension for a short bereavement period. And apart from that the Commonwealth scheme treats the pension as something payable to the individual.

Then, section 91, on the death of the recipient there is a discretionary power to make a payment to such a related person.  Finally, under section 277, the method of calculating the pension, 277, the maximum rate of step 1 is reduced by the income test at step 5 and the assets test at step 9 to produce the rate of the pension.  An essential character of the age pension, we submit, is it is a modest form of relief or benevolence provided by society through the will of the Parliament to ameliorate the conditions which residents of modest means are likely to face in the final years of their life where they do not otherwise have adequate income or assets to support it. 

Your Honours, could I then come to paragraphs 11 to 15 of our outline and then turn to CSR v Eddy?  In paragraphs 11 to 15 we draw attention to a series of general principles which have bearing upon the ultimate issue the Court needs to decide in this case.  Some of them are expressed at levels of high generality but that does not make them any less important to bear in mind.

The first principle, which we have identified at paragraph 28 and 29 of our written submissions, was the difference between compensation in tort and contract and tort being essentially backwards‑looking, seeking to put the plaintiff back in the position he, she or it would have been in but for the wrong, whereas contract is forward‑looking in the sense of seeking to put the plaintiff in the position so far as damages can do as if the contract had been performed.  In our submissions, we give your Honours the two key authorities of this Court for those propositions, Gates v City Mutual Life (1986) 160 CLR 1 at 12 in respect to tort and more recently Tabcorp Holdings v Bowen Investments (2009) 236 CLR 272 at 13 in respect to contract.

Now, that general difference in principle, of course, needs to be made more specific in respect to the particular cause of action in question but it can produce important and radical differences as we know, for instance, with the tort of negligent misstatement where the reliance damages, which tort will recognise, will often produce a different and lower form of compensation than a contractual measure of damages seeking to hold the tortfeasor to the representation made.

That first principle, we submit, has relevance in the present case when we come to understand what the tort of negligently inflicted personal injury seeks to identify as the core interest which it protects which is bodily integrity and because that is its core interest the tort does not necessarily protect every element of the economic welfare of the injured person into the future, particularly into the lost years.

Your Honours, the second general principle we identified, which I have just touched upon, is that with each tort it will be necessary to identify its rationale, its elements and the interests which it seeks to protect.  There we differ from the Court of Appeal below where Justice Blue has said that the approach we were urging opens up a disconformity between this tort and other torts.  That may well be exactly the case because each tort is protecting its own interests, so it is important to identify those interests.

The third proposition – and here there is a point of departure between the parties, perhaps – is that we submit that in the difficult or novel cases it will often be relevant to identify first what is it that has been lost and does the law afford compensation for that loss?  That question is logically anterior to the next question which is:  if there is to be compensation, what method will the Court choose to provide the compensation?

KIEFEL CJ:   Is the identification at the first step of injury and loss as two distinct or perhaps overlapping ideas because the notion of injury may perhaps better explain notions of diminution of earning capacity or loss.

MR GLEESON:   Yes, we accept that.  What your Honour says we accept is correct and so in the tort of negligence ‑ ‑ ‑

KIEFEL CJ:   We are not just talking about financial loss.

MR GLEESON:   Yes.  They are discrete matters but they are closely connected and they are overlapping and one needs to know what is the injury which the tort is seeking to regard as a harm and what are the forms of loss that the tort recognises in respect to that harm.  CSR v Eddy itself is a good example because, so far as something had been lost, there were two alternative views being propounded of what had been lost. 

The one that was ultimately favoured in the Court was that, if the person is injured and is unable to provide gratuitous care to those close to the person, what the person suffers is the absence or the lack of the satisfaction of being able to provide that care combined with the flipside of that, the feelings of remorse from not being able to do so.

That being identified as the relevant loss which has flown from the bodily injury, the Court then took the next step and said the appropriate method to compensate that loss is under general damages for the loss that brings to the person and that in turn finally impacted upon the measure because the Court said it would be a very modest addition to the overall general damages, which would be the appropriate way of reflecting that loss.

We would submit that what happened in CSR v Eddy is a good example of our fourth proposition that, although the compensatory principle is described as foundational and is in a sense, it does not necessarily provide the tool for identifying the injury, the loss, or necessarily answering which is the correct method by which the law would compensate for the loss.

The alternative view in CSR v Eddy was to say, well, if I am injured and I cannot provide those services, that the full loss I suffer is that inability to provide them, and what would often follow from that is that I would need to go out and commercially retain someone to provide those services and so I will be paying the full commercial cost and therefore that becomes my relevant loss and so then the compensation becomes easy – what is the cost of commercial care?  So the court made a choice between those two alternative ways of viewing the loss and that then drove the ‑ ‑ ‑

EDELMAN J:   Except in CSR the latter was only notional.

MR GLEESON:   Well ‑ ‑ ‑

EDELMAN J:   Because the commercial – the evidence was that the commercial cost would never have been incurred.

MR GLEESON:   In the particular case what your Honour says is correct but, as I read CSR, what is said is we recognise and respond to this form of loss under general damages with a modest amount, and even if a plaintiff were able to say “I have managed to scrimp and save and sell everything and I now as a matter of fact will be engaging commercial providers to provide that care”, you would not do any differently on the damages because the law is taking an anterior position.

So, your Honours, that brings us to the question of the role of the compensatory principle.  I have put our broad submission on that.  Could I ask your Honours to go to Harriton v Stephens, recognising it is a rather different case to the present, although it has some parallels.  That is found in the joint authorities at volume 2, tab 22.  There are two key parts that we draw attention to in this wrongful birth case. 

The first is in Justice Crennan’s judgment between paragraphs 264 to 270, which are found commencing at page 847.  When her Honour, in a judgment agreed in by Chief Justice Gleeson, Justices Gummow and Heydon, commenced with the compensatory principle and regarded as absolutely firm and controlling, she went on to add at paragraph 264:

if the principle cannot be applied the damage claimed cannot be actionable.

And in 265, particularly over the page, her Honour found this to be a case where the compensatory principle could not be applied because it would involve a comparison of Alexia Harriton’s condition, as it was with disabilities, and the state of non‑existence in which she would have been absent the negligence and the common law cannot contemplate or put a money value on the state of non‑existence. 

So we see at 267 that what was necessary was a close identification of the damage suffered by the child in order to see that the compensatory principle could not be applied, and her Honour reached the conclusion at the end of 270 that:

The analytical tool for measuring damages, the compensatory principle, depends for its utility and execution on proof of the actual damage suffered.

Justice Hayne expressed the matter a little differently but perhaps to the same ultimate effect, between pages 819 to 822, at paragraphs 161 and following.  We draw attention to the end of paragraph 161, where his Honour recognised as the:

a central, and the determinative, question is what does the law recognise as “damage”?  That question is separate and distinct from questions of duty or causation.  To decide the question, it is necessary to consider the place that is to be given to the tort of negligence in the fabric of the law as a whole.

This we see as another recognition that there may be an important anterior question:  is there something that has occurred which negligence regards as damage?  His Honour, applying that approach, over at paragraphs 167 to 168, indicated that one could not find relevant damage because it would involve a comparison between Alexia Harriton’s position and the state of non‑existence.  At 170, his Honour agreed with Justice Crennan at that point.

We would submit that Harriton has two relevances to this case:  firstly, that the need to identify anterior questions such as “is there relevant loss or damage?” and, secondly, the proposition that the common law does not place a value upon a state of non‑existence.  I will come back to that.

Your Honours, the one other authority we referred to on this proposition in our written submissions was the passage of Lord Hoffmann in Banque Bruxelles. That is found again in volume 2 at tab 14. The reference is [1977] AC 191, at pages 210 to 211 of the judgment, and at pages 505 to 506 of the book. Your Honours, is it more convenient to use the book numbers or the case numbers, or both?

BELL J:   Both, I think.  I think we are working on different systems.

KIEFEL CJ:   Yes.

MR GLEESON:   In that event, your Honours, in the judgment, at page 210, letter G, through to 211, letter B, his Honour referenced the compensatory principle in Livingstone v Rawyards and said that, at least in this case, which was a case of novel proportions, it was the wrong place to begin:

it is necessary to decide for what kind of loss he is entitled to compensation.  A correct description of the loss . . . must precede any consideration of the measure of damages.

That we submit is a correct statement.  I hasten to add two footnotes to that.  The first is that McGregor on Damages which your Honour ‑ ‑ ‑ 

KIEFEL CJ:   Are you really pointing to the distinction between ‑ you say loss and damages ‑ the distinction often pointed to is damage and damages.

MR GLEESON:   Yes.

KIEFEL CJ:   An important distinction.

MR GLEESON:   Yes.  So McGregor is somewhat critical of this passage.  We support it.  Secondly, it is said, well, the High Court in Kenny & Good in fact took a different approach to Lord Hoffmann on the substantive issue in the case.  Now, that is true.  Your Honours have at tab 24 Kenny & Good Pty Limited v MGICA (1992) Limited 199 CLR 413. It is page 877 of the book.

Now, while it is true that the Court took a different approach on the ultimate question, we would submit that for instance in Justice Gaudron’s judgment at paragraphs 16 to 17, pages 888 to 889 of the book, there is an important recognition of the very point being made by Lord Hoffmann, which is that it is critical to identify the interest which the tort or the wrong recognises and seeks to protect in the particular case.  Her Honour applied that analysis further at paragraphs 28 to 29 at page 892 and similar observations were made by Justice Gummow at paragraph 79.  So, we would submit that the basic idea of Lord Hoffmann remains a helpful one to be applied appropriately in the given case.

Your Honours, the last of our general principles which took a lot of prominence in CSR v Eddy was that the tort seeks to compensate the injured plaintiff for the losses they suffer, not for the losses their dependants may suffer indirectly by reason of the injury, and the qualification of that of course is, if the dependant could establish a direct duty of care, then the dependant could bring their own action.

The other qualification is that statute has intervened.  We have given your Honours in volume 1 of the authorities the South Australian provision of Lord Campbell’s Act.  It is at tab 8.  It is found in the Civil Liability Act 1936 and at page 311 of the book the relevant sections are sections 23 to 25, and that is an example of the Parliament stepping in and providing a remedy to the dependants on the assumption that they will not have the benefit of a direct duty of care usually and that this is an appropriate alleviation of the fact that the losses to the injured person are different to the losses to them.

The other provision we have provided to complete the South Australian position is at tab 11, which is the estate action under the Survival of Causes of Action Act 1940. That follows the model in many other States. Your Honours will observe on page 424 over to 425 that this follows the amendments that came in in 1982 in many or all jurisdictions to reverse Skelton v Collins in respect to the estate action.

The language used following the English model is that what is not recoverable under the estate action is the loss – is damages for:

the loss of capacity to earn, or the loss of probable future earnings ‑

We would regard the second of those as probably redundant or really for the avoidance of doubt.  It is indicating that the real damage is the loss of capacity to earn.  It manifests itself in a loss of future earnings but however you wish to word it, the estate cannot bring that claim. 

Your Honours, that brings me to CSR v Eddy which is in volume 2 at tab 16, (2005) 226 CLR 1. Can I say something first about the context of CSR v Eddy?  One of the points made correctly by the respondent is that the particular issue in CSR v Eddy was, of course, relatively narrow which was whether the Sullivan v Gordon damages were correct in principle and a range of arguments were put to try and hold on to Sullivan v Gordon, including they were an appropriate analogy to Griffiths v Kerkemeyer damages.

So, that was the tolerably narrow focus of the particular issue which the Court had to decide.  Nevertheless, it is also true that in deciding that issue the Court ranged widely over the basic principles that govern compensation for negligently inflicted personal injury.  So, we would submit, the judgment ought not be given any narrow reading, it should be read as a considered reflection of the appropriate principles in the broader area. 

Now, if I could commence at paragraph 16 on page 598, this is where we see most clearly the distinction between identifying the loss or the damage for which the law will provide compensation and the choice as to the method of that compensation and the approach which Justice Reynolds had taken in Burnicle v Cutelli in the end was the one which the High Court said was appropriate which was to view this as:

lost part of a capacity, the exercise of which can give to her pride and satisfaction and the receipt of gratitude, and the loss of which can lead to frustration and feelings of inadequacy.

That ultimately became what the Court said is the right way that the law of tort recognises this loss as opposed to the alternative that was being put.  There was some discussion of Griffiths v Kerkemeyer and then, when we come to the key passages we rely upon, which are 27 to 32, one of the reasons the Court said Griffiths v Kerkemeyer does not provide an appropriate starting point for Sullivan v Gordon damages is that in its own right it is anomalous and in finding it anomalous the Court had to make some more general observations about how compensation is provided under this tort.

Your Honours know that in paragraphs 29 to 31 the Court identified three types of loss and I immediately recognise the two express qualifications in this passage.  The first is at paragraph 28, that this is a statement of what has traditionally been seen to be the case, noting that it is a most thorough review of the prior authorities and so it is unlikely that major principles would have escaped this review. 

The second qualification, of course, your Honours, is in paragraph 31, that these are described as examples but not exhaustive of the relevant universe. Subject to those explicit qualifications, paragraph 29 says the first type of loss is non‑pecuniary loss and some examples are given.  That, in effect, becomes the general damages.  Pausing there, in the present case this case was not run below as any attempt to recover, as part of non‑pecuniary losses, any matter referrable to the failure to get in the age pension or the superannuation benefits.  So that is the first category.

