Cefai v Onestep Concrete and Pumping Pty Ltd
[2003] VSC 184
•5 June 2003
se
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
No. 5624 of 1999
| HELEN CEFAI | Plaintiff |
| v | |
| ONESTEP CONCRETE AND PUMPING PROPRIETARY LIMITED | Defendants |
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JUDGE: | SMITH J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 30 April 2003 and 9 May 2003 | |
DATE OF JUDGMENT: | 5 June 2003 | |
CASE MAY BE CITED AS: | Cefai v Onestep Concrete and Pumping Proprietary Limited | |
MEDIUM NEUTRAL CITATION: | [2003] VSC 184 | |
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Wrongs Act – interest on whether limited to first-tier.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J. Keenan QC and Mr R McGarvie | Clark & Toop |
| For the Defendants | Mr D Beach SC and Mr D Masel | JAC Law |
HIS HONOUR:
The plaintiff brought this proceeding under the Wrongs Act 1958, on her own behalf and on behalf of their five children, for damages arising out of the death on 19 March 1999 of her husband Frank Lawrence Cefai.
The trial of the proceeding was listed for hearing on 29 April 2003. On that date, however, the defendants admitted liability in a joint amended defence in an amount of $574,200 together with interest calculated according to law as limited by s 135C (5) Accident Compensation Act 1985 (the Act).
The matter was referred to the Practice Court for resolution of the dispute between the parties on the principles to be applied in determining the interest payable by the defendants to the plaintiff in respect of the amount recovered.
The plaintiff has submitted that interest should be assessed on the full amount of $574,200.00 calculated from the date of the issue of proceedings at the prescribed penalty interest rate. The plaintiff accepts, that s 135C(5) and (6) do not permit interest to be awarded in respect of any period prior to issuing proceedings, the date provided by s 60 of the Supreme Court Act 1986.[1]
[1]Cf Eccles v Bryant (1995) 3 VR 482.
The defendants, however, argue that applying s 135C(5), interest should be calculated on an amount of $175,000.00 being the portion of the damages assessed which relates to losses incurred prior to the date of the award of damages. The defendants also submit that interest should be calculated at a commercial rate.
Critical to the resolution of the issue of the amount on which interest is payable is the proper construction of s 135C(5) of the Act . That provision appears in Division 10 of Part 4 of the Act. Part 4 deals with Payment of Compensation and provides, inter alia, for compensation under the Act for the death of a worker. The legislation in its relevant form reflects changes made in 1997. Prior to those changes a worker, as well as dependents, had limited common law rights[2] and the legislation did not then have separate sections dealing with the rights of the injured worker and the rights of dependent persons. The injured workers' remaining common law rights were removed by the 1997 legislation and the following provisions introduced.
[2]Section 135, 135A.
•Section 135A enacted in its relevant form in 1997 prohibits actions for damages by workers or their dependants in respect of injuries or death suffered on or after 12 November 1997 but makes an exception for actions for damages under Part III of the Wrongs Act 1958.
•By further amendments passed in 1997, separate provisions were enacted dealing with actions for damages by workers and dependents in respect of pre-12 November 1997 injuries or deaths[3] and proceedings for damages brought by workers or dependents in respect of pre-1 December 1992 injuries.
[3]Section 135A, AB and AC.
•Section 135C was enacted to address claims for damages under Part III of the Wrongs Act 1958. It provides as follows:
"135C.Damages under Part III of Wrongs Act 1958
(1)A dependant of a worker may recover damages under Part III of the Wrongs Act 1958 in respect of the death of a worker arising otherwise than out of a transport accident within the meaning of the Transport Accident Act 1986.
(2)A court must not, in proceedings Under Part III of the Wrongs Act 1958, award damages in accordance with Subdivision Act 1988-section (1) in respect of the death of a person in excess of $500,000.
(3)If an award of damages in accordance with Subdivision Act 1988-section (1) is to include an amount, assessed as a lump sum, in respect of damages for future loss which is referable to –
(a)deprivation or impairment of earning capacity;
or
(b)loss of the expectation of financial support;
or
(c)a liability to incur expenditure in the future;
or
(d)any loss suffered by a dependant –
the present value of the future loss must be qualified by adopting a discount rate of 3 per cent in order to make appropriate allowance for inflation, the income from investment of the sum awarded and the effect of taxation on that income.
