Manser v Spry

[1994] HCATrans 444

..

.

• •

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Adelaide No AS of 1994

B e t w e e n -

GRAHAM MANSER

Appellant

and

JEANA ANNA SPRY

First Respondent

and

THE WORKERS REHABILITATION &
COMPENSATION CORPORATION

(WORKCOVER)

Second Respondent

Manser(2) 1 24/8/94

MASON CJ
BRENNAN J
DAWSON J
TOOHEY J

MCHUGH J

TRANSCRIPT OF PROCEEDINGS

AT ADELAIDE ON WEDNESDAY, 24 AUGUST 1994, AT 3.26 PM

Copyright in the High Court of Australia

MRS. WALSH, QC: If the Court pleases, I appear with my

learned friend, MR A.M.J. HILDITCH, for the

appellant. (instructed by Ward & Partners)

MR P.A. HEYWOOD-SMITH: If the Court pleases, I appear with

MR J.T.W. BIRCHALL for the respondent. (instructed

by Moloney & Partners)

MASON CJ:  The second respondent has informed the Court that

the second respondent does not intend to appear and

will abide by any order of the Court save as to

costs. Mr Walsh.

MR WALSH: 

If the Court pleases, this is a case about double

compensation and the basic principle upon which
damages and common law claims of negligence ought

to be assessed.  The dominant rule has been and

still is, we say with respect, that compensation should be for the loss sustained. For 35 years,

since Espagne's case, that has been the accepted

dominant rule and has not been doubted. There are,

of course, exceptions to that dominant rule, some

of which include that in the case of subventions,

such as moneys paid which may be in reduction of,

for example, loss as a result of loss of earning
capacity, may nevertheless not be taken into
account, but they are truly exceptions to the

dominant rule.

We say, with respect, that on occasions,

sometimes when one looks at Espagne's case and the

cases dealing with it, there are unfortunately -

courts have sometimes not concentrated on the

dominant rule, but have looked at the exceptions as

being the important part of Espagne's case. We

say, with respect, that happened, for example, on
the case that my learned friend relies upon from

the ACT Supreme Court.

The sorts of exceptions that will apply in

relation to the dominant rule include, for example,

contracts of insurance, where the person who is

injured has expended money in providing himself or

herself with a contract of insurance, and they

should have the fruits of that irrespective of the

fact that it may diminish the actual loss;

gratuitous payments that are made by persons who do not intend that a wrongdoer should have the benefit of the payments and the like, and all these have

been discussed in the cases.

In the case at bar, the Full Court, when it

answered the first question, which is the subject

of this appeal, heard in so far as it did not apply

that dominant rule and, with respect, we say that

what may have, in fact, occurred in the Full Court

Manser(2) 24/8/94

is that, with regret, the second question should

have been asked first and the first question should
have been asked after the determination of that,

because we say, with respect, that the effect of

the Full Court decision is that, in circumstances

where the appellant in this case is found

responsible, as a matter of causation, for the

subsequent disability, which was the subject of

compensation, there will be double compensation.

That cannot be avoided as a matter of

consequence of the answer, "None", to the first

question. And we have postulated what we say, with

respect, ought to be the correct answer to that

question in the outline of argument and, hopefully,

have done it in a way which will clearly avoid any

injustice, perceived or otherwise, to the

plaintiff, or the injured party in terms of an

assessment of damages.

It is put, contrary to what we have asserted in out outline, that there are complications

because of the issue of the potential of concurrent

tortious acts, or subsequent tortious acts, that

occur after a person has suffered a loss as a

result of injury. We say that all of that can

quite adequately be catered for by an application

of the ordinary common law principles to assessment

of damages and the rights of contribution between

tortfeasors, and that that is not the point in this

case.

The point in this case is that one must

determine firstly what is the dominant rule of

assessment of damages and, if I am correct in

saying that we look to the loss that the plaintiff

has suffered, then the rest can follow as a matter

of course, and the only question that we will be

called upon to consider then, in this case, if I am

of compensation in this case is in truth a right thus far, will be whether in fact the payment	replacement of wages, such that it ought to be
taken into account in an assessment of damages at
common law, or one of those subventions which is,
in truth, an exception to the general or dominant rule of compensation, and we say, with respect, at
the end of the day, it clearly is not. And that
can be demonstrated, in our respectful submission,
when one considers unemployment benefits, as being
something that ought to be deducted as a result of the decision of this Court in Redding v Lee.

Unemployment benefits are not paid because of

any connection with an injury that is sustained in

an accident or otherwise. Unemployment benefits,

by their very nature, are paid, or were paid in

those days and still, on the basis that somebody is

Manser(2) 3 24/8/94

fit for work but cannot obtain employment. So it

relates to the fact of unemployment and no more,

and thus it is, we say, that it is not appropriate,

as might be asserted to you, that you should look

to the question of whether the loss or disability

results from the same injury. That is not the

question that must be asked. The question is, and

always is, "What is the plaintiff's loss?"

Now, if we take, for example, a very

complicated scenario and set of facts, which would

test the proposition to its limits, we would still

reach the same conclusion, in our respectful

submission. For example, if somebody sustains an

accident, as in this case which occurred, in 1988,

and let us assume that that person continued to

work, as the plaintiff did, and subsequently had

another motor vehicle accident, but with a

different insurer, and let us assume one step

further that, after that, there has been a period

of lack of capacity to work for a finite period,

somebody then suffered an injury at work, which

happened to be an aggravation of the injury that

had been sustained in the second accident, which

was an aggravation of the first accident, or in

some way connected, or even not connected to that

matter, and they recovered; there was a period off
work for a finite period and thereafter they

returned to work; lost the job for no reason

connected with accident; went on unemployment

benefits but, by chance, when they were on

unemployment benefits the injury did in truth

incapacitate them again because of its progression.