The second type of loss is loss of earning capacity before the trial and after it.  We submit that in this paragraph the Court is quite carefully consistent with authority, focusing on the loss being the loss of earning capacity and correctly making the point, consistent with authority that, to the extent one looks at the lost future income, you are not compensating for it as earnings; you are only looking at that to the extent that helps you to value the damage or impairment to the earning capacity.

Now, to the extent that in this case the respondent seeks to analogise the pensions with paragraph 30, we submit your Honours should reject that approach because, in the present case, Mr Latz exercised his earning capacity through to the usual retirement date and some nine years later the terrible event of the mesothelioma cut in.

KIEFEL CJ:   I think the respondent in written submissions, paragraph 37, describes what is lost as the capacity to receive earnings.

MR GLEESON:   There was no such loss for Mr Latz in terms of – perhaps your Honour’s question is asking me to address the difference between ‑ ‑ ‑

KIEFEL CJ:   Linguistically, it bears a similarity to the second type of loss referred to at paragraph 30 of CSR v Eddy that underlying it may be other matters so that the capacity to receive earnings may not be all that is contemplated here, it is the capacity to enjoy them, which in itself involves other notions.

MR GLEESON:   Well, your Honour, I will put our proposition and then try to deal with that.  Our proposition is ‑ ‑ ‑

KIEFEL CJ:   I am sorry, and the other thing is it may involve notions of rights. 

MR GLEESON:   We need to grapple with that your Honour.  If we take loss of earning capacity first, which is the language used by the Court, we submit that is the traditional concept, that the injury to the body has impaired or diminished the ability of the person to work, and by work earn money as a reward for that work, and the Court is indicating it is not damages for loss of earnings simpliciter.  The Court there is referring to the earnings which would come from exercising the capacity to work. 

Your Honours will see at the end of paragraph 30, there is a reference back to Arthur Robinson v Carter (1968) 122 CLR 649 at 658, Chief Justice Barwick in that passage, which I do not think is in the materials, it is very clear Chief Justice Barwick is talking about loss of earning capacity in what I have called the traditional sense; the ability to deploy one’s labour. Chief Justice Barwick was making the point, which Justice McHugh later picked up in CSR v Eddy at paragraph 111 on page 631, that it might have been better if this was left as part of general damages and not isolated out as a head of special damages.  But in each of those cases it is the capacity to work and thereby earn money which has been damaged. 

Your Honours, I will come back to make one more observation on the question your Honour the Chief Justice raised by reference to another decision in one moment.  Just to complete these three, the third is actual financial loss and each of the examples given is a payment away, a cost or expense incurred, and the underlying concept there is that the injury to the body has created a need for services which has led to a financial loss.

Now, another area where we disagree with the Court of Appeal in South Australia is that on one of its formulations, they would regard the failure to getting benefits as actual financial loss.  We would submit that is beyond what the High Court has identified in this paragraph.

Your Honours, there is something else I will need to say about CSR v Eddy but I wanted just to deal with two other points immediately.  The first is that the three categories of loss that you there see match earlier statements of the principle and one example we would give for that is in Teubner v Humble 108 CLR 491, which is in volume 3 at tab 36. It is in the judgment of Justice Windeyer at 505, point 8 through to 507 and in a passage often cited in later judgments, his Honour said at 505:

Broadly speaking there are, it seems to me, three ways in which a personal injury can give rise to damage:  First, it may destroy or diminish, permanently or for time, an existing capacity, mental or physical:  Secondly, it may create needs which would not otherwise exist:  Thirdly it may produce physical pain or suffering.

Then his Honour has a discussion of the first category and he speaks of:

a permanent or temporary destruction or diminution of earning capacity . . . the damage arises really from the destruction of a faculty or skill . . . The sum that might have been earned by the exercise of a faculty or skill then becomes the measure of the economic value to the individual of the faculty or skill . . . been damaged.

So, in that passage, and I rely upon what follow, we would submit Justice Windeyer is emphasising the traditional approach to loss of earning capacity.

Your Honours, the second authority that is relevant at this point is the decision in GIO v Johnson which is back in volume 2 at tab 20, page 722.  It is GIO v Johnson (1981) 2 NSWLR 617, and I will subsequently indicate what happened when this went to the High Court. The key part is at the foot of page 626 of the report over to 627 where his Honour was dealing with the claim by Mr Kevin Neaves’ estate and your Honours would see on page 627 of the report at letter B that the way the claim was put was a foregone benefits claim which is, had I lived, my father would have transferred to me by way of gift “a timber mill and timber rights of high potential” and I would have enjoyed from the mill and from other activities an income of $50,000 per annum.

So what was being rolled here together was a traditional loss of earning capacity claim together with a loss of profits claim, had I lived as the owner of the mill I would have profited from the valuable timber.  That is what Justice Hutley said at letter D was quite “wrong in principle” because it exceeded the rule that the damages should be recoverable only for the loss of earning capacity.  At letter E his Honour said:

Loss of earning capacity is the capital asset consisting of the personal capacity to earn money from the use of personal skills.  This is not the same as earnings where the person concerned has capital.

His Honour then gives the example that if the millionaire rentier is killed and there is:

an action for damages, his loss of earning capacity is not the value of the interest he collects. 

So his Honour says if you have capital employed in a business you must split your earning capacity from the income and so this assessment, in effect, was grossly excessive because it compensated for matters which were not loss of income.  His Honour put it pithily at F:

The good fortune of a young man to have a generous father with capacity to make valuable gifts is not part of his earning capacity.

Now, those are very strong and clear statements.  They were in fact technically obiter because what happened as emerged from letter G is that his Honour said because the point had not been taken at trial he would not allow it to be decisive on appeal.

His Honour, with very great reluctance, over the page, accepted the assessment of $1 million, a very substantial assessment for what was deemed to be loss of earning capacity whereas, in truth, it was erroneously calculated.  Now, that went to the Court.  We have provided your Honours in a separate bundle what happened.  We have found it reported in The Legal Reporter of 29 October 1982, and also the Registry has helpfully provided a transcript of the Court of that day together with a note of the oral judgment of Acting Chief Justice Mason, Justices Wilson and Deane, a note of Justice Murphy’s judgment which is the last page and it appears Justice Brennan agreed with the plurality. 

The key point is that the Court had granted special leave in the matter and heard the appeal at length and then picking up perhaps from Mr Solomon’s reporter on page 6 of The Legal Reporter in the first column near the bottom Acting Chief Justice Mason’s judgment is quoted verbatim and we can see in the second column that the appellant was seeking to argue the very point which Justice Hutley said was correct in principle but should have been taken below.  In the middle paragraph, Acting Chief Justice Mason says:

‘The appellant submits that this was an erroneous approach, as indeed it was.  Generally speaking, we agree with the criticisms which Mr Justice Hutley made of it in the Court of Appeal but the fundamental obstacle . . . is that the point which it now seeks to argue was not raised at the trial.

In that context, the Court ultimately revoked special leave.  Now, we do not have this as the authority of a concluded judgment of the Court because special leave was revoked.  However, it is in that rather special category where the Court has granted leave, heard the appeal at length and expressed a considered view as to the law and then reached the decision that leave should be revoked, and it is fairly clear that Acting Chief Justice Mason and Justices Wilson, Deane and Brennan all were of the view that loss of earning capacity should be treated in what I have called the “traditional category”. 

So, your Honour the Chief Justice, that is my longer answer to where we put this.  That to the extent there is an attempt to broaden this out to loss of earnings, where loss of earnings means failure to get in anything that I might have otherwise got in, that is not the approach that the law has taken and nor should the law extend that far.

KIEFEL CJ:   Do I take it from your references to the qualifications you identified before in CSR v Eddy that you are pulling back a little bit from the claim that it exhaustively states the categories of recoverable loss or are you maintaining that?  Do you need to go that far?

MR GLEESON:   Well, I have to recognise the qualifications that are there.

KIEFEL CJ:   Quite.  What I am really asking is is it necessary to say that the plurality exhaustively states the categories there, or rather that this is a novel category not seen in any previous authority of the Court and that judicial method would then require that it be somehow made consistent with or that the categories are able to accommodate damage or loss of this kind?

MR GLEESON:   The latter is the correct way to put it, your Honour, recognising the experience such as GIO shows us that what we call the traditional approach has a very deep and sound and respectable basis.  So if the Court is to move beyond it, the Court can.  It is a question of whether there is an appropriate rationale to do so, having regard to ‑ ‑ ‑

EDELMAN J:   This case really is not in the territory of the second category of CSR or the GIO type case.  They are cases really which ultimately boil down to the fact that if you have not earned it you have not lost it.

MR GLEESON:   Well, we agree with the first part of what your Honour put, that this case cannot be put into the second category of CSR v Eddy, we submit, because there is no damage to earning capacity.  The only place it could be put is if you expanded the third category and said actual financial loss is not limited to payments made to meet the needs generated from the injury but includes in whatever circumstances forgone benefits by reason of the injury, but we submit ‑ ‑ ‑

EDELMAN J:   And you can find that by reference to Lord Hoffmann’s notion of the scope of the duty.

MR GLEESON:   That is the first answer.  We are saying that it is a scope point, that because the interest being protected is the bodily integrity it is perfectly understandable that, if the insult to the body creates a new need and money has to be paid to satisfy that need, that is within the scope of the tort.  

We are saying once you move beyond that and say more generally, “How has my economic position been worsened by reason of the fact I am now a person with that injury and I have not got in something I might have got in”, that is a very, very large step and, if one is contemplating taking that step, we have sought to point out in our written submissions at paragraph 54 that one of the issues becomes where does the principled line get drawn and how is it drawn?

EDELMAN J:   Would you draw the same line then for all torts?  The tort of trespass to land is concerned with interest to land; the tort of false imprisonment is concerned with interest to liberty.  In all of those cases, you can only recover as compensable financial losses that are caused by those torts if they are directly referrable to the nature of the interest protected.

MR GLEESON:   Yes, in the sense there will need to be close reference to what is the interest protected by that tort, but no, the interest is not necessarily the same in each case.  So, if one is looking at trespass to land, one is looking at the most ancient torts in the common law which has arisen out of a stream of legal history and courts have grappled over centuries with the precise delimitation of that interest which is protected and one does not upset the delicate balance that has been set in those cases simply by saying we must have the same result as we have for negligently inflicted personal injury.  With negligently inflicted personal injury the courts to date have, we submit, struck a particular view of the scope of what is protected and that view to date does not – and we submit should not – capture the sorts of matters that we refer to in paragraph 54.

GORDON J:   Do you regard each of those matters listed in 54 as all of the one kind?  In other words, is there a distinction to be drawn between, for example, if you put in terms of certainty or terms, the superannuation on one side and the balance of the other items?

MR GLEESON:   Well, it may be possible to start drawing differences, but we are urging that it would need to be done in a principled fashion and ‑ ‑ ‑

GORDON J:   Well, it comes back to the question of what has been earned.

MR GLEESON:   Well, that may be one way of looking at it, but there is a broader theme of the respondent’s case that we certainly seek to oppose, which is they say because of the compensatory principle anything which you would have got in, but for the injury, should be turned into money, and the respondent does not shy away from saying all of the matters in paragraph 54 are all of the one; provided you can arithmetically turn them into money, you should get them.

So the respondent would say that Justice Hutley was wrong. He should have said if the facts show on a sufficient balance of probabilities that you will receive a gift, then you ought to be able to be compensated for all of the income or capital that would have arisen from the gift.  So we are seeking to address that which is the high point of their case, that is one thing, and saying your Honours should not adopt that as a proposition.  That is a bridge too far for a whole range of reasons.

So if I could just complete my submissions on that and then come back to the narrower issues; on that, that would be a most dramatic expansion of the liability in damages for negligently inflicted personal injuries.  It is very difficult to curtail the quantum of those liabilities if that were the step that were taken.  It raises very large issues about why the particular tortfeasor should be providing this so‑called compensation which, depending upon the person, may be small or may be very, very large.

One response might be, well, you can deal with that remoteness in the particular facts of the case.  We would submit that is not an adequate response to it.  The sort of way in which Justice Hutley dealt with the millionaire rentier by saying that is simply not loss or damage recognised in this cause of action, we submit is the correct manner to deal with it, rather than say, “Did you have sufficient appreciation that, in the ordinary course of things, if you injure someone they might get benefits of a particular kind?” 

One of the points that are important to this as a measure of tort and not contract damages is that normally the losses come about through an involuntary transaction:  one person has negligently injured another, and ordinarily the first person will not have knowledge, foresight or appreciation of the range of circumstances in which the person might suffer forgone benefits; whereas in contract, if you have actually given a warranty to the person, then it is perfectly possible within Hadley v Baxendale to measure under remoteness principles how far you should be liable for these various categories.

We do put that, for all those reasons and for the sorts of reasons CSR v Eddy advanced, if the law were to move to paragraph 54, that is for Parliament, not for this Court.  Now, your Honour, that leaves me to deal with the narrower proposition.

