Papadopoulos v MC Labour Hire Services Pty Ltd & Anor (Ruling No 2)
[2009] VSC 176
•5 May 2009
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
No. 4244 of 2007
| CHRISTOPHER PAPADOPOULOS | Plaintiff |
| v | |
| MC LABOUR HIRE SERVICES PTY LTD and CONCEPT HIRE LIMITED | Defendants |
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JUDGE: | BEACH J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 5 May 2009 | |
DATE OF RULING: | 5 May 2009 | |
CASE MAY BE CITED AS: | Papadopoulos v MC Labour & Anor (Ruling No. 2) | |
MEDIUM NEUTRAL CITATION: | [2009] VSC 176 | |
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INDUSTRIAL ACCIDENT – Accident compensation – Assessment of damages – Benefits from other sources – Redding v Lee – Insurance payout – Relevance of the identity of the party paying the premium – Insurance payment not to be taken into account in assessment of damages.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J.B. Richards SC with Mr A.D.B. Ingram | Clark Toop & Taylor |
| For the First Defendant | Mr D.E. Curtain QC with Mr S.A. O’Meara | Lander & Rogers |
| For the Second Defendant | Mr R.J. Stanley QC with Mr D. Masel | Wotton & Kearney |
HIS HONOUR:
Incolink is a joint venture between employer associations and unions in the Victorian commercial building industry. Incolink administers a number of funds under trust deeds and agency agreements. Funds are paid into Incolink by employers for workers under the terms of an enterprise bargaining agreement or a workplace agreement. These include redundancy payments which are held on trust for employees and paid to them in times of unemployment.
Additionally, employers pay amounts to Incolink which are used to purchase insurance products such as income protection insurance and portable sick leave benefits. Incolink obtains these insurance products through an insurance broker, Windsor Insurance Management. Windsor Insurance Management administers the insurance schemes purchased by Incolink on behalf of Incolink.
The plaintiff has received a sum of $150,000 subsequent to his accident on 10 May 2001. This sum was paid because the plaintiff established that he had suffered permanent and total disablement. The relevant insurance product to which the plaintiff had access provided for a lump sum payment of $150,000 to him upon him suffering permanent and total disablement. The premium for the policy which produced the payment of $150,000 to the plaintiff was paid by the first defendant.
Whilst counsel for the first defendant sought to establish from an internet site during cross-examination of an employee of Incolink that payments to Incolink could be made voluntarily, the probabilities, as was fairly conceded by the first defendant during argument, are that the premium was paid pursuant to the terms of an enterprise bargaining agreement or a workplace agreement or pursuant to some other contractual obligation.
The first defendant submits that the payment of $150,000 must be taken into account in any assessment of the plaintiff's pecuniary loss damages. Senior counsel for the first defendant conceded, in my view correctly, that the first defendant carried the onus of establishing that the deduction should be made; see also Transfield Pty Ltd v Mastroianni. [1]
[1] (1998) 18 NSWCCR 193.
So far as authority is concerned, the starting point is Bradburn v Great Western Railway Company.[2] That case held that in an action for damages for personal injury no deduction should be made from the damages by reason of the plaintiff having received a payment under an accident insurance policy taken out by the plaintiff.
[2] (1874) LR 10 Exch 1.
The first defendant contends that Bradburn's case is distinguishable from the present case because Mr Papadopoulos did not take out or pay for the insurance policy. However, Australian authority in relation to whether superannuation payments and pensions of various kinds should be taken into account in the assessment of personal injury damages have not upheld this distinction.
In Watson v Ramsay[3] Brereton J said at p.463:
“A superannuation scheme of the type involved here is therefore to my mind completely analogous to a policy of accident or sickness insurance taken out in the employee’s favour with his employer instead of with an insurer. Whether paid by him wholly or paid for partly by him and partly by his employer, it is nonetheless to my mind provided in consideration of his service to his employer, and where superannuation becomes payable before the normal retiring age it is not payable in recognition of any injury which may have caused such retirement or in order to alleviate any loss of earnings, thereby occasioned, or as a discretionary payment or act of grace; it is payable simply and solely because the employee has by his work bought his entitlement to it; if it were not paid, and he sued for it, the fact that he had recovered damages for his injury from his employer or anyone else could not conceivably be pleaded in bar in that action.”[4]
[3] [1960] NSWR 462.
[4]See also National Insurance Company of New Zealand Limited v Espagne (1961) 105 CLR 569 at 573, 576, 588 and 598-600, Federal Commissioner of Taxation v Scully (2000) 201 CLR 148 at 168, paragraph 31 and following, per Gaudron ACJ and McHugh, Gummow and Callinan JJ and State of New South Wales v Davies (1998) 43 NSWLR 182.