Now, in all of those scenarios, if we look to

the dominant rule in relation to the first

accident, there was no great difficulty. Of

course, the trial judge will have the problem of

separating one injury from another one; who is

responsible for what. But, at the end of the day,

there will only be one loss of capacity; one loss

of income, at the end of the day, and, in so far as

that has been replaced, and it is not of a

character which should not be brought into account

because it is a subvention of a gratuitous kind,

then the answer will be clear. So we say, with

respect, that the issues which my learned friend

raises in his outline of argument, really are not

to the point.

BRENNAN J: 

Why do you say "only one loss of capacity"?

MR WALSH: 

One loss of capacity.

BRENNAN J: 

Then how is it that, in the case of successive

accidents, it is possible to assess damages against
the respective tortfeasors for loss of capacity?

Manser(2) 4 24/8/94

MR WALSH:  Because, Your Honour, as a matter of fact, what

will happen - if one looks at it from the

prospective of the second tortfeasor, the second

tortfeasor will argue, "You had no capacity for

work because it was lost." It is a fact; it is a

reality, just as if it was a incapacity to work

because of a disease that unfortunately the worker

had. In relation to the first, the first will say,

"But you know, by the time we have our assessment

of damages, that there has been the intervention of

a subsequent event, by which the person has, in

fact, lost that capacity". And it might be a

subsequent tortfeasor, or it could be, as some

cases have had to cope with, the person who has

lost the capacity due to a condition unassociated
with any accident. But the courts have been

dealing with those sorts of issues for a long time

quite - - -

BRENNAN J:  Of course they have. My question to you is:

how do you say there is only one loss of capacity
when the courts have been dealing with those sorts
of issues and have assessed damages against the two

several tortfeasors?

MR WALSH: Because, in our respectful submission, they have

assessed damages for loss of capacity in so far as

it is to be productive of financial loss in each

case.

BRENNAN J: That is right, and it is that which

distinguishes the two capacities.

MR WALSH:  Indeed; yes, I accept that, Your Honour.

BRENNAN J: So, it is not one loss of capacity, it is two.

MR WALSH:  Yes, I see the point that Your Honour is making,

but at the end of the day, it is what is lost in

terms of the benefits of that capacity.

BRENNAN J: What you are saying, really, is, that there

cannot be double dipping in relation to the two.

MR WALSH: Correct, Your Honour, quite so.

BRENNAN J: Yes. Well then, that is relevant though when we

come to this, is it not, because we then have to

consider the operation of the statute in this case?

MR WALSH:  Indeed, Your Honour, yes. I am sorry, of course.

BRENNAN J: Yes.

MR WALSH:  Now, if the Court pleases, the question which we

say arises in this case is, given the basis of an

award of damages in an action at common law for

Manser(2) 24/8/94

negligence, should the workers compensation

payments received in replacement, or partial

replacement, of wages, be taken into account in the

assessment of the injured person's wages? The

Court knows that there were two questions before

the Full Court, and if I may I turn very briefly to

the facts which led to the questions, namely the

agreed facts in the case stated, and the questions

which followed. And they appear at page 12 of the

appeal book, and page 13.

Your Honours will observe that there was a

motor vehicle accident on 25 November 1988, and

that the plaintiff sustained, by way of an agreed

fact, an aggravation and/or exacerbation of those

injuries in the work incident on 22 July 1991. But

the plaintiff had been unable to resume employment

following the work accident, but had been paid

income maintenance and had medical expenses

pursuant to WorkCover Act, and we need not be

troubled by this in terms of the intervener now,

because of the answer to question No (2), but there

had been an intervention by the intervener, and:

(f) In the action the plaintiff claims from

the defendant, damages for past and future

non-economic losses, damages for past and

future economic losses, impairment of past and

future earning capacity, medical expenses -

that may be required in the future. The plaintiff

and the defendant both disputed the validity of a
claim made by WorkCover for recovery, and the

plaintiff and defendant intervener all desired that

the case be stated to the Full Court.	And the two
questions are then stated:

(1) With respect to the sums paid or to be

paid to or on behalf of the plaintiff pursuant

to the WorkCover Act, what impact, if any,

should those sums have on the assessment of
the plaintiff's damages in the action?

And the answer, of course, was, "None" .

(2) Does any and what liability attach to the

defendant with respect to the Notice dated

14 January 1993?

That notice appears on page 14 of the appeal book, and the Court will observe that the notice has two

essential components; one on page 14 which details

compensation paid up until the date of the notice,

and that is hospital expenses, income maintenance -

I should say, hospital expenses are paid under

section 32 of the Act, to which I will turn later.

Income maintenance is paid under section 35 of the

Manser(2) 6 24/8/94

Act; so that is section 32 and section 35, and

medical expenses under section 32 of the Act.

TOOHEY J:  Mr Walsh, what is it in the agreed facts that

identifies the payments made consequent upon the

work accident as subsumed in the damages payable in

respect of the motor vehicle accident?

MR WALSH:	Nothing specifically, Your Honour, because the case stated was put on the basis that a number of
things could occur in the trial of the action. It
could be, for instance, that it might be demonstrated, as a matter of fact, that the second
event was a novus actus interveniens, in which case
there would be no assessment in respect of that loss, as against the tortfeasor. But, by way of
agreement, it was put that it was, in fact, an
aggravation of the earlier injury sustained in the motor vehicle accident. In which case, the
tortfeasor may well be liable for the same loss;
the same disability, because it was an aggravation during the course of an ordinary working day, as it were, for which the tortfeasor would be liable.

