Haines v Bendall

[1991] HCATrans 30

A -h, Al:STRAL!A (:" -->>->»~~«(:(.,,<..<.:

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S93 of 1990

B e t w e e n -

TREVOR WILLIAM HAINES

Appellant

and

DENNIS BENDALL

Respondent

MASON CJ
BRENNAN J
DEANE J
DAWSON J
TOOHEY J
GAUDRON J

MCHUGH J

Haines(2) 1 6/2/91

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 6 FEBRUARY 1991, AT 2.16 PM

Copyright in the High Court of Australia

MR D.F. JACKSON, QC:  May it please the Court, I appear with

my learned friend, MR P.R. GARLING, for the

appellant. (instructed by Patricia Elizabeth

Audrey Lee)

MR J. ALLSOP:  May it please the Court, I appear for the

respondent in this matter.	(instructed by Abbott
Tout Russell Kennedy)

MASON CJ:	Mr Jackson?
MR JACKSON:	Your Honour should have two documents: one

being an outline of submissions, the other being a

small book which contains the two Acts, the

Workers' Compensation Act 1926, and in the last few

pages section 94 of the Supreme Court Act 1970.

Your Honours, I should say in relation to the

Workers Compensation Act that not the whole Act has been extracted but every part of the Act which

could conceivably be germane is in it and,

Your Honours, many parts that - - -

MASON CJ:  I would have thought from the size of the book,

the whole Act had been extracted.

MR JACKSON:  Your Honour, some parts have been omitted.

Your Honours, as is apparent from the outline of submissions, the first issue in the case is whether

a lump sum payable to an injured person under

section 16 of the Workers Compensation Act is to be

taken into account to reduce the amount of damages

on which interest under section 94 of the Supreme

Court Act is to be calculated.

May I commence by indicating the course which

we propose to take in dealing with that issue and

that is, first, to refer to the basic facts and,

Your Honours, I simply wish to do so in order to

indicate the passages where the relevant parts of

the evidence are encapsulated in the reasons for

provisions which are material and, thirdly, to turn judgment. Secondly, to indicate the legislative	to the submissions which we wish to make about that
issue.

Your Honours, may I come then to the basic

facts. The respondent's cause of action arose

on 5 December 1979 when he suffered spinal injury

when he came into contact with a submerged rock

shelf in the swimming hole in Glenbrook Creek and a

convenient summary of the circumstances of the

injury is to be found in the reasons for judgment

of Mr Justice Priestley in the Court of Appeal at

page 197 line 19 going through to page 198 line 7.

Haines(2) 2 6/2/91

May I take Your Honours to that? Your Honours

will see at the conclusion of that passage, at

page 198, that His Honour said that:

The plaintiff suffered an incomplete CS

quadriplegia as a result.

The respondent, although suffering - although

rendered a quadriplegic - was not rendered

incapable of walking, and it may be convenient for

Your Honours to have a summary of his physical

disabilities. They may be seen at page 170,

lines 8 to 24, in the reasons for judgment of the

primary judge, where His Honour adopts the first

paragraph of a report by Dr Yeo, which appears at

the passage to which I just referred, it is the

paragraph commencing:

Mr Bendall is now teaching full-time -

and so on. The adoption of that, Your Honours, in

effect, appears at the top of the next page.

Your Honours, could I go then to the manner of

calculation of damages, so far as material to the

question of interest, and Your Honours will see

that at page 184 His Honour commenced to deal with

but I would refer Your Honours to the whole of

the question of general damages, and -

page 184 under that heading, going through to

page 185, and at about line 18 on page 185 Your

Honours will see that His Honours assessed:

damages under this head at $180,000 -

and, for the purpose of calculating interest, he

arrived at a figure of $75,000 as being that part

of the $180,000 which he would attribute to that

head in respect of the period prior to judgment,

and he awarded interest under section 94 on that

sum, and the interest awarded, Your Honours, was in

respect of the period commencing on the date of the

injury, and, Your Honours, it seems - I say "it

seems" for a reason I will mention in just a

moment - going to the date of trial rather than the
date of judgment.	Your Honours, the difference is

minimal, but one gets that from the amounts

involved and the amount which he awarded as

interest, Your Honours, appears at page 188, about

line 12, where he says:

Thus I allow 8% interest on $75,000.

BRENNAN J: For how long?

MR JACKSON:  Your Honour, I am sorry. That was in respect

of the period from the date of the injury until the

Haines(2) 3 6/2/91

date of the trial.	That is how it seems to work
out, Your Honour.	Now, Your Honour, the argument

before the primary judge and before the Court of

Appeal was that the $75,000 was too high a figure on which to calculate the interest, and that it

should have been reduced by reason of a payment of

$49,037, paid in 1985 pursuant to section 16 of the

Workers Compensation Act. And, Your Honours, could

I refer in that regard to page 185, and

Your Honours will see, in the last four lines on

that page, that he refers to the question which is

said to arise.

Now, Your Honours, when I come to the

conclusion of my argument, I will give Your Honours

a document which sets out the calculation which

would be the correct conclusion if our submissions
are correct, but may I pass over the detail of it

for the moment.

Your Honours, when I come to the conclusion of

my argument I will give Your Honours a document

which sets out the calculation which would be the

correct conclusion if our submissions are correct

but may I pass over the detail of it for the

moment.

Could I move then, Your Honours, to the

relevant statutory provisions and may I go first to the Workers Compensation Act and then, secondly, to the Supreme Court Act. Your Honours, the Workers

Compensation Act commences relevantly with

section 7(1) which Your Honours will find at the

page numbered 24 in the document Your Honours have.

Your Honours, section 7(l)(a) of that Act

provides that:

A worker who has received an injury -

Your Honours, if I could pass over some words -

shall receive compensation from his employer

in accordance with this Act.

Your Honours, the term "compensation" is defined, though not in a very illuminating way, in

section 6(1), which is at page 7, and it is simply

said to include:

medical and death benefits prescribed by this

Act.

Your Honours, so that to see the content of what is comprehended by compensation in section 7(l)(a), it

is necessary to go to the substantive provisions of

the Act. And, Your Honours, the principal rights

Haines(2) 4 6/2/91

relevant for present purposes, which go to make up

the compensation to which an injured worker is

entitled, are to be found in sections 9 and 16.

May I go first to section 9 which Your Honours will

see at page 44.

In section 9(1) it is provided that:

where total or partial incapacity for work

results from the injury the compensation

payable by the employer under this Act shall

include -

and then it goes on to provide, Your Honours, in

paragraph (a) for the payment of a weekly sum in

lieu of wages, the weekly sum to be paid, of

course, to the worker.

Your Honours will see, if one looks at

section 9(l)(a), about five lines into it, that the

payment is to be:

in respect of any period of incapacity

whichtogether with any other such periods -

then leaving out the next three lines -

of incapacity resulting from the one injury -

so it is speaking about incapacity resulting from

the injury.

Your Honours, in addition to the payments -

Your Honours, I shall not go into the detail of the

working out of the amounts in particular cases but

could I just give Your Honours a number of other

references in relation to the operation of the

right conferred by section 9. If one goes to

section 10 of the Act, at page 58, at the bottom of

that page, there is provision in addition for a

worker to receive payments or recompense for

medical or hospital treatment, ambulance services

or treatment for rehabilitation.

If one goes to section 11, at page 69,

Your Honours, there is the provision in

section ll(l)(a) for there to be payment in respect

of partial incapacity - and Your Honour I am still

speaking about the weekly payment. There is

provision for the payment in respect of partial as

distinct from total incapacity and for the method

of working out how it is to be calculated in such a

case.

If one goes to section 15(1), at page 73,

there is provision, Your Honours, for redemption of

the weekly payment:

Haines(2) 6/2/91

by the payment of a lump sum -

that is the bottom of page 73, and Your Honours

will also see, at the top of the next page that in

section lS(lA), there is provision if the worker

agrees for the redemption to encompass not merely

redemption of the right to the weekly payment under

section 9 and its cognate provisions but also a

redemption of a liability to make a payment in

respect of the provision presently material, that

is section 16.

Now, Your Honours, having gone to those provisions may I then go to section 16 itself and

Your Honours will see it at page 74. Now, the

central provision of section 16 is section 16(1)

and it says that:

A workers who has received -

and this is the first requirement of it -

ah injury mentioned in the first column of the

table hereunder set forth -

and, Your Honours, I will come to the table a

little little if I may -

shall be entitled to receive from his employer

by way of -

and then the description of the nature of the right

is:

compensation for that injury, in addition to
any other compensation prescribed by this Act,

the amount indicated in respect of that injury

in the second column of that table.

Now, Your Honours, I wish to go to a couple of other provisions of section 16, but it is

convenient to go from there to the table and then
come back to those provisions.	May I take

Your Honours to the table at page 82. Now,

Your Honours will see that the table really consists of two parts. It consists of a table, in

the stricter sense, which is divided into, on the

one hand, a column headed, "Nature of Injury" and,
on the other hand, an "Amount payable" in respect

of the injury. Then underneath it there are three additions, or perhaps qualifications, dealing with

injuries of a particular nature. But,

Your Honours, for the present purposes one is

simply concerned with the table itself.

