Reynolds v John Lewis Food Services Pty Ltd (Ruling)
[2013] VCC 681
•24 June 2013
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CIVIL DIVISION | Revised Not Restricted Suitable for Publication |
DAMAGES AND COMPENSATION LIST
SERIOUS INJURY DIVISION
Case No. CI-11-04882
| MERVYN REYNOLDS | Plaintiff |
| v | |
| JOHN LEWIS FOOD SERVICES PTY LTD | Defendant |
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JUDGE: | HIS HONOUR JUDGE BROOKES | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 1 October 2012 | |
SUBMISSIONS: | 1, 12 and 23 October 2012, 20 March 2013 | |
DATE OF RULING: | 24 June 2013 | |
CASE MAY BE CITED AS: | Reynolds v John Lewis Food Services Pty Ltd (Ruling) | |
MEDIUM NEUTRAL CITATION: | [2013] VCC 681 | |
RULING
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Subject: ACCIDENT COMPENSATION
Catchwords: Whether continuing right to weekly payments of compensation following award of damages for economic loss – statutory interpretation – Rule 47.04 ruling
Legislation Cited: Accident Compensation Act 1985, s134AB(22), (25), (26) and (36); Workers Compensation Act 1958; County Court Civil Procedure Rules 2008
Cases Cited:Turner v Manier (No 1) [1958] VR 350; Turner v Manier (No 2) [1958] VR 358; State of Victoria v Adamo [1964] VR 267; Alevras v Sidney Cook Fasteners [1972] VR 383
Declaration: The plaintiff is entitled to pursue his claim as presently pleaded.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S McCredie | Arnold Thomas & Becker |
| For the Defendant | Mr M F Fleming SC with Mr M J Richards | Wisewould Mahony |
HIS HONOUR:
1 By Statement of Claim filed 12 October 2011, the plaintiff has sought an order for weekly payments of compensation for incapacity dating from 27 May 2011 in respect of injury suffered in the course of his employment with the defendant on or about 12 September 2000. The matter came on for hearing before me on 1 October 2012, and it was agreed between the parties that a preliminary point would be adjudicated pursuant to rule 47.04 of the County Court Civil Procedure Rules 2008, the issue being the proper construction of s134AB(36)(a) of the Accident Compensation Act 1985 (“the Act”). In those circumstances, the following facts were not in issue.
2 On 14 September 2000, the plaintiff lodged a Claim for Compensation for injury to his right calf and lumbar spine. The claim was accepted and 500 weeks of compensation paid ($193,350).
3 On 5 April 2005, the plaintiff lodged a claim pursuant to s98C of the Act with respect to a back injury which he claims also arose out of or in the course of his employment with the defendant. Proceedings were issued in the Magistrates’ Court in relation to the acceptance of the back injury and funding of the back surgery. By way of Consent Orders dated 23 August 2007, the matter settled on the basis that liability be accepted pursuant to s98C and s98E for the back injury and the L4‑5 laminectomy.
4 The plaintiff sought leave to bring proceedings for damages for both heads in relation to injuries to his right calf and back. Serious injury certificates were granted for both heads on 5 August 2009. The plaintiff’s claim for damages proceeded for fourteen days before a jury from 9 May 2011 to 26 May 2011. On 26 May 2011, judgment was entered in the following terms:
“Judgment for the plaintiff in the sum of $79,584, being
(a) Pain and suffering damages assessed by the jury of $145,000 reduced by $12,360 in accordance with s134AB(25)(b) of the Accident Compensation Act 1985, a sum of $132,640;
(b) Pecuniary loss damages assessed by the jury of $191,148 reduced by $193,350 in accordance with s134AB(25)(a) of the Accident Compensation Act 1985, an amount of $Nil;
(c) The sum of $132,640, further reduced by 40% in accordance with the jury finding in relation to contributory negligence, an amount of $79,584.”
5 The reduction in the pecuniary loss damages assessed by the jury ($191,148) by the amount of weekly payments already paid ($193,350) to an amount of ‘Nil’ was done in compliance with s134AB(25)(a).