TOOHEY J: Sorry, I do not think I follow that - that last

part.

MR WALSH: Well, Your Honour, if I sustain an injury to my

back, for example, but I am able to continue

working, and the medical evidence is that in the

course of my normal daily activities I may, ~ithout

there being a specific incident of any

significance, exacerbate that condition and that I

may thereby be unable to work, the original

tortfeasor, or the primary tortfeasor, may be found

to be liable for that consequential loss, because,

for no other reason, than that is one of the sorts

of things that could occur because of the

predisposition of the plaintiff to further injury,

as a result of the injury actually suffered.

So, for example, and as we refer to in our

outline of argument to Fishlock v Plummer, where

that sort of issue is discussed. But the point
that we make here is that the court was not being

asked, as a matter of fact, to say, "Well, that

will have to be taken into account in this case".

It was asked a general question, "In this case,

what will be the result in the assessment of

damages?", and the answer will be, we say, that if,

in fact, the primary tortfeasor or the appellant in

this case is to be liable for that disability and

loss, for the reasons that it was a natural

consequence of the injury, made apparent, as
opposed to being a possibility in the future, which

we often hear of and have to speculate upon in

terms of its chance of happening, but let us assume

Manser(2) 7 24/8/94

in this case it has in fact occurred, is there to

be any effect upon the assessment of damages by the

payment of compensation?

TOOHEY J: That makes it a very hypothetical exercise, does

it not?

MR WALSH: Well, Your Honour, with respect, we say that it

is not a difficult exercise to comprehend in the

nature of damages claims generally heard by the

courts, because - and the Full Court had, in our

respectful submission, no difficulty in - - -

TOOHEY J: That does not make it difficult or easy, it just

makes it hypothetical.

MR WALSH:  Yes, it does, Your Honour. But we would ask

Your Honours to assume, for the purposes of the

question, that it was an aggravation, and assume

firstly that, in fact, the defendant will, in fact,

be found responsible for that disability.

Otherwise there is no issue to be decided, and our

outline of argument, at page 4, puts the answer in

this way, at point 3, if one compares the question

which appears at page 13:

With respect to the sums paid or to be paid to or on behalf of the plaintiff pursuant to the

WorkCover Act, what impact, if any, should

those sums have on the assessment of the

plaintiff's damages in the action?

And the answer, we say, should be, "In so far as

the plaintiff has received or will receive

compensation, which does not have to be repaid to

the Corporation, and which is compensation for the very loss and expense claimed against Manser, that

compensation should be taken into account in the

assessment of the plaintiff's award of damages in a

way which will ensure that the plaintiff is not

doubly compensated for the same loss."

So it assumes exactly what I have put, that in fact there will be a successful claim against the

defendant, the tortfeasor, for the loss which has

in fact occurred, and that that tortfeasor will be

liable for it and, we say, in that event then there

should be no double dipping, and it should be taken

into account in that way.

BRENNAN J: What is your answer to the second question?

MR WALSH:  The second question, Your Honour, is not in

dispute - the answer to it is not in dispute.	The
second question is:

Manser(2) 24/8/94

Does any and what liability attach to the

defendant with respect to the Notice dated

14 January 1993.

And the answer was, "No". And that appears at

page 32 of the appeal book. The question there, in

that question was, whether, by way of the WorkCover

Act, WorkCover could recover from the defendant the

amount that it had paid, in the event that we

postulate that the tortfeasor is liable, and the

court said, "No it cannot", because of the peculiar

and specific wording of the Act, which said that,

"If it did not arise out of the same trauma", and

they analysed the definition of trauma, "then it
would not be taken into account."

By answering the question in the way that the court did, we are left then with a position that if

this defendant is liable for the aggravation and

the consequential loss, the plaintiff will retain

the workers compensation because it cannot be

recovered from either the defendant or the

plaintiff, because that is the necessary result of

the answer to the second question. The plaintiff

will, because of the answer to the first question,

receive both the compensation and the assessment of

damages at common law and to the extent, we say,

with respect, indicated at pages 14 and 15 -

DAWSON J:  So your argument is confined to the common law in

this situation.

MR WALSH: Quite so, indeed. It is, Your Honour.

MR WALSH:  It is a very discrete point. We say the common

law answers it. We say that the Full Court went

into error because possibly the questions were not put in the correct order. And I say that for this

reason: the Full Court concluded, at page 32, at

line 14:  It is true that, ifs 54 is not

interpreted in the way for which the

Corporation contends -

that is WorkCover -

some workers will get a double benefit.	The
remedy is in Parliament's hands.

We say the error was that the remedy is not in

Parliament's hands at all. If Parliament wants to

help WorkCover, that is true the remedy is in

Parliament hands, but that is not the remedy

here - - -

Manser(2) 9 24/8/94

DAWSON J: It is not the remedy that is in Parliament's

hands.	The answer lies in the common law is
the·- - -

MR WALSH: Absolutely. That is our point, Your Honour. And

we say it must rely on it, and the common law has

dealt with it in the past many times. If one turns

to the way in which the Full Court approached the

question, one can see what has happened, in our

respectful submission. At page 23, at about

line 25, after reciting the section, the President,

with whom the other judges agreed, put this:

the first question in the case stated

would appear to ask, in effect, whether the

plaintiff's award of damages in the action

should be reduced by setting off wholly or in

part the compensation that the plaintiff has

or may receive by reason of the work accident

on 22 July 1991 that (according to the agreed

facts) amounted to an aggravation of

exacerbation of her original injuries and also

gave rise to a compensable disability within

the meaning of s 30 of the Act.

