Metropolitan Transit Authority v Ivanovski

[1992] HCATrans 84

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Melbourne No M61 of 1991

B e t w e e n -

METROPOLITAN TRANSIT AUTHORITY

Applicant

and

DIMITAR IVANOVSKI

Respondent

Application for special leave

to appeal

MASON CJ
DEANE J

GAUDRON J

Metropolitan 1 13/3/92

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 13 MARCH 1992, AT 11.30 AM

Copyright in the High Court of Australia

MR J.E. BARNARD, QC:  May it please the Court, I appear with

my learned friend, MR P. CLARK, for the applicant.

(instructed by Coltmans)

MR D.A. KENDALL, QC: If the Court pleases, I appear with my

learned friend, MR C.J. BLANDEN, for the

respondent. (instructed by Galbally & O'Bryan)

MASON CJ:	Mr Barnard?
MR BARNARD:	If the Court pleases, may I, at the outset, indicate that the respondent suffered injury in the
course of his employment as a cleaner on
3 March 1987, and it is relevant that that injury
did not arise out of the use of a motor vehicle, it
was not a transport accident nor was it a journey
accident.  It was an injury to the back which
caused a disc relapse, and the respondent was paid $7973 pursuant to section 98 of the Accident
Compensation Act, and the learned trial judge at
trial assessed his damages at $25,000. His Honour
was asked to reduce that sum by the amount paid
pursuant to section 98, and he was asked to do it
under section 135(3A) of the Accident Compensation Act, and he refused to do that but he went on to
consider whether he should do it in accordance with
the principles of the common law and he decided
that he should not make any reduction in accordance
with those principles.

The simple argument that we put here, and that

I failed to make the Full Court understand that we

put, that is that we desire to argue that the

payment pursuant to section 98 of the Accident

Compensation Act should be taken into account as a

subvention in reduction of common law damages.

MASON CJ:  Now, did you present that argument to the Full

Court?

MR BARNARD: It is our submission, our belief, that it is

the only argument we put and, in fact, 48 hours
before the commencement of the hearing a summary of

the appellant's argument was presented to the Full

Court - - -

MASON CJ: That is at page l?

MR BARNARD:  And that summary appears at page 7.

MASON CJ: Page 7.

MR BARNARD:  The first paragraph 1. is the history of the

section. Paragraph 2. says:

Metropolitan 2 13/3/92

Benefits paid under the Act prior to judgment are to be treated as subventions.

And it refers to Redding v Lee, and goes on only
with that argument relevant to that, and

paragraph 3 is concerned, merely, with whether

amendments have changed the Act. And it becomes

apparent that even Mr Justice Nathan - - -

MASON CJ: Yes, at the end of his judgment he refers to it.

MR BARNARD: - - - at the end of his judgment regards it as

a main argument put to the court.

Now, I am aware that they say that the notice

of appeal really did not raise it, but if the
notice of appeal did not raise it, it was still a

matter that had to be taken into account in the

assessment of damages because the Full Court set

aside the assessment of $25,000 and substituted,

and we would say properly substituted, a higher

assessment but still did not take it into account.

GAUDRON J:  Is it entirely clear that it has not been taken

into account of the reassessment of damages?

MR BARNARD:  No mention is made of it, and having regard to

what is said in all of the judgments it is unlikely

that they have taken it into account.

Mr Justice Nathan has considered the argument and he has concluded that it should not be taken into

account as double dipping, and he agrees with the

others.

GAUDRON J:  Now, the damages are purely for pain and

suffering?

MR BARNARD:  They are, necessarily, purely for pain

suffering.

GAUDRON J:  The subvention, if you like, the workers

compensation payments in question were weekly

payments?

MR BARNARD:  No, it is not.

GAUDRON J: They are not?

MR BARNARD:  If I could take the Court to that matter, and I

hope the Court has been provided with a copy of the

Accident Compensation Act.

MASON CJ: Yes.