Termination of weekly payments
6 Following this judgment, the plaintiff’s weekly payments were terminated in accordance with s134AB(36), s134AB(36A) and s14(5). (Termination takes effect, subject to s134AB(36A), when the circumstance in s134AB(36) occurs – ie the date of the entry of judgment by which the award of pecuniary loss damages was reduced by the amount of weekly payments. Notice of termination was not required: see s114(5).
Present proceeding
7 The plaintiff now seeks reinstatement of weekly payments from 27 May 2011 to date, and ongoing. It is pleaded that s134AB(36) does not relieve the employer or the insurer of liability for weekly payments of compensation because, so it is claimed by the plaintiff in paragraph 18 of the Statement of Claim, “... in the circumstances ... no pecuniary loss damages were awarded to the plaintiff”.
8 The plaintiff’s pleading in paragraph 18 of the Statement of Claim requires that the words “where pecuniary loss damages are awarded” in s134AB(36)(a) refer to the entry of judgment after reduction of the jury assessment of pecuniary loss damages by the amount of weekly payments: see ss25(a).
9 The defendant joins issue with this implicit construction. It is contended, rather, that the reference to “pecuniary loss damages” being “awarded” must be construed as a reference to the assessment of common-law damages in respect of pecuniary loss (in this case, by the jury) prior to reduction of that assessment of pecuniary loss damages by the amount of weekly payments.
10 The defendant submits that the ordinary sense of the statutory language supports this contention. When a court is required by s134AB(25)(a) to “reduce” “the amount of” a “judgment” or “order for damages”, “to the extent that it is in respect of pecuniary loss”, by the “amount of [weekly payment] compensation”, prior to the judgment or order for damages being “entered”, it is a natural use of language to construe these references to the “amount of” a “judgment” or “order for damages”, prior to reduction, as the “awarding” of the “pecuniary loss damages” referred to in s134AB(36)(a).
11 The defendant further submits it is a natural use of language to describe the jury’s assessment of pecuniary loss damages (in the present matter, at $191,148) as the jury having “awarded” “pecuniary loss damages” of $191,148.
12 By contrast, the amount of pecuniary loss damages after reduction for weekly payment compensation (in the present matter, Nil) would be more naturally referred to as the judgment being “entered”, or the amount of damages being “received”, rather than the amount of damages being “awarded”.
13 Senior Counsel for the defendant submits the statutory language in s134AB(22)(a) and s134AB(24) supports the defendant’s contention. The references to the “award” of “pecuniary loss damages” in both subsections is consistent with the defendant’s contention that the same concept in s134AB(36)(a) refers to the determination of the quantum of pecuniary loss damages prior to its reduction by the amount of weekly payments in accordance with s134AB(25)(a).
14 He further submits the construction contended for by the defendant conforms also with a readily understood statutory intention; namely, that a common-law proceeding in which pecuniary loss damages have been claimed, and a judgment entered statutorily reduced by weekly payments of compensation already received, will lead to the entitlement to weekly payments being terminated as from the entry of judgment.
15 The defendant submits that the overall statutory construction of s134AB is that a plaintiff receiving weekly payments takes a “risk” in claiming pecuniary loss damages that the pecuniary loss damages awarded may be less than expected, but the plaintiff is not bound to claim pecuniary loss damages in the common-law proceeding.
16 The plaintiff’s counsel argues that because the pecuniary loss damage final award (my emphasis) is nil, the plaintiff’s right to apply for ongoing weekly payments of compensation is preserved, and that this “is consistent with the evolving approach to maximising choice for a worker yet ensuring no double-dipping ... .” (see paragraph 30, submission dated 12 October 2012).
17 In order to demonstrate this evolving choice, counsel for the plaintiff has carefully and helpfully set out the legislative forerunners to s134AB pursuant to the Workers Compensation Act 1958.