(4)Except as provided in Subdivision Act 1988-section (3), nothing in that Subdivision Act 1988-section affects any other law relating to the discounting of sums awarded as damages.
(5)A court must not, in relation to an award of damages in accordance with this section, order the payment of interest, and no interest is payable, on any amount of damages, other than damages referable to loss actually suffered before the date of the award, in respect of the period from the date of the death of the person in respect of whom the award is made, to the date of the award.
(6)Except as provided in sub-section (5), nothing in that sub-section affects any other law relating to the payment of interest on any amount of damages, other than special damages.
(7)If a judgment, order for damages, settlement or compromise is made or entered in favour of a dependant of a worker in respect of proceedings in respect of the death of the worker –
(a)the amount of the judgment, order for damages, settlement or compromise must be reduced by the sum of the compensation (if any) paid under section 92, 92A or 92B in respect of the death; and
(b)the Authority, an authorised insurer, the employer or self-insurer is not liable to pay compensation, or further compensation, in respect of the death."
In broad terms, s 135C capped the amount of damages that may be recovered to $500,000 (now $574,200), laid down a discount rate of three per cent for future loss referable to the listed categories, provided for interest and the taking into account of compensation paid under the Act.
My attention was drawn by counsel to certain long-standing features of the pre-existing law in relation to Wrongs Act claims. They may be summarised as follows:[4]
•the loss suffered by the claimants is the loss of the expectation of future pecuniary benefit, or benefit reducible to a money value;
•that loss is regarded in law as having occurred at the moment of death;
•a two tiered approach has been traditionally taken in the assessment of damages for such loss by looking first at the period between death and trial and then looking at the future as it appears at the time of the trial;
•notwithstanding that process of assessment, no part of the loss was regarded as being incurred in the future although to assess it an inquiry as to the future has to be made.
[4]Ruby v. March (1975) 132 CLR ; East v. Breen [1975] V. R. 19; Wright v Western Australia Trustee & Agency Co Ltd [1987] VR 771 Evans v. Anderson [1992] 1 V. R. 771.
The question of construction raised is the extent to which ss 135 C (5) and (6) have limited the rights the plaintiff would otherwise have had.
The plaintiff submits that the words in s 135 C (5)
"no interest is payable, on any amount of damages, other than damages referable to loss actually suffered before the date of the award . . ."
recognise the legal principle that the loss suffered by the dependants of the deceased is actually suffered before the date of the award because it is suffered at the moment of death. No part of the damages in the present case were to be regarded as outside the expression "loss actually suffered before the date of the award". The two tier approach to assessment is said to be simply the method of assessing damages for the loss suffered at the date of death. Accordingly it is put that the pre-existing law has not been changed in respect of Wrongs Act claims and s 60 of the Supreme Court Act 1986 can still apply.
The defendants argue that the plaintiff brings the proceeding pursuant to an entitlement to do so provided by s 135C of the Accident Compensation Act. The action would otherwise be precluded by s 134A of that Act. The defendants further argue that the plaintiff's entitlement to interest otherwise available pursuant to s 60 Supreme Court Act 1986 is reduced by s 135C of the Accident Compensation Act.
The defendants argue that s 135C(5) should be interpreted as applying to the first tier of the assessment -- the part of the damages assessed having regard to what has occurred between the date of death and the date of the award. The defendants submit the provision purports to be disentitling and that unless that construction is adopted, no operation can be given to the provision. The words "damages, other than damages referable to loss actually suffered before the date of the award" should not be construed to mean the whole of the damages because this would merely give back exactly what had been taken away and give s 135C(5) no work to do[5]. Reliance is also placed upon a passage from Luntz "Assessment of Damages for Personal Injury and Death",[6] where it is said that interest may be awarded on the whole of the lump sum but that that should not apply where the Court assesses the damages in two stages and that in such instances interest may be awarded only on those damages representing the loss up to the date of judgment. Having regard to the authorities cited by the learned author in support of his proposition, I take the view that it relates to jurisdictions where the losses are treated in law as separate and divisible as between pre-trial and post-trial losses or the relevant statutory interest provision was different and Ruby v Marsh, therefore, distinguishable.