MR BARNARD:  And if I could take the Court first to

section 98 of that Act.	It can be seen that
subsection (1) provides:

Metropolitan	13/3/92 In addition to any other compensation payable under this Act, a worker who in the course of
the worker's employment suffers an injury
mentioned in the Table to this sub-section is
entitled to compensation equal to -

And then it goes on to provide benefits of either

up to $78,100 or $100,000, and it really is, if one

looks at it like the old table of maims, and

although I think the side notes suggest it is a

table of maims, but if one looks at the end of the

items, the injuries listed, we have:

Quadriplegia, paraplegia -

and then the next one -

Impairment of the back.

Now, the Act, however, goes on to specifically

provide what this is for and that is in

section 98(5):

Compensation under this section is in respect

of permanent impairment and other

non-pecuniary loss.

I should say that so far as the Act is concerned,

other non-pecuniary loss or pecuniary loss is not
defined, but at the end of section 135, and the
relevant part is on page 169 of the reprint,
"Pecuniary loss" is defined, but it is only defined

for the purposes of section 135 and it is defined

to include:

loss of earning capacity, the reasonable costs

specified in section 99 -

which are medical, hospital and rehabilitation

expenses -

and loss of pecuniary advantages of marriage.

But otherwise there is no definition, and we would

say that non-pecuniary loss takes its normal

meaning of loss for pain and suffering and loss of

enjoyment of life.

DEANE J:  Mr Barnard, would not your argument involve a

double penalty against the plaintiff under 135(3A)?

I mean, presume here that the $8000 had been taken

into account, and taking it into account the

verdict was for $140,000, how much could he get?

MR BARNARD:  No, let me say this that I understand what

Your Honour - if his verdict is under $140,000 he

gets the payment under section 98 plus his verdict

Metropolitan 4 13/3/92

less the payment under section 98, so he gets what

his common law damages are. It is only when you

get awards of damages above $140,000 that he

suffers a penalty, but it is not a double penalty.

What the Act says is he cannot get more than

$140,000 and what he will get is $140,000 made up,

in part, by payment under section 98 and made up,
in other part, by what he will recover in the

court.

DEANE J: But when you have the section expressly taking

account of the payment under the maims table to

reduce the maximum amount of damages, why should

you read it as also allowing that amount to be

taken into account in the assessment of the damages

which it subjects to the subsection (3A) limit?

MR BARNARD:  That arises only in circumstances where you get

over the $140,000. But of course the other problem

with this is that not deducting it disadvantages

the person who gets over $140,000 because the

person who is worth less than $140,000 will recover

his proper common law damages plus the payment

under section 98.	The person who gets over
$140,000 is cut back to $140,000.	We would submit,

on the proper interpretation of it, if it is taken

off the $140,000, pursuant to section (3A) you do

not take it off again. It would not be a

subvention, in that case, it would be a

misunderstanding of the rule laid down in Redding

v Lee that you do not have it twice, and if he was

not getting it twice you would not take it off. I

accept the problem Your Honour puts, but in our

submissions the double deduction would not

represent an application of the principle in

Espagne's case and Redding v Lee.

DEANE J:  Can I approach it another way. On your argument,

is not subsection (3A) pointless?

MR BARNARD: Pointless?

DEANE J: It achieves nothing on your argument?

MR BARNARD: With respect, no. There are

circumstances - - -

DEANE J:  I put that wrongly. Are not the last words in

subsection (3A) pointless?

MR BARNARD: With respect, no. If somebody got damages of

$400,000 and they had received $100,000, the full

amount under section 98 they would get $300,000 if

those latter words were not there, there would be

no upper limit on damages.

DEANE J:	I understand your answer, yes.
Metropolitan	13/3/92

MR BARNARD:  Yes. If the Court pleases, we say that the

scheme of the Act confirms the view that section 98

is compensation for non-pecuniary loss and that a

section 98 payment should be taken into account as

a subvention. We would point out that the

Commission is liable to pay both compensation under

the Act and, also, to indemnify employers at common

law. So, it is not taking a subvention paid by the

Government in reduction of your liability. Under

section 20 of the Act and, in particular, section

20(c):

The functions of the Commission are to -

(c) pay compensation to persons entitled to

compensation under this Act -

and (f) is to:

defend actions against employers at common

law.