Now, Your Honours, if one looks at the table

what appears to be contemplated by it - I should

Haines(2) 6 6/2/91

say if one looks at the table in isolation, what

appears to be contemplated by it is loss in the

sense of total loss of the particular portion of

the body. But, Your Honours, that notion is

altered by two other provisions of it which are

subsections (4) and (5) and may I take Your Honours

back to those provisions now at page 79.

Now, Your Honours will see that subsection (4)

says that:

For the purpose of the said table the

expression "loss of" includes "permanent loss
of the use of".

So that it is not necessary in, for example, the case of loss of an arm for there to be severance,

stricto sensu as it were. The second feature is,

Your Honours, that if one looks at subsection (5)

it says that:

For the purpose of the said table the

expression "loss of" also includes the
"permanent loss of the efficient use of" but

in such a case a percentage of the prescribed

amount payable, equal to the percentage of the

diminution of the full efficient use, may be

awarded in lieu of the full amount.

Your Honours, if I could just say one thing at

this point: it could not be clearer, in our

submission, than it is from the terms used in

subsections (4) and (5) that the payment to be made

pursuant to section 16 is a payment for a

functional loss one way or another.

Your Honours, I will come back to section 16

in respect of our submissions, but may I turn then

to the second provision which is relevant and that

is the power to award interest. Your Honours, that

derives from section 94(1) of the Supreme Court Act

which is contained in the last two pages of the

book after a divider and section 94(1) is the

provision which confers the power to award, as it

were, pre-interest judgment, and then section 95 is

the provision which deals with interest after

judgment. What section 94(1) says, in a fairly

familiar form, is that:

In any proceedings for the recovery of any money (including any ..... damages ..... ), 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 the money for the whole

or any part of the period between the date

Haines(2) 7 6/2/91

when the cause of action arose and the date
when the judgment takes effect.

Your Honours, that power is expressed in broad terms, of course, but the decisions on it and its

cognate provisions have indicated the purpose for which and the manner in which and the purpose the

power is to be exercised.

Your Honours, may I now move to the third

aspect of our argument on the first point and that

is the submissions which we wish to make in support

of the proposition which we advance and may I start

in this way, Your Honours, by making the submission

that the purpose of an award of interest is to

compensate a plaintiff for the detriment suffered

by being kept out of money.

Your Honours, the purpose was put in that way

in a decision of the Privy Council to which I will

come and a decision which, in relevant respects,

has been adopted by the Court subsequently.

The relevant decision is Thompson v Faraonio,

(1979) 54 ALJR 231, and I wanted to refer the Court

to page 233. The relevant part, Your Honours, at

page 233 is in the right column commencing about

half-way down the page where Their Lordships say,

and I should say they are speaking in a context of

economic loss, but the principle does not seem to

be any different when one goes to non-economic

loss:

If damages for economic loss are

calculated in two parts - as compensation for

pre-trial loss and for post-trial or future

loss - it cannot be right to award interest on

the part awarded for future loss. The reason

for awarding interest is to compensate the

plaintiff for having been kept out of money

which theoretically was due to him at the date

of his accident -

and Their Lordships proceed. Now, Your Honours,

that is a statement of the principle, and it was a

passage that was adopted by a majority of the Court in Cullen v Trappell, (1980) 146 CLR 1, at page 18,

the judgment of Justice Gibbs. Your Honours, the

passage which is overall relevant runs from

pages 18 to 21. May I indicate to Your Honours

within that part the passages which are

particularly relevant, and could I commence at

page 18 about half-way down the page, and

His Honour says:

Notwithstanding the absence of any such

expressed prohibition, it was held in -

Haines(2) 6/2/91

Thompson v bottom of that page to the passage to which I have

and then His Honour goes on to refer to

just referred.	Then he says at the top of the
next page:

In accordance with the general principle

which I have just stated, interest may be

awarded on economic loss incurred up to the

date of judgment.

There is then a discussion of the fact that not all the loss will have been suffered immediately at the date when the injuries were sustained and that the

loss may be one which occurs in a number of stages

over time, and that perhaps that might result in a

difference in interest rates or in a difference of
the period.

Now, His Honour then goes on to deal with the

question of interest on that part of the award
which represents damages for non-economic loss -

that is page 19, the paragraph commencing half-way

down the page; and then at page 20 at about

point 4, the paragraph commencing, "On the other

hand", goes on to discuss the question of the

approach to interest in the case of pain and

suffering and loss of amenities and the dissection

of that figure into pre and post-judgment; then

the bottom of the page and the top of the next page

adopts that approach.

Your Honours, perhaps most relevantly for present purposes, the approach in Thompson v

Faraonio was once again adopted by the Court in

Batchelor v Burke, (1981) 148 CLR 448.

Your Honours, that case is important because it

deals directly with workers compensation although

it is right to say immediately that it is dealing

with the other aspect of compensation, that is, the

equivalent of section 9 of the New South Wales Act,

the provision dealing with weekly payments in lieu

of wages.

Your Honours, in that case - and I will come

to the case in a little more detail in a moment -
the Court held that payments similar to those under

section 9 of the New South Wales Act were to be

taken into account in determining the amount on

which interest should be calculated.

Your Honours, may I say something about the

case before going to the passages? The plaintiff's
award for damages in the case had included the sum

of $21,000 for loss of wages pre-trial. The

plaintiff's employer, who was not the defendant in

the common law proceedings - and a similar

Haines(2) 9 6/2/91

situation obtains here - had paid workers

compensation in at least that sum, that is, it had

paid workers compensation, $21,000 or more, and the

issue which arose was whether interest should be

allowed on the $21,000 damages. Now, the trial

judge had held that interest should be awarded

without regard to the fact of payment of the
compensation, the factor of significance to the

primary judge being that the payment of the

compensation had been a payment made by a third

party, that is, a party, a person not the defendant

in the common law proceedings, and the Full Court

agreed with that approach - that is the Full Court

of South Australia.

Now, Your Honours, having said that could I

take Your Honours to the relevant parts of the

reasons for judgment commencing at page 451 about

point 5 and going to the end of the page. Now,

Yours Honours, in that passage Chief Justice Gibbs

who delivered the main judgment in the case

referred to the fact that the statement in Thompson

v Faraonio had been approved by the Court in Cullen

v Trappell and then said at the bottom of the page

that:

If this principle is applied to the present

case, it would appear that interest should not

be awarded in respect of the respondent's loss

of earnings before the trial, since that loss

has been made good by the payments of workers'

compensation, and the respondent had not

suffered any financial detriment from a

practical point of view.

Now His Honour then at page 453, commencing at

about point 4, dealt with what in effect was the

argument on the other side and that was the

argument that the workers compensation payment was

something which was -

collateral or too remote -

or something of that nature to be taken into

account and he sets out the argument, in effect,

and about point 4 on page 453 and then goes on to

say, a little further down, in a passage which goes

from there to about half-way down on page 455, that

that approach should not be adopted.

Now, Your Honours, I will not read it out but

may I refer Your Honours to a number of parts of

it. First of all, at page 453, about half-way down

the page he says:

The answer to the question whether the

compensation should be taken into

Haines(2) 10 6/2/91

account ..... is largely provided by a

consideration of the legislation under which

the compensation is payable.

He then sets out or paraphrases the terms of the

South Australian statute and at page 454,

commencing about the sixth line draws attention as

a particularly germane matter to the fact that the

compensation had, in effect, to be repaid from any

damages obtained by the injured worker. And,

Your Honours, that occupies I think, for practical

purposes, most of page 454 going down to about
point 7. His Honour notes, about point 7, not

every advantage or disadvantage which accrues to an

injured worker and which is relevant to the

assessment of damages should be disregarded as

collateral or remote. He elaborates on that

proposition at the bottom of the page and then,

Your Honours, goes on to conclude at page 455,

about point 3 and then says in the paragraph of

importance, ultimately, the second-last paragraph,

his reasons for judgment on page 455 that it would:

not be right to award interest in respect of

that portion of the award which represents damages for earnings lost before trial but replaced by payment of workers' compensation.

It would not be consistent with that principle

to award interest simply to discourage

defendants from delaying the settlement of

claims. The interest -

and His Honour paraphrases again the principle:

is awarded to compensate the plaintiff for the

detriment that he has suffered by being kept
out of his money.

Now, Your Honours, I mentioned in the course

of dealing with those reasons that some relevance
was attached to the fact that there were provisions
in the South Australian statute requiring, in
effect, the compensation to be refunded. There are

similar provisions, Your Honours, in the New South

Wales statute; they may be seen at page 209, as

part of section 63 in relation to proceedings

against the employer. I will come, in just a

moment, to that position which obtains where a

third party is the defendant in the common law

proceedings.

Your Honours, so far as section 63 is

concerned, it provides in section 63(1) that:

Nothing in this Act shall affect any civil

liability of the employer where the injury was

caused by -

Haines(2) 11 6/2/91

his negligence, to put it shortly, or negligence

for which he is responsible. And then,

Your Honours, the first move towards the working

out of the potential conflict of the two concepts

is in section 63(2), which says that:

In such a case the worker may proceed both under this Act and independently of this Act,

but where in proceedings independently of this Act he accepts money brought into court by his

employer or he obtains judgment against his

employer he shall not be entitled to any

compensation under this Act other than
compensation paid to him before such
acceptance or judgment.