KEANE J:   Mr Gleeson, before you go on to that, can I just ask you:  in trying to find a home for this category of loss in either category 1, 2 or 3 in CSR v Eddy, is it not possible to regard this kind of loss as an aspect of the first category, in the sense that it is an aspect that used to be dealt with as loss of expectation of life and a conventional sum – a very modest conventional sum – was awarded by the courts of common law for loss of expectation of life that did not recognise a difference between the prospects of a happy life of a rich man and a poor man because, well, the law just drew the line there?

If one regards it as a case about loss of expectation of life – that is to say, because you are not alive you do not receive these moneys or you will not receive these moneys, would not one naturally see that as fitting in category 1 as an aspect of loss of amenity of life?

MR GLEESON:   Your Honour, the short answer to that is yes.  That is the concession we have sought to make in paragraph 6 of our reply, that if you were to put it somewhere, that is where it should be, and it should be part of that undifferentiated or unfragmented sum that CSR v Eddy speaks about at paragraph 39, and it would be a modest sum of money and it would be done consistent with those traditional views of the tort, but particularly because of the inability to contemplate and put a money sum on that period of life of which you have been deprived.

Now, in the present case, perhaps like CSR v Eddy, there was no express attempt below to try to get an increase in that award on that ground.  There was an award on that ground and so, as in CSR v Eddy, an appropriate resolution of the appeal would be to say that is the territory it is in, it is a modest recovery.  In the present case there is no need to adjust the damages given the way the parties ran the case.  In saying that to your Honour, I have, as it were, moved from our first proposition in paragraph 4 that the tort simply does not treat forgone economic gains as compensable loss to our second proposition ‑ ‑ ‑

KEANE J:   Not if they are associated with loss of expectation of life.

MR GLEESON:   Yes.  I am moving down to that as our second proposition, which is the narrower one, that where you are in that category, the essential ‑ ‑ ‑

KIEFEL CJ:   Just before you go on there, in relation to the first area of damage, would it be described then as loss of the enjoyment of the benefits of earlier investments?

MR GLEESON:   No, your Honour.  What I was putting was something less than that, which was the ‑ ‑ ‑

KIEFEL CJ:   I am not saying loss of the receipt of the benefits but rather putting it in the context of the first area of damages, which are not reflected so much in money’s worth but rather in an amenity or enjoyment of life principle.  I am drawing a bit of a distinction from Justice Keane in relation to expectation of life and saying it perhaps also could be seen as loss of part of the enjoyment or amenity of life because you do not have the benefit of what you could do with your investments.  But that is not to say that it is earning capacity, which is your principal point.

MR GLEESON:   Well, it is not earning capacity and it is not the discounted present value of the pension; it is more modest appreciation.  But I would attempt to stay with what I was putting to Justice Keane, but could I give a practical example, and I do not want to rush too soon but if we look at the superannuation pension here, because of the manner in which the reversionary streams operate and what they are called the derivative benefits, if you ask what has Mr Latz lost here, he knows that the security that he paid his 6 per cent for over 30 years has materialised into a pension stream and that the protection, which was both for himself and for his dependants, will be achieved and has not been impaired.

He knows when he dies that he has secured that protection that he bought.  So what has he lost in that situation?  He has lost tolerably little in terms of “Have I looked after my dependents?  I have in fact looked after them exactly as I paid for and I did not wish my early death, but from the moment I am dead I know that that two-thirds stream will be there and it will be there, everything else being equal, for a 16 year longer period than it otherwise would have been.”

In that situation, we would submit, if you were doing it as category 1, is there some modest increase needed to the general damages.  It would be exceptionally modest because the person has achieved and not been damaged in that part of the capacity.  That leaves the aspect your Honour the Chief Justice put to me.  What about Mr Latz himself?  “Had I lived, I would have, in my final 16 years of life, had the benefit that I would have had a stream of money coming in.”

Now, at that point, we submit ‑ and this is really our proposition in paragraphs 5 and 6 ‑ there is a real problem with the common law treating that as a head of loss, save in the sense of a modest recovery for a loss of amenity for the reasons – what is it that you are now comparing?  You are comparing two future existences.  The counterfactual existence is, if I remained alive for 16 years I would have received a stream of pensions, I would have incurred living costs and I would have had an entire other quality of life which is impossible to really identify and reduce to money.

What I am comparing that with is the actual world which is non‑existence and the only thing we know about non‑existence is because I am not here, I will not receive the pensions, we know nothing else about what non‑existence would look like.  Now, for those reasons, which are a little similar to Harriton but in a very different situation, we submit the common law approach is not to recognise the failure to receive the pensions as loss and it is not to attempt to place a money value on the failure to survive into the lost years and all the common law would do is as per our paragraph 6 in reply.

GAGELER J:   So, on that basis a plaintiff would not be able to recover lost wages during lost years?

MR GLEESON:   But the plaintiff never recovers, as such, lost wages in lost years, the plaintiff having suffered an injury to the body while alive which is an injury to a capital asset, is entitled to damages for that injury while alive, conventionally measured by reference to an expectation of wages that might be earned in the lost years.

GAGELER J:   Which involves comparing existence with non‑existence?

MR GLEESON:   With respect, no, your Honour, what it does is to say while you are alive damage to your bodily person has damaged a facility here and now and that has happened, you are diminished now in a capital sense and we put a value on that diminution now even though we look when we come to measurement, Skelton v Collins says we do not cut off the measurement at the date of your shortened death.  This is difference because this is saying these are things which can only ever fall in in a future period – in a period where you are not alive.

EDELMAN J:   Why could not one say that in the instant before death the value of the superannuation pension here and now is diminished?

MR GLEESON:   Your Honour’s question refers to the superannuation pension.  My submissions are, of course, different in respect to the aged pension, but in respect to the superannuation pension our proposition is that under the scheme what the person bought was the security that there would be a primary flow of benefits and then in circumstances which cannot be controlled, namely, death whenever that occurred, the potential for a derivative flow of benefits that that is a change in the form of the benefit but it is not an impairment of the substance or the character of the benefit.

So, if you evaluate in the second immediately before death you would take into account – well, what that means is it will change to that other form and the value that it then takes, of course, will still depend upon how the world plays out.  The spouse might exercise the right of commutation and take a lump sum, the spouse might say I will stay on the pension stream.

NETTLE J:   Mr Gleeson, may I just come back to your Harriton point which I took to be a pushback against Justice Keane’s suggestion that you might include something in the first head of damage for loss of expectation of life?  I understood you to be saying if you by analogy, albeit it a loose one, with Harriton, you really could not do that because oblivion is incomparable with continued life with a stream of superannuation payments.

MR GLEESON:   Your Honour, I may not have been clear.  What I was seeking to put was that, as I understand it, the traditional approach to loss of expectation of life, what that says is, and this is the reason it is modest, is for that period while I remain alive my life is diminished to some extent by reason of my appreciation that my life will not have the length it otherwise would have. 

That is what has traditionally been compensated for, that can be compensated for, and in looking at that, how is my life diminished until my actual date of death knowing I do not have what it might otherwise have been.  One might bring to account that what might have otherwise have been would include a life in which various things happen, including the age pension, including the superannuation benefits, including various demerits on the other side of the ledger, all of that producing a very modest sum.

So I was not seeking to pushback against that part of Justice Keane.  I was seeking to say with Harriton that if you go the step further and say “I will treat your failure to receive $51,000 per year for 16 years as a compensable loss”, you are then in the area where you have the problems of Harriton, because you are now seeking to compare one aspect of the counterfactual world with an actual world which we cannot know about the existence of.

Your Honours, the point I had reached in our outline was paragraph 18, and I just need to deal with the three key cases that are put against us before I come to our final submissions.  Skelton v Collins (1966) 115 CLR 94, which is in volume 3 at tab 35, the key matter that we emphasised was that this was a case considering loss of earning capacity in what I have identified as the traditional sense and the precise question was when you measure that loss do you cut it off before you reach the lost years, and the Court held that you do not so cut it off.

We would emphasise that the various judgments were focusing on lost earning capacity in that traditional sense and not any broader sense of loss of earnings, and this is a difference between the parties perhaps.  Could I just indicate some of the key passages where that is clear?  Justice Taylor at page 107 of the judgment, near the end of the middle paragraph.  Justice Taylor, again on page 121, the whole of the first and the second paragraphs, Justice Menzies at the foot of page 126, top of 127, and Justice Windeyer at 128, the first full paragraph over for the next several pages.

Now, could I also make these observations about Justice Windeyer?  The key passage relied upon by the respondent is on page 128 in the last paragraph, which is a reference to the compensatory principle, the damages not being punitive, and they are to compensate for what the person has suffered and will suffer in mind, body or estate and the key question is to identify what is comprised by mind, body and estate.  His Honour then says over the page that the general principle yields to more particular doctrines and then his Honour says:

The next rule . . . flows from the principle of compensation is that anything having a money value which the plaintiff has lost should be made good in money.

The respondent says, well, that is our case at its highest, and we would submit that has to be understood in the context which Justice Windeyer is applying it, which is he immediately goes on to speak of:

The destruction or diminution of a man’s capacity to earn money can be made good in money.

It is clear for the whole of that paragraph he is speaking about the labour and the skill, so it is loss of earning capacity in the tradition sense.  So, really on that page 129, the first full paragraph matches on to CSR v Eddy category 3.  The large paragraph matches on to CSR v Eddy category 2.  The final paragraph, going over to the next page, is CSR v Eddy category 1, and these are the concepts I was seeking to develop in my answer to Justice Keane.  This is what would be covered in the general damages for diminished satisfaction of enjoyment and not being able to do things you had planned or hoped to do.

Justice Windeyer in fact on the whole of pages 130 and 131 is very, very strong that in this area you are not compensating as such for the lost years.  What one is doing is seeking to measure in some way the diminished satisfaction and enjoyment while you are still alive and what his Honour says in the middle of 130, which is:

Still less can I grasp the idea that a man’s life is a possession of his that can be valued in money.

That, we submit, is a correct and continuing recognition that the lost years as such cannot be treated as compensable loss.  His Honour puts it neatly at the foot of 131:

the money is not then a recompense for a loss of something having a money value.  It is given as some consolation or solace for the distress that is the consequence of a loss on which no monetary value can be put.

Now that, we submit, is the correct territory in which any recompense for the failure to getting certainly the age pension and probably the superannuation pension should be put.  Now, that is the first key case that is relied upon against us.

Your Honours, the second is Todorovic, which is at tab 37, (1981) 150 CLR 402, just about a year before GIO and Hutley came to the Court.  The important thing which is clear from the head note, is the case was primarily about the discount rate, inflation, tax and Chief Justice Gibbs and Justice Wilson made those issues clear on page 409 of the report and they said how are the courts to:

approach the everyday task of assessing damages for personal injuries in cases in which the plaintiff, by reason of his injuries, has suffered a loss or impairment of his capacity to earn wages in the future, or will require in the future to be supplied with goods and services for which he will have to pay.

So it is very much dealing with the traditional loss of earning capacity, what is the discount rate.  Interestingly, Justice Murphy at page 454 at point 7 observed that because of the narrow focus of the appeal:

insufficient attention [was given to] . . . what is increasingly a very important item of damage, that is, adverse effect on superannuation rights. 

And that is borne out by the record of argument.  So that is the first limitation to be taken from this case.

The second is that if your Honours go to pages 425 to 426 of the report, what is set out at 425 is the assessment in the Court of Appeal where one can see that loss of earning capacity has been separated out from loss of superannuation benefits.  That happened below.  However, the facts are very different to the present case.  This was a person who, at age 35, was injured, rendered unemployable, who had thereby had his earning capacity damaged for 30 years up until his normal retirement date and as well as that, lost the ability, because of that damage to earning capacity, to make the five per cent contributions which would have got him superannuation payments for the last 12 years of his life.

So although these two heads have been separated out, this is really loss of superannuation benefits by reason of damage to earning capacity.  That is the first critical difference to the present case.  The second, your Honours will see on 426, is that the superannuation benefits were for that 12 year period and then discounted back.  This was not a lost year’s claim.  What this was saying was for the last 12 years of your life, but for the damage to your earning capacity, you would have been comforted by substantial superannuation.  In the actual world where you are alive, you will not have that protection and that is compensable loss. 

So we make no submission against that as being a continuing correct appreciation in a case where there is loss of earning capacity which causes loss of superannuation benefits and the loss is felt before the person’s death.  Your Honours, the third of the key cases relied upon by the respondent is in volume 2, which is Fitch v Hyde‑Cates (1982) 150 CLR 482, at tab 19. Again, it was cited around the very same time as Todorovic, GIO and Hutley.  The case was not about any of the issues which directly arise here.  Your Honours see from the headnote it was essentially about the manner in which the estate’s survival action was entitled to recover damages, and in particular what did it mean to calculate the damages without reference to the loss or gain to the estate consequent upon death. 

The case stands for the proposition in the headnote that the damages for loss of earning capacity in the lost years – that is, the Skelton v Collins damages – are not precluded from recovery by the estate.  That is the proposition which the legislature immediately reversed in 1982 in the example of the statutes I took you to.

It is clear from Justice Mason, at page 708, that that is the issue he and the Court are addressing.  It is also clear from the relatively brief record of argument that the Court received no argument on any broader questions such as superannuation benefits or annuities or the like.  The key passage relied upon by the respondent is at page 491, the middle paragraph.  In the course of finding that loss of earning capacity is part of the deceased’s claim arising before death rather than something which is consequent upon death and therefore an estate claim, Justice Mason referred to what Lord Scarman had said in Gammell v Wilson, drawing a distinction between annuities and insurance moneys falling on death.