Of course, it is under section 134 and

section 134(4) imposes the liability to

indemnify on the Commission.

Notwithstanding anything in any Act or any law to the contrary the Commission shall subject

to this Act be liable to indemnify the

employers in respect of the employer's

liability against which the employer is
insured under a contract of insurance under

sub-section (1) -

and subsection (1) deems there:

to be a contract of insurance in the

prescribed form in respect of an employer's

liability at common law or otherwise (except

under this Act) in respect of an injury to a

worker arising out of or in the course

of ..... employment

-

and the extent of that contract is in

subsection (3) -

A contract ..... shall insure the employer

against the employer's liability at common law

or otherwise (except under this Act) in

respect of injuries arising out of or in the

course of, or due to the nature of,

employment.

So, what we say is there we have the liability both
at common law and the payments under the Act

imposed on the Accident Compensation Commission.

Metropolitan 6 13/3/92

The scheme of the Act is that for injuries at

work, other than injuries resulting from transport

accidents and journey accidents, there is no longer

a common law right to claim damages for pecuniary

loss, and the damages for pecuniary loss, pursuant

to section 93 of the Act provides that:

If a worker's incapacity for work results

from, or is materially contributed to by, an

injury which entitles the worker to

compensation, the compensation shall be in the

form of weekly payments subject to and in

accordance with this Part.

And we would point out that those weekly payments

are set out in sections 93A for partial incapacity

and 93B for total incapacity. They are payments

which are related to pre-injury weekly earnings and

they are payments which the period of entitlement

continues up until the retirement age whilst

incapacity continues. And, we would submit that in

those circumstances it points to the section 98

payment. It says that it is for non-pecuniary, it
points to it being a compensation for non-pecuniary

loss, pecuniary loss itself being otherwise

compensated by weekly payments and under section 99

a comprehensive scheme for the payment of:

medical, hospital ..... rehabilitation -

expenses. We go on to say that the inconsistency

that I have referred to Mr Justice Deane arising

from section 135(3A) justifies the view that it was

intended that they be reduced, because not to do so

would disadvantage a person who is worth more than
$140,000 and advantage the smaller claims, those

where damages for pain and suffering were under

$140,000.

Now, section 135(4) provides where:

(a) judgment is obtained in proceedings in

respect of an injury arising out of or in the

course of, or due to the nature of, employment

to recover damages if the damages for that

injury were, or the amount paid for that

injury was directly or indirectly, in whole or

in part, in respect of non-pecuniary loss .....

the Commission or a self-insurer is not, after the date on which the judgment was obtained or the compromise or settlement was made, liable

to pay any compensation under section 98 in

respect of that injury to a person to whom

damages are awarded or an amount paid under

the compromise or settlement.

Metropolitan 7 13/3/92

Now, the consequence of that is that once you get

your common law damages you become disentitled, or
once you settle you can become disentitled to a
payment under section 98. So, if the amount of a

98 payment is not to be deducted, it means that the

person who makes his claim on the Commission for a

98 payment and has a determination before his

common law action comes on, gets his common law

damages plus a 98 payment, the person who goes

ahead with a common law action loses his right to

that section 98 payment. In our submission, that

inconsistency again points to the fact that there

should be a deduction.

It may be argued against us, and I should

refer to section 135(4A) which provides:

The amount of any judgment, order for damages,

settlement or compromise made or entered into

in favour of a worker or the dependants of a

worker in respect of proceedings against an

insured person or the incorporated nominal

defendant or under Part III of the Wrongs Act

1958 shall be reduced by the amount of

compensation paid under this Act.

It may be argued that because the Parliament provided for the reduction in these cases it

intended that there be no reduction in other cases.