[5]Citing Commonwealth v Baume (1905) 2 CLR 405, 414: Project Blue Sky Inc v ABA (1998) 194 CLR 355.
[6]4th Ed, 11.3.9.
Counsel for the plaintiff when asked for a rebutting example was able only to suggest that a possible item of damages that might actually occur after the date of the award was the cost of a head stone or memorial.
In considering the proper construction of ss 135 C(5) and (6), it is relevant to consider the legislative history and judicial analysis of the sections' predecessors.
Counsel for the plaintiff referred me to two County Court judgments interpreting similar earlier provisions in the Act. In Fenton v. SECV[7], His Honour, Judge Stott considered the then the Act provisions which included interest provisions[8] identical to the subsections under consideration.[9] The relevant provisions were found in s 135(1) and 135A. Section 135A(1) contained provisions applying to claims both for damages by the injured worker and for damages by dependents of the worker under Part III of the Wrongs Act 1958. The interest provisions were to be found in sub-ss (16) and (17). They are still to be found there in the current s 135A but in respect of claims for pre-12 November 1997 injuries or death. Judge Stott summarised the legislation in 1993 as follows:[10]
[7]County Court, 2 August 1993.
[8]Section 135 A (16) (17)
[9]Wright v Western Australian Trustee and Agency Co (1987) VR 771, Ruby v Marsh (1975) 1 32 CLR 642, Evans v Anderson (1992) 1 VR 411.
[10]145.
"It is clear that the Section 135A covers two types of actions, an action in respect of an injury arising out of or in the course of or due to the nature of employment, and a Wrongs Act action. Subsection (1) is worded so as to cover both types of actions. Subsections (2) to (7) are clearly referable only to an injury action. Subsections (8) and (9) are clearly referable only to a Wrongs Act action. Subsection (11) is worded so as to cover both types of action. On its face subsection (12) would be wide enough to cover both types of action but as s 26(4) of the Wrongs Act 1958 precludes the reduction of damages recoverable by defendants on account of the deceased's fault it would have no operation in a Wrongs Act claim. Subsection (13) is clearly referable only to an injury action. Subsections (14), (15, (16) and (17) would have application to both types of actions and subsection (18) would appear to be restricted to an injury action."
Referring to the relevant authorities concerning the assessment of damages in a Wrongs Act claim, his Honour commented that damages awarded in a Wrongs Act claim:[11]
"are damages referable to loss actually suffered before the date of the award, notwithstanding that the calculation of those damages can take into account all relevant facts existing at the date of the award."
His Honour then commented that in the absence of any other statutory provision s 60 Supreme Court Act 1986 would govern the issue of interest and would have the effect that interest would be awarded on the full amount of damages.[12]
[11]147.
[12]148. He cited in support Luntz, Assessment of Damages, 3rd Ed, para 11.38.
His Honour commented further that in enacting s 135A, the Parliament must be taken to have been aware of the relevant authorities on the assessment of damages in Wrongs Act claims and that:
"if it was Parliament's intention to exclude an entitlement to interest on damages in a Wrongs Act claim it would have been a simple matter for it to have made an express provision to that effect. Yet, far from excluding such an entitlement to interest, Sub-section 16 seems to confirm that an award of interest on damages referable to loss actually suffered before the date of the award is permissible."
His Honour came to the conclusion, with which I agree, that the then s 135A(16) applied to allow interest on the total damages assessed using the two tier approach in Wrongs Act claims because that amount is "referable to loss actually suffered before the date of the award." His Honour then went on to consider the question of the period in respect of which interest should be calculated. It is unnecessary to consider that issue because the plaintiff does not seek interest for the period prior to the commencement of the proceedings.
When the interest sub-sections were to be found in sections which dealt with claims both by workers and dependants of deceased workers, the delimiting language of the sub-section arguably had work to do at least in claims relating to a worker's injuries. It may well be that on proper analysis the interpretation of Ashley, J. in Eccles v Taylor[13] should also be applied to the interest provisions in the Act in so far as they apply to claims by injured workers with the result that provisions such as those interpreted by His Honour Judge Stott should properly be construed as limiting the injured worker's right to interest. I express no view on that issue.