Our submission is that that is a slender thread upon which to erect a proposition that annuities ceasing on death become a recoverable head of loss or damage in tort.  There is no discussion by Justice Mason of what kind of annuity he has in mind.  There was no argument on the topic.  The annuity he had in mind may well not bear a resemblance to the superannuation pension in the present case.  There is no indication that it has derivative rights or reversionary strings attached to it.  His Honour should, we submit, be read as saying no more than if an annuity is compensable, that will not occur as part of the loss to the estate consequent upon the death and it therefore will not be excluded.

Your Honours, there may be one final earlier High Court authority that Mr Jackson relies upon, Paff v Speed 105 CLR 549, which is at tab 29 of volume 3. We would submit that that is not grappling with the issue before your Honours as identified.

That brings me to the final part of our submissions which are our more general propositions as to why the law should not take this extra step.  We have really identified three general matters that I have touched upon in  various ways so far.  The first, the difficulty in drawing a principled line; the second, these are not losses to Mr Latz, they are at best losses felt by family members after his death; and, thirdly, the inability of the common law to formulate damages for the lost years.

Could I just then elaborate on the last one, which is our final proposition which is more specific to particular benefits in issue here?  With the age pension, we submit that that is tolerably clear.  It is there to provide a limited form of benevolence for people of limited means facing those final years of their life.  It has not been bought in any way by the person.  It in no way relates to their earning capacity.  It is not a prerequisite that the person has worked, and the non‑payment of the pension is the cessation of an allowance for which there is no further need.

Your Honours, the only other matter I want to say about the age pension is that, while the amounts of that may seem relatively modest compared to the superannuation pension, the issue of principle is a very important one because if that is given the stamp or the head of loss and then if it is the subject of a discounted present value which may, given life expectancy, be many, many years, it will provoke a significant inflation of awards in these and in other matters.  So we would urge your Honours not simply to regard it as a fairly small amount of money; it is a very substantial issue of both principle and money, not just for funds like Amaca but for like funds.

That brings me to the superannuation pension and by reason of the construction I have sought to place on the statute, we submit that the tort has, at most, changed the form of the benefit during the lost years but not impaired its essential character and it is impossible to treat the derivative or the reversionary streams as something which has simply come from a separate source and must be put out of account when one contemplates the damage.

We put that proposition in a primary way and in an alternative way.  In the primary way, we say that Mr Latz has acquired the essential security which he bargained for and has not been relevantly injured and, for that reason, there is nothing to be recovered by way of a separate head of damage save for the possibility of loss of amenity.  We put that in an alternative sense that I will deal with in reply that on any view the Court of Appeal majority was correct to bring to account the reversionary pension when it assessed the damages.

Just finally, your Honour, in the judgment in the joint core appeal book, could I just indicate the three or four places where we seek to differ from the majority in the Court of Appeal?  The first is on page 67 between paragraphs 62 through to 68 Justice Blue treats classification of damages as “logical and/or practical” but otherwise governed entirely by the compensatory principle.  For the submissions I have put that fails to appreciate a series of further specific inquiries the law has undertaken to ascertain whether something is an appropriate loss having regard to the interests of the tort. 

Your Honours, at pages 70 to 71 we differ in the reading of Skelton v Collins.  We dispute that Justice Taylor or Justice Windeyer can be read as speaking more generally than the loss of earning capacity which was clearly in issue.  At page 73, paragraph 77, I have indicated why we submit Justice Mason in Fitch cannot be read as broadly as is there put.

Your Honours, at page 76 there is a statement in paragraph 86 that CSR v Eddy can be understood as not having referred to these sort of claims because they were not in existence until very recently.  We doubt that the material would allow one to draw that evaluative conclusion.  We know from this statute it was introduced in South Australia in 1974, there is a very long time in which contributory pension schemes and the age pension have existed in Australia in all sorts of areas.  So, it is unlikely that that explains the observations in CSR v Eddy.  At paragraph 87, we have read “actual financial loss” in the narrower sense.

In paragraph 91, it is important to note that Dabinett v Whittaker is not a good authority because it was one where the benefits were repayable upon success in the action, and that is not the case with the age pension in the present case. I will give the reference: section 1178 of the Social Security Act does not render these benefits repayable.

At page 79, when the analysis comes to first principles, Justice Blue said there was no reason to distinguish these losses.  We submit there is, for the very reasons that Justice Hutley identified in GIO.  At 99, he suggests we are contending for a special rule on personal injuries.  We submit we are not; it is a rule reflecting the interests of the tort.  At 100, he says that Amaca is distinguishing between active and passive income.  That is not the distinction we are drawing.  It is the distinction between damaged loss of earning capacity and other forgone receipts.

In Justice Stanley’s judgment, we would submit, his analysis is correct, between pages 93 and 96.  Finally, in Justice Hinton’s judgment, commencing at page 113, we would agree with much of his initial analysis of the character of, first, the age pension and then his analysis of the character of the superannuation benefit, over the page.  We would agree, at the top of page 115, that the superannuation benefit is not deferred wages.  Where we depart is essentially at the foot of page 115 to 116. 

Your Honours will see at 116, in paragraph 252, that his Honour says that there is not much difference between this and loss of wages to trial and actual fixed financial loss.  That is obviously the wrong way to view that.  That is simply a part of the measure of the damage to earning capacity.  Unless your Honours have questions, they are our submissions in‑chief.

KIEFEL CJ:   Thank you.  Yes, Mr Jackson.

MR JACKSON:   Your Honours, may I say one thing:  Mr Latz, though perhaps for not much longer, is a person who is bringing his own action.  He is alive; it is not an estate claim and it is not a claim which is made under any compensation to relatives legislation.  It is simply a claim which he is making for the loss which he has suffered by reason of the injury which has occurred to him.

Could I start, your Honours, with the appeal by Amaca.  As your Honours have heard, that appeal is, in essence, an appeal against the views of Justice Blue and Justice Hinton on the issues of superannuation benefits and loss of age pension.  May I make two preliminary remarks in relation to that.

The first is that this is not a case where there is any difficulty in the quantification of the amounts in question.  Your Honours, in that regard, the length of time during which the life has been shortened is established.  Could I refer your Honours to the passages from the trial judge, which are quoted in our submissions in paragraph 6, particularly footnote 9.  The references to where those passages may actually be seen are at pages 17 and 25 of the appeal book.

Similarly, the amounts of superannuation, age pension and living expenses during those years were established and could I refer again to the references in paragraph 6 of our respondent’s submissions.  That is the first point, your Honours –no difficulty in quantification.

The second point, your Honours, concerns the nature of the loss that is being sued for in respect of those items and there is a claim for actual economic loss suffered by the plaintiff.  May I say just one thing, your Honours.  One speaks of lost years but one does have to bear in mind that the term “lost years” has, relevantly, two meanings.  One meaning is if one is talking in the context of loss of earning capacity because the period at which the lost years end, or the last of the lost years, is the time when the earning capacity might last have been exercised.

When one is speaking about superannuation, for example, it will ordinarily be the case that the lost years will end at the time when the pre‑accident expectation of life comes to an end, that is working on the assumption, of course, that most superannuation schemes will be ones which have the result that a person is paid a pension for the rest of their lives although no doubt there is a possibility of commutation.

If I could say just one further thing about it, one does not really need, in looking at cases dealing with superannuation, one does not really expect to see a great deal of separate discussion of the lost years in relation to superannuation payments because, assuming that one is speaking about a pension that is a lifetime pension, it is simply a question of what was the pre‑accident expectation of life, as distinct from what was the pre‑accident or pre‑injury period during which earning capacity might have been exercised, which can be a different question.

Could I deal first with the superannuation issue.  Our learned friends argue that such an award is novel ‑ and synonyms for that have been used rather freely – and an extension of the types of loss for which damages are allowed in cases of personal injury.  Justice Stanley appears to have agreed with that view.  The two references are paragraphs 165 and 170 of his reasons at pages 94 and 97 of the combined book.  Your Honours, could we say, with respect, that is really quite wrong.  Such damages have been awarded for quite some decades and there was nothing unusual or novel in awarding damages for such a loss in this case.

Your Honours, we would submit that a relevant starting point is Paff v Speed (1961) 105 CLR, volume 3 behind tab 29.  I am sorry, your Honours, to have to go back to these cases, but we do wish to make somewhat different points from them from those which our learned friends have done.

Your Honours, Paff v Speed, in our submission, demonstrates that at least since 1961, only 57 years ago, damages have been awarded for loss of superannuation benefits.  Paff v Speed was a case of a young police officer whose career as such had come to an end in consequence of injuries he received in a motor accident.  He claimed damages, including for loss of a police pension on retirement, a superannuation‑type payment, including the loss of a police pension on retirement had he been able to continue in the police force.

Now, the scheme involved had distinct similarities to the scheme in question here.  Your Honours will see it referred to at page 550 of the report at about point 8 on the page.  It does not go into great detail about it, your Honours, but you will see it referred to in the last paragraph of the facts stated in relation to the case.

Your Honours, the ultimate issue in the case was whether in reduction of the claim for superannuation benefits there should be taken into account a lower amount which he had actually begun to receive from the fund.  But what the case does illustrate, in our submission, is that the type of loss, an economic loss, if I could use that expression ‑ the type of loss, an economic loss, though related to employment but not perhaps itself loss of earning capacity, was an appropriate head of damage.

KIEFEL CJ:   Mr Jackson, do you accept that the superannuation benefits here in question and the pension benefits are not loss of earning capacity?

MR JACKSON:   Well, your Honour, we put it in two ways.  There are views that it is and views that it is not.  We say prima facie it seems not to be directly loss of earning capacity.  But, equally, it is possible, your Honours ‑ we have referred to this in our written submissions – to regard it as a reflection of earning capacity of the past or as in a kind of remnant of earning capacity.  I think your Honour referred to the passage in our submission before.

KIEFEL CJ:   The capacity to benefit I think – capacity to receive earnings.

MR JACKSON:   Yes, because in the case of superannuation it is something – and I will come to this in a little more detail – something very connected, if I could use that expression, to the actual exercise of earning capacity in the past.

KIEFEL CJ:   With superannuation it really reflects past earnings that have been invested by others to produce a future income stream.

MR JACKSON:   Yes, and very commonly these days, of course, there is a requirement for an employer contribution and also an employee usually has the ability themselves to make a contribution during the period of employment.

KIEFEL CJ:   But the capacity to receive the moneys is to say no more than one no longer exists, it does not really describe the actual damage, does it – the loss?

MR JACKSON:   Well, it describes the inability and consequence of the tort. 

KIEFEL CJ:   It is a consequence of death.

MR JACKSON:   I am sorry, your Honour?

KIEFEL CJ:   It is a consequence of death, of not being here, the capacity to receive, but I do not think there is any case that has ever looked at compensable damage in that way.

MR JACKSON:   Well, your Honour, may I move on a little in relation to those?

KIEFEL CJ:   I am taking you away from Paff v Speed though, I think, that is where you ‑ ‑ ‑

MR JACKSON:   Yes, what I was going to say, your Honour, about Paff v Speed was just this – the further thing I was going to say was just this, that at the time of Paff v Speed there was a question whether there could be recovery for losses occurring during the years by which the tort had shortened the plaintiff’s expected span of life and that issue was resolved only a few years later in 1966 where the Court in Skelton v Collins ‑ and I will come to it in just a moment, your Honours ‑ held unanimously that damages were available for economic loss not merely for the years remaining after injury but also for the years which were described as the “lost years” by which the plaintiff’s life had been shortened in consequence of the tort. 

Now, your Honours, Skelton v Collins, it is in volume 3, your Honours, behind tab 35, that was a major case.  It was a decision deliberately not following English decisions on the same question at a time when to do that occasioned perhaps a little more comment than would be the case today and, your Honours, it was itself followed by the House of Lords in Pickett v British Rail Engineering Ltd [1980] AC 136.

Could I go to Skelton v Collins for a moment, your Honours, in volume 3 behind tab 35? Your Honours, the principal reasons on the issue were those of Justice Taylor which you will see him ‑ and I can give your Honours the very briefest references. The issue is stated by him at page 107 about point 7 on the page and your Honours will see immediately before the last paragraph, he says:

The second is that in assessing damages for the plaintiff’s lost earning capacity regard should have been had –

and your Honours will see the remainder of that paragraph.  That was the core issue.  Your Honours, the discussion of the issue commences at page 113, about point 8 on the page, and your Honours will see at the bottom of the page “The further question arises”, and your Honours will see that sentence, and then the conclusion ‑ and I think my learned friend took you to this passage, is at page 121, about point 5 on the page.  Your Honours will see the paragraph commencing:

For the reasons I have given –

and your Honours will see that his Honour goes on to say at about the fourth line:

in no way operates to displace or destroy his right to recover damages for economic loss resulting from his diminished earning capacity.

And your Honours will see the remainder of that.  Your Honours, it is not, as we understand it, argued that the central principle of Skelton v Collins has no application, but that it does not extend beyond the period of earning capacity.