In support of its submissions, the first defendant relied upon two authorities: Hussain v New Taplow Paper Mills Limited[5] and Harris v Commercial Minerals Limited.[6] Hussain is of no assistance to the first defendant. As Sheller JA, with whom Mason P and Meagher JA agreed, said in New South Wales v Davies:[7]
“It is to be observed that in that case [Hussain’s case] the injured plaintiff was paid amounts indistinguishable in character from sick pay in lieu of wages under an insurance scheme to the premiums of which he had made no contribution; compare Graham v Baker (1961) 106 CLR 340 at 345-356 and Redding v Lee (1983) 151 CLR 117 at 139.”
[5] [1988] 1 AC 514.
[6] (1996) 186 CLR 1.
[7] (1998) 43 NSWLR 182 at p.191.
Similarly, there is nothing in Harris which assists the first defendant. Harris dealt with the need to take into account the present value of future benefits payable under the Dust Diseases Act of New South Wales. These payments were of a kind and character not relevantly distinguishable from workers' compensation benefits. The decision involved the application of settled principle enunciated by the High Court in Manser v Spry[8] and Redding v Lee.[9] Nothing in that decision cuts across what was said in Watson v Ramsay, Federal Commissioner of Taxation v Scully and New South Wales v Davies, to which I have referred.
[8] (1994) 181 CLR 428.
[9] (1983) 151 CLR 117.
In determining whether the Incolink payment should be taken into account, the issue turns on the character and purpose of the payment; see Redding v Lee, Wallington v State Electricity Commission of Victoria (No. 2),[10] Nagy v Masters Dairy Limited[11] and Insurance Australia Limited v HIH Casualty & General Insurance Limited. [12]
[10] [1980] VR 91.
[11] (1997) 150 ALR 301.
[12] [2007] VSCA 223, [164] – [168].
Generally a court is required to consider the nature of the benefit which is sought to be set off against a plaintiff's damages, and to inquire whether the person or body supplying the benefit intended that the plaintiff should enjoy it in addition to whatever damages he might recover. The conclusion that the benefit is intended for the plaintiff personally and not in reduction of the damages may be more easily drawn when it is seen that the receipt of the benefit is not dependent on the loss of wages or earning capacity for which the plaintiff claims damages and is not intended to replace the lost wages or remedy the loss of earning capacity: see the judgment of Gibbs CJ in Redding v Lee.
In Redding v Lee, Mason and Dawson JJ discussed the injustice of reducing damages on account of benefits received by a plaintiff resulting from benevolence. They said benefits of this kind spring from a desire to assist the plaintiff, not from any wish to relieve against the tortfeasor's liability. Their Honours went on to say that a similar comment could be made about pension and superannuation benefits "whose purpose is to ameliorate the plaintiff's situation irrespective of his right to recover compensation against the tortfeasor." Their Honours then said at page 138 of the Commonwealth Law Reports:
"For this reason no distinction should be drawn between pension and superannuation benefits to which the plaintiff has contributed and those to which he has made no contribution, although there is a stronger reason for refusing to reduce the plaintiff's damages on account of payments which he has himself made, thereby diminishing the assets which he otherwise owns."
In this case, the judgment of Brereton J in Watson v Ramsay is apposite. If the Incolink payment was made as a result of the purchase of an insurance product required to be purchased because of an EBA or workplace agreement, then, by his work, the plaintiff bought his entitlement to the Incolink payment. The first defendant could have called evidence that the premium was paid as a result of some benevolence on its part and not as a result of any contractual obligation contained in an EBA, a workplace agreement or otherwise. It chose not to do so, and during the course of argument this ceased to be an issue.
I am not persuaded that the premiums were paid other than pursuant to a contractual obligation. Having regard to the evidence of Ms Garcia, in my view the probabilities suggest that such premium as was paid by the first defendant was paid pursuant to a contractual obligation enforceable at the suit of the plaintiff. Further and in any event, the payment was not intended to replace lost wages or remedy the plaintiff's loss of earning capacity. The benefit was for the purpose of assisting the plaintiff, not for relieving a tortfeasor's liability.
Whether one approaches this case on the basis of the judgments in Redding v Lee, to which I have referred, or whether one takes the approach taken by Brereton J, the result is the same. The Incolink payment was not dependent on the loss of wages or earning capacity for which the plaintiff claims damages and was not intended to replace the lost wages or remedy such loss of earning capacity. More specifically, and remembering it is the first defendant who carries the onus in relation to this matter, I am not satisfied that the Incolink payment was dependent on the loss of wages or earning capacity for which the plaintiff claims damages, nor that it was intended to replace the lost wages or remedy such loss of earning capacity.
Further, and in any event, it was not paid as some discretionary payment or act of grace. It was payable because the plaintiff had, by his work, bought his entitlement to it. If the plaintiff had recovered damages from either defendant before the Incolink payment was paid to him, there is no suggestion his receipt of damages could have been pleaded in an answer to that claim. It follows for the reasons I have given that the Incolink payment does not fall to be taken into account in the assessment of the plaintiff's pecuniary loss damages.
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