[13](1995) 2 VR 482. Ashley, J. expressly declined to analyse the application of the provision in the Transport Accident Act to Wrongs Act claims (491).
The decision in Fenton v SECV was followed by His Honour Judge Spence in Ebert v Apex Quarries Proprietary Limited[14], another Wrongs Act claim.[15] It appears that this construction was thereafter applied.[16] It did not lead to any amendment of the legislation or appellate challenge. I note that the Act was amended in 1994, 1996 (three times) then in 1997 by Act No 107/1997 to introduce the provisions with which we are concerned.
[14]1990/99004901-1994.
[15]I note that a similar construction was applied by His Honour Judge Anderson to the similar provisions in the Transport Accident Act – Oataway, 27.9.02.
[16]Note that in Gouldstone v. Walker Corporation Proprietary Limited, Ashley, J. , 6 November 1995, damages were awarded in a Wrongs Act claim where the claim arose out of a death in 1991. It was common ground that interest could be awarded pursuant to section 60 of the Supreme Court Act on the full award of damages. The issue was the rate of interest.
What then was the intention of Parliament in 1997 when the Act was revised and, in particular, issues relating to post 12 November 1997 Wrongs Act claims were specifically and separately addressed? In doing so, Parliament used the same provisions which had been previously employed and had been interpreted and applied in such a way as to allow interest to be calculated on the full amount of damages awarded in Wrongs Act claims. Was it intending to maintain what had been the entitlement under the previous legislation? On the other hand, was it intended to limit the interest entitlement to interest on the amount of the damages awarded attributable to the first tier calculation in such claims?
Consideration of the legislative history and the second reading speech relating to the 1997 amendment[17] make it clear that the objectives of the 1997 amendments included eliminating the remaining rights to recover damages in common law actions by injured workers while retaining the right of dependants of a deceased worker to recover common law damages. Nothing was said expressly in the second reading speech as to the interest entitlement but it revealed an intention to preserve the status quo so far as Wrongs Act claims were concerned.[18] For example, the Treasurer said[19]
"A worker injured on or after commencement will not be entitled to recover damages of any kind in a common law action. However the dependents of a deceased worker will continue to be able to recover damages of up to $500,000 under the Wrongs Act 1958."
Later he said:
"The government has also retained the existing right of dependents (who may not be spouses or dependent children) to seek damages under the Wrongs Act[20]
[17]Hansard Legislative Assembly 12 November 1997 1075.
[18]Interpretation of Legislation Act 1984, s 35(a) and (b).
[19]At 1075.
[20]At 1076.
In considering the interpretation of s 135C(5) comparison should be made with the 1997 amended s 135A. It permits an injured worker and dependents of a deceased worker to bring claims for compensation in respect of injuries arising out of employment before 12 November 1997. It is similar in form to the previous provisions interpreted by Judge Stott and Judge Spence. Provisions have been added, however, to set out procedures and timetables and other matters. Subsections (16) and (17) remain and deal with interest in language identical with that of s 135C(5) and (6). They are not the only sections copied into s 135C. Also copied across are s 135A(14), (15), (s 135C(3) and (4)) applying a discount rate of three per cent to the assessment of certain future losses, and s 135A(9) placing a ceiling on damages for Wrongs Act claims of $500,000 (s 135C(2)).
The provisions to be construed are identical in language and structure with those used in earlier versions of the same legislation. There is a presumption of construction that:
"in the absence of any context indicating a contrary intention, it may be presumed that the Legislature intended to attach the same meaning to the same words when used in a subsequent statute in a similar connection."[21]
In addition the
"principle is of particular force where the legislation under consideration and that with which it is compared originated from the same source."[22]
[21]Lennon v Gibson and Howes Ltd [1919] AC 709, 711 – 722; Ramaciotti v FCT; (1920) 29 CLR 49, 53; The Wik Peoples v Queensland (1996) 134 ALR 637, 671.`
[22]Pearce & Geddes, Statutory Interpretation in Australia, 5th Ed, citing Kerr v Verran (1989) 88 ALR 125, 136-7.