18 With respect to the Act, he argues as follows.
19 Section 62 was significantly amended by Act 8084 which inserted a new ss(1)(aa) (tab “F”). This amendment essentially provided that where judgment against a person other than the employer has been satisfied in whole or in part, the right to compensation under the Act is reduced to the amount recovered under the judgment and the right to further weekly payments is extinguished. For illustrative cases and discussion see Turner v Manier (No 1);[1] Turner v Manier (No 2)[2] and State of Victoria v Adamo.[3]
[1][1958] VR 350
[2][1958] VR 358
[3][1964] VR 267
20 By its final pre-1985 iteration, the whole scheme of the Workers Compensation Act under s62, s63 and s79 was repealed and replaced by Act 9683 of 1981. At tab “G” is the ceased Butterworths service (Boyes & O’Loughlen) reproduction of those provisions with commentary. As a generalisation, the effect of the amended legislation was to enable a worker the maximum flexibility of choice between recovering common-law damages and statutory compensation without permitting double-dipping. This can be seen particularly in s63(4) and (5), which enabled the worker to abandon a judgment at common law so that the action would be treated as dismissed with a right to recover statutory compensation unaffected.
21 Section 65(1) is the obvious precursor to s134AB(22). It is more limited, in that it applied only to common-law claims against employers. Of interest for present purposes, it provided that “the amount of the judgment or order shall be reduced by the amounts of payments made in respect of the period to which the judgment or order for damages relates”. Presumably if the common-law claim restricted the pecuniary loss claim, say to future pecuniary loss, then no reduction of past weekly payments would be applicable since those payments were not made in the period to which the judgment “relates”.
22 Although s65 seems to have enabled the common-law claim to be manipulated to avoid reduction of the judgment by amounts of weekly payments made, s64 provided (as s62(1)(aa) and s79 had previously) that upon the judgment against the employer or third party being satisfied in whole (or the claim settled or compromised) by ss(b), the right of a worker to further weekly payments under this Act shall thereupon cease and determine.
23 It would appear that the legislative intent under the Workers Compensation Act was to the following effect:
(a)There was an element of risk in the worker pursuing a claim for economic loss at common law, rather than pursuing his or her ‘no-fault’ entitlements pursuant to statute; to wit, the amount recovered at common law may be less than the statutory entitlement.
(b)The risk could be ameliorated by either abandoning a judgment at common law so that the action could be treated as dismissed, or having the matter dismissed in fact, perhaps for a finding of no negligence. In either circumstance, the right to recover statutory compensation was unaffected.
(c)However, s64 of the Act provided that upon a judgment against the employer being satisfied in whole (or the claim settled or compromised), the right of a worker to further weekly payments under the Act would thereupon cease and determine.
24 The essential question in this case, therefore, is whether, in achieving a verdict of $191,148 for economic loss, the plaintiff’s right to claim further weekly payments of compensation has been forfeited because he had already received $193,350 by way of weekly compensation. Although there is no equivalent to s63(4) and (5) of the Workers Compensation Act which enabled the worker to abandon a judgment at common law so that the action could be treated as dismissed, the plaintiff argues, in effect, that any award by the jury less than $193,350 is abandoned in a de facto manner by a recording of a final judgment of nil dollars for pecuniary loss. (See also Alevras v Sidney Cook Fasteners[4]).
[4][1972] VR 383
The legislative intent of Section 134AB
25 It would seem non-contentious following a finding of no negligence by a jury that no pecuniary loss damages will be “awarded” on any scenario pursuant to ss(36)(a) such that the employer may still be liable to pay weekly payments in respect of the injury.
26 Further, s(22) provides:
“A court must not, in proceedings in accordance with this section, award to a worker in respect of an injury—
(a) pecuniary loss damages—
(i)if the total pecuniary loss damages assessed, before the reduction (if any) under section 26(1) of the Wrongs Act 1958 and before the reduction (if any) under subsection (25), is less than $52,220 ... .”
27 Accordingly, if the jury in this case had awarded, say, $50,000 instead of $191,148, it would appear that the worker would have the beneficial interpretation of ss(36) referred to.
28 That would seem to be, however, the limit of the protection afforded to the worker. For example, if the jury had awarded $60,000 pecuniary loss damages, that sum would equally be reduced to nil by the provisions of ss(26).
29 Of course it could be argued that the intent of ss(22) was not to afford protection to a worker equivalent to an abandonment of the judgment for economic loss, but to provide an extra hurdle in his or her way for the recovery of damages.