And, to that one adds subsection (5), at page 211, which says that:

Where any payment by way of

compensation ..... has been made, the payment

shall, to the extent of its amount, be a

defence to proceedings against the employer

independently of this Act in respect of the

injury.

Your Honours, could I come then to the position in

relation to proceedings against third parties.

There are two provisions of the Act which are

potentially material; one is section 64, the other section 64A - I say "potentially material'' because section 64A deals with the situation after a
particular date, but the particular date is such

that it does not apply to the present case because

the plaintiff's injury occurred prior to the date

which triggers the operation of section 64A.

So, if I could take Your Honours to

section 64, it provides in subsection (1) that:

Where the injury for which compensation is

payable under this Act was caused under

circumstances creating a legal liability in

some person other than the employer to pay

damages in respect thereof -

(a) the worker may take proceedings both

against that person to recover damages and

against any person liable to pay compensation,

but shall not be entitled to retain both

drnages and compensation.

Your Honours, I shall not go through the remaining

provisions of it. They work out the detail of the

broad proposition there stated.

Haines(2) 12 6/2/91

Your Honours, having said that, may I turn

then to the reasons of the courts below for not
taking interest into account? Could I go first to
the reasons for judgment of the primary judge, and

Your Honours, there is a similarity between the

reasons in both courts, but could I go first to the

reasons of the primary judge which commence at

page 185, line 22. Now, Your Honours, at that

reference, the last four lines on page 185, His

Honour indicates the question; he then, at

page 186, sets out, about line 5, section 16(1), he

refers to the table about line 15, he then

commences to deal with his reasons at line 20 on

page 186. He says that:

Counsel for the defendant was unable to refer

me to any case, in which the approach ..... had

been adopted -

but had -

submitted however that as a matter of

principle the s. 16 payment -

should be taken into account.

Now, Your Honours, he then proceeds to refer -

and I say refer because he, himself, was referred

to an observation of Mr Justice Taylor in Skelton v

Collins. I will come to that observation in a

little more detail in a moment but His Honour

derives rather more from it than it merits, with

respect, if I may say so, because Your Honours will

see at the top of page 187 that the passage is one

in which His Honours says that he finds it:

impossible to ignore, or, to regard merely as

a minimal factor what has been referred to as

the subjective element. The expression 'loss
of the amenities of life' is a loose
expression but as a head of damages in

personal injury cases it is intended to

denote -

and so on. Your Honours, what His Honour said in

his reasons for judgment really goes on to take

that out of context, with respect, because if one

goes to Skelton v Collins, it is apparent - if one

goes to the particular passage - that the emphasis

on consciousness of disability made by

Mr Justice Taylor was made simply in order to deal with the matter there at issue, namely, whether:

damages for the loss of amenities of life -

should be the same even if there was no

consciousness of the loss. Your Honours, I will

Haines(2) 13 Mr Jackson, QC 6/2/91

come back to the case in a moment, but His Honour

drew a lot from it because he went on to say, at

page 187 of outline 16:

Thus it was argued that section 16

payments are designed to compensate for "the
physical destruction or impairment of some
part of the body" and therefore there was a

coincidence between the two forms of

compensation. I cannot accept this argument.

A section 16 payment is a statutory right to
which a worker injured in the course of his

employment is entitled.

Then he said - and this, Your Honours, seems to be

the critical element in his reasons for judgment:

There is no subjective element in the quantum

of the entitlement. On the other hand, an

allowance for general damages in a common law

action encompasses compensation for pain and

suffering, discomfort, inconvenience, loss of

pleasure derived from work, hobbies and

sport -

and he went on to elaborate upon it.

Your Honours, I said I would go to Skelton v

Collins and may I do so for two purposes.

Your Honours, the first is to indicate that what

Justice Taylor was doing was simply to emphasize

his view in relation to the more exact question

whether damages for loss of amenities should or
should not be the same depending on whether there

was consciousness of the loss and, on the other

hand, to indicate that the nature of the damages

for loss of amenities of life is that it is,

itself, compensation. One speaks of damages as

being compensatory and the concept is one of

compensation.

Your Honours, Skelton v Collins,

(1966) 115 CLR 94. Could I go first, Your Honours,

to page 112 at the bottom of that page. That is

part of the reasons for judgment of Justice Taylor

and he says at the last line:

It may be that this is one reason why their

reasons appear compelling to me but, however

this may be, in assessing damages for a loss

of the amenities of life -

and then His Honour goes on to deal with the

passage which is cited. That passage cited by the

primary judge in this case goes down to about the

tenth line on the page but if Your Honours read on

to the end of that paragraph, what Your Honours

Haines(2) 14 Mr Jackson, QC 6/2/91

will see is that His Honour is simply saying that

damages for loss of amenities should be lower or

less if there is not consciousness of the loss.

Could I refer Your Honours, for example, to the passage about one-third of the way down the

page where His Honour uses the expression "a much

higher degree of loss than where the victim is

completely insensible to his loss capacity", and

then follows on to say:

Perhaps, in other words, it may be said that a

person who is obliged for the rest of his life

to live with his incapacity, fully conscious

of the limitations which it imposes upon his

enjoyment of live, is entitled to greater

compensation than one who, although deprived -

et cetera. Your Honours, the second reason for

which I wish to go to Skelton v Collins concerns

the second part, in effect, of the reasoning lying

behind the primary judge's decision, and that is

the assumption that there is some difference in

kind between the two concepts underlying the
awards.

Your Honours, we would make two submissions

about that: the first is that the assumption is
not correct and that the concepts of compensation

involved in the two types of award are the same.

The money amounts are different, of course, but the

concepts lying behind them are the same.

McHUGH J:  They are not, are they, because there is one

very important distinction? The lump sum payment

is for the future as well as for the past and what

you are seeking to do is to say that having

deprived the plaintiff of his general damages for a period to the date of trial you should get a credit

in terms of interest by reason of the fact that he

has got a lump sum payment for the future as well

as the past.

MR JACKSON:  Your Honour, may I say two things about that -

and I really want to deal with that in the second

issue - how much you take into account, do you take
the lot or do you, as we would say, have to

apportion that, but may I perhaps postpone that,

Your Honour?

McHUGH J:  Yes. I am ..... challenging you on your

proposition that the two concepts are the same.

MR JACKSON:  Yes. Your Honour, they are different in

money.	I	accept entirely that the purpose of the
award for	compensation under section 16 is to
provide a	figure which is related to disability, to

Haines(2) 15 6/2/91

put it loosely, both for the past and for the

future.	Your Honour, having said that one of two
things would follow.	One is, and this is our

primary submission, that one would take off the

lot, and I will come to the reasons for that a

little later, if I may; the second is that, if

that is not right, there would still be room for an

apportionment in respect of so much of it as

applies to the past, as it were.

McHUGH J: 

But how can you do that because you are dealing

with questions of pain and suffering and loss of
enjoyment of hobbies and matters of that nature in
general damages, whereas the lump sum payment does

not deal with it of those matters?

MR JACKSON: 

Your Honour, that is point I am about to deal

with. That is what it is designed to do,

inadequate no doubt, if one looks at it as a matter

of money, ex hypothesi it is inadequate because a

court has awarded more.	But it does deal with
those things, we would submit.	Your Honour, I am

sorry, I was tempted into dealing with what you

said. May I come back to it?

Your Honours, could I go on to say this: the

second submission we would make is this, that if

the concepts are not the same, and that is not

identical, the factors to be taken into account in

making a payment under section 16 involve a part

and a large part of the concepts involved in an

award of general damages.

Your Honours, could I go then to section 16

and the starting point of it, of course, is that

section 16(1) speaks of compensation. It does not

further define what it comprehends by that

compensation. In that regard, what it says,

Your Honours, is that a worker is entitled to

receive -

compensation for that injury.

On page 74 that is what it says. If one deals

first of all with an award of general damages, what

it seeks to provide is compensation for the injury.

Could I in that regard take Your Honours back

to Skelton v Collins, 115 CLR, in particular the

passage in the judgment of Justice Windeyer at
page 128 point 8 and going through to page 130
point 5. Your Honours will see that His Honour

commences by saying in the first three lines of that passage that damages are compensatory, not punitive.

Haines(2) 16 6/2/91

They are given to compensate the injured person for what he has suffered and will

suffer in mind, body or estate.

Your Honours, the passage continues and one sees, for example, at page 129 in the first new paragraph

on the page:

The general principle that damages are

compensatory yields what seem to me to be some

equally sure, but more particular, doctrines.

He speaks then of recompense for expenses, and then

in the next paragraph:

The next rule that, as I see the matter,

flows from the principle of compensation is

that anything having a money value ..... should

be made good in money.

Then, Your Honours, at the bottom of the page:

The next matter depends upon very

different considerations. It turns upon the

plaintiff being deprived of something that he
could not have sold.

He then proceeds to deal in that paragraph with pain, suffering and loss of amenities, and it is

clear that what he is describing in the elaboration

of the concepts that he has referred to is that

they are something which can properly be described

as something which is compensation for injury.

Could I give Your Honours two other references

in that regard. One is Teubner v Humble,

(1963) 108 CLR 491, again in the judgment of

Justice Windeyer. It is a passage commencing at

page 505 and going on to page 508. The passage

commences in the second last paragraph on page 505.