They point out that the action has yet to be tried.

But then His Honour says:

There has been a series of cases in the

High Court

and His Honour goes on to deal with those cases

dealing with invalid pensions, insurance payments,

unemployment and sickness benefits. So far so

good. Quite correctly, His Honour has understood

the point and taken it into account. His Honour

then deals with Espagne's case.	He then says, with
respect, at line 6:

However, there is no need to consider what

effect the relevant common law principles

would have in the case of worker's

compensation payments in this State -

refers to Farmer v Griffith, which we say, with

respect, is no support at all to the point we are

considering now; refers to Luntz, Assessment of

Damages, paragraphs 8.8.1 and 2 - and, if I may

pause there, they include cases such as Hood

Constructions, on our list of authorities,

Full Court of the Supreme Court of New South Wales,

and other cases of that ilk, and so far, again,

His Honour is on the track, and then says:

For instance, s 84 of the Workers Compensation

Act 1971 expressly contemplated the case of a

worker receiving compensation -

Manser(2) 10 24/8/94

and then deals with the fact that it is normally

recovered by way of - and it was recoverable -

under section 54, and points out, at the foot of
that page that there are some cases where, as a

matter of practicality, and by way of authority in

this State, if it is the employer you reduce the

workers compensation from the amount which the

employer has to pay. And over the page, at

page 25, continues:

There is no reason to think thats 54 of the
1986 Act, which broadly speaking deals with

the same subject though in a different way, is intended to have any different effect upon the

assessment of a plaintiff's damages.

And we say that is quite true. I pause to mention

this, that although this legislation, namely the

Workers Rehabilitation and Compensation Act in this

case is a radical departure in many ways from older

Acts, nevertheless, in relation to the point here

being discussed, they are not different,

namely, the recoverability provisions in generally

from a third party tortfeasor.

So His Honour reflected on that fact and said,

"Well look, this Act is similar to the 1971 Act,"

and so it is, in that regard, although not as a

whole, and then points out at line 9 that:

if the Corporation (or exempt employer) -

and they are the two types of people who co~rd be

liable for payments of compensation under our Act -

pays compensation in the circumstances under

consideration, it is given certain rights of

recovery pursuant to s 54 which may be

enforced, as the case requires, against either

the wrongdoer -

quite so, and we accept that.

It is clear, as withs 84 of the 1971 Act,

that the scheme propounded bys 54 assumes

that the injured party's damages will not be

reduced by reason of the compensation payments
he has received.

And it is true, at this point, to say that this scheme, in this respect under this Act, is the same

as the old Act and that damages for compensation

would be recoverable in the ordinary event against case, regrettably, because of the second question

the tortfeasor and then it would be repaid, of
course, to the person who paid the compensation.

Manser(2) 11 24/8/94

and the second answer is that despite all of that

it is not to be repaid. That is the difference.

TOOHEY J: It is not to be - - -?

MR WALSH:	Not to be repaid, because there was an anomaly in the Act in relation to the definition of the same
trauma.  What His Honour is doing, with respect, is
that His Honour is recognizing that workers
compensation legislation in the past and under this
Act does not intend that the worker should, in effect, receive double compensation, but it should
be recovered from the tortfeasor and repaid, and
that is what these cases and Luntz is all about.
But what His Honour forgot when he went to the end
of the day was to then reflect upon, we say with respect, the answer to the second question, and say, "Well now, how does that affect the position in relation to the first question?"
TOOHEY J:	You mean, had there been only one accident, a

work-related accident, which gave rise to a third

party claim, this question would not be before the

Court?

MR WALSH:  Yes, never be before the Court.

TOOHEY J: Yes. It is only that the work-related accident

occurring later in time does not fall within the

definition of "same trauma".

MR WALSH:  "Same trauma", quite so, Your Honour, and that is

not in dispute before this Court. If WorkCover had

challenged that you may have to consider that, but

they do not challenge that. They accept it as a

correct interpretation of the Act. It is similar

to a question that arose in Hood Constructions, to

which I will turn later, and the answer was in the

way we would ask it to be in this case.

BRENNAN J:	Was this the way in which it was run in the Full Court?
MR WALSH:	Yes, the proposition was put in that way, with

respect, Your Honour.

BRENNAN J: Well, I must say I read the judgment as though

the construction of section 54 was the whole point

at issue in the Full Court.

MR WALSH:  Your Honour, it is true that the emphasis was on

the issue of section 54, and it may well be that it

was left to an application of the principles, as

understood, that the answer would be dependent upon

the answer to the second question.

Manser(2)	12	24/8/94
BRENNAN J:	I see.	The proposition is this that once the

argument on section 54 disappears because it is

agreed now as to what the operation is then a

question which, as it were, passed sub silentio in

the Full Court calls for determination here.

MR WALSH:  Yes, Your Honour. Well, not sub silentio, it was

in fact put that there should be no double dipping.

BRENNAN J:  It was assumed what the answer would be if the

answer to section 54 was answered.

MR WALSH:	Yes, Your Honour.
BRENNAN J:	I see.

MR WALSH: But, there was a, naturally, considerable debate

about the issue of the proper interpretation of the

Act.

BRENNAN J:	Of course.
MR WALSH:	And it may be that that subsumed so much

importance that there was not as much emphasis put

on what the result would be in accordance with the

differing potential answers.

TOOHEY J: But your suggested answer to the first question,

as appears in paragraph 3, is couched in terms

that:

Insofar as the plaintiff has received or

will receive compensation, which does not have

to be repaid -

now, that assumes that the same trauma is not

involved.