Now, your Honours, it is perfectly possible, of course, to say that Skelton v Collins was concerned with earning capacity and that no claim for superannuation benefits was involved. We would accept that. But, your Honours, one does see that in the passage to which I just referred at page 121, about point five, that Justice Taylor used the expression:

economic loss resulting from his diminished earning capacity.

That use, and similar uses to which I will come, suggest, in our submission, that diminished earning capacity was the species but economic loss the genus of which that species formed part.  And, your Honours, that comes also from Fitch v Hyde‑Cates in passages which your Honours have not yet seen. 

GAGELER J:   Mr Jackson, the diminished earning capacity to which Justice Taylor was referring to in that passage, I am putting to you to get your reaction, could only be I think, the diminution in the years in which the money would be earned.

MR JACKSON:   Yes, in which the capacity might, absent the injury, have been exercised.  So that is a period that could fall – could finish before the ordinary life expectancy. 

GAGELER J:   Yes.

MR JACKSON:   That is why I was suggesting earlier, your Honours, that there are two different periods capable of being involved.  Your Honours, that view, the economic loss being the genus and diminished earning capacity a species, is supported, in our submission, by the observation of Justice Windeyer at page 128 where, in the last paragraph on the page, in the third line, your Honours will see he uses the expression:

They are given to compensate the injured person for what he has suffered and will suffer in mind, body or estate. 

Your Honours will see the words “or estate”, and the fact that his Honour was not speaking in any narrow way, in our submission, is apparent from what follows. 

Now, if I could invite your Honours to turn to page 129, and if I could just go back to a passage which my learned friend referred in passing.  The first new paragraph on page 129 refers to the need to concentrate on the – I am sorry your Honours.  I will start again.

At the end of the first paragraph that continues onto page 129, his Honour says there is the need to concentrate “upon the claim of the plaintiff to compensation”.  It is there one sees, your Honours, in the next paragraph he says:

The general principle that damages are compensatory yields what seem to me to be some equally sure, but more particular, doctrines.

If I could pause at that point, your Honours, we would submit it seems apparent enough that the expression “yields” means gives rise to or produces – otherwise, why would there be a reference to more particular doctrines, and if your Honours go to about point 6 on page 129:

what is to be compensated for is the destruction or diminution of something having a monetary equivalent.

Your Honours will see the next sentence where there is a reference to selling not just labour and skills but also the product of labour and skills.  Now, your Honours, at the time of Skelton v Collins, as we submitted earlier, the existence of claims for lost superannuation was hardly unknown.  It was only five years after Paff v Speed.

Your Honours, one form of economic loss recognised in addition to loss of earning capacity was loss of superannuation benefits.  That gives rise, in our submission, to two matters.  In the first place, why in those circumstances would economic loss in the lost years, whether they be the shorter or the longer period, be treated as limited to loss of earning capacity and as excluding loss of superannuation benefits?

Secondly, and this may be putting the same proposition in a different way, where a plaintiff’s injury prevents the plaintiff from working and the plaintiff is a member of a superannuation scheme, it is difficult to see why, on the one hand, damages for loss of or diminution to earning capacity would be recoverable in respect of the period both before and during the relevant lost years but damages for lost superannuation would only be recoverable in respect of a period before the lost years or, perhaps, depending on whichever argument of my learned friends seems more attractive, or perhaps only while there was loss of earning capacity.  After all, the period when superannuation‑type pensions are most likely to be an issue and when the loss of them is likely to bite is later in life rather than earlier.

Your Honours, the third decision which, in our submission, is germane is that of the Court in 1981 in Todorovic v Waller.  That is in volume 3 of the authorities behind tab 37.  There it was held, your Honours, that superannuation benefits, again under a government‑type scheme, were recoverable.  If I could just pause at that point, your Honours, it is no doubt perfectly possible to say, as our learned friends say orally and also in paragraph 4 of their reply submissions, that in Paff v Speed the pension entitlement itself was not an issue ‑ ‑ ‑

KIEFEL CJ:   It was also described simply as an allowance that was made available.  The discussion about the nature of it does not seem to have been gone into.

MR JACKSON:   No, I do not think it was, your Honour, but your Honour will see the scheme was one where after retirement after a number of years’ service you received payments then which were of a generally similar nature and in case of injury you also received payments.  He received the payments.  Should they be taken into account in reduction of the amount otherwise recoverable for the superannuation payments that had to be foregone?  Your Honours, it is perfectly possible to say also Skelton v Collins was concerned only with loss of earning capacity.  Superannuation was not in question.  It is also perfectly possible to say that in Todorovic v Waller the real issue was the discount rate.

But, your Honours, to say those things leaves out of account, in our submission, that the cases have given rise to a course of decision over a long period on which many people have based their activities.  Could I refer to what we have said in our written submissions in paragraph 11?  We refer there to numerous cases.  If I could give one supporting reference in that regard, it is to the decision of the New South Wales Court of Appeal in a case called Ghunaim v Bart (2004) ATR 81‑731. In the supplementary materials we have given the Court, it is behind tab 7 ‑ I am sorry, in the supplementary materials we have not given the Court, which I would like to give the Court if I may. It is behind tab 7.

Your Honours, may I just say in relation to this decision, the New South Wales Court of Appeal in 2004 was determining whether actuarial evidence was necessary in all superannuation cases and, your Honours, there were differences of views amongst courts of the States.  The reasons for judgment are behind tab 7.  The discussion about loss of superannuation benefits commences at the page numbered in the top left at 143 in the book.  Your Honours will see in paragraph 125 Justice McColl, who gave the judgment of the court, said:

The appellant was entitled to recover the superannuation benefits he would ultimately have received, but for his injuries, following his normal retirement ‑

Your Honours will see various cases there referred to.  Your Honours, could I just say that if one goes through the decision, you will find that there are 19 decisions in which – and I am talking of a period 14 years ago – claims for loss of such benefits had been made.  Could I just say, your Honours, that you will see, for example, in paragraph 142 of the reasons, at the page numbered 145, there is a reference to a large number of cases in which they are calculated without actuarial evidence in Western Australia and Queensland.

Then in paragraph 143, you will see a decision in Western Australia in which Justice Anderson gave the relevant judgment.  Could I refer then to paragraph 144?  What your Honours will see in paragraph 144 – and if I could go over the page numbered 146, the quotation commencing on the fourth line of that page – his Honour said:

In my opinion, once it is accepted that superannuation contributions by employers are virtually compulsory, the Court can hardly avoid the conclusion that loss of earning capacity will, as a general rule, involve an additional loss in the form of loss of superannuation benefits.  The Court is then bound to do the best it can -

Then your Honours will see the comment about what is the appropriate way to go about it.  But the principal point we would seek to make about that case, your Honours, is that it refers to a very significant number of decisions in which, as I have said I think twice already, your Honours, 14 years ago claims of this kind have been made.

GORDON J:   In each of those cases, though, they were dealing with diminished earning capacity.

MR JACKSON:   I am sorry, your Honour, I just did not quite hear what your Honour said.

GORDON J:   In each of those cases – I have not read all of them ‑ I assume they are dealing with diminished earning capacity in the sense that they gave rise to a reduction in subsequent superannuation entitlements.  Here we are dealing with, are we not, a different category of loss.  We are dealing with a category of loss which is, in a sense, the reduction in the amount of superannuation post‑retirement.  I am asking do any of those cases deal precisely with this factual situation?

MR JACKSON:   I think the answer is yes, your Honour.

GORDON J:   Which ones are they?

MR JACKSON:   I will check on that.  May I respond to your Honour more directly about that perhaps after lunch?  My understanding of it is that there are a number of cases in which the issue that was there being discussed on what is the appropriate method of calculation for the superannuation benefit, was relating to the period when the superannuation benefit would otherwise have been payable, as in this case – not every case, of course, but many of them.

KEANE J:   But is that not because there is a link between the diminished earning capacity; that is, to earn the income from which contributions to superannuation are made, and the lesser superannuation benefit produced as a result, as opposed to simply the non‑receipt?

MR JACKSON:   That may be some cases, your Honour, obviously.  But if one has a case of a person, let us say, who has retired and whose earning capacity has in effect gone, would be regarded as no longer exercisable, and that person was injured in an accident or mesothelioma, as in this case, and is dying from that, maybe unrelated to earning capacity, present and past earning capacity would be purely historical.

KEANE J:   But that is the sort of case we are interested in, is it not?

MR JACKSON:   Is what, sorry?

KEANE J:   That is the sort of case we are interested in, the case where earning capacity has been exercised until the superannuation benefit cuts in on the assumption that earning capacity is no longer exercisable - it is superannuation - and the question then is whether the non‑receipt of those benefits is a consequence of a loss or a diminution of earning capacity.  On one view it could be said the earning capacity has been exercised to the full, has produced a benefit that is as high as it can be and the loss is the loss of the receipt of moneys not directly related to the loss of earning capacity, because it was never reduced.

MR JACKSON:   Well, your Honour, that is so.  Your Honour, I am sorry, when I say that is so what I ‑ ‑ ‑

KEANE J:   But all I am saying, Mr Jackson, is I think what Justice Gordon has raised, and certainly what I am interested in, is a case of this kind rather than a case where reduced earning capacity over the working life of the plaintiff has adversely affected the amount of superannuation benefits to which that plaintiff is ultimately entitled.

MR JACKSON:   Your Honour, I understand that and that, in a sense, leads me to Fitch v Hyde‑Cates which is the fourth decision which – I am sorry, is a further part of the course of decision ‑ ‑ ‑

KIEFEL CJ:   Just before you turn to it, Mr Jackson, might I interrupt you just a little further?  Are the 19 cases that you referred to concerned principally with how one assesses the loss of superannuation?  That is, it is concerned with the quantification or assessment rather than the identification of superannuation benefits as themselves a distinct loss?

MR JACKSON:   Your Honour, I think that is so.  I think, if I could just say, as one sees the judgment of Justice McColl on this issue ‑ ‑ ‑

KIEFEL CJ:   That is really what I was drawing from.

MR JACKSON:   That works on the assumption that ‑ ‑ ‑

KIEFEL CJ:   That there is a loss of earning capacity and that the superannuation benefits are simply part of the calculation of what has been lost.

MR JACKSON:   Your Honour, I think I assented too quickly to what your Honour has said.  What I was going to refer to, at paragraph 125 - it is behind tab 7 in the supplementary material - your Honour will see in paragraph 124:

The trial judge awarded the appellant $22,768.24 under this head of damages.  He calculated this amount by taking 11% of the figures he had awarded for past and future economic loss.

Actually called the “rule of thumb” approach.  Then, your Honour will see at paragraph 125 her Honour starts with the proposition that he:

was entitled to recover the superannuation benefits he would ultimately have received, but for his injuries, following his normal retirement.

KIEFEL CJ:   I see at paragraph 127 the parties are directed:

to prepare a schedule setting out the competing figures ‑

so we seem to be in the realms of analysis, and at paragraph 144, to which you took us before, the quotation is directed to an acknowledgement that superannuation – once you have loss of earning capacity, there may be an additional loss which is, of course, beyond strict earnings themselves by way of salary or wages, an additional loss in the form of loss of superannuation benefits.

MR JACKSON:   Your Honour, the decisions that are – the issue being dealt with in that case was a question of how you calculate ‑ ‑ ‑

KIEFEL CJ:   Calculate losses. 

MR JACKSON:   Yes. 

KIEFEL CJ:   It is not really directed to the question before us.

MR JACKSON:   Not especially your Honour, but one thing that is noticeable is the passage at paragraph 144, saying, as is the obvious thing, there is very likely to be a relationship between – very likely to be an additional loss as well as loss of earning capacity.  But, your Honour, the – and you see, for example, paragraph 147 the extent to which you have to go in terms of:

must turn on the facts of each case ‑

of course.  But, your Honours, the point I seek to make about it is that loss of earning is really a question in the sense of the point in time at which, on the one hand, the injury occurs and if the injury is something that occurs after one has ceased work, then it is, we would submit, a little difficult to see why one would not be entitled to loss of – to the equivalent of ‑ sorry, why one would not be entitled to an amount reflecting the loss of superannuation entitlement in circumstances where one would be entitled to that, to the loss of superannuation entitlement if one was still working.  It is very difficult to see why one gets one but not the other.

Your Honours, I was going to go to Fitch v Hyde‑Cates which is in volume 2 of the authorities behind tab 19. Your Honours, that case, in our submission, has relevance in two respects. It concerned the limitation on damages to be imposed by section 2(2) of the Law Reform (MiscellaneousProvisions) Act 1944 (NSW). At page 486, about point 3, Chief Justice Mason stated the issue. And, your Honours, the terms of the provision, to which he was referring, are set out at page 489, commencing at point 9 on the page. Your Honours, the issues arose in relation to section 2(2)(c) and 2(2)(d). In dealing with the – your Honours, section 2(2) deals with survival actions, not Lord Campbell claims.

In dealing with section 2(2)(c), at page 491, about point 4 on the page, his Honour said that the provision did not apply to lost earning capacity or lost wages in the “lost years”. And, at 491, about 4, that it applied to:

losses or gains . . . consequential upon death –

And one sees, then, at 491, point 5, what my learned friend described as a “slender thread” – well, your Honour, sometimes one has to have whatever threads there are, particularly if five Justices of the Court agree on it and that is sometimes a little less slender.  But, your Honours will see that his Honour then said that Lord Scarman in Gammell v Wilson had:

correctly observed that annuities ceasing on death is not a good example “... for that loss . . . is to be attributed to the years lost by reason of the injury sustained and is, therefore, part of the cause of action which vested in the deceased before his death …”.

