Fire and All Risks Insurance Co Ltd v Callinan

[1978] HCA 31

HIGH COURT OF AUSTRALIA

Stephen, Mason, Jacobs, Murphy and Aickin JJ.

FIRE AND ALL RISKS INSURANCE CO. LTD. v. CALLINAN

(1978) 140 CLR 427

8 August 1978

Practice (Q.) Judgment

Practice (Q.) Judgment—Interest—For whole or any part of period from arising of cause of action to date of judgment—Damages for personal injuries—Discretion—Distinction between detriment suffered before and after judgment—Division of damages under distinct heads—The Common Law Practice Act, 1867-1972 (Q.), s. 72.* * Section 72 of The Common Law Practice Act, 1867-1972 (Q.) provides, so far as material, as follows: "(1) In any proceedings in respect of a cause of action that arises after the commencement of the Common Law Practice Act Amendment Act 1972 in a court of record for the recovery of money (including proceedings for debt, damages or the value of goods) the court may order that there shall be included in the sum for which judgment is given interest at such rate as it thinks fit on the whole or any part of that sum for the whole or any part of the period between the date when the cause of action arose and the date of the judgment. . . . (3) This section - (a) does not authorize the giving of interest upon interest; (b) does not apply in respect of any debt on which interest is payable as of right whether by virtue of an agreement or otherwise; (c) does not affect damages recoverable for the dishonour of a bill of exchange."

Decision

Aug. 8.
THE COURT delivered the following written judgment: -
This is an appeal from an order of the Full Court of the Supreme Court of Queensland dismissing a defendant's appeal on the issue of liability but allowing its appeal in so far as it concerned the award of interest on damages. The grounds of appeal in the appeal to this Court relate both to the issue of liability and to the question whether interest ought to have been awarded on the damages or any part thereof up to the date of judgment. The respondent has cross-appealed on the ground that the Full Court ought not to have interfered with the award of interest made by the trial judge. (at p430)

2. The plaintiff had sought damages for personal injuries. The learned trial judge awarded general damages assessed at $50,000 together with special damages agreed at $4,352.93. He ordered that the plaintiff recover from the defendant interest on the sum of $52,000 calculated at eight per cent from the date of issue of the writ, a period of just over two years. The Full Court, while leaving untouched the amounts assessed by way of damages, remitted the case to the learned trial judge so that he might substitute for his award of interest such new award of interest as would conform to what the Full Court described as the guidelines set out in its joint judgment (1977) Qd R 366 . (at p430)

3. The present appeal on the issue of liability is concerned with the finding that the respondent was not guilty of any contributory negligence. It has been submitted that the trial judge ought to have found that the respondent was travelling at an excessive speed shortly before and up to the time of the accident. Two police officers had given evidence that they, while travelling in the opposite direction, had observed the respondent a few moments before and that he had been travelling on his motor cycle at 100 k.p.h. However, the respondent gave evidence that he had been travelling at 40-50 m.p.h. and had reduced speed to 10 m.p.h. and the trial judge concluded that the speed of the motor cycle at the point of impact was not excessive. He accepted the evidence of the respondent. Of the police evidence, he said: "It seems to me that recollections or estimates of distance and time on the part of the police may not be strictly accurate". In the light of those findings it is not possible to interfere with the trial judge's conclusion that the respondent was not guilty of contributory negligence and the Full Court rightly declined to interfere. (at p431)

4. In relation to the appeal and the cross-appeal on the award of interest up to the date of judgment, there is the preliminary question whether the appeal and cross-appeal lie without special leave: see Judiciary Act 1903 (Cth) s. 35 (4); for an award of interest up to the date of judgment is an award of interest in the nature of damages. In view of our ultimate decision it is not necessary to pursue this aspect to a conclusion. (at p431)

5. In allowing the appeal so far as it concerned the award of interest, Douglas J., speaking for the Full Court, expressly refrained from any discussion of general aspects of the award of interest on damages, instead confining himself to the particular issues for decision in the appeal. This is a course which seems equally appropriate to the disposal of the present appeal to this Court. (at p431)