MR WALSH:	Yes, Your Honour.
TOOHEY J: Hence, there is no obligation to repay and, you

say it is common ground between the parties that

there was not the same trauma, or do you say that?

MR WALSH: It is now. It is not the same trauma because of

the decision of the Full Court to answer

question No (2).

TOOHEY J: Yes, I know judges should not really ask these

sort of questions, and they may be told, "Well, it

is no concern of the Court," and so be it. But, it

just puzzles me why the case just did not run its

ordinary course, and then when the question of

assessment of damages arose these questions were

not argued in the ordinary way. I am not inviting

you to tell me of any sort of arrangement that

might have been made, but it has given rise to a

Manser(2) 13 24/8/94

question which is very hypothetical as it is

formulated.

MR WALSH:	I think, Your Honour, because it was of such fundamental importance to what is, in this State at
least, amounts to a lot of cases.

TOOHEY J: Yes, except that until damages had been assessed,

and some decision been made as to how far the

exacerbation played any part in the assessment of

damages, the question really did not arise.

MR WALSH:  No, well it would have been possibly preferable,

Your Honour, that it had not arisen in the way that

it has, but having done so we say, with respect,

that the decision stands and is binding upon courts

in this State and we say, with respect, it is

wrong.

TOOHEY J:	What is the decision that is binding?
MR WALSH:	What we say is the decision is that in the

circumstances of this case where the court is

determined that in fact the compensation payments

are not to be repaid, that there is still

nevertheless no effect on the assessment of

damages.

TOOHEY J:  No, I was looking more literally, Mr Walsh, in

terms of the questions asked and the answers given.

MR WALSH:	Your Honour, that appears at - - -
TOOHEY J:	The formal order of the court on page 33 is

simply, "None" and "No".

MR WALSH:	Yes, Your Honour.
TOOHEY J: So, where does that take us?
MR WALSH:	That then takes us back to the first two

questions, Your Honour, at page 13, with the

corresponding answers.

BRENNAN J:  Why is it that if the answer to question (2) is,

"No," the answer to question (1) is the amount

should be deducted in toto?

MR WALSH:  Why it should not be?

BRENNAN J: Yes.

MR WALSH:  I can only presume what might be an argument to

be put by my learned friend, Your Honour, and it
would be this, that there is always - or we say not

in the case of this Act - the potential for

something to happen in respect of future payments

Manser(2) 14 24/8/94

that might be made under the Act. We say that is

something that the learned trial judge would assess

in relation to the risk or the possibility like

everything else is assessed by way of a future
event, and that is why we have couched the answer

to question No {l) in the way that we have, to make

sure that no matter what the argument is in

relation to what might happen in the future the

plaintiff is adequately protected by way of the

answer that we postulate should have been given.

DAWSON J: What, do you mean in the future the Act might be

amended or something?

MR WALSH:  Yes, or something like that, Your Honour. I

mean, they have all sorts of estoppel arguments or

could be retrospective, I suppose, and the taking

away of rights that have been accrued, and all

sorts of arguments like that. But let us assume

that Parliament was going to do something like

that, which is so highly unlikely, but nevertheless

if it is to be postulated than a trial judge would

have to treat it like everything in courts with the

usual exigencies and the risk of certain things occurring in the future and, with respect, this

Court has had to grapple with that problem in Malec

v Hutton's case in terms of the possibility of

events occurring in the future and the percentage

possibilities and the like. We say that it might

sound difficult but at the end of the day judges

will make that assessment in accordance witn the

principles laid down by this Court.

TOOHEY J: Is it a matter of record that any sums - and I am

looking at question (1) when I ask this - paid or to

be paid pursuant to the WorkCover Act will not be

payments made in respect of the same trauma?

MR WALSH:  Yes, because of the answer to question No (2).

Can I help Your Honours by turning to that section?

It is in the judgment, and it may be appropriate
just to look at it.	If the Court turns to page 21

of the appeal book, section 54 is recited, and

Your Honour will see that the relevant subsections

are these:

(1) ..... no liability attaches to an employer

in respect of a compensable disability arising

from employment by that employer except -

(a) a liability under this Act;

and that is doing away with common law remedies.

So, that is one way in which it is a very different

Act, a different scheme, but you need not be

troubled, we say, with respect with that, on this

occasion at least.

Manser(2) 15 24/8/94

Then, if one goes to subsection (5) we come to the real heart of the section as it affects

recovery:

Where -

(a) compensation is paid or payable under

this Act in respect of a compensable

disability;

that is one that comes under the Act -

(b) a right of action exists against a person

other than the employer for damages in respect

of the disability.

the person by whom the compensation is paid or

payable -

WorkCover -

is entitled to recover from that other

person -

the third party tortfeasor -

the amount of the compensation in accordance

with subsection (7).

DAWSON J:  In the most common instances that would be a

motor accident, I imagine?

MR WALSH:  Yes, but there could be a worker who slipped over

in the premises of another person - - -

DAWSON J: In the course of work.

MR WALSH:  In the course of their work, yes, and it often

happens, apparently, and regrettably from day to

day in the Compensation Court. Under

subparagraph (7):

Where -

(a) compensation is paid or payable to a

person ..... under this Act;

(b) the injured party has received, or is

entitled to, damages from another person ("the

wrongdoer") -

that is us -

in pursuance of rights arising from the same

trauma as gave rise to the rights to

compensation under this Act.

Manser(2) 16 24/8/94

And that is where, in this case, the WorkCover fell

down because - - -

TOOHEY J:  One would have thought that that would be a

crucial agreed fact in order to give rise to the

question.