And, Mr Latz is in that position.  Could we just say, your Honours, an annuity, of course, is something really outside the concept of loss of earning capacity?  It does, however, have significant similarities to the payment of periodical superannuation.

The second part of his Honour’s reasons in Fitch which is particularly relevant is where he is dealing with section 2(2)(d), that commences on page 492. It is a passage, your Honours, that goes from 492 about point 5 to 495 about point 6. I am going to take your Honours very briefly to some references in it but what does seem to be the case, in our submission, is that his Honour, hardly surprisingly perhaps in the light of his observation about annuities, does appear to be treating, to use the phrase again the “genus as economic loss” of which loss of earning capacity is one species.

May I refer your Honours first to page 492 about point 6, third line under the heading.  The paragraph specifically excludes particular heads of damage but significantly it makes no reference to economic or pecuniary loss.  You will see a few lines further on reference again to heads of damage separate from economic loss.  Last five or six lines on that page:

It naturally refers to physical or mental injury or disability; it does not naturally refer to economic loss . . . If it has the larger meaning contended for by the appellant so that it includes economic loss –

Then, your Honours, at the bottom of page 493, the last few lines.  Then, your Honours, page 494, at about point 3 on the page:

courts and lawyers have always drawn a distinction between economic loss and non‑economic loss despite the fact that each flows –

et cetera.  And, then, at the end of that paragraph:

In these, as in later cases, the notion was that damages for loss of expectation of life was a head of damage separate from economic loss.

Also, your Honours, the bottom of that page, last four lines, and the passage really goes to page 495, about point 8 on the page.  The point we would seek to make about the case is that, whilst it does seem to be speaking of economic loss as the genus and whilst it is no doubt possible, as paragraph 4 of our learned friends’ reply seeks to do, to brush aside the case by saying that the actual decision is presently irrelevant, that is not right, in our submission.  The actual decision is, in our submission, very much against the Amaca case.  I see the time, your Honour.

KIEFEL CJ:   Yes, thank you, Mr Jackson.  The Court will adjourn until 2.15 pm.

AT 12.45 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.15 PM:

KIEFEL CJ:   Yes, Mr Jackson.

MR JACKSON:   Thank you, your Honours.  I was about to refer to the way in which the principle relating to damages was referred to in some of the – not in all – I have been to some of the decisions.  But may I just take your Honours for a moment to what we have said in our written submissions in paragraphs 12 and following dealing with the way in which in Todorovic v Waller the members of the Court described the claims involved.  Your Honours will see in paragraph 12 that Chief Justice Gibbs and Justice Wilson, with whom Justice Aicken agreed, set out the – said the general proposition which we referred to in the first part of paragraph 12.

Then your Honours will see the references that they had to there being future pecuniary loss and financial loss resulting from personal injuries.  Then in the reasons for judgment of Justice Stephen you will see the passages that we have italicised in which there is spoken of financial loss and economic loss, and financial loss again.  Then, your Honours, Justice Brennan, the reference to the financial loss which he has suffered and will probably suffer as a result of the wrong et cetera, and we elaborate upon that in paragraph 13.

Your Honours, could we just say, in paragraph 13 we refer also to the statement by the Court in Haines v Bendall at the commencement of the reasons for judgment of four members of the Court.  In that statement, compensation is the cardinal concept, it is the one principle which is absolutely firm and which must control all else.  Your Honours will see the passage – the earlier parts of that passage so far as money can do.

Your Honours, at this point, may we go to what appears to be Amaca’s case essentially on this question in relation to superannuation.  That can be seen, your Honours, best, in a sense, by looking at their reply in paragraph 4.  If one commences at line 22 on that page, it is said that Amaca’s argument does not involve any departure from Todorovic or any other case but provides for damages to be awarded in respect of lost superannuation benefits consequent upon lost capacity to earn.

If one asks what that contention really means, that seems to be contained in the last four lines of paragraph 4 and, your Honours, the two instances that are there referred to – or two instances are there referred to, in essence, one could only recover for loss of superannuation benefits if you get less in superannuation because your contributions were lower because of the injury and also the second class of case you would get less in superannuation because you had to retire early.

Your Honours, in our submission, that approach has its difficulties because it does start with the assumption that lost superannuation benefits are recoverable, but then it seeks to place limitations on that proposition and where does one – one asks hypothetically – derive the limitations from?  The answer seems to be, by adoption of an assumption, that there must be a relationship of some kind between the lost or diminished earning capacity and the superannuation.

But, your Honours, one does not really see that expressed as a connection in reasons for judgment.  Rather, one sees that case after case, in a sense, has proceeded without anyone other than Amaca perceiving what is now claimed to be the required connection with loss of earning capacity, rather like the proud mother.

KIEFEL CJ:   In the cases to which you have earlier referred, they proceed upon the assumption that there has been a loss of earning capacity and the superannuation or pension benefit, whatever it is called, is an incident of the loss such as wages or other allowances.  That is the way in which it is viewed.  And what they are concerned with is the extent to which benefits of this kind may be taken into account in the assessment of damages, not whether it is itself a form of damage.

MR JACKSON:   With respect, that is, in a sense, our second position.  As to the first position, we would submit this:  the statements of the principle – I do not want to over‑egg the pudding by calling it the compensatory principle, but that is what it is – is a principle which says that you are entitled prima facie to recover the losses that you have sustained by reason of the injury, the subject of the tort.

GORDON J:   Can I test that proposition in this way:  in the cases that we were talking about before lunch, they were cases where the worker was still of working age, and there was an assessment made about the loss suffered as a result of the injury, one of which was, in a sense, the inability to recover or receive the superannuation benefits they would have received but for the injury.  If you come to our case, we have a retired worker who has a workplace injury which manifests itself after the date of retirement, and we have an injury which has brought about a loss.  As I understand the way you describe it, it is a loss in the reduction of the superannuation benefits for the whole of the lost years. 

Does it come to this, as I understand your argument, that there is an inconsistency or incongruity between the results where you have a worker who is of working age who would be entitled to recover as damages all of the superannuation benefits at the proper level for all of the lost years, but where you have someone in this situation who is post‑retirement, they would be treated differently and in effect receive less just because they are post‑retirement and the injury has manifested itself at a late stage?

MR JACKSON:   The answer is, yes.  I think your Honour said to me – said as part of the question, that this was a workplace injury.  That it was ‑ ‑ ‑

GORDON J:   Sorry, I will take that out – take that out of the equation. 

MR JACKSON:   Yes.

GORDON J:   I agree with that. 

MR JACKSON:   Yes.  I agree with your Honour.  Yes, I accept what your Honour is putting to me.  Yes.

GORDON J:   Is it the consequence then that in ‑ as I understand your case, that in awards of this nature, if it was to be regarded as novel or new it would be limited to the circumstances of Mr Latz?  That is, if you are right about, for example, the superannuation pension, it would not alter the award or the calculation, either as a matter of principle or calculation, for those who are still of working age.

MR JACKSON:   Yes. 

GORDON J:   It is a category of worker ‑ I will take out worker – it is a category of person who have retired – it is not diminution of earning capacity, it is in a different sphere of operation. 

MR JACKSON:   Yes, your Honour, may I say a couple of things in relation to that.  The first is, your Honour, that in our submission there is no need to justify an award of damages in respect of superannuation of the type we are talking about.  By putting the damages into a special category, and the general principle is the compensatory principle, such as Haines v Bendall to which I referred a few moments ago. 

Your Honours, could we also say ‑ and this is a preliminary to responding to what your Honour said ‑ that our learned friends, of course, as so often happens, have placed reliance on a kind of floodgates arguments that you see for example in paragraph 54 of their submissions in‑chief.  We deal with those, your Honours, in paragraphs 51 to 53 of our submissions.  Your Honour, I do not propose to go into detail about them orally.

But if a relationship with loss of earning capacity ‑ and, your Honour, this is the penultimate thing I am going to say in response to your Honour ‑ if a relationship between loss of earning capacity were regarded as necessary, there is some form of connection with earning capacity in the sense that the superannuation payment is a form of deferred income. 

We have referred to this in our written submissions in paragraph 37.  May I go there for just a moment?  I think the last four lines having referred to Lord Reid in Parry v Cleaver, we speak of it being deferred earnings.  Your Honours, because the position is that a person has two potential streams of remuneration, wages for a job – wages and the superannuation, it simply is that they are payable at different times and one could seek to categorise a claim of this kind as being a claim for lost earnings.

The present case, of course, your Honours, is one does need to bear in mind Mr Latz’s own claim.  This is not a survival claim or a Lord Campbell…..But the last thing I wanted to say, your Honour, in response to your Honour Justice Gordon, was this; the question of incongruity can arise in this way because it is his own claim it is a claim that he is making for something that he has lost.  He has lost the ‑ or he will lose the benefit of the superannuation payments that he would otherwise have received.  Your Honours, it seems an odd thing if he is able to – to use an expression your Honour Justice Edelman used earlier, if he is able to claim those the day before he dies but the claim disappears because of the death when ‑ ‑ ‑

KIEFEL CJ:   But is not the point that is made for Amaca, that if one considers his injury, the consequences of the accident for him, he has, at that point, already qualified for full benefits in relation to the superannuation benefits and, therefore, they are simply not in the equation in relation to the injury he has suffered.  The injury that he has suffered – I am sorry, you were talking about a connection between loss of earning capacity and superannuation, well, is not the connection, the necessary connection, that the former is the type of – is the injury, the damage, and the latter is the damages, what flows from it?  That is the connection.  I am sorry, there is two discussions there.

MR JACKSON:   Well, your Honour, he has not yet qualified, of course, in, I think, the sense his Honour was using.

KIEFEL CJ:   Yes.

MR JACKSON:   He is simply in a position of a person saying I am alive, maybe not for too long, but I have, because of this injury, lost what I would otherwise have been able to get had I been able to continue living and would have got for the rest of my life expectancy, that is, a certain sum of money, payable each fortnight. 

NETTLE J:   Is it fair to say, Mr Jackson, that superannuation defers the capacity to earn as much as it defers the earnings?

MR JACKSON:   I am sorry, your Honour?

NETTLE J:   Is it fair to say that superannuation defers the capacity to earn the superannuation benefit as much as it defers the earning of the benefit?

MR JACKSON:   It does, your Honour, yes.

NETTLE J:   So that is the connection?

MR JACKSON:   It is a connection if one has to have that kind of connection, yes, your Honour.

BELL J:   Mr Jackson, can I just ask this.  You say if one has to make that connection, and as I understand your primary position it is that the compensatory principle requires that all economic losses flowing from the injury be brought to account. 

If that is right, it is perhaps curious that there are clear statements in the authorities that one does not look, in computation of the loss, at wages as distinct from loss of earning capacity.  I am seeking to understand on your argument why that is so, why it has been necessary to make very clear, as one can see in a line of authority, that what one is compensating for is the impairment of the capacity as distinct from the lost wages.

MR JACKSON:   The reason, your Honour, is that most often the issue which arises is one where a person has not been in fact exercising the earning capacity or is in a situation where the  – a casual or itinerant worker is an obvious example.  So the issue mostly arises when saying earning capacity rather than actual earnings and I am speaking about the future rather than ‑ ‑ ‑

BELL J:   Yes.

MR JACKSON:   One is trying to estimate what the particular plaintiff might have earned by utilising the capacity that they had.  The capacity that they have, your Honour, is one which, in some respects, is identified and quantified by their conduct prior to the injury.  The issue mostly arises in that way.

It arises too, your Honour, in cases where the opportunity for the fullest exercise of the capacity has not yet arisen.  The bright student who is injured, the judge’s associate, who might have become a member of the Court, and that kind of thing.

So that one does have a situation where capacity is a relevant criterion, because you are looking to see not so much what a person is doing but what they are capable of doing.  That is why one looks at that, your Honour.  Of course, if you are looking to see what has been the loss of wages and remuneration up to the time of the injury, you are talking about looking at actuals. 

There are also cases where one looks at the reverse.  People can have lives where, for a time, they make a great deal of money but that does not last very long.  Entertainers are often in that category.  They are fashionable for a while and then, unfortunately, time moves on and they do not, and things of that kind.

Your Honours, if one is looking at the capacity of someone, one might say they were making, say, $20,000 a night by doing whatever they do, but there was no way that was going to last for too long.  It was a good theme while it was there but it was not much of a theme overall.  There is no problem in quantifying in this case, of course, your Honours.

Your Honours, could I just say that in reality, in our submission, the Amaca case is based on a view of the observations of Chief Justice Gleeson and Justices Gummow and Hayden, with Justice Callinan agreeing, in CSR v Eddy.  That is in volume 2 of the authorities, number 16.  There are several features about the case.  One is that in the bundle of materials I gave your Honours this morning there are the earlier judgments in that case.  They are known as Thompson v CSR.  You will see that the first decision in the Dust Diseases Tribunal was called Thompson v CSR Ltd.  It is behind tab 1 in those materials. 