His Honour then goes on to deal with the various

ways in which damages may be broken up.	He says at
page 506 at about the sixth line:

The destruction or diminution of a faculty has

another, and non-economic, result because of

the deprivation of the ability to participate

in normal activities -

and so on, and he goes on to elaborate upon that

throughout that page. And, Your Honours, at the

bottom of page 507, says that:

But in so far as the possession of money can

in a particular case give pleasure or provide

comfort, money can properly be said to

compensate for pain and suffering.

Haines(2) 17 6/2/91

Your Honours, finally, in that regard, may I go

also to Sharman v Evans, (1976) 138 CLR 563, in the

joint judgment of Justices Gibbs and Stephen. If

Your Honours go to the last two lines on page 584,

through to about 12 lines down on page 585,

speaking about damages for loss of amenities of

life and make it apparent that they regard that as

falling within the concept of compensation and,

Your Honours, what emerges from those cases is, if

I could say these things, that the term - damages,

of course, are described as being compensatory;

they are compensation for that injury, if one could

use the expression in 16(1).

It is difficult, we would submit, with

respect, to see why the term "compensation for that

injury", used in section 16(1), should be given a

meaning which excludes, as the subject-matters for

which the compensation is given, the items or the

headings - to put it loosely - which lie behind an

award of damages under the general law.

McHUGH J:  But although the statute calls it compensation,

in no sense is it compensation, is it, because -

not only for the reason that you mention, that it

is less than what judges award - but the 15-year-

old worker gets the same sum as the 65-year-old

worker. So if you lose a leg at 15 you get exactly

the same sum as if you lose the leg at 65.

MR JACKSON:	Yes, Your Honour.
McHUGH J:	Does that not throw up the difficulty of working

this out? What do you do, do you take a fiftieth

of the lump sum for a 15-year-old worker and weigh

that against his pre-trial date loss, and in the

case of a 65-year-old man can you take half of it

or something. I mean, how do you work these

figures out? Does it not all show that there is

really no comparison between these two concepts?

MR JACKSON: In our submission, no, Your Honour.

Your Honour, may I deal with that - I am sorry,

Your Honour, to keep postponing this; may I just come back to that in just a moment. I just wanted

to deal with one more thing before going to it and
that is that a different view, with respect, was

taken in New South Wales in a decision to which I

will come, an unreported decision of the Court of

Appeal, in dealing with section 16. The case does

not decide the precise point, I hasten to say.

McHUGH J:  I probably sat on it, did I?

MR JACKSON:  No, Your Honour. I would not lead Your Honour

into that quite so bluntly. It is Powder River

Pastoral Company Pty Ltd v Wadley, an unreported

Haines(2) 18 6/2/91

decision of that court given on 13 December 1983.

The particular provision of section 16 which was

under consideration was section 16(1B)(a2), which

is set out on the first page of the reasons for

judgment of the President, Mr Justice Moffitt.

But the observations of the court were

expressed rather more broadly and Your Honours will

see, at the bottom of the first page of

His Honour's reasons for judgment, that he set out

the contentions that there had been an error of law

in three respects. The second respect was this -

and this is at the top of page 2 - it was urged

that:

By assessing the compensation on a basis

similar to that for assessing damages for personal injury according to common law -

or the error alleged was -

assessing the compensation on a basis similar

to that -

adopted in common law proceedings.

His Honour dealt with that question - and the

members of the court held there was not an error of

law by taking that approach, he deals with that

submission at page 4, and Your Honours will see the

new paragraph on the page, and he deals initially

with a contention that section 16 was confined to:

compensation for specific injuries resulting

in ..... loss of earnings or earning capacity.

And then it goes on to say, at about seven lines

from the bottom of the page:

The Commission has to assess such sum as is

appropriate to compensate for the injury.

And then, at page 5, about 10 lines down from the

top, says:

Compensation for a work injury defined in S 16

will be that which will compensate for the

detriments which are a consequence of the

injury. That is the simple logic of the

common law in compensating for an injury

caused by a tort.

Now, His Honour goes on to elaborate upon the proposition in the remainder of that paragraph and

then in the next paragraph says:

Haines(2) 19 6/2/91

As the Act does not confine the subject matter of compensation to earning losses, so that it

extends to personal detriments, there is

certainly no error of law if the Commission

fixes the sum awarded by reference to the kind

of considerations applied in assessing

compensatory damage for personal injury at

common law and hence in including compensation

for pain and suffering and compensation for

loss of the organ itself viewed in the way to

which reference has been made.

Then he says, in the next sentence:

there is no basis to exclude compensation for

loss or suffering.

The subject of compensation is the injury

not just the loss of the organ which resulted

from it. Compensation for the injury -

And then, Your Honours, if one goes through the

remainder of that paragraph and also the next

paragraph where he concludes dealing with that

question. Now, the issue was dealt with also by

Mr Justice Mahoney and his reasons for judgment are relevantly - it is the second page of his reasons for judgment, and in the fifth line on the second

page he refers to the submission that had been made

that it was inappropriate to take into account:

the principles on which damages for personal

injuries are assessed

and then dealt with the proposition at the bottom
of that page, in the last paragraph, the second

sentence.

First, that which is to be given is

"compensation". The discretion therefore

looks to compensation rather than punishment

or blameworthiness. And the Commission will

be entitled to look at all of the matters for

which compensation is appropriate.

And he goes on to elaborate upon the proposition,

going on to the top of the next page and then says,

Your Honours, about one-third of the way down

page 3:

It submitted the Act did not deal with

compensation for loss ..... or for pain and

suffering or similar matters and submitted
that therefore the present provision was

limited ..... to economic loss.

And he went on to say, then, in the next paragraph:

Haines(2) 20 6/2/91

If the discretion be understood in this

way, I do not think the Commission erred in

law ..... I do not think the Commission acted on

the basis simply that the considerations
relevant in assessing compensation for
tortious injury ..... are congruent with the
considerations relevant under this provision.
It was, I think, looking to the analogy
between these two matters. There was no error

of law in so doing. Matters such as "physical

injury, pain and suffering and general

distress" are relevant in assessing

compensation of tortious injury at common law.

And he went on to say that he thought he was right

in doing so.

Now, Your Honours, in our submission, if one

is speaking about compensation and compensation

under section 16(1) the subject-matter of the

compensation, in our submission, is similar to or

the same as the subject-matter of the compensation

for which damages are awarded at common law.

Now, Your Honours, if one goes to

Mr Justice Carruthers judgment again -

McHUGH J:  I have to read this judgment more carefully, but

I am not quite sure what use you are making of it.

I rather thought that the court was saying that

compensation under 16(1B) is akin to compensation

in a common law action but it has nothing really to

say about the lump sum payment under section 16(1).

MR JACKSON:  No, Your Honour, what I am seeking to say - I

accept what Your Honour says in terms of the
ultimate result in the case and that the point the

court was dealing with was 16(1B) and the

provision, but the court seemed to go beyond - in

arriving at the conclusion which it did, the court

seemed to be speaking more broadly than it would be

necessary to do so to deal only with that
provision.	What I am submitting is, that the

approach that is demonstrated by the more general

comments of the court in that case is an approach

which is correct.

In our submission, if one says, "Why is

compensation being given?" or "What is the

compensation for?", the compensation is for the

injury. When one speaks of there being

compensation for the injury, one says, "What

aspects of the injury give rise to a need for

compensation?", and, in our submission, the aspects

of the injury which give rise to the need for

compensation are ones which are the sorts of things

Haines(2) 21 6/2/91

for which an award of damages under the general law

provides. Your Honour, the quantum is another

thing but the content of the subject-matter is, in

our submission, the same and it is not correct to

say, in our submission, as the primary judge said
at the bottom of page 187 that there is a stark

contrast between the two concepts, the compensation

which is given under section 16(1), in our

submission, is a compensation designed to provide

for the very disabilities, to put it loosely, which

are listed immediately above that comment.

TOOHEY J: In what sense, Mr Jackson, is it designed to

provide for those things, because it is operating
within an artificial ceiling, being the amount

prescribed for total loss of use of a particular

limb, or whatever it might be?

MR JACKSON:  Yes. Your Honour, I am sorry, "provide for"

was the wrong word if one understands that to mean

making provision for the defraying of those

expenses to the extent they might be expenses.

What I am simply seeking to convey is that when the

legislature says there is compensation for that

injury, the matter for which it is providing the

money, or for which the money is provided or made

available is, in terms of a subject-matter, in

effect - and I put it loosely - what is set out in

His Honour's reasons for judgment where he lists

the various items that go to make up the

compensation for pain and suffering and so on.

TOOHEY J: Well, I suppose you can say it is not confined to

economic loss.

MR JACKSON:	Yes, Your Honour.
TOOHEY J:	How much further you can take, I am not sure

because of the artificial constraints imposed by

the amount itself.

MR JACKSON:  Your Honour, if one took the example perhaps of

two jurisdictions where one were entitled to sue

for damages under the general law for the same

injury. Now, in one jurisdiction the award in

respect of pain, suffering and loss of amenities

might be $200,000 and in another jurisdiction the

assessment of damages might be exactly the same but

there was a statutory ceiling limiting the maximum

to $150,000. Your Honour, it would be right to

say, in our submission, that the subject-matter
giving rise to the award in each case was exactly
the same but the amount of the entitlement by

reason of the injury varied only because of the

statutory cap in one jurisdiction but the

subject-matter of it is the same, in our

submission.