MR WALSH: Well, we do not need to agree because it is

beyond dispute. It has gone beyond an agreed fact,

it is a fact in law because of the answer to the

second question. If one looks at the rest of the subsection it is clear that neither the plaintiff

nor the tortfeasor, if it is not the same trauma,

have to repay the money therefore there there is

going to be double dipping.

BRENNAN J:  The proposition is that section 54 has no

application in this case.

MR WALSH:  Yes, Your Honour.

BRENNAN J: That is agreed?

MR WALSH: It is agreed.

BRENNAN J: Well, that being so, the problem is simply

whether in a case where there is no obligation to

repay the amount which is received by way of

statutory benefit is to be taken into account in

the assessment of damages.

MR WALSH:  Yes, Your Honour, a simple issue and we say, with

respect, that it is in this case because of the

character of the legislation. In short, we say

this to the Court in relation to the issues that

arise that the first question will be - and we have

answered it already - "What is the fundamental

basis upon which damages are to be assessed in the

common law action?" Two, "Where the payments of

compensation are of a character that they are to be

treated as an exception to the general rule in

assessment of damages or not?", and we say they are

not to be treated as an exception to the general

rule. Three, "Whether it matters that the injury

giving rise to the payment of workers compensation

is a different injury to that which gave rise to

the action in negligence?", and we will say it does

not matter in terms of the dominant rule of

compensation which is, "What is the loss?" Four,

"Whether a distinction is to be drawn between past

and future payments?" That is the issue that we

discussed a short time ago and, we say with

respect, you need not be troubled by that because

the answer that we suggest should be given gives

appropriate safeguards to the plaintiff if there is

to be any dispute about what may occur in the

future. And, five - and this is only one exception

Manser(2) 17 24/8/94

where we may have to make a concession - "Whether

the award of_a lump sum payment" under what is

section 43 of the Act, that is the Workers

Rehabilitation and Compensation Act, namely, a lump

sum for non-economic loss, "is of a different

character to the other heads of compensation?", and

I will deal with that separately, and it may be

that in relation to that one can perceive the

difference is not compensation for the same loss.

If the Court pleases, in answer to each of those questions I put these propositions to the

Court. Firstly, what is the fundamental principle

open which damages are to be assessed?	We say
because of Espagne's case, on my list of

authorities; Graham v Baker; Lee v Redding in

particular which was the case partly about pensions

and another case about unemployment benefits, and

because of the decision in Haines v Bendall,

admittedly a case relating to interest and the

effect of compensation payments that have been

made, that one can conclude as the Court did in

Haines v Bendall in the following terms:

Compensation is the cardinal concept. It is

the "one principle that is absolutely firm,

and which must control all else" ..... that a

plaintiff cannot recover more than he or she

has lost.

And, the emphasis we put of course is on the

"lost".

McHUGH J: 

How do you reconcile your argument with the

insurance cases? Is it insurance against
incapacity?

MR WALSH:  Yes, Your Honour. In the case of insurance

against incapacity the courts have made it clear

that because the worker has made the payment and

has insured himself or herself that it is to be

treated as an exception because he or she has paid	for the bounty which they then get in the event of
a disability arising. In other words, it is a
specific payment for a specific result and the
wrongdoer should not have the benefit of that, and
that is outlined in Espagne's case and Lee v
Redding.

But in the case of unemployment benefits where

that is not so or in the case of workers

compensation benefits where the levy is upon the

employer, not upon the worker, it is something that

what must also be looked at in those circumstances

then is the intention.

~

McHUGH J: But why is not the proper analysis that the

worker pays because he gets reduced wages? If the

Manser(2) 18 24/8/94

employer did not have to make contribution to

workers compensation funds there would be money to

pay wages to the worker. So, in that sense, the

worker does pay.

MR WALSH: Traditionally, Your Honour, in looking at whether

there should be an exception or not, two matters

have been looked at. One is the intention of the

donor, and the intention of the donor in the former

case is to pay to the recipient, namely, the person

who has paid the premium, irrespective of whatever

other compensation may exist. In the case at bar

that is not the intention, we say, and that is

clear from the legislation itself.

In relation to the second issue which

Your Honour has raised, namely, the fact that it

may be perceived in some way, in a roundabout way,

that the worker has in fact paid for, we say with

respect, that the courts have generally taken the

view that compensation is to be treated differently

even in that respect. True it is that there was an
analogy to be drawn.

McHUGH J:  I do not think any assistance is gained from

talking about loss. The worker does not suffer any

loss. He does not suffer any loss in an inaurance

case or in other cases where he is allowed to keep

the benefit of the payment; in those cases where

funds have been set up, for example. But, it is a

question of policy. I do not know that it is a

question of principle so much as a question of

policy.

MR WALSH: Well, I can only put it this highly, Your Honour,

that in Espagne's case, Lee v Redding, it was put

on the basis of what is lost - that a person is to

be compensated for what they have lost. But there

is an exception to that principle in the case of

certain subventions. And then one looks to the

character of the payment and the intention of the
donor.	We say, at the end of the day, that the

character of this payment and the intention of the

donor is such, and the answer should be such that

it was not intended to be received in addition to

any other payment that might be received by way of

damages.

TOOHEY J:  I know you have couched your suggested answer to

the first question in a way to meet some of these

problems but, certainly, when one glances at the

respondent's summary - and I am not inviting you to

go to it at this stage - it does seem that

questions may well arise as to the relationship

between damages awarded against the tortfeasor and

payments of compensation. I just wonder whether we

can usefully answer the question?