You can see a summary of the damages which were awarded in the case, in paragraph 42 on the last page.  They were, and they are explained, your Honours, at paragraphs 25 and following.  They were $165,000 general damages, an agreed $20,000 for loss of expectation of life, a sum of $20,000 for loss of earning capacity, agreed amounts of Griffiths v Kerkemeyer damages, and $165,000‑odd in respect of Sullivan v Gordon damages.  There was no claim for superannuation benefits.  The reason for that you can see in paragraphs 29 to 31.  His working history suffered from severe restrictions…..Your Honours, nor was there any appeal against the really very modest award for loss of earning capacity. 

The second point, your Honours, is that, as can be seen from the joint reasons in Eddy in this Court, which is behind tab 16 in volume 2, the point at issue related to the Sullivan v Gordon damages and related only to that.  Your Honours will see that at page 7 of the Commonwealth Law Reports, in particular in paragraph 2, the first few lines.

Now, your Honours, as can be seen from that same paragraph, the calculation of those damages was in respect of the rendering of the services during the lost years as well as those preceding them.  The issue was then treated by the Court as subdivided into four questions which you will see in paragraph 4.  Two of those, (a) and (b), are presently relevant, the first half of that paragraph.

The conclusions arrived at by the Court on those questions can be seen at page 32, paragraphs 68 and 69.  Your Honours, the issues involved did not require any discussion whether the statement of heads of damage at paragraphs 28 to 31 should be regarded as exhaustive.     Such a question, your Honours ‑ your Honours will see in the materials we have given to the Court this morning ‑ was never argued either in written submissions or orally.  Your Honours will see that material, I just have to say no doubt due to the incompetence of senior counsel for CSR. 

Your Honours, the third point we seek to make about it was that the language used in Eddy, paragraphs 28 to 31, does not, in our submission, support the appellant’s contention.  Your Honours, could I in that regard start with paragraph 27 of those reasons, which you will see at page 15.  Your Honours will see that it states the general principle that, to put it shortly, a plaintiff has to suffer actual financial loss except in case of pain and suffering and so on, not readily measurable in money. 

Your Honours, if one goes then to the actual language that is used in paragraphs 28 to 31, we have referred to this, your Honours, in our written submissions, at paragraphs 27 to 30.  Your Honours, I will not go into it in detail, but may I say if one goes to the reasons for judgment in this case, in the Full Court, at page 75 of the core appeal book, your Honours will see Justice Blue at page – I will start again.  Justice Blue, in paragraph 83, was dealing with the language that was used, and paragraph 84 also, and Justice Hinton, in paragraph 250 of his reasons, and at paragraph 115.  We rely on what their Honours say as demonstrating that the language used in those paragraphs was not intended to cover the field exhaustively.

Your Honours, could we say in relation to this issue that we would submit the judgments of both the majority in the Full Court on this issue reflect the better view, and may I, your Honours, refer to Justice Blue at page 70, paragraphs 72 to 77 and his discussion of Eddy at paragraphs 81 to 90.  Your Honours, there was a dissenting judgment on this issue, that of Justice Stanley. 

Your Honours will see that at paragraph 159.  At paragraph 159 you will see that, in the lengthier paragraph at page 91, he sets out six reasons why – sorry, I will start again.  He sets out six reasons why our submissions were not to be accepted. 

Your Honours, may I deal with those very briefly.  The first reason is in the third line on page 91, your Honours, where he said that, standing alone, it is a statement at a high level of generality, and the passage to which he is referring is in the last two lines on the previous page and the first line.  Of course, it is, your Honours.  It sets out a general principle; namely, anything having a monetary value which a plaintiff has lost should be made good in money.

The second reason, your Honours, is that the principle is enunciated in the context of the Court considering an award for loss of earning capacity in the last years.  Well, your Honours, that is correct but it does not follow that the principle does not go further. 

The third reason, your Honours, was that, in assessing damages where a plaintiff’s life expectancy has been reduced by the defendant’s breach, the Court bases the award on a probable link with a working life had he not been injured.  Of course, your Honours, that is true, but only if one is speaking of loss of earning capacity.  If you are talking about loss of superannuation, one is talking about a period that goes to the end of the life expectancy.

A fourth point, your Honours, refers to Sharman v Evans.  The point that is sought to be made by his Honour is that a plaintiff is entitled to an award that compensates for the loss only to the extent that the lost years represent years when the plaintiff would otherwise have been earning income. 

Your Honours, if one goes to the relevant passage in Sharman v Evans, which is in volume 3 of the authorities, No 34, your Honours will see that at page 579, in the first new paragraph on the page, Justice Gibbs and Justice Stephen are there speaking of loss of earning capacity.  Now, your Honours, of course, when they are speaking then of lost years, they are talking of lost working years.  The fifth reason, your Honours, given by Justice Stanley at page 91 is, in our submission, a little curious, although we would say the first three lines are correct.

The proposition that a common law action for damages for personal injuries is not a claim to have a pecuniary loss made good is, in our submission, quite wrong.  It ignores, for example, cases like Paff v Speed which refer to superannuation benefits.  It ignores the observations in relation to economic loss in Fitch v Hyde‑Cates and Skelton v Collins to which we have made reference.  It also, with respect, your Honours, takes out of context the passage from Espagne which is referred to at footnote 122.  Your Honours will see that it is said there:

damages for personal injury is not a claim to have a pecuniary loss made good but to have an award of money to compensate for the reduction in earning capacity which is or may be productive of pecuniary loss.

Espagne, your Honours, is behind tab 27 in volume 3.  The passage referred to by Justice Stanley is at page 588.  Your Honours will see it about seven or eight lines down the page, “A common law action for damages”, et cetera.  It is not quite what his Honour has quoted it for, and then, your Honours, one also sees the immediately following sentence:

The distinction becomes thin when the element in general damages that is commonly called –

not “loss of earning capacity” but –

economic loss is separately considered.

The sixth reason given by his Honour does not, in our submission, sit well with the various decisions of loss of superannuation benefits; many decisions that have been made.  Your Honours, of course one does not ordinarily have a difficulty in having to work out the lost years in the case of superannuation benefits because it is calculated on the plaintiff’s expected pre‑accident life expectancy, and automatically that would take into account any lost years, if any, that there had been for loss of earning capacity.

Your Honours, could I come then to the age pension.  Regardless of how the age pension is characterised, it is a statutorily guaranteed right which for men has existed since June 1908.  It is a right to an ongoing stream of income for financial benefits that will come to a premature end because of the tort.  In our submission, there is not a principled reason to distinguish that type of guaranteed income stream from any other, including future earnings.

T55.Apr17.GH

I have taken your Honours to decisions on the compensatory principle, and I will not repeat those, but could we just say the fact that there are no reported decisions concerning similar losses, in our submission, is readily explained.  As the primary judge in this case observed at page 25 of the core appeal book in paragraph 116 of his reasons, ordinarily in mesothelioma cases – I am sorry, I will start again.  Your Honours will see:

ordinarily the Aged pension will have been the plaintiff’s only source of income and that by the time living expenses are deducted there will have been little, if anything left over to claim.

Of course, in mesothelioma cases, they are likely to occur many years after the exposure to asbestos, and people who were exposed to asbestos dust in the 60s and 70s are really only now, in some cases, developing the terminal illness in consequence of that exposure, and loss of pension entitlements only now crystallising.

Your Honours, in our submission, loss of the age pension is undoubtedly actual financial loss.  Could we adopt what was said in the United Kingdom by the UK Law Commission in its report on the assessment of damages in personal injury litigation?  Your Honours will see this behind the last tab in volume 4 of the book of authorities.  In the first version that was given to the Court I think wrong passage was there.  It should be one that has paragraph 90 and the last page of the volume.

Your Honours, of course if Mr Latz had not brought the claim in his own lifetime, his dependants could have claimed under Part 5 of the Civil Liability Act (SA) and those benefits, in our submission, would include the rights to a pension paid to the deceased.

Could I come then to the appeal in relation to the proposed deduction from the superannuation award?  Your Honours, it turns in the end on an issue which can be stated very shortly.  Latz lost a superannuation pension which he would otherwise have received from the government body for which he had worked.

He is compensated for the loss in respect of the period for which he would have obtained it absent the injury.  His spouse, not a claimant in these proceedings, receives from the government body an amount – call it a pension if one likes – in consequence of his death.  That gives rise to the question:  why is the pension she would receive to be treated as reducing the damages to which Mr Latz is entitled in his action?

Your Honours, we would submit that Lord Phillips of Worth Matravers, then Lord Justice Phillips, was entirely correct in the instinctive, if I can put it that way, response which he gave in decision in the United Kingdom Court of Appeal in West v Versil Ltd, which is in volume 3 of the authorities behind tab 39.  You will see the relevant part of it, your Honours, at the page numbered up the top 1409.  The particular passage is number 3.  Without going to the earlier detail:

His Lordship could see no legal basis upon which the moneys that would be received by the plaintiff’s widow after and in consequence of his death could properly be set against loss that would be caused to the plaintiff as a result of dying prematurely.

I said his instinctive reaction.  Your Honours, it is apparent that ultimately the point was not fully argued.  You can see that from the last few lines on the preceding page, page 1408, but we would submit that that view of the matter is the better view.

Your Honours, the starting point, of course, is that the rights of Mr Latz and Ms Taplin were rights deriving from the Superannuation Act 1988. My learned friend has taken your Honours to passages of that. May I seek to summarise what we would say about that?

He was an old scheme contributor for the purposes of section 33. That provision is in volume 1, page 64. He was entitled on retirement to the lesser of two figures referred to in section 34(5) at page 68. They were either 75 per cent of the salary before retirement or a figure calculated in accordance with a formula in section 34(1), which I will not attempt to elaborate upon, your Honours. Provided he did so within a certain period of retirement, he had a right to commute all or part of the periodical pension to a lump sum. He had not done so, and the time for doing it had expired.

Ms Taplin’s entitlement to a pension comes from section 38(1)(a). Because she was a spouse as defined, she was entitled to an amount equal to two-thirds of the pension he would be getting if he were alive. Again, if there had been eligible children, each of them would have had a statutory entitlement under a provision of section 38(1). May I take your Honours for just a moment to the relevant legislation in volume 1 behind tab 3? Your Honours will see at page 76 that:

If a contributor dies, the following provisions apply: 

(a)   If the contributor is survived by a spouse – the spouse is entitled to a pension -

That gives an entitlement to the spouse.  The argument on behalf of our learned friends commences by taking the word “contributor” in the definitions section, which you will at page 15 and picking up the words:

and no derivative rights exist in relation to that person under this Act -

Now, your Honours, that is the height, in our submission, of the argument and the argument comes down fundamentally to say that if you are claiming damages for personal injuries and part of the damages that you are claiming are because you have lost amounts that will be payable to you, those amounts are to be reduced by amounts that will be payable to someone else under, to put it broadly, the same scheme.

Your Honours, could we just say in relation to that – your Honours, if I could go for a moment to our written submissions, we put this rather more fully in paragraphs 60 and following of our written submission.  I say “rather more fully” because it is a very significant amount.  It is more than $400,000 taken off the amount in question.

If one goes to our written submissions in paragraphs 60 through to 62, those submissions deal in essence with the views of Justice Blue and Justice Hinton which are against us.  Those views, it is submitted, really involve something of a blurring of the issues, and may I go to them in a little more detail?

First of all, in relation to Justice Blue in the core appeal book at page 82, you will see in paragraph 114, after referring to the well‑known passage of Chief Justice Dixon in Espagne, his Honour said that the pension payable to Ms Taplin should not be disregarded. 

If one looks, your Honours, at the language that he uses in paragraphs 114 and 115, in our submission, that is not very satisfactory in arriving at that conclusion.  In the first place, he says at the bottom of page 82:

This is because it is the loss of the very pension payable by the Fund to Mr Latz that is the subject of his claim for economic loss.  On the contrary, it cannot have been the intention that Mr Latz‑

we say, whose intention really we are talking about -

could vicariously enjoy the pension payable by the Fund at the same time and in the same amount as damages payable by Amaca by reason of his loss of that very pension.

Now, your Honours, “vicariously enjoy” is a rather curious description of whatever might await Mr Latz but, in our submission, it is just simply saying you cannot get both.  If one goes, your Honours, to the next paragraph 115, in the last four or five lines you will see too the reference to there being “a matter of practical reality” and there it is said his loss could only be regarded as one-third.  Well, your Honour, it is, after all, his claim.  He is making a claim; he is alive.

Your Honours, if one goes then to Justice Hinton’s reasons at page 119 and to paragraph 261, the last five or six lines, he says:

It is as if the pension to which the primary beneficiary was entitled switched to the secondary beneficiary -

And then a couple of lines further down:

If this analysis is correct then the primary beneficiary notionally continues after death to realise a benefit –

Well, your Honours, one hopes that is right, in a sense, but could I just say that the reality of the situation is - and we have submitted this at paragraph 63 of our written submissions - that the reasons of Justice Stanley at paragraph 174 and following - and that is page 97 of the book - are rather more orthodox.  Your Honours, I will not go through the earlier paragraphs of that but if one goes to paragraph 180 after he has set out the submissions, he says:

It is inherent in the compensatory principle in awarding damages for personal injury that a plaintiff cannot recover more than he or she has lost.  Accordingly –

you cannot have double compensation:

The rule against double compensation applies where it can be shown that a plaintiff has or will receive payment in respect of a loss for which damages are claimed.