Haines(2) 22 6/2/91

Your Honour, the point I am seeking to make is

this: if one says that the entitlement under

section 16(1) is an entitlement to a sum of money, the quality of the entitlement is derived from the expression "compensation for the injury" which is

the way in which the section describes it.

Now, if one is looking to the things that

underlie the entitlement, why is such an

entitlement given, the reason is because that, one

would think, the legislature has taken the view

that a person suffering one of the listed

disabilities will suffer disadvantages and that

there should be something given for those

disadvantages - arbitrary, no doubt, in amount, but

something given for them.

Now, Your Honours, if one goes to say, "What

are the disadvantages in respect of which that is

to be given?", then the answer, in our submission,

is to be found by looking at the types of things

that go to make up compensation. Now, if one looks

at damages, that is itself compensation. There is

really no difference between the two concepts, in

our submission.

McHUGH J: But it is more - - -

BRENNAN J:  Mr Jackson, does your submission assume that it

is always right to award interest in respect of the

award of non-economic loss pre-trial?

MR JACKSON:  Economic loss?

BRENNAN J: Non-economic loss.

MR JACKSON: Well, it does, Your Honour, yes.

BRENNAN J: There seems to me to be some problem here.

MR JACKSON: Yes?.

BRENNAN J: If, three years ago, I, having been injured, I

have suffered some pain and disability of a kind

that would attract an award of, say, $100, and then

my trial does not come on for three years, am I

going to get only $100 at that time, by way of

general damages, or will inflation have had its

effect? And then, if one says, "Well you are going

to get so much for non-economic loss for that

period, but you have got your compensation", what

is your compensation for except for non-economic

loss?

MR JACKSON: Well, Your Honour, perhaps I have to commence

by saying that this is a point which has not been

taken below on our side, and has not been taken - I

Haines(2) 23 6/2/91

do not know whether it would or would not have been taken if the point had occurred, and, Your Honours,

I have to start by saying that. I do not, myself,

want to take the point at this stage.

BRENNAN J:  I appreciate that, but the problem as you are

approaching it is to try to identify the

considerations which go to the award of damages,

and the consideration which go to the award of

compensation. But if one approaches it in a

different way and says, "Well here is the award for

non-economic loss that has been made, and I have

got a statutory right to a certain amount as a

benefit consequent upon my injury", then is that

not the appropriate way to analyse it; looking at

the plusses and the minusses?

MR JACKSON:  I am sorry. I am not entirely certain that I

follow what Your Honour said then, but could I

say - - -

BRENNAN J:  I do not understand why it is that you have to

identify the considerations which go to the award

of damages and the award of compensation.

MR JACKSON: Well, Your Honour, I am doing so really in

response to the way in which it was dealt with

below, and that is the - - -

BRENNAN J:  Does it accord with principle?

MR JACKSON: Well, Your Honour, could I just say this? It

seems to have been treated as established that it

is appropriate to award - appropriate, but not
obligatory - interest on some part of the damages

for personal injuries in so far as those damages

relate to the past, as it were.

BRENNAN J: Yes.

MR JACKSON:  Now, Your Honour, once one comes to that point,

and one comes to a point where the judge has made a

finding, of course, about what part of the damages

do relate to the past, and the cases would lead to	his doing so, and indeed the practice would lead to
his doing so, now, having done that, he is then saying as to the damages for personal injury, "Some
part of this relates to the past, and parts of this
money would have been money which would have been
obtained, which you should have had earlier." Now,
that is the point at which we would differ from the
judge in the sense that in calculating how much of
that, he says you take no account of the payment that was in fact made and a payment which cannot be
duplicated in your damages - - -

Haines(2) 24 6/2/91

BRENNAN J: 

But why is it that you do not say, "On the one

hand you have been kept out of money that you
should have had, and therefore you shall have some

interest, whatever it might be and whatever rate

you choose upon that; on the other hand, you have

had the benefit of a statutory right to section 16

compensation.  You have had that, you have had it

since you got it, and therefore we put the two into

some sort of balance and work out where it should

lie."?

MR JACKSON: 

Your Honour, I think we do say that, perhaps in

a halting way, but the reason why I am on the track

in which I am currently engaged is the factor which

was significant in the Court of Appeal and before

the primary judge was the one with which I am

currently dealing. What I wanted to do was to say

that was wrong and that it was not a case where you

simply could say these things are unrelated. What

I was going to move on to say was that there was

really no significant difference between the

approach to be taken in a case like this and the

approach to be taken in a case like Batchelor v

Burke, and that is, you get the money; the two

sums of money are ones which the statute which

provides the policy, namely, the Workers

Compensation Act, says have to be, to put it

loosely, set off one against the other, and that is

appropriate too when one comes to interest.

McHUGH J: But a person gets his lump sum payment simply

because he is injured, and irrespective of what

pain and suffering he undergoes or what loss of

enjoyment of life, and as I put earlier, he gets

the same amount whether he is 15 or 65.

MR JACKSON:  Yes, Your Honour.

McHUGH J: Well, there really is no comparison between the

two concepts, is there?

MR JACKSON:  There is, Your Honour. He gets the damages

because he is injured. It is the familiar question

that arises that one sees sometimes in relation to

whether you take into account sickness benefit or

something like that in awarding damages. But in

awarding interest, the reason why, if one puts it

that way, the section 16 payment is made is because
there has been an injury suffered in the course of

the employment which has had a particular

consequence, the particular consequence being,

Your Honour, loss of use of - meaning loss of use
of, meaning loss of efficient use of - a limb as
the statute says, or some other part of the body on
the one hand; and on the other hand, one has the

situation where the compensation under the general

law is awarded for exactly the same reason.

Haines(2) 25 6/2/91

McHUGH J: Unless a plaintiff can show that he suffered pain

and suffering as a result of his injury or it has

had some other detrimental consequences he will get

very little, if any, damages. But a plaintiff here

can get these lump sums although he has suffered

nothing more than the moment of pain when he incurs

the injury. It may not affect him in the slightest

in any shape or form.

MR JACKSON:  Your Honour, if one looked at the types of

injury that are listed in the table that would,

with respect, be unlikely.

McHUGH J:  What about fingers, little fingers and things

like that?

MR JACKSON:  Your Honour, I suppose it depends on the

individual.

McHUGH J:  I can assure you in my experience there were a

number of workmen who did not mind losing little
fingers and things like that. In fact, there was
often some suggestion they deliberately lost them

for compensation.

MR JACKSON: Well, Your Honour, that may reflect on economic

circumstances which force a jovial hardihood upon

them, but that having happened that is, with

respect, not an answer. The true situation, in our

submission, is that if one looks at the relevant

sections of the Act, and it is plain as may be, we

would submit with respect, that what is being given

is compensation for loss of use and it is exactly

the same thing as damages.

Your Honour, numbers of dollars may be

different. They depend on age and so on, but the

underlying concept is similar.

McHUGH J: Apart from the fact that you have to repay this

lump sum payment, what is the difference in

principle between this case and the case of a

disability insurance policy? Now, you are not the

employer in this case. You have not paid the money

to this plaintiff, but you seek to take advantage

of the Act. If the plaintiff had a disability

insurance policy, you would not have an argument,

would you?

MR JACKSON:	No.
McHUGH J:	How do you distinguish the two situations?
MR JACKSON:	We would say this, that it is in the end a

matter of looking at what is the public policy -

and I will seek to explain that in just a moment -

what is the policy underlying the two items

Haines(2) 26 6/2/91

involved? Now, Your Honour, if one looks at, for

example, statutory payments such as sickness

benefit, unemployment benefit and so on, one looks

at the underlying policy of the statutory concept.

I cannot give Your Honour the exact reference, but

Muller v Evans was a case in the early 1980s in the

Court, together with another case heard at the same time, where the Court had to decide whether, I

think, sickness benefit should or should not be

taken into account.	The Court divided very
narrowly on the point.

That is in relation to statutory things and,

Your Honour, it becomes in the end a matter of the

Court looking at the statute which provides for the

benefit and saying, "Should one derive from it the

intention of the legislature that the sum is or is

not to be taken into account?". Your Honour, if I
could just pause there for a moment. If one

applies that test and, Your Honour, it has an

unruly element to it, of course, it is difficult to

see how one could do it any other way, if one

applies that test to a case like the present and

one looks for the intention of the legislature, one

tends to see it in the feature which was regarded

by the Court as being of significance in Batchelor v Burke, that is, the fact that the money is to be

taken into account in relation to damages.

McHUGH J: What about social service payments? They have to

be repaid. Why, on your argument, should they not

be taken into account in terms of calculating

interest?

MR JACKSON: Well, Your Honour, I cannot now remember

whether they are or whether they are not but the -

well, perhaps they should, Your Honour. Sometimes

they are to be.

McHUGH J: Well, they are certainly taken into - but I am

talking about in terms of calculating interest.

MR JACKSON:  Yes.

McHUGH J:  You would have to say the plaintiff should get

less interest than he should otherwise get for loss

of wages because he has enjoyed social service

payments.