Manser(2) 19 24/8/94

MR WALSH:	We say, yes, you can, with respect, yes, obviously, but for this reason: if one looks at
the possibilities that might arise as I put earlier
on in my address to the Court, what the Court will
do is it will assess the liability of this
tortfeasor no matter what might have occurred in the past and it could be other events apart from
this, and determine what the liability is. It will
then determine whether there has been compensation
in respect of the loss for which this tortfeasor is
liable. If it is determined that, for instance,
there is a discrete period of loss of wages for
which this tortfeasor is liable but there has been
compensation for that period, then it must be taken into account unless it comes within one of the exceptions.

TOOHEY J: But what if the plaintiff is receiving weekly

payments, this is the compensation, that might well

be the subject of some lump sum payment in the

future. I mean, how are all those things to be

taken into account?

MR WALSH:  The future I recognize was something - there had

to be a protection built in and we say we have

effectively done that because what the Court will

have to do is make an assessment of what is the

likelihood of the person receiving the compensation

for the same disability in the future.

TOOHEY J: But why should not the Court go ahead and do that

so that these questions assume some practical

significance?

MR WALSH:  Your Honour, the fact is that if we do not make

the assumption that the Court can do that there

will be a myriad of different results and each case

someone will say, "Well we want that question

answered in this case."

TOOHEY J: Well, I am not suggesting that this may not be an

appropriate case at some appropriate time. I am

just questioning whether that time has yet been
reached and whether this Court can usefully do

anything other than enunciate some broad

proposition.

MR WALSH:  Yes. What we say to the Court is this, that the

Court can easily say that the assumption has been

made by way of the facts that have been agreed

between the parties that there is an aggravation of

the condition as suffered in the motor vehicle

accident in the work accident. We assume thereby

that it is intended for the purposes of this

exercise that the tortfeasor will be liable for ~he very same loss, namely for that aggravation and for the loss that occurs. In that event, and to answer

Manser(2) 20 24/8/94

the question in this case, the answer is as

follows.

We had been dealing with the issue of the

fundamental principle and then in answer to

His Honour Justice McHugh, I dealt with the second

point, namely, are payments of compensation within

the exceptions to the general rule, and we say that

they are not. We say that firstly the Act does not
intend that they should be received independently

of other rights of compensation and Your Honours

will recall that His Honour Justice Cox, the

President, actually assumed that that was so in the case, and we say, with respect, that there is

little doubt that this Act ought to be interpreted

for the purposes of this point in the same way as

other Acts have been interpreted and that is that

they are not intended, by way of their nature and

their character, to be an addition to other

payments that might be received by way of damages.

The important issues with respect to the

assessment of a benefit in this context are: what

was the doner's intention? What is the character

of payment? Is it, in truth, a replacement of

wages, or was it not of that character? Is there any substantial element of discretion in terms of

the payment, for example, in relation to pensions

in Lee v Redding, where one of the critical issues

was that pensions were in fact the result of an

element of discretion, and the Court's analysis was

that they should not be taken into account because

they are not intended to be linked, as it were, to

wages and loss of wages?

As I have indicated to the Court, the

character of the payments in this case is one of

replacement of wages and we say, with respect,

there cannot be much doubt about that fact; that

the payment is not intended, as in the case of

pensions, to be in addition to any other

compensation paid.

BRENNAN J:  Mr Walsh, what do you say about an argument that

says the statute in section 54 has indicated the

areas in respect of which there should be and

should not be double dipping? There should not be

double dipping when it is the same trauma; as for

the rest, there can be?

MR WALSH:  My answer to that would be, Your Honour, that on

a proper interpretation of the whole of the statute

- and I have outlined the sections - that that is

not what Parliament has intended. It is similar,

we say with respect, to the case of

Hood Constructions v Nicholas, which was a decision

of the New South Wales Court of Appeal, and in that

Manser(2) 21 24/8/94

case almost a similar issue arose. There was by

chance an anomaly in the Act, which I think the court referred to as a casus omissus, and it is

likely that that is the case here, particularly

given the fact that WorkCover had sought to recover

the money and then unfortunately, because of the

interpretation of the section, was unable to do so,

but in Hood Constructions, the same issue arose in

effect, not the same facts, and the court

determined that in fact you should take into

account the payments of workers compensation.

BRENNAN J:  Why how can you say it is a casus omissus when

it all turns on the same trauma, which are the

words chosen by the legislature?

MR WALSH:  Your Honour, we can only put this to the Court,

that there are numerous sections that indicate a

general intention that there should not be a

doubling up of compensation. For example, if I may

turn to the book of - - -

BRENNAN J: Well no doubt there are, and one of those

sections is section 54, and it says, "In these

circumstances there will not be double dipping".

MR WALSH:	Your Honour, I suppose my answer to this can never be higher than this, that looking at the
legislation as a whole, that is not the intention.
It is highly unlikely that Parliament could have
intended in that event only there should be a
double dipping but not in any other event. It is
highly unlikely that Parliament which has created a creature of statute, which is run by the
government, should in fact intend that a plaintiff or worker shall receive double benefits in one
case, but not in another case, as against the
payment of damages, for instance, from another
government department such as the compulsory third
party insurer, which is - - -
BRENNAN J:	Why is it that the statute should be construed

as meaning that where there is a duplication of

amount, the benefit of the duplication shall, in

one instance, redound to the benefit of WorkCover

and in the other instance for the benefit of a

tortfeasor?

MR WALSH:  In truth, Your Honour, the answer is that it

could not have possibly intended that, we say with

respect, and that is why it has overlooked the

proposition that we now have to contend with.

BRENNAN J: But that is the effect of it.

MR WALSH: That is the effect of it, Your Honour.