Then, your Honours, the end of that paragraph, we would submit he is correct in saying that:

The rule against double compensation has no application in this case where the appellant seeks to bring to account in the assessment of the respondent’s damages, amounts that might be payable not to him but to his partner –

Your Honours, we would submit that his Honour is correct in his view at paragraph 182.  At about the seventh or eighth line:

The reversionary pension payable to Ms Taplin is a statutory benefit conferred upon her pursuant to s 38(1)(a) –

Towards the end of the page:

If Ms Taplin survives the respondent she will enjoy an independent statutory entitlement.  In these circumstances there is no double compensation.

Your Honours will see that his Honour said:

That can be demonstrated by considering the situation if the respondent had no spouse. On his death no third party would enjoy any entitlement to superannuation benefits under the Superannuation Act. Accordingly there would be no question of reducing the respondent’s damages.

It goes on to the next page.  Your Honours, could we also make the point which we seek to make in our written submissions, in paragraphs 67 to 70.  If one looks, for example, at paragraph 67 and asks, dealing with the other side’s argument, “What had he purchased?” the answer is that he purchased two distinct rights:  one for himself and one for her.  Why should one be set off against the other?  That goes on at paragraph 68 and following.

Your Honours, could we say that the trial judge’s views on this issue are set out in the core appeal book at page 23.  They deal shortly and, in our submission, clearly and correctly with this question.  The relevant paragraphs are paragraphs 101 to 115, commencing at page 23.  May I direct your Honours particularly to the points at paragraphs 109, 112 and 113. 

Your Honours, as we have also said in our written submissions, in paragraph 72, the decision of the New South Wales Court of Appeal in Dionisatos – my pronunciation is not good ‑ in volume 2 of the authorities, behind tab 18 ‑ printed in my volume, helpfully, back to front ‑ supports our contention.  I am not certain if your Honours have the same problem with it.

T60Apr17C1

I am going to refer to page 74, where your Honours will see paragraphs 206 to 207.  It related to a payment made under the Dust Diseases Act to the wife of the injured party.  Your Honours will see that the submissions we are advancing here were adopted, and similarly,

particularly, paragraph 217 on page 76.  It cannot be concluded that it involved the same loss. 

Otherwise, we rely on our written submissions.  The orders which we seek are in our written submissions, paragraphs 75 and 76.  Those are our submissions.

KIEFEL CJ:   Yes, Mr Gleeson.

MR GLEESON:   Your Honours, for the points in reply on the appeal and on the cross-appeal, could I follow the order of Mr Jackson’s written outline.  The first matter we would make, which responds to paragraphs 3 through to 13, is that, contrary to the promise that you would be shown one or even up to 16 cases which have dealt with the issue before you, the respondents have produced no such case. 

Therefore, any submission that there is some settled course of practice which will be disrupted should be rejected.  In addition, the Court does not have the benefit of any earlier decision of this Court or appellate court which, on a considered basis, after full argument, has dealt with the real issue before you.  So in those circumstances you have the traditional position stated in CSR v Eddy and you have the present case.  That is our first matter of response.

NETTLE J:   Are all those 19 cases cases in which the claim was by someone who had been injured while still employable age?

MR GLEESON:   Yes.  As far as we have checked them over lunch, the answer is yes.  They all fall into the category of two elements.  The first your Honour mentioned, which was there was impairment of earning capacity, and that led to the superannuation benefit being treated as compensable in the sense that, because the person could not work to the full extent, the person could not make or benefit from the ordinary and full superannuation arrangements.  Therefore, which is the second aspect, the loss of superannuation benefit was, for the period between the retirement age and ‑ ‑ ‑

NETTLE J:   The shortened life?

MR GLEESON:   No, the normal life.  None of them – this is the other point ‑ were, as far as we can tell, lost years cases in the second sense, which Mr Jackson used, of your entire life being shortened.  So what they were compensating for was essentially, “Because I have not worked as much as I would have, I have put in less contributions, so the super that I will receive in the period post my retirement is less than it might otherwise have been.”

GORDON J:   Is that right?  Are they not cases which we were taken to this morning which were directed at compensating for the expected life but for the injury?

MR GLEESON:   Your Honour – this was my second point in response to your question about incongruity – on our review of the cases, none of them go beyond what I have just identified. 

So to the extent that the lost years are in play, in the authorities we have, they are in the Skelton v Collins sense of Mr Jackson’s first category, a shortening of the period of my working life.  They are not in the sense of compensating for that period of non-existence.  That is why we say in terms of the lost years issue, in that real sense, no case we have found has gone the distance that is necessary for Mr Latz’s case. 

So that is our first broad response.  The details of that could be mapped against each of the cases Mr Jackson has referred to, but none of them, we would submit, hit the mark of the present case. 

Your Honours, what that means, which is important, addressing your Honour Justice Gordon’s question, we submit, is that there is not incongruity in the result for which we contend.  We also submit, which is the correlative of that, that it is very hard to say this is just dealing with a particular situation and without opening the larger, complete situation.  That is most clear with the age pension.  Mr Jackson says he gets it because of the compensatory principle.  That is a benefit which he says would have come in.  He does not seek and, of course, cannot link that to loss of earning capacity in any way.  He ignores the fact that the need will no longer be in existence in that situation.  We would submit that the age pension is quite remote from the interests which are protected by the tort. 

EDELMAN J:   Do you accept that, so far as those 16 or 19 cases incorporate an amount for loss of superannuation benefits within the loss of earning capacity, that that is properly done? 

MR GLEESON:   The answer is yes, in the manner in which those cases are contemplating it.  What they are saying is as a measure of your loss of earning capacity you lost the ability to make the contributions which would have generated superannuation payments at the end of your working life and that is actually clearest from what Justice McColl was discussing in Ghunaim v Bart which is tab 7 of the respondent’s supplementary materials at paragraph 124.

EDELMAN J:   But it would only apply, on your submission, so far as it is calculated by reference to employee contributions rather than employer contributions?

MR GLEESON:   It certainly applies in the first case.  In the second case where, by reason of your loss of ability to work, you have lost employee contributions into the scheme which might provide you with additional benefits, that might, by parity of reasoning, fall into the same category.  The particular case is in the first of your Honour’s categories, so at paragraph 124, that the rule of thumb approach seems to be that because – I am sorry, this is actually in your Honour’s second category.  The rule of thumb approach is because it is a 9 per cent employer contribution on a gross basis, that is rounded up to 11 per cent because loss of earning capacity is calculated on a net basis and so the theory is because you did not work for certain years, you lost that ability to have that amount in super and that is also explained in paragraph 144.

So there is nothing in that saying that the law compensates for your failure to survive into the lost years, used in the sense of your ultimate life expectancy, or that it, in particular, compensates you for superannuation in respect of that period.  We submit that that is the very, very large step which is required to be taken and should not be taken in principle, because it gets one into the problem of valuing non‑existence as against existence.

KIEFEL CJ:   The earlier cases do not have regard, of course, so much to notions of contribution which an employee cannot make and therefore loses the benefits resulting.  Cases such as Paff v Speed refer to a loss of all the advantages of that position of employment – the policeman on retirement – but they all flow from a loss of earning capacity. 

MR GLEESON:   They all flow from loss of earning capacity.

KIEFEL CJ:   It is just seen as part of a package that equate to the damages.

MR GLEESON:   It is part of the package and it is seen as the additional payments which would have been received on or after the date of retirement referrable to that damage to earning capacity.  Paff v Speed was a damage to earning capacity which then created that deficiency.

KIEFEL CJ:   Yes.

MR GLEESON:   That leaves the situation where, in the present case, the issue tendered is a person who has fully exercised his earning capacity over his working life.  That is step one.  Step two, he has made all available contributions to the superannuation scheme and commenced on the pension stream.  Step three, he has purchased rights under a scheme which always intended that, following his death, the spouse would receive a two‑thirds reversionary pension.

Step four, the tort only cuts in adverse to him on him by reason of death.  It is the effect of death and non‑existence placing him in a position that he cannot receive what he otherwise would but with the immediate corollary that the spouse would receive two‑thirds of what he would, and the two‑thirds having, as I have indicated, a commonsense relationship to the whole; namely, had he remained alive, one might have expected a third to be spent on joint expenses and a third to be spent on looking after the spouse.  So those two‑thirds are reflected in the continuing pension to the spouse.

So, if that be the appropriate characterisation, we submit the Court should not be recognising there has being any head of loss failing a very large step of treating the “lost years” in the larger sense as compensable.

Your Honours, the other matters with these.  In relation to Mr Jackson’s paragraphs 10 to 12, we have put our primary submissions in relation to Fitch. The section that he took you to just before the adjournment does not take his argument any further. In that part of the judgment, Justice Mason simply held that loss of earning capacity does not qualify as bodily or mental harm within section 2(2)(d) of the statute. He said nothing about the larger proposition for which Mr Jackson contends.

Your Honours, could I then go to the cross‑appeal in this sense.  If your Honours were to go to the two cases which Mr Jackson relied upon, and can I just illustrate neither of them assists his argument.  The first case was Dionisatos which is in volume 2, tab 18 and we make no challenge to the result in that case but we indicate it is – the clear need to distinguish it. 

If your Honours have that decision at 91 NSWLR 34, it is important to look at the two different statutory schemes. They were totally different schemes which generated different rights. The first scheme, which is on page 67 of the report, which was the Dust Diseases Scheme, provided for statutory payments of compensation to the injured worker and then created statutory payments in favour of the dependants.

Your Honours will see from the relevant section which was 8(2B)(d) that it was a form of Lord Campbell’s Act claim.  So, the question for the dependant would be what payment is necessary so as to be reasonable and proportionate to the injury to me, the dependant, by reason of the primary person suffering the injury and being deceased?  So that is the basis upon which the spouse had a statutory claim.

The other claim, which is on page 70 in paragraph 185 is the section 15B(2) civil liability claim, and that is a statutory reversal of CSR v Eddy in respect to Sullivan v Gordon.  So that is giving back the Sullivan v Gordon damages to the injured worker.  Unsurprisingly, the Court held that the passages Mr Jackson took you to, 206 and 207, that:

The payments to [the spouse] under the Dust Diseases Act cannot be treated as a substitute or partial substitute for compensatory damages for the injury to Mr Dionysatos.

In other words, these were separate injuries to separate people compensated for by separate statutory schemes.  Your Honours see that in paragraph 218 with the conclusion that the husband and wife:

had different rights to be enjoyed independently of the other’s rights.

Now, that is the key critical difference. Under sections 34 and 38 of the Superannuation Act (SA), it is impossible to regard these as different rights capable of enjoyment independent of each other. The statute has said that can never occur. The spouse can only enjoy the reversionary pension in the circumstance that the primary pension has ceased and that, we submit, is the critical distinction and the critical reason why, focusing on Mr Latz’s loss, he has not suffered any more than, at the most, one‑third of the pension.

Your Honours, the second case that was referred to was Lord Phillips, which is in volume 3, at tab 39.  Two matters to note:  one is that the Court has two versions of the case.  The first stops with Lord Phillips and says that Lord Millett delivered a concurring judgment.  We have actually provided you with a second version which contains Lord Millett, and it is quite important what Lord Millett says. 

The second thing is that, with no disrespect to the Court, the case is not a strong authority on any issue because it is littered throughout the judgment that none of the issues were fully or properly argued.  Concessions were made which the Court said ought not to have been made.  That is apparent in the passage Mr Jackson took you to at the foot of 1408, but it is also littered throughout the judgment. 

The third reason is that it is quite a distinct statutory scheme.  This was a scheme where, on the retirement of the primary person, he had an option to, for the first time, move on to a dual pension which would continue for his spouse after his death.  He did not have any previous right to that surviving spouse pension.  To move on to that pension, he had to accept a reduction in his primary pension payments.  The questions of

deduction and set‑off arose in the context of that very particular scheme, which is not even close to the present scheme. 

So, your Honours, concluding with Mr Jackson’s outline, paragraphs 20 to 24, we would submit that Justice Blue and Justice Hinton did not engage in a blurring of the issues.  What they did, which was appropriate, was very carefully attend to the precise nature of the statutory scheme and the fact that one string of benefits could never be enjoyed independently of the other string of benefits.  In that circumstance, they appropriately identified the relevant loss.  May it please the Court.

KIEFEL CJ:   Thank you, Mr Gleeson.

MR JACKSON:   Your Honour, may I just say one thing in response to the reply on our appeal? 

KIEFEL CJ:   Yes. 

MR JACKSON:   Our learned friend referred to the judgment of the New South Wales Court of Appeal in Dionisatos but, your Honours, if one looks at paragraph 220 of that, page 76, your Honours will see that the right that the wife had was dependent on there having been the death of her husband.  Your Honours, might I just say, as your Honours will be aware, this is a case in which Mr Latz’s time for life is not great.

KIEFEL CJ:   Yes.  The Court reserves its decision in this matter and adjourns to 9.45 am tomorrow for pronouncement of orders and otherwise to 10.15 am.

AT 3.29 PM THE MATTER WAS ADJOURNED