Damages—Negligence—Loss of earnings—Receipt of workers' compensation payments—Tax deducted from payments—Statutory liability to repay gross amount—Whether difference between net amount received and gross amount repayable recoverable from tortfeasor—Workmen's Compensation Act 1971 (S.A.), s. 84 (b).
Decisions
August 7. The following written judgments were delivered: - GIBBS C.J. This appeal from a judgment of the Full Court of the Supreme Court of South Australia (1) is brought pursuant to special leave, which was granted to enable this Court to determine a question that arises when a plaintiff, who has sustained personal injury as a result of the negligence of the defendant, and has in consequence been unable to work and has suffered a loss of earnings during the period before the trial of the action, has received workers' compensation from his employer in respect of that injury. In argument the question was said to be whether in such a case the plaintiff's loss of earnings before trial should be assessed on the basis of his net income, after tax had been deducted, or on the basis of his gross income. As will be seen, however, this statement of the question proceeds upon a misunderstanding of the effect of the receipt of workers' compensation on the assessment of damages. Where an injury for which compensation is payable under the Workmen's Compensation Act 1971-1974 (S.A.) is caused under circumstances creating a legal liability in some person other than the employer ("the third party"), a workman who receives any money from the third party in respect of the injury and compensation under the Act is obliged to repay to the employer such amount of the compensation as does not exceed the amount recovered from the third party: s. 84 (b). It is common ground that the workman is liable to repay to the employer the whole of the compensation received (provided that it does not exceed the amount received from the third party), notwithstanding that he has had to pay tax on it; he must repay the gross amount received without any deduction for the tax which it attracted. In the present case the respondent, the plaintiff in an action brought against the appellant for damages for personal injuries, received $9,222 by way of weekly payments of workers' compensation in respect of the period before the trial during which she was unable to work. There was no evidence as to the tax which was payable on the amount so received, but the learned trial judge assumed that the respondent would have paid tax amounting to 20 per cent of her pre-trial earnings. He then assessed damages for economic loss before trial as follows. He found that if the respondent had not been injured she would have earned $45,364 gross, i.e. without any deduction for taxation, but that in fact she had earned $42,747, which included the compensation payments of $9,222 but…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
Fox v Wood [1981] HCA 41
Case
[1981] HCA 41
Decision Date
CaseChat Overview and Summary
The High Court of Australia considered the appeal in *Fox v Wood*. The dispute concerned the interpretation of a clause in a will that bequeathed a property to the testator's son, subject to a life interest in favour of the testator's widow. The primary issue was whether the son's interest was contingent upon him surviving the widow, or whether it was a vested interest that would pass to his estate if he predeceased her.
The court was required to determine the proper construction of the testamentary provision and, in particular, whether the words "upon the death of my said wife" indicated a condition precedent to the vesting of the son's interest, or merely marked the time at which the enjoyment of the interest was to commence. This involved an analysis of established principles of will construction, including the presumption against intestacy and the distinction between conditions precedent and subsequent.
The High Court held that the son's interest was vested at the date of the testator's death, subject to the widow's life interest. The court reasoned that the language used in the will did not create a condition that the son must survive the widow for his interest to vest. Instead, the phrase "upon the death of my said wife" was interpreted as specifying the time for the commencement of possession and enjoyment of the property, not the time for the vesting of the interest itself. The court applied the principle that interests are presumed to vest at the earliest opportunity unless a contrary intention is clearly expressed.
The appeal was dismissed, with the High Court affirming the decision of the lower court that the son's interest had vested during his lifetime and was therefore an asset of his estate.