MR JACKSON:  Yes. I am told as a matter of practice they

are taken into account, Your Honour. I cannot

speak of it myself but I understand that to be the

case and one could see why that it is really,

because one would think that primary judges, unless

otherwise directed, would be inclined to apply

Batchelor v Burke by analogy to payments of that

kind.

Haines(2) 27 6/2/91

BRENNAN J: There are two propositions, are there not? One

is, that you get interest for being kept out of

money that you have not had. If you have had money

in place of it, you do not get interest unless -

and this is the second proposition - the way in

which you got that money is a subvention which is

not to be taken into account in relief of the

defendant. Well, perhaps I am thinking to myself
why are we looking at it in the way in which we

are?

MR JACKSON:  Your Honour, the second point Your Honour put

to me is one that is answered in a sense, in our

submission, or the answer to the application of it is given by saying was it a case in which there is no relevant difference between the legislation in

Batchelor v Burke and a case like the present.

McHUGH J:  I put to you earlier that the big distinction is

that the lump sum payment is for the future as well
as for the past and, indeed, in many cases a vast

part of it is for the future.

MR JACKSON:  Your Honour, in many cases it will be and in

many cases it may not be.

DAWSON J:	What if it is inadequate, quite inadequate? cannot you say, "Well, really, I'm going to	Why
attribute that to the future"?

MR JACKSON:  Your Honour, because if one is - could I just

say what I wanted to say about that perhaps now and

it is this. What we would say, Your Honours, is this: that one has a payment which is made under

section 16(1) as being compensation for a

particular injury. Now, because of the terms of

the statute the amount of the compensation cannot

exceed a particular sum because there is a

statutory limit which increases regularly.

Your Honour, if one looks at the decision given in

common law proceedings - and that is how the

question must arise - one sees that the court makes

makes an award of compensation for the particular an award in respect of the same thing. That is, it injury.

Your Honour, if it be that the amount of the

award is one which is higher than the amount of the

compensation provided for by the statute, then it

is appropriate to say that the - I am sorry, I

should add one further thing - and one sees the

judge hearing the trial make an adjustment of the

award for general damages into pre and post

judgment, as it were. Now, if one looks at the

amount that he regards as being the appropriate

amount prior to judgment and if that is higher than

the amount of the statutory compensation, then it

Haines(2) 28 6/2/91

is appropriate to say that all that sum is a sum

which reflects compensation prior to the trial

because the amount the judge assessed as being the

compensation to that time is higher. Your Honour,

if on the other hand, the amount that he awards is

lower then, of course, you would not take into

account some of it.

Your Honour, that is the basis on which we

would say one takes into account the lot in a case

such as the present. If, however, one says the
compensation under section 16 is something which

should be treated as being applicable over the

whole period of the person's life or, perhaps,
working life then the next stage would be that I

suppose it would be appropriate to make some

apportionment of it into the amount which properly

reflects the period to trial and properly reflects

the future.

Now, there would seem to be no particular

objection, in our submission, in the latter case to

adopting the same proportionate apportionment as

the judge adopts when dividing up the damages into

pre and post judgment. Now, Your Honour, that is

the submission we would make in relation to that.

But, Your Honour, I do not want to adopt the second proposal as being our primary submission, a sort of compromise submission, but our submission is that

if one looks at the subject-matter, in many cases,
the apportionment will have the result that perhaps

the whole of the compensation is to be taken into

account.

Your Honours, could I say just a couple more

things?

BRENNAN J:  Mr Jackson, could I just delay you for one

minute longer? Take a practical case of a

quadraplegic who finds difficulty with heat

regulation and he gets his compensation so he

air-conditions his house and when it comes to trial

there is some award for the cost of

air-conditioning. Now, why is it that if he spent

his workers compensation in the air-conditioning
his house and that is the need that his injuries

have given rise to, there should be any deduction

at all from his damages which would otherwise be

awarded for loss of amenities and so forthby reason
of his having received his workers compensation.

If one puts it on the other hand, he spends it on a sound system, he has had the benefit of that for

some time. One can see that he has had the benefit

of it for a longer period than he would have if he

had waited until he got his damages and you might

take it off. It just seems to me to be nonsense to

Haines(2) 29 6/2/91

try to equate the thing that the money is given for

in damages and workers compensation.

MR JACKSON:	Your Honour, I would, with respect, to adopt perhaps part of what Your Honour says.	I am not
certain that I adopt the lot.

BRENNAN J:  You would then have to go on to the question of

interest on the amount for the cost of putting in

the air-conditioning scheme.

MR JACKSON:	Your Honour, we would submit -
McHUGH J:	Can I just interrupt you to say, you said earlier

that you should adopt the same proportions but in many cases you cannot because in a case where the

plaintiff suffered a lot of pre-trial pain, a

substantial part of his award of general damages

may be up to the date of trial whereas the lump sum

payment may be spread over a period of 30 or 40

years.

MR JACKSON:  Your Honour, if one is talking about what we

would put as our second approach, that is the

.;.pportiorunent, what we would submit is to say that

one is looking at a sum of money. The sum of money

is to compensate for that injury - and I am sorry to use the expression again, Your Honour - but in

compensating for the injury you are compensating

not just for a linear thing that can be divided up

with precise equality, what one is compensating for

is compensating for a number of things that occur

at different times. One of them is compensating

for the pain and suffering that might have
occurred, for example, when a hand was mangled in a

machine and that one is compensating, on the other

hand, perhaps, for some loss of agility in dealing

with the ordinary things of life such as cutting up

a meal. Now, the latter will last over a long

time; it will probably get better after a couple

of years but it may never get any better. But,

Your Honour, the compensation for that injury under

section 16(1) itself is something which is weighted in the sense that it may be like the chicken and	the steak, in a sense, it starts off at one end as
a very large thing when the injury happens but there may be times when it gets larger again when
there is some further disability. So, it is not
right, in our submission, to say that it is capable
of equal division and goes over perhaps 40 years,
it may, but Your Honour, the best person to decide
in the end, one would think, what proportion of it
is to be taken into account is a judge who has to make a similar assessment in respect of the damages
he is awarding for what, we would submit, are
similar things and prima facies there would not

Haines(2) 30 6/2/91

usually be much reason for adopting a different

approach.

McHUGH J:  Can I put to you that your submissions assume

that both injuries occur at the same time but, in

practice, they frequently do not. For example, the

plaintiff may have mangled his hand, may undergo a

great deal of pain for two, three years and then

there is an amputation.	Now, what happens in that
situation?

MR JACKSON:  Your Honour, it is not really a question of

both injuries, with respect, it is one injury.

McHUGH J: It is one injury, I know, but it has different

consequences. And, for the purpose of section 16,

when he goes before the Board and is assessed he

has got a 100 per cent loss of the efficient use

after the amputation, before that he may not have

had.

MR JACKSON:  Yes. Your Honour, what would happen, of

course, is that when he has his action the action
is in respect of the cause of action that arose by

the hand being mangled. That having happened, if one assumes then that the judgment is given after the hand is amputated, one has a situation where

the time at which the amount payable under

section 16(1) is paid, and that is the only time -

and, Your Honour, I will come back to that in a

moment - the time at which, of course, is after

that.

Now, he is being awarded damages under the

general law because the effect of the negligence,

let us say, has been that his hand has been mangled

resulting in the end in the hand having to be

amputated.	The award of damages takes into account
those things.	The award of interest takes into

account the fact that the payment under section 16

has been made. There can be, of course, no

deduction of that sum from the interest in respect

of the period prior to it being paid but the judge

still has to work out how much of that section 16

payment on this assumption is attributable to the

period prior to judgment.

TOOHEY J: That is the difficulty, is it not, and it is not

without significance that the examples that you

give us are cases of loss of efficient use of or loss of use of rather than loss of which is what

section 16 begins by talking about? If somebody

loses a limb as a result of an accident and the
amount is fixed by the schedule to the Act, then
there is no room for debate as to how much is
payment and equally no room for debate as to how

much of that represents economic loss, non-economic

Haines(2) 31 6/2/91

loss, past loss, future loss and it jus~ seems to
me to point up the difficulty of trying to compare

two things which are really incomparable.

MR JACKSON:  Your Honour, I must say I had not designedly

been referring to cases of that kind.

TOOHEY J: 

No, I am not suggesting for a moment that you

were but I think if you fasten on to the loss of
limb cases, it really does point up the difficulty
in making any sort of comparison.

MR JACKSON: 

Your Honour, could I say two things about that:

the first is - and whilst I do not want to labour

the point - the reason for referring to

section 16(4) and 16(5) and the reference in those

to loss of the use of and loss of efficient use and

so on was really to point out that there is an

analogy conceptually between the subject-matter of

the compensation, on the one hand, and the subject-

matter and award for general damages on the other.

If I could then go to the other feature that

Your Honour mentioned, if one does take an injury resulting in some immediate loss of use as by

amputation or something of that nature, it is right

to say that the amount is fixed by the statute pro

tern. But having said that, Your Honour, the next

question is: what is that for? And, Your Honours,

one has to go back to the statute, that is

compensation for the injury.

Your Honour, it is right to say, again, that

the number of dollars is fixed by the statute. It

is right to say that it is a payment that is once

and for all but, having said all that, one then says, "Well, what is the payment for?", and the
answer is that it is compensation for the injury
and what one is getting then is compensation which

covers, in our submission, all the disadvantages

that are disadvantages caused by having the

particular injury.