6. For the appellant it was submitted that under s. 72 of The Common Law Practice Act, 1867-1972 (Q.) interest should not be awarded on damages awarded in an action for personal injuries. The submission is based on a practice to that effect adopted in England at a time when the legislation there in force was in terms similar to the present Queensland provision. But the practice in England was a practice and no more, and was itself altered in respect of pending actions when a new provision was introduced in 1967 in respect of future actions: see Jefford v. Gee (1970) 2 QB 130 . The language of s. 72 is quite wide enough to cover damages in actions for personal injury and we can see no reason why they should be treated differently from other actions. (at p431)

7. The learned trial judge had given no indication of his method of assessment of the amount of general damages at the sum of $50,000 nor of why he had awarded interest on $52,000, being the total of assessed general damages and agreed special damages, less $2,352. That latter figure does not represent any item or cumulation of items identifiable from his Honour's reasons for judgment. As was said in the Full Court's reasons, his Honour appears to have allowed interest from date of issue of the writ on at least $2,000 of the total of special damages and this despite the fact that no items of special damage were incurred until considerably after issue of the writ. (at p432)

8. It appears at least possible that the trial judge chose interest for the full period on $2,000 as a "broad brush" solution to the problem of interest on special damages. Thus, instead of calculating precise periods for each item of special damages, from the date of incurring the damage to the date of judgment, he chose a figure of slightly less than half the total of special damages and allowed interest for the full period. However he omits any explanation. Although, if this aspect stood alone, there might well be no basis for interfering with the decision as to interest, the failure to make any kind of dissection of the figure for general damages puts the case into a different category. (at p432)

9. The claim for general damages contained elements of loss of earning capacity, pain and suffering and loss of amenities. Each of these represented detrimental consequences, some of which had already been borne by the plaintiff before the trial and others of which he would bear in the future. To allow interest on the award of general damages without discernible regard for this temporal distinction was wrong, and this for the reasons stated by the Full Court. (at p432)

10. It is enough to refer to the conclusions to which the members of the Full Court arrived in relation to the various heads of general damages. In the case of loss of earning capacity interest should, they concluded, be allowed only on that part of the damages awarded under that head which represents compensation for those detriments the practical impact of which, in terms of economic loss actually incurred, has already, at the date of judgment, been experienced by the plaintiff. In the case of pain, suffering and loss of amenities it was said they too "should have a time differential applied to them for the purpose of giving interest on damages within the terms of s. 72". These conclusions accurately reflect the application to the Queensland legislation of the principles enunciated by a majority of this Court in Ruby v. Marsh (1975) 132 CLR 642 . (at p432)

11. Of course, to arrive at an appropriate award of interest does not call for any nice apportionment of the various detriments into their pre- and post-trial segments, the process should not be permitted to assume an importance incommensurate with its relative effect upon the total sum for which judgment is given. Those passages from the authorities which the Full Court has cited and which refer to the matter being "dealt with in quite a broad way"; "broadly and without bothering about too exact calculations" - De Nitis v. Seekts (1962) VR 417, at p 117 and Murphy v. Murphy (1963) VR 610, at p 614 respectively - sufficiently make this point. However the need remains, when exercising the discretion to award interest which the Queensland legislation gives to trial judges, to pay regard to the distinction which exists between items of detriment already suffered and those to be suffered in the future. A money award is the only compensation which the law can provide in respect of the suffering of those detriments and if interest is to be awarded "on the whole or any part of that sum for the whole or any part of the period" between the arising of action and judgment, s. 72 (1), a proper exercise of discretion must necessarily involve the paying of due regard to the time of manifestation and to the duration of the various detriments in question. (at p433)

12. The course adopted by the learned trial judge, who made no dissection of his award of general damages into distinct heads, no doubt made it very difficult for him properly to exercise his discretion in relation to any award of interest. In Jefford v. Gee (1970) 2 QB, at p 151 the Court of Appeal had this in mind when it observed that "the court will, in future, have to itemize the damages in most personal injury cases". It was to enable such itemization to be effected, so that an award of interest might then be made having regard to the temporal considerations applicable to each item, that the Full Court remitted the case to the trial judge. We detect nothing, either in the form of its order or in its statement of the principles which should have governed the award of interest in this case, with which we disagree. (at p433)

13. We would dismiss this appeal. (at p433)

Orders

Appeal dismissed with costs.