Manser(2) 22 24/8/94

BRENNAN J: And you are saying that that must be the result.

Why is it that it is not just as simple to say that, in one instance, the benefit was to redound

to the advantage of WorkCover and the other to the

benefit of the plaintiff?

MR WALSH:  I suppose, without an analysis of the Act and the

other provisions, that is an argument that is open

and it cannot be met other than by saying that is
what has happened in this case, that is what the

statute has done in fact, and we cannot overcome

that fact, it is possible one way or the other.

But we say that if one is going to look at the

matter in that light, one must then say what is

likely to have been the intention of Parliament,

and I cannot put it higher than that, Your Honour.

DAWSON J:  Is it possible to say you are really dealing with

two sorts of insurance schemes here; you are not

really looking at a benefit to the tortfeasor, but

something broader, in fact?

MR WALSH:  Yes, I think that is possible, Your Honour. I

will have to think about the result of that.

DAWSON J:  I mean, it is true as a matter of reality that

the tortfeasor does not get any benefit at all.

MR WALSH:  No, quite so, that is true, the reality of it is

that. One is a payment in respect of incapqcity by

way of disability under the Act; the other one is

by way of damages. They are clearly differept

types of payments, there is no doubt about that;

different in their character. But one can only

fall back, I suppose - as I said earlier to

His Honour Justice Brennan, that if we are to look

and balance it in that way, then it is important

then to consider the Act and the effect of the Act

and what is likely to be Parliament's intention in

that regard.

If the Court pleases, I had been dealing with

the issue of the character of the benefits and I
think I -

McHUGH J: Could I just ask you, does section 55 throw any

light on this question?

MR WALSH:  Section 55 is a section which generally suggests,

we say with respect, that it is not intended that

there be any double compensation, as it were.
Section 55, which is in the book of relevant

legislation, which you should have before you -

should I indicate to the Court that what we have

done is, in the first section behind the yellow

paper, deal with the relevant sections as they were

on 25 November 1988, which was the date of the

Manser(2) 23 24/8/94

accident, and the second half, it is the current
Act, namely the provisions as they currently stand,
but I am loo.king at the former and section 55,

which speaks of prohibition of double recovery of

compensation and that section provides that:

Where a disability is compensable under this

Act and under a corresponding law,
compensation shall not be paid both under this

Act and under the corresponding law.

But "corresponding law" is defined, Your Honour,

under the definition section and, if you will

excuse me, Your Honours do not have it before you,

but I have five copies of the full Act in case it

is necessary, and:

"corresponding law" means a law -

(a) of the Commonwealth;

(b) of a State (other than this State) or a

Territory of the Commonwealth;

(c) or

of another country,

that provides for compensation for

disabilities arising from employment.

DAWSON J:	Do you have copies of the whole Act, do you?
MR WALSH:	Yes, but I did not hand them up, because we

should have seven, and I apologise for that; I will

bring another two, but I have five copies of the

Act for the Court. If one looks at the definition

section, section 3, the interpretation section,

"corresponding law" is defined, but it does not

include the case at bar. What we say with respect

is that Parliament is making it very clear that it
is not intended that there should be double

compensation, we say with respect. If one looks at

section 54, section 55, the general tenor of this

Act is against double compensation, much the same as I say it was in the New South Wales case of

Hood Constructions where, unfortunately, there was

in fact a circumstance that allowed the potential

for double compensation.

If the Court pleases, I will turn to the provisions of the Act shortly, but what I have done

to assist the Court in view of the time that was
taken with the earlier two cases, was to try and

truncate my discussion of the various cases, which

we say are important to consider, and I have handed

to Your Honours' associate a copy of -

Manser(2) 24 24/8/94

MASON CJ:	An analysis of the cases, yes.
MR WALSH:	- - - an analysis of the cases, yes. What I have

done there is to highlight the points which we say

are important to consider, particularly in relation

to that second question that I will raise, namely

the character of the workers compensation payments,

and the starting point is at page 2 in the case of

National Insurance Co of New Zealand Ltd v Espagne.

Your Honours will see that His Honour Chief Justice

Dixon, at about point 5 on that page, observed at page· 571 point 6:

that the topic of whether such payment should

be taken into account depends upon the

character of the statute.

little assistance is to be found in looking at

the supposed injustice of relieving the

wrongdoer or his insurer.

There is no legal rule existing that can be

applied to every case.

Page 573 point 3:

that certain special services, aids, benefits,

subventions and the like are available to
injured people, eg hospital benefit and if the

injured person has availed himself of these he

cannot establish or calculate his damages on

the footing that he did not do so.

So that is in accordance with the general principle

that has been stated, but there are others that

have an additional characteristic, and some of the

things that the court spoke of in terms of

additional characteristics are that the benefits

are benevolently provided, that they are intended

to be enjoyed independently of the existence of a right of redress against others. May I pause just

there, in answer to Your Honour Justice Brennan, it

may be put, I suppose, in answer to the point that

we were discussing a short time ago, that if the

general rule is that you should not be doubly

compensated, then it would be for, we say, my
learned friend to say this is one of those

exceptions that ought not to be taken into account.

Manser(2)	25	24/8/94
MASON CJ:	Mr Walsh, we will adjourn now.	We will resume at

9.30 tomorrow morning in thi~ Court. Criminal

special leave applications will commence tomorrow

morning in Courtroom No 3 at the time when this

case concludes and at the same time in this Court

we will commence hearing the civil special leave

applictions.

AT 4.30 PM THE MATTER WAS ADJOURNED

UNTIL THURSDAY, 25 AUGUST 1994

Manser(2) 26 24/8/94