Your Honour, I do not know that I can take it

further than that.

McHUGH J:	The economic and non-economic?
MR JACKSON:	Your Honour, not really, in a sense, because

the section 16 - perhaps I should say this: if one

goes back to the other provisions of the Act, one

sees that - perhaps I should start back one stage.

The Act seems to be dealing with circumstances

where it works on the assumption that one has

employees or persons who are quasi-employees, to
put it loosely, in respect of those persons it

provides for compensation of a couple of basic

kinds, one being that which appears to be the

Haines(2) 32 6/2/91

economic aspect and that is the loss of the
periodical payments they had received from their

work which is capable then of becoming redeemed as

a l~ps~.

Your Honour, I suppose it is right to say that

section 16 does not exclude the possibility of it

reflecting an economic element.

TOOHEY J: Well, it would be difficult, would it not,

because the weekly payments for total or partial
incapacity do not necessary equate with

pre-accident or post-accident earnings.

MR JACKSON: Although there is a relationship between them,

Your Honour, in terms of proportions, and so on.

MCHUGH J:  But there is a ceiling on it.

MR JACKSON:  Yes. Your Honour, if it be right to say that

there is an economic element involved in it, that

really, in a sense, we would submit, supports our

case rather than militating against it because one

would see that the economic loss that is being

catered for as part of it is something which has

already been sustained in part. Now, some of that may have been compensated for in other parts of an award of damages but some of it may not, and in so

far as it reflects the period - again on this

ass~ption - the period up to trial, then on the

second approach we would advance it would be

correct to take it off.

On the other hand, on the first approach, we

would submit, the numbers of dollars would usually

be such that the whole amount would be taken from

the damages for loss of amenities.

DAWSON J: 

Mr Jackson, forgive me for going right back, but

the purpose of the payment of interest is to
compensate the plaintiff for being kept out of his

money, I suppose, and one can see that very easily

with economic loss because it is calculated in

accordance with the actual economic loss because

when you come to non-economic loss that is

calculated as at the time of assessment and there

is not the same argument for interest there.

Now, if interest is paid for being kept out of his money, then that would assist your argument,

would it, in the sense that this money is something

he had not been kept out of?

MR JACKSON: 

Yes, Your Honour, of course.

DAWSON J: 

If that is the answer, that is simple.

Haines(2) 33 6/2/91

MR JACKSON:	Yes.
DAWSON J:	One is not really worried about, in that sense, future loss or past loss, or whatever it might be.

MR JACKSON:  Your Honour, that is our submission. Why I

have gone into, of course, all this is for reasons

I have indicated already.

DEANE J:  But that raises harder questions, does it not?

I mean, what is involved here is that the employer has been kept out of his money and the real

question is who is going to get an unfair
advantage. Should it be the worker to whom the

employer owed an obligation, or should it be the
wrongdoer who can increase the advantage by

delaying judgment for as long as he can? There are very strong policy reasons supporting the view that if there is this deficiency in the legislation

which precludes the insurer under the workers
compensation policy from getting the interest on

the money he is paid, far better that the benefit

falls on the employee than on the wrongdoer.

MR JACKSON:  Well, the way in which Your Honour puts it to

me makes that the inevitable answer, I suppose, if

one puts it that way, with respect.

DEANE J:  Yes. Well, I meant to put the argument the other way to you.

MR JACKSON:  Yes. Your Honour, it is a question, I

suppose, of how one seeks to characterize the

reason for paying interest at all. Now,

Your Honour, one assumes, we would submit, that

prior to legislation such as the Supreme Court Act
provision that the way in which damages were
assessed were such as to give the plaintiff

appropriate compensation and that the same

situation obtains now, notwithstanding section 94.

From there, Your Honour, there has developed

an approach, guiding - to put it correctly, I

hope - the way in which, or the reasons for which,
interest should be awarded.	Now, one sees, in the

cases to which I referred earlier, we would submit,

an affirmation of the proposition that the purpose

of awarding interest is for the benefit of the

party entitled to the award of damages and one is

not really concerned - and, Your Honour, I will

come to a passage in just a moment - with the fact,

as in Batchelor v Burke, that the person who paid the money was someone other than the defendant in the proceedings, and one is not concerned, in

effect, to punish the defendant in the proceedings,

it is simply to give assist the plaintiff because

the plaintiff did not get the money earlier.

Haines(2)	6/2/91
DEANE J:	What if this had been an action in negligence for

property damage? Would it have been open to the

defendant to say, "Oh, he cannot get interest

because was insured", or would the position be that
the plaintiff would get interest, but would be
entitled to account to the insurer who had paid the
amount of the loss, not only for the loss, but for

the interest recovered?

MR JACKSON: Well, Your Honour, it is perhaps complicated a

little by another concept in that, and that is the

concept of subrogation, or course, because one

assumes in a case like that that either the

plaintiff is suing on his own account, but with the
consent of the insurer, or that the plaintiff is
suing - but really the insurer is suing - utilizing

the right of subrogation.

DEANE J: Well, I had in mind the first.

MR JACKSON:  Yes. Well now, Your Honour, in a case like

that, what we would submit is that the plaintiff

would, ordinarily speaking, be entitled to obtain

interest but, Your Honour, probably the interest

would have to be paid over to the insurer because

the insurers would have been - the loss is one

stage further on, as it were.

DEANE J:  I do not know the answer, but the principle would

seem to me to indicate that that would be the

answer.

MR JACKSON:	Yes, Your Honour, because one does not want to elevate insurance to an entirely separate category,
but there is the separate concept of subrogation
involved and it seems to be, one would think, that
the insurer is to be put back in the position that
it would otherwise have occupied.
Your Honour, I was going to give a reference before in relation to the purpose of payment of
interest; could I give Your Honour a reference to
Batchelor v Burke, 148 CLR, at page 455, where the
Chief Justice, with whom the other members of the Court agree, said, about point 5:

The interest is awarded to compensate the

plaintiff for the detriment that he has

suffered by being kept out of his money, and
not to punish the defendant for having been
dilatory in settling the plaintiff's claim.

Your Honours, one matter to which I have not yet referred consists of the reasons for judgment

in the Court of Appeal. May I take Your Honours to

them very briefly? The relevant part of the

reasons commences at page 211, about line 15.

Haines(2) 35 6/2/91

Your Honours, from the remainder of that page

through to page 213, line 19, there is really

recitation of the submissions, and then at line 20

on page 213 what His Honour Mr Justice Priestley

said, commences there and goes through to page 214,

about line 2, and his observations were similar to

those of the primary judge:

It seems to me that although there might be

some small overlap between the

injuries ..... and the matters included in the

head of damage -

they -

are so different in substance.

Your Honour, we have said all we really want to

about that proposition.

Now, Your Honours, so far as the calculation

is concerned, may I hand to Your Honours copies of

a calculation based on the assumption that our

primary proposition as to the manner of taking the

amount into account should be adopted and

Your Honours, the figures on that are figures the

parties have agreed.

MASON CJ: Yes.

MR JACKSON:	Your Honours, the essence of it is to be seen under the heading "Calculation" and it there
provides for interest at the rate provided for by
the judge on the amount of damages that he thought
was appropriate up to - this. is item 1 - the date
when the payment under section 16 was made, which
Your Honours will see in the second line was
12 April 1985. Then, Your Honours, in paragraph 2
under "Calculation", the $75,000 is reduced by the
amount of the section 16 payment and covering the period then to judgment on that reduced amount.
Your Honours, that is that calculation.

The calculation based on the second basis we

put forward, may I now hand to Your Honours,

results in a somewhat different figure.

McHUGH J:	The figure of 8 per cent is really an interest rate of 16 per cent.
MR JACKSON:	I suspect so, Your Honour, yes. It is the figure the trial judge used.
McHUGH J:	The 8 per cent?
MR JACKSON:	Yes.

Haines(2) 36 6/2/91

McHUGH J:  He selected 16 per cent because it is spread out.

DEANE J: It is the Diplock calculation.

MR JACKSON:  Your Honours will see the first figure under

the heading ttCalculation" is unchanged. The second

figure deducts for the second period a figure of

$20,433.72 rather than the figure of $49,037.	The
way in which that figure is arrived at appears
under the heading "Apportionment", and what has
been done has been to apply to the section 16

payment the same proportion as the judge applied to
the award of general damages to arrive at his

figure of general damages up to the date of the

judgment. Your Honours, those are our submissions.

MASON CJ: Thank you, Mr Jackson. Yes, Mr Allsop.

MR ALLSOP:  Your Honours have a number of documents provided

to you on behalf of the respondent, firstly the
respondent's submissions together with a small

compilation of accompanying material setting out

some of the history of section 16 to which I would

seek to take the Court initially.

Before I do that perhaps if I can summarize

the submissions that I make in this way; that is

that there is a fundamental and stark difference

between the nature or purpose of a section 16

payment and non-pecuniary general damages at common

law. Payments under section 16(1), which these

payments were, are payments pursuant to a statutory

right or statutory obligation which is, in effect, a statutory tariff. It is payment for the injury

or loss of function, and one need go no further
than to say that to characterize it.