We would point out there that the claims against

"an insured person or the incorporated nominal

defendant" are claims against or injuries arising

out of the use of motor vehicles prior to

1 January 1987, when the Transport Accident scheme

came into effect, and there is a reference to the

Wrongs Act, that is claims for death, and, in our submission, there was a specific reason for

providing or including this expressly, and

particularly in relation to motor car accidents

because a decision of the Full Court of this State

in relation to the Motor Accidents Act had said

that where a plaintiff recovers damages, there were

payments made under the Motor Accidents Act in

respect of loss of earning capacity, that those

payments could only be deducted for damages for

loss of earning capacity and could not be deducted

for common law damages for pain and suffering.

What we say the Parliament has done here is

intending to keep motorists right outside, or
persons injured as a result of motor vehicle
accidents, intending to keep them right outside

the Accident Compensation scheme, and in

circumstances where they would have full common law

rights, required them to pay back all of their

benefits under the Act. Of course at

section 135(1) that provides:

Metropolitan 13/3/92

A worker who is or the dependants of a worker who are or may be entitled to compensation in

respect of an injury arising out of or in the

course of, or due to the nature of, employment

shall not, in proceedings in respect of the

injury, recover any damages in respect of

pecuniary loss except -

(a) in proceedings against an insured person

or the incorporated nominal defendant in
respect of an injury or death caused by or
arising out of the use of a motor car before

the commencement of section 34 of the

Transport Accident Act -

and that was 1 January 1987. So that they being

excepted from the bar to claim pecuniary loss, if

they went to common law they went to common law and

had to give up all of their benefits under the Act. In other words, it precluded them from choosing and

saying, "Look, I will go to common law only for
damages for pain and suffering and take a benefit
under the Act, or I will go to common law for

damages for pecuniary loss and otherwise take a

section 98 payment". It prevented that sort of

thing and we say there are good political reasons

for so doing.

So it is our submission that, looking at

section 98 in the whole context of the Act, we

should be entitled to argue that it is to be taken

into account as a subvention. The matter is a

matter, certainly, of general application in courts at the present time, and particularly in the

county court, because persons who have their claims

coming on are constantly having them adjourned so

that they go off to make their application under

section 98, and get that application determined,

the solicitors and lawyers fearing that if they do

not succeed in that application first they may have

necessarily, of course settlements are more	a claim against them. Settlements are delayed and,
difficult, there being arguments as to the amount
involved which they should recover. The Court no
doubt has read the affidavit in support which
indicates the financial consequences to the
Commission of these amounts not being deducted.

DEANE J:  Mr Barnard, has your client paid the $42,000 that

are not in dispute to the respondent?

MR BARNARD:  I would think, the lot - the lot, $50,000.

DEANE J: What, you want $8,000 back?

Metropolitan 9 13/3/92

MR BARNARD:  I might say it is not uncommon in this State

even where there is an appeal to pay up.

DEANE J: Yes.

MR BARNARD:  The plaintiff's solicitor have given an

undertaking about that.

DEANE J:  No, but my query has been answered, all that is

not in dispute has certainly been paid?

MR BARNARD: That is so.

MASON CJ: Yes, thank you, Mr Barnard. Mr Kendall?

MR KENDALL:  May it please the Court, it is our submission

that the intent of subsection (3A) is to impose a

limit to the amount of compensation that may be

recovered for non-pecuniary loss, and it is not

unimportant to note, we would submit, that

subsections (3A), (4A) and (4B) were only

introduced in 1987 and were introduced by the same

amending Act.

It is submitted that the law recognizes that in certain instances benefits which are paid, such

as those under the Social Security legislation, may

be retained, notwithstanding that a successful

common law action is conducted, and we submit that,

as was expressed by the former Chief Justice in

Redding v Lee, the conclusion that the plaintiff

might be able to retain that benefit is stronger in

a situation where you are not concerned with a loss

of wages, as is the situation here.