30 In any event, the award to a worker of pecuniary loss damages set out in ss(22) is, on ordinary statutory interpretation, different from “the total pecuniary loss damages assessed before the reduction ...”. The “award” in this sub‑section must relate to the final “award” or “judgment”.
31 Sub-section (22) differentiates, in my view, between a final award to a worker of pecuniary loss damages (ie final judgment) and total pecuniary loss damages assessed (ie jury verdict). On the plaintiff’s case, pecuniary loss damages awarded in ss(36)(a) means, similarly, the final award or judgment entered. Thus an award of nil damages means that a claim for weekly payments can be made.
32 In the pre-1985 position the whole scheme of the Workers Compensation Act was represented by Act No 9683 of 1981. I accept counsel for the plaintiff’s submission that the effect of this amended legislation was to enable the worker the maximum flexibility of choice between recovering common-law damages and statutory compensation without permitting double-dipping. Pursuant to s63(4) of that Act, the worker could, before the expiration of a period of 28 days after judgment, abandon the judgment. Then, pursuant to ss(5), where a worker abandoned the judgment, s62 of the Act would apply in all respects as if the action had been dismissed, and the worker would be at large to have compensation assessed in accordance with that section, and no damages would be recoverable in the action. Thus, by way of analogy with the present situation, the plaintiff would be able to abandon the judgment of $191,148, keep his $193,350, and make such further application for weekly payments as the no-fault statute would permit.
33 Counsel for the plaintiff then, not unnaturally, submits that the structure of s134AB of the Accident Compensation Act, particularly with respect to ss(22), (25), (26) and (36), is consistent with the evolving approach to maximising choice for a worker, yet ensuring no double-dipping demonstrated occurs. (Reference: see paragraph 30, submission of 12 October 2012.)
Conclusions
34 The ultimate conclusion will depend upon a ruling as to whether the phrase “where pecuniary loss damages are awarded” contained in ss(36)(a) relates to the final judgment entered of nil dollars or whether it relates to the verdict of the jury prior to the deductions to be made pursuant to ss(25) and (26).
35 On balance, I prefer the interpretation proffered by the plaintiff. The award of pecuniary loss damages contained in ss(22) is not the verdict amount decided by the jury for the reasons referred to above. It is clearly the final judgment sum after the respective deductions are to be made.
36 The same or similar phrase is used in ss(36), to wit “where pecuniary loss damages are awarded”. Accordingly, this would suggest a prima facie intention that the award relates to the final position as outlined in ss(22).
37 Further, the concept of a judgment being entered pursuant to ss(25) and (26) contemplates what must be done to the “total pecuniary loss damages assessed” pursuant to ss(22) by way of reduction before a (final) judgment or order is entered in favour of a worker.
38 Thus, on this construction, the legislature has intended that an award of damages assessed which is less than an entitlement to weekly payments of compensation, either already made, as in this case, or to be made in the future, should not prevent a worker from pursuing the right to statutory compensation when it is prima facie of greater value than the damages assessed.
39 In paragraph 17 of its written submission dated 1 October 2012, the defendant submitted “Indeed, in this regard, the plaintiff’s implicit construction of s134(36)(a) could lead to absurd outcomes”.
40 In the example there given, the nil entry of pecuniary loss damages would mean that the entitlement to statutory weekly payments would be greater than the pecuniary loss damages assessed by the jury. In that case, Parliament’s intention would be that the worker is entitled to pursue that greater entitlement, even if it is only to the extent of one dollar or such sum as could be assessed pursuant to the Act.
41 Naturally, in most circumstances, an outcome such as this is usually disastrous for a plaintiff as to costs consequences, but that would fall under the category of the risk voluntarily undertaken by the plaintiff.
42 Accordingly, I rule that the phrase contained in s134AB(36)(a), “where pecuniary loss damages are awarded”, relates to the final entry of judgment made in this case being nil dollars and therefore the plaintiff is entitled to pursue his claim as presently pleaded.
43 I will hear the parties as to consequential orders.
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