Payments or awards of general damages in Australia in significant sums beyond nominal sums

are substantially awards for subjective loss by way

of a payment as solatium or compensation but

compensation in a particular sense. Compensation

for something for which compensation is impossible.

That badly paraphrases His Honour

Mr Justice Windeyer in Skelton v Collins. It is a

provision of a fair sum of money as solace for the subjective injury in the sense of largely pain and

suffering and subjective appreciation of position

consequent upon the event in question.

There is, or may be, a nominal amount hidden

or tucked away within an award of non-pecuniary

general damages for objective fact of injury and

disability and that is best seen by what award a

quadriplegic who is insensible obtains under non-pecuniary general damages where pain and

suffering is simply not available because there is

Haines(2) 37 6/2/91

no pain and suffering and as one sees from Skelton

v Collins, it is a sum with which

Mr Justice Windeyer had some doubts as to whether

it should be awarded at all but in conformity with

Mr Justice Taylor and Mr Justice Owen and
Mr Justice Kitto allowed a sum of small amount.
That is to be contrasted quite dramatically with
the position of common law general damages in

England for non-pecuniary loss in cases such as

Wise v Kaye, to which I will take Your Honours, and
I have provided a copy to Your Honours, and

Shepard's case which has recently been affirmed in the House of Lords in Lim Poh's case in 1980. That

stark distinction between England and Australia is

this: that a quadriplegic - perhaps as a paradigm

to be taken for this proposition - who is

insensible has suffered no pain and suffering

because there is no subjective loss but when the

English courts turn to loss of amenity they say

that the quadriplegic has suffered the greatest

loss of amenity possible. He or she has suffered

the loss of amenity of the whole body and

significant sums are awarded by way of

non-pecuniary general damages for loss of amenity

without any realization of loss.

Perhaps it is jumping into the submissions a

bit further, Your Honour, but perhaps summarizing

them. If that were the position in Australia -

which, in my submission, it clearly is not - after

Skelton v Collins, Teubner v Humble, and Sharman v

Evans - then they will be real force in looking at

a statutory tariff which looks at particular parts

of the body and says for limbs or fingers, so much

money and then looking at an award of general

damages which had as a substantial component for

loss of amenity of limbs a substantial amount of

money irrespective of subjective element, there may

well be a real correlation in degree which may be

the sort of thing that it was necessary for the

trial judge to exercise a discretion upon, but

without that, there is this stark contrast.

If I may go back to develop the outline of

submissions, Your Honours, section 16(1) is a

peculiar statutory right that has a history that

goes back to 1926. If I can take Your Honours

briefly to the accompanying material to indicate

some of the aspects of its history which found the

submission of its peculiarity, its variety of

purpose over the years and the inability to simply

characterize it as it was in the Court of Appeal,

if my learned friend's submissions as to what the

Court of Appeal said accurately reflect that.

Your Honours, on page 4 - and the page numbers

are in handwriting at the top right-hand corner -

Haines(2) 38 6/2/91

one finds section 16 as it was originally in 1926.

There are three matters to perhaps note first of

all, and they are all concerned with the

relationship which section 16 had for many years

with economic loss and physical incapacity. It

initially was dependent upon total or partial

incapacity, incapacity being in this context a

notion embodying incapacity to work.

Secondly, as can be seen from subsection (2),

when a sum under section 16 was paid, moneys for
weekly compensation up to that point in time had to
be deducted from it, so there was a clear
relationship between the lump sum and weekly

payments and embodied within the election that was

available in subsection (1) was the proposition

that once the worker took a sum under section 16(1)

his rights to future weekly payments ceased.

Gradually over the years by amending Acts,

which I will take Your Honours very briefly to,

those three elements were washed out, as it were,

if I can use that expression, of the provision.

Before leaving the 1926 provision, it is noticeable

in looking at pages 4 and 5 of the materials that

there were no provisions of the kind referred to in
the Powder Works case, that is as appropriate

provisions, if I could use that expression.	They
were all scheduled injury amounts.

On page 8, Your Honours, there is the relevant part of the 1929 amendment where various amendments

were made to those aspects of incapacity and what
had to be paid back in subparagraphs 6(c)(i), (ii)

and (iii).

At page BA, the next page of the materials, is

a page from the 1948 amending Act which abolished

by the effect of section 2(l)(f)(i) abolished the

necessity or the requirement to deduct past

payments. So that is the first element to go.

Then in 1951 at page 12 of the accompanying

materials the necessity for there to be total or

partial incapacity was removed, and that is found

in paragraph (f)(i) at the bottom of page 12, being

page 160 of the statute book.

Your Honours, I have provided then an informal

consolidation from the red statutes, from pages 13
to 15 of the statute as it stood in 1957, by way of

assistance. The next major step that was taken was

in 1964 when the election was removed, that

election being, as I said, if the worker took the

section 16 moneys he could not take any more weekly compensation and that is to be found, Your Honours,

at pages 35 and 36. Before going to that,

Haines(2) 39 6/2/91

Your Honours, at pages 19 and following for some

pages I have included the second reading speeches

in 1964, this being the time when the legislature

once and for all, as it were, cut the apparent

direct link between section 16 and other economic

benefits, or economic benefits by way of weekly

compensation under the Act. The Minister, Mr

Landa, at the passage which is marked with a line on page 19 and going over to 20, makes this

statement and perhaps it does not take the matter

much further, but he says at page 20, it is in the

left-hand column of page 2436 of the Hansard -

By this amendment it is proposed that the

worker be paid a lump sum as recompense for

the physical loss sustained and in addition

receive weekly compensation payments as
recompense for his continuing incapacity,

whether total or partial. Lump-sum payments

are also proposed as compensation for total or

partial loss of the power of speech -

et cetera. There is nothing in that second reading

speech, nor in any of the other material part of

which came from the legislative council, second

reading speeches, to indicate that there was any

express intention or any real intention on behalf

of Parliament to now provide for such things as

pain and suffering.

It is compensation for the injury - I am

sorry, Your Honours, the relevant page which

contains the 1964 amendment is at page 27 and I

would draw Your Honours attention to two things.

Firstly, there was a new subsection (1) introduced

which is there at paragraph (h)(i) but I should

point out to Your Honours that at the same time as

that amendment was made the first of, I think it

was the first, the first of the "as appropriate"

provisions finds its way into section 16 and that is section (lB) dealing with facial disfigurement and I will come back to those provisions in due

course when I make my submissions on the Powder Works case. Your Honours, I have given the Court

references to Horlock and Bennett v General Motors

and Mason v Commissioner for Railways. They,

without necessarily reading Your Honours those

passages, say no more than this:  when looking at

section 16 in various contexts, that it is money

for injury and in one of the cases refers to

incapacity. Now, Your Honours, that is consistent,

in my submission, with this being a peculiar and

particular provision whereby when an injury

occurred money was paid. Up to 1964 it quite

clearly had, in one sense, as one of its elements

Haines(2) 40 6/2/91

of purpose if that be relevant, some economic

benefit although it was not in any way calculated

by reference to economic benefit. What it

effectively was, as submitted in paragraph 1, is a statutory pronouncement that limbs or loss of limbs simpliciter were worth X dollars or X pounds.

BRENNAN J:  Mr Allsop, the statutory right which is

conferred by section 16 is acquired by a person who
has been injured and the injury is his ticket of

entitlement to the benefit. Is that benefit to be

taken into account in calculating, in any way, his

entitlement to damages at common law?

MR ALLSOP: No, Your Honour, for this reason: it in part

relates to the somewhat difficult effect of

section 64, that it does have to be paid back, pro

tanto at least, once an award of common law damages

is paid. The true debate about collateral benefits

has been answered at least in part by the statute

because it has to go back to the person who paid it

being - - -

BRENNAN J: Well, in part it has been answered by the

statute. In part it has been answered by

Batchelor v Burke, but neither of those parts is
the part that is relevant here, and is the question

to be resolved by reference to Redding v Lee in

151 CLR?

MR ALLSOP:  I am not sure, Your Honour.

BRENNAN J: In other words, does one look at the statute in

order to discover whether the benefit thereby

provided goes in relief of the wrongdoer or not,
because the benefit that has been acquired in this

case is the use of money for a period, that is,
from the time when the section 16 benefit is paid

or payable to the time when it has to be repaid?

MR ALLSOP: It is a benefit that from the statute is clear

is not to benefit the wrongdoer.

BRENNAN J: Well, if that is so, then it is the answer to

it.

MR ALLSOP:  It may be the end of the case.

BRENNAN J: Perhaps we need to see the provisions of the

statute which made that clear, and how those

provisions of the statute are to be reconciled with the wrongdoer.

MASON CJ:  Mr Allsop, you might have a look at Redding v Lee

overnight.

Haines(2) 41 6/2/91

MR ALLSOP:	I will, Your Honour.
McHUGH J:	When contributory negligence is taken into

account, is my recollection right that it has some

effect on workers compensation payments as well?

Is it all paid back if a plaintiff is guilty of contributory negligence?

MR ALLSOP:  I am not sure, Your Honour. I will have a look

overnight.

MASON CJ:  Mr Allsop, we will adjourn now.

AT 4.20 PM THE MATTER WAS ADJOURNED

UNTIL THURSDAY, 7 FEBRUARY 1991

Haines(2) 42 6/2/91