We would, in particular, refer the Court to

Redding v Lee, 151 CLR, which we understand has

been produced, at pages 122 to 125, the judgment of

the former Chief Justice.	He says, at the top of
page 122:

It is trite to say that a court, in

assessing compensation for economic loss

suffered by an injured plaintiff, endeavours

to compensate the plaintiff for what he has

actually loss, i.e., to restore him to the

financial position in which he would have been

if he had not been injured. It might

therefore be thought that where the plaintiff

has, as a consequence of his injuries,

received a financial benefit which he would

not have otherwise received, such benefit

would reduce the amount of his financial loss

and must be taken into account in the

assessment of his damages. In many cases the

benefit will of course be taken into account.

Sometimes the receipt of the benefit will mean

Metropolitan 10 13/3/92

that the plaintiff has suffered no loss, and

therefore can recover no damages. If a
plaintiff is unable to work, but nevertheless

receives wages or sick pay, he cannot claim

that he has suffered a loss of wages; if he

needs medical attention, but it is provided

free, he cannot claim that he should be
credited with an amount for expenditure on

medical attention which it has not been

necessary to make ..... However, the present are

not cases in which the provision of the

benefit has meant that the plaintiff has not

suffered financial loss. In the present

cases, the question is whether the plaintiff,

having suffered a loss, "ought to be debited

with the amount or value of a subvention of
which he has had the benefit" ..... Although

logic might suggest that a plaintiff should be

debited with the amount of any benefit which
he has received in consequence of his injuries

and which in fact reduces his loss, the

authorities show that that is certainly not

true in every case.

His Honour subsequently refers to Espagne's case,

and particularly the judgments of the then

Chief Justice and Justice Windeyer, and at pages 125 in the third line observes:

The test suggested is a general one, and it

requires the court to consider the nature of the benefit which the defendant seeks to set off against the damages, and to inquire

whether the person or body supplying the

benefit intended that the plaintiff should

enjoy it in addition to whatever damage he

might recover from the defendant. In the case

of a benefit provided under statutory
authority, the intention of the legislature,

in providing the benefit, must be gleaned from

the statute itself as a matter of

interpretation. If the statute expressly

provides (as some statutes relating to

workers' compensation have done) that a

plaintiff who has recovered damages shall

repay the amount of the benefit it will be

clear that the receipt of the benefit must be

disregarded in the assessment. In many cases,

however, the statute under which the benefit

is provided will give no assistance of this

kind.	Then it will be necessary to consider
closely the nature of the benefit itself.	The

conclusion that the benefit is intended for

the plaintiff personally and not in reduction

of the damages may more readily be drawn when

it is seen that the receipt of the benefit is

Metropolitan 11 13/3/92

not dependent on the loss of wages or earning

capacity.

Now, if the Court pleases, we are here

concerned with an Act which has taken away a lot of

long standing common law rights. It is our

submission that the intention of this legislature

is made plain in the words of subsection (3A)

itself. It is of considerable significance, we

submit, that sections (4A) and (4B), dealing with

common law actions in relation to journey claims,

specifically prescribe that the awards of damages,

or the judgment, shall be reduced by the amount of

compensation which has been paid under the Accident

Compensation Act. Subsection (4A) deals with the

situation where the damages exceed the award made

under the Act, subsection (4B) deals with that
situation where the entitlements under the Act are

greater than the amount of the judgment or award of

damages.

But the significant factor here, we submit, is that in legislation introduced by Act No 83 of 1987 which introduced, also, subsection (3A), the

legislature has seen fit to specifically use the

phrase "shall be reduced by the amount of the

judgment". One might then ask, why is that not

done in subsection (3A), if the intention of the

legislature was that the amount received under

section 98 should be taken off the top of any award

of damages or, alternatively, allowance made in the

calculation of damages for non-pecuniary loss.

We submit that this very drastic legislation

seeks to provide a maximum limit which might be

recovered, by way of compensation, for
non-pecuniary loss. If the intention was

otherwise, we would submit it would be very easy,

or would have easily achieved the result, had the

legislature introduced words such as those referred

on page 12 of the application book. At line 20 he to by the former Chief Justice in Victoria, set out says:

It seems to me that the appellant seeks

to have the sub-section operate as if it read:

"In proceedings for damages in respect of an

injury arising out of or in the course of, or

due to the nature of, employment, the amount

of damages shall be reduced by any amounts of

compensation paid under section 98 and shall

not exceed in any case $140,000".