In one sense the context may be said to be different in that the particular sub-section to be construed is now found in provisions especially created to deal solely with Wrongs Act claims which originate after 12 November 1997. For my part, however, I would not regard what has occurred as creating a different context. The context in question is the right of injured workers and dependents of deceased workers to bring proceedings for damages and what has occurred is a reorganisation of the provisions within that context because of a decision to terminate the right of injured workers to seek damages. If, however, it be accepted that there has been a change of context, it is not one that would indicate an intention that s 135C(5) be construed differently from s 135A(16) or their predecessors. The need for a separate s 135C arose from the drafting approach taken to give effect to the intention to eliminate the injured worker's entitlement to common law damages. As a matter of drafting that has been dealt with by maintaining the previous s 135A but limiting its operation to claims arising prior to 12 November 1997. It having been decided, however, to maintain the right of dependents to bring Wrongs Act claims, the drafting solution adopted was to include those arising prior to 12 November 1997 in s 135A and to create s 135C to deal with those arising after that date. I am unable to advance a reason as to why if the rights were to be maintained they should differ depending on whether they were enforced pursuant to s 135A or s 135C. The context, therefore, in fact indicates an intention that the sub-sections should have the same meaning.
It is also well established that where provisions are re-enacted after judicial decision as to their meaning, it may be presumed that the Parliament has adopted that construction. It would appear that such a presumption is not strong and there is authority that the presumption such as it is applies only to decisions of superior Courts.[23] The authority cited as confining the presumption to re-enactment after decisions of superior Courts is Northrope v City of Hawthorn.[24] In that case, Lowe and Gavan Duffy JJ declined to take into account re-enactment of legislation after a decision of the County Court saying that the general rule applied only to decisions of superior Courts. What their Honours said, in explaining their position should be noted:
"The presumption that the Legislature has approved of the meaning assigned judicially to its language by merely re-enacting that language unaltered after the Court's decision has so far as we know been limited to decisions of the superior Courts. The doctrine imputes to the Legislature knowledge of the decision given: but we do not suppose that the Courts have ever thought that the individual members of the Legislature or even of Cabinet have without specific instructions such knowledge. The common sense of the matter is that the Legislature will be informed by some or one of its members learned in the law or by the Crown advisers of what has been decided and in the light of that information will act or refrain from acting. Such advice would we think certainly have regard to the fact that previously the presumption has only applied in the case of decisions of superior Courts. If attention were drawn to a decision of an inferior Court we should suppose that the Legislature would be advised the decision did not require to be dealt with by the Legislature. Consequently we think that no safe inference can be drawn from successive re-enactments of the notice section in the same language after the interpretation put on it by the County Court judge. "[25]
[23]Pearce and Geddes, para 3.39 to para 3.46.
[24][1941] VLR 178.
[25]At 182-3.
MacFarlane J disagreed suggesting that the fact that it was not a decision of a superior Court merely went to the weight of the presumption. His Honour stated:
"His Honour indicated that he did not have to rely upon the proposition based on re-enactment of the section at various times following the County Court decision."
His Honour went on to say, however,
"At the same time although Gordon's case ([1907] 29 ALT (Supp) 4) is a decision of a County Court it has stood for well over thirty years – it has never been departed from nor, so far as can be discovered, challenged until now. Moreover the Legislature has not only re-enacted what is now s 834, but has amended it in other respects, and has left unaltered the language on which the construction put upon it by Gordon's case, and now challenged, depends. While I should not treat that combination of circumstances as conclusive I should if necessary regard it as not without weight in construing the section."[26]
Pearce and Geddes suggest that that is the better view, arguing that the rule must apply no matter what level of court interpreted the section.
[26]At 181.
In the present case, what we have is more than one decision of the County Court applying the construction. We also have the apparent acceptance of that construction for many years in relation to Wrongs Act claims. One would expect that fact to be well known to the "Crown advisers". Further, it must be borne in mind that the County Court had tried the vast bulk of litigation under this legislation and the question of interest on damages would have arisen in countless cases. It would, therefore, be highly relevant for the Parliament to be advised if the pattern of decisions from the County Court was thought to be unsatisfactory by the Government of the day and was to be changed by the proposed legislation. The history of the legislation would suggest that the Government of the day would not have hesitated to bring to the Parliament amendments to deal with the issue if it was thought that the construction was too generous and an undue burden on the scheme. In the case of the 1997 amendments, the second reading speech of the Treasurer made it clear that that was in fact the focus of the proposed changes. While wishing to provide fair and comprehensive protection for injured workers under the legislation, the Government put the changes to the Parliament because it was concerned about the cost trend emerging. A comprehensive review had been undertaken. The Treasurer stated:[27]
[27]At 1073.