He then observes:

Metropolitan 12 13/3/92

The sub-section however does not say that and

accordingly the Court cannot in my view give

effect to such a meaning.

Similar expressions are found in the judgments of

Mr Justice Murphy, page 16, line 39:

There is nothing in the words of

s. 135(3A) which, in my opinion, would support
the view that the statutory limit on the

amount of damages for non-pecuniary loss is to

be arrived at by deducting first from the

damages otherwise awardable the amount of any

s. 98 table of maims award.

And then, finally, the passage which has already been referred to in the judgment of

Mr Justice Nathan on page 21 at line 13, he says:

Insofar as that prohibition should or has any

validity -

that is prohibition against double dipping -

it does not find expression ins. 135(3A). If

the legislature had intended to incorporate

the prohibition into this section, then it

would have been simple to do so.

Bearing in mind that this section is designed to

create a ceiling, it is our submission that it is

not appropriate to give consideration to situations

where the larger awards of damages might be made, and the effect of the reduction under section 98,

or the section 98 payments would have upon those

awards. The fact of the matter is that the whole

concept has been to limit the amount capable of

being recovered in the field of pecuniary loss or

non-pecuniary loss. Subsection (3A), in our

submission, means what it says. It imposes a

limit, and it is our submission that the judges of

the Full Court were correct in their

interpretation.

DEANE J:  Mr Kendall, the judges in the Full Court do not

seem to have considered the argument that is now

put, that is an argument independently, as it were,

of subsection (3A). Is there any dispute that the

argument was put?

MR KENDALL:  No, Your Honour, it certainly was put, and as I

understand Their Honours, what Their Honours had

done is gone on to say, "Look, we have to look at

the section, we construe it at its face value", and

reach their conclusions accordingly".

Metropolitan 13 13/3/92

DEANE J: What, you read the judgments as impliedly dealing

with the argument on the basis that, unless you
construe subsection (3A) in the way the applicant
argued then, it indicated a legislative intent

contrary to the argument?

MR KENDALL:	Yes, Your Honour.
DEANE J:	I follow
MR KENDALL:	I think, Your Honour, there is nothing further

I can add.

MASON CJ: Mr Barnard, can I ask you this question: in the

event that the Court is disposed to grant special
leave to appeal, will you pay the costs of the

appeal, in any event?

MR BARNARD:  I have instructions to agree to that,

Your Honour.

MASON CJ:  You have instructions to agree to that. Now, I

put the question, without indicating one way or the other what the Court's attitude is, because we want

to give the matter a little further consideration

and we will give our decision after the

adjournment.

MR BARNARD: If the Court pleases.

MASON CJ: Is there anything else you want to say?

MR BARNARD:  I think it would be only relevant to the

appeal, Your Honours.

MASON CJ:	I mean, is there anything else you want to say with respect to the grant of special leave to
appeal?
MR BARNARD:	No, Your Honour.
AT 12.07 PM THE MATTER WAS ADJOURNED

UNTIL LATER THE SAME DAY

UPON RESUMING AT 2.07 PM:

MASON CJ: This application raises a point which was not

fully addressed in the judgments in the Full Court

of the Supreme Court, namely, whether the benefit received by the respondent pursuant to section 98 of the Accident Compensation Act 1985 (Viet.)

Metropolitan 14 13/3/92

should be treated as a subvention in reduction of

common law assessment of damages for non-pecuniary

loss. In the context of the particular and

Accident Compensation

detailed provisions of the sufficient prospects of success to warrant the grant of special leave to appeal.

The application is therefore refused.

MR KENDALL:	I ask for costs, if the Court pleases.
MASON CJ:	The application for costs is not opposed?
MR BARNARD:	No, Your Honour.
MASON CJ:	The application is refused with costs.

MR BARNARD: If the Court pleases.

AT 2.08 PM THE MATTER WAS ADJOURNED SINE DIE

Metropolitan 15 13/3/92