"The review process confirmed that while Victoria has the best Workers Compensation Scheme in Australia, our advantage was being eroded and that the underlying cost of the scheme was not running ahead of premium levels and demanded urgent attention. The issues of common law, serious injury classification, as well as the overall level of disputation emerged as the most obvious factors in the cost shift and became the focus of further very detailed and extensive research and analysis."
Amongst the concerns expressed was the concern to:[28]
[28]Ibid.
"move quickly to protect WorkCover's long financial health."
After referring to a blow out in writs issued and common law payments from M$17.9 in 1995 – 1996 to M$135.7 in 1996-1997. The Treasurer stated:[29]
"These facts and their obvious impact upon the viability of the scheme, forced the focus of the review back to the fundamental question of including a common law component in a no fault scheme."
The Treasurer stated that:[30]
"The new WorkCover arrangements will offer the most comprehensive and progressive set of no fault benefits for injured workers in Australia. The savings from the deletion of any damages in a common law action will be re-directed into meeting that commitment."
[29]At 1074.
[30]Ibid.
Later the Treasurer in referring to death benefits referred to areas where the Government intended by the legislation to increase the statutory benefits payable to dependant spouses and children dependant on a deceased worker and made the statements noted above about retaining existing rights under the Wrongs Act.
If the Government and the Parliament were concerned about the construction that had been applied to the interest provisions, a construction which must have affected the cost of the scheme, here was an opportunity to change the legislation. The legislative history also shows that such change has been a common occurrence.
In all the circumstances, it may be presumed that the construction applied by the County Court had been accepted by the Government and the Parliament and was not intended to be changed by the 1997 reconstruction of the Act. If that analysis is correct, s 135C(5) should be interpreted as allowing interest on the whole of the amount of damages awarded in a Wrongs Act claim unless there is a contrary intention revealed in the legislation.
It remains to consider the argument advanced for the defendant that the plaintiff's construction prevents what is a disentitling section from having any effect and, therefore, cannot be correct because Parliament must have intended some operation.[31]
[31]See authorities above and generally Pearce and Geddes, 2.22, 2.23.
I suggest that there is an explanation for the language used which gives operation to all the words of the sub-section. It lies in the drafting changes that occurred in 1997.
In making separate provision for Wrongs Act claims, Parliament needed to address the issue of interest on damages awarded in such claims. If, as it appears was the case, that it was not intended to change the then law, the drafter was faced with a number of choices. One was including no provision (on the assumption that s 60 Supreme Court Act 1986 would apply) but this could have given rise to argument that there was to be no entitlement to interest. Another choice was using a different formula, but it could also have given rise to argument. Viewed in that light, it is understandable that not wanting to change the law, the same provision might be repeated on the assumption that it would be interpreted as previously interpreted. Thus in a broad sense, however clumsy it may seem to use some disentitling or limiting words, the entire provision can be said to have operation or effect in preserving existing rights.
If that analysis is incorrect, it is my view that the clear and unequivocal reference in s 135C(5) to what the law has long accepted to be the description of the loss suffered under the Wrongs Act and the history of and repetition of the provision in question lead to the conclusion that this is one of those cases where, in giving effect to Parliament's intention, it is not possible to give full and literal meaning to every word used in the provision.[32]
[32]Brisbane City Council v AG (Qld) (1908) 5 CLR 695, 720; Secretary, Department of Social Security v Rurak (1990) ALR 17 at 28; Australian Alliance Assurance Co. Ltd v A-G (Qld) [1916] StR Qd 135, 161.
For the foregoing reasons I have come to the conclusion that interest is payable on the total sum awarded for damages.
There remains the issue of the interest rate to be applied. The defendant has not made out a case that something less than the penalty interest rate should be applied.[33] Accordingly, that is the rate that should be applied.
[33]Cf Gouldstone v Walker Corporation Pty Ltd, above, Ashley, J. 6 November 1995.
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